Garden Fresh Restaurant Corp. v. Superior Court
180 Cal. Rptr. 3d 89
Cal. Ct. App.2014Background
- Alicia Moreno sued Garden Fresh (her former employer) in California alleging Labor Code violations, asserting putative class claims and a representative PAGA claim.
- Moreno had signed two arbitration agreements during employment; Garden Fresh sought to compel individual (bilateral) arbitration and to dismiss or stay class and PAGA claims.
- The trial court granted the petition to compel arbitration but left to the arbitrator the question whether the contracts permit classwide or representative arbitration, rather than deciding that gateway question itself.
- Garden Fresh petitioned for writ of mandate asking the appellate court to direct the trial court to decide, as a gateway matter, whether the arbitration agreements (silent on class/representative arbitration) permit class or representative proceedings.
- The appellate court issued an order to show cause and ultimately granted the writ, holding that when an arbitration agreement is silent on class/representative arbitration the court — not the arbitrator — decides whether such arbitration was agreed to, and remanded for the trial court to determine both class/representative arbitrability and the effect of Iskanian on the PAGA claim.
Issues
| Issue | Plaintiff's Argument (Moreno) | Defendant's Argument (Garden Fresh) | Held |
|---|---|---|---|
| Who decides whether a silent arbitration agreement permits class arbitration? | Arbitrator should decide; parties submitted that question to arbitration. | Court should decide as a gateway question; silence implies judicial determination. | Court decides; availability of class arbitration is a gateway question for judge absent clear unmistakable agreement otherwise. |
| Who decides whether a silent arbitration agreement permits representative (PAGA) arbitration? | Arbitrator should decide (combined with class argument). | Court should decide; representative arbitration likewise a gateway issue. | Court decides; representative arbitrability also a gateway question and trial court must also consider Iskanian's effect on PAGA arbitrability. |
| Whether the appellate court should decide merits of arbitrability now or remand? | (requested by Garden Fresh at argument) ask appellate court to decide merits. | Trial court should decide merits on remand after full briefing. | Appellate court declines to decide merits; remands for trial court determination. |
| Whether an express clause is required to find consent to class/representative arbitration? | Implicit agreement could suffice (depending on facts). | Express consent not required but silence weighs against class/representative arbitration. | Left open; court noted Supreme Court guidance makes express consent unnecessary in theory but factual record here lacks evidence of implied consent, so trial court should assess. |
Key Cases Cited
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (class arbitration cannot be compelled absent contractual basis)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (classwide arbitration conflicts with fundamental attributes of arbitration)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (not deciding who decides class arbitrability where parties agreed arbitrator should decide)
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (plurality view that availability of class arbitration implicated contract interpretation/procedure)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (distinguishing gateway arbitrability questions for courts versus procedural matters for arbitrators)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (presumption that courts decide questions of arbitrability absent clear and unmistakable evidence to the contrary)
- John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (subsidiary issues grow out of dispute and bear on final disposition)
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (PAGA claims and waiver issues; PAGA as representative claim raising distinct considerations)
- Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir.) (observing Supreme Court has indicated class arbitrability is likely a gateway question)
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (arbitrator awards generally not reviewable for errors of law or fact)