Shahla Bamossy vs. Bloomingdales, Inc.

Opposition

Cal. Super. - 4th Dist.July 21, 2017

OO 0 9 O N Un BA W N NN N N N N N N N ND mm e m e m e m p m e m e m e m e m c o NN O N Ln BAA W I N D = O O OV 0 NN O N PRE W N = O THE GRAVES FIRM ALLEN GRAVES (SB#204580) allen @gravesfirm.com JACQUELINE TREU (SB#247927) jacqueline @ gravesfirm.com JENNY YU (SB#253033) jennyyu @gravesfirm.com 122 N. Baldwin Ave., Main Floor Sierra Madre, CA 91024 Telephone: (626) 240-0575 Facsimile: (626) 737-7013 Attorneys for Plaintiff Shahla Bamossy ELECTRONICALLY FILED Superior Court of California, County of Orange 0312/2018 at 03:12:00 PM Clerk of the Superior Court By Olga Lopez, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE Shahla Bamossy, an individual, in her individual and representative capacity, Plaintiff, Vv. Bloomingdales, Inc., and DOES 1 through 10, inclusive, Defendants. Case No. 30-2017-00933266-CU-OE-CXC OPPOSITION TO MOTION TO COMPEL ARBITRATION Date: ~~ March 23, 2018 Time: 10:00 a.m. Dept: CX105 Judge: Hon. Randall J. Sherman OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo TABLE OF CONTENTS I. INTRODUCTION.....ccctitiiitiitiectiesttetee teeters beets eben 5 II. PAGA CLAIMS MAY NOT BE COMPELLED TO ARBITRATION.............c...... 6 III. PLAINTIFF ASSERTS ONLY PAGA CLAIMS ....ccooiiiiiiiienieeeeceeeeeeieeiens 7 IV. ARBITRATION WOULD VIOLATE ISKANIAN ......coccovitiitiniiniineeneeneesieesieeieens 9 A. PAGA Claims May Not Be Split into "Arbitrable" Components..............c..cc....... 10 B. Arbitration Would Improperly Strip the State of its Enforcement Rights.............. 11 V. SECTION 203 PENALTIES ARE RECOVERABLE UNDER PAGA ................. 12 A. The Statutory Language Specifically Authorizes a PAGA Action...........ccccceeueene 13 B. A Private Attorney General Has the Same Section 203 Standing as the LWDA... 14 1. The PAGA Plaintiff Stands in the Shoes of the State...........cccoceeveervierueennnen. 14 2. The State Has Standing to Collect Section 203 Penalties..........c.c.cceveeerueenneenne 14 3. The Legislative History Supports Private Attorney General Enforcement ....... 17 C. Labor Code §256 Independently Authorizes the Exact Same Penalty .................. 17 VI. THIS MOTION CANNOT ADDRESS ALLEGED IMPROPER REMEDIES ..... 18 YI, CONCLUSTON wu oun mimasis sos sss sows ss mes. osm sss ssi 0080 ws ais sos ss ems ss 19 3 OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo TABLE OF AUTHORITIES CASES Amalgamated Transit Union, Local 1756, ALF-CIO v. Superior Court, 46 Cal. 4th 993 (2009) ...oooeeieeeeeeeeeeeeeeeeeeeeeeeeeee e 11 Arias v. Superior Court, 46 Cal. 4th 969, 980-981 (2009) ...ccoeeiieereeeeeeee ieee eee ee e e ee 6, 14 Bradstreet v. Wong, 161 Cal. App. ATH TAL CRO nines sooinsinsnsinn session ssa 58 5586s is 50 15 Department of Industrial Relations v. UI Video Stores, Inc., S55 Cal. App. 4th 1084... sees sates 15 Esparza v. KS Industries, LP, 13 Cal. App. Sth 1228 (2017) eeeeeieeieeeie ters seers ee 16 Hernandez v. Ross Stores, Inc., 7 Cal. App. Sth 171 (2016) .eeeeeieeiieeieeeie cease eee ee s ers sees ee 10 Iskanian v. CLS Transportation Los Angeles, LLC, SATA]: QI SR: COTE 000.00 000000 0508.0 50, SAAS passim Lawson v. ZB, N.A., 18 Cal. App. Sth 705 (2017) eevee cease eters seers sees ee 16 Millan v. Restaurant Enterprises Group, Inc., 14 Cal. App. 4th 477 (1993) neice eee eects steers sae sees aee ee 15 Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007) eerie eects eects eerie eee essere eas 14 Perry v. Robertson, 200 Cal. App. 30 358 (OBB «sus sommnsres.can sen somomansmss ssn somes es 5 550. 5008850057555.630 560 RUEA555 KE 8 Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425 (9th Cir. 2015) oii cece eee eee eee essere eee eens 11 Velasco v. Mis Amigos Meat Mkt., Inc., 2013 U.S. Dist. LEXIS 15253327 (E.D. Cal. 2013) ..oooooiviiiieiieeeeeeeeeeeeeeeee. 18 Williams v. Superior Court, 237 Cal. App. 4th 642 (2015) weeeeeieiieie eee eee etree severe 10 8 OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo TABLE OF AUTHORITIES (CONTINUED) STATUTES Cal. Civ. Code S168 ......cceeeeiieiie ceases eres e eats setae ste e sete ense ee ssae ease e esas eens 6 Cal. Civ. Code §3513 oii eters eee eesti estes sateen eee saae ease e esas eens 6 Cal. CiV. Proc. Code S382 ooo ieee eee eee eee eee e eee e eee ve ates ee ee eeees 14 Cal. Lab. Code §90.5 on s eaten ras 17 Cal. Lab. COE S96 cove eee eee eee eee eee teeta ee eee eters 13 Cal. Lab. Code S201 ovens e e eee eee eee tetra ee ae tebe passim Cal. Lab. COE S202... eee eee eee eee eee eee ee teste ease aera aaa passim Cal. Lab. Code §203 oui eee eee eee eee eater ease aera aaa passim Cal. Lab. Code S256 overeat eee eater eee aaa 10, 17, 18 Cal. Lab. Code §2699 ......eiiiiieieeeeeeee eee eee ee e e e e eee ae aera passim 4- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo I. INTRODUCTION California law is clear that claims brought pursuant to the Private Attorney General Act (“PAGA”) may not be compelled to arbitration. Here, Defendant admits that every single cause of action in the complaint describes a PAGA claim with regard to the merits. But the company contends that the one of the remedies associated with Plaintiff’s Fourth Cause of Action (penalties under Labor Code §203) cannot be recovered under PAGA. On that basis, Defendant urges that an entire cause of action must be sent to arbitration and the merits of nearly the entire case determined there. No published authority has ever done what Defendant is asking here, and there are multiple reasons why this Court should not make the new law that Defendant seeks. First, the requested arbitration would violate the California Supreme Court authority in Iskanian that forbids mandatory arbitration of PAGA claims. Plaintiff’s First Amended Complaint states repeatedly that it is limited to PAGA and the remedies recoverable thereunder. Even the request for Section 203 penalties only seeks monies to the extent they can be recovered “pursuant to Labor Code §2699(a).” FAC 10:5-6. Second, Defendant’s basic legal premise is wrong: Labor Code section 2699.5 explicitly lists Section 203 penalties as being recoverable under PAGA. Even if the statute were not clear (which it is), controlling law provides that a PAGA plaintiff stands in the shoes of the Labor Commissioner. Because the Labor Commissioner can recover Section 203 penalties, a PAGA plaintiff must have the same ability on behalf of the State. Third, arbitration cannot be based on a single remedy. Even if Section 203 penalties were not subject to PAGA (which they are), a PAGA cause of action may not be split into “individual” and “representative” components in order to force arbitration. If Section 203 penalties cannot be recovered under PAGA, the correct response would be to strike the requested relief or allow Plaintiff to amend to address the issue. This motion fails because Defendant is wrong on the law, and even if it were right, the result should be a change in the complaint, not a “gotcha” arbitration that a reasonable litigant would never expect. _5- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo II. PAGA CLAIMS MAY NOT BE COMPELLED TO ARBITRATION Our Legislature enacted PAGA to address the shortage of government resources available to enforce the California Labor Code. Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348, 379 (2014); Arias v. Superior Court, 46 Cal. 4th 969, 980-981 (2009). PAGA provides that employees may bring representative actions on behalf of the State “for the purpose of seeking statutory penalties for Labor Code violations.” Iskanian, 59 Cal. 4th at 381. Such actions are “fundamentally a law enforcement action designed to protect the public.” Id. Because of the vital function that PAGA serves in enforcement of California’s employment laws, the California Supreme Court has determined that the state’s right to recover penalties under PAGA may not be waived. Iskanian, 59 Cal. 4th at 383. As observed by the California Supreme Court, our statutes prohibit parties from either agreeing to exempt a party from responsibility for violating the law or agreeing to waive laws that have been established for a public reason. Id. at 382-383; Cal. Civ. Code §8§1668, 3513. “The PAGA was clearly established for a public reason, and agreements requiring the waiver of PAGA rights would harm the state’s interests in enforcing the Labor Code.” Id. at 383. As a result, the established rule in California is that PAGA claims may not be compelled to arbitration, even where the agreement contains a representative action waiver. See Mtn. at 19:10-13; Iskanian, 59 Cal. 4th at 384. There is no dispute over this point, and Defendant itself recognizes this controlling law. Mtn. at 19:9-17. Compelling PAGA claims to arbitration would effect a waiver of the state’s PAGA interest and is contrary to public policy. Iskanian, 59 Cal. 4th at 383-384. Where, as here, an arbitration agreement arising out of the employment context compels the waiver of representative claims under the PAGA, it is unenforceable. Id. at 384. Here, Plaintiff seeks to recover PAGA remedies only. See FAC {3 (“The relief Plaintiff seeks in this Complaint is limited to relief recoverable under the California Private Attorney General Act”). These claims cannot be compelled to arbitration. -6- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo III. PLAINTIFF ASSERTS ONLY PAGA CLAIMS “The relief Plaintiff seeks in this Complaint is limited to relief recoverable under the California Private Attorney General Act (PAGA).” -First Amended Complaint {3 Defendant does not deny that every cause of action asserted by Plaintiff - including Plaintiff’s Fourth Cause of Action for violation of Labor Code Sections 201 and 202 - is properly the subject of a PAGA action. Mtn. at 19:9-17. The company’s entire motion is not based on the Fourth Cause of Action, but instead on the fact that Plaintiff’s prayer for relief with regard to that cause of action includes a two-line reference to Labor Code Section 203. Mtn. at 20:5-6. In other words, Defendant admits that PAGA claims cannot be compelled to arbitration and does not dispute the fact that every single cause of action in the complaint articulates a valid PAGA claim. The entirety of Defendant’s motion is a request that this Court separate out one portion of the prayer for relief, treat that prayer as an individual claim of Plaintiff’s, and compel arbitration with regard to that one prayer for relief while the rest of the case is stayed. Mtn. at p. 19-20. The situation here is completely different from a complaint where some causes of action are properly pled under PAGA and other causes of action are individual claims subject to arbitration. In this case, there are no non-PAGA causes of action. Defendant’s motion forces the Court to answer the question: can a defendant use a single line of a prayer for relief as a backdoor to effectively force arbitration of an entire cause of action, despite the fact that the cause of action itself makes no individual claim and controlling California Supreme Court authority forbids arbitration of the valid PAGA claim? There are multiple reasons that the answer must be no. First of all, as described in more detail below, Defendant’s basic premise regarding Section 203 is wrong. Labor Code §2699.5 specifically lists Section 203 as being subject to PAGA, and the company’s entire motion fails because this Court is bound to respect the plain language of the statute. te OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo Even if the Court somehow rewrote Section 2699.5, however, the plain language of the Complaint would still be fatal to Defendant’s argument: e Paragraph three of Plaintiff’s First Amended Complaint explicitly states that “The relief Plaintiff seeks in this Complaint is limited to relief recoverable under the California Private Attorney General Act (PAGA).” FAC {3. e The First Amended Complaint also explicitly states that every cause of action is brought as a PAGA action. See FAC 3, 14. e The First Amended Complaint goes on to state specifically that Plaintiff does not seek Section 203 penalties in any individual capacity, but instead seeks “the civil penalties described in Labor Code §203 . . . pursuant to Labor Code §2699(a).” FAC, 10:5-6 (emphasis supplied). That third point is critical. Defendant incorrectly claims that Plaintiff somehow individually seeks Section 203 penalties. That claim is precluded by the actual language of the Complaint. Rather than seeking Section 203 penalties directly, the Complaint only seeks to recover penalties “pursuant to Labor Code §2699(a).” FAC, 10:5-6. If Section 203 penalties are not available under Section 2699(a), then the Complaint, by its own terms, does not seek them. The Complaint is explicitly and repeatedly clear: there are no individual claims. This is only a PAGA action. Because Defendant’s motion is based exclusively on a single prayer for relief, the repeated explicit statements in the complaint limiting the claims to PAGA relief is dispositive. The purpose of a complaint is to give a defendant notice of the claims at issue in the litigation. See Perry, 201 Cal. App. 3d at 339 n.3 (noting the policy of ensuring the pleading provides fair notice of claims to the defendant). To the extent this Court finds Section 203 penalties cannot be recovered under PAGA (which would be error), Plaintiff has explicitly given notice in the First Amended Complaint that she is not seeking any such penalty. Defendant asks this Court to completely ignore paragraph three of the First Amended Complaint and effectively hold that any mention of Section 203 in a complaint creates a sort of “arbitration trap,” wherein a plaintiff who relied on the plain language of _8- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo the Labor Code and never intended to describe an arbitrable claim is nonetheless sent unwillingly to arbitration. That trick can’t work. At best, Defendant’s argument alleges a conflict between paragraph three of the FAC and the two-line reference to Section 203 in the Prayer for Relief. The clear statement limiting the suit to PAGA must govern. Enforcement of Paragraph Three is consistent with the basic rule that a plaintiff is the master of his or her own complaint. It is not the role of courts to invent claims that a party never sought to litigate and force that party to contest those claims in a forum that he or she never wanted. Plaintiff has pled a PAGA-only complaint and Defendant’s motion amounts to a failed attempt at “gotcha” litigation. Section 203 penalties are specifically listed as being recoverable under PAGA in Labor Code 2699.5 and California trial courts confronting this issue routinely hold that Section 203 penalties are recoverable under PAGA. See Plaintiff’s RIN Exh. 1; Treu Decl. {2.! Even if this Court somehow concludes that Section 203 penalties are unavailable under PAGA, the fact remains that the First Amended Complaint clearly gives notice of a PAGA-only lawsuit. Defendant might try to argue that the Section 203 penalties should be stricken, but it cannot reasonably argue that Plaintiff gave notice of a non-PAGA claim subject to arbitration. IV. ARBITRATION WOULD VIOLATE ISKANIAN “Requiring the waiver of PAGA rights would harm the state’s interests in enforcing the Labor Code.” Iskanian, 59 Cal. 4th at 383 (2014). Defendant’s effort to treat a single element of relief from one cause of action as a separate arbitrable claim misunderstands the basic nature of a PAGA claim and conflicts with the State’s right to litigate its claims. ! Plaintiff is mindful that trial court opinions may not be cited as authority, and Plaintiff does not offer the trial court opinion as authority with regard to the proper treatment of Section 203 penalties. Instead, Plaintiff offers the trial court opinion on this issue to show that inclusion of a claim for relief under Labor Code Section 203 is completely consistent with an intent to draft a PAGA-only complaint. 9. OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo A. PAGA Claims May Not Be Split into ‘“‘Arbitrable” Components Besides being incompatible with the plain language of the controlling statute and the Complaint, Defendant’s argument that a discrete portion of Plaintiff’s PAGA claim for violation of Labor Code Sections 201-202 may be split into an “individual” portion is directly prohibited by controlling case law. “[A] single representative PAGA claim cannot be split into an arbitrable individual claim and a nonarbitrable representative claim.” Hernandez v. Ross Stores, Inc., 7 Cal. App. 5th 171, 178 (2016), citing to Williams v. Superior Court, 237 Cal. App. 4th 642, 649 (2015). In Hernandez and Williams, the defendants argued that the issue of whether the employee plaintiff was an “aggrieved party” - that is, whether the plaintiff personally suffered the Labor Code violations alleged - was an individual claim and thus subject to the arbitration agreement. Hernandez, 7 Cal. App. 5th at 174-175; Williams, 237 Cal. App. 4th at 645. The Hernandez and Williams courts disagreed, holding that the defendants could not force the plaintiffs to split their claims into “individual” and “representative” portions. Hernandez, 7 Cal. App. 5th at 178; Williams, 237 Cal. App. 4th at 649. The PAGA claims asserted, as a whole, were simply nonarbitrable. A PAGA claim “is not a dispute between an employer and an employee arising out of their contractual relationship. It is a dispute between an employer and the state.” Hernandez, 7 Cal. App. at 177, citing Iskanian, 59 Cal. 4th at 384. As a result, a PAGA claim “does not involve an individual claim” whatsoever - as there is no dispute between employee and employer, the claim cannot be subject to an arbitration agreement. Defendant’s improper attempt to split the PAGA claims into “arbitrable” components must fail. Besides failing as a matter of law, the fractured procedure proposed by Defendant also fails on a practical level. For example, the Fourth Cause of Action will continue to support claims for penalties under Labor Code §256 (“The Labor Commissioner shall impose a civil penalty . . . as waiting time under the terms of Section 203”) and/or §2699(f), as well as attorney’s fees, even if Defendant’s motion is granted. How will that work? Will the merits of the Fourth Cause of Action be litigated or arbitrated? -10- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo If all that Defendant seeks to arbitrate is a single remedy, the logical approach would be to complete litigation with regard to liability and then hold arbitration with regard to the issue of remedies. By placing the cart before the horse, Defendant hopes to backdoor its way into an arbitration on the merits, despite the parties’ universal agreement that all of the merits questions in this action are PAGA claims. B. Arbitration Would Improperly Strip the State of its Enforcement Rights Iskanian forbids arbitration of PAGA claims because the employee does not own the claims at issue in a PAGA case. Iskanian, 59 Cal. 4th at 382 (“The government entity on whose behalf the plaintiff files suit is always the real party in interest in the suit); Amalgamated Transit Union, Local 1756, ALF-CIO v. Superior Court, 46 Cal. 4th 993, 1003 (2009) (PAGA “does not create property rights or any other substantive rights .. . the employee does not own an assignable interest”). Instead of being a private action, a PAGA case is fundamentally a law enforcement action to protect the public. Iskanian, 59 Cal. 4th at 381. Because the State’s law enforcement capacity is at issue, California courts examine PAGA arbitration in terms of the impact that it has on the state’s ability to enforce its own laws. Id. at 388-389. The Iskanian court concluded that mandatory arbitration of a PAGA claim would impermissibly curtail the state’s ability to effect law enforcement through PAGA. Id.; Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 430 (9th Cir. 2015) (permitting waiver of PAGA actions would “disable one of the primary mechanisms for enforcing the Labor Code”). In this case, ordering any arbitration would have the practical effect of requiring an arbitrator, rather than this Court, to resolve all of the wage claims in the PAGA action. Even if the arbitration were somehow limited to just the Section 203 penalties, an arbitrator would still need to resolve the entirety of Plaintiff’s wage claim to determine whether or not those penalties should be awarded. Here, the Section 203 penalties are related to the Fourth Cause of Action alleging that Defendant violated Labor Code §§201-202 by failing to pay all wages due at termination. But the claim in the Fourth Cause of Action, that unpaid wages were due at termination, is wholly dependent on the 11- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo claims in the Second Cause of Action that employees were required to work off the clock answering and returning phone calls. Therefore, before the Fourth Cause of Action can be resolved, the arbitrator would need to determine the merits of the Second Cause of Action, because unpaid wages can only be due at termination only if there were unpaid wages earned in the first place. Further, once the arbitrator has answered the question of whether or not there were unpaid wages, he or she will also necessarily resolve the Third, Fifth and Sixth Causes of Action, all of which likewise depend on the existence of off- the-clock work creating unpaid wages. Although Defendant claims it is seeking arbitration with regard to just one potential remedy, the truth is that the arbitration sought by the company will resolve five causes of action - nearly the entire lawsuit. No authority has ever suggested that an employer can use this kind of maneuver as a “backdoor” to evade the holding of Iskanian and deprive the State of its ability to have its appointed representative litigate the State’s claims in state court. Iskanian held that an employee cannot waive the states right to litigate in state court even if he or she deliberately executes an explicit agreement to arbitrate all PAGA claims. Iskanian, 59 Cal. 4th at 384. If an employee cannot waive the State’s right through an explicit written agreement, how can she give up those rights by including a prayer for relief under Labor Code §203 in a PAGA claim? V. SECTION 203 PENALTIES ARE RECOVERABLE UNDER PAGA “Any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency . . .may, as an alternative, be recovered through a civil action brought by an aggrieved employee.” -Labor Code §2699(a). The foregoing sections explain two independent bases on which Defendant’s motion fails. First, the plain language of the complaint describes a PAGA-only action and arbitration of that claim would violate Iskanian. Second, Defendant’s plan to sever a single remedy from a cause of action would violate Hernandez and basic judicial management. But there is a third reason that Defendant’s claim fails: the company’s suggestion that Section 203 penalties cannot be collected under PAGA is false. 12- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo A. The Statutory Language Specifically Authorizes a PAGA Action In analyzing a statute, “we must look first to the words of the statute, because they generally provide the most reliable indicator of legislative intent.” Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094, 1103 (2007). The PAGA states: Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee. Cal. Lab. Code §2699(a). This language provides that, where the Labor and Workforce Development Agency or its subordinate units are empowered to collect a penalty for violation of the Labor Code, an employee plaintiff may act as a Private Attorney General and file suit to recover such penalty. The text of the PAGA explicitly includes Labor Code §§201-203 as the enumerated statutes that may be enforced through the mechanism of PAGA. Specifically, Labor Code §2699.5 provides a list of Labor Code sections for which an employee may serve as a Private Attorney General. The list includes more than one hundred Labor Code sections, and Sections 201-203 are prominently among them: “The provisions of subdivision (a) of Section 2699.3 apply to any alleged violation of the following provisions: subdivision (k) of Section 96, Sections 98.6, 201, 201.3, 201.5, 201.7, 202, 203. . .” It is hard to be clearer than that. Specifically, and on its face, PAGA provides that a plaintiff may enforce Section 203 through PAGA by collecting the penalties stated in Section 203. For its part, Defendant points to dicta from Iskanian in which the court examines the difference between civil penalties and statutory penalties and gives Section 203 as an example of a statutory penalty (which Defendant argues is outside the reach of PAGA). Mtn. at 19:22-25. This argument fails because the issue was not before the court in Iskanian, and the opinion never addresses the fact that Section 203 penalties are explicitly listed as recoverable under PAGA in the statute. The court has developed a -13- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo taxonomy of civil and statutory penalties that may be useful when the legislature has not expressed a specific intention, but cannot be a substitute for reading the plain written language of the statute. The failure of Iskanian and the other authorities cited by Defendant to address this issue does not represent an oversight, but rather reflects the fact that those courts were not considering the core question at issue here. Faced with the actual language of Section 2699.5, a court deciding this issue on the merits is obliged to follow the explicit instructions of the legislature. B. A Private Attorney General Has the Same Section 203 Standing as the LWDA 1. The PAGA Plaintiff Stands in the Shoes of the State A Private Attorney General can collect Section 203 penalties because the LWDA has authority to collect them. In Arias, 46 Cal. 4th 969, the California Supreme Court ruled that a plaintiff who brings a representative action under PAGA does not need to meet the class certification requirements of CCP §382. Arias reiterated the fact that a PAGA plaintiff stands in the place of the LWDA with the right to collect all penalties that agency could collect: “the employee plaintiff represents the same legal right of interest as state labor law enforcement agencies - namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency.” Id. (emphasis supplied); Iskanian, 59 Cal. 4th at 380 (accord). Importantly, a PAGA litigant’s status as ‘the proxy or agent’ of the state is not merely semantic; it reflects a PAGA litigant’s substantive role in enforcing our labor laws on behalf of state law enforcement agencies. Iskanian, 59 Cal. 4th at 388. By the plain language set forth by the California Supreme Court, an employee suing under PAGA is deputized to seek the penalties available to the Labor Workforce Development Agency on behalf of the state. 2. The State Has Standing to Collect Section 203 Penalties The rule set forth in Arias and Iskanian is important because the State has always had the right to enforce every Labor Code provision, including Sections 201 through 203. See e.g. Labor Code §95 (“The division may enforce the provisions of this code and all -14- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo labor laws of the state”); Millan v. Restaurant Enterprises Group, Inc., 14 Cal. App. 4th 477, 486 (1993) (noting that the DLSE is “entrusted with responsibility for enforcing” Section 203). As a result, the state has the right to bring suit to collect such penalties. Bradstreet v. Wong, 161 Cal. App. 4th 1440, 1445 (2008) (lawsuit filed by Labor Commissioner against employer sought waiting time penalties for failure to pay wages due at the time of termination); Department of Industrial Relations v. UI Video Stores, Inc., 55 Cal. App. 4th 1084, 1096 (Department of Labor Standards Enforcement filed complaint to recover penalty wages pursuant to Section 203) (1997). If the State has the power to collect Section 203 penalties, and as a Private Attorney General Plaintiff now stands in the place of the State, how can Defendant argue that Plaintiff lacks the State’s authority to enforce Labor Code §§201 through 203? Defendant gets it wrong because Section 203 is part of a small group of penalties that, prior to PAGA, were collectible by both the LWDA and by individual employees. Defendant cites to cases that distinguish between civil penalties that can be collected by the State and statutory penalties that could be collected directly by employees. Defendant errs because it concludes that the distinction between the two types of penalties must mean that the PAGA somehow stripped the State and its designated Private Attorney General of their pre-PAGA ability to collect penalties. Of course, this is wrong. The entire point of PAGA was to expand enforcement, not restrict it. The authority on which Defendant relies does examine the difference between penalties that could be collected by individuals and penalties that could be collected by the state in the pre-PAGA world. Those authorities do not, however, support Defendant’s odd position that the Labor Commissioner is somehow without authority to enforce the labor laws of this state. Defendant cites language from Iskanian that states that penalties for which employees have a private right of action can be distinguished from penalties which, prior to the PAGA, the Labor Commissioner alone had the authority to collect. Mtn. at 19:22-25. This is an unremarkable passage. Of course, employees had a private right of action to recover penalties prior to PAGA, and of course -15- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo PAGA provided additional means by which employees could enforce the Labor Code with additional penalties. But nowhere in Iskanian does the court limit the enforcement power of the State by holding that the State is somehow barred from collecting the penalties described by Section 203. That would be an absurd reading of the case. Defendant’s contention that non-arbitrability is limited to claims that “can only be brought by the state or its representatives” is similarly inapposite. Only the state or its representatives may bring a PAGA action. And while Defendant contends that only claims for penalties that “largely go to state coffers” are non-arbitrable, Defendant does not identify in any way how this applies to Section 203 penalties. Defendant has provided no authority to support its apparent contention that 75% of any recovered Section 203 penalties, like all PAGA penalties, will not be provided to the LWDA. Iskanian simply does not support Defendant’s position. Thus, Defendant’s citation to Lawson, 18 Cal. App. Sth at 721 and Esparza v. KS Industries, LP, 13 Cal. App. 5th 1228, 1242 (2017) for the proposition that Section 203 penalties are “statutory” penalties is entirely irrelevant. These cases do establish a taxonomy of penalties, but neither of these cases hold that the State may not use its designated Private Attorney General to recover penalties that have been part of the State’s enforcement toolkit for decades. Defendant selectively cites to a portion of Lawson that Defendant contends describes recovery of Section 203 penalties as “victim-specific” relief subject to arbitration. Mtn. at 20:5-14. But this language does not actually have anything to do with penalties at all. While Defendant refers to “victim-specific” relief in an attempt to conflate this with Section 203 penalties, the court made clear that this relief refers to damages claims, not penalties: “Our opinion today would not permit a state to circumvent the FAA by, for example, deputizing employee A to bring a suit for the individual damages claims of employees B, C, and D.” Lawson, 18 Cal. App. 5th at 721. -16- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo 3. The Legislative History Supports Private Attorney General Enforcement The Legislature intended Labor Code §2699 to address the dwindling enforcement capacity of the LWDA by allowing individual employees to stand in the place of the LWDA when that agency lacks the resources to investigate and issue a citation. The following excerpt from the Third Reading Analysis of Senate Bill 796 (the bill that created Section 2699) prepared by the Office of Senate Floor Analysis is illustrative: California’s Labor Code is enforced by LWDA and its various boards and departments, which may assess and collect civil penalties for specified violations of the Code. Evidence received by the Senate Judiciary Committee indicated that the DIR was failing to effectively enforce labor law violations. This bill would propose to augment the LWDA's civil enforcement efforts. Treu Decl. Exh. 1, pp. 3-4. Thus, the entire point of PAGA is to allow a Private Attorney General to act where the State had authority but lacked the resources to do so. Labor Code §90.5 summarizes the basic policy that drove the legislation: “It is the policy of the state to vigorously enforce minimum labor standards in order to ensure employees are not required or permitted to work under substandard unlawful conditions or for employers that have not secured the payment of compensation.” Because it would prevent a Private Attorney General from enforcing Labor Code provisions that were within the purview of the LWDA, Defendant’s interpretation is contrary to the purpose of PAGA. C. Labor Code §256 Independently Authorizes the Exact Same Penalty Even if Plaintiff could not recover the Section 203 penalty directly under PAGA (she can), she would nonetheless have standing to recover the same money as a civil penalty under Labor Code §256: “The Labor Commissioner shall impose a civil penalty in an amount not exceeding 30 days’ pay as waiting time under the terms of Section 203.” -17- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo Because Section 256 specifically authorizes collection of the exact same payment, Defendant’s argument is, at best, a distinction without a difference. See Velasco v. Mis Amigos Meat Mkt., Inc., 2013 U.S. Dist. LEXIS 152533, 27 (E.D. Cal. 2013) (awarding Section 203 penalties as pursuant to Section 256). The correct remedy for such a scrivener’s detail would be a simple amendment, not forced arbitration. VI. THIS MOTION CANNOT ADDRESS ALLEGED IMPROPER REMEDIES Defendant has brought the wrong motion. In her complaint, Plaintiff has explicitly stated that the relief she seeks “is limited to relief recoverable under the California Private Attorney General Act (PAGA).” FAC, 3. With regard to Section 203 penalties, Plaintiff explicitly states that she only seeks those penalties that are available “pursuant to Labor Code §2699(a).” FAC, 10:5-6. Should this Court determine that the penalties described in Section 203 cannot be recovered through Labor Code §2699(a), the complaint makes clear that such penalties are not being sought. Because the complaint precludes any remedy that cannot be recovered through Labor Code §2699(a), the correct avenue for Defendant to address this issue would have been to file a motion to strike the extraneous claim for relief, or a motion for summary judgment. This Court cannot compel arbitration of a claim that this lawsuit does not even seek, and Defendant cannot create an individual cause of action out of a two-line reference to a single form of relief. Alternatively, if the Court somehow holds that Labor Code Section 2699.5 can be rewritten to exclude Section 203 penalties from PAGA (which Plaintiff respectfully submits would be error), the Court should grant Plaintiff leave to amend to clarify any ambiguity between her request for Section 203 penalties and her multiple repeated statements that the instant case is a PAGA-only action. Such an amendment is appropriate for multiple reasons. First, courts freely grant leave to amend, and the circumstances present no exception to that general rule. Second, it would be unfair to trap Plaintiff in an arbitration given the weight of authority that supports a PAGA claim for Section 203 penalties. Even if this Court somehow comes -18- OPPOSITION TO MOTION TO COMPEL ARBITRATION OO 0 3 O N Un BA W N NN N N N N N N N N m o m e m e m p m e m p m e m e m c o NN O N Wn BA W N = O O OVO 0 N S N N B A ND = Oo down on the other side of this issue, there can be no argument that a reasonable litigant might look at Labor Code §2699.5 and conclude that Section 203 penalties are available to a Private Attorney General just as the statute provides. Indeed, other trial courts have reached exactly this conclusion. See RIN Exh. 1. Although the rulings of other trial courts cannot serve as authority on this issue, they can and do demonstrate that every part of Plaintiff’s complaint is consistent with her desire to initiate a PAGA-only action, and she should be allowed to amend if this Court comes to the conclusion that some part of the complaint is inadvertently inconsistent with that intent. VII. CONCLUSION Plaintiff has filed a PAGA-only action seeking only penalties that may be recovered under that Act. Plaintiff has not plead any individual claims and does not seek to litigate individual claims before this Court, an arbitrator, or anywhere else. Defendant’s effort to invent an individual cause of action based on a single prayer for relief and then force Plaintiff to unwillingly litigate that cause of action before an arbitrator is a transparent effort to obtain tactical advantage. If Defendant is sincere, and the company only wishes to litigate a single remedy, then it should seek to resolve all questions of liability before this Court and then hold an arbitration that is truly limited to the one remedy at issue in its motion. Of course, that is not what Defendant really wants. Defendant wants the tactical advantage of having an arbitrator make a ruling on the merits of a PAGA claim. The controlling law forbids exactly what Defendant seeks here. Whether it be viewed as an attempt to invent an individual claim that does not exist, or a simple end-run around the controlling authority of Iskanian, Defendant’s motion would result in the destruction of the State’s right to have its PAGA claim litigated in the state court. Defendant’s contention that a single penalty in this action is inaptly pled cannot result in having the merits of a PAGA claim forced to arbitration. The issue is more appropriately the subject of a motion to strike or a simple amendment by Plaintiff. The law forbids the merits arbitration that Defendant seeks, and this Court must deny it. -19- OPPOSITION TO MOTION TO COMPEL ARBITRATION O© 60 1 O N On» BA W O N = N N N ND ND ND N N N m m ee e e Dated: March 12,2018 THE GRAVES FIRM ~ 1 LA / Gilg mmm By: EF 7 JACQUELINE TREU Attorney for Plaintiff Bhs Bamossy / 20- OPPOSITION TO MOTION TO COMPEL ARBITRATION © 0 N N O N nn A W O N BN N N N N N N N N = PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss: COUNTY OF LOS ANGELES ) I am employed in the County of Los Angeles, State of California. I am over the age of 18, and not a party to the within action. My business address is 122 N. Baldwin Ave., Main Floor, Sierra Madre, CA 91024. On March 12, 2018, I served the following document(s) described as: OPPOSITION TO MOTION TO COMPEL ARBITRATION on the interested parties by transmitting a true and correct copy thereof addressed as follows: Fermin Llaguno Brian Cole Littler Mendelson 2050 Main St., Ste. 900 Irvine, CA 92614 fllaguno@littler.com beole@littler.com 1 VIA OVERNIGHT MAIL: By delivering such document(s) to an overnight mail service or an authorized courier in a sealed envelope or package designated by the express service courier addressed to the person(s) on whom it is to be served. ] VIA U.S. MAIL: I am readily familiar with the firm's practice of collection and processing of correspondence for mailing. Under that practice such sealed envelope(s) would be deposited with the U.S. postal service on March 12, 2018with postage thereon fully prepaid, at Sierra Madre, California. [] VIA PERSONAL DELIVERY: I delivered such documents to a professional messenger to be personally delivered by hand today to the offices of the addressee(s) pursuant to CCP §1011. [x] VIA EMAIL: I personally sent such document(s) via email to the known email address of the person(s) on whom it is to be served before 5:00 p.m. I declare under penalty of perjury under the laws of the State of California that the above is true and correct and was executed on March 12, 2018 at Sierra Madre, California. Justine Gray (lA £2 { Type or Print Name Signatiire