California Supreme Court
LAFITTE V. ROBERT HALF INTERNATIONAL INC.
“A class action employment lawsuit settled before trial for $19 million, with the agreement that no more than a third of that recovery would go to class counsel as attorney fees. In seeking the trial court’s approval of the settlement, class counsel sought the maximum fee amount, $6,333,333.33. After considering information from class counsel on the hours they had worked on the case, applicable hourly fees, the course of the pretrial litigation, and the potential recovery and litigation risks involved in the case, the trial court—over the objection of one class member—approved the settlement and awarded counsel the requested fee.
The objecting class member contends the trial court’s award of an attorney fee calculated as a percentage of the settlement amount violates a holding of this court in Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303 (Serrano III), to the effect that every fee award must be calculated on the basis of time spent by the attorney or attorneys on the case. (See Serrano III, at p. 48, fn. 23, 141 Cal.Rptr. 315, 569 P.2d 1303.) We disagree. Our discussion in Serrano III of how a reasonable attorney fee is calculated was made in connection with an award under the “private attorney general” doctrine. (See id. at pp. 43–47, 141 Cal.Rptr. 315, 569 P.2d 1303.) We clarify today that when an attorney fee is awarded out of a common fund preserved or recovered by means of litigation (see Serrano III, supra, at p. 35, 141 Cal.Rptr. 315, 569 P.2d 1303), the award is not per se unreasonable merely because it is calculated as a percentage of the common fund.”
The Court disapproved Jutkowitz v. Bourns (1981) 118 Cal.App.3d 102, 173 Cal.Rptr. 248.
Law Office of Lawrence W. Schonbrun and Lawrence W. Schonbrun, for Plaintiff and Appellant.
Law Offices of Kevin T. Barnes, Kevin T. Barnes, Gregg Lander, Los Angeles; Law Offices of Joseph Antonelli, Joseph Antonelli, Janelle Carney, Chino Hills; Hilaire McGriff and Mika M. Hilaire, Los Angeles, for Plaintiffs and Respondents.
Paul Hastings, Judith M. Kline, Los Angeles, and M. Kirby C. Wilcox, San Francisco, for Defendants and Respondents.
Cal. 8/11/16 opinion by Werdegar, Cantil-Sakauye, Chin, Corrigan, Liu, Cuéllar, and Kruger concurring; concurring opinion by Liu; ___ P.3d ___, 205 Cal.Rptr.3d 555, 2016 WL 4238619.
McLEAN v. STATE of CAL.
“Under Labor Code sections 202 and 203, an employer must make prompt payment of the final wages owed to an employee who “quits” his or her employment, or else pay statutory penalties. In this case, plaintiff Janis S. McLean, a retired deputy attorney general, filed suit against the State of California on behalf of herself and a class of former state employees who, having resigned or retired, did not receive their final wages within the time periods set out in the statute. We consider two questions arising from McLean’s suit. First, do sections 202 and 203 apply when employees retire? Second, is McLean’s suit subject to dismissal on the ground that it was filed against the State of California, rather than the state agency for which she had worked?
We conclude, as the Court of Appeal had held, that Labor Code sections 202 and 203 (section 202 & section 203) apply when employees retire from their employment. We also conclude that McLean’s decision to name the State of California as a defendant rather than the Department of Justice is not a basis for dismissing her suit. We accordingly affirm the judgment of the Court of Appeal.”
Kershaw, Cutter & Ratinoff, William A. Kershaw, Lyle W. Cook, Stuart C. Talley and Ian J. Barlow for Plaintiff and Appellant.
Kamala D. Harris, Attorney General, Susan Slager, Acting Assistant Attorney General, Alicia Fowler and Chris Knudsen, Assistant Attorneys General, Fiel D. Tigno, William T. Darden and Aimee Feinberg, Deputy Attorneys General, for Defendants and Respondents.
Cal. 8/18/16 opinion by Kruger, Cantil-Sakauye, Werdegar, Chin, Corrigan, Liu, and Cuéllar concurring; ___ P.3d ___, 2016 WL 4395672.
California Courts of Appeal
CASTRO-RAMIREZ V. DEPENDABLE HIGHWAY EXPRESS, INC.
“Plaintiff Luis Castro-Ramirez sued his former employer, Dependable Highway Express, Inc. (DHE), alleging causes of action for disability discrimination, failure to prevent discrimination, and retaliation under the Fair Employment and Housing Act (FEHA or the Act) (Gov. Code, § 12900 et seq.), as well as wrongful termination in violation of public policy. (He alleged other claims not pursued on appeal.) Plaintiff’s son requires daily dialysis, and according to the evidence, plaintiff must be the one to administer the dialysis. For several years, plaintiff’s supervisors scheduled him so that he could be home at night for his son’s dialysis. That schedule changed when a new supervisor took over and ultimately terminated plaintiff for refusing to work a shift that did not permit him to be home in time for his son’s dialysis. The trial court granted defendant’s motion for summary judgment and denied plaintiff’s motion to tax costs.
We reverse the judgment and the order denying the motion to tax costs. Plaintiff has demonstrated triable issues of material fact on his causes of action for associational disability discrimination, failure to prevent discrimination, retaliation, and wrongful termination in violation of public policy.”
The court reasoned that even though Plaintiff had abandoned his failure to accommodate claim, “[W]e find accommodation relevant as to plaintiff’s discrimination cause of action. … Association with a physically disabled person appears to be itself a disability under FEHA. Like the many other definitions set forth in section 12926, this definition of a physical disability applies “in connection with unlawful practices [under FEHA], unless a different meaning clearly appears from the context.” (§ 12926.) Accordingly, when section 12940, subdivision (m) requires employers to reasonably accommodate “the known physical … disability of an applicant or employee,” read in conjunction with other relevant provisions, subdivision (m) may reasonably be interpreted to require accommodation based on the employee’s association with a physically disabled person.”
Employees’ Legal Advocates and A. Jacob Nalbandyan for Plaintiff and Appellant.
Gordon & Rees, Don Willenburg, Mark S. Posard and Jennifer M. Lynch for Defendant and Respondent.
Second District, Division 8, 8/29/16 decision by Flier, Rubin concurring, Grimes dissenting based on ADA case law which the majority found inapplicable; ___ Cal.Rptr.3d ___; 2016 WL 4506089.
ESPARZA V. SAND & SEA, INC.
“The question in this case is whether an arbitration provision in an employee handbook is legally enforceable. The employee handbook containing the arbitration provision included a welcome letter as the first page, which stated, “[T]his handbook is not intended to be a contract (express or implied), nor is it intended to otherwise create any legally enforceable obligations on the part of the Company or its employees.” The employee signed a form acknowledging she had received the handbook, which mentioned the arbitration provision as one of the “policies, practices, and procedures” of the company. The acknowledgement form did not state that the employee agreed to the arbitration provision, and expressly recognized that the employee had not read the handbook at the time she signed the form. Under these circumstances, we find that the arbitration provision in the employee handbook did not create an enforceable agreement to arbitrate. We therefore affirm the trial court’s denial of the employer’s petition to compel arbitration.”
Telep Law, Desiree Telep, Irvine, Tina Dao for Plaintiff and Respondent.
Greenberg Traurig, Mark D. Kemple, Karin L. Bohmholdt and Nicholas A. Insogna, Los Angeles, for Defendants and Appellants.
Second District, Division 4, 8/22/16 decision by Collins, Epstein and Willhite concurring; ___ Cal. Rptr. 3d ___, 2016 WL 4434737.
MARIN ASSN. OF PUB. EMP. v. MARIN CO. EMP. RETIREMENT ASSN.
“The practice known as “pension spiking,” by which public employees use various stratagems and ploys to inflate their income and retirement benefits, has long drawn public ire and legislative chagrin. Effective January 1, 2013, the Legislature amended Government Code section 31461, a provision of the County Employees Retirement Law, with the aim of curtailing pension spiking by excluding specified items from the calculation of retirement income. A number of individuals currently employed by various governmental entities in the County of Marin, together with a number of organizations representing current county employees, brought suit to halt implementation of the revised formula. The trial court concluded application of the new formula to current employees did not amount to an unconstitutional impairment of the employees’ contracts, and sustained the pension authority’s general demurrer without leave to amend.
After an extensive independent review, we reach the same conclusion and affirm, holding that the Legislature did not act impermissibly by amending section 31461 to exclude specified items and categories of compensation from the calculation of pensions for current employees. As will be shown, while a public employee does have a “vested right” to a pension, that right is only to a “reasonable” pension—not an immutable entitlement to the most optimal formula of calculating the pension. And the Legislature may, prior to the employee’s retirement, alter the formula, thereby reducing the anticipated pension. So long as the Legislature’s modifications do not deprive the employee of a “reasonable” pension, there is no constitutional violation. Here, the Legislature did not forbid the employer from providing the specified items to an employee as compensation, only the purely prospective inclusion of those items in the computation of the employee’s pension. Neither the statutory change, nor the implementation of that change by the county pension agency, amounts to an impairment of the employee’s receipt of a “reasonable” pension upon retirement.”
Attorneys for Plaintiffs and Appellants Marin Association of Public Employees; Catherine Hall: Leonard Carder, Peter Warren Saltzman, Arthur Wei–Wei Liou;
Attorneys for Plaintiff and Appellant Service Employees International Union Local 1021: Weinberg, Roger & Rosenfeld, Vincent A. Harrington, Jr., Kerianne Ruth Steele, Anne I. Yen, Alameda, Sean Daniel Graham, Caren Pamela Spencer, Alameda;
Attorneys for Plaintiffs and Appellants Marin County Fire Department Firefighters’ Association; Marin County Management Employees Association; Joel Chandler; and Angelo Sacheli: Carroll, Burdick & McDonough, Gregg McLean Adam, Amber Lynn Griffiths; Messing Adam & Jasmine, Gregg McLean Adam, Jonathan Dennis Yank;
Attorneys for Defendants and Respondents Marin County Employees’ Retirement Association; Board of Retirement of the Marin County Employees’ Retirement Association: Manatt, Phelps & Phillips, Ashley Kathleen Dunning, Kelly L. Knudson, San Francisco, Benjamin G. Shatz, Michael V. Toumanoff, Los Angeles; Nossaman, Ashley Kathleen Dunning, San Francisco, Michael V. Toumanoff, Los Angeles;
Attorneys for Intervenor and Respondent: Kamala D. Harris, Attorney General, Douglas J. Woods, Assistant Attorney General, Constance L. LeLouis, Rei R. Onishi, Anthony P. O’Brien, Deputy Attorneys General.
First District, Division 2, 8/17/16 decision by Richman, Kline and Miller concurring; ___ Cal. Rptr.3d ___, 2016 WL 4379316.
MORRIS B. SILVER M.D., INC. v. INTERNAT. LONGSHORE ETC.
“Morris B. Silver M.D., Inc. (Silver) sued the International Longshore and Warehouse Union—Pacific Maritime Association Welfare Plan (Plan) to recover payment for health care services provided to Plan policyholders. Silver’s action was dismissed on the ground all of his state law causes of action were preempted by the federal Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1001 et seq.) (ERISA). We reverse the order dismissing the lawsuit and remand for further proceedings as set forth in this opinion.”
The court reasoned, “The gravamen of Silver’s causes of action for breach of oral contract, quantum meruit and promissory estoppel is that the Plan orally agreed to pay Silver for health care services in the specified amounts, authorized the provision of those services and then failed to pay as agreed. Although Silver has not asserted a cause of action for negligent misrepresentation, its claims are indistinguishable from those found not to be preempted by Memorial Hospital [Memorial Hosp. System v. Northbrook Life Ins. Co. (5th Cir. 1990) 904 F.2d 236] and those courts that have applied the two-part Memorial Hospital test. Like those cases, Silver’s three contract/quasi-contract causes of action do not address an area of exclusive federal concern. Silver is not, as the Plan argues, seeking compensation for the Plan’s decisions to deny coverage under the terms of an ERISA plan; his alleged right to reimbursement does not depend on the Plan’s terms. Rather, the claims are predicated on a garden-variety failure to make payment as promised for services rendered. To be sure, the claims would not exist but for an ERISA plan and are predicated on somebody’s interpretation of the plan. But the fact an ERISA plan is an initial step in the causation chain, without more, is too remote of a relationship with the covered plan to support a finding of preemption. (Cf. Dishman v. UNUM Life Ins. Co. of America, supra, 269 F.3d at p. 984 [“Obviously, at some level Dishman’s tort claim relates to the plan. That cannot be denied. But that cannot be the end of the analysis, either, for as we know, ‘pre-emption does not occur … if the state law has only a tenuous, remote, or peripheral connection with covered plans, as is the case with many laws of general applicability.’ ”].)”
“ … Silver’s claim for interference with contractual relations is predicated on the EOB the Plan sent to policyholders stating the “Total Patient Responsibility” for the amount charged by Silver was zero. … Although Silver acknowledges the Plan sent policyholders EOBs in conformity with its obligations under ERISA, it argues its claim is based upon the Plan’s extraneous tortious conduct of improperly directing policyholders in the EOB to disregard their financial obligations to Silver.
Silver’s argument to the contrary notwithstanding, the Plan’s allegedly tortious conduct cannot be separated from the Plan’s discharge of its obligations to notify participants of an adverse determination under ERISA. … Whether use of the form essentially constituted a tort—a question with wide-ranging implications for any plan using a similar form—is precisely the kind of decision that conflict preemption is intended to eliminate: one that could result in inconsistent directives among states and increased administrative and financial costs of complying with ERISA. Applying Memorial Hospital, the cause of action addresses an area of exclusive federal concern—the manner in which adverse determinations are communicated to plan participants—and directly affects the relationship between the plan and participants. Accordingly, the cause of action is preempted. On remand the trial court should enter a new order sustaining the Plan’s demurrer to Silver’s first cause of action as preempted by ERISA.”
Law Offices of Jonathan A. Stieglitz and Jonathan A. Stieglitz, Poway, for Plaintiff and Appellant.
Seyfarth Shaw, D. Ward Kallstrom, Kevin J. Lesinski, Jonathan A. Braunstein and Eden Anderson, San Francisco; Leonard Carder, Christine S. Hwang and Andrew J. Ziaja, San Francisco, for Defendant and Respondent.
Second District, Division 7, 8/22/16 decision by Perluss, Zelon and Segal concurring; ___ Cal. Rptr. 3d ___, 2016 WL 4434735.
STANISLAUS COUNTY DEPUTY SHERIFFS’ ASSN. v. COUNTY OF STANISLAUS
“The Stanislaus County Deputy Sheriffs’ Association (appellant), on behalf of certain custodial deputies designated as a “peace officer” by Penal Code section 830.1, subdivision (c) (custodial deputies), filed this action in the trial court seeking, among other relief, a judicial declaration that such custodial deputies may lawfully carry concealed firearms while off duty without the necessity of obtaining a permit to carry a concealed weapon. The current practice of Stanislaus County, Stanislaus County Sheriff’s Department, the Chief Executive Officer of Stanislaus County and the Stanislaus County Sheriff (collectively respondents) is to recognize that a custodial deputy may carry a concealed firearm while off duty only if that deputy has first obtained a license or a permit to carry a concealed weapon. Appellant maintains that respondents’ practice does not comport with section 25450, which categorically exempts all peace officers listed in section 830.1 from the prohibition against carrying a concealed weapon. As we explain below, appellant is correct. Accordingly, we reverse the contrary conclusion and judgment of the trial court and remand the matter back to the trial court with instructions to enter declaratory relief in appellant’s favor consistent with this opinion.”
Goyette & Associates and Richard P. Fisher for Petitioner and Appellant.
Jones & Mayer, Martin J. Mayer and James R. Touchstone, Fullerton, for Respondents.
Fifth District, 8/11/16 decision by Kane; ___ Cal. Rptr.3d ___, 2016 WL 4249730.
YOUNG v. REMX, INC.
“In this wage and hour lawsuit, plaintiff Vanessa Young appeals from the trial court’s order compelling arbitration of her individual claims, dismissing her class claims, bifurcating her representative claim pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.), and staying the PAGA claim pending completion of the arbitration on her individual claims. We conclude the order is nonappealable because we reject appellant’s argument that the “death knell” doctrine applies in these circumstances. The appeal is dismissed.”
“ … This doctrine provides that an “order which allows a plaintiff to pursue individual claims, but prevents the plaintiff from maintaining the claims as a class action, … is immediately appealable because it effectively r[ings] the death knell for the class claims.”
We conclude plaintiff’s appeal does not fall within the death knell doctrine. As an initial matter, in light of the remaining representative PAGA claim, it appears the order does not “amount[ ] to a de facto final judgment for absent plaintiffs.” (Miranda, supra, 241 Cal.App.4th at p. 200.) Our Supreme Court has “emphasized that orders that only limit the scope of a class or the number of claims available to it are not similarly tantamount to dismissal and do not qualify for immediate appeal under the death knell doctrine; only an order that entirely terminates class claims is appealable.” (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 757–758 (In re Baycol Cases).) Although the only class claim has been dismissed, the representative PAGA claim remains and plaintiff does not contend there are any putative class members who are not also aggrieved employees for purposes of the PAGA claim. Accordingly, the order does not appear to constitute a de facto final judgment for absent plaintiffs—the putative class members/aggrieved employees under PAGA—because their PAGA claims remain pending.
In any event, because of the remaining PAGA claim, plaintiff has not established the second rationale for the death knell doctrine: that “the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.” (Miranda, supra, at p. 200.)”
“ … The focus of the death knell doctrine is whether plaintiff has a sufficient incentive to proceed and here, as in Munoz, the PAGA claim provides that incentive. Plaintiff contends the arbitrator may rule against her on her individual claim and her “incentive to pursue PAGA claims [will be] exterminated if the arbitrator decides that [plaintiff’s] individual claims have no merit” in light of the narrow scope of review for an arbitration award. Our inquiry, however, looks at the impact of the appealed-from interlocutory order. That a possible outcome in a subsequent order might eliminate plaintiff’s incentive to pursue the PAGA claim does not render the current order appealable.” (Emphasis in original.)
Setareh Law Group, Shaun Setareh, Tuvia Korobkin, and Farrah Grant, for Plaintiff and Appellant.
Seyfarth Shaw, Timothy L. Hix, Andrew M. McNaught, Daniel C. Whang, and Tamara Fisher, for Defendant and Respondent.
First District, Division 5, 8/17/16 decision by Simons, Jones and Needham concurring; ___ Cal. Rptr. 3d ___, 2016 WL 4386166.
Ninth Circuit
BODI v. SHINGLE SPRINGS BAND OF MIWOK
“This appeal requires us to decide whether a federally recognized Indian tribe waives its sovereign immunity from suit by exercising its right to remove to federal court a case filed against it in state court. This question has divided the district courts, and it has been reached by only one of our sister circuits, which held that removal does not, standing alone, waive tribal immunity. See Contour Spa at the Hard Rock, Inc. v. Seminole Tribe of Fla., 692 F.3d 1200, 1206–08 (11th Cir. 2012). We now follow the lead of the Eleventh Circuit and hold that the act of removal does not express the clear and unequivocal waiver that is required for a tribe to relinquish its immunity from suit. Because the district court held otherwise, we reverse.”
Christopher F. Wohl (argued), Palmer Kazanjian Wohl Hodson LLP, Sacramento, California; Paula Yost, Sandra R. McCandless and Ian Barker, Dentons US LLP, San Francisco, California; for Defendants-Appellants.
David Nied (argued) and Wendy L. Hillger, Ad Astra Law Group, LLP, San Francisco, California, for Plaintiff-Appellee.
Ninth Cir. 8/8/16 decision by Friedland, McKeown and Sack concurring; ___ F.3d. ___ (2016); 2016 WL 4183518.
BROTHERHOOD OF MAINT. OF WAY EMPLOYEES DIV. v. BNSF RAILWAY, INC.
“In this appeal, we decide whether the test for distinguishing between major and minor labor disputes pursuant to the Railway Labor Act (RLA), 45 U.S.C. §§ 151–188, applies when a labor union alleges that an employer illegally retaliated against an employee attempting to file grievances. We hold that the test does apply, and that the district court correctly categorized the dispute in this case as minor, and subject to mandatory arbitration.”
“ … Minor disputes are those “growing out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions.” 45 U.S.C. § 153(i); see ConRail, 491 U.S. at 303, 109 S.Ct. 2477. They are “attempts to enforce existing contractual obligations and rights.” Ass’n of Flight Attendants, 567 F.3d at 1047. “Where an employer asserts a contractual right to take the contested action, the ensuing dispute is minor if the action is arguably justified by the terms of the parties’ collective-bargaining agreement. Where, in contrast, the employer’s claims are frivolous or obviously insubstantial, the dispute is major.” ConRail, 491 U.S. at 307, 109 S.Ct. 2477. The ConRail test “looks to whether a claim has been made that the terms of an existing agreement either establish or refute the presence of a right to take the disputed action. The distinguishing feature of such a case is that the dispute may be conclusively resolved by interpreting the existing agreement.” Id. at 305, 109 S.Ct. 2477. The burden on the employer to show that its position is “arguably justified” by the agreement is “relatively light.” Id. at 306–07, 109 S.Ct. 2477. “When in doubt, courts construe disputes as minor.” Ass’n of Flight Attendants, 567 F.3d at 1047.
BMWED attempts to sidestep the ConRail framework entirely by claiming that the distinction between minor and major disputes does not apply to the case before us. We disagree. The union’s contention is that the dispute is neither a dispute over the enforcement of the CBA nor the negotiation of new rights, but is instead a dispute over whether BNSF’s alleged retaliation against Tindell undermines the purpose of the RLA and the grievance process. This is a distinction without a difference. BNSF has asserted a “contractual right to take the contested action.” ConRail, 491 U.S. at 307, 109 S.Ct. 2477. BMWED, in response, contends that BNSF’s reliance on the contract is a pretext for illegal retaliation. This is a dispute that fits squarely within the major/minor framework from the RLA and ConRail. BMWED’s defense to the contractual language is tantamount to an argument that BNSF’s contractual position is “frivolous” or in “bad faith,” a concept incorporated into the ConRail test. At bottom, BMWED’s claim is that BNSF’s contractual position is not “arguably justified” because it is really a cover for illegal retaliation. BMWED cannot merely invoke the general concept of retaliation or corporate action that discourages the filing of grievances in order to evade mandatory arbitration.”
Richard S. Edelman (argued) and Matthew D. Watts, Mooney, Green, Saindon, Murphy & Welch, P.C., Washington, D.C., for Plaintiff–Appellant.
David M. Pryor (argued) and Andrea L. Hyatt, BNSF Railway Company, Forth Worth, Texas; Donald J. Munro, Jones Day, Washington, D.C.; for Defendant–Appellee.
Ninth Cir., 8/24/16 decision by Smith; Nguyen and Wilken concurring; ___ F.3d. ___ (2016); 2016 WL 4446116.
DEMER v. IBM CORP. LTD PLAN
“Plaintiff-Appellant Daniel G. Demer filed suit, pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), against Defendants-Appellees IBM Corporation LTD Plan (the “Plan”) and Metropolitan Life Insurance Company (“MetLife”). Mr. Demer claimed that MetLife, the claim administrator and insurer for the Plan, improperly denied his claim for long-term disability (“LTD”) benefits. See 29 U.S.C. § 1132(a)(1)(B) (providing that “[a] civil action may be brought … by a participant or beneficiary … to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan”). The district court denied Mr. Demer’s motion for summary judgment, granted Defendants’ cross-motion, and entered judgment in favor of Defendants.
We reverse the district court’s entry of judgment in Defendants’ favor and remand to the district court with instructions to remand this case to MetLife to re-evaluate the merits of Mr. Demer’s LTD claim.”
The decision viewed with skepticism the Plan’s structural conflict of interest as both evaluator and funder and the financial conflict of interest of the Plan’s retained medical experts. The decision noted, “Here, MetLife could have maintained records of its reviewers’ findings on claims to show their neutrality in practice, but it did not. While MetLife therefore missed an opportunity to negate any inference of a financial conflict of interest, Mr. Demer failed as well to develop more powerful evidence that could have established enhanced skepticism in reviewing MetLife’s decision. Thus, we find there is neither a lack of conflict of interest (justifying no skepticism) nor a substantial conflict of interest (warranting enhanced skepticism). Instead, the financial conflict – modest but extant – warrants some, but not substantial, weight under Abatie and Montour.”
“ … The dissent mistakenly equates outside experts with independent experts, but the former does not guarantee the latter. We do not quarrel with the notion that using outside medical evaluators can be an important step toward the goal of obtaining neutral assessments, but it is not hard to imagine an outside medical examiner who does not engage in a neutral, independent review, such as where the examiner receives hundreds of thousands of dollars from a single source and performs hundreds of reviews for that source every year. … Despite the dissent’s suggestion that the majority disapproves of outside reviewers, we imply no such disapproval; we simply apply the unremarkable proposition that the number of examinations referred and the size of the professional fees paid to a reviewer may compromise the neutrality of an expert. See Montour, 588 F.3d at 634; Nolan, 551 F.3d at 1152, n.3.”
“ … Taking into account the totality of the circumstances – i.e., the financial conflict of interest of the IPCs on whom MetLife relied (which warrants some skepticism in reviewing the IPCs’ conclusions), the substantial evidence of Mr. Demer’s mental limitations due to pain medication and physical limitations, and the IPCs’ reviews of Mr. Demer’s condition, without having examined him and without explaining why they rejected his credibility, particularly in light of evidence corroborating his credibility (both medical and nonmedical) – MetLife abused its discretion in denying Mr. Demer’s claim for LTD benefits.”
Michelle L. Roberts (argued), Roberts Bartolic LLP, Alameda, California; Barry Kirschner (argued), Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C., Tucson, Arizona; for Plaintiff-Appellant.
Michelle McAloon Constandse (argued), Metropolitan Life Insurance Company, Irvine, California; James K. Mackie, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Tucson, Arizona, for Defendants-Appellees.
Ninth Cir. 8/26/16 decision by Chin, Christen concurring, and Bybee dissenting in part but concurring in the judgment; ___ F.3d ___; 2016 WL 4488006.
KOBOLD v. GOOD SAMARITAN REG’L MED. CTR.
The three cases in this consolidated appeal—Kobold v. Good Samaritan Regional Medical Center, Barr v. Ross Island Sand & Gravel Co., and Allen v. Northwest Permanente—involve different parties and facts, but are similar in important ways. All three involve employees represented by labor unions who seek remedies under state law against their employers. In all three, there is a collective bargaining agreement (“CBA”) between the union and the employer setting out a grievance and arbitration procedure to govern disputes arising under the agreement. And in all three, a grievance was filed but did not provide full relief, prompting the employee to turn to the courts. All the employees initially filed their cases in state court, but the cases were removed to federal court on the basis of preemption under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a). In all the cases, the district court denied a motion to remand and held the state law claims preempted. We consider the § 301 preemption questions on appeal.
As this court has observed more than once, although § 301 preemption questions arise fairly frequently, “[f]amiliarity … has not bred facility.” Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 689 (9th Cir. 2001) (en banc) (alteration in original) (quoting Galvez v. Kuhn, 933 F.2d 773, 774 (9th Cir. 1991)). In the hope that doing so will illuminate the parameters of § 301 preemption analysis, and so help “[breed] facility,” id. we have consolidated the three cases for consideration and resolve them in this single opinion. We begin with a review of § 301 preemption doctrine and then proceed to discuss each case.”
In Kobold’s case, the CBA provided that nurses were to be paid one and one-half times their regular pay rate for all hours worked above their regularly scheduled full-time equivalent shifts “except when there is a change of schedule agreed upon by the Medical Center and nurse.” The decision concluded that the LMRA preempted Kobold’s wage claims because, although her right to overtime premium was statutory, interpretation of the CBA was required to resolve the dispute over how a change of schedule agreement was reached in order to determine how many of the overtime hours Kobold worked were subject to such an agreement.
In Barr’s case, the CBA provided that Ross Island Sand & Gravel Co. (“RISG”) and Barr would each contribute to the cost of Barr’s health and welfare benefits. RISG was to pay 90% of the cost of benefits, and would deduct the other 10% from employees’ paychecks. RISG was to remit its contributions and the employees’ paycheck deductions to the Oregon Teamsters Employers Trust Fund (“OTET”), which managed the health insurance plan. The decision concluded that Barr’s rights and interpretations of issues regarding those rights were statutory and independent of his rights under the CBA. The decision similarly concluded that Barr’s breach of fiduciary duty claim was not preempted. “A court need only determine whether RISG kept the health insurance funds in a separate account, promptly turned them over, and did not keep them for its own use or benefit; such a determination does not require a court to do any more than look at or refer to the RISG CBA, if that. See Balcorta, 208 F.3d at 1108.”
However, the decision found that Barr’s “had and received” claim was preempted. “RISG’s authority to deduct funds from Barr’s paychecks and Barr’s right to have those funds applied toward his health insurance premiums are purely contractual entitlements. Without those provisions in the RISG CBA, Barr would have no basis upon which to bring the money had and received claim. … Barr therefore can only maintain a claim under § 301 if he can demonstrate that his remedies under the RISG CBA were exhausted. The Teamsters settled or abandoned all grievances related to RISG’s failure to remit paycheck deductions to OTET; the grievances were never submitted to an arbitrator. Because the contractual remedies were not exhausted, and Barr does not allege that Teamsters breached its duty of fair representation, he cannot pursue his money had and received claim as a § 301 claim.”
“…All three of Barr’s claims “have ‘a common nucleus of operative fact.’ ” Osborn v. Haley, 549 U.S. 225, 245, 127 S.Ct. 881, 166 L.Ed.2d 819 (2007) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966)); see 28 U.S.C. § 1367(a). The district court therefore should decide on remand whether to exercise supplemental jurisdiction over Barr’s Or. Rev. Stat. § 652.610(4) and breach of fiduciary duty claims.” In a footnote, the decision also instructed the trial court to address RISG’s defense that Barr’s action was preempted by ERISA.
In Allen’s case, her employment as a nurse practitioner was conditioned on being re-credentialed every two years. While on leave, Allen learned renewal of her credential was conditioned upon her agreeing to a Work Improvement Plan. When Allen did not sign a proposed agreement, the Credentials Committee denied her application. Pursuant to the CBA, the union grieved Allen’s denial through binding arbitration. The arbitrator ultimately found that the Committee did not have just cause to essentially fire Allen. “Having so concluded, the arbitrator vacated the Committee’s decision, remanded Allen’s credentialing application for further proceedings by the Committee, and placed Allen on paid administrative leave for 60 days, but declined to award back pay.”
Unhappy with the arbitration award, Allen sued in state court. The case was removed to federal court based on LMRA preemption. “In response, Allen filed a motion to remand, contending that NWP’s credentialing process was not governed by the Nurses’ CBA and that none of her claims required interpretation of the Nurses’ CBA.
A magistrate judge concluded otherwise. She recommended that the motion to remand be denied, holding that “most of [Allen’s] claims substantially depend on an analysis of the CBA, and, thus, are preempted.” Alternatively, the magistrate judge decided, Allen was “taking the opposite position now than she took in the arbitration” regarding whether the Committee’s actions were governed by the Nurses’ CBA’s substantive standards, and was therefore judicially estopped from arguing that they were not.”
The decision found that the union not Allen had taken an opposite position during the arbitration. “Because Allen herself took no position at all during the arbitration, her litigating position cannot be “clearly inconsistent” with a nonexistent earlier position.” However, the decision agreed that Allen’s intentional interference claim was preempted because, “the arbitrator decided the question raised under the first Burnside factor—whether Allen’s claims arise out of the Nurses’ CBA or, rather, “exist independently” of it. In asking us to conclude that her claims are independent of the Nurses’ CBA, Allen is, in effect, asking us to overturn the arbitrator’s interpretation of the contract. That we cannot do.” (Emphasis in original.)
“ … Because those claims were preempted at the time of removal, the district court properly denied Allen’s motion to remand and retained jurisdiction over her remaining claims.” The decision then agreed that Allen’s remaining claims were time-barred.
Thomas K. Doyle (argued), Bennett, Hartman, Morris & Kaplan, Portland, Oregon, for Plaintiff–Appellant Susan Kobold.
Kirk Peterson (argued), Bullard Law, Portland, Oregon, for Defendant–Appellee Good Samaritan Regional Medical Center.
Elizabeth Farrell (argued), Portland, Oregon; Benjamin Rosenthal, Portland, Oregon; for Plaintiffs–Appellants Larry Barr, et al.
Ankur H. Doshi (argued) and Kamyavathana Sivanesan, Portland, Oregon; Sheeba Suhaskumar, law student; Northwestern School of Law of Lewis & Clark College, Portland, Oregon; for Defendant–Third–Party–Plaintiff–Appellee Ross Island Sand & Gravel Co.
Matthew Caruso Ellis (argued), Portland, Oregon; George P. Fisher, Portland, Oregon; for Plaintiff–Appellant Ona C. Allen.
Chris Kitchel (argued), James N. Westwood, and Brenda K. Baumgart; Stoel Rives LLP, Portland, Oregon; for Defendant–Appellee Northwest Permanente, P.C.
Ninth Cir. decision by Berson, Watford and Soto concurring; ___ F.3d __, 2016 WL 4191521, 207 L.R.R.M. (BNA) 3030, 26 Wage & Hour Cas.2d (BNA) 1345.
MORRIS v. ERNST & YOUNG
“In this case, we consider whether an employer violates the National Labor Relations Act by requiring employees to sign an agreement precluding them from bringing, in any forum, a concerted legal claim regarding wages, hours, and terms and conditions of employment. We conclude that it does, and vacate the order of the district court compelling individual arbitration.”
As a condition of employment, Morris was forced to waive any class action claim. Nonetheless, Morris brought a class action claim alleging that the firm relied on the misclassification to deny overtime wages in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C.A. § 201 et seq., and California labor laws.
Relying on Horton I, the decision reasoned, “This case turns on a well-established principle: employees have the right to pursue work-related legal claims together. 29 U.S.C. § 157; Eastex, Inc. v. NLRB, 437 U.S. 556, 566, 98 S.Ct. 2505, 57 L.Ed.2d 428 (1978). Concerted activity—the right of employees to act together—is the essential, substantive right established by the NLRA. 29 U.S.C. § 157. Ernst & Young interfered with that right by requiring its employees to resolve all of their legal claims in “separate proceedings.” Accordingly, the concerted action waiver violates the NLRA and cannot be enforced.” D.R. Horton, 357 NLRB No. 184 (2012) (“Horton I”), slip op. at 1, enf. denied 737 F.3d 344 (5th Cir. 2013) (“Horton II”).
Max Folkenflik (argued), Folkenflik & McGerity, New York, New York; H. Tim Hoffman, H. Tim Hoffman Law, Oakland, California; Ross L. Libenson, Libenson Law, Oakland, California; for Plaintiffs-Appellants.
Rex S. Heinke (argued) and Gregory W. Knopp, Akin Gump Strauss Hauer & Feld, Los Angeles, California; Daniel L. Nash, Akin Gump Strauss Hauer & Feld, Washington, D.C.; for Defendants-Appellees.
Ninth Cir. 8/22/16 decision by Thomas, Hurwitz concurring, Ikuta dissenting; ___ F.3d ___, 2016 WL 4433080.
STILWELL v. CITY OF WILLIAMS
“Plaintiff-Appellant Ronnie Stilwell sued his city employer for retaliation, alleging that he was fired for planning to testify against the City in a lawsuit relating to age discrimination. Stilwell asserted that his termination violated both the First Amendment and the retaliation provision of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 623(d). The question we must answer is whether the retaliation provision of the ADEA precludes a plaintiff such as Stilwell from bringing a First Amendment retaliation claim under 42 U.S.C. § 1983. We hold that it does not.”
As a threshold matter, the decision found that the speech in Stilwell’s declaration was protected by the First Amendment. Lane v. Franks, ––– U.S. ––––, 134 S.Ct. 2369, 2378, 189 L.Ed.2d 312 (2014); Alpha Energy Savers, Inc. v. Hansen, 381 F.3d 917, 927 (9th Cir. 2004).
Relying primarily Fitzgerald v. Barnstable School Committee, 555 U.S. 246, 129 S.Ct. 788, 172 L.Ed.2d 582 (2009), the decision analyzed whether Congress intended the ADEA to preclude use of § 1983 to enforce constitutional rights.
“Like the disparities identified in Fitzgerald, our examination of the ADEA’s retaliation provision and First Amendment retaliation claims brought under § 1983 reveals differences in who may sue and be sued. First, the ADEA does not allow for suit against individuals, whereas § 1983 does. … Second, state employees, in practice, cannot sue under the ADEA but can sue under § 1983. … Third, the ADEA is generally applicable to private and public (but not state) employers with twenty or more employees. … Finally, the Supreme Court has held that independent contractors may sue under § 1983 for First Amendment retaliation.”
“ … Also similar to the differences identified in Fitzgerald, there is a difference between ADEA retaliation suits and § 1983 First Amendment retaliation suits in how liability is established under each. See Fitzgerald, 555 U.S. at 257, 129 S.Ct. 788 (examining different standards of liability for Title IX and § 1983 claims). … First, an ADEA plaintiff bears a greater burden of proof as to causation than a plaintiff bringing a First Amendment retaliation claim. … Second, exactly as in Fitzgerald, 555 U.S. at 257, 129 S.Ct. 788, there is a difference in the requirements for establishing liability between the ADEA retaliation clause and § 1983 when the defendant is a municipality. … Finally, the remedies available to those individuals bringing suit under the ADEA’s retaliation provision and § 1983 are different.”
The decision found, “The result that the retaliation provision of the ADEA does not preclude § 1983 First Amendment retaliation suits makes sense in light of the heightened level of protection that the Constitution affords First Amendment rights. Rights subject to heightened scrutiny are much more likely to be the basis of a successful constitutional claim than are those subject to rational basis review. See, e.g., Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 84, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000) (explaining the greater difficulty in prevailing on an equal protection claim subject to rational basis review than on one subject to heightened scrutiny).
The decision concluded, “Because the ADEA’s retaliation provision is critically different from the ADEA’s discrimination provision at issue in Ahlmeyer, that opinion is not controlling here. As explained above, the ADEA’s retaliation protections are narrower than the First Amendment’s in some important respects, whereas the ADEA discrimination provision provides more protection against age discrimination than does the Equal Protection Clause. Cf. Kimel, 528 U.S. at 86, 120 S.Ct. 631 (“Judged against the backdrop of our equal protection jurisprudence, it is clear that the ADEA is ‘so out of proportion to a supposed remedial or preventive object that it cannot be understood as responsive to, or designed to prevent, unconstitutional behavior.’ ” (quoting City of Boerne v. Flores, 521 U.S. 507, 532, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997))).
Given the substantial difference between the level of scrutiny afforded age discrimination equal protection claims and First Amendment retaliation claims, we cannot assume that Congress intended the ADEA to affect the availability of § 1983 claims in the same manner in both subject areas.”
Charles Anthony Shaw (argued), Law Offices of Charles Anthony Shaw, PLLC, Prescott, Arizona, for Plaintiffs–Appellants.
Kenneth H. Brendel (argued), Mangum, Wall, Stoops & Warden, PLLC, Flagstaff, Arizona, for Defendants–Appellees.
Ninth Cir. 8/5/16 decision by Friedland, Gould concurring, Fernandez dissenting; ___ F.3d ___, 2016 WL 4151221.
TEUTSCHER v. WOODSON
This appeal requires us to examine the limits on a district court’s authority to award front pay and reinstatement as equitable remedies for a retaliatory discharge after a plaintiff has already sought and been awarded by a jury front pay damages to compensate for the same harm. Plaintiff-Appellee Scott Teutscher went to trial against his former employer, Riverside Sheriffs’ Association (“RSA”), on retaliatory discharge claims under both state law and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001–1461 (“ERISA”). A jury awarded him lump-sum damages on his state law claims, and the district court then entered judgment in his favor on his ERISA claim. Even though, at Teutscher’s request, the jury had been instructed to include front pay in its damages award, the district court granted Teutscher additional equitable remedies consisting of reinstatement as well as front pay until reinstatement occurred. RSA appeals these equitable remedies, arguing that they conflict with the jury’s front pay award in violation of the Seventh Amendment and improperly duplicate Teutscher’s recovery from the jury.
Given the way in which the jury was instructed and the evidence presented at trial, the jury’s verdict encompassed an implicit factual determination as to the entire amount of front pay to which Teutscher was entitled on account of his retaliatory discharge. We hold that the district court’s grant of an additional front pay remedy for the same harm disregarded that determination in violation of the Seventh Amendment right to a jury trial. In addition, although the reinstatement remedy does not necessarily conflict with factual findings implicit in the jury’s verdict, we hold that it is nevertheless improper because Teutscher waived that relief when he elected to seek the duplicative front pay remedy from the jury. We accordingly reverse the district court’s equitable awards.”
Smith’s concurring opinion reasoned, “Although front pay may look very similar to compensatory damages for future lost earnings, it is a distinct remedy. The Seventh Circuit has upheld an award of both future lost earnings and front pay, and concluded that such an award does not necessarily constitute a double recovery. Williams v. Pharmacia, Inc., 137 F.3d 944, 953 (7th Cir. 1998). … The Williams court also noted that a jury award for future compensatory damages was not necessarily factually inconsistent with an equitable front pay award because the awards can “compensate the plaintiff for different injuries.” Williams, 137 F.3d at 953. Reinstatement (and front pay) puts the plaintiff back in his job, or at least pays him as if he had been reinstated. Future compensatory damages can be significantly broader than that, and encompass reputational harms, loss of experience, and other “forward-looking aspects of the injury caused by the discriminatory conduct.” Id. Similarly, a compensatory damages award that only gives the plaintiff the cash value of reasonably-certain future earnings at a particular place of employment might still leave the plaintiff suffering harms that might be appropriately remedied with reinstatement, such as a restored track record and job history, which could assist the plaintiff in future employment searches.
In this way, each remedy can have some unique benefits, even though the core of the harm (a lost paycheck) can be remedied by either. In addition to this practical distinction, the Supreme Court in Pollard made clear that there is a technical distinction between compensatory damages for future lost earnings and equitable front pay in lieu of reinstatement. 532 U.S. at 852. For the two awards to be a violation of the Seventh Amendment, moreover, the issues underlying each must be “common to both the legal and equitable claims.” Dairy Queen, Inc. v. Wood, 369 U.S. 469, 472 (1962). Again, although there is significant overlap between the compensatory and equitable inquiries, they are not identical.”
Smith concluded, “I concur in the judgment, however, because I believe the district court abused its discretion in granting reinstatement in this context. As the majority observes, the jury had been asked to compensate Teutscher for the cash value of his future paychecks with RSA. The district court’s analysis on reinstatement is only a paragraph, and appears to assume that additional equitable relief was “appropriate” to redress the ERISA violation over and above the jury verdict. If the district court had provided reasoning to explain why it believed reinstatement was appropriate to redress non-monetary wrongs inflicted on Teutscher, it might have articulated a basis for reinstatement that was in harmony with the damages award. On this thin record, however, it is not apparent that is what happened. Therefore, I would reverse the equitable award as an abuse of discretion.”
Daniel P. Stevens (argued) and Heather K. McMillan, Stevens & McMillan, Tustin, California, for Plaintiff-Appellee.
Jon R. Williams (argued), Williams Iagmin LLP, San Diego, California, for Defendant-Appellee.
William N. Woodson, III (argued), Law Offices of Wm. N. Woodson, III APC, Fallbrook, California, pro se Intervenor-Appellant.
Ninth Cir. 8/26/16 decision by Friedland, Watford concurring, and concurring opinion by Smith; ___ F.3d. ___, 2016 WL 4488008.
TORRES v. MERCER CANYONS, INC.
“Defendant Mercer Canyons, Inc. (Mercer) appeals the district court’s order certifying a class of domestic farm workers, represented by Bacilio Ruiz Torres and Jose Amador (collectively, Plaintiffs). Mercer operates a fruit and vegetable farm near Prosser, Washington. In 2013, Mercer participated in the federal H-2A program, which permitted Mercer to hire foreign workers to fill temporary agricultural positions at an hourly wage of $12.
Plaintiffs brought a putative class action, claiming that Mercer had a common policy or practice of failing to inform domestic farm workers of the availability of H-2A work that paid $12 per hour, in violation of the Agricultural Workers’ Protection Act (AWPA), 29 U.S.C. §§ 1831(e) and 1821(f), and the Washington Consumer Protection Act (CPA), Wash. Rev. Code § 19.86.020. In addition, Plaintiffs alleged that Mercer failed to pay its own domestic workers $12 per hour when they carried out the same tasks as foreign H-2A workers, in violation of AWPA and state wage laws.
The district court certified an Inaccurate Information class and an Equal Pay subclass, corresponding to Plaintiffs’ claims. We affirm the district court’s class certification order.”
Eric D. Miller (argued), Michael T. Reynvaan, Frederick B. Rivera, and William B. Stafford, Perkins Coie LLP, Seattle, Washington, for Defendant-Appellant.
Lori Jordan Isley (argued), Joachim Morrison, and David Solis, Columbia Legal Services, Yakima, Washington; Adam J. Berger and Martin S. Garfinkel, Schroeter Goldmark & Bender, Seattle, Washington; for Plaintiffs-Appellees.
Ninth Cir. 8/31/16 decision by Smith, Tashima and Kobayashi concurring; ___ F.3d. ___, 2016 WL 4537378.