High court win for employers, early PAGA claimants

In a closely watched case involving California's Private Attorneys General Act, the state Supreme Court ruled Thursday that a plaintiff in a representative action has no right to intervene, object or move to vacate a judgment in a related case involving the same claims against rideshare company Lyft Inc.

The 5-2 decision is a victory for employers and plaintiffs who reach PAGA settlements before other workers file claims and a loss for two other plaintiffs - led by driver Brandon Olson - who sought to pursue their own claims on behalf of the state. It is a loss for the state, which filed an amicus curiae brief arguing that non-parties should be able to intervene.

Justice Martin J. Jenkins, an appointee of Gov. Gavin Newsom, wrote that PAGA's legislative history undermines Olson's argument that joint oversight by the courts and the state Labor and Workforce Development Agency is "inadequate" even if he believes lead plaintiff Tina Turrieta's $15 million settlement with Lyft is a bad deal for him and the state.

The 2004 law, which allows plaintiffs to sue on behalf of the state agency and share the proceeds, does not offer any guidance on whether aggrieved workers like Olson can intervene in cases in which they have identical claims, the justice wrote.

"In light of the above, we conclude that the intervention power Olson claims - which he bases on an alleged right as a state proxy to assert the state's right to intervene - is inconsistent with the scheme the Legislature enacted and, for that reason, outside the scope of his authority to commence and prosecute a PAGA action on the state's behalf," Jenkins wrote for the majority. Turrieta v. Lyft Inc., 2024 DJDAR 7251 (Cal. S. Ct., filed Nov. 10, 2021).

Chief Justice Patricia Guerrero, a Newsom appointee; Justice Carol A. Corrigan, an appointee of Gov. Arnold Schwarzenegger; Justice Joshua P. Groban and Justice Leondra R. Kruger, both appointees of Gov. Jerry Brown, concurred.

Justice Goodwin H. Liu, a Brown appointee, dissented, arguing that the majority's ruling protects bad settlements and makes it impossible for other plaintiffs to intervene.

"Taken together, the court's decision creates a substantial risk of auctioning the settlement of representative PAGA claims to the lowest bidder and insulating those settlements from appellate review," he wrote in an opinion joined by Justice Kelli M. Evans, a Newsom appointee.

"These consequences, which the court views as required by PAGA despite the lack of textual support, are inconsistent with the statute's purpose: to maximize enforcement of the Labor Code by permitting private attorneys general to prosecute labor violations against defendants on behalf of the state," Liu added.

The ruling could affect other pending cases. Plaintiffs have appealed a PAGA settlement with staffing agency Adecco USA Inc. in the 1st District Court of Appeal. Moniz v. Adecco USA Inc., A167464 (Cal. App. 1st, filed March 21, 2023).

Kruger wrote a concurrence saying that, although the issue is not directly addressed in Jenkins' ruling, there is no basis for questioning the state's right to participate in litigation brought by a private party under PAGA.

Allen W. Graves of The Graves Firm, who represents Turrieta, wrote in an email that the majority ruling "struck the right balance as it navigated the legal and policy questions at issue here."

Felix Shafir, a partner with Horvitz & Levy LLP who represents Lyft, did not respond to an email seeking comment.

Monique Olivier, a partner with Olivier & Schreiber PC who represents Olson, bemoaned the decision and its implications in an email.

"As Justice Liu's dissent recognizes, the majority ignores the very purpose of the PAGA statute the court has consistently recognized in prior decisions, as well as the opinion of the LWDA, the government agency with the most relevant experience and knowledge about PAGA enforcement," she wrote.

"The majority's holding rewards bad behavior by businesses and plaintiffs' lawyers who benefit from engaging in settlements that sell out workers," Olivier added.