Fernando M. Olguin, United States District Judge
Having reviewed and considered the parties' motions in limine, and concluding that oral argument is not necessary to resolve the motions, see Fed. R. Civ. P. 78; Local Rule 7-15; Willis v. Pac. Mar. Ass'n, 244 F.3d 675, 684 n. 2 (9th Cir.2001), the court rules as follows.
Plaintiff Aladdin Zackaria ("Zackaria" or "plaintiff") filed this wage and hour class action against Wal-Mart Stores, Inc. ("Wal-Mart" or "defendant") on August 3, 2011, in the San Bernardino County Superior Court. (See Notice of Removal, Exhibit ("Exh.") A ("Complaint")). Defendant removed the case to this court on September 6, 2012, pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2). Plaintiff brought the action individually and on behalf of individuals currently and formerly employed by defendant as an Asset Protection Coordinator ("APC").
Plaintiff filed a motion for class certification pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(2). (See Renewed Motion for Class Certification ("Class Cert. Motion"), Dkt. No. 78). The court denied the Class Cert. Motion in May, 2015. (See Court's Order of May 18, 2015, at 26). Subsequently, in its Order Re: Further Proceedings, the court set a trial date of November 17, 2015. (See Court's Order of May 21, 2015, at 15-16).
Each party filed two motions in limine, the substance of which overlaps almost entirely. Defendant's Motion In Limine No. 1 To Exclude Irrelevant Testimony and Exhibits Unrelated to Plaintiff Aladdin Zackaria's Claim ("Dft. MIL No. 1"), seeks to exclude testimony, declarations, personnel files, and any other exhibits related to employees other than Zackaria, which plaintiff intends to use to support his representative PAGA claim at trial. (See Dft. MIL No. 1 at 2). The basis for Dft. MIL No. 1 is that since the court denied class certification because "the exemptions questions at issue in this action did not lend themselves to common proof" (see id. at 1), plaintiff cannot now pursue a representative PAGA claim "on behalf of an unidentified number of additional non-party employees." (Id. at 2). Defendant's Motion in Limine No. 2 to Exclude Hearsay Exhibits ("Dft. MIL No. 2") seeks to exclude the declarations and personnel files of the non-parties that are the subject of Dft. MIL No. 1 on the additional basis that they are hearsay. (See Dft. MIL No. 2 at 1). Plaintiff, on the other hand, filed its Motion in Limine No. 1 To Exclude Testimony, Evidence, or Argument by Defendant Relating to the Denial of Class Certification and the Appeal Therefrom ("Pltf. MIL No. 1"), arguing that because the denial of class certification does not impact the remaining PAGA claim, it is irrelevant, and any mention of it "will likely confuse and mislead the jury to believe that the merits of Plaintiffs' underlying claims may be unmeritorious[.]" (Pltf. MIL No. 1 at 1). Plaintiff's Motion in Limine No. 2 Barring Defendant From Calling All 340 Plus Aggrieved Employees to Testify at Trial ("Pltf. MIL No. 2") seeks to prevent Wal-Mart from arguing that all of the 340-plus APCs "must testify because this is a PAGA action." (See Pltf. MIL No. 2 at 1). Plaintiff asserts that "[d]efendants confronting representative actions do not have the right to call all class members to the stand" (see id. at 3), but defendant responds that plaintiff's motion is simply "not directed to any claims that remain in this case." (Id. at 1). "Were there a representative claim remaining for trial here," defendant argues, "then Walmart would be entitled to ... present evidence from other [APCs] to rebut Plaintiff's evidence." (See id. at 3) (emphasis in original).
As the paragraph above makes clear, the core of the parties' dispute is whether the court's denial of class certification means that Zackaria cannot pursue a representative PAGA claim.
When the California Legislature enacted PAGA, it declared that "adequate financing of labor law enforcement was necessary to achieve maximum compliance with state labor laws, that staffing levels for labor law enforcement agencies had declined and were unlikely to keep pace with the future growth of the labor market, and that it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations[.]" Arias v. Superior Court, 46 Cal.4th 969, 980, 95 Cal.Rptr.3d 588, 209 P.3d 923 (2009). Under PAGA, an "aggrieved employee" may bring a civil action personally and on behalf of current or former employees to recover civil penalties for violations of the California Labor Code. See id. "Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency [("LWDA")], leaving the remaining 25 percent for the `aggrieved employees.'"
The majority of federal courts that have addressed the issue have found that "representative PAGA claims need not be certified under Rule 23 to proceed." Gallardo v. AT & T Mobility, LLC, 937 F.Supp.2d 1128, 1137 (N.D.Cal.2013) (collecting cases) (describing the purpose of such actions to "vindicate the public through the imposition of civil penalties as opposed to conferring a private benefit upon the plaintiff and the represented employees") (internal quotation marks omitted); see also Achal v. Gate Gourmet, Inc., 114 F.Supp.3d 781, 804-06, 2015 WL 4274990, *13 (N.D.Cal.2015) (same). In Baumann v. Chase Inv. Services Corp., 747 F.3d 1117, cert. denied, ___ U.S. ___, 135 S.Ct. 870, 190 L.Ed.2d 702 (2014), the Ninth Circuit recently considered whether PAGA actions are sufficiently similar to Rule 23 class actions to trigger Class Action Fairness Act ("CAFA") jurisdiction. The Baumann court found that because a "PAGA suit is fundamentally different than a class action[,]" id. at 1123 (internal quotation marks omitted), "PAGA actions are also not sufficiently similar to Rule 23 class actions to trigger CAFA jurisdiction." Id. at 1122 & 1124 (further finding that "Rule 23 and PAGA are more dissimilar than alike"). In other words, "[b]ecause an identical suit brought by the state agency itself would plainly not qualify as a CAFA class action, no different result should obtain when a private attorney general is the nominal plaintiff." Id. at 1123.
Defendant's reliance on Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010) is unavailing. Defendant states that Shady Grove held that "a New York statute concerning the ability of a plaintiff to pursue a representative action in state court did not trump Rule 23's application in federal court, which automatically applies" in all civil actions in federal court. (See Dft. MIL No. 1 at 10, citing Shady Grove, 559 U.S. 393 at 400, 130 S.Ct. at 1428, 176 L.Ed.2d 311 (internal quotation marks omitted; emphasis in original)). Thus, it argues that Rule 23's requirements are relevant "to determining whether the plaintiff [can] pursue a representative action in federal court" in this case. (See id. at 11).
Defendant, however, has overlooked or disregarded the Ninth Circuit's description
Baumann, 747 F.3d at 1124. In Shady Grove, the Supreme Court held, under the Erie doctrine, that Rule 23 is merely a procedural device that allows for joinder of parties, and as such, applies to claims asserted in federal court even if the state law does not provide for such a procedure in state court. See 559 U.S. at 407-08, 130 S.Ct. at 1443; Baumann, 747 F.3d at 1124. Courts that have applied this reasoning to PAGA claims have found that PAGA, by "specifically permit[ting] recovery for unnamed parties[,]" "is a procedural mechanism by which litigants may recovery for absent plaintiffs, akin to a class action." Fields v. QSP, Inc., 2012 WL 2049528, *5 (C.D.Cal.2012). Following from that finding is a conclusion that a plaintiff whose claim is viable in state court may be foreclosed from litigating it in federal court if the plaintiff cannot meet federal procedural and jurisdictional requirements — i.e., Rule 23 — since federal courts must apply federal procedural rules in diversity cases. See Achal, 114 F.Supp.3d at 809-10, 2015 WL 4274990, at *16 (summarizing the applicable reasoning "[u]nder a procedural construction of PAGA").
While PAGA may be comparable in some ways to rules that are procedural, the court does not agree with the courts that have found PAGA to be procedural rule for purposes of Erie analysis. See Achal, 114 F.Supp.3d at 809-10, 2015 WL 4274990, at *16 (That PAGA was found not to be substantive in the sense that it does not create transferrable property interest "does not mean the label `substantive' is inapplicable for purposes of other legal doctrines."). Analogizing to qui tam actions, the Fields court recognized that PAGA and qui tam suits set out a procedural mechanism that is often "characterized as a substantive right to pursue a claim for relief." See Cunningham v. Leslie's Poolmart, Inc., 2013 WL 3233211, *7 (C.D.Cal.2013) ("Since a plaintiff's right under PAGA to pursue a bounty through a representative action is closely analogous to a qui tam relator's right, ... an aggrieved employee's rights under PAGA should also be characterized as substantive."); see also Iskanian, 59 Cal.4th at 382, 173 Cal.Rptr.3d 289, 327 P.3d 129 (holding that PAGA representative claims are "a type of qui tam action"); Sakkab v. Luxottica Retail North America, Inc., 2015 WL 5667912, 803 F.3d 425 (9th Cir. 2015) (same). Other federal courts in California have reached the same conclusion. See, e.g., Moua v. Int'l Business Machines Corp., 2012 WL 370570, *3 (N.D.Cal.2012) ("PAGA transcends the definition of what is simply procedural. The statute's plain purpose is to protect the public interest through a unique private enforcement process, not to allow a collection of individual plaintiffs to sue the same defendant in one consolidated action for the sake of convenience and efficiency. Comparing PAGA to a statute or rule of procedure which merely directs the fine details of litigation unfairly minimizes this purpose."); Cardenas v. McLane Foodservice, Inc., 2011 WL 379413, *2 (C.D.Cal.2011) (finding that to characterize PAGA as wholly procedural would ignore the intent of the legislature in passing the statute). These courts have
For these reasons, defendant's claim that Rule 23 is the "only ... procedure under which a plaintiff can pursue a representative action," (see Dft. MIL No. 1 at 10), is incorrect. Just as that statement does not hold true for qui tam actions, see, e.g., Cunningham, 2013 WL 3233211, at *7, parens patriae actions, see, e.g., Baumann, 747 F.3d at 1122, or FLSA actions, see, e.g., Beauperthuy v. 24 Hour Fitness USA, Inc., 772 F.Supp.2d 1111, 1117 (N.D.Cal.2011), it does not hold true for PAGA actions.
Finally, the court is not persuaded by defendant's contention that plaintiff's appeal to the Ninth Circuit, in which he described his remaining claim as an "individual claim," is dispositive. (See, e.g., Dft. MIL. No. 1 at 2 & Reply in Support of Defendant's Motion in Limine No. 1 at 1). Plaintiff's appeal followed the court's denial of class certification. (See Request for Judicial Notice ("RJN"), Dkt. No. 106, Exh. A, Petition for Permission to Appeal Order Denying Class Certification ("Petition").
Defendant states that "[a] plaintiff pursuing a representative PAGA action must prove the alleged underlying Labor Code violations (i) first, as to him or herself, and (ii) second, as to all ... aggrieved employees for which a penalty also is sought." (Dft. MIL No. 1 at 7); see also Rope v. Auto-Chlor Sys. of Wash., Inc., 220 Cal.App.4th 635, 651 n. 7, 163 Cal.Rptr.3d 392 (2013) ("PAGA requires that the representative plaintiff establish that the employer have committed the Labor Code violations for which recovery is sought against the aggrieved employees."); Hibbs-Rines v. Seagate Technologies, LLC, 2009 WL 513496, *4 (N.D.Cal.2009) ("[C]ivil penalties under PAGA are only assessed for violations of the California Labor Code. Plaintiff will have to prove Labor Code violations with respect to each and every individual on whose behalf plaintiff seeks to recover civil penalties under PAGA.") (emphasis in original). From there, defendant leaps to the conclusion that a plaintiff pursuing a representative PAGA claim must "also face[] the challenge of showing that the PAGA claim is manageable for resolution." (See Dft. MIL No. 1 at 7). Defendant argues that plaintiff is unable to meet that challenge because "individual issues would predominate in any action to resolve the claims of absent non-party employees." (Id. at 8). "This is especially so here where the evidence that Plaintiff seeks to submit in support of his representative action is the same evidence that the Court already considered in denying class certification." (Id.). Plaintiff, on the other hand, counters that for the same reasons PAGA claims do not need to satisfy federal class action requirements, "PAGA claims are not required to comply with Rule 23 manageability requirements[.]" (See Dft. MIL No. 1 at 4).
As the court concluded with respect to defendant's argument regarding Rule 23, the court finds defendant's manageability argument inconsistent with PAGA's purpose and statutory scheme.
Having determined that a PAGA representative claim need not satisfy the requirements of Rule 23, including the manageability requirement of Rule 23(b), the court turns to the question of what evidence is relevant to plaintiff's claim. Plaintiff's PAGA claim defines "aggrieved employees" as "Plaintiff and the other salaried employees" (see Complaint at ¶ 72), but does not provide further information regarding which salaried employees — presumably, APCs — plaintiff intends to include. (See, generally, Complaint). Plaintiff's witness list identifies 14 witnesses he intends to call regarding their "claims in this lawsuit as ... aggrieved employee[s]" (see Gershman Decl., Exh. A, Plaintiff Aladdin Zackaria and the Aggrieved Employees' Witness List at 5-9), but it is unclear whether these are all of the "aggrieved employees" plaintiff intends to represent. Indeed, plaintiff's exhibit list identifies the declarations of additional employees that plaintiff wishes to introduce (see Gershman Decl., Exh. B, Plaintiff Aladdin Zackaria and the Aggrieved Employees' Exhibit List at 1-2), but it is unclear whether the declarants are also "aggrieved employees" or whether plaintiff intends to introduce their declarations as supporting evidence. The parties do not directly address this specific question during their meet-and-confer session (see, generally, Gershman Decl., Exhs. D and E), though they appear to assume that the group of "aggrieved employees" includes all of the approximately 340 California APCs. (See id. Exh. E at 12).
In short, the court is not certain which individual(s) — if any in addition to the 14 identified in his witness list — plaintiff intends to include as an "aggrieved employee." The court therefore cannot determine what evidence is relevant to their claims, nor can it determine what evidence is more prejudicial than probative of such claims. Cf. Rix v. Lockheed Martin Corp., 2012 WL 13724, *3 (S.D.Cal.2012) (on a motion to strike, noting that "it has not yet been determined how many violations Plaintiff will seek to establish, and how many allegedly aggrieved [employees] could be potentially included. The Court tentatively concludes it would be premature to strike Plaintiff's PAGA claim at this stage of the proceedings[.]") (quoting an unpublished prior order in the matter). Before it can make any decisions regarding the conduct of the trial and admissible evidence, plaintiff must provide more information to the court and to defendant.
Based on the foregoing, IT IS ORDERED THAT:
1. The parties' motions in limine
2. No later than
3. The trial currently set for November 17, 2015, and all associated pretrial dates, including the pretrial conference set for November 6, 2015, are
The California Supreme Court has made it clear that a PAGA claim is not a dispute between an employee and an employer, but rather a "dispute between an employer and the state, which alleges directly or through its agents — either the [LWDA] or aggrieved employees — that the employer has violated the [California] Labor Code." Iskanian, 59 Cal.4th at 386-387, 173 Cal.Rptr.3d 289, 327 P.3d 129 (emphasis omitted). The employee bringing a PAGA action is prosecuting a "law enforcement action" and "represents the same legal right and interest as state labor law enforcement agencies[.]" Id. at 387, 173 Cal.Rptr.3d 289, 327 P.3d 129 (internal quotation marks omitted). The court is unaware of any case in which the LWDA has sought to certify a class before litigating the merits, nor is the court aware of any provision of California law requiring — or even mentioning as an option — such a strategy. Likely for that reason, no provision in PAGA requires an employee to obtain class certification before proving labor code violations as to other aggrieved employees and securing recovery for the state. Therefore, particularly considering the recent holdings of Iskanian, Baumann, and Sakkab, it strikes the court that far from being required, class certification in this context makes little sense.