United States District Court, S.D. California
LINDA ANDRADE, individually and on behalf of all others similarly situated; and LILIANA AVILA, individually and on behalf of all others similarly situated, Plaintiffs,
v.
P.F. CHANG’S CHINA BISTRO, INC., a Delaware corporation; and DOES 1 through 50, inclusive, Defendants.
ORDER: (1) DENYING DEFENDANT’S RENEWED MOTION
TO VACATE ARBITRATION CLAUSE CONSTRUCTION AWARD; AND (2)
DENYING AS MOOT DEFENDANT’S MOTION FOR STAY OR, IN THE
ALTERNATIVE, TEMPORARY RESTRAINING ORDER AND/OR PRELIMINARY
INJUNCTION (ECF NOS. 70, 75)
JANIS
L. SAMMARTINO, UNITED STATES DISTRICT JUDGE
Presently
before the Court are Defendant P.F. Chang’s China
Bistro, Inc.’s Renewed Motion to Vacate Arbitration
Clause Construction Award [9 U.S.C. § 10] (Renewed Mot.
to Vacate, ECF No. 70) and Ex Parte Application for
Stay or, in the Alternative, Temporary Restraining Order
and/or Preliminary Injunction (Mot. to Stay, ECF No. 75).
Also before the Court are Plaintiffs’ Linda Andrade and
Liliana Avila’s Opposition to (ECF No. 72) and
Defendant’s Reply in Support of (ECF No. 73) the
Renewed Motion to Vacate. The Court vacated the hearing on
the Renewed Motion to Vacate and took these matters under
submission without oral argument pursuant to Civil Local Rule
7.1(d)(1). (ECF No. 74.) Having considered the parties’
arguments and the law, the Court DENIES Defendant’s
Renewed Motion to Vacate (ECF No. 70) and DENIES AS MOOT
Defendant’s Motion to Stay (ECF No. 75).
BACKGROUND
On
November 7, 2012, Plaintiffs filed the initial class action
complaint in this matter, alleging that Defendant engaged in
unfair competition and provided its employees with deficient
wage statements. (ECF No. 1.) Subsequently, on December 12,
2012, Plaintiffs filed an amended complaint, which included a
new, Private Attorney General Act (PAGA) claim. (ECF No. 8.)
On December 20, 2012, Defendant “move[d] this Court to
compel all of Plaintiffs[’] . . . individual claims to
arbitration pursuant to [Defendant]’s Dispute
Resolution Policy [(DRP)] . . . .” (ECF No. 11 at
2.[1])
Plaintiffs opposed the motion to compel arbitration,
partially on the ground that the DRP’s prohibition of
PAGA representative claims rendered the arbitration agreement
illegal and unenforceable. (ECF No. 18 at 15-17.) The Court
rejected this argument and concluded that the arbitration
agreement was enforceable even though it required
Defendant’s employees to waive their representative
PAGA claims. (ECF No. 24.)
On
September 6, 2013, Plaintiffs moved for re-consideration,
arguing that the Court should not exercise supplemental
jurisdiction over the PAGA claims due to public policy
considerations. (ECF No. 27 at 6-8.) The Court rejected
Plaintiffs’ argument and affirmed its previous ruling.
(ECF No. 36.) Subsequently, the matter proceeded to
arbitration before the Honorable Eli Chernow (retired).
(Decl. of John S. Battenfeld (Battenfeld Decl.) ¶ 3, ECF
No. 70-2.)
On June
26, 2014, the California Supreme Court issued an opinion in
Iskanian v. CLS Transportation, 59 Cal.App.4th 348
(2014), in which it held that “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.” Id. at 360. The
California Supreme Court further concluded that “the
[Federal Arbitration Act (FAA)] does not preempt a state law
that prohibits waiver of PAGA representative actions in an
employment contract.” Id. Thereafter, on
August 29, 2014, Plaintiffs filed a Motion for Clause
Construction Award with the Arbitrator, asking him to vacate
this Court’s previous orders as erroneous under
Iskanian and either permit arbitration of
Plaintiffs’ PAGA claim on a representative basis or
return the PAGA claim to this Court. (Battenfeld Decl. ¶
4, ECF No. 70-2; see also Battenfeld Decl. Ex. 1,
ECF No. 70-2 at 8-26.) On October 16, 2014, the Arbitrator
granted Plaintiffs’ motion, finding (1) the Arbitrator
rather than this Court could decide the validity of any class
or representative action waiver, and (2) the DRP’s
language barring Plaintiffs from pursuing arbitration of
representative claims was invalid as against public policy.
(Battenfeld Decl. ¶ 4, ECF No. 70-2; see also
Battenfeld Decl. Ex. 4, ECF No. 70-2 at 65-70.)
On
November 10, 2014, Defendant filed its first Motion to Vacate
Arbitration Clause Construction Award pursuant to 9 U.S.C.
§ 12 in this Court. (ECF No. 44.) The Court denied the
motion without considering the merits on the ground that
extreme circumstances did not warrant review of a non-final
arbitral award. (ECF No. 64 at 6.)
Plaintiffs
subsequently moved in arbitration to file a second amended
complaint (SAC) adding eight new representative PAGA claims.
(Battenfeld Decl. ¶ 7, ECF No. 70-2; see also
Battenfeld Decl. Ex. 5, ECF No. 70-2 at 71-92.) Plaintiff
Avila also sought discovery based on the new PAGA claims
Plaintiffs sought to add, to which Defendant objected.
(Battenfeld Decl. ¶ 8, ECF No. 70-2.) Consequently,
Defendant filed a brief with the Arbitrator asking him to
strike the new PAGA claims (Battenfeld Decl. ¶ 9, ECF
No. 70-2; see also Battenfeld Decl. Ex. 6, ECF No.
70-2 at 93-106), which the Arbitrator denied (Battenfeld
Decl. ¶ 9, ECF No. 70-2; see also Battenfeld
Decl. Ex. 7, ECF No. 70-2 at 107-08). Defendant then moved to
eliminate or postpone PAGA representative discovery
(Battenfeld Decl. ¶ 10, ECF No. 70-2; see also
Battenfeld Decl. Ex. 8, ECF No. 70-2 at 109-22) and requested
leave to file a motion for summary judgment to dismiss the
new representative PAGA claims in Plaintiffs’ SAC
(Battenfeld Decl. ¶ 10, ECF No. 70-2; see also
Battenfeld Decl. Ex. 9, ECF No. 70-2 at 123-31). The
Arbitrator denied Defendants’ motions. (Battenfeld
Decl. ¶ 10, ECF No. 70-2; see also Battenfeld
Decl. Ex. 10, ECF No. 70-2 at 132-33.) Plaintiffs have since
engaged in discovery with which Defendants have complied,
including a Rule 30(b)(6) deposition and written discovery.
(See Battenfeld Decl. ¶¶ 11-12, ECF No.
70-2; see also Battenfeld Decl. Ex. 11, ECF No. 70-2
at 134-45.) Plaintiffs have also moved to compel the
production of additional documents and Rule 30(b)(6)
witnesses. (See Battenfeld Decl. ¶¶ 13,
16, ECF No. 70-2; see also Battenfeld Decl. Ex. 12,
ECF No. 70-2 at 146-55.) This discovery, as well as the
briefing and hearings before the Arbitrator, have caused
Defendant to incur over $350, 000 in attorney’s fees
and over $50, 000 in fees paid to the Arbitrator. (Battenfeld
Decl. ¶¶ 19- 20, ECF No. 70-2.) Consequently,
Plaintiffs filed the instant Renewed Motion to Vacate on June
13, 2016. (ECF No. 70.)
Because
the arbitration is now scheduled to begin on August 8, 2016
(id. at ¶ 20), Defendant filed the instant
Motion to Stay on July 25, 2016, asking the Court to stay the
representative arbitration or, alternatively, issue a
temporary restraining order and/or an order to show cause
regarding the issuance of a preliminary injunction to stay
the arbitration from proceeding while the Renewed Motion to
Vacate is pending (Mot. to Stay Mem. 9, 21, ECF No. 75-1).
MOTION
TO VACATE
I.
Legal Standard
A
district court has jurisdiction “to vacate or enforce a
labor arbitration award.” Millmen Local 550, United
Bros. of Carpenters and Joiners of America, AFL-CIO v. Wells
Exterior Trim, 828 F.2d 1373, 1375 (9th Cir. 1987)
(citing Gen. Drivers Local Union No. 90 v. Riss &
Co., 372 U.S. 517, 519 (1963); Kemner v. Dist.
Council of Painting & Allied Trades No. 36, 768 F.2d
1115, 1118 (9th Cir. 1985)). “[T]he United States court
in and for the district wherein the award was made may make
an order vacating the award upon the application of any party
to the arbitration . . . [¶] where the arbitrators
exceeded their powers . . . .” 9 U.S.C. § 10.
“Historically,
for an arbitration award to be subject to judicial review, it
must be final and binding as to all of the issues presented
to the arbitrator.” Chinmax Med. Sys. Inc. v. Alere
San Diego, Inc., No. 10cv2467 WQH (NLS), 2011 WL
2135350, at *4 (S.D. Cal. May 27, 2011) (citing
Millmen, 828 F.2d at 1375; New United Motor
Mfg., Inc. v. United Auto Workers Local 2244, 617
F.Supp.2d 948, 954 (N.D. Cal. 2008)). “An [arbitral]
award is ‘mutual, definite, and final’ under
§ 10(a)(4) [of the FAA] if it resolves all issues
submitted to arbitration, and determines ‘each issue
fully so that no further litigation is necessary to finalize
the obligations of the parties.’” New United
Mfg., Inc., 617 F.Supp.2d at 954 (quoting ConnTech
Dev. Co. v. Univ. of Conn. Educ. Props., Inc., 102 F.3d
677, 686 (2nd Cir. 1996)). “The Ninth Circuit has said
that because of the Congressional policy favoring arbitration
when agreed to by the parties, judicial review of
non-final arbitration awards should be indulged, if
at all, only in the most extreme cases.” Pac.
Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935
F.2d 1019, 1022 (9th Cir. 1991) (emphasis in original)
(citing Millmen, 828 F.2d at 1377; Sunshine
Mining Co. v. United Steelworkers, 823 F.2d 1289, 1295
(9th Cir. 1987); Aerojet-Gen. Corp. v. ...