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Reverse chronological e-mail alerts prepared pro bono for the California Lawyers Association (formerly State Bar of California) Labor & Employment Law Section since 2007, covering California, 9th Circuit and US Supreme Court decisions, and new laws signed by Governor. To subscribe, contact LaborLaw@CLA.Legal.

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Trejo v. County of Los Angeles (CA2/1 B293564 6/9/20) Civil Service/Probation by Reassignment


Deputy sheriff challenged his employer’s practice of extending probation while investigating the deputy’s claimed misconduct as violating the Los Angeles County Civil Service Rules.  Trial court agreed with deputy and issued a writ of mandate directing the Los Angeles County Sheriff’s Department to reinstate deputy as permanent civil service employee.  We affirm, holding the plain language of the rules does not authorize the department’s practice of extending probation by re-assigning deputies under investigation to administrative duty.  We also agree the deputy did not fail to exhaust administrative remedies.

Williams v. U.S. Bancorp Investments, Inc. (CA1/4 A156226 6/8/20) Wage and Hour Class Action/Arbitration


In a class action, an order denying certification to a proposed class does not preclude an absent member of the putative class from later seeking to certify an identical class in a second action.  (Smith v. Bayer Corp. (2011) 564 U.S. 299, 312–316 (Smith); Bridgeford v. Pacific Health Corp. (2012) 202 Cal.App.4th 1034, 1041–1044 (Bridgeford).)  In this [wage and hour] case, we are called upon to decide a closely related question: whether collateral estoppel bars an absent member in a putative class that was initially certified, but later decertified, from subsequently pursuing an identical class action.  We conclude that the rule of Smith and Bridgeford applies equally in this context.  Accordingly, we reverse the trial court’s order dismissing plaintiff’s class claims and compelling arbitration of his individual claims.


N. L. v. Credit One Bank, N.A. (9th Cir. 19-15399 6/3/20) Class Representative Settlement/Washington State Meal Break Law


This case requires us to decide what happens when a class representative voluntarily settles only his individual claims without indicating any financial stake in the unresolved class claims [regarding Washington state meal break law]. We conclude that such a scenario renders the class claims moot, and therefore dismiss this appeal.


Thole v. U. S. Bank N. A. (US 17-1712 6/1/20) ERISA/Standing


Plaintiffs James Thole and Sherry Smith are retired participants in U. S. Bank’s defined-benefit retirement plan, which guarantees them a fixed payment each month regardless of the plan’s value or its fiduciaries’ good or bad investment decisions. Both have been paid all of their monthly pension benefits so far and are legally and contractually entitled to those payments for the rest of their lives. Nevertheless, they filed a putative class-action suit against U. S. Bank and others (collectively, U. S. Bank) under the Employee Retirement Income Security Act of 1974 (ERISA), alleging that the defendants violated ERISA’s duties of loyalty and prudence by poorly investing the plan’s assets. They request the repayment of approximately $750 million to the plan in losses suffered due to mismanagement; injunctive relief, including replacement of the plan’s fiduciaries; and attorney’s fees. The District Court dismissed the case, and the Eighth Circuit affirmed on the ground that the plaintiffs lack statutory standing.


Held: Because Thole and Smith have no concrete stake in the lawsuit, they lack Article III standing. See Lujan v. Defenders of Wildlife, 504 U. S. 555, 560–561. Win or lose, they would still receive the exact same monthly benefits they are already entitled to receive.


None of the plaintiffs’ arguments suffices to establish Article III standing. First, the plaintiffs rely on a trust analogy in arguing that an ERISA participant has an equitable or property interest in the plan and that injuries to the plan are therefore injuries to the participants. But participants in a defined-benefit plan are not similarly situated to the beneficiaries of a private trust or to participants in a defined contribution plan, and they possess no equitable or property interest in the plan, see Hughes Aircraft Co. v. Jacobson, 525 U. S. 432, 439–441. Second, the plaintiffs cannot assert representative standing based on injuries to the plan where they themselves have not “suffered an injury in fact,” Hollingsworth v. Perry, 570 U. S. 693, 708, or been legally or contractually appointed to represent the plan. Third, the fact that ERISA affords all participants—including defined-benefit plan participants—a cause of action to sue does not satisfy the injury-in-fact requirement here. “Article III standing requires a concrete injury even in the context of a statutory violation.” Spokeo, Inc. v. Robins, 578 U. S. ___, ___. Fourth, the plaintiffs contend that meaningful regulation of plan fiduciaries is possible only if they may sue to target perceived fiduciary misconduct. But this Court has long rejected that argument for Article III standing, see Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 489, and defined-benefit plans are regulated and monitored in multiple ways.


The plaintiffs’ amici assert that defined-benefit plan participants have standing to sue if the plan’s mismanagement was so egregious that it substantially increased the risk that the plan and the employer would fail and be unable to pay the participants’ future benefits. The plaintiffs do not assert that theory of standing here, nor did their complaint allege that level of mismanagement. Pp. 2–8.


873 F. 3d 617, affirmed.


KAVANAUGH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, and GORSUCH, JJ., joined. THOMAS, J., filed a concurring opinion, in which GORSUCH, J., joined. SOTOMAYOR, J., filed a dissenting opinion, in which GINSBURG, BREYER, and KAGAN, JJ., joined.


Jarboe v. Hanlees Auto Group (CA1/3 A156411, filed 5/8/20, pub. ord. 5/29/20) Arbitration


Plaintiff Thomas Jarboe was hired by DKD of Davis, Inc., doing business as Hanlees Davis Toyota (DKD of Davis).  Shortly after he began working, Jarboe was transferred to Leehan of Davis, Inc., doing business as Hanlees Chrysler Dodge Jeep Ram Kia (Leehan of Davis).  Following his termination at Leehan of Davis, Jarboe brought this wage and hour action against the Hanlees Auto Group (Hanlees), its 12 affiliated dealerships, including DKD of Davis and Leehan of Davis, and three individual defendants, Dong K. Lee, Kyong S. Han, and Dong I. Lee (collectively defendants).  Defendants moved to compel arbitration based on an employment agreement between Jarboe and DKD of Davis.  The trial court granted the motion as to 11 of the 12 causes of action against DKD of Davis, but denied the motion as to the other defendants.  The trial court also allowed Jarboe’s claim under the Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698 et seq. to proceed in court against all defendants.  The trial court refused to stay the causes of action allowed to proceed in litigation pending arbitration of Jarboe’s claims against DKD of Davis.  (See Code Civ. Proc., § 1281.4).


Hanlees, its affiliated dealerships, and the individual defendants contend they are entitled to enforce the agreement to arbitrate between Jarboe and DKD of Davis as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel.  The record fails to support either theory.  Neither did the trial court err in failing to stay the litigation under Labor Code section 1281.4.  Accordingly, we affirm.


Boermeester v. Carry (CA2/8 B290675 5/28/20) Title IX


Matthew Boermeester was expelled from the University of Southern California (USC) for committing intimate partner violence against Jane Roe.  The superior court denied his petition for writ of administrative mandate to set aside the expulsion.  He appeals, contending, among other things, that the process leading to his expulsion violated his right to a fair hearing.  We conclude USC’s disciplinary procedures at the time were unfair because they denied Boermeester a meaningful opportunity to cross-examine critical witnesses at an in-person hearing.  We thus reverse and remand with directions to the superior court to grant the petition for writ of administrative mandate.

Betancourt v. OS Restaurant Services, LLC (CA2/8 B293625, filed 4/30/20, pub. ord. 5/21/20) Wage and Hour/Attorneys’ Fees


The Labor Code mandates an award of reasonable attorney fees to the prevailing party in any action brought for the nonpayment of wages, if any party requests attorney fees at the initiation of the action.  (Lab. Code, § 218.5, subd. (a).)  But an action brought for failure to provide rest breaks or meal periods (§ 226.7) is not “an ‘action brought for the nonpayment of wages’ ” within the meaning of section 218.5.  (Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1255 (Kirby); id. at p. 1259 [“the Legislature intended section 226.7 claims to be governed by the default American rule that each side must cover its own attorney’s fees”].)


The trial court awarded plaintiff over $280,000 in attorney fees, even though the only wage and hour claims alleged and litigated were for rest break and meal period violations, and claims for penalties based on those violations.  We conclude the trial court abused its discretion and reverse the judgment to the extent it awards attorney fees to plaintiff.


Younan v. Fleming Distribution Company (CA1/3 A157038, filed 4/23/20, pub. ord. 5/15/20) Arbitration/Waiver


Appellant Fleming Distribution Company (Fleming) appeals from a trial court order denying its petition to compel arbitration, stay proceedings, vacate a Labor Commissioner award of $27,412.60 to former Fleming employee, respondent Alfonus Younan (Younan), and dismiss the action.  Fleming contends the court erred in denying its petition because Younan’s employment application and employment agreement contained enforceable arbitration clauses and Fleming did not waive its right to arbitration.  We conclude Fleming did waive its right to arbitration and affirm.


Grande v. Eisenhower Medical Center (2020) 258 Cal.Rptr.3d 324 (SC S261247/E068730 review granted 5/14/20) Wage and Hour Class Action/Staff Agency/Res Judicata 


Petition for review after affirmance of judgment. May a class of workers bring a wage and hour class action against a staffing agency, settle that lawsuit with a stipulated judgment that releases all of the staffing agency's agents, and then bring a second class action premised on the same alleged wage and hour violations against the staffing agency's client? Review granted/brief due.



Court of Appeal Decision


Adams v. West Marine Products (9th Cir. 20-15444 5/13/20) Wage and Hour/CAFA Local Controversy Exception


The panel affirmed the district court’s order remanding a putative class action to state court after it was removed to federal court under the Class Action Fairness Act (“CAFA”), pursuant to 28 U.S.C. § 1332(d).


A former West Marine Products, Inc. employee filed the putative class action on behalf of herself and other similarly situated current and former employees, alleging violations of California wage and hour laws.


The local controversy exception, and the home state exception (sometimes called the “home state controversy exception”), provide exceptions to CAFA jurisdiction. Under the discretionary base of the home state exception, the district court may decline to exercise jurisdiction where more than one-third of the putative class, and the primary defendants, are citizens of the state where the action was originally filed. Invoking the discretionary home state controversy exception, the district court declined to exercise jurisdiction and ordered the case remanded to state court.


The panel held that the district court reasonably inferred from the facts in evidence that it was more likely than not that more than one-third of class members were California citizens. The panel held further that the district court did not err in raising sua sponte an exception to CAFA jurisdiction. Although the local controversy and home state exceptions are not jurisdictional, the exceptions are treated as a form of abstention that a court may raise sua sponte.


The panel held that the district court provided the parties with an adequate opportunity to address whether the home state exception to CAFA jurisdiction applied when the district court invited briefing on the home state exception to CAFA jurisdiction, which encompasses both the mandatory and discretionary bases for remand. The district court considered the six factors to determine whether it should exercise its discretion to remand to state court. 28 U.S.C. § 1332(d)(3). The panel concluded that the district court did not abuse its discretion in concluding that remand was appropriate.


Willis v. City of Carlsbad (CA4/1 D074988, filed 4/22/20, pub. ord. 5/12/20) Whistleblower Retaliation/Government Claims Act


Plaintiff and appellant James Willis, a peace officer employed by the Carlsbad Police Department (Department), sued defendant and respondent City of Carlsbad (City) alleging in part that it engaged in whistleblower retaliation against him in violation of Labor Code section 1102.5, subdivision (b) by denying him promotions after he reported what he perceived was misconduct by another officer and complained about a Department program he believed was an unlawful quota system.  Before trial, City successfully moved to strike allegations of other assertedly retaliatory acts within Willis's cause of action on grounds he had not timely presented a government tort claim within six months of the acts as required by the Government Claims Act (Gov. Code, § 911.2).  Thereafter, the trial court in limine excluded evidence of any violations by City of the Public Safety Officers Procedural Bill of Rights Act (POBRA, or at times, the Act; § 3300 et seq.), while at the same time permitting City to present evidence Department had denied Willis promotion because of a June 2012 e-mail he wrote under an assumed name lodging the officer misconduct accusations.  The jury returned a verdict finding in favor of Willis that his reporting of City's violation of law was a contributing factor in City's decision to deny him the promotion.  However, it also found City would have denied Willis his promotion anyway for legitimate independent reasons.  Accordingly, the court entered judgment in City's favor on the whistleblower retaliation claim.


Willis contends the trial court erred as a matter of law by striking those portions of his section 1102.5 cause of action because the Government Claims Act's six-month statute of limitations was either equitably tolled or his cause of action had not accrued by reason of the continuing tort/continuing violation doctrine.  He further contends the court's evidentiary rulings were a prejudicial abuse of discretion.  We conclude the trial court did not err, and accordingly affirm the judgment.


Our Lady of Guadalupe School v. Morrissey-Berru (US 19-348 oral arg. transcript 5/11/20) Employment Discrimination/ Ministerial Exception


Whether the Religion Clauses prevent civil courts from adjudicating employment discrimination claims brought by an employee against her religious employer, where the employee carried out important religious functions.


Supreme Court Oral Argument Transcript

9th Circuit Decision: Morrissey-Berru v. Our Lady of Guadalupe School (9th Cir 2019) 769 Fed.Appx. 460.


Galeotti v. Internat. Union of Operating Engineers etc. (CA1/5 A157785 5/6/20) Threat to Terminate Employment Can be Extortion/Wrongful Termination


John Galeotti appeals from a judgment of dismissal entered after the court sustained respondents’ demurrer to his second amended complaint without leave to amend.  He contends his second amended complaint stated causes of action for wrongful termination in violation of public policy and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO; 18 U.S.C. § 1961 et seq.).  He further contends his first amended complaint stated a cause of action for interference with prospective economic advantage against the individual respondents.  We agree that his second amended complaint states causes of action and reverse the judgment.


In the published portion of our opinion, we conclude that a threat to terminate employment can provide a basis for an extortion claim, and, for this and other reasons, the allegations of the second amended complaint stated a cause of action for wrongful termination in violation of public policy.  In the unpublished portion of our opinion, we conclude the second amended complaint stated RICO claims but the first amended complaint did not state a cause of action for interference with prospective economic advantage.


Nelson v. Tucker Ellis, LLP (CA1/3 A153661 5/5/20) Interference with Contract and Prospective Economic Advantage


This is an appeal from judgment on the pleadings entered by the trial court in favor of defendant Tucker Ellis, LLP (Tucker Ellis), a law firm.  Plaintiff Evan C. Nelson, an attorney, brought this tort action against his former employer Tucker Ellis based on its production of materials in response to a valid out-of-state subpoena.  According to Nelson, these materials were his privileged and confidential work product communications not subject to disclosure without his consent.  He asserts causes of action for negligence, invasion of privacy, intentional and negligent interference with contract, intentional and negligent interference with prospective economic advantage, and conversion.


On appeal, Nelson seeks reversal of the judgment, arguing the trial court prejudicially erred when finding each of his causes of action barred under the law of the case as determined by this court in Tucker Ellis LLP v. Superior Court (2017) 12 Cal.App.5th 1233 (Tucker Ellis III).  In Tucker Ellis III, we held inter alia that Tucker Ellis, not Nelson, was the holder of the work product privilege with respect to the materials in question.  Nelson also challenges the trial court’s alternative ruling that the litigation privilege codified in Civil Code section 47 barred each of his claims, as well as the court’s subsequent denial of his request to amend the complaint.  For reasons set forth below, we affirm the judgment.


Int’l Bhd. Of Teamsters v. NASA Servs. (9th Cir. 19-55166 5/1/20) Arbitration


The panel reversed the district court’s order compelling arbitration of a labor dispute and remanded.


A waste management company and a union signed a Labor Peace Agreement containing an arbitration clause. The LPA’s terms were conditioned upon the company entering into an exclusive franchise agreement with the City of Los Angeles by December 31, 2016. The franchise agreement was signed by the President of the Board of Public Works on January 31, 2017.


The panel held that under California contract law, the LPA clearly and unambiguously contained a condition precedent to formation, rather than a condition precedent to performance. If the condition precedent failed, then there was no contract. The panel remanded for the district court to determine in the first instance whether the city and the company entered an exclusive franchise agreement by December 31, 2016. The panel held that if that condition failed, then the district court could not compel arbitration.


Caldera v. Dept. of Corrections & Rehabilitation (CA4/3 G057343 4/30/20) FEHA/Attorney Fee Award


This is an appeal from a trial court’s order of attorney fees under the Fair Employment and Housing Act (FEHA).  Augustine Caldera is a prison correctional officer who sometimes stutters when he speaks.  In 2010, Caldera filed a lawsuit against the California Department of Corrections and Rehabilitation (CDCR) and his supervisor alleging disability discrimination.  The trial court granted defendants’ motion for summary judgment.  We reversed; we held that a stutter constitutes a disability under the FEHA.  (Caldera v. [CDCR] et al. (Feb. 25, 2014) [nonpub. opn.] (Caldera I).)


A jury found in Caldera’s favor and awarded $500,000.  The court granted a motion for new trial because it found the damage award excessive.  We reversed on procedural grounds.  (Caldera v. [CDCR] (2018) 25 Cal.App.5th 31, 34 (Caldera II).)


After nearly a decade of litigation, Caldera sought about $2.4 million in statutory attorney fees (a $1.2 million “lodestar” and a 2.0 “multiplier”).  The court awarded a little over $800,000.  Caldera appeals.


An attorney fee award under the FEHA is designed to incentify and reward a plaintiff’s attorney in a civil rights case.  Trial courts first determine a lodestar amount:  the hours spent times a reasonable hourly rate.  Courts may then increase the amount, usually by applying a multiplier to the lodestar.  The multiplier is to compensate for extrinsic factors such as the risk of nonpayment (the contingency factor), the public interest advanced by the case, the difficulty of the issues involved, and the skill of the attorneys.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1135 (Ketchum).)


Here, Caldera could not find a local attorney to take his discrimination lawsuit, so he hired an out-of-town firm.  But when calculating attorney fees, the court set the attorneys’ hourly rate based on a lower local rate, rather than a higher out-of-town rate.  The court then applied the extrinsic Ketchum factors to the hourly rate, rather than applying a multiplier to the lodestar.  In sum, Caldera’s attorneys were not adequately compensated consistent with the purposes of the FEHA.    


Thus, we reverse the trial court’s order for attorney fees.

Marez v. Lyft, Inc. (CA1/1 A156761 4/30/20) Respondeat Superior


Jonathan Gaurano, driving a vehicle rented through defendant Lyft, Inc.’s (Lyft) “Express Drive program,” struck plaintiffs Sabrina Marez’s and Marissa Cruz’s (plaintiffs) vehicles and caused significant injuries.  The trial court rejected plaintiffs’ argument that Lyft was liable under the doctrine of respondeat superior and granted Lyft’s motion for summary judgment.  Plaintiffs appeal from that judgment, arguing Gaurano had been acting within the scope of his employment with Lyft at the time of the accident.  Plaintiffs further contend the trial court abused its discretion in limiting the scope of a person most qualified (PMQ) deposition.  We disagree and affirm the judgment.


Patel v. Chavez (CA2/1 B291695 4/30/20) Labor Commissioner Proceeding/Anti-SLAPP


Plaintiffs and appellants Balubhai Patel, DTWO & E, Inc. (DTWO), and Stuart Union, LLC (collectively, plaintiffs) appeal from the trial court’s order granting defendant and respondent Manuel Chavez’s motion to strike plaintiffs’ complaint against Chavez, pursuant to the anti‑SLAPP statute, Code of Civil Procedure section 425.16.  Plaintiffs’ complaint alleges that Chavez, plaintiffs’ former employee, falsely testified at a Labor Commissioner’s hearing on wage claims Chavez filed against plaintiffs, which the Labor Commissioner ultimately decided in Chavez’s favor.  On this basis, plaintiffs’ complaint asserts a federal civil rights cause of action against all defendants under section 1983 of title 42 of the United States Code (section 1983).  The complaint also contains a petition for writ of mandate addressed to all defendants seeking reversal of the Labor Commissioner’s award.


On appeal, plaintiffs argue that the anti-SLAPP statute does not apply to federal causes of action, and that even if it did apply, plaintiffs met their burden of establishing a probability of success.


Colucci v. T-Mobile USA, Inc. (CA4/1 D075932 4/29/20) FEHA Retaliation/Punitive Damages


T-Mobile USA, Inc. (T-Mobile) appeals a judgment entered on a $5 million jury verdict in favor of former employee Stephen Colucci in a workplace retaliation case. T-Mobile primarily challenges the $4 million punitive damages award, arguing there is insufficient evidence that a managing agent engaged in retaliatory conduct or that the managing agent's actions were malicious or oppressive (Civ. Code, § 3294, subd. (b)).  Alternatively, it argues the punitive damages award is constitutionally excessive and must be reduced.  Finally, T-Mobile contends the jury's $200,000 award of damages for future emotional distress is not supported by sufficient evidence.


For the reasons discussed below, we reduce the punitive damages award to an amount that is one and one-half (1.5) times the amount awarded in compensatory damages, and otherwise affirm the judgment.


IATSE Local 15 v. NLRB (9th Cir. 19-70651 4/29/20) Good Faith Bargaining/Inability to Pay Claim


The panel affirmed the National Labor Relations Board’s findings that: (a) the employer, Audio Visual Services Group d/b/a PSAV Presentation Services, effectively retracted its claim of inability to pay the union’s wage and benefit proposals, thereby limiting its obligation to produce financial documents to the union; and (b) PSAV’s conduct did not constitute bad faith bargaining in violation of the National Labor Relations Act (the “Act”).


The International Alliance of Theatrical Stage Employees, Local 15 (the “Union”) is the certified collective-bargaining representative for PSAV’s employees. At issue in this collective bargaining case was whether PSAV effectively retracted its claim of inability to pay the union’s wage and benefits proposals, thereby limiting its obligation to produce financial documents to the union, and whether PSAV failed to bargain in good faith.


The panel held that substantial evidence supported the NLRB’s finding that the substance of PSAV’s bargaining position was an unwillingness to pay, rather than an inability to pay, the Union’s demands. The panel concluded that substantial evidence supported the NLRB’s finding that PSAV retracted its inability-to-pay claim, and PSAV’s failure to produce documents responsive to the Union’s first document request did not violate the Act.


The panel rejected the Union’s arguments that PSAV bargained in bad faith. First, the panel held that the fact that PSAV never changed its wage proposal did not itself establish that it acted in bad faith; and on this record, the panel could not conclude that PSAV’s position on benefits was evidence of bad faith either by itself or in conjunction with its overall bargaining posture. Second, PSAV’s employee discipline proposals did not evidence its bad faith. Third, PSAV’s behavior away from the bargaining table did not demonstrate its bad faith. Fourth, PSAV’s withholding of documents did not evidence PSAV’s overall bad faith. Finally, PSAV’s refusal to bargain before May 2016 did not evidence overall bad faith bargaining.


Cedar Point Nursery v. Shiroma (9th Cir. 16-16321 rehng. en banc den. 4/29/20) ALRB Regulation/Union Access to Employees at Worksites/5th Amendment Takings


The panel denied a petition for panel rehearing, and denied on behalf of the court a petition for rehearing en banc, from an opinion in which the panel affirmed the district court’s dismissal of an action seeking declaratory and injunctive relief against members of the California Agricultural Labor Relations Board who promulgated a regulation allowing union organizers access to agricultural employees at employer worksites under specific circumstances.


Concurring in the denial of rehearing en banc, Judge Paez, joined by Judge W. Fletcher wrote separately only to respond to arguments raised in Judge Ikuta’s dissent from the decision, which were not raised by the parties. Judge Paez stated that the majority opinion correctly held that the plaintiffs had not suffered a “permanent and continuous” loss of their right to exclude the public from their property. They had thus not suffered a taking in violation of the Fifth Amendment.


Dissenting from the denial of rehearing en banc, Judge Ikuta joined by Judges Callahan, R. Nelson, Bade, Collins, Bress, Bumatay, and VanDyke stated that the majority fundamentally misunderstood the nature of the property rights at issue, and how California had taken them. Judge Ikuta wrote that the plaintiffs had plausibly alleged that California had appropriated easements and thus taken valuable property rights protected by the Takings Clause. By failing to give fair consideration to the plaintiffs’ actual claims, the majority created a circuit split, disregarded binding Supreme Court precedent, and deprived property owners of their constitutional rights.


Obbard v. State Bar of California (CA1/5 A155106 4/28/20) Superior Court Research Attorneys are State of California Employees Not Subject to MCLE


The State Bar of California (State Bar) argues that respondent Philip B. Obbard, a research attorney for the Superior Court of the State of California, is not a state employee and is not, therefore, exempt from the State Bar’s mandatory continuing legal education requirements.  (See Bus. & Prof. Code, § 6070, subd. (c) [exempting “employees of the State of California”]).  The trial court disagreed and entered judgment for Obbard.  We affirm.


Alaniz v. Sun Pacific Shippers (CA2/6 B290013A 4/28/20) Hirer’s Liability to Independent Contractor’s Employee


The Privette/Hooker doctrine sets forth the circumstances in which the hirer of an independent contractor can be liable for injuries to the contractor’s employees.  (Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette); Hooker v. Department of Transportation (2002) 27 Cal.4th 198 (Hooker).)  In a negligence action, the hirer of an independent contractor may be liable to the contractor’s employee only if “the hirer retained control over safety conditions at [the] worksite” and “exercise of retained control affirmatively contributed to the employee’s injuries.”  (Hooker, at p. 202, original italics.)  In a premises liability action, the hirer may be liable for injuries to the employee only if:  “(1) it knows or reasonably should know of a concealed, preexisting hazardous condition on its premises; (2) the contractor does not know and could not reasonably ascertain the condition; and (3) the [hirer] fails to warn the contractor.”  (Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 675 (Kinsman), italics added.)  We conclude that the trial court here prejudicially erred when it omitted these elements from its instructions on negligence and premises liability.


Sun Pacific Shippers, L.P. (Sun Pacific), appeals from the judgment after a jury awarded damages against it for injuries sustained by Jesus Alaniz, an employee of one of its independent contractors.  Sun Pacific contends:  (1) the trial court erred when it did not instruct the jury on the Privette/Hooker doctrine, (2) the court erred when it did not instruct on mitigation of damages, (3) the court improperly denied its motion for judgment notwithstanding the verdict (JNOV), and (4) substantial evidence does not support the award of future medical expenses.  We reverse the judgment, remand for a new trial on the negligence cause of action, and direct judgment for Sun Pacific on the premises liability cause of action.

Luna v. Hansen & Adkins Auto Transport (9th Cir. 18-55804 4/24/20) Fair Credit Reporting Act/Disclosure Provided with Other Employment Materials


Affirming the district court’s summary judgment in favor of defendant, the panel held that an employer does not violate the Fair Credit Reporting Act by providing a FCRA disclosure simultaneously with other employment materials, and by failing to place a FCRA authorization on a standalone document.


The panel held that 15 U.S.C. § 1681b(b)(2)(A)(i), forbidding procurement of a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing to the consumer . . . in a document that consists solely of the disclosure,” does not prohibit the presentation of the disclosure together with other application materials. The panel held that the co-presentation of the disclosure and an authorization did not render the disclosure neither clear nor conspicuous. Further, the FCRA requires only that a consumer authorization be “in writing,” not that it be put in a clear and conspicuous, standalone document.


Pinter-Brown v. The Regents of the University of Cal. (CA2/8 B290086 4/23/20) FEHA Gender Discrimination/Prejudicial Error


Dr. Lauren Pinter-Brown sued The Regents of the University of California for gender discrimination based on a series of events that took place while she was a Professor of Medicine at the University of California at Los Angeles (UCLA).  The jury found in favor of Dr. Pinter-Brown and awarded her upward of $13 million in economic and noneconomic damages.


Unfortunately, the trial court committed a series of grave errors that significantly prejudiced The Regents’ right to a fair trial by an impartial judge.


First, the court delivered a presentation to the jury highlighting major figures in the civil rights movement, and told the jury their duty was to stand in the shoes of Dr. Martin Luther King and bend the arc of the moral universe toward justice.  Second, the court allowed the jury to hear about and view a long list of discrimination complaints from across the entire University of California system that were not properly connected to Dr. Pinter-Brown’s circumstances or her theory of the case.  Third, the court allowed the jury to learn of the contents and conclusions of the Moreno Report, which documented racial discrimination occurring throughout the entire UCLA campus.  Finally, the court allowed Dr. Pinter-Brown to resurrect a retaliation claim after the close of evidence despite having summarily adjudicated that very claim prior to trial.

These errors were cumulative and highly prejudicial.  They evidence the trial court’s inability to remain impartial and created the impression that the court was partial to Dr. Pinter-Brown’s claims.


We must reverse.


Ajaxo, Inc. v. E*Trade Financial Corp. (CA6 H042999 4/23/20) Trade Secret (applicable to employment cases)


A jury in 2003 found defendant E*Trade Financial Corp. (E*Trade) liable for trade secret misappropriation and for breach of a mutual nondisclosure agreement with plaintiff Ajaxo, Inc. (Ajaxo).  The jury awarded damages only on the breach of contract cause of action after the trial court granted a nonsuit on the issue of damages for trade secret misappropriation.  An appeal before this court led to a remand for a second trial on damages for the misappropriation.  The jury in that 2008 trial found no net damages for unjust enrichment and awarded nothing to Ajaxo.  The trial court then denied Ajaxo’s request to seek a reasonable royalty under the California Uniform Trade Secret Act (Civ. Code, §§ 3426‑3426.11 (CUTSA)). A second appeal followed, and this court reversed.  We held that the trial court had the discretion to award payment of a reasonable royalty pursuant to section 3426.3, subdivision (b), which states that “[i]f neither damages nor unjust enrichment caused by misappropriation are provable, the court may order payment of a reasonable royalty . . . .”  We remanded the matter for the trial court to exercise its discretion under the statute.  The trial court held a bench trial on remand to determine whether Ajaxo was entitled to a reasonable royalty and in what amount, if any.  It ultimately declined to award any royalty to Ajaxo.  It entered judgment for E*Trade and awarded E*Trade its costs as the prevailing party in the action. 


On appeal, Ajaxo challenges the trial court’s failure to award it a reasonable royalty for E*Trade’s willful and malicious trade secret misappropriation.  Ajaxo also challenges the denial of its motion for a new trial and the award of costs in favor of E*Trade.  Among the issues raised, we decide whether the trial court abused its discretion by declining to award any reasonable royalty despite the available evidence from which a reasonable royalty theoretically might have been derived.  We consider the court’s findings on the evidence, its application of apportionment principles from patent law, its exclusion of expert testimony and analysis of Ajaxo’s royalty model, and its treatment of what are commonly called the “Georgia‑Pacific factors” for determining a royalty rate in intellectual property disputes.  (See Georgia‑Pacific Corp. v. United States Plywood Corp. (S.D.N.Y. 1970) 318 F.Supp. 1116 (Georgia‑Pacific).) 


We also decide whether the trial court erred in its prevailing party determination and costs award, an issue that requires us to reconcile the meaning of a “prevailing party . . . in any action or proceeding” (Code Civ. Proc., § 1032, subd. (b)) with the practical effect of Ajaxo having already obtained full satisfaction of what became a separate, final judgment in its favor following the remittitur in 2006 from the first appeal, including costs awarded at that time. 


We conclude as to the reasonable royalty that the trial court did not abuse its discretion in denying a royalty under the CUTSA based upon Ajaxo’s failure to carry its burden of proof and to support its royalty theories with credible, reliable, non-speculative evidence.  As to the other issues raised on appeal, we find no reversible error and will affirm the judgment and the award of costs in favor of E*Trade.


Cardinal Care Management, LLC v. Afable (CA1/4 A154062 4/20/20) Labor Commissioner Award/Waiver of Undertaking


Appellants operate several residential care facilities for the elderly.  Respondents are seven former employees who worked at the facilities, and who brought administrative proceedings against appellants before the Labor Commissioner (the Commissioner) seeking unpaid wages and penalties.  When the Commissioner awarded the employees more than $2.5 million, appellants sought de novo review in the trial court, an action that required them to post an undertaking in the amount of the award or to obtain a waiver.  (Lab. Code, § 98.2; Code Civ. Proc., § 995.240.)  The primary question we must address is whether the trial court provided an adequate hearing on appellants’ financial ability to post the undertaking.  We conclude the proceedings were adequate and comported with due process, and accordingly affirm the trial court’s dismissal of the consolidated trial court actions.  Appellants also challenge an award of attorney fees, which we affirm.


Anthony v. Trax Int’l (9th Cir. 18-15662 4/17/20) ADA/Qualified Individual Test


The panel affirmed the district court’s grant of summary judgment in favor of the employer in a disability discrimination action under Title I of the Americans with Disabilities Act.


After plaintiff filed suit, alleging that her employer terminated her from her position as a technical writer because of her disability, the employer learned that, contrary to her representation on her employment application, plaintiff lacked the bachelor’s degree required of all technical writers under the employer’s government contract. Under the two-step qualified individual test promulgated by the EEOC and embedded in the court’s precedent, an individual who fails to satisfy the job prerequisites cannot be considered “qualified” under the ADA unless she shows that the prerequisite is itself discriminatory in effect. Disagreeing with the Seventh Circuit and agreeing with other circuits, the panel held that a limitation on the use of after-acquired evidence, applicable under McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), to an employer attempting to excuse its discriminatory conduct under the Age Discrimination in Employment Act, does not extend to evidence used to show that an ADA plaintiff is not a qualified individual, as required to establish a prima facie case of disability discrimination. Further, the employer had no obligation to engage in the interactive process to identify and implement reasonable accommodations.


Nuno v. Cal. State Univ., Bakersfield (CA5 F077889 4/13/20) FEHA Self-Represented Litigant/Clear and Understandable Instructions


Plaintiff, a college professor who represented himself, sued his employer for discrimination and retaliation in violation of the California Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.).  The employer successfully demurred to the initial complaint and plaintiff was granted leave to amend.  When plaintiff failed to file an amended complaint within the time given, employer submitted an ex parte application for an order of dismissal with prejudice.  The trial court granted the dismissal with prejudice and subsequently entered a judgment in favor of employer.  Plaintiff appealed. 


In Gamet v. Blanchard (2001) 91 Cal.App.4th 1276 (Gamet), the court set forth the principle that self-represented litigants are not entitled to special exemptions from California’s procedural rules, but they are “entitled to treatment equal to that of a represented party.”  (Id. at p. 1284.)  To provide “fair and equal treatment,” courts should “make sure that verbal instructions given in court and written notices are clear and understandable by a layperson.”  (Ibid.)  Here, the trial court’s statements at a case management conference about the filing of an amended complaint were not clear and understandable.  As a result, plaintiff was misled into believing he had until the next case management conference to seek counsel and file an amended complaint and, relying on this belief, he left the country to attend an educational conference.  While plaintiff was out of the country and a month before the date of the next case management conference, defendants requested and obtained an ex parte order dismissing the action with prejudice pursuant to Code of Civil Procedure section 581, subdivision (f)(2).  We conclude the court prejudicially abused its discretion by (1) failing to provide clear and understandable instructions to plaintiff that the setting of another case management conference did not extend the deadline for filing an amended complaint and (2) dismissing plaintiff’s action with prejudice prior to that conference.


As in Gamet, we reverse and remand for further proceedings.


Galaza v. Wolf (9th Cir. 17-17037 4/8/20) Title VII Discrimination and Retaliation


The panel dismissed an appeal for lack of appellate jurisdiction under 28 U.S.C. § 1291 because the district court’s decision was not final for purposes of conferring jurisdiction in plaintiff’s action alleging claims under federal and state law after her employment with the Transportation Security Administration was terminated.


Plaintiff filed a first amended complaint asserting Title VII claims for sex discrimination, race discrimination, and retaliation; and filed a motion for reconsideration regarding the dismissal of her Rehabilitation Act claim. The district court: denied the government’s motion to dismiss the first amended complaint without prejudice to renewal; found that plaintiff had otherwise adequately pled Title VII sex and race discrimination claims; did not separately address plaintiff’s Title VII retaliation claim; and denied plaintiff’s motion for reconsideration, affirming its decision that the Aviation and Transportation Security Act preempted the Rehabilitation Act.


The panel dismissed for lack of jurisdiction because plaintiff voluntarily dismissed what she thought were her sole remaining claims without prejudice after the district court dismissed her Rehabilitation Act claim, and because the district court did not meaningfully participate in the dismissal of those claims and did not formally dismiss an additional remaining claim. The panel further held that the procedural posture of the case indicated that the district court did not intend to enter a final judgment and that the retaliation claim was still before the district court. Judge Paez concurred in the judgment. He agreed that there was no subject matter jurisdiction over the appeal, but he would reach that determination on a narrower ground.


Judge Paez would hold that plaintiff’s outstanding retaliation claim prevented the district court’s dismissal of the Rehabilitation Act claim from being designated as a final judgment under 28 U.S.C. § 1291, and he would not reach the issue of whether plaintiff’s voluntary dismissal could be construed as one with prejudice for purposes of establishing a final judgment. Judge Collins concurred in the majority opinion which held that there was no jurisdiction over the appeal of the dismissal of plaintiff’s Rehabilitation Act for two reasons, and wrote separately to respond to Judge Paez’s concurrence, which took issue with the second reason.


Judge Collins wrote that Judge Paez was wrong in suggesting that plaintiff’s voluntary dismissal of her race and sex discrimination claims without prejudice presented no jurisdictional obstacle in this case; and rather, on this record, it was the principal obstacle to appellate jurisdiction.

Brooks v. AmeriHome Mortgage Company, LLC  (CA2/6 B298132, filed 3/16/20, ord. pub. 4/8/20) Arbitration


AmeriHome Mortgage Company, LLC (AmeriHome) appeals an order granting Anthony Brooks’s motion for preliminary injunction to enjoin arbitration [on his PAGA claim].  We affirm.


Wood v. Super. Ct. (CA4/1 D076325M mod. 4/8/20) DFEH/Attorney-Client Privilege [Unruh Act case equally applicable to FEHA employment cases]


It is ordered that the opinion filed herein on March 13, 2020, be modified as follows:


On pages 5 and 6, in fifth sentence of the paragraph beginning, "After the parties were unable," the phrase "Crunch's public statements" is replaced with "DFEH's public statements," so that the modified paragraph reads as follows:


After the parties were unable to resolve their dispute informally, Crunch filed a motion to compel production of documents, including the email at issue.  Crunch contended that the documents were relevant, discoverable, and nonprivileged.  Crunch disputed that an attorney-client relationship could exist between the DFEH and Wood, given DFEH's governmental function.  Among other things, Crunch cited DFEH's letters to Crunch during its investigation of Wood's complaint, where it stated that " 'DFEH serves as a neutral fact-finder and represents the state of California rather than the complaining party.' "  Crunch asserted these letters were consistent with DFEH's public statements, which state, " 'The DFEH will conduct an impartial investigation.  [DFEH] is not an advocate for either the person complaining or the person complained against.  [DFEH] represents the state.' "  Crunch argued that DFEH may act only on behalf of the state and, similar to a criminal prosecutor, it could not compromise its impartiality by undertaking to represent a specific individual.  Crunch concluded that Wood could not show that her communications with DFEH were for the purpose of securing legal advice or retaining DFEH lawyers as her counsel.


There is no change in the judgment.

Ducksworth v. Tri-Model Distribution Services (CA 2/8 B294872 4/7/20) FEHA/Staffing Agencies

Bonnie Ducksworth and Pamela Pollock are customer service representatives at Tri-Modal Distribution Services. Tri-Modal promoted others but, for decades, never promoted them. Ducksworth and Pollock believed this was due to discrimination against African-Americans. They sued.


In addition to her discrimination claim, Pollock also sued about sexual harassment. Tri-Modal’s executive vice president Mike Kelso began “a dating relationship” with Pollock. Pollock refused Kelso’s request to make the relationship more sexual. Pollock ultimately ended the relationship. After she dumped him, Kelso blocked her promotions at Tri-Modal, Pollock alleged.


These contentions implicated employer Tri-Modal, but it is not involved in this appeal. Rather three different defendants are our sole concern, as follows.


Two of these other defendants are two staffing agencies called Scotts Labor Leasing Company, Inc., and Pacific Leasing, Inc. Scotts and Pacific supplied employees, including Ducksworth and Pollock, to Tri-Modal. The trial court granted summary judgment for Scotts and Pacific because they were uninvolved in Tri-Modal’s decisionmaking about whom to promote. We affirm this ruling for the staffing agencies.


The third defendant is Kelso. The trial court granted a separate summary judgment for Kelso because the statute of limitations barred Pollock’s claim against him. Pollock appeals this ruling on two grounds. First, she says the court erred at summary judgment in overruling her hearsay objection to a key part of Kelso’s evidence. Second, she argues the court miscalculated the statute of limitations by running the clock from the date the employer offered a competitor the promotion and the competitor accepted the promotion rather than the later date when the competitor began working at the new position. We affirm this summary judgment ruling for Kelso. 


Babb v. Wilkie (US 18–882 4/6/20) ADEA/Federal Employees


Petitioner Noris Babb, a clinical pharmacist at a U. S. Department of Veterans Affairs Medical Center, sued the Secretary of Veterans Affairs (hereinafter VA) for, inter alia, age discrimination in various adverse personnel actions. The VA moved for summary judgment, offering nondiscriminatory reasons for the challenged actions. The District  Court granted the VA’s motion after finding that Babb had established a prima facie case, that the VA had proffered legitimate reasons for the challenged actions, and that no jury could reasonably conclude that those reasons were pretextual. On appeal, Babb contended the District Court’s requirement that age be a but-for cause of a personnel action was inappropriate under the federal-sector provision of the Age Discrimination in Employment Act of 1967 (ADEA). Because most federal-sector “personnel actions” affecting individuals aged 40 and older must be made “free from any discrimination based on age,” 29 U. S. C. §633a(a), Babb argued, such a personnel action is unlawful if age is a factor in the challenged decision. Thus, even if the VA’s proffered reasons in her case were not pretextual, it would not necessarily follow that age discrimination played no part. The Eleventh Circuit found Babb’s argument foreclosed by Circuit precedent.


Held: The plain meaning of §633a(a) demands that personnel actions be untainted by any consideration of age. To obtain reinstatement, damages, or other relief related to the end result of an employment decision, a showing that a personnel action would have been different if age had not been taken into account is necessary, but if age discrimination played a lesser part in the decision, other remedies may be appropriate. Pp. 3–14.


(a) The Government argues that the ADEA’s federal-sector provision imposes liability only when age is a but-for cause of an employment decision, while Babb maintains that it prohibits any adverse consideration of age in the decision-making process. The plain meaning of the statutory text shows that age need not be a but-for cause of an employment decision in order for there to be a violation. Pp. 4–7.


(1) The ADEA does not define the term “personnel action,” but a statutory provision governing federal employment, 5 U. S. C. §2302(a)(2)(A), defines it to include most employment-related decisions—an interpretation consistent with the term’s general usage. The phrase “free from” means “untainted,” and “any” underscores that phrase’s scope. As for “discrimination,” its “normal definition” is “differential treatment.” Jackson v. Birmingham Bd. of Ed., 544 U. S. 167, 174. And “[i]n common talk, the phrase ‘based on’ indicates a but-for causal relationship,” Safeco Ins. Co. of America v. Burr, 551 U. S. 47, 63, thus indicating that age must be a but-for cause of the discrimination alleged. The remaining phrase—“shall be made”—denotes a duty, emphasizing the importance of avoiding the taint. Pp. 4–5.


(2) Two matters of syntax are critical here. First, “based on age” is an adjectival phrase modifying the noun “discrimination,” not the phrase “personnel actions.” Thus, age must be a but-for cause of discrimination but not the personnel action itself. Second, “free from any discrimination” is an adverbial phrase that modifies the verb “made” and describes how a personnel action must be “made,” namely, in a way that is not tainted by differential treatment based on age. Thus, the straightforward meaning of §633a(a)’s terms is that the statute does not require proof that an employment decision would have turned out differently if age had not been taken into account. Instead, if age is a factor in an employment decision, the statute has been violated.


The Government has no answer to this parsing of the statutory text. It makes correct points about the meaning of particular words, but draws the unwarranted conclusion that the statutory text requires something more than a federal employer’s mere consideration of age in personnel decisions. The Government’s only other textual argument is that the term “made” refers to a particular moment in time, i.e., the moment when the final employment decision is made. That interpretation, however, does not mean that age must be a but-for cause of the ultimate outcome. Pp. 5–7.


(b) Contrary to the Government’s primary argument, this interpretation is not undermined by prior cases interpreting the Fair Credit Reporting Act, 15 U. S. C. §1681m(a), see Safeco Ins. Co. of America, 551 U. S. 47; the ADEA’s private-sector provision, 29 U. S. C. §623(a)(1), see Gross v. FBL Financial Services, Inc., 557 U. S. 167; and Title VII’s anti-retaliation provision, 42 U. S. C. §2000e–3(a), see  University of Tex. Southwestern Medical Center v. Nassar, 570 U. S. 338. The language of §633a(a) is markedly different than the language of those statutes; thus the holdings in those cases are entirely consistent with the holding here. And the traditional rule favoring but-for causation does not change the result: §633a(a) requires proof of but-for causation, but the objection of that causation is “discrimination,” not the personnel action. Pp. 8–11.


(c) It is not anomalous to hold the Federal Government to a stricter standard than private employers or state and local governments. See §623(a). When Congress expanded the ADEA’s scope beyond private employers, it added state and local governments to the definition of employers in the private-sector provision. But it “deliberately prescribed a distinct statutory scheme applicable only to the federal sector,” Lehman v. Nakshian, 453 U. S. 156, 166, eschewing the private sector provision language. That Congress would want to hold the Federal Government to a higher standard is not unusual. See, e.g., 5 U. S. C. §2301(b)(2). Regardless, where the statute’s words are unambiguous, the judicial inquiry is complete. Pp. 11–13.

(d) But-for causation is nevertheless important in determining the appropriate remedy. Plaintiffs cannot obtain compensatory damages or other forms of relief related to the end result of an employment decision without showing that age discrimination was a but-for cause of the employment outcome. This conclusion is supported by basic principles long employed by this Court, see, e.g., Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 103, and traditional principles of tort and remedies law. Remedies must be tailored to the injury. Plaintiffs who show that age was a but-for cause of differential treatment in an employment decision, but not a but-for cause of the decision itself, can still seek injunctive or other forward-looking relief. Pp. 13–14.


743 Fed. Appx. 280, reversed and remanded.


ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and BREYER, SOTOMAYOR, KAGAN, GORSUCH, and KAVANAUGH, JJ., joined, and in which GINSBURG, J., joined as to all but footnote 3. SOTOMAYOR, J., filed a concurring opinion, in which GINSBURG, J., joined. THOMAS, J., filed a dissenting opinion.

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