A recent ruling by the California Supreme Court has resolved a contentious issue in labor law: the authority of trial courts to dismiss claims under the Private Attorneys General Act of 2004 (PAGA) on manageability grounds.
Background: Diverging Opinions Among Courts
There was a split in the Courts of Appeal regarding whether trial courts could strike PAGA claims due to manageability concerns. Estrada v. Royalty Carpet Mills, Inc. concluded that such authority was lacking, while Wesson v. Staples the Office Superstore, LLC, and others, argued in favor of this authority.
The Supreme Court’s Decision
The Supreme Court has now clarified this legal uncertainty. It held that trial courts do not have the inherent authority to dismiss PAGA claims on manageability grounds. This decision is rooted in the limited inherent authority of trial courts to dismiss claims, the structural differences between class claims and PAGA claims, and the nature of PAGA claims as administrative enforcement actions.
Key Points from the Decision
- Limited Inherent Authority: The Court emphasized that the inherent authority of trial courts to dismiss claims is limited and does not extend to striking PAGA claims for manageability.
- Distinction from Class Actions: PAGA claims differ significantly from class claims, and imposing class action manageability requirements on PAGA actions is inappropriate.
- Administrative Nature of PAGA Claims: PAGA claims are essentially administrative enforcement actions, and imposing a manageability requirement would undermine their effectiveness.
This ruling is a significant win for employees. Employers will no longer be able to get trial courts to dismiss PAGA claims on manageability grounds.