California Court Of Appeal Approves Limiting Or Striking Unmanageable PAGA Claims

• Published date: 16 September 2021
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: Akin Gump Strauss Hauer & Feld LLP
• Author: Mr Gregory Knopp, Gary M. McLaughlin, Donna M. Mezias, Aileen M. McGrath and Jonathan P. Slowik

Key Points

• In Wesson v. Staples The Office Superstore, LLC the California Court of Appeal held that "courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable."
• Drawing on principles from other types representative actions'including class actions'the court explained that "[i]n general . . . a need for individualized proof pertaining to a very large number of employees will raise manageability concerns."
• The Wesson decision marks the first time an appellate court has weighed in on whether PAGA claims must be manageable, and comes after years of skepticism at the trial court level regarding whether courts had authority to limit or preclude PAGA claims due to manageability concerns.

On September 9, 2021, the California Court of Appeal issued a significant decision in Wesson v. Staples The Office Superstore, LLC, holding that trial courts have authority to ensure that claims under the Private Attorneys General Act (PAGA) are manageable, and that courts may limit or strike unmanageable PAGA claims.

Under PAGA, "aggrieved employees" may sue employers for civil penalties for alleged violations of the California Labor Code on behalf of other allegedly aggrieved employees, without satisfying class certification requirements. Employers have often defended such claims by arguing that plaintiffs have not demonstrated that such claims can be manageably tried. However, until last week, no appellate court had weighed in the manageability issue, and most state trial courts have been reluctant to limit or preclude PAGA claims based on manageability concerns.

The Wesson decision breathes new life into the manageability argument. The court unequivocally held that "courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable[.]" Slip op. at 4. The court also made clear that "as a matter of due process, defendants are entitled to a fair opportunity to litigate affirmative defenses," and therefore courts should ensure that both the claims and defenses can be manageably tried. Id.

In reaching its decision, the court drew upon precedent from other types of representative actions (such as those under the Unfair Competition Law), but also on class action principles. In fact, it specifically observed that because the procedural safeguards that attend class actions do...