2017-00220226-CU-OE

Austin Smith vs. Sacramento Downtown Arena, LLC

Nature of Proceeding:

Filed By:

Motion to Stay Action Pending Arbitration

Solano, Susana P.

The motion of Defendants Sacramento Downtown Arena LLC, Sacramento Basketball Holdings GP, LLC, Sacramento Basketball Holdings, LLC, Sacramento Kings LTD, Kings Arco Arena LTD, Arena Limited Partnership, and Royal Kings Arena Limited Partnership (collectively “Defendants”) to stay this action pending completion of an overlapping arbitration is GRANTED.

The plaintiff in this case is Austin Smith (Smith). Smith’s first amended complaint (FAC) against Defendants contains a single cause of action denominated “Private Attorneys General Act” (PAGA). Austin alleges that Defendants violated a variety of wage-and-hour provisions under the Labor Code and related wage orders. Among other things, he alleges Defendants failed to pay minimum and overtime wages, failed to provide accurate wage statements and failed to provide meal and rest breaks. Pursuant to the PAGA provisions in Labor Code §§ 2698 et seq., Smith seeks civil penalties on behalf of the state, the real party in interest. (See Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, 445-446.)

The same day Smith filed this case, he filed a demand for arbitration before the AAA. (See Solano Decl., Exh. A.) The Defendants in this case are the respondents in the arbitration. Smith is arbitrating wage-and-hour violations on behalf of an employee class. The causes of action in Smith’s AAA complaint include failure to pay minimum and overtime wages, failure to provide accurate wage statements, and failure to provide meal and rest breaks. Substantial portions of Smith’s two charging documents are identical. (Compare FAC, ¶¶ 18-21 with AAA Compl., ¶¶ 17-20.) In other words, Smith is seeking to arbitrate substantive, classwide wage-and-hour violations and simultaneously litigate an inarbitrable PAGA claim based on the same violations. (See Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, 962-963.)

The motion to stay is granted to protect the arbitrator’s jurisdiction and avoid inconsistent rulings. (Heritage Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th 1146, 1152 [“’In the absence of a stay, the continuation of the proceedings in the trial court disrupts the arbitration proceedings and can render them ineffective’”]; Arias v. Superior Court (2009) 46 Cal.4th 969, 986-987 [PAGA litigation can have collateral estoppel effect]; see also Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998)18 Cal.4th 739, 758 [trial court has “inherent authority to stay an action when appropriate […to…] overcome problems of simultaneous litigation if they do occur”].) In reaching this decision, the court appreciates Smith’s point that he cannot be compelled to arbitrate his standing to bring a PAGA claim, i.e., whether Defendants committed wage and hour violations against him. (See Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408, 419-421.) Because Smith was the one who demanded arbitration of his class claims against Defendants, there has been no such compulsion. Furthermore, the court expresses no opinion about the degree to which the arbitration could have res judicata or collateral estoppel effect on the PAGA case.

The motion is granted, and this civil action is stayed pending completion of the arbitration.