Tuesday, July 12, 2011

Second District Finds PAGA Claims Not Subject to FAA Preemption Under Concepcion: Brown v. Ralphs Grocery

On July 12, 2011, the Second District (Division Five) held that the U.S. Supreme Court’s preemption analysis in AT&T Mobility LLC v. Concepcion does not apply to PAGA claims. See Brown v. Ralphs Grocery, __Cal.App.4th __ (2011).  The Court remanded the action for further consideration as to “whether the provision in the arbitration agreement waiving plaintiff’s right to pursue a representative action under the PAGA can be severed or whether the presence of that one invalid provision in the arbitration agreement renders the entire agreement or portions thereof unenforceable.”  The ultimate holding on this question may provide a basis to exclude labor class actions from the scope of FAA preemption under Concepcion whenever a PAGA claim is alleged.  More on this decision later.

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