Viking River Cruises urges Supreme Court to curb Calif. worker lawsuits

Betty Q. Hixson

U.S. Supreme Court is seen in Washington, U.S., October 3, 2016. REUTERS/Yuri Gripas

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  • California law is only path to court for many workers
  • Cruise company says claims belong in individual arbitration
  • Liberal justices concerned about limiting enforcement of labor laws

(Reuters) – The U.S. Supreme Court on Wednesday heard a cruise company’s bid to limit the ability of workers in California to sue their employers on behalf of the state, with the liberal justices expressing concerns about restricting the state’s powers to enforce labor laws.

Paul Clement of Kirkland & Ellis, who represents Viking River Cruises Inc, told the court that a unique California law allowing workers to act as “private attorney generals” and bring legal claims covering large groups of employees improperly circumvents agreements many workers have signed waiving their rights to participate in class action-style cases.

California’s Private Attorneys General Act allows workers to keep 25% of any damages they win, while the rest goes to the state. And the law has become the only way to sue in court for the increasing number of workers who have such agreements that require them to bring legal disputes against their employers in individual arbitration.

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Viking River, backed by a slew of business groups, says the Federal Arbitration Act (FAA), which generally requires that arbitration agreements be enforced according to their terms, applies even in PAGA cases.

The Supreme Court’s three liberal justices sounded unconvinced on Wednesday, saying PAGA reflects California’s decision on how best to enforce its employment laws in the face of limited state resources.

“I’m wondering whether anybody, when they were enacting the FAA, thought it would end up precluding the ability of the state to structure its own law enforcement,” Justice Elena Kagan said to Clement.

Clement, a former U.S. solicitor general, replied that the FAA does impose limits on states. He cited a 2011 Supreme Court ruling in AT&T Mobility Inc v. Concepcion that said the FAA preempts state laws that “stand as an obstacle” to enforcing arbitration agreements.

Reuters listened to a livestream of the arguments.

Viking River is asking the high court to reverse a 9th U.S. Circuit Court of Appeals ruling that allowed a PAGA case accusing the company of violating wage laws to proceed.

Scott Nelson of Public Citizen, who represents plaintiff Angie Moriana, said Concepcion and other recent pro-arbitration Supreme Court rulings were different because they involved traditional class-action claims.

PAGA cases do not share any of the procedural features of class actions, which are designed to protect the rights of class members, Nelson said.

Members of the court’s conservative majority peppered both sides with questions but gave little indication of how they could rule.

The case is Viking River Cruises Inc v. Moriana, U.S. Supreme Court, No. 20-1573.

For Viking River: Paul Clement of Kirkland & Ellis

For Moriana: Scott Nelson of Public Citizen

Read more:

High court will review arbitration exemption under novel Calif. law

Calif. AG tells SCOTUS arbitration exemption key to enforcing labor laws

California’s Private AG Act is a scourge, employers tell SCOTUS

SCOTUS suddenly very interested in California’s Private Attorneys General Act

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https://www.reuters.com/legal/government/viking-river-cruises-urges-supreme-court-curb-calif-worker-lawsuits-2022-03-30/

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