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California Class Actions and PAGA (“Probably All is Going to the Attorneys”) Claims Continue to Overwhelm the State

We have reported before about the huge jury verdicts that get handed out in California with alarming regularity and California’s sustained #1 ranking as the “Top Judicial Hellhole” in the nation. A corollary problem continues unabated: The prevalence of class actions and lawsuits under the Private Attorneys General Act (PAGA).

Though California accounts for 12% of the population of the United States (yes, one in eight Americans lives in the Golden State), currently more than 50% of all class actions in the country are filed here. Further, PAGA claims, which operate essentially like sloppy class actions with far fewer procedural hurdles for the plaintiff and far less oversight by judges, have flooded the courts since PAGA was enacted in 2004 – since then, more than 35,000 PAGA lawsuits have been filed and thousands more are filed each year against employers great and small.

Like most litigated claims, PAGA actions usually get settled – and that’s when the mischief really kicks in. Once a settlement amount is agreed upon, it’s a relatively common practice for the plaintiff’s attorney to allocate as little as possible to the PAGA claim because, after all, 75% of that amount must be paid to the California Labor and Workforce Development Agency (LWDA).  No one wants that!

So, in reality, “PAGA” stands for “Probably All is Going to the Attorneys.”

Not surprisingly, plaintiffs’ attorneys really like PAGA because they can have it both ways: Use the threat of outsize costs, penalties and attorney’s fees to drive up the settlement value, then once a settlement amount has been extracted, allocate as little as possible to that pesky PAGA claim, which requires the 75% payment to the state.

© 2019 Proskauer Rose LLP.

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About this Author

Anthony J Oncidi, Employment Attorney, Proskauer Rose Law Firm
Partner

Anthony J. Oncidi heads the Labor & Employment Law Group in the Los Angeles office. Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection....

310-284-5690
Cole Lewis Employment Attorney
Associate

Cole Lewis is an associate in the Labor & Employment Department.

Cole graduated from UCLA School of Law, where he worked as a law clerk for Public Counsel of Los Angeles and advocated for benefit recipients in the Department of Public Social Services. He has also previously worked as a summer associate in Proskauer’s Labor & Employment Department.

Prior to law school, Cole received his Bachelor’s degree in Journalism at Indiana University, where he graduated cum laude.

310-284-5668