Court Opinion

ID: 4170543
Source: CourtListenerOpinion
Date Created: 2017-05-19 20:03:54.431619+00
Date Added: 2024-06-11T14:39:01.604415
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                           FILED
                            FOR THE NINTH CIRCUIT
                                                                           MAY 19 2017
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
DONTE D. WINFREY, SR., an                        No.   16-55184
individual, on behalf of himself and all
similarly situated and aggrieved                 D.C. No. 5:15-cv-01873-VAP-SP
employees,

              Plaintiff-Appellee,                MEMORANDUM*

 v.

KMART CORPORATION, AKA Sears
Holding Corporation,

              Defendant-Appellant.

                   Appeal from the United States District Court
                       for the Central District of California
                Virginia A. Phillips, Chief District Judge, Presiding

                             Submitted May 9, 2017**
                               Pasadena, California

      *
             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).
Before: PREGERSON and FRIEDLAND, Circuit Judges, and LASNIK,***
District Judge.

      Defendant Kmart Corporation (“Kmart”) appeals the district court’s order

denying Kmart’s motion to stay plaintiff Donte D. Winfrey, Sr.’s representative

claims under the California Labor Code Private Attorneys General Act of 2004

(“PAGA”). Kmart argues that the district court abused its discretion by declining

to stay litigation of Mr. Winfrey’s nonarbitrable representative PAGA claims

pending the arbitration of Mr. Winfrey’s underlying Labor Code claims pursuant to

an arbitration agreement in Mr. Winfrey’s personnel file.

      Section 3 of the Federal Arbitration Act (“FAA”) provides that a court “shall

on application of one of the parties stay the trial” of “any suit or proceeding”

brought “upon any issue referable to arbitration under [an arbitration]

agreement . . . until such arbitration has been had in accordance with the terms of

the agreement.” 9 U.S.C. § 3. A party is only “entitled to a stay pursuant to

section 3” as to arbitrable claims or issues. Leyva v. Certified Grocers of Cal.,

Ltd., 593 F.2d 857, 863 (9th Cir. 1979) (emphasis added). As to nonarbitrable

claims and issues, however, the district court has discretion whether to stay the

litigation pending arbitration. Id. at 863–64.

      ***
            The Honorable Robert S. Lasnik, United States District Judge for the
Western District of Washington, sitting by designation.
                                           2
      In this case, the parties do not dispute that, under the terms of the arbitration

agreement, if a court determines the PAGA waiver is unenforceable, Mr. Winfrey’s

representative PAGA claims “must be litigated in a civil court . . . and not as a

private attorney general arbitration.” Because the waiver of representative PAGA

claims is unenforceable, see generally Sakkab v. Luxottica Retail N. Am., Inc., 803
F.3d 425 (9th Cir. 2015); Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129 (Cal.

2014), those claims are nonarbitrable here, and it follows that Section 3 of the FAA

does not require the district court to stay litigation of those claims while

Mr. Winfrey’s other claims are arbitrated.

      Accordingly, the district court had discretion to decide whether “it is

efficient for its own docket and the fairest course for the parties to enter a stay of

an action before it, pending resolution of independent proceedings which bear

upon the case.” Leyva, 593 F.2d at 863. If there is “even a fair possibility” that a

stay will “work damage” to another party, a stay may be inappropriate.

Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066

(9th Cir. 2007) (quoting Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)). The

district court acted within its discretion in denying a stay of Mr. Winfrey’s

nonarbitrable PAGA action pending arbitration of Mr. Winfrey’s Labor Code

claims.

                                            3
AFFIRMED.

            4