Sanchez v. MC Painting CA4/1
D078817M
| Cal. Ct. App. | May 11, 2022Background
- MC Painting hired Lauro Sanchez in 2018; Sanchez signed a Spanish-language arbitration agreement that waived the right to bring class, collective, or representative actions and stated the FAA governed the agreement.
- Sanchez filed a putative class/wage-and-hour action in 2020, then voluntarily dismissed all individual/class claims and left only a representative PAGA claim.
- MC Painting petitioned to compel arbitration of the remaining PAGA claim; Sanchez opposed relying on Iskanian v. CLS Transp., which holds PAGA waivers unenforceable.
- The trial court denied the petition, concluding Iskanian remains good law and the PAGA representative claim cannot be compelled to arbitration.
- MC Painting appealed arguing Epic Systems overruled Iskanian and asked for a stay pending the Supreme Court’s decision in Viking River Cruises; the appellate court declined and affirmed.
- The court also rejected a claim that it abused its discretion by considering Sanchez’s late opposition, finding either good cause or harmless error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of a predispute waiver of representative PAGA claims | Sanchez: PAGA waiver unenforceable under Iskanian because PAGA is a law-enforcement action on the state’s behalf | MC Painting: The arbitration agreement’s waiver of representative PAGA claims is valid | Court: Waiver unenforceable under Iskanian; PAGA is a state enforcement action and cannot be waived by employee without the state’s consent |
| Whether Epic Systems abrogates Iskanian / FAA preemption | Sanchez: Iskanian remains controlling; Epic Systems does not control PAGA because PAGA actions are on the state’s behalf | MC Painting: Epic Systems (and federal FAA law) preempts Iskanian and requires enforcement of arbitration waivers | Court: Epic Systems does not control Iskanian; multiple California decisions reaffirm Iskanian and the court is bound to follow it |
| Whether to stay the appeal pending the U.S. Supreme Court’s decision in Viking River Cruises | Sanchez: No stay; state precedent controls until U.S. Supreme Court says otherwise | MC Painting: Stay until the Supreme Court resolves FAA preemption in Viking River Cruises | Court: Denied stay; appellate court must apply existing California Supreme Court precedent (Iskanian) until changed by higher authority |
| Whether trial court abused discretion by considering Sanchez’s untimely opposition | Sanchez: Late opposition should be considered; good cause exists | MC Painting: Untimely opposition should have resulted in deemed admissions and reversal | Court: No abuse of discretion; statute permits extension for good cause and any error would be harmless because legal conclusion still supports denial |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (holding predispute waivers of representative PAGA claims unenforceable; PAGA is a state law-enforcement action)
- Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (U.S. 2018) (upheld enforcement of arbitration agreements prohibiting class/collective actions under the FAA)
- ZB, N.A. v. Superior Court, 8 Cal.5th 175 (Cal. 2019) (reaffirmed Iskanian’s rule that PAGA waivers are unenforceable and not preempted by the FAA)
- Correia v. NB Baker Elec., Inc., 32 Cal.App.5th 602 (Cal. Ct. App. 2019) (rejected argument that Epic Systems overruled Iskanian; explained PAGA differs because the state is the real party in interest)
- Provost v. YourMechanic, Inc., 55 Cal.App.5th 982 (Cal. Ct. App. 2020) (followed Iskanian post-Epic Systems and declined to treat Epic Systems as overruling Iskanian)
- Taheri Law Group v. Sorokurs, 176 Cal.App.4th 956 (Cal. Ct. App. 2009) (untimely opposition to petition to compel arbitration leads to deemed admissions, but court retains discretion to extend time and must still decide legal issues)