January 2020 started off with a bang for Altshuler Berzon LLP partner Michael Rubin, who had back-to-back arguments in the Ninth Circuit on January 6 and 8, 2020 in San Francisco.
The first case up was Canela v. Costco, a case of first impression under the federal Class Action Fairness Act (CAFA) and California’s Labor Code Private Attorney General Act (PAGA) – a state statute that provides a private right of action to employees in California, authorizing them to sue as agents of the State Labor and Workforce Development Agency for civil penalties against an employer that allegedly violated plaintiff’s and other aggrieved employees’ rights under the California Labor Code. The appeal raised several questions, including whether a PAGA representative action filed in state court can ever be removed to federal court under CAFA, and whether, if a PAGA claim is litigated in federal court, the plaintiff must satisfy all requirements of Rule 23 of the Federal Rules of Civil Procedure before being permitted to seek civil penalties based on violations committed against other aggrieved employees.
Two days later, in the same courtroom of the James R. Browning Court of Appeals building and before two of the same judges, Rubin argued Johnson v. Serenity Transportation, a Rule 23(f) appeal concerning the construction and application of California Labor Code §2810.3. That statute, which the California Legislature enacted to overcome the difficulties faced by many workers under existing “joint-employer” liability standards, imposes strict liability on “client employers” for Labor Code wage violations committed by those companies’ “labor contractors.” In Serenity Transportation, the ultimate issue – another question of first impression – is whether Section 2810.3 applies in circumstances where the labor contractor provides workers to more than one client employer at the same time – in this case, by requiring those workers to be on-call, or “engaged to wait,” while awaiting dispatch to one of the labor contractor’s clients. Because the appeal arose in the context of a district court’s denial of class certification (based on the court’s legal conclusion that Section 2810.3 does not apply in that situation), a threshold issue in the appeal is whether, or under what circumstances, a district court has authority to deny certification based upon a legal determination that plaintiffs’ claim lacks merit – even if that merits question is common to the class as a whole.
Both cases are currently under submission by the Ninth Circuit.