Court Opinion

ID: 6334241
Source: CourtListenerOpinion
Date Created: 2022-04-22 17:03:17.14217+00
Date Added: 2024-06-11T09:23:35.469185
License: Public Domain

Filed 4/22/22 Sanchez v. MC Painting 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                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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 APPEL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

 LAURO SANCHEZ,                                                       D078817

           Plaintiff and Respondent,

           v.                                                         (Super. Ct. No. 37-2020-00030754-
                                                                      CU-OE-CTL)
 MC PAINTING,

           Defendant and Appellant.

         APPEAL from an order of the Superior Court of San Diego County,
Timothy B. Taylor, Judge. Request for judicial notice granted. Order
affirmed.
         Finch, Thornton & Baird, Chad T. Wishchuk and Marlene C. Nowlin
for Defendant and Appellant.
         Moon & Yang, Kane Moon, Allen Feghali and Enzo Nabiev for Plaintiff
and Respondent.
      MC Painting appeals from an order denying its petition to compel
arbitration of a Private Attorneys General Act of 2004 (PAGA) (Lab. Code,
§ 2698 et seq.) action brought by a former employee, Lauro Sanchez. In
denying the petition, the trial court followed Iskanian v. CLS Transportation
Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), which held that a
worker’s right to pursue a representative PAGA action cannot be waived and
that this state law rule is not preempted by the Federal Arbitration Act
(FAA).
      On appeal, MC Painting contends Iskanian is no longer controlling
because it has been “overruled” by the United States Supreme Court in Epic
Systems Corp. v. Lewis (2018) 138 S.Ct. 1612 (Epic Systems). But in Correia
v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, 619‒620 (Correia) and
more recently again in Provost v. YourMechanic, Inc. (2020) 55 Cal.App.5th
982, 997‒998, review denied January 20, 2021, S265736 (Provost), other
panels of this court rejected that identical claim. We see no compelling
reason to depart from these cases.
      Alternatively, MC Painting asks that we stay this appeal until the
United States Supreme Court decides the FAA preemption issue in Moriana
v. Viking River Cruises, Inc. (Sept. 18, 2020, B297327) [nonpub. opn.], cert.
granted sub nom. Viking River Cruises v. Moriana (Dec. 15, 2021, No. 20-
1573), ___ U.S. ___ [211 L.Ed.2d 421] (Viking River Cruises).) However, we
cannot disagree with binding California Supreme Court precedent based on
the mere possibility that a future United States Supreme Court decision will
overrule Iskanian. After also rejecting MC Painting’s contention that the
trial court abused its discretion by considering Sanchez’s tardy opposition
papers, we affirm the order denying the petition to compel arbitration.

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                FACTUAL AND PROCEDURAL BACKGROUND
        MC Painting is in the business of painting, concrete restoration, stucco
patching, and related services. In February 2018, it hired Sanchez, who
signed a Spanish language arbitration agreement. In English, it states in
part:
           “In connection with any dispute, claim, or controversy
           (‘Claim(s)’) arising out of or in any way related to the
           employment, . . . whether based in contract, tort, or
           statutory duty or prohibition, the Parties agree to submit
           the Claim(s) to binding arbitration . . . .” [¶] . . . [¶]
           “All issues and questions concerning the construction,
           validity, enforcement, and interpretation of this Agreement
           shall be governed by, and construed in accordance with, the
           Federal Arbitration Act . . . . Employee agrees Employee is
           waiving the right to bring . . . a class action, representative
           action, or collective action . . . .”
        In 2020, Sanchez filed a putative class action complaint against MC
Painting alleging wage and hour claims. Later, Sanchez voluntarily
dismissed his claims without prejudice, with the exception of a representative

PAGA cause of action.1
        MC Painting petitioned to compel arbitration. Citing Iskanian,
Sanchez opposed the motion stating, “the California Supreme Court has been
abundantly clear that representative PAGA claims are not subject to
arbitration.” After an unreported hearing, the trial court denied the petition,

1     The request for dismissal is not in the record on appeal; however, the
parties’ briefs agree that Sanchez’s only remaining claim is a representative
PAGA action. (See Alki Partners, LP v. DB Fund Services, LLC (2016) 4
Cal.App.5th 574, 586, fn. 5 [order sustaining demurrer not in record, but
established by the parties’ briefs].) Moreover, the order denying the motion
to compel arbitration is consistent with the briefs, stating “the class and
individual allegations have been dismissed from the [first amended
complaint], leaving only the representative PAGA claim.”
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stating, “Iskanian remains good law” and “several appellate courts” have held
that a “PAGA plaintiff may not be required to arbitrate” without the state’s
consent.

                                 DISCUSSION

A.    The Trial Court Correctly Determined That Sanchez’s Agreement to
      Arbitrate Representative PAGA Claims is Unenforceable.
      PAGA “authorizes an employee to bring an action for civil penalties on
behalf of the state against his or her employer for Labor Code violations
committed against the employee and fellow employees, with most of the
proceeds of that litigation going to the state.” (Iskanian, supra, 59 Cal.4th at
p. 360.) “The civil penalties recovered on behalf of the state under the PAGA
are distinct from the statutory damages to which employees may be entitled
in their individual capacities.” (Iskanian, at p. 381.) A PAGA action is,
therefore, “ ‘ “fundamentally a law enforcement action designed to protect the
public and not to benefit private parties.” ’ ” (Iskanian, at p. 387.)
      “[A]n 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.)
This state law is not preempted by the FAA because “the FAA aims to ensure
an efficient forum for the resolution of private disputes, whereas a PAGA
action is a dispute between an employer and the state [Labor and Workforce
Development] Agency.” (Iskanian, at p. 384.) If these holdings remain good
law, the waiver contained in MC Painting’s arbitration agreement is not
enforceable.
      MC Painting contends Iskanian is no longer good law, its FAA
preemption holding having been “effectively overruled” by the United States
Supreme Court in Epic Systems, supra, 138 S.Ct. 1612. But we have already

                                        4
rejected this same contention twice—in Correia, supra, 32 Cal.App.5th 602
and Provost, supra, 55 Cal.App.5th at pp. 997‒998.
      As we explained in Correia, the claim in Epic Systems differed
“fundamentally from a PAGA claim” because the employee there was
“asserting claims on behalf of other employees,” whereas a PAGA plaintiff has
“been deputized by the state” to act “ ‘as “the proxy or agent” of the state’ ” to
enforce the state’s labor laws. (Correia, supra, 32 Cal.App.5th at pp. 619–
620.) Because Epic Systems did not decide the same question presented in
Iskanian, the Correia court concluded its “interpretation of the FAA’s
preemptive scope [did] not defeat Iskanian’s holding or reasoning for
purposes of an intermediate appellate court applying the law.” (Correia, at
p. 620.) Correia further held that “[w]ithout the state’s consent, a predispute
agreement between an employee and an employer cannot be the basis for
compelling arbitration of a representative PAGA claim because the state is
the owner of the claim and the real party in interest, and the state was not a
party to the arbitration agreement.” (Correia, at pp. 621–622.)
      Moreover, as we explained in Provost, more than a year after Epic
Systems was decided, the California Supreme court reaffirmed Iskanian in
ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175 (ZB, N.A.). (See discussion in
Provost, supra, 55 Cal.App.5th at p. 998.) ZB, N.A. cited Iskanian with
approval, including its holding that an employee’s predispute agreement
waiving the right to bring a representative PAGA claim is unenforceable and
this rule is not preempted by the FAA. (ZB, N.A., at p. 185.) “Iskanian
established an important principle: employers cannot compel employees to
waive their right to enforce the state’s interests when the PAGA has
empowered employees to do so.” (ZB, N.A., at p. 197.) “Because we reaffirm

                                        5
our conclusion that Iskanian has not been overruled, we are bound to follow

it.” (Provost, at p. 998.)2

B.    This Appeal Should Not Be Stayed
      In Viking River Cruises, the Court of Appeal held that Epic Systems did
not overrule or invalidate the Iskanian rule against PAGA waivers. After the
California Supreme Court denied review in Moriana, the United States
Supreme Court granted certiorari to consider whether the FAA requires
enforcement of a bilateral arbitration agreement providing that an employee
cannot raise representative PAGA claims. (Viking River Cruises, supra,
B297327, cert. granted sub nom. Viking River Cruises v. Moriana (Dec. 15,

2021, No. 20-1573) ___ U.S. ___ [211 L.Ed.2d 421].)3
      MC Painting asks that we “hold” this appeal “in abeyance” until the
Supreme Court decides Viking River Cruises. However, under stare decisis
we do not have the discretion to question whether Iskanian was correctly
decided and we are duty bound to apply it in this appeal unless and until the
United States Supreme Court declares it to be an incorrect statement of
federal law. (See Auto Equity Sales, Inc. v. Superior Court of Santa Clara
County (1962) 57 Cal.2d 450, 455.) Obviously MC Painting can continue to
raise this issue as it pursues the appellate process.

2     Other cases uniformly concluding that Epic Systems did not overrule
Iskanian include: Collie v. Icee Company (2020) 52 Cal.App.5th 477, 482
review denied November 10, 2020, S264524; Contreras v. Superior Court of
Los Angeles County (2021) 61 Cal.App.5th 461, 471–472; Herrera v. Doctors
Medical Center of Modesto, Inc. (2021) 67 Cal.App.5th 538, 549–550; and
Olson v. Lyft, Inc. (2020) 56 Cal.App.5th 862, 872.
3     MC Painting’s request for judicial notice of the Supreme Court’s docket
in Viking River Cruises and “Question Presented” is granted. (Evid. Code,
§§ 452, subd. (d), 459, subd. (a).)
                                        6
C.    The Court Did Not Abuse Its Discretion In Considering Sanchez’s Late
      Opposition Papers
      Where, as here, a lawsuit is already pending, a defendant may file a
petition to compel arbitration in lieu of filing an answer to a complaint.
(Code Civ. Proc., § 1281.7.) MC Painting did so here on December 23, 2020,
with a proof of service by mail to an address in California filed the same date.
The hearing was scheduled for April 2, 2021. Absent an extension of time,
Sanchez’s response was due 15 after service—that is, January 7, 2021.
(Id., §§ 1290.6, 1013)! But he did not file opposition until March 15, 2021.
      Where no timely opposition is filed, the allegations of a petition to
compel arbitration are deemed admitted. (Taheri Law Group, A.P.C. v.
Sorokurs (2009) 176 Cal.App.4th 956, 962 (Taheri).) MC Painting invoked
that rule, but the trial court allowed the late filing, stating:
         “[E]ven if [Code of Civil Procedure] section 1290.6 applies,
         the statute specifically allows the court to extend the time
         for filing an opposition for good cause. [MC Painting] has
         failed to show that the court has no good cause to consider
         the late opposition brief or that it has suffered undue
         prejudice by the tardy filing. To the contrary, it appears
         that [MC Painting] was able to timely file and serve an 11-
         page reply on the merits.”
      In a two-paragraph argument at the end of its opening brief, MC
Painting contends that the order should be reversed because Sanchez filed an
untimely response. But as the trial court correctly noted, Code of Civil
Procedure section 1290.6 expressly allows an extension of time “for good
cause”—and MC Painting makes no argument that the trial court abused its
discretion in determining good cause existed here.
      In any event, the consequence of an untimely opposition is merely that
the factual allegations in the petition are deemed admitted. The trial court
still must draw legal conclusions from those deemed admitted facts. (Taheri,

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supra, 176 Cal.App.4th at p. 962). Here, the petition alleges: (1) MC
Painting is a California corporation; (2) in the construction industry;
(3) engaged in interstate commerce; (4) Sanchez signed the arbitration
agreement; and (5) the allegations in Sanchez’s complaint arise out of or
relate to his employment. Even assuming these allegations are deemed true,
the court remained free to draw the legal conclusion that the arbitration
agreement was unenforceable under Iskanian as to the representative PAGA
claims. Thus, even assuming for the sake of discussion that the trial court
abused its discretion in considering late opposition, any such error was
harmless.
                                DISPOSITION
      The request for judicial notice is granted. The order is affirmed.
Sanchez is entitled to recover costs on appeal.

                                                                          DATO, J.

WE CONCUR:

HALLER, Acting P. J.

IRION, J.

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