Dhillon v. John Muir Health (SC S224472 5/25/17) Disciplinary Action/Writ Appeal
As a general rule, a litigant may appeal an adverse ruling only after the trial court renders a final judgment. (Code Civ. Proc., § 904.1.) The question in this case concerns the application of this general rule when a trial court has granted a petition for writ of administrative mandamus and remanded the matter for proceedings before an administrative body. The issuance of the writ did not definitively resolve the dispute between the parties, but it did mark the end of the writ proceeding in the trial court. Is the court’s order an appealable final judgment? We conclude that it is, and we reverse the contrary judgment of the Court of Appeal.
EEOC V. McLane Co. (9th Cir. 13-15126 on rem. 5/24/17) EEOC/Subpoena
On remand from the United States Supreme Court, the panel vacated the district court’s order denying enforcement of an administrative subpoena issued by the Equal Employment Opportunity Commission to McLane Company as part of an investigation of a sex discrimination claim.
The EEOC alleged that McLane discriminated the basis of sex when it fired a former employee after she failed to pass a physical capability strength test. As relevant here, the subpoena requested “pedigree information” (name, Social Security number, last known address, and telephone number) for employees or prospective employees who took the test. The panel held that the district court abused its discretion by denying enforcement of the subpoena because the information was relevant to the EEOC’s investigation.
The panel vacated the district court’s order denying enforcement of the subpoena and remanded for further proceedings. The panel held that on remand McLane was free to renew its argument that the EEOC’s request for pedigree information was unduly burdensome. The panel further instructed that on remand, the district court should resolve whether producing a second category of evidence—the reasons test takers were terminated—would be unduly burdensome to McLane.
Bartoni v. American Medical Response West (CA1/2 A143784, filed 4/25/17, pub. ord. 5/24/17) PAGA Meal & Rest Periods/UCL/Class Certification
Current and former employees of an ambulance service company sued their employer, alleging that its meal and rest period policies violate California law. Their complaint alleges claims on behalf of a proposed class as well as non-class claims concerning those same meal and rest period policies under Labor Code section 2698 et seq., the Private Attorneys General Act of 2004 (PAGA).
Before us is plaintiffs’ appeal of the trial court’s denial of their motion for class certification. The appeal raises two issues. First, is the order denying class certification appealable under the “death knell” doctrine, where plaintiffs’ PAGA claims remain pending? Second, did the trial court err in denying class certification? We will exercise our discretion to treat the appeal as a writ petition, and therefore we need not decide the first question. We conclude that the trial court’s denial of class certification rests in part on an incorrect legal assumption about the nature of rest periods, and therefore we will remand part of the matter for further consideration.
Demetris v. Transp. Workers Union of Am. (9th Cir. 15-15229 5/22/17) Railway Labor Act/Duty of Fair Representation
The panel affirmed the district court’s dismissal of two consolidated actions brought under the Railway Labor Act, alleging a union’s breach of the duty of fair representation in the decision to distribute the proceeds of a bankruptcy settlement to all of its members unevenly.
American Airlines, Inc. and American Eagle Airlines, Inc. filed for Chapter 11 bankruptcy and negotiated new collective bargaining agreements with Transport Workers Union of America, AFL-CIO, which represented mechanics, fleet service workers, and other laborers. The new agreements cut pension and medical benefits for union members and granted the union a stake in the equity that would be granted to unsecured creditors in the bankruptcy. The union and American also negotiated an early separation program whereby more senior union members could choose voluntarily to leave American in exchange for lump-sum cash payments.
Union members who took advantage of the early separation program alleged that the union breached its duty of fair representation by excluding them from the bulk of the equity distribution. The panel held that there was no breach of duty because the union’s conduct was not arbitrary, discriminatory, or in bad faith.
Garcia v. Pexco (CA4/3 G052872, filed 4/24/17, pub. ord. 5/16/17) Arbitration/Agency Exception
Narciso Garcia appeals from an order granting defendant Pexco, LLC’s (Pexco) motion to compel arbitration. Garcia opposed the motion on the ground Pexco was not a party to the arbitration agreement. We find Garcia is equitably estopped from denying Pexco’s right to arbitrate and the agency exception applies. We affirm the order of the trial court compelling arbitration between Pexco and Garcia.
Orzechowski v. Boeing Co. Non-Union Long-term Disability Plan (9th Cir. 14-55919 5/11/17) ERISA
The panel reversed the district court’s judgment, after a bench trial, in favor of the defendants in an ERISA action challenging a decision to terminate the plaintiff’s long-term disability benefits.
The district court reviewed the benefits decision for an abuse of discretion because the ERISA plan gave defendants discretionary authority. The panel held that de novo review was required under California Insurance Code § 10110.6, which voided the discretionary clause contained in the plan.
The panel held that § 10110.6 is not preempted by ERISA because it falls within the savings clause set forth in 29 U.S.C. § 1144(b)(2)(A). Agreeing with the Seventh Circuit, the panel concluded that § 10110.6 is directed toward entities engaged in insurance, and it substantially affects the risk-pooling arrangement between the insurer and the insured.
The panel held that § 10110.6 applied to the plaintiff’s claim because the relevant insurance policy renewed after the statute’s effective date. The panel remanded the case to the district court.
Mendoza v. Nordstrom, Inc. (SC S224611 5/8/17) Day of Rest
The Ninth Circuit Court of Appeals has asked this court to resolve unsettled questions concerning the construction of the state’s day of rest statutes, Labor Code sections 550–558.1. (Mendoza v. Nordstrom, Inc. (9th Cir. 2015) 778 F.3d 834; see Cal. Rules of Court, rule 8.548.) These statutes prohibit an employer from “caus[ing] his employees to work more than six days in seven” (§ 552), but do not apply “when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof” (§ 556).
The Ninth Circuit asks:
Is the day of rest required by sections 551 and 552 calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?
Does the section 556 exemption for workers employed six hours or less per day apply so long as an employee works six hours or less on at least one day of the applicable week, or does it apply only when an employee works no more than six hours on each and every day of the week?
What does it mean for an employer to “cause” an employee to go without a day of rest (§ 552): force, coerce, pressure, schedule, encourage, reward, permit, or something else? (See Mendoza v. Nordstrom, Inc., supra, 778 F.3d at p. 837.)
We answer, as more fully explained below:
A day of rest is guaranteed for each workweek. Periods of more than six consecutive days of work that stretch across more than one workweek are not per se prohibited.
The exemption for employees working shifts of six hours or less applies only to those who never exceed six hours of work on any day of the workweek. If on any one day an employee works more than six hours, a day of rest must be provided during that workweek, subject to whatever other exceptions might apply.
An employer causes its employee to go without a day of rest when it induces the employee to forgo rest to which he or she is entitled. An employer is not, however, forbidden from permitting or allowing an employee, fully apprised of the entitlement to rest, independently to choose not to take a day of rest.
Park v. Bd. Trustees Cal. State Univ. (SC S229728 5/4/17) FEHA National Origin Discrimination/Anti-SLAPP
To combat lawsuits designed to chill the exercise of free speech and petition rights (typically known as strategic lawsuits against public participation, or SLAPPs), the Legislature has authorized a special motion to strike claims that are based on a defendant’s engagement in such protected activity. (See Code Civ. Proc., § 425.16, subd. (a).) We consider a question that has generated uncertainty in the Courts of Appeal: What nexus must a defendant show between a challenged claim and the defendant’s protected activity for the claim to be struck?
As we explain, a claim is not subject to a motion to strike simply because it contests an action or decision that was arrived at following speech or petitioning activity, or that was thereafter communicated by means of speech or petitioning activity. Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted. Because the Court of Appeal ruled to the contrary, holding a claim alleging a discriminatory decision is subject to a motion to strike so long as protected speech or petitioning activity contributed to that decision, we reverse.
Bank of America Corp. v. Miami (US 15–1111 5/1/17) Fair Housing Act/Predatory Loans
The City of Miami filed suit against Bank of America and Wells Fargo (Banks), alleging violations of the Fair Housing Act (FHA or Act). The FHA prohibits, among other things, racial discrimination in connection with real-estate transactions, 42 U. S. C. §§3604(b), 3605(a), and permits any “aggrieved person” to file a civil damages action for a violation of the Act, §§3613(a)(1)(A), (c)(1). The City’s complaints charge that the Banks intentionally targeted predatory practices at African-American and Latino neighborhoods and residents, lending to minority borrowers on worse terms than equally creditworthy nonminority borrowers and inducing defaults by failing to extend refinancing and loan modifications to minority borrowers on fair terms. The City alleges that the Banks’ discriminatory conduct led to a disproportionate number of foreclosures and vacancies in majority-minority neighborhoods, which impaired the City’s effort to assure racial integration, diminished the City’s property-tax revenue, and increased demand for police, fire, and other municipal services. The District Court dismissed the complaints on the grounds that (1) the harms alleged fell outside the zone of interests the FHA protects and (2) the complaints failed to show a sufficient causal connection between the City’s injuries and the Banks’ discriminatory conduct. The Eleventh Circuit reversed.
1. The City is an “aggrieved person” authorized to bring suit under the FHA. In addition to satisfying constitutional standing requirements, see Spokeo, Inc. v. Robins, 578 U. S. ___, ___, a plaintiff must show that the statute grants the plaintiff the cause of action he or she asserts. It is presumed that a statute ordinarily provides a cause of action “only to plaintiffs whose interests ‘fall within the zone of interests protected by the law invoked.’” Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U. S. ___, ___.
The City’s claims of financial injury are, at the least, “arguably within the zone of interests” the FHA protects. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U. S. 150, 153. The FHA defines an “aggrieved person” as “any person who” either “claims to have been injured by a discriminatory housing practice” or believes that such an injury “is about to occur,” 8 U. S. C. §3602(i). This Court has said that the definition of “person aggrieved” in the original version of the FHA “showed ‘a congressional intention to define standing as broadly as is permitted by Article III of the Constitution,’” Trafficante v. Metropolitan Life Ins. Co., 409 U. S. 205, 209; and has held that the Act permits suit by parties similarly situated to the City, see, e.g., Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91 (village alleging that it lost tax revenue and had the racial balance of its community undermined by racial-steering practices). Against the backdrop of those decisions, Congress did not materially alter the definition of person “aggrieved” when it reenacted the current version of the Act.
The Banks nonetheless contend that the definition sets boundaries that fall short of those the Constitution sets. Even assuming that some form of their argument is valid, this Court concludes that the City’s financial injuries fall within the zone of interests that the FHA protects. The City’s claims are similar in kind to those of the Village of Bellwood, which the Court held in Gladstone, supra, could bring suit under the FHA. The Court explained that the defendants’ discriminatory conduct adversely affected the village by, among other things, producing a “significant reduction in property values [that] directly injures a municipality by diminishing its tax base, thus threatening its ability to bear the costs of local government and to provide services.” Id., at 110–111. The City’s alleged economic injuries thus arguably fall within the FHA’s zone of interests, as this Court has previously interpreted that statute. Stare decisis principles compel the Court’s adherence to those precedents, and principles of statutory interpretation demand that the Court respect Congress’ decision to ratify those precedents when it reenacted the relevant statutory text. Pp. 5–9.
2. The Eleventh Circuit erred in concluding that the complaints met the FHA’s proximate-cause requirement based solely on the finding that the City’s alleged financial injuries were foreseeable results of the Banks’ misconduct. A claim for damages under the FHA is akin to a “tort action,” Meyer v. Holley, 537 U. S. 280, 285, and is thus subject to the common-law requirement that loss is attributable “‘to the proximate cause, and not to any remote cause,’” Lexmark, 572 U. S., at ___. The proximate-cause analysis asks “whether the harm alleged has a sufficiently close connection to the conduct the statute prohibits.” Id., at ___. With respect to the FHA, foreseeability alone does not ensure the required close connection. Nothing in the statute suggests that Congress intended to provide a remedy for any foreseeable result of an FHA violation, which may “‘cause ripples of harm to flow’” far beyond the defendant’s misconduct, Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519, 534; and doing so would risk “massive and complex damages litigation,” id., at 545. Rather, proximate cause under the FHA requires “some direct relation between the injury asserted and the injurious conduct alleged.” Holmes v. Securities Investors Protection Corporation, 503 U. S. 258, 268. The Court has repeatedly applied directness principles to statutes with “common-law foundations.” Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 457. “‘The general tendency’” in these cases, “‘in regard to damages at least, is not to go beyond the first step.’” Hemi Group, LLC v. City of New York, 559 U. S. 1, 10. What falls within that step depends in part on the “nature of the statutory cause of action,” Lexmark, supra, at ___, and an assessment “ of what is administratively possible and convenient,’” Holmes, supra, at 268.
The Court declines to draw the precise boundaries of proximate cause under the FHA, particularly where neither the Eleventh Circuit nor other courts of appeals have weighed in on the issue. Instead, the lower courts should define, in the first instance, the contours of proximate cause under the FHA and decide how that standard applies to the City’s claims for lost property-tax revenue and increased municipal expenses. Pp. 10–12.
No. 15–1111, 800 F. 3d 1262, and No. 15–1112, 801 F. 3d 1258, vacated and remanded.
BREYER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined. THOMAS, J., filed an opinion concurring in part and dissenting in part, in which KENNEDY and ALITO, JJ., joined. GORSUCH, J., took no part in the consideration
or decision of the cases.
Rizo v. Yovino (9th Cir. 16-15372 4/27/17) Equal Pay Act/Prior Salary/Factor Other Than Sex
The panel vacated the district court’s order denying the defendant employer’s motion for summary judgment on a claim under the Equal Pay Act.
The defendant conceded that it paid the female plaintiff less than comparable male employees for the same work. The defendant sought to establish the affirmative defense that this pay differential was based on a “factor other than sex” by showing that its pay structure was based on employees’ prior salaries. The panel held that under Kouba v. Allstate Ins. Co., 691 F.2d 873 (9th Cir. 1982), prior salary alone can be a “factor other than sex” if the defendant shows that its use of prior salary was reasonable and effectuated a business policy. The panel remanded the case for further proceedings, with instructions that the district court evaluate the business reasons offered by the defendant and determine whether the defendant used prior salary reasonably.
Porter v. Nabors Drilling USA (9th Cir. 15-16985 4/21/17) PAGA/Automatic Bankruptcy Stay
The panel granted the motion of Nabors Drilling USA, L.P. to recognize an automatic stay, triggered by its filing for reorganization under Chapter 11 of the Bankruptcy Code, in a lawsuit file by plaintiff Jeremy Porter, who asserted a claim under California’s Private Attorney General Act of 2004 (“PAGA”).
The panel held that the exception to an automatic stay established in 11 U.S.C § 362(b)(4), described as the governmental regulatory or governmental unit exception, did not apply to a claim brought by a private party under PAGA. Because the governmental unit exception to the automatic bankruptcy stay did not apply to Porter’s PAGA action, the panel concluded that the automatic stay applied to the action, including the appeal currently before the court. The panel suspended further activity in this appeal.
Featherstone v. S. Cal. Permanente Medical (CA2/1 B275225 4/19/17) FEHA/Refusal to Rescind Resignation
Ruth Featherstone (Featherstone) appeals from summary judgment entered against her on claims that her former employer, defendant and respondent Southern California Permanente Medical Group (SCPMG), refused to rescind her resignation in violation of the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12940 et seq.) and public policy.
Specifically, Featherstone alleged that while working for SCPMG she suffered a “temporary” disability, which arose as a result of a “relatively uncommon side effect of the medication” she was taking in late December 2013; this “adverse drug reaction” allegedly caused Featherstone to suffer from an “altered mental state.” While under the influence of this altered mental state, Featherstone resigned from her position with SCPMG—first, she resigned orally in a telephone conversation with her supervisor and then, a few days later, confirmed her resignation in writing in an email to her supervisor. A few days after confirming her resignation in writing, Featherstone requested SCPMG to allow her to rescind her resignation. SCPMG, after considering Featherstone’s request, declined to do so. Featherstone then sued, alleging that SCPMG acted with discriminatory animus by refusing to allow her to rescind her resignation.
We affirm for two principal reasons. First, SCPMG’s refusal to allow Featherstone to rescind her resignation was not an adverse employment action under the FEHA. Second, Featherstone failed to raise a triable issue of fact as to whether the SCPMG employees who accepted and promptly processed her resignation knew of her alleged temporary disability at the time they took those actions. Because Featherstone failed to present evidence raising a triable issue of material fact about the legality of SCPMG’s actions, summary judgment was appropriate.
Cal Fire Local 2881 v. California Public Employees’ Retirement System (2016) 7 Cal.App.5th 11 (SC S239958/A142793 rev. granted 4/12/17) Public Employee Pension/Airtime Service Credits
Petition for review after affirmance of judgment in an action for writ of administrative mandate. (1) Was the option to purchase additional service credits pursuant to Government Code section 20909 (known as “airtime service credits”) a vested pension benefit of public employees enrolled in CalPERS? (2) If so, did the Legislature’s withdrawal of this right through the enactment of the Public Employees’ Pension Reform Act of 2013 (PEPRA) (Gov. Code, §§ 7522.46, 20909, subd. (g)), violate the contracts clauses of the federal and state Constitutions? Review granted/brief due.
Sumrall v. Modern Alloys, Inc. (CA4/3 G052678M, filed 4/13/17, mod. 4/18/17) Workplace/Coming and Going Rule Business Errand Exception
This court hereby orders that the opinion filed herein on April 13, 2017, be modified as follows:
1. On page 1, second paragraph the name “Waylie” is deleted and replaced with “Wylie” so the paragraph reads:
“Law Offices of William J. Kopeny and William J. Kopeny; Aitken, Aitken, Cohn, Wylie A. Aitken and Megan G. Demshki; Hunt & Adams and John C. Adams for Plaintiffs and Appellants.”
2. On page 7, second sentence of the first full paragraph, the word “cannot” is deleted and replaced with “can” so the sentence reads:
“Thus, the question of whether Campos was engaged in a business errand—and was therefore acting within the scope of his employment—is not a question of law that can be resolved in a motion for summary judgment.”
This modification does not change the judgment.
Dunson v. Cordis Corp. (9th Cir. 17-15257 4/14/17) CAFA Removal/Bellwether-Trial Process (consumer case possibly applicable to employment mass actions)
. . . [P]laintiffs requested consolidation for purposes of pretrial proceedings, which standing alone does not trigger removal jurisdiction under CAFA’s mass action provision. The plaintiffs also requested consolidation for purposes of establishing a bellwether-trial process, but nothing they said indicated that they were referring to a bellwether trial whose results would have preclusive effect on the plaintiffs in the other cases. The district court therefore correctly held that removal jurisdiction does not exist under CAFA’s mass action provision, and it properly remanded the cases to state court.
Sumrall v. Modern Alloys, Inc. (CA4/3 G052678 4/13/17) Coming and Going Rule/Business Errand Exception
“In general, an employee is not acting within the scope of employment while travelling to and from the workplace. But if the employee, while commuting, is on an errand for the employer, then the employee’s conduct is within the scope of his or her employment from the time the employee starts on the errand . . . .” (CACI No. 3724 [The Going-and-Coming Rule—Business Errand Exception], italics added; Jeewarat v. Warner Bros. Entertainment Inc. (2009) 177 Cal.App.4th 427, 435-436 (Jeewarat).)
Here, a construction company paid its employee only for the hours he worked at a jobsite. But rather than driving his vehicle directly from his home to the jobsite, the company expected the employee to first commute to the company’s “yard.” The employee would then drive a company truck from the yard to the jobsite, transporting coworkers and materials. One day, while driving from his home to the yard, the employee collided with a motorcyclist, who sued the construction company. The trial court granted defendant summary judgment, finding that the employee was commuting to his “work,” and therefore he was not acting within the scope of his employment.
However, there is a material, triable issue: the location of the “workplace.” If the yard is the employee’s “workplace,” then he apparently was on an ordinary commute and he was not acting within the scope of his employment. In this lawsuit, defendant infers from the undisputed facts that its yard is the employee’s “workplace,” even though it paid its employee only from the time he arrived at the jobsite. But if the employee’s jobsite is his “workplace,” as plaintiff infers, then the employee was arguably on a business errand to the yard for the employer’s benefit, and that business errand would have started when the employee left his home.
We cannot state as a matter of law that the employee was not on a business errand while commuting from his home to the employer’s yard. Thus, we will reverse the trial court’s granting of defendant’s summary judgment motion.
Boling v. Public Employment Relations Bd. (CA4/1D069626 4/11/17) Pension Reform Ballot Initiative/Meet and Confer
In June 2012 the voters of City of San Diego (City) approved a citizen-sponsored initiative, the "Citizens Pension Reform Initiative" (hereafter, CPRI), which adopted a charter amendment mandating changes in the pension plan for certain employees of City of San Diego (City). In the proceedings below, the Public Employment Relations Board (PERB) determined City was obliged to "meet and confer" pursuant to the provisions of the Meyers-Milias-Brown Act (MMBA) (Gov. Code, § 3500 et seq.) over the CPRI before placing it on the ballot and further determined that, because City violated this purported obligation, PERB could order "make whole" remedies that de facto compelled City to disregard the CPRI.
We conclude, for the reasons stated below, that under relevant California law the meet-and-confer obligations under the MMBA have no application when a proposed charter amendment is placed on the ballot by citizen proponents through the initiative process, but instead apply only to proposed charter amendments placed on the ballot by the governing body of a charter city. We also conclude that, although it is undisputed that Jerry Sanders (City's Mayor during the relevant period) and others in City's government provided support to the proponents to develop and campaign for the CPRI, PERB erred when it applied agency principles to transform the CPRI from a citizen-sponsored initiative, for which no meet-and-confer obligations exist, into a governing-body-sponsored ballot proposal within the ambit of People ex rel. Seal Beach Police Officers Assn. v City of Seal Beach (1984) 36 Cal.3d 591 (Seal Beach). Accordingly, we hold PERB erred when it concluded City was required to satisfy the concomitant "meet-and-confer" obligations imposed by Seal Beach for governing-body-sponsored charter amendment ballot proposals, and therefore PERB erred when it found Sanders and the San Diego City Council (City Council) committed an unfair labor practice by declining to meet and confer over the CPRI before placing it on the ballot.
Shaw v. Superior Court (SC S221530 4/10/17) Retaliatory Termination/Review of Jury Trial Denial
This case presents two issues: (1) Is a trial court ruling denying a request for a jury trial in a civil action subject to review prior to trial by a petition for an extraordinary writ or may such a ruling be reviewed only by appeal after trial? and (2) Is there a right to a jury trial in a health care facility whistleblower action for retaliatory termination brought pursuant to Health and Safety Code section 1278.5, subdivision (g), as amended in 2007?
For the reasons explained below, we conclude (1) that a trial court ruling denying a request for a jury trial in a civil action is reviewable prior to trial by a petition for an extraordinary writ, and (2) that there is no statutory right to a jury trial in a cause of action for retaliatory termination under the statutorily created civil action authorized under Health and Safety Code section 1278.5, subdivision (g) inasmuch as the language and legislative history of that statute demonstrate that the Legislature intended that the remedies available in such an action would be determined by the court rather than by a jury. The absence of a jury trial in a retaliatory termination action under Health and Safety Code section 1278.5, subdivision (g) does not deprive a plaintiff of a right to a jury trial, however, because Health and Safety Code section 1278.5, subdivision (m) fully preserves a plaintiff’s right to obtain a jury trial in the related tort cause of action for wrongful termination in violation of public policy authorized under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 (Tameny).
Santillan v. USA Waste of Cal. (9th Cir. 15-55238 4/7/17) Retaliation
The panel reversed the district court’s grant of summary judgment in favor of USA Waste of California, Inc. on Gilberto Santillan’s wrongful termination claim under California law based on age discrimination and retaliation; affirmed the district court’s denial of Santillan’s request for leave to amend the complaint; and remanded for further proceedings.
The panel held that the district court erred in holding that Santillan failed to establish a prima facie age discrimination claim. The panel further held that USA Waste failed to rebut the presumption of unlawful discrimination because it did not offer a legitimate reason for firing Santillan when USA Waste’s only proffered reason was Santillan’s failure to provide proof of his legal right to work in the United States as required by the Immigration Reform and Control Act of 1986 (IRCA). Specifically, the panel held that IRCA exempted Santillan from the proof of employment eligibility that USA Waste demanded. The panel also held that making Santillan’s reinstatement contingent upon such proof would violate California public policy.
The panel held that Santillan established a prima facie retaliation case and a presumption of unlawful retaliation. Specifically, the panel held that the district court erred in concluding that Santillan did not engage in protected activity when he used an attorney to negotiate his reinstatement. The panel held that California public policy protected Santillan’s right to representation by an attorney to negotiate the terms and conditions of employment. The panel further held that Santillan established a nexus between his termination and his protected activity where USA Waste fired Santillan because he was represented by his attorney at the settlement agreement negotiations.
Finally, the panel held that the district court did not abuse its discretion by denying Santillan’s request for leave to amend the complaint. The panel held that Santillan failed to show he was diligent in seeking to amend the complaint because his request to amend came eight months after the deadline for making such a request.
McGill v. Citibank, N.A. (SC S224086 4/6/17) Arbitration
In previous decisions, this court has said that the statutory remedies available for a violation of the Consumers Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.), the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.), and the false advertising law (id., § 17500 et seq.) include public injunctive relief, i.e., injunctive relief that has the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the general public. (Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 315-316 (Cruz); Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1077 (Broughton).) The question we address in this case is the validity of a provision in a predispute arbitration agreement that waives the right to seek this statutory remedy in any forum. We hold that such a provision is contrary to California public policy and is thus unenforceable under California law. We further hold that the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not preempt this rule of California law or require enforcement of the waiver provision. We therefore reverse the judgment of the Court of Appeal.
McLane Co. v. EEOC (US 15–1248 4/3/17) EEOC Subpoena/Standard of Review
Damiana Ochoa worked for eight years in a physically demanding job for petitioner McLane Co., a supply-chain services company. McLane requires employees in those positions—both new employees and those returning from medical leave—to take a physical evaluation. When Ochoa returned from three months of maternity leave, she failed the evaluation three times and was fired. She then filed a sex discrimination charge under Title VII of the Civil Rights Act of 1964. The Equal Employment Opportunity (EEOC) began an investigation, but McLane declined its request for so-called “pedigree information”: names, Social Security numbers, addresses, and telephone numbers of employees asked to take the evaluation. After the EEOC expanded the investigation’s scope both geographically (to cover McLane’s national operations) and substantively (to investigate possible age discrimination), it issued subpoenas, as authorized by 42 U. S. C. §2000e–9, requesting pedigree information relating to its new investigation. When McLane refused to provide the information, the EEOC filed two actions in Federal District Court—one arising out of Ochoa’s charge and one arising out of the EEOC’s own age discrimination charge—seeking enforcement of its subpoenas. The District Judge declined to enforce the subpoenas, finding that the pedigree information was not relevant to the charges, but the Ninth Circuit reversed. Reviewing the District Court’s decision to quash the subpoena de novo, the court concluded that the lower court erred in finding the pedigree information irrelevant.
Held: A district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion, not de novo. Pp. 6–12.
(a) Both factors that this Court examines when considering whether such decision should be subject to searching or deferential appellate review point toward abuse-of-discretion review. First, the longstanding practice of the courts of appeals is to review a district court’s decision to enforce or quash an administrative subpoena for abuse of discretion. Title VII confers on the EEOC the same authority to issue subpoenas that the National Labor Relations Act (NLRA) confers on the National Labor Relations Board (NLRB). During the three decades between the NLRA’s enactment and the incorporation of its subpoena-enforcement provisions into Title VII, every Circuit to consider the question had held that a district court’s decision on enforcement of an NLRB subpoena is subject to abuse-of-discretion review. Congress amended Title VII to authorize EEOC subpoenas against this uniform backdrop of deferential appellate review, and today, nearly every Court of Appeals reviews a district court’s decision whether to enforce an EEOC subpoena for abuse of discretion. This “long history of appellate practice,” Pierce v. Underwood, 487 U. S. 552, 558, carries significant persuasive weight.
Second, basic principles of institutional capacity counsel in favor of deferential review. In most cases, the district court’s enforcement decision will turn either on whether the evidence sought is relevant to the specific charge or whether the subpoena is unduly burdensome in light of the circumstances. Both of these tasks are well suited to a district judge’s expertise. The first requires the district court to evaluate the relationship between the particular materials sought and the particular matter under investigation—an analysis “variable in relation to the nature, purposes and scope of the inquiry.” Oklahoma Press Publishing Co. v. Walling, 327 U. S. 186, 209. And whether a subpoena is overly burdensome turns on the nature of the materials sought and the difficulty the employer will face in producing them—“ ‘fact intensive, close calls’ ” better suited to resolution by the district court than the court of appeals. Cooter & Gell v. Hartmarx Corp., 496 U. S. 384, 404.
Other functional considerations also show the appropriateness of abuse-of-discretion review. For one, the district courts’ considerable experience in making similar decisions in other contexts, see Buford v. United States, 532 U. S. 59, 66, gives them the “institutional advantag[e],” id., at 64, that comes with greater experience. Deferential review also “streamline[s] the litigation process by freeing appellate courts from the duty of reweighing evidence and reconsidering facts already weighed and considered by the district court,” Cooter & Gell, 496 U. S., at 404, something particularly important in a proceeding designed only to facilitate the EEOC’s investigation. Pp. 6–9.
(b) Court-appointed amicus’ arguments in support of de novo review are not persuasive. Amicus claims that the district court’s primary task is to test a subpoena’s legal sufficiency and thus requires no exercise of discretion. But that characterization is not inconsistent with abuse-of-discretion review, which may be employed to insulate the trial judge’s decision from appellate review for the same kind of functional concerns that underpin the Court’s conclusion that abuse of discretion is the appropriate standard.
It is also unlikely that affording deferential review to a district court’s subpoena decision would clash with Court of Appeals decisions that instructed district courts to defer to the EEOC’s determination about the relevance of evidence to the charge at issue. Such decisions are better read as resting on the established rule that the term “relevant” be understood “generously” to permit the EEOC “access to virtually any material that might cast light on the allegations against the employer.” EEOC v. Shell Oil Co., 466 U. S. 54, 68–69. Nor do the constitutional underpinnings of the Shell Oil standard require a different result. While this Court has described a subpoena as a “ ‘constructive’ search,” Oklahoma Press, 327 U. S., at 202, and implied that the Fourth Amendment is the source of the requirement that a subpoena not be “too indefinite,” United States v. Morton Salt Co., 338 U. S. 632, 652, not every decision touching on the Fourth Amendment is subject to searching review. See, e.g., United States v. Nixon, 418 U. S. 683, 702. Cf. Illinois v. Gates, 462 U. S. 213, 236; Ornelas v. United States, 517 U. S. 690, distinguished. Pp. 9–11.
(c) The case is remanded so that the Court of Appeals can review the District Court’s decision under the appropriate standard in the first instance. In doing so, the Court of Appeals may consider, as and to the extent it deems appropriate, any of McLane’s arguments regarding the burdens imposed by the subpoena. Pp. 11–12.
804 F. 3d 1051, vacated and remanded.
SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, BREYER, ALITO, and KAGAN, JJ., joined. GINSBURG, J., filed an opinion concurring in part and dissenting in part.
Bonome v. City of Riverside (CA4/2 E064925 3/24/17) Police Officer “Honorary Retired” Status
Defendants and appellants City of Riverside (City) and Riverside Police Chief Sergio Diaz appeal the grant of the petition for writ of mandate (Writ) filed by plaintiff and respondent Camillo Bonome, Jr.
Bonome had been employed as a Riverside Police Officer since 1995. On May 21, 2013, a Memorandum of Finding was sustained against Bonome for failing to properly investigate and report an incident involving a sexually abused girl in June 2012. Chief Diaz recommended Bonome be terminated. Prior to the hearing on his termination, Bonome applied for and was granted disability retirement by CalPERS for a back injury he sustained while on duty.
Upon his disability retirement being effective, Bonome requested his retirement identification badge and that the badge include a Carry Concealed Weapon (CCW) endorsement. Bonome’s request was denied because Chief Diaz and the City did not consider him to be “honorably retired” as that term is defined in Penal Code section 16690. The City and Chief Diaz stated he was not entitled to a hearing to dispute the finding. Bonome filed the Writ contending he was honorably retired and entitled to a CCW endorsement, and if the endorsement was denied for cause, he was entitled to a good cause hearing. The trial court agreed and granted the Writ.
On appeal, the City and Chief Diaz insist the trial court erred when it determined Bonome was “honorably retired” within the meaning of Penal Code section 16690 based only on the plain language of the statute and without reviewing the legislative history. This interpretation leads to an absurd result.
We uphold the trial court’s grant of the Writ. The City and Chief Diaz may deny the CCW endorsement for cause but Bonome is entitled to a good cause hearing if it is denied.
Farrar v. Direct Commerce, Inc. (CA1/1 A146944 3/23/17) Arbitration
Plaintiff Wilson Farrar has sued her former employer, defendant Direct Commerce, Inc., alleging causes of action for breach of contract, conversion, wrongful termination, breach of the covenant of good faith and fair dealing, and failure to pay wages owed and waiting time penalties. Farrar, who was hired by the company as its vice president of business development, negotiated an employment agreement set forth in a six-page offer letter detailing, inter alia, her compensation, additional bonus structure, and stock options. The agreement also included an arbitration provision, set off by the same kind of underlined heading and spacing as the other enumerated paragraphs of the agreement. The trial court denied Direct Commerce’s petition to compel arbitration on the ground of the arbitration provision was procedurally and substantively unconscionable. While the arbitration provision is one-sided, as it excludes any claims arising from the confidentiality agreement Farrar also signed, we conclude that offending exception is readily severable and, on this record, should have been severed. We therefore reverse and remand for arbitration.
DB Healthcare v. Blue Cross Blue Shield (9th Cir. 14-16518 3/22/17) ERISA
The panel affirmed two district court judgments dismissing ERISA actions brought by health care providers designated to receive direct payments from employee health plan administrators for medical services.
The panel held that neither direct statutory authority nor derivative authority through assignment authorized the health care providers to bring suit in federal court under ERISA’s civil enforcement provisions. Agreeing with other circuits, the panel reaffirmed that health care providers are not health plan beneficiaries who may sue for declaratory relief and money damages under ERISA § 502(a)(1)(B) or injunctive relief under ERISA § 502(a)(3). Rather, a health care provider must bring claims derivatively, relying on its patients’ assignments of their benefit claims. The panel held that the health care providers here, however, lacked derivative authority to sue, given the nature of the governing agreements and of the purported assignments. In one case, the governing employee benefit plans contained non-assignment clauses that overrode any purported assignments. In the other case, although the provider agreement permitted assignment, and payment authorization forms could be construed as assigning the provider limited rights, the provider’s claims fell outside the scope of the assigned rights.
Gerard v. Orange Coast Memorial Medical Center (CA4/3 G048039B, filed 3/1/17, pub. ord. 3/21/17) Waiver of Second Meal Period
Three health care workers sued their hospital employer in this putative class and private attorney general enforcement action for alleged Labor Code violations and related claims. In this appeal, their primary complaint is the hospital illegally allowed its health care employees to waive their second meal periods on shifts longer than 12 hours.
A statute requires two meal periods for shifts longer than 12 hours. But an order of the Industrial Welfare Commission (IWC) authorizes employees in the health care industry to waive one of those two required meal periods on shifts longer than 8 hours. The principal issue before us concerns the validity of the IWC order.
This is our second opinion in this case. Our first opinion concluded the IWC order is partially invalid to the extent it authorizes second meal break waivers on shifts over 12 hours and we reversed. (Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, review granted May 20, 2015, S225205 (Gerard I)).
After the California Supreme Court granted the hospital’s petition for review in Gerard I, that court transferred the case back to this court with directions to vacate our decision and to reconsider the cause in light of the enactment of Statutes 2015, chapter 506 (Sen. Bill No. 327 (2015-2016 Reg. Sess.); SB 327).
Upon reconsideration we conclude the IWC order is valid and affirm.
Brunozzi v. Cable Communications (9th Cir. 15-35623 3/21/17) Wage and Hour Overtime/Bonus
The panel reversed the district court’s summary judgment in favor of the defendant in an action brought under the Fair Labor Standards Act and Oregon state law by plaintiffs who worked as technicians, installing cable television and internet services.
The panel held that the defendant’s piece-work-based pay plan, which included a bonus designed to decrease in proportion to an increase in the number of overtime hours worked, violated the Fair Labor Standards Act’s overtime provisions.
The panel reversed the district court’s summary judgment on the technicians’ claims under Or. Rev. Stat. § 652.140(1), which requires employers to pay all wages earned and unpaid by the end of the first business day after a discharge or termination.
The panel also reversed the district court’s summary judgment on one technician’s retaliation claims under Or. Rev. Stat. § 659A.199, which prohibits a private employer from retaliating against an employee who has in good faith reported information that the employee believes is a violation of law, and Or. Rev. State. § 652.355, which prohibits an employer from discharging or otherwise discriminating against an employee who has discussed, made, or consulted an attorney about a wage claim. The technician verbally complained to his immediate supervisors that he was not being property compensated for overtime, and he refused to work any additional overtime hours unless he was paid an overtime rate. The panel held that the term “reported” in § 659A.199 means a report of information to either an external or internal authority. The panel held that the act of complaining about inadequate wages is a protected activity under § 652.355.
The panel remanded the case to the district court for further proceedings.
NLRB v. SW General, Inc. (US 15–1251 3/21/17) NLRB Acting General Counsel
Article II of the Constitution requires that the President obtain “the Advice and Consent of the Senate” before appointing “Officers of the United States.” §2, cl. 2. Given this provision, the responsibilities of an office requiring Presidential appointment and Senate confirmation (PAS office) may go unperformed if a vacancy arises and the President and Senate cannot promptly agree on a replacement. Congress has accounted for this reality by giving the President limited authority to appoint acting officials to temporarily perform the functions of a vacant PAS office without first obtaining Senate approval.
The current version of that authorization is the Federal Vacancies Reform Act of 1998 (FVRA). Section 3345(a) of the FVRA permits three categories of Government officials to perform acting service in a vacant PAS office. Subsection (a)(1) prescribes the general rule that, if a vacancy arises in a PAS office, the first assistant to that office “shall perform” the office’s “functions and duties temporarily in an acting capacity.” Subsections (a)(2) and (a)(3) provide that, “notwithstanding paragraph (1),” the President “may direct” a person already serving in another PAS office, or a senior employee in the relevant agency, to serve in an acting capacity instead.
Section 3345 also makes certain individuals ineligible for acting service. Subsection (b)(1) states: “Notwithstanding subsection (a)(1), a person may not serve as an acting officer for an office under this section” if the President nominates him for the vacant PAS office and, during the 365-day period preceding the vacancy, the person “did not serve in the position of first assistant” to that office or “served in [that] position . . . for less than 90 days.”
The general counsel of the National Labor Relations Board (NLRB) is a PAS office. In June 2010, a vacancy arose in that office, and the President directed Lafe Solomon to serve as acting general counsel. Solomon qualified for acting service under subsection (a)(3) of the FVRA, because he was a senior employee at the NLRB. In January 2011, the President nominated Solomon to serve as the NLRB’s general counsel on a permanent basis. The Senate never took action on the nomination, and the President ultimately withdrew Solomon’s name in favor of a new candidate, whom the Senate confirmed in October 2013. Throughout this entire period Solomon served as the acting general counsel to the NLRB.
In January 2013, an NLRB Regional Director, exercising authority on Solomon’s behalf, issued an unfair labor practices complaint against respondent SW General, Inc. An Administrative Law Judge concluded that SW General had committed unfair labor practices, and the NLRB agreed. SW General sought review in the United States Court of Appeals for the District of Columbia Circuit, arguing that the complaint was invalid because, under subsection (b)(1) of the FVRA, Solomon could not perform the duties of general counsel to the NLRB after having been nominated to fill that position. The NLRB countered that subsection (b)(1) applies only to first assistants who automatically assume acting duties under subsection (a)(1), not to acting officers who, like Solomon, serve under (a)(2) or (a)(3). The Court of Appeals vacated the Board’s order. It concluded that the prohibition on acting service by nominees contained in subsection (b)(1) applies to all acting officers, regardless of whether they serve pursuant to subsection (a)(1), (a)(2), or (a)(3). As a result, Solomon became ineligible to perform the duties of general counsel in an acting capacity once the President nominated him to fill that post.
1. Subsection (b)(1) of the FVRA prevents a person who has been nominated to fill a vacant PAS office from performing the duties of that office in an acting capacity. The prohibition applies to anyone performing acting service under the FVRA. It is not limited to first assistants performing acting service under subsection (a)(1). Pp. 8– 18.
(a) The text of the FVRA requires this conclusion. Pp. 8–14.
(1) Subsection (b)(1) applies to any “person” and prohibits service “as an acting officer for an office under this section.” “Person” has an expansive meaning that can encompass anyone who performs acting duties under the FVRA. See Pfizer Inc. v. Government of India, 434 U. S. 308, 312. And “under this section” clarifies that subsection (b)(1) applies to all of §3345: The FVRA contains crossreferences to specific subsections and paragraphs. But subsection (b)(1) refers to §3345, which contains all of the ways a person may become an acting officer. The rest of the FVRA also uses the pairing of “person” and “section” to encompass anyone serving as an acting officer under the FVRA, and Congress could readily have used more specific language if it intended subsection (b)(1) to apply only to first assistants acting under (a)(1).
The dependent clause at the beginning of subsection (b)(1)— “[n]otwithstanding subsection (a)(1)”—confirms the breadth of the prohibition on acting service by nominees. In statutes, “notwithstanding” clauses show that one provision prevails over another in the event of a conflict. Here, that means that subsection (b)(1) applies even when it conflicts with the default rule in (a)(1) that first assistants “shall perform” acting duties. Pp. 8–10.
(2) The Board argues that, because the phrase “notwithstanding subsection (a)(1)” does not mention (a)(2) or (a)(3), Congress did not intend the prohibition in subsection (b)(1) to apply to people serving as acting officers under those provisions. The Board relies on the “interpretive canon, expressio unius est exclusio alterius, expressing one item of [an] associated group or series excludes another left unmentioned.” Chevron U. S. A. Inc. v. Echazabal, 536 U. S. 73, 80 (internal quotation marks omitted).
This interpretive canon applies, however, only when “circumstances support[ ] a sensible inference that the term left out must have been meant to be excluded.” Id. , at 81. A “notwithstanding” clause does not naturally give rise to such an inference; it just shows which of two or more provisions prevails in the event of a conflict. Singling out one conflict generally does not suggest that other, unaddressed conflicts should be resolved in the opposite manner. Here, the conflict between (a)(1) and (b)(1) is unique: The former uses mandatory language—the first assistant “shall perform” acting duties—while the latter identifies who “may not” serve as an acting officer. The “notwithstanding” clause clarifies that the mandatory language in subsection (a)(1) does not prevail over subsection (b)(1) in the event of a conflict. Subsections (a)(2) and (a)(3) lack that mandatory language, so the natural inference is that Congress left these provisions out of the “notwithstanding” clause because they differ from subsection (a)(1), not to implicitly exempt them from the prohibition in subsection (b)(1).
Moreover, subsection (b)(2) specifies that (b)(1) “shall not apply” to certain people who are “serving as the first assistant.” If (b)(1) applied only to first assistants, stating that limitation would be superfluous. Pp. 10–14.
(b) Because the text is clear, the Board’s arguments about legislative history, purpose, and post-enactment practice need not be considered. In any event, its arguments are not compelling.
The original draft of the FVRA contained a prohibition on nominees serving as acting officers, but explicitly limited that prohibition to first assistants. The Board argues that, when Congress revised this original draft, it made changes to give the President more flexibility to appoint acting officers and did not intend to broaden the prohibition on nominees performing acting service. The glitch in this argument is that Congress did change the prohibition on nominees performing acting service, revising it to clearly apply to all acting officers. The fact that certain Senators stated that they wanted to give the President more flexibility to appoint acting officials does not mean that they got exactly what they wanted. Nor does a statement by one of the sponsors of the FVRA—who said that subsection (b)(1) applies only to first assistants—overcome the clear text, particularly given that the very next Senator to speak offered a contradictory account of the provision. The Board also argues that, since the FVRA was enacted, Congress has not objected when Presidents have nominated individuals who were serving as acting officers under subsection (a)(2) or (a)(3), and that the Office of Legal Counsel and Government Accountability Office have issued guidance construing subsection (b)(1) to apply only to first assistants. Relying on NLRB v. Noel Canning, the Board contends that this “historical practice” is entitled to “significant weight.” 573 U. S. ___.
“[H]istorical practice” is too grand a title for the Board’s evidence. The FVRA was not enacted until 1998, and the evidence the Board cites is not significant enough to warrant the conclusion that Congress’s failure to speak up implies that it has acquiesced in the view that subsection (b)(1) applies only to first assistants. By contrast, the Court’s decision in Noel Canning dealt with the President’s constitutional authority under the Recess Appointments Clause; an issue that had attracted intense attention from Presidents, Attorneys General, and the Senate dating back to the beginning of the Republic. Pp. 14–18.
2. Applying the FVRA to this case is straightforward. Subsection (b)(1) prohibited Solomon from continuing his service as acting general counsel once the President nominated him to fill the position permanently. The President could have appointed another person to serve as acting officer in Solomon’s place, but did not do so.
P. 18. 796 F. 3d 67, affirmed.
ROBERTS, C. J., delivered the opinion of the Court, in which KENNEDY, THOMAS, BREYER, ALITO, and KAGAN, JJ., joined. THOMAS, J., filed a concurring opinion. SOTOMAYOR, J., filed a dissenting opinion, in which GINSBURG, J., joined.