Yocupicio v. PAE: PAGA Actions Are Not Class Actions under CAFA, 9th Cir. Holds

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In a recent opinion, the Ninth Circuit Court of Appeals underscored the distinction between class actions and representative claims brought under the California Private Attorneys General Act (“PAGA”), holding that PAGA claims cannot be aggregated with class claims in order to obtain jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”). Yocupicio v. PAE Group, LLC, No. 15-55878 (9th Cir. July 30, 2015) (slip op. available here). CAFA provides for federal jurisdiction over class actions where the amount in controversy exceeds $5 million. Prior to a line of cases including Yocupicio, Baumann v. Chase Inv. Servs. Corp., 747 F.3d 1117 (9th Cir. 2014), and Urbino v. Orkin Servs. of Cal., Inc., 726 F.3d 1118 (9th Cir. 2013), federal district courts had generally aggregated the claims of individual class members, including any relief sought for non-class claims (such as PAGA claims), in order to determine whether the jurisdictional threshold was met.

In her complaint, Plaintiff Yocupicio alleged multiple violations of the California Labor Code against her employer, PAE Group, on behalf of herself and a putative class of other employees, along with a representative claim under PAGA. PAE removed the case to federal court, alleging that the amount in controversy exceeded CAFA’s $5 million threshold. The defendant reached this calculation by combining class claims valued at $1.6 million with a $3.25 million PAGA claim and adding reasonable attorney’s fees. The district court denied the plaintiff’s motion to remand.

The Ninth Circuit reversed the district court’s decision and remanded, finding that the lower court had failed to properly consider CAFA’s legislative history, which clearly distinguishes between class actions and other representative actions. According to the panel, CAFA’s focus on “class actions” shows that Congress did not intend to grant jurisdiction over all representative actions; thus, the panel held that the statute grants federal jurisdiction only when the class claims alone meet the $5 million threshold. Slip op. at 7-8. In addition, the court held that the class claims could not be brought in federal court under supplemental jurisdiction since there was no independent complete diversity of citizenship with respect to the PAGA claim.

The crux of this opinion is succinctly summarized in a footnote, which points out the common mischaracterization of representative actions as being the same as class actions for all intents and purposes: “No doubt all class claims are representative in nature. However, not all representative claims are class claims; to say that they are would be a logical fallacy.” Slip op. at 6 n.6, citing Washington v. Chimei Innolux Corp., 659 F. 3d 842, 848 (9th Cir. 2011).

Authored By:
Rebecca Labat, Partner