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.
See prior archived alerts by clicking on "Blog" under menu. For alerts older than one year, please request under "Contact" tab.
Hebert v. Barnes & Noble, Inc. (CA4/1 D079038, filed 4/19/22, pub. ord. 5/12/22) Fair Credit Reporting Act
Vicki Hebert filed a putative class action against Barnes & Noble, Inc. (Barnes & Noble), alleging it willfully violated the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.; hereafter, the FCRA, or the Act). The FCRA requires an employer like Barnes & Noble to provide a job applicant like Hebert with a standalone disclosure stating that the employer may obtain the applicant’s consumer report when making a hiring decision. (15 U.S.C. §§ 1681a(h), 1681b(b)(1)(A).) According to Hebert, Barnes & Noble willfully violated the FCRA by providing job applicants with a disclosure that included extraneous language unrelated to the topic of consumer reports.
Barnes & Noble filed a motion for summary judgment arguing that no reasonable jury could find its alleged FCRA violation was willful. It asserted it included the extraneous information in its disclosure due to an inadvertent drafting error. The trial court agreed with Barnes & Noble, granted the company’s motion for summary judgment, and entered judgment in the company’s favor.
Unlike the trial court, we conclude a reasonable jury could find that Barnes & Noble’s alleged FCRA violation was willful. Based on the evidence presented in the proceedings below, a reasonable jury could find that Barnes & Noble acted willfully because it violated an unambiguous provision of the FCRA, at least one of the company’s employees was aware of the extraneous information in the disclosure before the disclosure was displayed to job applicants, the company may not have adequately trained its employees on FCRA compliance, and/or the company may not have had a monitoring system in place to ensure its disclosure complied with the FCRA.
Because a reasonable jury could find that Barnes & Noble’s alleged FCRA violation was willful, we reverse the judgment and remand the matter with directions that the trial court vacate its order granting the motion for summary judgment and enter a new order denying the motion for summary judgment.
Quach v. Cal. Commerce Club (CA2/1 B310458 partial pub. 5/10/22) Arbitration
California Commerce Club, Inc. (Commerce Club) appeals from an order denying its motion to compel arbitration of a dispute with its former employee, Peter Quach, respondent here. Quach argued below that Commerce Club had waived its right to arbitrate by waiting 13 months after the filing of the lawsuit to move to compel arbitration, and by engaging in extensive discovery during that period. Quach claimed the delay prejudiced him by forcing him to expend time and money preparing for litigation. The trial court agreed, finding Commerce Club had waived the right to arbitrate by propounding a “large amount of written discovery,” taking Quach’s deposition, and expending “significant time meeting and conferring.”
We disagree with the trial court. Our Supreme Court has made clear that participation in litigation alone cannot support a finding of waiver, and fees and costs incurred in litigation alone will not establish prejudice on the part of the party resisting arbitration. (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1203 (St. Agnes Medical Center).) This rule has particular force here, where Quach admitted he incurred no costs in litigation that he would not otherwise have expended had the case gone to arbitration earlier.
Although Quach argues later Supreme Court authority has approved of Court of Appeal cases diluting the rule from St. Agnes Medical Center, those cases nonetheless involved a showing that a party’s unreasonable delay in asserting the right to arbitrate prejudiced the party resisting arbitration. That showing is absent in the instant case.
In the unpublished portion of the opinion, we reject Quach’s alternative argument that the arbitration agreement is unconscionable.
Accordingly, we reverse and direct the trial court to grant Commerce Club’s motion to compel arbitration.
Shields v. Credit One Bank (9th Cir. 20-15647 5/6/22) ADA Employment Discrimination
The panel reversed the district court’s dismissal of an employment discrimination action under Title I of the Americans with Disabilities Act and remanded.
Kate Shields alleged that her former employer violated the ADA by failing to accommodate her disability and instead terminating her from her human resources job after she underwent a bone biopsy surgery of her right shoulder and arm. The district court concluded that Shields failed to plead a “disability” because she did not adequately allege that she had “a physical or mental impairment that substantially limit[ed] one or more major life activities.”
Applying the ADA Amendments Act of 2008 and regulations issued in 2011, the panel held that in order to be substantially limiting, an impairment need not involve permanent or long-term effects. The panel concluded that Shields pleaded facts plausibly establishing that she had a physical impairment both during an immediate post-surgical period and during an extension period in which her surgeon concluded that her injuries had not sufficiently healed to permit her to return to work. The panel also concluded that the activities that Shields pleaded she was unable to perform qualified as “major life activities,” which include caring for oneself, performing manual tasks, lifting, and working. Finally, the complaint adequately alleged that Shields’s impairment substantially limited her ability to perform at least one major life activity.
Bullock v. City of Antioch (CA1/5 A161029 5/6/22) Public Employee Retirement Medical Plan
Plaintiffs, retired employees of the City of Antioch (City), appeal from an order sustaining the City’s demurrer to plaintiffs’ second amended complaint without leave to amend. We review the decision de novo and find the trial court erred in sustaining the demurrer based upon collateral estoppel, also known as issue preclusion. We reverse and remand.
Doe v. Anderson Union High School Dist. (CA3 C093099 5/4/22) Negligent Hiring & Supervision
Daniel Schafer, a teacher at a high school in the Anderson Union High School District (District), had a sexual relationship with one of his students, plaintiff Jane Doe, which included sexual activities in his classroom. Doe sued the District, principal Carol Germano, and superintendent Tim Azevedo for negligent hiring and negligent supervision. We refer to the defendants collectively as the District, except when being more specific is necessary to the discussion. The trial court granted the District’s motion for summary judgment and entered judgment in favor of the District, finding that there was no evidence the District knew or should have known that Schafer posed a risk of harm to students.
Doe now contends the trial court erred by granting summary judgment because the District had a duty to supervise and monitor Schafer and Doe and whether the District breached its duty to Doe is a question of fact for the jury.
We conclude the District did not know that Schafer would have sex with Doe, and it had no information that would support a conclusion that it should have known. On this record, the District did not have a duty to review alarm data and video recordings in order to constantly monitor all teachers, students, and campus visitors, nor did it have such a duty specifically with regard to Schafer and Doe. Accordingly, we need not address the claim of breach of duty.
We will affirm the judgment.
Shaw v. Super. Ct. (CA1/4 A163263 5/3/22) PAGA/Exclusive Concurrent Jurisdiction
Petitioners brought a representative suit under the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.). They conceded that their suit arises from the same facts and theories as another PAGA action pending in Los Angeles. While their petition for judicial coordination (Code Civ. Proc., § 404) with the Los Angeles PAGA suit was pending, the trial court in this case stayed petitioners’ suit. After the petition for coordination was denied, the trial court denied petitioners’ motion to lift the stay, concluding that the stay was warranted under the doctrine of exclusive concurrent jurisdiction. In this writ of mandate proceeding, we find that the trial court did not err in applying the exclusive concurrent jurisdiction rule to this dispute. We therefore deny the petition for a peremptory writ of mandate.
Leshane v. Tracy VW, Inc. (CA3 C093881 4/29/22) PAGA/Arbitration
Plaintiffs Nicole Leshane, Steve Garner, Justin Prasad, Isaac Saldana, and Maurice West sued defendants Tracy VW, Inc. and RJ Gill Ventures, Inc. alleging several Labor Code violations. They did so on behalf of themselves as defendants’ former employees, on behalf of others similarly situated, and on behalf of the state pursuant to the Private Attorneys General Act of 2004 (Private Attorneys General Act) (Lab. Code, § 2698 et seq.). After defendants filed a petition to compel arbitration, plaintiffs filed a first amended complaint alleging violations of the Labor Code solely as representatives of the state under the Private Attorneys General Act.
Defendants continued to seek arbitration of plaintiffs’ individual claims and dismissal of their class-wide claims pursuant to the arbitration agreements each plaintiff signed. Defendants reasoned “[p]laintiffs’ amendment of the Complaint to strip out [claims not pertaining to the Private Attorneys General Act] has not, without more, made the controversy go away. The elimination of claims for individual and class-wide damages from the Complaint is only an indication that Plaintiffs are not actively seeking that relief at this time and in this forum. There remains a controversy between the parties that that [sic] Plaintiffs, or any of them, could resuscitate at some point in the future. And Defendants have the absolute right to compel arbitration of such controversy . . . .”
The trial court denied defendants’ petition to compel arbitration finding plaintiffs’ claim under the Private Attorneys General Act was not subject to arbitration citing Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348. Defendants appeal the trial court’s order.
Wing v. Chico Healthcare & Wellness Centre (CA2/5 B310232 4/28/22) PAGA/Arbitration
In this appeal, Chico Healthcare & Wellness Centre, LP asks us to reconsider the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) in light of subsequent United States Supreme Court authority. The trial court relied on Iskanian to deny Chico’s motion to compel arbitration of Jill Wing’s Private Attorneys General Act (PAGA) claims. PAGA allows an aggrieved employee to sue for civil penalties under the Labor Code as a representative of the state. (Lab. Code, § 2699 et seq.) Chico contends two United States Supreme Court cases — Epic Systems Corp. v. Lewis (2018) __ U.S. __ [138 S.Ct. 1612] (Epic Systems) and Kindred Nursing Centers Ltd. Partnership v. Clark (2017) __ U.S. __ [137 S.Ct. 1421] (Kindred Nursing) — impliedly overruled Iskanian, but Chico itself acknowledges these cases do “not [address] PAGA directly . . . .” As we set out below, Epic Systems and Kindred Nursing did not decide the same question Iskanian decided. We affirm the order denying the motion to compel arbitration.
Cummings v. Premier Rehab Keller (US 20–219 4/28/22) Emotional Distress Damages/Rehabilitation Act/Affordable Care Act
Jane Cummings, who is deaf and legally blind, sought physical therapy services from Premier Rehab Keller and asked Premier Rehab to provide an American Sign Language interpreter at her sessions. Premier Rehab declined to do so, telling Cummings that the therapist could communicate with her through other means. Cummings later filed a lawsuit seeking damages and other relief against Premier Rehab, alleging that its failure to provide an ASL interpreter constituted discrimination on the basis of disability in violation of the Rehabilitation Act of 1973 and the Affordable Care Act. Premier Rehab is subject to these statutes, which apply to entities that receive federal financial assistance, because it receives reimbursement through Medicare and Medicaid for the provision of some of its services. The District Court determined that the only compensable injuries allegedly caused by Premier Rehab were emotional in nature. It held that damages for emotional harm are not recoverable in private actions brought to enforce either statute. The District Court thus dismissed the complaint, and the Fifth Circuit affirmed.
Held: Emotional distress damages are not recoverable in a private action to enforce either the Rehabilitation Act of 1973 or the Affordable Care Act. Pp. 3–15.
(a) Congress has broad power under the Spending Clause of the Constitution to “fix the terms on which it shall disburse federal money.” Pennhurst State School and Hospital v. Halderman, 451 U. S. 1, 17. Pursuant to that authority, Congress has enacted statutes prohibiting recipients of federal financial assistance from discriminating on the basis of certain protected characteristics. This Court has held that such statutes may be enforced through implied rights of action. Barnes v. Gorman, 536 U. S. 181, 185. Although it is “beyond dispute that private individuals may sue” to enforce the anti-discrimination statutes at issue here, “it is less clear what remedies are available in such a suit.” Ibid.
The Court’s cases have clarified that whether a particular remedy is recoverable must be informed by the way Spending Clause “statutes operate”: by “conditioning an offer of federal funding on a promise by the recipient not to discriminate, in what amounts essentially to a contract between the Government and the recipient of funds.” Gebser v. Lago Vista Independent School Dist., 524 U. S. 274, 286. Because Spending Clause legislation operates based on consent, the “legitimacy of Congress’ power” to enact such laws rests not on its sovereign authority, but on “whether the [recipient] voluntarily and knowingly accepts the terms of th[at] ‘contract.’ ” Barnes, 536 U. S., at 186 (quoting Pennhurst, 451 U. S., at 17). The Court has regularly applied this contract-law analogy to define the scope of conduct for which funding recipients may be held liable, with an eye toward ensuring that recipients had notice of their obligations. “The same analogy,” Barnes, 536 U. S., at 187, similarly limits “the scope of available remedies.” Gebser, 524 U. S., at 287. Thus, a particular remedy is available in a private Spending Clause action “only if the funding recipient is on notice that, by accepting federal funding, it exposes itself to liability of that nature.” Barnes, 536 U. S., at 187. Pp. 3–5.
(b) To decide whether emotional distress damages are available under the Spending Clause statutes in this case, the Court therefore asks whether a prospective funding recipient deciding whether to accept federal funds would have had “clear notice” regarding that liability. Arlington Central School Dist. Bd. of Ed. v. Murphy, 548 U. S. 291, 296. Because the statutes at issue are silent as to available remedies, it is not obvious how to decide that question. Confronted with the same dynamic in Barnes, which involved the question whether punitive damages are available under the same statutes, the Court followed the contract analogy and concluded that a federal funding recipient may be considered “on notice that it is subject . . . to those remedies traditionally available in suits for breach of contract.” 536 U. S., at 187. Given that punitive damages “are generally not available for breach of contract,” the Court concluded that funding recipients “have not, merely by accepting funds, implicitly consented to liability for punitive damages.” Id., at 187–188.
Crucial here, the Court in Barnes considered punitive damages generally unavailable for breach of contract despite the fact that such damages are hardly unheard of in contract cases: Treatises cited in Barnes described punitive damages as recoverable in contract where “the conduct constituting the breach is also a tort for which punitive damages are recoverable.” Restatement (Second) of Contracts §355, p. 154. That recognized exception to the general rule, however, was not enough to give funding recipients the requisite notice that they could face such damages. Under Barnes, the Court thus presumes that recipients are aware that they may face the usual contract remedies in private suits brought to enforce their Spending Clause “contract” with the Federal Government. Pp. 5–7.
(c) The above framework produces a straightforward analysis in this case. Hornbook law states that emotional distress is generally not compensable in contract. Under Barnes, the Court cannot treat federal funding recipients as having consented to be subject to damages for emotional distress, and such damages are accordingly not recoverable.
Cummings argues for a different result, maintaining that traditional contract remedies here do include damages for emotional distress, because there is an exception—put forth in some contract treatises—under which such damages may be awarded where a contractual breach is particularly likely to result in emotional disturbance. See, e.g., Restatement (Second) of Contracts §353. That special rule is met here, Cummings contends, because discrimination is very likely to engender mental anguish. This approach would treat funding recipients as on notice that they will face not only the general rules, but also “more fine-grained,” exceptional rules that “govern in the specific context” at hand. Brief for Petitioner 33–35. That is inconsistent with both Barnes and the Court’s larger Spending Clause jurisprudence. Barnes necessarily concluded that the existence of an on-point exception to the general rule against punitive damages was insufficient to put funding recipients on notice of their exposure to that particular remedy. No adequate explanation has been offered for why the Court—bound by Barnes—should reach a different result here. The approach offered by Cummings pushes the notion of offer and acceptance, central to the Court’s Spending Clause cases, past its breaking point. It is one thing to say that funding recipients will know the basic, general rules. It is quite another to assume that they will know the contours of every contract doctrine, no matter how idiosyncratic or exceptional. Cummings would essentially incorporate the law of contract remedies wholesale, but Barnes constrains courts to imply only those remedies “that [are] normally available for contract actions.” Id., at 188. In urging the Court to disregard that restriction, Cummings would have the Court treat statutory silence as a license to freely supply remedies the Court cannot be sure Congress would have chosen. Such an approach “risks arrogating legislative power,” Hernández v. Mesa, 589 U. S. ___, ___, and is particularly untenable in a context requiring “clear notice regarding the liability at issue,” Arlington, 548 U. S., at 296.
Even if it were appropriate to treat funding recipients as aware that they may be subject to “rare” contract-law rules that are “satisfied only in particular settings,” Brief for Petitioner 34, funding recipients would still lack the requisite notice that emotional distress damages are available under the statutes at issue. That is because the Restatement’s formulation—that such damages are available where “the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result,” §353—does not reflect the consensus rule among American jurisdictions. There is in fact no majority rule on what circumstances, if any, may trigger the exceptional allowance of such damages. For instance, many states reject the broad and generally phrased Restatement exception because they award emotional distress damages only in a narrow and idiosyncratic group of cases in which the breaching conduct would also have been a tort. These cases unsurprisingly mix contract, quasi-contract, and tort principles together, suggesting that they do not establish or evince a rule of contract law.
Emotional distress damages are not “traditionally available in suits for breach of contract.” Barnes, 536 U. S., at 187. There is correspondingly no ground, under the Court’s cases, to conclude that federal funding recipients have “clear notice,” Arlington, 548 U. S., at 296, that they would face such a remedy in private actions brought to enforce the statutes here. Pp. 7–15.
948 F. 3d 673, affirmed.
ROBERTS, C. J., delivered the opinion of the Court, in which THOMAS, ALITO, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined. KAVANAUGH, J., filed a concurring opinion, in which GORSUCH, J., joined. BREYER, J., filed a dissenting opinion, in which SOTOMAYOR and KAGAN, JJ., joined.
Bijon Hill v. Walmart, Inc. (9th Cir. 21-15180 4/26/22) Wage and Hour/Good-Faith Defense to Mistaken Belief of Independent Contractor Status
The panel affirmed the district court’s summary judgment in favor of Walmart in a diversity action brought by a plaintiff who alleged that Walmart owed her penalties pursuant to California Labor Code § 203 because it failed to pay her immediately after several photo shoots.
Plaintiff appeared in ten photo shoots organized by Walmart between July 2016 and August 2017 for a total of fifteen days, in non-consecutive periods of one or two days. Plaintiff sued Walmart for its failure to pay her immediately after each photo shoot ended and sought more than $540,000 in penalties. The district court denied summary judgment on Walmart’s defense that plaintiff was an independent contractor outside the protection of the relevant Labor Code provisions due to disputes of material fact. However, it granted summary judgment on Walmart’s good-faith defense. The district court concluded that there was a good-faith dispute about whether plaintiff was an independent contractor that made it objectively reasonable for Walmart to believe plaintiff was not an employee.
As a threshold issue, the panel rejected plaintiff’s contention that Walmart was foreclosed from raising a good-faith defense based on mistakenly classifying an employee as an independent contractor. The panel held that Walmart’s argument that plaintiff was an independent contractor was a good-faith dispute that any wages are due. A good-faith mistake about a worker’s employment status was a defense to the imposition of waiting-time penalties pursuant to Cal. Labor Code § 203.
The panel turned to the merits of Walmart’s good-faith defense. First, the panel held that nothing in the record suggested bad faith on Walmart’s part. Next, the panel considered whether a reasonable jury could find that Walmart’s independent contractor defense was unreasonable or unsupported by evidence. The panel held that the applicable test for its analysis of the employment relationship was the common law test derived from S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 769 P.2d 399 (Cal. 1989). The panel noted that a second test for employment explained in Martinez v. Combs, 231 P.3d 259 (Cal. 2010), and Dynamex Operations West, Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018), applied only to cases governed by California Industrial Welfare Commission (IWC) wage orders; and held that it did not apply here where plaintiff did not allege that Walmart violated any wage order.
The panel next considered the ultimate issue: based on the undisputed material facts, and the state of California employment law in 2016 and 2017, did Walmart have reasonable grounds to believe plaintiff was an independent contractor? Plaintiff put forth evidence that Walmart exercised significant control over her activities. On the other hand, plaintiff arranged for and paid for her own travel; Walmart did not provide plaintiff with a Form W-2; plaintiff provided modeling services for other companies; and the length of time plaintiff was employed argued against employment status. All these facts would have suggested to Walmart that the parties did not believe they were forming an employment relationship – the last Borello factor. The unrebutted facts in the record also suggested that another Borello factor – whether or not the work was a part of the regular business of the principal – weighed against employment status. Consequently, there were some reasonable grounds for Walmart to believe that plaintiff was an independent contractor, which was sufficient for a good-faith dispute. The panel rejected plaintiff’s counterarguments where she cited three cases that she contended supported her position. The panel held that the cases were not enough to render unreasonable Walmart’s belief that plaintiff was a contractor.
Because Walmart raised a good-faith dispute as to whether it was plaintiff’s employer and that dispute provided a sufficient defense to plaintiff’s claims, and because plaintiff did not identify a material factual dispute, the panel affirmed the district court’s summary judgment to Walmart.
Kennedy v. Bremerton School (US 21-41 oral argument 4/25/22) First Amendment Freedom of Expression
Petitioner Joseph Kennedy lost his job as a football coach at a public high school because he knelt and said a quiet prayer by himself at midfield after the game ended. After considering an interlocutory petition in which Kennedy sought review of the lower courts' refusal to grant him a preliminary injunction, four members of this Court observed that "the Ninth Circuit's understanding of the free speech rights of public school teachers is troubling and may justify review in the future," but concluded that this Court should stay its hand until the lower courts definitively determined the reason for Kennedy's termination. The statement also noted that Kennedy had a then unaddressed claim under the Free Exercise Clause.
On remand, the lower courts found-and the school district ultimately agreed-that Kennedy lost his job solely because of his religious expression. Yet the Ninth Circuit nevertheless ruled against him again. The court not only doubled down on its "troubling" free-speech reasoning, which transforms virtually all speech by public-school employees into government speech lacking any First Amendment protection, but reached the remarkable conclusion that, even if Kennedy's prayer was private expression protected by the Free Speech and Free Exercise Clauses (which it undoubtedly was), the Establishment Clause nevertheless required its suppression. The court denied en banc review over the objection of 11 judges.
The questions presented are:
1. Whether a public-school employee who says a brief, quiet prayer by himself while at school and visible to students is engaged in government speech that lacks any First Amendment protection.
2. Whether, assuming that such religious expression is private and protected by the Free Speech and Free Exercise Clauses, the Establishment Clause nevertheless compels public schools to prohibit it
9th Circuit Decision: 991 F.3d 1004 (9th Cir. 2021)
Kuciemba v. Victory Woodworks (9th Cir. 21-15963 4/21/22) Workplace Spread of COVID-19/Derivative Injury Doctrine
The panel certified to the Supreme Court of California the following questions:
1. If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer?
2. Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?
Ross v. Super. Ct. (CA4/1 D079278 4/19/22) Whistleblower Retaliation/Disability Discrimination
Christopher Ross, a former prosecutor with the Riverside County District Attorney’s office (DA’s Office), sued the County of Riverside (the County) for whistleblower retaliation and disability discrimination after the DA’s Office allegedly demoted him and refused to accommodate medical issues in response to Ross raising concerns that the DA’s Office was prosecuting an innocent man for murder. Ross alleged the executive management team in the DA’s Office retaliated and discriminated against him “at the specific direction,” and with the “express knowledge and consent” of, then–District Attorney Paul Zellerbach.
During a deposition, the former district attorney who preceded Zellerbach, Rodric Pacheco, testified about a conversation he had with the current district attorney who succeeded Zellerbach, Mike Hestrin. Pacheco testified that he and Hestrin shared the view that Zellerbach was one of the most unethical attorneys they had encountered as prosecutors. According to Pacheco, Hestrin then revealed that an unidentified “County lawyer or lawyers” asked Hestrin to alter his anticipated testimony regarding his views of Zellerbach’s ethical character.
Ross subpoenaed Hestrin for a deposition about his communications with the unidentified County lawyers, as well as regarding advice Hestrin provided to Ross in Hestrin’s capacity as an official in the prosecutors’ union in which Ross was a member. The County moved to quash the subpoena under the “general rule . . . that agency heads and other top governmental executives are not subject to deposition absent compelling reasons,” such as “when the official has direct personal factual information pertaining to material issues in the action and the deposing party shows the information to be gained from the deposition is not available through any other source.” (Westly v. Superior Court (2004) 125 Cal.App.4th 907, 910-911 (Westly).)
The trial court granted the County’s motion to quash, finding Hestrin’s alleged communications with the unidentified County lawyers were irrelevant to Ross’s retaliation and discrimination claims, and that Ross could obtain evidence regarding his union rights from other sources. Ross seeks a writ of mandate directing the trial court to vacate its order granting the motion to quash and to enter a new order denying it.
We deny the petition as it relates to evidence concerning Hestrin’s role counseling Ross regarding his union rights. Ross has not shown the trial court abused its discretion by finding he could obtain this type of evidence from sources other than the sitting district attorney.
We grant the petition as it relates to alleged requests by the unidentified County lawyers that Hestrin alter his testimony regarding Zellerbach’s ethical character. Assuming any attorney-client privilege ever protected such communications, Hestrin waived it by voluntarily disclosing the communications to Pacheco. And, although we agree with the trial court that the testimony is irrelevant to the merits of Ross’s substantive claims against the County, the testimony is relevant to Zellerbach’s credibility, and he will likely be a material trial witness. Testimony showing the unidentified County lawyers attempted to suppress or alter a witness’s testimony about the credibility of a material witness is also relevant to show the County’s consciousness of guilt.
Accordingly, we deny the petition in part, and grant it in part, as set forth more fully in our Disposition.
Rose v. County of San Benito (CA6 H048681 4/19/22) Public Employees’ Medical Hospital Care Act/Implied Vested Right
For more than two decades, defendant San Benito County (county or San Benito) provided health insurance benefits for its employees under the Public Employees’ Medical Hospital Care Act (PEMHCA or the Act), which requires a participating county to pay retiree health insurance benefits at the same contribution rate it pays to active employees. Starting in January 2017, the county ceased providing benefits under PEMHCA and at the same time reduced the health insurance benefit contribution for Medicare-eligible retirees. Plaintiffs, who are retired county employees, filed this action asserting that the county’s actions violated an implied promise made by the county that, upon their retirement, plaintiffs would receive “fully paid” lifetime retiree health insurance benefits, with premium contributions equal to those paid for active employees.
The trial court found after a bench trial that the county’s adoption and continued renewal of healthcare benefits under PEMHCA’s equal contribution framework evinced a legislative intent to confer a vested right to lifetime, nonmodifiable, retiree health insurance premiums equal to those paid to active employees. The court at the same time rejected plaintiffs’ claim of an implied vested right to “fully paid” lifetime health insurance premiums. In making its decision, the trial court admitted and considered evidence beyond the legislative record. The evidence the trial court relied on included testimony of former members of the county’s board of supervisors and other former county employees regarding their knowledge and understanding of the county’s provision of retiree health insurance benefits.
On appeal, the county contends that the finding of an implied vested right in lifetime retiree health insurance benefits at an equal contribution rate as that of active employees is unsupported by the legislative and factual record and contrary to California Supreme Court and other case authority. The county argues that plaintiffs failed to overcome the presumption articulated in Retired Employees Assn. of Orange County, Inc. v. County of Orange (2011) 52 Cal.4th 1171 (Retired Employees) against inferring a private contractual or vested right to public employee benefits, absent a clear basis in the contract or convincing extrinsic evidence. The county also challenges the court’s consideration of evidence outside the legislative record as reversible error.
For the reasons explained below, we conclude that the trial court erred in relying upon inadmissible evidence to ascertain legislative intent and in failing to apply the presumption against finding an implied vested right in the absence of a clear manifestation of legislative intent to contractually bind the county. Moreover, we decide that plaintiffs’ admissible evidence does not support a finding of an implied vested right. Accordingly, we reverse the judgment.
Martínez-Rodriguez v. Giles (9th Cir. 19-35526 4/18/22) Forced Labor/TN Visa
The panel reversed the district court’s summary judgment in favor of defendants on claims of violation of federal statutory prohibitions on forced labor, reversed the district court’s decision declining to retain supplemental jurisdiction over state law claims, and remanded.
Plaintiffs were six citizens of Mexico who were recruited to work as “Animal Scientists” at Funk Dairy in Idaho under the “TN Visa” program for “professional” employees established under the North American Free Trade Agreement. But when plaintiffs arrived at the dairy, they were instead required to work substantially as general laborers. Plaintiffs alleged that defendants’ bait-and-switch tactics violated applicable federal statutory prohibitions on forced labor by, among other things, abusing the TN Visa program in order to coerce plaintiffs to provide menial physical labor.
For purposes of their summary judgment motion, defendants conceded that all plaintiffs believed that their ability to remain lawfully in the U.S. depended on their continued employment at Funk Dairy. The panel concluded that in light of that concession and its obligation, on review of a grant of summary judgment to defendants, to construe the evidence in the light most favorable to plaintiffs, a reasonable jury could find that Funk Dairy knowingly obtained plaintiffs’ labor by abusing the TN Visa process in order to exert pressure on plaintiffs to provide labor that was substantially different from what had been represented to them and to federal consular officials. The panel held that, so construed, Funk Dairy’s conduct violated the provisions of Chapter 77 of Title 18 of the U.S. Code that prohibit forced labor and trafficking of persons into forced labor. Plaintiffs therefore asserted triable causes of action under the civil suit provision of Chapter 77, 18 U.S.C. § 1595(a).
Because the panel held that the district court erred in dismissing plaintiffs’ federal claims, the panel also reversed the district court’s decision to decline supplemental jurisdiction over plaintiffs’ claims under Idaho state law.
Nunez v. Cycad Management LLC (CA2/2 B306986, filed 3/18/22, pub. ord. 4/11/22) Arbitration/Procedural and Substantive Unconscionability
Appellant Cycad Management LLC moved to compel arbitration of respondent Jose Merced Nunez’s lawsuit. (Code Civ. Proc., § 1281.2.) In support of the motion, Cycad offered a “Mutual Arbitration Agreement” (Agreement). The trial court found the Agreement unconscionable and refused to enforce it.
Substantial evidence supports factual findings that the Agreement is adhesive because it was presented to Nunez as a nonnegotiable condition of his employment. It is procedurally unconscionable because it was given to Nunez in English, which he cannot read, without adequate explanation or a fee schedule. It is substantively unconscionable because it allows the arbitrator to shift attorney fees and costs onto Nunez and drastically limits his ability to conduct discovery. We affirm the denial of Cycad’s motion to compel arbitration.
Mendoza v. ATU (9th Cir. 20-16079 4/7/22) Labor Law Claim-Splitting
The panel affirmed the district court’s dismissal of labor law claims as barred by the doctrine of claim-splitting.
These appeals arose from two overlapping suits challenging a national union’s imposition of a trusteeship over one of its local unions. After discovering apparent financial malfeasance by Jose Mendoza, then president of Local 1637, the Amalgamated Transit Union (“ATU”) imposed the trusteeship, thereby removing Mendoza and the other Local 1637 executive board members from office. Mendoza filed a single-plaintiff action (“Mendoza I”) against ATU and several of its officers. Later, while that action was still pending, Mendoza filed a second, multi-plaintiff action (“Mendoza II”) in which he and a majority of the other former executive board members of Local 1637 asserted related claims against ATU, the same ATU officers, and several other defendants.
The panel affirmed the district court’s dismissal of all claims against ATU and its officers in Mendoza II as barred by claim-splitting. The panel held that, with respect to the claims against ATU and its officers, the additional plaintiffs in Mendoza II were adequately represented by Mendoza in Mendoza I. Because the claims against these defendants in the two cases otherwise involved the same causes of action and the same parties, the assertion of those claims in the second suit (Mendoza II) violated the doctrine of claim-splitting.
The panel resolved remaining issues in a concurrently filed memorandum disposition.
Buchanan v. Watkins & Letofsky (9th Cir. 21-15633 4/7/22) Employment Discrimination & Retaliation/ADA Jurisdiction
The panel reversed the district court’s summary judgment in favor of defendant Watkins & Letofsky, a Nevada limited liability partnership, in an action brought by Amy Buchanan alleging employment discrimination and retaliation under the Americans with Disabilities Act.
The district court concluded that the ADA did not apply to W&L Nevada because it had fewer than 15 employees. The panel held that because Title VII and the ADA include the same 15-employee threshold and statutory enforcement scheme, the integrated enterprise doctrine applicable in Title VII cases applies equally under the ADA. Under this doctrine, a plaintiff can bring a claim if she can establish that the defendant is so interconnected with another employer that the two form an integrated enterprise, and the integrated enterprise collectively has at least 15 employees.
Daniel Watkins and Brian Letofsky, who were licensed to practice in Nevada and California, owned and were the only partners of W&L Nevada. Likewise, they owned and were the only partners of Watkins & Letosfsky, a California limited liability partnership. Considering factors of interrelation of operations, common management, centralized control of labor relations, and common ownership or financial control, the panel concluded that Buchanan established a genuine issue of material fact whether W&L’s two offices were an integrated enterprise. The panel reversed and remanded for the district court to consider in the first instance whether, even if W&L Nevada and W&L California were an integrated enterprise, they together had fewer than 15 employees.
Teacher v. Cal. Western School of Law (CA4/1 D078550 4/5/22) Student Expulsion
Plaintiff Christopher Teacher filed a complaint seeking a writ of administrative mandate (Code Civ. Proc., § 1094.5) (first cause of action) against California Western School of Law (CWSL) challenging the procedures that CWSL followed in expelling him from the law school. The trial court denied Teacher’s request for a writ and entered a judgment in favor of CWSL. Teacher appeals from the judgment. On appeal, he claims that CWSL failed to provide him with a fair administrative process in expelling him, among other contentions.
The contours of the common law right to “fair process” Doe v. Regents of University of California (2021) 70 Cal.App.5th 494, 513 (UC Davis), in private university student disciplinary settings is both unsettled and evolving. (See, e.g., Doe v. Westmont College (2019) 34 Cal.App.5th 622, 634–635 (Westmont) [reviewing case law].) However, one component of the right to fair process is well established, commonsensical, and undisputed: “Where student discipline is at issue, [a] university must comply with its own policies and procedures.” (Doe v. University of Southern California (2016) 246 Cal.App.4th 221, 239 (USC).)
CWSL violated this principle in expelling Teacher. CWSL’s disciplinary procedures expressly provide, “The student or the student’s spokesperson shall have the right to cross[-]examine witnesses.” Notwithstanding this provision, CWSL did not afford Teacher the opportunity to cross-examine any of the witnesses on whose statements CWSL relied in reaching its decision to expel Teacher. In light of the fact that CWSL entirely deprived Teacher of this important right guaranteed by its own procedures, we reverse the judgment, emphasizing that we do not reach any conclusion as to Teacher’s commission of the misconduct that CWSL alleges. We remand for further proceedings.
A. B. v. Hawaii State Dept of Educ. (9th Cir. 20-15570 4/4/22) Title IX/Class Certification
The panel reversed the district court’s order denying female student athletes’ motion for class certification in their action seeking declaratory and injunctive relief to redress alleged violations of Title IX in the athletic programs at a public high school in Hawaii.
Plaintiffs brought Title IX claims for failure to provide equal treatment and benefits, failure to provide male and female students with equivalent opportunities for participation in athletics, and retaliation against female athletes when issues of Title IX compliance were brought to the attention of high school administrators. The district court denied plaintiffs’ motion for class certification on the grounds that, under Fed. R. Civ. P. 23(a), they failed to meet the requirement of numerosity, and as to the retaliation claim, commonality and typicality were lacking. The district court concluded that because plaintiffs failed to meet one or more requirements of Rule 23(a), it was not necessary to address the additional requirements of Rule 23(b)(1)(B) and (b)(2).
As to numerosity, the panel held that Rule 23(a)(1) requires a party seeking class certification to show that “the class is so numerous that joinder of all members is impracticable.” The panel applied the standard set forth in Jordan v. County of Los Angeles, 669 F.2d 1311 (9th Cir. 1982), vacated, 459 U.S. 810 (1982), on remand, 713 F.2d 503 (9th Cir. 1983), modified, 726 F.2d 1366 (9th Cir. 1984), which requires consideration of the size of the class as well as potentially countervailing factors including the geographical diversity of class members, the ability of individual claimants to institute separate suits, whether injunctive or declaratory relief is sought, and the ability to identify and locate class members. The panel concluded that the district court failed to give appropriate weight to the very large size of the proposed class, which well exceeded 300 persons, and there were no countervailing case-specific considerations indicating that, despite the large class size, joinder of all class members was nonetheless practicable. The panel held that the district court also erred in failing adequately to consider the fact that the class, as defined, included “future” female student athletes at the high school. The panel therefore reversed the denial of class certification as to plaintiffs’ first and second claims and remanded with instructions to address whether plaintiffs also satisfied one or more of the criteria in Rule 23(b).
The panel held that as to plaintiffs’ third cause of action for unlawful retaliation, the district court erred in also denying class certification on the further ground that plaintiffs failed to show commonality and typicality because this claim was centered on the high school water polo team, rather than on female student athletes as a whole. The panel concluded that the district court failed adequately to consider plaintiffs’ contention that defendants’ alleged retaliatory actions had a class-wide effect. In addition, the district court failed to properly consider the legal principles that govern a retaliation claim of this nature under Title IX and require consideration of whether plaintiffs fall within the zone of interests that Title IX protects.
The panel held that the district court abused its discretion in concluding that plaintiffs did not meet the requirements of Rule 23(a). The panel therefore reversed the district court’s order denying class certification and remanded for it to consider whether plaintiffs satisfied Rule 23(b).
Badgerow v. Walters (US 20–1143 3/31/22) Arbitration/FAA Jurisdiction /Look-Through Approach
The Federal Arbitration Act authorizes a party to an arbitration agreement to petition a federal court for various forms of relief. But the Act’s authorization of such petitions does not itself create the subject matter jurisdiction necessary for a federal court to resolve them. Rather, the federal court must have an “independent jurisdictional basis” to do so. Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576, 582. In Vaden v. Discover Bank, 556 U. S. 49, this Court assessed whether there was a jurisdictional basis to decide an FAA Section 4 petition to compel arbitration by means of examining the parties’ underlying dispute. The Court reasoned that specific language in Section 4 instructed a federal court to “look through” the petition to the “underlying substantive controversy.” Id., at 62. If the dispute underlying a Section 4 petition falls within the court’s jurisdiction—for example, by presenting a federal question—then the court may rule on the petition to compel arbitration.
In this case, the question presented is whether that same “look-through” approach to jurisdiction applies to applications to confirm or vacate arbitral awards under Sections 9 and 10 of the FAA. Petitioner Denise Badgerow initiated an arbitration proceeding against her employer’s principals (collectively, Walters), alleging that she was unlawfully terminated. After arbitrators dismissed Badgerow’s claims, she filed suit in Louisiana state court to vacate the arbitral award. Walters removed the case to Federal District Court and applied to confirm the award. Badgerow then moved to remand the case to state court, arguing that the federal court lacked jurisdiction to resolve the parties’ requests—under Sections 10 and 9 of the FAA, respectively—to vacate or confirm the award. The District Court applied Vaden’s look-through approach, finding jurisdiction in the federal-law claims contained in Badgerow’s underlying employment action. The District Court acknowledged that Sections 9 and 10 of the FAA lack the distinctive text on which Vaden relied, but it applied the look-through approach anyway so that “consistent jurisdictional principles” would govern all kinds of FAA applications. The Fifth Circuit affirmed.
Held: Vaden’s “look-through” approach to determining federal jurisdiction does not apply to requests to confirm or vacate arbitral awards under Sections 9 and 10 of the FAA. Pp. 4–16.
(a) Congress has granted federal district courts jurisdiction over two main kinds of cases: suits between citizens of different States as to any matter valued at more than $75,000 (diversity cases), 28 U. S. C. §1332(a), and suits “arising under” federal law (federal-question cases), §1331. Normally, a court has federal-question jurisdiction whenever federal law authorizes an action. But because this Court has held that the FAA’s provisions do not themselves support federal jurisdiction, a federal court must find an independent basis for jurisdiction to resolve an arbitral dispute. In this case, neither application reveals a jurisdictional basis on its face. So to find an independent basis for jurisdiction, the District Court had to look through the Section 9 and 10 applications to the underlying substantive dispute, where a federal-law claim satisfying §1331 indeed exists.
In Vaden, this Court approved the look-through approach for a Section 4 petition by relying on that section’s express language. That language provides that a party to an arbitration agreement may petition for an order to compel arbitration in a “United States district court which, save for [the arbitration] agreement, would have jurisdiction” over “the controversy between the parties.” “The phrase ‘save for [the arbitration] agreement,’ ” the Court stated, “indicates that the district court should assume the absence of the arbitration agreement and determine whether [the court] ‘would have jurisdiction . . .’ without it” by looking through to the “underlying substantive controversy” between the parties. 556 U. S., at 62.
Sections 9 and 10 of the FAA contain none of the statutory language on which Vaden relied. So under ordinary principles of statutory construction, the look-through method should not apply. “[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act,” this Court generally takes the choice to be deliberate. Collins v. Yellen, 594 U. S. ___, ___. That holds true for jurisdictional questions, as federal “district courts may not exercise jurisdiction absent a statutory basis.” Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U. S. 546, 552. Because a statutory basis for look-through jurisdiction is lacking in Sections 9 and 10, the Court cannot reach the same result here as in Vaden. Pp. 4–9.
(b) Walters presents a two-part argument to justify exercising jurisdiction here. Walters first claims that Section 4’s language does not authorize look-through jurisdiction, but is only a capacious venue provision designed to give applicants a broad choice among federal courts possessing jurisdiction. Walters next construes Section 6—which requires any FAA application to “be made and heard in the manner provided by law for the making and hearing of motions”—to provide the basis for an FAA-wide look-through rule. Walters’s reading of Section 4 does not comport with how Vaden understood Section 4 or with the actual text of that provision, which never mentions venue, and refers only to jurisdiction. And Walters’s Section 6 argument fares no better. Courts do not possess jurisdiction to decide ordinary motions by virtue of the look-through method. So Congress would not have prescribed that method by telling courts, as Section 6 does, to treat FAA applications like motions. Pp. 9–12.
(c) Walters also makes several policy arguments preaching the virtues of adopting look-through as a uniform jurisdictional rule. Walters claims that a uniform rule will promote “administrative simplicity”; that the look-through approach will be “easier to apply” than a test grounding jurisdiction on the face of the FAA application itself; and that the look-through rule will provide federal courts with more comprehensive control over the arbitration process. Brief for Respondents 27, 28. But “[e]ven the most formidable policy arguments cannot overcome a clear statutory directive.” BP p.l.c. v. Mayor and City Council of Baltimore, 593 U. S. ___, ___. And anyway, Walters oversells the superiority of his proposal. First, uniformity in and of itself provides no real advantage here because courts can easily tell whether to apply look-through or the normal jurisdictional rules. Second, the use of those ordinary rules, in the context of arbitration applications, is hardly beyond judicial capacity. And third, there are good reasons why state, rather than federal, courts should handle applications like the ones in this case. Pp. 12–16.
975 F. 3d 469, reversed and remanded.
KAGAN, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, SOTOMAYOR, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined. BREYER, J., filed a dissenting opinion.