18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 369 whether they were “aggrieved employees” entitled to raise PAGA claims to an arbitrator frustrated the purpose of the PAGA and was therefore prohibited under California law. The California Court of Appeal agreed with Plaintiffs and it granted Plaintiffs’’ petition for writ of mandate ordering trial court to vacate its order compelling arbitration. Defendant argued that the Federal Arbitration Act (“FAA”) governed the matter and created a presumption in favor of arbitration. However, the Court of Appeal was unpersuaded and found that the Supreme Court of California had expressly rejected this argument when it held that a PAGA claim lies completely outside the FAA’s coverage because it was not a dispute between an employer and an employee arising out of their contractual relationship and was instead a dispute between an employer and the state. Alternatively, Defendant argued that the order did not compel arbitration of a PAGA claim. Instead, Defendant maintained that what the trial court did was to carve out part of the PAGA claim – whether or not Plaintiffs were really aggrieved employees – and then ordered that “antecedent” fact to be arbitrated. Id. at *10. Thus, Defendant maintained that if Plaintiffs were not employees but instead were independent contractors, this was not a PAGA claim at all, the law regarding PAGA claims did not apply, and the parties had agreed to arbitrate. Looking to pertinent California case law, the Court of Appeal concluded that a representative PAGA claim cannot be split into an arbitrable individual claim and a non-arbitrable representative claim. Thus, the Court of Appeal held that claims under the PAGA cannot be arbitrated without the state’s consent. Nothing in the record suggested that the state had consented to the arbitration of Plaintiffs’ PAGA claim against Defendant. Accordingly, the Court of Appeal determined that the preliminary question of whether Plaintiffs were “aggrieved employees” under PAGA could not be decided in private party arbitration because delegation of that question to an arbitrator frustrated the purpose of the PAGA and was therefore prohibited under California law. For these reasons, the Court of Appeal granted Plaintiffs’ petition for writ of mandate and directed the trial court to vacate its order granting the motion to compel arbitration. Felczer, et al. v. Apple Inc., No. 177314 (Cal. App. 4th Dist. April 23, 2021). Plaintiffs, group of retail workers, brought a class action alleging violations of certain California wage & hour labor laws. Following a trial, Plaintiffs were awarded $2 million in damages. The trial court memorialized the award in its September 2017 judgment, noting that costs would be determined at a later time. Shortly after entry of the judgment, Plaintiffs filed a memorandum of costs, and several months later moved for an award of attorneys’ fees under the California Code of Civil Procedure. Defendant opposed the award of attorneys’ fees and filed a motion to tax costs. In March 2018, the trial court granted the attorneys’ fee motion, and awarded over $2 million to class counsel. A month later the trial court partially granted Defendant’s motion to tax costs, thereby reducing the recoverable amount to about $440,000. These amounts for costs and attorneys’ fees were ultimately included in the judgment, but the trial court did not specify when interest on that portion of the judgment would start. Both parties appealed to the California Court of Appeal, but after participating in the Court of Appeal’s settlement program, they eventually came to an agreement that dismissed their respective appeals. The matter was subsequently remanded to the trial court for “further proceedings on a distribution plan and appropriate notice.” Id. at *5. On remand, the trial court initially encouraged the parties to work together to determine the details of distribution, but an insurmountable controversy developed regarding the date on which interest for the attorneys’ fees and costs awarded to Plaintiffs should begin to accrue. Defendant maintained that interest should only begin when the amounts were made certain – March 2018 for the attorneys’ fees and April 2018 for the costs – whereas Plaintiffs argued both should run from the date the judgment was entered in September 2017. The trial court ultimately adopted Defendant’s position, and entered an order that specified that the interest would begin accruing on the dates the respective awards were quantified. On Plaintiffs’ subsequent appeal, they argued that they were entitled to collect interest on attorneys’ fees and costs beginning on the date of the judgment in September 2017. The Court of Appeal held that in a civil case where the prevailing party was entitled to recover certain litigation expenses and attorneys’ fees from the losing party, the post-judgment interest on an award of prejudgment costs begins to run on the date of the judgment or order that establishes the right of a party to recover a particular cost item, even if the dollar amount has yet to be ascertained. As such, the Court of Appeal reversed the trial court’s order and remanded with instructions for the trial court to enter an order awarding Plaintiffs interest on costs calculated from September 13, 2017, the date that judgment was entered. In all other respects, the Court of Appeal affirmed the trial court’s order. Ferra, et al. v. Hollywood Hotel, LLC, 2021 Cal. LEXIS 4877 (Cal. July 15, 2021). Plaintiff, a bartender, brought a wage & hour class action lawsuit alleging that Defendant violated § 226.7(c) of the California Labor