PAGA Tactic Denied by Cal. Court of Appeal: Plaintiff Who Voluntarily Dismissed PAGA Claims Could Not Invoke Death Knell Doctrine To Appeal Denial of Class Certification
Topics: Court Decisions, PAGA
Last week, in Chavez v. Hi-Grade Materials Co., the California Court of Appeal took up a novel jurisdictional question: Can a putative class action plaintiff unilaterally ring the death knell for the entire class and create appellate jurisdiction by voluntarily dismissing his PAGA claims? The Court concluded that the answer is no. The Court also recognized the voluntary dismissal as a tactic to create an end-run around the rules against interlocutory appeals, and dismissed the employee’s appeal.
Angel Chavez Reyes filed a class action complaint asserting 12 causes of action for violations of the California Labor Code and California Business and Professions Code. Chavez also sought penalties under the Private Attorneys General Act ("PAGA"). The trial court denied class certification due to issues of numerosity, manageability, and typicality. The trial court's order noted that Chavez's PAGA claims were not subject to class certification and therefore were not subject to the order.
In September 2023, Chavez appealed the order denying class certification under the death knell doctrine. The doctrine allows for the immediate appeal of an order denying class certification if the order effectively terminates the action for all class members other than the individual plaintiff, rendering further proceedings impractical and unlikely. In November 2024, while the appeal was pending, Chavez voluntarily dismissed his PAGA claims without prejudice.
The California Court of Appeal affirmed the trial court’s order.
Death Knell Doctrine Inapplicable Where PAGA Claims Remain Pending
The death knell doctrine does not apply when representative PAGA claims remain pending after the trial court has denied class certification. A plaintiff seeking PAGA penalties does so as a representative of the state, so there is still a possibility of group recovery despite the termination of the class claims. Here, nothing in the trial court’s order undermined the viability of Chavez’s PAGA claims. Chavez also did not claim that the PAGA claims were derivative of or dependent upon the class claims. With viable PAGA claims intact, the death knell doctrine did not apply.
The Court addressed the “wrinkle” that, despite the remaining PAGA claims, the denial of class certification is the death knell for putative class members who were employed during the class period (four years before the filing of the Complaint), but not within the one-year PAGA statute of limitations. Nonetheless, the Court concluded that the death knell doctrine still did not apply because there was significant overlap between the putative class and the group entitled to PAGA penalties, such that a substantial portion of the putative class could still obtain relief.
Voluntary Dismissal of PAGA Claims Did Not Create Appellate Jurisdiction
The Court held that Chavez’s voluntary dismissal of his PAGA claims—over a year after the denial of class certification—did not retroactively make the trial court’s order appealable. Chavez also dismissed the claims without prejudice which, by definition, is not a final judgment. The Court sided with the employer’s argument that Chavez’s voluntary dismissal was an improper attempt to circumvent the death knell doctrine. “[A]llowing a putative class action plaintiff to sound the death knell of their own class or representative claims would undermine the finality principle underlying the one final judgment rule, ‘invite protracted litigation and piecemeal appeals,’ and condone the use of the ‘voluntary dismissal-tactic’ as an end-run around the rules against interlocutory appeals.” The Court also observed that the voluntary dismissal tactic would encourage plaintiffs to abandon PAGA claims in an effort to manufacture appellate jurisdiction.
The Chavez decision is a positive contribution to the growing judicial wariness of procedural gamesmanship in PAGA lawsuits. The Court also confirmed the death knell doctrine’s narrow parameters, even where some putative class members may not recover from the remaining PAGA claims.
If you have any questions about PAGA litigation strategy, please contact your favorite CDF attorney. We will continue to monitor the evolving PAGA legal landscape. To stay up to date, be sure to subscribe to CDF’s California Labor & Employment Law blog.
