An amicus brief by the California Business and Industrial Alliance (CABIA) has been distributed to the U.S. Supreme Court prior to oral arguments later this month in Viking v. Moriana, a case involving the California Private Attorneys General Act (PAGA).
A CABIA study is key to understanding the impact of PAGA on Californians, Tom Manzo, CABIA founder and president, said in an email response to the Northern California Record.
“Our amicus brief has factual data from our study proving PAGA is a complete failure for everyone involved with the exception of the trial lawyers,” Manzo said. “PAGA is not a Qui Tam Action, it is the furthest from that it could possibly be. Public and private interests (and public and private remedies) are mutually exclusive. PAGA creates a ‘reverse qui tam’—the private plaintiff gets to bring a class action on behalf of herself and others, and the state gets to take a bounty even though the underlying conduct did not inflict pocketbook harm to it.”
So far, two major industries have sought and received PAGA exemptions through legislation – construction with AB 1654 and janitorial services with SB 646, and the Viking case provides further proof that the law isn’t working, Manzo said.
“Our amicus brief highlighted just how harmful PAGA has been to employers and employees alike, and it expands on how the California Supreme Court’s holding that PAGA ‘assigns’ state claims to ‘aggrieved’ employees is an artifice foreclosed by the plain terms of the Federal Arbitration Act (“FAA”), Manzo said.
A key question arising from the Viking case is whether California's PAGA is subject to the terms of the FAA.
“The parties agreed to resolve any future disputes through bilateral arbitration, so they agreed not just to arbitrate their disputes, but to do so on an individualized basis, rather than on a class or representative basis,” Manzo said. “Respondent sued Viking in court and asserted a claim on behalf of hundreds of others (PAGA), while contending that the arbitration agreement is unenforceable under California law.”
Congress has recognized arbitration serves the interests of all sides in achieving efficient and fair outcomes, Manzo said. “But PAGA does not; PAGA lawsuits are time consuming, ineffective, and result in higher costs for employers and lower recoveries for employees as pointed out in CABIA’s study.”
Oral arguments in Viking v. Moriana are scheduled before the SCOTUS on March 30. CABIA will hold a news conference in Washington that day in support of Viking, Manzo said.