Judge: Gail Killefer, Case: 20STCP01958, Date: 2022-10-24 Tentative Ruling

Case Number: 20STCP01958    Hearing Date: October 24, 2022    Dept: 37

HEARING DATE:                 October 24, 2022   

CASE NUMBER:                  20STCP01958

CASE NAME:                        Derek Hay, et al. v. Jane Does 1-5 

TRIAL DATE:                        March 7, 2023

PROOF OF SERVICE:          OK

MOTION:                               Defendants’ Motion for Judgment on the Pleadings  

MOVING PARTIES:             Petitioners, Derek Hay and Direct Models, Inc.

OPPOSING PARTIES:          Respondents, DOES  

OPPOSITION:                       October 11, 2022

REPLY:                                  October 17, 2022

TENTATIVE:                         Defendant’s motion for judgment on the pleadings is granted. Defendant is to give notice.

Background

This is an action brought by Petitioner, Derek Hay (“Hay”) to appeal a Labor Commissioner Award.  According to the operative petition, filed June 19, 2020, Hay is the owner and Chief Executive Officer of Petitioner, Direct Models Inc. dba LA Direct Models (“Direct Models”), who represents artists in the adult entertainment industry and who entered into agreements to represent Respondents, Jane Does 1-5, at various points between 2015 to 2017. In 2018, Jane Does 1-5 filed Petitions to Determine Controversy (the “Petition”) with the California Labor Commissioner, alleging that Petitioners engaged in improper conduct in connection with their representation of all respondents by coercing Jane Does 1-5 to engage in unwanted and unlawful sexual relations and failing to properly account for fees they received.

On June 15, 2020, the Labor Commissioner rendered a Determination on Controversy, in which the Labor Commissioner awarded Respondents $24,206.9 plus additional fees to be determined after an accounting. Petitioners appeal the Labor Commissioner’s June 15, 2020, award and seek trial de novo pursuant to Labor Code § 1700.44.

On March 2, 2020, prior to the filing of this action, a criminal Complaint was filed In Los Angeles County (Action number BA484102) by the Office of the Attorney General and charged defendants, including Hay, with two counts of felony pandering in violation of Penal Code § 266i(a)(1)) (the “Criminal Action”).

Hay and Direct Models (collectively “Appellants”) now move for judgment on the pleadings as to the eleventh cause of action for unfair competition on the grounds that the court lacks jurisdiction for the eleventh cause of action and further fails to sufficiently plead a cause of action.

Request for Judicial Notice

Appellants request judicial notice of the following in support of their motion:

1.      The initial Petition of JANE DOES 1-4 as filed on June 19, 2018 with the State of California Labor Commissioner's Office; (Exhibit 1)

2.      The Answer of DIRECT MODELS and DEREK HAY as filed on August 8, 2018 with the State of California Labor Commissioner's Office; (Exhibit 2)

3.      The First Amended Petition filed by JANE DOES 1-5 on November 19, 2018 with the State of California Labor Commissioner's Office; (Exhibit 3)

4.      The Motion to Strike and Dismiss as filed by DIRECT MODELS and DEREK HAY on October 25, 2018 with the State of California Labor Commissioner's Office; (Exhibit 4)

5.      The Opposition of JANE DOES 1-5 to Motion to Strike or Dismiss filed November 2, 2022 with the State of California Labor Commissioner's Office; (Exhibit 5)

6.      The Reply of DIRECT MODELS and DEREK HAY as filed with the State of California Labor Commissioner's Office on November 8, 2018; (Exhibit 6)

7.      The Order on Motion to Dismiss or Strike Claims issued by Hearing Officer Patricia Salazar of the Office of the Labor Commissioner on August 7, 2019; (Exhibit 7)

8.      Appeal of Labor Commissioner Award as filed with this Court on June 19, 2020 including attachments (First Amended Petition to Determine Controversy and Determination of Controversy); (Exhibit 8)

9.      Notice of Appearance & Response to Appeal for Labor Commissioner's Determination filed by Jane Does on June 21, 2020. (Exhibit 9)

Appellants’ request is granted. The existence and legal significance of these documents are proper matters for judicial notice. (Evid. Code § 452(h).) However, the court may not take judicial notice of the truth of the contents of the documents.  (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)  Documents are only judicially noticeable to show their existence and what orders were made.  The truth of the facts and findings within the documents are not judicially noticeable.  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

Meet and Confer Efforts

As of January 1, 2018, a party filing a motion for judgment on the pleadings must meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion, identifying all of the specific allegations that it believes are subject to be stricken and, with legal support, the basis of the deficiencies.  (CCP § 439(a)(1).)  “The parties shall meet and confer at least five days before the date a motion for judgment on the pleadings is filed.  If the parties are unable to meet and confer by that time, the moving party shall be granted an automatic 30-day extension of time within which to file a motion for judgment on the pleadings, by filing and serving, on or before the date a motion for judgment on the pleadings must be filed, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.”  (CCP § 439(a)(2).)   

Appellants submit the declaration of counsel Richard W. Freeman (“Freeman”) to show compliance with section 439. Freeman attests he reached out to Does’ counsel “telephonically on the issues raised by this Motion” and have discussed them on several occasions. (Freeman Decl. ¶7.) Freeman does not explain whether the parties have come to an agreement on the issues, but as this motion is now to be heard, the court concludes they have not.

The Freeman declaration is sufficient for the purposes of compliance with the meet and confer requirements.

Discussion

I.                   Legal Standard

A defendant may move for judgment on the pleadings if the complaint does not state facts sufficient to constitute a cause of action against the defendant.¿¿(CCP § 438(b)(1) & (c)(1)(B)(ii).)¿¿Except as provided by statute, the rules governing demurrers govern motions for judgment on the pleadings.¿¿(Cloud v. Northrup Grumman Corp.¿(1998) 67 Cal.App.4th 995, 999.)¿¿Therefore, the grounds for a motion for judgment on the pleadings must be apparent from either the face of the complaint or a matter of which the court may take judicial notice.¿¿(Ibid.)¿¿The court accepts the truth of all material facts properly pleaded, but not the truth of “contentions, deductions or conclusions of law.”¿¿(Aubry¿v. Tri-City Hospital Dist.¿(1992) 2 Cal.4th 962, 967.)¿ 

Pursuant to CCP S 438(e), a motion for judgment on the pleadings may not be made “if a pretrial conference order has been entered pursuant to Section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court otherwise permits.”  

II.                Analysis

The purpose of the Talent Agency Act (“TAA”) is “remedial; its purpose is to protect artists seeking professional employment from the abuses of talent agencies.”  (Styne v. Stevens (2001) 26 Cal.4th 42, 50.) Under the TAA, “no person shall engage in or carry on the occupation of a talent agency without first procuring a license therefor from the Labor Commissioner.”  (Lab. Code § 1700.5.)  A “talent agency” means “a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist….”  (Lab. Code, § 1700.4(a).)  The term “artist” includes “models.”  (Id. at subd. (b).) According to the TAA, the parties can “appeal within 10 days after [the commissioner’s] determination, to the superior court where the [dispute] shall be heard de novo.”  (Lab. Code § 1700.4(a).)   

The TAA states: “In cases of controversy arising under this chapter,” for example, a person engaged in the occupation of a talent agency without a license, “the parties involved shall refer the matters in dispute to the Labor Commissioner ….”  (Lab. Code § 1700.4(a) [emphasis added].)  According to the California Supreme Court, “this language, using the mandatory ‘shall,’ grants ‘original and exclusive jurisdiction over issues arising under the Act’ to the Labor Commissioner. [Citations.]”  (Villanueva v. Fidelity National Title Co. (2021) 11 Cal.5th 104, 127.) California law provides the Labor Commissioner with exclusive jurisdiction to decide the first instance issues arising under the TAA and requires any defense first be heard by the Labor Commissioner before the parties can proceed to this Court. (Labor Code § 1700.44(a); Styne v. Stevens (2001) 26 Cal.4th 42.)

First, Appellants contend the appellate jurisdiction vested in this court pursuant to section 1700.44 can only include claims which were “actually heard and decided by the Determination of the Labor Commissioner.” (Memorandum of Points & Authorities (“MPA”), 1.) Appellants further contend that the eleventh cause of action was dismissed from the First Amended Petition and was neither heard nor decided at the Hearing on the Determination of Controversy. (Id.) Appellants therefore contend that Does initially overreached by including the unfair competition law claim before the Labor Commissioner, but after a successful challenge to the cause of action, the claim was not given a final decision. (MPA, 4-5.) “Since the Eleventh Cause of Action for Unfair Business Practices was not considered, heard, or decided, it is not properly within the jurisdiction of this Court at this time since the Court’s jurisdiction is limited by statute to a consideration of those matters decided in the Determination [pursuant to] Labor Code §1700.44.” (MPA, 5.)

In opposition, Does contend the successful challenge to the eleventh cause of action as before the Labor Commissioner was merely an interlocutory order and “did not determine all rights between the parties and was not a final judgment.” (Opposition, 3.) As such, Does contend they could not appeal the interlocutory order striking the eleventh cause of action before the Labor Commissioner. (Opp., 4.) Further, Does cite to several authorities involving Berman hearings pursuant to Labor Code § 98.2 which allowed for an extension of consideration of related issues not directly decided by the Labor Commissioner. (Id.) Therefore, Does contend this court maintains jurisdiction over the eleventh cause of action because “Hearing Officer Salazar’s Order was an interlocutory non-appealable order, and as this Court has jurisdiction over the entire matter as originally filed.” (Opp., 5.) However, Does fail to point to supporting authorities for an extension of consideration for section 1700.44 claims.

In reply, Appellants correctly contend that following the order striking the eleventh cause of action before the Labor Commissioner, Does

“had options: (1) seek leave of the Hearing Officer to amend the First Amended Petition to state a claim over which the Labor Commissioner had jurisdiction; (2) immediately pursue a direct action in the Superior Court to state that claim against DIRECT MODELS and HAY; and (3) await Determination and then pursue direct action. Not only did DOES' counsel ignore two reasonable and workable alternatives to the Hearing Officer's Dismissal but even after the Appeal for Trial de Novo, Counsel never took any steps in this proceeding to insure [sic] that this Court could and would exercise its jurisdiction over that issue as part of this Trial de Novo.” (Reply, 4.)

Appellants further correctly explain that Labor Code §§ 98 and 98.2 follow a different procedure, with different policy considerations, than what underpins Labor Code § 1700.44. (Reply, 4-6.)

“[T]he Talent Agency Act requires that all matters which ‘colourably’ [sic] arise under the Talent Agency Act be brought to the Labor Commissioner first. There is no alternative civil action that is permitted. That is critical because in the Section 98.2 Labor Code cases the employee has the alternative of going directly to the courts whereas here, the DOES were required to bring claims that colourably arose under the TAA to the Labor Commissioner. The Labor Commissioner's Determination that the UCL Claim did not colourably arise limited the claims that would be considered at the Labor Commissioner hearing, were not decided, and required Does to file a separate action on those claims.” (Reply, 6.)

Appellants therefore contend Does could have brought a separate action, instead of now seeking an “expansion of TAA claims heard by the Labor Commissioner to expand into additional claims not heard below by the Labor Commissioner.” (Reply, 6.) The court agrees.

Does have provided no compelling, persuasive authorities which would allow for the expansion of TAA claims to include ones not previously decided upon appellate review before this court. As Appellants correctly explain, Does had several options to retain claims which were outside the purview of the Labor Commissioner, failed to do so, and now seek to bring new claims into the determinations of the de novo review this court has been empowered to perform. As Labor Code §§ 1700.4 and 1700.44 make clear, this court has been authorized to perform an appellate review of issues and claims actually decided by the Labor Commissioner. Does’ eleventh cause of action was not actually decided during those proceedings. Thus, the court finds a lack of jurisdiction over the eleventh cause of action in this action.

Having found a lack of jurisdiction over the eleventh cause of action in this matter, the court does not consider further briefing by the parties as to the sufficiency of the pleading of the claim.

For these reasons, Appellants’ motion is granted.

Conclusion

Appellants’ motion for judgment on the pleadings is granted. Appellants are to give notice.