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Meza v. Pacific Bell Telephone Co. (CA2/3 B317119M , filed 6/17/22, mod. 7/12/22) PAGA
It is ordered that the opinion filed herein on June 17, 2022, be modified as follows:
On page four, in the second sentence of the first full paragraph, insert the words “and rest periods” between “meal” and the following comma, so the language reads:
failed to provide legally required meal and rest periods,
2. Delete the sentence beginning on page four with “The 2011 guidelines” and ending on page five with “positive image of the company” and insert the following in its place:
The 2011 guidelines, for example, provided that technicians: were not to abandon their vehicles, were required to protect company property at all times, were not allowed to travel “out of route,” were not allowed to sleep in their vehicles at any time, were not permitted to congregate their vehicle with other company vehicles during meal or rest periods, and were expected to conduct themselves in a manner to project a positive image of the company during meal and rest periods.
3. On page 23, in the first sentence of the first full paragraph, delete the words “existed requiring” and insert the word “required” in their place.
4. On page 23, in the first sentence of the first full paragraph, insert after the word “communication” and before the period the words “to argue that such a requirement was a condition of employment,” so that the language reads:
communication to argue that such a requirement was a condition of employment.
5. On page 26, the first sentence of the second full paragraph, insert the letter “s” at the end of the word “statement.”
6. On page 29, the third sentence in the first full paragraph, capitalize the letter “l” in “legislature.”
Huerta v. CSI Elec. Contractors (9th Cir. 21-16201 7/8/22) Wage & Hour Certified Questions
The panel certified to the Supreme Court of California the following questions:
(1) Is time spent on an employer’s premises in a personal vehicle and waiting to scan an identification badge, have security guards peer into the vehicle, and then exit a Security Gate compensable as “hours worked” within the meaning of California Industrial Welfare Commission Wage Order No. 16?
(2) Is time spent on the employer’s premises in a personal vehicle, driving between the Security Gate and the employee parking lots, while subject to certain rules from the employer, compensable as “hours worked” or as “employer-mandated travel” within the meaning of California Industrial Welfare Commission Wage Order No. 16?
(3) Is time spent on the employer’s premises, when workers are prohibited from leaving but not required to engage in employer-mandated activities, compensable as “hours worked” within the meaning of California Industrial Welfare Commission Wage Order No. 16, or under California Labor Code Section 1194, when that time was designated as an unpaid “meal period” under a qualifying collective bargaining agreement?
Coastline JX Holdings LLC v. Bennett (CA4/3 G059552 7/7/22) ERISA
In December 2019, Coastline JX Holdings LLC (Coastline), assignee of a judgment creditor’s interest in a money judgment entered against Stephen H. Bennett, served on Seamount Financial Group, Inc. (Seamount) a notice of levy on Bennett’s assets in an individual retirement account and a profit-sharing plan. After the trial court ordered Seamount to liquidate Bennett’s interest in both assets and turn them over to the levying officer to be delivered to Coastline, Bennett filed a motion for reconsideration of the trial court’s order, under Code of Civil Procedure section 1008. In his motion, Bennett first argued to the trial court that the profit-sharing plan was protected from levy because it qualified as a plan under the Employee Retirement Income Security Act of 1974 (ERISA; 29 U.S.C. § 1001 et seq.). He also filed a motion to tax costs.
The trial court denied Bennett’s motion, but informed the parties that, under its inherent authority, it would reconsider its prior order regarding the distribution of the profit-sharing plan only (not the individual retirement account) because the court previously had not considered the implications of it being an ERISA-compliant plan. After ordering supplemental briefing and setting a hearing on the court’s own motion, the court reversed its prior decision and concluded the profit-sharing plan was exempt from levy due to preemption by ERISA. The court ordered Coastline to reimburse the profit-sharing plan any funds it had received under the court’s prior order. The trial court also denied Bennett’s motion to tax costs and the request for attorney fees that was included in his supplemental briefing.
Coastline and Bennett each appealed. We affirm the trial court’s order and reject each of the parties’ arguments on appeal.
As to Coastline’s appeal, we hold the trial court timely exercised its inherent authority to reconsider its order regarding the profit-sharing plan. We further hold, as a matter of first impression, that the profit-sharing plan here was automatically exempt from levy under both ERISA and California law because (1) it is an ERISA-compliant pension plan which is not assignable as a matter of federal law (29 U.S.C. § 1056(d)(1)); and (2) under California’s Enforcement of Judgments Law (§ 680.010 et seq.), property that is not assignable is not subject to California’s enforcement of judgment procedures and is thus automatically exempt from levy. (See §§ 695.030, 704.210.) There is no conflict, therefore, between ERISA and California law here. Accordingly, ERISA preemption, upon which the trial court based its ruling, is not at issue. The trial court had authority, in reversing its prior order, to direct Coastline to return to the plan the funds that had been ordered delivered to it in contravention of federal and state law.
In his appeal, Bennett argues the trial court abused its discretion by denying his request for attorney fees. Bennett was not entitled to such an award for several reasons, not the least of which is that the trial court denied his motion for reconsideration. The trial court’s reasons for denying the motion to tax costs were supported by the record and its ruling did not otherwise constitute an abuse of discretion. Bennett forfeited his argument challenging the court’s ruling as to the individual retirement account because he did not file a timely notice of appeal from the court’s prior ruling ordering its liquidation.
Bowerman v. Field Asset Services (9th Cir. 18-16303 7/5/22) Wage & Hour Class Certification/Attorneys’ Fees
The panel reversed the district court’s class certification order of a class of 156 individuals who personally performed work for Field Asset Services, Inc. (“FAS”), reversed the partial summary judgment in favor of the class, vacated the interim award of more than five million dollars in attorneys’ fees, and remanded for further proceedings.
FAS is in the business of pre-foreclosure property preservation for the residential mortgage industry. Plaintiff Fred Bowerman was the sole proprietor of BB Home Services, which contracted with FAS as a vendor. Bowerman alleged that FAS willfully misclassified him and members of the putative class as independent contractors, rather than employees, resulting in FAS’s failure to pay overtime compensation and to indemnify them for their business expenses.
FAS first argued that the district court abused its discretion by certifying the class, despite the predominance of individualized questions over common ones. Under Fed. R. Civ. P. 23(b)(3), a district court must find that common questions of fact or law to class members predominate over individual members’ questions before certifying a class. The panel held that the class members could not establish FAS’s liability for failing to pay overtime wages or to reimburse expenses by common evidence. The panel reversed the class certification because the class members failed to demonstrate that FAS’s liability was subject to common proof. Even if class members needed to prove only that they were misclassified as independent contractors to establish FAS’s liability by common evidence, class certification would still be improper under Rule 23(b)(3) because the class members failed to show that “damages are capable of measurement on a classwide basis.” Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013). Even under a narrow interpretation of Comcast Corp., the class members cannot establish predominance. Nor have the class members shown that damages can be determined without excessive difficulty.
Second, FAS argued that S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 769 P.2d 399 (Cal. 1989) (“Borello”), not Dynamex Operations West, Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018) (“Dynamex”), applied to all the class members’ claims. The panel held that the California Court of Appeal has repeatedly limited Dynamex’s applications to claims based on or “rooted in” California’s wage orders. Here, the class members’ expense reimbursement claims were not based on a California wage order, but on Cal. Labor Code § 2802. Nor were they “rooted in” a California wage order, even though the class members belatedly invoked Wage Order 16-2001 in their class certification briefing. The panel rejected FAS’s contention that Borello governed because the overtime claims were “joint employment” claims to which Dynamex did not apply. The panel held that Dynamex applied to Bowerman’s overtime claims. The panel noted that FAS’s joint employment would likely succeed were an actual employee of a vendor suing FAS, claiming that FAS was an employer. On remand, the district court may consider the joint employment issue in the first instance for class members who own or operate LLCs or corporations, which are distinct legal entities.
Third, FAS contended that the district court erred by granting summary judgment under Borello’s multifactor and fact-intensive inquiry because, among other reasons, FAS did not control the manner and means of the class members’ work. The panel first considered the expense reimbursement claims. The panel held that Borello governed the class members’ reimbursement claims. Under Borello, the existence of an employment relationship is a question for the trier of fact, and the district court erred in finding no triable issue of material fact.
Next, the panel considered the overtime claims. Dynamex adopted the “ABC test” to determine employee status for purposes of wage and hour claims like the class members’ overtime claims. The ABC test presumptively considers all workers to be employees, and permits workers to be classified as independent contractors only if the hiring business shows that the worker in question satisfies each of three conditions – A, B, and C. The panel held that summary judgment would not be proper under parts A or C of the test because there were genuine disputes of material fact – whether the vendors were free from FAS’s control, and whether the vendors were engaged in an independently established trade, occupation, or business. The panel further held that summary judgment would be proper under part B of the test, which requires that the worker perform work that is outside the usual course of the hiring entity’s business, but FAS failed to satisfy part B. The facts supported the conclusion that the vendors performed services for FAS in the usual course of FAS’s business. This alone was dispositive of Bowerman’s employee status under Dynamex. In addition to Dynamex considerations, since the district court’s summary judgment decision, Cal. Labor Code § 2776 enacted a retroactive business-to-business exception to the ABC test, which provides that Dynamex does not apply to a bona fide business-to-business contracting relationship if a business service provider contracts to provide services to another such business. In this case, the determination of employee/independent contractor status of the business provider is governed by Borello if the contracting business demonstrates that twelve criteria are satisfied. Viewing these criteria, the panel held that there was a genuine dispute of material fact as to whether the exception applied to FAS and its vendors. The panel concluded that because of the enactment of section 2776, summary judgment was no longer warranted on the class’s overtime claims, even though summary judgment would be proper on those claims under Dynamex for sole proprietors like Bowerman.
The panel also held that there was a genuine dispute of material fact as to whether the class members ever incurred reimbursable expenses or ever worked overtime. Summary judgment was improper because a putative employer cannot be liable to an entire class of putative employees for failing to reimburse their business expenses and pay them overtime – unless the putative employer in fact failed to do so for each of them.
Fourth, FAS argued that the district court abused its discretion by awarding attorneys’ fees. The attorneys’ fee award on appeal was an interim award. The panel held that this case presented “extraordinary circumstances” that justified the exercise of pendent appellate jurisdiction over the interim fee award. The panel joined a majority of sister circuits, and held as a matter of first impression, that it could, and would, here, exercise pendent appellate jurisdiction over interim fee awards that are inextricably intertwined with or necessary to ensure meaningful review of final orders on appeal. The panel further held that the interim award of attorneys’ fees must be vacated because the class certification and summary judgment orders were issued in
Hargrove v. Legacy Healthcare, Inc. (CA4/2 E076240, filed 6/9/22, pub. ord. 7/1/22) PAGA/Standing to Appeal
In 2016, plaintiff Stephanie Hargrove initiated this action against defendants and respondents San Bernardino Convalescent Operations, Inc., dba Legacy Post-Acute Rehabilitation Center (Hargrove’s former employer; SBCO), Indio Nursing & Rehabilitation Center, Inc. (another skilled nursing facility where Hargrove was never employed; INRC), and Legacy Healthcare, Inc. (managerial and support services corp.; Legacy) under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). Approximately four years later, in 2020, Hargrove died. Her attorneys requested leave to file an amended pleading to substitute movant and appellant Makiya Cornell in place of Hargrove to prosecute the PAGA claims; however, on October 6, 2020, the trial court denied the request, dismissed the action, and stated that Cornell “is free to file her own claim and her own causes of action.”
On appeal, Cornell contends that she has standing to appeal the trial court’s order denying her request to substitute herself in place of Hargrove as an order effectively denying a motion to intervene. Alternatively, Cornell argues that this court may treat her appeal as a petition for writ of mandate. Assuming we conclude that Cornell has standing to appeal, she contends the trial court abused its discretion in refusing to permit her to amend Hargrove’s complaint to substitute Cornell as the representative plaintiff such that her PAGA claim relates back to the original complaint.
We conclude that, strictly speaking, Cornell does not have standing to appeal the judgment; however, we treat the order denying the motion to amend as an order denying an implicit motion to intervene, and conclude the trial court did not abuse its discretion in denying the motion. Thus, we affirm.
Grande v. Eisenhower Medical Center (SC S261247 6/30/22) Privity/Wage & Hour/UCL
A staffing agency (FlexCare LLC) arranged for a nurse (Lynn Grande) to work at a hospital (Eisenhower Medical Center). The nurse sued the staffing agency for violating the Labor Code and the Unfair Competition Law. The parties settled and the court entered judgment upon the settlement. The hospital was not a party to that initial lawsuit and the settlement did not name the hospital as a released party.
The nurse then sued the hospital based on the same alleged violations. The hospital argued that, because of the first judgment, claim preclusion foreclosed the nurse’s second suit. The Court of Appeal disagreed, criticizing the reasoning of a published opinion that found claim preclusion on similar facts. (Grande v. Eisenhower Medical Center (2020) 44 Cal.App.5th 1147, 1162–1163 (Grande), criticizing Castillo v. Glenair, Inc. (2018) 23 Cal.App.5th 252, 278–281 (Castillo).) We granted review to resolve this tension in the case law.
The core of this dispute concerns privity. Judgments bind not only parties, but also “those persons ‘in privity with’ parties.” (Armstrong v. Armstrong (1976) 15 Cal.3d 942, 951.) Questions about privity typically arise when a litigant attempts to use a judgment against someone who was not party to that judgment. (See DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 826, fn. 9 (DKN Holdings).)
This case does not present a typical privity question. Because the nurse was a party to the initial judgment, the judgment can be used against her whether or not she was in privity with some other party. But for claim preclusion, the affirmative defense asserted by the hospital, that is not enough. Instead, we have frequently explained that claim preclusion can be asserted only by a party in the first action or someone in privity with a party in the first action. In this case, a nonparty (the hospital) argues that it is in privity with a party (the staffing agency) to benefit from the claim-preclusive effect of a judgment that undoubtedly binds an opposing party (the nurse).
That argument is not persuasive. We recently explained that privity “requires the sharing of ‘an identity or community of interest,’ with ‘adequate representation’ of that interest in the first suit, and circumstances such that the nonparty ‘should reasonably have expected to be bound’ by the first suit.” (DKN Holdings, supra, 61 Cal.4th at p. 826.) There is no such privity here because of the hospital and staffing agency’s different legal interests. Nor can preclusion be based on a claimed indemnification or agency relationship between those litigants. We will thus affirm the judgment of the Court of Appeal.
Hamilton v. Wal-Mart Stores (9th Cir. 19-56161 6/30/22) PAGA/Manageability
The panel reversed the district court’s dismissal of Alyssa Hernandez’s California Private Attorney General Act (“PAGA”) claims, alleging wage and hour violations, against Wal-Mart Stores, Inc.; and remanded for further proceedings.
The district court dismissed some of Hernandez’s PAGA claims on the ground that they were unmanageable and dismissed her remaining PAGA claims as a discovery sanction.
California’s Labor Code allows employees to sue an employer for violating provisions designed to protect the health, safety, and compensation of workers. Following the enactment of PAGA in 2004, employees may stand in the shoes of the Labor Commissioner and recover civil penalties for Labor Code violations. Sections 2699(a) and 2699.3 of PAGA contain requirements for such actions.
The panel first addressed the question whether, in addition to the presuit requirements listed in Cal. Labor Code section 2699.3, an aggrieved employee asserting a PAGA cause of action must also certify the requirements for class certification included in Fed. R. Civ. P. 23. The panel held that the recently decided Viking River Cruises, Inc. v. Moriana, — S. Ct. —, 2022 WL 2135491, at *3 (2022), case expressly foreclosed Walmart’s argument that Hernandez was barred from pursuing her PAGA claims because she did not seek class certification under Rule 23. In addition, given their differing coverage, PAGA and Rule 23 are fully compatible and do not conflict for purposes of the first step of an Erie analysis. The panel also rejected Walmart’s argument that the district court correctly rejected some of Hernandez’s PAGA claims as unmanageable under its inherent authority. The panel held that, in light of the structure and purpose of PAGA, imposing a manageability requirement in PAGA cases akin to that imposed under Rule 23(b)(3) would not constitute a reasonable response to a specific problem and would contradict California law by running afoul of the key features of PAGA actions. The panel concluded that an employee plaintiff need not comply with the Rule 23 requirements, including the “manageability” requirement, to assert a PAGA cause of action.
The panel next addressed the question whether Hernandez’s PAGA claims were barred because of a failure sufficiently to disclose estimated damages under Fed. R. Civ. P. 26(a). The panel held that Rule 26(a) applied to claims for damages. Hernandez’s PAGA claims seek civil penalties, not damages, so Rule 26(a) does not apply to her PAGA claims.
The panel addressed remaining claims raised on appeal in a concurrently filed memorandum disposition.
California Business & Industrial Alliance v. Becerra (CA4/3 G059561 6/30/22) PAGA/Separation of Powers
Plaintiff California Business & Industrial Alliance appeals from a judgment of dismissal entered after the trial court sustained the demurrer of defendant Xavier Becerra, in his official capacity as Attorney General of the State of California, without leave to amend. Plaintiff, a lobbying group for small and midsized businesses in California, filed this action seeking a judicial declaration that the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.), is unconstitutional under various theories and an injunction forbidding defendant from implementing or enforcing PAGA. PAGA allows California employees to sue their employers and pursue civil penalties on behalf of the state for violations relating not only to themselves, but also to other California employees of the same employer.
On appeal, plaintiff asserts a single theory: that PAGA violates California’s separation of powers doctrine by allowing private citizens to seek civil penalties on the state’s behalf without the executive branch exercising sufficient prosecutorial discretion. We reject this theory for two reasons. First, our Supreme Court held in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian), that “PAGA does not violate the principle of separation of powers under the California Constitution.” (Id. at p. 360.) Despite plaintiff’s allegation in its complaint that Iskanian is “incorrect,” and its arguments before us that this statement is either “dictum” or is limited to a different type of separation of powers challenge, Iskanian is directly on point and controlling, and we have no authority to defy its mandate.
Second, even if Iskanian did not require this result, we would reach it anyway through application of California’s preexisting separation of powers doctrine. PAGA is not meaningfully distinguishable from comparable qui tam statutes outside the employment context, including the California False Claims Act (Gov. Code, § 12650 et seq.) the Insurance Frauds Prevention Act (Ins. Code, § 1871 et seq.) the Safe Drinking Water and Toxic Enforcement Act of 1986, colloquially known as Proposition 65 (Health & Saf. Code § 25249.5 et seq.) and many others. Plaintiff and its supporting amici fail to produce even one single case in which any of these many statutes has been held to violate California’s separation of powers doctrine. Nor do they identify any sufficiently significant distinctions between those statutes and PAGA, or any other compelling reason for us to break new ground.
Accordingly, we affirm the judgment of the trial court.
Bill Signed by Governor
AB 189 by Committee on Budget and Fiscal Review. State Government – Name changes of DFEH to Civil Rights Department (CRD) and FEHC to Civil Rights Council (CRC)
Callahan v. Brookdale Senior Living Cmties. (9th Cir. 20-55603 6/29/22) PAGA Intervention
The panel affirmed the district court’s denial of Michelle Neverson’s motion to intervene, and dismissed Neverson’s appeal of the district court’s approval of the Private Attorneys General Act (“PAGA”) settlement between Carolyn Callahan and her former employer, Brookdale Senior Living Communities, Inc.
Callahan brought the action pursuant to California’s PAGA, Cal. Lab. Code sections 2698-2699.5, which allows aggrieved employees to recover civil penalties for Labor Code violations on behalf of themselves, the state, or other employees. Callahan and Brookdale agreed to a settlement. Neverson, who was a plaintiff in an overlapping PAGA case against Brookdale, filed a motion to intervene in Callahan’s action to object to the PAGA settlement.
The panel held that Neverson was not a party to Callahan’s case and could not appeal the approval of the PAGA settlement.
The panel first considered whether Neverson was entitled to intervene in Callahan’s case as a matter of right under Fed. R. Civ. P. 24(a)(2). The panel held that Neverson’s motion for intervention as a matter of right failed at the fourth and final prong of the Wilderness Society v. U.S. Forest Serv., 630 F.3d 1173, 1177 (9th Cir. 2011), test, which requires that an applicant’s interest must be inadequately represented by the parties to the action. Here, Neverson and Callahan had the same ultimate objective: to obtain civil penalties on behalf of the California Labor & Workforce Development Agency (“LWDA”) under PAGA. Given this identity of interest, Neverson needed to make a compelling showing to demonstrate inadequate representation. The panel concluded she failed to make this required showing. Accordingly, the panel affirmed the district court’s denial of Neverson’s motion to intervene as of right.
The panel next considered whether the district court abused its discretion in denying Neverson permissive intervention under Fed. R. Civ. P. 24(b). The district court held that the discretionary factors governing permissive intervention pointed strongly against intervention: both Callahan and Neverson are deputized agents of the LWDA who assert the interests of the LWDA, and allowing Neverson to intervene would not significantly contribute to the factual development of issues in the case. The panel concluded that the district court did not err in denying Neverson permissive intervention, and affirmed the denial of Neverson’s motion to intervene.
Because Neverson’s motion to intervene was properly denied, she never became a party to the PAGA action. As a non-party to this action, Neverson had no right to appeal the district court’s approval of the PAGA settlement. The panel dismissed her appeal of the settlement approval, and did not consider whether the district court abused its discretion in approving the settlement.
Essick v. County of Sonoma (CA1/4 A162887 6/29/22) Public Safety Officers Procedural Bill of Rights Act
Following the submission to the County of Sonoma (the County) of a harassment complaint against Mark Essick, the elected sheriff of the County, an independent investigator, Ms. Amy Oppenheimer, conducted an inquiry and prepared a written report. A local newspaper requested that the County release the complaint, the report, and various related documents (collectively, the Oppenheimer Report) pursuant to the California Public Records Act (CPRA) (Gov. Code, § 6250 et seq.). Sheriff Essick objected to the County’s release of the Oppenheimer Report. In this “reverse” CPRA action, the trial court denied his request for a preliminary injunction barring the Oppenheimer Report’s release.
Sheriff Essick appeals, contending the trial court erred because (1) the Oppenheimer Report should be classified as confidential under an exemption to the CPRA (Gov. Code, § 6254, subd. (k)), either as a “peace officer” “personnel record” (Pen. Code, §§ 832.7, subd. (a), 832.8, subd. (a)) or because it constitutes a “report or findings” relating to a complaint by a member of the public against a peace officer (Pen. Code, §§ 832.5, subd. (b), 832.7, subd. (a)); and (2) the County should be estopped to release the Oppenheimer Report because it promised him that, in conducting its investigation, it would abide by Government Code section 3300 et seq. (the Public Safety Officers Procedural Bill of Rights Act) (POBRA), and it therefore should be bound to keep the results of the investigation confidential. We disagree on both points and will affirm.
Torres v. Texas Dep’t of Public Safety (US 20–603 6/29/22) USERRA/Sovereign Immunity
Article I of the Constitution grants Congress the power “[t]o raise and support Armies” and “[t]o provide and maintain a Navy.” §8, cls. 1, 12–13. Pursuant to that authority, Congress enacted the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which gives returning service members the right to reclaim their prior jobs with state employers and authorizes suit if those employers refuse to accommodate veterans’ service-related disabilities. See 38 U. S. C. §4301 et seq. Petitioner Le Roy Torres enlisted in the Army Reserves in 1989. In 2007, he was called to active duty and deployed to Iraq. While serving, Torres was exposed to toxic burn pits, a method of garbage disposal that sets open fire to all manner of trash, human waste, and military equipment. Torres received an honorable discharge. But he returned home with constrictive bronchitis, a respiratory condition that narrowed his airways and made breathing difficult. These ailments, Torres says, left him unable to work his old job as a state trooper. Torres asked his former employer, respondent Texas Department of Public Safety (Texas), to accommodate his condition by reemploying him in a different role. Texas refused. So Torres sued Texas in state court to enforce his rights under USERRA. §4313(a)(3). Texas tried to dismiss the suit by invoking sovereign immunity. The trial court denied the State’s motion. An intermediate appellate court reversed, reasoning that, under this Court’s case law, Congress could not authorize private suits against nonconsenting States pursuant to its Article I powers except under the Bankruptcy Clause, citing Central Va. Community College v. Katz, 546 U. S. 356. The Supreme Court of Texas denied discretionary review. After the decision below, this Court issued PennEast Pipeline Co. v. New Jersey, 594 U. S. ___. PennEast held that the States waived their sovereign immunity as to the federal eminent domain power pursuant to the “plan of the Convention.” The Court then granted Torres’ petition for certiorari to determine whether, in light of that intervening ruling, USERRA’s damages remedy against state employers is constitutional.
Held: By ratifying the Constitution, the States agreed their sovereignty would yield to the national power to raise and support the Armed Forces. Congress may exercise this power to authorize private damages suits against nonconsenting States, as in USERRA. Pp. 3–16.
(a) While courts generally may not hear private suits against nonconsenting States, see Blatchford v. Native Village of Noatak, 501 U. S. 775, 779, the States remain subject to suit in certain circumstances. States may consent to suit, see Sossamon v. Texas, 563 U. S. 277, 284; Congress may abrogate States’ immunity under the Fourteenth Amendment, see Fitzpatrick v. Bitzer, 427 U. S. 445, 456; and, as relevant here, States may be sued if they agreed their sovereignty would yield to the exercise of a particular federal power as part of the “plan of the Convention,” PennEast, 594 U. S., at ___—that is, if “the structure of the original Constitution itself” reflects a waiver of States’ immunity, Alden v. Maine, 527 U. S. 706, 728.
Consistent with these principles, the Court long ago found structural waiver as to suits between States, see South Dakota v. North Carolina, 192 U. S. 286, and suits by the United States against a State, see United States v. Texas, 143 U. S. 621. A century later, in Central Va. Community College v. Katz, 546 U. S. 356, the Court recognized another structural waiver, holding that Congress may authorize private suits against States under the Bankruptcy Clause. For several years, both before and after Katz, the Court declined to acknowledge additional waivers of sovereign immunity under Congress’ Article I powers or to find Article I authority to abrogate immunity. See, e.g., Seminole Tribe of Fla. v. Florida, 517 U. S. 44; Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627. Last Term, in PennEast, the Court considered whether Congress could, pursuant to its eminent domain power, authorize private suits against States to enforce federally approved condemnations necessary to build interstate pipelines. PennEast held that Congress could authorize such suits because, upon entering the federal system, the States implicitly agreed their “eminent domain power would yield to that of the Federal Government.” 594 U. S., at ___. PennEast defined the test for structural waiver as whether the federal power is “complete in itself, and the States consented to the exercise of that power—in its entirety—in the plan of the Convention.” Id., at ___. Pp. 4–6.
(b) Congress’ power to build and maintain the Armed Forces fits PennEast’s test, as the Constitution’s text, its history, and this Court’s precedents show. To begin, the Constitution’s text strongly suggests a complete delegation of authority to the Federal Government to provide for the common defense. Article I spells out Congress’ many related powers across multiple provisions, §8, cls. 1, 11–16; Article II makes the President the “Commander in Chief,” §2, cl. 1; and Article IV charges the Federal Government with “protect[ing]” States “against Invasion,” §4. The Constitution also divests the States of like authority, see Art. I, §10, cls. 1, 3, assigning them only a limited role in “the Appointment of the Officers” to and the “training [of] the Militia,” “according to the discipline prescribed by Congress,” §8, cl. 16. History teaches the same lesson. “[T]he want of power in Congress to raise an army” under the Articles of Confederation had left the National Government “dependen[t] upon the States” to supply military forces via a system of quotas and requisition that had nearly cost the fledging Nation victory in the Revolutionary War. Selective Draft Law Cases, 245 U. S. 366, 381. The Constitution, by design, worked “an entire change in the first principles of the system,” giving Congress direct power over the “formation, direction or support of the NATIONAL FORCES.” The Federalist No. 23, p. 148 (A. Hamilton). By ratifying that document, the States well knew that their sovereignty would give way to national policy to build and maintain the Armed Forces. Consistent with this structural understanding, Congress has long legislated regarding military forces at the expense of state sovereignty. See, e.g., 1 Stat. 182. This Court’s precedents likewise show that ordinary background principles of state sovereignty are displaced in this uniquely federal area. See, e.g., Tarble’s Case, 13 Wall. 397, 398 (the “National government[’s] . . . power ‘to raise and support armies’ ” cannot be “question[ed by] any State authority”); United States v. Oregon, 366 U. S. 643, 648–649 (authority “normally left to the States” is displaced by Congress’ “constitutional powers to raise armies and navies”).
Under PennEast’s test, Congress’ power to build and maintain a national military is “complete in itself”: Upon entering the Union, the States agreed that their sovereignty would “yield . . . so far as is necessary” to federal policy for the Armed Forces. 594 U. S., at ___. Because the States committed not to “thwart” this federal power, “[t]he consent of a State,” including to suit, “can never be a condition precedent” to Congress’ chosen exercise. Id., at ___. Pp. 6–12.
(c) No contention to the contrary persuades the Court otherwise. The categorical claim that Congress may not exercise its Article I powers to abrogate state sovereign immunity ignores the fact that “congressional abrogation is not the only means of subjecting States to suit. . . . States can also be sued if they have consented to suit in the plan of the Convention.” PennEast, 594 U. S., at ___. Nor is USERRA’s text insufficiently clear to displace potential immunity under Texas law. USERRA expressly “supersedes any State law . . . that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.” §4302(b). Neither Seminole Tribe nor Alden compels a different result. Congress’ commerce powers, at issue in Seminole Tribe, are distinguishable from its war powers under PennEast’s “complete in itself” inquiry. And in Alden, the Court expressly embraced “ ‘the postulate that States . . . shall be immune from suits, without their consent, save where there has been “a surrender of this immunity in the plan of the convention.” ’ ” 527 U. S., at 730 (emphasis added). That “save where” proviso recognizes exceptions for structural waivers, supplying the basis for the Court’s decisions in PennEast and Katz, as well as the decision today. Finally, the idea that PennEast and Katz involved in rem actions and the fact that USERRA suits lack a certain founding-era pedigree do not make a difference under PennEast’s basic reasoning.
The Court therefore holds that, in joining together to form a Union, the States agreed to sacrifice their sovereign immunity for the good of the common defense. Pp. 12–16.
583 S. W. 3d 221, reversed and remanded.
BREYER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SOTOMAYOR, KAGAN, and KAVANAUGH, JJ., joined. KAGAN, J., filed a concurring opinion. THOMAS, J., filed a dissenting opinion, in which ALITO, GORSUCH, and BARRETT, JJ., joined.
Seviour-Iloff v. LaPaille (CA1/1 A163503 6/28/22) Wage and Hour
Plaintiffs Elsie Seviour-Iloff and Laurance Iloff (jointly, plaintiffs) filed wage claims with the Division of Labor Standards Enforcement (DLSE) against defendants Cynthia LaPaille and Bridgeville Properties, Inc. (BPI) for unpaid wages in violation of the Labor Code. Plaintiffs received a favorable order from the Labor Commissioner, and BPI appealed to the superior court. Following a de novo trial on the wage claims, the superior court found plaintiffs were entitled to unpaid wages and certain penalties but rejected plaintiffs’ unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.) claims, declined to award other penalties, and did not impose personal liability on Cynthia LaPaille, the chief executive officer of BPI.
On appeal, plaintiffs contend the trial court (1) miscalculated the statute of limitations when awarding unpaid wages, (2) erred in declining to impose personal liability on LaPaille, (3) erred in declining to award liquidated damages under Labor Code section 1194.2 or administrative penalties under section 248.5, (4) abused its discretion in denying their UCL claims, and (5) miscalculated the waiting time penalties. We conclude the trial court miscalculated the statute of limitations, and erred in declining to impose personal liability on LaPaille. We further conclude the trial court failed to properly calculate the waiting time penalties owed to plaintiffs, and remand to the trial court to recalculate those penalties in accordance with this opinion. In all other respects, we affirm the judgment.
Broome v. The Regents of the U. of Cal. (CA1/5 A160591.6/27/22) Public Employment Pension Benefits
Anne Broome and William Gurtner (Plaintiffs), retired employees of the University of California (University), sued the University’s governing body, the Board of Regents (Regents), for breach of contract, promissory estoppel, and related claims, alleging Regents violated an obligation to provide them with certain pension benefits. The trial court issued judgment in favor of Regents and Plaintiffs appeal. We affirm
Kennedy v. Bremerton School District (US 21–418 6/27/22) First Amendment Freedom of Religion/Free Exercise and Free Speech Clauses
Petitioner Joseph Kennedy lost his job as a high school football coach in the Bremerton School District after he knelt at midfield after games to offer a quiet personal prayer. Mr. Kennedy sued in federal court, alleging that the District’s actions violated the First Amendment’s Free Speech and Free Exercise Clauses. He also moved for a preliminary injunction requiring the District to reinstate him. The District Court denied that motion, and the Ninth Circuit affirmed. After the parties engaged in discovery, they filed cross-motions for summary judgment. The District Court found that the “‘sole reason’” for the District’s decision to suspend Mr. Kennedy was its perceived “risk of constitutional liability” under the Establishment Clause for his “religious conduct” after three games in October 2015. 443 F. Supp. 3d 1223, 1231. The District Court granted summary judgment to the District and the Ninth Circuit affirmed. The Ninth Circuit denied a petition to rehear the case en banc over the dissents of 11 judges. 4 F. 4th 910, 911. Several dissenters argued that the panel applied a flawed understanding of the Establishment Clause reflected in Lemon v. Kurtzman, 403 U. S. 602, and that this Court has abandoned Lemon’s “ahistorical, atextual” approach to discerning Establishment Clause violations. 4 F. 4th, at 911, and n. 3.
Held: The Free Exercise and Free Speech Clauses of the First Amendment protect an individual engaging in a personal religious observance from government reprisal; the Constitution neither mandates nor permits the government to suppress such religious expression. Pp. 11–32.
(a) Mr. Kennedy contends that the District’s conduct violated both the Free Exercise and Free Speech Clauses of the First Amendment. Where the Free Exercise Clause protects religious exercises, the Free Speech Clause provides overlapping protection for expressive religious activities. See, e.g., Widmar v. Vincent, 454 U. S. 263, 269, n. 6. A plaintiff must demonstrate an infringement of his rights under the Free Exercise and Free Speech Clauses. If the plaintiff carries his or her burden, the defendant must show that its actions were nonetheless justified and appropriately tailored. Pp. 11–30.
(1) Mr. Kennedy discharged his burden under the Free Exercise Clause. The Court’s precedents permit a plaintiff to demonstrate a free exercise violation multiple ways, including by showing that a government entity has burdened his sincere religious practice pursuant to a policy that is not “neutral” or “generally applicable.” Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U. S. 872, 879– 881. Failing either the neutrality or general applicability test is sufficient to trigger strict scrutiny, under which the government must demonstrate its course was justified by a compelling state interest and was narrowly tailored in pursuit of that interest. See, e.g., Church of Lukumi Babalu Aye, Inc. v. Hialeah, 508 U. S. 520, 546.
Here, no one questions that Mr. Kennedy seeks to engage in a sincerely motivated religious exercise involving giving “thanks through prayer” briefly “on the playing field” at the conclusion of each game he coaches. App. 168, 171. The contested exercise here does not involve leading prayers with the team; the District disciplined Mr. Kennedy only for his decision to persist in praying quietly without his students after three games in October 2015. In forbidding Mr. Kennedy’s brief prayer, the District’s challenged policies were neither neutral nor generally applicable. By its own admission, the District sought to restrict Mr. Kennedy’s actions at least in part because of their religious character. Prohibiting a religious practice was thus the District’s unquestioned “object.” The District explained that it could not allow an on-duty employee to engage in religious conduct even though it allowed other on-duty employees to engage in personal secular conduct. The District’s performance evaluation after the 2015 football season also advised against rehiring Mr. Kennedy on the ground that he failed to supervise student-athletes after games, but any sort of postgame supervisory requirement was not applied in an evenhanded way. Pp. 12–14. The District thus conceded that its policies were neither neutral nor generally applicable.
(2) Mr. Kennedy also discharged his burden under the Free Speech Clause. The First Amendment’s protections extend to “teachers and students,” neither of whom “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.” Tinker v. Des Moines Independent Community School Dist., 393 U. S. 503, 506. But teachers and coaches are also government employees paid in part to speak on the government’s behalf and to convey its intended messages. To account for the complexity associated with the interplay between free speech rights and government employment, this Court’s decisions in Pickering v. Board of Ed. of Town-ship High School Dist. 205, Will Cty., 391 U. S. 563, and Garcetti v. Ceballos, 547 U. S. 410, and related cases suggest proceeding in two steps. The first step involves a threshold inquiry into the nature of the speech at issue. When an employee “speaks as a citizen addressing a matter of public concern,” the Court’s cases indicate that the First Amendment may be implicated and courts should proceed to a second step. Id., at 423. At this step, courts should engage in “a delicate balancing of the competing interests surround-ing the speech and its consequences.” Ibid. At the first step of the Pickering–Garcetti inquiry, the parties’ disagreement centers on one question: Did Mr. Kennedy offer his prayers in his capacity as a private citizen, or did they amount to government speech attributable to the District?
When Mr. Kennedy uttered the three prayers that resulted in his suspension, he was not engaged in speech “ordinarily within the scope” of his duties as a coach. Lane v. Franks, 573 U. S. 228, 240. He did not speak pursuant to government policy and was not seeking to convey a government-created message. He was not instructing players, discussing strategy, encouraging better on-field performance, or engaged in any other speech the District paid him to produce as a coach. Simply put: Mr. Kennedy’s prayers did not “ow[e their] existence” to Mr. Kennedy’s responsibilities as a public employee. Garcetti, 547 U. S., at 421. The timing and circumstances of Mr. Kennedy’s prayers—during the postgame period when coaches were free to attend briefly to personal matters and students were engaged in other activities—confirms that Mr. Kennedy did not offer his prayers while acting within the scope of his duties as a coach. It is not dispositive that Coach Kennedy served as a role model and remained on duty after games. To hold otherwise is to posit an “excessively broad job descriptio[n]” by treating everything teachers and coaches say in the workplace as government speech subject to government control. Garcetti, 547 U. S., at 424. That Mr. Kennedy used available time to pray does not transform his speech into government speech. Acknowledging that Mr. Kennedy’s prayers represented his own private speech means he has carried his threshold burden. Under the Pickering–Garcetti framework, a second step remains where the government may seek to prove that its interests as employer outweigh even an employee’s private speech on a matter of public concern. See Lane, 573 U. S., at 242. Pp. 15–19.
(3) Whether one views the case through the lens of the Free Exercise or Free Speech Clause, at this point the burden shifts to the District. Under the Free Exercise Clause, a government entity normally must satisfy at least “strict scrutiny,” showing that its restrictions on the plaintiff’s protected rights serve a compelling interest and are narrowly tailored to that end. See Lukumi, 508 U. S., at 533. A similar standard generally obtains under the Free Speech Clause. See Reed v. Town of Gilbert, 576 U. S. 155, 171. The District asks the Court to apply to Mr. Kennedy’s claims the more lenient second-step Pickering–Garcetti test, or alternatively, intermediate scrutiny. The Court concludes, however, that the District cannot sustain its burden under any standard. Pp. 19–30.
i. The District, like the Ninth Circuit below, insists Mr. Kennedy’s rights to religious exercise and free speech must yield to the District’s interest in avoiding an Establishment Clause violation under Lemon and its progeny. The Lemon approach called for an examination of a law’s purposes, effects, and potential for entanglement with religion. Lemon, 403 U. S., at 612–613. In time, that approach also came to involve estimations about whether a “reasonable observer” would consider the govern-ment’s challenged action an “endorsement” of religion. See, e.g., County of Allegheny v. American Civil Liberties Union, Greater Pittsburgh Chapter, 492 U. S. 573, 593. But—given the apparent “shortcomings” associated with Lemon’s “ambitiou[s],” abstract, and ahistorical approach to the Establishment Clause—this Court long ago abandoned Lemon and its endorsement test offshoot. American Legion v. American Humanist Assn., 588 U. S. ___, ___ (plurality opinion).
In place of Lemon and the endorsement test, this Court has instructed that the Establishment Clause must be interpreted by “‘reference to historical practices and understandings.’ ” Town of Greece v. Galloway, 572 U. S. 565, 576. A natural reading of the First Amendment suggests that the Clauses have “complementary” purposes, not warring ones where one Clause is always sure to prevail over the others. Everson v. Board of Ed. of Ewing, 330 U. S. 1, 13, 15. An analysis focused on original meaning and history, this Court has stressed, has long represented the rule rather than some “‘exception’” within the “Court’s Establishment Clause jurisprudence.” Town of Greece, at 575. The District and the Ninth Circuit erred by failing to heed this guidance. Pp. 19–30.
ii. The District next attempts to justify its suppression of Mr. Kennedy’s religious activity by arguing that doing otherwise would coerce students to pray. The Ninth Circuit did not adopt this theory in proceedings below and evidence of coercion in this record is absent. The District suggests that any visible religious conduct by a teacher or coach should be deemed—without more and as a matter of law—impermissibly coercive on students. A rule that the only acceptable government role models for students are those who eschew any visible religious expression would undermine a long constitutional tradition in which learning how to tolerate diverse expressive activities has always been “part of learning how to live in a pluralistic society.” Lee v. Wesiman, 505 U. S. 577, 590. No historically sound understanding of the Establishment Clause begins to “mak[e] it necessary for government to be hostile to religion” in this way. Zorach v. Clauson, 343 U. S. 306, 314. Pp. 24–30.
iii. There is no conflict between the constitutional commands of the First Amendment in this case. There is only the “mere shadow” of a conflict, a false choice premised on a misconstruction of the Establishment Clause. School Dist. of Abington Township v. Schempp, 374 U. S. 203, 308 (Goldberg, J., concurring). A government entity’s concerns about phantom constitutional violations do not justify actual violations of an individual’s First Amendment rights. Pp. 30–31.
(c) Respect for religious expressions is indispensable to life in a free and diverse Republic. Here, a government entity sought to punish an individual for engaging in a personal religious observance, based on a mistaken view that it has a duty to suppress religious observances even as it allows comparable secular speech. The Constitution neither mandates nor tolerates that kind of discrimination. Mr. Kennedy is entitled to summary judgment on his religious exercise and free speech claims. Pp. 31–32.
991 F. 3d 1004, reversed
GORSUCH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, and BARRETT, JJ., joined, and in which KAVANAUGH, J., joined, except as to Part III–B. THOMAS, J., and ALITO, J., filed concurring opinions. SOTOMAYOR, J., filed a dissenting opinion, in which BREYER and KAGAN, JJ., joined.
P. ex rel. Spitzer v. AWI Builders, Inc. (CA4/3 G059795A 6/22/22) Unfair Competition Law/Labor and Employment Practices in Public Works
In 2015, defendants AWI Builders, Inc. (AWI), Construction Contractors Corporation, Zhirayr Robert Mekikyan, Anna Mekikyan, and Tigran Oganesian (collectively, the AWI defendants) were under criminal investigation by the Orange County District Attorney’s Office (OCDA) and the Riverside County District Attorney’s Office (RCDA) in connection with AWI’s involvement in certain public works projects including AWI’s work on the Orange County Fair project. In October 2015, pursuant to search warrants jointly obtained by OCDA and RCDA, a large amount of AWI’s property was taken into OCDA’s custody.
In 2017, OCDA decided not to pursue criminal charges against the AWI defendants and reassigned the matter to Orange County Deputy District Attorney Kelly Ernby for civil prosecution. In 2018, Ernby filed a civil complaint, on behalf of the People of the State of California and against the AWI defendants, for violations of the unfair competition law (Bus. & Prof. Code, § 17200) (UCL), provided the AWI defendants with a copy of OCDA’s full investigative file, sans privileged documents, and returned documents seized during the criminal investigation to the AWI defendants.
In 2020, the AWI defendants filed a motion seeking an order recusing and disqualifying from this case Ernby, Donde McCament (a now retired Orange County deputy district attorney who was involved in the prior criminal investigation), and the entire OCDA (the motion to recuse). The AWI defendants argued OCDA had engaged in misconduct by, inter alia, improperly handling property seized during the criminal investigation that was protected by the attorney‑client privilege and the work product doctrine. The AWI defendants also argued that in the instant UCL action, Ernby had wrongfully threatened one of the AWI defendants, their counsel, and a paralegal with criminal prosecution, a claim Ernby categorically denied.
After requesting supplemental briefing and evidence on the issue of OCDA’s handling of privileged material received through the execution of the search warrants, the trial court denied the motion to recuse.
We affirm. The AWI defendants do not challenge the sufficiency of the evidence supporting the trial court’s findings. The trial court did not err by denying the motion to recuse because the evidence showed that no conflict of interest existed that would render it unlikely that the AWI defendants would receive a fair trial. (Pen. Code, § 1424, subd. (a) (section 1424(a)).)
We publish this opinion for two reasons. First, we hold that a motion seeking to disqualify a district attorney from pursuing civil claims against a party under the UCL must be decided under section 1424(a). In 1985, the Legislature amended and broadened the scope of section 1424(a) (Stats. 1985, ch. 24, § 1, p. 2391), from applying only to motions to disqualify a district attorney from prosecuting a criminal case to motions to disqualify a district attorney from “performing an authorized duty.” (See In re Marriage of Abernethy (1992) 5 Cal.App.4th 1193, 1198-1199.) This is in contrast to subdivision (b)(1) of Penal Code section 1424, which limits the statute’s application to motions seeking to disqualify a city attorney or city prosecutor “from performing an authorized duty involving a criminal matter.” (Italics added; see City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 850 [holding Pen. Code, § 1424 inapplicable to civil action filed by city attorney].) Section 17206, subdivision (a), of the Business and Professions Code authorizes a district attorney to bring a civil action under the UCL. Because the prosecution of civil claims under the UCL qualifies as an authorized duty of the district attorney within the meaning of section 1424(a), a motion to recuse a district attorney in such a case must be resolved under that code section.
Second, we hold that an order denying a motion to recuse under section 1424(a) is an appealable order because it constitutes an order refusing to grant an injunction within the meaning of Code of Civil Procedure section 904.1, subdivision (a)(6). In other words, applying Meehan v. Hopps (1955) 45 Cal.2d 213, 214-218 (Meehan), an order denying such a motion is an order that refuses to enjoin counsel from further participation in the case and is therefore appealable.
Estrada v. Royalty Carpet Mills, Inc., 76 Cal.App.5th 685 (2022) (S274340/G058397 review granted 6/22/22) PAGA
Petition for review after affirmance in part and reversal in part of judgment. Do trial courts have inherent authority to ensure that claims under the Private Attorneys General Act (Lab. Code, § 2698 et seq.) will be manageable at trial, and to strike or narrow such claims if they cannot be managed? Review granted/brief due.