On June 9, 2022, the California Court of Appeal, 4th District, issued its decision in Hargrove v. Legacy Healthcare, Inc., No. E076240, 2022 WL 2071982 (Cal. Ct. App. June 9, 2022), which affirmed a trial court decision dismissing a Private Attorneys General Act (PAGA) lawsuit for lack of a proper plaintiff and denying leave to substitute a different plaintiff. The decision highlights the necessity of exhausting administrative remedies as a prerequisite to bringing a PAGA claim, and explains an important limitation of a ruling by the court earlier this year.
PAGA requires an allegedly aggrieved employee to provide written notice of his or her claims to the Labor & Workforce Development Agency (LWDA) before filing a civil lawsuit so that the state agency may decide in the first instance whether to investigate the alleged violations. Cal. Lab. Code § nbsp;2699.3. Only after the LWDA takes no action for 65 days (or, less commonly, informs the employee it intends to take no action), can the employee file a PAGA action. In Hargrove, the original plaintiff provided notice to the LWDA in August 2016 and filed her lawsuit in October 2016. She died in February 2020, during discovery.
After the plaintiff's death, her attorneys sought leave to amend the complaint to substitute a different former employee, Makiya Cornell, to prosecute the PAGA claims in Hargrove's stead. Cornell served her LWDA notice in May 2020. By substituting Cornell as a plaintiff, the attorneys hoped to take advantage of the original limitations period established by Hargrove, which stretched back four years earlier than the limitations period that would otherwise apply to Cornell's claims.
The trial court dismissed the action and denied leave to amend, and the Court of Appeal affirmed. In doing so, the Court of Appeal applied the framework adopted by the California Court of Appeal, 1st District, earlier this year in Hutcheson v. Superior Court, 74 Cal. App. 5th 932, 935 (2022). Under Hutcheson, a representative plaintiff may substitute for another in a PAGA action if (1) the substituting plaintiff satisfies PAGA's prerequisites of standing, notice and statute of limitations; and (2) if the claims in the amended PAGA complaint relate back to the original complaint. Id. at 945.
Cornell's failure to timely exhaust the claims alleged by Hargrove in her own right was fatal to both prongs of this test. First, the Court of Appeal held that Cornell did not meet the PAGA prerequisites with respect to the time period at issue (2015-19) because she did not provide notice until years after the period in question began. Second, the Court held that she could not take advantage of the relation back doctrine, citing precedent that the doctrine should not be applied when it would frustrate the purpose of administrative prerequisites to bringing a claim.1
Fortunately, a plaintiff dying during pending litigation is an exceedingly rare event. However, PAGA plaintiffs can become unable or unwilling to prosecute claims for many other reasons, such as loss of interest, dismissal as a discovery sanction, or (depending on what happens in Viking River Cruises, Inc. v. Moriana) because of a binding arbitration agreement. (To read about the pending Viking River Cruises case, click here. To read about what the decision could mean for current and future cases, click here and here.) Hargrove illustrates that in such cases, PAGA's exhaustion requirement could make it difficult for another plaintiff to pick up the torch.
Footnote
1. Other facts also supported both prongs, especially that Cornell was hired in 2019. Thus, she was not an "aggrieved employee" during the large majority of the period and her claims were not based on the same facts and did not involve the same injury as Hargrove's. See Cal. Lab. Code § 2699(a) (only an "aggrieved employee" may bring a PAGA action).
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