On August 1, 2024, the California Supreme Court docket issued a resolution in Turrieta v. Lyft that considerably narrows the authority of PAGA litigants to intervene in overlapping PAGA actions. The Supreme Court docket’s ruling confirms that the courts and the Labor & Workforce Improvement Company (“LWDA”) – and never competing PAGA litigants – have major duty for offering oversight of PAGA settlements.
The Procedural Background
In Turrieta, a person who offered providers as a driver utilizing the Lyft App filed an motion towards Lyft searching for civil penalties beneath the California Personal Attorneys Normal Act of 2004 (“PAGA”), alleging that the Firm did not pay minimal wages, additional time premiums, and enterprise expense reimbursements in violation of the California Labor Code. Two different staff filed their very own, separate PAGA actions towards Lyft that additionally alleged that the Firm did not pay minimal wages, additional time premiums, and enterprise expense reimbursements. In December 2019, the Firm entered right into a settlement settlement with the Turrieta plaintiff. The plaintiffs within the different PAGA actions subsequently filed motions to intervene within the Turrieta motion and objected to the settlement. After the trial courtroom denied the motions to intervene and accredited the settlement, the intervening plaintiffs moved to vacate the judgment, which the trial courtroom denied.
The intervening plaintiffs appealed and challenged the settlement, the trial courtroom’s denial of their motions to intervene, and the trial courtroom’s denial of their motions to vacate the judgment. The Court docket of Enchantment affirmed the settlement and the trial courtroom’s denial of the intervening plaintiffs’ motions. The Court docket of Enchantment discovered that the trial courtroom correctly denied the motions to intervene, that the intervening plaintiffs lacked standing to maneuver to vacate the judgment, and that they lacked standing to problem the settlement on attraction. One of many intervening plaintiffs sought assessment by the California Supreme Court docket, claiming that as a deputized agent of the State of California beneath PAGA, he had the correct to intervene within the Turrieta motion, to vacate the judgment, and to have the courtroom contemplate his objections to the settlement settlement.
The California Supreme Court docket’s Choice
On August 1, the California Supreme Court docket issued a choice affirming the judgment of the Court docket of Enchantment. The State’s highest courtroom concluded {that a} competing PAGA litigant lacks the authority to intervene within the ongoing PAGA motion of one other plaintiff asserting overlapping claims, to require a courtroom to think about its objections to a proposed settlement within the overlapping motion, or to maneuver to vacate a judgment entered in that motion. The Court docket reasoned that such authority is inconsistent with the statutory scheme enacted by the California Legislature, which provides the duty of settlement oversight solely to the trial courtroom and the LWDA.
In concluding that the intervening plaintiff lacked the authority that he claimed, the California Supreme Court docket acknowledged that in 2016, the California Legislature amended PAGA to require judicial assessment and approval of any PAGA settlement, even when the events agreed to waive PAGA penalties. On the identical time, the Legislature required that the events submit a replica of the settlement settlement to the LWDA on the identical time they submitted it to the trial courtroom for approval. Moreover, the Legislature offered the LWDA with extra funds to carry out its oversight obligations. The California Supreme Court docket said that when the Legislature addressed oversight, “it appeared solely to the courts and to the LWDA.” As well as, the Court docket famous that permitting competing PAGA litigants to intervene in overlapping PAGA actions would create delay and complexity “of a completely completely different order” than that created by the statutory judicial approval requirement. However the Court docket acknowledged that trial courts have discretion to think about written feedback supplied to proffered settlements, not as formal objections, however as a part of the Court docket’s position in evaluating whether or not a PAGA settlement is honest and affordable. Nevertheless, if a trial courtroom refuses to think about such feedback, the plaintiffs from different circumstances don’t have any redress, no proper to intervene, and no proper to attraction an approval they consider to have been unreasonable.
Key Takeaways
The Turrieta resolution represents a uncommon win for employers from the State’s highest courtroom. Most notably, the choice affirms that employers can enter into an settlement to settle a PAGA motion with out concern {that a} competing PAGA litigant will intervene within the motion and disrupt the settlement. And since employers can settle with any of the PAGA plaintiffs (and never simply the plaintiff within the first-filed motion), the Court docket’s resolution is more likely to encourage PAGA litigants to be extra affordable in settlement negotiations. Whereas plaintiffs may argue that this provides the employer undue bargaining energy, if the ruling had gone the opposite method, it could have created perverse incentives for the competing PAGA plaintiffs to claim meritless objections to the settlement and threaten prolonged appeals so as to extort concessions from the settling events. Moreover, if the events undergo the Court docket a very unreasonably low settlement, the LWDA could object to the proposed settlement and the trial courtroom could reject the settlement. As such, Turrieta provides PAGA plaintiffs and defendants incentives to be affordable in settlement negotiations.
The Turrieta resolution comes one month after the PAGA reform payments, Senate Invoice 92 and Meeting Invoice 2288, have been signed into legislation by Governor Newsom. As we beforehand reported, among the many adjustments included in these payments, the payments impose common caps on PAGA penalties, impose additional caps for proactive compliance and remediation, and supply remedy alternatives to keep away from litigation. The payments are more likely to considerably alter PAGA litigation for California employers going ahead, and the Turrieta resolution marks one other growth within the altering panorama of PAGA litigation. Employers are inspired to seek the advice of with their authorized counsel to find out what these developments imply for them when confronted with precise or threatened PAGA litigation.