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Sky Sports, Inc v. the Superior Court of Los Angeles County

December 15, 2011

SKY SPORTS, INC., PETITIONER,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, RESPONDENT; HECTOR HOGAN ET AL., REAL PARTIES IN INTEREST.



PETITION for writ of mandate. Ernest M. Hiroshige, Judge. Petition granted in part, and denied in part. (Los Angeles County Super. Ct. No. BC402060)

The opinion of the court was delivered by: Aldrich, J.

CERTIFIED FOR PUBLICATION

Petitioner Sky Sports, Inc., doing business as Sky Security Services (the company), seeks a writ of mandate, directing the respondent court to vacate an order finding that it has waived its right to compel arbitration in this class action lawsuit, which seeks damages and penalties for rest break violations (Lab. Code, §§ 203, 226.7). The company raised the arbitration issue to defeat class certification. The company maintained that the putative class representative, Hector Hogan, was not an adequate class representative because his claims were not typical of the majority of the class who had signed arbitration agreements. Although Hogan had not signed the company's arbitration agreement, we must determine if the company waived its right to enforce the agreements because it did not move to compel arbitration before certification of a class that included parties to the agreement. We conclude the statutory requirements to compel arbitration under Code of Civil Procedure section 1281.2*fn1 were not satisfied until the class was certified. Thus, any purported delay in bringing the motion does not constitute a waiver of the right to move to compel arbitration. We grant the petition for mandate to permit the company to file a motion to compel arbitration.*fn2

FACTUAL AND PROCEDURAL BACKGROUND

Hogan filed a class action complaint against the company seeking damages and penalties for failure to provide rest breaks. (Lab. Code, §§ 203, 226.7.) The putative class was defined to include "employees who worked in non-exempt positions performing services as licensed security guards . . . ." In its answer to the class action complaint, the company asserted as an affirmative defense that the complaint was barred by a mandatory arbitration agreement. Hogan, however, did not sign an arbitration agreement.

1. Trial Court Determines Company Waived its Right to Enforce Arbitration Agreements Signed by Putative Class Members

On November 16, 2009, Hogan moved to certify a proposed class of "all current and former licensed security guards" employed by the company from November 14, 2004, to the present. About eight months later, in supplemental briefing, the company first raised the arbitration agreements to defeat class certification. The company maintained that Hogan was not an adequate class representative and could not use the class action procedure to defeat an otherwise enforceable arbitration agreement.

On July 22, 2010, the trial court issued a tentative ruling granting the class certification motion, certifying the class as all "current and former licensed security guards employed by [the company] from November 14, 2004 to the present." Hogan was appointed the class representative. After oral argument, the trial court took the matter under submission.

Ruling on the submitted matter, the trial court issued an interim order, requesting that the company lodge, under seal, a list that identified those putative class members who signed arbitration agreements. The company's list revealed that a high percentage of the putative class signed arbitration agreements.

Following the submission of the arbitration agreements, the trial court issued a tentative ruling denying class certification because the "arbitration agreements entered into by the great majority of the class members trump the procedural mechanism by which plaintiff Hogan seeks to consolidate these claims." The trial court also rejected Hogan's argument that the company waived the right to compel the arbitration. The trial court viewed the company's one-year delay in raising the issue as unreasonable, but concluded that the delay was not sufficient by itself to waive the right to compel arbitration.

On April 18, 2011, the trial court announced its ruling on the class certification motion and certified of a class that included a high percentage of employees who had signed arbitration agreements. The trial court's order stated that the company waived its right to arbitration due to the unreasonable delay in bringing the petition to compel arbitration, citing section 1281.2, subdivision (a).

2. Petition for Writ of Mandate

The company sought a writ of mandate, directing the respondent court to vacate its order because the company waived its right to enforce the arbitration agreements. We informed the trial court and parties that we were considering the issuance of a peremptory writ of mandate in the first instance to vacate only the arbitration order and to permit the company to bring a motion to compel arbitration. (Lewis v. Superior Court (1999) 19 Cal.4th 1232, 1239-1240; Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 178-180.) Our order stated that a "motion to compel the named plaintiff Hector Hogan to arbitrate before a ruling on the class ...


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