Payne & Fears Secures Victory for Client – Court Rejects Common PAGA Abuses

On August 13, 2020, Payne & Fears attorneys secured a victory on behalf of Southern Counties Oil Co. in a published opinion from the California Court of Appeal, First District in the case, Robinson v. Southern Counties Oil Company.

Background

Richard Robinson worked as a truck driver for Southern Counties Oil Co. from February 4, 2015 through June 14, 2017. In August 2018, Robinson filed a complaint under the California Labor Code Private Attorneys General Act of 2004 (PAGA) § 2698 et seq., seeking penalties based on the allegation that Southern Counties Oil Co. denied meal and rest breaks to him and other aggrieved employees. Robinson did not allege individual claims.

In February 2019, the San Diego County Superior Court approved a settlement in a class action, Gutierrez v. Southern Counties Oil Co. (Gutierrez), that sought individual damages as well as civil penalties under PAGA for the same alleged Labor Code violations. Robinson and three other employees opted out of the Gutierrez settlement.

Following a demurrer, Robinson amended the complaint seeking to represent the three employees who opted out of the settlement in Gutierrez and persons who were employed by Southern Counties from January 27, 2018 to the present.

The court sustained without leave to amend a demurrer to the amended complaint, holding that Robinson is barred from bringing a PAGA action asserting the same claims that were settled in Gutierrez and that he lacks standing to bring a representative action on behalf of employees employed during the time period when he was no longer employed by Southern Counties Oil Co. Robinson appealed. The First Appellate District, Division Four, upheld the dismissal.

Significance for Employers

This week, the Court of Appeal made two significant holdings. First, the court held that under the claim preclusion doctrine, a plaintiff cannot bring a second PAGA action after the defendant resolves an identical PAGA action in another matter. The court reached this holding by recognizing this basic point: the Labor and Workforce Development Agency (LWDA) is always the real party in interest in a PAGA claim.  

Second, the court held that a plaintiff does not have standing to serve as a PAGA representative for a time period during which he or she was not employed. “The preclusion of Robinson’s claims for the period during which he was employed by Southern County deprives him of standing to assert claims arising exclusively after he was so employed.”  (Opinion, 7)

“This case may have a significant impact on future PAGA litigation because it addresses a common PAGA abuse head-on,” said Amy Patton, lead attorney for Southern Counties Oil Co. “Companies that see multiple PAGA claims covering the same time period may use this case to attack later-filed PAGA claims at the pleading stage. This would significantly reduce the settlement value of these lawsuits.”  

The Southern Counties Oil Co. team consisted of Amy Patton, Raymond Nhan, and Sean O’Brien with significant contribution at the trial court from Matthew Lewis.

The case is A158791 in the Court of Appeal for the State of California First Appellate District, Division Four.