Duane Morris Class Action Review - 2023 - Report - Page 36
The Third Circuit agreed with the former, holding that, like the out-of-state plaintiffs in
Bristol-Myers, the opt-in plaintiffs in FLSA collective actions must satisfy the personal
jurisdiction requirements of the Fourteenth Amendment to join the suit by demonstrating
general personal jurisdiction or specific personal jurisdiction. As to the former, the optins could not establish general personal jurisdiction over FedEx because the company
was incorporated in Delaware and had a principal place of business in Tennessee. As
to the latter, the opt-ins could not establish specific jurisdiction because they lived and
worked in New York and Maryland, respectively, and based their claims entirely on their
treatment by FedEx in their home states. Id. at 383.
During 2022, the parties in three of these cased filed petitions for review by the U.S.
Supreme Court, and requested that it address the question of personal jurisdiction in the
context of collective actions. To date, the Supreme Court has denied two of the
petitions, with the Fischer petition outstanding. Thus, it is unlikely that the Supreme
Court will resolve this issue in 2023, and corporate defendants can expect that personal
jurisdiction will remain a powerful defense for facing collective actions outside of their
home states.
Trend # 10 – PAGA Actions Suffered Their First Setback, WorkArounds Continued To Percolate
In 2022, actions under the California Private Attorneys General Act (PAGA), Cal. Lab.
Code, §§ 2698, et seq., saw their first setback as a workaround to workplace arbitration
programs that require individual proceedings.
The PAGA created a scheme to “deputize” private citizens - “aggrieved employees” - to
sue their employers for violations of the California Labor Code on behalf of their coworkers as well as the State. If successful, aggrieved employees receive 25% of any
recovered civil penalties and pass the other 75% to the California Labor and Workforce
Development Agency (LWDA). The PAGA authorizes the attorneys who pursue the
action to collect their attorney’s fees and costs in addition to the civil penalties.
A.
The Explosion Of PAGA Notices
According to data maintained by the California Department of Industrial Relations, the
number of PAGA notices filed with the LWDA has increased exponentially over the past
two decades. The number grew from 11 notices in 2006 to 1,743 in 2011, to 5,208 in
2016, and to 6,502 in 2021. From 2013 to 2014, employers saw the largest single year
increase, from 1,605 notices in 2013 to 4,532 notices in 2014, an increase of 182%.
Over the five-year period from 2017 to 2021, the number of notices grew from 4,985 in
2017, to 6,502 in 2021, an increase of 30%.
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Duane Morris Class Action Review – 2023