Judge: Gail Killefer, Case: 24STCV02708, Date: 2025-01-15 Tentative Ruling
Case Number: 24STCV02708 Hearing Date: January 15, 2025 Dept: 37
HEARING DATE: Wednesday, January 25, 2025
CASE NUMBER: 24STCV02708
CASE NAME: Stringcandy LLC, et al. v. American
Federation of Musicians, et al.
MOVING PARTY: Defendant American Federation of Musicians of the
United States and Canada (“AFM”)
OPPOSING PARTY: Plaintiffs Stringcandy LLC and Stephanie Matthews
TRIAL DATE: Not set.
PROOF OF SERVICE: OK
PROCEEDING: Demurrer to Second Amended Complaint
OPPOSITION: 25 October 2024
REPLY: 31
October 2024
TENTATIVE: The demurrer is
sustained with leave to amend. Plaintiff is granted 10 days leave to amend. The
court sets the OSC RE: Amended Complaint for, and continues the Case Management
Conference to, January 31, 2025, at 8:30 a.m. Defendant to give notice.
Background
On February 1, 2024, Stringcandy LLC and
Stephanie Matthews (“Plaintiffs”) filed a Complaint against the American
Federation of Musicians of the United States and Canada (“AFM”); Musicians
Union of Las Vegas, Local No. 369 (“Local 369”) and Does 1 to 20.
Defendant Local 369 was dismissed as a
party on May 3, 2024.
The First Amended Complaint (“FAC”)
alleged six causes of action: (1) fraud, (2) breach of contract, (3) breach of
the implied covenant of good faith and fair dealing, (4) declaratory relief, (5)
intentional interference with prospective economic advantage (“IIPEA”); and (6)
breach of the duty of fair representation.
On
July 18, 2024, the court sustained Defendant AFM’s demurrer to the first,
second, third, and sixth causes of action without leave to amend and sustained
the demurrer with leave to amend as to the fourth and fifth causes of action
for declaratory relief and IIPEA.
On August 23, 2024, Plaintiffs filed
the operative Second Amended Complaint (“SAC”) alleging two causes of action: (1)
intentional
interference with prospective economic advantage (“IIPEA”); and (2) declaratory
relief.
Defendant AFM now demurs to the SAC.
Plaintiffs oppose the motion. The matter is now before the court.
I. Legal
Standard
Where pleadings are defective, a party may raise the defect
by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A
demurrer tests the sufficiency of a pleading, and the grounds for a demurrer
must appear on the face of the pleading or from judicially noticeable matters.¿
(CCP, § 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In
evaluating a demurrer, the court accepts the complainant’s properly pled facts
as true and ignores contentions, deductions, and conclusory statements. (Daar
v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971)
5 Cal.3d 584, 591.) Moreover, the court does not consider whether a plaintiff
will be able to prove the allegations or the possible difficulty in making such
proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d
590, 604.)
Leave to amend must be allowed where there is a reasonable
possibility of successful amendment. (Goodman v. Kennedy (1976) 18
Cal.3d 335, 348.)¿ The burden is on the complainant to show the Court that a
pleading can be amended successfully. (Ibid.)
II. Discussion
A. 1st
Cause of Action: Intentional Interference with Prospective Economic Advantage
“The five
elements for intentional interference with prospective economic advantage are:
(1) an economic relationship between the plaintiff and some third party, with
the probability of future economic benefit to the plaintiff; (2) the defendant's
knowledge of the relationship; (3) intentional acts on the part of the
defendant designed to disrupt the relationship; (4) actual disruption of the
relationship; and (5) economic harm to the plaintiff proximately caused by the
acts of the defendant.” (Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6.)
A claim for intentional interference with prospective economic advantage
(“IIPEA”) requires that the interference be wrongful by some legal measure
other than the fact of the interference itself. (Della Penna v. Toyota Motor
Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 378.) “[A]n act is independently
wrongful if it is unlawful, that is, if it is proscribed by some
constitutional, statutory, regulatory, common law, or other determinable legal
standard.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th
1134, 1159.)
Plaintiffs allege that AFL is an affiliate of Local 369 and
Local 369 “is controlled by Defendant AFM and is contractually required to
comply with all orders and directions of Defendant AFM’s executive leadership.”
(SAC, ¶ 4.) Plaintiffs allege that in
April 2023, Local 369 acting with knowledge and approval of Defendant AFM,
published a January to March 2023 newsletter (the “Newsletter”) that
intentionally included a false and defamatory statement that members of Local
369 had been wrongfully terminated from the Adele Residency. (Id. ¶¶ 28,
29.) By publishing the Newsletter, Defendants intended to disrupt the economic
relationship between Plaintiffs and “Weekends with Adele” who declined to enter
into new agreements with Plaintiffs for the rendering of musical services by
musicians employed by Plaintiffs. (Id. ¶ 31.)
Plaintiffs fail to plead a defamation cause of action, thus
there is no claim supporting the finding that Defendants engaged in wrongful
independent conduct sufficient to support an IIPEA claim. Moreover, the truth
or falsity of whether Local 369 members were wrongfully terminated by
Plaintiffs appears to be a disputed issue of fact which the court is preempted
from adjudicating.
The SAC takes the position whether the Local 369 members
were wrongfully terminated requires that the court look at “Article IX, Section
A, Step 3 of the 2022 CBA and the 2023 CBA” and the grievance procedure of the
CBA. (SAC, ¶ 21.) “Since the LOCAL 369 failed to commence an arbitration within
the time required by Article IX, Section A, Step 3 of the 2022 CBA and the 2023
CBA, all of the Grievants’ grievances are deemed invalid pursuant to the
above-referenced provisions of the 2022 CBA and the 2023 CBA.” (Id. ¶
22.) The SAC also cites to Article IX, Section A, Step 4 of the 2022 CBA and
the 2023 CBA to show that the CBA prohibited the parties from taking any septs
to settle the dispute “arising under” the CBA. (Id., ¶ 23.) Whether Plaintiffs
wrongfully terminated Local 369 members is a determination that must be made by
the NLRB. Plaintiffs cite no case law that would permit the court to make this
determination.
Plaintiffs asserts this action is not preempted by the NLRA
because the Newsletter was published in “April 2023, following the expiration
of the term of the 2023 CBA.” (SAC, ¶ 28) However, the SAC admits that it was
Local 369 that filed the grievances on behalf of its members “after the signing
of the 2023 CBA.” (Id. ¶ 13.) Consequently, Plaintiffs fail to demonstrate
that determining whether they wrongfully terminated Local 369 members does not
require that this court analyze the CBA, or that it does not fall under the
jurisdiction of the NLRA.
The United States Supreme Court instructs that “when
resolution of a state-law claim is substantially dependent upon analysis of the
terms of an agreement made between the parties in a labor contract, that claim
must either be treated as a § 301 claim, [citation], or dismissed as pre-empted
by federal labor-contract law.” (Allis-Chalmers Corp. v. Lueck (1985)
471 U.S. 202, 220 [105 S.Ct. 1904, 1916, 85 L.Ed.2d 206].) Similarly, “Section 301 of the LMRA preempts
state law claims that are based directly on rights created by a collective
bargaining agreement, and also preempts claims that are substantially dependent
on an interpretation of a collective bargaining agreement.” (Aguilera v.
Pirelli Armstrong Tire Corp. (9th Cir. 2000) 223 F.3d 1010, 1014.) “When
the meaning of particular contract terms is not disputed, however, the fact
that a collective bargaining agreement must be consulted for information will
not result in § 301 preemption.” (Ibid.)
Defendant AFM succeeds in showing that on its face, the
first cause of action is preempted because it would require the court to
determine if Local 269 members were wrongfully terminated by Plaintiffs
pursuant to terms of the CBA. The SAC fails allege that the terms of the CBA
are not disputed such that the court could make the determination whether Local
369 were wrongfully terminated.
Moreover, section 8(a)(1) of the NLRA protects an employee’s
right to make grievances under a CBA. (See N.L.R.B. v. Eaton Corp. (6th
Cir. 1980) 623 F.2d 479, 480; Toledo World Terminals (1988) 289 NLRB
670, 703.)
Lastly, Plaintiff fails to show that when a CBA is expired,
it prohibits a person from asserting that they were wrongfully terminated, thus
taking the employment dispute outside the purview of the NLRA. “[W]hen a
collective bargaining agreement expires,
its terms and conditions persist under the NLRA.”
(Valley Hospital Medical Center, Inc. v. National Labor Relations
Board (9th Cir. 2024) 100 F.4th 994, 999.)
Whether Local 369 members were wrongfully terminated is a
determination that must be made by looking at the CBA and determining “whether
the non-rehire constituted a wrongful termination, as indicated by the fact
that Local 369 filed grievances under the CBA for wrongful termination.”
(Demurrer, at p. 16:17-20.)
Lastly, while the SAC alleges that Local 369’s placing of
Plaintiffs on the “Do Not Work For List” damages Plaintiffs, Plaintiffs do not
allege this was the interference nor explain who this action was independent
wrongful conduct sufficient to support an IIPEA claim. Moreover, Local 369 has
been dismissed from this action. As to AFM, the SAC does not allege that Plaintiffs
being placing on the “International Unfair List” damaged their prospective economic
relations or why such conduct was independently wrongful.
The demurrer to the first cause of action is sustained with
leave to amend.
B. 2nd Cause of Action – Declaratory Relief
Paragraphs 36 and 37 assert that Local 369 bylaws and AFM’s bylaws
provide that the grievance and arbitration provision in a CBA “shall be the
exclusive method of resolving disputes arising under those agreements between
the parties to those agreements.” (SAC, ¶¶ 36, 37.) The SAC further alleges
that Defendants violated their bylaws by commencing internal disciplinary Charges
proceedings against Plaintiff Mathewes doing business as Stringcandy, despite
the CBA’s provisions being the exclusive means to resolve disputes. (Id.
¶¶ 40, 41.)
Plaintiffs seek a judicial determination that (1) the
internal disciplinary charges proceedings “are prohibited by Article 7, Section
1 of Defendant AFM’s Bylaws and Article XVII of the Bylaws of the LOCAL 369”;
(2) “Defendant AFM and/or its agents are not an impartial tribunal for
adjudication of the Charges proceedings, and (3) that the placement of
Plaintiffs on Defendant AFM’s “International Unfair List”; and “the ‘Do Not Work For’ list maintained by
Defendant AFM’s agent, the LOCAL 369, is a violation of Article 7, Section 1 of
Defendant AFM’s Bylaws, Article XVII of the Bylaws of the LOCAL 369, and a
violation of the due process rights granted to Plaintiff MATTHEWS as a member
of Defendant AFM by Article 7, Section 1 of the Bylaws of Defendant AFM.” (SAC, ¶ 46.)
Plaintiff also seeks “a permanent injunction against
Defendants: (a) terminating the Charges proceedings commenced by Defendant AFM
against Plaintiff MATTHEWS; and (b) requiring Defendants to immediately remove
Plaintiffs from Defendant AFM’s “International Unfair List” and the LOCAL 369’s
“Do Not Work For List.” (SAC, ¶ 47.)
Defendant AFM asserts that Plaintiffs as employers have no
standing to sue Local 369. The SAC is devoid of any allegations showing that the
Plaintiffs are members of Local 369 or third-party beneficiaries of Local 369’s
bylaws. Plaintiffs’ opposition urges this court to “utilize its equitable
powers to construe Defendants’ bylaws in a manner that reflects Defendants’
self-serving and knowingly dishonest characterization of Plaintiff MATTHEWS as
the employer and, by implication, a party to the CBA.” (Opposition, at p.
17:24-26.) However, courts cannot add or very the terms of a contract without
the consent of the contracting parties. “Courts cannot ‘rewrite agreements and
impose terms to which neither party has agreed.’” (Ramirez v. Charter
Communications, Inc. (2024) 16 Cal.5th 478, 516.) Moreover, Local 369 is no
longer a party to this action.
Accordingly, Plaintiffs fail to show they are entitled to
the relief request in the second cause of action as it pertains to Local 369.
Defendant AFM asserts that Stringcandy is a corporate entity
that is not subject to AFM bylaws nor a third-party beneficiary and has no
right to invoke the protections of the AFM. The SAC fails to show that the
bylaws were intended to benefit Stringcandy or gave Stringcandy standing to challenge
AFM’s bylaws.
Defendant AFM further asserts that the grievance procedures
that dictate that the CBA is the exclusive grievance procedure only applied to
disputes between parties subject to the CBAs:
Article 7, Section 1, of the AFM’s
bylaws, provides as follows: “Grievance and arbitration provisions contained in
a CBA or engagement contract shall be the exclusive method of resolving
disputes arising under those agreements between the parties to those
agreements.”
(SAC, ¶ 37.)
The SAC asserts that “Plaintiff MATTHEWS is not a party to
the 2022 CBA” and is therefore not subject to the exclusive dispute resolutions
set forth in the CBA. Moreover, while the internal disciplinary “Charges
falsely allege that Plaintiff MATTHEWS is a party to the 2022 CBA and 2023 CBA,”
the allegation alone does not make AFM’s internal disciplinary proceedings invalid.
(SAC, ¶¶ 41, 42.)
Defendant AFM further asserts that it is premature for
Plaintiff Matthews to allege they were deprived of “a full and fear hearing by
an impartial tribunal” because the right arises in “all cases of discipline and
Plaintiff Mathewes has not been disciplined because the proceedings are “presently
being adjudicated.” (SAC, ¶¶ 39, 40.)
Until the disciplinary hearing is completed, the court
cannot find that Plaintiff was disciplined or that Plaintiff is not required to
exhaust internal grievance procedures:
courts have discretion to decide
whether to require exhaustion of internal union procedures. In exercising this
discretion, at least three factors should be relevant: first, whether union
officials are so hostile to the employee that he could not hope to obtain a
fair hearing on his claim; second, whether the internal union appeals
procedures would be inadequate either to reactivate the employee's grievance or
to award him the full relief he seeks under § 301; and third, whether
exhaustion of internal procedures would unreasonably delay the employee's
opportunity to obtain a judicial hearing on the merits of his claim. If any of
these factors are found to exist, the court may properly excuse the employee's
failure to exhaust.
(Clayton v. International Union, United Auto., Aerospace,
and Agr. Implement Workers of America (1981) 451 U.S. 679, 689 [101 S.Ct.
2088, 2095, 68 L.Ed.2d 538].) The SAC is devoid of any facts showing that AFM’s
internal grievance procedure is inadequate to ensure she obtains a fair
hearing.
As the allegation that Defendant AFM placed Plaintiff on the
“International Unfair List” and Local 369’s “Do Not Work For” List in violation
of Article 7, Section 1 and Article 10,
Section 1(3) of AFM’s bylaws, Plaintiff fails to show that those provisions are
applicable to Plaintiff or AFM’s internal grievance procedures are inadequate
to provide Plaintiff with the requested relief such that Plaintiff is excused
from complying with the grievance procedures. (See Lynn v. Sheet Metal
Workers' Intern. Ass'n (9th Cir. 1986) 804 F.2d 1472, 1484.)
Article 7, Section 1 mandates that disputes arising between
parties are subject to a CBA, the CBA is the exclusive method for resolving
those disputes. (SAC, ¶ 37.) However, Plaintiff does not allege they were a party
to the CBA between AFM and Local 369, thus Article 7 is inapplicable. (SAC, ¶¶ 37, 42.) Article 10, Section 1(3) guarantees “a full
and fair hearing by an impartial tribunal” in cases of discipline. While the
court accepts that being placed on the AFM’s “International Unfair List” is a
form of discipline, the Plaintiff must allege facts to show that they are not
required to exhaust AFM’s internal remedies before bringing this action. (See Schick
v. Lerner (1987) 193 Cal.App.3d 1321, 1327 [facts not alleged in a pleading
are presumed not to exist].) The SAC is devoid of allegations as to why AFM’s
internal grievance procedures are inadequate to remove Plaintiff from the
“International Unfair List.”
The demurrer to the second cause of action is sustained with
leave to amend.
Conclusion
The demurrer is
sustained with leave to amend. Plaintiff is granted 10 days leave to amend. The
court sets the
OSC RE: Amended Complaint for, and continues the Case Management
Conference to, January
31, 2025, at 8:30 a.m. Defendant to give notice.