Erick Plaza Villamar v. Clean Harbors Environmental Services Inc.

• Court: District Court, C.D. California
• Decided: September 23, 2022
• Docket: 2:22-cv-03966
• Status: Unknown

Opinion

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1 JS-6, O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No.: 2:22-cv-03966-MEMF-(JEMx) 11 ERICK PLAZA VILLAMAR, 12 Plaintiff, ORDER DENYING DEFENDANTS’ 13 v. REQUEST FOR JUDICIAL NOTICE AS MOOT [ECF NO. 15] AND MOTION TO 14 COMPEL ARBITRATION [ECF NO. 14] 15 CLEAN HARBORS ENVIRONMENTAL AND DENYING DEFENDANTS’ MOTION SERVICES INC., et al., TO DISMISS AS MOOT [ECF NO. 14] 16 Defendants. 17 18 19 20 Before the Court is the Motion to Compel Arbitration and Request for Judicial Notice filed 21 by Defendants Clean Harbors Environmental Services, Inc. and HydroChem LLC. For the reasons 22 stated herein, the Court hereby GRANTS the Motion to Compel Arbitration. The Court further 23 DENIES Request for Judicial Notice and the Motion to Dismiss as MOOT. 24 25 26 27 / / / 28 / / / 1 Case 2:22-cv-03966-MEMF-JEM Document 30 Filed 09/23/22 Page 2 of 7 Page ID #:258

1 BACKGROUND 2 I. Factual Background1 3 Plaintiff Erick Plaza Villamar (“Villamar”) was employed by Defendants Clean Harbors 4 Environmental Services, Inc. (“Clean Harbors”) and HydroChem LLC (“HydroChem”) (collectively, 5 the “Clean Harbors Defendants”). Compl. ¶ 3. The Clean Harbors Defendants are the alter egos, 6 divisions, affiliates, integrated enterprises, joint employers, subsidiaries, parents, principals, related 7 entities, co-conspirators, authorized agents, partners, joint venturers, and/or guarantors, actual or 8 ostensible, of each other. Id. at ¶ 9. Moreover, the Clean Harbors Defendants are joint employers of 9 Villamar. Id. 10 Villamar executed an Arbitration Agreement (“Agreement”) with HydroChem. Clean 11 Harbors is not a party to the Agreement. See id. § 1. “[A]ll disputes. . . past, present or future, arising 12 out of or related to [Villamar’s] application for employment, employment, or . . . termination of 13 [Villamar’s] employment with [HydroChem]” fall under the Agreement. Id. ¶ 2. The Agreement 14 included a class action waiver stating that “any dispute [is] to be brought, heard, decided, or 15 arbitrated as a Class Action.” Id. ¶ 7. 16 II. Procedural History 17 On May 4, 2022, Villamar filed the instant action against the Clean Harbors Defendants in 18 the California Superior Court for the County of Los Angeles. See generally Compl. On June 9, 2022, 19 the case was removed to federal court. ECF No. 1. Villamar alleges ten causes of action: (1) failure 20 to provide required meal periods; (2) failure to provide required rest periods; (3) failure to pay 21 overtime wages; (4) failure to pay minimum wage; (5) failure to timely pay wage; (6) failure to pay 22 all wages due to discharged and quitting employees; (7) failure to maintain required records; (8) 23 failure to furnish accurate itemized statements; (9) failure to indemnify employees for necessary 24 expenditures incurred in discharge of duties; and (10) unfair and unlawful business practices. See 25 generally Compl. On June 16, 2022, the Clean Harbors Defendants filed the instant Motion to 26 Compel Arbitration and Dismiss Complaint (“Motion” or “Mot.”) and Motion to Request Judicial 27 28 1 Unless otherwise indicated, the following factual background is derived from the Complaint. Class Action Complaint, ECF No. 1-1, Ex. A (“Compl.”).

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1 Notice (“RJN”). Villamar filed an Opposition to the Motion on August 4, 2022. ECF No. 20 2 (“Opp’n”). The Clean Harbors Defendants submitted a Reply in support of the instant Motion on 3 August 11, 2022. ECF No. 21 (“Reply”). The Motion for Request for Judicial Notice is unopposed 4 by Villamar.2 The Court held a hearing on this matter on September 22, 2022. 5 MOTION TO COMPEL ARBITRATION 6 I. Applicable Law 7 Under Section 2 of the Federal Arbitration Act (“FAA”), arbitration clauses in contracts 8 “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for 9 the revocation of any contract.” 9 U.S.C. § 2. The FAA reflects the “fundamental principle that 10 arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) 11 (quoting Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010)). “If an ordinary procedural 12 rule—whether of waiver or forfeiture or what-have-you—would counsel against enforcement of an 13 arbitration contract, then so be it. The federal policy is about treating arbitration contracts like all 14 others, not about fostering arbitration.” Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022). 15 In determining whether to compel arbitration, the court must consider two gateway factors: (1) 16 whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers 17 the dispute. Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015) (quoting Howsam v. Dean 18 Witter Reynolds, Inc., 537 U.S. 79, 84 (2002)). Moreover, arbitration agreements may be invalidated 19 by “generally applicable contract defenses, such as fraud, duress, or unconscionability, but not by 20 defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to 21 arbitrate is at issue.” Concepcion, 563 U.S. at 343 (internal quotation marks omitted) (citing 22 23

24 2 The Clean Harbors Defendants submit—and ask the Court to take judicial notice of—one (1) exhibit in 25 support of its Motion to Compel Arbitration: JAMS Employment Arbitration Rules & Procedures (2021), https://www.jamsadr.com/rules-employment-arbitration/english) (the “JAMS Rules”). ECF No. 14-3. 26 A court may take judicial notice of facts not subject to reasonable dispute where the facts “(1) [are] generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily 27 determined from sources whose accuracy cannot reasonably be questioned.” FED. R. EVID. 201(b). With respect to Exhibit 1, although it appears that this Exhibit falls under the category of sources subject to 28 judicial notice under FED. R. EVID. 201(b), the Court need not reach this issue because the Exhibit plays no part in the Court’s order. The Court therefore DENIES the Request for Judicial Notice as MOOT.

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1 Doctor’s Assoc., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). The Act “leaves no place for the 2 exercise of discretion by a district court, but instead mandates that district courts shall direct the 3 parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” 4 Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). However, a nonsignatory to an 5 arbitration agreement “may invoke arbitration under the FAA if the relevant state contract law 6 allows the litigant to enforce the agreement.” Kramer v. Toyota Motor Corp., 705 F.3d 1122, 1129 7 (9th Cir. 2013). 8 II. Discussion 9 The Clean Harbors Defendants seek to compel the entire action to binding arbitration 10 pursuant to the Arbitration Agreement (“Agreement”) signed by Villamar during the onboarding 11 process. As an initial matter, they allege that Clean Harbors never employed Villamar. Mot. at 8. 12 Nonetheless, they assert that Clean Harbors can compel arbitration regardless of whether it 13 employed Villamar because: (1) Villamar entered into a valid and binding agreement to arbitrate 14 employment disputes with HydroChem; (2) the FAA governs the Agreement between Villamar and 15 HydroChem; (3) as an alleged agent, Clean Harbors can enforce the arbitration agreement between 16 Villamar and HydroChem; (4) the Agreement requires Villamar to resolve all of his claims asserted 17 in this action only on an individual basis in arbitration; (5) the Agreement is valid and enforceable; 18 (6) Villamar’s claims cannot proceed on a class-wide basis and should be dismissed in their entirety. 19 Motion at 6–12. Villamar concedes that he entered into a valid and binding agreement to arbitrate 20 employment disputes with Hydrochem. Opp’n at 1. However, Villamar contends that because Clean 21 Harbors is not a party to the Agreement, Clean Harbors cannot compel his claims to arbitration. Id.3 22 Villamar does not contest that he alleges in his Complaint that the Clean Harbors Defendants 23 were his joint employers and that they were agents of each other. Compl. ¶ 9. Villamar also does not 24 contest that his claims are governed by the Agreement. See Opp’n at 1. Counsel for Villamar 25

26 3 Moreover, Villamar argues that the Motion is improper because the Clean Harbors Defendants combine a 27 motion to compel arbitration and motion to dismiss. Opp’n at 1. However, Villamar cites to no authorities in support for this proposition. At the hearing, counsel for Villamar confirmed that he has no authority in 28 support of this proposition and conceded that this procedural approach is permissible. The Court therefore declines to find the instant Motion improper on this ground.

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1 confirmed at the hearing that Villamar concedes that he must arbitrate all of his claims against 2 HydroChem and the Agreement is not unconscionable. 3 A. Clean Harbors, as an agent of HydroChem, can compel Villamar’s claims to 4 arbitration. 5 The Clean Harbors Defendants contend that Clean Harbors can arbitrate Villamar’s claims 6 under the Agreement because Villamar alleges Clean Harbors was an agent of HydroChem. Villamar 7 does not dispute that he accepted the Agreement during the onboarding process. Opp’n at 1. Instead, 8 he argues that because the Clean Harbors Defendants contend that Clean Harbors never employed 9 him, Clean Harbors cannot enforce the arbitration agreement against him. Id. Indeed, Villamar 10 alleges that the Clean Harbors Defendants were joint employers of Villamar and the class members. 11 Compl. ¶ 9. However, he alleges in his Complaint that the Clean Harbors Defendants were the alter 12 egos and authorized agents of one another. Id. The Ninth Circuit has explained that “nonsignatories 13 of arbitration agreements may be bound by the agreement under ordinary contract and agency 14 principles.” Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006) (citing Letizia v. Prudential 15 Bache Securities, Inc., 802 F.2d 1185, 1187–88 (9th Cir. 1986)). California courts have recognized 16 that “a nonsignatory sued as an agent of a signatory may enforce an arbitration agreement.” Rowe v. 17 Exline, 63 Cal. Rptr. 3d 787, 793 (Ct. App. 2007); see also Garcia v. Pexco, LLC, 217 Cal. Rptr. 3d 18 793, 797 (Ct. App. 2017) (“[A] defendant may enforce the arbitration agreement when a plaintiff 19 alleges a defendant acted as an agent of a party to an arbitration agreement . . . .” (internal quotation 20 marks and citation omitted)); Dryer v. Los Angeles Rams, 709 P.2d 826, 834 (Cal. 1985) 21 (nonsignatory to an arbitration provision alleged to be an agent of a signatory is entitled to arbitrate 22 claims brought against it by another signatory). 23 Villamar contends that the Clean Harbors Defendants’ assertion that Clean Harbors itself did 24 not employ Villamar carries more weight than Villamar’s allegations that Clean Harbors was an 25 26 27 28

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1 agent of HydroChem.4 However, the case law simply does not support this view. See Dryer, 709 2 P.2d at 834 (nonsignatory to an arbitration provision alleged to be an agent of a signatory is entitled 3 to arbitrate claims brought against it by another signatory); Rowe v. Exline, 63 Cal. Rptr. 3d at 793 4 (“[A] nonsignatory sued as an agent of a signatory may enforce an arbitration agreement.”); Pexco, 5 217 Cal. Rptr. 3d at 797 (“[A] defendant may enforce the arbitration agreement when a plaintiff 6 alleges a defendant acted as an agent of a party to an arbitration agreement . . . .” (internal quotation 7 marks and citation omitted)). 8 B. Because the Agreement contains a clear and unambiguous class action waiver, 9 Villamar’s class claims must be dismissed in their entirety. 10 Parties to an arbitration agreement may specify the issues they choose to arbitrate, may agree 11 on a set of procedural rules to use during the arbitration, and may limit with whom they choose to 12 arbitrate their disputes. Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 664 (2010). As a 13 result, “a party may not be compelled under the FAA to submit to class arbitration unless there is a 14 contractual basis for concluding that the party agreed to do so.” Id. at 684 (emphasis added). The 15 Supreme Court has held that “[c]ourts may not infer from an ambiguous agreement that parties have 16 consented to arbitrate on a classwide basis.” Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1419 17 (2019). Rather, only an agreement that affirmatively and explicitly provides for class arbitration can 18 permit the use of such procedures. Nelsen v. Legacy Partners Residential Inc., 144 Cal. Rptr. 3d 198, 19

20 4 At the hearing on this matter, counsel for Villamar asserted that the allegations regarding Clean Harbors as 21 an agent were “boilerplate allegations” made in state court that he would not have made in federal court. The Court is, of course, bound by the operative complaint, particularly in the absence of any effort to amend the 22 complaint to delete these allegations. Counsel is also reminded of the following obligation in federal court under Federal Rule of Civil Procedure Rule 11(b): 23 By presenting to the court a pleading, written motion, or other paper—whether by signing, 24 filing, submitting, or later advocating it—an attorney . . . certifies that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances 25 . . . the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery . 26 . . . 27 FED. R. CIV. P. 11(b). 28

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1 207–12 (Ct. App. 2012); see also Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1075–77 2 (9th Cir. 2014) (affirming district court’s decision granting employer’s motion to compel arbitration 3 and dismissing class action where parties signed valid arbitration agreement containing class action 4 waiver). Here, the Agreement contains a clear and unambiguous waiver that requires Villamar to 5 waive his right for “any dispute to be brought, heard, decided, or arbitrated as a Class Action.” 6 Agreement ¶ 7. Villamar does not dispute that he signed the Agreement with this class action 7 waiver. See Opp’n at 2. Therefore, Villamar’s class action claims must be dismissed in their entirety. 8 The Court therefore GRANTS the Motion to Compel Arbitration.5 9 CONCLUSION 10 For the foregoing reasons, the Court hereby ORDERS as follows: 11 1. The Court DENIES the Request for Judicial Notice as MOOT; 12 2. The Court GRANTS the Motion to Compel Arbitration; 13 3. Villamar must arbitrate the claims alleged in the Complaint on an individual basis; 14 4. The class claims alleged in Villamar’s Complaint are DISMISSED; and 15 5. Litigation of the claims in the Complaint are STAYED in their entirety pending the outcome 16 of the arbitration proceedings.

17 18 IT IS SO ORDERED. 19

20 Dated: September 23, 2022 ___________________________________ 21 MAAME EWUSI-MENSAH FRIMPONG 22 United States District Judge 23

24 25 26 27 28 5 As a result, the Court need not address the arguments set forth by the Clean Harbors Defendants in the Motion to Dismiss.