Rules FAA Preempts California Rule Blocking Waivers of Representative PAGA Claims

Viking River Cruises, Inc. v. Angie Moriana

20-1573docketfromCourt of Appeal of California, Second Appellate District

✓

Granted

Dec 15, 2021

✓

Argued

Mar 30, 2022

✓

Decided

Jun 15, 2022

Current status: decided

Decision

5–3

Decided Jun 15, 2022

Majority (5)

Alito

Breyer

Gorsuch

Kagan

Sotomayor

Minority (3)

Barrett

Kavanaugh

Thomas

Majority5

Minority3

What the Court agreed to answer

In AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), and Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018), this Court held that when parties agree to resolve their disputes by individualized arbitration, those agreements are fully enforceable under the Federal Arbitration Act (“FAA”). Courts are not free to disregard or “reshape traditional individualized arbitration” by applying rules that demand collective or representational adjudication of certain claims. Epic, 138 S.Ct. at 1623. The FAA allows the parties not only to choose arbitration but to retain the benefits of arbitration by maintaining its traditional, bilateral form. While California courts follow Concepcion and Epic when a party to an individualized arbitration agreement tries to assert class-action claims, they refuse to do so when a party to such an agreement asserts representative claims under the California Private Attorneys General Act (“PAGA”), which—like a class action—allows aggrieved employees to seek monetary awards on a representative basis on behalf of other employees. See Iskanian v. CLS Transp. Los Angeles, LLC, 327 P.3d 129 (Cal. 2014). As a result, Concepcion and Epic have not caused bilateral arbitration to flourish in California, as this Court intended, but have merely caused FAA-defying representational litigation to shift form. The question presented is: Whether the Federal Arbitration Act requires enforcement of a bilateral arbitration agreement providing that an employee cannot raise representative claims, including under PAGA.

Rules FAA Preempts California Rule Blocking Waivers of Representative PAGA Claims

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Rules FAA Preempts California Rule Blocking Waivers of Representative PAGA Claims

Court holds FAA preempts California rule that voided waivers of representative PAGA claims

Court holds FAA preempts California rule that voided waivers of representative PAGA claims