Private Attorneys General Act Review – 2023 - Report - Page 18
portion of the PAGA settlement. With respect to the class action settlement at issue in
the appeal, a different objector argued that, in evaluating the proposed, pre-certification
settlement, the district court erroneously applied a presumption of fairness. The district
court considered that “the parties engaged in arm’s-length, serious, informed and noncollusive negotiations between experienced and knowledgeable counsel” and applied
the presumption of fairness. Id. at 1124. The Ninth Circuit reasoned that, in the precertification context, the district court should have employed a “higher standard of
fairness and a more probing inquiry than may normally be required under Rule 23(e).”
Id. at 1130. As a result, it remanded the case for further proceedings.
D.
Notable California State Court Rulings
i.
Decisions Regarding PAGA and Arbitration
In Seifu, et al. v. Lyft Inc., 2023 Cal. App. LEXIS 247 (Cal. App. 2d Dist. Mar. 30, 2023),
the plaintiff, a former rideshare driver, filed a class action under the Private Attorneys
General Act of 2004 (PAGA) alleging that the defendant misclassified him and other
drivers as independent contractors rather than employees, thereby violating multiple
provisions of the Labor Code. Id. at *1. The defendant moved to compel arbitration
based on the arbitration provision in the “Terms of Service” (TOS) that it required its
drivers to accept in order to offer rides through Lyft's smartphone application. Id. The
trial court denied the motion, finding the PAGA waiver in the arbitration provision made
it unenforceable. On the defendant’s appeal, the California Court of Appeal affirmed the
trial court’s ruling. Subsequently, the defendant petitioned the U.S. Supreme Court for a
writ of certiorari, which was granted. The Supreme Court vacated the judgment, and
remanded the case for further consideration in light of Viking River Cruises, Inc. v.
Moriana, 142 S.Ct. 1906 (2002). The Court of Appeal vacated the previous decision and
requested supplemental briefing from the parties on the application of Viking River. Id.
at *2. The plaintiff thereafter agreed with the defendant that pursuant to Viking River the
individual PAGA claim was subject to arbitration. The defendant, however, contended
that the plaintiff lacked standing to litigate the representative claims once his individual
claims were sent to arbitration. The Court of Appeal determined that PAGA standing is a
matter of state law that must be decided by California courts, and therefore, until a
precedential decision issued by the California Supreme Court, the Court of Appeal ruled
that a plaintiff is not stripped of standing to pursue non-individual PAGA claims when
individual PAGA claims are sent to arbitration. The Court of Appeal thus affirmed in part
and vacated in part with instructions to send the PAGA claim to arbitration.
In Piplack, et al. v. In-N-Out Burgers, 88 Cal. App. 5th 1281 (Cal. App. 4th Dist. Mar. 7,
2023), the plaintiffs, two former fast food employees, filed a representative class action
pursuant to the Private Attorney General Act (PAGA) alleging that the defendant
violated various provisions of the California Labor Code. Plaintiffs are former employees
of defendant and signed arbitration agreements at the commencement of their
employment. The defendant filed a motion to compel arbitration of the plaintiffs’ claims
pursuant to the arbitration agreements that the plaintiffs signed at the commencement
of their employment, which contained a PAGA waiver. The trial court denied the motion
to compel. On appeal, the California Court of Appeal affirmed in part and reversed in
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PAGA Litigation Review – 2023
