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Monday, June 29, 2009

Supreme Court Says Representative PAGA Actions Need Not Be Certified - As We Predicted

It's good to know that my powers of prediction are not failing me, at least not completely. In March, I predicted here that the Supreme Court would hold that Prop. 64 requires class certification in Unfair Competition Law ("UCL") actions, but not in actions seeking civil penalties on a representative basis under the 2004 Labor Code Private Attorneys General Act ("PAGA"). Cal. Labor Code section 2698, et seq. This morning, the Supremes issued their decisions in Arias v. Superior Court (Angelo Dairy) and Amalgamated Transit Union v. Superior Court (First Transit, Inc.) addressing these and other issues. In Arias, a unanimous Court held:
We hold that an employee who, on behalf of himself and other employees, sues an employer under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) for Labor Code violations must satisfy class action requirements, but that those requirements need not be met when an employee‘s representative action against an employer is seeking civil penalties under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.).
I didn't do as good a job predicting the outcome in Amalgamated. The Court held:
This case presents two issues. First, may a plaintiff labor union that has not suffered actual injury under the unfair competition law, and that is not an "aggrieved employee" under the Labor Code Private Attorney General Act of 2004, nevertheless bring a representative action under those laws (1) as the assignee of employees who have suffered an actual injury and who are aggrieved employees, or (2) as an association whose members have suffered actual injury and are aggrieved employees? The answer is "no." Second, must a representative action under the unfair competition law be brought as a class action? The answer is "yes," for the reasons stated in the companion case of Arias v. Superior Court (June 29, 2009, S155965) ___ Cal.4th ___.
I had predicted that the Court would answer both questions in the affirmative, so I missed on that one. Although I have to say that the Court framed the issue a little differently in its decision than it did in granting review, when it framed issue #1 thus:

Does a worker's assignment to the worker's union of a cause of action for meal and rest period violations carry with it the worker's right to sue in a representative capacity under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, sec. 2698 et seq.) or the Unfair Competition Law (Bus. & Prof. Code, sec. 17200 et seq.)?

That was the question I thought the Court would answer in the affirmative. In any case, you can read the full text of Arias here and Amalgamated here.

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