Lopez v. Thyssenkrupp Supply Chain Services, NA Inc.
- Vince Chhabria
- 3:23-cv-03368
- U.S. District Court · Northern District of California
- 3
In Lopez v. Thyssenkrupp Supply Chain Services, Judge Chhabria denied arbitration, holding California’s class and PAGA restrictions unenforceable and Lopez exempt from federal arbitration law.
Fabian Lopez and Thyssenkrupp Supply Chain Services, NA Inc.; the ruling determines that Lopez’s class and Private Attorneys General Act claims remain in court rather than proceeding in arbitration.
What happened
In Lopez v. Thyssenkrupp Supply Chain Services, the company asked the court to require Fabian Lopez to arbitrate his class claims and claims under California’s Private Attorneys General Act. The court determined that the newer arbitration agreement governed the dispute.
The court held that the agreement’s class-action waiver and requirement that Lopez pursue only an individual PAGA claim were not enforceable under California law. It also held that the Federal Arbitration Act did not override those California rules because Lopez is a transportation worker who handles goods moving through interstate commerce.
The court therefore ruled that Lopez’s class and PAGA claims must remain in court and denied the motion to compel arbitration. Judge Vince Chhabria issued the order on June 28, 2024.
The detailed version
- Lopez v. Thyssenkrupp Supply Chain Services, NA Inc. · No. 3:23-cv-03368
- Vince Chhabria
- June 28, 2024
Background
Thyssenkrupp Supply Chain Services, NA Inc. asked the court to compel Fabian Lopez to arbitrate the dispute. The company presented two arbitration agreements that might apply. The court concluded that the company’s newer agreement governed because it included an integration clause.
Class and PAGA provisions
The court held that the agreement’s class-action waiver was not enforceable under California law. Lopez showed that using a class action would be a more effective way to enforce the affected employees’ rights because his lawyer estimated that Lopez’s individual recovery would be about $10,000. Lopez also submitted statements that he feared retaliation for complaining about working conditions and was not familiar with his labor rights until he consulted his attorneys.
The court also held that the agreement’s requirement that Lopez pursue only an individual claim under California’s Private Attorneys General Act was not enforceable. California law does not allow the individual and nonindividual parts of a PAGA claim to be split into separate proceedings. The agreement provided that, if either provision was unenforceable, the class action or PAGA action had to be litigated in court rather than arbitration. The court therefore concluded that Lopez’s class action and PAGA claims must remain in court.
Federal Arbitration Act
The court held that the Federal Arbitration Act did not override these California rules. The Act exempts certain transportation workers from its coverage. The court found that Lopez was engaged in transporting goods because he loaded, unloaded, processed, and stored palletized component parts for Tesla while they awaited further transport.
The court also found that Lopez handled goods involved in interstate transportation. The goods originated outside California and were delivered either from an out-of-state location or through the Port of Oakland. Their pause at the warehouse did not remove them from interstate commerce because they were destined from the outset for Tesla’s production plant.
Disposition
The court denied Thyssenkrupp Supply Chain Services, NA Inc.’s motion to compel arbitration. The order states that Lopez’s class action and PAGA claims must remain in court. The court also overruled Lopez’s evidentiary objections and addressed the company’s objections as described in the order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.