Opinion
23-cv-03368-VC
06-28-2024
FABIAN LOPEZ, Plaintiff, v. THYSSENKRUPP SUPPLY CHAIN SERVICES, NA INC., Defendant.
ORDER DENYING MOTION TO COMPEL ARBITRATION RE: DKT. NO. 20
VINCE CHHABRIA UNITED STATES DISTRICT JUDGE
The motion to compel arbitration is denied. This ruling assumes that the reader is familiar with the facts, the applicable legal standard, and the arguments made by the parties.
tk Supply presented two arbitration agreements that might govern this dispute. A court must decide which one applies. See Coinbase, Inc. v. Suski, 144 S.Ct. 1186, 1194 (2024). The tk Supply agreement does, because it is newer and includes an integration clause. See Williams v. Atria Las Posas, 24 Cal.App. 5th 1048, 1052 (2018); see also Johnson v. Walmart Inc., 57 F.4th 677, 681 (9th Cir. 2023).
1. Neither the class action waiver nor the PAGA “individual action requirement” is enforceable under California law. The class action waiver is not enforceable, because Lopez has shown that the class mechanism would be a much more effective way of vindicating the rights of affected employees. See Muro v. Cornerstone Staffing Solutions, Inc., 20 Cal.App. 5th 784, 793 (2018). He has shown that any individual recovery would be modest-his lawyer estimates that Lopez himself would recover around $10,000 on his claims. Lopez also submitted a declaration saying that he “feared retaliation for making any complaints” about his working conditions. Dkt. No. 23-3 ¶ 8. And Lopez claims he was “not familiar” with his labor rights and “only became familiar with some of these rights after consulting with [his] attorneys.” Id. ¶ 9. Overall, these factors support invalidating the class action waiver. See Muro, 20 Cal.App. at 793-95. The PAGA “individual action requirement” is not enforceable either, because California law has a rule against splitting individual and nonindividual components of a PAGA claim into separate proceedings. See Kim v. Reins International California, Inc., 9 Cal. 5th 73, 88 (2020); see also Adolph v. Uber Technologies, Inc., 14 Cal. 5th 1104, 1117-18 (2023).
The arbitration agreement explains what to do if these provisions are not enforceable. If the class action waiver is unenforceable, the class action “must be litigated in a civil court of competent jurisdiction-not in arbitration.” The same goes for the PAGA-splitting clause: if that provision is unenforceable, the PAGA action too “must be litigated in a civil court of competent jurisdiction-not in arbitration.” So Lopez's class action and his PAGA claims must remain in court.
2. The Federal Arbitration Act does not preempt these California rules. Lopez is a transportation worker, so his employment contract is exempt from the FAA. See 9 U.S.C. § 1. Lopez is “engaged” in the transportation of goods. See Torres-Boyd v. Thyssenkrupp Supply Chain Services NA, Inc., No. 23-CV-1836-MMC, 2023 WL 7003242, at *6 (N.D. Cal. Oct. 23, 2023). He loads, unloads, processes, and stores goods-palletized component parts for Tesla- while they await further transport. See Dkt. Nos. 26-5 ¶¶ 4-8; 26-6 at 2; Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152, 1162 (9th Cir. 2024); see also Southwest Airlines Co. v. Saxon, 596 U.S. 450, 457 (2022). And Lopez is engaged in the “foreign or interstate” transportation of goods. The goods he handles originate outside of California; they are delivered either from an out-of-state location or through the Port of Oakland. See Dkt. Nos. 26-5 ¶¶ 46. The fact that the goods “pause” their interstate journey at the warehouse where Lopez works does not “remove them from the stream of interstate commerce,” as the goods are “inevitably destined from the outset” for Tesla's production plant. Carmona Mendoza v. Domino's Pizza, LLC, 73 F.4th 1135, 1138 (9th Cir. 2023).
Lopez's evidentiary objections are all overruled. Dooley's statements about her role at tk Supply and her review of its HR records laid the foundation for the rest of her statements. They also established personal knowledge. See Self-Realization Fellowship Church v. Ananda Church of Self-Realization, 206 F.3d 1322, 1330 (9th Cir. 2000). The same goes for Johnson. Neither one has offered an expert opinion. The hearsay objections fail too. See Sandoval v. County of San Diego, 985 F.3d 657, 666 (9th Cir. 2021). As for tk Supply's evidentiary objections: The objections to Carney's statements and most of Lopez's statements can be denied as moot, because this ruling does not rely on those statements. Lopez's expression of his own concerns about retaliation reflects facts within his personal knowledge. See Nigro v. Sears, Roebuck & Co., 784 F.3d 495, 497-98 (9th Cir. 2015). As does Lopez's statement about his degree of familiarity with his legal rights.
IT IS SO ORDERED.