By Phillip J. Ebsworth and Clara L. Rademacher
Seyfarth Synopsis: The First District held that a prevailing defendant in a PAGA action may not recover litigation costs from the California Labor Workforce Development Agency when the LWDA did not participate in the litigation.
In Rose v. Hobby Lobby Stores, Inc., a former employee at Hobby Lobby, filed a lawsuit under PAGA, alleging that her employer violated the “suitable seating” provisions of the applicable Industrial Welfare Commission Wage Order. After a nine-day bench trial, the court ruled in favor of Hobby Lobby. The trial court awarded nearly $125,000 in litigation costs to Hobby Lobby as the prevailing party under the general cost recovery rule set out in Code of Civil Procedure section 1032(b). The trial court concluded that the LWDA could be responsible for costs incurred by defendants who prevail on PAGA claims. The LWDA appealed, raising the issue of whether it could be held liable for litigation costs incurred by a prevailing defendant in a PAGA action.
The First District reversed the trial court’s order, concluding that even if a prevailing defendant in a PAGA action is entitled to recover its costs under the general cost recovery rule, those costs are not recoverable against the LWDA where it did not participate in the litigation. The court emphasized that the LWDA’s role as a real party in interest does not extend to liability for litigation costs incurred by a prevailing defendant. Accordingly, the awarded costs could only be recovered against the named-plaintiff.