On August 18, 2022, the California Court of Appeal (Fifth District) decided Porras v. Chipotle Servs., LLC, No. F081113, 2022 WL 3499646, rejecting a former employee’s attempt to vacate a $4.9 million Private Attorneys General Act (PAGA )settlement between Chipotle and other aggrieved employees. Porras is the latest case to address whether an employee who has brought suit under PAGA has standing to intervene in a separate PAGA action to challenge a court-approved settlement. While prior cases have adopted one of two approaches to this issue, Porras opted to “adopt a middle ground.” Id. at *6.
In July 2019, a former Chipotle employee, Jose Delgado joined a class action and PAGA representative action against Chipotle (the Barber action). On October 1, 2019, Chipotle reached a settlement agreement with plaintiffs in multiple PAGA actions (but not Barber) to consolidate and dismiss the lawsuits in exchange for a release of the PAGA claims. Delgado moved to intervene, and later, to vacate the judgment. The trial court found that Delgado had no standing to intervene in Porras and denied the motions.
The Court of Appeal acknowledged a split in authority regarding whether a plaintiff in one PAGA action has standing to bring a motion to vacate a judgment entered in another PAGA action. On one hand, Turrieta v. Lyft, Inc., 69 Cal. App. 5th 955 (2021) can be read as concluding that there is never standing in this circumstance, while on the other, Uribe v. Crown Building Maintenance Co., 70 Cal. App. 5th 986 (2021) and Moniz v. Adecco USA, Inc., 72 Cal. App. 5th 56 (2021) can be read as concluding that there is always standing. (The California Supreme Court will likely resolve this split, having granted review in Turrieta. Please use these links to read about the Turrieta, Uribe, and Moniz decisions.)
In Porras, the Court of Appeal adopted a “middle ground” by asking whether Delgado personally held an “immediate, pecuniary, and substantial” stake in the PAGA penalties. Id. at *7. Evaluating the range of possible outcomes, the court concluded that Delgado did not have such a stake—for example, even if the trial court awarded $20 million in PAGA penalties (which would have been an exceptional result), Delgado’s share “would have been less than $200.” Id. at *8. This amount, the court concluded, was not sufficient to confer standing to intervene.
While Porras in theory adopted a middle ground between the competing approaches of Turrieta and Uribe/Moniz, in practice it may be extremely difficult for a would-be intervenor to satisfy the Porras test. Because the “aggrieved employees” in a PAGA action share only 25% of the penalties, the payout to any single employee will be modest in all but exceptional cases. Notably, the Court modified its original decision on September 14, 2022, stating that, in the alternative, if “the focus should not have been on Delgado’s personal pecuniary stake in the PAGA penalties,” it would follow “the bright line rule” adopted in Turrieta “that nonparty employees . . . lack standing to bring a motion to set aside the judgment[.]” Id. at *10.