PAGA Penalties Cannot be Aggregated for Diversity Jurisdiction Purposes
1 min read
Aug 21, 2013
Under California's Private Attorney General Act (PAGA) statute, employees are given a private right of action against employers, on behalf of themselves, and on behalf of current and former employees, in order to collect penalties for alleged wage and hour violations. Prevailing employees can recover up to $100 per pay period for an initial violation, and $200 per pay period for each subsequent violation, not to mention potential recovery of attorney's fees and costs.
In this case, the employee worked for a pest control services company from 2005 to 2010. After leaving the company, he filed a representative action under PAGA alleging claims that he and other nonexempt employees were deprived of meal period, overtime, vacation wages, and itemized wage statements. The employer removed the matter to federal court on the basis of diversity jurisdiction, based on the argument that the aggregate dollar amount of all the employees' penalty claims would exceed the $75,000 diversity threshold. The district court acknowledged a divergence of opinion among the courts, but allowed the aggregation of the claims, and thus allowed the case to remain in federal court. The employee appealed. The Ninth Circuit Court of Appeals reversed the district could and held that the PAGA claims were individually held claims, not group claims, and therefore could not be aggregated to exceed the $75,000 threshold. The U.S. Supreme Court previously held that claims of class members can only been aggregated to meet the jurisdictional amount requirement only when they "unite to enforce a single title or right in which they have a common and undivided interest." Here, the Ninth Circuit held all the rights held by the employees were held individually, as an employee suffers a unique injury that can be redressed with the involvement of other employees. Therefore, PAGA penalties cannot be aggregated for diversity jurisdiction purposes.
For more information read Urbino v. Orkin Services, Inc., No. 11-56944 (9th Cir., August 13, 2013).
Featured Insights

Consumer Crossroads: Where Financial Services and Litigation Intersect
Oct 2, 2026
Expansive New Commercial Financing Licensing Requirement Signed into Law in California

In The News
Oct 2, 2026
Spencer Kook Explores How AI is Reshaping the Insurance Workforce

In The News
Oct 1, 2026
Jennifer Driscoll Discusses Emerging Antitrust Risks Tied to Social Media Algorithms

Healthcare Alert
Sep 30, 2026
Feeding Better Outcomes: The OIG’s Compliance Roadmap for Food-As-Medicine Programs

Consumer Crossroads: Where Financial Services and Litigation Intersect
Sep 30, 2026
Illinois Supreme Court Delivers a Third Key Win for Mortgage Lenders

In The News
Sep 28, 2026
Carol Rooney and Adam Topel Co-Author Article on Recent Developments in Appellate Advocacy

In The News
Sep 28, 2026
Lucy Wang Discusses New Landmark California Wildfire Insurance Reforms

Event
September 27–29, 2026
Hinshaw Partners Discuss Key Compliance and Litigation Issues at the 2026 MBA Conference

Press Release
Sep 24, 2026
Hinshaw Recognized as a 2027 “Powerhouse in Litigation” by BTI Consulting



