Case Name: Esteban Palomino v. Northrop Grumman Systems Corp., et al.

Case No.: 19-CV-345534

This is a putative class and Private Attorneys General Act (“PAGA”) action alleging wage statement violations against defendant Northrop Grumman Systems Corporation. Before the Court is Northrop’s motion to stay the action in favor of a related case, pursuant to PAGA, the doctrine of exclusive concurrent jurisdiction, and/or the Court’s inherent authority.

I. Factual and Procedural Background

According the complaint, plaintiff worked for defendant from August 2011 to January 17, 2019 as an hourly, non-exempt employee. (Complaint, ¶ 7.) During this time, he and other California employees were provided with wage statements that failed to identify Northrop’s legal name and address; failed to identify any applicable hourly rates of pay; and failed to state employees’ total hours worked accurately when overtime was paid. (Id. at ¶ 19.) Based on these allegations, plaintiff brings (1) a putative class claim for violation of Labor Code section 226 and (2) a claim for PAGA penalties.

Plaintiff filed this action on April 2, 2019. On February 22, 2019, another former Northrop employee filed a PAGA-only action against Northrop’s parent company, Northrop Grumman Corporation. That first-filed action is Hokanson v. Northrop Grumman Corp. (Super. Ct. Orange County, No. 30-2019-01053036-CU-OE-CXC). Hokanson alleges that Northrop Grumman Corporation committed meal and rest period violations, failed to provide compliant wage statements, and failed to pay wages due at separation of employment. The Hokanson complaint does not describe the manner in which the wage statements at issue were defective; however, the plaintiff’s PAGA notice letter states that the statements failed to reflect the total hours worked by the employee, the name and address of the employer, and all applicable hourly rates with the corresponding number of hours worked at each rate. Northrop Grumman Corporation responded to initial discovery requests in Hokanson in October of 2019. A status conference was scheduled for February 4, which the court indicated would address the pendency of this related action among other matters.

II. Legal Standards

“Under the rule of exclusive concurrent jurisdiction, when two superior courts have concurrent jurisdiction over the subject matter and all parties involved in litigation, the first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved until such time as all necessarily related matters have been resolved.” (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 786, internal citations and quotation omitted.) “The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, and preventing vexatious litigation and multiplicity of suits,” and is “enforced not so much to protect the rights of parties as to protect the rights of Courts of co-ordinate jurisdiction to avoid conflict of jurisdiction, confusion and delay in the administration of justice.” (Id. at pp. 786-787, internal citations and quotations omitted.) Still, where the rule applies, “[a]n order of abatement issues as a matter of right not as a matter of discretion ….” (Ibid.)

Applying the rule, “[i]f the court exercising original jurisdiction [over a matter] has the power to bring before it all the necessary parties … [and] to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings,” a second court should stay a later-served action pending resolution of the first one. (Plant Insulation Co. v. Fibreboard Corp., supra, 224 Cal.App.3d 781, 788.) Complete identity between the parties, causes of action, and remedies sought is not required as with the statutory plea in abatement; however, “the issues in the two proceedings must be substantially the same and the individual suits must have the potential to result in conflicting judgments” for exclusive concurrent jurisdiction to apply. (County of Siskiyou v. Superior Court (Environmental Law Foundation) (2013) 217 Cal.App.4th 83, 91.)

In circumstances where a stay is not mandatory—such as where a related action is pending in federal court or another state—trial courts have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency. (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) “Granting a stay in a case where the issues in two actions are substantially identical is a matter addressed to the sound direction of the trial court.” (Thomson v. Continental Ins. Co. (1967) 66 Cal.2d 738, 746; see also Simmons v. Superior Court (1950) 96 Cal.App.2d 119, 123.) “ ‘In exercising its discretion the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.’ ” (Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804, quoting Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208, 215.)

III. Request for Judicial Notice

Plaintiff’s request for judicial notice of filings in a federal PAGA action, which is unopposed, is GRANTED (Evid. Code, § 452, subd. (d)), although the legal conclusions reflected in these filings do not bind the Court.

IV. Analysis

The parties do not cite, and the Court is unaware of, any authority addressing the application of the rule of exclusive concurrent jurisdiction to parallel PAGA claims filed by different representative plaintiffs. As urged by plaintiff, however, California and federal authorities have held that “separate but similar actions by different employees against the same employer” are generally permissible under the PAGA statutory scheme. (Julian v. Glenair, Inc. (2017) 17 Cal.App.5th 853, 866 [where one representative plaintiff had already filed a PAGA action, subsequent agreements to arbitrate PAGA claims executed by other employees were unenforceable as against those employees], citing Tan v. GrubHub, Inc. (N.D. Cal. 2016) 171 F.Supp.3d 998, 1012-1013.) Federal courts have accordingly denied requests to stay parallel PAGA actions based on the federal “first-to-file” rule, which is similar to California’s rule of exclusive concurrent jurisdiction. (See Tan v. GrubHub, Inc., supra, 171 F.Supp.3d at pp. 1012-1016 [noting that defendants cited no case holding that “two PAGA representatives cannot pursue the same PAGA claims at the same time” and “declin[ing] to be the first [court] to so hold”].)

The courts have emphasized that “the doctrine of collateral estoppel … shields the employer from an abusive one-way intervention, that is, a series of PAGA actions by different employees that would continue until some employee prevailed.” (Julian v. Glenair, Inc., supra, 17 Cal.App.5th at pp. 866-867, internal quotations omitted.) Under this doctrine, “a judgment unfavorable to the employee binds the government, as well as all aggrieved nonparty employees potentially entitled to assert a PAGA action.” (Id. at p. 867, italics added.) As federal courts have noted, concerns with protecting employers from duplicative PAGA suits do not “compel a bar to filing a PAGA claim because of the mere pendency of another PAGA suit on the same issue by someone else.” (Tan v. GrubHub, Inc., supra, 171 F.Supp.3d at p. 1013.) However, the analysis would differ where “the earlier-filed PAGA claim [had] already been decided, since any judgment would be binding on government agencies and any aggrieved employee not a party to the proceeding ….” (Ibid.; see also Canela v. Costco Wholesale Corporation (N.D. Cal., May 23, 2018, No. 13-CV-03598-BLF) 2018 WL 2331877, at *7 [“Tan recognizes that a judgment in one PAGA action may bar another pending PAGA action. As such, there would be no inconsistent judgments even if there were concurrent suits at an earlier time.”], internal citation omitted.)

Significantly, “the rule of exclusive concurrent jurisdiction is a rule of policy, and countervailing policies may make the rule inapplicable.” (County of Siskiyou v. Superior Court, supra, 217 Cal.App.4th at p. 92; see also In re B.S. (2009) 172 Cal.App.4th 183, 191 [considering this principle, “the Legislature can alter or even abrogate the rule of exclusive concurrent jurisdiction”].) In enacting PAGA, the Legislature elected not to prohibit parallel actions by multiple representative plaintiffs as it did, for example, with respect to the False Claims Act. As a matter of policy, the Court will not apply the rule of exclusive concurrent jurisdiction where doing so “would … significantly impair PAGA’s enforcement mechanism, which permits the state to act through more than one employee with respect to a PAGA claim against a particular employer.” (Julian v. Glenair, Inc., supra, 17 Cal.App.5th at p. 873.) Considering that the actions at issue here were filed in close succession and are both in their early stages, the Court will not apply the rule here.

The Court further notes that the plaintiff in this action brings a putative class claim in addition to a PAGA claim. Although it seeks a stay of the entire case, Northrop makes no attempt to argue that the rule of exclusive concurrent jurisdiction would apply to plaintiff’s class claim, and it clearly would not considering that the Orange County court currently lacks the ability to grant the relief available in a class action.

Finally, Northrop states in its reply papers that it “is not arguing that this Court is required to stay” this action. Thus, it appears that Northrop relies primarily on the Court’s inherent authority to enter the requested stay. As an initial matter, the Court is unaware of any case law holding that it has the inherent authority to stay an action in favor of a related action pending in another Superior Court of California, as opposed to in federal court or another state. In any event, assuming it has the discretion to enter a stay, the Court declines to do so for the reasons already discussed. The Court also finds parallels to the observations of courts addressing related putative class actions, which have emphasized the tools available to trial court in managing such cases and the desirability of identifying and addressing all would-be representatives during the early phases of litigation. (See Fierro v. Landry’s Restaurant Inc. (2019) 32 Cal.App.5th 276, 292-297, discussing China Agritech, Inc. v. Resh (2018) 138 S.Ct. 1800.) As the Court has previously discussed with the parties, there are tools other than a stay that may be used to manage parallel PAGA actions in their early stages, including formal or informal coordination. The Court expects that such tools may be effectively utilized here.

V. Conclusion and Order

The motion to stay is DENIED.

The Court will prepare the order.