Nelson v. SoCal Gas: PAGA Claims May Proceed Despite Class Certification Denial

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Classwide adjudication of workplace violations has become increasingly difficult in recent years, due to heightened certification scrutiny and the widespread use of arbitration agreements and class waivers by employers.  However, a tentative ruling by an intermediate appellate court portends an easier path, in tandem with the growing significance of the California Labor Code’s Private Attorneys General Act (PAGA).

California’s Second Appellate District, Division Eight, is expected to confirm that plaintiffs seeking civil penalties on the State’s behalf and representing fellow employees pursuant to PAGA may continue to do so even where class certification has been denied. See Nelson v. Southern Cal. Gas Co., No. B238845 (Cal. Ct. App. argued Mar. 28, 2013). During oral argument, the three-judge panel tentatively indicated that it would reverse the ruling of Los Angeles Superior Court Judge Zaven V. Sinanian (available here). Judge Sinanian denied the plaintiff’s motion for class certification, chiefly on the ground of insufficient common questions of law or fact, then subsequently ruled that the plaintiff’s PAGA claims couldn’t go forward, citing the same commonality problem that supported the denial of class certification.

Judge Sinanian issued this ruling despite the California Supreme Court having held, in Arias v. Super. Ct., that a PAGA representative action need not satisfy the familiar class certification requirements of numerosity, typicality, commonality, and adequacy of representation. Arias, 46 Cal. 4th 969 (2009) (available here). In its Arias decision, the court specifically distinguished PAGA actions from other representative actions, finding that “the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies — namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor Workforce Development Agency.” Arias at 986.

The official decision in Nelson is expected to issue shortly.