July 27, 2022

Howitson v. Evans Hotels, LLC (D078894, July 21, 2022)

Plaintiff filed a putative wage-and-hour class action against her former employer. Plaintiff later accepted an offer to compromise that called for the entry of judgment in her favor in her individual capacity. Following the entry of this judgment, plaintiff filed a new lawsuit, based on the same facts as her prior lawsuit, against the same employer, pursuant to California’s Private Attorneys General Act, which permits an aggrieved employee—acting as a proxy for the state—to bring a representative law enforcement action on behalf of current or former employees to recover civil penalties for wage-related violations of California’s Labor Code. The employer argued that claim preclusion (res judicata) barred plaintiff’s PAGA claim because the claim was based on Labor Code violations that she could have asserted in the first suit. The trial court agreed, and the plaintiff appealed.

The Court of Appeal reversed, holding that the requirements for claim preclusion were not met in this case. The court arrived at this conclusion primarily because: (1) the two actions involved different claims for different harms (the first action involved claims for harms to the plaintiff while the second involved harms to the state and general public); and (2) because the state, which is the real party in interest in a representative PAGA action, was neither a party to the prior action nor in privity with the employee.