Paul DeCamp, Member of the Firm, and Robert H. Pepple, Associate, in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC and Los Angeles offices, respectively, were quoted in the Los Angeles Daily Journal, in “Business Group Sues in Bid to Kill the State’s PAGA Law,” by Blaise Scemama.

Following is an excerpt:

In an attempt to curb the Private Attorney General Act, lawyers representing an alliance of business owners filed a complaint Wednesday in Orange County to enjoin the state from implementing or enforcing the act, which they call unconstitutional.

“What was sold to the public as a tool to help workers and provide money to the state has become a giant club plaintiff firms use to beat employers over the head to extort large settlements,” said Washington, D.C.-based labor and employment attorney Paul DeCamp of Epstein Becker & Green PC. He filed the complaint on behalf of an association of employers called the California Business & Industrial Alliance.

The complaint alleges that after PAGA was passed by the Legislature in 2004, empowering private attorneys to file civil lawsuits on behalf of aggrieved employees and the state for Labor Code violations, a cottage industry of plaintiffs’ firms seeking to enrich only themselves was born.

As an example of how the act has been used in bad faith, the complaint cites Price v. Uber Technologies Inc., in which a Los Angeles County Superior Court judge approved a $7.75 million settlement, even though the estimated liability was over $1 billion. The plaintiffs’ attorneys were awarded $2.325 million, whereas the average Uber driver was awarded just over $1. Price v. Uber Technologies Inc., BC55451 (L.A. Super. Ct. filed Oct. 16, 2015).

Along with alleging PAGA violates the Eighth and 14thAmendments, the complaint also argues that the state Supreme Court erred in its ruling in Iskanian v. CLS Transportation when they found “a PAGA action could not be waived because the state – and not the named plaintiff – is the real party in interest.” …

However, the complaint argues, “In Iskanian, the California Supreme Court incorrectly labeled a ‘PAGA representative action … a type of qui tam action.’”

Labor and employment attorney Robert Pepple, also from Epstein Becker, said the analogy used in Iskanian is incorrect and referred to the section in the complaint that says: “A qui tam action differs significantly from a PAGA action because unlike a qui tam action, arising under the False Claims Act, the state of California plays almost no role in a PAGA action.”

While many constitutional challenges to the act have failed in the past, DeCamp said this suit is different in that, “Our case focuses on the reality of PAGA, as it has actually played out in the courts over many years and countless lawsuits.”

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