Lewis v. 24 Hour Fitness
Filed 1/15/13 Lewis
v. 24 Hour Fitness CA2/5
OFFICIAL REPORTS
California Rules of Court, rule
8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
KEVIN LEWIS et
al.,
Plaintiffs and Respondents,
v.
24 HOUR
FITNESS USA, INC.,
Defendant and Appellant.
B239912
(Los Angeles County
Super. Ct. No.
BC437680)
APPEAL
from an order of the Superior Court of
County, Elizabeth Allen-White, Judge. Reversed.
Law
Offices of Stephen Glick, Stephen Glick and Anthony Jenkins, for Plaintiffs and
Respondents.
Akin
Gump Strauss Hauer & Feld LLP, Rex S. Heinke, Gregory W. Knopp and Orly
Degani; and Littler Mendelson, PC, Keith A. Jacoby, Brandie N. Charles and Judy
M. Iriye, for Defendant and Appellant.
This
is the second appeal from the trial court’s refusal to enforce an arbitration
agreement between defendant, 24 Hour Fitness USA,
Inc., and plaintiffs Kevin Lewis, Amanda Nguyen, Shane Nicol and Fareh
Zoberi. Defendant argues the trial court
erred in severing the Private Attorneys General Act and Unfair Competition Law
claims as nonarbitrable and ordering these claims litigated before
arbitration. We conclude our prior
decision adjudicated all of plaintiffs’ claims and is the law of the case. Accordingly, we reverse the trial court’s
order.
On May 14, 2010, plaintiffs filed a complaint against defendant. On June 4, 2010,
plaintiffs filed their first amended
complaint on behalf of themselves and a class consisting of California sales
counselors, fitness trainers and managers employed by defendant. The first amended complaint alleged
violations of: Labor Code sections 201
through 203, 226, subdivisions (a) and (e), 510, 1174, 1194(a), and 1198; Industrial
Welfare Commission Order 2-2001; Business and Professions Code section 17200 et
seq.; and the Labor Code Private Attorneys General Act of 2004. (Lab. Code § 2699, subdivisions (a) and
(f).)
On July 29, 2010, defendant filed a motion to
compel arbitration and stay court proceedings. Defendant argued plaintiffs’ claims were
subject to arbitration under the arbitration policy in the employee
handbook. The arbitration agreement
requires all disputes to be resolved by an arbitrator through final and binding
arbitration including disputes relating to trade secrets, unfair competition,
compensation, termination and state statutes, if any address the same subject
matters, and all other statutory and common law except worker’s compensation
claims. The arbitration agreement is
governed by the Federal Arbitration Act.
The arbitration agreement contains a class action and class arbitration
waiver. The arbitration agreement
provides, “[T]here will be no right or authority for any dispute to be brought,
heard, or arbitrated as a class action (including without limitation opt out
class actions or opt in collective class actions), or in a representative or
private attorney general capacity on behalf of a class of persons or the
general public.â€
The trial court denied
the motion on September
20, 2010.
The trial court ruled Stolt-Nielsen
Corp. (2010) 130 S. Ct. 1758 did not preempt
Cal.4th 443. The trial court found the
class action waiver was unenforceable as against public policy as stated in
The trial court also found defendant waived arbitration. This was based on defendant’s statement that
it did not seek enforcement of the arbitration provision if the court found the
class waiver provision unenforceable.
On November 3, 2011, we reversed the trial court order in an unpublished opinion. (Lewis
v. 24 Hour Fitness USA, Inc. (Nov. 3, 2011,
B227869 [nonpub. opn.].) We found
plaintiff failed to present any evidence the class action waiver was
substantively unconscionable. We also
found defendant had not forfeited its right to challenge the class action
waiver ruling. In addition, this court
stated: “We need not address: the parties’ preemption contentions; the
arguments as to the trial court’s stated reasons for refusing to enforce the
arbitration agreements; and the arbitrability of any individual cause of action
as plaintiffs never raised this precise issue here or in the trial court. (Pearson
Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 681;
Textile Maintenance Co. (2011) 197 Cal.App.4th 733, 740.)†On November 30, 2011, we denied plaintiff’s petition for rehearing.
On remand, defendant
sought an order requiring plaintiff to arbitrate their individual claims. In opposition, plaintiff argued the trial
court should sever the language in the arbitration agreement prohibiting their
private attorney general enforcement under Labor Code section 2698 et seq. Plaintiffs relied on Brown v. Ralphs Grocery Company (2011) 197 Cal.App.4th 489,
502-503. Plaintiffs also contended this
court’s November 3, 2011 decision and subsequent order denying plaintiff’s
petition for rehearing are not the law of the case as to their claims under the
Private Attorneys General Act and Unfair Competition Law. They further argued the arbitration agreement
is unenforceable because the Private Attorneys General Act and Unfair
Competition Law waivers are substantively unconscionable. In the alternative, plaintiffs requested the
Private Attorneys General Act and Unfair Competition Law claims proceed in
court prior to the arbitration of their individual claims under Code of Civil
Procedure section 1281.2, subdivision (c).
On February 27, 2012, the trial court heard oral
argument on defendant’s motion to compel arbitration. The trial court proposed severing the Private
Attorneys General Act and Unfair Competition Law claims because they were
nonarbitrable under Brown v. Ralphs Grocery
Company. The trial court found our
prior decision did not “specifically indicate that the [Private Attorneys
General Act] claims and the [Unfair Competition Law] claims should be
arbitrated.†On March 12, 2012, the trial court ruled: “The
[Private Attorneys General Act] representative suit and [Unfair Competition
Law] claim waivers are severed from the arbitration agreement [.] [P]laintiffs’ [Private Attorneys General Act]
representative suit and [Unfair Competition Law] injunctive relief claims shall
proceed in this Court prior to the arbitration of their individual claims
pursuant to [Code of Civil Procedure section 1281.2, subdivision (c)].†Defendant filed its notice of appeal on March 20, 2012.
Under the law of the case
doctrine, “‘[t]he decision of an appellate court, stating a rule of law
necessary to the decision of the case, conclusively establishes that rule and
makes it determinative of the rights of the same parties in a subsequent
retrial or appeal in the same case.’†(
Cal.4th 482, 491; Kowis v. Howard (1992)
3 Cal.4th 888, 892-893.) Our Supreme
Court has stated: “‘ Generally, the
doctrine of law of the case does not extend to points of law which might have
been but were not presented and determined in the prior appeal. [Citation.]
As an exception to the general rule, the doctrine is . . . held
applicable to questions not expressly but implicitly decided because they were
essential to the decision of the prior appeal.
[Citations.]’†(
Estate of Horman (1971) 5 Cal.3d 62,
73.) The law of the case doctrine is
applicable even when the prior appellate opinion is erroneous. (Morohoshi
v. Pacific Home, supra, 34 Cal.4th at p. 491; People v. Stanley (1995) 10 Cal.4th 764, 786.)
Here, our prior opinion
adjudicated the arbitrability of plaintiff’s claims under the Private General
Attorneys Act and Unfair Competition Law.
We ruled plaintiffs forfeited their argument as to “arbitrability of any
individual cause of action as plaintiffs never raised this precise issue here
or in the trial court.†We cited
Court, supra, 48 Cal.4th at p. 681 and Tutti
Mangia Italian Grill, Inc. v. American Textile Maintenance Co., supra, 197
Cal.App.4th at p. 740 to support our forfeiture finding. This ruling applies to the arbitrability
of plaintiffs’ Private General Attorneys
Act and Unfair Competition Law claims.
Our prior ruling on the arbitrability of these claims is law of the
case.
The order under review is
reversed. Defendant, 24 Hour Fitness
USA, Inc., shall recover its costs on appeal from plaintiffs, Kevin Lewis,
Amanda Nguyen, Shane Nicol and Fareh Zoberi.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
TURNER,
P. J.
We concur:
KRIEGLER,
J.
FERNS, J.
assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
