Oral arguments before the U.S. Supreme Court took place late last month in Viking v. Moriana, a case that questions whether California’s Private Attorneys General Act (PAGA) is exempt from the rules of the Federal Arbitration Act (FAA).
The justices raised several key questions during the proceedings, Tom Manzo, founder and president of the California Business and Industrial Alliance (CABIA), told the Northern California Record. An amicus brief from CABIA, which has data on PAGA’s evolving impact on Californians, was in the pre-hearing documents submitted to the high court before the March 30 hearing.
Scott Nelson, the attorney for Angie Moriana, was asked by Chief Justice John Roberts how arbitration would preclude her right to pursue a claim.
“She doesn’t have a right to pursue the substantive claim in court, but she does have a right to pursue the substantive claim. It’s just in arbitration. And I thought that’s sort of at the core of our precedents,” Roberts said.
The Supreme Court agreed to hear the Viking v. Moriana case last December.
At the outset of the March 30 hearing, Paul Clement, the attorney for Viking, said, “The outcome here is controlled by this Court's decisions in Concepcion, Epic, and Lamps Plus. After those decisions, a state is not free to simply declare that a state statute is too important to be relegated to bilateral arbitration.”
The point that no other states have a PAGA statute except California was discussed later in the hearing.
“California can say we can do things differently, but there are federal guidelines that are out there, and they're there for a reason,” Manzo said.
Manzo noted that prior to the 2014 California Supreme Court ruling in Iskanian v. CLS Transportation Los Angeles, LLC – which prevented arbitration enforcement in PAGA cases – there was significantly less PAGA litigation.
“After Iskanian, there was an explosion in the number of cases,” Manzo said. “And if the Supreme Court rules in Viking’s favor, it would put PAGA back where it belongs; it should be in arbitration.”
CABIA will be working to help educate businesses and non-profits on arbitration, Manzo said. The group also held a news conference outside the Supreme Court on the day of the hearing.
“This case has raised a huge level of awareness on a California law and for years its bypassing federal regulations,” Manzo said. “Now we’ve got to wait to see what happens, and we’ve got to hope that this case makes a difference.”
The Supreme Court is scheduled to issue its decision by early July.