FOLLOW US

The California Supreme Court ruled Thursday that ride-hail drivers bringing claims under the state's Private Attorneys General Act (PAGA) lack standing to intervene in a separate case that reached a settlement. The decision came in a PAGA Deal Drivers Trial involving Tina Turrieta, who filed a claim in 2018 alleging that Lyft misclassified drivers as independent contractors instead of employees. PAGA enables workers to sue on behalf of themselves, the state, and other workers for labor law violations.

PAGA Deal Drivers Trial :Background and Settlement

Turrieta reached a $15 million settlement with Lyft in 2019. However, two drivers, Brandon Olson and Million Seifu, behind separate PAGA actions, attempted to intervene to block the settlement. A California court of appeal ruled in 2021 that Olson and Seifu did not have standing to intervene. Olson petitioned the California Supreme Court, and Seifu filed an application for relief.

Supreme Court's Decision

On Thursday, the state justices agreed with the appellate court, ruling against Olson and Seifu's standing to intervene. Justice Martin J. Jenkins, writing for the majority, stated that the authority Olson was seeking would contradict PAGA's intent.

"To intervene in the ongoing PAGA action of another plaintiff asserting overlapping claims, to require a court to consider objections to a proposed settlement in that overlapping action, and to move to vacate the judgment in that action — would be inconsistent with the scheme the Legislature enacted," the opinion said.

However, the justices left open the possibility that the state Legislature could amend the law to resolve such issues.

"We reiterate that the Legislature, in its policymaking role, remains free to consider the questions we have addressed and resolved in this opinion … and to decide whether statutory recognition of the rights Olson asserts is wise and/or necessary to achieve PAGA's goals," they said in the opinion.

PAGA Deal Drivers Trial : Dissenting Opinion

In a dissenting opinion, Justice Goodwin H. Liu argued that the decision "is contrary to basic principles undergirding the rules of civil procedure, which facilitate (even if they do not require) adjudication of the same claims in a single proceeding."

Justice Liu emphasized that the holding deprives trial courts of hearing from plaintiffs whose participation would ensure fair deals and deprives appellate courts of the opportunity to weigh challenges.

"Taken together, the court's decision creates a substantial risk of auctioning the settlement of representative PAGA claims to the lowest bidder and insulating those settlements from appellate review," Justice Liu wrote.

Justice Liu further noted, "Today's opinion steers PAGA into avoidable shoals, and the unfortunate result calls for legislative attention, lest the statute's goal of strengthening labor code enforcement be thwarted by settlement incentives that drive a race to the bottom."

Implications and Future Amendments

Thursday's decision aligns with the leaning of Justice Joshua P. Groban, who during oral arguments in May, expressed that allowing Olson and Seifu to intervene could theoretically lead to "conflicting" positions.

The dispute stems from respective cases that Turrieta, Olson, and Seifu each filed against Lyft in 2018, alleging misclassification. In Seifu's case, a California court of appeal ruled in the driver's favor in March 2023. Lyft sought a review by the U.S. Supreme Court, which declined to do so in June.

PAGA Deal Drivers Trial : Recent Developments

This ruling is the latest development in PAGA Deal Drivers Trial cases. In 2022 and 2023, the U.S. Supreme Court and the California Supreme Court, respectively, ruled on the arbitration of claims under the statute. Then, in June, Democratic Gov. Gavin Newsom and the state Legislature announced they would amend the law ahead of a proposed ballot measure that sought to eliminate it completely.

Independent contractors often lack benefits and protections required for employees, such as overtime pay and minimum wage.

Legal Representation

Turrieta is represented by Allen W. Graves and Adrian Hernandez of the Graves Firm APC. Lyft is represented by R. James Slaughter, Erin E. Meyer, Ian Kanig, and Morgan E. Sharma of Keker Van Nest & Peters LLP, and by Peder K. Batalden and Felix Shafir of Horvitz & Levy LLP. Seifu is represented by Shannon E. Liss-Riordan of Lichten & Liss-Riordan PC. Olson is represented by Jahan C. Sagafi and Adam Koshkin of Outten & Golden LLP, and by Rachel Bien, Christian Schreiber, and Monique Olivier of Olivier & Schreiber LLP.