81 Cal.App.5th 475
Cal. Ct. App.2022Background
- Howitson worked ~1 month (Apr–May 2019) for Evans Hotels and served LWDA with PAGA notice on March 26, 2020; LWDA did not act within the 65-day window that expired June 1, 2020.
- On May 26, 2020 Howitson filed a putative class and individual action alleging Labor Code violations (no PAGA claims).
- Evans served a CCP § 998 offer of $1,500 (plus fees); Howitson accepted on July 20, 2020; judgment was entered for her individual claims on September 20, 2020.
- About 10 days after accepting the § 998 offer, Howitson filed a separate PAGA action alleging the same underlying Labor Code violations on behalf of the state.
- Evans demurred, asserting claim preclusion (res judicata) because Howitson could have brought PAGA claims in the first action; the trial court sustained the demurrer without leave to amend.
- The Court of Appeal reversed, holding claim preclusion did not bar the PAGA suit because the PAGA action vindicates the state’s distinct right and the state was not in privity with Howitson in the earlier suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether settlement/judgment of plaintiff's individual claims bars later PAGA action by claim preclusion | Howitson: No — the individual harm she vindicated differs from the state’s interest in recovering civil penalties; PAGA claims are distinct | Evans: Yes — same facts/violations; Howitson could have added PAGA claims earlier, so res judicata and claim-splitting bar the later suit | Held: No — primary rights differ (employee vs. state) so causes of action are not the same; claim preclusion does not apply |
| Whether the state (LWDA) was in privity with Howitson such that the state is bound by the prior judgment | Howitson: No — she prosecuted individual claims for her own benefit, not as the state’s representative; no adequate representation of state interests | Evans: Yes — once the 65-day LWDA window expired, Howitson became the state’s agent and thus in privity | Held: No — privity not established; the state had no identity-of-interest or adequate representation in the first suit |
| Whether Evans forfeited the privity argument by not raising it below | Howitson: Evans failed to plead privity in trial court, so issue is forfeited | Evans: Not specifically argued below; court may nonetheless consider pure legal question on undisputed facts | Held: Court exercised discretion to address privity despite forfeiture because facts undisputed and question was legal |
| Whether prior authority (e.g., Villacres) compels preclusion where plaintiff settled earlier claims | Howitson: Villacres is distinguishable; prior settlement here was only for individual claims and did not release state PAGA claims | Evans: Villacres supports preclusion where settlement or class release covered claims that could have been raised | Held: Villacres is factually distinguishable and questioned as precedent given PAGA’s characterization of the state as the real party in interest |
Key Cases Cited
- Kim v. Reins Int’l Cal., 9 Cal.5th 73 (Cal. 2020) (PAGA deputizes employees to recover civil penalties on behalf of the state; PAGA claims are distinct from individual employee remedies)
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (PAGA plaintiff is proxy for state; state is real party in interest)
- Arias v. Superior Court, 46 Cal.4th 969 (Cal. 2009) (PAGA is a law-enforcement–style representative action that protects the public)
- Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888 (Cal. 2002) (primary-rights theory defines scope of a cause of action for claim-preclusion analysis)
- Villacres v. ABM Indus. Inc., 189 Cal.App.4th 562 (Cal. Ct. App. 2010) (court held prior class settlement could bar subsequent PAGA claims; court here questions and distinguishes Villacres)
- DKN Holdings LLC v. Faerber, 61 Cal.4th 813 (Cal. 2015) (discussion of representation/privity principles relevant to preclusion)
- Consumers Lobby Against Monopolies v. Pub. Utils. Comm’n, 25 Cal.3d 891 (Cal. 1979) (equitable exception allows denial of claim preclusion when public interest requires relitigation)