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Miranda v. Guess? Retail, Inc. (Cal. Ct. App., June 25, 2024, No. B323439)

The Appellate Case

Plaintiff was employed as a stockroom associate by clothing retailer Guess? Retail, Inc. at its Santa Monica store. He sued Guess? under the California Labor Code Private Attorneys General Act of 2004 (“PAGA”) for wage and hour violations he and other employees suffered for failure to reimburse employees for necessary business expenses incurred in discharge of their duties. The trial court dismissed Plaintiff’s case on the ground that he had no standing to pursue representative PAGA claims, based on the United States Supreme Court decision in Viking River Cruises v. Moriana (2022) 596 U.S. 639, which held that a PAGA plaintiff loses standing to pursue representative PAGA claims when their individual PAGA claims have been ordered into arbitration.

However, Viking also stated in Justice Sotomayor’s concurring opinion that if the Court’s understanding of California standing law is wrong, California appellate courts would have the last word on the standing issue. The trial court alternatively dismissed Plaintiff’s case on the ground that the trial would be unmanageable based on the California Court of Appeal decision in Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, which held that trial courts have inherent authority to dismiss PAGA claims on the basis of manageability.

Plaintiff appealed. After Plaintiff filed his notice of appeal, two decisions were issued by the California Supreme Court which affected the trial court’s order and the outcome of Plaintiff’s appeal. Regarding the standing issue, the California Supreme Court held in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, that a PAGA plaintiff still has standing to pursue representative PAGA claims even if the plaintiff’s individual PAGA claims must be arbitrated. Regarding the manageability issue, the California Supreme Court held in Estrada v. Royalty Carpet Mills, Inc. (2024) 15 Cal.5th 582 that trial courts do not have inherent authority to dismiss representative PAGA claims on manageability grounds. For both of those reasons, the Court of Appeal reversed the trial court’s order.

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