Martinez-Gonzalez v. Elkhorn Packing Co.

• Docket Number: Case No. 18-cv-05226-EMC
• Decision Date: 18 October 2022
• Citation: 635 F.Supp.3d 883
• Parties: Dario MARTINEZ-GONZALEZ, Plaintiff, v. ELKHORN PACKING CO., LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of California

635 F.Supp.3d 883

Dario MARTINEZ-GONZALEZ, Plaintiff, v. ELKHORN PACKING CO., LLC, et al., Defendants.

Case No. 18-cv-05226-EMC

United States District Court, N.D. California

Signed October 18, 2022

Ana Vicente de Castro, Josephine B. Weinberg, California Rural Legal Assistance, Inc., Salinas, CA, Karla A. Gilbride, Public Justice, P.C., Washington, DC, for Plaintiff.

Geoffrey F. Gega, Law Ofcs of Geoffrey F. Gega, Santa Ana, CA, Regina Silva, Atkinson Andelson Loya Ruud & Romo, La Jolla, CA, Kelly Christine Denham, Tyson and Mendes LLP, La Jolla, CA, Orlando James Arellano, Tyson Mendes LLP, Los Angeles, CA, for Defendant Elkhorn Packing Co., LLC.

Geoffrey F. Gega, Law Ofcs of Geoffrey F. Gega, Santa Ana, CA, Regina Silva, Atkinson Andelson Loya Ruud & Romo, La Jolla, CA, for Defendant D'Arrigo Bros. Co., of California.

ORDER GRANTING DEFENDANTS' POST-REMAND MOTION TO COMPEL ARBITRATION

Docket Nos. 24, 121

EDWARD M. CHEN, United States District Judge

Plaintiff Dario Martinez-Gonzalez sued Defendants Elkhorn Packing Co. ("Elkhorn") and D'Arrigo Bros. Co. of California ("D'Arrigo," and together with Elkhorn, "Defendants") for alleged labor violations. Defendants previously moved to compel arbitration. Docket No. 24 ("MTC"). After a bench trial, the Court denied Defendants' motion, concluding that the relevant arbitration agreements were invalid and unenforceable under the doctrines of economic duress and undue influence. Docket No. 67 ("Elkhorn I"). Defendants appealed. The Ninth Circuit reversed the Court's unenforceability conclusions and remanded to this Court "to determine whether [Plaintiff's] claims fall within the scope of the arbitration agreement." See Martinez-Gonzalez v. Elkhorn Packing Co. LLC, 25 F.4th 613, 629 (9th Cir. 2022) ("Elkhorn II").

Now pending is Defendants' post-remand, supplemental motion to compel arbitration. See MTC; Docket No. 121 ("Suppl. MTC"). For the following reasons, the Court GRANTS Defendants' motion to compel arbitration.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

The operative complaint alleges the following. Mr. Martinez-Gonzalez is an agricultural worker from Mexico who was recruited in Mexico by Elkhorn to work in fields operated by D'Arrigo in California and Arizona. Docket No. 13 ("FAC") ¶¶ 1-2, 17. He was employed as a seasonal laborer by Defendants under the H-2A visa program during the 2016, 2016-17, and 2017 lettuce harvesting seasons, under the terms of three separate job orders. Id. ¶¶ 26, 58, 76. Under the terms of the job orders and applicable federal regulations, Elkhorn was required to provide three meals a day to workers residing in employer-provided housing in which full kitchen facilities were not available for workers to prepare their own meals, as well as exercise time. Id. ¶¶ 21-23.

Mr. Martinez-Gonzalez alleges that during each of his three periods of employment, "Defendants violated federal and California law by failing to pay Plaintiff and other aggrieved employees for all hours worked, failing to pay required minimum wages and premium overtime pay, failing to provide meal and rest periods or compensation for missed meal and rest periods, and failing to pay waiting time penalties." Id. ¶ 1. "Defendants also breached the duty of care they owed to Plaintiff by providing meals to Plaintiff and . . . other workers working under the same job order(s) that were contaminated or spoiled and were not safe to eat." Id. In addition, on at least five occasions during the 2017 season, agents of Elkhorn entered Mr. Martinez-Gonzalez's Elkhorn-provided hotel room "without prior notice or permission," including once in June 2017 when an agent named "Lance yelled, physically intimidated Plaintiff by standing close to his face and threatened Plaintiff . . . with job suspension if Plaintiff complained about the unauthorized entry into Plaintiff's hotel room." Id. ¶¶ 104-05. Mr. Martinez-Gonzalez brings fourteen causes of action, including violations of the Fair Labor Standards Act, various provisions of the California Labor Code, the California Unfair Competition Law, the Private Attorneys General Act ("PAGA"), as well as breach of contract, negligence, and tortious intrusion upon seclusion. Id. ¶¶ 106-222.

B. The Arbitration Agreements

Defendants attach to their motion copies of identical Spanish-language arbitration agreements between Elkhorn and Mr. Martinez-Gonzalez that were signed on April 11, 2016, and March 28, 2017.¹ See Docket No. 24-1, Exhs. 1, 2. Also attached is an English version of the agreements. See id., Exh. 3 ("Agreements"). In relevant part, the agreements provide:

The Company [Elkhorn] and I [Mr. Martinez-Gonzalez] agree that all claims, disputes and controversies arising out of, relating to or in any way associated with my employment by the Company or the termination of that employment shall be submitted to final and binding arbitration pursuant to the terms of this agreement.

Agreements ¶ I. They further state:

To the extent permitted by law, the Company and I agree to waive any right to file any class or representative claims addressing wages or other terms or conditions of employment in any forum.

Id. ¶ III. Moreover:

This Agreement applies to any dispute involving the Company as well as any of its subsidiary or affiliated companies, successors and assigns, employees, officers and agents.

Id. ¶ XI. Finally, they read:

I HAVE READ THE FOREGOING ARBITRATION AGREEMENT AND UNDERSTAND ITS TERMS INCLUDING ITS WAIVER OF MY RIGHT TO A TRIAL IN A COURT OF LAW. I ACKNOWLEDGE THAT I HAVE BEEN GIVEN TIME TO REVIEW THIS AGREEMENT, TO GO OVER IT WITH AN ATTORNEY OF MY CHOICE AND THAT I HAVE THE RIGHT TO WITHDRAW FROM THIS AGREEMENT BY WRITTEN NOTICE TO THE COMPANY WITHIN 7 DAYS OF MY SIGNATURE.

Agreements ¶ XIV.

C. Procedural Background

1. Prior District Court Proceedings

Mr. Martinez-Gonzalez's original complaint was filed in the Superior Court of California on July 26, 2018. See Docket No. 1-2, Exh. A. Defendants removed the case to this Court on August 26, 2018, on the basis of diversity jurisdiction. See Docket No. 1. Mr. Martinez-Gonzalez then filed the operative first amended complaint on September 28, 2018. Docket No. 13. Defendants moved to compel arbitration on December 18, 2018. See MTC. Plaintiff opposed, arguing that he did not enter into an agreement to arbitrate future disputes with Elkhorn because he was under economic duress and subject to undue influence when signing the arbitration agreements. See Docket No. 28 at 3-8.

The Court deferred ruling on Defendants' motion to compel and set a trial regarding Plaintiff's affirmative defenses to the validity and enforceability of the arbitration agreements. Docket No. 38. On July 23, 2019, Plaintiff filed a Pretrial Conference Statement in which he indicated his intent to raise affirmative defenses of undue influence and economic duress at the trial. Docket No. 48. That same day, Plaintiff filed a trial brief developing his arguments and explaining the evidence in support of these two affirmative defenses. Docket No. 49.

On August 8, 2019, the parties filed a Joint Pretrial Conference Statement with the Court, in which Plaintiff set forth economic duress and undue influence as the only affirmative defenses he intended to raise at the trial. Docket No. 53. On September 16, 2019, the Court held a status conference with the parties to discuss the scope and plan for the upcoming trial; the parties discussed Plaintiff's economic duress and undue influence affirmative defenses, and there was no indication that Plaintiff sought to raise additional arguments with regards to the validity or enforceability of the arbitration agreements. See Docket No. 56.

The bench trial commenced on October 15, 2019. Plaintiff's counsel raised for the first time that Plaintiff sought to add an additional affirmative defense for "fraud in the factum" to their Opposition to Defendants Motion to Compel Arbitration "[b]ased on the evidence that has come to light through the depositions and today's testimony." See Docket No. 121-2 ("Silva Decl."), Exh. 6 ("Trial Transcript") at 178:6-14. To support this new affirmative defense, Plaintiff's counsel stated, "Plaintiff and the other workers were misled about the nature of what they were signing." Id. at 178:16-17. In response to the Court inquiry as to whether Plaintiff was seeking to amend Plaintiff's Opposition to Plaintiff's Motion to Compel Arbitration, Plaintiff's counsel responded and engaged in the following discussion with the Court as follows:

Our Opposition because, again, this is based on evidence that we were not aware of at the time we wrote the Opposition.

THE COURT: Well, you weren't aware of your clients' potential testimony about what they were told?

Ms. Gilbride: We had had conversation with him at that time, yes, and that his declaration, which was submitted in conjunction with the Opposition, reflect what he had told us at that point.

But in the course of the discovery, having his deposition taken, having more extended conversation, additional facts have come to light. Specifically, these references to seguro and that people were told the documents involved social security.

That's a fact that -- I can't personally say when it was first brought to our attention because there are multiple lawyers, but it certainly didn't come to my attention, and the significance didn't come to my attention until the course of preparing for this trial.

Id. at 179:2-20. After Defendants noted their objections, the Court ruled:

All right. I'm not going to allow any additional defense at this point, especially this is information that could have been obtained with reasonable diligence from -- this is not like something disclosed from the Defendants in a document that was hidden and then produced at the eleventh hour and therefore contains some new defense.

This defense is based on the client, your client's own testimony. And at this juncture, we've set this mini trial to hear two specific

...