Last Thursday, January 18, California’s Supreme Court held in Estrada v. Royalty Carpet Mills, Inc. that trial courts lack inherent authority to strike a Private Attorneys General Act (“PAGA”) claim on manageability grounds. The ruling resolved a prior split of authority on whether PAGA claims may be stricken where there is no manageable way to try them.
Background to Estrada
Plaintiff Jorge Luis Estrada sued his former employer, Royalty Carpet Mills, Inc., alleging various claims, including meal period violations. Estrada sought to represent classes of similarly situated employees and additionally sought penalties under PAGA. The trial court decertified the meal period classes and dismissed the PAGA claims seeking penalties based on the same meal period claims for everyone other than the named plaintiffs, ruling that those claims could not be tried manageably. The Court of Appeal held that the trial court had no authority to dismiss the PAGA claims on manageability grounds. Its holding broke away from a previous Court of Appeal decision that trial courts have the inherent authority to strike unmanageable PAGA claims. Subsequently, the Supreme Court granted a review to resolve the conflict.
What Does this Mean for CA Employers?
The State Supreme Court held that trial courts do not have the inherent authority to strike PAGA claims if they cannot be tried manageably. While motions to strike PAGA claims on manageability grounds are no longer viable, the Court emphasized that trial courts have other tools at their disposal to manage PAGA cases, including limiting the evidence that a plaintiff can present at trial and narrowing the scope of a complex PAGA claim. Furthermore, if a plaintiff’s PAGA claim is not appropriately tailored (i.e., an “overbroad or unspecific” claim in which the plaintiff “cannot prove liability to all or most employees”), the claim could be narrowed through substantive rulings, including demurrers or motions for summary judgment.
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