Correia v. NB Baker Elec., Inc., No. D073798 (D4d1 Feb. 25, 2019)
The Court of Appeal here affirms a decision severing out a PAGA representative claim as not amenable to arbitration while compelling arbitration of the rest of the case. In getting to that result, the Court makes three basic decisions:
First, The fact that Plaintiff mistakenly filed an opposition to the petition to compel nine court days before the hearing (which is the rule for regular motions under Code of Civil Procedure § 1005(b) instead of ten days after service of the petition (the rule for arbitration oppositions under § 1290.6) did not prevent the court from reaching the merits. The deadline in § 1290.6 is not jurisdictional, so the court could give relief for good cause.
Second, the California Supreme Court’s decision in Iskanian v. CLS Transportation—which held that waivers of PAGA representative claims are unenforceable—remains good law following the U.S. Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018)—which held that the National Labor Relations Act did not preclude class action waivers in employment agreements. Epic said that FAA preemption is broad, but it is not crosswise with Iskanian’s central point—that PAGA claims are essentially qui tam claims that belong to the government and thus can’t be waived by an agreement between private parties.
Third, although some federal courts suggest otherwise, PAGA claims—whether representative or individual—can’t be compelled to arbitration at all. Iskanian didn’t reach that issue, but it’s logic compels it. Because PAGA claims belong to the state, the statutory right to bring them in court can’t be waived in pre-dispute arbitration because the state has not consented. agreement without the state’s consent. A PAGA plaintiff does becomes semi-agent of the state when he brings his or her claims. In that capacity, the plaintiff could arguably consent to arbitration post-lawsuit on the state’s behalf. But at the time an employee signs a pre-dispute arbitration agreement, no such agency exists.
Affirmed.
Showing posts with label representative actions. Show all posts
Showing posts with label representative actions. Show all posts
Wednesday, February 27, 2019
Thursday, June 18, 2015
PAGA Takes Down Another Arbitration Clause
Williams v. Superior Court, No. B261007 (D2d4 Jun. 9, 2015)
Plaintiff in this case filed a single count action over the Labor Code Private Attorney General Act, seeking damages for Labor Code violations in both an individual and representative capacity. Defendant moved to compel arbitration, arguing that plaintiff had contractually waived the right to bring PAGA claims, and that, in any event the Labor Code violations that were the factual predicates to his PAGA claims we subject to an arbitration clause in his employment agreement. The trial court held the claims were unwaivable, but agreed that the underlying violations, when applied to the plaintiff individually, could be severed out and sent to arbitration, with the rest of the case stayed until that gets resolved.
Plaintiff in this case filed a single count action over the Labor Code Private Attorney General Act, seeking damages for Labor Code violations in both an individual and representative capacity. Defendant moved to compel arbitration, arguing that plaintiff had contractually waived the right to bring PAGA claims, and that, in any event the Labor Code violations that were the factual predicates to his PAGA claims we subject to an arbitration clause in his employment agreement. The trial court held the claims were unwaivable, but agreed that the underlying violations, when applied to the plaintiff individually, could be severed out and sent to arbitration, with the rest of the case stayed until that gets resolved.
Wednesday, January 8, 2014
Represent!
Market Lofts Community Association v. 9th Street Market Lofts, LLC, No. B245558 (D2d2 Jan. 7, 2013)
In a dispute between a developer and a homeowners’ association over parking spaces at some lofts across the street from Staples Center, the court of appeal reverses an order sustaining the developer’s demurrer for lack of standing. Because the HOA was a party to the parking contract with the developer, and an actual dispute about the HOA’s rights had arisen, it had standing to sue on its own behalf for declaratory relief. As to the HOA’s other claims—for breach of a contract between the developer and the homeowners, breach of fiduciary duty, fraud, rescission, and violations of the Unfair Competition Law—the court held that the HOA had representative standing to bring claims on behalf of its members under Code of Civil Procedure § 382. Although most people think of § 382 as the statute that authorizes class actions (albeit kind of vaguely), it also covers representative actions of other sorts. While “[i]t may also be true that while all class suits are representative in nature, all representative suits are not necessarily class actions.” (quoting Raven’s Cove Townhomes, Inc. v. Knuppe Dev. Co., 114 Cal. App. 3d 783, 794 (1981)). Standing to bring a representative action is appropriate when there is “an ascertainable class and a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented.” Here, the issues raised by the HOA’s complaint were common amongst its members, who would all be affected in the same manner by the their resolution, and in the absence of standing for the HOA, the homeowners would need to litigate 267 separate claims. Under the circumstances it was appropriate to afford representative standing to the HOA under § 382. That the developer might have individualized defenses against the homeowners did not merit otherwise.
Reversed.
In a dispute between a developer and a homeowners’ association over parking spaces at some lofts across the street from Staples Center, the court of appeal reverses an order sustaining the developer’s demurrer for lack of standing. Because the HOA was a party to the parking contract with the developer, and an actual dispute about the HOA’s rights had arisen, it had standing to sue on its own behalf for declaratory relief. As to the HOA’s other claims—for breach of a contract between the developer and the homeowners, breach of fiduciary duty, fraud, rescission, and violations of the Unfair Competition Law—the court held that the HOA had representative standing to bring claims on behalf of its members under Code of Civil Procedure § 382. Although most people think of § 382 as the statute that authorizes class actions (albeit kind of vaguely), it also covers representative actions of other sorts. While “[i]t may also be true that while all class suits are representative in nature, all representative suits are not necessarily class actions.” (quoting Raven’s Cove Townhomes, Inc. v. Knuppe Dev. Co., 114 Cal. App. 3d 783, 794 (1981)). Standing to bring a representative action is appropriate when there is “an ascertainable class and a well-defined community of interest in the questions of law and fact involved affecting the parties to be represented.” Here, the issues raised by the HOA’s complaint were common amongst its members, who would all be affected in the same manner by the their resolution, and in the absence of standing for the HOA, the homeowners would need to litigate 267 separate claims. Under the circumstances it was appropriate to afford representative standing to the HOA under § 382. That the developer might have individualized defenses against the homeowners did not merit otherwise.
Reversed.
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