Viking River Cruises, Inc. v. Moriana

VIKING RIVER CRUISES, INC. v. MORIANA

certiorari to the court of appeal of california,

second appellate district No. 20–1573. Argued March 30, 2022—Decided June 15, 2022 The question for decision is whether the Federal Arbitration Act, 9 U. S. C. § 1 et seq., preempts a rule of California law that invalidates contractual waivers of the right to assert representative claims under California's Labor Code Private Attorneys General Act of 2004, Cal. Lab. Code § 2698 et seq. PAGA enlists employees as private attorneys general to enforce California labor law. By its terms, PAGA authorizes any “aggrieved employee” to initiate an action against a former employer “on behalf of himself or herself and other current or former employees” to obtain civil penalties that previously could have been recovered only by the State in an enforcement action brought by California's Labor and Workforce Development Agency (LWDA). California precedent holds that a PAGA suit is a “ `representative action' ” in which the employee plaintiff sues as an “ `agent or proxy' ” of the State. Iskanian v. CLS Transp. Los Angeles, LLC , 59 Cal. 4th 348, 380. California precedent also interprets the statute to contain what is effectively a rule of claim joinder—allowing a party to unite multiple claims against an opposing party in a single action. An employee with PAGA standing may “seek any civil penalties the state can, including penalties for violations involv-ing employees other than the PAGA litigant herself.” ZB, N. A. v. Superior Court, 8 Cal. 5th 175, 185. Respondent Angie Moriana filed a PAGA action against her former employer Viking River Cruises, alleging a California Labor Code violation. She also asserted a wide array of other violations allegedly sustained by other Viking employees. Moriana's employment contract with Viking contained a mandatory arbitration agreement. Important here, that agreement contained both a “Class Action Waiver”—providing that the parties could not bring any dispute as a class, collective, or representative action under PAGA—and a severability clause—specifying that if the waiver was found invalid, such a dispute would presumptively be litigated in court. Under the severability clause, any “portion” of the waiver that remained valid would be “enforced in arbitration.” Viking moved to compel arbitration of Moriana's individual PAGA claim and to dismiss her other PAGA claims. Applying California's Iskanian precedent, the California courts denied that motion, holding that categorical waivers of PAGA standing are contrary to Cali-

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fornia policy and that PAGA claims cannot be split into arbitrable “individual” claims and nonarbitrable “representative” claims. This Court granted certiorari to decide whether the FAA preempts the California rule. Held: The FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. Pp. 649–663.

(a) Based on the principle that “[a]rbitration is strictly `a matter of consent,' ” Granite Rock Co. v. Teamsters, 561 U. S. 287, 299, this Court has held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so,” Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U. S. 662, 684. Because class-action arbitration mandates procedural changes that are inconsistent with the individualized and informal mode of bilateral arbitration contemplated by the FAA, see AT&T Mobility LLC v. Concepcion, 563 U. S. 333, 347, class procedures cannot be imposed by state law without presenting unwilling parties with an unacceptable choice between being compelled to arbitrate using such procedures and forgoing arbitration all together. Viking contends that the Court's FAA precedents require enforcement of contractual provisions waiving the right to bring PAGA actions because PAGA creates a form of class or collective proceeding. If this is correct, Iskanian's prohibition on PAGA waivers presents parties with an impermissible choice: Either arbitrate disputes using a form of class procedures, or do not arbitrate at all. Moriana maintains that any conflict between Iskanian and the FAA is illusory because PAGA creates nothing more than a substantive cause of action. This Court disagrees with both characterizations of the statute. Mo-riana's premise that PAGA creates a unitary private cause of action is irreconcilable with the structure of the statute and the ordinary legal meaning of the word “claim.” A PAGA action asserting multiple violations under California's Labor Code affecting a range of different employees does not constitute “a single claim” in even the broadest possible sense. Viking's position, on the other hand, elides important structural differences between PAGA actions and class actions. A class-action plaintiff can raise a multitude of claims because he or she represents a multitude of absent individuals; a PAGA plaintiff, by contrast, represents a single principal, the LWDA, that has a multitude of claims. As a result, PAGA suits exhibit virtually none of the procedural characteristics of class actions. This Court's FAA precedents treat bilateral arbitration as the prototype of the individualized and informal form of arbitration protected

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from undue state interference by the FAA. See, e. g., Epic Systems Corp. v. Lewis, 584 U. S. –––, –––. Viking posits that a proceeding is “bilateral” only if it involves two and only two parties and “is conducted by and on behalf of the individual named parties only.” Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338, 348. Thus, Iskanian's prohibition on PAGA waivers is inconsistent with the FAA because PAGA creates an intrinsically representational form of action and Iskanian requires parties either to arbitrate in that format or forgo arbitration altogether.

This Court disagrees. Nothing in the FAA establishes a categorical rule mandating enforcement of waivers of standing to assert claims on behalf of absent principals. Non-class representative actions in which a single agent litigates on behalf of a single principal necessarily deviate from the strict ideal of bilateral dispute resolution posited by Viking, but this Court has never held that the FAA imposes a duty on States to render all forms of representative standing waivable by contract or that such suits deviate from the norm of bilateral arbitration. Unlike procedures distinctive to multiparty litigation, single-principal, single-agent representative actions are “bilateral” in two registers: They involve the rights of only the absent real party in interest and the defendant, and litigation need only be conducted by the agent-plaintiff and the defendant. Nothing in this Court's precedent suggests that in enacting the FAA, Congress intended to require States to reshape their agency law governing who can assert claims on behalf of whom to ensure that parties will never have to arbitrate disputes in a proceeding that deviates from bilateral arbitration in the strictest sense. Pp. 649–659. (b) PAGA's built-in mechanism of claim joinder is in conflict with the FAA. Iskanian's prohibition on contractual division of PAGA actions into constituent claims unduly circumscribes the freedom of parties to determine “the issues subject to arbitration” and “the rules by which they will arbitrate,” Lamps Plus, Inc. v. Varela, 587 U. S. –––, –––, and does so in a way that violates the fundamental principle that “arbitration is a matter of consent,” Stolt-Nielsen, 559 U. S., at 684. For that reason, state law cannot condition the enforceability of an agreement to arbitrate on the availability of a procedural mechanism that would permit a party to expand the scope of the anticipated arbitration by intro-ducing claims that the parties did not jointly agree to arbitrate. A state rule imposing an expansive rule of joinder in the arbitral context would defeat the ability of parties to control which claims are subject to arbitration by permitting parties to superadd new claims to the proceeding, regardless of whether the agreement committed those claims to arbitration. When made compulsory by way of Iskanian, PAGA's joinder rule functions in exactly this way. The effect is to coerce parties into withholding PAGA claims from arbitration. Iskanian's indi-

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visibility rule effectively coerces parties to opt for a judicial forum rather than “forgo[ing] the procedural rigor and appellate review of the courts to realize the benefits of private dispute resolution.” Stolt- Nielsen, 559 U. S., at 685. Pp. 659–662.

(c) Under this Courts holding, Iskanian's prohibition on wholesale waivers of PAGA claims is not preempted by the FAA. But Iskanian's rule that PAGA actions cannot be divided into individual and nonindividual claims is preempted, so Viking was entitled to compel arbitration of Moriana's individual claim. PAGA provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding. And under PAGA's standing requirement, a plaintiff has standing to maintain nonindividual PAGA claims in an action only by virtue of also maintaining an individual claim in that action. As a result, Moriana would lack statutory standing to maintain her non-individual claims in court, and the correct course was to dismiss her remaining claims. Pp. 662–663. Reversed and remanded. Alito , J., delivered the opinion of the Court, in which Breyer , Soto-mayor , Kagan, and Gorsuch, JJ., joined, in which Roberts, C. J., joined as to Parts I and III, and in which Kavanaugh and Barrett, JJ., joined as to Part III. Sotomayor , J., filed a concurring opinion, post, p. 663. Barrett, J., filed an opinion concurring in part and concurring in the judgment, in which Kavanaugh, J., joined, and in which Roberts, C. J., joined as to all but the footnote, post, p. 664. Thomas, J., filed a dissenting opinion, post, p. 665.

Paul D. Clement argued the cause for petitioner. With him on the briefs were George W. Hicks, Jr., and Michael D. Lieberman.

Scott L. Nelson argued the cause for respondent. With him on the brief were Kevin T. Barnes, Gregg Lander, and Michael Rubin.*

*Briefs of amici curiae urging reversal were filed for the California Business and Industrial Alliance by C. Boyden Gray and Jonathan Berry; for the California New Car Dealers Association by Anna-Rose Mathieson and Susan Yorke; for the Chamber of Commerce of the United States of America et al. by Andrew J. Pincus, Archis A. Parasharami, Daniel E. Jones, Daryl Joseffer, Paul Lettow, Karen R. Harned, and Elizabeth Mil-ito; for the Civil Justice Association of California by Fred J. Hiestand; for the Employers Group by Anton Metlitsky, Apalla Chopra, Adam Karr, and Jason Zarrow; for the Restaurant Law Center by Todd B. Scherwin

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We granted certiorari in this case to decide whether the Federal Arbitration Act (FAA), 9 U. S. C. § 1 et seq., pre-empts a rule of California law that invalidates contractual waivers of the right to assert representative claims under California's Labor Code Private Attorneys General Act of 2004. Cal. Lab. Code Ann. § 2698 et seq. (West 2022).

A

The California Legislature enacted the Labor Code Private Attorneys General Act (PAGA) to address a perceived deficit in the enforcement of the State's Labor Code. Cali-

and Angelo I. Amador; for the Retail Litigation Center, Inc., et al. by Thomas C. Goldstein, Erica Oleszczuk Evans, and Deborah White; for Uber Technologies, Inc., et al. by Theane Evangelis, Blaine H. Evanson, and Bradley J. Hamburger; and for the Washington Legal Foundation et al. by Peder K. Batalden, Felix Shafr, John F. Querio, Cory L. Andrews, John M. Masslon II, and Lawrence S. Ebner.

Briefs of amici curiae urging affirmance were filed for the State of California by Rob Bonta, Attorney General of California, Michael J. Mon-gan, Solicitor General, Janill L. Richards, Principal Deputy Solicitor General, and Nicole Welindt, Associate Deputy Solicitor General; for the American Association for Justice by Matthew W. H. Wessler; for the American Federation of Labor and Congress of Industrial Organizations by Harold Craig Becker and Matthew J. Ginsburg; for the California Employment Lawyers' Association et al. by Monique Olivier and Catherine Ruckelshaus; for California Rural Legal Assistance, Inc., et al. by Cynthia L. Rice and Verónica Meléndez; for Public Justice by Ellen Noble, Karla Gilbride, and Leslie A. Brueckner; for the Taxpayers Against Fraud Education Fund by Colette G. Matzzie; for Tracy Chen by Mark F. Humenik; and for Steve Chou by Chris Baker. Briefs of amici curiae were filed for the California Employment Law Council by Richard H. Rahm, Paul Grossman, and Paul W. Cane, Jr.; for Civil Procedure and Arbitration Law Professors by Gary B. Friedman and Myriam Gilles; for the National Academy of Arbitrators by Matthew W. Finkin and Barry Winograd; and for Imre S. Szalai by Mr. Szalai, pro se. †The Chief Justice joins Parts I and III of this opinion.

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By its terms, PAGA authorizes any “aggrieved employee” to initiate an action against a former employer “on behalf of himself or herself and other current or former employees” to obtain civil penalties that previously could have been recovered only by the State in an LWDA enforcement action. Cal. Lab. Code Ann. § 2699(a). As the text of the statute indicates, PAGA limits statutory standing to “aggrieved employees”—a term defined to include “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” § 2699(c). To bring suit, however, an employee must also exhaust administrative remedies. That entails providing notice to the employer and the LWDA of the violations alleged and the supporting facts and theories. § 2699.3(a)(1)(A). If the LWDA flails to respond or initiate an investigation within a specified timeframe, the employee may bring suit. § 2699.3(a) (2). In any successful PAGA action, the LWDA is entitled to 75 percent of the award. § 2699(i). The remaining 25 percent is distributed among the employees affected by the violations at issue. Ibid.

California law characterizes PAGA as creating a “type of qui tam action,” 1 Iskanian v. CLS Transp. Los Angeles,

As the California courts conceive of it, the State “is always the real party in interest in the suit.” Iskanian, 59 Cal. 4th, at 382, 327 P. 3d, at 148. 2 The primary function of PAGA is

ex rel. Stevens, 529 U. S. 765, 768, n. 1 (2000). Qui tam actions “appear to have originated around the end of the 13th century, when private individuals who had suffered injury began bringing actions in the royal courts on both their own and the Crown's behalf ” and became more of a rarity as “royal courts began to extend jurisdiction to suits involving wholly private wrongs.” Id., at 774–775.

California precedent also interprets the statute to contain what is effectively a rule of claim joinder. Rules of claim joinder allow a party to unite multiple claims against an opposing party in a single action. See 6A C. Wright, H. Miller, & E. Cooper, Federal Practice and Procedure § 1582 (3d ed. 2016) (Wright & Miller). PAGA standing has the same function. An employee with statutory standing may “seek any civil penalties the state can, including penalties for violations involving employees other than the PAGA litigant Page Proof Pending Publication

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B

Petitioner Viking River Cruises, Inc. (Viking), is a company that offers ocean and river cruises around the world. When respondent Angie Moriana was hired by Viking as a sales representative, she executed an agreement to arbitrate any dispute arising out of her employment. The agreement contained a “Class Action Waiver” providing that in any arbitral proceeding, the parties could not bring any dispute as a class, collective, or representative PAGA action. It also contained a severability clause specifying that if the waiver was found invalid, any class, collective, representative, or PAGA action would presumptively be litigated in court. But under that severability clause, if any “portion” of the waiver remained valid, it would be “enforced in arbitration.”

After leaving her position with Viking, Moriana filed a PAGA action against Viking in California court. Her complaint contained a claim that Viking had flailed to provide her with her final wages within 72 hours, as required by §§ 101– 102 of the California Labor Code. But the complaint also asserted a wide array of other code violations allegedly sustained by other Viking employees, including violations of provisions concerning the minimum wage, overtime, meal periods, rest periods, timing of pay, and pay statements. Page Proof Pending Publication

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This ruling was dictated by the California Supreme Court's decision in Iskanian. In that case, the court held that pre-dispute agreements to waive the right to bring “representative” PAGA claims are invalid as a matter of public policy. What, precisely, this holding means requires some explanation. PAGA's unique features have prompted the development of an entire vocabulary unique to the statute, but the details, it seems, are still being worked out. An unfortunate feature of this lexicon is that it tends to use the word “representative” in two distinct ways, and each of those uses of the term “representative” is connected with one of Iskanian's rules governing contractual waiver of PAGA claims.

In the first sense, PAGA actions are “representative” in that they are brought by employees acting as representatives—that is, as agents or proxies—of the State. But PAGA claims are also called “representative” when they are predicated on code violations sustained by other employees. In the first sense, “ `every PAGA action is . . . representative' ” and “[t]here is no individual component to a PAGA action,” Kim, 9 Cal. 5th, at 87, 459 P. 3d, at 1131 (quoting Iskanian, 59 Cal. 4th, at 387, 327 P. 3d, at 151), because every PAGA claim is asserted in a representative capacity. But when the word “representative” is used in the second way, it makes sense to distinguish “individual” PAGA claims, which are premised on Labor Code violations actually sustained by the plaintiff, from “representative” (or perhaps quasi-representative) PAGA claims arising out of events in-Page Proof Pending Publication

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Iskanian's principal rule prohibits waivers of “representative” PAGA claims in the first sense. That is, it prevents parties from waiving representative standing to bring PAGA claims in a judicial or arbitral forum. But Iskanian also adopted a secondary rule that invalidates agreements to separately arbitrate or litigate “individual PAGA claims for Labor Code violations that an employee suffered,” on the theory that resolving victim-specific claims in separate arbitrations does not serve the deterrent purpose of PAGA. 59 Cal. 4th, at 383, 327 P. 3d, at 149; see also Kim, 9 Cal. 5th, at 88, 459 P. 3d, at 1132 (noting that based on Iskanian, California courts have uniformly “rejected efforts to split PAGA claims into individual and representative components”).

In this case, Iskanian's principal prohibition required the lower courts to treat the representative-action waiver in the agreement between Moriana and Viking as invalid insofar as it was construed as a wholesale waiver of PAGA standing. The agreement's severability clause, however, allowed enforcement of any “portion” of the waiver that remained valid, so the agreement still would have permitted arbitration of Moriana's individual PAGA claim even if wholesale enforcement was impossible. But because California law prohibits division of a PAGA action into constituent claims, the state courts refused to compel arbitration of that claim as well. We granted certiorari, 595 U. S. ––– (2021), and now reverse.

The FAA was enacted in response to judicial hostility to arbitration. Section 2 of the statute makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation Page Proof Pending Publication

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But under our decisions, even rules that are generally applicable as a formal matter are not immune to preemption by the FAA. See Lamps Plus, Inc. v. Varela, 587 U. S. –––, ––– (2019); Concepcion, 563 U. S., at 343. Section 2's mandate pro-

Based on these principles, we have held that “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” Id., at 684. See also Lamps Plus, 587 U. S., at –––; Epic Systems, 584 U. S., at ––– – –––; Concepcion, 563 U. S., at 347–348. The “ `shift from bilateral arbitration to class-action arbitration' ” mandates procedural changes that are inconsistent with the individualized and informal mode of arbitration contemplated by the FAA. Id., at 347 (quoting Stolt-Nielsen, 559 U. S., at 686). As a result, class procedures cannot be imposed by state law without presenting unwilling parties with an unacceptable choice between being compelled to arbitrate using procedures at odds with arbitration's traditional form and forgoing arbitration altogether. Putting parties to that choice is inconsistent with the FAA.

Viking contends that these decisions require enforcement of contractual provisions waiving the right to bring PAGA actions because PAGA creates a form of class or collective Page Proof Pending Publication

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Moriana offers a very different characterization of the statute. As she sees it, any conflict between Iskanian and the FAA is illusory because PAGA creates nothing more than a substantive cause of action. The only thing that is distinctive about PAGA, she supposes, is that it allows employee plaintiffs to increase the available penalties that may be awarded in an action by proving additional predicate violations of the Labor Code. But that does not make a PAGA action a class action, because those violations are not distinct claims belonging to distinct individuals. Instead, they are predicates for expanded liability under a single cause of action. In Moriana's view, that means Iskanian invalidates waivers of substantive rights, and does not purport to invalidate anything that can meaningfully be described as an “arbitration agreement.” 4

But Moriana's premise that PAGA creates a unitary private cause of action is irreconcilable with the structure of the statute and the ordinary legal meaning of the word “claim.” California courts interpret PAGA to provide employees with delegated authority to assert the State's claims on a representative basis, not an individual cause of action. See, e. g., Amalgamated Transit, 46 Cal. 4th, at 1003, 209 P. 3d, at 943

dispute between an employer and the State, nothing in the FAA categorically exempts claims belonging to sovereigns from the scope of § 2. 5 In briefing before this Court, Viking argued that the principle that the FAA does not mandate enforcement of provisions waiving substantive rights is limited to federal statutes. This argument is erroneous. The basis of this principle is not anything unique about federal statutes. It is that the FAA requires only the enforcement of “provision[s]” to settle a controversy “by arbitration,” § 2, and not any provision that happens to appear in a contract that features an arbitration clause. That is why we mentioned this principle in Preston, which concerned claims arising under state law. See 552 U. S., at 360 (noting that under the agreement, a party “relinquishe[d] no substantive rights . . . California law may accord him”). Page Proof Pending Publication

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Viking 's position, on the other hand, elides important structural differences between PAGA actions and class actions that preclude any straightforward application of our precedents invalidating prohibitions on class-action waivers. Class-action procedure allows courts to use a representative plaintiff's individual claims as a basis to “adjudicate claims of multiple parties at once, instead of in separate suits,” Shady Grove Orthopedic Associates, P . A. v. Allstate Ins. Co., 559 U. S. 393, 408 (2010). This, of course, requires the certifca-tion of a class. And because class judgments bind absentees with respect to their individual claims for relief and are preclusive as to all claims the class could have brought, Cooper v. Federal Reserve Bank of Richmond, 467 U. S. 867, 874 (1984), “class representatives must at all times adequately represent absent class members, and absent [class] members must be afforded notice, an opportunity to be heard, and a right to opt out of the class.” Concepcion, 563 U. S., at 349. And to “ensur[e] that the named plaintiffs are appropriate representatives of the class whose claims they wish to liti-

PAGA actions also permit the adjudication of multiple claims in a single suit, but their structure is entirely different. A class-action plaintiff can raise a multitude of claims because he or she represents a multitude of absent individuals; a PAGA plaintiff, by contrast, represents a single principal, the LWDA, that has a multitude of claims. As a result of this structural difference, PAGA suits exhibit virtually none of the procedural characteristics of class actions. The plaintiff does not represent a class of injured individuals, so there is no need for certification. PAGA judgments are binding only with respect to the State's claims, and are not binding on nonparty employees as to any individually held claims. Arias, 46 Cal. 4th, at 986, 209 P. 3d, at 933–934. This obviates the need to consider adequacy of representation, numerosity, commonality, or typicality. And although the statute gives other affected employees a future interest in the penalties awarded in an action, that interest does not make those employees “parties” in any of the senses in which absent class members are, see Devlin v. Scardelletti, 536 U. S. 1 (2002), or give those employees anything more than an inchoate interest in litigation proceeds. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U. S. 765, 773 (2000) (The “ `right' ” to a share of the proceeds of a qui tam action “does not even fully materialize until the litigation is completed and the relator prevails”).

Because PAGA actions do not adjudicate the individual claims of multiple absent third parties, they do not present the problems of notice, due process, and adequacy of representation that render class arbitration inconsistent with arbitration's traditionally individualized form. See Concepcion, 563 U. S., at 347–348. Of course, as a practical matter, PAGA actions do have something important in common with Page Proof Pending Publication

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Viking suggests an answer. Our FAA precedents treat bilateral arbitration as the prototype of the individualized and informal form of arbitration protected from undue state interference by the FAA. See Epic Systems, 584 U. S., at ––– – –––; see also American Express Co. v. Italian Colors Restaurant, 570 U. S. 228, 238 (2013); Concepcion, 563 U. S., at 347–349; Stolt-Nielsen, 559 U. S., at 685–686. Viking posits that a proceeding is “bilateral” in the relevant sense if— but only if—it involves two and only two parties and the arbitration “ `is conducted by and on behalf of the individual named parties only.' ” Wal-Mart, 564 U. S., at 348 (quoting Califano v. Yamasaki, 442 U. S. 682, 700–701 (1979)). PAGA actions necessarily deviate from this ideal because they involve litigation or arbitration on behalf of an absent principal. Viking thus suggests that Iskanian's prohibition on PAGA waivers is inconsistent with the FAA because PAGA creates an intrinsically representational form of action and Iskanian requires parties either to arbitrate in that format or forgo arbitration altogether.

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These principles do not mandate the enforcement of waivers of representative capacity as a categorical rule. Re-quiring parties to decide whether to arbitrate or litigate a single-agent, single-principal action does not produce a shift from a situation in which the arbitrator must “resolv[e] a single dispute between the parties to a single agreement” to one in which he or she must “resolv[e] many disputes between hundreds or perhaps even thousands of parties.” Stolt-Nielsen, 559 U. S., at 686. And a proceeding in which two and only two parties arbitrate exclusively in their individual capacities is not the only thing one might mean by “bilateral arbitration.” As we have said, “[t]he label `party' does not indicate an absolute characteristic, but rather a con- Page Proof Pending Publication

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Nor does a rule prohibiting waiver of representative standing declare “that a contract is unenforceable just because it requires bilateral arbitration.” Epic Systems, 584 U. S., at –––. Indeed, if the term “bilateral arbitration” is used to mean “arbitration in an individual capacity between precisely two parties,” a rule prohibiting representative-capacity waivers cannot invalidate agreements to arbitrate on a “bilateral” basis. An agreement that explicitly provided for “arbitration on a strictly bilateral basis” would, under that definition of the term “bilateral,” categorically exclude representative-capacity claims from its coverage. Such claims, after all, necessarily involve the representation of an absent principal, and thus cannot be arbitrated in a

We think that such a conflict between PAGA's procedural structure and the FAA does exist, and that it derives from the statute's built-in mechanism of claim joinder. As we noted at the outset, that mechanism permits “aggrieved employees” to use the Labor Code violations they personally suffered as a basis to join to the action any claims that could have been raised by the State in an enforcement proceeding. Iskanian's secondary rule prohibits parties from contracting around this joinder device because it invalidates agreements to arbitrate only “individual PAGA claims for Labor Code violations that an employee suffered,” 59 Cal. 4th, at 383, 327 P. 3d, at 149.

This prohibition on contractual division of PAGA actions into constituent claims unduly circumscribes the freedom of parties to determine “the issues subject to arbitration” and “the rules by which they will arbitrate,” Lamps Plus, 587 U. S., at –––, and does so in a way that violates the fundamental principle that “arbitration is a matter of consent,” Stolt-Nielsen, 559 U. S., at 684. The most basic corollary of Page Proof Pending Publication

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For that reason, state law cannot condition the enforceability of an arbitration agreement on the availability of a procedural mechanism that would permit a party to expand the scope of the arbitration by introducing claims that the parties did not jointly agree to arbitrate. Rules of claim joinder can function in precisely that way. Modern civil procedure dispenses with the formalities of the common-law approach to claim joinder in favor of almost-unqualified joinder. Wright & Miller § 1581. Federal Rule of Civil Procedure 18(a), which permits a party to “join, as independent or alternative claims, as many claims as it has against an opposing party,” is typical of the modern approach. But the FAA licenses contracting parties to depart from standard rules “in favor of individualized arbitration procedures of their own design,” so parties to an arbitration agreement are not required to follow the same approach. Epic Systems, 584 U. S., at –––. And that is true even if bifurcated proceedings are an inevitable result. See, e. g., Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 220–221 (1985); Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 103 (1983).

A state rule imposing an expansive rule of joinder in the arbitral context would defeat the ability of parties to control which claims are subject to arbitration. Such a rule would permit parties to superadd new claims to the proceeding, regardless of whether the agreement between them committed those claims to arbitration. Requiring arbitration Page Proof Pending Publication

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When made compulsory by way of Iskanian, the joinder rule internal to PAGA functions in exactly this way. Under that rule, parties cannot agree to restrict the scope of an arbitration to disputes arising out of a particular “ ` “transaction” ' ” or “ `common nucleus of operative facts.' ” Lucky Brand, 590 U. S., at –––. If the parties agree to arbitrate “individual” PAGA claims based on personally sustained violations, Iskanian allows the aggrieved employee to abrogate that agreement after the fact and demand either judicial proceedings or an arbitral proceeding that exceeds the scope jointly intended by the parties. The only way for parties to agree to arbitrate one of an employee's PAGA claims is to also “agree” to arbitrate all other PAGA claims in the same arbitral proceeding.

The effect of Iskanian's rule mandating this mechanism is to coerce parties into withholding PAGA claims from arbitration. Liberal rules of claim joinder presuppose a backdrop in which litigants assert their own claims and those of a limited class of other parties who are usually connected with the plaintiff by virtue of a distinctive legal relationship— such as that between shareholders and a corporation or between a parent and a minor child. PAGA departs from that norm by granting the power to enforce a subset of California public law to every employee in the State. This combination of standing to act on behalf of a sovereign and mandatory freeform joinder allows plaintiffs to unite a massive number of claims in a single-package suit. But as we have said, Page Proof Pending Publication

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We hold that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. This holding compels reversal in this case. The agreement between Viking and Moriana purported to waive “representative” PAGA claims. Under Iskanian, this provision was invalid if construed as a wholesale waiver of PAGA claims. And under our holding, that aspect of Iskanian is not preempted by the FAA, so the agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any “portion” of the waiver that remains valid must still be “enforced in arbitration.” Based on this clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana's individual PAGA claim. The lower courts refused to do so based on the rule that PAGA actions cannot be divided into individual and non-individual claims. Under our holding, that rule is preempted, so Viking is entitled to compel arbitration of Moriana's individual claim.

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For these reasons, the judgment of the California Court of Appeal is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice Sotomayor , concurring.

I join the Court's opinion in full. The Court faithfully applies precedent to hold that California's anti-waiver rule for claims under the State's Labor Code Private Attorneys General Act of 2004 (PAGA) is pre-empted only “insofar as it precludes division of PAGA actions into individual and nonindividual claims through an agreement to arbitrate.” Ante, at 662. In its analysis of the parties' contentions, the Court also details several important limitations on the pre-emptive effect of the Federal Arbitration Act (FAA). See ante, at 653–659. As a whole, the Court's opinion makes clear that California is not powerless to address its sovereign concern Page Proof Pending Publication

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The Court concludes that the FAA poses no bar to the adjudication of respondent Angie Moriana's “non-individual” PAGA claims, but that PAGA itself “provides no mechanism to enable a court to adjudicate non-individual PAGA claims once an individual claim has been committed to a separate proceeding.” Ante, at 663. Thus, the Court reasons, based on available guidance from California courts, that Moriana lacks “statutory standing” under PAGA to litigate her “nonindividual” claims separately in state court. Ibid. Of course, if this Court's understanding of state law is wrong, California courts, in an appropriate case, will have the last word. Alternatively, if this Court's understanding is right, the California Legislature is free to modify the scope of statutory standing under PAGA within state and federal constitutional limits. With this understanding, I join the Court's opinion.

Justice Barrett, with whom Justice Kavanaugh joins, and with whom The Chief Justice joins except as to the footnote, concurring in part and concurring in the judgment.

I join Part III of the Court's opinion. I agree that reversal is required under our precedent because PAGA's procedure is akin to other aggregation devices that cannot be imposed on a party to an arbitration agreement. See, e. g., Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U. S. 662 (2010); AT&T Mobility LLC v. Concepcion, 563 U. S. 333 (2011); Epic Systems Corp. v. Lewis, 584 U. S. ––– (2018); Lamps Plus, Inc. v. Varela, 587 U. S. ––– (2019). I would say nothing more than that. The discussion in Parts II and IV of the Court's opinion is unnecessary to the result, and much of it addresses disputed state-law questions as well as arguments not pressed or passed upon in this case.*

I continue to adhere to the view that the Federal Arbitration Act (FAA), 9 U. S. C. § 1 et seq., does not apply to proceedings in state courts. See Allied-Bruce Terminix Cos. v. Dobson, 513 U. S. 265, 285–297 (1995) (Thomas, J., dissenting); see also Kindred Nursing Centers L. P . v. Clark, 581 U. S. 246, 257 (2017) (Thomas, J., dissenting) (collecting cases). Accordingly, the FAA does not require California's courts to enforce an arbitration agreement that forbids an employee to invoke the State's Private Attorneys General Act. On that basis, I would affirm the judgment of the Cali-

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The attached opinion has been revised to refect the usual publication and citation style of the United States Reports. The revised pagination makes available the official United States Reports citation in advance of publication. The syllabus has been prepared by the Reporter of Decisions for the convenience of the reader and constitutes no part of the opinion of the Court. A list of counsel who argued or filed briefs in this case, and who were members of the bar of this Court at the time this case was argued, has been inserted following the syllabus. Other revisions may include adjustments to formatting, captions, citation form, and any errant punctuation. The following additional edits were made: p. 661, line 14: “operative” is inserted before “facts”

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