Fowler Packing Company, Inc. v. Lanier, 674 F.Supp.3d 851

Background

California appellate decisions Gonzalez and Bluford (2013) held piece-rate employees are entitled to separate hourly compensation for rest breaks and nonproductive time, creating substantial employer liability and litigation risk.
AB 1513 (Cal. Lab. Code § 226.2, Old Version, effective Jan. 1, 2016–Dec. 31, 2020) created a safe-harbor affirmative defense for employers who paid specified back wages by deadlines, but contained carve-outs in § 226.2(g) excluding certain claims (notably g(2) date-based exclusions and g(5) “ghost worker” exclusion).
Fowler (and Gerawan) were affected: Fowler faced the Aldapa lawsuit (filed before April 1, 2015) alleging use of fictitious "ghost" workers, which § 226.2(g)(5) would exclude from the safe harbor.
Fowler sued state officers (LWDA Secretary, DIR Director, Labor Commissioner) challenging § 226.2(g)(2) and (g)(5) under the federal and California constitutions (equal protection, bill of attainder, special legislation); Ninth Circuit reversed earlier dismissal as to Equal Protection and remanded.
On remand, court denied defendants’ Eleventh Amendment/standing-based summary‑judgment arguments (finding the officials have a sufficiently direct connection to give effect to § 226.2), and granted summary judgment for Fowler in part: § 226.2(g)(5) is void under the Equal Protection Clause and is severable from the remainder of the Old Version of § 226.2; defendants’ summary judgment denied in full.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Eleventh Amendment / Ex parte Young (jurisdiction)	State officers enforce piece‑rate laws and the safe harbor; Ex parte Young allows prospective relief	Officers lack a specific, direct enforcement role re § 226.2 so state sovereign immunity bars suit	Officials have sufficient supervisory/administrative roles (Labor Commissioner, DIR Director, LWDA Secretary) that give effect to § 226.2; Eleventh Amendment immunity does not bar the suit (Ex parte Young applies)
Article III standing / traceability	Plaintiffs have a concrete dispute because the statute affects their ability to use the affirmative defense in ongoing cases	Any injury is not fairly traceable to the named state officers	Court finds standing present for Fowler (law‑of‑the‑case did not preclude reexamination; traceability satisfied given officials’ enforcement roles)
Equal Protection challenge to § 226.2(g) carve-outs	Carve-outs were tailored to exclude specific defendants (including Fowler) as part of political compromise with UFW; the cutoffs lack a rational basis	Legislature rationally drew limits to protect settlement expectations, limit impact on pending litigation, and address ghost‑worker concerns	Following the Ninth Circuit, court finds defendants failed to identify a legitimate rational basis; g(5) (ghost‑worker carve‑out) violates Equal Protection as a matter of law; court grants Fowler summary judgment on g(5) (plaintiff conceded lack of standing re g(2) carve‑out for Gerawan)
Severability of invalid carve‑out(s)	Unconstitutional carve-outs can be severed, preserving the safe‑harbor affirmative defense	Amici/defendants contend carve-outs were essential to passage and thus not volitionally severable	Applying California "grammatical, functional, volitional" test, court finds g(5) grammatically, functionally, and volitionally severable and declares it void while preserving remainder of § 226.2 (Old Version)

Key Cases Cited

Fowler Packing Co. v. Lanier, 844 F.3d 809 (9th Cir. 2016) (reversed dismissal and held plaintiffs plausibly alleged equal protection violation regarding AB 1513 carve‑outs)
Ex parte Young, 209 U.S. 123 (U.S. 1908) (permits prospective suits against state officers for alleged ongoing violations of federal law)
FCC v. Beach Commc’ns, Inc., 508 U.S. 307 (U.S. 1993) (rational‑basis standard: any reasonably conceivable state of facts may provide rational basis)
Nordlinger v. Hahn, 505 U.S. 1 (U.S. 1992) (clarifies rational‑basis review criteria)
L.A. Cnty. Bar Ass’n v. Eu, 979 F.2d 697 (9th Cir. 1992) (state officials who give effect to a statute may be proper Ex parte Young defendants)
Ass’n des Eleveurs de Canards et d’Oies du Quebec v. Harris, 729 F.3d 937 (9th Cir. 2013) (supervisory authority can subject an official to suit under Ex parte Young)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden shifting principles)
Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (standard for genuine dispute of material fact on summary judgment)