Universal Prot. Serv., L.P. v. Superior Court of San Diego Cnty.

Decision Date01 January 2015
Docket NumberD066919
Citation184 Cal.Rptr.3d 382,234 Cal.App.4th 1128
CourtCalifornia Court of Appeals Court of Appeals
PartiesUNIVERSAL PROTECTION SERVICE, L.P., Petitioner, v. The SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent, Floridalma Franco, Real Party in Interest.

OPINION TEXT STARTS HERE

See 6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 506.

Petition for writ of mandate from an order of the Superior Court of San Diego County, Earl H. Maas III, Judge. Petition denied.

Sheppard, Mullin, Richter & Hampton and Richard J. Simmons, Jason Wade Kearnaghan, Cassidy M. English, Michael T. Campbell, Los Angeles, for Petitioner.

The Dion–Kindem Law Firm and Peter R. Kindem, Woodland Hills, The Blanchard Law Group and Lonnie C. Blanchard, Los Angeles, Jeffrey D. Holmes for Real Party in Interest.

O'ROURKE, J.

Petitioner Universal Protection Service, L.P. (Universal) petitions for a writ of mandate and/or prohibition challenging the superior court's order granting real party in interest Floridalma Franco's demand to arbitrate her employment-related disputes with Universal and ruling the arbitrator would decide the arbitrability of Franco's class action claims. Universal contends the court legally erred in its ruling because the parties' arbitration agreement did not clearly and unmistakably submit arbitrability questions to the arbitrator, and thus it was for the superior court to decide whether the agreement authorized class and/or representative arbitration.

We conclude the court erred by granting Franco's petition in reliance on Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444, 123 S.Ct. 2402, 156 L.Ed.2d 414 (Bazzle ). Nevertheless, we agree with Franco that the parties' reference to American Arbitration Association (AAA) rules, which unambiguously state that the arbitrator is to decide whether the parties' arbitration agreement permits class arbitration, constitutes clear and unmistakable evidence of their intent that the arbitrator decide this issue, which is a threshold question of arbitrability. Because the trial court reached the correct conclusion, we deny the petition.

FACTUAL AND PROCEDURAL BACKGROUND

In 2008, Franco, then a Universal employee, signed an arbitration agreement providing that she and Universal agreed subject to some exceptions to arbitrate “any and all disputes or claims” between them, including disputes relating to their employment relationship and its termination, and disputes over wage and hour violations (the arbitration agreement). The arbitration agreement states that the arbitration is to be conducted “in accordance with the National Rules for the Resolution of Employment Disputes set forth by the [AAA].” 1

In March 2014, Franco on behalf of herself and others similarly situated filed a claim for arbitration with the AAA setting out 11 causes of action based on Universal's alleged violations of the Labor Code and wage orders for not paying its security guards wages for regular and overtime hours, not providing required meal and rest breaks, not reimbursing for employment related expenses, and not providing itemized wage statements. In part, Franco sought to recover civil penalties under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).

Universal responded to Franco's demand by filing a declaratory relief action in the San Diego Superior Court. It sought judicial declarations that (1) the court, not an arbitrator, decide whether class, collective or other representative arbitration is available under the arbitration agreement and (2) the arbitration agreement required Franco to arbitrate her claims on an individual basis only.

Franco petitioned to compel arbitration. She pointed out that AAA rules and supplementary rules empowered the arbitrator to determine the issues of arbitrability and his or her own jurisdiction, as well as rule on objections as to the scope of the arbitration agreement. Franco maintained that the parties' designation of those rules in the arbitration agreement demonstrated they agreed the arbitrability of Franco's class and PAGA claims was an issue for the arbitrator, precluding the court from deciding those issues. The motion was supported by the declaration of Franco's counsel, who averred in part that based on those rules, the parties “clearly agreed that the issue of the arbitrability of Plaintiff's class claims as well as the arbitrability of the PAGA claims is an issue for the arbitrator to decide.” 2

In opposition, Universal argued Franco had conceded that the superior court was to determine the ‘gateway question’ of whether Franco's claims could proceed on a class and/or representative basis in arbitration. (Italics omitted.) Relying in part on Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 123 S.Ct. 588, 154 L.Ed.2d 491, and Stolt–Nielsen SA v. AnimalFeeds International Corp. (2010) 559 U.S. 662, 130 S.Ct. 1758, 176 L.Ed.2d 605 (Stolt–Nielsen ), Universal argued she had not provided evidence the parties had clearly and unmistakably agreed to submit that threshold issue to an arbitrator; that the choice to use AAA rules was not evidence of an agreement to delegate class arbitrability questions to the arbitrator, and courts had rejected such an argument. Universal further argued the parties' arbitration agreement was strictly limited to claims between it and Franco, making no reference to class arbitration, and thus the court could only order the parties to individual arbitration. Finally, Universal argued that under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129, Franco's PAGA claim was not arbitrable.

Following a short hearing on the matter, the court granted Franco's petition to compel arbitration. Citing Garcia v. DIRECTV, Inc. (2004) 115 Cal.App.4th 297, 9 Cal.Rptr.3d 190 (Garcia ), it ruled that [t]he arbitrator shall decide the issue of whether the class action claims are arbitrable.”

Universal filed this petition for writ of mandate or prohibition seeking an immediate stay and requesting that this court issue an alternative writ directing the superior court to vacate its order, or show cause why it should not be ordered to do so, and on return of that writ issue a peremptory writ of mandate directing the court to enter a new order denying Franco's motion to compel arbitration.

We issued an order to show cause, stayed the trial court's order and the parties' arbitration, and deemed, absent objection, Franco's informal response a return to the petition. We now deny the petition.

DISCUSSION
I. Standard of Review

Code of Civil Procedure section 1281.2, governing petitions to compel arbitration, provides: “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, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for the revocation of the agreement.”

“The standard of review of an order compelling arbitration is substantial evidence, where the trial court's decision was based upon the resolution of disputed facts, or de novo where the facts are not in conflict.” (Fagelbaum & Heller LLP v. Smylie (2009) 174 Cal.App.4th 1351, 1360, 95 Cal.Rptr.3d 252, citing Hartnell Community College Dist. v. Superior Court (2004) 124 Cal.App.4th 1443, 22 Cal.Rptr.3d 410.) The trial court here did not resolve factual disputes, but based its decision on what it believed to be controlling U.S. Supreme Court authority. Furthermore, the parties did not present conflicting evidence, but based their arguments strictly on the language of arbitration agreement and the referenced AAA rules, the language of which is not in dispute. Under these circumstances, we determine the correctness of the court's decision, a legal question, de novo. (Accord, Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, 1425, 34 Cal.Rptr.3d 547 [appellate court employs de novo standard of review where court's ruling on motion to compel arbitration rests on a decision of law]; Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 707, 111 Cal.Rptr.3d 876 [de novo standard applies to order on petition to compel arbitration where there is no factual dispute as to the agreement's language or conflicting evidence to aid its interpretation].)

II. The Superior Court Erred by Granting Franco's Motion to Compel Arbitration In Reliance on Garcia and Bazzle

Here, the superior court granted Franco's motion to compel arbitration based solely on Garcia, supra, 115 Cal.App.4th 297, 9 Cal.Rptr.3d 190, which in turn held [t]he Supreme Court ha[d] spoken” in Bazzle, supra, 539 U.S. 444, 123 S.Ct. 2402 and “quite plainly mandates” that the arbitrator must decide in the first instance whether a particular arbitration agreement prohibits or permits class arbitrations. (Garcia, at pp. 298, 302, 9 Cal.Rptr.3d 190.)

This court and others have declined to rely on Bazzle as the conclusive answer to that question. The Supreme Court's decisions in Stolt–Nielsen, supra, 559 U.S. at p. 680, 130 S.Ct. 1758 and Oxford Health Plans LLC v. Sutter (2013) ––– U.S. ––––, 133 S.Ct. 2064, 2068, fn. 2, 186 L.Ed.2d 113 point out that Bazzle is a nonbinding plurality opinion, casting doubt on whether it should be accorded any deference. (See Garden Fresh Restaurant Corporation v. Superior Court (2014) 231 Cal.App.4th 678, 685, 180 Cal.Rptr.3d 89 (Garden Fresh ) [U.S. Supreme Court has not yet decided whether availability of class arbitration is a question for the court or for an arbitrator to decide]; Truly Nolen of America v. Superior Court (2012) 208 Cal.App.4th 487, 515, fn. 4, 145...

To continue reading

Request your trial
3 cases
  • Our Children's Earth Found. v. Cal. Air Res. Bd., A138830
    • United States
    • California Court of Appeals Court of Appeals
    • February 23, 2015
  • Our Children's Earth Found. v. Cal. Air Res. Bd., A138830
    • United States
    • California Court of Appeals Court of Appeals
    • February 23, 2015
    ...weight to be accorded the facts and policy considerations that support the regulation. Rather, we limit our review to a determination [184 Cal.Rptr.3d 382] of whether the [agency] reasonably interpreted its legislative mandate. [Citation.]” ( Western States Petrole u m Ass'n v. De p a r tme......
  • Our Children's Earth Found. v. Cal. Air Res. Bd.
    • United States
    • California Court of Appeals Court of Appeals
    • January 1, 2015
    ... ... A138830 Court of Appeal, First District, Division 4, ... 3d 366] San Francisco City and County Superior Court, Hon. Ernest H. Goldsmith. (San Francisco ... Edison Company, PG&E Corporation, San Diego Gas & Electric Company, Southern California Gas ... ...

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT