On Wednesday, a panel of the California Court of Appeal’s First District unanimously held that venue for an action alleging violation of California’s Private Attorneys General Act (“PAGA”) is proper in any county where an allegedly aggrieved employee worked and suffered violations of the Labor Code. In Crestwood Behavioral Health, Inc. v. Superior Court of Alameda County, the Court of Appeal affirmed the trial court’s denial of Petitioner Crestwood Behavioral Health Inc.’s motion to transfer venue of the PAGA Action to Sacramento County. Crestwood Behavioral Health v. Superior Court, No. A160523, 2021 Cal. App. LEXIS 137 (Ct. App. Feb. 17, 2021). Petitioner argued that venue was improper in Alameda County as Petitioner is not based there, and Plaintiff Fragoza never worked there.
The Court rejected Petitioner’s argument and found that venue was proper in Alameda County. The Court cited Code of Civil Procedure sections 393 and 395.5, which provide that venue is proper in a county “in which the cause or some part of the cause, arose” (CCP § 393(a)) or “where the obligation or liability arises” (CCP § 395.5(a)). The Court held that in determining proper venue for a PAGA Action, a Plaintiff is not limited to the county/counties in which he or she suffered Labor Code violations, but instead may file suit in any county in which an allegedly aggrieved employee suffered a Labor Code violation. The Court reasoned that in a PAGA Action, the Plaintiff serves “as a proxy for the state.” The Court determined that there was no reason Plaintiff’s venue should be restricted based only on her own claims, as she pursues civil penalties on behalf of the state for alleged Labor Code violations suffered by aggrieved employees across the state. Here, the Court found that venue was proper in Alameda County because Plaintiff’s Complaint alleged that Labor Code violations occurred (and thus liability arose) at Petitioner’s facilities in Alameda County.
The effect of this holding is significant. Taken to its extreme, it gives a PAGA Plaintiff virtual carte blanche to forum shop. Any county where an employer operates and has employees appears to be a proper venue for a PAGA Action according to this decision.