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PAGA Suit Necessarily Includes Plaintiff’s Individual Claims, C.A. Declares
Rothschild Rejects Judge’s View That Woman Had Sued in a Representative Capacity, Only
By a MetNews Staff Writer
The Court of Appeal for this district held yesterday that a judge erred in denying a motion to compel arbitration on the ground that the plaintiff was suing a company she had worked for in a representative capacity, only, and was not pursuing any individual claims.
Presiding Justice Frances Rothschild of Div. One wrote that all actions under the Private Attorneys General Act of 2004 (“PAGA”) “necessarily includes an individual PAGA claim.”
The opinion reverses an order by Los Angeles Superior Court Judge Daniel S. Murphy denying a motion by Shipt, Inc., a subsidiary of Target Corporation, to compel arbitration of the claim brought by Christina Leeper. The plaintiff contends that Shipt has a practice of classifying persons who work for it as independent contractors when they are, in reality employees, and commits wage and hour violations in contravention of the Labor Code.
She signed an agreement with Shipt, prior to providing services, agreeing to arbitrate any disputes that arose. In resisting arbitration, she argued that brought the action in a “ representative capacity as an aggrieved employee on behalf of the State and all similarly aggrieved individuals subjected to the violations” and because she “alleges only non-individual PAGA claims on a representative basis, Shipt cannot compel them to arbitrate.”
Murphy accepted her argument. He ruled that Shipt had pled individual claims solely “to meet PAGA’s standing requirements within the representative action” and that he “may not compel this claim to arbitration.”
Appellant’s Contention
Shipt asserted in its opening brief on appeal:
“The court’s order is thus internally inconsistent: it recognizes that Leeper has alleged individual claims while at the same time asserting that she did so only to assert ‘representative’ claims. Standing is not just a paper requirement. It must not only be pleaded but also proved. By allowing otherwise the Superior Court effectively re-wrote PAGA and the California constitution to permit a party to assert a claim only for standing purposes.”
The employer argued that “all PAGA claims filed in court must have both an individual and representative component,” pointing out:
“Leeper’s Complaint recognizes this, expressly stating that she is an ‘aggrieved employee’ and that she is seeking to recover PAGA penalties on behalf of all “aggrieved employees,” which by definition includes herself.”
Rothschild’s Opinion
In her opinion reversing Murphy’s order, Rothschild said:
“We recognize that the existence of an individual PAGA claim in every PAGA action means this claim often may be separately compelled to arbitration where the FAA applies…, which may trigger a stay of the litigation of the representative PAGA claim…and even potentially affect the outcome of that litigation via issue preclusion….But Leeper’s contention that this result contravenes public policy is not a ground for ignoring the unambiguous language of the PAGA statute….
“In any case, statutory history supports our interpretation of what the Legislature intended.”
She explained that Senate Bill 796—which, when enacted, created PAGA—in its original form, authorized an civil action by an aggrieved employee “on behalf of himself or herself or other current or former employees,” Rothschild recited, italicizing the word “or” but the author (then-Sen. Joe Dunn, D-Orange County) made a “technical amendment changing “or” to “and.” He said the purpose was “to clarify the intent of the bill and correct drafting errors.”
The presiding justice recited that “[t]he Legislature accepted this change without opposition, and it is reflected in the final version of the statute.”
She said this “supports our interpretation of what the Legislature intended.”
The case is Leeper v. Shipt, Inc., B339670.
Camille A. Olson, Candace Bertoldi, Richard B. Lapp and Christopher A. Crosman of the Century City firm of Seyfarth Shaw represented Shipt and Target.
Daniel M. Hutchinson, Michelle A. Lamy and Faith E. A. Lewis of the San Francisco firm of Lieff Cabraser Heimann & Bernstein acted for Leeper.
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