Judge: Stephen I. Goorvitch, Case: 24STCP00227, Date: 2024-09-13 Tentative Ruling
Case Number: 24STCP00227 Hearing Date: September 13, 2024 Dept: 82
SkyHop Global LLC, Case No. 24STCP00227
v.
Hearing:
September 13, 2024
Location:
Stanley Mosk Courthouse
Department:
82
The City of Los Angeles Judge:
Stephen I. Goorvitch
[Tentative] Order Sustaining in Part, and
Overruling in Part, Demurrer
INTRODUCTION
In 1997, the City of Los Angeles (“Respondent”
or the “City”) enacted the Living Wage Ordinance (the “LWO”) which requires
certain City contractors, lessees, and other persons and entities doing business
with the City to pay their employees specified wages and benefits. The City’s Department of Public Works, Bureau
of Contract Administration (the “BCA”) has been applying the LWO against Petitioner
SkyHop Global LLC (“Petitioner” or “SkyHop”).
Petitioner now challenges that decision asserting three causes of
action: (1) Declaratory relief; (2) Injunctive Relief; and (3) Writ of mandate
under Code of Civil Procedure section 1085.
The City demurs to the petition and complaint. The court overrules the demurrer with respect
to the first and third causes of action but stays the first cause of
action. The court sustains the demurrer
to the second cause of action without leave to amend.
PETITIONER’S ALLEGATIONS
Petitioner
is a ground transportation business that transports airline crews to and from
LAX and their layover hotels. (Petition
for Writ of Mandate (“Pet.”) ¶¶ 6-7.) To
perform its operations at LAX, Petitioner executed a Non-Exclusive Licensing
Agreement (the “NELA”) with the City of Los Angeles on March 15, 2021. (Id. ¶ 11.)
The
BCA is responsible for making an initial determination whether an agreement is
governed by the LWO. (Id. ¶ 19.) On February 16, 2023, SkyHop received an
email from Sophy Tzeng, a Contract Compliance Analyst from the Equal Employment
Opportunity Enforcement (“EEOE”) Section of the BCA. (Id. ¶ 20.) The BCA received an anonymous complaint about
potential violations of the LWO and requested certain documents from
SkyHop. (Ibid.) SkyHop took the position that it is not
subject to the LWO because it does not fall under any of the definitions set
forth in Los Angeles Administrative Code (“LAAC”) section 10.37.1 and therefore
declined to submit the requested documents.
(Ibid.)
The
BCA and SkyHop continued to exchange correspondence concerning their respective
positions. (Id. ¶¶ 21-26.) Finally, on December 7, 2023, the BCA sent a violation
letter to SkyHop. (Id. ¶ 27; see
also Allison Decl., Exh. A.) The letter
stated: “This letter serves as notice to SkyHop Global (SG) that it has
violated the LWO and must now take measures to correct the violation.” (Allison Decl., Exh. A.) The letter made a series of “Findings,” which
included a finding that SkyHop’s “refusal to provide the requested documents is
a failure to cooperate with the [Office of Contract Compliance] and [SkyHop] is
now in violation of the LWO.” (Ibid.) The letter ordered “corrective action” and
“direct[ed] [SkyHop] to provide the documents as requested in the Request for
Documents sent on October 18, 2023.” (Ibid.) The letter stated: “Failure by the Employer
to cooperate with the DAA’s administrative and enforcement actions, including,
but not limited to, requests for information or documentation to verify
compliance with this may result in a determination by the DAA that the Employer
has violated this article . . . .” (Ibid.) Finally, the letter stated: “Should [SkyHop]
fail to comply with the required corrective action, it may result in a recommendation
to LAWA to terminate [SkyHop’s] NELA.” (Ibid.)
LEGAL STANDARD
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. (Code Civil Proc. § 430.30, subd. (a); Blank
v. Kirwan (1985) 39 Cal.3d 311, 318.) “We assume the truth of the
allegations in the complaint, but do not assume the truth of contentions,
deductions, or conclusions of law.” (California Logistics, Inc. v.
State (2008) 161 Cal.App.4th 242, 247.) The allegations in the petition must be
liberally construed in favor of Petitioner on demurrer. (See Mobil Oil Corp. v Exxon Corp.
(1986) 177 Cal.App.3d 942, 947.) “A demurrer
must dispose of an entire cause of action to be sustained.” (Poizner
v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters.”
(Hahn v. Mirda (2007) 147
Cal.App.4th 740, 747.)
EVIDENTIARY ISSUES
Respondent asks the court to take judicial notice of the
“Notice to Correct” because it was referenced in the petition but not
attached. Petitioner does not oppose the
request. Therefore, the request for
judicial notice is granted.
DISCUSSION
A. Writ of Mandate under
Code of Civil Procedure section 1085
The City argues that the petition is not ripe because the City has not
yet determined that the LWO applies to SkyHop or that SkyHop has violated “the
substantive provisions of the LWO.”
(Demurrer at 4.) To determine
whether a controversy is ripe, the court must consider two factors: (1) Whether
the dispute is “sufficiently concrete,” and (2) Whether withholding judicial
consideration will result in undue hardship to Petitioner. (See Stonehouse Homes LLC v. City of
Sierra Madre (2008) 167 Cal.App.4th 531, 540; see also Pacific Legal
Foundation v. California Coastal Commission (1982) 33 Cal.3d 158, 171-173.)
There are two essential requirements to the issuance of an ordinary writ
of mandate under Code of Civil Procedure section 1085: (1) a clear, present,
and ministerial duty on the part of the respondent, and (2) a clear, present,
and beneficial right on the part of the petitioner to the performance of that
duty. (California Ass’n for Health Services at Home v. Department of Health
Services (2007) 148 Cal.App.4th 696, 704.) However, mandamus “will
lie to correct abuses of discretion…. A
court must ask whether the public agency’s action was arbitrary, capricious, or
entirely lacking in evidentiary support, or whether the agency failed to follow
the procedure and give the notices the law requires.” (County
of Los Angeles v. City of Los Angeles (2013) 214 Cal.App.4th 643, 654.)
The court finds that the dispute is “sufficiently concrete” for
resolution. Contrary to the City’s
argument, in fact, the City has found that the LWO applies to SkyHop. (See, e.g., Allison Decl, Exh. A.) The City’s letter states:
In accordance with LAAC 10.37.1(k)(3) and (m)
definitions of Public Lease and Subcontractor, Airlines, as Public Lessees of
Los Angeles World Airports (LAWA) property, are subject to the LWO. [Skyhop]
is a subcontractor, any subcontractor that provides airlines with services are
also subject to the LWO. In addition, [SkyHop] is a Non-Exclusive License
Agreement (NELA) holder with LAWA, which is also subject to the LWO.
(Allison Decl.,
Exh. A, emphasis added.) The letter
finds that SkyHop “has violated the LWO” and therefore
the City “must now take measures to correct the violation.” (Allison Decl., Exh. A.) The petition’s allegations
further undermine the City’s argument.
Petitioner alleges that on February 28, 2023, Respondent asserted that
Petitioner is subject to the LWO because it has a “Public License” and is a
“subcontractor.” (Id. ¶ 21.) Petitioner alleges that on October 10, 2023,
Respondent asserted that:
Commercial ground transportation
operators contracted with airlines to provide industry-specific airline crew
transportation and who are requested to have a current Non-Exclusive License
Agreement to conduct such transportation services at Los Angeles International
Airport (LAX) satisfy the definition of “Airport Employer” and are
subject to the terms and provisions of the LWO.
(Id.
¶ 24 [emphasis added].) Petitioner
further alleges that on October 18, 2023, Respondent reiterated that “[s]ince
Skyhop has a CSPLA with LAWA, Skyhop is subject to the LWO.” (Id. ¶ 25 [emphasis added].) Based on these allegations, which the court
must accept as true, the petition alleges a ripe controversy. “[W]here an agency applies regulations to a
party’s injury, a sufficient controversy exists to satisfy the ripeness
requirement.” (Phelps v. State Water
Resources Control Bd. (2007) 157 Cal.App.4th 89, 103.) Petitioner has sufficiently alleged a ripe
controversy that has “reached, but has not passed, the point that the facts
have sufficiently congealed to permit an intelligent and useful decision to be
made.” (Santa Teresa Citizen Action
Group v. City of San Jose (2003) 114 Cal.App.4th 689, 708.)
Petitioner also
sufficiently alleges that it would suffer undue hardship if the court declined
to consider the issues at this stage. Petitioner alleges
that “[t]hrough its improper enforcement and application of the LWO, the City
is attempting to compel SkyHop to adhere to a statute that was never intended
to apply to SkyHop and that, on its face, is inapplicable to SkyHop.” (Pet. ¶ 32.)
Further, Petitioner alleges that “BCA has threatened to recommend that
the City terminate SkyHop’s NELA.” (Id.
¶ 41; see also id. ¶ 47.) These
allegations are sufficient. “[W]here a
regulation requires an immediate and significant change in the plaintiffs’
conduct of their affairs with serious penalties attached to noncompliance, the
case is justiciable” (City of Auburn
v. Qwest Corp. 260 F.3d 1160, 1173 (9th Cir. 2001), citations and internal
quotations omitted; see also Reno v. Catholic Soc. Servs., Inc. (1993)
509 U.S. 43, 57 (1993).)
Petitioner also alleges that “[a] writ of mandate is necessary” because “there is no
procedure for a formal hearing that would allow SkyHop the opportunity to be
heard on this matter.” (Pet. ¶
47.) The court accepts these allegations
as true for purposes of demurrer. (California Logistics, Inc. v. State (2008) 161
Cal.App.4th 242, 247.) This further establishes
hardship.
In
sum, the record is clear that the City has determined that the LWO applies to
Petitioner and is attempting to enforce the audit provisions against
Petitioner. Petitioner also sufficiently
alleges that there would be undue hardship in delaying a decision on this
issue. Therefore, the court finds that
the case is ripe and overrules the demurrer on that basis.
B. Declaratory Relief
Petitioner’s first
cause of action—for declaratory relief—appears to raise the same issue as the
petition for writ of mandate, viz., whether Respondent properly determined
that Petitioner is subject to the LWO.
Therefore, the court overrules the demurrer to this cause of action for
the reasons discussed in Section A.
However, the court
stays the first cause of action.
Pursuant to the local rules, only a cause of action for
writ of mandate is properly assigned to Department 82. (See LASC Local Rules 2.8(d) and 2.9.) Local Rules 2.8(d) and 2.9 do not include
a claim for declaratory relief as a special proceeding assigned to the writs
departments. While the court has
discretion to keep such matters, the court generally makes such determination
after ruling on the writ petition.
Accordingly, the court stays the first cause of action until resolution
of the third cause of action. At that
point, if the first cause of action is still at issue, the court will determine
whether to transfer that cause of action to an independent calendar court or handle
the case in Department 82.
C. Injunctive Relief
Petitioner’s
second cause of action is titled “injunctive relief.” “Injunctive relief is
a remedy, not a cause of action.
A cause of action must exist before a court may
grant a request for injunctive relief.” (Ivanoff v. Bank of America, N.A. (2017)
9 Cal.App.5th 719, 734.) Therefore, the
court sustains the demurrer without leave to amend. This order shall not preclude Petitioner from
seeking an injunction based on the third cause of action for writ of
mandate. (See County of DelNorte v.
City of Crescent City (1999) 71 Cal.App.4th 965, 973 [injunctive relief “is
available in a mandamus proceeding and is appropriate to restrain action which,
if carried out, would be unlawful”].)
The court shall interpret paragraphs 37-42 as providing notice in this
regard based upon subsection (b) of the prayer for relief, which seeks an
injunction.
CONCLUSION AND ORDER
Based upon the foregoing, the court orders as follows:
1. The court overrules the
demurrer to the first and third causes of action.
2. The court stays the
first cause of action pending resolution of the third cause of action.
3. The court sustains the
demurrer to the second cause of action without leave to amend. This order shall not preclude Petitioner from
seeking an injunction relating to the third cause of action.
4. Respondent shall file an
answer within thirty (30) days.
5. The court sets trial on
__________, 2025, at 9:30 a.m. The
opening brief shall be filed and served at least 60 days in advance of trial;
the opposition brief shall be filed and served at least 30 days in advance of trial;
and the reply brief shall be filed and served at least 15 days in advance of
trial. Petitioner’s counsel shall lodge
any administrative record at least 15 days before trial on a thumb drive.
6. Respondent’s counsel
shall provide notice and file proof of service with the court.
IT IS SO ORDERED
Dated: September 13, 2024 __________________________
Stephen
I. Goorvitch
Superior
Court Judge