With the recent U.S. Supreme Court decision in Viking v. Moriana raising awareness about controversial California Private Attorneys General Act (PAGA) claims, a new petition is also scheduled to be filed with the California Supreme Court over whether PAGA is constitutional.
The state’s high court will be asked to consider California Business and Industrial Alliance (CABIA) v. Becerra, which argues the PAGA statute violates the separation of powers doctrine.
While some California courts have characterized PAGA as a qui tam statute, the SCOTUS ruling pointed to case law discrepancies.
“And what’s happened with PAGA is it’s giving authority to people who abuse this law and there’s no oversight,” Tom Manzo, CABIA founder and president, told the Northern California Record.
As stated in the SCOTUS ruling, “The extent to which PAGA plaintiffs truly act as agents of the State rather than complete assignees is disputed,” the court noted. “The statute does not feature any explicit control mechanisms, such as provisions authorizing the State to intervene or requiring its approval of settlements.”
The California Labor and Workforce Development Agency (LWDA) says on its PAGA Procedures page that, “Ordinarily you will not hear anything from LWDA about your PAGA claim unless a determination is made to investigate a notice or otherwise become involved in the case.”
Questions persist about the how the payout structure in PAGA cases, and how much the state actually receives. In most cases, the attorneys who file the claims recoup the lion’s share, Manzo said, while the state and the employees receive far less.
“The real issue is there's a law in place – whether you agree with it or disagree with it – and there's no oversight and attorneys are just running wild,” Manzo said. “When it comes to PAGA, everybody’s on the losing end of it except for the trial lawyers.
“You’ve even got the state – you’ve got the former Director of the California Department of Industrial Relations saying there’s a problem with this law and nobody’s listening – why?”
California lawmakers have said they plan to consider legislation to reflect the Viking case decision that found PAGA cases are subject to arbitration.
Meanwhile, a citizens’ movement to replace PAGA recently gathered the required number of signatures and will be on the ballot in November 2024.