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

No. 20-1573

IN THE

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_______________

VIKING RIVER CRUISES, INC.,

v.

Petitioner,

ANGIE MORIANA,

Respondent.

_______________

On Writ Of Certiorari

To The California Court of Appeal

Second Appellate District

_______________

BRIEF OF UBER TECHNOLOGIES, INC.

AND POSTMATES, LLC

AS AMICI CURIAE IN SUPPORT OF

PETITIONER VIKING RIVER CRUISES, INC.

_______________

THEANE EVANGELIS

Counsel of Record

BLAINE H. EVANSON

BRADLEY J. HAMBURGER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

(213) 229-7804

tevangelis@gibsondunn.com

Counsel for Amici Curiae

Uber Technologies, Inc. and

Postmates, LLC

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ................................ 1

INTRODUCTION AND SUMMARY OF

ARGUMENT ............................................................... 2

ARGUMENT ............................................................... 4

I.

II.

PAGA ACTIONS ARE FUNDAMENTALLY

DIFFERENT FROM QUI TAM ACTIONS

AND ARE SUBJECT TO THE FAA. .................. 4

A.

QUI TAM ACTIONS REMEDY

PUBLIC HARMS SUFFERED BY

THE GOVERNMENT, WHEREAS

PAGA COMPENSATES FOR

PRIVATE HARMS OF AGGRIEVED

EMPLOYEES. ......................................... 5

B.

THE GOVERNMENT RETAINS

GREATER CONTROL IN QUI TAM

SUITS THAN IN PAGA ACTIONS. ........... 8

REPRESENTATIVE PAGA ACTIONS ARE

AKIN TO TRADITIONAL CLASS

ACTIONS...................................................... 11

CONCLUSION .......................................................... 16

ii

TABLE OF AUTHORITIES

Page(s)

Cases

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) .......................................... 4, 13

Brown v. Ralphs Grocery Co.,

28 Cal. App. 5th 824 (2018) ................................. 14

Clyburn v. Postmates, LLC,

No. 21CV002052 (Alameda Super.

Ct. Nov. 5, 2021)..................................................... 2

Correia v. NB Baker Elec., Inc.,

32 Cal. App. 5th 602 (2019) ................................... 3

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) ............................................ 2

Fed. Land Bank of New Orleans v.

Crosland,

261 U.S. 374 (1923) ................................................ 4

Huff v. Securitas Sec. Servs. USA, Inc.,

23 Cal. App. 5th 745 (2018) ................................... 7

Iskanian v. CLS Transportation Los

Angeles, LLC,

59 Cal. 4th 348 (2014) ............................ 1, 3, 4, 7, 8

United States ex rel. Killingsworth v.

Northrop Corp.,

25 F.3d 715 (9th Cir. 1994) .................................. 10

iii

TABLES OF AUTHORITIES

Page(s)

Kim v. Reins Int’l Cal., Inc.,

9 Cal. 5th 73 (2020) .......................................... 7, 14

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

999 F.3d 668 (9th Cir. 2021) .................... 5, 8, 9, 11

Marvin v. Trout,

199 U.S. 212 (1905) ................................................ 6

United States ex rel. Michaels v. Agape

Senior Cmty., Inc.,

848 F.3d 330 (4th Cir. 2017) ................................ 10

Mohamed v. Uber Techs., Inc.,

848 F.3d 1201 (9th Cir. 2016) .............................. 13

O’Connor v. Uber Techs., Inc.,

904 F.3d 1087 (9th Cir. 2018) .............................. 14

Oman v. Delta Air Lines, Inc.,

9 Cal. 5th 762 (2020) ............................................ 15

Postmates, LLC v. Santana,

No. 21-420 (Sept. 13, 2021) .................................... 2

Riley v. St. Luke’s Episcopal Hosp.,

252 F.3d 749 (5th Cir. 2001) ................................ 10

Rimler v. Postmates Inc.,

No. CGC-18-567868 (S.F. Super. Ct.

July 5, 2018) ........................................................... 2

iv

TABLES OF AUTHORITIES

Page(s)

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

803 F.3d 425 (9th Cir. 2015) ............................ 5, 12

Santana v. Postmates Inc.,

No. BC720151 (L.A. Super. Ct.

Sept. 5, 2018) .......................................................... 2

Searcy v. Philips Elecs. N. Am. Corp.,

117 F.3d 154 (5th Cir. 1997) ................................ 10

United States ex rel. Sequoia Orange Co.

v. Baird-Neece Packing Corp.,

151 F.3d 1139 (9th Cir. 1998) ................................ 9

Spokeo, Inc. v. Robins,

136 S. Ct. 1540 (2016) ............................................ 5

Swift v. United States,

318 F.3d 250 (D.C. Cir. 2003) ................................ 9

United States ex rel. Taxpayers Against

Fraud v. Gen. Elec. Co.,

41 F.3d 1032 (6th Cir. 1994) .................................. 8

Uber Techs., Inc. v. Gregg,

No. 21-453 (Sept. 21, 2021) .................................... 2

Uber Techs., Inc. v. Rosales,

No. 21-526 (Oct. 6, 2021) ....................................... 2

v

TABLES OF AUTHORITIES

Page(s)

United States v. Health Possibilities,

P.S.C.,

207 F.3d 335 (6th Cir. 2000) ................................ 10

Vt. Agency of Nat. Res. v. United States

ex rel. Stevens,

529 U.S. 765 (2000) ........................................ 5, 7, 8

Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) .............................................. 12

Ward v. United Airlines, Inc.,

9 Cal. 5th 732 (2020) ............................................ 15

Williams v. Superior Court,

3 Cal. 5th 531 (2017) ........................................ 7, 12

Wisconsin v. Mitchell,

508 U.S. 476 (1993) ................................................ 4

Statutes

31 U.S.C. § 3729 ...................................................... 6, 7

31 U.S.C. § 3730(b) ...................................................... 7

31 U.S.C. § 3730(b)(1) ................................................. 7

31 U.S.C. § 3730(b)(2) ................................................. 8

31 U.S.C. § 3730(c)(2)(A) ............................................. 9

31 U.S.C. § 3730(c)(2)(B) ........................................... 10

vi

TABLES OF AUTHORITIES

Page(s)

31 U.S.C. § 3730(d)(1)–(2) ......................................... 11

Act. of Feb. 20, 1792, ch. 7, § 25, 1 Stat.

232 .......................................................................... 6

Act of July 20, 1790, ch. 29, § 4, 1 Stat.

131 .......................................................................... 6

Act of Mar. 1, 1790, ch. 2, § 3, 1 Stat.

101 .................................................................... 6, 11

Act of Mar. 3, 1791, ch. 15, § 44, 1 Stat.

199 .......................................................................... 6

Act of Mar. 22, 1794, ch. 11, § 2, 1 Stat.

347 .......................................................................... 6

Act of May 19, 1796, ch. 30, § 18, 1 Stat.

469 .......................................................................... 6

Cal. Code Civ. Proc. § 387 ......................................... 10

Cal. Gov’t Code § 12652(f)(2)(A).................................. 9

Cal. Lab. Code § 2699 .................................................. 9

Cal. Lab. Code § 2699(i) ............................................ 11

Cal. Lab. Code § 2699(a) ....................................... 7, 12

Cal. Lab. Code § 2699(f)(2) ........................................ 13

Cal. Lab. Code § 2699(l)(1)–(2) ................................. 11

vii

TABLES OF AUTHORITIES

Page(s)

Other Authorities

Aaron Blumenthal, Circumventing

Concepcion: Conceptualizing

Innovative Strategies to Ensure the

Enforcement of Consumer Protection

Laws in the Age of the Inviolable

Class Action Waiver,

103 Cal. L. Rev. 699 (2015) .................................... 9

Anthony J. Oncidi & Cole D. Lewis,

California Class Actions and PAGA

(“Probably All is Going to the

Attorneys”) Claims Continue to

Overwhelm the State, The National

Law Review (Feb. 4, 2019),

https://bit.ly/3senqoo; ........................................... 15

Ashley Hoffman, Private Attorneys

General Act: Reform Needed to Stop

Abuse Forcing Employers into Costly

Settlements, Cal Chamber

(Jan. 2021), https://bit.ly/2XJCwVQ ................... 15

Christopher C. Frieden, Protecting the

Government’s Interests: Qui Tam

Actions Under the False Claims Act

and the Government’s Right to Veto

Settlements of Those Actions,

47 Emory L.J. 1041 (1998) ................................... 10

viii

TABLES OF AUTHORITIES

Page(s)

Congressional Research Service, Qui

Tam: The False Claims Act and

Related Federal Statutes

(Apr. 26, 2021),

https://bit.ly/3uayVzS ............................................ 7

Emily Green, State Law May Serve as

Substitute for Employee Class

Actions, Daily Journal

(Apr. 17, 2014),

https://bit.ly/3AVQ5lY ......................................... 14

Evan Caminker, The Constitutionality

of Qui Tam Actions, 99 Yale L.J. 341

(1989) ...................................................................... 6

Matthew J. Goodman, The Private

Attorney General Act: How to

Manage the Unmanageable,

56 Santa Clara L. Rev. 413 (2016) ................ 13, 15

Robert W. Fischer, Jr., Qui Tam

Actions: The Role of the Private

Citizen in Law Enforcement

20 UCLA L. Rev. 778 (1973) .................................. 6

Zachary D. Clopton, Procedural

Retrenchment and the States,

106 Cal. L. Rev. 411 (2018) .................................. 13

1

INTEREST OF AMICI CURIAE1

Uber Technologies, Inc. is a technology platform

that operates several marketplaces that connect service providers with customers. Most relevant to this

litigation, Uber operates a rideshare platform that

serves as a digital marketplace connecting passengers

in need of transportation with drivers providing

transportation services. Postmates, LLC is a wholly

owned subsidiary of Uber that operates a platform

connecting consumers with local merchants such as

restaurants and grocery stores and, if requested by a

consumer, local independent contractors (“couriers”)

who deliver food and other items from those merchants. Drivers and couriers who use Uber’s platform

do so pursuant to a contract that includes an arbitration provision, from which they may opt out. The arbitration provision commits both contracting parties

to resolve all disputes between them in individual arbitration.

Uber and Postmates have an interest in the outcome in Viking River Cruises, Inc. v. Moriana because,

in the wake of Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), numerous plaintiffs

have sought to skirt the terms of their contracts—requiring them to resolve disputes in individual arbitration—by filing actions in court under the California

Labor Code Private Attorneys General Act (“PAGA”)

1 Pursuant to Rule 37.6, counsel for amici curiae states that no

counsel for a party authored this brief in whole or in part and no

one other than the amici and its counsel made a monetary contribution to fund the preparation or submission of this brief. All

parties to this case have filed blanket consents with the Court to

allow submission of amicus briefs.

2

against Uber and Postmates. See, e.g., Clyburn v. Postmates, LLC, No. 21CV002052 (Alameda Super. Ct.

Nov. 5, 2021); Rimler v. Postmates Inc., No. CGC-18567868 (S.F. Super. Ct. July 5, 2018); Santana v. Postmates Inc., No. BC720151 (L.A. Super. Ct. Sept. 5,

2018). Uber and Postmates have therefore filed multiple petitions for a writ of certiorari that pose the

same question presented in this case: whether agreements calling for individual arbitration are enforceable under the Federal Arbitration Act (“FAA”) with respect to claims asserted under PAGA. Pet. for a Writ

of Cert., Uber Techs., Inc. v. Rosales, No. 21-526 (Oct.

6, 2021), response requested, Nov. 10, 2021; Pet. for a

Writ of Cert., Uber Techs., Inc. v. Gregg, No. 21-453

(Sept. 21, 2021), response requested, Nov. 10, 2021;

Pet. for a Writ of Cert., Postmates, LLC v. Santana, No.

21-420 (Sept. 13, 2021), response requested, Dec. 13,

2021; Pet. for a Writ of Cert., Postmates, LLC v. Rimler,

No. 21-420 (July 26, 2021), response requested, Sept.

20, 2021. These petitions are currently pending before

the Court.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The FAA requires courts to “enforce arbitration

agreements according to their terms—including terms

providing for individualized proceedings.” Epic Sys.

Corp. v. Lewis, 138 S. Ct. 1612, 1619 (2018). In Epic,

this Court held that the FAA “protect[s]” individual

arbitration agreements “pretty absolutely,” and requires courts “to enforce, not override, the terms of

[an] arbitration agreement[]” “providing for individualized proceedings.” Id. at 1619, 1621, 1623.

Despite this Court’s and the FAA’s “emphatic directions” (Epic, 138 S. Ct. at 1621), California courts

3

have created a de facto exception to the FAA that allows employees in California to avoid arbitration by

asserting their California Labor Code claims under

PAGA. Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th

348, 360 (2014). According to those courts, a PAGA

claim is a “kind of qui tam action” that falls outside

the scope of the FAA’s coverage, and thus cannot be

compelled to individual arbitration. Id. at 386; see

also, e.g., Correia v. NB Baker Elec., Inc., 32 Cal. App.

5th 602, 620 (2019).

But PAGA actions are not qui tam actions—they

are private actions—and so the reasoning used by California courts fails on its own terms. In a qui tam action, the government seeks to remedy a public harm,

with a small bounty provided as an incentive to private plaintiffs who bring actions on behalf of the government. By contrast, named plaintiffs in a PAGA action assert their own harm from purported violations

of the California Labor Code. PAGA plaintiffs are permitted to seek significant monetary relief for themselves and all other similarly “aggrieved employees,”

with a portion of the recovered penalties reverting to

the state. Moreover, while the government may intervene in and dismiss or settle a qui tam litigation at

any time, a PAGA plaintiff has complete control over

the litigation, and the decision to settle and at what

amount (subject only to court approval).

PAGA actions are functionally the same as traditional class actions, and thus agreements not to pursue class actions and PAGA actions are both subject

to the FAA’s rule requiring enforcement of arbitration

agreements that require individualized proceedings

and prohibit representative ones. Plaintiffs in Califor-

4

nia are plainly circumventing this binding, well-established rule by filing class claims as PAGA actions. And

in refusing to grant defendants’ motions to compel arbitration, California courts are denying defendants

their contractual right, guaranteed by the FAA, to all

the benefits of individualized arbitration. See AT&T

Mobility LLC v. Concepcion, 563 U.S. 333, 348 (2011).

The Court should reverse California’s latest attempt

to undermine the FAA’s strong policy in favor of individual arbitration.

ARGUMENT

I.

PAGA ACTIONS ARE FUNDAMENTALLY DIFFERENT FROM QUI TAM ACTIONS AND ARE SUBJECT

TO THE FAA.

In Iskanian, the California Supreme Court held

that “a PAGA claim lies outside the FAA’s coverage because it is not a dispute between an employer and an

employee arising out of their contractual relationship,” but rather a “dispute between an employer and

the state.” 59 Cal. 4th at 386–87 (emphasis in original). The court did not rest its conclusion on its interpretation or construction of the PAGA statute. Instead, the court stated that PAGA is a “kind of qui tam

action” because an aggrieved employee sues as “the

proxy or agent” of the state’s labor law enforcement

agencies to recover “civil penalties paid largely into

the state treasury.” Id. at 386–88.

The California Supreme Court’s characterization

of PAGA as a qui tam statute was wrong, and this

Court is not bound by that determination. See Wisconsin v. Mitchell, 508 U.S. 476, 484 (1993) (explaining

that the Court is not bound by a state court’s characterization of the effect of a state law); Fed. Land Bank

of New Orleans v. Crosland, 261 U.S. 374, 378 (1923)

5

(“The characterization of the act by the [state] Supreme Court as distinguished from the interpretation

of it does not bind this Court.”). Indeed, even the

Ninth Circuit in Sakkab v. Luxottica Retail North

America, Inc., 803 F.3d 425 (9th Cir. 2015), although

erroneously refusing to enforce an individual arbitration agreement as to PAGA claims, correctly declined

to adopt Iskanian’s reasoning that PAGA claims fall

outside the scope of the FAA’s coverage. Id. at 432–40;

see also Magadia v. Wal-Mart Assocs., Inc., 999 F.3d

668, 676 (9th Cir. 2021) (“PAGA differs in significant

respects from traditional qui tam statutes.”).

A. QUI TAM ACTIONS REMEDY PUBLIC HARMS

SUFFERED BY THE GOVERNMENT, WHEREAS

PAGA COMPENSATES FOR PRIVATE HARMS

OF AGGRIEVED EMPLOYEES.

In a qui tam suit, the government suffers a “violation of a legally protected right” and assigns its right

to seek relief for that injury to the relator who “suffered no such invasion.” Vt. Agency of Nat. Res. v.

United States ex rel. Stevens, 529 U.S. 765, 772 (2000);

see also Magadia, 999 F.3d at 674 (explaining that “[a]

qui tam statute permits private plaintiffs, known as

relators, ‘to sue in the government’s name for the violation of a public right’”) (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1551 n.* (2016) (Thomas, J., concurring)).

Qui tam provisions were adopted by the American

Colonies primarily as informer statutes, which deputized private citizens to sue for various violations of

the law and receive a share of the fine the violators

owed to the government. See Vt. Agency, 529 U.S. at

776. Within its first decade, Congress included qui

tam provisions giving informers the right to bring suit

under statutes penalizing everything from illegal

6

trade with Indian tribes (see Act of May 19, 1796,

ch. 30, § 18, 1 Stat. 469, 474), to misfeasance in census

taking (see Act of Mar. 1, 1790, ch. 2, § 3, 1 Stat. 101,

102; see also Act of Mar. 22, 1794, ch. 11, § 2, 1 Stat.

347, 349 (allowing informers to sue for, and receive

share of, penalty in illegal slave trade with foreign nations); Act of Mar. 3, 1791, ch. 15, § 44, 1 Stat. 199, 209

(allowing informers to sue for, and receive share of,

penalty for importing liquor without paying duties);

Act of July 20, 1790, ch. 29, § 4, 1 Stat. 131, 133 (allowing informers to sue for, and receive share of, penalty

for harboring runaway mariners); Act. of Feb. 20,

1792, ch. 7, § 25, 1 Stat. 232, 239 (allowing informers

to sue for, and receive share of, penalty for failing to

comply with certain postal requirements)).

These and other qui tam statutes encouraged informers to come forward with information regarding

crimes that did not involve an injured witness “who

would otherwise bring information to the attention of

ordinary law enforcement.” Robert W. Fischer, Jr., Qui

Tam Actions: The Role of the Private Citizen in Law

Enforcement 20 UCLA L. Rev. 778, 795 (1973). Thus,

the paradigmatic qui tam plaintiff “has no interest in

the matter … except as such informer.” Marvin v.

Trout, 199 U.S. 212, 225 (1905); see also Evan

Caminker, The Constitutionality of Qui Tam Actions,

99 Yale L.J. 341, 345 (1989) (“The qui tam litigant is

not personally injured by the defendant’s challenged

conduct; her interest in the litigation arises rather

from the statutory bounty offered for successful prosecution.”).

In line with this tradition, the federal False

Claims Act (“FCA”) (see 31 U.S.C. § 3729 et seq.) originated during the Civil War to “hold out to a confederate a strong temptation to betray his coconspirator.”

7

Congressional Research Service, Qui Tam: The False

Claims Act and Related Federal Statutes, at 6 (Apr. 26,

2021), https://bit.ly/3uayVzS (citation omitted). It prohibits various frauds against the government, including making false claims. See 31 U.S.C. § 3729. And

the FCA entitles any private person to bring suit in

the name of the federal government for injuries suffered by the government. See id. § 3730(b); see also Vt.

Agency, 529 U.S. at 791 (discussing statute).

A PAGA action is an inherently different claim because it “arises, first and fundamentally, out of ” the

“contractual relationship between the … employee

and the employer” (Iskanian, 59 Cal. 4th at 395 (Chin,

J., concurring)), and may be brought only by an employee “affected by at least one of the violations alleged in the complaint” (Huff v. Securitas Sec. Servs.

USA, Inc., 23 Cal. App. 5th 745, 754 (2018)). PAGA is

“meant to protect employees,” and thus “[o]nly an aggrieved employee has PAGA standing.” Kim v. Reins

Int’l Cal., Inc., 9 Cal. 5th 73, 81, 83 (2020) (first emphasis added); see also Williams v. Superior Court, 3

Cal. 5th 531, 546, 548 (2017) (explaining that PAGA

was adopted “for the benefit of the state’s workforce”

and to “afford[] employees workplaces free of Labor

Code violations”).

Unlike qui tam plaintiffs, PAGA plaintiffs can

pursue penalties for themselves and also “recover penalties for Labor Code violations suffered by other employees”—even for unrelated California Labor Code

violations. Huff, 23 Cal. App. 5th at 753–54; compare

Cal. Lab. Code § 2699(a) (authorizing an “aggrieved

employee” to bring a civil action “on behalf of himself

or herself and other current or former employees”),

with 31 U.S.C. § 3730(b)(1) (authorizing a private person to bring a civil action “for the person and for the

8

United States Government … in the name of the Government”).

In other words, PAGA does not authorize a private

person to recover for an injury suffered by the state of

California; instead, it entitles “aggrieved employees”

to seek significant monetary relief for their own injuries, and for those of other absent employees, arising

out of their contractual relationship with their employers. See Iskanian, 59 Cal. 4th at 395 (Chin, J., concurring); see also Magadia, 999 F.3d at 677 (“a PAGA

suit … implicates the interests of other third parties”).

B. THE GOVERNMENT RETAINS GREATER CONTROL IN QUI TAM SUITS THAN IN PAGA ACTIONS.

Another fundamental difference between a PAGA

action and a qui tam suit in that the government retains far greater control over qui tam litigation than

PAGA litigation.

A qui tam action involves only a “partial assignment” by the government to a private person of the

right to pursue relief for an injury suffered by the government. Vt. Agency, 529 U.S. at 773. As a result,

“[t]he government remains the real party in interest

throughout the litigation and ‘may take complete control of the case if it wishes.’” Magadia, 999 F.3d at 677

(quoting United States ex rel. Taxpayers Against

Fraud v. Gen. Elec. Co., 41 F.3d 1032, 1041 (6th Cir.

1994)).

Under the FCA, for example, even after the government declines to pursue a claim, it may intervene

in whole or in part throughout a qui tam plaintiff ’s

litigation. See 31 U.S.C. § 3730(b)(2), (c)(3). The gov-

9

ernment may even dismiss an FCA suit it initially declined to pursue, over a qui tam plaintiff’s objections.

See id. § 3730(c)(2)(A); see, e.g., United States ex rel.

Sequoia Orange Co. v. Baird-Neece Packing Corp., 151

F.3d 1139, 1145 (9th Cir. 1998) (noting that the government may intervene solely to dismiss and recognizing that the FCA may “permit the government to dismiss a qui tam action without actually intervening in

the case at all”); Swift v. United States, 318 F.3d 250,

251 (D.C. Cir. 2003) (similar). California retains similar control over a qui tam action brought under state

law. See Cal. Gov’t Code § 12652(f)(2)(A) (providing

the state with the right to intervene in a case it “initially declined” to pursue, where “the interest of the

state or political subdivision in recovery of the property or funds involved is not being adequately represented by the qui tam plaintiff ”).

But a PAGA action “represents a permanent, full

assignment of California’s interest to the aggrieved

employee.” Magadia, 999 F.3d at 677 (emphasis in

original). Consistent with this full assignment, private plaintiffs suing under PAGA have far more latitude than plaintiffs suing under a true qui tam statute like the FCA, and have discretion akin to that of

named plaintiffs in a class action.

In a PAGA action, once the state declines to pursue a claim, the private plaintiff is in full control to

frame the allegations and control the litigation. The

state has no authority under PAGA to intervene or to

dismiss a PAGA action over an aggrieved employee’s

objection. See Cal. Lab. Code § 2699; Magadia, 999

F.3d at 677; Aaron Blumenthal, Circumventing Concepcion: Conceptualizing Innovative Strategies to Ensure the Enforcement of Consumer Protection Laws in

the Age of the Inviolable Class Action Waiver, 103 Cal.

10

L. Rev. 699, 743 (2015) (“PAGA suits ... differ from qui

tam actions because the government cannot intervene

in the suit and cannot exercise control over the litigation.”). If the government wishes to intervene in a private plaintiff ’s PAGA suit, it must seek leave to do so

under the California Rules of Civil Procedure in the

same way any other interested party would. See Cal.

Code Civ. Proc. § 387.

Another key difference between a PAGA action

and a qui tam action is control over settlement. The

government may settle a FCA claim it chose not to

originally pursue, even when the qui tam plaintiff objects. See 31 U.S.C. § 3730(c)(2)(B); Riley v. St. Luke’s

Episcopal Hosp., 252 F.3d 749, 754 (5th Cir. 2001) (en

banc) (holding that even where the government does

not intervene, it “may settle a case over a relator’s objections”). And even when a qui tam plaintiff chooses

to settle an FCA claim, some courts have held that the

government retains “veto” authority over the settlement. See, e.g., United States ex rel. Michaels v. Agape

Senior Cmty., Inc., 848 F.3d 330, 339 (4th Cir. 2017);

United States v. Health Possibilities, P.S.C., 207 F.3d

335, 342–43 (6th Cir. 2000); Searcy v. Philips Elecs. N.

Am. Corp., 117 F.3d 154, 160 (5th Cir. 1997); contra

United States ex rel. Killingsworth v. Northrop Corp.,

25 F.3d 715, 723 (9th Cir. 1994); see also Christopher

C. Frieden, Protecting the Government’s Interests: Qui

Tam Actions Under the False Claims Act and the Government’s Right to Veto Settlements of Those Actions,

47 Emory L.J. 1041, 1078 (1998) (explaining that the

plain language of the FCA supports the view that the

government has an absolute right to veto a settlement). By contrast, though a court must approve a

PAGA settlement and notice of a settlement must be

11

supplied to the California Labor and Workforce Development Agency (see Cal. Lab. Code § 2699(l)(1)–(2)), a

PAGA plaintiff retains unilateral control over the decision to settle and at what amount without input

from the government.

Finally, in a qui tam action, the reward that a

plaintiff receives is a portion of a forfeiture to the government as a form of bounty. See, e.g., Act of Mar. 1,

1790, ch. 2, § 3, 1 Stat. 101, 102 (“the one half thereof

to the use of the United States, and the other half to

the informer; but where the prosecution shall be first

instituted on behalf of the United States, the whole

shall accrue to their use”). And the portion of the penalty award given to the FCA plaintiff depends on the

level of government involvement in the litigation. See

31 U.S.C. § 3730(d)(1)–(2).

But under PAGA, a plaintiff prevails by establishing a civil penalty against the defendant tied directly

to the number of violations suffered by the plaintiff

and other aggrieved employees. The plaintiff recovers

twenty-five percent of that penalty (regardless of the

government’s involvement) and shares that amount

with all other affected employees. See Cal. Lab. Code

§ 2699(i). These penalties can be significant, given

that judgments in a PAGA action can exceed tens of

millions of dollars. See Magadia, 999 F.3d at 672 (reversing the district court’s award of $100,000,000 in

damages and penalties to plaintiff on his Labor Code

and PAGA claims).

II. REPRESENTATIVE PAGA ACTIONS ARE AKIN TO

TRADITIONAL CLASS ACTIONS.

PAGA actions are, in practice, essentially indistinguishable from class actions, and it is no surprise that

PAGA claims skyrocketed in California after Iskanian

12

held that agreements to arbitrate PAGA claims are

unenforceable. Plaintiffs have simply recast thousands of class action claims as PAGA actions, and defendants in those cases are being forced to litigate

claims under PAGA that they and their employees

agreed to pursue in individual arbitration. The result

has been a blatant end-run around this Court’s precedents upholding agreements for individual arbitration.

In a class action, the private plaintiff files suit to

seek relief on behalf of themselves and others similarly situated who have suffered the “same injury.”

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348–49

(2011) (citations omitted). The same is true with

PAGA, as the named plaintiff in a PAGA action seeks

relief on behalf of himself and other aggrieved employees. See Cal. Lab. Code § 2699(a); Sakkab, 803 F.3d at

442–43 (Smith, J., dissenting) (“Class actions and

PAGA actions both allow an individual … to bring an

action on behalf of other people or entities.”). And as

in class actions, the relief that absent aggrieved employees receive is premised on the adjudication of the

named plaintiff ’s suit, since their recovery is directly

tied to the number of violations the named plaintiff

can prove. Williams, 3 Cal. 5th at 547–48.

In a class action, absent parties are bound by the

judgment or settlement. Williams, 3 Cal. 5th at 548.

So too with a PAGA action. See Cal. Lab. Code

§ 2699(a), (g); Williams, 3 Cal. 5th at 548.

Discovery in class actions and PAGA actions also

is often sweeping in scope. For example, in Williams

the California Supreme Court held that PAGA discovery should extend “as broadly as class action discovery

has been extended.” 3 Cal. 5th at 547–48; see also Sakkab, 803 F.3d at 446 (Smith, J., dissenting) (noting

13

that “the discovery required in a representative PAGA

claim is vastly more complex than would be required

in an individual arbitration”).

PAGA actions threaten defendants with liability

on the same scale as class actions. Under PAGA, civil

penalties are assessed against the employer in the

amount of “one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent

violation.” Cal. Labor Code § 2699(f)(2). As a result,

aggregated claims often seek millions of dollars in

penalties. See Zachary D. Clopton, Procedural Retrenchment and the States, 106 Cal. L. Rev. 411, 451

(2018). These “staggering” penalties “often greatly

outweigh any actual damages.” Matthew J. Goodman,

The Private Attorney General Act: How to Manage the

Unmanageable, 56 Santa Clara L. Rev. 413, 415 (2016)

(citation omitted). And just like many class actions,

the threat of “a devastating loss” in a PAGA action

means that defendants are often “pressured into settling questionable claims.” Concepcion, 563 U.S. at

350.

Given the functional similarities between PAGA

actions and class actions, in the wake of Iskanian, a

growing number of plaintiffs and their counsel have

turned to pursuing PAGA actions in court as a way of

avoiding agreements to arbitrate on an individual basis.

Uber and Postmates have seen first-hand the explosive growth of PAGA claims in the wake of California’s exempting PAGA from individual arbitration.

Soon after the California Supreme Court decided Iskanian, the Ninth Circuit ruled in Mohamed v. Uber

Technologies, Inc., 848 F.3d 1201 (9th Cir. 2016), that

14

although Uber’s arbitration agreement is enforceable,

“the PAGA waiver should be severed from the arbitration agreement” and PAGA claims should “proceed in

court on a representative basis.” Id. at 1206; see also

O’Connor v. Uber Techs., Inc., 904 F.3d 1087, 1092 n.2

(9th Cir. 2018) (noting PAGA waivers are severable

from arbitration agreements). Following Mohamed,

plaintiffs shifted from filing class actions to asserting

PAGA claims against Uber to avoid individual arbitration, leading to the filing of PAGA-only actions, such

as the Gregg and Rosales cases pending before this

Court. The same is true as to Postmates. In the Rimler and Santana actions that are now pending before

this Court, plaintiffs repackaged what are essentially

class claims as PAGA actions in order to avoid arbitration.

Uber and Postmates are not alone. See, e.g., Kim,

9 Cal. 5th at 82 (plaintiff settled individual claims and

pursued only his PAGA claim in court); Brown v.

Ralphs Grocery Co., 28 Cal. App. 5th 824, 831 (2018)

(after trial court granted Ralph’s “request to arbitrate

the non-PAGA claims on an individual basis, and

stayed the PAGA claims until completion of the arbitration,” plaintiff amended “her complaint to drop her

individual claims and proceed only on her PAGA

claims”). In the years since Concepcion, PAGA claims

have increasingly replaced class actions as a vehicle

to pursue claims under the California Labor Code.

In 2005, two years after PAGA was passed, plaintiffs filed a total of 759 PAGA actions. Emily Green,

State Law May Serve as Substitute for Employee Class

Actions,

Daily

Journal

(Apr.

17,

2014),

https://bit.ly/3AVQ5lY. By 2013, that number rose to

3,137 and by 2016, post-Iskanian, it was more than

5,000. See id. As of 2019, more than 35,000 PAGA

15

actions had been filed in total.2 And the number of

PAGA claims will only continue to rise, in part because

of the California Supreme Court’s recent decisions applying provisions of the California Labor Code to outof-state employers and employees. See Ward v. United

Airlines, Inc., 9 Cal. 5th 732, 760–61 (2020); Oman v.

Delta Air Lines, Inc., 9 Cal. 5th 762, 789 (2020).

2 Anthony J. Oncidi & Cole D. Lewis, California Class Actions

and PAGA (“Probably All is Going to the Attorneys”) Claims Continue to Overwhelm the State, The National Law Review (Feb. 4,

2019), https://bit.ly/3senqoo; see also Goodman, 56 Santa Clara

L. Rev. at 415; Green, State Law May Serve as Substitute, supra;

Ashley Hoffman, Private Attorneys General Act: Reform Needed

to Stop Abuse Forcing Employers into Costly Settlements, Cal

Chamber (Jan. 2021), https://bit.ly/2XJCwVQ (“PAGA lawsuits

have increased more than 1,000% from the law’s first year in effect” and notices to the Labor and Workforce Development

Agency are “anticipated to grow to more than 7,000 by 2022”).

16

CONCLUSION

The FAA applies to PAGA just like any other state

law, and requires enforcement of arbitration agreements that require individualized proceedings and

prohibit representative actions. The Court should reverse.

Respectfully submitted,

THEANE EVANGELIS

Counsel of Record

BLAINE H. EVANSON

BRADLEY J. HAMBURGER

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

(213) 229-7804

tevangelis@gibsondunn.com

Counsel for Amici Curiae

Uber Technologies, Inc. and

Postmates, LLC

February 7, 2022