A Post-Epic Systems Challenge to Iskanian Has Been Taken Up by the U.S. Supreme Court

Akin Gump Strauss Hauer & Feld LLP

In Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court held that an arbitration agreement purporting to waive the right to bring a representative action under the Private Attorneys General Act (PAGA) was unenforceable under state law. In numerous subsequent cases, litigants have asked the United States Supreme Court to grant certiorari to rule on whether the Federal Arbitration Act (FAA) preempted the Iskanian rule. The Court had consistently denied certiorari, including in October 2021 in DoorDash, Inc. v. Campbell, Case No. 21-220. (To read about the DoorDash challenge and other similar cases, click here.)

That streak was broken on December 15, 2021, when the Supreme Court granted certiorari in Viking River Cruises, Inc. v. Moriana, Case No. 20-1573. The petitioner argued that, like class and collective actions, representative actions under PAGA permit plaintiffs to prosecute claims and seek recovery on behalf of hundreds or thousands of employees. “All three forms of representational litigation involve procedural complexities and heightened stakes that are a poor fit for the streamlined and informal nature of traditional arbitration.” Petition at 18. Therefore, the petitioner argued that the Iskanian rule is incompatible with the Supreme Court’s precedent that “courts must ‘enforce arbitration agreements according to their terms—including terms providing for individualized proceedings.’” Id. at 18 (quoting Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1619 (2018)).

It is not immediately clear why the Court granted certiorari in Viking River Cruises but not in DoorDash, because the petitioners’ arguments in both cases were substantially identical. However, it is perhaps notable that the petitioner in DoorDash had settled with the respondent by the time it filed its petition, which may have raised concerns that the case was not a proper vehicle for addressing the issue.

The Court will likely hear oral argument in the case this spring, with a decision to follow by the end of June 2022.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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