California Court Of Appeal Holds Courts Have Authority To Ensure That PAGA Claims Are Manageable

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While California’s Private Attorneys General Act (PAGA) is often compared to class actions, many of the rules and regulations governing class actions are not present. And applying considerations like manageability to PAGA claims has caused California trial courts much consternation.

However, recently the California Court of Appeal for the Second Appellate District has provided some guidance. It recently decided on the issue of whether the trial courts have inherent authority to ensure that PAGA claims will be manageable at trial and whether courts have the authority to strike such claims if they are not.

The underlying case dealt with whether certain employees were appropriately classified as exempt from overtime requirements. The employer-defendant argued at the trial level that its affirmative defense, that the employees were appropriately classified, would require individualized proof, and thus the claim could not fairly and efficiently be litigated as a representative action. The trial court invited the plaintiff to provide a trial plan to show the case was manageable but instead, the plaintiff argued the trial court lacked authority to require his claim to be manageable. The trial court thereafter granted the employer’s motion to strike the PAGA claim.

The California Court of Appeal held that courts possess the authority to strike PAGA claims that are not manageable. The Court of Appeal drew on established principles of the courts’ inherent authority to manage litigation, including ensuring the manageability of representative claims, and concluded that:

(1) courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable;

(2) as a matter of due process, defendants are entitled to a fair opportunity to litigate available affirmative defenses, and a court’s manageability assessment should account for them; and,

(3) given the state of the record and the plaintiff’s lack of cooperation with the trial court’s manageability inquiry, the court did not abuse its discretion in striking his PAGA claim as unmanageable.

The Court of Appeal affirmed the trial court’s grant of the motion to strike.

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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