In Shaw v. Superior Court, 78 Cal. App. 5th 245 (2022)the California Court of Appeals held that trial courts have the discretion to apply the doctrine of exclusive concurrent jurisdiction to stay a subsequently filed PAGA action when there are two or more actions pending under the Private Attorney General Act (PAGA) arising from the same facts and theories. .
Background
On July 21, 2020, plaintiff Ashley Shaw notified the Labor and Workforce Development Agency (LWDA) that she intended to represent aggrieved employees of Beverages & More, Inc. ( BevMo). Shaw then filed a PAGA lawsuit in Los Angeles Superior Court, claiming that due to BevMo’s “two people in the store at all times” policy, BevMo violated numerous provisions of the Labor Code. . More than a year before Shaw filed her lawsuit against PAGA, another plaintiff, Tatiana Paez, filed a lawsuit against PAGA in Los Angeles Superior Court against BevMo. The claims in Paez’s complaint overlapped with Shaw’s claims (Paez’s complaint including several additional claims).
Superior Court Decision
It was undisputed that Shaw’s PAGA claims fully overlapped those of Paezand BevMo decided to stay the Shaw case under the doctrine of exclusive concurrent jurisdiction.
The trial court granted BevMo’s motion, rejecting Shaw’s argument that the doctrine does not apply to PAGA cases. Shaw then decided to lift the stay, arguing that collateral estoppel is the proper mechanism to protect defendants from potential vexatious litigation and that PAGA, per se, does not bar two actions from proceeding. simultaneously. Shaw also argued, without providing evidence, that the doctrine was inapplicable because Shaw had a solid case, excellent witnesses, and very experienced counsel (i.e., “compensating policy factors”). The trial court found that the policy underlying the application of exclusive concurrent jurisdiction outweighed the policy supporting a lifting of the stay, primarily that it would be ineffective for the same PAGA claims to be litigated concurrently. In response, Shaw filed a peremptory warrant order for the appeals court to lift the stay.
Court of Appeal Decision
On May 3, 2022, the California Court of Appeals denied Shaw’s motion for a writ of peremptory warrant, finding that the trial court did not err in applying the doctrine.
The California Court of Appeals was unswayed by either of Shaw’s two main arguments, finding that “PAGA does not include a legal first-to-file rule” and that “compensatory policy issues render exclusive concurrent jurisdiction unenforceable.” to PAGA prosecutions”.
With respect to Shaw’s first argument, the Court of Appeal concluded that the absence of a “first to file” rule in PAGA does not mean that the rule of exclusive concurrent jurisdiction cannot apply. The court clarified that the statutes do not alter or contradict the common law, which includes the doctrine of exclusive concurrent jurisdiction. The court also found no evidence of legislative intent to alter the common law rule. In sum, the court clarified that PAGA and the exclusive concurrent jurisdiction rule can co-exist.
As to Shaw’s second argument, the court found that the PAGA did not abrogate the policy-based exclusive concurrent jurisdiction rule. The court also found that the trial court did not “overstep the bounds of reason” in concluding that “other considerations” did not outweigh the policies supporting the application of exclusive concurrent jurisdiction. The court also confirmed that mechanisms exist to protect Shaw from other concerns regarding the application of exclusive concurrent jurisdiction, including the possibility of “reverse auctions” and possible frivolous claims by PAGA.
The practical implications
Prior to the judgment in this case, there was no final authority to apply the exclusive concurrent jurisdiction rule to stay subsequently filed PAGA actions. This decision should strengthen the arguments of employers when trying to stop and rationalize duplicative PAGA actions.
* Special thanks to Summer Associate Zeina Safadi for her valuable contributions to this GT blog post.
©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 207