Fine, Boggs & Perkins, John P. Boggs, David J. Reese, and Ian G. Robertson for Defendant and Appellant. Aequitas Law Group, Ronald H. Bae, and Joseph Cho for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County
Super. Ct. No. BC461585)
APPEAL from an order of the Superior Court of Los Angeles County, Amy D. Hogue, Judge. Affirmed.
Fine, Boggs & Perkins, John P. Boggs, David J. Reese, and Ian G. Robertson for Defendant and Appellant.
Aequitas Law Group, Ronald H. Bae, and Joseph Cho for Plaintiff and Respondent.
In this putative class action, some putative class members have signed an arbitration agreement with defendant, but the majority, including the prospective lead plaintiff, have not. Before the class certification motion was heard, defendant moved to compel arbitration and stay this litigation. The prospective lead plaintiff objected on several grounds, including the lack of personal jurisdiction over the putative class members who, until a class is certified, are not parties to this litigation. After the court denied the motion on this and other grounds, defendant appealed. Finding no error, we affirm.
In May 2011, the prospective lead plaintiff, Anthony Nguyen, filed a putative class action complaint for alleged wage and hour violations against his former employer, defendant Inter-Coast International Training, Inc. (Inter-Coast). The complaint "sought to establish a class of all non-exempt employees employed by Defendant for the four years prior to the filing of his Complaint."
After the complaint was filed, Inter-Coast entered into an arbitration agreement with its current employees. It is undisputed that Inter-Coast has no arbitration agreement with Nguyen and a majority of the putative class members. Based on the briefs and record on appeal, it appears that the putative class is comprised of 220 individuals, 59 of whom have signed an arbitration agreement.
The arbitration agreement stated in relevant part: "I and the Company both agree that any claim, dispute, and/or controversy that either party may have against one another . . . arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company, whether based on tort, contract, statutory, or equitable law, or otherwise . . . shall be submitted to and determined exclusively by binding arbitration. . . . I agree that the arbitration and this agreement shall be controlled by the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act."
When Nguyen requested employment information concerning several putative class members, Inter-Coast moved to compel arbitration and stay this litigation. Although Nguyen and a majority of the putative class members did not sign an arbitration agreement, Inter-Coast stated in its moving papers that "Plaintiff ANTHONY NGUYEN and a significant portion of the putative class members in this case agreed to arbitrate any employment-related disputes they had or would have with their employer, INTER-COAST INTERNATIONAL TRAINING, INC. Accordingly, the Court should now order these persons to honor their agreements and arbitrate their claims."
In opposition, Nguyen informed the court that he did not sign an arbitration agreement and that until a class is certified, he is the only plaintiff before the court: "The only two parties to this litigation are Plaintiff Anthony Nguyen and Defendant Inter-Coast Colleges, and Defendant has not submitted a written agreement between these parties to arbitrate. Without this agreement, the Court has no authority to compel arbitration[.]" Nguyen further asserted that "[p]utative class members are not party to a class action until the class has been certified. See Sky Sports, Inc. v. Superior Court, 201 Cal.App.4th 1363, 1369 (2011); see also Lee v. Southern California University [for] Professional Studies, 148 Cal.App.4th 782, 786 (2007). As the Court knows, this class has not been certified. Until the class is certified, Defendant's agreements with the putative class members to arbitrate cannot be enforced in this action. The Court should therefore deny the Petition."
At the hearing below, the trial court acknowledged its lack of "jurisdiction over people who are not in court. Until or unless the class is certified, I don't have anybody here [who signed an arbitration agreement]." According to the written order and reporter's transcript, the court denied the motion for the following reasons: (1) because there was no evidence that Nguyen had signed an arbitration agreement, there was no basis to enforce the agreement against him; (2) until a class is certified, the court lacks personal jurisdiction over the putative class members; (3) even assuming Nguyen had signed an arbitration agreement, Inter-Coast had waived its right to compel arbitration by actively litigating the matter for over a year without seeking to enforce the agreement until two months before trial; and (4) Inter-Coast had failed to comply with Code of Civil Procedure section 1281.2, which requires the party seeking to compel arbitration to plead and prove that a demand for arbitration had been made and refused.
Code of Civil Procedure section 1281.2 provides in relevant part: "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."
Inter-Coast timely appealed from the order denying the motion to compel arbitration and stay this litigation.
Although Inter-Coast raises numerous issues in its opening brief, we find one issue to be dispositive: whether the motion to compel arbitration and stay this litigation prior to certification of the class was premature because (1) the court lacked personal jurisdiction over the putative class members who signed an arbitration agreement, and (2) until a class is certified, the prospective lead plaintiff could amend the class definition to exclude those who signed an arbitration agreement, which would render the motion to compel arbitration moot.
Where, as here, the relevant facts are undisputed, we resolve the issue as a question of law and therefore consider it de novo. (Lee v. Southern California University for Professional Studies, supra, 148 Cal.App.4th at p. 785 (Lee).)
I. Relevant Cases
The plaintiff in Lee, a former law school student, filed a putative class action complaint against the defendant university for alleged violations of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) and Business and Professions Code section 17200. Some of the putative class members, but not Lee, had signed an arbitration agreement that the university sought to enforce by bringing a motion to compel arbitration prior to certification of the class. The trial court denied the motion to compel arbitration and the appellate court affirmed.
Because the putative class members who had signed an arbitration agreement were not yet parties to the litigation, the appellate court concluded the motion to compel arbitration was properly denied as premature. The appellate court explained that "no grounds exist for compelling arbitration when the only plaintiff currently before the court never agreed to arbitrate her claims. The question of whether she is an adequate class representative for those who did, and all other matters pertaining to whether the action is appropriate for class treatment, are issues for the trial court to decide when Lee moves to certify the class." (Lee, supra, 148 Cal.App.4th at p. 784.) "Lee has not, as of yet, brought a motion to certify any class. It is quite possible that when she does so, she will seek to narrow the definition of the class to law students only, none of whom signed arbitration agreements, according to [the university's] own evidence. She is certainly entitled to do that—[the university] offers no authority for the proposition that a plaintiff is bound by a preliminary class definition set forth in the complaint. It is also possible (and this court takes no position on this) that however Lee defines the class, any motion for class certification will be denied for other reasons. We cannot know this, of course, because there has, as of yet, been no such motion. Lee is the only plaintiff before the court at the moment, and she is not bound by an arbitration agreement; therefore she cannot be compelled to arbitrate." (Id. at pp. 786-787, fn. omitted.)
In Sky Sports, supra, 201 Cal.App.4th 1363, Division Three of this district considered a related issue: whether the defendant's failure to bring a motion to compel arbitration prior to certification of the class constituted a waiver of the right to arbitration. The answer, the court concluded, was no. The court held that prior to certification of the class, a motion to compel arbitration would have been premature because, as in Lee, the sole plaintiff before the court—the proposed class representative, Hogan—had not signed an arbitration agreement. Accordingly, the court stated, if the defendant had brought a motion to compel arbitration prior to certification of the class, "the trial court would have denied the motion because Hogan was not a party to the arbitration agreement. Thus, any delay in bringing the motion to compel arbitration until the class was certified to include parties to the arbitration agreement cannot constitute a waiver by the company. Until the class was certified, the pleading requirements to move to compel arbitration under section 1281.2 were not satisfied. [Citation.]" (Id. at p. 1369.) The court further noted that "until Hogan brought the class certification motion, he could have narrowed the class to include only those employees who did not sign arbitration agreements." (Ibid.)
Despite Inter-Coast's efforts to distinguish this case from Lee, we find the facts to be similar and the reasoning to be sound and equally applicable here. In both cases, (1) the arbitration agreement was signed by a portion of the putative class but not by the prospective lead plaintiff, and (2) the motion to compel arbitration was filed before the class was certified. These facts are significant for the following reasons: First, because the class was not certified when the motion to compel arbitration was heard, the court lacked personal jurisdiction over the putative class members. Second, until a class is certified, Nguyen could amend the class definition to exclude those who are parties to the arbitration agreement and, if that occurs, the putative class will not include anyone who is subject to the arbitration agreement. Third, regardless whether the class definition is amended, the class certification motion might be denied for other reasons and, if that occurs, the motion to compel arbitration will be moot.
None of the cases relied upon by Inter-Coast involved a motion to compel arbitration prior to certification of the class. The cases cited by Inter-Coast involved distinguishable situations in which: (1) personal jurisdiction over the parties to an arbitration agreement was not at issue and, therefore, the court's authority to enforce the agreement was not at issue (e.g., Circuit City Stores v. Adams (2001) 532 U.S. 105; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83; 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199); (2) the plaintiff sued two defendants, one who signed an arbitration agreement and one who did not, and the court, which had jurisdiction over both defendants, had discretion to stay the plaintiff's action against the latter while the plaintiff arbitrated its claim against the former (Hill v. G E Power Sys. (5th Cir. Tex. 2002) 282 F.3d 343; Nederlandse Erts-Tankersmaatschappij, N.V. v. Isbrandtsen Co. (2d Cir. N.Y. 1964) 339 F.2d 440 [remanded for consideration whether to grant a stay pending arbitration between plaintiff and a third party]); (3) the trial court properly stayed an action under its inherent authority to control its docket, conserve judicial resources, and provide for a just determination of the cases pending before it (Contracting Northwest, Inc. v. Fredericksburg (8th Cir. Iowa 1983) 713 F.2d 382, 386); and (4) the trial court properly issued a stay under section 3 of the Federal Arbitration Act of claims that were subject to arbitration (ChampionsWorld, LLC v. United States Soccer Fed'n, Inc. (N.D. Ill. 2007) 487 F.Supp.2d 980, 991-992).
Inter-Coast's remaining arguments—e.g., that Nguyen "attempted to actively pursue the claims of others with arbitral obligations by demanding their employee records for his case," and "at least one putative class member [Angie Jolly] made a general appearance by arguing the merits of the case and seeking personal relief from the court"—are not persuasive. The request for employee records did not result in the joinder of new parties to this litigation. The submission of Jolly's declaration in opposition to the motion to compel arbitration did not constitute a request for affirmative relief that could be granted only if Jolly were a party to this litigation. (See Pease v. San Diego (1949) 93 Cal.App.2d 706, 710-711 [a person makes a general appearance if she asks for any relief that can be granted only upon the hypothesis that the court has jurisdiction over her person].)
Inter-Coast's opening brief discusses numerous issues—including waiver of the right to arbitration, class action waivers, the Federal Arbitration Act, and federal preemption—that we need not address because the order may properly be affirmed on the grounds set forth above.
Applying the analysis in Lee and Sky Sports to the facts of this case, we conclude the motion to compel arbitration and stay this litigation was properly denied as premature.
The order denying the motion to compel arbitration and stay the proceedings is affirmed. Nguyen is entitled to recover his costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
SUZUKAWA, J. We concur:
EPSTEIN, P. J.