Porter v. Nabors Drilling USA, LP, 2017 WL 1404392 (9th Cir. 2017)

Jeremy Porter, a former employee of Nabors Drilling, filed a complaint alleging various claims against Nabors, including a claim arising under the Private Attorney General Act (“PAGA”). After removing the action to federal court, Nabors moved to compel arbitration of all of Porter’s claims pursuant to an arbitration agreement. Porter agreed to arbitrate all of his claims except the PAGA claim. Over Porter’s objection, the district court granted Nabors’ motion to compel arbitration of the PAGA claim, and Porter filed the current appeal. After the appeal was filed, Nabors filed a “Notice of Suggestion of Bankruptcy,” which stated that Nabors and its parent companies had filed voluntary petitions seeking bankruptcy protection under Chapter 11. Porter filed a motion for summary disposition, arguing that the automatic bankruptcy stay does not apply to a pending PAGA claim based on an exception to the automatic stay for proceedings brought “by a governmental unit … to enforce such governmental unit’s … police and regulatory power.” The United States Court of Appeals for the Ninth Circuit granted Nabors’ motion to stay the appellate proceedings, rejecting Porter’s contention that a PAGA claim falls within the governmental unit exception to the automatic stay. Cf. Gateway Community Charters v. Spiess, 9 Cal. App. 5th 499 (2017) (nonprofit public benefit corporation that operates charter schools is not an “other municipal corporation” exempt from liability for waiting time penalties pursuant to Cal. Lab. Code § 220(b)).