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FAA requires PAGA plaintiff to
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Viking River Cruises v. Moriana (US Supreme Ct
06/15/2022)
http://case.lawmemo.com/us/viking1.pdf
Sent to
Custom Alerts™ subscribers on 06/16/2022
The US Supreme
Court has held that the Federal Arbitration Act (FAA) preempts a
rule of California law that invalidates contractual waivers of the
right to assert representative claims under California's Labor
Code Private Attorneys General Act (PAGA).
Angie Moriana
filed a PAGA action against her former employer, alleging a
California Labor Code violation. She also asserted a wide array of
other violations allegedly sustained by other Viking employees.
Because her employment contract contained a mandatory arbitration
agreement, the employer moved to compel arbitration of Moriana's
individual PAGA claim and to dismiss her other PAGA claims.
The California courts denied that motion, holding that
categorical waivers of PAGA standing are contrary to California
policy and that PAGA claims cannot be split into arbitrable
"individual" claims and nonarbitrable "representative" claims,
relying on Iskanian v. CLS Transp, 59 Cal. 4th 348
(2014).
The Supreme Court put its focus on that portion of
Iskanian that precludes division of PAGA actions into individual
and non-individual claims through an agreement to arbitrate. The
Court said that "Iskanian's indivisibility rule
effectively coerces parties to opt for a judicial forum rather
than 'forgo[ing] the procedural rigor and appellate review of the
courts in order to realize the benefits of private dispute
resolution.' This result is incompatible with the FAA."
As
a result, Iskanian’s rule that PAGA actions cannot be
divided into individual and non-individual claims is preempted, so
the employer was entitled to compel arbitration of Moriana’s
individual claim.
As for the claims that were not
individual to Moriana, the Court pointed out that PAGA provides no
mechanism to enable a court to adjudicate nonindividual PAGA
claims once an individual claim has been committed to a separate
proceeding. "As a result, Moriana lacks statutory standing to
continue to maintain her non-individual claims in court, and the
correct course is to dismiss her remaining claims."
Eight
Justices ruled in favor of the employer, yet that took three
opinions, with some Justices joining in on only parts of another's
opinion. Justice Thomas dissented, based solely on his view that
the FAA does not apply to proceedings in state courts.
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