Estrada v. Royalty Carpet Mills, Inc., 15 Cal. 5th 582 (2024)

The California Supreme Court affirmed an appellate court judgment that “trial courts lack inherent authority to strike PAGA claims on manageability grounds”—that is, trial courts may not “dismiss [them] with prejudice.” In so holding, the Supreme Court overruled Wesson v. Staples the Office Superstore, LLC, 68 Cal. App. 5th 746 (2021).

The Court was careful to limit its decision to the question of whether trial courts can dismiss a PAGA claim on manageability grounds, but it assiduously avoided interfering with trial judges’ discretion to control their dockets. Thus, it “le[ft] undisturbed various case management tools” short of dismissing claims outright. In doing so, the Court expressly endorsed lower court decisions holding that trial courts may “limit the evidence to be presented at trial or otherwise limit the scope of the PAGA claim.” And it observed that because trial courts have the ability to limit evidence or claims, “it behooves the PAGA plaintiff to ensure that trial of the action is manageable[.]”

Because the California Supreme Court left intact a trial court’s inherent authority to control its own docket in the face of unwieldy PAGA claims, the ultimate impact of Estrada may prove to be relatively minor. Many trial courts already proactively work with litigants to manage individualized issues in PAGA cases, including requiring plaintiffs to submit trial plans at an early but practicable time. Nothing in Estrada casts any doubt on the propriety of these practices. Thus, employers may take the ruling as tacit encouragement to continue to try to limit PAGA claims in a way that allows parties and courts to manage individualized issues, even if outright dismissal is now off the table.