Valley Group Takes PAGA Challenge to Court

The California Business and Industrial Alliance appeared yesterday in Orange County Superior Court to defend its challenges to the Private Attorneys General Act, or PAGA, a law which encourages employees to file lawsuits to receive monetary awards if they find businesses in violation of the state’s labor code. In yesterday’s session, the Court granted CABIA, a Sunland-based business advocacy group, “leave to amend” its Procedural Due Process Challenge, meaning it may now rewrite the challenge, add substantial facts and further explain its position. The Court struck down CABIA’s Substantive Due Process and Equal Protection Challenges. CABIA’s Procedural Due Process Challenge posits that the adjudication process under PAGA is unfair and partial to the plaintiff. The business organization argues that PAGA lawsuits threaten millions of dollars in penalties for defendants without considering whether they knowingly violated labor codes or have the capital to pay the resulting fines. It also requires defendants to pay the plaintiff’s attorney fees. The organization claims that PAGA discourages companies from defending themselves in court and instead encourages them to pay exorbitant settlement fees, which is a direct violation of their procedural due process. CABIA also claims that the state’s delegation of executive legal power to private citizens violates California’s separation of powers doctrine. The organization will file its amended Procedural Due Process Challenge July 12.