Why it matters

What are the boundaries of discovery for plaintiffs in Private Attorneys General Act cases in California state court? The California Supreme Court heard oral argument on the issue recently, one that is of premium importance to employers and employees alike given the increasing popularity of PAGA claims in employment lawsuits. The case involves Michael Williams, a former employee of Marshalls Inc., who brought a representative action under PAGA accusing the retailer of various Labor Code violations. When the employer objected to answering special interrogatories, Williams moved to compel discovery, arguing that the information requested was vital to the prosecution of his PAGA claims. A trial court granted the motion in part and the plaintiff appealed. An appellate panel affirmed and the plaintiff appealed again to the state’s highest court. While the court appeared sympathetic to the employer’s concerns that a PAGA lawsuit could require burdensome discovery in what could be a meritless case, the court also appeared skeptical about placing limits on what plaintiffs could ask for and about whether the information requested of Marshalls was as difficult to provide as the employer contended.

Detailed discussion

After a little over a year of employment, Michael Williams filed a representative action against Marshalls Inc. under the Private Attorneys General Act (PAGA) alleging his former employer failed to provide its employees with meal and rest breaks or premium pay in lieu thereof, among other violations of the state’s Labor Code.

The plaintiff served special interrogatories seeking production of the names and contact information of all nonexempt Marshalls employees in California who had worked for the company over a roughly two-year period. The employer objected to the discovery on the ground it was irrelevant, overbroad and unduly burdensome, and implicated the privacy rights of its employees.

Williams then moved to compel the discovery, arguing the contact information was routinely discoverable in representative employee actions and vital to the prosecution of his PAGA claims.

The trial court granted the motion in part, compelling Marshalls to produce contact information for the employees at the Costa Mesa store where Williams worked, but denying production of the contact information of employees at the other 128 Marshalls stores statewide. Williams could renew his motion to compel the remaining information after he had been deposed “for at least six productive hours,” the court added, although Marshalls could attempt to show the plaintiff’s substantive claims had no factual merit in its opposition to such a motion.

An appellate panel affirmed the order, ruling that discovery of Marshalls’ employees’ contact information statewide was premature.

“At this nascent stage of plaintiff’s PAGA action there has as yet been no discovery—plaintiff has not even sat for his own deposition,” the court wrote. “The litigation therefore consists solely of the allegations in his complaint. But plaintiff alleges therein only that at the Costa Mesa store, he and perhaps other employees at that store were subject to violations of the Labor Code. Nowhere does he evince any knowledge of the practices of Marshalls at other stores, nor any fact that would lead a reasonable person to believe he knows whether Marshalls has a uniform statewide policy. That being the case, it was eminently reasonable for the trial judge to proceed with discovery in an incremental fashion, first requiring that plaintiff provide some support for his own, local claims and then perhaps later broadening the inquiry to discovery whether some reason exists to suspect Marshalls’ local practices extend statewide.”

The procedure proposed by Williams—“which contemplates jumping into extensive statewide discovery based only on the bare allegations of one local individual having no knowledge of the defendant’s statewide practices”—would be a “classic” use of discovery tools to wage litigation rather than facilitate it, the appellate panel said.

Even standing in as proxy for the Division of Labor Standards Enforcement by filing a PAGA claim did not change the court’s opinion, as “nothing in the PAGA suggests a private plaintiff … is entitled to the same access” as the DLSE. “We think it prudent that absent any express direction from the Legislature to the contrary, discovery in a civil action brought under the PAGA be subject to the same rules as discovery in civil actions generally,” the court wrote.

Employee privacy interests also outweighed the plaintiff’s need for disclosure, the court found. The California Constitution provides that all individuals have a right of privacy, which limits what courts can compel through civil discovery. Applying a balancing test, “we conclude Marshalls’ employees’ privacy interests outweigh plaintiff’s need to discover their identity at this time,” the appellate panel wrote. “Those interests begin with the employees’ right to be free from unwanted attention and perhaps fear of retaliation from an employer. On the other hand, plaintiff’s need for the discovery at this time is practically nonexistent.”

Williams appealed again. At oral argument, the California Supreme Court appeared hesitant to adopt the employer’s position to set a “low bar” for plaintiffs’ attorneys before proceeding with PAGA discovery. While Chief Justice Tani Cantil-Sakauye found the argument “cogent and reasonable,” she did add, “I’m having a hard time finding [it] in the PAGA statute.”

Marshalls told the state’s highest court that it was not seeking a special rule for discovery in PAGA cases, but simply trying to avoid a situation where plaintiffs could file a meritless claim and then seek broad discovery to burden an employer.

Justice Leondra R. Kruger questioned the extent of the burden on Marshalls to provide the information requested by Williams, to which the employer responded, “days and days.”

To read the appellate court opinion in Williams v. Marshalls of CA, click here.