Judge Kevin C. Brazile, Case 22STCV27744 2023-03-15 Tentative Ruling

Moving Party: Defendant Reliant Immediate Care Medical Group, Inc. (“Reliant”)

Ruling: Reliant’s Demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to the 7th cause of action.

Reliant’s Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the 9th cause of action.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

On August 25, 2022, Plaintiff Lopez filed his complaint against Jobsource, Inc., Jobsource Holdings, Inc., and Jobsource Downey (together “Jobsource”), Farwest Corrosion Control Company (“Farwest”), and Reliant Immediate Care Medical Group, Inc. (“Reliant”). (Compl. ¶¶ 6-10.)

In October 2021, Lopez suffered an injury while working at one of Farwest’s facilities in Downey. (Id. ¶¶ 20-21.) Lopez worked at Farwest beginning in September 2021 after he was placed there by Jobsource, a staffing agency based in Fullerton. (Id. ¶¶ 18, 20.) After Lopez was injured, he contacted Jobsource to request treatment from Reliant, their designated workers’ compensation clinic. (Id. ¶ 23.) According to Lopez, when he attended his appointment at Reliant, Reliant subjected him to an unnecessary drug test. (Id. ¶ 24.) Mr. Lopez’s drug test returned positive results for cannabis use. (Id. ¶ 30.) Jobsource and Farwest fired him, purportedly on that basis. (Id. ¶ 31.) Lopez alleges Reliant administered the test intending to find a pretext to terminate him from his position at Farwest rather than providing a reasonable accommodation for his disability. (Id. ¶ 24.)

Lopez’s complaint asserts eleven causes of action against Jobsource, Farwest, Reliant, or some combination of the three: (1) disability discrimination; (2) failure to reasonably accommodate; (3) failure to engage in the interactive process; (4) retaliation under California’s Fair Employment and Housing Act (FEHA); (5) failure to prevent discrimination and retaliation; (6) wrongful termination in violation of public policy; (7) aiding and abetting FEHA violations; (8) unlawful medical inquiry in violation of the FEHA; (9) violation of Labor Code section 432.6; (10) violation of California’s constitutional right to privacy; and (11) failure to re-hire in violation of the FEHA.

Lopez asserts only the seventh, ninth, and tenth causes of action against Reliant.

On January 12, 2023, Reliant demurred to Lopez’s seventh and ninth causes of action and moved to strike various references to and prayers for punitive damages from Lopez’s complaint.

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 for sufficiency tests whether the complaint alleges facts sufficient to constitute a cause of action. (Cal. Code Civ. Proc. § 430.10; Young v. Gannon (2002) 97 Cal.App.4th 209, 220.)

When considering a demurrer, a court reads the allegations stated in the challenged pleading liberally and in context, and “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Put differently: the court treats all facts alleged – but only the facts alleged – in the complaint as true. (Picton v. Anderson Union High School District (1996) 50 Cal.App.4th 726, 732.)

“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

As long as a party shows there is “a reasonable possibility any defect identified by the defendant can be cured by amendment,” the trial court should grant leave to amend the pleadings when sustaining a demurrer. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.) However, “[t]he burden is on the plaintiff to demonstrate the manner in which the complaint can be amended. (Ross v. Creel Printing & Publishing Company (2002) 100 Cal.App.4th 736, 748.)

Generally speaking, “[a] defendant is liable for aiding and abetting another in the commission of an intentional tort … if the defendant ‘ “ ‘knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act.’ ” ’ [Citation.]” (Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328, 343.)

“The FEHA does not provide a definition of ‘aiding and abetting.’ It is appropriate, therefore, to consider the common law definition of aiding and abetting. ‘Liability may . . . be imposed on one who aids and abets the commission of an intentional tort if the person (a) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person's own conduct, separately considered, constitutes a breach of duty to the third person.’ [Citations.]” (Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1325-1326.)

As framed by the Judicial Council, a finder of fact may determine a party aided and abetted a tort where it determines: (1) that the defendant knew a tort was or would be committed by a primary tortfeasor; (2) that the defendant gave substantial assistance or encouragement to the tortfeasor; and (3) that the defendant’s conduct was a substantial factor in causing harm to the plaintiff. (CACI No. 3610 (2015 rev.) (2023 edition).)

Reliant argues Lopez has not alleged facts showing it knew about Jobsource and Farwest’s purported tortious conduct. Lopez disagrees.

Both parties cite to Alch v. Superior Court (Alch) (2004) 122 Cal.App.4th 339, in which television writers brought a class action against studios and networks for age discrimination and included several talent agencies in their claims as aiders and abettors. The plaintiffs there alleged overwhelming facts in support of agencies’ knowledge, even including publicly disseminated revelations about the primary tortfeasors’ abusive practices. (Alch, supra, at pp. 389-390.) Reliant implies all aiding and abetting cases must meet, or at least approach, the Alch standard, but the decision itself makes no suggestion that it laid a threshold for “knowledge” on the part of an alleged abettor. Ultimately, the allegations of knowledge in Alch went so far above and beyond ordinary fact-pleading standards that they do little to assist the more borderline analysis here.

The court instead relies on the general rule that statutory causes of action must be pled with particularity. (See Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795.) Because Lopez’s aiding and abetting claim depends on a claim brought under the FEHA, his claim is inherently statutory and must satisfy the particularity rule. Under this heightened standard, Lopez has not pled sufficient facts.

Lopez points in his opposition papers to a litany of facts he alleges Reliant knew about. (See Opp. 14:11-25.) But all of the things Reliant allegedly knew have only been alleged by conclusion, and must be disregarded, if the knowledge itself is a mere conclusion. Lopez alleges Reliant “knew” various things and that it engaged in conduct “despite knowing and being aware” of the other defendants’ tortious scheme. (Compl. ¶¶ 91-92.) But he alleges no specific facts to support the knowledge itself.

For the reasons set forth above, Lopez has not alleged facts sufficient to state a cause of action against Reliant. However, he has demonstrated a possibility that his failure to do so may be cured by amendment. Therefore, the court SUSTAINS Reliant’s demurrer to the seventh cause of action WITH LEAVE TO AMEND.

Labor Code section 432.6 forbids “a person [to] as a condition of employment, continued employment, or the receipt of any employment-related benefit, require … any employee to waive any right, forum, or procedure for a violation of any provision of the [FEHA] or [the Labor Code].” (Lab. Code § 432.6, subd. (a).) The statute is a relatively new addition to the Labor Code; it was only codified in 2019 following passage of Assembly Bill 51 (Reg. Session 2019-2020) (AB-51) by the State Legislature. Only two published decisions in California have cited this section of the Code, not in any context relevant here. The court must turn to basic principles of statutory interpretation to decide the parties’ dispute over how to interpret the law.

Liability under section 432.6[1] depends on a plaintiff establishing that (1) defendant is a “person”; (2) plaintiff is an employee; (3) defendant “require[d]” plaintiff to waive legal rights; and (4) the waiver was imposed “as a condition of employment, continued employment, or receipt of an[ ] employment-related benefit.” (Lab. Code § 432.6, subd. (a).)

Lopez contends he has sufficiently alleged that (1) Reliant is a person, (2) Lopez was an employee (of Jobsource, not Reliant); (3) Reliant required him to waive his privacy rights; and (4) the waiver was imposed as a condition of continued employment, or possibly as a waiver of disability-related benefits.

Reliant first disputes Lopez’s construal of the statute. It claims that the “personhood” element must be read along with the “employee” element, such that the only “persons” subject to subdivision (a) of section 432.6 are the plaintiff’s employers. Second, Reliant argues Lopez has not pled facts sufficient to establish the third or fourth elements: Lopez has not alleged that Reliant required him to execute any waiver, or that Reliant, not being his employer, was even capable of conditioning anything on such a waiver.

The plain language of section 432.6 defeats Reliant’s argument as to the first and second elements, even though the plain language sweeps more broadly than its drafters appear to have intended.

The legislative history and subsequent interpretation of section 432.6 suggest that the term “person” was meant to refer to an employer imposing a waiver on an employee, as Reliant contends. Legislative analyses published throughout the life cycle of AB-51 portray the bill as prohibiting an employer from requiring waivers of legal rights.[2] In fact, the analyses indicate the bill primarily contemplated the issue of employment arbitration, rather than the medical exam and disability claims at issue here.[3] Reliant accurately presents the context and history of section 432.6, which reflect the Legislature’s intention to limit employers’ treatment of their employees.

Nevertheless, the fact remains that the bill does not refer to employers. It refers to “persons.” The course of statutory interpretation begins with the plain text, and only upon discovering ambiguity does a court move on to examine legislative history. (Mt. Hawley Ins. Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1396-1397.) “The first step in the interpretive process looks to the words of the statute themselves … [and i]f the interpretive question is not resolved in the first step, we proceed to the second step of the inquiry.” (Alejo v. Torlakson (2013) 212 Cal.App.4th 768, 787-788.) Here, the meaning of the term “persons” is broad and plain. And as Lopez points out, the term “persons” in subdivision (a) contrasts directly with the term “employers” used immediately below in subdivision (b). Subdivision (a) begins with the language “[a] person shall not,” while subdivision (b) begins an identically structured provision with “[a]n employer shall not … .” The plain language reflects a reasoned distinction between the terms.

Therefore, as an initial matter, section 432.6 applies to any “person” who imposes a condition on any “employee”, no matter whether the employee is employed by the person in question. Given the available legislative history, this oddity appears to be the result of poor drafting; but a poorly drafted law is nonetheless the law.

Third and Fourth Elements: Condition of Continued Employment or Employment Benefit

The legislative history assists Reliant’s case, however, regarding the third and fourth elements of Lopez’s claim. The terms “require” and “condition” in subdivision (a) suffer from some ambiguity. Where “the meaning of the words [in a statute] are not clear … courts are required to take a second step and refer to the legislative history.” (Soil v. Superior Court (1997) 55 Cal.App.4th 872, 875.) “We begin with the fundamental rule that our primary task is to determine the lawmakers’ intent.” (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798.)

The uniform, uncontradicted legislative history of section 432.6 suggests it applies, at most, only to those who have direct control over continued employment or provision of benefits at least nearly in the manner of an employer. In this sense, a “person” subject to section 432.6 must control an employee’s continued employment or benefits either as an employer, or with a degree of authority similar to an employer – as, for instance, a parent company or a hiring agent.

Lopez’s facts as pled do not indicate Reliant executed any direct control over his employment. Rather, they reflect a contractual relationship between Reliant and Jobsource wherein Reliant only provided Jobsource with certain information (drug test results). Jobsource then used that information to impose a condition on Lopez’s employment. Reliant held no direct authority over his employment. The language and history suggest that Reliant’s limited powers place it outside the provisions of section 432.6.

The facts alleged by Lopez make clear that Reliant falls outside the ambit of Labor Code section 432.6. Thus, he has failed to allege facts sufficient to state a cause of action against Reliant under that section, and his failure cannot be cured by amendment.

Therefore, the court SUSTAINS Reliant’s demurrer to the ninth cause of action WITHOUT LEAVE TO AMEND.

Code of Civil Procedure section 436 provides that the Court may, upon a motion made pursuant to Code of Civil Procedure section 435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading” and/or “strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc. § 436, subd. (a).) In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike, all parts in their context, and assume their truth. (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

A motion to strike is the procedure to attack a purportedly improper remedy such as unjustified punitive damages. (Venice Town Council, Inc. v. City of Los Angeles (1996) 47 Cal.App.4th 1547, 1561-1562.) A complaint including a request for punitive damages must also include allegations showing that the plaintiff is entitled to such an award. (Clauson v. Superior Court, supra, 67 Cal.App.4th at p. 1255.) A claim for punitive damages cannot be pled generally and allegations that a defendant acted "with oppression, fraud and malice" toward plaintiff are insufficient legal conclusions to show that the plaintiff is entitled to an award of punitive damages. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) Specific factual allegations are required to support a claim for punitive damages. (Ibid.)

Reliant moves to strike certain claims for punitive damages from the complaint. Specifically, Reliant seeks to strike (1) references to punitive damages in the seventh cause of action; (2) references in the ninth cause of action; (3) references in the tenth “Constitutional Right of Privacy” cause of action; and (4) general references in the Prayer for Relief.

Because the court has sustained Reliant’s demurrer in its entirety, its motion to strike is moot as to both the seventh and ninth causes of action. And the motion sweeps too broadly as to the tenth cause of action, which is brought against all defendants, and the general prayer for relief, which collects all claims stated in the complaint. Nonetheless, in the interest of preventing unnecessary litigation over the availability of punitive damages for the seventh cause of action, the court will take this opportunity to discuss the substance of Reliant’s argument.

Reliant’s position relies on the application of Code of Civil Procedure section 425.13. Section 425.13 subjects punitive damage claims against a medical practitioner to heightened pleading requirements where the claims are “directly related to the manner in which professional services were provided.” (Central Pathology Service Medical Clinic, Inc. v. Superior Court (1992) 3 Cal.4th 181, 192.) Reliant insists that “[t]here does not need to be an allegation … [of] medical negligence” for section 425.13 to apply. (Mot. 6:7-9.) Reliant is correct in this regard, but it misconstrues Lopez’s allegations.

Lopez does not suggest that only medical negligence claims are covered by section 425.13. He, like Reliant, correctly identifies the test for application of 425.13 – that the conduct be directly related to professional medical services, or that it arose while a provider was “engaged in the practice of medicine.” (Davis v. Superior Court (1994) 27 Cal.App.4th 623, 629.) Lopez argues that, applying the correct test, Reliant’s alleged conduct does not satisfy that standard. And because the conduct does not relate to the manner in which Reliant provided medical care, Lopez need not abide by the requirements of section 425.13.

The court agrees with Lopez, at least with regard to the seventh cause of action. The seventh cause of action for aiding and abetting arises almost entirely not from Reliant’s conduct, but from conduct by Jobsource and Farwest. The cause of action arises from the circumstances of Lopez’s employment, not his medical care, and from Reliant’s release of test information, not the process of testing itself. Nonetheless, the motion is moot, the court having sustained Reliant’s demurrer with leave to amend.

The court does not rule on whether Lopez has pled facts with sufficient particularity to support an award of punitive damages, particularly given that allegations of knowledge – invited by amendment to the seventh cause of action – will bear particular relevance to the question of malice.

Reliant’s demurrer is SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND as to the seventh cause of action and SUSTAINED WITHOUT LEAVE TO AMEND as to the ninth cause of action.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.

[1] Undesignated code references throughout this subsection refer to the Labor Code unless otherwise specified.

[2] See generally Committee Reports on Assembly Bill No. 51 (2019-2020 Reg. Session): Assem. Com. on Judiciary, Mar. 19, 2019 [“prohibits an employer from requiring … any employee[ ] to waive”]; Assem. Com. on Appropriations, Apr. 10, 2019 [same]; Sen. Com. on Labor, Public Employment and Retirement, June 19, 2019 [same]; Sen. Com. on Judiciary, Jul. 9, 2019 [same]; Sen. Com. on Appropriations, Aug. 12, 2019 [same]; see also Assem. Floor Analysis, Assem. Bill. No. 51, 3d reading Mar. 26, 2019 “Major Provisions” [“[p]rohibits an employer from requiring”]; Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Ass. Bill 51 [same].

Lopez points to an earlier version of the bill, Assembly Bill No. 3080 (2017-2018 Reg. Session) which was amended to delete “employer” and add “person”. But this bill was vetoed, and procedurally speaking the Legislature started from scratch with Assembly Bill 51, above. Given the weight of legislative history contradicting Lopez’s position, his argument based on a single piece of attenuated statutory history is unavailing.

That said, statutory history notwithstanding, the court finds Lopez correct regarding the interpretation of the term “person” based solely on the plain language and structure of section 432.6.

[3] Ibid.