Court Opinion

ID: 9865593
Source: CourtListenerOpinion
Date Created: 2023-09-25 19:04:31.259092+00
Date Added: 2024-06-11T13:40:31.049703
License: Public Domain

Filed 9/25/23 Decker v. Postmates CA1/2

              NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not
      been certified for publication or ordered published for purposes of rule 8.1115.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

                                  FIRST APPELLATE DISTRICT

                                               DIVISION TWO

       BARBARA DECKER,
       Plaintiff and Respondent,
                                                                    A165358
       v.
       POSTMATES, INC.,                                             (San Francisco County
                                                                    Super. Ct. No. CGC-20-
       Defendant and Appellant.
                                                                    586984)

      Barbara Decker filed a lawsuit against Postmates, Inc. under the
Private Attorney General Act (PAGA). Postmates moved to compel
arbitration and stay the case. The trial court denied the motion to compel,
but granted the stay, and Postmates appealed. Since the appeal was filed,
the United States Supreme Court has held that PAGA claims based on code
violations personally suffered by the plaintiff must be ordered to arbitration.
And the California Supreme Court has held that PAGA claims based on code
violations suffered by employees other than the plaintiff cannot be, and can
proceed in court. In short, both issues that existed as of the time this appeal
was filed have been resolved, in cases binding here. The only remaining
issue is as to the stay, in regard to which we remand the matter to the trial

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court to revisit the issue in light of the new cases and the passage of time
since it made its ruling.
                                  BACKGROUND
      The General Setting
      Postmates, LLC, formally known as Postmates, Inc. (Postmates), is an
online delivery service, operating an online and mobile platform connecting
consumers with local merchants such as restaurants and grocery stores and,
if requested by a consumer, local couriers who deliver food and other items
from those merchants. When a consumer places an order through
Postmates’s platform, he or she could decide whether to pick up an order in
person or have it delivered. And if the consumer chose delivery, nearby
couriers would receive a notification through the Postmates’s platform and
choose whether to accept the consumer’s offer to pick up and complete the
delivery.
      Anyone could sign up to be a courier, but they could not use the
Postmates platform to make deliveries without accepting the terms of
Postmates’s Fleet Agreement. The Fleet Agreement is a 15-page document
that Postmates’s brief describes in some detail, including how it is presented
to the courier, his or her options, how it is accepted, and various of the
provisions in it. We see no need to go into such detail here, as the issues
typically found in arbitration cases—issues, for example, such as the validity
of the agreement, unconscionability, delegation, or whether the FAA
applies—are not present here, where the issue is straightforward.
      To set the scene therefore, we quote this succinct paragraph from
Decker’s respondent’s brief: “The Fleet Agreement contains an arbitration
provision providing that ‘Postmates and [couriers] mutually agree that any
and all disputes or claims between the Parties will be resolved in individual

                                        2
arbitration.’ [Citation.] The arbitration provision also includes a
representative action waiver purporting to waive any ‘claims brought under
and state’s Private Attorney General Act (PAGA)[.]’ [Citation.] Lastly, the
arbitration provision also contains a severability clause which provides in
relevant part, ‘[i]n the event any portion of this Mutual Arbitration Provision
is deemed unenforceable, the remainder of this Mutual Provision will be
enforceable. Ms. Decker accepted the Fleet Agreement in order to begin
making deliveries on the Postmates platform.”
      The Proceedings Below
      In September 2020, Decker filed a complaint, followed shortly by an
amended complaint, against Postmates, alleging that she and other couriers
were misclassified as independent contractors. She sought penalties for
alleged violations of the Labor Code, including unpaid wages, overtime
compensation, skipped meal breaks, and wage statement violations.
      Decker’s lawsuit was based on PAGA, which authorizes any “aggrieved
employee” to initiate a civil action against a former employer “on behalf of
himself or herself and other current or former employees” to recover civil
penalties for violations of the Labor Code ordinarily “assessed and collected
by the Labor and Workforce Development Agency . . . .” (Lab. Code, § 2699,
subd. (a).) As our Supreme Court has described, “An employee suing under
PAGA ‘does so as the proxy or agent of the state’s labor law enforcement
agencies.’ [Citation.] . . . Moreover, the civil penalties a PAGA plaintiff may
recover on the state’s behalf are distinct from the statutory damages or
penalties that may be available to employees suing for individual violations.
[Citation.] Relief under PAGA is designed primarily to benefit the general
public, not the party bringing the action. [Citations.] ‘A PAGA
representative action is therefore a type of qui tam action,’ conforming to all

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‘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.’ ” (Kim v. Reins International
California, Inc. (2020) 9 Cal.5th 73, 81, italics omitted.)
        In January 2021, Postmates moved to compel arbitration and for a
stay.
        In May 2021, Decker filed an ex parte application for an order
dismissing her class claims, and on June 30, the trial court filed an order
dismissing those claims. And in light of the pending class action settlement
in the Postmates Classification Cases (J.C.P. No. 5068) No. CJC-20-005068,
pending before the San Francisco Superior Court, Postmates’s motion was
taken off calendar.
        Following months of continuances, on February 25, 2022, Decker filed
her opposition to Postmates’s motion. The opposition memorandum was brief
indeed, 12 pages total, and as alluded to above did not assert defenses or
positions typically found in arbitration cases. Rather, Decker’s opposition
relied primarily on Iskanian v. CLS Transportation Los Angeles, LLC (2014)
59 Cal.4th 348 (Iskanian), where the California Supreme Court held “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.” (Iskanian, supra, 59 Cal.4th at p. 360.) Iskanian
further held that the FAA does not preempt a rule against such waivers,
stating: “[A] PAGA claim lies outside the FAA’s coverage because it 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,
which alleges directly or through its agents—either the [Labor and Workforce

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Development] Agency or aggrieved employees—that the employer has
violated the Labor Code.” (Iskanian, at pp. 386−387.)
      Postmates filed a reply, and the motion came on for hearing on March
22. That same day, the trial court filed its order denying the motion to the
extent it sought to compel arbitration. Noting that Decker “pleads solely a
representative PAGA action,” and “does not allege any individual claims,” the
court held that “[t]he waiver of representative PAGA claims in an arbitration
provision—claims that are on behalf of the State of California—is
unenforceable and the Court of Appeal has held that the U.S. Supreme Court
has yet to abrogate that rule.” Thus, the court concluded, there was “nothing
to arbitrate.”
      Although the trial court denied the motion to compel arbitration, the
court granted the motion to stay pending overlapping arbitrations, based on
Code of Civil Procedure section 1281.4 (Section 1281.4).1 The court held that
section applied because the “employee/independent contractor
misclassification dispute is an issue in this case and that issue is presently
being arbitrated in several different venues.”
      On May 18, Postmates filed a notice of appeal.

      1 Which section provides:   “If a court of competent jurisdiction, whether
in this State or not, has ordered arbitration of a controversy which is an issue
involved in an action or proceeding pending before a court of this State, the
court in which such action or proceeding is pending shall, upon motion of a
party to such action or proceeding, stay the action or proceeding until an
arbitration is had in accordance with the order to arbitrate or until such
earlier time as the court specifies. [¶] . . . [¶] If the issue which is the
controversy subject to arbitration is severable, the stay may be with respect
to that issue only.”

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      A month later, specifically June 15, the United States Supreme Court
filed its opinion in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct.
1906 (Viking River).
      Viking River
      The Viking River court began its analysis by explaining PAGA claims
are “representative” in two ways. (Viking River, supra, 596 U.S. at p. ___
[142 S.Ct. at p. 1916].) First, “PAGA actions are ‘representative’ in that they
are brought by employees acting as representatives—that is, as agents or
proxies—of the State.” (Viking River, at p. ___ [142 S.Ct. at p. 1916].) In that
sense, “ ‘ “every PAGA action is . . . representative” ’ and ‘[t]here is no
individual component to a PAGA action,’ [citations], because every PAGA
claim is asserted in a representative capacity.” (Viking River, at p. ___
[142 S.Ct. at p. 1916].) Second, some PAGA actions are “representative” in
that they are brought by one employee to recover civil penalties for Labor
Code violations committed against other employees. (Viking River, at p. ___
[142 S.Ct. at p. 1916].)2
      As another preliminary matter, the Supreme Court, in a footnote,

      2 As explained in Galarsa v. Dolgen California, LLC (2023)

88 Cal.App.5th 639, 647–653, review granted May 3, 2023, S279021
(Galarsa): “The United States Supreme Court stated it would endeavor to be
clear in its use of the term ‘representative’ and would use the phrase ‘
“individual PAGA claim” to refer to claims based on code violations suffered
by the plaintiff.’ [(Viking River, supra, 596 U.S. at p. ___ [142 S.Ct. at
p. 1916].)] In addition, the court used the term ‘non-individual claims’
without explicitly defining it (id. at p. ___ [142 S.Ct. at pp. 1924, 1925]), but
the opinion readily implies such claims are representative claims pursued by
the plaintiff and based on Labor Code violations suffered by employees other
than the plaintiff.” Here, we will refer to PAGA claims based on code
violations personally suffered by a plaintiff as “individual” claims, and PAGA
claims based on code violations suffered by employees other than the plaintiff
as “non-individual” claims.

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rejected Iskanian’s holding that the FAA does not apply to PAGA claims.
(Viking River, supra, 596 U.S. at p. ___, fn. 4 [142 S.Ct. at p. 1919, fn. 4],
quoting Iskanian, supra, 59 Cal.4th at p. 387.) Specifically, it rejected
Iskanian’s reasoning “that a PAGA action lies outside the FAA’s coverage
entirely because § 2 is limited to controversies ‘arising out of’ the contract
between the parties [citation], and a PAGA action ‘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.’ [Citation.]” (Viking River,
at p. ___, fn. 4 [142 S.Ct. at p. 1919, fn. 4], quoting Iskanian, at p. 387.)
Viking River concluded that “disputes resolved in PAGA actions satisfy this
requirement,” because “[t]he contractual relationship between the parties is a
but-for cause of any justiciable legal controversy between the parties under
PAGA, and ‘arising out of’ language normally refers to a causal relationship.
[Citation.]” (Viking River, at p. ___, fn. 4 [142 S.Ct. at p. 1919, fn. 4].)
Moreover, “nothing in the FAA categorically exempts claims belonging to
sovereigns from the scope of § 2.” (Viking River, at p. ___, fn. 4 [142 S.Ct. at
p. 1919, fn. 4].)
      Given its conclusion that the FAA applied, the Supreme Court went on
to consider whether the FAA preempts two of Iskanian’s rules, which it
described this way: “Iskanian’s principal rule prohibits waivers of
‘representative’ PAGA claims in the first sense. That is, it prevents parties
from waiving representative standing to bring PAGA claims in a judicial or
arbitral forum. But Iskanian also adopted a secondary rule 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.” (Viking River, supra, 596 U.S. at p. ___

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[142 S.Ct. at pp. 1916–1917].)
      The Viking River court determined the FAA does not preempt
Iskanian’s principal rule. (Viking River, supra, 596 U.S. at pp. ___–___, ___–
___ [142 S.Ct. at pp. 1922–1923, 1924–1925]), reasoning that because the
FAA is concerned with the forum in which disputes are resolved, not with the
substantive law that resolves them, it did not preempt this rule. (Id. at p. ___
[142 S.Ct. at p. 1919].) Thus, even after Viking River, a contractual waiver of
the right to prosecute PAGA claims is unenforceable as against California
public policy.
      However, the Viking River court held the FAA preempts Iskanian’s
secondary rule “preclud[ing] [the] division of PAGA actions into individual
and non-individual claims through an agreement to arbitrate.” (Viking River,
supra, 596 U.S. at p. ___ [142 S.Ct. at p. 1924].) If splitting were allowed, the
court reasoned, parties might prefer to resolve higher-stakes nonindividual
claims in court, where appellate review is available to correct errors, but to
arbitrate lower-stakes individual claims. (Ibid.) But Iskanian’s prohibition
on contractual splitting of PAGA claims “circumscribes the freedom of parties
to determine ‘the issues subject to arbitration’ and ‘the rules by which they
will arbitrate’ ” by imposing on them an all-or-nothing choice: arbitrate both
individual and non-individual claims or forego arbitration entirely. (Viking
River, at p. ___ [142 S.Ct. at p. 1923].)
      The Supreme Court then turned to the agreement at issue there, which
required “arbitrat[ion] [of] any dispute arising out of [the plaintiff’s]
employment” and contained a waiver provision “providing that in any
arbitral proceeding, the parties could not bring any dispute as a class,
collective, or representative PAGA action. . . .” (Viking River, supra, 596 U.S.
at p. ___ [142 S.Ct. at p. 1916].) The agreement also included a “severability

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clause” specifying that “if any ‘portion’ of the waiver remained valid, it would
be ‘enforced in arbitration.’ ” (Ibid.) The court relied on that clause in
concluding the defendant was entitled to compel arbitration of the plaintiff’s
individual claim, even though the arbitration agreement was invalid as to the
representative claim. (Id. at p. ___ [142 S.Ct. p. 1925].)
      Having concluded that the individual PAGA claim should be compelled
to arbitration, the Supreme Court noted “[t]he remaining question is what
the lower courts should have done with [the plaintiff’s] non-individual
claims.” (Viking River, supra, 142 S.Ct. at p. 1925.) And, a majority held,
once a plaintiff’s individual PAGA claim is compelled to arbitration, any
remaining representative PAGA claim asserted on behalf of other allegedly
aggrieved employees should be dismissed.
      The Joint Motion to Stay
      On October 6, 2022, the parties filed in this court a joint motion to stay
the appeal (Joint Motion). Noting the holding in Viking River, the joint
motion stated, “it is undisputed that Decker’s individual PAGA claims must
be compelled to arbitration.” (Joint Motion at pp. 5, 11.) But the joint motion
went on, “Decker . . . nonetheless retains standing under PAGA to pursue the
representative PAGA claims in court” (Joint Motion at p. 5), adding this:
“Since Viking River, plaintiffs in California have disputed whether a plaintiff
lacks standing to pursue the non-individual PAGA claims after the individual
claims are compelled to arbitration. On July 20, 2022, the California
Supreme Court granted review in Adolph v. Uber Technologies, Inc. (No.
S274671), and will decide the question ‘[w]hether an aggrieved employee who
has been compelled to arbitrate claims under [PAGA] . . . maintains statutory
standing to pursue “PAGA claims arising out of events involving other
employees” . . . in court or in any other forum the parties agree is suitable.’

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[Citation.]”
      The joint motion then had its “Argument,” which began with this
paragraph: “The central dispute in this appeal is whether Decker may
litigate any portion of her PAGA claims in court. Under Viking River, there
is no question that Decker’s individual PAGA claims must be compelled to
individual arbitration pursuant to the Federal Arbitration Act and the
parties’ individual arbitration agreement. The dispute, then, is whether
Decker’s remaining non-individual PAGA claims must be dismissed (as
Viking River held) or may proceed in court (as Decker maintains) once the
individual PAGA claims are sent to arbitration. Because the California
Supreme Court will decide this question in Adolph, the parties request that
the Court stay this appeal in the interest of judicial efficiency and to conserve
party and judicial resources.”
      We denied the stay, and the parties filed their briefs, the last of which,
Postmates’s reply, was filed on July 3, 2023. Two weeks later, the California
Supreme Court decided Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th
1104(Adolph).
      Adolph
      By way of brief background, after Viking River at least five published
California Court of Appeal decisions squarely addressed the issue of whether
a plaintiff continues to have standing under PAGA to litigate non-individual
claims after the individual claims are compelled to arbitration. And all five
reached the same conclusion: dismissal for lack of standing is not required by
California law. (Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th
1281, 1292, review granted June 14, 2023, S279546; Gregg v. Uber
Technologies, Inc. (2023) 89 Cal.App.5th 786, 805–806, review granted June
14, 2023, S279722 (Gregg); Seifu v. Lyft, Inc. (2023) 89 Cal.App.5th 1129,

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1139–1141, review granted June 14, 2023, S279932; Nickson v. Shemran, Inc.
(2023) 90 Cal.App.5th 121, 134–135; Galarsa, supra, 88 Cal.App.5th at pp.
652–653, review granted May 3, 2023, S279021.)
      The California Supreme Court took up the issue in Adolph, and, citing
with approval the five unanimous decisions of the Courts of Appeal,
concluded that “[w]here a plaintiff has brought a PAGA action comprising
individual and non-individual claims, an order compelling arbitration of the
individual claims does not strip the plaintiff of standing as an aggrieved
employee to litigate claims on behalf of other employees under PAGA.”
(Adolph, supra, 14 Cal.5th at p. 1114; see id. at pp. 1121–1123.)
      Given the timing of Adolph, we requested supplemental briefing on it
as well as the issue of the stay ordered by the trial court. We received that
briefing and heard oral argument.
      Applying Adolph here, as we must, we conclude that Decker may
pursue the non-individual claims in court.
      That leaves the one remaining issue—the stay.
      The Stay
      Postmates argues in its opening brief and supplemental brief that
Decker’s non-individual PAGA claims should be stayed pending individual
arbitration, specifically, that we should direct the trial court to modify its
order staying the case to extend the stay pending arbitration of Decker’s
individual claims. Postmates argues that section 1281.4 requires a stay if a
court has ordered arbitration of a controversy involving overlapping issues,
and asserts, “Here, the trial court faithfully applied section 1281.4 and stayed
Decker’s PAGA action in light of several other pending arbitrations raising
materially identical misclassification-based claims. [Citation.] The court
noted that the ‘employee/independent contractor misclassification dispute’ at

                                        11
issue in Decker’s action ‘is presently being arbitrated in several different
venues,’ and ‘[g]iven that overlap, a stay is warranted.” And Postmates’s
supplemental brief asserts that Adolph “strongly suggests” that the non-
individual claims should be stayed.
      Decker, on the other hand, argues that we should remand the case back
to the trial court “for a determination of whether the case should be stayed at
the court’s discretion in the interests of judicial efficiency—but not because
the court is required to do so under section 1281.4.” Decker asserts that
section 1281.4 does not require a stay if a controversy in arbitration brought
by another claimant only shares an issue of fact or law with a court action,
which, she claims, is the situation here. Decker also contends that under
Viking River the individual claims in arbitration and non-individual claims in
court are separate—the former stemming from injury to Decker, the latter
from injuries to other employees.
      Finally, Decker’s supplemental brief—referring to “the recently
pending arbitrations” cited to by the trial court in its order—represents that
“those arbitrations—consolidated as Postmates Classification Cases, Case
No. CJC-20-005086 (San Francisco Superior Court)—settled last year.
Because these arbitrations are settled, there is no overlapping issue in any
pending arbitrations.”
      Adolph recognized that a “trial court may exercise its discretion to stay
the non-individual claims pending the outcome of the arbitration pursuant to
section 1281.4 of the Code of Civil Procedure.” And given the change in the
legal landscape and the passage of time since the trial court issued its order,
we remand the matter to the trial court.

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                                     DISPOSITION
      The order denying Postmates’s motion to compel arbitration is
reversed, and the matter is remanded to the trial court to enter a new order
and conduct further proceedings consistent with this opinion. The parties are
to bear their own costs on appeal.

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                                      _________________________
                                      Richman, J.

We concur:

_________________________
Stewart, P.J.

_________________________
Miller, J.

Decker v. Postmates, Inc. (A165358)

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