DIAZ v. MACY WEST STORES INC (2020)

MEMORANDUM ***

Yuriria Diaz (“Diaz”) appeals the district court's grant of Macy's West Stores, Inc. dba Macy's (“Macy's”) Motion to Dismiss for Diaz's lack of Article III standing to bring a California Private Attorney General Act (“PAGA”) claim. We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse and remand.

In her initial complaint, Diaz asserted class and individual claims for California Labor Code violations and a representative claim under PAGA in the district court against her former employer, Macy's. Diaz subsequently filed an amended complaint dismissing her class and individual claims against Macy's due to an arbitration agreement. Diaz only asserted the representative PAGA claim in her amended complaint.

The district court dismissed her PAGA claim for lack of standing, relying on a California appellate court decision holding that plaintiffs whose individual claims are dismissed with prejudice cannot bring PAGA claims because they are no longer “aggrieved employees” as defined by the statute. Kim. v. Reins Int'l Cal., Inc., 18 Cal.App.5th 1052, 227 Cal. Rptr. 3d 375, 378-80 (2017). The California Supreme Court has since reversed this decision and Macy's now concedes that Diaz has standing. Kim v. Reins Int'l Cal., Inc., 9 Cal.5th 73, 259 Cal.Rptr.3d 769, 459 P.3d 1123, 1133-35 (2020). Diaz thus qualifies as an “aggrieved employee” and has standing to bring a PAGA claim. See id.

In its Motion to Dismiss, Macy's also alleged that Diaz failed to exhaust her administrative notice requirements under PAGA. The district court did not reach this issue in its order. Although the parties have fully briefed the issue and this Court may properly consider it, we decline to do so here where the district court has not had the opportunity to rule. We reverse the district court's dismissal and remand for further proceedings.

REVERSED and REMANDED.