After Viking River Cruises, Plaintiffs Will Continue To Resist Arbitration In Pending Cases

• Published date: 17 May 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Akin Gump Strauss Hauer & Feld LLP
• Author: Mr Gregory Knopp, Donna M. Mezias and Jonathan P. Slowik

In Viking River Cruises, Inc. v. Moriana, Case No. 20-1573, the U.S. Supreme Court granted certiorari to decide whether representative claims under the Private Attorneys General Act (PAGA) may be compelled to individual arbitration. In Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court announced a rule against individual arbitration of PAGA claims, but the U.S. Supreme Court is widely expected to hold that the Federal Arbitration Act (FAA) preempts the Iskanian rule. (To read a recap of the Viking River Cruises oral argument, click here.)

In Part 1 of this two-part series, we examine the battle lines that will likely be drawn in current litigation if the U.S. Supreme Court overrules Iskanian. Current PAGA lawsuits on behalf of claimants subject to arbitration agreements will not automatically wind up in arbitration, nor should defendants expect that plaintiffs will submit to individual arbitration voluntarily. Instead, a flood of motions to compel arbitration will likely ensue, filed by defendants eager to enforce their arbitration agreements and opposed by plaintiffs who in many cases will have devoted substantial time and resources to pursuing a representative claim in court. Three arguments may feature prominently.

Waiver. In many cases, defendants may file motions to compel arbitrations many months or even years after lawsuits were filed. In such cases, plaintiffs will almost certainly argue that the defendants waived their rights to compel arbitration by not seeking to enforce their agreements sooner.

Because the vast majority of PAGA cases are litigated in state courts, California law regarding waiver will apply in most cases. Under this standard, courts consider the following factors:

• Whether the party's actions are inconsistent with the right to arbitrate.
• Whether the litigation machinery has been substantially invoked before the party notified the opposing party of an intent to arbitrate.
• Whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay.
• Whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings.
• Whether important intervening steps had taken place.
• Whether the delay affected, misled, or prejudiced the opposing party.

Saint Agnes Med. Ctr. v. PacifiCare of Cal., 31 Cal. 4th 1187, 1196 (2003). This inquiry may vary depending on the facts of specific cases, but...