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Rubio v. CIA Wheel Group (CA2/8 B300021 4/15/21) FEHA Medical Condition Discrimination/Punitive Damages
CIA Wheel Group dba The Wheel Group (CWG) and Wheel Group Holdings dba The Wheel Group (Holdings) appeal from a judgment entered against them after a bench trial in a wrongful termination action brought by former employee Maria Teresa Lopez. Lopez alleged, inter alia, that CWG terminated her in violation of public policy because she had cancer. Lopez died during the first trial of this matter, and the court declared a mistrial. The court appointed Lopez’s three children (hereafter plaintiffs) as her successors in interest. Following a second trial, the court found CWG terminated Lopez due to her medical condition, awarded plaintiffs $15,057 in economic damages, and added Holdings as a judgment debtor as the alter ego of and/or successor in interest to CWG, which had been dissolved. The court determined punitive damages were warranted, found Lopez’s noneconomic damages to be in the $100,000 to $150,000 range but not recoverable by plaintiffs after her death due to the provisions of Code of Civil Procedure section 377.34, and awarded punitive damages in the amount of $500,000 against appellants.
Appellants contend: 1) the punitive damages award is constitutionally excessive because it is 33 times the amount of the economic damages award; 2) the punitive damages award is excessive under California law; 3) the trial court erred in considering Holdings’s financial condition in determining the amount of punitive damages; and 4) substantial evidence does not support the trial court’s finding that an officer, director or managing agent of CWG acted with fraud, oppression or malice, or that any such conduct was ratified by CWG. We affirm the judgment.
https://www.courts.ca.gov/opinions/documents/B300021.PDF
Bafford v. Northrop Grumman (9th Cir. 20-55222 4/15/21) ERISA
The panel affirmed in part and vacated in part the district court’s dismissal of an action brought by members of an employee pension plan, alleging breach of fiduciary duty under the Employee Retirement Income Security Act and state-law professional negligence and negligent misrepresentation claims.
Northrop Grumman, plan sponsor, delegated administration of the plan to an Administrative Committee, which in turn contracted with Hewitt, a company that provided outside administrative services for the plan. Plaintiffs requested statements showing what their monthly pension benefit would be, using participant-entered assumptions. The statements mailed to plaintiffs by Hewitt grossly overestimated the benefits to which they would be entitled.
Plaintiffs alleged that Hewitt, the Committee, and Northrop had breached their fiduciary duties and that the Committee had failed to provide ERISA-required benefit information. Agreeing with the First Circuit, the panel held that calculation of benefits pursuant to a formula is not a fiduciary function, and so plaintiffs failed to state a claim for breach of a fiduciary duty by any of the three defendants. Furthermore, plaintiffs did not adequately plead that they submitted written requests for pension benefit statements as required to state a claim for violation of 29 U.S.C. § 1025(a)(1)(B)(ii). The panel therefore affirmed the dismissal of plaintiffs’ ERISA claims. However, because plaintiffs could plead facts adequate to allege that they made written requests via an electronic writing, the panel directed the district court to permit plaintiffs to file an amended complaint
Vacating in part, the panel held that plaintiffs’ state-law professional negligence and negligent misrepresentation claims were not preempted by ERISA because they did not have a “reference to or connection with” an ERISA plan. The panel remanded for further proceedings.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/15/20-55222.pdf
Zoller v. GCA Advisors (9th Cir. 20-15595 4/14/21) Arbitration
The panel reversed the district court denial of defendants’ motion to compel arbitration of statutory employment discrimination and civil rights claims, and remanded with the direction that all claims be sent to arbitration and the case be dismissed without prejudice.
When Shannon Zoller became an investment banker with GCA Advisors, LLC, she signed an employment contract that included an arbitration agreement, and she also signed a Form U4, as required by the Financial Industry Regulatory Authority. GCA later fired her, and she brought an action alleging various contract claims, as well as statutory claims under the Equal Pay Act, California’s Fair Pay Act, California’s Fair Employment and Housing Act, and the Civil Rights Act of 1871. The parties stipulated to arbitrate some of Zoller’s claims, but the district court denied GCA’s motion to compel arbitration of the statutory employment discrimination and civil rights claims because it held that Zoller did not knowingly waive her right to pursue these claims in court.
The panel stated that, under Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), while not all statutory claims may be appropriate for arbitration, if a party agreed to arbitrate, the party will be held to that agreement unless the party can prove a congressional intent to preclude a waiver of judicial remedies for the statutory rights at issue. Zoller, therefore, carried the burden to show such an intention. Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299 (9th Cir. 1994), extended Gilmer to Title VII claims and held that there must be at least a knowing agreement to arbitrate employment disputes before an employee may be deemed to have waived judicial remedies.
The panel assumed, without deciding, that this knowing waiver requirement remained good law and was applicable to the statutes at issue. The panel concluded that the arbitration agreement included clear language encompassing employment disputes, and the evidence showed that Zoller knowingly waived her right to a judicial forum to resolve her statutory claims. Accordingly, the panel reversed the district court’s denial of GCA’s motion to compel arbitration of these claims.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/14/20-15595.pdf
Wilson-Davis v. SSP America, Inc. (CA2/3 B306781, filed 3/11/21, pub. ord. 4/9/21) Arbitration
Plaintiff Tramon Wilson-Davis (plaintiff), individually and on behalf of a putative class, sued his employers, defendants SSP America LAX, LLC (SSP LAX) and SSP America, Inc. (SSP Inc.) (collectively, SSP) for violations of various provisions of California’s wage and hour laws. SSP moved to compel arbitration pursuant to the collective bargaining agreement between it and the labor union representing plaintiff. The trial court denied the motion to compel arbitration, and SSP appealed.
We affirm. The collective bargaining agreement between SSP and the union provides for arbitration of claims arising under the agreement, but it does not waive the right to a judicial forum for claims based on statutes. The trial court therefore correctly denied SSP’s motion to compel arbitration.
https://www.courts.ca.gov/opinions/documents/B306781.PDF
Contreras-Velazquez v. Family Health Centers of San Diego, Inc. (CA4/1 D075577M 4/7/21) Disability Discrimination/Punitive Damages
Rosario Contreras-Velazquez (Velazquez) sued her former employer, Family Health Centers of San Diego, Inc. (Family Health), alleging disability discrimination and related causes of action after she suffered a work-related injury and Family Health terminated her employment. A jury found Family Health not liable, but the trial court ordered a new trial as to three of Velazquez’s causes of action after finding the evidence was insufficient to support the jury’s verdict—a ruling we affirmed in a prior appeal. (Contreras-Velazquez v. Family Health Centers of San Diego, Inc. (Aug. 9, 2017, D071083) [nonpub. opn.] (hereafter, Velazquez I).)
At the ensuing retrial, a jury found in favor of Velazquez. The jury awarded her $915,645 in compensatory damages and $5 million in punitive damages. However, the trial court granted in part a motion for judgment notwithstanding the verdict (JNOV) and reduced the punitive damages award to $1,831,290 (a 2:1 ratio of punitive to compensatory damages). The court reasoned a punitive damages award equal to twice the compensatory damages award was the maximum amount permissible under the due process clause of the Fourteenth Amendment to the United States Constitution.
Family Health appeals the judgment and contends certain special verdict findings returned by the first jury estopped Velazquez from prevailing at the retrial under the issue preclusion doctrine. Family Health also appeals the JNOV order on the basis that the reduced punitive damages award remains grossly excessive in violation of Family Health’s due process rights. Family Health requests the punitive damages award be further reduced to $915,645 (a 1:1 ratio of punitive to compensatory damages). Velazquez cross-appeals the JNOV order and requests reinstatement of the $5 million punitive damages award.
We conclude the first jury’s special verdict findings did not constitute a final adjudication of any issue and, therefore, the trial court correctly ruled that the issue preclusion doctrine did not require entry of judgment in Family Health’s favor. Further, we conclude the trial court properly reduced the punitive damages award to an amount equal to twice the compensatory damages award—and no further. Therefore, we affirm both the judgment and the JNOV order.
https://www.courts.ca.gov/opinions/documents/D075577M.PDF
Department of Industrial Relations, etc. v. Built Pacific, Inc. (CA4/1 D076601, filed 3/15/21, ord. pub. 4/5/21) DLSE/Civil Wage Penalty Assessment
Built Pacific, Inc. (BPI) appeals from a judgment entered against it and in favor of the California Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE).
The DLSE issued a Civil Wage Penalty Assessment (CWPA) against BPI for labor law violations on a public works project. BPI entered into a settlement agreement with the DLSE but failed to timely pay the settlement amount. As a result, BPI was not released from liability, the DLSE sought judgment based on the final CWPA, and the superior court entered judgment on the CWPA pursuant to Labor Code section 1742, subdivision (d).
BPI appeals, asserting that the judgment must be reversed because it is based on an unreasonable and unenforceable liquidated damages clause of the settlement agreement under Civil Code section 1671, subdivision (b). We conclude Civil Code section 1671 does not apply because judgment was entered pursuant to the Labor Code and not a “contract.” Even if section 1671 were to apply, we conclude the disputed provision in the settlement agreement is both reasonable and enforceable. We therefore affirm the judgment.
https://www.courts.ca.gov/opinions/documents/D076601.PDF
Garcia v. SEIU (9th Cir. 19-16934 4/5/21) LMRA § 301 Preemption
The panel affirmed the district court’s order granting in part a union’s motion to dismiss and holding that five claims brought by a union member were preempted by § 301 of the Labor Management Relations Act and were therefore “converted” into § 301 claims.
This dispute between union members and their union arose out of a trusteeship imposed on Nevada Service Employees Union (the “Local”) by the Service Employees International Union (the “International”). Local member Raymond Garcia filed suit in state court against the International, International officials, and the Local’s board (collectively, the “Union”), challenging the trusteeship as violating the Local’s constitution, the International’s constitution, and an affiliation agreement between the two organizations. The Union removed the case to federal court.
The panel concluded that Garcia’s claims required analysis of at least one § 301 labor contract and were therefore preempted and removable. Agreeing with other Circuits, the panel held that § 301 completely preempts state law claims based on contracts between labor unions, which may include union constitutions. The panel held that savings clauses included in the Labor Management Reporting and Disclosure Act did not repeal § 301’s preemptive force. The panel held that in determining whether any state law claim is preempted and removable, the court employs a two-step analysis. First, the court determines whether the cause of action involves a right conferred by state law, as opposed to by a labor contract. If the labor contract alone creates the right, the claim is preempted and the analysis ends. Second, if the right underlying the state law claim exists independently of the labor contract, the court determines whether the right is nevertheless substantially dependent on analysis of a labor contract. Where there is substantial dependence, the state law claim is preempted by § 301.
The panel addressed the parties’ remaining issues on appeal in a concurrently issued memorandum disposition.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/05/19-16863.pdf
Parada v. East Coast Transport Inc. (CA2/2 B296566, filed 3/26/21, ord. pub. 4/1/21) Wage & Hour/ABC Test Post-Vazquez
Erick V. Parada, Felipe Alfonso Sergio Alonso Reyes, Jose Antonio Alfaro, and Rony Manual Arana (Appellants) appeal from a judgment against them following a court trial. Appellants are truck owner/operators who performed work as putative independent contractors for respondent East Coast Transport, Inc. (East Coast). East Coast is a drayage company that arranges for the pick-up and delivery of goods from Los Angeles area ports to nearby locations. Appellants sued East Coast, claiming that they were actually employees rather than independent contractors and were therefore wrongfully deprived of statutory protections and benefits given to employees, such as provisions for rest breaks and meal periods, reimbursement of expenses, and itemized wage statements.
Following the first portion of a bifurcated trial on Appellants’ claim under the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200), the trial court ruled that Appellants were independent contractors rather than employees. The court concluded that this finding disposed of each of Appellants’ claims and entered judgment accordingly.
In finding that Appellants were independent contractors, the trial court ruled that our Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex) did not apply retroactively. Dynamex held that a three-factor test (the so-called “ABC” test) should be used to determine if a worker qualifies as an independent contractor for purposes of California’s wage orders (which establish many entitlements for employees). (Id. at pp. 916–917.) One of the requirements of that test is that an independent contractor must perform work that is outside the usual course of the hiring entity’s business. Instead of the Dynamex test, the trial court applied the multi-factor definition of an independent contractor described in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello).
Since the trial court’s ruling, our Supreme Court has decided that Dynamex should be applied retroactively. In Vazquez v. Jan-Pro Franchising International (2021) 10 Cal.5th 944 (Vazquez), the court reached that conclusion primarily because Dynamex “addressed an issue of first impression” and did not change a settled rule on which the parties had relied. (Vazquez, at p. 948.)
Our Supreme Court’s decision in Vazquez controls here. The judgment therefore may not be affirmed on the legal ground that the trial court adopted.
East Coast also argues as an alternative ground for affirmance that federal law preempts the ABC test as applied to its business. In People v. Superior Court (Cal Cartage Transportation Express, LLC) (2020) 57 Cal.App.5th 619 (Cal Cartage), Division Four of this appellate district recently rejected an identical argument. We agree with the decision in that case and conclude that federal law does not preclude application of the ABC test here.
Because the judgment was based on an incorrect legal standard, we reverse it and remand the case for further proceedings on Appellants’ complaint.
https://www.courts.ca.gov/opinions/documents/B296566.PDF
In re Becker (9th Cir. 20-72805 4/1/21) ERISA
The panel denied a petition for a writ of mandamus challenging the district court’s order transferring an action under the Employee Retirement Income Security Act from the Northern District of California to Minnesota federal court pursuant to a forum selection clause in a retirement plan.
The panel held that mandamus relief was not warranted because the district court did not clearly err in transferring the case. Agreeing with other Circuits, the panel held that even though provision of “ready access to the Federal courts” is among ERISA’s goals, ERISA does not bar forum selection clauses. Thus, the plan properly designated, from among venues permitted by the statute, the venue where the plan was administered.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/01/20-72805.pdf
NCAA v. Alston (US 20-512 oral argument transcript 3/31/21) Student Athletes’ Compensation
Whether the Ninth Circuit erroneously held, in conflict with decisions of other circuits and general antitrust principles, that the National Collegiate Athletic Association eligibility rules regarding compensation of student-athletes violate federal antitrust law.
C. L. v. Del Amo Hospital (9th Cir. 19-56074 3/30/21) ADA/Service Dog
The panel vacated the district court’s judgment, after a bench trial, in favor of the defendant in an action seeking injunctive relief under Title III of the Americans with Disabilities Act (“ADA”), which prohibits discrimination in “places of public accommodations,” including hospitals.
Plaintiff C.L., who has been diagnosed with posttraumatic stress disorder and other conditions, obtained a dog named Aspen, intending it to be her service dog. Because enrolling in a full training course to provide Aspen with formal certification was not a viable option for C.L., she began self-training the dog. C.L. sought inpatient treatment at Del Amo Hospital’s National Treatment Center. When she asked the Center if she could bring Aspen with her as a service dog, Del Amo denied the dog admission. The district court entered judgment in favor of Del Amo on the ground that Aspen did not qualify as a service animal under the ADA.
The panel held that the district court erred as a matter of law by effectively imposing a certification requirement for C.L.’s dog to be qualified as a service animal. The panel held that the ADA prohibits certification requirements for qualifying service dogs for three reasons: (1) the ADA defines a service dog functionally, without reference to specific training requirements; (2) Department of Justice regulations, rulemaking commentary, and guidance have consistently rejected a formal certification requirement; and (3) allowing a person with a disability to self-train a service animal furthers the stated goals of the ADA, for other training could be prohibitively expensive.
The panel remanded for the district court to consider whether C.L.’s testimony regarding her self-training of Aspen, coupled with expert testimony, was sufficient to show that Aspen was more likely than not a qualified service dog at the time of trial.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/30/19-56074.pdf
Kaanaana v. Barrett Business Services, Inc. (SC S253458 3/29/21) County Contract Workers/Public Works/Minimum Wage
California’s prevailing wage law is a minimum wage provision that generally applies to those employed on public works. Different provisions define the term “public works” in various contexts. As relevant here, the term includes “work done” for certain types of government districts. (Lab. Code, § 1720, subd. (a)(2).) Plaintiffs are contract workers who act as belt sorters for a county sanitation district. We hold that their work falls within the definition of public works in section 1720, subdivision (a)(2) (hereafter section 1720(a)(2)).
https://www.courts.ca.gov/opinions/documents/S253458.PDF
Betancourt v. Transportation Brokerage Specialists, Inc. (CA1/3 A159528 3/29/21) Arbitration/Class Action Waiver
Defendant Transportation Brokerage Specialists, Inc. appeals from a trial court order denying its motion to (1) compel plaintiff Josue Betancourt to arbitrate his individual claims pursuant to the arbitration provision in his employment agreement; and (2) dismiss or strike his class claims pursuant to the class action waiver also contained in the employment agreement.
In its order, the trial court applied California law after finding that plaintiff was exempt from Federal Arbitration Act (9 U.S.C. § 1 et seq.) (FAA) coverage because he was a transportation worker engaged in interstate commerce. The trial court then denied defendant’s motion to dismiss or strike plaintiff’s class claims after finding that the class action waiver was unenforceable. The trial court also denied defendant’s motion to compel arbitration of plaintiff’s individual claims, concluding that the unenforceable class action waiver rendered the arbitration agreement unenforceable. On appeal, defendant challenges the trial court’s findings on FAA inapplicability, unenforceability of the class action waiver, and unenforceability of the arbitration agreement.
We agree with the trial court that plaintiff is exempt from FAA coverage. We also agree that the class action waiver is unenforceable under California law, and affirm the trial court’s order denying the motion to dismiss or strike plaintiff’s class claims. We reverse, in part, that portion of the trial court order denying the motion to compel arbitration of plaintiff’s individual claims and remand for further consideration consistent with this opinion, as the trial court improperly found the arbitration agreement unenforceable in its entirety rather than severing the class action waiver provision from the remainder of the employment agreement.
https://www.courts.ca.gov/opinions/documents/A159528.PDF
Akella v. The Regents of the University of California (CA6 H045886M, filed 2/16/21, pub. ord. 3/11/21, mod & rehg. den. 3/26/21)) Professor Discipline/Instructional Workload Policy
It is ordered that the opinion filed herein on February 16, 2021, and certified for publication on March 11, 2021, be modified as follows:
On page 13, after the last sentence of the first full paragraph which ends with the words “review the factual basis behind the agency’s order or decision for ‘substantial evidence in . . . light of the whole record.’ (Id., subd. (c).),” insert the following footnote:
6 Akella asserts, for the first time in a petition for rehearing, that the university’s disciplinary decision implicates a fundamental right concerning employment and, as such, requires independent review of the factual basis for the agency’s decision under section 1094.5, subdivision (c). Akella is correct that the standard of review in the superior court and on appeal “depends on the nature of the right affected by the administrative decision.” (MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 217, citing § 1094.5, subd. (c).) Indeed, “ ‘[i]f the decision of an administrative agency will substantially affect a “fundamental vested right,” then the trial court must not only examine the administrative record for errors of law, but must also exercise its independent judgment upon the evidence. [Citation.]’ ” (Ibid.) But this case was never litigated as implicating a fundamental right. To the contrary, Akella’s briefing—both as petitioner in the superior court and as respondent on appeal—expressly declined to make that assertion, stating instead that the case does not involve a fundamental vested right. In his respondent’s brief on appeal, for example, Akella quoted Schafer v. City of Los Angeles (2015) 237 Cal.App.4th 1250, for the relevant standard of review “ ‘in a case not involving a fundamental vested right . . . .’ ” (Id. at p. 1261 [noting that in an administrative mandamus proceeding not involving a fundamental vested right, the reviewing court “reviews the administrative record to determine whether substantial evidence in the record supports the agency’s factual findings”].) Akella also repeated his acknowledgment in his briefing to the superior court that there was “no ‘fundamental vested right’ ” at issue.
Having failed to assert at the outset that the university’s disciplinary proceedings involved a “fundamental vested right in his employment” (Wences v. City of Los Angeles (2009) 177 Cal.App.4th 305, 318), Akella has forfeited the argument on petition for rehearing. (See, e.g., Alameda County Management Employees Assn. v. Superior Court (2011) 195 Cal.App.4th 325, 338, fn. 10; accord Curtis Engineering Corp. v. Superior Court (2017) 16 Cal.App.5th 542, 551 [“Generally, a party may not assert new arguments and authorities for the first time in a petition for rehearing”].)
All footnotes commencing with footnote 6 shall be renumbered accordingly.
The petition for rehearing filed on behalf of respondent Ramakrishna Akella is denied.
There is no change in the judgment.
https://www.courts.ca.gov/opinions/documents/H045886M.PDF
Curtis v. Super. Ct. (CA2/7 B292967 3/24/21) CELA/Breach of Confidentiality/Attorney Work Product Protection
Robert A. Curtis, an attorney and third-party witness in the underlying action, appeals from an order granting the motion of the California Employment Lawyers Association (CELA) to compel Curtis to provide deposition testimony identifying a nontestifying expert whom Curtis consulted in prior litigation. In the underlying action, CELA alleges an unknown CELA member (Doe 1) sent Curtis, a non-member, information received from a members-only email distribution list in violation of a confidentiality agreement. Curtis then disclosed the confidential information from Doe 1 to his client, and the information was filed in opposition to a motion for attorneys’ fees filed in the prior action. Curtis contends the trial court abused its discretion in compelling him to testify because the identity of Doe 1—as a nontestifying expert—is entitled to both absolute and qualified attorney work product protection.
The identity of Curtis’s nontestifying expert is not entitled to absolute work product protection because it is not “a writing” that would reveal Curtis’s “impressions, conclusions, opinions, or legal research or theories.” (Code Civ. Proc., § 2018.030, subd. (a).) However, if an attorney can show that disclosure of the identity of a nontestifying expert would result in opposing counsel taking undue advantage of the attorney’s industry or efforts or impair the attorney’s ability to prepare and investigate a case, the identity may be entitled to protection under the qualified work product privilege. In that case, the identity is only discoverable if the party seeking discovery can establish that “denial of discovery will unfairly prejudice the party seeking discovery in preparing that party’s claim or defense or will result in an injustice.” (§ 2018.030, subd. (b).)
The identity of Doe 1 is entitled to at most qualified attorney work product protection, and the trial court did not abuse its discretion in finding CELA met its burden to demonstrate denial of disclosure would unfairly prejudice CELA in prosecuting the action and only minimally disadvantage Curtis. We agree with CELA that Curtis has appealed from a nonappealable discovery order, but we treat Curtis’s appeal as a petition for writ of mandate. We dismiss the appeal and deny the petition.
https://www.courts.ca.gov/opinions/documents/B292967.PDF
Bill Signed by Governor (3/19/21)
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SB 95, Skinner. Employment: COVID-19: supplemental paid sick leave
Jones v. Quality Coast (CA2/5 B297425, filed 2/22/21, mod, ord. pub. 3/23/21) Displaced Janitor Opportunity Act
Plaintiff and appellant Marvin Jones (Jones) sued Quality Coast, Inc. (Quality Coast), alleging the company’s decision not to hire him was the result of race and gender discrimination and a violation of the Displaced Janitor Opportunity Act (DJOA) (Lab. Code,[1] § 1060 et seq.). A jury returned a defense verdict on the discrimination claims. The DJOA claim was decided by the trial judge, who found Jones was not entitled to protection under that statute because he was a supervisory employee. The primary issue we are asked to decide is whether the trial court properly found Jones was a supervisory employee under the DJOA. We also consider whether the trial court erred in giving the jury a modified instruction on the business judgment rule (a question largely derivative of the DJOA issue presented) and in awarding costs to Quality Coast as the prevailing party on the DJOA claim.
https://www.courts.ca.gov/opinions/documents/B297425.PDF
Cedar Point Nursery, et al. v. Victoria Hassid, et al. (US 20-107 oral arg. transcript 3/22/21) ALRA/5th Amendment Takings
California law forces agricultural businesses to allow labor organizers onto their property three times a day for 120 days each year. The regulation provides no mechanism for compensation. A divided panel below held that, although the regulation takes an uncompensated easement, it does not effect a per se physical taking of private property because it does not allow "24 hours a day, 365 days a year" occupation. As an eight-judge dissent from denial of rehearing en bane noted, the panel "decision not only contradicts Supreme Court precedent but also causes a conflict split."
The question presented is whether the uncompensated appropriation of an easement that is limited in time effects a per se physical taking under the Fifth Amendment.
Clark v. Super. Ct. (CA4/1 D077711 3/19/21) FEHA/Exhaustion of Administrative Remedies
In this writ proceeding, we consider whether petitioner, Alicia Clark, exhausted her administrative remedies under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.) prior to bringing this action against her former employer, real party in interest, Arthroscopic & Laser Surgery Center of San Diego, L.P. (ALSC).
Clark filed an administrative complaint with the Department of Fair Employment and Housing (DFEH) (DFEH Complaint) that alleged that her former employer had committed various acts of employment discrimination against her. While Clark’s DFEH Complaint contained an inaccuracy as to ALSC’s legal name, it clearly and unequivocally reflected Clark’s intent to name ALSC as a respondent. Specifically, Clark’s DFEH Complaint named, as respondents, “Oasis Surgery Center LLC,” and “Oasis Surgery Center, LP,” which are variants of ALSC’s registered business name, “Oasis Surgery Center.” In addition, Clark’s DFEH Complaint referenced the names of her managers, supervisors, and coworkers.
The same day that Clark filed her DFEH Complaint, the DFEH issued a right-to-sue notice and Clark filed this action against “Oasis Surgery Center LLC,” and “Oasis Surgery Center, LP.” One week after filing her DFEH Complaint and the initial complaint in this action, Clark filed an amended complaint in this action, properly naming ALSC as a defendant.
Notwithstanding that Clark’s DFEH Complaint clearly identified her former employer as the intended respondent, the trial court granted ALSC’s motion for summary adjudication as to all of Clark’s FEHA claims brought against it because Clark “named the wrong entity in her DFEH [C]omplaint, and . . . never corrected that omission.” Clark then filed a petition for writ of mandate in this court, requesting that we vacate the trial court’s order granting ALSC’s motion for summary adjudication.
After considering the text and purpose of the relevant statutory exhaustion requirement, administrative regulations, and applicable case law, we conclude that Clark exhausted her administrative remedies against ALSC. FEHA’s exhaustion requirement should not be interpreted as a “ ‘procedural gotcha’ ” (People v. Matthews (2019) 32 Cal.App.5th 792, 798) that absolves an alleged perpetrator of discrimination from all potential liability merely because a plaintiff makes a minor mistake in naming the respondent in an administrative complaint when the intended respondent’s identity is clear. This is particularly true in a case such as this, in which the plaintiff’s error could not possibly have hampered any administrative investigation or prejudiced the defendant in any judicial proceedings. Accordingly, we grant Clark’s writ petition and direct the trial court to vacate its order granting ALSC’s motion for summary adjudication.
https://www.courts.ca.gov/opinions/documents/D077711.PDF
Green v. Mercy Housing, Inc. (9th Cir. 20-15134, 20-15358 3/19/21) Fair Housing Act/Costs
The panel vacated the district court’s grant of costs to the defendant in an action under the Fair Housing Act, and remanded. Joining the First, Second, Fourth, and Fifth Circuits, the panel held that in exercising its discretion whether to award costs to a prevailing defendant under the Fair Housing Act’s fee-shifting provision, a district court must apply the Christiansburg standard, which requires the court first to determine whether the plaintiff’s claim was frivolous, unreasonable, or groundless. In a separate, concurrently-filed memorandum disposition, the panel affirmed in part and reversed in part the district court’s grant of summary judgment to the defendant and remanded for further proceedings.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/19/20-15134.pdf
Clark v. Super. Ct. (CA4/1 D077711 3/19/21) FEHA/Exhaustion of Administrative Remedies
In this writ proceeding, we consider whether petitioner, Alicia Clark, exhausted her administrative remedies under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.) prior to bringing this action against her former employer, real party in interest, Arthroscopic & Laser Surgery Center of San Diego, L.P. (ALSC).
Clark filed an administrative complaint with the Department of Fair Employment and Housing (DFEH) (DFEH Complaint) that alleged that her former employer had committed various acts of employment discrimination against her. While Clark’s DFEH Complaint contained an inaccuracy as to ALSC’s legal name, it clearly and unequivocally reflected Clark’s intent to name ALSC as a respondent. Specifically, Clark’s DFEH Complaint named, as respondents, “Oasis Surgery Center LLC,” and “Oasis Surgery Center, LP,” which are variants of ALSC’s registered business name, “Oasis Surgery Center.” In addition, Clark’s DFEH Complaint referenced the names of her managers, supervisors, and coworkers.
The same day that Clark filed her DFEH Complaint, the DFEH issued a right-to-sue notice and Clark filed this action against “Oasis Surgery Center LLC,” and “Oasis Surgery Center, LP.” One week after filing her DFEH Complaint and the initial complaint in this action, Clark filed an amended complaint in this action, properly naming ALSC as a defendant.
Notwithstanding that Clark’s DFEH Complaint clearly identified her former employer as the intended respondent, the trial court granted ALSC’s motion for summary adjudication as to all of Clark’s FEHA claims brought against it because Clark “named the wrong entity in her DFEH [C]omplaint, and . . . never corrected that omission.” Clark then filed a petition for writ of mandate in this court, requesting that we vacate the trial court’s order granting ALSC’s motion for summary adjudication.
After considering the text and purpose of the relevant statutory exhaustion requirement, administrative regulations, and applicable case law, we conclude that Clark exhausted her administrative remedies against ALSC. FEHA’s exhaustion requirement should not be interpreted as a “ ‘procedural gotcha’ ” (People v. Matthews (2019) 32 Cal.App.5th 792, 798) that absolves an alleged perpetrator of discrimination from all potential liability merely because a plaintiff makes a minor mistake in naming the respondent in an administrative complaint when the intended respondent’s identity is clear. This is particularly true in a case such as this, in which the plaintiff’s error could not possibly have hampered any administrative investigation or prejudiced the defendant in any judicial proceedings. Accordingly, we grant Clark’s writ petition and direct the trial court to vacate its order granting ALSC’s motion for summary adjudication.
https://www.courts.ca.gov/opinions/documents/D077711.PDF
Kennedy v. Bremerton School District (9th Cir. 20-35222 3/18/21) First Amendment Free Speech and Free Exercise Claims/Title VII
The panel affirmed the district court’s summary judgment in favor of Bremerton School District in an action brought by Joseph Kennedy, the District’s former high school football coach, who alleged that his rights were violated under the First Amendment and Title VII of the Civil Rights Act of 1964 when the District prohibited him from praying at the conclusion of football games, in the center of the field, potentially surrounded by Bremerton students, and members of the community.
The panel held that the record before it and binding Supreme Court precedent compelled the conclusion that the District would have violated the Establishment Clause by allowing Kennedy to engage in the religious activity he sought. Kennedy’s attempts to draw nationwide attention to his challenge to the District showed that he was not engaging in private prayer. Instead, he was engaging in public speech of an overtly religious nature while performing his job duties. The District tried to accommodate Kennedy, but that was spurned by Kennedy insisting that he be allowed to pray immediately after the conclusion of each game, potentially surrounded by students. The panel held that the district court correctly granted summary judgment to the District on Kennedy’s free speech and free exercise claims.
The panel held that Kennedy’s Title VII claims alleging failure to rehire, disparate treatment, failure to accommodate and retaliation also failed. The panel held that the record reflected that Kennedy did not show that he was adequately performing his job; he could not make out a prima facie case of disparate treatment; the District could not reasonably accommodate Kennedy’s practice without undue hardship; and the District had a legitimate nondiscriminatory reason for its adverse employment actions.
Concurring, Judge Christen, joined by Judge D.W. Nelson, stated that she concurred in the majority’s decision affirming the district court’s order granting summary judgment, and dismissing Kennedy’s Free Speech and Free Exercise claims. Judge Christen wrote separately to underscore why, in her view, the outcome of this appeal was entirely driven by the circumstances from which Kennedy’s claims arose.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/18/20-35222.pdf
Vendor Surveillance Corporation v. Henning (CA4/1 D076079 3/18/21) Unemployment Insurance Taxes/Borello Factors
Vendor Surveillance Corporation (VSC) appeals from an adverse judgment in its action seeking refund of $278,692 in unemployment insurance taxes assessed by the California Employment Development Department (EDD). The outcome turns on whether project specialists hired by VSC between January 1, 2011 and December 31, 2013 (the audit years) are classified as employees or independent contractors. The first-impression legal issue is whether in making that determination, the court should apply (1) the ABC test announced in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 956‒957 (Dynamex) and later codified in the Labor Code; or instead (2) the Borello factors (S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello)), codified in an EDD regulation, California Code of Regulations, title 22, section 4304-1 (hereafter regulation 4304-1).
With little case law for guidance and an eye on appeal, the trial court prudently analyzed the evidence alternatively under each standard and determined that project specialists are VSC’s employees. We hold that Borello provides the applicable standard in assessing unemployment insurance taxes during the audit years. Because the court’s findings under that standard are supported by substantial evidence and its qualitative weighing of the Borello factors was an appropriate exercise of the court’s discretion, we affirm.
https://www.courts.ca.gov/opinions/documents/D076079.PDF
Rush v. State Teachers' Retirement System (CA1/4 A160558 3/18/21) Teacher Retirement/CalSTRS
George M. Rush, who retired in 2012 from City College of San Francisco after 38 years of service, disputes a decision by respondent California State Teachers Retirement System (CalSTRS) calculating his pension. The pension is based on Rush’s years of service, retirement age, and “final compensation” as defined by Education Code section 22134.5, subdivision (a) (hereafter section 22134.5(a)). (See Ed. Code, § 24202.5.) The parties dispute the proper method of calculating Rush’s final compensation given that, for 12 consecutive months over portions of two school years, Rush served as an associate dean at a salary significantly higher than his salary during the other portions of those years. We conclude that CalSTRS properly construed the versions of the statutes in effect in 2012, and that their application to Rush does not unconstitutionally impair any contractual obligation created by prior versions. We will thus affirm the denial of his writ petition to overturn CalSTRS’s determination.
https://www.courts.ca.gov/opinions/documents/A160558.PDF
Freyd v. University of Oregon (9th Cir. 19-35428 3/15/21) Equal Pay Act, Title VII, Title IX
The panel reversed in part and affirmed in part the district court’s grant of summary judgment in favor of the University of Oregon and other defendants in an action brought by a professor under the Equal Pay Act, Title VII, Title IX, and Oregon law.
Jennifer Freyd, a Professor of Psychology, alleged that the University paid her several thousand dollars less per year than it paid four of her male colleagues, despite their being of equal rank and seniority.
Reversing the district court’s summary judgment on the Equal Pay Act claim, the panel held that on such a claim, the plaintiff has the burden of establishing a prima facie case of discrimination by showing that employees of the opposite sex were paid different wages for equal work. The plaintiff must show that the jobs being compared (not the individuals holding the jobs) are substantially equal. The panel concluded that, viewing the evidence in the light most favorable to Freyd, a reasonable jury could find that she and her comparators performed a common core of tasks and did substantially equal work.
Declining to certify questions to the Oregon Supreme Court, the panel reversed the district court’s summary judgment on Freyd’s claim under Or. Rev. Stat. § 652.220, which prohibits employers from paying wages to any employee “at a rate less than that at which the employer pays wages to employees of the opposite sex for work of comparable character, the performance of which requires comparable skills.” Under Oregon law, “comparable work” is a more inclusive standard than equal work, and requires that the two jobs “have important common characteristics.” The panel concluded that Freyd raised a genuine issue of material fact under § 652.220 for the same reasons she did so under the Equal Pay Act.
The panel reversed the district court’s summary judgment on Freyd’s disparate impact claim under Title VII. The panel held that to make a prima facie case of disparate impact, a plaintiff must show that a facially neutral employment practice has a significantly discriminatory impact on a group protected by Title VII. The plaintiff must also establish that the challenged practice is either not job related or is inconsistent with business necessity. Even if the practice is job related and consistent with business necessity, though, the plaintiff may still prevail by showing that the employer refuses to adopt an available alternative practice that has less disparate impact and serves the employer’s legitimate needs. The panel concluded that, first, Freyd challenged a specific employment practice of awarding retention raises without also increasing the salaries of other professors of comparable merit and seniority. Second, she put forth evidence that this practice caused a significant discriminatory impact, and a reasonable jury could find that her statistical analysis showed a prima facie case of disparate impact. The panel agreed with the Seventh Circuit that where a sample is small but the results nevertheless indicate a disparity, the granting of summary judgment in favor of the defendant is premature. The panel further held that the University did not establish a business necessity defense as a matter of law.
The panel affirmed the district court’s summary judgment on Freyd’s claims for disparate treatment under Title VII and her claims under Title IX, Or. Rev. Stat. § 649A.030, and the Oregon Equal Rights Amendment.
Dissenting in part and concurring in part, Judge VanDyke wrote that the district court’s judgment on all claims, except Freyd’s Or. Rev. Stat. § 652.220 claim, should be affirmed. Judge VanDyke wrote that the market-driven practice of pay disparities based on retention raises does not violate federal and Oregon laws prohibiting sex discrimination.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/15/19-35428.pdf
Wilson v. The La Jolla Group (CA4/1 D077134 3/12/21) Wage and Hour/Class Action
Plaintiffs Mosanthony Wilson and Nancy Urschel brought a putative wage-and-hour class action against defendant The La Jolla Group (LJG). Plaintiffs worked for LJG as signature gatherers on behalf of political campaigns and political action committees. LJG classified them as independent contractors and paid them per signature submitted. In the underlying lawsuit, plaintiffs alleged that LJG misclassified them and, as employees, they were entitled to a minimum wage, overtime pay, meal and rest breaks, expense reimbursement, timely final wage payment, and itemized wage statements. Plaintiffs moved for certification of a class of LJG signature gatherers, which the trial court denied.
Plaintiffs appeal the order denying class certification. They contend the trial court erred by finding common questions did not predominate and the class action procedure was not superior to individual actions. They also contend the court erred by not granting a related motion for reconsideration. We agree on the current record that the trial court erred by declining to certify a class for one cause of action, for failure to provide written and accurate itemized wage statements. We therefore reverse the order denying class certification in part, as to that cause of action only, and remand for reconsideration. Otherwise, we disagree that the trial court erred and affirm.
https://www.courts.ca.gov/opinions/documents/D077134.PDF
Bichai v. Dignity Health (CA5 F078658, filed 2/25/21, pub. ord. 3/12/21) Staff Privileges
Plaintiff William N. Bichai, M.D., reapplied for staff privileges at a hospital and was preliminarily told his application would be granted. After Bichai disagreed with the treatment one of his patients received at another hospital, and advocated for what Bichai believed was medically appropriate care, the second hospital reported to the first hospital that Bichai had interfered with a patient’s treatment. The medical executive committee of the medical staff of the first hospital then recommended that Bichai’s reapplication for staff privileges be denied based on his inability to control his behavior and work cooperatively with others. Bichai sued both hospitals before the first hospital issued a final decision in the peer review proceeding addressing his reapplication. Bichai alleged multiple claims, including retaliation in violation of Health and Safety Code section 1278.5 (section 1278.5), a whistleblower provision that protects healthcare workers who advocate for medically appropriate care of a patient.
This appeal arises from the trial court’s decision to sustain a demurrer filed by the first hospital—that is, the hospital where Bichai’s reapplication for privileges was pending. We conclude Bichai’s claims against that hospital for unfair competition and conspiring with the second hospital to violate section 1278.5 failed to allege facts sufficient to constitute a cause of action. The hospital had yet to take any adverse action against plaintiff and his reapplication for privileges. The medical staff is a separate legal entity and, thus, its recommendation to deny Bichai’s reapplication is not an act of wrongdoing by the hospital. Consequently, a cause of action against the hospital has not yet accrued.
We therefore affirm the judgment.
https://www.courts.ca.gov/opinions/documents/F078658.PDF
Akella v. The Regents of the University of California (CA6 H045886, filed 2/16/21, pub. ord. 3/11/21) Professor Discipline/Instructional Workload Policy
In this appeal we address whether the instructional workload policy of a department at the University of California, Santa Cruz, authorized the department chair to assign an additional course to a professor to compensate for deficiencies in the professor’s fulfillment of his standard teaching workload. Professor Ramakrishna Akella refused to teach the additional course, which he believed department chair Brent Haddad had no authority to assign. Haddad, together with Joseph Konopelski, then dean of the school of engineering, filed a disciplinary complaint against Akella. A hearing committee of the Academic Senate Committee on Privilege and Tenure found that Akella had violated the Faculty Code of Conduct. The chancellor adopted the committee’s recommendations and imposed disciplinary sanctions. Akella sought review by writ of administrative mandate. The superior court ruled in Akella’s favor and ordered respondent, the Regents of the University of California (Regents), to set aside the disciplinary order. The Regents appeal from the judgment of the superior court. We find that substantial evidence in the record supported the university’s decision and reverse the judgment of the superior court.
https://www.courts.ca.gov/opinions/documents/H045886.PDF
Bernstein v. Virgin America (9th Cir. 19-15382, 20-15186, filed 2/23/21, amended 3/8/21) Flight Attendants/Wage & Hour/PAGA
The panel affirmed in part, reversed in part, and vacated the district court’s judgment in a putative class action, brought by a plaintiff class of California-based flight attendants who were employed by Virgin America, Inc., alleging that Virgin violated California labor laws.
During the Class Period, approximately 25% of Virgin’s flights were between California airports. Class members spent approximately 31.5% of their time working within California’s borders. The district court certified a Class of all individuals who worked as California-based Virgin flight attendants during the period from March 18, 2011; a California Resident Subclass; and a Waiting Time Penalties Subclass.
As a threshold matter, the panel held that the dormant Commerce Clause did not bar applying California law in the context of this case.
The panel reversed the district court’s summary judgment to plaintiffs on their claims for minimum wage and payment for all hours worked. Specifically, the panel held that Virgin’s compensation scheme based on block time did not violate California law. The fact that pay was not specifically attached to each hour of work did not mean that Virgin violated California law.
The panel held that under the circumstances of this case, Virgin was subject to the overtime strictures of California Labor Code § 510 as to both the Class and California Resident Subclass.
The panel affirmed the district court’s summary judgment to plaintiffs on their rest and meal break claims. The panel rejected Virgin’s contention that federal law preempted California’s meal and rest break requirements in the aviation context because federal law occupied the field. Specifically, the Federal Aviation Act did not occupy the field of flight attendant meal and rest breaks. Also, conflict preemption did not bar application of California’s meal and rest break requirements. Finally, the meal and rest break requirements were not preempted under the Airline Deregulation Act. Extrapolating the principles of Sullivan v. Oracle Corp., 254 P.3d 237 (Cal. 2011), the panel held that California’s meal and rest break requirements applied to the work performed by the Class and California Resident Subclass.
Applying Ward v. United Airlines, Inc., 466 P.3d 309, 321 (Cal. 2020) (holding that California Labor Code § 226(a) applied to workers who do not perform the majority of their work in any one state, but who are based for work purposes in California), the panel affirmed the district court’s summary judgment to plaintiffs on their wage statement claim.
The panel affirmed the district court’s summary judgment to plaintiffs on their waiting time penalties claim. Specifically, the panel held that although there was no California Supreme Court case specifically interpreting the reach of the waiting time penalties statute – Cal. Labor Code §§ 201 and 202 – for interstate employees, the analogy to Cal. Labor Code 226 was compelling. Because the California Supreme Court held § 226 to apply under these circumstances, the panel held that §§ 201 and 202 applied as well.
The panel affirmed the district court’s decision on class certification. Specifically, the panel held that the applicability of California law has been adjudicated on a class-wide or subclass-wide basis, and thus no individual choice-of-law analysis was necessary.
The panel reversed the district court’s holding that Virgin was subject to heightened penalties for subsequent violations under California’s Private Attorney General Act. Virgin was not notified by the Labor Commissioner or any court that it was subject to the California Labor Code until the district court partially granted plaintiff’s motion for summary judgment. On this basis, the panel held that Virgin was not subject to heightened penalties for any labor code violation that occurred prior to that point.
The panel held that since it reversed in part the district court’s judgment on the merits, California law required that the panel vacate the attorneys’ fees and costs award. The panel remanded the issue to the district court.
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/03/08/19-15382.pdf
Sargent v. Bd. of Trustees of the Cal. State Univ. (CA1 A153072 3/5/21) PAGA/CalOSHA Retaliation
Respondent Thomas Sargent is a health-and-safety technician at Sonoma State University (SSU or the University), which is part of the California State University (CSU) system. He sued CSU and his supervisor Craig Dawson (appellants) for the way he was treated after raising environmental concerns at the University. A jury found in his favor on claims alleging unlawful retaliation and on a claim under the Labor Code Private Attorneys General Act of 2004 (Labor Code, § 2698 et seq., PAGA), which was premised almost entirely on violations of the California Occupational Safety and Health Act of 1973 (Labor Code, § 6300 et seq., Cal-OSHA). Among other relief, he was awarded more than $2.9 million in PAGA penalties and more than $7.8 million in attorney fees. These consolidated appeals are from the judgment (A153072) and the award of fees (A154926).
Appellants offer several theories in arguing that CSU is not subject to PAGA as a matter of law, but we are not persuaded by them. We first reject their theory that Education Code section 66606.2 bars PAGA claims against CSU. We then reject their theory that CSU is categorically immune from PAGA penalties because it is a public entity. On this point, we hold that viable PAGA claims can be asserted against CSU, but only when the statutes upon which the claims are premised themselves provide for penalties. Here, Sargent brought some viable PAGA claims, but he ultimately failed to establish CSU’s liability for them because the jury found that he was not personally affected by the underlying statutory violations. Thus, we reverse the award of PAGA penalties.
In the unpublished portion of our opinion, we conclude that the trial court did not err in precluding certain evidence offered to defend Sargent’s retaliation claims, and we affirm the trial court’s award of attorney fees.
https://www.courts.ca.gov/opinions/documents/A153072.PDF
Alvarez v. Altamed Health Services Corp. (CA2/8 B305155M mod. 3/4/21) Employment Arbitration
Respondent Erendira Cisneros Alvarez sued appellants Altamed Health Services Corporation, Altamed Health Services Network, Inc. and Joumana Rechdan (collectively Altamed) on claims related to her employment with Altamed. Altamed appeals from the trial court’s order denying its motion to compel arbitration of the claims. Altamed contends the parties had a valid arbitration agreement which was not revocable due to procedural or substantive unconscionability or the failure of Altamed’s CEO to sign it. We agree, although we do sever one provision. We find the trial court erred in denying the motion to compel arbitration, order Paragraph 5 authorizing review by a second arbitrator severed, and remand the matter to enter an order granting the motion.