January 25, 2024

Estrada v. Royalty Carpet Mills, Inc.

Former employees brought a claim against the defendant under the Private Attorneys General Act of 2004 (PAGA) for alleged violations of Labor Code provisions requiring the provision of meal periods.  The named plaintiffs moved for class certification.  The trial court certified a class and three relevant subclasses.  Following a bench trial, the trial court entered an order decertifying two subclasses on the ground that there were too many individualized issues to support class treatment.  The trial court also dismissed the remaining claims and entered judgment.  Plaintiffs appealed.

The Court of Appeal reversed and held that that the trial court abused its discretion by decertifying the meal period subclasses. 

The California Supreme Court granted review and affirmed the Court of Appeal’s decision.  The Court noted that “unlike with class actions, a court’s authority to provide relief under PAGA is subject to specific statutory provisions that make it inappropriate to impose a manageability requirement on PAGA claims.”  The Court reasoned that the “structural differences between class actions and PAGA claims” support the finding that “importing the class action manageability requirement into the PAGA context would be improper because it would ‘frustrate legitimate legislative policy.’ ”  Allowing a court to strike PAGA claims “merely because they require individual determination” would deprive litigants of the remedy granted by the Legislature and would “defeat the purpose of the statute.”  The Court concluded that “trial courts lack inherent authority to strike PAGA claims on manageability grounds” because courts “do not generally possess a broad inherent authority to dismiss claims” or “strike PAGA claims by employing class action manageability requirements.”  While trial courts “may use a vast variety of tools to efficiently manage PAGA claims, given the structure and purpose of PAGA, striking such claims due to manageability concerns—even if those claims are complex or time-intensive—is not among the tools trial courts possess.”