Naveja v. Primerica, Inc.

• Decision Date: 14 May 2021
• Docket Number: No. 2:20-cv-01298-MCE-KJN,2:20-cv-01298-MCE-KJN
• Parties: MARIA NAVEJA, individually, and on behalf of other members of the general public similarly situated; Plaintiffs, v. PRIMERICA, INC., a Delaware corporation, et. al., Defendants.
• Court: U.S. District Court — Eastern District of California

MARIA NAVEJA, individually, and on behalf of other members of the general public similarly situated; Plaintiffs, v. PRIMERICA, INC., a Delaware corporation, et. al., Defendants.

No. 2:20-cv-01298-MCE-KJN

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

May 14, 2021

MEMORANDUM AND ORDER

By way of this action, Plaintiff Maria Naveja brings a class-action suit against Defendants Primerica, Inc., and its subsidiaries Primerica Financial Services, LLC, Primerica Client Services, and Primerica Life Insurance Company ("Defendants"). Plaintiff initially filed suit in Sacramento County Superior Court, whereupon Defendants timely removed to this Court. In response, Plaintiff moved to remand the action to state court. Defendants oppose Plaintiff's motion, and additionally move to compel arbitration and dismiss or stay these proceedings. For the reasons discussed infra, this Court DENIES Plaintiff's Motion to Remand, GRANTS Defendants' Motion to Compel Arbitration, and stays the Plaintiff's claims pending arbitration.¹

BACKGROUND

Plaintiff Maria Naveja and the class members she purports to represent were employed as exempt independent contractors with Defendants. As such, Plaintiffs were allegedly not paid certain wages and compensation they would have received if they were classified as employees. According to the Plaintiffs, the "Defendants had the authority to hire and terminate Plaintiff and other class members; to set work rules and conditions governing Plaintiff and the other class members' employment; and to supervise their daily employment activities." Complaint at 7, ECF No. 1-1. Therefore, Plaintiffs allege, "Defendants exercised sufficient authority over the terms and conditions of the plaintiff and the other class members' employment for them to be joint employers of Plaintiff and the other class members." Id. at 8.

Based on these and other similar allegations, Plaintiff brought a class action suit against Defendants in Sacramento County Superior Court alleging violations of eight separate California labor and employment statutes. Complaint, ECF No. 1-1. Defendants then removed the suit to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332 ("CAFA"), and further moved this Court to compel arbitration. Defs.' Mot. Remove, ECF No. 1; Defs.' Mot. Compel Arbitration, ECF No. 5. Defendants argue that Plaintiff agreed to submit the claims alleged in this lawsuit to binding arbitration.

Neither party disputes that the Plaintiff agreed to the "Basic Agreement," which is essentially an employment contract. Defs.' Reply, ECF No. 14. Section 15 of the Basic Agreement ("arbitration clause") states in relevant part:

[A]ny dispute between you and a Primerica Company (or any of their past or present officers, directors or employees) . . . will be settled solely through good faith negotiation . . . or, if that fails, binding arbitration. "Dispute" means any type of dispute in any way related to your relationship with a Primerica Company that under law may be submitted by agreement to binding arbitration, including allegations of breach of contract, personal or business injury or property damage, fraud and violation of federal, state or local statues, rules or regulations.

The arbitration will be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). If you do not want to use AAA, then you may select Judicial Arbitration and Mediation Services, Inc. ("JAMS"), or, if mutually agreed, another arbitration administrator.

Defs.' Mot. Compel Arbitration Ex. 2, ECF No. 5-1 (emphasis added).

In response, Plaintiff moved to remand these proceedings to state court and oppose the Defendants' Motion to Compel Arbitration. ECF Nos. 7, 11.

Before this Court can determine whether to compel binding arbitration, however, the Court must first have subject matter jurisdiction. Thus, the Court cannot address Defendants' Motion to Compel Arbitration until Plaintiff's Motion to Remand—which challenges that jurisdiction—has been adjudicated. If it finds that Defendants properly removed the instant action on jurisdictional grounds, the Court can then move onto the substantive motion made by Defendants to compel arbitration of the parties' dispute.

STANDARD

A. Motion to Remand

When a case "of which the district courts of the United States have original jurisdiction" is initially brought in state court, the defendant may remove it to federal court "embracing the place where such action is pending." 28 U.S.C. § 1441(a). There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331, and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court has federal question jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the United States." Id. § 1331. A district court has diversity jurisdiction "where the matter in controversy exceeds the sum or value of $75,000, . . . and is between citizens of different states, or citizens of a State and citizens or subjects of a foreign state . . . ." Id. § 1332(a)(1)-(2).

/// A defendant may remove any civil action from state court to federal district court if the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). "The party invoking the removal statute bears the burden of establishing federal jurisdiction." Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal citations omitted). "[I]f there is any doubt as to the right of removal in the first instance," the motion for remand must be granted. Id. Therefore, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to state court. 28 U.S.C. § 1447(c).

If the district court determines that removal was improper, then the court may also award the plaintiff costs and attorney fees accrued in response to the Defendants' removal. 28 U.S.C. § 1447(c). The court has broad discretion to award costs and fees whenever it finds that removal was wrong as a matter of law. Balcorta v. Twentieth-Century Fox Film Corp., 208 F.3d 1102, 1106 n.6 (9th Cir. 2000).

B. Compelling Arbitration

The Federal Arbitration Act ("FAA") governs the enforcement of arbitration agreements involving interstate commerce. 9 U.S.C. § 2. The FAA allows "a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in [the arbitration] agreement." 9 U.S.C. § 4. Valid arbitration agreements must be "rigorously enforced" given the strong federal policy in favor of enforcing arbitration agreements. Perry v. Thomas, 482 U.S. 483, 489-90 (1987) (citation omitted). To that end, the FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in the original).

The Supreme Court has repeatedly recognized the strong national policy favoring arbitration. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-25 (1991) (FAA's "purpose was .... to place arbitration agreements upon the same footing as other contracts," and recognizing a "liberal federal policy favoring arbitration agreements"); Shearson/Am. Express Inc. v. McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987) (FAA "establishes a 'federal policy favoring arbitration,' . . . requiring that we rigorously enforce agreements to arbitrate." (citations omitted)); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985) (federal policy of FAA is one which guarantees the enforcement of private contractual arrangements).

Given this policy, it is clear that a court is obligated to liberally interpret and enforce arbitration agreements and to do so "with a healthy regard for the federal policy favoring arbitration." Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983). Significantly, too, any doubts concerning arbitrability should be resolved in favor of arbitration. Mitsubishi Motors Corp., 473 U.S. at 624 n.13 (noting that the appellate court "properly resolved any doubts of arbitrability"); see also Hodsdon v. Bright House Networks, LLC, No. 1:12-cv-1580 AWI JLT, 2013 WL 1499486 at *2 (E.D. Cal. Apr. 11, 2013) ("Because there is a presumption in favor of arbitration, the Court is required to resolve any doubts concerning the scope of arbitrable issues in favor of arbitration.").

In determining whether to compel arbitration, the Court may not review the merits of the dispute. Rather, in deciding whether a dispute is subject to the arbitration agreement, a court must answer two questions: (1) "whether a valid agreement to arbitrate exists," and, if so, (2) "whether the agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The Supreme Court has also "recognized that parties can agree to arbitrate gateway questions of arbitrability, such as whether parties have agreed to arbitrate or whether their agreement covers a particular controversy. Rent-A-Center, West, Inc. v. Jackson,561 U.S. 63, 68-69 (2010) (internal quotations omitted). If the agreement to arbitrate contains such a delegation provision, the court must compel arbitration with respect to issues of arbitrability except to the extent there is a...