California Supreme Court focused on the familiar

By J. Clark Kelso

 
The California Supreme Court’s 2010-2011 Term had a familiar feel to it. The most interesting cases arose out of everyday circumstances and contexts, cases dealing with the ordinary person at work, at the grocery store, at the park. By and large, we see a court that is looking out for the little guy.

California Supreme Court Gov. Brown named Goodwin Liu to replace Carlos Moreno (top left)

Our new judicial leader, Chief Justice Tani Cantil-Sakauye, has settled in nicely at the court, although she now leads a judicial branch that is challenged by enormous budget cuts and internal political turmoil from certain judges who want greater local autonomy in matters of judicial administration. It is a rough introduction to the California judiciary, and as members of the bar, we owe her our confidence and support.

Finally, the Court has been deciding most of its cases this year using various assigned judges from the courts of appeal because Justice Carlos Moreno’s retirement left an empty chair at the court. Recently, Governor Brown has nominated Professor Goodwin Liu of the UC Berkeley law faculty to fill that seat. It is a solid appointment, and although Liu’s Ninth Circuit nomination was sacrificed at the altar of ideological bickering that now dominates federal judicial appointments, his appointment to the California Supreme Court will cause barely a ripple. He is superbly qualified, and it is good to see a law professor tapped for the high court. A little professional diversity on the court – not every justice needs to have served on the court of appeal – will be a good thing.

And now, on to the cases.

EMPLOYEE RIGHTS

Chief Justice Tani Cantil-Sakauye

Our first case involved grocery workers in Los Angeles, and they scored a big win in California Grocers Association v. City of Los Angeles (2011) 52 Cal.4th 177, where the Court upheld by a 6-1 vote a Los Angeles ordinance that vests current employees of certain grocery stores certain individual rights during the 90-day period following a change of ownership of the grocery store. In particular, for grocery stores that are 15,000 square feet or larger that undergo a change of ownership, the ordinance requires (1) the incumbent owner to prepare a list of nonmanagerial employees with at least six months’ employment as of the date of transfer in ownership, and the successor employer must hire from that list during the 90-day transition period; (2) during that same period, the hired employees may be discharged only for cause; (3) at the conclusion of the transition period, the successor employer must prepare a written evaluation of each employee’s performance, and if an employee’s performance is satisfactory, the employer must “consider” offering continued employment (although the ordinance does not required that anyone actually be retained); and (4) if the workforce is unionized, the union and the employer may agree on terms that supersede the ordinance.

The California Grocers Association filed a complaint against the city seeking to enjoin enforcement on the grounds that it was preempted by provisions in the Health and Safety Code, the Labor Code and federal labor law, and that it violated equal protection.

The California Supreme Court rejected these arguments, holding that the ordinance was not preempted and that it did not violate equal protection. The state statutes that purportedly preempted the ordinance dealt with food safety, not employee rights during a change in ownership. The state and federal labor statutes regulated the process of labor relations, and the ordinance did not purport to regulate the process of negotiation, so the ordinance was not preempted by the labor laws. The equal protection challenge was easily rejected under the rational basis test that applies to economic regulations.

Employees also won in Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191, where the Court answered several questions certified to it by the Ninth Circuit dealing with the applicability of California law to nonresident employees who work both in California and in other states for a California-based employer. The case involved several employees who worked for Oracle as customer trainers. Two of them lived in Colorado, and the other lived in Arizona. All were required to travel as part of their jobs, and each worked in California during the period relevant to the litigation. They claimed that Oracle owed them overtime pay consistent with California law for the period of time they worked in California, both under the Labor Code and the Unfair Competition Law, and they also claimed that California’s Unfair Competition Law could be used as a basis for recovering damages based on violations of the federal Fair Labor Standards Act for overtime worked in other states.

The Court answered the questions as both a matter of statutory construction and as a matter of conflict-of-laws principles. On the first question, the Court held that California’s overtime laws do indeed apply to work performed in California for a California-based employer by out-of-state employees.

The second question had to do with the availability of the Unfair Competition Law, that is Section 17200 of the Business & Professions Code, to redress a violation of the overtime law. The California Supreme Court had previously held that the Unfair Competition Law applied to this type of claim, and none of the parties disputed that interpretation.

The third question was whether the Unfair Competition Law applied extraterritorially to support a remedy for a violation of the Federal Labor Standards Act for overtime work performed by nonresidents in other states. The plaintiffs sought to use the Unfair Competition Law for these purposes because the FLSA had a two-year limitation period compared to the four-year limitation period applicable under the Unfair Competition Law. Plaintiffs wanted a couple of extra years of overtime pay. The Court held that the Unfair Competition Law does not apply extraterritorially in the circumstances of the case since nothing in the UCL statutes or its history remotely suggested extraterritorial application.

So the bottom line for this case is pretty simple: Come to work in California and get the benefits of our laws.

PAPER OR PLASTIC, PLEASE?

Plastic or paper. One of the many important choices made by millions of Californians every day. Except in the City of Manhattan Beach, where the city council adopted an ordinance banning the use of plastic bags by local businesses.

In response, a coalition of plastic bag manufacturers and distributors, known as the Save the Plastic Bag Coalition, filed a citizen standing suit to vindicate the public interest in, of all things, environmental quality. That’s right, the plastic bag industry championed the environmental requirements in CEQA and sued to block the ordinance, claiming the city was required to prepare an Environmental Impact Report before adopting the ordinance (CEQA is, after all, an equal opportunity statute!).

The city had actually studied the likely environmental impacts of the ordinance, but found them to be insignificant. Accordingly, a negative declaration was deemed to be sufficient. The Coalition filed suit and prevailed in both the superior court and court of appeal.

The Supreme Court of California unanimously reversed in Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155. There were two issues under review. First, the Court held that the Coalition had legal standing to make its challenge, rejecting the city’s argument that only natural persons, and not corporations, qualify for public interest, citizen standing. According to the Court, the Coalition’s commercial interests are not an impediment to its standing.

Second, the Court held that no EIR was required because the evidence did not establish any significant effect on the environment. As the court explained, “when we consider the actual scale of the environmental impacts that might follow from increased paper bag use in Manhattan Beach, instead of comparing the global impacts of paper and plastic bags, it is plain the city acted within its discretion when it determined that its ban on plastic bags would have no significant effect on the environment.” “Here,” the Court noted, “common sense leads us to the conclusion that the environmental impacts discernible from the life cycles of plastic and paper bags are not significantly implicated by a plastic bag ban in Manhattan Beach.”

IS THAT A FISH IN YOUR POCKET?

Our next case will be of particular interest to readers who fish or hunt game. The California Supreme Court held in People v. Maikhio (2011) 51 Cal.4th 1074, that a game warden who reasonably believes that a person has recently been fishing or hunting, but lacks reasonable suspicion that the person has violated an applicable fish or game statute or regulation, may nevertheless stop a vehicle in which the person is riding to demand the person display all fish or game the person has caught or taken.

The issue arose in a case where the game warden saw the defendant fishing off a bridge, but couldn’t be sure whether the defendant had caught a spiny lobster, which was out of season. The warden stopped the defendant’s car several blocks away from the bridge and asked the defendant if he had any fish or lobsters in the car. When defendant denied having any, the game warden looked in the car, saw the black bag on the floor, opened the bag and discovered a spiny lobster. Defendant was charged with a misdemeanor, but the trial court suppressed the evidence, and the Court of Appeal affirmed. The California Supreme Court reversed under the administrative search rationale and sent the case back for further proceedings.

TO BECOME OR NOT TO BECOME, THAT IS THE QUESTION!

If courts were classrooms for philosophical discourse, we could spend an entire semester on the question of whether a person can become something that they already are. For example, if you already are a lawyer, can you become a lawyer?

But courts are not classes for philosophy, and statutory interpretation is not a philosopher’s game. In People v. Zambia (2011) 51 Cal.4th 965, the Court had to interpret Penal Code Section 266i(a)(2) which defines pandering as encouraging “another person to become a prostitute.” The defendant was convicted of pandering when he tried to encourage an undercover police officer who was impersonating a prostitute to come work for him. The defendant argued that subdivision (a)(2) does not apply when the target is already a prostitute or an undercover police officer acting as one. The defendant asked, “how can I encourage someone who is already a prostitute or who is acting as a prostitute to become a prostitute?” and “how can I have the intention of making another becoming a prostitute if I believe they already are a prostitute?” In short, how can something become that which it already is?

If you wanted to go with the pure plain meaning of the phrase “to become a prostitute,” then you would vote with the two dissenting justices, Kennard and Werdegar, since the words “to become” connote a change from one state to another. But the five-justice majority worked its way around the plain meaning by the overall context of the rest of the statute, which criminalized other types of pandering-related activities without drawing any distinction between whether the other person was already a prostitute or not, by resort to 40-year-old legislative history suggesting that the statute should be read broadly to cover all pandering-related conduct, and by relying upon a string of intermediate appellate decisions over the years to which the Legislature arguably acquiesced by amending the statute multiple times without overruling those cases.

For my money, the Legislative acquiescence argument is the majority’s best bet because the dissenters win on the plain meaning of the statute. This is another great example of how to work beyond the plain meaning of words in a statute. Either that, or the majority has adopted Bob Dylan’s perspective that “We have never arrived. We are in a constant state of becoming.”

WHEN IS A LAWYER NOT A LAWYER?

Answer: When he switches sides!

When a lawyer represents a developer for several years attempting to assist in securing city council approval for a project, learning confidential information in the course of the representation, can that lawyer, two years after his representation has ceased, publicly oppose the project before the city council and solicit signatures for a ballot measure opposed to the project? You would have thought the answer to that question was pretty obvious, but lawyers sometimes have a way of rationalizing almost anything.

Fortunately, the answer to the Supreme Court of California was crystal clear. In Oasis West Realty v. Goldman (2011) 51 Cal.4th 811, the client sued its former attorney for breach of fiduciary duty, professional negligence and breach of contract. The former attorney interposed an anti-SLAPP motion, which came before the Supreme Court. Justice Baxter wrote for a unanimous court that the plaintiff easily satisfied its burden of establishing a probability of succeeding on its claims, and the anti-SLAPP motion should have been denied.

The Court relied upon its leading decision from 1932 in Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 573-74, where the Court explained that “an attorney is forbidden to do either of two things after severing [the] relationship with a former client. [The attorney] may not do anything which will injuriously affect [the] former client in any matter in which [the attorney] formerly represented [the client] nor may [the attorney] at any time use against [the] former client knowledge or information acquired by virtue of the previous relationship.”

The Court of Appeal and the defendant tried to limit this language to situations involving either concurrent or successive representation or to the actual disclosure of confidential information. But the Supreme Court was not having any of those limitations. From its perspective, the use by the attorney of confidential information against the client’s interests ― even absent a disclosure ― was unacceptable. The Supreme Court reversed the Court of Appeal and sent the case back for further proceedings.

CONCLUSION

J. Clark Kelso

That’s it for this year’s review. Next year, we should look forward to seeing how Goodwin Liu does on the Court. It is fair to say there are very high expectations for this young scholar. I don’t think we will be disappointed.

• J. Clark Kelso is a professor at the University of the Pacific McGeorge School of Law.