RLC to SCOTUS: Strike CA Rube Goldberg-Like PAGA Contraption

Constitution requires CA to respect federal law

The Retail Litigation Center (RLC), on behalf of the nation’s leading retailers, called on the U.S. Supreme Court to restore federal sovereignty and strike down California’s rule that allows the State to circumvent the Federal Arbitration Act (FAA) for its own financial gain.

For years, California’s judiciary has placed its own labor-law process outside the scope of the Federal Arbitration Act simply by designating a part of the recovery as the property of the State.  Therefore, no matter how clearly employees might declare their intention to resolve disputes thru arbitration and receive the resulting benefits, the California Private Attorneys General Act (PAGA) gives them (and their attorneys) a “Get Out of Bilateral Arbitration Free” card in exchange for paying attorneys’ fees and then tithing 75 percent of their winnings to the State – an unconscionable tax for employees who are truly injured.

“California’s legal fiction is unquestionably preempted by the text of the FAA, not to mention decades of Supreme Court precedent. Given California’s recidivist tendencies where arbitration is concerned, the Court must act in clear and unmistakable terms to re-assert the supremacy of the federal law,” said Deborah White, RLC President.

“The airy theory that California in some way ‘owns’ the claim is belied by the reality of its real-world effects on employment disputes. The State’s Rube Goldberg-like legal contraption is intended to obscure its true purpose, which is to further a racket that allows the State and its plaintiffs’ bar to profit at the expense of employers and employees alike.”

California represents a huge proportion of national labor-law claims: Current Bureau of Labor Statistics figures indicate that over 11% of all nonfarm employees in the United States are in California.  That means that, when it comes to one of the most critical areas of law for retailers in the nation’s most economically critical state, there might as well not be a Federal Arbitration Act at all.

The RLC submitted an amicus brief to the U.S. Supreme Court in support of the petitioner. The RLC’s brief was drafted by RLC Law Firm Member Tom Goldstein of Goldstein & Russell. The case is Viking River Cruises, Inc. v Angie Moriana.
Retail Litigation Center
Directed by the chief legal officers of the country's leading retail companies, the Retail Litigation Center (RLC) is the only organization dedicated to advocating for the industry's top priorities in the federal and state judiciary. The RLC also works with leading law firms and retail corporate counsel to develop forward-thinking strategies to combat meritless mass action litigation. Founded by the Retail Industry Leaders Association (RILA) in 2010 as an independent organization, the RLC is a 501(c)(6) membership association open to all retailers and select law firms.
  • Legal Affairs & Compliance
  • Retail Litigation Center
  • Workforce

Stay in the know

Subscribe to our newsletter