`
`
`
`
`No. __________
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`
`
`DOORDASH, INC.,
`
`v.
`
`BRANDON CAMPBELL,
`
`Petitioner,
`
`Respondent.
`
`
`
`On Petition For A Writ Of Certiorari
`to the California Court of Appeal
`
`
`PETITION FOR A WRIT OF CERTIORARI
`
`
`
`
`JOSHUA S. LIPSHUTZ
`Counsel of Record
`MICHAEL HOLECEK
`GIBSON, DUNN & CRUTCHER LLP
`555 Mission Street, Suite 3000
`San Francisco, California 94105
`(415) 393-8200
`JLipshutz@gibsondunn.com
`Counsel for Petitioner DoorDash, Inc.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`i
`
`QUESTION PRESENTED
`
`The Federal Arbitration Act (“FAA”) provides that
`arbitration agreements “shall be valid, irrevocable,
`and enforceable, save upon such grounds as exist at
`law or in equity for the revocation of any contract.” 9
`U.S.C. § 2. In Epic Systems Corp. v. Lewis, 138 S. Ct.
`1612 (2018), this Court held that the FAA requires
`courts to “enforce arbitration agreements according to
`their
`terms—including
`terms
`providing
`for
`individualized proceedings.” Id. at 1619. And since
`Epic Systems, this Court has repeatedly confirmed
`that courts must enforce arbitration agreements as
`written. See, e.g., Lamps Plus, Inc. v. Varela, 139 S.
`Ct. 1407, 1418 (2019); Henry Schein, Inc. v. Archer &
`White Sales, Inc., 139 S. Ct. 524, 530 (2019).
`
`California courts have nonetheless created a broad
`exception to the FAA’s “emphatic directions.” Epic
`Sys., 138 S. Ct. at 1621. According to the California
`Supreme Court, claims arising under California’s
`Private Attorneys General Act (“PAGA”), Cal. Lab.
`Code § 2698 et seq.—which threaten employers with
`massive penalties for even trivial legal violations—are
`exempt
`from
`the FAA, and otherwise valid
`agreements calling for individual arbitration are
`therefore unenforceable as to PAGA claims. See
`Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348,
`360 (2014). The Ninth Circuit has upheld this
`conclusion. See Sakkab v. Luxxotica Retail N. Am.,
`Inc., 803 F.3d 425, 431 (9th Cir. 2015). And both
`courts have declined to reassess their holdings in the
`wake of this Court’s decision in Epic Systems.
`
`
`
`
`
`
`
`ii
`
`The question presented is:
`
`individual
`for
`calling
`Whether agreements
`arbitration are enforceable under the Federal
`Arbitration Act with respect to claims asserted under
`California’s Private Attorneys General Act, Cal. Lab.
`Code § 2698 et seq.
`
`
`
`
`
`
`
`iii
`
`RULE 29.6 STATEMENT
`
`Pursuant to this Court’s Rule 29.6, petitioner
`DoorDash, Inc. states that
`it has no parent
`corporation and that no publicly held company owns
`10% or more of its stock.
`
`
`
`
`
`
`
`
`
`iv
`
`STATEMENT OF RELATED PROCEEDINGS
`
`This case arises from, and is related to, the
`following proceedings in the California Superior Court
`for the County of San Francisco, the California Court
`of Appeal, and the California Supreme Court:
`• Campbell v. DoorDash, Inc., No. CGC-19-
`575383 (Cal. Super. Ct.), order issued Nov.
`7, 2019;
`• Campbell v. DoorDash, Inc., No. A159296
`(Cal. Ct. App.), opinion issued Nov. 30, 2020;
`• Campbell v. DoorDash, Inc., No. S266497
`(Cal.), petition for review denied Mar. 10,
`2021.
`There are no other proceedings in state or federal
`trial or appellate courts directly related to this case
`within the meaning of this Court’s Rule 14.1(b)(iii).
`
`
`
`
`
`
`
`
`v
`
`TABLE OF CONTENTS
`
`Page
`
`QUESTION PRESENTED .................................... i
`
`RULE 29.6 STATEMENT .................................. iii
`
`STATEMENT OF RELATED
`PROCEEDINGS ................................................... iv
`
`OPINIONS BELOW .............................................. 4
`
`JURISDICTION .................................................... 4
`
`STATUTORY PROVISIONS INVOLVED ........... 5
`
`STATEMENT OF THE CASE .............................. 5
`
`A. Legal Background ..................................... 5
`
`B. Factual And Procedural History ............ 13
`
`REASONS FOR GRANTING THE
`PETITION ........................................................... 17
`
`A. The Decision Below Conflicts with
`This Court’s Decisions Interpreting
`the FAA .................................................... 18
`
`B. This Case Presents a Good Vehicle
`to Assess the Iskanian Rule ................... 21
`
`C. Whether the FAA Encompasses
`PAGA Claims Is an Important and
`Recurring Issue ....................................... 24
`
`CONCLUSION .................................................... 26
`
`
`
`
`
`
`
`
`vi
`
`TABLE OF APPENDICES
`
`Page
`
`APPENDIX A: Minute Order of the California
`Supreme Court (Mar. 10, 2021) .......................... 1a
`
`APPENDIX B: Order of the California Court of
`Appeal (Nov. 30, 2020) ........................................ 2a
`
`APPENDIX C: Order of the Superior Court of Los
`Angeles County (Nov. 7, 2019) ......................... 12a
`
`APPENDIX D: Statutory Provisions Involved ...... 15a
`
`9 U.S.C. § 2 ................................................. 15a
`
`Cal. Labor Code § 2699 .............................. 16a
`
`APPENDIX E: DoorDash, Inc.’s Petition to Compel
`Arbitration and Stay Proceedings .................... 19a
`
`APPENDIX F: Declaration of Stanley Tang in
`support of Petition to Compel Arbitration and
`Stay Proceedings ............................................... 42a
`
`APPENDIX G: Brandon Campbell’s Opposition to
`Petition to Compel Arbitration and Stay
`Proceedings ....................................................... 60a
`
`APPENDIX H: Declaration of Joshua Lipshutz in
`support of Petition to Compel Arbitration and
`Stay Proceedings ............................................... 78a
`
`
`
`
`
`
`
`vii
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`
`Cases
`
`Arias v. Superior Court,
`209 P.3d 923 (Cal. 2009) ........................................ 8
`
`AT&T Mobility LLC v. Concepcion,
`563 U.S. 333 (2011) .................. 1, 5, 6, 7, 13, 19, 25
`
`Campbell v. DoorDash,
`No. S266497 (Mar. 10, 2021) ............................... 22
`
`Correia v. NB Baker Elec., Inc.,
`244 Cal. Rptr. 3d 177
`(Cal. Ct. App. 2019) .............................................. 21
`
`Dr.’s Assocs., Inc. v. Casarotto,
`517 U.S. 681 (1996) ................................................ 6
`
`EEOC v. Waffle House,
`534 U.S. 279 (2002) .............................................. 19
`
`Epic Sys. Corp. v. Lewis,
`138 S. Ct. 1612 (2018) ... 1, 5, 11, 12, 13, 17, 18, 20,
`21
`
`Green Tree Fin. Corp.-Ala. v. Randolph,
`531 U.S. 79 (2000) .................................................. 5
`
`Henry Schein, Inc. v. Archer & White
`Sales, Inc.,
`139 S. Ct. 524 (2019) ...................................... 12, 13
`
`
`
`
`
`
`
`viii
`
`Huff v. Securitas Sec. Servs. USA, Inc.,
`23 Cal. App. 5th 745
`(Cal. Ct. App. 2018) ................................................ 7
`
`Iskanian v. CLS Transportation Los
`Angeles, LLC,
`59 Cal. 4th 348 (2014) ...................... 2, 9, 18, 19, 23
`
`James v. City of Boise,
`577 U.S. 306 (2016) .............................................. 21
`
`Kilby v. CVS Pharmacy, Inc.,
`739 F.3d 1192 (9th Cir. 2013) ................................ 8
`
`Kim v. Reins Int’l Cal., Inc.,
`459 P.3d 1123 (Cal. 2020) ...................................... 8
`
`Kindred Nursing Ctrs. Ltd. P’ship v.
`Clark,
`137 S. Ct. 1421 (2017) ...................................... 6, 13
`
`Lamps Plus, Inc. v. Varela,
`139 S. Ct. 1407 (2019) .......................................... 13
`
`Magadia v. Wal-Mart Assocs., Inc.,
`999 F.3d 668 (9th Cir. 2021) .................. 8, 9, 19, 20
`
`Marko v. DoorDash, Inc.,
`No. BC659841 (L.A. Super. Ct.) .......................... 17
`
`Marmet Health Care Ctr., Inc. v.
`Brown,
`565 U.S. 530 (2012) .............................................. 13
`
`Moriana v. Viking River Cruises, Inc.,
`No. S265257 (Cal. Dec. 9, 2020) .......................... 22
`
`
`
`
`
`
`
`ix
`
`Nitro-Lift Techs., L.L.C. v. Howard,
`568 U.S. 17 (2012) .................................... 13, 21, 23
`
`Postmates v. Rimler,
`No. 21-0119 (U.S. July 26, 2021) ......................... 22
`
`Provost v. YourMechanic,
`No. S265736 (Cal. Jan. 20, 2021) ........................ 22
`
`Rimler v. Postmates,
`No. S266718 (Cal. Feb. 24, 2021) ........................ 22
`
`Rivas v. Coverall N. Am., Inc.,
`842 F. App’x 55 (9th Cir. 2021) ........... 3, 21, 22, 23
`
`Rivas v. Coverall N. Am., Inc.,
`No. 20-55140 (9th Cir. Apr. 6, 2021) ................... 22
`
`Sakkab v. Luxxotica Retail North
`America, Inc.,
`803 F.3d 425 (9th Cir. 2015) .................. 3, 7, 10, 23
`
`Santana v. Postmates,
`No. S267574 (Cal. Apr. 14, 2021) ........................ 22
`
`Schofield v. Skip Transport,
`No. S267967 (Cal. May 12, 2021) ........................ 22
`
`Southland Corp. v. Keating,
`465 U.S. 1 (1984) .................................................... 5
`
`Viking River Cruises, Inc. v. Moriana,
`No. 20-1573 (U.S. May 10, 2021) ......................... 22
`
`YourMechanic, Inc. v. Provost,
`No. 20-1787 (U.S. June 21, 2021) ........................ 22
`
`
`
`
`
`x
`
`
`
`Statutes
`
`9 U.S.C. § 2 ........................................................ 5, 6, 18
`
`Cal. Lab. Code § 2698 et seq. ...................................... 1
`
`Cal. Lab. Code § 2699 .................................................. 7
`
`Cal. Lab. Code § 2699(i) .............................................. 7
`
`Cal. Lab. Code § 2699(a) ....................................... 2, 20
`
`Cal. Lab. Code § 2699(f)(2) .......................................... 7
`
`Cal. Lab. Code § 2699(g)(1) ......................................... 7
`
`Cal. Lab. Code § 2699(h) ............................................. 8
`
`Cal. Lab. Code § 2699.3(b)(2)(A)(i) ............................. 8
`
`Other Authorities
`
`2d Substitute H.B. 1076, 67th Leg., Reg.
`Sess. (Wash. 2021) ............................................... 26
`
`Assemb. B. 5876, 2021 Reg. Sess.
`(N.Y. 2021)............................................................ 26
`
`Braden Campbell, Calif. Private AG
`Law: Coming to a State Near You?,
`Law360 (Feb. 21, 2020, 11:56 AM),
`https://bit.ly/3hxPHCp ......................................... 26
`
`Charles Thompson et al., Employers
`Must Brace for PAGA-Like Bills
`Across US, Law360 (June 18, 2021),
`https://bit.ly/3BAFGfH ......................................... 26
`
`
`
`
`
`
`
`xi
`
`Emily Green, State Law May Serve As
`Substitute for Employee Class
`Actions, Daily Journal
`(Apr. 17, 2014),
`https://bit.ly/3AVQ5lY.......................................... 24
`
`H.B. 1959, 192nd Gen. Court
`(Mass. 2021) ......................................................... 26
`
`H.B. 483, 2019 Gen. Assemb., Reg. Sess.
`(Vt. 2019) .............................................................. 26
`
`H.B. 5381, 2020 Gen. Assemb., Reg.
`Sess. (Conn. 2020) ................................................ 26
`
`Jathan Janove, More California
`Employers Are Getting Hit with
`PAGA Claims, Soc’y for Human Res.
`Mgmt. (Mar. 26, 2019),
`https://bit.ly/3wzkHX1 ......................................... 25
`
`Legis. Doc. 1693, 129th Leg., 1st Reg.
`Sess. (Me. 2019) ................................................... 26
`
`Matthew J. Goodman, The Private
`Attorney General Act: How to
`Manage the Unmanageable,
`56 Santa Clara L. Rev. 413 (2016) ............ 4, 24, 25
`
`Maureen A. Weston, The Clash:
`Squaring Mandatory Arbitration
`with Administrative Agency and
`Representative Recourse, 89 S. Cal.
`L. Rev. 103 (2015) ................................................ 24
`
`
`
`
`
`
`
`xii
`
`S.B. 1179, 192nd Gen. Court
`(Mass. 2021) ......................................................... 26
`
`S.B. 12, 2021 Reg. Sess. (N.Y. 2021) ......................... 26
`
`S.B. 139, 2019 Gen. Assemb., Reg. Sess.
`(Vt. 2019) .............................................................. 26
`
`S.B. 750, 80th Legis. Assemb., Reg.
`Sess. (Or. 2019) .................................................... 26
`
`Tim Freudenberger et al., Trends in
`PAGA Claims And What It Means
`For California Employers, Inside
`Counsel (Mar. 19, 2015),
`https://bit.ly/2NFIXWi ......................................... 24
`
`Toni Vranjes, Doubts Raised About New
`California PAGA Requirements,
`Society for Human Resource
`Management (Dec. 6, 2016),
`https://bit.ly/36tlRZl ............................................. 25
`
`U.S. Bureau of Labor Statistics,
`Economy at a Glance: California,
`https://bit.ly/3xybqzK ........................................... 25
`
`Zachary D. Clopton, Procedural
`Retrenchment and the States,
`106 Cal. L. Rev. 411 (2018) .................................. 25
`
`
`
`
`
`
`
`
`
`1
`
`PETITION FOR A WRIT OF CERTIORARI
`
`The Federal Arbitration Act (“FAA”) requires
`courts to “enforce arbitration agreements according to
`their
`terms—including
`terms
`providing
`for
`individualized proceedings.” Epic Sys. Corp. v. Lewis,
`138 S. Ct. 1612, 1619 (2018). California courts refuse
`to follow that mandate with respect to an entire
`category of claims: those brought against employers
`(or putative employers) under California’s Private
`Attorneys General Act (“PAGA”), Cal. Lab. Code
`§ 2698 et seq.—an expansive statute that permits
`individuals to seek penalties on behalf of themselves
`and any other purportedly “aggrieved” employees.
`
`This is not the first time that California has tried
`to end-run the FAA. In AT&T Mobility LLC v.
`Concepcion, 563 U.S. 333 (2011), this Court evaluated
`the California Supreme Court’s Discover Bank rule,
`which rendered class action waivers in arbitration
`agreements unenforceable on public policy grounds.
`Id. at 338, 348. This Court held that the FAA
`preempted
`the Discover Bank
`rule because
`“[r]equiring the availability of classwide arbitration
`interferes with
`fundamental attributes” of the
`traditional, bilateral arbitration favored by the FAA.
`Id. at 344.
`
`More recently, this Court reaffirmed in Epic
`Systems that
`the FAA
`requires
`“rigorous[]”
`enforcement of class and collective action waivers in
`arbitration agreements calling
`for
`“one-on-one
`arbitration,” regardless of countervailing policy
`interests expressed in federal labor laws. 138 S. Ct.
`at 1621, 1619. And yet, despite this Court’s “emphatic
`direction[]” that individual arbitration agreements
`must be enforced “according to their terms,” id. at
`
`
`
`
`
`
`
` 2
`
`1621, state courts in California have devised a blanket
`exception to that rule for PAGA claims.
`
`Presently, employees (and purported employees)
`in California can evade otherwise valid and binding
`agreements to arbitrate disputes with their employers
`on an individual basis merely by asserting their
`claims under PAGA. That state statute authorizes an
`“aggrieved employee” to seek civil penalties “on behalf
`of himself or herself and other current or former
`employees” for a wide range of violations of the
`California Labor Code. Cal. Lab. Code § 2699(a).
`
`In Iskanian v. CLS Transportation Los Angeles,
`LLC, 59 Cal. 4th 348 (2014), the California Supreme
`Court held that workers may bring PAGA actions—
`which are inherently representative, and seek relief
`on behalf of others—notwithstanding their agreement
`to arbitrate disputes individually. Id. at 360. The so-
`called “Iskanian rule” thus allows employees in
`California to bring PAGA claims on behalf of
`themselves and hundreds or thousands of other
`“aggrieved employees” in court, often for millions of
`dollars in penalties—even if they expressly agreed to
`resolve all disputes in individual arbitration.
`
`Both the California Supreme Court and the Ninth
`Circuit have held that this “rule” is not preempted by
`the FAA. In Iskanian itself, the California Supreme
`Court held that a PAGA claim “lies outside the FAA’s
`coverage because it is not a dispute between an
`employer and an employee arising out of their
`contractual relationship.” 59 Cal. 4th at 386. The
`court reasoned that a PAGA claim “is a dispute
`between an employer and the state,” meaning that the
`state is “the real party in interest,” id. at 386–87
`(emphasis in original)—even though in PAGA actions
`
`
`
`
`
`
`
` 3
`
`it is the individual employee who files the action, is
`represented by counsel, and controls the litigation. A
`divided panel of the Ninth Circuit similarly held in
`Sakkab v. Luxxotica Retail North America, Inc., 803
`F.3d 425 (9th Cir. 2015), that the Iskanian rule was
`not preempted by the FAA—though it did not endorse
`the California Supreme Court’s reasoning. Instead,
`the Ninth Circuit held that the Iskanian rule falls
`within the FAA’s savings clause because the Iskanian
`rule “bars any waiver of PAGA claims, regardless of
`whether the waiver appears in an arbitration
`agreement or a non-arbitration agreement.” Id. at
`432.
`
`Both the California Supreme Court and the Ninth
`Circuit have repeatedly declined to reconsider these
`holdings, even as one Ninth Circuit judge has
`observed that this Court’s decision in Epic Systems
`“seriously undermine[s]” the Iskanian rule, putting
`California law in “obvious” “tension[]” with this
`Court’s command that agreements to arbitrate
`individually must be enforced. Rivas v. Coverall N.
`Am., Inc., 842 F. App’x 55, 57, 59 (9th Cir. 2021)
`(Bumatay, J., concurring); see also id. at 58 (“Recent
`Supreme Court decisions . . . make clear that our
`precedent is in serious need of a course correction.”).
`This Court’s review is necessary to prevent parties
`from “sidestep[ping] an arbitration agreement simply
`by filing a PAGA claim.” Id.
`
`Granting review would resolve an important and
`recurring issue affecting thousands of employers in
`the country’s most populous state. Since Iskanian,
`PAGA has become the preferred avenue for plaintiffs
`seeking
`to evade
`the
`individual arbitration
`agreements to which they agreed and to which they
`
`
`
`
`
`
`
` 4
`
`are otherwise bound. The sheer volume of PAGA
`filings has exploded in the years since Iskanian—
`thousands of PAGA actions are now filed every year.
`See Matthew J. Goodman, The Private Attorney
`General Act: How to Manage the Unmanageable, 56
`Santa Clara L. Rev. 413, 446 (2016). The California
`Supreme Court and the Ninth Circuit have made clear
`they will not change course. Absent this Court’s
`intervention, California’s unwritten and unprincipled
`“PAGA exception” to the FAA may spread to other
`states, some of which are considering adopting similar
`laws.
`
`This Court should grant review to make clear that
`the FAA applies to claims asserted under PAGA, and
`to reaffirm
`its prior holdings that
`individual
`arbitration agreements must be enforced according to
`their terms.
`
`OPINIONS BELOW
`
`The California Supreme Court’s order denying
`DoorDash’s petition for review is unpublished and is
`reproduced at App.1a. The California Court of
`Appeal’s opinion is unpublished but available at 2020
`WL 7021459 and reproduced at App.2a–11a. The
`judgment of the California Superior Court of the City
`and County of San Francisco is unpublished and is
`reproduced at App.12a–14a.
`
`JURISDICTION
`
`This Court has jurisdiction under 28 U.S.C.
`§ 1257(a). The California Supreme Court denied
`DoorDash’s petition for review on March 10, 2021. On
`March 19, 2020, this Court extended the deadline to
`
`
`
`
`
`
`
` 5
`
`file a petition for writ of certiorari due on or after that
`date to 150 days.
`
`STATUTORY PROVISIONS INVOLVED
`
`Section 2 of the Federal Arbitration Act, 9 U.S.C.
`§ 2, states: “A written provision in any maritime
`transaction or a contract evidencing a transaction
`involving commerce to settle by arbitration a
`controversy thereafter arising out of such contract or
`transaction, or the refusal to perform the whole or any
`part thereof, or an agreement in writing to submit to
`arbitration an existing controversy arising out of such
`a contract, transaction, or refusal, shall be valid,
`irrevocable, and enforceable, save upon such grounds
`as exist at law or in equity for the revocation of any
`contract.”
`
`STATEMENT OF THE CASE
`
`A.
`
`Legal Background
`
`1. Congress enacted the FAA in 1925 “to reverse
`the longstanding judicial hostility to arbitration,”
`Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79,
`89 (2000) (quotation marks omitted). Congress
`recognized that arbitration has much to offer—“not
`least the promise of quicker, more informal, and often
`cheaper resolutions for everyone involved.” Epic Sys.,
`138 S. Ct. at 1621. The FAA thus sought to “ensur[e]
`that private arbitration agreements are enforced
`according to their terms,” Concepcion, 563 U.S. at 344
`(quotation marks omitted), and “to foreclose state
`legislative attempts to undercut the enforceability of
`arbitration agreements,” Southland Corp. v. Keating,
`465 U.S. 1, 16 (1984). In furtherance of those ends,
`the FAA mandates that arbitration agreements “shall
`be valid, irrevocable, and enforceable, save upon such
`
`
`
`
`
`
`
` 6
`
`grounds as exist at law or in equity for the revocation
`of any contract.” 9 U.S.C. § 2.
`
`Section 2’s final phrase, referred to as its “savings
`clause,” permits courts to apply “generally applicable
`contract defenses, such as
`fraud, duress, or
`unconscionability,”
`to
`invalidate
`arbitration
`agreements in limited circumstances. Dr.’s Assocs.,
`Inc. v. Casarotto, 517 U.S. 681, 687 (1996). The
`savings clause reflects the basic principle that
`arbitration agreements, like other contracts, are
`unenforceable if they were procured by fraud or other
`means that vitiate consent. See id. But this Court
`has stated clearly that the FAA’s savings clause does
`not condone “any state rule discriminating on its face
`against arbitration,” Kindred Nursing Ctrs. Ltd.
`P’ship v. Clark, 137 S. Ct. 1421, 1426 (2017), or any
`state law that “frustrates [the FAA’s] purpose to
`ensure that private arbitration agreements are
`enforced according to their terms,” Concepcion, 563
`U.S. at 347 n.6.
`
`The Court has especially emphasized the latter
`point—that the FAA preempts state laws that
`interfere with parties’ ability to choose the efficiency
`and
`informality of bilateral arbitration.
`
`In
`Concepcion, the Court considered the enforceability of
`a consumer contract providing for “arbitration of all
`disputes between the parties, but requir[ing] that
`claims be brought in the parties’ individual capacity,
`and not as a plaintiff or class member in any
`purported class or representative proceeding.” Id. at
`336 (quotation marks omitted). This Court held that
`the FAA preempts any state law or rule prohibiting
`class action waivers in arbitration agreements,
`including California’s Discover Bank rule. Id. at 341–
`
`
`
`
`
`
`
` 7
`
`44. And the Court concluded that the Discover Bank
`rule “interfere[d] with fundamental attributes of
`arbitration”—namely, its informality, lower cost,
`greater efficiency, and speed—by “[r]equiring the
`availability of classwide arbitration.” Id. at 344. As
`the Court explained, “[t]he overarching purpose of the
`FAA . . . is to ensure the enforcement of arbitration
`agreements according to their terms so as to facilitate
`streamlined proceedings.” Id.
`
`2. PAGA allows employees to file lawsuits to
`recover civil penalties for Labor Code violations on
`behalf of themselves, other “aggrieved” employees,
`and the State of California. Cal. Lab. Code § 2699.
`But the statute is even more expansive than that: An
`employee who alleges that she was “affected by at
`least one Labor Code violation” may “pursue penalties
`for all the Labor Code violations committed by that
`employer,” regardless whether she was affected by
`them. Huff v. Securitas Sec. Servs. USA, Inc., 23 Cal.
`App. 5th 745, 751 (Cal. Ct. App. 2018). For California
`Labor Code provisions that do not themselves specify
`a monetary penalty, PAGA provides statutory
`penalties of $100 per employee subjected to a violation
`per pay period for the first violation, and $200 per
`employee per pay period
`for each subsequent
`violation. Cal. Lab. Code § 2699(f)(2). Employees
`keep 25 percent of any civil penalties recovered and
`remit the rest to the State. Id. § 2699(i). PAGA also
`provides that “[a]ny employee who prevails in any
`action shall be entitled to an award of reasonable
`attorney’s fees and costs.” Id. § 2699(g)(1). PAGA
`penalties can—and often do—run into the hundreds
`of millions of dollars. See Sakkab, 803 F.3d at 448
`(Smith, J., dissenting) (“[A] representative PAGA
`claim could . . . increase the damages awarded . . . by
`
`
`
`
`
`
`
` 8
`
`a multiplier of a hundred or thousand times.”); Kilby
`v. CVS Pharmacy, Inc., 739 F.3d 1192, 1196 (9th Cir.
`2013) (“Even a conservative estimate would put the
`potential penalties [under PAGA] in these cases in the
`tens of millions of dollars.”).
`
`While PAGA claims “may be brought as class
`actions,” the California Supreme Court has held that
`they need not comply with California’s class action
`statute. Arias v. Superior Court, 209 P.3d 923, 930
`n.5, 933 (Cal. 2009). As a result, in California courts,
`plaintiffs suing under PAGA on behalf of other
`allegedly aggrieved employees are not required to
`seek or obtain class certification or provide notice of
`the action to absent persons. See id. at 929–34. Nor
`is an employee barred from bringing a PAGA claim
`even after resolving her own wage-and-hour claims
`against an employer in an individual settlement. See
`Kim v. Reins Int’l Cal., Inc., 459 P.3d 1123, 1128–32
`(Cal. 2020).
`
`These purportedly “non-class” PAGA actions can
`bind absent employees without notice or an
`opportunity to opt out. See Arias, 209 P.3d at 934.
`They are also preclusive as to the defendant
`employers: “[I]f an employee plaintiff prevails in an
`action under [PAGA] for civil penalties by proving
`that the employer has committed a Labor Code
`violation, the defendant employer will be bound by the
`resulting judgment.” Id.
`
`Under PAGA, “[a]n aggrieved employee can only
`sue if California declines to investigate or penalize an
`alleged violation.” Magadia v. Wal-Mart Assocs., Inc.,
`999 F.3d 668, 677 (9th Cir. 2021) (citing Cal. Lab.
`Code §§ 2699(h), 2699.3(b)(2)(A)(i)). “But once
`California elects not to issue a citation, the State has
`
`
`
`
`
`
`
` 9
`
`no authority under PAGA to intervene in a case
`brought by an aggrieved employee.” Magadia, 999
`F.3d at 677 (emphasis added).
`
`PAGA is distinct from “a traditional qui tam
`action” because qui tam actions serve “only as ‘a
`partial assignment’ of the Government’s claim,” while
`“PAGA represents a permanent, full assignment of
`California’s interest to the aggrieved employee.” Id.
`PAGA “lacks the ‘procedural controls’ necessary to
`ensure that California—not the aggrieved employee
`(the named party
`in PAGA
`suits)—retains
`‘substantial authority’ over the case.” Id. PAGA’s
`“complete assignment” of California’s interest to an
`aggrieved employee, as the Ninth Circuit recently
`observed, “undermines the notion that the aggrieved
`employee is solely stepping into the shoes of the State
`rather than also vindicating the interests of other
`aggrieved employees.” Id.
`
`3. In Iskanian, the California Supreme Court held
`that employees may bring PAGA actions in court
`despite agreeing to arbitrate disputes individually. 59
`Cal. 4th at 360. “[A]n arbitration agreement requiring
`an employee as a condition of employment to give up
`the right to bring representative PAGA actions,” the
`court reasoned, “is contrary to public policy.” Id. In
`so doing, the court expressly held that its rule was not
`subject to the FAA: whereas “the FAA aims to ensure
`an efficient forum for the resolution of private
`disputes, [] a PAGA action is a dispute between an
`employer and the state.” Id. at 384 (emphasis in
`original).
`
`In Sakkab, a divided panel of the Ninth Circuit
`declined to adopt the California Supreme Court’s
`reasoning but nevertheless agreed with its conclusion
`
`
`
`
`
`
`
`10
`
`that the Iskanian rule was not preempted by the FAA.
`803 F.3d at 432. The majority held that the Iskanian
`rule fit within Section 2’s savings clause because
`Iskanian’s holding supposedly “bars any waiver of
`PAGA claims, regardless of whether the waiver
`appears in an arbitration agreement or a non-
`arbitration agreement.” Id. The majority further
`concluded that the Iskanian rule does not conflict with
`the FAA’s purpose to overcome judicial hostility to
`arbitration because
`it “does not prohibit the
`arbitration of [PAGA] claim[s],” but rather “provides
`only that representative PAGA claims may not be
`waived outright.” Id. at 434. And the majority said
`“the Iskanian rule does not conflict with the FAA[]
`because it leaves parties free to adopt the kinds of
`informal
`procedures
`normally
`available
`in
`arbitration.” Id. at 439.
`
`In dissent, Judge N.R. Smith accused the majority
`of “ignor[ing] the basic precepts enunciated in
`Concepcion” by holding that the Iskanian rule does
`not frustrate the FAA’s purposes. Sakkab, 803 F.3d
`at 440 (Smith, J., dissenting). Judge Smith opined
`that Iskanian’s prohibition of representative action
`waivers was sufficiently analogous to Discover Bank’s
`prohibition of class action waivers such that both
`California rules are inconsistent with the FAA. Id. at
`443–44. He further reasoned that “the Iskanian rule
`burdens arbitration” by “mak[ing] the process slower,
`more costly, and more likely to generate procedural
`morass; . . . requir[ing] more formal and complex
`procedure[s]; and [] expos[ing] the defendants to
`substantial unanticipated risk.” Id. at 444.
`
`4. Four years after Iskanian, this Court held in
`Epic Systems
`that agreements
`to arbitrate
`
`
`
`
`
`
`
`11
`
`individually must be enforced according to their
`terms. The Court rejected the argument that, for
`workers who have agreed to arbitrate their disputes
`individually, the National Labor Relations Act
`(“NLRA”) nevertheless guarantees the right to bring
`class and collective actions against employers. Epic
`Sys., 138 S. Ct. at 1619.
`
`In reciting the question presented, the Court
`framed the issue broadly: “Should employees and
`employers be allowed to agree that any disputes
`between them will be resolved through one-on-one
`arbitration?
` Or should employees always be
`permitted to bring their claims in class or collective
`actions, no matter what they agreed with their
`employers?” Epic Sys., 138 S. Ct. at 1619 (emphasis
`added). And the Court reached a similarly broad
`conclusion: “In the [FAA], Congress has instructed
`federal courts to enforce arbitration agreements
`according to their terms—including terms providing
`for individualized proceedings”—regardless whether
`a plaintiff attempts to bring a class, collective, or other
`type of representative action, and regardless whether
`the plaintiff seeks to represent private or public
`entities (or both). Id. (emphasis added). Although it
`analyzed the NLRA in Epic Systems, the Court made
`clear that it does not “mak[e] any difference” whether
`a contrary rule arises under a federal law (like the
`NLRA) or a state law (like PAGA); in either
`circumstance, the FAA requires courts “to enforce, not
`override, the terms of the arbitration agreement[].”
`Id. at 1623.
`
`The plaintiffs in Epic Systems had “object[ed] to
`their agreements precisely because they require
`individualized arbitration proceedings instead of class
`
`
`
`
`
`
`
`12
`
`or collective ones.” 138 S. Ct. at 1622. This Court cast
`that objection aside, explaining that the “argument
`that a contract is unenforceable just because it
`requires bilateral arbitration” is “emphatic[ally]” at
`odds with the FAA. Id. at 1623, 1621 (emphasis in
`original).
` Arbitration has “traditionally [been]
`individualized,” and even a federal statute embodying
`important “public policy” interests cannot override an
`agreement to arbitrate individually—no matter how
`well intentioned the law is or whether it applies to all
`contracts generally. Id. at 1622–23.
`
`“[A]rbitration
`
`is clear”:
`law
`“the
`Thus,
`agreements . . . must be enforced as written,” absent
`a “clear” congressional command to the contrary. Epic
`Sys., 138 S. Ct. at 1632. And given the widespread
`“judicial antagonism toward arbitration” that led to
`the FAA’s enactment, courts “must be alert to new
`devices and formulas” that would expressly or
`implicitly “declar[e] arbitration against public policy.”
`Id. at 1623. “[A] rule seeking to declare individual
`arbitration proceedings off limits is . . . just such a
`device.” Id.
`
`Since Epic Systems, this Court has held twice more
`that the FAA requires courts to enforce arbitration
`agreements according to their terms. In Henry
`Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct.
`5
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