READYLINK HEALTHCARE, INC., a Nevada Corporation, on behalf of itself and others similarly situated v. STATE COMPENSATION INSURANCE FUND; Dave Jones, Insurance Commissioner, in his official capacity
No. 12-56248
United States Court of Appeals, Ninth Circuit
June 12, 2014
Argued and Submitted April 10, 2014.
Our decision in Gallegos-Galindo is not an aberration. To the contrary, several of our sister circuits have likewise held that any sex offense involving a lack of consent is a forcible sex offense. For example, the Eleventh Circuit recently explained that “any nonconsensual sexual contact will satisfy the guidelines definition of ‘forcible sex offense.‘” United States v. Contreras, 739 F.3d 592, 597 (11th Cir. 2014). While the Eleventh Circuit acknowledged that “[i]t may seem odd that the term ‘forcible sexual offenses’ is defined to include crimes that do not have physical force as an element,” the court concluded that the post-2008 definition “could hardly be any clearer” that lack of consent is sufficient. Id. at 596. The Tenth Circuit has similarly explained that “[w]hen an offense involves sexual contact with another person, it is necessarily forcible when that person does not consent.” United States v. Reyes-Alfonso, 653 F.3d 1137, 1142 (10th Cir. 2011) (internal quotation marks omitted). And the Fifth Circuit has held that a conviction under a state statute prohibiting non-consensual “touch[ing] of the victim‘s intimate parts” constitutes a forcible sex offense. United States v. Diaz-Corado, 648 F.3d 290, 293 (5th Cir. 2011). In urging us to read a penetration requirement into the expanded definition of forcible sex offense, Quintero-Junco not only asks us to depart from our decision in Gallegos-Galindo, but also to part company with our sister circuits. We decline to do so.
For these reasons, Quintero-Junco‘s prior conviction constitutes a forcible sex offense. The district court thus correctly applied the “crime of violence” enhancement when calculating Quintero-Junco‘s Guidelines range.
CONCLUSION
The district court properly treated the Guidelines as its starting point, and the court correctly concluded that Quintero-Junco‘s prior Arizona conviction for attempted sexual abuse constitutes a forcible sex offense. Accordingly, we affirm the judgment of the district court.
AFFIRMED.
Seth A. Rafkin (argued) and Jennifer M. Bogue, Cooley LLP, San Diego, CA, for Plaintiff-Appellant.
Kamala D. Harris, Attorney General of California, Paul D. Gifford, Senior Assistant Attorney General, Felix E. Leatherwood, Supervising Deputy Attorney General, Brian D. Wesley (argued), Deputy Attorney General, Los Angeles, CA, for Defendant-Appellee Dave Jones, California Insurance Commissioner, in his official capacity.
Bruce D. Celebrezze (argued) and Benjamin E. Shiftan, Sedgwick LLP, San Francisco, CA; LaDonna Wallace, Jody A. DeBernardi, and Judith D. Sapper, State Compensation Insurance Fund, Santa Ana, CA, for Defendant-Appellee State Compensation Fund.
OPINION
HURWITZ, Circuit Judge:
This case involves parallel judicial proceedings, one in state court and the other in federal court. Each was initiated by ReadyLink Healthcare, Inc. (ReadyLink), and each contended that a decision by the Commissioner of the California Department of Insurance (Commissioner) was preempted by Internal Revenue Service (IRS) regulations. The federal district court abstained, relying on Younger v. Harris, 401 U.S. 37 (1971). While this appeal from the district court judgment was pending, the California Court of Appeal rejected ReadyLink‘s preemption claim, and the California Supreme Court denied review.1
Applying the Supreme Court‘s guidance in Sprint Communications, Inc. v. Jacobs, ___ U.S. ___, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013), we find that the district court erred by abstaining. However, because issue preclusion now bars ReadyLink‘s claim, we affirm the judgment dismissing the complaint.
I. Background
ReadyLink provides temporary nurses for medical facilities. From 2000 to 2006, ReadyLink purchased workers’ compensation insurance from the State Compensation Insurance Fund (SCIF). See
When SCIF audited ReadyLink for the 2005 policy year, it found that ReadyLink had failed to report certain per diem payments to employees as payroll, and billed ReadyLink for an additional premium of $555,327.53. ReadyLink appealed that decision to the California Department of Insurance, see
The ALJ first found that the California Workers’ Compensation Uniform Statistical Reporting Plan (USRP),2 which SCIF used to calculate ReadyLink‘s premium rates, exempts payments for “additional living expenses not normally assumed” from payroll. Because ReadyLink‘s per diem payments were not tied to the expenses that nurses accrued while working away from their homes, the ALJ concluded that the payments were actually wages. In doing so, the ALJ rejected ReadyLink‘s argument that the USRP should be interpreted consistently with IRS per diem reporting rules. The Commissioner affirmed and designated the decision as precedential.
ReadyLink then petitioned the Los Angeles Superior Court for a writ of administrative mandamus pursuant to
While the state court appeal was pending, ReadyLink filed this putative class action against SCIF and the Commissioner in the Central District of California. The federal complaint alleged that IRS regulations preempted the Commissioner‘s decision, requested both declaratory and injunctive relief, and asserted various state-law damage claims. After SCIF moved to dismiss the complaint, the district court ordered supplemental briefing to address possible abstention under Younger and Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). The district court then dismissed the federal preemption claim on Younger grounds and declined to exercise supplemental jurisdiction over the remaining state-law claims. ReadyLink appealed.
As ReadyLink‘s appeal to this court was pending, the California Court of Appeal affirmed the Superior Court‘s denial of mandamus, expressly holding that the Commissioner‘s decision was not preempted by federal law. ReadyLink HealthCare, Inc. v. Jones, 210 Cal.App.4th 1166, 148 Cal.Rptr.3d 881, 886-92 (2012). The California Supreme Court denied ReadyLink‘s subsequent petition for review.
II. Younger Abstention
A.
The district court had jurisdiction over ReadyLink‘s complaint under
B.
In Younger v. Harris, the Supreme Court reaffirmed the long-standing principle that federal courts sitting in equity cannot, absent exceptional circumstances, enjoin pending state criminal proceedings. 401 U.S. at 43-54. The Court, citing comity concerns, later extended the Younger principle to civil enforcement actions “akin to” criminal proceedings, Huffman v. Pursue, Ltd., 420 U.S. 592, 604, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975), and to suits challenging “the core of the administration of a State‘s judicial system,” Juidice v. Vail, 430 U.S. 327, 335, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977).
The Court‘s subsequent opinion in Middlesex County Ethics Committee v. Garden State Bar Ass‘n, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982), found abstention appropriate when (1) there is “an ongoing state judicial proceeding,” (2) those “proceedings implicate important state interests,” and (3) there is “an adequate opportunity in the state proceedings to raise constitutional challenges.” Id. at 432. Our ensuing decisions concluded that the three Middlesex factors controlled Younger abstention in civil actions. See, e.g., Meredith v. Oregon, 321 F.3d 807, 816-17 (9th Cir. 2003); Fresh Int‘l Corp. v. Agric. Labor Relations Bd., 805 F.2d 1353, 1357-62 (9th Cir. 1986). And, although not a threshold element, we identified a fourth requirement: The requested relief must seek to enjoin—or have the practical effect of enjoining—ongoing state proceedings. AmerisourceBergen Corp. v. Roden, 495 F.3d 1143, 1149 (9th Cir. 2007); Gilbertson, 381 F.3d at 977-78 (citing Samuels v. Mackell, 401 U.S. 66, 72, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971)).
But, our post-Middlesex decisions have sent mixed signals on whether Younger remains limited to criminal cases, quasi-criminal actions, and orders involving the administration of a state‘s judicial system. A number of our opinions suggested that, notwithstanding Middlesex, Younger applies only to those three types of proceedings. See, e.g., Logan v. U.S. Bank Nat. Ass‘n, 722 F.3d 1163, 1167-69 (9th Cir. 2013); Potrero Hills Landfill, Inc. v. Cnty. of Solano, 657 F.3d 876, 883-85 & n. 7 (9th Cir. 2011); Martori Bros. Distribs. v. James-Massengale, 781 F.2d 1349, 1354-56 (9th Cir. 1986), abrogated on other grounds, Ohio Civ. Rights Comm‘n v. Dayton Christian Schs., Inc., 477 U.S. 619, 627 n. 2, 106 S.Ct. 2718, 91 L.Ed.2d 512 (1986). Others, however, implied that district courts must abstain in any action when the Middlesex factors are present. See, e.g., Delta Dental Plan of Cal., Inc. v. Mendoza, 139 F.3d 1289, 1295 (9th Cir. 1998); Fresh Int‘l Corp., 805 F.2d at 1358.
We also have been less than clear on whether Younger applies only to state-initiated proceedings. Compare Potrero Hills, 657 F.3d at 883 n. 7 (“[O]ur case law clearly demonstrates that the first Younger prong may be satisfied even when the ongoing state proceeding involves only private litigants.“), with San Jose Silicon Valley Chamber of Commerce Political Action Comm. v. City of San Jose, 546 F.3d 1087, 1093 (9th Cir. 2008) (“We must abstain under Younger if four requirements are met: (1) a state-initiated proceeding is ongoing....“).
For orders at the “core” of the judicial process, the underlying state proceeding plainly need not have been initiated by the state. See Juidice, 430 U.S. at 329-30, 335-36; Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 4-5, 12-14, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987). For civil enforcement actions that are akin to criminal proceedings, however, “a state actor is routinely a party to the state proceeding and often initiates the action,” the proceedings “are characteristically initiated to sanction the federal plaintiff for some wrongful act,” and “[i]nvestigations are commonly involved, often culminating in the filing of a formal complaint or charges.” Sprint, 134 S.Ct. at 592.
In civil cases, therefore, Younger abstention is appropriate only when the state proceedings: (1) are ongoing, (2) are quasi-criminal enforcement actions or involve a state‘s interest in enforcing the orders and judgments of its courts, (3) implicate an important state interest, and (4) allow litigants to raise federal challenges. See Sprint, 134 S.Ct. at 593-94; Gilbertson, 381 F.3d at 977-78. If these “threshold elements” are met, we then consider whether the federal action would have the practical effect of enjoining the state proceedings and whether an exception to Younger applies. See Gilbertson, 381 F.3d at 978, 983-84. Each element must be satisfied, AmerisourceBergen, 495 F.3d at 1148, and the date for determining whether Younger applies “is the date the federal action is filed,” Gilbertson, 381 F.3d at 969 n. 4.
C.
The state proceedings here did not fall within the three exceptional categories of cases identified in Sprint and NOPSI. First, obviously they were not parallel state criminal proceedings.
Second, neither the Commissioner‘s approval of SCIF‘s premium calculation nor the Los Angeles Superior Court‘s affirmance was an order at “the core of” California‘s court system, Juidice, 430 U.S. at 335, implicating the “State‘s interest in enforcing the orders and judgment of its courts,” Sprint, 134 S.Ct. at 588. “Core” orders involve the administration of the state judicial process—for example, an appeal bond requirement, Pennzoil, 481 U.S. at 12-14, a civil contempt order, Juidice, 430 U.S. at 335-36, or an appointment of a receiver, Lebbos v. Judges of the Superior Court, 883 F.2d 810, 815 (9th Cir. 1989). This case, in contrast, involves a “single state court judgment” interpreting an insurance agreement and state law, not the process by which a state “compel[s] compliance with the judgments of its courts.” Potrero Hills, 657 F.3d at 886. If the mere possibility of inconsistent federal and state court judgments justified Younger abstention, Younger would swallow whole both Colorado River abstention and preclusion. See AmerisourceBergen, 495 F.3d at 1150.
Third, the state court proceedings here do not “rank as an act of civil enforcement ‘akin to a criminal prosecution’ in ‘important respects.‘” Sprint, 134 S.Ct. at 592
SCIF and the Commissioner argue that the state proceedings were akin to a criminal prosecution because the Commissioner “convened” an administrative hearing and issued an opinion interpreting state regulations. The assertion proves too much. If the mere “initiation” of a judicial or quasi-judicial administrative proceeding were an act of civil enforcement, Younger would extend to every case in which a state judicial officer resolves a dispute between two private parties. This would render meaningless the “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them,” Colorado River, 424 U.S. at 817, and “would extend Younger to virtually all parallel state and federal proceedings, at least where a party could identify a plausibly important state interest,” Sprint, 134 S.Ct. at 593. That the Commissioner interpreted a California regulation is similarly irrelevant: In nearly every civil case, litigants request that a court or a quasi-judicial agency interpret a statute, a regulation, or the common law.
The district court therefore erred by abstaining. But, things have changed since the district court‘s decision: The California courts have now directly rejected ReadyLink‘s preemption claim. We turn to the consequences of that rejection.
III. Preclusion
A.
Because the California Court of Appeal rejected ReadyLink‘s preemption claim after the federal district court entered its judgment, neither party addressed preclusion below. However, we may consider issue preclusion, a question of law, for the first time on appeal. Clements v. Airport Auth., 69 F.3d 321, 329-30 (9th Cir. 1995). Issue preclusion “bars ‘successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment,’ even if the issue recurs in the context of a different claim.” Taylor v. Sturgell, 553 U.S. 880, 892, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008) (quoting New Hampshire v. Maine, 532 U.S. 742, 748-49, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)).
We determine the preclusive effect of a state court judgment by applying that state‘s preclusion principles.
California law bars relitigation of an issue of law or fact if five requirements are met:
First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actu-
B.
Applying the California issue preclusion test, we conclude that the decision of the California Court of Appeal bars ReadyLink‘s preemption claim.
First, the California court resolved the very issue that ReadyLink raised in the district court—whether the Commissioner‘s decision creates an obstacle to federal tax law. Jones, 148 Cal.Rptr.3d at 888-89. The state court held that ReadyLink‘s preemption argument was a misguided attempt “to compare two distinct areas of law,” and concluded that the Commissioner may impose more demanding per diem reporting requirements for workers’ compensation purposes than the IRS imposes for federal tax purposes. Id. at 888-90.
Second, ReadyLink actually litigated the issue. “For purposes of collateral estoppel, an issue was actually litigated in a prior proceeding if it was properly raised, submitted for determination, and determined in that proceeding.” Hernandez v. City of Pomona, 46 Cal.4th 501, 94 Cal.Rptr.3d 1, 207 P.3d 506, 514 (2009). ReadyLink‘s state briefing asserted that IRS reporting regulations preempted the Commissioner‘s decision. The California Court of Appeal disagreed.
Issue preclusion applies even if the Commissioner himself had no authority to declare the USRP unenforceable in the underlying administrative proceedings. See
ReadyLink insists that it could not fully present its preemption claim without conducting discovery or presenting evidence to a trial court. ReadyLink, however, made the same point to the California Court of Appeal, which determined as a matter of law that the Commissioner‘s decision would not frustrate the purpose of federal reporting regulations. Jones, 148 Cal.Rptr.3d at 888-89. This satisfies the “actually litigated” requirement. See Lucido, 795 P.2d at 1225 (requiring “the opportunity to present full cases“); see also Kremer v. Chem. Const. Corp., 456 U.S. 461, 481, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982) (“[S]tate proceedings need do no more than satisfy the minimum procedural requirements of the Fourteenth Amendment‘s Due Process Clause in order to qualify for the full faith and credit guaranteed by federal law.“). Preemption is almost always a legal question, the resolu-
The third, fourth, and fifth requirements for issue preclusion under California law are not subject to debate. The state court necessarily decided the preemption issue, as “the resolution of the issue was not ‘entirely unnecessary to the judgment in the initial proceeding.‘” Zevnik v. Superior Court, 159 Cal.App.4th 76, 70 Cal.Rptr.3d 817, 821 (2008) (quoting Lucido, 795 P.2d at 1226). The California Court of Appeal‘s decision was on the merits, and became final after review was denied. See Abelson v. Nat‘l Union Fire Ins. Co., 28 Cal.App.4th 776, 35 Cal.Rptr.2d 13, 19 (1994). And, the parties in the state and federal actions were the same.
Moreover, applying issue preclusion would preserve “the integrity of the judicial system” by promoting judicial economy. Lucido, 795 P.2d at 1229. There is no reason for a federal court to tackle anew the precise legal issue resolved by the California Court of Appeal.
Contrary to ReadyLink‘s assertion, giving the California Court of Appeal‘s decision preclusive effect does not close federal courts to constitutional claims against California agencies. Had ReadyLink not made its Supremacy Clause claim in the mandamus action, the Court of Appeal‘s opinion would not have precluded a federal suit raising that claim. See Honey v. Distelrath, 195 F.3d 531, 533 (9th Cir. 1999); Gallagher v. Frye, 631 F.2d 127, 129-30 (9th Cir. 1980). ReadyLink also could have avoided claim preclusion by initially requesting both administrative review and declaratory relief in federal court. Cf. City of Chi. v. Int‘l Coll. of Surgeons, 522 U.S. 156, 163-69, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997) (holding that federal district courts have supplemental jurisdiction over state law claims arising under a state administrative review statute); Duchek v. Jacobi, 646 F.2d 415, 419 (9th Cir. 1981) (“However extensive their power to create and define substantive rights, the states have no power directly to enlarge or contract federal jurisdiction.“). But, ReadyLink instead voluntarily chose to litigate the Supremacy Clause claim in the state mandamus action, and the appellate court‘s decision therefore has preclusive effect.
IV. Conclusion
For the foregoing reasons, the judgment of the district court dismissing the complaint is AFFIRMED.