Does the Federal Arbitration Act Preempt a California State Law That Permits Aggregate Litigation in a Labor Dispute, Precluding an Arbitration Agreement Signed by the Plaintiff?

This article discusses Viking River Cruises, Inc. v. Angie Moriana, to be argued to the Supreme Court on March 30, 2022. The Court will address whether California’s Private Attorneys General Act (PACA) permits a plaintiff in a labor dispute to seek relief on behalf of hundreds of claimants and the State of California despite the Court’s prior arbitration precedents holding that the Federal Arbitration Act (FAA) preempts California state law that would preclude bilateral arbitration and permit aggregate litigation.Viking’s appeal implicates the intersection of the FAA with California’s PAGA statute and the considerable body of federal and state case law concerning the enforceability of bilateral arbitration clauses that contain class action or any form of collective redress waiver. The Supreme Court has considered the issue of class action waivers multiple times in the past twenty years. The Court consistently has invalidated such class action waivers and held that the FAA preempts and overrides state law that would restrict or prohibit collective arbitration or litigation. The Court consistently has found in favor of defendants’ rights to enforce bilateral arbitration. The Viking appeal is yet the latest chapter in the arbitration class action waiver saga. It returns the Court to a consideration of federal preemption under the FAA of state anti-waiver laws. It asks the Court to consider the latest twist in this narrative, namely a California state statute that purportedly creates a representational procedure on behalf of the state.The appeal involves the Court’s two recent in arbitration and class action waiver cases. In Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), the Court in a 5-4 split decision ruled that arbitration agreements requiring individual arbitration were enforceable under the FAA, regardless of the collective action provisions set out in the NLRA and the Fair Labor Standards Act of 1938. And in AT& T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), the Court in a 5-4 split decision overruled the California Supreme Court’s decision in Discover Bank, invalidating a class action waiver provision under California state law. In deciding this appeal, the Court will consider the reach of its Conception and Epic decisions, counterbalanced by the California Supreme Court’s determination that PAGA actions lie outside the Concepcion and Epic pronouncements.Apart from the textual discussion of FAA preemption doctrine as it applies to arbitration clauses, the Court may also consider and weigh the policy arguments advanced by the parties. Viking and its numerous business amici have supplied the court with compelling statistics about the flood of PAGA cases after the California Supreme Court determined that PAGA actions were beyond the reach of federal preemption. The plaintiffs plead on behalf of California employees whom they contend are exploited by California employers, a situation compounded by ineffectual state agency enforcement of the California labor laws. They point out that if the Court adopts Viking’s position and disallows exclusion of PAGA suits in arbitration agreements, employers will not only continue to list PAGA as an exclusion but will continue to expand their list of prohibited actions in arbitration agreement