LAW & MOTION CALENDAR

TENTATIVE RULINGS

 

December 2, 2022

 

9:00 a.m.

 

CX-104

                                                                                                                             

JUDGE WILLIAM D. CLASTER

 

Department CX104 Phone Number: (657) 622-5304

 

 

The Court will hear oral argument on all matters at the time noticed for the hearing.  If you would prefer to submit the matter on your papers without oral argument, please advise the clerk by calling (657) 622-5304. The Court will not entertain a request for continuance nor filing of further documents once the ruling has been posted.

 

APPEARANCES:  Appearances, whether remote or in person, must be in compliance with new Code of Civil Procedure §367.75, California Rules of Court, Rule 3.672, and Superior Court of California, County of Orange, Appearance Procedure and Information, Civil Unlimited and Complex, located at https://www.occourts.org/media-relations/covid/Civil_Unlimited_and_Complex_Appearance_Procedure_and_Information.pdf

 

 

COURT REPORTERS:  Official court reporters (i.e. court reporters employed by the Court) are NOT provided for any matters in this department.  If a party desires a record of a law and motion proceeding, it will be the party’s responsibility to provide a court reporter.  Parties must comply with the Court’s policy on the use of privately retained court reporters which can be found at:

 

·         Civil Court Reporter Pooling; and

 

·         For additional information, please see the court’s website at  Court Reporter Interpreter Services for additional information regarding the availability of court reporters.

 

·         Civil Limited, Unlimited and Complex (Updated June 11, 2020)

 

 

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CASE NAME

MATTER

1

21-01217175

 

Pure Health and Beauty LLC vs. Electronic Commerce LLC

Defendant Commercial Bank of California's Notice of Motion and Motion to Compel Arbitration ROA 135

Defendant Commercial Bank of California’s (CBCal) motion to compel arbitration is GRANTED.  The Pure Health parties are ordered to arbitrate their claims on an individual basis.  This matter is STAYED, with the exception of the Pure Health parties’ pending attachment motions, which will be heard as scheduled on December 9, 2022. An arbitration review conference will be held on July 10, 2023 at 8:30 a.m.

Defendants Electronic Commerce, LLC, Tyler Neuroth, and Darnell Ponder filed a notice of non-opposition to this motion.  The Pure Health parties filed a conditional non-opposition, arguing the attachment proceedings should continue in this Court while arbitration is pending.

The Court agrees with the Pure Health parties on this point.  CBCal concedes that under CCP § 1281.8, “a court may review an application for a writ of attachment even if the dispute is arbitrable.”  (Reply at p. 4.)

The remainder of CBCal’s reply is devoted to arguing why the Pure Health parties fail to satisfy both the attachment statutes and the additional requirements of CCP § 1281.8.  CBCal then urges the Court to “not even hear the attachment motion.”  (Reply at p. 6.)  These arguments are properly raised in opposition to the attachment motion, not in support of a motion to compel arbitration.  Again, the Code of Civil Procedure expressly permits the Pure Health parties to seek a writ of attachment in a court even if the dispute is otherwise arbitrable.  CBCal identifies no authority allowing the Court to simply refuse to hear an already-filed motion that is permitted by statute.

Accordingly, CBCal’s motion to compel arbitration is granted.  The Pure Health parties are ordered to individually arbitrate their claims.  Pursuant to CCP § 1281.4, this case is stayed pending the completion of arbitration, with the exception of the attachment hearing already on calendar.

2

21-01197517

 

Galan vs. J.L. Ray Company, Inc.

Plaintiff Johnny Galan's Notice of Motion and Unopposed Motion for Preliminary Approval of Class Action and PAGA Settlement  ROA 36

The Court has reviewed the supplemental briefing filed in response to the prior minute order.  The motion for preliminary approval of class action settlement is GRANTED as to the current version of the parties’ settlement agreement.  The Court also approves the current version of the class notice.

The motion for final approval shall be heard on June 2, 2023 at 9:00 a.m. in Department CX104. Moving papers are due 16 court days before the hearing. 

Please submit a revised proposed order that conforms to the foregoing, includes the date of the final approval hearing, and updates all dates that are calculated in reference to the date preliminary approval is granted.

3

22-01251890

 

Orange County Sanitation District, a public entity vs. Bayside Village Marina, LLC, a California limited liability company

Plaintiff Orange County  Sanitation District's Notice of Motion and Motion for Order for Pre-Judgment Possession ROA 55

Plaintiff Orange County Sanitation District’s (“OC San”) motion for prejudgment possession is GRANTED.

OC San’s evidentiary objection No. 5 is SUSTAINED on hearsay grounds.  The Court declines to rule on the remaining objections, which involve evidence immaterial to this ruling.

GROUNDS FOR RULING

This eminent domain case involves OC San’s intent to take various property interests currently owned by Defendant Bayside Village Marina, LLC (“BVM”) in connection with a sewer replacement/refurbishment project.

I.            Procedural Prerequisites

CCP § 1255.410(a)-(b) list a number of procedural prerequisites to bringing a motion for prejudgment possession.  BVM does not challenge OC San’s compliance with subdivision (a), but it does challenge OC San’s compliance with the requirements of subdivision (b), which requires all occupants of the property to be served 90 days before the motion is heard.

BVM leases a portion of its property to commercial tenants.  These businesses were timely served.  (See ROAs 60, 62, 64.)  But BVM also leases boat slips and storage space to a number of tenants.  OC San did not serve the slip and storage tenants.  BVM contends that its leases with the slip and storage tenants create a real property interest that requires they be served.  The sole basis for this claim is the testimony of BVM’s president, Michael Gelfand, generally describing the contents and effect of the leases.  Because the Court has sustained a hearsay objection to this testimony (in that Gelfand is describing the contents of the leases for the truth of the matter asserted), there is no evidence of the interest, if any, conveyed by the leases.

In any event, as OC San points out in reply, slip and storage tenants are not the sort of “occupants” who must be served under § 1255.410(b).  The statute provides that “[i]f the property is lawfully occupied by a person dwelling thereon or by a farm or business operation,” a motion for prejudgment possession can be heard 90 days after service on the record owner and the occupants.  BVM’s slip and storage tenants are not “persons dwelling thereon,” farms, or businesses.  As a result, they did not have to be served.

II.          Standard of Review

Because OC San’s motion is opposed, the standard of review is set forth in CCP § 1255.410(d)(2):

If the motion is opposed by a defendant or occupant within 30 days of service, the court may make an order for possession of the property upon consideration of the relevant facts and any opposition, and upon completion of a hearing on the motion, if the court finds each of the following:

(A)  The plaintiff is entitled to take the property by eminent domain.

(B)  The plaintiff has deposited pursuant to Article 1 (commencing with Section 1255.010) an amount that satisfies the requirements of that article.

(C)  There is an overriding need for the plaintiff to possess the property prior to the issuance of final judgment in the case, and the plaintiff will suffer a substantial hardship if the application for possession is denied or limited.

(D)  The hardship that the plaintiff will suffer if possession is denied or limited outweighs any hardship on the defendant or occupant that would be caused by the granting of the order of possession.

III.       Entitlement to Take Property

As to the first element, OC San is a county sanitation district organized under the County Sanitation District Act, Health & Saf. Code § 4700 et seq.  It has the power to acquire property by eminent domain as necessary or convenient for the construction, operation, and maintenance of a sewer system.  (Id. § 4740.)  Before OC San may commence an eminent domain proceeding, it must adopt a resolution of necessity finding and determining (1) that the public interest and necessity require the project; (2) that the project is planned in a manner that will be compatible with the greatest public good and least private injury; and (3) that the property sought to be acquired is necessary for the project.  (CCP §§ 1245.220, 1245.230.)  The Resolution of Necessity (Complaint Ex. 1) contains all findings required by the Code of Civil Procedure.  OC San is therefore entitled to take the property by eminent domain, unless BVM can point to some reason it isn’t.

A.           CEQA Challenge

 

First, BVM contends that OC San hasn’t complied with CEQA, pointing to its related ongoing CEQA case against OC San.  It correctly cites City of Stockton v. Marina Towers LLC (2009) 171 Cal.App.4th 93 for the proposition that “CEQA is mandatory before a public entity may condemn property for a proposed project. Thus, if the public entity fails to prepare a valid EIR or negative declaration for the proposed project prior to condemning the property, the trial court is authorized to dismiss the action.”  (Id., at p. 109.)  Similarly, Burbank-Glendale-Pasadena Airport Authority v. Hensler (1991) 233 Cal.App.3d 577 provides, “[A] successful CEQA challenge to the adoption of a resolution of necessity would also constitute a defense to an eminent domain proceeding.”  (Id., at p. 589.)

BVM discusses prior CEQA proceedings before Judge Wilson, noting that at a hearing, he made a number of comments suggesting he would find CEQA violations.  BVM appears to argue that a finding of CEQA violations in this Court (after reassignment from Judge Wilson) is all but assured, meaning there is a complete defense to eminent domain here.

But as Hensler points out, noncompliance with CEQA is an affirmative defense.  (Hensler, supra, 233 Cal.App.3d at p. 589.)  BVM thus bears the burden of proof.  It can’t meet that burden simply by pointing to the existence of a CEQA suit, and it identifies no authorities holding that the existence of a CEQA suit defeats a motion for prejudgment possession.  In any event, Judge Wilson’s comments are simply comments.  They have no ability to bind this Court in its subsequent consideration of BVM’s CEQA petition.  Furthermore, as OC San points out, Judge Wilson recused himself from the CEQA matter for cause under CCP § 170.6(a)(6)(A)(iii).  As a result, to the extent anything he said arguably is binding on this Court, it is either void or voidable.  (See Christie v. City of El Centro (2006) 135 Cal.App.4th 767, 776 [“The acts of a judge subject to disqualification are void or, according to some authorities, voidable.”].)

Accordingly, BVM’s CEQA arguments do not defeat OC San’s right to take at this stage.

B.           Other Right-to-Take Challenges

 

BVM contends it has asserted a number of other right to take challenges that should be adjudicated before prejudgment possession is granted.  (See Opp. at p. 13.)  Both sides point to different language from the same Legislative Committee comment on CCP § 1255.410:

It should be noted that the determination of the plaintiff's right to take the property by eminent domain is preliminary only. The granting of an order for possession does not prejudice the defendant's right to demur to the complaint or to contest the taking. Conversely, the denial of an order for possession does not require a dismissal of the proceeding and does not prejudice the plaintiff's right to fully litigate the issue if raised by the defendant.

OC San focuses on the first half: this is a preliminary motion, and BVM will be able to litigate its right-to-take challenges later.  BVM focuses on the second half: OC San can still ultimately take possession even if the Court denies the motion now, which it should do.

The Court is ultimately swayed by a point OC San makes in reply.  It has made the necessary findings in a Resolution of Necessity.  The Resolution of Necessity itself is subject to an extremely forgiving “gross abuse of discretion” standard.  (See Anaheim Redevelopment Agency v. Dusek (1987) 193 Cal.App.3d 249, 258.)  BVM’s non-CEQA challenges to the right to take must meet that standard.  What evidence would allow the Court to reach the (preliminary, non-binding) conclusion that OC San committed a gross abuse of discretion in adopting the Resolution of Necessity?  On the present record, the Court does not see how it could reach that conclusion. Accordingly, OC San has sufficiently established its right to take for present purposes.

IV.         Deposit of Sufficient Amount

As to the second element, OC San submits the DuVall Declaration to establish the fair market value of the property interests to be taken.  He is a licensed appraiser.  (DuVall Decl., ¶ 2.)  He prepared an appraisal report that contains the information required by CCP § 1255.010(b).  (Id., Ex. F.)  He values the property interests at $4,417,486.  (Ibid.)  OC San, through its counsel, deposited this amount with the State Treasurer.  (Weisberg Decl., ¶ 2 & Ex. 4.)

Defendants do not appear to contest either the appraisal value or the fact of the deposit.  OC San has satisfied this element.

V.           OC San’s Overriding Need and Substantial Hardship

OC San seeks to take these property interests in connection with a major sewer replacement/refurbishment project.  Robert Thompson, OC San’s assistant manager, explains that current sewer equipment (pumping stations, pipelines, etc.) is out of date, posing a serious risk of sewage spill into Newport Bay.  (Thompson Decl. ¶¶ 6-10.)  He also explains the purpose of each property acquisition.  (Id., ¶¶ 11-16.)  He anticipates that bidding for the project will begin in late 2023, with construction beginning in mid-2024.  OC San is currently in the permitting stages of the Project, which he anticipates will take nine months to a year.  (Id., ¶ 17.)  The Project will require permits from both the Coastal Commission and the City of Newport Beach.  (Id., ¶ 18.)

Andrew Brown, the manager for the Project, testifies that under the Newport Beach Municipal Code, only a property owner or an authorized agent with written consent may apply for the necessary permits.  (Brown Decl. ¶¶ 7-9 & Ex. D.)

Gary Weisberg, counsel for OC San, declares that he sought BVM’s written authorization to proceed with permitting (i.e., letting OC San apply to the City as BVM’s authorized agent) without prejudice to the pending CEQA case and any defenses here.  BVM refused.  (Weisberg Decl. ¶ 6 & Ex. J.)

Taking all of this together, OC San contends prejudgment possession is necessary because the City won’t let OC San apply for permits unless it’s (1) the property owner or (2) an authorized agent, and BVM refused the second option.  Denial or delay of possession will delay the Project schedule and compromise OC San’s ability to replace an aging sewer system, the sort of thing the prejudgment possession scheme seeks to avoid.  (See Mt. San Jacinto Community College Dist. v Superior Court (2007) 40 Cal.4th 648, 659.)

In opposition, BVM argues construction is years away, not starting until 2024 at the earliest.  As a result, there is no need for possession now.  Nor does OC San’s dispute with the City create an overriding need and substantial hardship.  OC San could have worked cooperatively with the City, but it chose not to do so.

The Court finds OC San has established an overriding need for possession and that substantial hardship that will arise if prejudgment possession is denied.  BVM misunderstands why OC San needs the property interests: not to begin construction, but to begin permitting.  The City’s municipal code requires permit applicants to either be in possession of the property or be the owner’s authorized agent.  Because BVM rejected OC San’s offer to act with authorization, OC San cannot apply for necessary permits unless it has possession.  Under the current project timeline, those permits must be secured now to preserve a mid-2024 start date.  Delays to the start date will compromise OC San’s ability to repair an aging sewer system that unrebutted testimony establishes is out-of-date and at risk of causing a sewage spill.

VI.         Balancing of Hardships

BVM identifies several claimed hardships it will suffer.  First, BVM argues its own redevelopment project will be impaired if prejudgment possession is granted.  (Gelfand Decl., ¶¶ 4, 12.)  But while BVM puts on evidence that its project is in the works, it fails to supply evidence of how the prejudgment possession will cause a hardship.  All BVM’s president Michael Gelfand offers is a vague, unexplained statement that “the permanent access easement OC San seeks would significantly impair BVM’s ability to develop its remaining Property.”  (Id., ¶ 12.)

Second, BVM will be impacted by a loss of rental income associated with slip and storage tenants, and potentially commercial tenants, relocating.  But as OC San points out, lost rent is remediable with money damages.  OC San has already deposited estimated just compensation, and BVM has not challenged the amount of that deposit.  In any event, to the extent the deposit turns out to be insufficient, BVM may pursue damages from lost rent at trial.

Third, BVM asserts that its tenants will all be negatively impacted by the taking, and the boat and RV tenants will likely be forced to relocate, a lengthy, complicated process.  But BVM cites no authority for the proposition that it can raise hardship to third parties in opposition.  Furthermore, the Court notes that none of the three commercial tenants who was served has appeared to oppose this motion.

The Court therefore concludes that the hardships OC San will face if the motion is denied outweigh the hardships BVM will face if the motion is granted.

VII.      Relocation Assistance

Finally, BVM argues that OC San must offer its slip and storage tenants relocation assistance under the Relocation Assistance Act and the California Code of Regulations, that OC San has failed to do so, and that this is a prerequisite to transfer of possession.

There are two problems with this argument.  First, a claim for relocation assistance belongs to BVM’s tenants, not BVM.  BVM cites no authority holding that it has standing to raise this argument. 

Second, the claim cannot be pursued in an eminent domain trial.  “One asserting the benefits of [the Relocation Assistance Act] must file a claim under the procedure therein provided.”  (Orange County Flood Control Dist. v. Sunny Crest Dairy, Inc. (1978) 77 Cal.App.3d 742, 766.)  “[B]enefits recoverable under it may not be asserted or proved in an eminent domain trial.”  (Ibid.; see also Los Angeles Unified School Dist. v. Casanola (2010) 187 Cal.App.4th 189, 204 [“If a property owner is dissatisfied with the relocation benefits awarded by the condemning entity, he or she may seek judicial review through administrative mandamus, but he may not challenge the award in an eminent domain action.”].)  Even if OC San totally fails to pay relocation assistance, that failure cannot be part of an eminent domain trial. 

As a result, the alleged failure to pay relocation assistance is not a reason to deny the motion.

4

21-01178241

 

Pacific Stone Construction, Inc., a California Corporation vs. Rafipoor

Defendants Santa Brassy, Inc., Santa Broadway, Inc., Santa LBX, Inc., Santa Mission, Inc., Santa Mix, Inc., Santa Valencia, Inc., Saint Arts, Inc., Santa Cerritos, Inc., Santa UTC, Inc., and Santa Vine, Inc.'s Notice of Motion and Motion to Compel Further Verified Responses to Discovery and Award Sanctions  ROA 164

Motion is off calendar.

5

20-01166066

 

Rodriguez vs. Village Green Foods, Inc.

Defendant Village Green Foods, Inc.'s Notice of Motion and Joint Motion for Approval of Settlement of Individual Claims and Dismissal of Entire Action Without Prejudice ROA 148

The parties’ joint motion to (1) approve the settlement of Plaintiff’s individual claims (including the individual component of his PAGA claim) and (2) dismiss the action without prejudice is CONTINUED to January 13, 2023 at 9:00 a.m. in Department CX104 for the parties to address the following issues.  Any supplemental briefing is to be filed by January 3, 2023.

Alternatively, if, as part of the settlement, Plaintiff were to dismiss his individual PAGA claim with prejudice and limit the settlement payment to his individual wage and hour claims, then the following analysis and further hearing would be unnecessary. If the parties elect to take this alternate approach, then they should file a declaration with the revised settlement agreement, along with a proposed order of dismissal.

Plaintiff previously dismissed his class claims pursuant to CRC 3.770, leaving only his individual wage-and-hour claims and his PAGA claim to litigate.  The Court ordered Plaintiff’s wage-and-hour claims to arbitration and stayed the PAGA claim.  Instead of arbitrating the individual claims immediately, the parties tried to settle all outstanding claims, but they could not reach agreement.  Following the United States Supreme Court’s ruling in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, Plaintiff initiated arbitration of his individual wage-and-hour claims and the individual component of his PAGA claim.  The parties then reached a settlement that covers Plaintiff’s individual wage-and-hour claims and the individual portion of his PAGA claim, with no effect on the “representative” portion of his PAGA claim, i.e., claims for civil penalties arising from Labor Code violations suffered by other employees.  The parties now move for an order approving this settlement and dismissing the case without prejudice.

Whether “individual” or “representative,” Plaintiff’s PAGA claim still belongs to the State, not to Plaintiff himself.  (See Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003.)  As a result, the settlement of Plaintiff’s individual PAGA claim must be approved by the Court.  (Lab. Code § 2699(l)(2); Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56.)

To that end, and assuming the parties elect not to follow the above-described alternative procedure,  the Court requires the following:

  1. A copy of the settlement agreement.

 

  1. Proof that the settlement agreement has been served on the LWDA.  (See Lab. Code § 2699(l)(2).)

 

  1. Sufficient information for the Court to discharge its duties under Moniz, including the theory of each predicate Labor Code violation allegedly suffered by Plaintiff, the evidence supporting Plaintiff’s claims and Defendant’s defenses, and an estimated value of the individual PAGA claim.

 

6

22-01257316

 

Kamel vs. Hibbett, Inc., a Delaware corporation

1. Defendant Hibbett Retail, Inc.'s Notice of Motion and Motion to Strike Plaintiff's Nationwide Class Action Allegations ROA 39

2. Specially Appearing Defendant Hibbett, Inc.'s Notice of Motion and Motion to Quash Service of Summons for Lack of Personal Jurisdiction ROA 43

                                                MOTION TO STRIKE

Defendant Hibbett Retail, Inc.’s motion to strike the nationwide class allegations is DENIED.

This case is a putative nationwide class action involving alleged violations of the Fair and Accurate Credit Transactions Act (FACTA).  Plaintiff seeks to represent a class of persons nationwide who purchased merchandise with credit cards at Hibbett Retail’s stores and received a receipt that contained the first six and last four digits of their credit card numbers, in violation of FACTA’s requirement that only the last five digits be printed on a receipt.

Hibbett Retail moves to strike the nationwide class allegations from the complaint, leaving only the California subclass at issue.  It contends the Court lacks personal jurisdiction over non-California class members’ FACTA claims.

The Due Process Clause of the Fourteenth Amendment “limits the personal jurisdiction of [the] state courts.”  (Bristol-Myers Squibb Co. v. Superior Court (2017) 137 S.Ct. 1773, 1779.)   Personal jurisdiction can be either general or specific.  (Id., at 1779-80.)  It appears undisputed that this Court lacks general jurisdiction over Hibbett Retail, a Delaware corporation with its principal place of business in Alabama.  (Compl. ¶ 11.)  Thus, the Court can adjudicate claims against Hibbett Retail only to the extent there is specific jurisdiction.

Hibbett Retail argues that under Bristol-Myers Squibb, the Court lacks personal jurisdiction over the claims of nonresident putative class members. In Bristol-Myers Squibb, which was a mass tort action rather than a class action, the United States Supreme Court held that California courts lacked jurisdiction over the product liability claims of non-California plaintiffs:  “The mere fact that [some] plaintiffs were prescribed, obtained, and ingested [the drug] in California—and allegedly sustained the same injuries as did the nonresidents—[did] not allow the State to assert specific jurisdiction over the nonresidents’ claims.”  (Id., at p. 1781.)  Hibbett Retail argues the same result should hold here: the fact that some class members were injured in California doesn’t allow the Court to exercise personal jurisdiction over out-of-state class members’ claims.

In opposition, Plaintiff notes two federal appellate decisions that have held Bristol-Myers Squibb inapplicable in the class action context.  (See Lyngaas v. Curaden AG (6th Cir. 2021) 992 F.3d 412; Mussat v. IQVIA, Inc. (7th Cir. 2020) 953 F.3d 441.  A third appellate decision cited by Plaintiff, Molock v. Whole Foods Market Group, Inc. (D.C.Cir. 2020) 952 F.3d 293, does not reach the question.)  These cases explain that in class actions, as a practical matter, the lawsuit is the defendant against the representative plaintiff.  There is one unitary claim and one unitary defense.  In mass tort actions, while some issues may be coordinated for pretrial purposes, each plaintiff is a separate named party with individual claims, and the defendant must present individual defenses.  As a result, different jurisdictional analyses apply to mass and class actions, and Bristol-Myers Squibb does not apply.  (Lyngaas, 992 F.3d at p. 435; Mussat, 953 F.3d at p. 447.)

Another point in Lyngaas bears mention: “Long-standing precedent shows that courts have routinely exercised personal jurisdiction over out-of-state defendants in nationwide class actions, and the personal-jurisdiction analysis has focused on the defendant, the forum, and the named plaintiff, who is the putative class representative.”  (Lyngaas, supra, 992 F.3d at p. 433 [emphasis original].)  California courts, like federal courts, have a long history of handling nationwide class actions with nonresident class members. Indeed, in its own opinion in Bristol-Myers Squibb, the California Supreme Court string-cited a number of them to support its holding about mass actions. (See Bristol-Myers Squibb Co. v. Superior Court (2016) 1 Cal.5th 783, 806-07.) 

This history suggests that to the extent that Bristol-Myers Squibb applies to California courts, its application does not extend from the mass tort action context to the class action context. Furthermore, Bristol-Myers Squibb itself never discusses the class action context.  (See Bristol-Myers Squibb, supra, 137 S.Ct. at p. 1789, fn. 4 [Sotomayor, J., dissenting] [“The Court today does not confront the question whether its opinion here would also apply to a class action in which a plaintiff injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom were injured there.”].)  Hibbett Retail, for its part, identifies no published California case applying Bristol-Myers Squibb to limit a putative nationwide class.

Considering (1) California courts’ long history of handling nationwide class actions, (2) the differences between mass and class actions, (3) the fact that the alleged violations here center on a single federal law, and (4) the lack of binding precedent applying Bristol-Myers Squibb in the class action context, the Court concludes it does not apply here. 

In making this ruling, the Court acknowledges that this issue is a close call. In particular, recent federal district court decisions have differed on this issue with well-reasoned decisions coming to opposite conclusions.  (Compare Carpenter v. PetSmart, Inc. (S.D.Cal. 2020) 441 F.Supp.3d 1028 [holding no specific personal jurisdiction over out-of-state class members] with Carranza v. Terminix International Company Limited Partnership (S.D.Cal. 2021) 2021 WL 1174732 [holding that exercising specific personal jurisdiction over out-of-state class members does not offend due process]). Nevertheless, for the reasons set forth above, the motion to strike is denied.

                                             MOTION TO QUASH

Defendant Hibbett, Inc.’s motion to quash service of summons is CONTINUED to March 17, 2023 to permit the jurisdictional discovery described below.  Plaintiff Anthony Kamel is to file a supplemental brief of no more than 8 pages (in addition to any supporting declarations, evidence, etc.) by March 3, 2023.  Hibbett is to file a responsive supplemental brief of no more than 8 pages (in addition to any supporting declarations, evidence, etc.) by March 10, 2023.

Hibbett has filed objections to Plaintiff’s evidence in support of his opposition.  Objection No. 6 is SUSTAINED.  The remaining objections are OVERRULED.

I.            Background

This is a putative nationwide class action involving alleged violations of the Fair and Accurate Credit Transactions Act.  Plaintiff alleges that he visited a Hibbett Sports store in Fullerton, paid for merchandise with a credit card, and was provided a receipt bearing the first six and last four digits of his credit card number, in violation of FACTA’s requirement that only the last five digits be printed on a receipt.  Plaintiff has named Hibbett and its subsidiary, Hibbett Retail, Inc., as defendants.  Hibbett Retail has entered a general appearance in this action.  Hibbett, on the other hand, contends it is not subject to personal jurisdiction in this Court.  It moves to quash service of summons, arguing it is a mere holding company, while Hibbett Retail actually controls day-to-day operation of the Fullerton store at issue (and other stores nationwide).

II.          Standard of Review

California courts may exercise personal jurisdiction “on any basis not inconsistent with the Constitution of this state or of the United States.”  (CCP § 410.10.)  “Under the minimum contacts test personal jurisdiction may be either general or specific.  [Citations.]  General jurisdiction exists when the defendant's contacts with the forum state are so ‘substantial’ or ‘continuous and systematic’ as to make it consistent with traditional notions of fair play and substantial justice to subject the defendant to the jurisdiction of the forum even when the cause of action is unrelated to the defendant’s contacts with the forum.  [Citations.]  Specific jurisdiction, on the other hand, requires some nexus between the cause of action and the defendant’s activities in the forum state. Under well-established case law specific jurisdiction exists when (1) the defendant has ‘purposefully availed’ himself or herself of forum benefits; (2) the controversy is related to or arises out of the defendant’s contacts with the forum; and (3) the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’  [Citations.]”  (Brue v. Al Shabaab (2020) 54 Cal.App.5th 578, 589-590.)  “The plaintiff bears the burden of showing the defendant has sufficient minimum contacts with the state to justify jurisdiction.”  (Id., at p. 590.)

“A plaintiff attempting to assert jurisdiction over a nonresident defendant is entitled to an opportunity to conduct discovery of the jurisdictional facts necessary to sustain its burden of proof.  [Citation.]  In order to prevail on a motion for a continuance for jurisdictional discovery, the plaintiff should demonstrate that discovery is likely to lead to the production of evidence of facts establishing jurisdiction.”  (In re Automobile Antitrust Cases I & II (2005) 135 Cal.App.4th 100, 127.) 

III.       Existence of Jurisdiction

It appears undisputed that the Court lacks general jurisdiction over Hibbett, which is alleged to be a Delaware corporation with its principal place of business in Alabama.  (Compl. ¶ 10.)  The question is whether specific jurisdiction lies.  Plaintiff’s complaint alleges Hibbett is subject to jurisdiction (1) in its own right, (2) because subsidiary Hibbett Retail is an alter ego of Hibbett, or (3) as principal of Hibbett Retail on an agent-principal theory.

Countering these allegations, Hibbett’s general counsel, David Benck, unequivocally declares that Hibbett is simply a holding company for Hibbett Retail, that Hibbett does nothing in California and has no property or employees in California, that it doesn’t direct or supervise the operation of Hibbett Retail, that it doesn’t print customer receipts, and that all proper formalities are observed between Hibbett and Hibbett Retail.

A.           Hibbett in Its Own Right

 

Plaintiff submits a press release downloaded from Hibbett’s website announcing the opening of the Fullerton Hibbett Sports store in September 2021.  (Habashy Decl., Ex. 3.)  This press release says “Hibbett (NASDAQ:HIBB), the Birmingham-based premium athleisure and footwear retailer operating more than 1,000 stores nationwide, today announced the opening of the first Orange County, California Hibbett store in Fullerton.”  It continues: “‘We are excited to bring the first Hibbett Sports location to the Fullerton community and welcome sneakerheads looking for the hottest new drops, along with families and athletes,’ said John Hart, District Sales Manager (DSM), Hibbett.”

Plaintiff also submits a press release about Hibbett’s name change from “Hibbett Sports, Inc.” to “Hibbett, Inc.”, dated June 2021.  (Habashy Decl., Ex. 1.)  That is, several months before the Fullerton store was opened, Hibbett assumed its current name, and the press release quotes a “Hibbett” district manager as saying “we” opened a store in Fullerton. 

In this press release, Hibbett appears to hold itself out as the entity controlling the Fullerton location where Plaintiff allegedly suffered FACTA violations.

B.           Alter Ego

 

“In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.”  (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.5th 523, 538.)  If the second element cannot be established by evidence, the alter ego doctrine cannot be invoked to create jurisdiction over the shareholder.  (Id., at p. 539.)

Regarding the second prong of the analysis, Plaintiff says it would be inequitable for Hibbett Retail to be treated separately because Hibbett is “ultimately responsible for the actions of the subsidiaries it controls.”  (Opp. at p. 12.)  If this were sufficient to impose alter ego liability, it would effectively eliminate any distinction between parent and subsidiary.

Plaintiff also contends he’s put on evidence that Hibbett controls the POS system at Hibbett Retail stores, meaning it would be inequitable to shield Hibbett from liability.  But the first alleged piece of evidence is a 2019 interview Plaintiff has neither included in his papers nor sought judicial notice of.  The Court will not consider this interview, particularly when Plaintiff filed both original and “corrected” copies of his supporting evidence.  The second piece of evidence, Hibbett’s 2017 annual report, does discuss an “upgrade” to retail POS systems.  (Habashy Decl., Ex. 4, at p. 5.)  But the second prong of the alter ego analysis requires “conduct amounting to bad faith” by the parent.  (Sonora Diamond, supra, 83 Cal.App.5th at p. 539.)  Plaintiff nowhere explains how Hibbett ordering an upgrade of Hibbett Retail’s POS systems is bad faith conduct.  On this record, Plaintiff fails to satisfy the second prong of the alter ego analysis.

C.            Agent-Principal

 

The United States Supreme Court held in Daimler AG v. Bauman (2014) 571 U.S. 117 that exercise of general personal jurisdiction over an agent cannot, by itself, justify the exercise of general personal jurisdiction over a principal.  Hibbett strenuously argues that under the logic of Daimler, the same is true for specific jurisdiction: the Court cannot exercise personal jurisdiction over Hibbett simply because Hibbett Retail is subject to specific personal jurisdiction.  But Daimler recognizes that “[a]gency relationships . . . may be relevant to the existence of specific jurisdiction.”  (Daimler, 517 U.S. at p. 135, fn. 13 [emphasis original].) 

The question, then, is the degree of control Hibbett has over Hibbett Retail: “[I]f a parent corporation exercises such a degree of control over its subsidiary corporation that the subsidiary can legitimately be described as only a means through which the parent acts, or nothing more than an incorporated department of the parent, the subsidiary will be deemed to be the agent of the parent in the forum state and jurisdiction will extend to the parent.”  (Sonora Diamond, supra, 83 Cal.App.4th at p. 541.)  “As a practical matter, the parent must be shown to have moved beyond the establishment of general policy and direction for the subsidiary and in effect taken over performance of the subsidiary’s day-to-day operations in carrying out that policy.”  (Id., at p. 542 [emphasis original].)

Hibbett’s Benck unequivocally declares that Hibbett does not supervise the day-to-day activity of Hibbett Retail, the operations of Hibbett Retail, or the business and affairs of Hibbett Retail.  (Benck Decl. ¶¶ 9, 10, 20.)  In opposition, Plaintiff points to statements from Hibbett’s SEC filings that at most show general strategic control—things like a common human resources manual for all Hibbett subsidiaries, unified business and marketing strategies, etc.  This isn’t enough to show the day-to-day control required for agent-principal jurisdiction under Sonora Diamond.

IV.         Jurisdictional Discovery and Further Proceedings

Plaintiff requests a continuance for further discovery.  In light of the evidence Plaintiff has put on that Hibbett appears to hold itself out as controlling the Fullerton store, the Court believes jurisdictional discovery on this specific topic is proper.  If discovery confirms Plaintiff’s reading of the press releases, this may provide a basis for jurisdiction.

The Court will not permit further discovery as to alter ego or agent-principal discovery.  In support of this request, Plaintiff points to evidence of Hibbett’s alleged general control of Hibbett Retail’s operations.  As discussed above, Plaintiff identifies evidence tending to show that a parent controls the general direction of its subsidiary, which is insufficient as a matter of law under Sonora Diamond

As a result of the foregoing, the only potential basis for exercising personal jurisdiction over Hibbett is Hibbett’s control of the Fullerton store.  The motion will be continued for Plaintiff to take discovery on this issue only, and the parties will be permitted to file supplemental briefs after discovery is complete.

7

21-01233089

 

Cruz vs. Zov's Bistro, Inc.

1. Defendants Zov's Bistro, Inc., Zov's Bistro II, Inc., Zov's Enterprises, Inc., and Armen Karamardian's Notice of Motion and Motion to Compel Arbitration and Dismiss PAGA Representation ROA 44

2. Status Conference

The Court continued Defendants Zov’s Bistro, Inc.; Zov’s Bistro II, Inc.; Zov’s Enterprises, Inc. (collectively “Zov’s” unless their separate identity is relevant) and Armen Karamardian’s motion to compel arbitration to permit additional briefing on the issue of the alleged 2019 arbitration agreement between Zov’s Bistro II and Plaintiff Natalio Cervantes.  Upon review of the supplemental briefing, the Court orders as follows:

  1. The motion is DENIED with respect to Cervantes.

 

  1. As to Plaintiff Carlos Cruz, the Court adopts its earlier tentative ruling: the motion is GRANTED as to Cruz, but the arbitration of his wage-and-hour, UCL, and PAGA claims is STAYED pending resolution of Cervantes’ claims in this Court.  However, the arbitration of Cruz’s FEHA claims is not stayed.

 

GROUNDS FOR RULING

I.            Prior Proceedings

The Court previously concluded that Zov’s had not proven a meeting of the minds with respect to an alleged 2018 arbitration agreement with Cervantes.  The Court invited supplemental briefing regarding an alleged 2019 agreement.  Zov’s produced a copy of the second page of this agreement in response to Cervantes’ statutory demand for his personnel file, but not the first.  In prior briefing, Karamardian testified that the first page of the 2019 agreement was missing from Cervantes’ file, but he attached what he claimed to be the first page of the form of agreement used in 2019.  The Court noted the footer of the purported form differed from the footer of Cervantes’ signature page, meaning that while Cervantes signed something, he hadn’t signed the form attached to Karamardian’s declaration.  Notably, the portion of the agreement defining the scope of arbitrable claims was missing from the signature page.

II.          Additional Evidence

Karamardian now testifies that he mistakenly attached the wrong form to his prior declaration.  Attached to his supplemental declaration as Exhibit 1 is what he claims to be the entire form actually provided to Cervantes.  From the Court’s review, this form matches the signature page actually signed by Cervantes.  Cervantes doesn’t offer testimony or argument to the contrary, and he admits he signed the signature page (though he has no specific recollection of doing so).  The Court therefore finds a valid arbitration agreement exists.  Further, the terms of this agreement cover all claims at issue here, and the agreement includes a class/PAGA waiver.

III.       Unconscionability

But the existence of an agreement is a separate question from its enforceability.  Cervantes claims the agreement is unconscionable, and thus unenforceable.  “‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’  (Citation.)  But they need not be present in the same degree. ‘Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.’  (Citation.)”  (Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114.)

A.           Procedural Unconscionability

 

The Court previously noted a credibility issue with Karamardian’s testimony.  The purported 2018 agreement was given to Cervantes in both English and Spanish.  Karamardian testified this was pursuant to Zov’s practice of providing documents to employees in both English and their native language.  (ROA 40, ¶ 10.)  When confronted with the English-only 2019 signature page, Karamardian changed his tune, testifying that Cervantes was fluent in English, so he didn’t require Spanish documents.  (ROA 58, ¶ 4.)  This contradicted his previous testimony that Zov’s practice was to provide documents in the employee’s native language, as opposed to a language the employee is fluent in.  Karamardian now offers yet another version of events.  He testifies that Zov’s makes documents available in Spanish to anyone who asks, and that Cervantes never requested a Spanish version.  (ROA 77, ¶ 5.)

It appears to the Court that Karamardian has repeatedly changed his description of Zov’s practices to suit whatever most favors Zov’s current line of argument.  The Court therefore credits Karamardian’s original testimony, and not his subsequent testimony: Zov’s usual practice is to provide documents to employees in both English and their native language.  By giving Cervantes the 2019 agreement only in English, Zov’s acted contrary to its own stated practices.

Given Karamardian’s credibility issues, the Court also credits Cervantes’ testimony about his English fluency (or lack thereof) over Karamardian’s.  Specifically, Cervantes testifies, and the Court finds, that Cervantes only speaks rudimentary English (a vocabulary limited to restaurant kitchen terms and the like), and that his ability to read English is even more limited.  (ROA 87, ¶ 3.)  The Court also credits Cervantes’ testimony that Karamardian himself knew this, because Karamardian only ever spoke to Cervantes in Spanish.  (Id., ¶ 5.)  That is, not only did Zov’s provide the 2019 agreement in a language Cervantes couldn’t read, Zov’s (through Karamardian) knew Cervantes had only a rudimentary understanding of English.  This indicates a “high degree of procedural unconscionability.”  (Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74, 85 [high degree of unconscionability when employer knew employees required Spanish translations, but provided relevant terms of agreement in English only].) 

The Court also credits Cervantes’ testimony about the circumstances of his execution of the agreement over Karamardian’s testimony to the contrary.  That is, the Court finds it more believable that (1) Cervantes was told he had to sign the agreement; (2) Zov’s never told Cervantes he could ask questions about the content of the agreement, take a copy home to review before signing, etc.; and (3) the agreement was presented in a take-it-or-leave-it fashion as a condition of employment.

Taking all of this together, the Court finds a very high degree of procedural unconscionability.

B.           Substantive Unconscionability

 

Because there are multiple areas of procedural unconscionability, “even a relatively low degree of substantive unconscionability may suffice to render the agreement unenforceable.”  (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 130.)  Here, Cervantes identifies three areas of perceived substantive unconscionability.

First, he contends the arbitration agreement, like the one in OTO, fails to provide a procedure equivalent to a Berman hearing under Labor Code §§ 98 et seq.  Cervantes’ claims include claims for unpaid wages that could be brought in a Berman hearing.  The 2019 arbitration agreement contains no carve-out for Berman proceedings before the DLSE.  “[W]hile the waiver of Berman procedures does not in itself render an arbitration agreement unconscionable, the agreement must provide in exchange an accessible and affordable forum for resolving wage disputes.”  (OTO, supra, 8 Cal.5th at pp. 133-134 [emphasis original].)  Cervantes persuasively argues the 2019 agreement, like the one in OTO, lacks a suitable equivalent to Berman proceedings.  For the reasons set forth in Cervantes’ papers, the Court agrees.

Second, he contends that the agreement requires him to bear costs not required if he were to litigate in court.  (Cf. Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 110-111 [“[W]hen an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.”].)  Cervantes is correct.  The 2019 agreement does not require the employer to pay the arbitrator’s fee.  Rather, it provides that CCP § 1280 et seq. governs the arbitration.  As a result, CCP § 1284.2’s default rule that the parties split the arbitrator’s fee applies.  In his original declaration, Karamardian states that Zov’s will cover the arbitrator’s fees, but “[n]o existing rule of contract law permits a party to resuscitate a legally defective contract merely by offering to change it.”  (O’Hare v. Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 180 [employer’s subsequent offer to bear costs unique to arbitration did not cure substantive unconscionability].)

Third, he contends the agreement for individual arbitration is illusory and one-sided.  The agreement provides, “I and the Company agree to utilize binding individual arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to my employment.”  But it goes on, “Both I and the Company agree that any claim, dispute, and/or controversy that I may have against the Company (or its owners, directors, officers, managers, employees, or agents), or the Company may have against me, shall be submitted to and determined exclusively by binding arbitration.”  That is, under the arbitration agreement, Cervantes must pursue all relevant defendants in a single proceeding.  Here, that means Zov’s Bistro, Zov’s Bistro II, and Zov’s Enterprises can pool their resources to arbitrate against Cervantes, but Cervantes cannot pool his resources with any other employee.  The Court agrees.  The agreement unconscionably allows Zov’s and its employees to band together in defense without allowing employees to band together in prosecution.

C.            Severance

 

The 2019 agreement has both (1) a high degree of procedural unconscionability and (2) three substantively unconscionable terms.  Two of these terms—the lack of a Berman proceeding equivalent and the requirement that the parties split the arbitrator’s fees—“can only be remedied by rewriting the parties’ agreement to arbitrate,” which the Court cannot do.  (Magno v. The College Network, Inc. (2016) 1 Cal.App.5th 277, 292.)  Furthermore, the presence of multiple unconscionable terms weighs against severance even if the terms were all severable.  (Ibid.)

D.           Conclusion on Enforceability

 

For these reasons, the Court finds the 2019 agreement unenforceable.  Because the Court previously found Zov’s had failed to prove a meeting of the minds vis-ŕ-vis the alleged 2018 agreement, the motion to compel arbitration is denied as to Cervantes.

IV.         Further Proceedings

For the reasons set forth in the Court’s original tentative ruling, the motion to compel is granted with respect to Cruz, but the arbitration of his wage-and-hour, UCL, and PAGA claims will be stayed pending the completion of Cervantes’ proceedings in this Court.  The stay does not extend to Cruz’s FEHA claims, which are unrelated to Cervantes’ claims.

8

21-01233648

 

Muha vs. Experian Information Solutions, Inc.

1. Plaintiffs Charlotte Muha, Chaning Grabner, and Debra Grabner's Application for Admission of Jessie Fruchter to the Bar of Court Pro Hac Vice ROA 71

2. Plaintiffs Charlotte Muha, Chaning Grabner, and Debra Grabner's Application for Admission of John D. Blvthin to the Bar of this Court Pro Hac Vice ROA 72

The applications of John D. Blythin and Jesse Fruchter for admission pro hac vice are DENIED WITHOUT PREJUDICE. 

CRC 9.40(d)(1) requires an application to state the applicant’s residential address.  This information is missing from both applications.  CRC 9.40(e) requires the application be served on the State Bar along with payment of a $50 fee.  Proof of service upon and payment to the State Bar is missing from both applications.

The Court will be inclined to grant renewed applications for admission pro hac vice that address these issues.

9

17-00927449

 

Pitre vs. Wal-Mart Stores, Inc.

Defendant Walmart Inc.'s Notice of Motion and Motion to Renew or Reconsider Its Motion for Summary Adjudication Based on Standing ROA 282

Motion has been continued to 01/13/2023 at 9:00 a.m.

10

19-01121146

 

Miller vs. Corcept Therapeutics Inc.

Defendant Corcept Therapeutics Inc. Notice of Motion and Motion to Maintain Confidentiality and Seal Protected Documents ROA 299

Defendant Corcept Therapeutics Incorporated’s motion to seal is GRANTED for the same reasons set forth in the Court’s order of August 5, 2022 (ROA 240).  The clerk is ordered to permanently seal ROA 288.

11

21-01207008

 

Jardon vs. Fullerton Baekjeong, LLC

Plaintiff Eva Jardon's Notice of Motion and Motion for Order Approving Settlement Under California Labor Code Section 2699 Et Seq   ROA 81

Plaintiff’s motion for approval of PAGA settlement is CONTINUED to January 20, 2023 at 9:00 a.m. in Department CX104 to permit the parties to respond to the following items of concern.   Any supplemental briefing shall be filed on or before January 11, 2023.  If a revised settlement agreement and/or proposed notice is submitted, a redline version showing all changes, deletions and additions must be submitted as well.  In addition, Plaintiff must provide proof of service of any revised settlement agreement and supplemental papers on the LWDA.

1.            Are there any other matters, whether individual, class, or PAGA, pending or in the pre-filing LWDA stage, that could be affected by approval of this settlement?

 

2.            Who signed the agreement on behalf of Defendants?  What is their authority to do so?

 

3.            Please provide a bid from the settlement administrator.

 

4.            Counsel mentions a 20% sampling of payroll data.  Did Defendants also produce a sample of time data?

 

5.            How did counsel investigate the claims that can’t be proven from records (e.g., rest breaks, off-the-clock work)?

 

6.            The notice refers to a release of PAGA claims based on Labor Code § 204 and failure to pay wages timely during employment.  It appears these violations are not pled in the FAC.

 

7.            The notice says uncashed checks will be redirected to the Controller in the employee’s name, but the agreement says uncashed checks will be canceled, with the funds sent to the LWDA.

 

8.            Should notice be given in any languages other than English?