CALIFORNIA CASE LAW ALERT

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North Am. Title Co. v. Superior Court (SC S280752 10/28/24) Judge Disqualification | Wage-and-Hour Class Action

This [wage-and-hour class action] case requires us to interpret various statutes governing the disqualification of judges. In particular, we consider what we refer to as a timeliness requirement set forth in Code of Civil Procedure section 170.3, subdivision (c)(1) (section 170.3(c)(1)), and a nonwaiver provision set forth in section 170.3, subdivision (b)(2) (section 170.3(b)(2)).

The timeliness requirement of section 170.3(c)(1) provides that a party who seeks to disqualify a trial court judge by filing a verified statement of disqualification must do so “at the earliest practicable opportunity after discovery of the facts constituting the ground for disqualification.” The nonwaiver provision of section 170.3(b)(2) provides that, notwithstanding a party’s general ability to waive a disqualification, “[t]here shall be no waiver of disqualification if the basis therefor” falls into one of two categories, one of which is that “[t]he judge has a personal bias or prejudice concerning a party” (§ 170.3, subd. (b)(2)(A)).

We granted review to decide whether the nonwaiver provision precludes application of the timeliness requirement when a party alleges that a judge is disqualified due to bias or prejudice concerning a party. The Court of Appeal held that it does. (See North American Title Co., Inc. v. Superior Court (2023) 91 Cal.App.5th 948, 978 (North American Title).) According to the Court of Appeal, the nonwaiver provision must be read “to prohibit all forms of waiver, including implied waiver due to untimeliness.” (Id. at p. 982.) Under the court’s reading of the statute, a party alleging bias or prejudice cannot “waive[]” its right to seek judicial disqualification (ibid.), even when the claim is asserted long past the point of “discovery of the facts constituting the ground for disqualification” and, for that reason, is not required to assert its claim of judicial bias “at the earliest practicable opportunity.” (§ 170.3(c)(1).)

We disagree with the Court of Appeal’s interpretation of the statute. It conflates the concepts of waiver and forfeiture, and it extends the statute’s prohibition on waiver to scenarios where forfeiture based on failure to comply with the timeliness requirement may properly be found. As the statutory text, structure, legislative history, and case law make clear, the nonwaiver provision of section 170.3(b)(2) applies only in circumstances in which “a judge [has] determine[d] himself or herself to be disqualified” and, absent an explicit waiver of disqualification by the parties, would recuse himself or herself from the proceedings. (§ 170.3, subds. (a)(1) & (b)(1).) We thus agree with appellants and Real Parties in Interest Carolyn Cortina et al. (Real Parties in Interest) that the nonwaiver provision is limited to the process of judicial self-disqualification, and it is inapplicable when a party seeks disqualification by filing a written verified statement of disqualification. When a party seeks disqualification, the statute’s timeliness requirement contemplates that the litigant may forfeit the right to seek disqualification by failing to file a statement of disqualification “at the earliest practicable opportunity after discovery of the facts constituting the ground for disqualification.” (§ 170.3(c)(1).) The statute’s nonwaiver provision has no effect on the separate issue of forfeiture in this context.

The Legislature quite reasonably could have enacted statutory language that treats judicial self-disqualification differently from party-initiated disqualification attempts. Judicial self-disqualification involves an admission of bias or prejudice, which the Legislature could reasonably decide was not waivable by the parties. A party-initiated disqualification attempt, by contrast, involves only an allegation of bias or prejudice. It does not necessarily mean the judge is actually biased or prejudiced. The Legislature could reasonably have placed a timeliness requirement on such party-initiated statements of judicial qualification to encourage parties to bring possible conflicts to the court’s attention promptly and avoid potential gamesmanship and delay. On the other hand, the Legislature may have been less concerned about the timeliness of judicial self-disqualification because such disqualification is compelled by a judicial officer’s ethical duties and does not pose the same risk of, or incentive for, misuse of the disqualification process. In sum, the timeliness requirement imposes a reasonable obligation on parties to expeditiously advance all known disqualification issues. It encourages the prompt and efficient adjudication of such claims, and it ensures that challenges to a judge’s impartiality are subject to careful and deliberate scrutiny.

We therefore hold section 170.3(c)(1)’s timeliness requirement — that a statement of disqualification filed by a party “shall be presented at the earliest practicable opportunity” — applies even when the alleged basis for disqualification is that “[t]he judge has a personal bias or prejudice concerning a party” (§ 170.3, subd. (b)(2)(A)). On this basis, we reverse the Court of Appeal’s judgment and remand the case for that court to consider in the first instance whether the statement of disqualification filed by North American Title Company (Petitioner) was timely.

This interpretation of sections 170.3(c)(1) and 170.3(b)(2) makes it unnecessary for us to examine a secondary issue raised in the petition for review: whether “section 170.2’s provision that it is not grounds for disqualification that a judge ‘in any capacity expressed a view on a legal or factual issue presented in the proceeding,’ [is] inapplicable if, on review, an appellate court determines such issue was not ‘properly’ before the [trial] court.” Because the Court of Appeal has not yet considered whether Petitioner’s statement of disqualification was presented in a timely manner, this question is premature for our review. (Accord, Penthouse International, Ltd. v. Superior Court (1982) 137 Cal.App.3d 975, 982 (Penthouse) [“Timeliness of the statement must be considered; if it was not presented ‘at the earliest practicable opportunity,’ . . . none of the other issues need be reached”].) We thus express no view on this issue.

https://www.courts.ca.gov/opinions/documents/S280752.PDF

Heckman v. Live Nation Entertainment, Inc. (9th Cir. 23-55770 10/28/24) Arbitration | Delegation Clause [not an employment case, but holding may be applicable]

Plaintiffs-Appellees Skot Heckman, Luis Ponce, Jeanene Popp, and Jacob Roberts (collectively, “Plaintiffs”) brought a putative class action against Live Nation Entertainment, Inc., and Ticketmaster LLC (collectively, “Defendants”) in January 2022, alleging anticompetitive practices in violation of the Sherman Act. Live Nation is the largest concert promoter for major entertainment venues in the United States. Ticketmaster is the largest primary ticket seller for live events at major concert venues in the United States. Live Nation and Ticketmaster merged in 2010.

Plaintiffs bought tickets to live entertainment promoted by Live Nation and sold through Ticketmaster’s website. Their online ticket purchase agreement on the Ticketmaster website included an agreement to comply with Ticketmaster’s Terms of Use (“Terms”). Ticketmaster’s Terms provide that any claim arising out of the ticket purchase, as well as any prior ticket purchase, will be decided by an arbitrator employed by a newly created entity, New Era ADR (“New Era”), using novel and unusual procedures.

The district court denied Defendants’ motion to compel arbitration pursuant to the arbitration agreement. It held that the clause delegating to the arbitrator the authority to determine the validity of the arbitration agreement—the “delegation clause”—was unconscionable under California law, both procedurally and substantively. Heckman v. Live Nation Ent., Inc., 686 F. Supp. 3d 939, 967 (C.D. Cal. 2023). Defendants appealed. We have jurisdiction under 9 U.S.C. § 16(a). Coinbase, Inc. v. Bielski, 599 U.S. 736, 739 (2023).

We affirm. We hold that the delegation clause of the arbitration agreement, and the arbitration agreement as a whole, are unconscionable and unenforceable under California law. We hold further that the application of California’s unconscionability law to the facts of this case is not preempted by the Federal Arbitration Act (“FAA”). Finally, we hold, as an alternate and independent ground, that the FAA does not preempt California’s prohibition of class action waivers contained in contracts of adhesion in large-scale small-stakes consumer cases.

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/28/23-55770.pdf

Richard v. Union Pacific Railroad Co. (CA2/3 B322044,filed 9/30/24, pub. 1-/24/24) Federal Employers’ Liability Act (FELA)

Terrence Richard fell from a train and broke his leg while working as a brakeman for Union Pacific Railroad Company (Union Pacific). Richard sued Union Pacific for negligence under the Federal Employers’ Liability Act (FELA) (45 U.S.C. § 51 et seq.). A jury returned a special verdict for Union Pacific, finding the company was not negligent.

On appeal, Richard contends the trial court erred by granting Union Pacific’s motion in limine to exclude the testimony of Richard’s retained expert, Richard Hess. Hess is a retired Union Pacific railroad engineer who had worked for the last 15 years of his career on the track where Richard was injured. Hess would have testified that when starting a very long train on that track, it is necessary to engage the throttle and release the brakes simultaneously to avoid excessive “slack action” at the rear of the train. “Slack action” is the movement of the expandable and retractable coupling spaces between a train’s railcars. The length of the train increases the slack, and the amount of slack action affects the severity of the shock of train movements. Hess further would have testified that immediately before Richard’s accident, the locomotive engineer released the brakes and then waited 24 seconds before engaging the throttle. Hess would have opined that this delay caused a surge at the end of the train where Richard was working, making it difficult for him to avoid losing his footing.

We conclude that the trial court erred by excluding Hess’s testimony. Hess had experience relevant to the subject about which he was to testify, and his testimony would have been helpful to the jury because it would have assisted the jury in interpreting the video of Richard’s fall and understanding how the locomotive engineer’s actions may have caused a surge at the rear of the train. The exclusion was prejudicial because it left Richard without a witness to testify to what Union Pacific’s locomotive engineer did and why it was dangerous. We therefore reverse the judgment for Union Pacific and remand the matter for a new trial.

https://www.courts.ca.gov/opinions/documents/B322044.PDF

Bath et al. v. State of Cal. et al. (CA1/2 A167908, filed 9/25/24, pub. 10/23/24) Public Employees | Breach of Contract

Plaintiffs are employees of the State of California who provide dental care to inmates in the state prison system; their employment is governed by a memorandum of understanding (MOU). Plaintiffs have sued the state and related defendants seeking compensation for time they have spent on “pre- and post-shift safety and security activities,” such as going through security and picking up and returning alarm devices.

Defendants filed a demurrer, which the trial court sustained without leave to amend on the ground these activities are not compensable under the Portal-to-Portal Act of the Fair Labor Standards Act. After judgment was entered, plaintiffs appealed.

Plaintiffs contend they have alleged viable wage claims and the trial court improperly decided a disputed question of fact in ruling on the demurrer. Defendants respond that the trial court did not err, and, in any event, the judgment may be affirmed on alternative grounds they raised in their demurrer. Specifically, defendants argue the MOU governing the terms and conditions of plaintiffs’ employment precludes their claims; plaintiffs’ statutory claims fail because the statutes at issue do not apply to government employers; the claims are all subject to dismissal because plaintiffs failed to exhaust their contractual remedies (grievance and arbitration procedures in the MOU); and the claims are all barred by the applicable statute of limitations.

We conclude defendants’ demurrer is well taken as to plaintiffs’ statutory claims, but plaintiffs have stated a claim for breach of contract. We further conclude that defendants’ affirmative defense of failure to exhaust contractual remedies cannot be resolved in a demurrer and plaintiffs’ contract claim is not time barred. Accordingly, we affirm in part and reverse in part.

https://www.courts.ca.gov/opinions/documents/A167908.PDF

Wentworth v. Regents of the Univ. of Cal. (CA1/4 A168296M, filed 9/30/24, mod. & rehrg. den. 10/23/24) FEHA Interactive Process and Reasonable Accommodation | Information Practices Act

THE COURT:

It is ordered that the opinion filed herein on September 30, 2024, be modified as follows:

On page 11, the last sentence of the second paragraph that reads, “Tiwon emailed her notes of the meeting to a staff member to be distributed to students.” is changed to:

“Tiwon emailed her notes of the meeting to a student to give to other students.”

On page 37, the first sentence of the first full paragraph that reads, “Regents do not dispute that they can be held liable for the statements at the April 2016 meeting.” is changed to:

“For the purposes of this appeal, Regents do not dispute that they can be held liable for the statements at the April 2016 meeting.”

On page 37, the fourth sentence of the first full paragraph that reads, “But there were other people present at the meeting, and Tiwon emailed her notes of the meeting to be distributed to all students in the department.” is changed to:

“But there were other people present at the meeting, and Tiwon emailed her notes of the meeting to be given to other students in the department.”

On page 38, the third sentence of the first full paragraph that reads, “Additionally, the notes of the meeting were later circulated to students in the department, and there is no evidence that all these recipients knew about the investigations.” is changed to:

“Additionally, the notes of the meeting were later sent to a student to give to other students in the department, and there is no evidence that all students knew about the investigations.”

On page 39, the first sentence of the first paragraph that reads, “As with the disclosures at the April 2016 meeting, Regents do not dispute that the leaks of the letter to the San Francisco Chronicle and Daily Californian can be attributed to them.” is changed to:

“As with the disclosures at the April 2016 meeting, for the purposes of this appeal Regents do not dispute that the leaks of the letter to the San Francisco Chronicle and Daily Californian can be attributed to them.”

On page 61, the following text shall be added at the end of the last paragraph, after the sentence that reads, “The trial court should also consider the importance or significance of the entire personnel file to Wentworth’s overall case, not just the significance of the March 2016 letter.”

“Under the unique circumstances of this case, the jury verdict against Wentworth on the personnel file cause of action does not on its own foreclose Wentworth’s ability to recover fees under either the traditional or catalyst theories. The verdict was essentially the result of an unforced error by Wentworth and did not address the merits of Wentworth’s factual contentions regarding his personnel file. It therefore does not preclude a finding that Wentworth achieved victory in a practical sense or achieved his primary litigation goals when he obtained his complete personnel file only after filing suit and moving to compel production of documents. (See Harbor v. Deukmejian (1987) 43 Cal.3d 1078, 1103 [affirming denial of petition for writ of mandate but holding the petitioners were nonetheless successful and entitled to attorney’s fees under Code Civ. Proc., § 1021.5 because they vindicated an important legal principle].)”

There is no change in judgment.

The petition for rehearing is denied.

https://www.courts.ca.gov/opinions/documents/A168296M.PDF

Los Angeles County Employees Retirement Assn. v. County of Los Angeles, 102 Cal.App.5th 1167(2024), review granted, 2024 WL 4511044 (Mem) (Oct. 16, 2024); S286264/B326977 CERL | Prop. 162 | Civil Service Classification & Salary Setting

Petition for review after reversal of judgment. (1) Does the board of a county public employee retirement system established under the County Employees Retirement Law of 1937 (CERL) (Gov. Code, § 31450 et seq.) have authority under the California Constitution and relevant statutes to create employment classifications and set salaries for employees of the retirement system? (2) Does Government Code section 31522.1 impose a ministerial duty on a county board of supervisors to include in the county’s employment classifications and salary ordinance the classifications and salaries adopted by the board of a county public employee retirement system for employees of that system? (3) Do Proposition 162 (Cal. Const., art. XVI, § 17) and CERL override a county board of supervisors’ constitutional authority to establish civil service classifications, set salaries, and maintain a civil service system for county employees under article XI of the California Constitution? Review granted/brief due.

Docket

Court of Appeal Decision

Ramirez v. City of Indio (CA4/1 D082997, filed 9/13/24, pub. 10/11/24) MOU Administrative Appeal

Former police officer Sergio Ramirez (Ramirez) administratively appealed the decision of the City of Indio Police Department (City) to terminate his employment at the conclusion of the “Appeals Procedure” set forth in the Memorandum of Understanding (MOU) between the City of Indio and the Indio Police Officers’ Association. After a full evidentiary hearing, the arbitrator recommended the reinstatement of Ramirez with full back pay and benefits, but the City Manager upheld the decision of the Chief of Police (Chief) to terminate Ramirez.

After unsuccessfully petitioning the superior court for writ of mandate (Code Civ. Proc., §§ 1085, 1094.5), Ramirez appeals to this court and asserts the superior court erroneously interpreted the arbitrator’s role in the MOU’s administrative appeal procedure. Although he acknowledges that the MOU vests the City Manager with power to revoke the arbitrator’s advisory findings and recommendations, Ramirez contends the MOU and due process considerations required the City Manager to defer to the arbitrator’s determinations of the weight and credibility of testimony and evidence presented at the hearing.

We reject Ramirez’s proposed interpretation of the MOU’s administrative appeal procedure and affirm.

https://www.courts.ca.gov/opinions/documents/D082997.PDF

Montana Medical Ass’n v. Knudsen (9th Cir. 23-35014 10/9/24) Vaccination Status Discrimination | Preemption

The panel (1) reversed the district court’s decision that Montana House Bill 702 (HB 702), which prohibits discrimination based on vaccination status, is preempted by the Americans with Disabilities Act (ADA) and the Occupational Health and Safety Act (OSH Act) and violates the Fourteenth Amendment’s Equal Protection Clause; and (2) vacated in full the district court’s permanent injunction enjoining enforcement of HB 702 in health care settings.

Plaintiffs are health care providers and several Montana residents with compromised immune systems who sought to invalidate HB 702 in all health care settings. They alleged that the ADA and the OSH Act impliedly preempt HB 702 because the statutes require employers to know employee vaccination status and to discriminate on that basis in order to furnish ADA accommodations for persons with immunocompromising disabilities and to satisfy the OSH Act’s duty to furnish a workplace free of recognized hazards. Plaintiffs further alleged that HB 702 violates the Equal Protection Clauses of the United States and Montana Constitutions by irrationally subjecting different types of health-related facilities to differing rules.

The panel held that because plaintiffs sought to enjoin HB 702 across all health care settings, plaintiffs’ preemption and Equal Protection theories were properly analyzed as facial challenges. The panel held that neither the ADA nor the OSH Act’s general duty clause facially preempts HB 702 in health care settings. Plaintiffs had not demonstrated that HB 702 creates a genuine conflict with the ADA in any specific case, much less that HB 702 is facially invalid in all health care settings. The district court’s broad findings showed at most only the existence of a perceived conflict that was too speculative on these facts to justify preemption. Nor did the record support an injunction in the case of any specific plaintiff. The panel reserved judgment on whether, in a future case, the ADA and the OSH Act’s general duty clause could preempt HB 702 on a narrower, as-applied basis.

The panel held that the Equal Protection Clause does not facially invalidate HB 702 in health care settings because the classification and differential treatment of facilities could rationally reflect Montana’s interest in balancing personal privacy interests and public health by exempting facilities that the State believes pose different risks.

Concurring, Judge McKeown wrote separately to address the standards for facial preemption and to encourage the Ninth Circuit to join the majority of its sister circuits in articulating the proper standard. Under such a standard, courts must analyze the potential conflict between state and federal law based on the general principles of preemption. If there is a conflict, the scope of the remedy must be tailored to the scope of the conflict. If the scope of the conflict is broad enough, then a facial remedy may be proper, but courts must not facially strike down a state law with a “plainly legitimate sweep.” In this case, Judge McKeown agreed with the majority that plaintiffs had not shown enough to justify facial preemption, even under the lower “plainly legitimate sweep” standard.

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/10/09/23-35014.pdf

Liu v. Miniso Depot CA, Inc. (CA2/1 B338090 10/7/24) Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act | Arbitration

The #MeToo movement highlighted concerns that compelled arbitration of sexual harassment claims can perpetuate unacceptable behavior and minimize its consequences by diverting such claims from public court proceedings into a private forum. In response, Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA; 9 U.S.C. §§ 401-402). As codified, the EFAA amended the Federal Arbitration Act (FAA; § 1 et seq.), and was placed within the FAA’s other provisions. Section 402, added by the EFAA, states, “Notwithstanding any other provision of [the FAA], at the election of the person alleging conduct constituting a sexual harassment dispute . . . , no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” (§ 402(a).)

This matter requires that we determine whether the EFAA exempts from arbitration all causes of action in a complaint that asserts both sexual harassment and non-sexual harassment claims, or whether a trial court may still compel arbitration of the non-sexual harassment claims. Defendants Miniso Depot CA, Inc., USA Miniso Depot, Inc., and Lin Li (collectively, Miniso) appeal the trial court’s denial of their motion to compel arbitration of certain claims asserted against them by former Miniso employee and plaintiff Yongtong “Jade” Liu. Miniso concedes that the EFAA exempts Liu’s claims alleging sexual harassment from arbitration, but contends that the trial court erred in failing to compel arbitration of Liu’s other employment-related claims.

We agree with our colleagues in Division Three of this appellate district, who recently concluded in Doe v. Second Street Corp. (Sept. 30, 2024, B330281) ___ Cal.App.5th ___ [2024 WL 4350420] that the plain language of the EFAA exempts a plaintiff’s entire case from arbitration where the plaintiff asserts at least one sexual harassment claim subject to the act. Here, at least one of Liu’s claims is subject to the EFAA, and thus the trial court did not err in refusing to compel Liu to arbitrate any of her claims.

https://www.courts.ca.gov/opinions/documents/B338090.PDF

Wentworth v. Regents of the Univ. of Cal. (CA1/4 A168296 9/30/24) FEHA Interactive Process and Reasonable Accommodation | Information Practices Act

Blake Wentworth, formerly a professor at the University of California, Berkeley, appeals from trial court orders granting defendant Regents of the University of California (Regents) summary adjudication of three causes of action under the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.) (FEHA) and Information Practices Act (Civ. Code, § 1798 et seq.) (IPA), denying Wentworth’s motion to compel responses to certain discovery requests, and denying Wentworth’s request for a retrial of one cause of action for which the jury left the verdict form blank. In a separate consolidated appeal, Wentworth attacks a postjudgment order denying his requests for attorney’s fees and costs.

Wentworth fails to demonstrate any prejudicial error as to his claims for failure to engage in the interactive process or provide reasonable accommodations, so we affirm the summary adjudication order as to those claims. We also find no error in the trial court’s orders denying Wentworth’s motion to compel responses to discovery requests and motion for retrial. The summary adjudication of the invasion of privacy cause of action must be reversed, however, because Wentworth’s evidence raises a triable issue of material fact about whether Regents violated the IPA by leaking to the media a letter about student complaints against him and disclosing information about his disability accommodation at a faculty and student meeting. Because we reverse the summary adjudication of the invasion of privacy cause of action, we must also reverse the rulings on the request for attorney’s fees and costs. We will remand for further proceedings.

https://www.courts.ca.gov/opinions/documents/A168296.PDF

Doe v. Second Street Corp. (CA2/3 B330281 9/30/24) Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) (9 U.S.C. §§ 401–402). In general terms, the EFAA renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases that arise or accrue on or after March 3, 2022, the EFAA’s effective date.

Jane Doe (plaintiff) filed the present case against Second Street Corporation dba The Huntley Hotel (the hotel) and two of its supervisors (collectively, defendants) in 2023. The operative complaint alleges a pattern of sexual harassment and discrimination both before and after the EFAA’s effective date, as well as a variety of wage-and-hour violations. Defendants moved to compel arbitration, citing an arbitration provision in the hotel’s employee handbook. The trial court denied the motion to compel, concluding that the EFAA rendered the arbitration provision unenforceable as to all of plaintiff’s claims. The trial court also granted plaintiff leave to file a first amended complaint adding additional claims, including a claim for constructive wrongful termination.

We affirm the trial court’s order in its entirety. We conclude that the trial court properly found that under the EFAA’s plain language, (1) plaintiff’s sexual harassment claims alleging continuing violations both before and after the EFAA’s effective date are exempt from mandatory arbitration, and (2) plaintiff’s other causes of action are also exempt from mandatory arbitration under the EFAA because they are part of the same “case.” Accordingly, the trial court properly denied defendants’ motion to compel arbitration. We further conclude that the trial court did not abuse its discretion by permitting plaintiff to file a first amended complaint.

https://www.courts.ca.gov/opinions/documents/B330281.PDF

Mooney v. Fife (9th Cir. 22-16328, 23-15158, 9/30/24) False Claims Act Retaliation

The panel reversed the district court’s summary judgment in favor of the defendants in a qui tam action under the False Claims Act and remanded for further proceedings.

Plaintiff Thomas Mooney was employed as chief operating officer for Dr. Douglas Fife, his wife Heather Fife, and Fife Dermatology, PC, d/b/a Vivida Dermatology. Mooney alleged concerns about improper billing practices at Vivida. Following a conversation between Mooney and a dermatologist belonging to another practice, Vivida terminated his employment, citing unauthorized disclosure of confidential information in violation of Mooney’s employment agreement.

The panel held that a False Claims Act retaliation claim requires proof of three elements: (1) protected conduct; (2) notice; and (3) causation. Following most of the other circuits that had considered the issue, the panel clarified that in analyzing a retaliation claim, a court must use the McDonnell Douglas burden-shifting framework, rather than the Mt. Healthy framework commonly applied to First Amendment retaliation claims. Under the McDonnell Douglas framework, once an employee has established a prima facie case of retaliation, the burden shifts to the employer to produce a legitimate, non-retaliatory reason for the employee’s termination. Then, if the employer produces such a reason, the burden shifts to the employee to show that the proffered explanation was pretextual.

In 2009, Congress amended 31 U.S.C. § 3730(h) to provide that, in addition to protecting lawful acts done by the employee, the False Claims Act also protects employees from being discharged because of efforts to stop violations of the Act. Prior to this amendment, this court held that, under the Moore test, protected conduct had both a subjective and an objective component. Thus, an employee engaged in protected activity where (1) the employee in good faith believed, and (2) a reasonable employee in the same or similar circumstances might believe, that the employer was possibly committing fraud against the government. In U.S. ex rel. Hopper v. Anton, 91 F.3d 1261 (9th Cir. 1996), this court also held that the employee must be investigating matters that were calculated, or reasonably could lead, to a viable action under the False Claims Act. Agreeing with the Eleventh Circuit, the panel held that Hopper’s “investigating” requirement does not apply when the employee alleges that he was discharged because of efforts to stop violations of the Act. The panel further held that the Moore test continues to apply following the 2009 amendment.

Applying this post-2009 amendment test, the panel concluded that, at the summary judgment stage, Mooney engaged in protected conduct that satisfied the first element of a retaliation claim. Viewing the evidence in the light most favorable to Mooney, he subjectively and objectively believed that Vivida was possibly committing fraud against the government.

The panel concluded that Mooney also met the notice requirement of a prima facie case, which requires a showing that the employer must have known that the employee was engaging in protected conduct. Disagreeing with other circuits, the panel held that it was irrelevant that Mooney had a job duty to ensure compliance with billing regulations and to report irregularities.

Vivida did not challenge causation, the third element of a prima facie case, and so the burden shifted to Vivida to produce a legitimate, non-retaliatory reason for Mooney’s termination. The panel held that Mooney established genuine issues of material fact whether the reasons proffered by Vivida were pretextual. The panel therefore reversed the district court’s grant of summary judgment as to Mooney’s claim for False Claims Act retaliation and remanded that claim for trial.

The panel also reversed the district court’s grant of summary judgment on Mooney’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing.

Concurring in part and in the judgment, Judge Collins wrote that he concurred in the court’s opinion except for its holding that the subjective and objective components for protected activity, adopted in Moore with respect to the prior version of the False Claims Act, also apply in determining whether an employee engaged in protected conduct in the form of efforts to stop violations of the False Claims Act. Judge Collins wrote that this amended language seems to suggest a stronger objective component than the one described in Moore. Nonetheless, even assuming arguendo that Mooney had to show that Vivida was likely engaged in False Claims Act violations that he made efforts to stop, Judge Collins thought his evidence was sufficient to raise a triable issue of fact on that score.

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/09/30/22-16328.pdf

2024 California Labor & Employment Bills Signed by Governor (9/30/24)

BY BILL NUMBER

AB 171 by the Committee on Budget – Employment

AB 181 by the Committee on Budget – State employment: State Bargaining Units: agreements: compensation and benefits

AB 224 by Assemblymember Blanca Rubio (D-Baldwin Park) – Worker status: employees and independent contractors: newspaper distributors and carriers

AB 310 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – State Department of State Hospitals: civil service psychiatrists

AB 375 by Assemblymember Laurie Davies (R-Laguna Niguel) – Food delivery platforms: disclosure of delivery drivers’ identity

AB 628 by Assemblymember Lori Wilson (D-Suisun City) – Prisons: employment of inmates

AB 672 by Assemblymember Dr. Corey Jackson (D-Moreno Valley) – Civil Right Department: community assistance

AB 938 by Assemblymember Al Muratsuchi (D-Torrance) – Education finance: classified and certificated staff salaries

AB 1034 by Assemblymember Tim Grayson (D-Concord) – Labor Code Private Attorneys General Act of 2004: exemption: construction industry employees

AB 1137 by Assemblymember Reginald Byron Jones-Sawyer, Sr. (D-Los Angeles) – Excluded employees

AB 1239 by Assemblymember Lisa Calderon (D-Whittier) – Workers’ compensation: disability payments

AB 1246 by Assemblymember Stephanie Nguyen (D-Elk Grove) – Public employees’ retirement: Public Employees’ Retirement System optional settlements

AB 1790 by Assemblymember Damon Connolly (D-San Rafael) – California State University: sexual harassment: implementing California State Auditor recommendations

AB 1815 by Assemblymember Dr. Akilah Weber (D-San Diego) – Discrimination: race: hairstyles

AB 1843 by Assemblymember Freddie Rodriguez (D-Pomona) – Emergency ambulance employees

AB 1854 by Assemblymember Pilar Schiavo (D-Chatsworth) – Service member protections

AB 1870 by Assemblymember Liz Ortega (D-San Leandro) – Notice to employees: legal services

AB 1888 by Assemblymember Dr. Joaquin Arambula (D-Fresno) – Department of Justice: Labor Trafficking Unit

AB 1903 by Assemblymember Brian Maienschein (D-San Diego) – International commercial arbitration: procedure

AB 1941 by Assemblymember Sharon Quirk-Silva (D-Fullerton) – Local public employee organizations

AB 1955 by Assemblymember Christopher Ward (D-San Diego) – Support Academic Futures and Educators for Today’s Youth Act (LGBTQ)

AB 1966 by Assemblymember Laurie Davies (R-Laguna Niguel) – Human trafficking: notice: primary ticket sellers

AB 1976 by Assemblymember Matt Haney (D-San Francisco) – Occupational safety and health standards: first aid materials: opioid antagonists

AB 1997 by Assemblymember Tina McKinnor (D-Inglewood) – Teachers’ Retirement Law

AB 2011 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Unlawful employment practices: small employer family leave mediation program: reproductive loss leave

AB 2020 by Assemblymember Mia Bonta (D-Oakland) – Survivors of Human Trafficking Support Act

AB 2047 by Assemblymember Mike Fong (D-Alhambra) – Public postsecondary education: discrimination prevention

AB 2048 by Assemblymember Mike Fong (D-Alhambra) – Community colleges: systemic campus reforms: sexual harassment: report

AB 2049 by Assemblymember Blanca Pacheco (D-Downey) – Motions for summary judgment: filing deadlines

AB 2063 by Assemblymember Brian Maienschein (D-San Diego) – Health care coverage

AB 2067 by Assemblymember Diane Dixon (R-Newport Beach) – Financial institutions: service of process

AB 2123 by Assemblymember Diane Papan (D-San Mateo) – Disability compensation: paid family leave

AB 2134 by Assemblymember Al Muratsuchi (D-Torrance) – School employees: transfer of leave of absence for illness or injury

AB 2227 by Assemblymember Josh Hoover (R-Folsom) – Unemployment insurance: violations

AB 2245 by Assemblymember Juan Carrillo (D-Palmdale) – Certificated school employees: permanent status: regional occupational centers or programs operated by single school districts

AB 2283 by Assemblymember Blanca Pacheco (D-Downey) – Civil actions: electronic service

AB 2284 by Assemblymember Tim Grayson (D-Concord) – County employees’ retirement: compensation

AB 2288 by Assemblymember Ash Kalra (D-San Jose) – Labor Code Private Attorneys General Act of 2004

AB 2299 by Assemblymember Heath Flora (R-Modesto) – Labor Commissioner: whistleblower protections: model list of rights and responsibilities

AB 2319 by Assemblymember Lori Wilson (D-Suisun City) – California Dignity in Pregnancy and Childbirth Act

AB 2326 by Assemblymember David Alvarez (D-San Diego) – Equity in Higher Education Act: discrimination: compliance, regulations, and reports

AB 2337 by Assemblymember Diane Dixon (R-Newport Beach) – Workers’ compensation: electronic signatures

AB 2345 by Assemblymember Jim Patterson (R-Fresno) – Short-term staff permits: provisional intern permits: teaching permits for statutory leave: designated subjects career technical education teaching credentials: cardiopulmonary resuscitation (CPR) certification

AB 2364 by Assemblymember Luz Rivas (D-Sylmar) – Property service worker protection

AB 2370 by Assemblymember Sabrina Cervantes (D-Riverside) – Community colleges: faculty: instructor of record: qualifications

AB 2407 by Assemblymember Gregg Hart (D-Santa Barbara) – Public postsecondary educational institutions: sexual harassment complaints: state audits

AB 2474 by Assemblymember Tom Lackey (R-Palmdale) – Retirement: County Employees Retirement Law of 1937: benefit payments and overpayments

AB 2499 by Assemblymember Pilar Schiavo (D-Chatsworth) – Employment: unlawful discrimination and paid sick days: victims of violence

AB 2561 by Assemblymember Tina McKinnor (D-Inglewood) – Local public employees: vacant positions

AB 2573 by Assemblymember Mike Fong (D-Alhambra) – Policy fellows: status of services: associations

AB 2608 by Assemblymember Jesse Gabriel (D-Encino) – Postsecondary education: sexual violence and sexual harassment: training

AB 2631 by Assemblymember Mike Fong (D-Alhambra) – Local agencies: ethics training

AB 2622 by Assemblymember Juan Carrillo (D-Palmdale) – Contractors: exemptions: work and advertisements

AB 2705 by Assemblymember Liz Ortega (D-San Leandro) – Labor Commissioner

AB 2738 by Assemblymember Luz Rivas (D-Sylmar) – Labor Code: alternative enforcement: occupational safety. A signing message can be found here

AB 2754 by Assemblymember Anthony Rendon (D-Lakewood) – Employment contracts and agreements: sufficient funds: liability

AB 2755 by Assemblymember Buffy Wicks (D-Oakland) – Claims against the state: appropriation

AB 2770 by the Committee on Public Employment and Retirement – Public employees’ retirement

AB 2834 by Assemblymember Anthony Rendon (D-Lakewood) – Public postsecondary education: part-time faculty

AB 2837 by Assemblymember Rebecca Bauer-Kahan (D-Orinda) – Civil actions: enforcement of money judgments

AB 2873 by Assemblymember Eduardo Garcia (D-Coachella) – Breaking Barriers to Employment Initiative: grants

AB 2889 by Assemblymember Rick Chavez Zbur (D-Los Angeles) – Local public employee relations: the City of Los Angeles Employee Relations Board and the Los Angeles County Employee Relations Commission

AB 2925 by Assemblymember Laura Friedman (D-Glendale) – Postsecondary education: Equity in Higher Education Act: prohibition on discrimination: training

AB 2931 by Assemblymember Mike Fong (D-Alhambra) – Community colleges: classified employees: merit system: part-time student-tutors

AB 2971 by Assemblymember Brian Maienschein (D-San Diego) – Classified Employee Staffing Ratio Workgroup: community college districts

AB 2987 by Assemblymember Liz Ortega (D-San Leandro) – Public postsecondary education: sex discrimination complaints: status updates and notices

AB 3025 by Assemblymember Avelino Valencia (D-Anaheim) – County employees’ retirement: disallowed compensation: benefit adjustments

AB 3087 by Assemblymember Mike Fong (D-Alhambra) – California Community Colleges Economic and Workforce Development Program

AB 3089 by Assemblymember Reginald Byron Jones-Sawyer, Sr. (D-Los Angeles) – Chattel slavery: formal apology

AB 3105 by Assemblymember Heath Flora (R-Modesto) – Employment: wages and hours: exemption for faculty at private institutions of higher education

AB 3131 by Assemblymember Kevin McCarty (D-Sacramento) – Strong Workforce Program: applicants receiving equity multiplier funding

AB 3278 by the Committee on Transportation –Transportation: omnibus bill (human trafficking)

AB 3280 by the Committee on Judiciary – Superior court: lactation rooms: Judicial Council report

AB 3283 by the Committee on Judiciary – Enforcement of judgments: claims of exemption

SB 92 by Senator Tom Umberg (D-Santa Ana) – Labor Code Private Attorneys General Act of 2004

SB 155 by the Committee on Budget and Fiscal Review – Higher education budget trailer bill

SB 399 by Aisha Wahab (D-Fremont) – Employer communications: intimidation

SB 828 by Senator María Elena Durazo (D-Los Angeles) – Minimum wages: health care workers: delay

SB 940 by Senator Thomas Umberg (D-Santa Ana) – Civil disputes

SB 949 by Senator Catherine Blakespear (D-Encinitas) – Superior court: lactation accommodation

SB 962 by Senator Steve Padilla (D-San Diego) – San Diego Unified Port District: public employee pension benefits

SB 963 by Senator Angelique Ashby (D-Sacramento) – Hospitals: self-identification procedure: human trafficking or domestic violence

SB 988 by Senator Scott Wiener (D-San Francisco) – Freelance Worker Protection Act

SB 1090 by Senator María Elena Durazo (D-Los Angeles) – Unemployment insurance: disability and paid family leave: claim administration

SB 1097 by Senator John Laird (D-Santa Cruz) – Veterans: military and veterans: gender-neutral terms

SB 1100 by Senator Anthony Portantino (D-Burbank) – Discrimination: driver’s license

SB 1137 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – Discrimination claims: combination of characteristics

SB 1162 by Senator Dave Cortese (D-San Jose) – Public contracts: employment compliance reports: apprenticeship programs

SB 1166 by Senator Bill Dodd (D-Napa) – Public postsecondary education: sex discrimination reports

SB 1177 by Senator Steven Bradford (D-Gardena) – Public utilities: women, minority, disabled veteran, and LGBT business enterprises

SB 1189 by Senator Monique Limόn (D-Santa Barbara) – County Employees Retirement Law of 1937: county board of retirement

SB 1287 by Senator Steven Glazer (D-Orinda) – Public postsecondary education: Equity in Higher Education Act: prohibition on violence, harassment, intimidation, and discrimination

SB 1303 by Senator Anna Caballero (D-Merced) – Public works

SB 1321 by Senator Aisha Wahab (D-Silicon Valley) – Employment Training Panel: employment training program: projects and proposals

SB 1340 by Senator Lola Smallwood-Cuevas (D-Los Angeles) – Discrimination

SB 1348 by Senator Steven Bradford (D-Gardena) – Postsecondary education: Designation of California Black-Serving Institutions

SB 1350 by Senator María Elena Durazo (D-Los Angeles) – Occupational safety and health: definitions

SB 1356 by Senator Aisha Wahab (D-Silicon Valley) – Judiciary: training: gender bias

SB 1379 by Senator Bill Dodd (D-Napa) – Public Employees’ Retirement Law: reinstatement: County of Solano

SB 1385 by Senator Richard D. Roth (D-Riverside) – Medi-Cal: community health workers: supervising providers

SB 1414 by Senator Shannon Grove (R-Bakersfield) – Crimes: solicitation of a minor, human trafficking

SB 1490 by Senator María Elena Durazo (D-Los Angeles) – Food delivery platforms

SB 1491 by Senator Susan Talamantes Eggman (D-Stockton) – Postsecondary education: Equity in Higher Education Act

BY SUBJECT MATTER

Arbitration