Relation Back Doctrine Can Apply to PAGA Claims

Employment Law

Considering the intersection of the Private Attorneys General Act (PAGA) and the doctrine of relation back, a California appellate panel found that the doctrine can apply to the statute, opening the door to a subsequent employee to move forward with a suit dating back to the date the initial complaint was filed.

Larry Van Steenhuyse worked for UBS Financial Services as a financial advisor. On December 22, 2017, he gave notice to UBS and the Labor and Workforce Development Agency (LWDA) that he intended to seek penalties under PAGA on behalf of himself and all aggrieved UBS financial advisors in California for alleged Labor Code violations.

He claimed that UBS failed to reimburse financial advisors for routinely incurred reasonable and necessary business expenses for travel, mileage, education, entertainment and marketing.

Van Steenhuyse filed his PAGA lawsuit on February 26, 2018.

A second UBS financial advisor, Andrew Hutcheson, submitted his notice of intent to sue over UBS’ alleged failure to reimburse business expenses on April 18, 2018, and filed suit in February 2019.

The notices and complaints were worded almost identically and they made the same allegations of facts and theories concerning UBS’ purported Labor Code violations.

In March 2019, Hutcheson filed a motion to intervene and replace Van Steenhuyse as the named plaintiff. He sought to extend the statute of limitations back to December 22, 2016, or one year before Van Steenhuyse submitted his notice of intent.

UBS stipulated to the filing of an amended complaint that added Hutcheson as the named plaintiff and removed Van Steenhuyse, but argued that the doctrine of relation back did not apply. Hutcheson was barred from recovering PAGA penalties for any alleged Labor Code violations that occurred before December 19, 2017, the time period before he filed his own suit, UBS told the court.

The trial court agreed, holding that the doctrine of relation back did not apply. But the appellate panel reversed.

Under the doctrine of relation back, the amended complaint must rest on the same general set of facts, involve the same injury and involve the same “instrumentality” or cause of injury, the court explained. The most important question: whether the original pleading gave the defendant adequate notice of the claim.

All of these requirements were met, the panel said.

“The substitution of Hutcheson for Van Steenhuyse does not expand the scope of the original complaint filed by Van Steenhuyse,” the court wrote. “The LWDA remains the real party in interest, and UBS has had notice since December 2017 of the facts and theories underlying the claims.”

UBS also argued that recognizing the relation back doctrine would reflect an impermissible assignment by Van Steenhuyse to Hutcheson of a PAGA claim in which Van Steenhuyse had no assignable interest, but the court adopted a different perspective.

“Van Steenhuyse and Hutcheson each have standing as aggrieved employees and the LWDA remains the real party in interest in this lawsuit regardless of the identity of the named plaintiff,” the panel said.

The court also disagreed that Hutcheson would be given more time to recover.

“It is true that if the amendment relates back, then Hutcheson and the LWDA can potentially recover penalties over a longer period than they could under Hutcheson’s separate complaint, which was filed in February 2019,” the panel wrote. “But relation back would not grant the LWDA or Hutcheson or any other aggrieved employees the potential for any more than they had under Van Steenhuyse’s original complaint, which was filed in February 2018.

“And if relation back does not apply, UBS avoids exposure to potential liability for civil penalties over some period of time, simply because Van Steenhuyse relinquished his role as a representative plaintiff. The result would be a weakening of the punitive and deterrent force of PAGA.”

The panel reversed and remanded to the trial court.

“[W]e conclude that if the trial court finds that the claims in the amended PAGA complaint here rest on the same general set of facts, involve the same injury, and refer to the same instrumentality as the claims in the original complaint filed by Van Steenhuyse … then the relation back doctrine applies, and Hutcheson can assert claims on behalf of the LWDA for violations going back to December 22, 2016,” the panel held. “In other words, the mere fact that Hutcheson’s PAGA notice was submitted after Van Steenhuyse’s does not bar the application of the doctrine of relation back to an amended complaint that seeks to substitute Hutcheson as the representative plaintiff in this action.”

To read the opinion in Hutcheson v. Superior Court, click here.

Why it matters: While the appellate panel didn’t opine on the application of the relation back doctrine to the case at hand, the court was clear that the doctrine can apply in PAGA actions, as long as the doctrinal requirements—that the amended complaint rests on the same general set of facts, involves the same injury and involves the same “instrumentality” or cause of injury—are satisfied.



pursuant to New York DR 2-101(f)

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