Fowler Packing Company, Inc. v. LanierFowler Packing Company, Inc. v. Lanier
ORDER GRANTING PLAINTIFF‘S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
(Doc. Nos. 62, 64)
This case is before this court following the Ninth Circuit‘s decision and order of remand issued on December 20, 2016 and its mandate issued on March 28, 2017. (Doc. Nos. 42, 49); Fowler Packing Co., Inc., et al. v. Lanier, et al., 844 F.3d 809 (9th Cir. 2016). Following remand, defendants filed a motion for summary judgment. (Doc. No. 64.) Plaintiff Fowler Packing Company, Inc. (“Fowler“) also moved for summary judgment in its favor. (Doc. No. 62.)1 Oppositions and replies were filed in connection with the cross-motions, as was an amicus brief on behalf of the class of certified workers in two actions that were then pending before this court. (Doc. Nos. 65, 66, 67, 71, 73, 74.) A hearing on the pending motions was held on
November 21, 2017. (Doc. No. 76.) Attorneys David Schwarz and Michael Harbour appeared on behalf of plaintiffs, and California Deputy Attorney Generals Mark Beckington
BACKGROUND
With their cross-motions for summary judgment, the parties submitted a joint statement of stipulated facts in lieu of separate statements of undisputed facts. (Doc. No. 62-2.)2 The facts summarized below are largely derived from the parties’ joint statement of stipulated facts as well as additional facts the court has considered as noted.
A. Piece-Rate Compensation and AB 1513
This case concerns California legislation addressing the piece-rate compensation of employees. Piece-rate compensation involves a method of calculating compensation based on the type and number of tasks completed rather than by the number of hours worked. See Gonzalez v. Downtown LA Motors, LP, 215 Cal. App. 4th 36, 41 (2013) (describing how an employer compensated automotive service technicians based on the number of hours that the company determined was appropriate to spend on a task, regardless of how long the technician actually spent to complete that task); Bluford v. Safeway Stores, Inc., 216 Cal. App. 4th 864, 867 (2013) (describing how an employer compensated truck drivers based on miles driven and specific tasks performed).
In 2002, the California Industrial Welfare Commission promulgated Wage Order No. 4, which provided that “[e]very employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.”
1. Gonzalez and Bluford
As noted above, in the spring of 2013, California appellate courts issued two decisions concerning the application of California‘s minimum wage laws to piece-rate compensation for nonproductive time. In these two decisions, Gonzalez and Bluford, the state appellate court held that employees who are paid on a piece-rate basis are
2. Legislative History of AB 1513
On or about August 28, 2014, a draft of proposed legislation (the “Draft Legislation“) was circulated to certain members of the California Legislature with the intention of addressing the Gonzalez and Bluford decisions. Stakeholders and legislators were concerned regarding the impact of the decisions on employers, given the significant potential liability that application of those decisions could impose upon them and the increase in litigation that immediately followed those appellate court decisions. Therefore, the drafters of the proposed legislation included a safe harbor provision, namely an affirmative defense that could be asserted in certain circumstances, with the intent to provide an option for California businesses facing unanticipated and significant potential liability arising from the application of those two then-recent decisions.
The Draft Legislation sought to address, among other things, whether the affirmative defense provisions would be applicable to any pending litigation, and what limitations should be established. The resulting draft thus provided that the affirmative defense provisions would not apply to:
(1) Damages and penalties previously awarded in an order or judgment that was final and not subject to further appeal as of January 1, 2015. (2) Any claims based on the failure to provide rest and recovery periods or pay for nonproductive time that were asserted in an action filed prior to July 1, 2013. (3) Any claims for unpaid wages, damages, and penalties that accrue after January 1, 2015.
The Draft Legislation did not include the specific date exclusion that was subsequently included in the enacted legislation in
The following year, Assembly Bill 1513 (“AB 1513“) was introduced in the California Legislature on or about March 5, 2015. The initial version of AB 1513 did not mention piece-rate compensation and instead, proposed merely to repeal obsolete workers’ compensation study requirements.
On or about August 27, 2015, AB 1513 was amended to address piece-rate compensation and related issues. In doing so, the drafters of AB 1513 sought to address, among other things, the scope of the affirmative defense provisions and whether those provisions would be applicable to any pending litigation, along with any corresponding limitations such as cut-off dates that should be established. The need to address these issues existed for reasons independent of the United Farm Workers (“UFW“) and any position that union may have taken. (Doc. No. 62-2 at ¶ 23.) In resolving these issues, the drafters of AB 1513 included a number of limitations to the affirmative defense which were codified in
The provisions of AB 1513 were codified at
3. California Labor Code § 226.2 (Old Version)
Section 226.2 includes two primary provisions. First, subdivision (a) provides that employees compensated on a piece-rate basis must be compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation. In addition, it establishes certain wage statement requirements as well as a methodology for calculating wages for these employees.
Subdivision (b) of § 226.2 provides that employers may assert an affirmative defense to any claim for recovery of wages, damages, and penalties “based solely on the employer‘s failure to timely pay the employee the compensation due for rest and recovery periods and other nonproductive time,” so long as the employer complies with certain requirements by December 15, 2016. Notably, in order for an employer to assert this affirmative defense, it must pay its employees for previously uncompensated or undercompensated rest and recovery periods and other nonproductive time from July 1, 2012, to December 31, 2015, using one of two stated formulas.
Employers, however, under a number of circumstances cannot access the safe harbor and those circumstances are enumerated in
(2) Claims based on the failure to provide paid rest or recovery periods or pay for other nonproductive time for which all of the following are true:
(A) The claim was asserted in a court pleading filed prior to March 1, 2014, or was asserted in an amendment to a claim that relates back to a court pleading filed prior to March 1, 2014, and the amendment or permission for amendment was filed prior to July 1, 2015.
(B) The claim was asserted against a defendant named with specificity and joined as a defendant, other than as an unnamed (DOE) defendant pursuant to Section 474 of the Code of Civil Procedure, in the pleading referred to in
subparagraph (A), or another pleading or amendment filed in the same action prior to January 1, 2015. * * *
(5) Claims for paid rest or recovery periods or pay for other nonproductive time that were made in any case filed prior to April 1, 2015, when the case contained by that date an allegation that the employer has intentionally stolen, diminished, or otherwise deprived employees of wages through the use of fictitious worker names or names of workers that were not actually working.
Section 226.2(b)(3) also requires that, in order to assert the affirmative defense, by July 1, 2016, “the employer [must] provide [ ] written notice to the [Department of Industrial Relations] of the employer‘s election to make payments to its current and former employees in accordance with the requirements of this subdivision and subdivision (c).”
B. Related Wage Dispute in Aldapa
Plaintiff Fowler is a named defendant in a related case concerning piece-rate compensation that was filed on March 17, 2015 by agricultural piece-rate workers claiming in part that Fowler had failed to pay wages due for rest periods and other nonproductive time. See Aldapa v. Fowler Packing Co., Inc., No. 1:15-cv-00420-DAD-SAB, Compl., Doc. No. 2 (E.D. Cal. Mar. 17, 2015). In addition, the plaintiffs in Aldapa alleged Fowler willfully used fictitious worker names (referred to as “ghost workers” or “muertitos“) in order to undercompensate employees who were actually working. Id. ¶¶ 32-34. Because the complaint in Aldapa was filed prior to April 1, 2015, and because the complaint contained so-called “ghost worker claims” relating to the use of fictitious worker names, the affirmative defense set forth in
The parties in Aldapa reached a settlement in that case, and on August 4, 2022, the plaintiffs filed a motion for preliminary approval of the parties’ class action settlement, which the court granted on January 12, 2013. (Aldapa, Doc. Nos. 278, 283.) On April 14, 2023, the plaintiffs filed a motion for final approval of the parties’ class action settlement, and the final approval hearing is currently scheduled for June 5, 2023. (Aldapa, Doc. Nos. 291, 292.)
C. Procedural Background
On January 22, 2016, plaintiffs Fowler and Gerawan commenced this action against defendants David M. Lanier, in his official capacity as Secretary of the California Labor and Workforce Development Agency (“LWDA“); Christine Baker, in her official capacity as the Director of the California Department of Industrial Relations; and Julie A. Su, in her official capacity as California Labor Commissioner. (Doc. No. 1.)4 Specifically, plaintiffs
Constitution and Article 1, § 7 of the California Constitution. (Id. ¶ 52.) Second, plaintiffs assert that these same subdivisions violate the prohibition against bills of attainder of Article I, § 10 of the United States Constitution and Article I, § 9 of the California Constitution. (Id. ¶ 59.) Finally, plaintiffs assert that these subdivisions of
On March 7, 2016, defendants filed a motion to dismiss plaintiffs’ complaint, which the court granted on July 8, 2016. (Doc. Nos. 10, 33.) In that dismissal order this court concluded that the plaintiffs did have Article III standing to bring their claims and rejected defendants’ argument to the contrary. (Doc. No. 30 at 7.) Next, plaintiffs conceded that Eleventh Amendment immunity applied as to their state law claims and that the court lacked jurisdiction in that regard, resulting in the dismissal of those state law claims. (Id. at 7-8.) This court also found that the challenged provisions,
In considering the universe of potential cases involving claims for failure to pay wages due for rest and recovery periods and other nonproductive time, the legislature could have concluded that there existed a legitimate state interest in allowing a subset of those cases to proceed through litigation. Certainly, the legislature could have decided that employers facing both claims for failure to pay wages for nonproductive time and ghost worker claims should not be afforded the same affirmative defense as those defending claims for lost wages only. Such a distinction clearly finds a rational basis and would not have been so unrelated to the legislature‘s broader goal of addressing the potential increase in litigation so as to bar its adoption. As defendants point out, the legislature may have been particularly sensitive to allegations involving the improper use of fictitious worker names to diminish employee compensation.
Moreover, allegations that an employer intentionally stole, diminished, or otherwise deprived employees of wages through the use of fictitious worker names pose unique challenges related to the later calculation of lost wages. Because the safe harbor provision of
Labor Code § 226.2 requires determination of either “actual sums due” or an “employee‘s gross earnings,” any calculation of lost wages may be potentially inaccurate where an employer is also accused of intentionally altering pay records. SeeCal. Lab. Code § 226.2(b)(1) . Thus, it is entirely reasonable for the legislature to have elected to treat cases involving ghost worker allegations differently from other piece-rate compensation cases.Finally, plaintiffs argue that the classification of claims under subdivision (g)(5) based on the date a claim is asserted—April 1, 2015—is arbitrary and intended solely to preclude use of the statutory affirmative defense in the Aldapa case. Plaintiffs suggest that the legislature
should have applied such an exception to all cases involving ghost worker claims. (Doc. No. 16 at 29-30.) But, despite plaintiffs’ protestations, the April 1, [2015]5 deadline serves a rational purpose. First, it is clear that in light of the concerns described above, the legislature needed to set some limitation as to when ghost worker claims could be made. Without a limit, as defendants point out, employees seeking lost piece-rate compensation could have simply included these additional allegations for the sole purpose of denying an employer the ability to take advantage of the statutory affirmative defense. Furthermore, the decision to select April 1, 2015, as opposed to any other date, is reasonable, and the court finds it unnecessary to question the process that resulted in the legislature‘s adoption of this time limitation. The legislature is necessarily engaged in the business of line drawing, and any delineation would have led to a distinction between employers who would be allowed to assert an affirmative defense and those who would not. See Beach, 508 U.S. at 315 (“Defining the class of persons subject to a regulatory requirement—much like classifying governmental beneficiaries inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line, and the fact [that] the line might have been drawn differently at some points is a matter for legislative, rather than judicial, consideration.“) (quoting United States R.R. Ret. Bd. v. Fritz, 449 U.S. 166, 179 (1980)). The legislative classification of employers based on allegations of improper use of fictitious worker names under subdivision (g)(5) is rational and related to a legitimate state interest for purposes of equal protection. See Nordlinger, 505 U.S. at 10.
(Id. at 11-12.)
On July 13, 2016, plaintiffs filed a notice of appeal of this court‘s order of dismissal, seeking review by the U.S. Court of Appeals for the Ninth Circuit. (Doc. No. 36.) On December 20, 2016, the Ninth Circuit reversed this court‘s dismissal order as to plaintiff‘s equal protection
claim6, holding that “the only conceivable explanation for AB 1513‘s carve-outs is that they were necessary to procure the UFW‘s support in passing that legislation” and “that justification would not survive even rational basis scrutiny[.]” Fowler Packing Co., Inc. v. Lanier, 844 F.3d 809, 816 (9th Cir. 2016). Indeed, the panel went so far as to say, “we cannot imagine a plausible legitimate basis for the package of legislative classifications set by the legislature in AB 1513‘s carve-outs, which requires us to conclude that Plaintiffs have alleged a plausible equal protection claim.” Id. at 815, n.3. Thus, the Ninth Circuit concluded that plaintiffs’ complaint plausibly stated a claim that the carve-out provisions violated the Equal Protection Clause and remanded the case to this district court for further proceedings as to that claim. Id. at 816, 819.
On September 15, 2017, the parties filed cross-motions for summary judgment. (Doc. Nos. 62, 64.) Both parties filed their respective oppositions on October 13, 2017. (Doc. Nos. 65, 66.) On October 17, 2017, the amicus curiae brief in opposition to plaintiffs’ motion for summary judgment and in support of defendants’ motion for summary judgment was filed on behalf of the class of certified workers in two actions
On March 27, 2023, plaintiff Fowler filed a petition with the Ninth Circuit requesting the issuance of a writ of mandamus directing this court to rule on the pending cross-motions for
summary judgment. (Doc. No. 99); Fowler Packing Co. v. U.S. Dist. Ct. for the E.D. of Cal., No. 23-70047, Pet., Doc. No. 1-2 (9th Cir. Mar. 27, 2023). On May 2, 2023, the Ninth Circuit granted Fowler‘s petition for a writ of mandamus and directed this court to rule on the pending summary judgment motions by May 29, 2023. (Doc. No. 102.) The Ninth Circuit also provided that this court “may order any supplemental briefing and hold any additional hearings it deems appropriate.” (Id.) At this court‘s direction, the parties provided supplemental briefing. (Doc. Nos. 104, 105, 106.) A further hearing on the pending motions was held on May 22, 2023, at which attorney David Schwarz appeared on behalf of plaintiff Fowler, and California Deputy Attorney General Lara Haddad appeared on behalf of defendants. (Doc. No. 108)7
Summary judgment is appropriate when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
In summary judgment practice, the moving party “initially bears the burden of proving the absence of a genuine issue of material fact.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The moving party may accomplish this by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” or by showing that such materials “do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.”
If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In attempting to establish the existence of this factual dispute, the opposing party may not rely upon the allegations or denials of its pleadings but is required to tender evidence of specific facts in the form of affidavits, and/or admissible discovery material, in support of its contention that the dispute exists. See
In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the
“In evaluating the evidence to determine whether there is a genuine issue of fact,” the court draws “all inferences supported by the evidence in favor of the non-moving party.” Walls v. Cent. Contra Costa Transit Auth., 653 F.3d 963, 966 (9th Cir. 2011). It is the opposing party‘s obligation to produce a factual predicate from which the inference may be drawn. See Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff‘d, 810 F.2d 898, 902 (9th Cir. 1987). Finally, to demonstrate a genuine issue, the opposing party “must do more than simply show that there is some metaphysical doubt as to the material facts. . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.‘” Matsushita, 475 U.S. at 587 (citation omitted).
DISCUSSION
A. Subject Matter Jurisdiction
In their motion for summary judgment, defendants first argue that they are entitled to summary judgment because plaintiffs lack subject-matter jurisdiction based on the State‘s sovereign immunity under the Eleventh Amendment. (Doc. No. 62-1 at 14-24.) According to defendants, because none of the defendants have any meaningful role in implementing or enforcing the challenged legislation, the exception that allows suits for prospective declaratory and injunctive relief against state officers who are sued in their official capacities, to enjoin an alleged ongoing violation of federal law under the decision in Ex parte Young, 209 U.S. 123 (1908), does not apply, and this action is barred. (Id.) Defendants also argue that plaintiffs lack Article III standing because the injuries alleged here are not fairly traceable to the actions of any named defendant. (Id. at 18-20.)
In opposition, plaintiff argues that defendants’ attack on subject-matter jurisdiction is inappropriate because the issue has previously been litigated before this court, defendants failed to appeal this court‘s rejection of their jurisdictional arguments to the Ninth Circuit, and nothing in the record justifies disregarding the law of the case doctrine as to this issue. (Doc. No. 65 at 9-17.) Plaintiff also asserts that the defendants can be sued under the Ex parte Young exception because plaintiff‘s claim asserts that defendants are charged with the responsibility of enforcing California‘s piece-rate wage laws and giving effect to the state law in question. (Id. at 17-27.)
Here, the issue of whether plaintiffs have Article III standing and whether Eleventh Amendment sovereign immunity bars suit reduces to the same basic question: do defendants have a direct connection to enforcement of the affirmative defense provided for by AB 1513 such that any alleged injuries caused thereby are causally traceable to defendants? Nonetheless, the court will address the arguments with respect to standing and sovereign immunity separately.
1. Standing and the Law of the Case Doctrine
“The law of the case doctrine generally prohibits a court from considering an issue that has already been decided by that same court or a higher court in the same case.” Stacy v. Colvin, 825 F.3d 563, 567 (9th Cir. 2016). In order for the doctrine to apply, a court must have decided the issue in question explicitly or by necessary
In the order granting defendants’ motion to dismiss, the undersigned declined to dismiss the complaint on grounds relating to standing and ripeness, finding that “the operation of § 226.2 serves to create an actual and concrete controversy as to whether plaintiffs have the right to assert the statutory affirmative defense in plaintiffs’ related cases.” (Doc. No. 33 at 7.) However, that prior order did not address whether subject-matter jurisdiction is lacking over plaintiffs’ claims based on the State‘s Eleventh Amendment sovereign immunity. In fact, the undersigned explicitly declined to reach the issue of whether defendant Lanier was a properly named defendant in this action in the order granting defendants’ motion to dismiss. (Id. at 15, n.4.)
Because this court previously considered only the issue of whether plaintiffs have standing and explicitly declined to consider whether defendants were properly named in this action, the law of the case doctrine does not preclude the court from considering the latter issue now. Lummi Indian Tribe, 235 F.3d at 452 (stating that the issue must have been decided explicitly or by implication in the previous disposition for the law of the case doctrine to apply). Moreover, it would be within this court‘s discretion to reconsider the issue in any event. See Fazli v. ConocoPhillips Co., 369 F. App‘x 814, 815 (9th Cir. 2010)8 (“With respect to the district court‘s prior order, when the issue is one that previously was decided by the district court itself, application of the doctrine is discretionary.“). Of course, “[t]he objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006) (citing
Finally, this court is not precluded from considering arguments related to sovereign immunity because that issue was not considered by the Ninth Circuit on appeal from this court‘s dismissal order. Plaintiff Fowler appealed this court‘s order dismissing its equal protection and bill of attainder claims and focused their briefing on appeal on those issues, rather than addressing subject matter jurisdiction. Therefore, the Ninth Circuit‘s remand order did not address whether standing and subject matter jurisdiction were lacking, or whether defendant Lanier was immune
from suit pursuant to the Eleventh Amendment. (See Doc. No. 42.) Though the amici raised jurisdictional and immunity issues when they argued that the named defendants did not play a sufficient role in enforcing the challenged state statute in their brief in support of defendants’ petition for rehearing, the Ninth Circuit did not reach those questions and instead issued a one-page order summarily denying the petition for rehearing en banc. (See Doc. No. 48.)
Plaintiffs argue that the Ninth Circuit should be deemed to have implicitly heard and decided defendants’ contention that subject matter jurisdiction is lacking, because it granted leave to file the amicus brief, and then subsequently denied plaintiffs’ request for rehearing. (Doc. No. 65 at
As noted above, this court previously determined in the order granting defendants’ motion to dismiss that plaintiffs do not lack standing. (Doc. No. 33 at 7.) However, neither this court nor the Ninth Circuit considered defendants’ argument that plaintiffs lack a direct connection to the enforcement of the affirmative defense provided under AB 1513 sufficient to provide a basis on which to claim that plaintiff‘s alleged injuries stemming from that enforcement are causally traceable to defendants. Accordingly, this court is not prohibited from now considering whether sovereign immunity applies by the law of the case doctrine.
2. Eleventh Amendment Sovereign Immunity and Traceability
The Eleventh Amendment prohibits federal courts from hearing suits brought by private citizens against state governments without the state‘s consent. Hans v. Louisiana, 134 U.S. 1, 15 (1890); Sofamor Danek Grp. v. Brown, 124 F.3d 1179, 1183 (9th Cir. 1997); Nat. Res. Def. Council v. Cal. Dep‘t of Transp., 96 F.3d 420, 421 (9th Cir. 1996). Application of Eleventh Amendment immunity subjects a complaint to dismissal for lack of subject matter jurisdiction. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039-40 (9th Cir. 2003). State immunity extends to state agencies and to state officers who act on behalf of the state. Puerto Rico Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 142-46 (1993); see also Flint v. Dennison, 488 F.3d 816, 824-25 (9th Cir. 2007) (the Eleventh Amendment bars
However, the Eleventh Amendment does not bar suits against state officials sued in their individual capacity for acts taken during the course of their official duties. Hafer, 502 U.S. at 31; Stilwell v. City of Williams, 831 F.3d 1234, 1245-46 (9th Cir. 2016); Pena v. Gardner, 976 F.2d 469, 473 (9th Cir. 1992). Specifically, the Eleventh Amendment does not bar suit in federal court against a state officer accused of violating federal statutory or constitutional law. Ex parte Young, 209 U.S. at 159-60.
The Ex parte Young doctrine is premised on the notion that states cannot authorize state officers to violate the Constitution and laws of the United States. Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 104 (1984); Sofamor Danek Grp., 124 F.3d at 1183. Accordingly, “when a plaintiff brings suit against a state official alleging a violation of federal law, the federal court may award prospective injunctive relief that governs the official‘s future conduct, but may not award retroactive relief that requires the payment of funds
To determine whether Ex parte Young applies, a court “need only conduct a straightforward inquiry into whether the complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Verizon Md., Inc. v. Pub. Serv. Comm‘n of Md., 535 U.S. 635, 645 (2002). To invoke the Ex parte Young exception, the official sued must have some connection to the enforcement of the allegedly unconstitutional act. Ex parte Young, 209 U.S. at 157; Coal. to Defend Affirmative Action v. Brown, 674 F.3d 1128, 1134 (9th Cir. 2012). This connection “must be fairly direct; a generalized duty to enforce state law or general supervisory power over the persons responsible for enforcing the challenged provision will not subject an official to suit.” Coal. to Defend Affirmative Action, 674 F.3d at 1134 (quoting L.A. Cnty. Bar Ass‘n v. Eu, 979 F.2d 697, 704 (9th Cir. 1992)).
Whether plaintiff Fowler‘s claims here are barred by Eleventh Amendment immunity is dependent on the scope of defendants’ authority in relation to the enforcement of
For the reasons explained below, the court concludes that defendants’ role in giving effect to the safe harbor provisions of the challenged statute subjects them to suit, regardless of whether defendants are specifically responsible for enforcing the affirmative defense provisions of that
statute.10 See Eu, 979 F.2d at 704. In Eu, the
As discussed in more detail below, the Labor Commissioner and the Director of Industrial Relations both give effect to AB 1513, and the LWDA Secretary demonstrates supervisory and independent authority in carrying out the provisions of that statute. All of the defendants named in this action have the responsibility to enforce the AB 1513‘s safe harbor provision and thus, to determine its scope and applicability. See
The California Labor Commissioner has the authority to investigate employee complaints and hold a “hearing in any action to recover wages, penalties, and other demands for compensation. . . .”
Similarly, the Director of Industrial Relations has broad responsibilities to give effect to California‘s piece-rate wage requirements and AB 1513‘s safe harbor provision under the Old Version of the statute. In this regard, the Director of Industrial Relations is required to “administer and enforce all laws imposing any duty, power, or function upon the offices or officers of the department.”
statute establishes a specific connection to the challenged statute such that she is not entitled to Eleventh Amendment immunity. See Eu, 979 F.2d at 704 (finding that state officers were not entitled to Eleventh Amendment immunity with respect to a challenged statute that prescribed the number of superior court judges because the officers named as defendants had specific connections to the challenged statute in that one had a duty to appoint judges to any newly-created judicial positions, and the other had a duty to certify subsequent elections for those positions); see also Coal. to Defend Affirmative Action, 674 F.3d at 1134 (“Yudof has a ‘fairly direct’ connection, to say the least, to the enforcement of section 31. [citation omitted]. As the head of the University of California, he does more than just “live with” section 31. He enforces it.“).
Finally, the LWDA Secretary has similarly broad powers to effectuate
State officials are not entitled to Eleventh Amendment immunity from suit where enforcement of the challenged statute is possible but is not imminent. The fact that these state officials did not bring enforcement proceedings against plaintiff Fowler “under the challenged statute does not preclude . . . suit” even where the challenged statute is not the type “that gives rise to enforcement proceedings.” Eu, 979 F.2d at 704. Moreover, despite not having brought any enforcement actions, the Labor Commissioner certainly had the power to do so under
In finding that defendants are not immune from suit, this court diverges, at least in part, from determinations made by the district court in Sandoval v. Lanier, No. 5:16-cv-02309-JGB-SP, 2017 WL 8186677 (C.D. Cal Aug. 9, 2017). In Sandoval, the plaintiffs had asserted four causes of action on behalf of a putative class against the same three defendants named in this action. 2017 WL 8186677, at *1-2. There, the plaintiffs alleged that due to their employers’ compliance with the affirmative defense requirements of the safe harbor provision, piece-rate workers were being deprived of their statutory right to minimum wage. Id. at *2. The district court in Sandoval reviewed several cases and ultimately concluded that although the named defendants had a general duty to enforce California‘s labor, occupational safety, and wage laws, “California law does not provide them with a role in either enforcing Section 226.2(b), or giving effect to the affirmative defense it provides.” Id. at *6. As a result, the district court in Sandoval found that defendants were immune from suit and that based on a similar analysis, plaintiffs also lacked standing to sue. Id. at *7-8.
This court declines to follow the reasoning of the district court in Sandoval for several reasons. In analyzing the role that defendants have in connection to enforcing the challenged affirmative defense provisions, that court concluded that “Defendants’ role in relation to § 226.2(b) is purely administrative.” Id. at 9. The undersigned disagrees with that characterization. As discussed at length above, the California Labor Commissioner, the Director of Industrial Relations, and the Secretary of the LWDA have both direct
Even if defendants’ role in relation to
Finally, the undersigned concludes that even if the ultimate power to enforce the safe harbor provision of
For these reasons, the undersigned declines to adopt the conclusion reached by the district court in Sandoval and instead finds that the named defendants in this action are not entitled to immunity from suit under the Eleventh Amendment.
Accordingly, the court will deny defendants’ motion for summary judgment in its entirety.
“The Equal Protection Clause of the Fourteenth Amendment commands that no State shall ‘deny to any person within its jurisdiction the equal protection of the laws,’ which is essentially a direction that all persons similarly situated should be treated alike.” City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 439 (1985); see also Lee v. City of Los Angeles, 250 F.3d 668, 686 (9th Cir. 2001). “[A] classification neither involving fundamental rights nor proceeding along suspect lines is accorded a strong presumption of validity.” Heller v. Doe, 509 U.S. 312, 319 (1993); see also United States v. Hancock, 231 F.3d 557, 566 (9th Cir. 2000). Here, on appeal from this court‘s dismissal order, the Ninth Circuit applied the rational basis standard because the challenged provision of
Employing rational basis scrutiny, a statutory classification must be upheld so long as “there is any reasonably conceivable state of facts that could provide a rational basis for the classification.” FCC v. Beach Commc‘ns, Inc., 508 U.S. 307, 313 (1993). Thus, under this highly deferential standard,
the Equal Protection Clause is satisfied so long as there is a plausible policy reason for the classification, the legislative facts on which the classification is apparently based rationally may have been considered to be true by the governmental decisionmaker, and the relationship of the classification to its goal is not so attenuated as to render the distinction arbitrary or irrational.
Nordlinger v. Hahn, 505 U.S. 1, 11 (1992) (citations omitted); see also Armour v. City of Indianapolis, 566 U.S. 673, 680 (2012). The party challenging the rationality of a legislative classification bears the burden “to negative every conceivable basis which might support it.” Beach, 508 U.S. at 315 (citing Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S. 356, 364 (1973)); see also Heller, 509 U.S. at 320; Hernandez-Mancilla v. Holder, 633 F.3d 1182, 1185 (9th Cir. 2011).
In its order remanding this case, the Ninth Circuit concluded that plaintiffs’ claim brought under the Equal Protection Clause should not have been dismissed under rational basis review. Fowler, 844 F.3d at 814. In reaching this conclusion, the Ninth Circuit considered potential justifications for including the carve-outs provided for by
Similarly, the Ninth Circuit found that defendants’ proffered explanation for
Though defendants continue to articulate the same plausible rationales for the enactment of the challenged provisions by the Legislature, those rationales were already considered and rejected by the Ninth Circuit in this case. Moreover, defendants have offered no evidence in support of those rationales in opposition to plaintiff‘s motion for summary judgment. Finally, defendants have not articulated any new “conceivable basis which might support” the carve-outs, and thus have not shifted the burden to plaintiff to negate any such new rationales. See Beach, 508 U.S. at 315. The parties before the court11 have stipulated that the California Legislature needed to adopt time limitations as to the affirmative defense provided in
As they did before the Ninth Circuit, defendants argue that it is reasonably conceivable that the cut-off date appearing in
On summary judgment,12 as before the Ninth Circuit, defendants have been unable to explain why the specific cut-offs that would permit a party to avail itself of the affirmative defense are all different, lending itself to the inference that such lines were drawn by the California Legislature in order to purposefully exclude plaintiff Fowler from accessing the affirmative defense created by the legislation. For instance, defendants still have yet to provide any explanation for why a defendant is only excluded from the safe harbor provision of the Old Version of
At the pleading stage, the Ninth Circuit analyzed the challenged provisions and found that it simply could conceive of no legitimate justification for the specificity requirement except for the improper purpose of denying Fowler, Gerawan, and Delano access to the safe harbor in violation of their right to equal protection. Fowler, 844 F.3d at 816. Defendants have still failed to proffer any legitimate explanation, much less come forward with any evidence, showing why the cut-off dates are all different, other than for the purpose of excluding plaintiff from relying on the affirmative defense. Without such an explanation from defendants, supported by evidence and in light of the Ninth Circuit‘s quite direct opinion in this case, this district court simply has no choice but to now find that as a matter of law the carve-outs to the affirmative defense violate the Equal Protection Clause.13
Despite reaching this conclusion, the court must still determine whether the offending carve-out provisions are severable from the remainder of the Old Version of
C. Severability
Plaintiff argues that the unconstitutional carve-outs in the Old Version of
Here,
Next, under California law, courts are to consider whether a provision is “grammatically, functionally, and volitionally” separate from the remaining portions of a law when deciding whether the provision is severable. Vivid Ent., LLC v. Fielding, 774 F.3d 566, 574 (9th Cir. 2014) (interpreting California law). All three criteria must be satisfied in order to sever the invalid provision. McMahan v. City & Cnty. of San Francisco, 127 Cal. App. 4th 1368, 1374 (2005). To be grammatically severable, a provision must “constitute[] a distinct and separate provision . . . which can be removed as a whole without affecting the wording of any other provision.” Calfarm Ins. Co. v. Deukmejian, 48 Cal. 3d 805, 822 (1989). Plaintiff contends that
Functional severability requires that after severing the invalid portion, the remaining provisions of the statute “must be capable of separate enforcement.” Vivid Ent., 774 F.3d at 576. That is,
[t]he part to be severed must not be part of a partially invalid but unitary whole. The remaining provisions must stand on their own, unaided by the invalid provisions nor rendered vague by
their absence nor inextricably connected to them by policy considerations. They must be capable of separate enforcement.
People‘s Advocate, Inc. v. Superior Court, 181 Cal. App. 3d 316, 332 (1986). Here, plaintiff argues that because ”
Finally, the provision must be volitionally severable, meaning that after excluding the invalid section, “the remainder . . . is complete in itself and would have been adopted by the legislative body had the latter foreseen the partial invalidation of the statute, . . . or constitutes a completely operative expression of the legislative intent . . . [and is not] so connected with the rest of the statute as to be inseparable.” Santa Barbara Sch. Dist., 13 Cal. 3d at 331 (citations and quotation marks omitted); Calfarm Ins. Co., 48 Cal. 3d at 821. According to the California Supreme Court, ”Santa Barbara stands for the proposition that if a part to be severed [and therefore saved] reflects a ‘substantial’ portion of the [legislature]‘s purpose, that part can and should be severed and given operative effect.” Gerken v. Fair Pol. Pracs. Com., 6 Cal. 4th 707, 715 (1993); see also Santa Barbara Sch. Dist., 13 Cal. 3d at 331-332 (“[I]t seems eminently reasonable to suppose that those who favored the proposition would be happy to achieve at least some substantial portion of their purpose.“).
As the California Supreme Court has subsequently explained:
[T]he [remaining valid] provisions to be severed must be so presented to the [legislature] in the [bill] that their significance may be seen and independently evaluated in the light of the assigned purposes of the enactment. The test is whether it can be said with confidence that the [legislature‘s] attention was sufficiently focused upon the parts to be severed so that it would have separately considered and adopted them in the absence of the invalid portions.
Gerken, 6 Cal. 4th at 714-15. In other words, “[t]he issue, when assessing volitional separability, is not whether a legislative body would have preferred the whole to the part; surely it would have. . . .” Cal. Redevelopment Ass‘n, 53 Cal. 4th at 273. “Instead, the issue is whether a legislative body, knowing that only part of its enactment would be valid, would have preferred that part to nothing, or would instead have declined to enact the valid without the invalid.” Id.
To decipher the legislature‘s “preference” or determine whether its “attention
Here, amici argue that the carve-outs are not volitionally severable because the California Legislature drafted
the stipulated facts show that the legislature drafted
AB 1513 so as to balance the competing interests of employers, employees, management, and labor groups and determined that they had to include the carve-outs to offset the burden that the ‘safe harbor’ provision placed on employees who had already devoted significant time and resources litigating their wage and hour claims.
(Id.) In support of this argument, amici cite to an article published in the Sacramento Bee on September 30, 2015, titled “How Jerry Brown and farmers settled a major wage dispute,” which plaintiff attached as an exhibit to its complaint (see Doc. No. 1-1 at 15), and which included statements made by state officials, lawmakers, and industry stakeholders regarding the passage of
Plaintiff Fowler disagrees with amici‘s arguments, and on the specific question of severability, defendants also disagree with amici‘s position and join with plaintiff Fowler in arguing that the carve-outs are volitionally severable from the statute. (Doc. Nos. 74 at 12-14; 71 at 16.) Plaintiff Fowler contends that amici did not provide evidentiary support for their bald assertion that the Legislature “never intended for the safe harbor provision to exist without” to carve-outs. (Doc. No. 74 at 12-13.) According to plaintiff Fowler, “[n]othing in the stipulated facts, the legislative history, or the publicly-available record supports this proposition,” and “[t]he legislative history is devoid of any mention of the carve outs or why they were included.” (Id. at 13.)
In addition, as to the stipulated facts, plaintiff Fowler essentially argues that amici improperly extrapolates from those cited facts and draws conclusions that are not actually supported by any evidence before the court. (Id.) For example, plaintiff Fowler objects to amici‘s assertion that plaintiff Fowler “admits that the carve-outs were part of a ‘grand compromise’ needed for passage of the law.” (Doc. No. 74 at 13, n.2) (citing Doc. No. 67-1 at 24). Plaintiff Fowler explains that “[t]he stipulated facts state only that the carve outs ‘were necessary in order to help avoid the UFW‘s opposition to the bill,‘” but “[t]he fact that the UFW threatened to oppose
At the May 22, 2023 second hearing on the pending motions, plaintiff Fowler emphasized that the evidence before the court establishes that the central purpose of
The court has now carefully reviewed the evidence before it on summary judgment and agrees only to a limited extent with plaintiff Fowler that the court does not have conclusive evidence before it clearly establishing that the Legislature would not have passed
Should the Legislature clarify the statutory requirements for piece-rate compensation?
Should the Legislature provide an affirmative defense and safe harbor for employers who, by December 15, 2016, fully compensate their employees, as specified, for all under-compensated or uncompensated rest periods, recovery periods, or unproductive time between July 1, 2012 and December 31, 2015?
See Sen. Labor and Industrial Relations Comm., B. Analysis of AB 1513, Sept. 2, 2015, 2015-2016 Reg. Sess. (Cal. 2015). That analysis summarized the then 2013 decisions in Gonzalez and Bluford and the concerns that were raised regarding the impact of those decisions—concerns that
following week, dated September 10, 2015, there was again no mention of the purpose for including the carve-out provisions, though there was for the first time a reference to the carve-outs in the section of the analysis that summarized the arguments of opponents. See Sen. Labor and Industrial Relations Comm., B.
While acknowledging that
AB 1513 would allow employers to come into compliance and avoid continued exposure from non-productive time wage claims, opponents argue thatAB 1513 contains provisions that unfairly excludes participation by some agricultural employers. Opponents argue that safe-harbor exclusions, as expressly inserted by use of the March 1, 2014 date sacrifices some companies to continued legal exposure in exchange for legal protections afforded to others. Opponents also point to the provision excluding any company for which an active claim is open alleging the adding of “ghost” employees to reduce or eliminate employee wages from use of payment calculation formulas and exposure protections afforded byAB 1513 .
(Id. at 7.) Similarly, in the assembly labor committee‘s
Opponents argue that although this bill would allow employers to come into compliance and avoid continued exposure for unpaid wage claims, it contains troubling provisions that unfairly exclude participation by some agricultural employers. Opponents argue that these arbitrary provisions set forth a troubling precedent that represents political targeting that sacrifices some companies to continued legal exposure in exchange for legal protections afforded to others. In particular, opponents argue that these provisions are an attempt to single out two agricultural employers for retribution, by leaving them exposed to multi-million dollar damage claims and penalties, while eliminating similar liability threats faced by dozens of other similarly-situated growers. Opponents state that, whatever the intent behind these changes, the result in unfair and unconstitutional.
(Id. at 7.) Finally, the senate floor analysis and the assembly floor analysis included the same information and explanations as the committees’ analyses, and neither provide an explanation as to why the carve-outs were included, even in the face of the opposition arguments. See Assemb. Floor Analysis of AB 1513, Sept. 11, 2015, 2015-2016 Reg. Sess. (Cal. 2015); see also Sen. Floor Analysis of AB 1513, Sept. 11, 2015, 2015-2016 Reg. Sess. (Cal. 2015). In each of the committees’ analyses and in the senate floor analysis, there is section at the end in which supporters and opponents are separately listed and the UFW is not listed as a supporter or opponent in any of them. Taking into consideration this legislative history, and the absence of any discussion regarding the importance of the carve-out provisions or the purpose for including them in the bill, this court concludes that it has not been established on summary judgment that the carve-outs were the driving force motivating the Legislature to pass this bill.17
The inclusion of the carve-outs may very well have been necessary to
Here, based solely on the limited evidence before this court on summary judgment, the purpose of
Accordingly, the court concludes that the carve-out that is applicable to plaintiff Fowler—Old Version
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CONCLUSION
For the reasons stated above:
- Defendants’ motion for summary judgment (Doc. No. 62) is denied in its entirety;
- Plaintiff‘s motion for summary judgment (Doc. No. 64) is granted;
- Subsection (g)(5) in the version of the
California Labor Code § 226.2 in effect between January 1, 2016 and December 31, 2020 is void based on violation of the Equal Protection Clause, and that subsection is severable from the remainder of that statute; - The Clerk of the Court is directed to update the docket to reflect that the following current office holders are substituted in as the named defendants in this action in place of the prior officer holders:
- Stewart Knox, in his official capacity as Secretary of the California Labor and Workforce Development Agency, is substituted in for the prior office holder, David M. Lanier;
- Katie Hagen, in her official capacity as the Director of the California Department of Industrial Relations, is substituted in for the prior office holders, Christine Baker and Acting Director Andre Schoorl; and
- Lilia Garcia-Brower, in her official capacity as the California Labor Commissioner, is substituted in for the prior office holder Julie A. Su; and
- The Clerk of the Court is directed to close this case.
IT IS SO ORDERED.
Dated: May 25, 2023
Dale A. Drozd
UNITED STATES DISTRICT JUDGE