In Viking River Cruises, Inc. v. Moriana, Case No. 20-1573, the U.S. Supreme Court is poised to decide later this term whether the Federal Arbitration Agreement (FAA) preempts a California rule, established in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014). The Iskanian rule holds that an agreement purporting to waive an employee's right to bring a representative action under the Private Attorneys General Act (PAGA) is unenforceable. Advocates seeking to overturn Iskanian argue that this rule interferes with fundamental attributes of arbitration and is inconsistent with Supreme Court precedents requiring that arbitration agreements be enforced according to their terms. (To read more about Viking River Cruises, click here.)
The Viking River Cruises decision may be outcome-determinative for countless pending PAGA actions where the named plaintiff signed an arbitration agreement purporting to waive the right to bring claims except on an individual basis. If the Supreme Court rules that the FAA preempts the Iskanian rule, defendants in such cases can be expected to try to enforce their arbitration agreements and compel the plaintiffs to arbitrate claims on an individual basis, rather than as representatives of other allegedly aggrieved employees.
Given the potential case-altering impact of Viking River Cruises, some defendants have been requesting that courts stay pending PAGA actions until the Supreme Court rules. At least one court found no justification for a stay, explaining that "[s]peculation about what the United States Supreme Court might say this June in Viking River Cruises does not affect how this Court must treat the arbitration agreement today, under existing precedent." Medrano v. Windsor Gardens Healthcare Ctr. of Fullerton, LLC, No. 30-2021-01179331-CU-OE-CXC, slip op. at 2 (Orange Super. Ct. Feb. 25, 2022) (Claster, J.).
However, other courts have been overwhelmingly receptive. As one court explained, "absent a stay, there is a real risk that the parties will needlessly litigate an issue that is ultimately sent to arbitration." Caldera v. Glasswerks LA, Inc., No. 20STCV45749 (L.A. Super. Ct. Mar. 4, 2022) (Hammock, J.) (tentative affirmed by court). Another explained that "needlessly litigating the claims" would result in "significant waste." Abreau v. Prospect Med. Holdings, Inc., No. 20STCV21447, slip op. at 3 (L.A. Super. Ct. Feb. 28, 2022) (Murphy, J.). Other decisions are in accord. E.g., McKillop v. OneHalloweenNight, Inc., No. 34-2017-00206815-CU-OE-GDS, slip op. at 5 (Sacramento Super. Ct. Feb. 23, 2022) (Sueyoshi, J.) ("[J]udicial economy and substantial justice compel the determination that this matter be stayed pending a decision in the U.S. Supreme Court."); Canakie v. Safran Cabin, Inc., No. 30-2021-01222644-CU-OE-CXC (Orange Super. Ct. Jan. 27, 2022) (Wilson, J.) (accord).
Not only could waste occur in the absence of a stay, a decision in Viking River Cruises is expected by June 2022, so any stay would be relatively brief. In a matter of a few short months, it is not likely that evidence would be lost or that witnesses' memories would fade. Abreau, slip op. at 3 (finding only a "minor risk" of witnesses becoming available); Caldera (same). As the Viking River Cruises decision draws nearer, this concern will continue to diminish.
Depending on the court, it may be difficult at this point for a defendant to get a hearing on a motion to stay before Viking River Cruises is decided. Nevertheless, considering how well these arguments are resonating with trial court judges, defendants would be well advised to explore ways to defer burdensome undertakings (such as employee-specific discovery) until after the Supreme Court's decision, even if a noticed motion is not a possibility.
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