Court Opinion

ID: 9881659
Source: CourtListenerOpinion
Date Created: 2023-10-03 17:01:09.763505+00
Date Added: 2024-06-11T14:14:01.715946
License: Public Domain

NOT FOR PUBLICATION                            FILED
                     UNITED STATES COURT OF APPEALS                         OCT 3 2023
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

LIONEL HARPER, et al.,                            No.   22-16429

                Plaintiffs-Appellees,             D.C. No.
                                                  2:19-cv-00902-WBS-DMC
 v.

CHARTER COMMUNICATIONS, LLC,                      MEMORANDUM*

                Defendant-Appellant.

                    Appeal from the United States District Court
                       for the Eastern District of California
                    William B. Shubb, District Judge, Presiding

                          Submitted September 14, 2023**
                             San Francisco, California

Before: S.R. THOMAS, FORREST, and MENDOZA, Circuit Judges.
Judge S.R. THOMAS concurring.

      Defendant Charter Communications, LLC (“Charter”) appeals from the

district court’s denial of its motion to compel arbitration of Plaintiff Lionel

Harper’s claim for penalties under the Private Attorney General Act, Cal. Lab.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Code §§ 2698-2699.8 (“PAGA”). We have jurisdiction under 9 U.S.C. § 16, and

we review de novo the district court’s denial of a motion to compel arbitration.

Lim v. TForce Logistics, LLC, 8 F.4th 992, 999 (9th Cir. 2021). We affirm.

      1. “In deciding whether to compel arbitration under the [Federal Arbitration

Aact], a court’s inquiry is limited to two ‘gateway’ issues: ‘(1) whether a valid

agreement to arbitrate exists and, if it does, (2) whether the agreement

encompasses the dispute at issue.’” Lim, 8 F.4th at 999 (quoting Chiron Corp. v.

Ortho Diagnostics Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). “As with any

other contract dispute, we first look to the express terms” of the agreement.

Chiron, 207 F.3d at 1130. Here, the parties’ Arbitration Agreement expressly

excludes preexisting litigation, like Harper’s PAGA claims. Section P provides:

      Entire Agreement. This Agreement sets for [sic] the complete
      agreement of the parties on the subject of resolution of the covered
      disputes, and supersedes any prior or contemporaneous oral or written
      understanding on this subject; provided, however, that this Agreement
      will not apply to the resolution of any charges, complaints, or lawsuits
      that have been filed with an administrative agency or court before the
      Effective Date of this Agreement.

The parties agree that the Effective Date is May 23, 2021, and that Harper’s PAGA

claims date back to May 3, 2019, when he first brought them against Charter in

state court. Because the Arbitration Agreement does not “encompass[] the dispute

at issue,” Charter’s motion must be denied. Lim, 8 F.4th at 999 (quoting Chiron,

207 F.3d at 1130).

                                          2
      The district court denied Charter’s motion on a different ground. It rejected

Harper’s argument that Section P exempted his claims, and proceeded to analyze

whether the Arbitration Agreement’s PAGA waiver was enforceable as to Harper’s

individual PAGA claims.1 Construing ambiguities in the agreement against

Charter, the drafter, the district court held that the PAGA wavier was

unenforceable. We need not decide, however, whether the district court was

correct in its analysis regarding the PAGA waiver because Section P exempts the

disputed claims from arbitration in any case, and we “may affirm on any ground

supported by the record.” Brown v. Dillard’s, Inc., 430 F.3d 1004, 1009 (9th Cir.

2005).

      2. The district court rejected Harper’s argument about Section P because

“Harper’s claims are not excluded from arbitration under section C(14).” Section

C, titled “Excluded Claims,” lists fourteen types of claims “specifically excluded

from arbitration under this Agreement.” The district court found that Harper’s

1
  In Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022), the Supreme
Court held that individual PAGA claims—where an employee sues, as an agent or
proxy of the state, for harms he personally sustained—could be compelled into
arbitration. Id. at 1924. Additionally, the state-law bar on waivers of non-
individual PAGA claims—those based on code violations sustained by other
employees—remained valid. Id. at 1924–25. Thus, an arbitration provision is
“invalid if construed as a wholesale waiver” of both individual and non-individual
PAGA claims. Id. at 1924. But a party is “entitled to enforce the agreement
insofar as it mandate[s] arbitration of [the plaintiff]’s individual PAGA claim.” Id.
at 1925.

                                          3
claims were previously subject to an arbitration agreement—one he signed during

his employment in 2017—so they were not excluded by Section C. That is no

reason to ignore the plain language of Section P.

      Under California law, courts “must interpret contractual language in a

manner which gives force and effect to every provision, and not in a way which

renders some clauses nugatory, inoperative or meaningless.” City of Atascadero v.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal. App. 4th 445, 473 (1998);

accord Int’l Brotherhood of Teamsters v. NASA Servs., Inc., 957 F.3d 1038, 1042

(9th Cir. 2020) (same). The district court violated this guidance by relying on

Section C(14) at Section P’s expense. To give meaning to both sections, Section C

should be read as supplementing, not narrowing, Section P. The district court

erred by reading Section C as expanding the scope of the Arbitration Agreement,

which in turn rendered “meaningless” Section P’s exemption for preexisting

litigation. City of Atascadero, 68 Cal. App. 4th at 473.

      3. Finally, Charter asks us to ignore as beyond the scope of this appeal

Harper’s argument about Section P and the scope of the Arbitration Agreement.

But that is precisely the task at hand. As already discussed, we review de novo

denials of motions to compel arbitration, Lim, 8 F.4th at 999, and we may affirm

on any ground supported by the record, Brown, 430 F.3d at 1009. Moreover, we

must decide “whether the agreement encompasses the dispute at issue,” Lim, 8

                                         4
F.4th at 999 (quoting Chiron, 207 F.3d at 1130), and we do so by “first look[ing]

to the express terms” of the Arbitration Agreement, Chiron, 207 F.3d at 1130.

Here, the express terms show that the Arbitration Agreement does not encompass

the claims before us.

      AFFIRMED.

                                         5
                                                                               FILED
Harper v. Charter Communications, No. 22-16429
                                                                                 OCT 3 2023
S.R. Thomas, Senior Circuit Judge, concurring:                              MOLLY C. DWYER, CLERK
                                                                             U.S. COURT OF APPEALS

      I agree with the majority that the district court did not err in denying

Charter’s motion to compel arbitration. I write separately to register my agreement

with the district court’s conclusion that “[b]ecause . . . the representative action

waiver is unenforceable as to PAGA claims as a matter of law . . . the Agreement is

‘null and void with respect to’ such claims.”

      The Supreme Court has affirmed that under California law, a “wholesale

waiver” of an employee's PAGA claims is void and unenforceable. Viking River v.

Moriana, 142 S.Ct. 1906, 1924-25 (2022); Iskanian v. CLS Transportation Los

Angeles, LLC, 59 Cal. 4th 348, 384 (2014).

      The Arbitration Agreement before us purports to waive Harper’s right to

bring claims against Charter in “any purported class or representative proceeding.”

This is a wholesale waiver that is therefore invalid and unenforceable. See 142

S.Ct. at 1916, 1924. Because the Agreement does not allow the offending waiver

to be severed, I would hold that the Agreement is void as to Harper's PAGA claims

regardless of how we interpret the relationship between Section C and Section P.

However, I agree that, given the rationale of the disposition and the result, that it is

not necessary to reach that question. Therefore, I fully concur.