California Supreme Court to Resolve Circuit Split About PAGA Manageability

Akin Gump Strauss Hauer & Feld LLP

On June 22, 2022, the California Supreme Court granted review in Estrada v. Royalty Carpet Mills, Inc., 76 Cal. App. 5th 685 (2022), to resolve a split of authority regarding whether trial courts can strike or limit unmanageable Private Attorneys General Act (PAGA) claims. The Court will likely hear oral argument in 2023.

In Wesson v. Staples the Office Superstore LLC, 68 Cal. App. 5th 746 (2021), the 2nd District held that “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.” Id. at 756. Drawing on principles from class actions and other representative actions, the court explained that “[i]n general . . . a need for individualized proof pertaining to a very large number of employees will raise manageability concerns.” Id. at 771. (Click here to reach about the Wesson decision.) Conversely, in Estrada, the 4th District held that “a court cannot strike a PAGA claim based on manageability.” Estrada, 76 Cal. App. 5th at 697. While Estrada also expressed concern about unmanageable claims, it explained that where claims involve “hundreds or thousands of alleged aggrieved employees, each with unique factual circumstances,” the court may render a trial manageable by limiting the presentation of evidence and witnesses, but not by striking or limiting the claims. Id. at 713. (Click here to reach about the Estrada decision.)

The California Supreme Court is poised to resolve this split, but the order granting review gives little indication which way the Court may rule. Although it is perhaps significant that the Court denied review of Wesson in December 2021, it is also possible that the Court merely waited for a conflict to develop before wading into the issue. The Court also denied a request to depublish Estrada, so both cases remain good law while the appeal is pending.

While the Court may not be tipping its hand, there may be strong arguments that Wesson is the better-reasoned decision. Click here to read Akin Gump’s analysis of a potential flaw in the Estrada court’s reasoning.

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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