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For companies doing business in California, it’s important to be aware of the January 18, 2024 California Supreme Court decision in Estrada v. Royalty Carpet Mills, Inc.*, which examined whether trial courts can strike PAGA claims on manageability grounds. PAGA, or the Private Attorneys General Act of 2004, created new enforcement and procedural standards to the California Labor Code’s wage and hour provisions. While the law has been viewed as pro-plaintiff, the decision in Estrada can be seen as underscoring that point of view.

The underlying case in Estrada examined the conflicting decisions of two California courts of appeal as to whether trial courts have the inherent authority to strike a PAGA claim on manageability grounds. The California Supreme Court concluded that, unlike the authority that trial courts have to bar class action claims, trial courts lack inherent authority to strike PAGA Claims on manageability grounds. However, the court noted that trial courts have other tools at their disposal to manage PAGA claims.

Read more about the landmark decision and its implications for businesses facing PAGA claims by clicking here.

* The California Supreme Court quoted Sheppard Mullin partners Richard Simmons and Ryan Krueger and associate Tyler Johnson’s The California Private Attorneys General Act (PAGA) Litigation and Compliance Manual multiple times in the decision.