Justia California Court of Appeals Opinion Summaries

The San Diego City Attorney brought an enforcement action under the Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the State of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hires ("Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart challenged the trial court’s order, arguing that even though the State was not a party to its Shopper agreements, they were bound by its arbitration provision to the extent they seek injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law

Plaintiff sued her former employer, Wood Ranch USA, Inc. (Wood Ranch) for compensatory and punitive damages on nine different causes of action. Wood Ranch moved to compel arbitration. The trial court granted the motion and stayed the pending court proceedings. Plaintiff filed a motion to vacate the trial court’s prior order compelling arbitration. Invoking sections 1281.97 and 1281.99, Plaintiff argued that Wood Ranch’s late payment of its share of the initiation fees constituted a material breach of the arbitration agreement.   The trial court granted the motion, and the Second Appellate District affirmed the court’s order vacating its earlier order compelling arbitration between the parties in this case. The appeal presents a question of first impression: Are these provisions preempted by the Federal Arbitration Act (FAA)? The court held that they are not because the procedures they prescribe further—rather than frustrate—the objectives of the FAA to honor the parties’ intent to arbitrate and to preserve arbitration as a speedy and effective alternative forum for resolving disputes.   The court explained that Sections 1281.97 and 1281.99 undeniably single out arbitration insofar as they define procedures that apply only to arbitrated disputes. But that they are arbitration-specific is not sufficient to warrant preemption by the FAA. Further, these sections in this case do not interfere with the FAA’s first goal of honoring the parties’ intent. Moreover, applying these sections, in this case, does not interfere with the FAA’s second goal of safeguarding arbitration as an expedited and cost-efficient vehicle for resolving disputes. View "Gallo v. Wood Ranch USA, Inc." on Justia Law

The issue presented for the Court of Appeal's review in this case centered on whether California Code of Civil Procedure Section 1281.4 authorized the trial court to stay a plaintiff’s action on the basis of a pending arbitration to which the plaintiff was not a party. Ann Leenay brought an action against her former employer, Lowe’s Home Centers, LLC (Lowe’s), under the Private Attorneys General Act of 2004 (PAGA). The trial court granted a petition to coordinate her action with a number of other PAGA actions against Lowe’s. Lowe’s then moved to stay the coordinated actions under section 1281.4. Lowe’s based the motion on over 50 arbitration proceedings against it, but Leenay and the other plaintiffs in the coordinated actions were not parties in any of those arbitration proceedings. The trial court granted the motion to stay, and Leenay filed a petition for writ of mandate asking the Court of Appeal to vacate the order. The Court of Appeal concluded the trial court erred by granting the motion to stay. "[S]ection 1281.4 applies only when a court has ordered parties to arbitration, the arbitrable issue arises in the pending court action, and the parties in the arbitration are also parties to the court action. Under those circumstances, the court must stay the action (or enter a stay with respect to the arbitrable issue, if the issue is severable)." Those circumstances did not exist in this case. The Court therefore granted Leenay’s writ petition. View "Leenay v. Super. Ct." on Justia Law

Plaintiff worked as a driver for California Transit. After California Transit terminated his employment, Evenskaas filed this wage and hour class action against California Transit; its owner, and the company that administered California Transit’s payroll, Personnel Staffing Group, LLC (collectively, the California Transit defendants).   Because Plaintiff signed an arbitration agreement, in which he agreed to arbitrate all claims arising from his employment and waived his right to seek class-wide relief, the California Transit defendants filed a motion to compel arbitration. The trial court denied the motion. The California Transit defendants appealed, contending the FAA applies to the arbitration agreement.   The Second Appellate District reversed the order denying Defendants’ motion to compel arbitration is reversed. The court directed the trial court to enter a new order granting the motion and dismissing Plaintiff’s class claims. The court explained that because the paratransit services California Transit hired Plaintiff to provide involve interstate commerce for purposes of the FAA, the FAA applies to the arbitration agreement and preempts the Gentry rule that certain class action waivers in employment arbitration agreements are unenforceable. View "Evenskaas v. California Transit, Inc." on Justia Law

Plaintiff sued her employer, Life Insurance Company of North America, and several related individuals (collectively, Employer) for discrimination, harassment and wrongful termination. In response, Employer moved to compel arbitration based on a 2014 arbitration agreement. However, Employer did not present a copy of the agreement. Instead, Employer presented an auto-generated acknowledgment indicating Plaintiff read and consented to the terms of the agreement.The trial court denied Employer's motion to compel arbitration, finding that Employer did not establish an agreement to arbitrate and, even if an agreement existed, it was both procedurally and substantively unconscionable.The Second Appellate District affirmed. The trial court had the authority to review the "gateway" issue of arbitrability because Plaintiff claimed to have never seen or agreed to the arbitration agreement. Further, the fact that Employer's system created an auto-generated acknowledgment that Plaintiff consented to the agreement did not overcome Plaintiff's claim that she was not presented with the agreement and never would have agreed to it. View "Trinity v. Life Ins. Co. of North America" on Justia Law

The San Diego City Attorney brought an enforcement action under the California Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the People of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hired (called "Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart appealed, arguing that even though the State was not a party to its Shopper agreements, it was bound by its arbitration provision to the extent the State sought injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law

A cryogenic storage tank, manufactured by Chart and used by PFC, a San Francisco fertility clinic, to store patients’ reproductive material, experienced a failure. A putative class action was filed in federal court against four defendants. Claims against Chart proceeded in federal court; claims against other defendants proceeded in arbitration. Claimants not involved in the federal litigation filed subsequently-coordinated suits in California state courts against the four defendants. Arbitration was compelled for about 260 claims against PFC but not the other defendants. After 18 months of negotiations and discovery, three defendants reached an agreement to resolve the claims against them in all proceedings. The trial court entered a good faith settlement determination, dismissing with prejudice “[a]ll existing cross-complaints” for equitable indemnity or contribution against the settling defendants.Chart, the non-settling defendant, unsuccessfully challenged the good faith settlement determination in a mandamus proceeding, then filed an appeal. The court of appeal dismissed the appeal, noting a split among the divisions. When one tortfeasor defendant intends to settle a case before it is resolved against all defendants, the tortfeasor may petition the court for a determination that the settlement was made in good faith. (Code Civ. Proc. 877.6.) so that the other defendants are barred from obtaining contribution or indemnification from the settling tortfeasor based on the parties’ comparative negligence or fault. The court’s good faith determination is reviewable only by a timely petition for writ of mandate. View "Pacific Fertility Cases" on Justia Law

Plaintiff was a floor supervisor at the Defendant hotel and casino. In 2015, Defendant required all employees to sign a new arbitration policy as a condition of employment. Plaintiff signed the new policy. The following year, Defendant fired Plaintiff after Plaintiff accepted counterfeit $100 bills during his shift. In 2019, Plaintiff obtained a right-to-sue letter from DFEH and brought causes of action under wrongful termination, age discrimination, retaliation and harassment.In 2020, Defendant responded to Plaintiff's claim, but failed to move to compel arbitration. However, on December 23, 2020, 13 months after Plaintiff filed his lawsuit, Defendant moved to compel arbitration. The trial court denied Defendant's motion, finding that the 13-month wait prejudiced Plaintiff and that Defendant had waived its right to compel arbitration.The Second Appellate District reversed, finding Plaintiff's allegations of prejudice were insufficient. Waiver does not occur merely by participating in litigation; the case must reach the point of judicial litigation before a court will find a party waived the right to compel arbitration. The court also rejected Plaintiff's claim that the arbitration agreement was unconscionable. View "Quach v. Cal. Commerce Club" on Justia Law

Plaintiffs Nicole Leshane, Steve Garner, Justin Prasad, Isaac Saldana, and Maurice West sued defendants Tracy VW, Inc. and RJ Gill Ventures, Inc. alleging several Labor Code violations. Plaintiffs brought suit on behalf of themselves as defendants’ former employees, on behalf of others similarly situated, and on behalf of the state pursuant to the Private Attorneys General Act of 2004. After defendants filed a petition to compel arbitration, plaintiffs filed a first amended complaint alleging violations of the Labor Code solely as representatives of the state under the Private Attorneys General Act. Defendants continued to seek arbitration of plaintiffs’ individual claims and dismissal of their class-wide claims pursuant to the arbitration agreements each plaintiff signed. The trial court denied defendants’ petition to compel arbitration finding plaintiffs’ claim under the Private Attorneys General Act was not subject to arbitration citing Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014). Defendants appealed the trial court’s order. Finding no reversible error in the trial court's judgment, the Court of Appeal affirmed. View "Leshane v. Tracy VW, Inc." on Justia Law

As a condition of Plaintiff’s employment, she agreed to be bound by Defendant’s Alternative Dispute Resolution Policy (“ADR Policy”), which provided that “final and binding arbitration” would be the exclusive means for resolving “covered disputes” between the employee and employer. Plaintiff provided the required notice of alleged Labor Code violations. The agency did not respond to her notice within the time provided by statute, allowing Plaintiff to file PAGA representative claims. Plaintiff’s lawsuit also alleged class claims. Relying on the ADR Policy, Defendant requested Plaintiff stipulate to arbitrate her individual claims, strike her class claims, and stay her PAGA claims pending the outcome of arbitration. Plaintiff refused; she instead amended her complaint to drop the class claims, leaving only the PAGA claims that were asserted on behalf of herself and all other similarly aggrieved employees. After an unsuccessful mediation, Defendant moved to compel arbitration of Plaintiff’s PAGA claims. The trial court denied the motion. On appeal, Defendant argued that there is no distinction between the agent binding the principal to arbitration under a power of attorney in Kindred Nursing and an employee binding the State of California in a PAGA action.   The Second Appellate Division affirmed the Superior Court’s order denying Defendant’s motion to compel arbitration. The court reasoned that both Epic Systems and Kindred Nursing involved private actions between private parties asserting private rights. It did not involve an action between an employer and a representative of the state to recover civil penalties on the state’s behalf to benefit the general public. View "Wing v. Chico Healthcare & Wellness Centre" on Justia Law