4 minute read | January.30.2024
The California Supreme Court has determined that trial courts lack the authority to strike claims brought under California’s Private Attorneys General Act (PAGA) on the grounds that trying them would be unmanageable.
In a long-awaited decision, the Supreme Court also reminded trial courts of various tools and case management techniques they can use to make PAGA claims manageable.
California employers have been inundated with lawsuits under the state’s Private Attorneys General Act, which permits employees to sue on behalf of themselves and other “aggrieved employees” for violations of the California Labor Code.
Given the courts’ expansive views on discovery and standing in these cases, and the lack of procedural protections present in the class action requirements, employers and courts have faced broad PAGA representative actions alleging widespread violations. Courts are still grappling with how to try such expansive cases.
One hope was that courts could strike PAGA claims if trying them would be unmanageable. The California Supreme Court has now determined that courts lack the inherent authority to do so. The court’s decision in Estrada v. Royalty Carpet Mills, Inc. resolved a split among California’s appellate courts as to whether trial courts have inherent authority to strike PAGA claims on the ground that the claim is “unmanageable.” The Courts of Appeal previously were split on this issue, with one court holding that the trial courts possess broad inherent authority to strike PAGA claims as unmanageable, see Wesson v. Staples the Office Superstore, LLC, and the other holding that the trial courts lack such inherent authority. See Estrada v. Royalty Carpet Mills, Inc.
The California Supreme Court concluded that trial courts cannot strike PAGA claims based on class action manageability standards. It reasoned that because PAGA claims are not class claims, it is inappropriate for the trial court to strike PAGA claims by employing class action requirements.
The high court affirmed, however, that trial courts have various tools and case management techniques to make PAGA claims manageable, which include:
The court did not address the issue of “whether a defendant’s right to due process can ever support striking a PAGA claim, and if so, the circumstances under which such striking would be appropriate.” Accordingly, Estrada leaves open the argument that trial courts may strike PAGA claims that are so broad that attempting to try the PAGA representative claim in one trial would impede a defendant’s due process right to defend itself.
The court also emphasized the importance and long history of the manageability requirement for both California and federal (Rule 23) class actions, outside the context of a PAGA claim.
In short, although Estrada confirms that courts lack broad discretion to dismiss PAGA representative claims based on class action manageability standards, the case does not entirely disarm employers of their defenses to such claims. Indeed, Estrada warns employees to be scrupulous in their pleadings——or face the risk of adverse pre-trial rulings and reduced recoveries.
The key takeaways for employers are: