80 Cal.App.5th 734
Cal. Ct. App.2022Background
- Plaintiff California Business & Industrial Alliance (CBIA), a lobbying group seeking repeal/reform of PAGA, sued Attorney General Xavier Becerra in his official capacity for declaratory and injunctive relief, alleging PAGA violates California’s separation of powers (and other constitutional) doctrines.
- Trial court sustained the Attorney General’s demurrer to CBIA’s separation-of-powers claim without leave to amend and entered judgment for the Attorney General; CBIA appealed.
- PAGA authorizes current and former employees to bring qui tam-like actions for Labor Code violations on behalf of the state; it requires written notice to the agency and employer, allows the agency 60–120 days to investigate/cite, and allocates penalties 75% to the state and 25% to employees.
- CBIA’s core complaint: PAGA usurps executive prosecutorial discretion and control by permitting private parties to prosecute/statewide penalties with allegedly insufficient government supervision (citing lack of evidentiary thresholds, short response deadlines, and no explicit intervention clause).
- The Court of Appeal affirmed, holding it was bound by the California Supreme Court’s decision in Iskanian that PAGA does not violate separation of powers, and alternatively concluding PAGA, like other qui tam statutes, does not materially impair executive functions given statutory notice, investigation, citation, settlement-notice provisions, and intervention mechanisms under California law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does PAGA violate California’s separation of powers by depriving the executive of prosecutorial discretion and control over enforcement? | PAGA deputizes private plaintiffs to prosecute Labor Code violations without sufficient executive supervision or control (insufficient thresholds; short deadlines; no express intervention). | Iskanian controls: PAGA is a lawful qui tam scheme; PAGA provides notice, agency investigation/citation authority, settlement/judgment notice; courts may permit intervention to protect state interests. | Demurrer affirmed. Iskanian is binding; PAGA does not violate separation of powers. Even absent Iskanian, PAGA’s structure and existing intervention/notice mechanisms save it from impairing executive functions. |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (held PAGA does not violate California separation of powers)
- Marine Forests Society v. California Coastal Comm., 36 Cal.4th 1 (Cal. 2005) (articulates separation-of-powers test: statutes may not materially impair executive functions)
- County of Santa Clara v. Superior Court, 50 Cal.4th 35 (Cal. 2010) (public-nuisance/contingent-fee supervision principles relied on in separation-of-powers discussion)
- People ex rel. Clancy v. Superior Court, 39 Cal.3d 740 (Cal. 1985) (addressed prosecutorial supervision and contingent fee counsel in public actions)
- National Paint & Coatings Assn. v. State of California, 58 Cal.App.4th 753 (Cal. Ct. App. 1997) (upheld Proposition 65 against separation-of-powers attack, relying in part on notice/agency role)
- U.S. ex rel. Kelly v. Boeing Co., 9 F.3d 743 (9th Cir. 1993) (holding federal False Claims Act’s notice/intervention features cure separation-of-powers concerns)
- Abbott Laboratories v. Superior Court, 9 Cal.5th 642 (Cal. 2020) (discussed intervention/approval mechanisms; not a separation-of-powers holding but cited by parties on intervention authority)