Stringcandy v. Am. Federation of Musicians etc.Stringcandy v. Am. Federation of Musicians etc.
On appeal, Stringcandy and Matthews contend the trial court erred in finding that section 301(a) of the
A. The Allegations of the Third Amended Complaint
Stringcandy and Matthews filed this action on February 1, 2024. After the trial court sustained demurrers to the first and second amended complaints, on February 3, 2025 they filed the operative third amended complaint (complaint). The complaint asserted four causes of action against the Federation: (1) defamation (libel); (2) defamation (slander); (3) intentional interference with prospective economic advantage; and (4) declaratory relief.
As alleged in the complaint, Stringcandy is a Los Angeles-based company that hires musicians to perform in high-profile musical productions. Matthews is Stringcandy‘s managing member, a working musician, and a member of the Federation.
In November 2022 Stringcandy entered into a collective bargaining agreement (CBA) with the Musicians Union of Las Vegas, Local 369 (Local 369) “governing the provision of musical services by string musicians within the jurisdiction of [Local 369]” for an artist residency show titled “Weekends with Adele” in a Las Vegas, Nevada hotel-casino. Local 369 is an unincorporated affiliate of the Federation that, as alleged on information and belief, “is controlled by” the Federation and “contractually required to comply with all orders and directions” from Federation leadership. The 2022 CBA commenced on November 12, 2022 and terminated on December 31, 2022, and it was “fully performed by all parties thereto.”
In January 2023 Matthews, on behalf of Stringcandy, engaged in collective bargaining with Local 369, which was represented by its president, Yunior Lopez. The negotiations concerned the employment of string musicians for additional
On January 21, 2023 Stringcandy and Local 369 entered a new CBA that, like the 2022 agreement, “govern[ed] the provision of musical services by string musicians” within Local 369‘s jurisdiction for the Adele residency. Both the 2022 and 2023 CBA‘s included mandatory dispute resolution procedures requiring “submission of written grievances to the employer.”
Concurrently with execution of the 2023 CBA, Stringcandy and Local 369 entered into a side agreement, the “LPH-LV contract,” which “specifically identified exactly 24 string musicians that would be hired by [Stringcandy] to provide musical services pursuant to the terms and provisions of the 2023 CBA.” Due to a “physical limitation” imposed by the stage design of the Adele residency, “it [was] not possible for more than 24 string musicians to perform simultaneously” at any of the shows. The 2022 and 2023 CBA‘s and the LPH-LV contract were not attached to the complaint (that is, the third amended complaint), or filed with the demurrer.
The complaint alleged on information and belief that around January 18, 2023 Lopez notified the Federation that Stringcandy did not intend to hire three union musicians—Lopez, Rhea Hosanny, and Jason Bonham (collectively defined as the
On January 23, 2023, two days after signing the agreements, Local 369 submitted written grievances to Stringcandy on behalf of the Grievants, in which the Grievants claimed their terminations were unjust and demanded they be reinstated immediately and made whole. As alleged on information and belief, Lopez and Local 369 knew reinstatement would be impossible “without wrongfully terminating at least 3 of the specified musicians” in the LPH-LV contract because of the 24-musician capacity limitation.
A mediation took place on March 16, 2023. Thereafter, Local 369 failed “to take any of the post-mediation actions, including arbitration of the dispute, required by the dispute resolution provisions of the [2022 and 2023 CBA‘s] within the time allowed by said [CBA‘s],” with the result that the grievances “became invalid.” At no time did any of the parties to the grievances or this litigation dispute the terms of their agreements, and, as alleged, “none of the terms [of the agreements] are currently disputed.”
The first cause of action for libel alleged that around April 2023, Local 369, with the “knowledge, approval and ratification” of the Federation, published in its January-March
The second cause of action for slander further alleged that around April 2023 representatives of Local 369 and the Federation told the production team responsible for the Adele residency that Stringcandy and Matthews had wrongfully terminated Local 369 members from the show. As alleged on information and belief, the Federation representatives knew the statement was false or acted with reckless disregard to its truth.
The third cause of action for intentional interference with prospective economic advantage alleged, in relevant part, that “by publishing the newspaper statement and the false statements [to the production team], the Federation either “intended to disrupt” the economic relationship between Stringcandy and Matthews and musical production companies or “knew that disruption of that relationship was certain or substantially certain to occur.”
The fourth cause of action for declaratory relief related to union disciplinary charges filed against Matthews for her role in
On March 3, 2025 the Federation demurred to the complaint. It argued the tort claims for defamation and intentional interference were preempted by Section 301, which establishes exclusive federal court jurisdiction over “suits for violation of contracts between an employer and a labor organization.” (
As to the declaratory relief cause of action, Matthews‘s request to enjoin the Federation‘s disciplinary action failed because, among other things, she did not exhaust the procedures set forth in the Federation bylaws. Moreover, declaratory relief was not available to remove Matthews and Stringcandy from the blacklists because the blacklists did not prevent Matthews from working as a musician, and Stringcandy was not union member.
In their opposition, Matthews and Stringcandy argued Section 301 did not preempt their tort claims because the claims did not require the trial court to interpret a collective bargaining agreement; rather the court need only “consult” the parties’
After a hearing, on May 12, 2025 the trial court sustained the demurrer without leave to amend and dismissed the action without prejudice. The court found the LMRA preempted the tort claims under Section 301, explaining that “for the court to determine whether the refusal to hire was a wrongful termination, the court would have to look at the 2023 [CBA] and interpret the Parties’ obligations and the scope of permissible conduct, including [the Federation‘s] ability to publicize its labor disputes.” Moreover, “there are legal questions as to whether the LPH-LV contract is a collateral agreement or an agreement that supersedes or explains the terms of the 2023 [CBA],” which would require the court to examine both agreements. The court also found the NLRA preempted the tort claims under Garmon, supra, 359 U.S. 236. On the declaratory relief cause of action, Matthews failed to show she was excused from exhausting the Federation‘s procedures; she did not show the procedures were inadequate to address her arguments or that a resolution in her favor would not provide her complete relief.
DISCUSSION
A. Standard of Review
“‘In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory.‘” (Matthews v. Becerra (2019) 8 Cal.5th 756, 768; accord, T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.) When evaluating the complaint, “we assume the truth of the allegations.” (Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 209; accord, Lee v. Hanley (2015) 61 Cal.4th 1225, 1230.) “““We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.““” (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010.) Where
“A judgment of dismissal after a demurrer has been sustained without leave to amend will be affirmed if proper on any grounds stated in the demurrer, whether or not the court acted on that ground.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324; accord, Ko v. Maxim Healthcare Services, Inc. (2020) 58 Cal.App.5th 1144, 1150.)4
B. Section 301 of the LMRA Preempted the Defamation and Intentional Interference Causes of Action
1. Section 301 preemption
Section 301(a) of the LMRA provides, “Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States.” (
“‘[A]lthough the language of § 301 is limited to “[s]uits for violation of contracts,” [federal] courts have concluded that, in order to give the proper range to § 301‘s policies of promoting arbitration and the uniform interpretation of collective bargaining agreement provisions, § 301 “complete preemption” must be construed to cover “most state-law actions that require interpretation of labor agreements.“‘” (Melendez, supra, 7 Cal.5th at p. 8; accord, Balcorta v. Twentieth Century-Fox Film Corp., supra, 208 F.3d at p. 1108 [summarizing U.S. Supreme Court decisions].) This does not mean that “““every claim which requires a court to refer to the language of a labor-management agreement is necessarily preempted“““; rather, the United States Supreme Court “‘has distinguished between claims that require interpretation or construction of a labor agreement and those that require a court simply to “look at” the agreement.‘” (Melendez, at p. 8; accord, Balcorta, at p. 1108.)
“[W]hen the meaning of contract terms is not the subject of dispute, the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not
When deciding a preemption issue on a demurrer, we apply a de novo standard of review “because federal preemption presents a pure question of law.” (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 9; accord, Center for Environmental Health v. Perrigo Co. (2023) 89 Cal.App.5th 1, 16.)
2. Resolution of the defamation and intentional interference claims requires interpretation of the 2023 CBA
Stringcandy and Matthews contend Section 301 does not preempt their tort claims because the trial court could resolve the case without interpreting the 2023 CBA, instead simply “consulting” the LPH-LV contract to identify the roster of musicians hired to perform pursuant to the CBA. This, they argue, would establish that the Grievants were not wrongfully terminated (i.e., if they were not on the agreed-upon roster), and there is no dispute over the terms of the CBA. We agree with the
The elements of a cause of action for defamation are “‘[1] a publication that is [2] false, [3] defamatory, and [4] unprivileged, and that [5] has a natural tendency to injure or that causes special damage.‘” (Taus v. Loftus (2007) 40 Cal.4th 683, 720; accord, Cocoa AJ Holdings, LLC v. Schneider (2025) 115 Cal.App.5th 980, 991.) The complaint alleged the Federation acted with actual malice, which requires proof by a preponderance of the evidence that the defamatory statement was made “‘with knowledge that it was false or with reckless disregard of whether it was false or not.‘” (Reader‘s Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 256-257; accord, Edward v. Ellis (2021) 72 Cal.App.5th 780, 793.)
The only publications alleged to constitute defamation are the April 2023 printed statement in the Local 369 newsletter that “‘[s]ince January 2023, we . . . have again stepped forward to defend members who were wrongfully terminated from the Adele Residency,‘” and the union representatives’ April 2023 oral statement to the producers of the Adele residency that Stringcandy and Matthews wrongfully terminated Local 369 members from the show.
The elements of a cause of action for intentional interference with prospective economic advantage are “(1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant‘s knowledge of the relationship; (3) intentionally wrongful acts designed to
The critical element of proof for each tort claim is whether the statement Stringcandy “wrongfully terminated” the Grievants was false (and, for malice and intentional interference, whether the Federation knew it was false). The trial court will therefore need to determine whether there was a wrongful termination, and within the factual universe of the complaint, it cannot do this without examining the CBA‘s and resolving “questions relating to what the parties to a labor agreement agreed and what legal consequences were intended to flow from breaches of that agreement.‘” (Allis-Chalmers Corp. v. Lueck, supra, 471 U.S. at p. 211; accord, Sciborski, supra, 205 Cal.App.4th at p. 1164.)
Despite two previous demurrers and three amendments, the relevant allegations are spare. Stringcandy and Local 369 entered a CBA in 2022 “governing the provision of musical services” by union musicians for the Adele residency, and they entered a substantially similar agreement in January 2023.
The complaint does not allege the basis of the Grievants’ contentions that their termination was wrongful but acknowledges their grievances were asserted pursuant to the CBA‘s. The complaint also admits that as of April 2023, when the allegedly defamatory statements were published, there had been no adjudication of the Grievants’ claim that their omission from the 2023 roster was wrongful. Instead, the complaint alleged that following a mediation in March 2023, Local 369 failed to timely pursue the required post-mediation actions, including demanding arbitration, rendering their grievances “invalid.” But in order to determine whether the Grievants’ claims were invalid for failure to timely demand arbitration, the trial court would need to interpret the dispute resolution procedures of the CBA‘s, and in any event, even if the grievances became invalid, this would not establish that the April 2023 publications were false.
Because there has been no determination whether the Grievants were wrongfully terminated, the trial court would need
Stringcandy and Matthews argue that the trial court need not consider, let alone construe, the 2023 CBA to resolve their tort claims, because simply consulting the LPH-LV contract would show that Grievants were not included in the roster of 24 musicians hired in January 2023 to provide musical services pursuant to the terms of the 2023 CBA. But the fact Grievants were omitted from the 2023 roster is not in dispute—the question is whether the failure to include them was wrongful. The complaint alleges the 2023 CBA governed the provision of string musicians for the 2023 Adele residency; thus, the terms of that agreement would govern the musician‘s claims they were wrongfully terminated, regardless of the LPH-LV contract‘s roster of musicians. (See Olguin, supra, 740 F.2d at p. 1474 [even where wrongful discharge claim does not identify a collective bargaining agreement and is alleged based on some other agreement, “any independent agreement of employment
Stringcandy and Matthews argue that because Local 369 approved the 2023 musician roster by signing the LPH-LV contract during the collective bargaining process, the Grievants necessarily do not have valid claims for wrongful termination. We are not persuaded. That Local 369 signed off on the roster and the Federation allegedly concealed its plan to file grievances without reserving its rights under the LPH-LV contract could potentially support defenses to a wrongful termination claim (e.g., waiver, estoppel, unclean hands, and fraudulent inducement). But that does not mean the CBA did not give the Grievants a basis for asserting they were wrongfully terminated. Because the complaint does not allege the nature of the Grievants’ claims or what terms in the CBA were relevant to those claims, it is impossible to determine without interpreting the CBA whether the statements that the Grievants were wrongfully terminated were false or that the Federation knew they were false.
Stringcandy and Matthews also contend that section 301 does not preempt state law claims for defamation based on actual malice, citing Linn v. United Plant Guard Workers of America, Local 114 (1966) 383 U.S. 53. In Linn, the United States Supreme Court held the NLRA did not preempt a company‘s general manager from asserting a cause of action for malicious libel based on union organizers’ circulation of leaflets containing inflammatory false statements about the manager. (Linn, at p. 66.) The court reasoned that “a State‘s concern with redressing malicious libel is ‘so deeply rooted in local feeling and responsibility’ that it fits within the exception specifically carved out by [Garmon, supra, 359 U.S. 236]” for cases of “compelling state interests” such as prevention of intimidation and threats of
Linn addresses only NLRA preemption under Garmon, not preemption under Section 301 based on federal court jurisdiction over collective bargaining agreements.7 Stringcandy and Matthews do not cite, and we are not aware of, any California or federal case holding that Section 301 preemption rules do not apply to claims for malicious defamation. In any event, the defamation alleged here did not involve an injury inflicted during a labor dispute that the NLRB is ill-equipped to address. Instead, the central question is whether the public characterization of the labor dispute by the Federation and Local 369 was false, a question that should be decided under federal labor law. (Olguin, supra, 740 F.2d at p. 1474.)
C. The Declaratory Relief Cause of Action Fails Because Matthews Did Not Exhaust the Federation‘s Internal Procedures
Matthews contends the trial court erred in finding she must exhaust the Federation‘s internal disciplinary procedures before seeking a judicial declaration that the Federation cannot
“As a general rule, ‘“a party must exhaust administrative remedies before resorting to the courts. [Citations.] Under this rule, an administrative remedy is exhausted only upon ‘termination of all available, nonduplicative administrative review procedures.‘“‘“” (Hill RHF Housing Partners, L.P. v. City of Los Angeles (2021) 12 Cal.5th 458, 477.) “The exhaustion requirement applies to defenses as well as to claims for affirmative relief,” and courts have described “exhaustion of administrative remedies as ‘a jurisdictional prerequisite to resort to the courts.‘” (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1080 (Coachella); see Tesoro Refining & Marketing Co. LLC v. Los Angeles Regional Water Quality Control Bd. (2019) 42 Cal.App.5th 453, 469 [“The exhaustion requirement is not a matter of judicial discretion; it is a jurisdictional prerequisite to resort to the courts.“].) The exhaustion requirement is “‘excused if it is clear that the exhaustion would be futile,‘” that is, “‘the party invoking the exception “can positively state that the [administrative body] has declared what its ruling will be on a particular case.“‘” (Coachella, at pp. 1080-1081; accord, Foster v. Sexton (2021) 61 Cal.App.5th 998, 1025.)
“‘A demurrer may properly be [sustained] based on the failure to adequately plead an exhaustion of administrative remedies.‘” (Ventura29 LLC v. City of San Buenaventura (2023) 87 CalApp.5th 1028, 1036; see Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 333 [trial court did not err in dismissing plaintiff‘s complaint where plaintiff did not show “that
Holderby v. Intern. Union of Operating Engineers, Local Union No. 12 (1955) 45 Cal.2d 843 (Holderby), relied on by the trial court, is directly on point. In Holderby the Supreme Court recognized it is a “jurisdictional rule” that “a plaintiff who seeks judicial relief against an organization of which he is a member must first invoke and exhaust the remedies provided by that organization applicable to his grievance.” (Id. at p. 846.) The court reversed a trial court judgment in favor of an expelled union member who sued his union for reinstatement and damages for wrongful expulsion because the member had not challenged his suspension through an internal appeal process provided by the union‘s constitution. (Id. at pp. 845-849.) The court rejected the member‘s argument that exhaustion was excused because the union violated its rules and caused him harm by suspending him, explaining that such a broad conception of futility would “swallow the rule” in any case where a member has “a justified grievance involving personal and property rights” against his organization. (Id. at p. 847.) Instead, “[i]t is only when the organization violates its rules for appellate review or upon a showing that it would be futile to invoke them that the further pursuit of internal relief is excused. The violation of its own rules which inflicts the initial wrong furnishes no right for direct resort to the courts.” (Ibid.)
As discussed, Matthews sought a judicial determination that her union, the Federation, could not discipline her in connection with charges it filed in November 2023 and that it must remove her and Stringcandy from its blacklists pending any adjudication because the Federation was not an impartial tribunal and would not give her a fair hearing. The complaint
Further, Matthew based her allegation that she could not get a fair hearing from the Federation on the very violations that she alleged had “inflict[ed] the initial wrong.” (Holderby, supra, 45 Cal.2d at p. 847.) Specifically, she alleged the Federation was “hostile” to her and would not be impartial because of (1) the April 2023 false statement in the Local 369 newsletter; (2) the April 2023 false representation to the Adele residency production team; and (3) the placement of Stringcandy and Matthews on the blacklists prior to adjudicating the disciplinary charges, causing her financial harm. Matthew did not allege “the organization violates its rules for appellate review or . . . it would be futile to invoke [those rules].” (Ibid.) Nor did she “positively state” the Federation had declared what its ruling will be in her case. (Coachella, supra, 35 Cal.4th at pp. 1080-1081.)
Matthews relies on Clayton v. International Union, United Auto., Aerospace, and Agr. Implement Workers of America (1981) 451 U.S. 679, 689, which held that “courts have discretion to decide whether to require exhaustion of internal union procedures,” listing three factors for courts to consider. Clayton is inapposite. That case addressed whether a union member asserting a Section 301 claim against his union for breach of its duty of fair representation under the collective bargaining agreement in representing the member in his suit against his
Matthews also contends she should be excused from exhaustion of her administrative remedies because requiring exhaustion would lead to unreasonable delay and financial harm. Courts of Appeal have recognized exceptions to exhaustion for “situations where the agency indulges in unreasonable delay” or “when pursuit of an administrative remedy would result in irreparable harm.” (Green v. City of Oceanside (1987) 194 Cal.App.3d 212, 222 [citing cases]; accord, SJCBC, LLC v. Horwedel (2011) 201 Cal.App.4th 339, 346.) Matthews has not met her burden to show she falls within this exception.
Matthews argues there was unreasonable delay because the Federation‘s disciplinary action has been “indefinitely suspended” pending action on complaints Local 369 and the Federation filed with the NLRB, which could take “years.” Specifically, the complaint alleged that Local 369 and the Federation, in February 2023 and February 2024, respectively, filed complaints with the NLRB against Stringcandy based on the allegations in the 2023 grievances (which also formed the basis of
These allegations are inadequate to excuse exhaustion. The complaint does not allege the Federation was being dilatory or that its decision to stay the disciplinary proceedings pending adjudication of the NLRB charges was improper. On the contrary, the NLRB adjudications will afford Matthews the independent hearing she seeks given that the NLRB complaints are based on the same alleged misconduct: the failure to include the Grievants on the list of hired musicians for the Adele residency. Matthews has also failed to show irreparable harm. The blacklists prevent union musicians from working for a blacklisted entity. The fourth cause of action, if successful, would prevent the Federation and its affiliates from blacklisting Matthews, but the blacklist would only impact Stringcandy (which has no standing to bring the cause of action), not Matthews. Moreover, the complaint does not allege any other harm to Matthews or that the blacklist has impaired her ability to pursue work as a musician.9
The May 12, 2025 order of dismissal is affirmed. The Federation is to recover its costs on appeal.
FEUER, J.
We concur:
SEGAL, Acting P. J.
STONE, J.