Viking River Cruises v. Moriana

California’s Private Attorneys General Act (PAGA) creates a right of action in which individual employees bring suit on behalf of the State to recover penalties from employers for violations of California’s Labor Code. In Iskanian v. CLS Transportation Los Angeles, 327 P.3d 129 (Cal. 2014), the California Supreme Court held that the right to bring a PAGA action cannot be waived prospectively, whether in an arbitration agreement or any other type of contract. In Sakkab v. Luxottica Retail North America, Inc., 803 F.3d 429 (9th Cir. 2015), the Ninth Circuit agreed with the California Supreme Court that the Federal Arbitration Act (FAA) does not preempt Iskanian’s holding, because Iskanian does not prohibit arbitration of specific types of claims or otherwise disfavor arbitration. In the years since, the U.S. Supreme Court has repeatedly denied petitions for certiorari that argued that those decisions were wrongly decided.

In this case, an employee of Viking River Cruises sued the company in state court under PAGA claiming widespread violations of California wage and hour laws. The company sought to compel arbitration based on an arbitration agreement that purports to forbid an employee from bringing any private attorney general action. The trial court and the California Court of Appeal, applying Iskanian, held that the waiver of PAGA claims was unenforceable and that the PAGA claims could proceed in court. The California Supreme Court denied review. Viking filed a petition for certiorari repeating the contentions presented in earlier unsuccessful petitions that Iskanian and Sakkab were wrongly decided and arguing that the Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), justifies review.

PCLG, as co-counsel for the plaintiff, prepared the brief in opposition to the petition. The brief explains that the Supreme Court has already denied review of the Iskanian issue after Epic, and that neither that decision nor any other Supreme Court decision supports the argument that a rule prohibiting enforcement of waivers of statutory claims, such as PAGA claims, is preempted by the FAA.