On September 30, 2021, the California Court of Appeal (Second District) issued its decision in Turrieta v. Lyft, Inc., Case No. B304701, which limits the ability of nonparty “aggrieved employees” to challenge a Private Attorneys General Act (PAGA) settlement, even where the nonparties are PAGA plaintiffs in parallel litigation and the settlement would extinguish their claims. The court ruled that while trial courts may permit nonparties to object to a settlement, such nonparties have no grounds for intervention and no standing to move to vacate the judgment or challenge the judgment on appeal.
The Turrieta decision involved a series of overlapping PAGA cases against rideshare operator Lyft—the Olson, Seifu and Turrieta actions—all of which argued that Lyft drivers were misclassified as independent contractors. Although Turrieta was the last of the three to be filed, all three actions were brought within seven weeks of each other in mid-2018. Turrieta reached a settlement first, and because of the close proximity of the three cases being filed, the release covered virtually the entire relevant period in the Olson and Seifu actions. The trial court permitted objections from both the Olson and Seifu plaintiffs but denied their motions to intervene and to vacate the judgment.
The Court of Appeal affirmed. Ruling first on the denial of the motions to vacate, it found that the nonparties to Turrieta lacked standing because their “rights or interests [were not] injuriously affected by the judgment.” Slip op. at 17 (quoting Sabi v. Sterling, 183 Cal. App. 4th 916, 947 (2010)). This conclusion flows from the fact that the state “is always the real party in interest” in a PAGA action. Id. at 18 (quoting Kim v. Reins Int’l Cal., Inc., 9 Cal. 5th 73, 81 (2020)). “Because it is the state’s rights, and not appellants’, that are affected by a parallel PAGA settlement, appellants are not aggrieved parties with standing to seek to vacate the judgment or appeal.” Id. at 19.
The same reasoning also applied to the motions to intervene, which required a “threshold showing” that the would-be-intervenors “had a direct and immediate interest in the settlement[.]” Id. at 27. “As with standing, appellants have no personal interest in the PAGA claims,” and therefore no right to intervene. Id.
Ironically, the fact that a PAGA plaintiff represents the state’s interests and not their own has been key to many plaintiff-friendly developments in the law over the years, in contexts such as arbitration, federal court jurisdiction and standing. In Turrieta, however, it effectively foreclosed the parallel plaintiffs from pursuing their claims.