Altshuler Berzon LLP Attorneys Urge State Courts to Reject U.S. Supreme Court’s Mistaken Understanding of State Law Issues in Viking River Cruises v. Moriana

Briefing on Remand to State Court Highlights Errors in Supreme Court Majority’s Analysis

Oct. 20, 2022 – Hoping to transform an 8-1 initial loss in the Supreme Court into a complete victory in the state courts, Altshuler Berzon LLP and its co-counsel today urged the California Court of Appeal on remand from in Viking River Cruises, Inc. v. Moriana, 142 S.Ct. 1906 (2022), to reject the Supreme Court majority’s holdings on two critical issues of state law. If plaintiff succeeds, the result will be a far-reaching victory not only for plaintiff Angie Moriana and the rest of Viking’s commissioned salespeople in California, but for workers throughout the State.

In Viking River Cruises, the Supreme Court began by rejecting each of the employers’ principal arguments, thereby upholding against Federal Arbitration Act (“FAA”) preemption challenge the California rule invalidating clauses in arbitration agreements that prohibit workers from pursuing statutory claims under California’s Labor Code Private Attorneys General Act (“PAGA”). Instead of ending there, however, the Supreme Court went on to decide two exclusively state law issue: (1) construing the severability clause in the arbitration agreement as requiring plaintiff to split her PAGA claim in two, pursuing her claim for “individual” relief in arbitration and her claim for “non-individual” relief in court; and (2) declaring that once the PAGA plaintiff was compelled to arbitrate her “individual” PAGA claim, she lost standing to litigate the remaining “non-individual” component of that claim in court.

Plaintiff’s brief on remand to the Court of Appeal pointed out that if the Supreme Court’s ruling were right, the arbitration agreement would be unenforceable because its effect would be to strip plaintiff or her right to pursue the most significant, “non-individual” component of her PAGA claim—in violation of the very California rule that the Court had upheld against FAA-preemption challenge. Plaintiff then pointed out that the Court’s ruling was not right, both because the arbitration agreement could not fairly be construed as requiring plaintiff to arbitrate any portion of her PAGA claim and, even if it did, the California Supreme Court’s unanimous decision in Kim v. Reins International California, Inc., 9 Cal.5th 73 (2020), established that PAGA standing has only two requirements: that plaintiff be an “employee” who was “aggrieved” by a Labor Code violation committed by her employer, and that plaintiff satisfied those requirements whether her PAGA action proceeded in one forum or two.

Oral argument has not yet been scheduled.