Thursday, January 8, 2015

This Ain't No PAGA

McGill v. Citibank, N.A., No. G047838 (Dec. 18, 2014)

The trial court in this case partially granted a petition to to compel arbitration, but denied it with respect to the plaintiff’s Unfair Competition Law, Consumer Legal Remedies Act and False Advertising Law claims seeking injunctive relief. The denial was based on a line of old California cases holding that those claims aren’t arbitrable because they benefit the public. But those cases are preempted by AT&T Mobility v. Concepcion, which says states can’t make rules that discriminate against arbitration. In Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court recently distinguished Concepcion with respect to claims brought under the Labor Code’s Private Attorney General Act. According to the Court, PAGA claims belong to the state government, even if they are prosecuted by an individual on the state’s behalf. Because the state didn’t agree to arbitrate the claims, a defendant can’t compel arbitration of PAGA claims.  But that logic does not apply to UCL, CLRA, or FAL claims, which—while sometimes touching on the public interest—are nonetheless claims belonging to individuals, not the state’s claims that are pursued by an individual on its behalf.


Classic Minutemen, should you care. 

Update: Review granted, April 2, 2015. 

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