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Court of Appeal:
Judge Has Inherent Power to Bar Unmanageable PAGA Suit
By a MetNews Staff Writer
The Court of Appeal for this district, treating a representative action under the Labor Code’s Private Attorney General Act the same as class actions, held yesterday that a judge may disallow a suit if the individual circumstances of the class members render group litigation unmanageable.
“This appeal raises a question of first impression: whether trial courts have inherent authority to ensure that PAGA claims will be manageable at trial, and to strike such claims if they cannot be managed,” Presiding Justice Nora M. Manella of Div. Four wrote. “We hold that courts possess this authority.”
Fred Wesson brought the action against his former employer, Staples the Office Superstore, LLC, claiming that he and 345 other current and former Staples general managers in California were improperly class as “exempt” employees, not entitled to overtime pay. He sought nearly $36 million in civil penalties for alleged Labor Code violations.
Kuhl Affirmed
Manella’s opinion affirms orders by Los Angeles Superior Court Judge Carolyn B. Kuhl. In a published portion, it upholds her order striking the PAGA claim, and in an unpublished portion it finds no abuse of discretion in denying Wesson’s motion for summary judgment or summary adjudication.
The opinion quotes Kuhl’s explanation for disallowing the PAGA claim:
“A four-year trial involving witnesses and documents individually pertaining to each of 346 General Managers does not meet any definition of manageability.”
In light of that ruling, Kuhl found, there was no need to address Wesson’s motions.
Manella’s Opinion
Manella wrote:
“California courts have exercised their inherent powers to preclude representative claims where a trial of those claims would be unmanageable. In the class action context, the courts have required class action proponents to demonstrate that ‘litigation of individual issues, including those arising from affirmative defenses, can be managed fairly and efficiently.’…The statutory provision that authorizes class actions, Code of Civil Procedure section 382, contains no such requirement.”
She noted that a May 5, 1999 Court of Appeal opinion from the Fourth District’s Div. One in South Bay Chevrolet v. General Motors Acceptance Corp. approved a trial court’s use of inherent authority to preclude a representative action under the Unfair Competition Law.
“[I]n both the class action and the representative UCL claim context, barring a claim as unmanageable does not affect the parties’ substantive rights,” Manella said. “Instead, this remedy precludes the plaintiffs’ particular use of an aggregation procedure, leaving in place any substantive claim by an absent class member or UCL claimant.”
Same Principles Apply
She continued:
“Drawing on these principles of the courts’ inherent authority to manage litigation, including ensuring the manageability of representative claims, we conclude that courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike a claim that cannot be rendered manageable. The same concerns attendant to the fair and efficient trial of representative claims apply in the context of PAGA actions.” Staples put forth as an affirmative defense that its general managers were properly classified as exempt. Manella rejected Wesson’s contention that unmanageability is relevant only to the plaintiff’s case and not to affirmative defenses and found merit in Staples’s contention, accepted by Kuhl, that “individualized assessments of the 346 GMs” would be required if the case were allowed to go forward.
Manella commented that “if possible, the court should work with the parties to render a PAGA claim manageable by adopting a feasible trial plan or limiting the claim’s scope,” and pointed out that Kuhl’s “conclusion that the claim was unmanageable resulted not from the court’s reluctance to work with the parties, but from Wesson’s insistence that manageability of the action was irrelevant.”
The case is Wesson v. Staples the Office Superstore, LLC, B302988.
Todd M. Schneider, Carolyn H. Cottrell and David C. Leimbach of the Emeryville firm of Schneider Wallace Cottrell Konecky joined with Raymond P. Boucher and Maria L. Weitz of Woodland Hills’s Boucher LLP on representing the plaintiffs. Tritia M. Murata, David P. Zins and Maya Harel, Karen J. Kubin and James R. Sigel of Morrison & Foerster were attorneys on appeal for Staples.
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