Court Opinion

ID: 9912183
Source: CourtListenerOpinion
Date Created: 2023-12-21 19:02:49.347269+00
Date Added: 2024-06-11T12:52:37.863340
License: Public Domain

Filed 12/21/23 Garcia v. Omni Hotels Management Corp. CA4/1
                   NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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.

                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                       DIVISION ONE

                                              STATE OF CALIFORNIA

ISMAEL GARCIA,                                                              D081228

          Plaintiff and Respondent,

          v.                                                                (Super. Ct. No. 37-2019-00068188-
                                                                            CU-OE-CTL)
OMNI HOTELS MANAGEMENT
CORPORATION,

          Defendant and Appellant.

          APPEAL from an order of the Superior Court of San Diego County,
Eddie C. Sturgeon, Judge. Reversed and remanded.
          Hirschfeld Kraemer, Reed E. Schaper, Ferry E. Lopez, and Felicia R.
Reid for Defendant and Appellant.
          Sullivan & Yaeckel Law Group, William B. Sullivan, Erick K. Yaeckel,
and Ryan T. Kuhn for Plaintiff and Respondent.
      Omni Hotels Management Corp. (Omni) appeals the denial of its
motion to compel arbitration of the claims brought against it in late 2019 by
its former employee, Ismael Garcia (Garcia), under the Private Attorneys

General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).1 Omni did not file
its motion to compel arbitration until 2022, after the United States Supreme
Court clarified that some PAGA claims might be compelled to arbitration.
The trial court found that Omni waived its right to seek enforcement of its
arbitration agreement by failing to raise the issue earlier.
      On appeal, we conclude that when a motion to compel arbitration had
no realistic chance of success until after a change in the law, litigating the
case in court up to that point did not waive the right to compel arbitration.
As we explain, modification of the legal rule concerning arbitration of PAGA
claims constituted good cause for Omni’s failure to bring its motion to compel
arbitration sooner, and the undisputed facts do not support a waiver finding.
We therefore vacate the order denying Omni’s motion to compel arbitration
and remand for the trial court to address the remaining issues from that

motion.2

1     All further statutory references are to the Labor Code unless otherwise
indicated.
2     Omni asks us to take judicial notice of the docket and certain
documents filed in a related action, Martinez, Trumpe, et al. v. Omni Hotels
Management Corp. (Super. Ct. San Diego County, 2020, No. 37-2020-
000222617-CU-OE-CTL), pending before the same superior court judge
assigned to this action. Omni contends that, because the trial court granted
Omni’s motion to compel arbitration in that case, these documents establish
that the superior court issued inconsistent orders. Because these records are
not necessary to our conclusion, the request for judicial notice is denied.
                                        2
              FACTUAL AND PROCEDURAL BACKGROUND

A.    PAGA and the Federal Arbitration Act (FAA)

      California’s Labor Code “contains a complex scheme for timely
compensation of workers, deterrence of abusive employer practices, and
enforcement of wage judgments.” (Voris v. Lampert (2019) 7 Cal.5th 1141,
1157.) This scheme includes the right of an “aggrieved employee” to seek
civil penalties “on behalf of himself or herself and other current or former
employees” under PAGA. (§ 2699, subd. (g)(1).) In an attempt to shield
themselves from this exposure, employers added binding arbitration clauses
to their labor contracts and included waivers extending to PAGA claims.
This practice spurred over a decade of litigation testing the interplay between
the FAA (9 U.S.C. § 1 et seq.) and PAGA.
      We start by reviewing two key cases in this series. In 2014, the
California Supreme Court held that “an employee’s right to bring a PAGA
action is unwaivable.” (Iskanian v. CLS Transportation Los Angeles, LLC
(2014) 59 Cal.4th 348, 383 (Iskanian).) The court also found that arbitrating
individual PAGA claims—which the disputed labor agreement allowed—
would “not serve the purpose of the PAGA.” (Id. at p. 384.) “ ‘[A]ssuming
[individual PAGA claims are] authorized, a single-claimant arbitration under
the PAGA for individual penalties will not result in the penalties
contemplated under the PAGA to punish and deter employer practices that
violate the rights of numerous employees under the Labor Code.’ ” (Iskanian,
at p. 384.) “Appellate courts interpreted this aspect of Iskanian ‘as
prohibiting splitting PAGA claims into individual and nonindividual
components to permit arbitration of the individual claims.’ ” (Nickson v.
Shemran, Inc. (2023) 90 Cal.App.5th 121, 128 (Nickson), quoting Lewis v.
Simplified Labor Staffing Solutions, Inc. (2022) 85 Cal.App.5th 983, 993.)

                                       3
Following Iskanian, no PAGA claims—individual or representative—could be
compelled to arbitration because of pre-dispute agreements. (See Viking
River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 648 [142 S.Ct. 1906, 1916]
(Viking River) [trial court’s ruling that “categorical waivers of PAGA standing
are contrary to state policy and that PAGA claims cannot be split into
arbitrable individual claims and non-arbitrable ‘representative’ claims. . . .
was dictated by the California Supreme Court’s decision in Iskanian”].)
      Eight years later, the United States Supreme Court overruled part of
Iskanian, holding in Viking River that the FAA preempts Iskanian’s
“prohibition on contractual division of PAGA actions into constituent
claims . . . .” (Viking River, supra, 596 U.S. at p. 659.) The court decided that
contrary to Iskanian, the FAA preempts any rule disallowing the separation
of PAGA claims into individual and representative categories. Further,
Viking River held that the FAA controlled a plaintiff’s individual PAGA
claim. (Id. at p. 662.) At the same time, however, Iskanian’s prohibition
against pre-dispute class or representative case waivers survived. (Viking
River, supra, at pp. 662–663.)

B.    Procedural History

      In 2014, Omni hired Garcia as an “On-Call Banquet Bartender” at its
San Diego hotel. It contends that Garcia signed an “Amended and Restated
Alternative Dispute Resolution Program for California” agreement and a
“Receipt of Arbitration Program and Acknowledgment” form as part of his
hiring process. Omni asserts these documents require Garcia to arbitrate his
PAGA claims.
      In December 2019, during a period when Iskanian appeared to control
PAGA actions, Garcia filed a PAGA case against Omni. He alleged various
California Labor Code violations and sought civil penalties. Garcia asserted

                                        4
his claims “in a representative capacity on behalf of all current and former
aggrieved [Omni] employees.” Omni did not raise the arbitration agreement
as an affirmative defense and did not seek to compel arbitration. The parties
characterize the litigation history differently, but agree they engaged in the
discovery process, that Garcia filed (and Omni opposed) multiple motions to
compel discovery, and that in December 2021 they participated in an
unsuccessful mediation. In January 2022, the parties exchanged
correspondence regarding discovery issues, including the preparation and

issuance of a Belaire-West notice to affected Omni employees.3
        But, on December 15, 2021, the United States Supreme Court granted

certiorari in Viking River.4 On January 20, 2022, Omni notified Garcia of its
intent to seek a stay pending the resolution of Viking River. Six days later,
Omni filed a motion asking the superior court to “stay [the] action until 30
days after [the United States Supreme Court] . . . issues a decision in Viking
River.” The court granted the stay, setting a status conference for July 29,
2022.
        At the July 29th conference, and in light of the Supreme Court’s
then-recent decision in Viking River, the court and parties discussed “the
status of the case and a filing of a Motion to Compel Arbitration.” Following
the conference, the court vacated the September trial date, entering a
deadline for Omni to file its motion to compel. Omni timely filed its motion.
Garcia opposed the motion arguing, among other things, that Omni waived

3     Belaire-West notices provide employees notice of representative PAGA
actions, affording employees an opportunity to opt out of disclosing personal
contact information to PAGA plaintiffs. (See Williams v. Superior Court
(2017) 3 Cal.5th 531, 553.)
4     Viking River Cruises, Inc. v. Moriana (2021) 142 S.Ct. 734, cert.
granted, 596 U.S. 639 [142 S.Ct. 1906].
                                        5
the right to seek arbitration both by failing to plead the arbitration
agreement as an affirmative defense and by delaying its request to compel
arbitration.
      The trial court found Omni waived its right to seek arbitration because
(a) “approximately 1040 days [had]passed since the filing of the lawsuit”;
(b) the change in law provided no excuse for delay because Viking River itself
demonstrated that an employer could successfully enforce its arbitration
rights; (c) Omni failed to raise arbitration as an affirmative defense; (d) “the
extensive discovery motion practice that occurred in 2020 and of the other
actions taken by both parties in prosecuting and defending this action,
including participating in class-wide mediation” were “ ‘inconsistent with the
right to arbitrate’ ”; (e) “ ‘the litigation machinery’ ha[d] been substantially
invoked” by Omni; and (f) “ordering arbitration at this late stage would
prejudice [Garcia,] who has already incurred expenses associated with the
litigation and mediation.” Omni appealed.

                                  DISCUSSION

      In finding that Omni waived its right to arbitrate this dispute, the trial
court focused on the duration of Garcia’s lawsuit to date and Omni’s
pre-Viking River litigation conduct. In contrast, we conclude that Viking
River significantly changed the legal landscape in which Omni and Garcia
found themselves. Because Omni moved quickly to compel arbitration once
the Supreme Court decided Viking River and we do not see any other
significant circumstances that require a different result, we hold that Omni
did not waive its right to arbitrate.

                                         6
A.    Applicable Law and the Standard of Review

      The parties dispute the applicable law (state or federal) determining
our standard of review (de novo or substantial evidence). There is ambiguity
as to whether state or federal law governs the waiver analysis for an
arbitration agreement subject to the FAA. (See, e.g., Morgan v. Sundance,
Inc. (2022) 596 U.S. 411, 416 [142 S.Ct. 1708, 1712] (Morgan) [“[T]he parties
have disagreed about the role state law might play in resolving when a
party’s litigation conduct results in the loss of a contractual right to
arbitrate.”].) Indeed, although Omni argues that federal law applies, in the
superior court Omni principally cited California authority. Garcia does not
dispute that the FAA applies but relies exclusively on California law.
      We need not resolve which law applies since under either federal or
state authority our conclusion is the same: Omni’s right to arbitration
remains viable. (See, e.g., St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187, 1194–97 (St. Agnes) [explaining that state
and federal waiver rules are “very similar”].) Moreover, even when federal
substantive law applies, we generally look to state law for our standard of
review. (See Colombo v. BRP US Inc. (2014) 230 Cal.App.4th 1442, 1458
[applying state law standard of review to federal common law issue], citing
Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 558, fn. 3 [state
law controls on “practice and procedure,” including “rules defining the
standard of appellate review”].) Under California law, “the determination of
waiver is a question of fact, and the trial court’s finding, if supported by
sufficient evidence, is binding on the appellate court.” (St. Agnes, at p. 1196.)
But “[w]hen . . . the facts are undisputed and only one inference may
reasonably be drawn, the issue is one of law and the reviewing court is not

                                        7
bound by the trial court’s ruling.” (Platt Pacific, Inc. v. Andelson (1993)
6 Cal.4th 307, 319.)

B.    General Principles of Waiver as Applied to Arbitration of PAGA Claims

      Code of Civil Procedure section 1281.2 provides that a court can deny a
petition to compel arbitration if “[t]he right to compel arbitration has been
waived by the petitioner.” (See, e.g., St. Agnes, supra, 31 Cal.4th at
pp. 1194–1196.) In an arbitration context “ ‘waiver’ has a number of
meanings in statute and case law,” including “as a shorthand statement for
the conclusion that a contractual right to arbitration has been lost.” (Id.
at p. 1195, fn. 4.) “[N]o single test delineates the nature of the conduct that
will constitute a waiver of arbitration.” (Id. at p. 1195.) However, six
discretionary factors help guide this particular “waiver” inquiry:
         “ ‘(1) whether the party’s actions are inconsistent with the
         right to arbitrate; (2) whether “the litigation machinery has
         been substantially invoked” and the parties “were well into
         preparation of a lawsuit” before the party notified the
         opposing party of an intent to arbitrate; (3) whether a party
         either requested arbitration enforcement close to the trial
         date or delayed for a long period before seeking a stay; (4)
         whether a defendant seeking arbitration filed a
         counterclaim without asking for a stay of the proceedings;
         (5) “whether important intervening steps [e.g., taking
         advantage of judicial discovery procedures not available in
         arbitration] had taken place”; and (6) whether the delay
         “affected, misled, or prejudiced” the opposing party.’ ” (St.
         Agnes, supra, 31 Cal.4th at p. 1196, quoting Sobremonte v.
         Superior Court (1998) 61 Cal.App.4th 980, 992
         (Sobremonte), quoting Peterson v. Shearson/American
         Express, Inc. (10th Cir.1988) 849 F.2d 464, 467–468.)

      Generally, if a motion to compel arbitration lacked a realistic chance of
success when a lawsuit was filed, a change in law may constitute good cause
for failure to earlier raise the defense. (See Iskanian, supra, 59 Cal.4th at

                                        8
p. 376 [“This case is therefore distinguishable from cases finding unexcused
delay where the [asserting party] had a real chance of succeeding in
compelling individual arbitration under extant law”], overruled on other
grounds in Viking River, supra, 596 U.S. 639.) Because Omni contends that a
change in the law excused its failure to file a motion to compel arbitration
sooner, a closer examination of Iskanian is instructive.
      The employee in Iskanian filed his PAGA and class action claims in
2006; the employer responded with a successful motion to compel arbitration.
(Iskanian, supra, 59 Cal.4th at p. 361.) The appellate court vacated and
remanded after considering Gentry v. Superior Court (2007) 42 Cal.4th 443,
an intervening California Supreme Court decision holding that “class action
waivers in employment arbitration agreements are invalid under certain
circumstances.” (Iskanian, at p. 361.) The employer withdrew its motion to
compel, and the action proceeded in superior court for several years. (Ibid.)
“The parties engaged in discovery,” including class discovery, and litigated a
class certification motion. (Id. at 375.) The superior court certified a class in
October 2009. (Ibid.) Almost two years later, in May 2011, the United States
Supreme Court issued an opinion casting doubt on Gentry. (Iskanian, at
p. 375.) The employer then “renewed its petition to compel arbitration,”
which the trial court granted. (Ibid.) On appeal, the Supreme Court held
that the employer had not waived its right to arbitrate. (Id. at p. 378.)
      Although pending for five years by the time the renewed motion to
compel was filed, our Supreme Court concluded that defendant’s delay in
pursuing arbitration was reasonable given the law change. (Iskanian, supra,
59 Cal.4th at pp. 376, 378.) The employee claimed, “because he spent three
years attempting to obtain class certification, including considerable effort
and expense on discovery, waiver should be found on the ground that the

                                        9
delay in the start of arbitration prejudiced him.” (Id. at p. 376.) The court
disagreed, concluding the delay in seeking arbitration “was reasonable in
light of the state of the law at the time and [the employee’s] own opposition to
arbitration.” (Id. at p. 377.) The court further concluded that, “[b]ecause the
arbitration agreement itself provides for ‘reasonable discovery,’ there [was]
no indication that [the employer] obtained any material information through
pretrial discovery that it could not have obtained through arbitral discovery.”
(Id. at p. 378.) The court thus held that there was no cognizable prejudice to
the employee from pretrial court proceedings. (Ibid.)
      More recently, two courts of appeal addressed facts nearly identical to
those before us. Both decisions held that the change in the law brought about
by Viking River constituted good cause for delay in moving to compel
arbitration.
      In Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281, (Piplack)
involved an employee claim against a fast-food restaurant company. In late
2019, employees filed their PAGA lawsuit. (Id. at p. 1285.) The case
proceeded normally in court “with the filing of answers, demurrers, amended
complaints, and a discovery motion.” (Id. at p. 1286.) In February 2022, the
employer filed its motion to compel arbitration, explaining that the United
States Supreme Court recently granted certiorari in Viking River, leading the
company to believe the Supreme Court would reverse the Iskanian rule.
(Piplack, at p. 1286.) The trial court summarily denied the employer’s
motion. Relying on Iskanian’s waiver analysis (which survived Viking River),
Piplack explained that a PAGA defendant does not waive arbitration by
vigorously defending itself in litigation “because the relevant question is
whether there was any unreasonable delay” to enforcing an arbitration
clause. (Piplack, at p. 1289.) In the court’s view, failing to request

                                       10
arbitration prior to Viking River was not unreasonable. Piplack held the
employer “had not waived its right to arbitrate as a matter of law” because
once Viking River was decided, the defendant “raised its right to arbitrate as
soon as it had any chance of success.” (Piplack at p. 1290.)
      Relying on Piplack, the court in Barrera v. Apple American Group LLC
(2023) 95 Cal.App.5th 63, 77–79 (Barrera) also held that no waiver occurred
where the defendant acted promptly to secure its right to arbitration once the
Supreme Court granted certiorari in Viking River. Barrera held that “[g]iven
these circumstances, any delay in bringing their motion was not
unreasonable. Defendants therefore did not waive their right to arbitrate as

a matter of law.” (Id. at p. 79.)5

C.    Omni Did Not Waive Its Right to Compel Arbitration

      We come to the same conclusion in this matter as did the courts in
Piplack and Barrera. We examine the waiver question by looking at three
areas the trial court discussed: the change in law, litigation conduct, and
prejudice to Garcia. We also consider whether the result would be different if
we applied federal law rather than California law as to waiver.

      1.    Change in the Law

      We conclude that because Omni’s motion to compel arbitration had no
reasonable chance to succeed prior to the Supreme Court decision in Viking
River; failure to bring that motion does not support finding an arbitration
waiver.
      The only claims asserted in this action are under PAGA. Iskanian held
that an employment agreement “compel[ling] the waiver of representative

5      Because Piplack and Barrera were filed some months after its ruling in
this case, we understand that the trial court did not have the benefit of
reviewing those decisions.
                                      11
claims under the PAGA . . . is contrary to public policy and unenforceable as
a matter of state law.” (Iskanian, supra, 59 Cal.4th at p. 384.) Iskanian also
prohibited splitting PAGA actions and compelling only individual PAGA
claims to arbitration. (See Viking River, supra, 596 U.S. at p. 648 [trial
court’s ruling that “categorical waivers of PAGA standing are contrary to
state policy and that PAGA claims cannot be split into arbitrable individual
claims and nonarbitrable ‘representative’ claims. . . . [¶] was dictated by the
California Supreme Court’s decision in Iskania.”]; Nickson, supra,
90 Cal.App.5th at p.128 [Iskanian’s “rule and the logic behind it seemed
sound—until Viking River.”].)
      Indeed, Garcia does not dispute that before Viking River, Iskanian
foreclosed a successful motion to compel arbitration. Instead, he
contends—as the trial court found—that Viking River itself demonstrates
Omni could have filed a motion to compel arbitration, challenging the
existing law all the way to the United States Supreme Court. But that would
be true in nearly every instance in which there is a change in the law. The
law’s constant evolution demonstrates that in the right circumstances,
today’s futile motion at the trial level may be tomorrow’s agent of change in
the appellate courts. But that is not the standard by which we evaluate this
matter. More importantly, perhaps, the California Supreme Court held that
a change in the law can support finding good cause for delay in filing a
motion to compel arbitration, and we are bound by that ruling. (See
Iskanian, supra, 59 Cal.4th at p. 377; Auto Equity Sales, Inc. v. Superior
Court (1962) 57 Cal.2d 450, 455 [“The decisions of this court are binding upon
and must be followed by all the state courts of California”].)

      2.    Litigation Conduct

                                       12
      In finding Omni waived its right to arbitration, the trial court
understandably commented on “the extensive discovery motion practice that
occurred in 2020 and of the other actions taken by both parties in prosecuting
and defending this action, including participating in class-wide mediation.”
And absent the change in the law effected by Viking River, this would be a
significant and perhaps dispositive consideration. But the pre-Viking River
litigation conduct here was not as significant as that in Iskanian. (Iskanian,
supra, 59 Cal.4th at pp. 375, 378.) Indeed, in Iskanian the parties had
completed class discovery and the court certified the class by the time the
employer filed its motion to compel arbitration. (Id. at p. 375.) Although this
lawsuit had been pending for several years, we cannot say that Omni’s
pre-Viking River actions waived the right to arbitrate considering the fact
that it moved promptly once certiorari was granted to assert its arbitration
rights.
      The trial court here observed that, although “failure to plead an
affirmative defense is not itself determinative,” Omni “could have at least
raised the affirmative defense but did not.” “ ‘To properly invoke the right to
arbitrate, a party must (1) timely raise the defense and take affirmative steps
to implement the process, and (2) participate in conduct consistent with the
intent to arbitrate the dispute. Both of these actions must be taken to secure
for the participants the benefits of arbitration.’ ” (Fleming Distribution
Company v. Younan (2020) 49 Cal.App.5th 73, 81, quoting Sobremonte,
supra, 61 Cal.App.4th at pp. 997–998.) For purposes of waiver, Omni’s
failure to assert the arbitration provision as an affirmative defense yields to
the same analysis as not bringing a motion to compel arbitration: Until
Viking River, arbitration of PAGA claims could not be compelled, making
assertion of this affirmative defense an exercise in futility.

                                        13
      Garcia contends there are disputed issues of fact concerning the
conduct of the litigation that require us to defer to the trial court’s order. We
disagree. Although Garcia claims that Omni’s appellate brief misrepresented
the record in multiple ways, our review reveals only one example that might
qualify as a distortion. Omni states “the only motions [it] filed in the Trial
Court were to stay proceedings and compel arbitration.” In fact, in its
Supplemental Brief Regarding Scope of Belaire-West Notice, Omni also
moved for “an order to sequence discovery.” We find Omni’s misstatement
immaterial. Further, a request to sequence discovery does not bring the
litigation activity in this matter to a level that distinguishes it from Iskanian.
      The rest of Garcia’s examples are either not misrepresentations or not
supported by the record. For example, Garcia seeks to rebut Omni’s
contention that it “did not propound class discovery” By noting that “Omni
served discovery on Plaintiff in October[ ] 2020 seeking (inter alia) documents
and information related to Plaintiff’s claims that Omni violated wage and
hour laws.” Omni does not dispute that it served discovery, only that it did
not serve “class discovery.” Garcia does not cite anything that contravenes
Omni’s actual argument. In any case, participating in “class” discovery
would not change our analysis. (See Iskanian, supra, 59 Cal.4th at p. 375
[parties completed class discovery and a class had been certified before
motion to compel was filed].)
      Garcia also argues that “Omni itself requested class-wide mediation,
and agreed to produce formal discovery and issue a Belaire-West Notice in the
event of a failed mediation.” Garcia’s record citations do not support these
assertions. Even assuming these statements are true, they do not help
Garcia’s position.

                                       14
      As to post-Viking River litigation conduct, the record does not reflect
any unreasonable delay by Omni. Omni filed a motion to stay proceedings a
little more than a month after certiorari was granted. The proposed motion
to compel was discussed at the first post-stay status conference, with Omni
filing its motion in accordance with court-imposed deadlines. Garcia
contends that Omni did not “immediately” seek to enforce the arbitration
agreement after the Supreme Court decided Viking River, contending that he
“was required to force Omni to either (1) continue the litigation of the case, or
(2) file its Motion to Compel Arbitration, at a July 29, 2022 status
conference.” In support, Garcia points to the superior court’s Register of
Actions and the minutes of the July 29, 2022 status conference—neither of
which reflect that Garcia had to “force” Omni to bring its motion.

      3.    Prejudice

      The trial court also found that “ordering arbitration at this late stage
would prejudice [Garcia] who has already incurred expenses associated with
the litigation and mediation.” But Iskanian forecloses this conclusion.
      In Iskanian, the employee contended “that because he spent three
years attempting to obtain class certification, including considerable effort
and expense on discovery, waiver should be found on the ground that the
delay in the start of arbitration prejudiced him.” (Iskanian, supra, 59 Cal.4th
at p. 376.) The court rejected this argument because the delay and expense
were not “caused by the unreasonable or unjustified conduct of the party
seeking arbitration,” but rather “the delay was reasonable in light of the state
of the law at the time and [the employee’s] own opposition to arbitration.”
(Id. at p. 377.) Here, too, the delay was reasonable given the state of the law
before Viking River. (See Iskanian at p. 361 [litigation conducted for five
years before motion to compel arbitration, including at least two years of

                                       15
discovery and a class certification motion]; Barrera, supra, 95 Cal.App.5th
at pp. 2–3 [litigation conducted for over two years, “with defendants filing a
demurrer, plaintiffs serving discovery requests, and defendants responding to
those requests”]; Piplack, supra, 88 Cal.App.5th at pp. 1285–1286 [litigation
conducted for over two years “with the filing of answers, demurrers, amended
complaints, and a discovery motion”].) We do not find prejudice based on
unreasonable delay.

      4.    Federal Law as to Waiver

      As previously noted, there is some uncertainty as to whether state or
federal law applies to the waiver analysis for arbitration agreements
governed by the FAA. (See Morgan, supra, 596 U.S. at pp. 416–417
[reserving on disputed issues regarding the relevance of state law to waiver
analysis].) As Iskanian involved an arbitration agreement under the FAA,
we follow our Supreme Court’s analysis.
      In any case, relevant California law and federal law are the same.
Under federal law, a party may “knowingly relinquish the right to arbitrate
by acting inconsistently with that right.” (Morgan, supra, 596 U.S. at p. 419.)
“Where, as here, the concern is whether the undisputed facts of defendant’s
pretrial participation in the litigation satisfy the standard for waiver, the
question of waiver of arbitration is one of law which [courts] review de novo.”
(Fisher v. A.G. Becker Paribas Inc. (9th Cir. 1986) 791 F.2d 691, 693 (Fisher).)
      The Ninth Circuit held that, if existing law would have precluded
arbitration at the time a lawsuit is filed, waiting to file a motion to compel
arbitration until after the law has changed is not inconsistent with the right
to arbitrate. (See Fisher, supra, 791 F.2d at pp. 694–697; Letizia v.
Prudential Bache Securities, Inc. (9th Cir. 1986) 802 F.2d 1185, 1187
[Although “defendants did not seek arbitration until after the close of

                                       16
discovery, nine months after their answer was filed,” “there was no existing
right to arbitrate when this suit was filed,” and “there could have been no
waiver.”].) Federal courts cannot consider prejudice to the party resisting
arbitration. (Morgan, supra, 596 U.S. at p. 415.) We therefore conclude that
even under federal law our analysis and conclusions under state law would
remain unchanged.

                                DISPOSITION

      In its minute order the trial court stated, “Because the motion is denied
on [the basis of waiver], the court does not decide the remaining issues raised
in the parties’ papers.” Given our ruling, the October 28, 2022 order denying
Omni’s motion to compel arbitration is vacated, and the matter is remanded
to the trial court to address the unresolved issues raised by the parties on the
motion.

                                                                      DATO, J.

WE CONCUR:

O’ROURKE, Acting P. J.

KELETY, J.

                                      17