23 Oct Arbitration of PAGA Claims
In Viking River Cruises v. Moriana (2022) 142 S.Ct. 1906, the United States Supreme Court held the Federal Arbitration Act preempted the California “Iskanian rule” which prohibits the splitting of individual and non-individual PAGA claims where the plaintiff signed an arbitration agreement with a waiver of class and representative claims. SCOTUS enforced the arbitration agreement which required the plaintiff to arbitrate the PAGA claim on an individual basis. More controversial was the Court’s ruling on what happens with the representative PAGA claim after the individual claim is sent to arbitration. Based on the Court’s interpretation of PAGA standing requirements, the Court ruled that once the plaintiff is compelled to arbitrate the individual PAGA claim, the plaintiff lacks standing under PAGA to pursue the representative claim and, therefore, the representative claim should be dismissed. The plaintiff and defense bars strongly disagree on the significance of this part of the decision, and whether SCOTUS correctly interpreted PAGA standing requirements under state law. The California Supreme Court has since accepted review of a case against Uber, that should resolve this issue.
