Labor lawyers tell U.S. Supreme Court justices not to meddle in California state law

A group of lawyers say the U.S. Supreme Court has grossly misinterpreted California labor law — and they want a rehearing.

In a new response to the Court’s June decision limiting the state’s worker protection law, the attorneys argue that the nine justices misunderstand California labor policy and succumbed to “obvious errors.” Plus, four lawyers on the case said, judges in Washington shouldn’t be trying to settle a state policy in the first place. They are requesting that the Court hold a rehearing on the matter.

Attorneys Scott Nelson, Kevin Barnes, Gregg Lander and Michael Rubin represented Angie Moriana inViking River Cruises v. Moriana. Moriana, who said Viking was late to send her last paycheck after she quit her job, sued the company through the Private Attorneys General Act, which allows California employees to sue their employers on behalf of the state.

But Viking said employees like Moriana were bound to arbitration agreements, so a PAGA claim was invalid. The Court agreed. Nelson said the justices need to try again. But a majority of justices must agree to a Supreme Court rehearing, and such hearings are rare.

“The Supreme Court, since the founding of the nation, has held that it doesn’t actually have the authority to issue rulings on matters of state law, and in most cases, it doesn’t even have jurisdiction to address them,” Nelson told the Bee. “I see this as a highly unusual case.”

But California law, according to labor lawyer Mariko Yoshihara, is already clear on PAGA standing. She suggested that the Court came into their deliberations with a limited understanding of what PAGA is and how it works.

“That is why the Supreme Court really is not supposed to be deciding these issues, because they weren’t fully briefed on that issue,” Yoshihara said. “And I think had the parties fully briefed it, I think they would have seen that what they were deciding and what they were putting in the opinion was actually wrong.”

The Court decided that PAGA is superseded by a federal law that requires private disputes to be settled through arbitration. The Court said that a PAGA claim could be split into two: an individual claim, and a claim on behalf of other workers. Even if an employee could sue on behalf of others, the Court asserted, that PAGA claim could be dropped if the employer could force them into arbitration for their individual claim.

In other words, if one part of a PAGA claim is invalid, the whole thing becomes null.

The logic came as a surprise to Moriana’s lawyers. The Supreme Court invented the concept of splitting a PAGA claim into two after the oral argument, according to Rubin, so parties couldn’t respond to the Court’s reasoning until the ruling had been posted. It was a “completely new analysis,” Rubin said.

“This notion of splitting a PAGA claim into two is something that the parties didn’t brief, didn’t argue and weren’t asked about at the March 25th oral argument,” Rubin said. “The court just made this up for the first time in preparing its ruling.”

The move is the latest in an ongoing battle between the U.S. Supreme Court and the state of California, which boasts uniquely progressive laws. While the Court scrapped Roe v. Wade, the state Legislature moved forward over a dozen reproductive health protection bills. By the time the Court allowed more Americans to carry concealed weapons, Golden State lawmakers had already readied legislation to clarify and strengthen the state’s concealed carry restrictions.

The lawyers say that California legal precedent supports the idea that PAGA claims on behalf of others remain valid, even if individual claims are arbitrated. The California Supreme Court has previously rejected the idea that once an individual claim is redressed, an employee is no longer considered aggrieved -- and no longer eligible for PAGA standing.

“We’re not asking the Supreme Court to guess differently, and to apply California law as we understand it,” Rubin said. “We’re simply saying that this is a state law issue, not a federal issue. What the US Supreme Court should’ve done, and should do now, is not speculate about what California standing law provides.”

According to Rubin, the Supreme Court decision has already impacted the California court system, which is currently hearing PAGA claims. A ruling from the California Supreme Court could clarify to the lower courts that group PAGA claims remain valid.

Action from the state Legislature could also help. The day of the ruling, State Senator Dave Cortese (D-San Jose), Chair of the Senate Labor, Public Employment and Retirement Committee, wrote that while his office is still studying the court’s ruling, he is “prepared to author legislation to respond.”

But the Senator has yet to unveil an official legislative response to the decision. Yoshihara noted that there are just a couple months left until the Legislature convenes, but that “we want to make sure we get this right.”

“There are always political challenges when you have to push through legislation at the very end of session,” she said. “I think we want to make sure that we are pushing something forward that makes sense given what’s also happening in the courts in our state courts.”

The lawyers are seeking a rehearing not to completely reverse the decision, but to adjust it so that it won’t dictate how California courts should go about PAGA claims.

Yoshihara said ensuring that PAGA claims on behalf of others remain intact is crucial because group claims allow workplaces to address widespread problems without the intimidating, drawn out process of individual arbitration.

“The most important thing that we’re trying to focus on is ensuring that there is a mechanism to address workplace-wide violations,” she said. “Because that’s what forced arbitration is taking away from workers. And that’s what’s leading to inefficient and ineffective labor law enforcement.”

This story was originally published July 12, 2022 at 2:55 PM.