1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 TRAVIS SHANLEY, No. 2:24-cv-01011-DC-JDP 12 Plaintiff, 13 v. ORDER GRANTING IN PART DEFENDANTS’ MOTION TO COMPEL 14 TRACY LOGISTICS LLC, et al., ARBITRATION OF PLAINTIFF’S INDIVIDUAL CLAIMS, AND STAYING 15 Defendants. THE ACTION IN ITS ENTRIETY PENDING COMPLETION OF ARBITRATION 16 (Doc. No. 20) 17 18 19 This matter is before the court on Defendants C&S Wholesale Grocers, LLC, formerly 20 C&S Wholesale Grocers Inc.; Tracy Logistics LLC; and Sacramento Logistics LLC’s 21 (collectively, “Defendants”) motion to compel arbitration of Plaintiff Travis Shanley’s individual 22 claims brought against them. (Doc. No. 20.) The pending motion was taken under submission to 23 be decided on the papers pursuant to Local Rule 230(g). (Doc. No. 22.) For the reasons explained 24 below, the court will grant, in part, Defendants’ motion to compel arbitration. 25 BACKGROUND 26 Defendant C&S Wholesale Grocers, LLC (“C&S”) is a nationwide supply chain services 27 and wholesale grocery supply company that, through its operating subsidiary entities, supplies 28 grocery products to more than 6,000 independent supermarkets, chain stores, military bases, and 1 institutions in California and throughout the United States. (Doc. Nos. 20-1 at ¶ 5; 25 at ¶ 4.) 2 Defendant Tracy Logistics LLC (“Tracy”), a subsidiary of Defendant C&S, is one of the largest 3 wholesale grocery suppliers on the West Coast and operates a facility in Stockton, California. 4 (Doc. Nos. 20-1 at ¶¶ 5–6; 25 at ¶¶ 2–4.) 5 Individuals working in the Stockton facility may be employed as order selectors, 6 receivers/unloaders, or loaders. (Doc. No. 28-1 at ¶ 6.) Order selectors receive assignments 7 through order sheets or an audio headset system to pick grocery items from storage rack systems 8 in the Stockton facility. (Doc. Nos. 26-1 at ¶ 3; 28-1 at ¶ 6.) The order selector then stacks the 9 selected items on a pallet, wraps or bags the items on the pallet as necessary, prints out a shipping 10 label that identifies the customer’s name, city, and state, and attaches the label to the shipment. 11 (Doc. Nos. 26-1 at ¶¶ 3–6; 28-1 at ¶ 6.) According to Defendants, there are three categories of 12 order selectors for the three general categories of products received and stored at the Stockton 13 facility: perishable order selectors, frozen order selectors, and non-perishable grocery order 14 selectors. (Doc. No. 28-1 at ¶ 6.) Perishable order selectors procure only perishable produce, 15 dairy, meat, poultry, and seafood items for customer orders. (Id.) 16 On May 13, 2022, Plaintiff filed an application for employment with Defendant Tracy. 17 (Doc. No. 20-1 at ¶ 30.) As part of the application process, on May 16, 2022, Plaintiff reviewed 18 and electronically signed Defendant C&S’s mutual arbitration agreement regarding wage and 19 hour claims (“the C&S MAA”). (Id. at ¶¶ 8, 19, 29, 38.)1 Plaintiff began working in Defendant 20 Tracy’s Stockton facility on or around May 23, 2022, and worked until on or about December 14, 21 2022. (Doc. No. 25 at ¶ 5.) Plaintiff worked as an order selector. (Doc. 26-1 at ¶ 2.) According to
22 1 On May 23, 2022, as part of the onboarding process, Plaintiff was presented with and signed 23 Defendant Tracy’s mutual voluntary arbitration agreement (“the Tracy MVAA”). (Doc. No. 20-2 at ¶ 9.) In a related declaratory relief action, Plaintiff challenges the formation and enforceability 24 of the Tracy MVAA. Shanley v. Tracy Logistics LLC et al., No. 23-cv-02608-DC-JDP. The Tracy MVAA covers wage and hour claims and broadly extends its coverage to claims including, but 25 not limited to, discrimination, harassment, retaliation, and breach of contract. (Doc. No. 20-2 at 6–7.) In contrast, the C&S MAA narrowly applies to statutory and common law wage and hour 26 claims and excludes many of the categories of claims the Tracy MVAA covers. (Doc. No. 20-1 at 27 21–22.) Notwithstanding the C&S MAA’s limited coverage of claims, both this case and the declaratory relief action center around alleged violations of California’s wage and hour laws—the 28 types of claims that are covered by both arbitration agreements. 1 Defendants, Plaintiff worked exclusively with perishable products. (Doc. 28-1 at ¶¶ 13, 15.) 2 Plaintiff initiated this lawsuit by filing a wage-and-hour class action complaint on April 3, 3 2024, bringing eight causes of action against seven defendants: Tracy Logistics LLC; Stockton 4 Logistics LLC; Fresno Logistics LLC; C&S Wholesale Grocers, LLC, formerly C&S Wholesale 5 Grocers Inc.; C&S Logistics of Sacramento/Tracy LLC, and C&S Logistics of Fresno LLC. (Doc. 6 No. 1.) 7 On July 12, 2024, Defendants filed the pending motion to compel arbitration of Plaintiff’s 8 individual claims and to stay all proceedings pending resolution of the arbitration under the 9 Federal Arbitration Act (“FAA”), and in the alternative, the California Arbitration Act (the 10 “CAA”) to the extent the CAA is applicable and not preempted by the FAA. (Doc. No. 20 at 9.) 11 Defendants assert Plaintiff must submit all his individual claims arising out of or relating to his 12 employment to arbitration. (Id.) On July 24, 2024, Plaintiff filed the operative first amended 13 complaint raising the same eight causes of action, but this time only naming Defendants C&S; 14 Tracy; and Sacramento Logistics LLC. (Doc. No. 25.) 15 On July 26, 2024, Plaintiff filed an opposition to Defendants’ motion to compel arbitration 16 and supporting declaration. (Doc. Nos. 26; 26-1.) In his opposition, Plaintiff contends 17 Defendants’ pending motion was mooted by the filing of the first amended complaint. (Id. at 4.) 18 Plaintiff also asserts that although he agreed to the C&S MAA, the C&S MAA provides that it is 19 governed by the FAA, and the FAA does not apply to him because he is a transportation worker 20 and is therefore exempt under 9 U.S.C. § 1. (Id. at 5–7.) Separately, Plaintiff argues the C&S 21 MAA cannot be enforced under the CAA. (Id. at 7–9.) 22 On August 5, 2024, Defendants filed a reply to Plaintiff’s opposition and evidentiary 23 objections to Plaintiff’s declaration. (Doc. Nos. 28; 28-2.) On August 12, 2024, Plaintiff filed 24 objections to Defendants’ reply and Defendants filed a response the following day. (Doc. Nos. 25 30–31.) 26 LEGAL STANDARDS 27 “The threshold issue in deciding a motion to compel arbitration is ‘whether the parties 28 agreed to arbitrate.’” Quevedo v. Macy’s, Inc., 798 F. Supp. 2d 1122, 1133 (C.D. Cal. 2011) 1 (quoting Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 756 (9th Cir. 1988)). “When 2 determining whether a valid contract to arbitrate exists, we apply ordinary state law principles 3 that govern contract formation.” Davis v. Nordstrom, Inc., 755 F.3d 1089, 1093 (9th Cir. 2014) 4 (citing Ferguson v. Countrywide Credit Indus., Inc., 298 F.3d 778, 782 (9th Cir. 2002)). The 5 party seeking to compel arbitration “bears the burden of proving the existence of an agreement to 6 arbitrate by a preponderance of the evidence.” Johnson v. Walmart Inc., 57 F.4th 677, 681 (9th 7 Cir. 2023). 8 A. Federal Arbitration Act 9 The FAA governs written arbitration agreements affecting interstate commerce and 10 provides that written arbitration agreements “shall be valid, irrevocable, and enforceable, save 11 upon such grounds as exist at law or in equity for the revocation of any contract.” Circuit City 12 Stores, Inc. v. Adams, 532 U.S. 105, 111–12 (2001); 9 U.S.C. § 2. “By its terms, the [FAA] leaves 13 no place for the exercise of discretion by a district court, but instead mandates that district courts 14 shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has 15 been signed.” Dean Witter Reynolds, Inc. v. Byrd, 479 U.S. 213, 218 (1985) (citing 9 U.S.C. 16 §§ 3–4); see also AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (“[C]ourts must 17 place arbitration agreements on equal footing with other contracts and enforce them according to 18 their terms.”). 19 Under the FAA, a court’s role is limited to determining (1) whether a valid agreement to 20 arbitrate exists and, if it does (2) whether the agreement encompasses the dispute at issue. Bielski 21 v. Coinbase, Inc., 87 F.4th 1003, 1009 (9th Cir. 2023) (Chiron Corp. v. Ortho Diagnostic Sys., 22 Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). If both conditions are met, the FAA requires the court 23 to enforce the parties’ arbitration agreement by its terms. Chiron, 207 F.3d at 1130. In ruling 24 upon a motion to compel arbitration, “district courts rely on the summary judgment standard of 25 Rule 56 of the Federal Rules of Civil Procedure.” Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 26 667, 670 (9th Cir. 2021). The party seeking to compel arbitration bears the burden of proving the 27 existence of an agreement and the party opposing bears the burden of proving any defense. 28 Norcia v. Samsung Telecoms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017); Lim v. TForce 1 Logistics, LLC, 8 F.4th 992, 999 (9th Cir. 2021). 2 B. California Arbitration Act 3 Under the CAA, arbitration agreements are “valid, enforceable and irrevocable, save upon 4 such grounds as exist for the revocation of any contract.” See Cal. Civ. Proc. Code § 1281; 5 Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 99 (2000) (California law, 6 like federal law, generally “favors enforcement of valid arbitration agreements.”); see OTO, 7 L.L.C. v. Kho, 8 Cal. 5th 111, 125 (2015) (“California law strongly favors arbitration.”). As with 8 motions to compel arbitration under the FAA, courts evaluate motions to compel arbitration 9 brought under the CAA using a summary judgment standard. Lane v. Francis Cap. Mgmt. LLC, 10 224 Cal. App. 4th 676, 683 (2014). Unlike the FAA, the CAA as a state statute, “obviously does 11 not prevent [California’s] Legislature from selectively prohibiting arbitration in certain areas.” 12 Armendariz, 24 Cal. 4th at 98. 13 DISCUSSION 14 A. Defendants’ Evidentiary Objections 15 “[A] court ruling on a motion to compel arbitration reviews the evidence on the same 16 standard as for summary judgment under Rule 56.” Alkutkar v. Bumble Inc., No. 22-cv-00422- 17 PJH, 2022 WL 16973253, at *3 (N.D. Cal. Nov. 16, 2022). Under Federal Rule of Civil 18 Procedure 56, which governs summary judgment, “[a] supporting or opposing affidavit must be 19 made on personal knowledge, set out facts that would be admissible in evidence, and show that 20 the affiant is competent to testify on the matters stated.” Fed. R. Civ. P. 56(e). 21 In connection with Defendants’ reply in support of their pending motion, Defendants 22 object to certain portions of Plaintiff’s declaration based on lack of personal knowledge, 23 foundation, relevance, hearsay, and speculation. First, Defendants object that Plaintiff’s 24 statements referring to shipments of goods other than perishable goods are irrelevant because 25 Plaintiff and the class of workers to which he belongs worked exclusively with perishable 26 products. (Doc. No. 28-2 at 2–3.) Defendants’ objection is well-taken because statements about 27 products Plaintiff did not handle are not relevant to the analysis of the pending motion. Thus, the 28 court sustains this objection, and the court will not consider those statements. 1 Second, Defendants object to Plaintiff’s statements that he knew where shipments were 2 going and where some of the groceries had come from because he saw shipping labels. (Id. at 2– 3 3.) Defendants asserts these statements lacks foundation, personal knowledge, and constitute 4 inadmissible hearsay. (Id.) Defendants’ objections are not well founded, however, because 5 foundation, personal knowledge, and hearsay evidence may be considered by the court in ruling 6 on a motion to compel arbitration (and summary judgment) so long as the evidence could be 7 presented in an admissible form at trial. See Pierre v. Iec Corp., No. 22-cv-01289-FWS-JDE, 8 2023 WL 3551962, at *4, n. 1 (C.D. Cal. Mar. 14, 2023) (finding at the motion to compel 9 arbitration stage that “except in the rare instances in which the objecting party demonstrates with 10 specificity that the subject evidence could not be produced in a proper format at trial, the court 11 does not consider any objections on the grounds that the evidence ‘constitutes hearsay or 12 inadmissible lay opinion, or that there is a lack [of] personal knowledge.’”) (citing Holt v. Noble 13 House Hotels & Resort, Ltd, 370 F. Supp. 3d 1158, 1164 (S.D. Cal. 2019)); see also Morton v. 14 Cnty. of San Diego, No. 21-cv-01428-MMA-DDL, 2024 WL 5126281, at *4 (S.D. Cal. Dec. 16, 15 2024) (“objections for lack of foundation or relevance are not appropriate at summary judgment). 16 Therefore, the court overrules Defendants’ evidentiary objection based on foundation, personal 17 knowledge, and hearsay. 18 Lastly, Defendants object to Plaintiff’s statements he knew where shipments were going 19 and where some of the groceries had come from because he saw shipping labels on the grounds 20 that such statements are pure speculation. (Doc. No. 28-2 at 2–3.) The court finds Defendants 21 objection is unfounded as Plaintiff has provided sufficient facts to substantiate his conclusion that 22 some groceries had come from outside of California and shipments were leaving California. 23 Accordingly, the court overrules Defendants’ evidentiary objection based on speculation. 24 B. Defendants’ Motion is Not Rendered Moot by the Filing of the First Amended 25 Complaint 26 An “amended complaint supersedes the original, the latter being treated thereafter as non- 27 existent.” Ramirez v. County of San Bernardino, 806 F.3d 1002, 1008 (9th Cir. 2015) (citation 28 omitted). Generally, courts deny a motion that targets a complaint that is no longer in effect. See 1 Lemberg v. Lularoe, No. 17-cv-02102-AB-SHK, 2018 WL 6927836, at *3 (C.D. Cal. Mar. 1, 2 2018) (denying the motion to compel arbitration as moot because the motion was targeted at a 3 previous iteration of the complaint and plaintiff’s first amended complaint added new plaintiffs 4 and causes of action); W. Air Charter, Inc. v. Sojitz Corp., No. 18-cv-07361-JGB-MAA, 2019 5 WL 6998765, at *1 (C.D. Cal. Aug. 1, 2019) (finding that upon plaintiff filing a third amended 6 complaint, defendant’s arbitration motion no longer pertained to the operative pleading because 7 the third amended complaint eliminated all reference to the agreement defendants cited as the 8 basis for their arbitration motion). 9 Here, Plaintiff amended his pleadings only to remove four previously named defendants, 10 and he did so in reaction to Defendants’ filing of a motion to dismiss on the basis of this court’s 11 lack of personal jurisdiction over them. (Doc. No. 25.) Plaintiff’s first amended complaint still 12 asserts the exact same claims as in the initial complaint, is based on the same factual allegations, 13 and it is those same claims that Defendants seek to compel Plaintiff to arbitrate. (Compare Doc. 14 No. 1 with Doc. No. 25.) Thus, the court finds Defendants’ motion to compel arbitration of 15 Plaintiff’s individual claims is not rendered moot by Plaintiff’s filing of the first amended 16 complaint. 17 C. An Arbitration Agreement Exists Between the Parties 18 The party seeking to compel arbitration bears the burden of proving by a preponderance of 19 the evidence that an agreement to arbitrate exists. Norcia v. Samsung Telecomms. Am., LLC, 845 20 F.3d 1279, 1283 (9th Cir. 2016), cert. denied, 138 S. Ct. 203 (2017). “With respect to the moving 21 party's burden to provide evidence of the existence of an agreement to arbitrate, it is generally 22 sufficient for that party to present a copy of the contract to the court.” Baker v. Italian Maple 23 Holdings, LLC, 13 Cal. App. 5th 1152, 1160 (2017). As stated above, Defendants have presented 24 a copy of the C&S MAA, which Plaintiff electronically signed on May 16, 2022. (Doc. No. 20-1 25 at ¶ 38.) Therefore, Defendants have met their burden to provide evidence that an arbitration 26 agreement existed between the parties. 27 D. The FAA’s Transportation Worker Exemption 28 The FAA does not apply to employment contracts of “any . . . class of workers engaged in 1 foreign or interstate commerce.” 9 U.S.C. § 1. This exemption has been construed to encompass 2 “transportation workers” who are “actively engaged” and “play a direct and necessary role in the 3 free flow of goods across borders.” Sw. Airlines Co. v. Saxon, 596 U.S. 450, 458 (2022) (citing 4 Circuit City Stores v. Adams, 532 U.S. 105, 121 (2001)). A transportation worker is not required 5 to work for a company in the transportation industry to be exempt under § 1 of the FAA. 6 Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 252 (2024). Further, the 7 transportation worker does not have to cross state borders. See Saxon, 596 U.S. at 458 (holding 8 “one who loads cargo on a plane bound for interstate travel” is a transportation worker); Lopez v. 9 Aircraft Serv. Int’l Inc., 107 F. 4th 1096, 1103 (9th Cir. 2024) (concluding a fuel technician who 10 places fuel in a plane used for foreign and interstate commerce is a transportation worker); 11 Rittmann v. Amazon.com, Inc., 971 F.3d 904, 909 (9th Cir. 2020) (holding drivers who made the 12 “last mile” deliveries of packaged products from Amazon warehouses were engaged in the 13 movement of interstate commerce and were transportation workers). The party resisting 14 arbitration under this exemption “bear[s] the burden of proving that [the] exemption applies.” 15 Rogers v. Lyft, Inc., 452 F. Supp. 3d 904, 913 (N.D. Cal. 2020) (citing Rogers v. Royal Caribbean 16 Cruise Line, 547 F.3d 1148, 1151 (9th Cir. 2008)). 17 In assessing whether an employment contract comes within the scope of the FAA’s 18 transportation worker exemption, a court engages in a two-step analysis. Ortiz v. Randstad 19 Inhouse Servs., LLC, 95 F. 4th 1152, 1159 (9th Cir. 2024). First, the court defines the “relevant 20 class of workers” to which the employee belongs. Id. (citing Saxon, 596 U.S. at 455). The 21 relevant class of workers is determined with reference to “the specific nature of [the employee’s] 22 work, not [the] employer’s status . . .” Id.; see also Saxon, 596 U.S. at 456 (holding an employee 23 “is [] a member of a ‘class of workers’ based on what she does . . ., not what [her employer] does 24 generally”). Second, the court determines whether that class of workers is actively engaged in 25 foreign or interstate commerce and plays a tangible and meaningful role in the movement of 26 goods across borders. Ortiz, 95 F.4th at 1159–60, 1162. 27 At the first step, the parties provide competing definitions of the relevant class of worker. 28 Plaintiff contends he “belongs to a class of workers whose role is exclusively warehouse duties, 1 involving handling, organizing, and staging products in the flow of interstate commerce, but not 2 moving them on the road or rail themselves.” (Doc. No. 26 at 6.) In response, Defendants argue 3 Plaintiff’s class of workers should be limited to “warehouse workers who select from warehouse 4 inventory predominantly locally-sourced, perishable inventory products for orders from 5 predominantly in-state grocery stores.” (Doc. No. 28 at 9.) The court finds neither of the parties’ 6 definitions properly define the relevant class. As Saxon instructs, Plaintiff’s class of worker can 7 be properly defined by reference to his job description, and entirely without reference to 8 Defendants’ line of business. Ortiz, 95 F.4th at 1162. According to Plaintiff, as an order selector 9 he would find or pick specific groceries, sometimes wrap and bag groceries, assemble groceries 10 for shipment on pallets, print and attach shipping labels to the groceries, and place the shipment at 11 a bay door. (Doc. No. 26-1 at ¶¶ 3–6.) Similarly, according to Defendants, Plaintiff was 12 responsible for selecting only perishable products for customer orders, stacking those selected 13 items, wrapping the items on a pallet as necessary, attaching a shipping label to the pallet, and 14 leaving the pallet in a staging area. (Doc. No. 28 at ¶ 6.) These job descriptions capture the 15 undisputed work Plaintiff performed as an employee. Therefore, the court finds Plaintiff belonged 16 to a class of workers that handled and prepared perishable products for shipment. 17 Turning to step two, the court must address whether an order selector that handled 18 perishable products is actively engaged in foreign or interstate commerce. First, Defendants argue 19 order selectors are not transportation workers because their work is not similar to that of a seamen 20 or railroad worker. (Doc. No. 28 at 12.) Defendants contend the exemption was not meant to 21 extend to warehouse workers who merely move products within a warehouse. (Id. at 12, n. 7.) 22 In his opposition, Plaintiff argues this case parallels the facts of Ortiz, in which the Ninth 23 Circuit found warehouse workers who transported packages only within the warehouse were 24 exempt from the FAA. (Doc. No. 26 at 6.) In Ortiz, the Ninth Circuit found that although the 25 warehouse workers transported Adidas products only within the warehouse—to and from storage 26 racks—the workers “fulfilled an admittedly small but nevertheless ‘direct and necessary’ role” in 27 the interstate commerce of Adidas products. 95 F.4th at 1157–58, 1162, 1166. 28 In response, Defendants argue Ortiz is inconsistent with Supreme Court precedent and 1 was decided in error. (Doc. No. 28 at 12, n. 7.) The court finds Defendants argument is 2 unavailing. The Supreme Court expressly declined to review the Ninth Circuit’s decision in Ortiz. 3 See Ortiz v. Randstad Inhouse Serv., No. 23-1296, 2024 WL 4426655 (2024) (petition for writ of 4 certiorari denied). This court must follow binding precedent. Mohamed v. Uber Techs., Inc., 848 5 F.3d 1201, 1211 (9th Cir. 2016). Thus, under Ortiz, warehouse workers who move products 6 within a warehouse may qualify as a transportation worker under § 1. 7 Next, Defendants contend Plaintiff’s class of workers were not actively engaged in foreign 8 or interstate commerce because a majority of the products handled by Plaintiff never entered 9 interstate commerce. (Doc. No. 28 at 10–11.) Plaintiff asserts he engaged in interstate commerce 10 because he handled groceries that traveled interstate. (Doc. No. 26 at 7.). In support, Plaintiff 11 declares he knew some of the groceries had come from California, Idaho, and Oregon and the 12 “shipments would go to grocery retailers across the western states, including California, Nevada 13 (both Vegas and Reno), and Utah.” (Doc. 26-1 at ¶¶ 7–8.) 14 In response, Defendants acknowledge some of the products it delivered from the Stockton 15 facility originate from suppliers outside of California. (Doc. No. 20-1 at ¶ 6.) However, 16 Defendants estimate approximately 80–85% of the perishable food items received, stored, and 17 selected for fulfilling customer orders from the Stockton facility originate from suppliers/vendors 18 in California. (Doc. No. 28-1 at ¶ 10.) The Stockton facility has approximately 750 active 19 customers comprised of both chain grocery stores and independent, “mom and pop” grocery 20 stores. (Id. at ¶ 12.) Defendants estimate “[a]pproximately 85% of those customers operate 21 entirely within California and thus receive deliveries from the Stockton [f]acility only within 22 California.” (Id.) According to Defendants, approximately 15% or less of those customers have 23 locations outside of California that order products from the Stockton facility. (Id.) Further, 24 Defendants assert the Stockton facility has approximately 700 customer delivery routes per week, 25 and approximately 90% of those routes are for customer deliveries located only within California. 26 (Id.) Defendants argue Plaintiff did not actively engage in interstate commerce because he did not 27 handle products that came from or went to other states “on a frequent basis.” (Doc. No. 28 at 10– 28 11.) 1 The court recognizes that “[s]omeone whose occupation is not defined by its engagement 2 in interstate commerce does not qualify for the exemption just because she occasionally performs 3 that kind of work.” Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 800 (7th Cir. 2020) (citing 4 Hill v. Rent-A-Center, 398 F.3d 1286, 1289-90 (11th Cir. 2005)); see Capriole v. Uber Techs., 5 Inc., 7 F.4th 854, 864 (9th Cir. 2021) (drivers who predominantly engaged in intrastate trips were 6 not actively engaged in interstate commerce, “even though some [] drivers undoubtedly cross 7 state lines in the course of their work.”) (citing Rogers v. Lyft, Inc., 452 F. Supp. 3d 904, 916 8 (N.D. Cal. 2020)); see also Nair v. Medline Indus., No. 22-cv-00331-DAD-JDP, 2023 WL 9 2636464, at *4 (E.D. Cal. Mar. 24, 2023) (“The question then is whether the interstate movement 10 of goods was a “central part of the class members’ job description.”) (citing Capriole, 7 F.4th at 11 865). 12 Here, even if the court adopts Defendants’ estimates, the court finds Plaintiff’s class of 13 workers frequently and actively engaged in interstate commerce. By Defendants’ own estimate, 14 approximately 15–20% of the perishable products Plaintiff’s class of workers may have handled 15 came from outside California. (Doc. No. 28-1 at ¶ 10.) This estimate stands in stark contrast to 16 other cases in which courts have found a worker only engaged in interstate commerce 17 occasionally. See Capriole, 7 F.4th at 864 (“Only 2.5% of ‘all trips fulfilled using the Uber Rides 18 marketplace in the United States between 2015 and 2019 . . . started and ended in different states’ 19 . . . [o]verall interstate trips, even when combined with trips to the airport, represent a very small 20 percentage of Uber rides.”); Burns v. Maplebear, Inc., No. 24-cv-04618, 2024 U.S. Dist. LEXIS 21 158161, at *10 (N.D. Ill. Aug. 7, 2024) (“Instacart produced data showing that, on average, over 22 the last three years, approximately 99.6% of Instacart orders in the United States were 23 intrastate”); See Walz v. Walmart Inc., No. 23-cv-06083-BHS, 2024 WL 2864230, at *7 (W.D. 24 Jun. 6, 2024) (“At most, Walz plausibly alleges that he and some other Spark Driver workers 25 have only occasionally delivered products across state lines. This does not demonstrate that he 26 belongs to a class of transportation workers that is defined by its engagement in interstate 27 commerce.”); Carr v. Traffic Mgmt., Inc., No. 24-cv-01333-HDV-JC, 2024 WL 4329070, at *3 28 (C.D. Cal. Aug. 13, 2024) (“Plaintiff points to the instances when he delivered traffic safety 1 equipment from TMI's facility in Michigan to customers in Indiana . . .[b]ut such instances 2 occurred merely twice over the course of four years, and was not part of his paid job duties.”). 3 Thus, contrary to Defendants’ characterization, the court finds that Plaintiff was actively engaged 4 in handling perishable products that came from out of state. 5 Defendants also contend Plaintiff’s class of workers did not engage in interstate 6 commerce because any products they handled that came from outside of California were not a 7 part of a single, unbroken chain of interstate commerce. (Doc. No. 28 at 11.) Defendants assert 8 out-of-state goods “came to rest” at the Stockton facility, and any subsequent transaction to a 9 California customer was “functionally” a separate “local transaction.” (Id.) The court finds 10 Defendants’ argument unpersuasive. The flow of interstate commerce ceases when the goods in 11 question have come to a permanent rest. Rittmann, 971 F.3d at 916 (emphasis added). When 12 goods are “inevitably destined from the outset of the interstate journey” for delivery to known 13 customers, the fact that goods may “pause” at a warehouse does not “remove them from the 14 stream of interstate commerce.” Carmona Mendoza v. Domino’s Pizza, LLC, 73 F.4th 1135, 1138 15 (9th Cir. 2023). Defendants do not dispute that the perishable products were inevitably destined 16 for the Stockton facility’s customers, independent and chain grocery stores. (Doc. No. 28-1 at ¶ 17 12.) Thus, the fact perishable products paused their journey at the Stockton facility until they 18 were inevitably delivered to Defendants’ known customers did not remove them from the flow of 19 interstate commerce. 20 Accordingly, the court finds Plaintiff has made a sufficient showing that he is a 21 transportation worker under § 1 and, consequently, is exempt from coverage under the FAA. In 22 light thereof, Defendants are not entitled, under the FAA, to an order compelling plaintiff to 23 arbitrate his individual claims. 24 E. The CAA Applies 25 In the alternative, Defendants ask the court to compel arbitration under the CAA, to the 26 extent the CAA is applicable. (Doc. No. 20.) As discussed above, Plaintiff does not dispute that 27 an arbitration agreement exists, or that he signed the C&S MAA. Instead, Plaintiff argues the 28 C&S MAA cannot be enforced under California law. (Doc. No. 26 at 7–9.) 1 First, Plaintiff argues the C&S MAA cannot be enforced under California law because the 2 agreement made the application of the FAA an essential term and “offer no application of state 3 law in the alternative.” (Id. at 7–8.) The court finds Plaintiff’s argument unavailing. Courts have 4 consistently determined an arbitration agreement’s explicit selection of the FAA does not 5 invalidate the entire agreement in the event the plaintiff is found to qualify for the FAA’s 6 transportation worker exemption. See Breazeale v. Victim Servs., Inc., 198 F. Supp. 3d 1070, 7 1079 (N.D. Cal. 2016) (noting that “when a contract with an arbitration provision falls beyond the 8 reach of the FAA, courts look to state law to decide whether arbitration should be compelled 9 nonetheless”); Garrido v. Air Liquide Indus. U.S. LP, 241 Cal. App. 4th 833, 841 (2015) 10 (applying California law to an arbitration agreement with a choice-of-FAA provision where the 11 plaintiff was exempt from the FAA); Lagatree v. Luce, Forward, Hamilton & Scripps, 74 Cal. 12 App. 4th 1105, 1121 (1999) (“Assuming arguendo that the FAA does not apply, we would assess 13 the validity of the parties’ arbitration agreements under the California Arbitration Act.”). 14 Second, Plaintiff cites to the decision in Gentry v. Superior Court, 42 Cal. 4th 443 (2007) 15 to support his argument that the C&S MAA is unenforceable because California law does not 16 allow class action waivers. (Doc. No. 26 at 9.) In Gentry, the court identified four factors that 17 must be considered to determine whether a class action waiver in an arbitration agreement is 18 unenforceable. 42 Cal. 4th at 463. The factors include: “the modest size of the potential recovery, 19 the potential for retaliation against members of the class, the fact that absent members of the class 20 may be ill informed about their rights, and other real-world obstacles to the vindication of class 21 members’ right to [wages] through individual arbitration.” Id. To be entitled to a finding that a 22 class action waiver is unenforceable a plaintiff must make a “proper factual showing” as to those 23 four factors. Id.; Compare Garrido, 241 Cal. App. 4th at 846–47 (affirming the trial court’s 24 finding that a class action waiver was unenforceable when plaintiff submitted evidence as to each 25 of the four factors) with Brown v. Ralphs Grocery Co., 197 Cal. App. 4th 489, 496–97 (2011) 26 (reversing trial court’s finding that a class action waiver was unenforceable when plaintiff failed 27 to provide any evidence as to the four factors). Here, Plaintiff summarily concludes a class action 28 waiver could be found unenforceable under Gentry. (Doc. No. 26 at 9.) However, Plaintiff has not 1 identified, what evidence, if any, supports his conclusion. Plaintiff has not met his burden of 2 providing evidence that satisfies any of the four factors under Gentry. Therefore, the court finds 3 the presence of class action waivers in the arbitration agreements does not render the agreements 4 unenforceable. 5 Third, Plaintiff contends his wage and hour claims are not subject to arbitration under 6 California Labor Code Section 229. (Doc. No. 26 at 8–9.) Section 229 states that “[a]ctions to 7 enforce the provisions of this article [Cal. Lab. Code § 200–244] for the collection of due and 8 unpaid wages claimed by an individual may be maintained without regard to the existence of any 9 private agreement to arbitrate.” See Cal. Lab. Code § 229; Lane v. Francis Cap. Mgmt, LLC, 224 10 Cal. App. 4th 676, 684 (2014). Only three of Plaintiff’s eight causes of action are brought under 11 the subject article. Specifically, Plaintiff’s first three claims for failure to pay regular wages, 12 failure to provide meal breaks or compensation in lieu thereof, and failure to authorize and permit 13 rest breaks or compensation in lieu thereof, are brought under that article. (Doc. No. 25 at 15–20.) 14 Therefore, the court shall stay Plaintiff’s first three claims pending arbitration of Plaintiff’s 15 remaining individual claims. See Neims v. Neovia Logistics Distrib., LP, No. 23-cv-00716, 2023 16 WL 6369780, at *8 (C.D. Cal. Aug. 10, 2023) (ordering some claims to arbitration and staying 17 proceedings with respect to the remaining claims that were not arbitrable). 18 CONCLUSION 19 For the reasons explained above: 20 1. Defendants’ motion to compel arbitration of Plaintiff’s individual causes of action 21 (Doc. No. 20) is granted in part; 22 2. Plaintiff shall be and hereby is ordered to submit his fourth through eighth 23 individual causes of action brought against Defendants in this action to arbitration; 24 3. Plaintiff’s first through third individual causes of action are stayed pending 25 completion of the arbitration proceedings on Plaintiff’s other individual claims; 26 4. Plaintiff’s class causes of action are stayed pending completion of the arbitration 27 proceedings; 28 5. The parties shall file a joint status report ninety (90) days from the date of entry of 1 this order, and every 90 days thereafter, regarding the status of the arbitration 2 proceedings; 3 6. Within fourteen (14) days of the completion of the arbitration proceedings, the 4 parties shall file a joint status report to notify the court of the arbitrator’s decision 5 and request that the stay of this case be lifted; and 6 7. The Clerk of the Court is directed to update the docket to reflect that Defendants 7 Stockton Logistics LLC, Fresno Logistics LLC, C&S Logistics of 8 Sacramento/Tracy LLC, and C&S Logistics of Fresno LLC have been terminated 9 from this action as of July 24, 2024, the date Plaintiff filed the first amended 10 complaint. 11 b IT IS SO ORDERED. □ 13 | Dated: _December 30, 2024 RUC Dena Coggins 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15