Page 1
California Supreme Court:
PAGA Plaintiff Has No Right to Intervene in Similar Action
Jenkins Says Status as State’s Proxy Does Not Confer Authority to Object to Settlement by Another Employee Which Resolves All Overlapping Claims Against Employer; Liu, Joined by Evans, Dissents
By Kimber Cooley, Staff Writer
The California Supreme Court held yesterday that plaintiffs in representative actions—brought under legislation authorizing them to act as a private attorneys general in prosecuting labor law violations—do not have the right to intervene, object to, or move to vacate a judgment in a related action based on their status as proxies of the state even if the proposed settlement will resolve their claims.
The high court determined that such intervention would be inconsistent with the legislative intent of the Private Attorneys General Act (“PAGA”), codified at Labor Code §2698 et seq., which authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the state.
The dispute arose after multiple former employees of Lyft, Inc. filed separate lawsuits under PAGA seeking the recovery of civil penalties for Labor Code violations, each alleging that the ride-share company misclassified drivers as independent contractors and failed to pay overtime wages and reimburse certain business expenses.
One plaintiff, Tina Turrieta, reached a settlement with Lyft and moved for court approval on Dec. 9, 2019. Two plaintiffs pursuing their own representative actions against the company—Brandon Olsen and Million Seifu—each moved to intervene in Turrieta’s action and submitted objections to the settlement.
Los Angeles Superior Court Judge Dennis Landin denied the motions on Jan. 2, 2020. Olsen and Seifu appealed and Div. Four of the Second District Court of Appeal affirmed the judgment on Sept. 30, 2021.
The Supreme Court on Jan. 5, 2022, granted Olsen’s petition for review.
Jenkin’s Opinion
Justice Martin J. Jenkins authored the opinion, affirming the judgment of the appellate court. He wrote:
“We hold that an aggrieved employee’s status as the State’s proxy in a PAGA action does not give that employee the right to seek intervention in the PAGA action of another employee, to move to vacate a judgment entered in the other employee’s action, or to require a court to receive and consider objections to a proposed settlement of that action.”
Chief Justice Patricia Guerrero and Justices Carol Corrigan, Leondra Kruger, and Joshua P. Groban joined in the opinion.
Kruger wrote separately to “underscore…that a trial court has a duty to ensure the fairness…of any settlement of PAGA claims” and that “[p]art of that duty includes carefully considering any indications that the settlement has benefited the parties involved at the expense of undermining the protections the Labor Code.”
Justice Goodwin H. Liu, joined by Justice Kelli Evans, dissented, saying:
“The court arrives at this conclusion without answering a preliminary question that the parties have briefed: whether the state itself may seek to intervene in a PAGA suit…or move to vacate a judgment….By avoiding the embedded inquiry…, the court elides a key aspect of how PAGA works and does not follow the statutory scheme to its logical conclusion.”
Statutory Basis
Olson argues that Code of Civil Procedure §387(d) authorizes his intervention in Turrieta’s suit as a deputy of the state. Subd. (d)(1) provides for mandatory intervention if “[t]he person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest.”
Subd. (d)(2) provides for permissive intervention if “if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.”
Olson asserts that his status as the state’s proxy grants him the right to intervene under the section as the state has deputized him to pursue its substantial rights in the claims Turrieta is purporting to settle.
Turrieta and Lyft disagree, arguing that PAGA sets forth the rights bestowed upon a litigant suing under the statute and that nothing in the statutory scheme suggests that commencing a PAGA suit includes the right to intervene in an action brought by a separate aggrieved employee.
PAGA Statutory Language
Jenkins looked to the language of PAGA for guidance and noted that the parties do not dispute that the legislation does not explicitly provide for intervention by one PAGA plaintiff in the action brought by another, even if the parties assert overlapping claims.
He acknowledged that “[t]he absence of such language, however, is not…determinative” and said that “the question to which we now turn, is whether recognition of the intervention power Olson asserts would further the Legislature’s objectives in authorizing an aggrieved employee to commence and prosecute a PAGA action.”
He remarked that the legislative purpose in enacting PAGA was to remedy underenforcement of worker protections by empowering employees to enforce the Labor Code as representatives of the state’s Labor and Workforce Development Agency (“LWDA”).
The justice opined that “Turrieta’s PAGA action serves these statutory purposes” and that her interests were aligned with those of other potentially aggrieved employees.
In light of that alignment, he concluded that “it is debatable whether recognition of the intervention power Olson asserts—which he bases on his simultaneous representation of the very same state interests that Turrieta already represents—is reasonably necessary to effectuate the Legislature’s objectives in authorizing PAGA actions.”
Unintended Consequences
Olsen argues that declining to recognize a right to intervene will lead to unintended negative consequences by allowing “hasty, secret settlements to be approved by busy trial courts” and will “invite mischief” by encouraging defendants facing multiple PAGA lawsuits to “put the case out to bid” for a settlement of all the cases by a single plaintiff.
Unpersuaded, Jenkins said that “[o]ther aspects of the statutory scheme suggest that recognition of the intervention power Olson asserts is neither reasonably necessary to effectuate PAGA’s purpose nor consistent with the Legislature’s intent.”
The jurist noted that PAGA was amended in 2016 to allow for court approval of any settlement and provides for the submission of the proposal to the LWDA, both of which will provide for oversight and protect against Olson’s concerns. He reasoned:
“[W]hen the Legislature expressly addressed oversight, it looked only to the courts and to the LWDA, and it provided the funds it deemed necessary for the LWDA to effectively perform its statutorily assigned oversight functions. These actions of the Legislature and the explanatory comments in the legislative history—which contain no mention or suggestion of oversight by anyone else—indicate the Legislature does not share Olson’s view that courts are not adequately equipped to ‘sniff out bad deals’ and ‘assess[] [the] fairness’ of proposed settlements….”
Given that PAGA does not authorize the intervention, Jenkins said:
“[Olson] cannot establish a cognizable interest to support intervention under…section 387 based on his asserted authority, as the state’s proxy or agent, to assert any state right to intervene. In reaching this conclusion, we do not take sides in the parties’ policy debate over the potential benefits, disadvantages, and dangers of allowing or disallowing such intervention.”
Liu’s View
Liu, joined by Evans, took issue with the fact that the majority did not discuss, as a threshold issue, whether the state itself has the right to intervene under §387. He added:
“This result is contrary to basic principles undergirding the rules of civil procedure, which facilitate (even if they do not require) adjudication of the same claims in a single proceeding. It also deprives trial courts of discretion to permit knowledgeable and interested plaintiffs to intervene in suits, even when their participation would help ensure that proposed settlements are fair to aggrieved employees and the state.”
Agreeing with Olson that the result may create a risk of “auctioning the settlement of representative PAGA claims to the lowest bidder,” he wrote:
“Although the court misconstrues PAGA, the Legislature is not without recourse. It may wish to expressly authorize PAGA plaintiffs to seek intervention and to move to vacate a judgment in a parallel proceeding as a means of augmenting the state’s limited enforcement capacity.”
The case is Turrieta v. Lyft, Inc., 2024 S.O.S. 2599.
Copyright 2024, Metropolitan News Company