A recent appeals court ruling highlights a controversial procedure in litigation involving PAGA (Private Attorneys General Act) claims.
In Crestwood Behavioral Health, Inc. v. Superior Court of Alameda Cty, the First Appellate District Court of Appeal upheld the lower court’s ruling that allowed the plaintiff to move the case to a different county.
“Crestwood filed a motion to transfer venue to Sacramento County (where its principal place of business is located), arguing that venue is not proper in Alameda County because [plaintiff] Fragoza worked only in Solano County,” the appellate ruling states.
The court’s ruling now extends the venues where plaintiffs may file PAGA lawsuits.
“It’s really bad news for anybody that’s got multiple locations,” Tom Manzo, founder and president of the California Business and Industrial Alliance (CABIA), told the Northern California Record. “If the primary motivation of privatized justice is to make the claim as big as you possibly can and to seek venues where you can get the most favorable ruling, that is proof again that the system is not working.”
Of Crestwood’s more than 20 facilities, only two are in Alameda County.
“We see no reason why the Legislature would restrict the proper venue to the location of an individual employee when she is suing on behalf of all aggrieved employees, not herself,” the court wrote.
It raises questions about whether the ruling will open the door to what the California Labor & Employment Law Blog describes as “forum shopping.”
Meanwhile, CABIA is hoping to see PAGA reform legislation passed this session. The group has released a first of its kind study on the impact of PAGA, which includes recommending the California Labor and Workforce Development Agency (LWDA) handle PAGA cases.
“Funding reserves accessible by LWDA and the agencies under its authority exist in the amount of more than $113 million,” the report states.
“That unit has $113 million sitting in the account, and the state needs to take over PAGA and quit letting the private attorneys,” Manzo said. “The state isn’t going to pick a venue that’s more friendly; they’re just going to look at the facts, the state should handle PAGA.”