Peña v. Top Productions: Ruling Confirms Substitute of Named Plaintiff Appropriate in PAGA Action

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Addressing an issue related to the California Labor Code Private Attorney General Act of 2004 (PAGA) that has not yet been taken up by an appellate court, the San Francisco Superior Court recently ruled that when a named plaintiff (or “aggrieved employee” in PAGA parlance) becomes unavailable, it is appropriate to substitute a different, similarly aggrieved, employee to take the original plaintiff’s place, without replicating the PAGA-mandated notice already given by the original named plaintiff.  Peña v. Top Prods., LLC, No. CGC-10-496879 (S.F. Super. Ct. July 19, 2011) (order overruling demurrer to third amended complaint).

In Peña, the original plaintiff, Marco Ruelas, filed a representative PAGA action in February of 2010, giving the required notice to California’s Labor and Workforce Development Agency (LWDA) and to the defendant, Top Productions, LLC.  However, Ruelas later became unable to continue in his role as the plaintiff.  Thereafter, Jose Peña, a then-current employee of Top Productions, assumed the role of named plaintiff.  The defendant’s demurrer did not directly contest the substitution; rather, the defendant alleged that Peña was obligated to re-notify both the LWDA and the defendant.

Judge Peter J. Busch overruled the demurrer, holding that the original notices given by Peña’s predecessor satisfied PAGA’s notice requirement.  Indeed, the court took the relatively unusual step of substituting Peña’s name on the case’s caption, which originally read “Ruelas v. Top Productions, LLC.”  Typically, even where there is a substitution of the named plaintiff in a representative action, the case title retains the name of the original plaintiff.

In a PAGA action, the named plaintiff functions as an agent of the State, recovering civil penalties that are distinct from any statutory or common law damages that might also be recovered in either an individual or a class action.  In light of AT&T v. Concepcion, the recent United States Supreme Court ruling that constrains the ability to bring class actions in circumstances where an arbitration agreement with a class action waiver exists (as in the employer-employee context), PAGA is an important enforcement mechanism, as it is not subject to requirements applicable to class actions.