United States: California Supreme Court Expands Scope of PAGA Discovery

On July 13, 2017, in a decision with serious repercussions on the scope of PAGA discovery, the California Supreme Court overruled the Court of Appeals in Williams v. Superior Court to allow state-wide discovery of Marshalls employees' contact information, without the plaintiff first having to show any evidence to support his own individual claims or the existence of a company-wide policy.

Plaintiff was a Marshalls employee who brought an action under the California Labor Code Private Attorneys General Act ("PAGA") for meal and rest break violations, timely wage payment, and wage statement violations. At the start of discovery, the plaintiff sought employee contact information pertaining to the approximately 16,500 non-exempt workers across all Marshalls locations in California.  Although the trial court and the Court of Appeals held that incremental discovery was more appropriate and denied the plaintiff's request for any employee contact information outside of his own work location until after undergoing "six productive hours of deposition," the California Supreme Court disagreed.

Instead, the Supreme Court, in a lengthy opinion, shut down each of the Court of Appeals' objections to the plaintiff's request for state-wide discovery.   First, the Supreme Court held that "[i]n pursuing such [representative] discovery, the strength or weakness of the plaintiff's individual claim is immaterial."  Second, the Supreme Court stated that state-wide discovery was proper absent any company-wide or uniform policy as "[a] uniform policy may be a convenient or desirable way to show commonality of interest in a case where class certification is sought, but it is not a condition for discovery, or even success, in a PAGA action..."

Third, regarding objections to the plaintiff's discovery requests for undue burden and overbreadth, the Supreme Court similarly stated that the plaintiff's right to discovery is broad and that, absent claims of privilege or significant evidence of undue burden, his right to discovery extends to all information that is reasonably calculated to lead to discoverable information. Fourth, regarding the privacy rights that other employees have in their contact information, the Supreme Court stated that such privacy rights were not related to any "serious privacy invasion[s]."  In making this ruling on privacy rights, the Supreme Court expressly disapproved of numerous California cases that have held that a "compelling interest" is required to overcome any privacy rights.  Instead, the Supreme Court, referencing its previous opinion in Hill v. National Collegiate Athletic Assn., stated that unless the privacy interest involves "an obvious invasion of an interest fundamental to personal autonomy" (which would require a "compelling interest" to overcome), that a fact-specific factor analysis, favoring at least partial disclosure, is appropriate.

Although the ruling in the Supreme Court's decision is largely limited to requests regarding employee contact information, the Supreme Court does makes broad sweeping statements about general discovery in PAGA actions:

The Legislature was aware that establishing a broad right to discovery might permit . . . fishing expeditions. . . . It granted such a right anyway. . . .  That the eventual proper scope of a putative representative action is as yet uncertain is no obstacle to discovery.

Moreover, while comparing PAGA actions (which are not subject to class certification requirements) to class actions (which are), the Supreme Court stated that "overlapping policy considerations support extending PAGA discovery as broadly as class action discovery has been extended."

While the Supreme Court's decision here is a big step back for employers, there are some key takeaways regarding how to attempt to limit PAGA discovery going forward. As the holding is limited to employee contact information, it is not certain how California courts will utilize this opinion when deciding the breadth of further discovery in PAGA actions.  Moreover, throughout its opinion, the Supreme Court repeatedly noted that partial disclosures were strongly preferred to complete denials of discovery: "Such limits need not be all or nothing . . . trial courts should consider alternatives such as partial disclosure or a shifting of costs before settling on a complete denial of discovery."

Here, the plaintiff was actually willing to accept certain limitations on discovery. For example, the plaintiff was willing to accept contact information only from a representative sample of ten to twenty percent of employees (outside his work location), to share the costs of the discovery, and accept as a condition of disclosure a notice to employees allowing them an opportunity to opt out of having their information shared.  The Supreme Court took into account these alternatives while finding the Court of Appeals' outright denial to be improper.   As such, although it is unlikely that a court will now completely deny a discovery request similar to the one in Williams, there is still the possibility that at least some alternative limitations would be upheld.

That being said, expect the plaintiffs' bar to use the Williams decision to support broad discovery requests in PAGA actions going forward.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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