Opposition Brief — Viking River Cruises, Inc., Petitioner v. Angie Moriana

No. 20-1573

IN THE

Supreme Court of the United States

VIKING RIVER CRUISES, INC.,

Petitioner,

v.

ANGIE MORIANA,

Respondent.

On Petition for a Writ of Certiorari to the

California Court of Appeal

RESPONDENT’S BRIEF IN OPPOSITION

KEVIN T. BARNES

Counsel of Record

GREGG LANDER

LAW OFFICES OF

KEVIN T. BARNES

1635 Pontius Avenue

Second Floor

Los Angeles, CA 90025-3361

(323) 302-9675

barnes@kbarnes.com

SCOTT L. NELSON

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

Attorneys for Respondent

September 2021

i

QUESTION PRESENTED

Whether the Federal Arbitration Act requires

state courts to enforce a waiver of a statutory right of

action to collect penalties on behalf of a state, in violation of neutral principles of state law prohibiting

such a waiver, if the waiver is set forth in an arbitration agreement.

ii

TABLE OF CONTENTS

QUESTION PRESENTED .......................................... i

TABLE OF AUTHORITIES ....................................... v

INTRODUCTION ....................................................... 1

STATEMENT .............................................................. 3

1.

PAGA .................................................................... 3

2.

Iskanian ................................................................ 5

3.

Sakkab .................................................................. 7

4.

This Case ............................................................ 11

REASONS FOR DENYING THE WRIT .................. 13

I.

Epic does not support Viking’s request for

review. ................................................................ 13

II. Iskanian is fully consistent with this Court’s

precedents........................................................... 16

A. This Court’s FAA decisions do not require

enforcement of agreements that bar assertion

of statutory rights. ......................................... 17

B. This Court’s decisions do not require

enforcement of agreements that strip states of

police power to authorize enforcement actions

on their behalf. ............................................... 19

C. Iskanian and Sakkab do not reflect hostility

to arbitration. ................................................ 21

D. Iskanian does not impose procedures

incompatible with arbitration. ...................... 24

III. This case does not present the question

whether Iskanian forecloses arbitration of

PAGA claims. ..................................................... 26

iii

IV. Viking’s objections to PAGA provide no basis for

review. ................................................................ 31

CONCLUSION.......................................................... 34

iv

TABLE OF AUTHORITIES

Cases

Page(s)

14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009) ................................. 18, 24, 26

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995) ............................................. 21

Am. Express Co. v. Italian Colors Rest.,

570 U.S. 228 (2013) ............................... 5, 7, 18, 26

Apple Am. Group, LLC v. Salazar,

577 U.S. 1048 (2015) ........................................... 11

Arias v. Super. Ct.,

209 P.3d 923 (Cal. 2009) ............................. 4, 5, 23

Arizona v. United States,

567 U.S. 387 (2012) ............................................. 21

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ...................................... passim

Baumann v. Chase Inv. Servs. Corp.,

747 F.3d 1117 (9th Cir. 2014),

cert. denied, 574 U.S. 870 (2014) .......................... 8

Bloomingdale’s, Inc. v. Vitolo,

137 S. Ct. 2267 (2017) ......................................... 11

Booker v. Robert Half Int’l, Inc.,

413 F.3d 77 (D.C. Cir. 2005) ............................... 10

Bridgestone Retail Operations, LLC v. Brown,

575 U.S. 1037 (2015) ............................................. 7

CarMax Auto Superstores Cal., LLC v. Areso,

577 U.S. 1048 (2015) ........................................... 11

Cohen v. UBS Fin. Servs., Inc.,

799 F.3d 174 (2d Cir. 2015) ................................. 14

v

Correia v. NB Baker Elec., Inc.,

244 Cal. Rptr. 3d 177 (Cal. Ct. App. 2019) ......... 29

DIRECTV, Inc. v. Imburgia,

577 U.S. 47 (2015) ............................................... 22

Doctor’s Assocs., Inc. v. Casarotto,

517 U.S. 681 (1996) ............................................. 21

EEOC v. Waffle House, Inc.,

534 U.S. 279 (2002) ................................... 6, 17, 20

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) .................................. passim

Five Star Sr. Living Inc. v. Mandviwala,

138 S. Ct. 2680 (2018) ............................... 2, 10, 14

Gentry v. Super. Ct.,

165 P.3d 556 (Cal. 2007) ....................................... 5

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991) ......................................... 17, 26

Granite Rock Co. v. Int’l B’hood of Teamsters,

561 U.S. 287 (2010) ....................................... 29, 30

Greene v. Fisher,

565 U.S. 34 (2011) ............................................... 14

Iskanian v. CLS Transp. Los Angeles, LLC,

327 P.3d 129 (2014), cert. denied,

574 U.S. 1121 (2015) .................................... passim

Kindred Nursing Ctrs. Ltd. P’ship v. Clark,

137 S. Ct. 1421 (2017) ....................... 22, 23, 24, 30

Magadia v. Wal-Mart Assocs., Inc.,

999 F.3d 668 (9th Cir. 2021) ............................... 31

Marmet Health Care Ctr., Inc. v. Brown,

565 U.S. 530 (2012) ......................................... 8, 27

vi

McGill v. Citibank, N.A.,

393 P.3d 84 (2017) ............................................... 29

Medtronic, Inc. v. Lohr,

518 U.S. 470 (1996) ............................................. 10

Metro. Life Ins. Co. v. Massachusetts,

471 U.S. 724 (1985) ....................................... 10, 21

Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc.,

473 U.S. 614 (1985) ................................. 17, 18, 26

PennyMac Fin. Servs., Inc. v. Smigelski,

140 S. Ct. 223 (2019) ................................. 2, 10, 14

Perry v. Thomas,

482 U.S. 483 (1987) ....................................... 21, 22

Preston v. Ferrer,

552 U.S. 346 (2008) ................................... 8, 18, 19

Printz v. United States,

521 U.S. 898 (1997) ............................................. 21

Prudential Overall Supply v. Betancourt,

138 S. Ct. 556 (2017) ..................................... 10, 11

Rivas v. Coverall N. Am., Inc.,

842 F. Appx. 55 (9th Cir. 2021) ..................... 16, 29

Rodriguez de Quijas v. Shearson/Am. Express, Inc.,

490 U.S. 477 (1989) ............................................. 17

Sakkab v. Luxottica Retail N. Am., Inc.,

803 F.3d 425 (9th Cir. 2015) ........................ passim

Shearson/Am. Express, Inc. v. McMahon,

482 U.S. 220 (1987) ................................. 17, 18, 26

Smith v. Bayer Corp.,

564 U.S. 299 (2011) ............................................... 4

vii

Tanguilig v. Bloomingdale’s, Inc.,

210 Cal. Rptr. 3d 352 (Cal. Ct. App. 2016),

cert. denied, 138 S. Ct. 356 (2017) ................ 11, 29

ZB, N.A. v. Super. Ct.,

448 P.3d 239 (Cal. 2019) ............5, 8, 28, 29, 30, 32

Statutes and Rules

Federal Arbitration Act, 9 U.S.C. § 1 et seq. ..... passim

§ 2 ............................................................... 7, 17, 19

Private Attorneys General Act (PAGA),

Cal. Lab. Code § 2698 et seq. ........................ passim

§ 2699(g) ................................................................. 4

§ 2699(i) ................................................................. 4

S. Ct. R. 10 ................................................................ 16

INTRODUCTION

California’s Private Attorneys General Act, or

PAGA, creates a right of action in which individual

employees bring actions on behalf of the State to recover penalties from employers for violations of California’s Labor Code. In Iskanian v. CLS Transportation Los Angeles, LLC, 327 P.3d 129 (Cal. 2014), the

California Supreme Court held that the right to bring

a PAGA action cannot be waived prospectively,

whether in an arbitration agreement or any other type

of contract. In Sakkab v. Luxottica Retail North America, Inc., 803 F.3d 429 (9th Cir. 2015), the Ninth Circuit agreed with the California Supreme Court that

Iskanian’s neutral rule is not preempted by the Federal Arbitration Act (FAA) because it does not prohibit

arbitration of specific types of claims or otherwise disfavor arbitration.

Iskanian and Sakkab do not conflict either with

this Court’s precedents or with decisions of other state

supreme courts or federal courts of appeals. As a result, in the seven years since Iskanian, and the six

years since Sakkab, this Court has repeatedly denied

petitions for certiorari claiming those decisions were

wrongly decided.

This case involves an intermediate California appellate court’s routine application of Iskanian to a contract that purported to waive altogether an employee’s

right to bring any private attorney general action

against her employer. The employer, Viking River

Cruises, now seeks review in this Court, repeating the

contentions presented in earlier unsuccessful petitions that Iskanian and Sakkab were wrongly decided.

Viking argues that review is now justified by this

Court’s decision in Epic Systems Corp. v. Lewis, 138 S.

2

Ct. 1612 (2018). But nothing about that argument is

new. The same year Epic was decided, the respondent

in Five Star Senior Living Inc. v. Mandviwala, U.S.

No. 17-1357, cert. denied, 138 S. Ct. 2680 (2018), explained that Iskanian and Sakkab are fully consistent

with Epic: The rule that an employee may not be

barred from pursuing a PAGA claim in any forum

“does not provide ‘that a contract is unenforceable just

because it requires bilateral arbitration,’ ” and “does

not ‘target arbitration either by name or by more subtle methods.’ ” Mandviwala, Br. in Opp. 3, 22 (quoting

Epic, 138 S. Ct. at 1623, 1622). The next year, in PennyMac Financial Services, Inc. v. Smigelski, 140 S. Ct.

223 (2019), the Court again denied a petition premised

squarely on the assertion that Iskanian and Sakkab

conflict with Epic. That argument, which no appellate

court has accepted, has grown no stronger since then.

Viking also recycles the argument that Iskanian

“prohibits outright the arbitration of a particular type

of claim.” Pet. 22 (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341 (2011)). Iskanian, however,

did not hold that an agreement to arbitrate PAGA

claims is unenforceable. It held “that representative

PAGA claims may not be waived outright,” but it did

“not prohibit the arbitration of any type of claim.” Sakkab, 803 F.3d at 434. Although some intermediate

California courts have suggested that PAGA claims

may be nonarbitrable, the California Supreme Court

has never decided that question.

And in any event, this case does not present it. The

lower courts did not refuse to enforce an agreement to

arbitrate PAGA claims, because Viking’s agreement

unambiguously prohibited arbitration (as well as litigation in court) of any private attorney general claim.

3

In holding that the employee’s PAGA claims must proceed in court, the lower court gave effect to the agreement’s exclusion of private attorney general claims

from arbitration and held the agreement invalid only

insofar as it precluded PAGA claims completely. Because the FAA prohibits courts from compelling parties to arbitrate matters that they have expressly

agreed not to arbitrate, the only remedy for the invalid

waiver was to allow the claim to be litigated.

Viking’s petition, like those that came before it,

fails to come to grips with the central fact that California’s rule that the right to bring PAGA claims cannot be waived is not an effort to “declare individualized arbitration proceedings off-limits.” Pet. 19 (quoting Epic, 138 S. Ct. at 1623). Rather, Viking’s invocation of the FAA is an attempt to avoid bilateral resolution of the State’s claim for penalties through the

representative chosen by California lawmakers—an

individual aggrieved employee. Viking does not seek

to compel arbitration of that claim, but to enforce a

waiver of the right to bring the claim in any forum—

something no decision of this Court has ever held that

the FAA countenances, let alone requires.

STATEMENT

1. PAGA

PAGA provides for enforcement of California’s Labor Code by enlisting individual plaintiffs as private

attorneys general to recover civil penalties for the

State, with a share going to affected employees. Before

PAGA’s enactment, only the State could obtain such

penalties. See Iskanian, 327 P.3d at 145–46. PAGA

authorizes an “aggrieved employee” to recover penalties for Labor Code violations committed against her-

4

self and other employees in a representative civil action. Cal. Lab. Code § 2699(g). Penalties recovered under PAGA “shall be distributed as follows: 75 percent

to the Labor and Workforce Development Agency for

enforcement of labor laws and education of employers

and employees about their rights and responsibilities

under this code …; and 25 percent to the aggrieved

employees.” Id. § 2699(i).

“A PAGA representative action is … a type of qui

tam action.” Iskanian, 327 P.3d at 148. PAGA actions

are commonly maintained by individual plaintiffs. See

Arias v. Super. Ct., 209 P.3d 923, 929–34 (Cal. 2009).

They require neither class certification nor notice to

other employees. See id. Other employees are bound

by a PAGA adjudication only with respect to civil penalties, just as they would be “bound by a judgment in

an action brought by the government.” Id. at 933. The

effect of a PAGA judgment does not rest on the principles that make class action judgments binding on

class members. See Smith v. Bayer Corp., 564 U.S.

299, 312–13 (2011). Rather, it rests on a very different

basis: “When a government agency is authorized to

bring an action … a person who is not a party but who

is represented by the agency is bound by the judgment

as though the person were a party.” Arias, 209 P.3d at

934.

PAGA reflects the legislature’s determination that

limitations on the State’s enforcement resources render it “in the public interest to allow aggrieved employees, acting as private attorneys general, to recover

civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies …

retain primacy over private enforcement efforts.” Id.

at 929–30. “In a lawsuit brought under the act, the

employee plaintiff represents the same legal right and

5

interest as state labor law enforcement agencies.” Id.

at 933. The action “is a dispute between an employer

and the state, which alleges directly or through its

agents—either the Labor and Workforce Development

Agency or aggrieved employees—that the employer

has violated the labor code.” Iskanian, 327 P.3d at 151.

Because PAGA aims to deter and penalize Labor

Code violations rather than compensate individuals,

“[t]he government entity on whose behalf the plaintiff

files suit is always the real party in interest in the

suit.” Id. Thus, “[a]ll PAGA claims,” whether involving

violations affecting one or a thousand employees, “are

‘representative’ actions in the sense that they are

brought on the state’s behalf.” ZB, N.A. v. Super. Ct.,

448 P.3d 239, 243 (2019). Accordingly, the plaintiff

may “seek any civil penalties the state can,” id., but

the PAGA right of action does not provide a mechanism for seeking compensatory remedies, such as lost

wages, either for the plaintiff or for other employees,

id. at 245–52.

2. Iskanian

The plaintiff in Iskanian filed both a putative class

action and a representative claim under PAGA, based

on alleged violations of California wage-and-hour

laws. The defendant sought to compel arbitration under an agreement that barred both class actions and

representative actions.

The California Supreme Court held the class action

ban valid and enforceable. The court concluded that

Concepcion, 563 U.S. 333, and American Express Co.

v. Italian Colors Restaurant, 570 U.S. 228 (2013), required it to overrule its earlier decision in Gentry v.

Super. Ct., 165 P.3d 556 (Cal. 2007), which had held

6

class bans in employment arbitration agreements unenforceable in some circumstances. See Iskanian, 327

P.3d at 133. The California court also anticipated this

Court’s ruling in Epic that federal labor laws do not

preclude enforcement of class-action bans. See id. at

141. All seven justices, however, agreed that the

agreement was unenforceable to the extent it left no

forum in which the plaintiff could pursue a PAGA

claim. The court began by holding that employment

agreements in which employees prospectively waive

the right to bring PAGA representative actions are unenforceable under state law. See id. at 149. The court

then held that the FAA does not require enforcement

of such purported waivers. See id. at 150–53.

The court’s five-justice majority opinion on this

point rested in part on the state-law holding that the

real party in interest under PAGA is the State, on

whose behalf the PAGA plaintiff seeks penalties. As

the court observed, a PAGA action is by definition a

representative action on the State’s behalf. See id. at

151. Thus, enforcing an employment agreement banning representative actions would prevent the State

from pursuing its claim through the agent authorized

by law to represent it: the PAGA plaintiff. Because “a

PAGA action is a dispute between an employer and

the state Labor and Workforce Development Agency,”

id. at 149, and because the State is not a party to the

agreement invoked to bar the claim, the court held

that permitting the PAGA action to proceed would not

conflict with the FAA’s requirement that private arbitration agreements be enforced as between the parties, id. at 151 (citing EEOC v. Waffle House, Inc., 534

U.S. 279 (2002)). Having held that the PAGA claims

must be available in “some forum,” id. at 155, the

7

court remanded for consideration of whether they

would be arbitrated or litigated in court.

Justices Chin and Baxter, concurring in the judgment, set forth an alternate basis for the result. Invoking this Court’s statements that the FAA does not

require enforcement of “a provision in an arbitration

agreement forbidding the assertion of certain statutory rights,” id. at 157 (quoting Am. Express, 570 U.S.

at 236), they concluded that holding prospective

PAGA waivers unenforceable “does not run afoul of

the FAA,” id.

This Court denied certiorari in Iskanian, 574 U.S.

1121 (2015), and, soon after, in another case where the

California Supreme Court had applied Iskanian.

Bridgestone Retail Operations, LLC v. Brown, 575

U.S. 1037 (2015).

3. Sakkab

In Sakkab, the Ninth Circuit agreed with the California Supreme Court that the FAA does not preempt

Iskanian’s prohibition on waivers of the right to bring

PAGA representative claims. 803 F.3d at 429 (M.

Smith, J.). The court held that the Iskanian rule falls

within the FAA’s savings clause, which makes agreements to arbitrate enforceable “save upon such

grounds as exist at law or in equity for the revocation

of any contract.” 9 U.S.C. § 2. Applying this Court’s

teaching that “a state contract defense must be ‘generally applicable’ to be preserved by § 2’s saving

clause,” 803 F.3d at 432 (quoting Concepcion, 563 U.S.

at 339), the court held that the Iskanian rule is “generally applicable” because it “place[s] arbitration

agreements on equal footing with non-arbitration

agreements.” Id. Iskanian, the court held, bars prospective waiver of PAGA claims, “regardless of

8

whether the waiver appears in an arbitration agreement or a non-arbitration agreement.” Id.

Sakkab further concluded that Iskanian does not

conflict with the FAA’s purposes. The court recognized

that the FAA’s purpose is to overcome judicial hostility to arbitration and that it “therefore preempts state

laws prohibiting the arbitration of specific types of

claims.” Id. at 434 (citing Marmet Health Care Ctr.,

Inc. v. Brown, 565 U.S. 530 (2012), and Preston v. Ferrer, 552 U.S. 346, 356–59 (2008)). Iskanian, however,

“expresses no preference” as to whether PAGA claims

“are litigated or arbitrated.” Id. Iskanian “provides

only that representative PAGA claims may not be

waived outright” and “does not prohibit the arbitration of any type of claim.” Id.; accord ZB, 448 P.3d at

241 (explaining that Iskanian “held that a court may

not enforce an employee’s alleged predispute waiver of

the right to bring a PAGA claim in any forum”).

Further, Sakkab held that Iskanian does not “interfere[ ] with arbitration.” 803 F.3d at 434 (quoting

Concepcion, 563 U.S. at 346). Iskanian’s prohibition

on PAGA waivers, the court explained, is unlike the

rule at issue in Concepcion, under which bans on

class-action procedures were deemed unconscionable.

Concepcion held that rule preempted because it

“‘interefere[d] with fundamental attributes of arbitration,’ by imposing formal classwide arbitration procedures on the parties against their will.” Id. at 435

(quoting Concepcion, 563 U.S. at 344). By contrast,

“ ‘fundamental[ ]’ differences between PAGA actions

and class actions” render Concepcion’s concerns inapplicable to the Iskanian rule. Id. (quoting Baumann v.

Chase Inv. Servs. Corp., 747 F.3d 1117, 1123 (9th Cir.

2014), cert. denied, 574 U.S. 1060 (2014)).

9

A class action, Sakkab elaborated, is a “procedural

device” in which individual claims of multiple plaintiffs are adjudicated together, creating the necessity

for formal procedures such as class certification, classwide notice, and opt-out rights, to protect each class

member’s rights with respect to his individual claim.

Id. “By contrast, a PAGA action is a statutory action”

in which the State, represented by the employee who

brings the action “as the proxy or agent of the state’s

labor law enforcement agencies,” litigates one-on-one

against the defendant to recover penalties “measured

by the number of Labor Code violations committed by

the employer.” Id. (citations omitted). Because the

plaintiff is not employing a procedure for aggregating

claims belonging to other employees, but is pursuing

the State’s claims for penalties, “there is no need to

protect absent employees’ due process rights in PAGA

arbitrations,” and “PAGA arbitrations therefore do

not require the formal procedures of class arbitrations.” Id. at 436. Thus, the court continued, “prohibiting waiver of such claims does not diminish parties’

freedom to select the arbitration procedures that best

suit their needs.” Id. Enforcing such a waiver would

not preserve fundamental attributes of arbitration,

but would “effectively … limit the penalties an employee-plaintiff may recover on behalf of the state.” Id.

Sakkab acknowledged that the liabilities defendants incur for PAGA violations may be large and that

some defendants might hesitate to agree to arbitrate

such claims. Id. at 437. The court reasoned, however,

that “the FAA would not preempt a state statutory

cause of action that imposed substantial liability

merely because the action’s high stakes would arguably make it poorly suited to arbitration.” Id. “Nor …

would the FAA require courts to enforce a provision

10

limiting a party’s liability in such an action, even if

that provision appeared in an arbitration agreement.”

Id. (citing Booker v. Robert Half Int’l, Inc., 413 F.3d

77, 83 (D.C. Cir. 2005) (Roberts, J.)). Likewise, the

FAA does not preempt a rule prohibiting parties “from

opting out of the central feature of the PAGA’s private

enforcement scheme—the right to act as a private attorney general to recover the full measure of penalties

the state could recover.” Id. at 439.

Finally, the court invoked this Court’s instruction

that “ ‘[i]n all pre-emption cases’ we must ‘start with

the assumption that the historic police powers of the

States were not to be superseded by the Federal Act

unless that was the clear and manifest purpose of

Congress.’ ” Id. (quoting Medtronic, Inc. v. Lohr, 518

U.S. 470, 485 (1996)). Here, the State exercised its

“broad authority under [its] police powers to regulate

the employment relationship to protect workers

within the State,” id. (quoting Metro. Life Ins. Co. v.

Massachusetts, 471 U.S. 724, 756 (1985)), by “creating

a form of qui tam action” to supplement the State’s

limited enforcement resources. Id. “The FAA,” the

court concluded, “was not intended to preclude states

from authorizing qui tam actions to enforce state law”

or to “require courts to enforce agreements that severely limit the right to recover penalties” in such actions. Id. at 439–40.

The Ninth Circuit denied rehearing en banc in

Sakkab, and no judge requested a vote on the petition.

Since Sakkab, this Court has denied certiorari in

at least seven more cases seeking review of whether

the FAA preempts Iskanian: Smigelski, 140 S. Ct. 223;

Mandviwala, 138 S. Ct. 2680; Prudential Overall Sup-

11

ply v. Betancourt, 138 S. Ct. 556 (2017); Bloomingdale’s, Inc. v. Tanguilig, 138 S. Ct. 356 (2017); Bloomingdale’s, Inc. v. Vitolo, 137 S. Ct. 2267 (2017); CarMax Auto Superstores Cal., LLC v. Areso, 577 U.S.

1048 (2015); Apple Am. Group, LLC v. Salazar, 577

U.S. 1048 (2015).

4. This Case

Respondent Angie Moriana worked as a sales representative for petitioner Viking River Cruises. Ms.

Moriana, together with other Viking employees, was

subjected to violations of California’s Labor Code including failure to pay all wages due; failure to pay

overtime at the required rate; failure to provide meal

and rest periods; failure to provide accurate, itemized

wage statements, and other violations. Ms. Moriana

filed this action under PAGA in a California state

court in 2018. As Viking acknowledges, her operative

complaint asserts only a PAGA claim seeking recovery

of penalties for these violations.

Viking moved to compel arbitration, invoking an

agreement Ms. Moriana had signed with a company

that contracted to provide human resources services

for Viking as a “co-employer.” The agreement provides

that any dispute arising out of Ms. Moriana’s employment with Viking must be arbitrated. It further provides that “[t]here will be no right or authority for any

dispute to be brought, heard, or arbitrated as a class,

collective, representative or private attorney general

action.” Pet. App. 14. Viking acknowledged that Iskanian holds that such a waiver of the right to bring a

representative or private attorney general action under PAGA is unenforceable as a matter of California

law, but it argued that this Court’s decision in Epic

had effectively overruled Iskanian. The trial court

12

noted that California appellate decisions had held

that Epic did not address the enforceability of an

agreement, such as this one, barring a PAGA representative action in any forum, and, citing Iskanian, it

denied Viking’s motion. Pet. App. 16.

The California Court of Appeal affirmed in an unpublished opinion. Citing previous appellate decisions

holding that Epic does not affect Iskanian’s holding

that predispute waivers of PAGA claims are unenforceable, the court rejected Viking’s argument that

Epic effectively overruled Iskanian. Iskanian’s nonwaiver rule, the court held, is not an impermissible

device to evade a valid requirement that individual

claims be arbitrated, but a permissible rule aimed at

preventing employers from escaping liability by “precluding PAGA actions in any forum.” Pet. App. 6. The

court also rejected Viking’s argument that “Moriana’s

‘individual PAGA claim’ should be compelled to arbitration.” Id. The court explained that “[a]ll PAGA

claims are ‘representative’ actions in the sense that

they are brought on the state’s behalf.” Id. (quoting

ZB, 448 P.3d at 243). Because Moriana’s complaint

contained only a single cause of action for penalties

under PAGA, id. at 7, the court held that she had

brought only a “single representative claim,” id. at 6,

that fell within the agreement’s unenforceable blanket

waiver of all representative and private attorney general claims. She had “alleged no personal claim seeking compensation that might be individually arbitrated” under the agreement. Id. at 7.

The California Supreme Court denied Viking’s petition for review.

13

REASONS FOR DENYING THE WRIT

This case is not about whether the FAA requires

enforcement of an agreement providing for arbitration

of a particular claim on an individual basis. Rather,

the agreement at issue purports to bar PAGA claims

altogether, regardless of the forum. The lower courts

agree that the FAA does not require enforcement of an

arbitration clause that waives PAGA claims altogether rather than requiring their arbitration, and no

decision of this Court has held that the FAA overrides

state laws prohibiting waivers of specific rights of action. Epic, the principal decision on which Viking rests

its request for review, holds that the FAA provides for

enforcement of agreements by individuals to arbitrate

their claims individually rather than collectively, but

says nothing to suggest that the FAA requires enforcement of a waiver of an individual’s right to pursue a

unitary, representative claim on behalf of the State.

Viking’s petition merits review no more than did any

of the previous petitions contending that Iskanian and

Sakkab were erroneous.

I.

Epic does not support Viking’s request for

review.

The core holding of Iskanian that drove the outcome below is that an agreement, arbitration or otherwise, cannot prospectively waive an employee’s

right to bring a PAGA action in some forum. Iskanian,

327 P.3d at 155. Viking does not claim that there is

any conflict among federal courts of appeals or state

supreme courts over whether the FAA preempts that

holding. It concedes that the Ninth Circuit agrees that

the FAA does not preempt a rule that “only prohibits

[parties] from opting out of the central feature of the

PAGA’s private enforcement scheme—the right to act

14

as a private attorney general to recover the full measure of penalties the state could recover.” Sakkab, 803

F.3d at 439; see Pet. 11. Indeed, although PAGA

claims may be brought outside California and the

Ninth Circuit, see, e.g., Cohen v. UBS Fin. Servs., Inc.,

799 F.3d 174, 180 (2d Cir. 2015), no federal appellate

or state supreme court has rejected Iskanian’s nonwaiver rule. Moreover, Viking cites no decisions of this

Court holding that the FAA requires enforcement of

an agreement that waives a claim rather than requiring its arbitration. And it acknowledges that this

Court has repeatedly denied petitions for certiorari arguing that Iskanian and Sakkab erred in applying

FAA preemption doctrine.

Viking asserts, however, that Epic now justifies review. According to Viking, “all but one” of the past petitions presenting the issue predated Epic. Pet. 30. In

fact, a petition challenging Iskanian and Sakkab was

pending when Epic was decided, and the relevance of

Epic was discussed extensively in both the brief in opposition and the reply in that case. See Mandviwala,

No. 17-1357, Br. in Opp. 3, 6, 19, 21, 22, 24, 25, 26, 27;

Reply 1, 6, 9, 10, 12. This Court, however, did not

think its opinion in Epic justified even an order granting, vacating, and remanding for further consideration—the usual course when there is a “reasonable

probability” that an intervening decision of the Court

may call into question the outcome below. Greene v.

Fisher, 565 U.S. 34, 41 (2011). The following year, the

petitioner in Smigelski invoked Epic as justification

for either plenary review or a grant, vacatur, and remand. Again, and despite the absence of any self-evident “vehicle problems,” Pet. 30, this Court denied certiorari without requesting a response. 140 S. Ct. 223.

15

As those denials reflect, Viking’s contention that

the Court has not had sufficient opportunity to consider this issue since issuing the decision in Epic is

incorrect. And as the denials further reflect, Iskanian

does not conflict with Epic. Indeed, in Iskanian itself,

the California Supreme Court anticipated Epic’s holding and articulated its rationale: Iskanian rejected the

argument that the National Labor Relations Act “prohibits contracts that compel employees to waive their

right to participate in class proceedings to resolve

wage claims.” 327 P.3d at 138. Iskanian held that “a

rule against class waivers” was incompatible with the

FAA because it “interferes with fundamental attributes of arbitration and, for that reason, disfavors arbitration in practice,” and it further concluded that

the NLRA does not “overrid[e] the FAA’s mandate.”

Id. at 141, 142. That analysis exactly tracks this

Court’s reasoning in Epic. See 138 S. Ct. at 1621–26.

Moreover, Epic’s holding that collective proceedings that aggregate the separate claims of individuals

are incompatible with “arbitration’s fundamental attributes,” id. at 1622, says nothing about whether

state courts must enforce agreements that waive individuals’ rights to assert unitary claims on behalf of a

state in bilateral proceedings. The arbitration agreements at issue in Epic, like those in Concepcion before

it, prohibited class or collective proceedings. But they

did not bar an individual from asserting any claim

that she could otherwise assert in a bilateral proceeding. In contrast, the agreements that Iskanian holds

unenforceable do just that. Thus here, Viking’s agreement is unenforceable under Iskanian because its prohibition of “private attorney general” claims forecloses

16

any assertion of a PAGA claim, in any manner, in any

forum.1

Iskanian’s condemnation of such agreements does

not “attack[ ] (only) the individualized nature of … arbitration proceedings.” Epic, 138 S. Ct. at 1622. It attacks only the waiver of an individual’s entitlement to

pursue a particular claim and the concomitant waiver

of the State’s entitlement to pursue its claims through

an individual authorized to do so under state law. Epic

does not consider, let alone resolve, whether a statelaw rule precluding such waivers violates the FAA,

any more than do any of this Court’s prior holdings,

including Concepcion. Indeed, Viking points to nothing in Epic that adds materially to Viking’s underlying

argument that Iskanian conflicts with Concepcion. See

Pet. 16–20; see also Rivas v. Coverall N. Am., Inc., 842

F. Appx. 55, 56 (9th Cir. 2021). And that argument has

been at the heart of every one of the petitions challenging Iskanian that this Court has denied, starting

with Iskanian itself. See Iskanian, No. 14-241, Pet. i.

II. Iskanian is fully consistent with this Court’s

precedents.

Beyond Viking’s mistaken assertion that Epic is a

game-changing decision, its request for review rests

on its argument that Iskanian conflicts with this

Court’s FAA jurisprudence. Such arguments that

lower courts have misapplied settled precedents

“rarely” justify a grant of certiorari. S. Ct. R. 10. And

as this Court’s repeated rejection of petitions presenting the same arguments underscores, this case is not

––––––––––––––––––––––––

1 Viking observes that Ms. Moriana could have opted out of

the PAGA waiver, but Iskanian’s holding that a waiver of the

right to bring a PAGA action is unenforceable does not depend on

its voluntariness.

17

one of those rare instances. This Court’s FAA decisions have never held that an arbitration agreement

may be used as a vehicle to waive the right to assert a

claim, let alone a claim on behalf of a state that is not

a party to the agreement. Moreover, both Iskanian

and Sakkab carefully follow and apply this Court’s admonitions that state laws may not reflect hostility to

arbitration or impose procedures incompatible with

its fundamental attributes.

A. This Court’s FAA decisions do not

require enforcement of agreements that

bar assertion of statutory rights.

As the concurring Justices in Iskanian pointed out,

this Court has never held that the FAA requires enforcement of agreements waiving individuals’ rights to

assert particular claims. The FAA makes agreements

to arbitrate claims enforceable; it does not provide for

enforcement of agreements that claims cannot be pursued at all. See 9 U.S.C. § 2. Allowing defendants to

excuse themselves from liability for specific kinds of

claims or particular forms of relief is not the FAA’s objective.

This Court’s decisions enforcing arbitration agreements thus repeatedly emphasize that arbitration involves choice of forum, not waiver of claims: “By agreeing to arbitrate a statutory claim, a party does not

forgo the substantive rights afforded by the statute; it

only submits to their resolution in an arbitral, rather

than a judicial, forum.” Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628

(1985); accord Waffle House, 534 U.S. at 295, n.10;

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,

26 (1991); Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 481 (1989); Shearson/Am.

18

Express, Inc. v. McMahon, 482 U.S. 220, 229–30

(1987).

An agreement to arbitrate is thus not “a prospective waiver of the substantive right.” 14 Penn Plaza

LLC v. Pyett, 556 U.S. 247, 265 (2009). Indeed, this

Court has agreed that an arbitration clause containing “a prospective waiver of a party’s right to pursue

statutory remedies” would be “against public policy,”

Mitsubishi, 473 U.S. at 637, n.19—precisely Iskanian’s rationale.

In American Express, this Court held that a classaction ban in an arbitration agreement was enforceable despite its practical effect of making antitrust

claims too costly for the plaintiffs, 570 U.S. at 238–39,

but reiterated that the FAA does not require enforcement of arbitration agreements that expressly waive

statutory claims and remedies. The Court explained

that this principle “finds its origin in the desire to prevent ‘prospective waiver of a party’s right to pursue

statutory remedies.’ ” Id. at 236 (quoting Mitsubishi,

473 U.S. at 637 n.19). That principle, the Court added,

“would certainly cover a provision in an arbitration

agreement forbidding the assertion of certain statutory rights.” Id.

The principle that the FAA does not require enforcement of agreements forbidding assertion of

claims applies equally to state and federal claims. The

Court’s decisions, including American Express, have

repeatedly stated that arbitration clauses may not

waive claims, without suggesting that state-law

claims differ in this respect. Indeed, in Preston v. Ferrer, this Court held that an arbitration agreement was

19

enforceable in part because the signatory “relinquishe[d] no substantive rights … California law may

accord him.” 552 U.S. at 359.

The non-waiver principle applies to state-law

claims because the FAA makes agreements to arbitrate claims enforceable, 9 U.S.C. § 2, but does not authorize enforcement of agreements to waive claims regardless of their source. Thus, although federal law

may not affirmatively bar the enforcement of a waiver

of state-law claims in an arbitration clause, see Sakkab, 803 F.3d at 433 n.9, nothing in the FAA requires

enforcement of such a waiver.

B. This Court’s decisions do not require enforcement of agreements that strip

states of police power to authorize enforcement actions on their behalf.

Iskanian held—as a matter of state-law statutory

construction—that the State is the “real party in interest” in PAGA actions. 327 P.3d at 151. The lion’s

share of the recovery goes to the State, which is bound

by the outcome. An action for statutory penalties,

whether brought by state officers or a PAGA qui tam

plaintiff, is thus “a dispute between an employer and

the state,” acting “through its agents.” Id. Enforcing a

waiver of PAGA claims in an employment agreement

would effectively impose that waiver on a governmental body that is not party to the agreement, preventing

the State from asserting its claims through a representative authorized by law. It is perfectly coherent,

and consistent with the terms and purposes of the

FAA, to recognize that an employee must be permitted

to bring a PAGA representative claim in some forum

because the State is not bound to a waiver to which it

did not agree. See Iskanian, 327 P.3d at 155.

20

None of this Court’s decisions enforcing arbitration

agreements suggests that such an agreement can

waive the right to bring a claim on behalf of a state.

As Iskanian correctly stated, this Court’s “FAA jurisprudence—with one exception …—consists entirely of

disputes involving the parties’ own rights and obligations, not the rights of a public enforcement agency.”

327 P.3d at 150. The “one exception,” Waffle House,

“does not support [the] contention that the FAA

preempts a PAGA action.” Id. at 151. Quite the contrary.

In PAGA cases, as in Waffle House, “[n]o one asserts that the [State of California] is a party to the

contract,” or that it agreed to waive its claims, and “[i]t

goes without saying that a contract cannot bind a nonparty.” 534 U.S. at 294. As in Waffle House, allowing

an arbitration agreement to preclude recovery of penalties for the State would “turn[ ] what is effectively a

forum selection clause into a waiver of a nonparty’s

statutory remedies.” Id. at 295. “Nothing in Waffle

House suggests that the FAA preempts a rule prohibiting the waiver of this kind of qui tam action on behalf

of the state for such remedies.” Iskanian, 327 P.3d at

151.2

Holding that a federal statute aimed at enforcing

agreements to resolve private disputes preempts a

state’s ability to assert its claims against those who

––––––––––––––––––––––––

2 One of Viking’s amici points out that some lower courts have

held that qui tam plaintiffs under the federal False Claims Act

may be compelled to arbitrate claims even though the United

States is not a party to the arbitration agreement. See Wash. Legal Fdn. Br. 15. The amicus, however, cites no authority suggesting an arbitration agreement can waive the right to bring a False

Claims Act qui tam action.

21

violate its laws would violate fundamental preemption

principles. “[T]he historic police powers of the States”

are not preempted “unless that was the clear and

manifest purpose of Congress.” Iskanian, 327 P.3d at

152 (quoting Arizona v. United States, 567 U.S. 387,

400 (2012)). Enforcing wage-and-hour laws falls

squarely within those police powers, and the structure

of a state’s law enforcement authority is central to its

sovereignty. Id. (citing Metro. Life, 471 U.S. at 756;

Printz v. United States, 521 U.S. 898, 928 (1997)).

The FAA’s purpose is to render arbitration agreements in contracts affecting commerce enforceable as

between contracting parties. It embodies no manifest

purpose to interfere with “the state’s interest in penalizing and deterring employers who violate California’s

labor laws.” Iskanian, 327 P.3d at 152. The FAA does

not allow parties to contract out of liabilities for penalties imposed by state law, and thus a state’s choice

to grant citizens non-waivable claims to enforce those

liabilities does not conflict with FAA.

C. Iskanian and Sakkab do not reflect hostility to arbitration.

Iskanian does not place arbitration agreements on

an “unequal ‘footing’ ” with other contracts, AlliedBruce Terminix Cos. v. Dobson, 513 U.S. 265, 281

(1995), and does not “invalidate arbitration agreements under state laws applicable only to arbitration

provisions,” Doctor’s Assocs., Inc. v. Casarotto, 517

U.S. 681, 687 (1996); see also Perry v. Thomas, 482

U.S. 483, 492 n.9 (1987). As Sakkab recognizes, Iskanian provides even-handedly that an employment

agreement may not prospectively forbid employees to

bring PAGA actions, whether or not the prohibition is

22

in an arbitration clause. 803 F.3d at 432–33; see Iskanian, 327 P.3d at 133, 148–49.

That rule does not run afoul of this Court’s disapproval of rules “that apply only to arbitration or that

derive their meaning from the fact that an agreement

to arbitrate is at issue.” Epic, 138 S. Ct. at 1622 (citation omitted); accord Kindred Nursing Ctrs. Ltd.

P’ship v. Clark, 137 S. Ct. 1421, 1426 (2017); see also

DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 58 (2015).

Iskanian does not “target arbitration either by name

or by more subtle methods.” Epic, 138 S. Ct. at 1622.

Rather, it comports with the FAA’s “‘equal-treatment’

rule for arbitration contracts,” id., and falls well

within the principle that the FAA does not preempt

state laws concerning the “enforceability of contracts

generally.” Perry, 482 U.S. at 492 n.9.

Moreover, unlike in Kindred, where it was difficult

to imagine how the state rule at issue could apply to

anything but an arbitration agreement, it is not “utterly fanciful” to posit that, if PAGA waivers were permissible, they would appear outside of arbitration

clauses. 137 S. Ct. at 1427. It is not only likely, but

inevitable, that if employers were given the power to

opt out of PAGA liability through employment agreements, they would do so regardless of whether they

also wished to require arbitration of other claims.

Thus, Iskanian does not “rely on the uniqueness of an

agreement to arbitrate as [its] basis.” Id. at 1426 (citation omitted). Allowing employers to use arbitration

agreements to extract waivers of PAGA claims that

cannot be obtained through other employment agreements would uniquely favor arbitration agreements,

an outcome the FAA neither requires nor allows.

23

The Iskanian anti-waiver rule, moreover, does not

disfavor agreements based on whether they have “the

defining features of arbitration agreements.” Kindred,

137 S. Ct. at 1426. In particular, the rule does not “impermissibly disfavor[ ] arbitration” by targeting its bilateral nature and rendering a contract “unenforceable just because it requires bilateral arbitration.” Epic,

138 S. Ct. at 1623. As Iskanian explains, “[r]epresentative actions under the PAGA, unlike class action

suits for damages, do not displace the bilateral arbitration of private disputes between employers and employees over their respective rights and obligations toward each other.” 327 P.3d at 152. Arbitration as to

private rights proceeds wholly unaltered by Iskanian.

The employer must only leave open some forum in

which a PAGA qui tam plaintiff may pursue the

State’s claims for penalties. See id.

Moreover, if parties agreed to arbitrate PAGA representative claims for penalties on behalf of the State,

the proceedings would remain bilateral ones between

individual plaintiffs (acting as representatives of the

State) and defendants. See Arias, 209 P.2d at 929–34;

see also Sakkab, 803 F.3d at 435–39. Although the recovery sought in a PAGA action encompasses “penalties … measured by the number of Labor Code violations committed by the employer,” Sakkab, 803 F.3d

at 435, a PAGA action, whether in litigation or arbitration, remains a one-on-one proceeding between the

State, represented by the plaintiff, and the defendant.

Id. Thus, Iskanian is not premised on objection to bilateral proceedings as long as they allow full assertion

of PAGA claims. See Epic, 138 S. Ct. at 1623.

In short, Iskanian is not “tailor-made to arbitration

agreements,” Kindred, 137 S. Ct. at 1427, but to employment agreements waiving PAGA claims. Such

24

waivers are in no sense a “primary characteristic of an

arbitration agreement.” Id. Indeed, this Court has repeatedly warned against “confus[ing] an agreement to

arbitrate … statutory claims with a prospective

waiver of the statutory right.” Pyett, 556 U.S. at 265.

Prohibiting a prospective waiver of a statutory right

of action does not disfavor a primary characteristic of

arbitration or otherwise “interfere with one of arbitration’s fundamental attributes.” Epic, 138 S. Ct. at

1622.

D. Iskanian does not impose procedures incompatible with arbitration.

The Iskanian rule also does not effectively impose

procedures incompatible with arbitration, as did the

prohibitions of class-action waivers addressed in Concepcion and Epic. Sakkab thoroughly explained how

PAGA claims are consistent with arbitration’s fundamental attributes, and Viking’s disagreement with

that analysis provides no reason for granting review.

In Concepcion, this Court held that California’s

rule against consumer contracts banning class actions

“interfere[d] with fundamental attributes of arbitration and thus create[d] a scheme inconsistent with the

FAA,” 563 U.S. at 344, because it effectively “allow[ed]

any party to a consumer contract to demand” classwide arbitration. Id. at 346. The Court held that classwide arbitration conflicted with the FAA because it

fundamentally changed the nature of arbitration, requiring complex, formal procedures attributable to the

inclusion of absent class members. Id. at 346–51.

As explained above, however, PAGA cases are not

class actions, but bilateral proceedings. The due-process protections of class certification, notice, opt-out

rights, and other procedures that concerned the Court

25

in Concepcion, 563 U.S. at 348–50, are not features of

PAGA proceedings. See Sakkab, 803 F.3d at 435–36.

Thus, Iskanian’s anti-waiver rule does not conflict

with “Concepcion’s essential insight” that “courts may

not allow a contract defense to reshape traditional individualized arbitration by mandating classwide arbitration procedures without the parties’ consent.” Epic,

138 S. Ct. at 1623.

Viking argues that PAGA claims involve complexity because they require addressing violations affecting multiple employees and their “heightened stakes”

make them a “poor fit” for arbitration. Pet. 18. Viking’s argument reduces to the proposition that if a

state creates claims of liability that defendants find

inconvenient or otherwise undesirable to arbitrate,

the FAA entitles defendants to require prospective

plaintiffs to waive those claims altogether. As Sakkab

pointed out, however, Concepcion does not suggest

that the FAA’s purposes require transforming it into

a vehicle for preempting state-law rights of action that

involve large liabilities, are legally or factually complex, or may otherwise be unappealing for defendants

to arbitrate. And no decision of this Court, or any state

supreme court or federal court of appeals, has so held.

This Court’s decisions prohibit states from mandating

procedures incompatible with arbitration, see Epic,

138 S. Ct. at 1622–23, not from creating claims that

parties may not want to arbitrate, see Sakkab, 803

F.3d at 437–39.

Indeed, many arbitrable claims require consideration of evidence concerning the defendant’s conduct toward third parties and involve high stakes. An antitrust claim, for example, typically requires evidence of

the anticompetitive effect of the defendant’s conduct

and any procompetitive justifications for it—matters

26

extending far beyond the parties’ individual circumstances. And the stakes of a treble damages antitrust

action may be very high. No one could suggest, however, that arbitration of an antitrust claim “is not arbitration as envisioned by the FAA.” Concepcion, 563

U.S. at 351. In American Express, for example, this

Court held that the FAA requires enforcement of

agreements to arbitrate antitrust claims despite the

cost of developing market-wide evidence. 570 U.S. at

238–39. This Court has likewise held that many potentially high-stakes claims requiring consideration of

evidence beyond the individual parties are arbitrable.

See, e.g., Mitsubishi, 473 U.S. at 637 (antitrust);

McMahon, 482 U.S. at 229–33 (Securities Exchange

Act claims); id. at 238–42 (civil RICO claims); Pyett,

556 U.S. at 258 (employment discrimination claims);

Gilmer, 500 U.S. at 33–35 (federal civil rights claims).

The FAA would not permit, let alone require, enforcement of an arbitration provision that purported to

waive altogether a party’s right to bring such statutory claims in any forum. See Mitsubishi, 473 U.S. at

637 n.19.

III. This case does not present the question

whether Iskanian forecloses arbitration of

PAGA claims.

In addition to its faulty argument that Iskanian is

incompatible with fundamental attributes of arbitration, Viking argues that Iskanian “is displaced by the

FAA” because it “prohibits outright the arbitration of

a particular type of claim.” Pet. 22 (quoting Concepcion, 564 U.S. at 341). Viking’s invocation of this

Court’s holdings that “a categorical rule prohibiting

arbitration of a particular type of claim … is contrary

to the … FAA,” Pet. 23 (quoting Marmet, 565 U.S. at

27

532–33), is misplaced for two reasons. First, Iskanian

did not announce a categorical prohibition on arbitration of PAGA claims. Second, this case does not turn

on whether a state could prohibit arbitration of PAGA

claims because the arbitration agreement at issue did

not provide for arbitration of PAGA claims. Instead, it

excluded assertion of representative or private attorney general claims in arbitration proceedings—and in

any other forum.

Iskanian’s holding was clear: An agreement must

leave open “some forum” for the assertion of a PAGA

claim on behalf of the State by an aggrieved individual

employee. See 327 P.3d at 155; see also id. at 159

(Chin, J., concurring). Iskanian did not foreclose the

possibility that an employee could agree to arbitrate

rather than waive a PAGA representative claim. The

California Supreme Court did not resolve that question because the agreement before it, which waived

the right to bring all representative claims, gave the

court “no basis to assume that the parties would prefer

to resolve a representative PAGA claim through arbitration.” Id. at 155. Even so, the court did not foreclose

the possibility that, on remand, the PAGA claims

might be arbitrated. See id.

For these reasons, Iskanian “does not prohibit the

arbitration of any type of claim.” Sakkab, 803 F.3d at

434. Rather, it “expresses no preference” between litigation and arbitration of PAGA claims and “provides

only that representative PAGA claims may not be

waived outright.” Id.

The California Supreme Court’s subsequent restatements of Iskanian’s holding are to the same effect. As the court recently put it: “Iskanian established

28

an important principle: employers cannot compel employees to waive their right to enforce the state’s interests when PAGA has empowered employees to do

so.” ZB, 448 P.3d at 252. The California Supreme

Court has never held that Iskanian is a non-arbitrability rule.

Viking argues otherwise based on one sentence in

Iskanian, which states that “a PAGA claim lies outside the FAA’s coverage.” 327 P.3d at 151. That statement was part of the Court’s explanation of its reasons

for concluding that an agreement, including an arbitration agreement, cannot waive the State’s right to

assert its claims for penalties through a PAGA plaintiff. Read in context, it is best understood as meaning

that an agreement waiving PAGA claims is outside the

FAA’s coverage because, as the court went on to elaborate, the FAA’s goal of enforcing private agreements

to arbitrate does not extend to enforcing outright

waivers of PAGA claims, which “curtail the ability of

states to supplement their enforcement capability by

authorizing willing employees to seek civil penalties.”

Id. at 152.

Even on Viking’s reading, moreover, the statement

is no more than dicta concerning an issue not before

the court: whether an agreement to arbitrate PAGA

claims would be enforceable. Viking wrongly contends

that Iskanian implicitly decided that PAGA claims are

not arbitrable because it did not order arbitration of

the PAGA claims on remand but did require individual arbitration of the non-PAGA damages claims the

plaintiff had asserted on behalf of a class. But, as Iskanian explained, the reason the court did not order

arbitration of the PAGA claims was that the arbitration agreement barred arbitration of any representa-

29

tive claims, and PAGA claims are inherently representative because they assert the State’s claim for

penalties. See id. at 151. By contrast, the agreement

did call for arbitration of the individual damages

claims that the plaintiff sought to litigate in a class

action. Thus, the court’s holding that the class-action

waiver was enforceable necessarily required individual arbitration of the damages claims. See id. at 155.

But the holding that the PAGA waiver was unenforceable to the extent that it did not allow any forum for

PAGA claims, id. at 133; see also id. at 157 (Chin, J.,

concurring), did not have that consequence because

fundamental FAA principles prohibit requiring parties to arbitrate claims they have agreed not to arbitrate. See Granite Rock Co. v. Int’l B’hood of Teamsters, 561 U.S. 287, 302 (2010); see also Rivas, 842 F.

Appx. at 58 (Bumatay, J., concurring); McGill v. Citibank, N.A., 393 P.3d 84, 97 (2017).

Some lower California courts have subsequently

stated that agreements to arbitrate PAGA claims are

unenforceable, absent consent by the State, in light of

Iskanian’s reasoning. Those statements are themselves dicta to the extent that they were issued in

cases concerning agreements that barred arbitration

of PAGA representative claims rather than requiring

arbitration of such claims. See, e.g., Correia v. NB

Baker Elec., Inc., 244 Cal. Rptr. 3d 177 (Cal. Ct. App.

2019); Tanguilig v. Bloomingdale’s, Inc., 210 Cal.

Rptr. 3d 352, 359–60 (Cal. Ct. App. 2016), cert. denied,

138 S. Ct. 356 (2017). Moreover, given Iskanian’s clear

statement of its holding, and the repetition of that

holding in ZB, the conclusion that PAGA claims are

nonarbitrable cannot be attributed to the California

Supreme Court. Until that court so holds, any asser-

30

tion that California law bars enforcement of an agreement to arbitrate PAGA claims, and that such a bar

violates the FAA, is premature.

In any event, this case would not present that issue

because it does not involve an agreement to arbitrate

PAGA claims. The arbitration agreement explicitly

prohibits arbitration of any “private attorney general”

claims, Pet. App. 14, a prohibition that necessarily encompasses all PAGA claims. The agreement’s bar on

arbitration of “representative” actions, id., likewise

forecloses arbitration of any PAGA claim, because

“[alll PAGA claims are ‘representative’ actions in the

sense that they are brought on the state’s behalf” and

assert its claims for penalties for Labor Code violations. ZB, 448 P.3d at 243. This case, like Iskanian itself, presents only the question whether an agreement

to waive PAGA claims is enforceable, not whether an

agreement to arbitrate them must be enforced. And

this Court’s statements that the FAA preempts a state

law “prohibit[ing] outright the arbitration of a particular type of claim,” Kindred, 137 S. Ct. at 1427, say

nothing at all about laws prohibiting outright the

waiver of a particular type of claim.

Indeed, the FAA allows courts to “order arbitration

of a particular dispute only where the court is satisfied

that the parties agreed to arbitrate that dispute.”

Granite Rock, 561 U.S. at 297. Thus here, it is the parties’ agreement and the FAA, not Iskanian, that preclude arbitration of Ms. Moriana’s PAGA claim. Under

the agreement, the lower courts could not order arbitration of that claim, and the only available remedy

for the invalid PAGA waiver was to allow it to proceed

in court. Whether California law permits arbitration

of a PAGA claim, and, if not, whether the FAA nonetheless requires such arbitration, are issues that could

31

arise only under a completely different arbitration

agreement: one that provided for rather than precluded arbitration of PAGA claims.

IV. Viking’s objections to PAGA provide no basis for review.

Viking’s criticisms of PAGA echo those advanced in

every previous petition for certiorari challenging Iskanian and provide no basis for review by this Court.

Viking points to differences between PAGA and other

qui tam statutes that give the State less control over

a PAGA claim brought by an individual than the federal government has over a False Claims Act case.

Those differences, however, cannot obscure the central reason that the State is the real party in interest

in a PAGA action: An action in which the State is entitled to 75 percent of the recovery is the State’s in a

very real sense, regardless of the extent to which the

State has chosen to exercise control over its prosecution. The State’s dominant interest “reflects a PAGA

litigant’s substantive role in enforcing our labor laws

on behalf of state law enforcement agencies.” Iskanian, 327 P.3d at 152.3 The design of the statute is

a matter of policy choice concerning how the State

wants its claims pursued, and disagreement with the

wisdom of that choice has no bearing on whether the

FAA issues this case presents merit review.

––––––––––––––––––––––––

3 In Magadia v. Wal-Mart Associates, Inc., 999 F.3d 668 (9th

Cir. 2021), a Ninth Circuit panel held that differences between

PAGA and conventional qui tam statutes were sufficient to take

PAGA claims outside the narrow Article III exception allowing

uninjured persons to bring qui tam actions. But the panel

acknowledged that PAGA plaintiffs represent the State’s interests pursuant to an assignment of its claim. See id. at 675.

32

Viking’s claim that Iskanian allows plaintiffs to

“just replace the words ‘class action’ in their pleadings

with ‘PAGA representative action’ and then proceed to

litigate in court as if Concepcion and Epic never happened,” Pet. 26, is also fundamentally wrong. In a

PAGA claim, a plaintiff is limited to seeking penalties

on behalf of the State, a small percentage of which are

distributed to employees affected by a violation. A

class action that would aggregate individuals’ own

claims for monetary relief for Labor Code violations,

such as back wages or damages, seeks compensatory

remedies that are unavailable under PAGA. See ZB,

448 P.3d at 241. Thus, Iskanian does not provide an

end run around Concepcion and Epic. Its anti-waiver

rule only applies when a plaintiff moves to a different

playing field and seeks penalties on behalf of the State

rather than compensatory relief for herself and similarly situated employees.

That many employees may make that choice—in

part because individual arbitration does not provide

an opportunity for a recovery sufficient to make pursuing compensatory claims cost-effective—does not

suggest that the FAA should be extended to require

enforcement of PAGA waivers. The objective of the

FAA is not to shield defendants from liabilities to

states for violations of valid laws. Nonetheless, the

statistics cited by Viking concerning the number of

PAGA notices make clear that Viking’s objective is to

suppress PAGA claims and shield employers from liabilities it considers excessive. California, however, has

made the judgment that widespread Labor Code violations require enforcement mechanisms that exceed

the State’s own capacity to initiate actions. This Court

has no basis for second-guessing that judgment or for

33

using the FAA as a tool to limit assertion of the State’s

claims.

Viking’s contention that allowing such claims to

proceed upsets employers’ expectations, Pet. 20, is

groundless. The FAA never created any legitimate expectation that employers could evade the State’s penalty claims through arbitration agreements with employees, and California employers have been on notice

for over seven years since Iskanian that they cannot

expect enforcement of PAGA waivers. In this case, Viking cannot possibly have relied on enforcement of a

PAGA waiver executed two years after Iskanian and

a year after Sakkab.

The possibility that other states may adopt similar

measures likewise provides no reason for review. If

such laws are ultimately adopted, and if states then

develop anti-waiver doctrines similar to Iskanian,

their conformity with the FAA will inevitably be

tested in court. If such litigation results in decisional

conflict over the Iskanian rule, review by this Court

may become necessary. No such conflict now exists.

Finally, even if Viking’s policy objections to PAGA

and Iskanian had any arguable merit, this case would

be a particularly poor vehicle for addressing Viking’s

FAA preemption arguments because it arises from a

state court. Justices of this Court continue to disagree

over whether the FAA applies in state courts. See Kindred, 137 S. Ct. at 1429 (Thomas, J., dissenting). If

this Court were to review this case on the merits, the

vote of at least one Justice would be to affirm on the

ground that the FAA does not apply to state courts,

and there would be a significant likelihood that no

34

holding on the scope of FAA preemption would command a majority. Review would threaten to waste the

time and efforts of the Court.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

KEVIN T. BARNES

Counsel of Record

GREGG LANDER

LAW OFFICES OF

KEVIN T. BARNES

1635 Pontius Avenue

Second Floor

Los Angeles, CA 90025

(323) 302-9675

barnes@kbarnes.com

SCOTT L. NELSON

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

Attorneys for Respondent

September 2021