Garden Fresh Rest. Corp. v. Superior Court of San Diego Cnty.
| Decision Date | 17 November 2014 |
| Docket Number | D066028 |
| Citation | 180 Cal.Rptr.3d 89,231 Cal.App.4th 678 |
| Court | California Court of Appeals Court of Appeals |
| Parties | GARDEN FRESH RESTAURANT CORPORATION, Petitioner, v. SUPERIOR COURT of San Diego County, Respondent, Alicia Moreno, Real Party in Interest. |
OPINION TEXT STARTS HERE
See 6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 499 et seq.
Petition for writ of mandate from an order of the Superior Court of San Diego County, Joel R. Wohlfeil, Judge. Petition granted. (San Diego County Super. Ct. No. 37–2013–00071988–CU–OE–CTL)
Morgan Lewis & Bockius, Dena Harandi and Melinda S. Riechert for Petitioner.
Blumenthal Nordrehaug & Bhowmik, Kyle R. Nordrehaug and Norman B. Blumenthal for Real Party in Interest.
No appearance for Respondent.
Real party in interest Alicia Moreno sued petitioner Garden Fresh Restaurant Corporation (Garden Fresh), her former employer, for claims related to a variety of alleged Labor Code violations. Moreno filed the action as a putative class action, and also pursued representative relief under the Private Attorney General Act of 2004 (PAGA) (Lab.Code, § 2698 et seq.).
Garden Fresh moved to compel arbitration of Moreno's claims, on an individual basis only, based on two arbitration agreements that Moreno signed during her tenure as an employee of Garden Fresh. Garden Fresh requested that the court dismiss Moreno's class and representative claims, arguing that the parties' arbitration agreements did not contemplate class- or representative-based arbitration. The trial court granted the motion to compel arbitration, but specifically left to the arbitrator to decide the question whether the arbitration agreements between the parties contemplated classwide and/or representative arbitration, thereby denying Garden Fresh's request that only Moreno's individual claims be sent to arbitration.
Garden Fresh filed a petition for a writ of mandate in this court, requesting that this court direct the trial court to vacate that portion of its order leaving to the arbitrator to determine whether the parties' arbitration agreements, which are silent on the issue, contemplated class and/or representative arbitration. Garden Fresh maintains that where an arbitration agreement is silent on the issue whether class and/or representative arbitration is available, the court, not the arbitrator, should determine whether the arbitration agreement contemplates bilateral arbitration 1 only, or rather, whether their arbitration agreement contemplates that class and/or representative claims may be pursued in arbitration.2
We issued an order to show cause, and now grant the petition.
Moreno was employed by Garden Fresh, in California, from June 2006 to June 2013. Moreno signed two arbitration agreements during her employment.
Moreno filed this lawsuit “on behalf of herself and all other similarly situated current and former employees, and on behalf of the State of California pursuant to the Private Attorney General Act of 2004.” In the complaint, Moreno alleged causes of action for unfair and unlawful competition, failure to pay overtime wages, failure to provide accurate itemized wage statements, and failure to provide all wages when due. Moreno also brought a representative claim pursuant to PAGA for penalties for Labor Code violations suffered by Moreno and other “aggrieved employees.”
After Moreno filed and served the complaint, counsel for Garden Fresh sent Moreno's attorney a copy of the arbitration agreements that Moreno had signed, and demanded that Moreno arbitrate her claims on an individual basis. Moreno declined to stipulate to binding arbitration of her claims on an individual basis.
A few months after demanding arbitration, Garden Fresh filed a petition in the trial court to compel arbitration. Garden Fresh requested that Moreno's claims be sent to arbitration on an individual basis only, stating, “Garden Fresh respectfully moves this Court for an order compelling arbitration of Plaintiff's individual claims, dismissing her class and representative claims (or, in the alternative, staying her PAGA claim), and staying this judicial proceedingpending the outcome of arbitration.”
In response to Garden Fresh's petition to compel bilateral arbitration, Moreno argued that the question whether arbitration should be handled on an individual, as opposed to on a class and/or representative basis, was a matter for the arbitrator, not the trial court, to decide.
The trial court ultimately granted Garden Fresh's petition to compel arbitration, but referred the entire matter to the arbitrator, leaving it to the arbitrator to decide whether the parties' agreements contemplate class and/or representative arbitration. The trial court stated:
Garden Fresh filed a petition for a writ of mandate in this court, seeking a peremptory writ of mandate directing the trial court to vacate that portion of its March 28, 2014 order leaving to the arbitrator to determine whether the parties had agreed to class and/or representative arbitration, and instead, requiring that the court determine, as a gateway matter, whether the parties had agreed to class or representative arbitration. We issued an order to show cause (OSC), and stated that we would deem Moreno's informal response to be a return to the OSC, absent any objection. Moreno has not objected. We now consider the petition.
The question that Garden Fresh's petition presents is: who decides whether an agreement to arbitrate disputes between the parties to the agreement authorizes class and/or representative arbitration when the contract is silent on the matter—the arbitrator or the court?
Arbitrators derive their powers from the parties' voluntary submission of disputes for resolution in a nonjudicial forum. Under the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA), a valid arbitration agreement arises from the parties' consent, and the primary purpose of the FAA is to ensure that agreements to arbitrate are enforced according to their terms. Arbitration agreements are construed to give effect to the parties' contractual rights and expectations. (Stolt–Nielsen, supra, 559 U.S. at p. 682, 130 S.Ct. 1758.) The parties may agree to limit the issues that they choose to arbitrate, may agree on rules under which an arbitration will proceed, and “may specify with whom they choose to arbitrate their disputes.” (Id. at p. 683, 130 S.Ct. 1758, italics omitted.) Thus, arbitration, as a matter of contract between the parties, is a way to resolve only those disputes that the parties have agreed to submit to arbitration. (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (First Options ).)
While federal policy favors arbitration agreements, an arbitrator has the power to decide an issue only if the parties have authorized the arbitrator to do so. Because parties frequently disagree as to whether a particular dispute is arbitrable, courts play a limited threshold role in determining “whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbitrability[.]’ ” (Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (Howsam ).)
“Questions of arbitrability” are limited to a narrow range of gateway issues. They may include, for example, “whether the parties are bound by a given arbitration clause” or “whether an arbitration clause in a concededly binding contract applies to a particular type of controversy.” (Howsam,supra, 537 U.S. at p. 84, 123 S.Ct. 588; see also Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (plurality opinion) (Bazzle ).) Courts generally presume that so-called “gateway disputes” are “ ‘for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.’ ” (Howsam,supra, at p. 83, 123 S.Ct. 588.) These matters are important enough that courts “hesitate to interpret silence or ambiguity” as grounds for giving an arbitrator the power to decide them, because “doing so might too often force unwilling parties to arbitrate a matter they reasonably would have thought a judge, not an arbitrator, would decide.” (First Options,supra, 514 U.S. at 945, 115 S.Ct. 1920.)
“[T]he law reverses the presumption,” with respect to what have been referred to as subsidiary questions. (First Options, supra, 514 U.S. at p. 945, 115 S.Ct. 1920.) Subsidiary questions “grow out of the dispute and bear on its final disposition.” (John Wiley & Sons, Inc. v. Livingston (1964) 376 U.S. 543, 557, 84 S.Ct. 909, 11 L.Ed.2d 898.) Subsidiary issues include, for example, issues related to “ ‘waiver, delay’ ” or “ ‘whether a condition precedent to arbitrability has been fulfilled.’ ” (Howsam,supra, 537 U.S. at pp. 84–85, 123 S.Ct. 588.) If the availability of class/representative arbitration is not a “question of arbitrability,” then it is presumptively for the arbitrator to resolve. (First Options, supra, at pp. 944–945, 115 S.Ct. 1920.) This is because once a court decides that the parties have agreed to resolve a particular dispute through arbitration, it follows that they would have agreed to have an arbitrator decide these subsidiary questions, in addition to the particular dispute, absent clear language to the contrary.
In Bazzle,supra, 539 U.S. at pages 452–453, 123 S.Ct. 2402, a plurality of the United States Supreme Court asserted that the availability of class arbitration is not a question of arbitrability because “it concerns neither the validity of the arbitration clause nor its applicability...
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