The California Supreme Court has issued its opinion in Estrada v. Royalty Carpet Mills, Inc. (S274340, Jan. 18, 2024), resolving a split of authority regarding whether claims brought under the Private Attorneys General Act (PAGA) may be stricken where there is no manageable way to try them. Unfortunately for California employers, the answer is no. This outcome is disappointing to those hoping that the Supreme Court might have done something more in Estrada to curb the abuse of PAGA, which too often becomes a vehicle through which overreaching, unmanageable claims are alleged in shakedown lawsuits in an attempt to extract windfall settlements. The present state of affairs is a sober reminder that, now more than ever, PAGA is broken and needs to be fixed.
Despite its holding, Estrada recognizes that PAGA manageability is a concern. In particular, Estrada distinguishes a trial court’s inability to dismiss PAGA claims outright on manageability grounds from the various tools that remain available to courts to efficiently manage such claims. Indeed, the opinion acknowledges the “challenges” presented by the complexities of PAGA actions, and it leaves “undisturbed” the various case management tools courts can and should use to ensure that such claims are “efficiently, fairly, and effectively tried.” So, while motions to strike PAGA claims for unmanageability alone are no longer viable, the focus on PAGA manageability is far from over. To the contrary, Estrada reminds plaintiffs of the need to be practical in bringing appropriately tailored claims capable of being effectively tried. Nothing in Estrada prevents trial courts from insisting that plaintiffs provide a trial plan showing how their claims would be tried, and Estrada reminds courts that they may limit PAGA claims and/or testimony or other evidence offered at PAGA trials to ensure manageability. Estrada even preserves the possibility of striking a PAGA action altogether where the claims are so unmanageable as to deprive a defendant of due process. Going forward, we can expect trial courts to emphasize workable trial plans and the use of other case management tools to effectively and efficiently manage their PAGA dockets.
[View source.]
