California Business Group, CABIA, Rallies for SCOTUS Reform of Private Attorneys General Act – Opinion

Here is the problem with getting people to care about the Private Attorneys General Act (PAGA) and its deleterious effects on small business in California: it’s a complicated morass—intentionally made so by plaintiff’s attorneys, in order to erode the power of the employer and business owner to run their business as they see fit. Employees are affected by this erosion in quality and flexibility, as well in promotions and bonuses. Why hasn’t your boss given everyone a raise in two years? Perhaps because the boss had to make a PAGA claim, and all of his or her coffers are empty.

Blaine Eastcott from Rockcreation Climbing Gyms, a California-based entrepreneur and entrepreneur said it clearly:

“I [would]You will have to borrow funds to cover the cost of your purchase [a PAGA lawsuit] off, which means if I am paying a PAGA lawsuit, I’m not paying my employees a better wage.

I’m not paying the bonuses when, you know Christmas rolls around, or the company does better, because it’s burdened by these loans. I’m not buying amenities that improve the operation for the community of people that use the facilities.”

Doesn’t get more bottom line than that. The taxpaying public is still blissfully ignorant of the impact PAGA has on their lives and communities.

The Supreme Court appears to be taking a new interest in Federal Arbitration Act, and any lawsuits that may add to PAGA’s morass and the FAA’s end-runs. This was the topic of one of the cases that the SCOTUS Justices looked at: Viking River Cruises, Inc. v. Moriana. Because a favorable decision for Viking River Cruises, the petitioner in this case could significantly limit PAGA damages and cause reforms of the Act, it has been closely monitored.

On Wednesday, SCOTUS received oral arguments in the case. This was the ideal opportunity for California Business and Industrial Alliance’s (CABIA), to host a rally at the Supreme Court steps to raise awareness about PAGA abuses and to represent the interests of those who were adversely affected.

PAGA has a significant financial impact on the State of California, as well as attorneys who file these claims. CABIA published a blog entry about an attorney, who brags on the plate of how much he has bilked businesses by filing PAGA claims.

Daniel Gaines hails from Gaines & Gaines law, a firm well-known for filing lawsuits under the Private Attorneys General Act (PAGA). In fact, the firm ranks 4th in California for the number of PAGA claims it files.

You might think that someone who makes a living filing frivolous lawsuits against unsuspecting small businesses might not flaunt their profession; with Gaines, it’s quite the opposite.

It has recently come to our attention that Gaines drives a white Rolls Royce proudly bearing the license plate “MR PAGA.” We couldn’t believe it either, but as they say: A picture is worth a thousand words.

Trial attorneys have been profiting off of PAGA lawsuits for too long, and our state’s businesses have suffered for it. It’s bad enough that these attorneys have made careers out of going after entrepreneurs, but to advertise it so blatantly (on a Rolls Royce no less) just adds insult to injury.

Named and shamed. It is obvious that anyone would want to own a Rolls Royce bearing this license plate. We hope that SCOTUS will rule in favor Viking River Cruises and render this lawyer and all his ilk useless. We want them to go back ambulance chase.

CABIA advocates for California-based businesses and submitted an amicus curiae brief to coordinate with. Viking River Cruises Inc. v. MorianaThat was also a part.

It was also an ambitious undertaking. California business owners sacrificed their time to travel over 3,000 miles and tell their stories. Oral arguments will determine whether Viking is granted their petition and whether PAGA is weakened or if it wins.

From the SCOTUS blog:

This case involves PAGA, California’s Private Attorneys General Act. Any employee may bring action against an employer under this statute. She can assert claims on behalf all her employees. In a PAGA case against Lyft for example, one employee brought claims on behalf more than 500,000 Lyft drivers. Cases involving thousands of workers are common. To explain further, PAGA authorizes any individual employee to bring any claim that the employer has violated California’s Labor Code; 75% of the award goes to the state and the remainder is distributed to the aggrieved employees as a group. An employee (Angie Miana in this instance) requested relief from PAGA against Viking River Cruises. She claimed that Viking River Cruises failed to pay wages, did not pay overtime and had committed other violations. Viking argued that the action should fail because Moriana’s employment agreement called for individualized arbitration of all disputes about her employment with Viking and explicitly waived her right to assert such claims through PAGA.

John Loudon (ex-businessman from California and ex-senator for Missouri), is Vice President of Government Affairs at CABIA. Loudon was present at the Rally and shared these words.

“What’s so sinister about PAGA is that it’s a conspiracy of the plaintiff’s bar of the state inspiring to suck money out of companies on the back of workers.”

This is a well-known tactic used by progressive government and the unions. Use the workers as the face of “reform” in order to enrich themselves.

This must be ended.

The California courts support them, unfortunately. mo’ moneyLawyers, uphold PAGA-supporting decisions. It is this reason that it was ultimately decided by the Supreme Court.

It surprised nobody when the Supreme Court granted review. Viking argues that the decisions of the California courts are a flagrant departure from the Supreme Court’s rulings in the area and that a decision in its favor follows directly from Concepcion. For Viking, Moriana’s agreement to individualized arbitration means that neither courts nor legislatures in California have the power to move the dispute to another forum or to aggregate the claims of multiple employees in the same proceeding. It argues that the same problems that motivated the Supreme Court to reject California’s mandate for class-based arbitration compel rejection of the PAGA proceeding here. The most obvious is that a PAGA proceeding with claims by tens or thousands of employees would be so different from a bilateral, individual arbitration proceeding it will ruin the efficiency Viking River has claimed.

After the Rally I listened attentively to the oral arguments. While the justices were a bit testy but not too contentious, I listened to their oral arguments. Most striking was the sudden interest that Justices Elena Kagan (Stephen Breyer) and Sonia Sotomayor had in federalism. If you read their dissent in the 6-3 decision to strike Biden’s employer vaccine mandate, the government is the be-all, end-all over corporations, and they have no right to oppose any inroads made through federal fiat.

They seem to be fine with the state-engineered FAA loophole. PAGA is the king of all this. Other state plaintiff bars have begun to notice. California leads the way… in enriching corrupt lawyers nationwide.

Justice Sotomayor, as was the case in oral arguments about vaccine mandates, again proved herself to be uninformed. She used information she had been spoonfed to answer her questions. She argued with the counsel for Viking, Paul D. Clement, that the company was seeking to destroy the state’s ability to enforce its labor law violations.

SOTOMAYOR: That’s what you’re banking on. You’re banking on destroying the state’s mechanism for enforcing its law –for enforcing labor law violations, aren’t you?

MR. CLEMENT: No, Justice Sotomayor, we’re not. Moriana is still able to bring her claims. Those claims are backed by attorneys’ fee provisions.

Mr. Clement held his own with the Justices’ questions, the conservative policymakers I spoke with felt good about the tenor of the arguments.

California’s business owners continue to fight for reform and stand firm.

Rally highlights and commentary.



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