Court Opinion

ID: 8484046
Source: CourtListenerOpinion
Date Created: 2022-11-15 23:01:35.743077+00
Date Added: 2024-06-11T16:49:50.598456
License: Public Domain

Filed 11/15/22 Quinn v. Dolgen California CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 LATISHA R. QUINN,

      Plaintiff and Respondent,                                        G060015

           v.                                                          (Super. Ct. No. 30-2018-01015215)

 DOLGEN CALIFORNIA, LLC,                                               OPI NION

      Defendant and Appellant.

                   Appeal from an order of the Superior Court of Orange County, Kirk H.
Nakamura, Judge. Reversed and remanded with directions.
                   McGuire Woods, Matthew C. Kane, Amy E. Beverlin and Sabrina A.
Beldner for Defendant and Appellant.
                   Robins Kaplan and Glenn A. Danas; James Hawkins, James R. Hawkins,
Gregory Mauro and Michael Calvo for Plaintiff and Respondent.
                                          *                  *                  *
                                    INTRODUCTION
              Latisha R. Quinn brought a representative action against her former
employer, Dolgen California, LLC (Dolgen) in which she sought the recovery of
penalties under the Private Attorney General Act of 2004 (PAGA) (Labor Code, § 2698
et seq.) for several Labor Code violations allegedly suffered by her and other employees.
Following Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348
(Iskanian) and its progeny, the trial court denied Dolgen’s motion to compel the
arbitration of the “individual” portion of Quinn’s PAGA claim for Labor Code violations
she herself had allegedly suffered. (See Kim v. Reins International California, Inc.
(2020) 9 Cal.5th 73, 88 (Kim) [California “[a]ppellate courts have rejected efforts to split
PAGA claims into individual and representative components”].)
              During the pendency of this appeal, the United States Supreme Court
decided Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __, __ [142 S.Ct. 1906,
1924] (Viking), in which it held that the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et
seq.) preempts the rule of Iskanian “insofar as it precludes division of PAGA actions into
individual and non-individual claims through an agreement to arbitrate.” The Viking
court further held an employer is entitled to enforce an arbitration agreement “insofar as
it mandated arbitration of [the employee]’s individual PAGA claim.” (Viking, supra, at
p. 1925].)
              In light of Viking, we reverse the order denying Dolgen’s motion to compel
arbitration and remand with directions to the trial court to enter a new order requiring
Quinn to arbitrate her individual PAGA claim.

                                             2
                       FACTS AND PROCEDURAL HISTORY
                                            I.
                                 QUINN’S PAGA CLAIM
              Quinn filed a lawsuit against Dolgen in which she solely sought the
recovery of penalties under PAGA for alleged Labor Code violations suffered by her and
other employees. In her second amended complaint, Quinn alleged Dolgen violated
various provisions of the Labor Code by failing to pay overtime wages, minimum wages,
wages earned and owned upon separation from employment, and by failing to indemnify
for necessary business expenses. Quinn, as an aggrieved employee, sought “penalties
under Labor Code 2698, et seq. on behalf of the general public as private attorney general
and all other aggrieved employees as well as wages due and owing under Labor Code
§ 558 pursuant to the provision of Labor Code § 2699.5.”

                                            II.
                     DOLGEN’S MOTION TO COMPEL ARBITRATION
              Dolgen filed a motion to compel “individual arbitration of [Quinn]’s claims
and stay proceedings pending ruling on motion and completion of court-ordered
arbitration.” In support of the motion, Dolgen produced evidence that on September 15,
2014, prior to Quinn’s first day of her first term of employment with Dolgen (September
17, 2014 until May 8, 2015), and then again prior to the first day of work of her second
term of employment on December 12, 2016, Quinn electronically signed the Dollar
General Employee Arbitration Agreement (the arbitration agreement) which stated in
part:
              “Dolgen California LLC (‘Dollar General’) has a process for resolving
employment related legal disputes with employees that involves binding arbitration. This
Dollar General Employee Arbitration Agreement (‘Agreement’) describes that process

                                            3
and constitutes a mutually binding agreement between you and Dollar General, subject to
opt out rights described at the end of this Agreement.
              “You agree that, with the exception of certain excluded claims described
below, any legal claims or disputes that you may have against Dollar General, its parent
and subsidiary corporations, employees, officers and directors arising out of your
employment with Dollar General or termination of employment with Dollar General
(‘Covered Claim’ or ‘Covered Claims’) will be addressed in the manner described in this
Agreement. You also understand that any Covered Claims that Dollar General may have
against you related to your employment will be addressed in the manner described in this
Agreement.
              “Class and Collective Action Waiver: You and Dollar General may not
assert any class action, collective action, or representative action claims in any
arbitration pursuant to this Agreement or in any other forum. You and Dollar General
may bring individual claims or multi-plaintiff claims joining together not more than three
plaintiffs, provided that the claims are not asserted as a class, collective or representative
action. Non-representative, multi-plaintiff arbitrations (up to the three-plaintiff limit)
may only be filed if each of the plaintiff’s claims: (1) arises out of the same transaction,
occurrence, or series of transactions or occurrences; (2) arises out of the same work
location; and (3) presents a common question of law or fact. A challenge to a multi-
plaintiff action can be initiated by any party by filing a motion to dismiss or sever one or
more parties. The arbitrator shall rule upon the motion to dismiss or sever based upon the
standards set forth in this Paragraph. NOTE: This waiver does not apply to claims under
the National Labor Relations Act.” (Bold and underlining omitted, italics added.)
              The arbitration agreement also contained a severability clause, stated: “If
any parts of this Agreement are found to be invalid, illegal, or unenforceable, the validity,
legality, and/or enforceability of the remaining provisions will not be affected by that

                                               4
decision, and any invalid, illegal or unenforceable provisions shall be modified or
stricken.”
              Quinn filed an opposition to Dolgen’s motion, in which she argued that
PAGA claims cannot be subjected to arbitration and that splitting any portion of Quinn’s
PAGA claim would impermissibly split the action into arbitrable and nonarbitrable
claims.
                                            III.
             THE TRIAL COURT DENIES THE MOTION TO COMPEL ARBITRATION
              The trial court denied Dolgen’s motion to compel arbitration. In its minute
order, the court explained that, although Quinn did not dispute having executed the
arbitration agreements, “California authority indicates a ‘predispute agreement to
arbitrate PAGA claims is not enforceable without the State’s consent.’” Citing Iskanian,
supra, 59 Cal.4th at page 384, the trial court explained the FAA is inapplicable to PAGA
claims “‘because it is not a dispute between an employer and an employee arising out of
their contractual relationship [but] a dispute between an employer and the state,’” and
PAGA waivers are therefore unenforceable. The trial court further stated that an
“‘individual PAGA claim’ does not exist” and “‘[a] single representative PAGA claim
cannot be split into an arbitrable individual claim and a nonarbitrable representative
claim.’”
              Dolgen appealed. After the United States Supreme Court issued its
decision in Viking, supra, 142 S.Ct. 1906, we invited the parties to file supplemental
letter briefs addressing the impact of Viking and its progeny on this appeal; both Quinn
and Dolgen filed supplemental letter briefs addressing Viking.

                                             5
                                       DISCUSSION
                                              I.
                                   STANDARD OF REVIEW
                “An order denying a motion to compel arbitration is an appealable order.
(Code Civ. Proc., § 1294, subd. (a).) ‘“‘There is no uniform standard of review for
evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s
order is based on a decision of fact, then we adopt a substantial evidence standard.
[Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then a
de novo standard of review is employed.’”’ [Citation.]” (Coughenour v. Del Taco, LLC
(2020) 57 Cal.App.5th 740, 747.)
                Here, the relevant facts to our review are undisputed. As pointed out by the
trial court, Quinn acknowledges she signed the arbitration agreements in question. The
court’s order granting the motion to compel was based on the application of the holdings
of Iskanian and its progeny and thus is based on a matter of law which we review
de novo.

                                              II.
                  PAGA OVERVIEW AND ISKANIAN, SUPRA, 59 CAL.4TH 348
                “In September 2003, the Legislature enacted [PAGA]. The Legislature
declared that adequate financing of labor law enforcement was necessary to achieve
maximum compliance with state labor laws, that staffing levels for labor law enforcement
agencies had declined and were unlikely to keep pace with the future growth of the labor
market, and that it was therefore in the public interest to allow aggrieved employees,
acting as private attorneys general, to recover civil penalties for Labor Code violations,
with the understanding that labor law enforcement agencies were to retain primacy over
private enforcement efforts. [Citation.]” (Arias v. Superior Court (2009) 46 Cal.4th 969,
980 (Arias).)

                                              6
              “A PAGA claim is legally and conceptually different from an employee’s
own suit for damages and statutory penalties.” (Kim, supra, 9 Cal.5th at p. 81.) “An
aggrieved employee suing under PAGA ‘does so as the proxy or agent of the state’s labor
law enforcement agencies.’ [Citation.] Every PAGA action is ‘a dispute between an
employer and the state.’” (Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, 74,
quoting, inter alia, Iskanian, supra, 59 Cal.4th at p. 386.)
              In a PAGA action, “the employee plaintiff represents the same legal right
and interest as state labor law enforcement agencies—namely, recovery of civil penalties
that otherwise would have been assessed and collected by [LWDA].” (Arias, supra,
46 Cal.4th at p. 986.) Civil penalties a PAGA plaintiff may recover on the state’s behalf,
therefore, are distinct from the statutory damages or penalties that may be available to
employees suing for individual violations. (Iskanian, supra, 59 Cal.4th at p. 381.) “An
action under PAGA ‘“is fundamentally a law enforcement action”’ and relief is
‘“designed to protect the public and not to benefit private parties.”’ [Citation.] ‘A
PAGA representative action is therefore a type of qui tam action,’ conforming to all
‘traditional criteria, except that a portion of the penalty goes not only to the citizen
bringing the suit but to all employees affected by the Labor Code violation.’ [Citation.]
The ‘government entity on whose behalf the plaintiff files suit is always the real party in
interest.’” (Moniz v. Adecco USA, Inc., supra, 72 Cal.App.5th at p. 74.) “Only an
‘aggrieved employee’ has standing to bring a civil action under PAGA. (Labor Code,
§ 2699, subd. (a).) An ‘aggrieved employee’ is ‘any person who was employed by the
alleged violator and against whom one or more of the alleged violations was committed.’
(Labor Code, § 2699, subd. (c).)” (Ibid.)
              In Iskanian, supra, 59 Cal.4th at page 360, the Supreme Court held, inter
alia, “an arbitration agreement requiring an employee as a condition of employment to
give up the right to bring representative PAGA actions in any forum is contrary to public
policy.” The Supreme Court further held “the FAA’s goal of promoting arbitration as a

                                               7
means of private dispute resolution does not preclude our Legislature from deputizing
employees to prosecute Labor Code violations on the state’s behalf. Therefore, the FAA
does not preempt a state law that prohibits waiver of PAGA representative actions in an
employment contract.” (Ibid.)

                                            III.
            THE UNITED STATES SUPREME COURT OVERRULES A PORTION OF
           ISKANIAN, SUPRA, 59 CAL.4TH 248 IN VIKING, SUPRA, 142 S.CT. 1906
              After the trial court denied Dolgen’s motion to compel arbitration, and
while Dolgen’s appeal from the court’s order was pending, the United States Supreme
Court issued its decision in Viking, supra, 142 S.Ct. at page 1913 to address whether the
FAA preempts “a rule of California law that invalidates contractual waivers of the right
to assert representative claims under [PAGA].”
              In Viking, the parties had entered into an employment arbitration agreement
containing a waiver provision prohibiting the parties from, inter alia, bringing any dispute
as a representative PAGA action. (Viking, supra, 142 S.Ct. at pp. 1915-1916, 1924.) The
United States Supreme Court noted that under Iskanian, such a provision was invalid if
“construed as a wholesale waiver of PAGA claims,” and concluded that Iskanian’s
holding on that point was not preempted by the FAA. (Id. at p. 1917.)
              The Viking court’s analysis continued to address the severability clause in
the parties’ arbitration agreement which provided that, in the event the waiver provision
was invalid in some respect, “any ‘portion’ of the waiver that remains valid must still be
‘enforced in arbitration.’” (Viking, supra, 142 S.Ct. at p. 1924.) The Viking court
explained that, because of the severability provision, the employer was entitled to enforce
the parties’ agreement “insofar as it mandated arbitration of [the employee]’s individual

                                             8
              1
PAGA claim,” but the lower courts had “refused to do so based on the rule that PAGA
actions cannot be divided into individual and non-individual claims.” (Id. at p. 1925.)
The court observed California courts followed “a secondary rule” established in Iskanian
that “invalidates agreements to separately arbitrate or litigate ‘individual PAGA claims
for Labor Code violations that an employee suffered,’ on the theory that resolving victim-
specific claims in separate arbitrations does not serve the deterrent purpose of PAGA.”
(Id. at pp. 1916-1917.)
              The Viking court reversed the lower court’s order denying the employer’s
motion to compel and explained: “[T]he FAA preempts the rule of Iskanian insofar as it
precludes division of PAGA actions into individual and non-individual claims through an
agreement to arbitrate. This holding compels reversal in this case. . . . Under our
holding, that rule is preempted, so [the employer] is entitled to compel arbitration of [the
employee]’s individual claim.” (Viking, supra, 142 S.Ct. at pp. 1924-1925; id. at
pp 1916-1917.)

1
   The Viking court explained its use of the relevant terminology as follows:
  “PAGA’s unique features have prompted the development of an entire vocabulary
unique to the statute, but the details, it seems, are still being worked out. An unfortunate
feature of this lexicon is that it tends to use the word ‘representative’ in two distinct
ways, and each of those uses of the term ‘representative’ is connected with one of
Iskanian’s rules governing contractual waiver of PAGA claims.
  “In the first sense, PAGA actions are ‘representative’ in that they are brought by
employees acting as representatives—that is, as agents or proxies—of the State. But
PAGA claims are also called ‘representative’ when they are predicated on code violations
sustained by other employees. In the first sense, ‘“every PAGA action is . . .
representative”’ and ‘[t]here is no individual component to a PAGA action,’ [citation],
because every PAGA claim is asserted in a representative capacity. But when the word
‘representative’ is used in the second way, it makes sense to distinguish ‘individual’
PAGA claims, which are premised on Labor Code violations actually sustained by the
plaintiff, from ‘representative’ (or perhaps quasi-representative) PAGA claims arising out
of events involving other employees. For purposes of this opinion, we will use
‘individual PAGA claim’ to refer to claims based on code violations suffered by the
plaintiff. And we will endeavor to be clear about how we are using the term
‘representative.’” (Viking, supra, 142 S.Ct. at p. 1916.)

                                             9
                                              IV.
  WE MUST REVERSE THE ORDER DENYING THE MOTION TO COMPEL ARBITRATION IN
                   LIGHT OF VIKING, SUPRA, 142 S.CT. 1906
              Here, there is no dispute the parties entered into an arbitration agreement on
two separate occasions containing the same relevant provisions. Like the parties’
arbitration agreement in Viking, the arbitration agreements in the instant case contain a
provision prohibiting the parties from asserting any representative action claims in any
arbitration or in any other forum. As discussed ante, under both Iskanian and Viking, that
waiver provision is invalid to the extent it is “a wholesale waiver of PAGA claims.”
(Viking, supra, 142 S.Ct. at p. 1925.)
              Like the agreement in Viking, the arbitration agreements in the instant case
contain a severability provision. That severability provision provides that if any part of
the arbitration agreement is found to be invalid, illegal, or unenforceable, “the validity,
legality, and/or enforceability of the remaining provisions will not be affected by that
decision, and any invalid, illegal or unenforceable provisions shall be modified or
stricken.”
              Contrary to Quinn’s argument in a supplemental letter brief, the language
of the instant severability provision is indistinguishable in its effect from that of the
language contained in the severability provision in Viking. The Viking court described
the severability provision in the arbitration agreement before it as providing “if any
‘portion’ of the waiver [in the parties’ arbitration agreement] remained valid, it would be
‘enforced in arbitration.’” (Viking, supra, 142 S.Ct. at p. 1916.)
              Given the invalidity and unenforceability of representative action claim
waivers under Viking and Iskanian, the severability provision in the instant arbitration
agreements applies to strike, as relevant in this appeal, the part of the “Class and
Collective Action Waiver” provision which purports to require Quinn to waive the right
to bring a representative action in arbitration or in any other forum. As so modified, the

                                              10
arbitration agreement requires arbitration, “with the exception of certain excluded claims
described below,” of “any legal claims or disputes . . . arising out of [Quinn’s]
employment with [Dolgen] or termination of employment with [Dolgen].” The modified
arbitration agreement does not identify PAGA claims as excluded claims. As the rule
against splitting PAGA actions into individual and nonindividual claims for purposes of
enforcing arbitration agreements is preempted by the FAA, Dolgen is entitled to enforce
the arbitration agreement to mandate arbitration of Quinn’s individual PAGA claim in
this case. (Viking, supra, 142 S.Ct. at p. 1924.) We therefore reverse the order denying
the motion to compel arbitration of that claim.
              In a supplemental letter brief, Dolgen argues that we should dismiss
Quinn’s nonindividual/representative PAGA claim left after her individual PAGA claim
is compelled to arbitration in light of the penultimate paragraph of the Viking majority
opinion, stating: “The remaining question is what the lower courts should have done
with [the employee]’s non-individual claims. Under our holding in this case, those
claims may not be dismissed simply because they are ‘representative.’ Iskanian’s rule
remains valid to that extent. But as we see it, PAGA provides no mechanism to enable a
court to adjudicate nonindividual PAGA claims once an individual claim has been
committed to a separate proceeding. Under PAGA’s standing requirement, a plaintiff can
maintain non-individual PAGA claims in an action only by virtue of also maintaining an
individual claim in that action. [Citation.] When an employee’s own dispute is pared
away from a PAGA action, the employee is no different from a member of the general
public, and PAGA does not allow such persons to maintain suit. See Kim, 9 Cal.5th, at
[p.] 90 (‘PAGA’s standing requirement was meant to be a departure from the “general
public” . . . standing originally allowed’ under other California statutes). As a result, [the
employee] lacks statutory standing to continue to maintain her non-individual claims in
court, and the correct course is to dismiss her remaining claims.” (Viking, supra,
142 S.Ct. at p. 1925.)

                                             11
               We do not need to address the fate of Quinn’s nonindividual/representative
PAGA claim because our review in this matter is limited to the trial court’s order denying
Dolgen’s motion to compel arbitration which, for the reasons we have discussed, is
reversed. There was no motion to dismiss the nonindividual/representative PAGA claim
filed in or decided by the trial court, and so that issue is not before this court at this time.

                                        DISPOSITION
               The order is reversed and the matter is remanded with directions that the
trial court enter a new order requiring Quinn to arbitrate her individual PAGA claim. In
the interest of justice, no party shall recover costs on appeal.

                                                    MARKS, J.*

WE CONCUR:

O’LEARY, P. J.

SANCHEZ, J.

*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

                                               12