108 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com conclusion” of Wesson.526 Estrada relies on differences between PAGA actions and class actions, concluding that “[a]llowing dismissal of unmanageable PAGA claims would effectively graft a class action requirement onto PAGA claims” and “would also interfere with PAGA's purpose as a law enforcement mechanism by placing an extra hurdle on PAGA plaintiffs that is not placed on the state.”527 Despite disagreeing with Wesson, Estrada still gives courts some tools to limit PAGA claims by narrowing the group of employees to only those for whom violations can be proved. According to Estrada, “courts are not powerless when facing unwieldy PAGA claims” because they “may still, where appropriate and within reason, limit the amount of evidence PAGA plaintiffs may introduce at trial to prove alleged violations to other unrepresented employees.”528 “If plaintiffs are unable to show widespread violations in an efficient and reasonable manner,” the Estrada court provides, “that will just reduce the amount of penalties awarded rather than lead to dismissal.” The Ninth Circuit also weighed in on this debate and sided with the reasoning in Estrada.529 The Ninth Circuit held that “under federal law, an exercise of inherent powers ‘must be a reasonable response to a specific problem and … cannot contradict any express rule or statute.”530 After examining the “structure and purpose of PAGA,” the Ninth Circuit concluded that “imposing a manageability requirement in PAGA cases akin to that imposed under Rule 23(b)(3) would not constitute a reasonable response to a specific problem and would contradict California law by running afoul of the key features of PAGA actions.”531 The split between Wesson and Estrada undoubtedly created confusion for employers, which is likely why the California Supreme Court granted review of the Estrada decision on June 22, 2022. The California Supreme Court agreed to consider the following issue: “Do trial courts have inherent authority to ensure that claims under the Private Attorneys General Act (Lab. Code, § 2698 et seq.) will be manageable at trial, and to strike or narrow such claims if they cannot be managed?”532 On January 18, 2024, the California Supreme Court addressed the split in appellate authority and held that, while trial courts may use a variety of tools to efficiently manage PAGA claims, striking such claims due to manageability concerns — even if those claims are complex or time-intensive — is not among the tools trial courts possess.533 Notwithstanding its holding limiting the ability of trial courts to dismiss PAGA cases on the ground that they were not manageable, the Supreme Court did note that trial courts have inherent authority to dismiss claims in limited circumstances. The Supreme Court also affirmed that trial courts can formulate rules of procedure to facilitate trial 526 Id. at 687. 527 Id. 528 Id. 529 Hamilton v. Wal-Mart Stores, Inc., 39 F.4th 575, (9th Cir. 2022). 530 Id. at 586. 531 Id. at 587. 532 Estrada v. Royalty Carpet Mills, 511 P.3d 191 (Cal. 2022). 533 Estrada v. Royalty Carpet Mills, Inc., 2024 WL 188863, at *1 (Cal. Jan. 18, 2024).
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