With the U.S. Supreme Court set to hear oral argument later this month in Viking River Cruises, Inc. v. Moriana, Case No. 20-1573, much of the wage and hour bar has turned its attention to Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 248 (2014). Viking River Cruises will decide the fate of a rule announced in Iskanian, holding that an agreement purporting to waive an employee's right to bring a representative action under the Private Attorneys General Act (PAGA) is unenforceable. (To read about the Viking River Cruises petition, and how state trial courts have reacted to it, click here and here.) But before Iskanian, there was Arias v. Superior Court, 46 Cal. 4th 969 (2009), the O.G. California Supreme Court PAGA case that paved the way for non-class PAGA actions.

Although now commonplace, the plaintiff in Arias employed what at the time was a controversial procedure: he alleged PAGA claims against his employer on a representative basis without attempting to comply with the requirements for a class action. The employer moved to strike the claims, arguing that they were procedurally improper because they failed to comply with the pleading requirements for class actions. The trial court agreed, and struck the claims. Id. at 976.

The Court of Appeal reversed, explaining that for four reasons, a PAGA action need not satisfy traditional class action requirements. First, Labor Code Section 2699(a) states that an aggrieved employee may bring a PAGA action "on behalf of himself of herself and other current or former employees," and may do so "[n]otwithstanding any other provision of law." Second, similar language in Business & Professions Code Section 17204 had been interpreted to permit representative actions that were not class actions (although that provision was later amended). Third, PAGA did not expressly require that representative actions comply with class action requirements. Fourth, a PAGA action is essentially a law enforcement action designed to protect the public, not an action designed to provide relief to individual employees. Id. at 981.

The California Supreme Court agreed with the Court of Appeal's reasoning, and also addressed additional arguments raised by the petitioner. It quickly disposed of the petitioner's arguments that allowing PAGA plaintiffs to pursue representative actions without satisfying class certification requirements would lead to "absurd results" and that such a rule was contrary to PAGA's legislative history. Id. at 982-84.

The petitioner also raised due process concerns, which the Court addressed in detail. The petitioner argued that the Court of Appeal's rule would give rise to "one-way intervention," whereby "one plaintiff could sue and lose; another could sue and lose; and another and another until one finally prevailed; then everyone else would ride on that single success." Id. at 985 (quoting Fireside Bank v. Superior Court, 40 Cal. 4th 1069, 1078 (2007)). The Court acknowledged that this was a possibility, but disagreed that it raised a due process concern. It explained that "the judgment in [a PAGA] action is binding not only on the named employee plaintiff but also on government agencies and any aggrieved employee not a party to the proceeding," because the plaintiff sues "as the proxy or agent of the state's labor law enforcement agencies." Id. at 985-86. And while it may be true that nonparty employees could invoke collateral estoppel after a successful PAGA lawsuit to obtain employee-specific remedies like damages and statutory penalties, the same would be true if the state brought an enforcement action directly. Id. at 987.

The Arias decision helped pave the way for "PAGA-only" lawsuits, where a plaintiff eschews class claims and elects to pursue relief only in a representative action under PAGA. Had Arias been decided the other way, there would be little incentive for a plaintiff ever to do so, and PAGA claims would likely be brought only as add-ons in lawsuits pursuing conventional class relief.

Twelve years and many thousands of PAGA lawsuits later, one question raised by the Arias decision remains unresolved. In a footnote, the Court stated that PAGA claims "may be brought as class actions." Id. at 981 n.5 (emphasis added). It is not clear why a plaintiff would ever bring a PAGA claim as a class action if class certification principles need not apply. However, one answer may be that proving that a PAGA action satisfies class action principles may be a way of demonstrating that the representative claim is manageable. As the Court of Appeal affirmed in Wesson v. Staples the Office Superstore, LLC, 68 Cal. App. 5th 746 (2021), trial courts have discretion to strike or limit PAGA representative claims that cannot be manageably tried. (To read about the Wesson decision, click here.)

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