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July 26, 2022

Superior Courts Officially Have the Discretion to Stay Later-Filed PAGA Actions

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In Shaw v. Superior Court, 78 Cal. App. 5th 245 (2022), the California Court of Appeal held that trial courts have discretion to apply the doctrine of exclusive concurrent jurisdiction to stay a later-filed PAGA action when there are two or more pending Private Attorney General Act (PAGA) actions arising from the same facts and theories.

Background

On July 21, 2020, Plaintiff Ashley Shaw gave notice to the Labor and Workforce Development Agency (LWDA) that she intended to represent aggrieved employees of Beverages & More, Inc. (BevMo). Shaw subsequently filed a PAGA complaint in Los Angeles Superior Court, contending that as a result of BevMo's "two persons in the store at all times" policy, BevMo had violated numerous provisions of the Labor Code. Over one year before Shaw filed her PAGA complaint, however, another plaintiff, Tatiana Paez, had filed a PAGA complaint in Los Angeles Superior Court against BevMo. The claims in Paez's complaint overlapped with Shaw's claims (with Paez's complaint including several additional claims).

Superior Court's Decision

It was undisputed Shaw's PAGA claims overlapped entirely with those in Paez, and BevMo moved to stay Shaw's 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 in PAGA cases. Shaw then moved to lift the stay, arguing collateral estoppel is the appropriate mechanism to shield defendants from potential vexatious litigation and that PAGA, in itself, does not prohibit two actions from moving forward concurrently. Shaw also argued, without providing proof, that the doctrine was inapplicable because Shaw had a strong case, excellent witnesses, and highly experienced counsel (i.e., "countervailing policy factors"). The trial court found the policy behind application of exclusive concurrent jurisdiction outweighed the policy supporting a lifting of the stay—mainly that it would be inefficient for the same PAGA claims to be litigated simultaneously. In response, Shaw filed for a peremptory writ of mandate for the appellate court to lift the stay.

Appellate Court's Decision

On May 3, 2022, the California Court of Appeal denied Shaw's petition for a peremptory writ of mandate, finding the trial court did not err in applying the doctrine.

The California Court of Appeal was not swayed by either of Shaw's two main arguments, holding that "PAGA does not include a statutory first-to-file rule" and "countervailing policy concerns render exclusive concurrent jurisdiction inapplicable to PAGA" suits.

Regarding Shaw's first argument, the Appellate Court concluded that the absence of a "first-to-file" rule within PAGA does not mean the exclusive concurrent jurisdiction rule cannot apply. The court made it clear that statutes do not alter or contradict 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 coexist.

As to Shaw's second argument, the court held PAGA did not repeal the policy-driven exclusive concurrent jurisdiction rule. The court also found that the trial court did not "exceed the bounds of reason" in holding "other considerations" did not outweigh the policies supporting application of exclusive concurrent jurisdiction. The court also confirmed mechanisms exist to protect Shaw from other concerns regarding application of exclusive concurrent jurisdiction, including the possibility of ‘reverse auctions' and potential frivolous PAGA claims.

Practical Implications

Before the ruling in this case, no definitive authority existed allowing application of the exclusive concurrent jurisdiction rule to stay later-filed PAGA actions. This ruling should strengthen employers' arguments when trying to stop and streamline duplicative PAGA actions.

Special thanks to Summer Associate Zeina Safadi for her valuable contributions to this GT blog post

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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