Garcia v. Superior Court of L.A. Cnty.
| Decision Date | 15 May 2015 |
| Docket Number | B257054 |
| Citation | 236 Cal.App.4th 1138,187 Cal.Rptr.3d 312 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Eduardo GARCIA, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent; Southern Counties Express, Inc., Real Party in Interest. |
Gilbert & Sackman, Joshua F. Young, Michael D. Weiner, Los Angeles, Sean M. Kramer for Petitioners.
No appearance for Respondent.
Larson & Gaston, Victor J. Consentino for Real Party in Interest.
Petitioners Eduardo Garcia, Garcia Transportation GP, and Luis Torres-Garzon seek relief from the April 25, 2014 order of respondent court (Michael P. Vicencia, Judge) granting the motion of real party in interest Southern Counties Express, Inc., to compel arbitration of Petitioners' wage and hour complaints to the Labor Commissioner.1 We grant the requested relief in part and remand to the trial court with directions.
Petitioners are truckdrivers (sometimes called owner-operators) who were engaged by Southern Counties Express, Inc. (Southern Counties), to haul shipping containers from the ports of Los Angeles and Long Beach to facilities throughout Southern California. When engaged by Southern Counties, and at 90-day intervals thereafter, each of the drivers signed an “Independent Contractor” agreement (consisting of 17 pages, with appendices); at less-frequent intervals they signed “Vehicle Lease” agreements (consisting of 12 pages). The independent contractor agreements provided that the contracting driver would use the specified truck to provide hauling services at Southern Counties's direction; the vehicle lease agreements provided that the contracting drivers would lease a specified truck from Southern Counties for that purpose. And (as required by federal regulations governing Southern Counties as an authorized interstate carrier), that Southern Counties will have “exclusive possession, use and control of the Equipment and shall assume complete responsibility for the operation thereof to the extent required by such regulation... .” (See 49 C.F.R. §§ 376.11, 376.12(c)(1).) Each of the agreements contained provisions requiring the parties to submit any disputes arising under the agreements to arbitration.
The arbitration clauses of the most recent agreements provided that “[a]ny dispute, claim or controversy arising out of or relating to this Agreement for the breach, termination, enforcement, interpretation, or validity thereof, including the applicability of Agreement to arbitrate, shall be determined by arbitration... .” They go on to provide that the arbitration shall take place before a single arbitrator in Los Angeles County, administered pursuant to the JAMS Streamlined Arbitration Rules & Procedures; that judgment may be entered on the award; that the arbitrator may allocate all or part of the costs of the arbitration (including arbitrator's fees and the prevailing party's reasonable attorney's fees); and that any claim brought by the independent contractor must be in his or her individual capacity and not as a class or representative proceeding.2
In March 2013, Petitioners filed administrative claims with the California Division of Labor Standards Enforcement (DLSE) alleging Southern Counties misclassified Petitioners as independent contractors rather than employees. Their claims sought administrative relief under Labor Code sections 98 through 98.8, to recover minimum-wage payments, reimbursements of improper deductions from compensation and statutory penalties. (Eduardo Garcia v. Southern Counties Express, Inc., case No. 05-55450 ADC; Luis Torres-Garzon v. Southern Counties Express, Inc., case No. 05-57718 LT.)3
Southern Counties petitioned respondent court to compel arbitration of the claims in these cases, and to stay the DLSE proceedings in each of them. (Southern Counties Express, Inc. v. Eduardo Garcia (Super. Ct. L.A. County, No. NS026531); Southern Counties Express, Inc. v. Luis Torres-Garzon (Super. Ct. L.A. County, No. NS026539).)4
The trial court (Michael P. Vicencia, Judge) considered documentary and testimonial evidence, and argument from the parties (including the Labor Commissioner on Petitioners' behalf), concerning Petitioners' claims that the arbitration provisions of their agreements are unconscionable, and therefore unenforceable. After two days of hearings, the court granted an order compelling arbitration under the JAMS Streamlined Arbitration Rules & Procedures.5 It found the witnesses from Southern Counties to be very credible, and Petitioners' testimony to be less so. It found that because Southern Counties had needed drivers, Petitioners' bargaining position was not inferior to that of Southern Counties. It found that because Petitioners had not sought to negotiate any term of their agreements with Southern Counties, there was no evidence that Southern Counties had refused them that opportunity, or that the agreements were presented to them on a take-it-or-leave-it basis. It found that because Petitioners had been required to sign renewed independent contractor agreements at 90-day intervals, they had ample opportunities to review their agreements and to obtain legal advice concerning them. Based on these conclusions, the court ruled that the parties' agreements were not procedurally unconscionable. Its ruling was grounded on only the procedural unconscionability issue; the court did not consider or rule upon whether the agreements were or were not substantively unconscionable.
By timely petition to this court, Petitioners Garcia and Luis Torres-Garzon seek a writ of mandate or other extraordinary relief compelling respondent court to vacate its order granting Southern Counties's petitions to compel arbitration, and to enter a new order denying the petitions to compel arbitration and to permit the administrative proceedings to continue before the DLSE. We requested opposition and issued an order to show cause. Southern Counties filed a return, to which Petitioners replied. We sought and received further briefing with respect to a number of issues, and we heard oral argument. We conclude that the order compelling arbitration must be reversed and the matter remanded to the trial court for consideration and determination of threshold issues concerning Southern Counties's right to arbitration.
Strong public policies favor enforcement of agreements to arbitrate disputes. Under the California Arbitration Act (Code Civ. Proc., § 1280 et seq. (CAA)), “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists... .” (Code Civ. Proc., § 1281.2.) Under that provision, the court shall order arbitration of any dispute that it determines is within the parties' arbitration agreement unless the right to compel arbitration has been waived or the agreement is otherwise unenforceable. (Code Civ. Proc., § 1281.2.) Under both the CAA and the Federal Arbitration Act (9 U.S.C. § 1 et seq. (FAA)), arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2 ; AT & T Mobility LLC v. Conception (2011) 563 U.S. 333, 131 S.Ct. 1740, 1748, 179 L.Ed.2d 742 ; Rebolledo v. Tilly's, Inc. (2014) 228 Cal.App.4th 900, 912, 175 Cal.Rptr.3d 612.)
With respect to agreements to which the FAA applies, the federal policy favoring arbitration preempts any state law impediments to the policy's fulfillment. If a state law interferes with the FAA's purpose of enforcing arbitration agreements according to their terms, the FAA preempts the state law provision, no matter how laudable the state law's objectives. (AT & T Mobility LLC v. Concep c ion, supra , 131 S.Ct. at p. 1753 ; Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384, 173 Cal.Rptr.3d 289, 327 P.3d 129.) Under the supremacy clause of the United States Constitution (art. VI, cl. 2 ), the FAA requires any conflicting state law to give way. (Nitro–Lift Techs., L.L.C. v. Howard (2012) ––– U.S. ––––, 133 S.Ct. 500, 504, 184 L.Ed.2d 328 ; Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983) 460 U.S. 1, 24–25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 [].)
Arbitration nevertheless is a matter of contract. No public policy favors requiring arbitration of issues that the parties have not agreed to arbitrate. (Rebolledo v. Tilly's, Inc., supra , 228 Cal.App.4th at p. 912, 175 Cal.Rptr.3d 612 ; Mendez v. Mid–Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 540–541, 163 Cal.Rptr.3d 80.) In ruling on a motion to compel arbitration, the court, guided by general principles of California law, must first determine whether the parties actually agreed to arbitrate the dispute. (Mendez v. Mid–Wilshire Health Care Center, supra, 220 Cal.App.4th at p. 541, 163 Cal.Rptr.3d 80.)
Code of Civil Procedure sections 1281.2 and 1290.2 provide for summary proceedings in the trial court to resolve petitions to compel arbitration, in which the trial court sits as a trier of fact, weighing documentary evidence and any oral testimony that the court may hear in its discretion. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, 64 Cal.Rptr.2d 843, 938 P.2d 903 ; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413, 58 Cal.Rptr.2d 875, 926 P.2d 1061.) In such proceedings the petitioner bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, while a party opposing the petition bears the...
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