Young v. Remx, Inc.

• Citation: 206 Cal.Rptr.3d 711,2 Cal.App.5th 630
• Decision Date: 26 July 2016
• Docket Number: A143786
• Court: California Court of Appeals
• Parties: Vanessa YOUNG, Plaintiff and Appellant, v. REMX, INC., et al., Defendants and Respondents.

2 Cal.App.5th 630

206 Cal.Rptr.3d 711

Vanessa YOUNG, Plaintiff and Appellant

v.REMX, INC., et al., Defendants and Respondents.

A143786

Court of Appeal, First District, Division 5, California.

Filed July 26, 2016

As Modified August 17, 2016

Setareh Law Group, Shaun Setareh, Tuvia Korobkin, and Farrah Grant, for Plaintiff and Appellant.

Seyfarth Shaw, Timothy L. Hix, Andrew M. McNaught, Daniel C. Whang, and Tamara Fisher, for Defendant and Respondent.

SIMONS

, J.

In this wage and hour lawsuit, plaintiff Vanessa Young appeals from the trial court's order compelling arbitration of her individual claims, dismissing her class claims, bifurcating her representative claim pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.

), and staying the PAGA claim pending completion of the arbitration on her individual claims. We conclude the order is nonappealable because we reject appellant's argument that the “death knell” doctrine applies in these circumstances. The appeal is dismissed.

BACKGROUND

Plaintiff's operative first amended complaint (complaint) alleges that, after her employment with defendants terminated, defendants failed to timely pay her all of her final wages. The complaint asserts, on behalf of plaintiff and a putative class, a cause of action for this failure under Labor Code sections 201

through 203. The complaint also asserts a representative PAGA claim seeking civil penalties on behalf of plaintiff and other aggrieved employees.¹

Defendants filed a motion to compel individual arbitration, dismiss plaintiff's class claims, and bifurcate and stay the PAGA claim. In support of the motion, defendants submitted an arbitration agreement signed by plaintiff. The arbitration agreement provided any disputes “arising out of or relating to my employment or the termination of my employment” will be submitted to arbitration. The agreement further provided “[a]ny such claims must be submitted on an individual basis only and I hereby waive the right to bring or join any type of collective or class claim in arbitration, in any court, or in any other forum.” Defendants conceded in their motion that under Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 173 Cal.Rptr.3d 289, 327 P.3d 129

, the arbitration agreement cannot require plaintiff to waive her representative PAGA claim, and therefore asked the court to bifurcate and stay that claim.

Plaintiff opposed the motion, arguing (1) the arbitration agreement only identifies a nonparty entity called RXOS, and therefore does not extend to disputes with defendants; (2) the agreement is unenforceable; and (3) the agreement is unconscionable. In reply, defendants noted the arbitration agreement, by its terms, applies to plaintiff and her “Employer.” Although Employer is not defined in the agreement, defendants argued it is undisputed that they were plaintiff's employer and, in any event, RXOS is a division of defendants. Defendants also argued the agreement was enforceable and not unconscionable.

The trial court granted defendants' motion. The order compelled arbitration of plaintiff's individual claim, dismissed the class claims, bifurcated the representative PAGA claim, and stayed the PAGA claim pending the completion of arbitration. This appeal followed.

DISCUSSION

“ ‘Orders granting motions to compel arbitration are generally not immediately appealable.’ ” (Miranda, supra, 241 Cal.App.4th at p. 200, 193 Cal.Rptr.3d 770

.) Plaintiff argues the appealed-from order is nonetheless directly appealable under the death knell doctrine. This doctrine “ ‘provides that an order which allows a plaintiff to pursue individual claims, but prevents the plaintiff from maintaining the claims as a class action, ... is immediately appealable because it “effectively r[ings] the death knell for the class claims.” ’ [Citations.] Appealability under the death knell doctrine requires ‘an order that (1) amounts to a de facto final judgment for absent plaintiffs, under circumstances where (2) the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.’ ” (Ibid. ) In Franco v. Athens Disposal Co., Inc. (2009) 171 Cal.App.4th 1277, 1288, 90 Cal.Rptr.3d 539, the Court of Appeal concluded that an order upholding a class arbitration waiver and compelling arbitration of individual claims constitutes the death knell of the class litigation.

Although the death knell doctrine is usually discussed in the context of class claims, both class claims and representative PAGA claims “are forms of representative actions, whereby one or more plaintiffs seek recovery on behalf of nonparties. [Citation.] In both types of action, the potential recovery is greater if the claim is brought as a class or representative action than it would be if the plaintiff sought only individual relief. [Citations.] In both, the represented nonparties are bound by any final judgment.” (Miranda, supra, 241 Cal.App.4th at pp. 200–201, 193 Cal.Rptr.3d 770

.) “The rationale underlying the death knell doctrine—‘ “that without the incentive of a possible group recovery the individual plaintiff may find it economically imprudent to pursue his lawsuit to a final judgment and then seek appellate review of an adverse class determination,” ’ thereby rendering the order ‘effectively immunized by circumstance from appellate review’ [citation]—applies equally to representative PAGA claims.” (Id. at p. 201, 193 Cal.Rptr.3d 770.)

We conclude plaintiff's appeal does not fall within the death knell doctrine. As an initial matter, in light of the remaining representative PAGA claim, it appears the order does not “ ‘amount[ ] to a de facto final judgment for absent plaintiffs.’ ” (Miranda, supra, 241 Cal.App.4th at p. 200, 193 Cal.Rptr.3d 770

.) Our Supreme Court has “emphasized that orders that only limit the scope of a class or the number of claims available to it are not similarly tantamount to dismissal and do not qualify for immediate appeal under the death knell doctrine; only an order that entirely terminates class claims is appealable.” (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 757–758, 122 Cal.Rptr.3d 153, 248 P.3d 681 (In re Baycol Cases ).) Although the only class claim has been dismissed, the representative PAGA claim remains and plaintiff does not contend there are any putative class members who are not also aggrieved employees for purposes of the PAGA claim. Accordingly, the order does not appear to constitute a de facto final judgment for absent plaintiffs—the putative class members/aggrieved employees under PAGA—because their PAGA claims remain pending.

In any event, because of the remaining PAGA claim, plaintiff has not established the second rationale for the death knell doctrine: that “ ‘the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.’ ” (Miranda, supra, at p. 200, 193 Cal.Rptr.3d 770

.) Munoz v. Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, 189 Cal.Rptr.3d 134 (Munoz ), is instructive. In Munoz, the trial court denied class certification in a lawsuit alleging class claims and a representative PAGA claim. (Id. at p. 294, 189 Cal.Rptr.3d 134.) The Court of Appeal found the continued presence of the PAGA claim precluded application of the death knell doctrine: “Given the potential for recovery of significant civil penalties if the PAGA claims are successful, as well as attorney fees and costs, plaintiffs have ample financial incentive to pursue the remaining representative claims under the PAGA and, thereafter, pursue their appeal from the trial court's order denying class certification. Denial of class certification where the PAGA claims remain in the trial court would not have the ‘legal effect’ of a final judgment.” (Id. at p. 311, 189 Cal.Rptr.3d 134.)²

Plaintiff argues Munoz

is distinguishable because she must arbitrate her individual claim before she can pursue her PAGA claim. The focus of the death knell doctrine is whether plaintiff has a sufficient incentive to proceed and here, as in Munoz, the PAGA claim provides that incentive. Plaintiff contends the arbitrator may rule against her on her individual claim and her “incentive to pursue PAGA claims [will be] exterminated if...