Estrada v. Royalty Carpet Mills, Inc.

Royalty Carpet Mills, Inc. (Royalty) (defendant) operated two facilities in Orange County, California. Jorge Luis Estrada and 12 other current or former Royalty employees (the workers) (plaintiffs) filed a complaint against Royalty, asserting various claims for Labor Code violations. One claim was a class-action claim based on Royalty’s alleged failure to provide first and second meal periods. Another was a claim brought under California’s Labor Code Private Attorneys General Act of 2004 (PAGA), seeking PAGA penalties for the Labor Code violations, including the meal-related violations. The trial court certified a class of former hourly workers who worked at either Orange County facility. It also certified a meal subclass to determine whether subclass members were provided proper meal periods. After the presentation of evidence, the court ordered decertification of the meal subclass, concluding that there were too many individualized issues to support class treatment. The trial court also dismissed the meal-based PAGA claim except as to the named plaintiffs, concluding that the claim was unmanageable as to unnamed plaintiffs because of the individualized issues. After the court entered judgment on the remaining claims, the workers appealed, arguing, among other things, that the trial court lacked authority to dismiss the meal-based PAGA claim on manageability grounds. The court of appeals agreed, reversing the dismissal. The California Supreme Court granted review.