Iskanian PAGA Ruling Stands; U.S. Supreme Court Denies Cert. in Bridgestone

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On Monday, June 1, 2015, the U.S. Supreme Court denied the defendant’s petition for a writ of certiorari in Brown, et al. v. Bridgestone Retail Operations, LLC, a wage-and-hour class action involving the enforceability of waivers of Private Attorneys General Act of 2004 (PAGA) claims—the same issues litigated in Iskanian v. CLS Transportation Los Angeles, 59 Cal. 4th 348 (2014). See Brown, 331 P.3d 1274 (Aug. 27, 2014) (cert. denied by Bridgestone Retail Operations, LLC v. Brown, et al., 2015 U.S. LEXIS 3644 (U.S. June 1, 2015)) (Mr. Brown is represented by Capstone Law APC). In Iskanian, the California Supreme Court held that an arbitration agreement purporting to waive the employee’s right to bring representative claims under PAGA is invalid under California law, and that California’s rule against PAGA enforcement action waivers is not preempted by the Federal Arbitration Act (FAA). In January 2015, the Supreme Court of the United States denied CLS’s petition for writ of certiorari.

Initially, in June 2013, the California Court of Appeal upheld a class action waiver in Brown, finding that the employers’ delay in compelling arbitration had not resulted in a waiver of their right to arbitrate, but found the representative action waiver unenforceable as a violation of public policy. Brown, 216 Cal. App. 4th 1302. The court directed the trial court to vacate its order and enter a new order granting the motion to compel arbitration with respect to all except the PAGA claim, and stay the action pending the arbitration. Id. The California Supreme Court then granted the plaintiffs’ petition for review in September 2013, putting on hold further action in Brown pending Iskanian. 307 P.3d 877. Following Iskanian, the California Supreme Court transferred Bridgestone back to the Court of Appeal with directions to vacate the latter’s prior decision and reconsider the cause in light of the Supreme Court’s holding in Iskanian. The Court of Appeal then issued a writ of mandate directing the superior court to vacate its order granting defendant’s motion to compel arbitration and for a stay.

By denying certiorari in Bridgestone, the U.S. Supreme Court leaves intact the California high court’s Iskanian decision requiring that representative actions brought under the PAGA proceed on a representative basis in some forum, whether it be court or in arbitration.

Authored by: 
Mao Shiokura, Associate