Posts belonging to Category Judiciary

In Noel Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013), the D.C. Circuit Court ruled that President Obama lacked the authority to make three recess appointments to the five-member National Labor Relations Board (NLRB). The recess appointments were deemed unconstitutional, leaving the NLRB with only one board member — two short of the three required to make a quorum and allow the NLRB to function. At least 30 workplace disputes pending before the NLRB are now in limbo.

Of greater consequence, Noel Canning potentially abrogates every NLRB decision since January of 2012, including: Costco Wholesale Corp., 358 NLRB No. 106 (Sept. 7, 2012) (employer’s “social media policy” prohibiting electronic postings that “damage the Company, defame any individual or damage any person’s reputation” held unlawful); Karl Knauz Motors, Inc., 358 NLRB No. 164 (Sept. 28, 2012) (employer’s rule prohibiting “disrespectful” language or “any other language which injures the image or reputation of” employer held unlawful); and Banner Health System, 358 NLRB No. 93 (July 30, 2012) (asking employee who was subject of an internal investigation to refrain from discussing matter violates the NLRA).  Also in question are D. R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012) and Convergys Corp., 2012 NLRB LEXIS 742 (Oct. 25, 2012), key pro-worker decisions finding class action waivers unconscionable.

Meanwhile, as his NLRB appointments are being assailed, President Obama has made two appointments to the Federal Circuit. Unique among the federal intermediate appellate courts, the Federal Circuit was established in 1982 pursuant to Article III of the Constitution, in order to effectuate the merger of the United States Court of Customs and Patent Appeals and the appellate division of the United States Court of Claims. The Federal Circuit’s jurisdiction covers patents and trademarks, but also takes the appeals of certain administrative agency decisions. Indeed, fully half of the Federal Circuit’s caseload is administrative law.

The president’s two most recent appointments, Raymond Chen and Todd Hughes, are notable in broadening the federal judiciary’s diversity. Hughes would be the first openly gay federal appeals court judge, while Chen would be the first Asian American to serve on the Federal Circuit in over 25 years.

A Ninth Circuit en banc panel recently heard oral argument in the much-watched Kilgore v. KeyBank Nat’l Assn., No. 09-16703 (audio recording available here), which concerns whether two California Court of Appeal decisions remain good law in light of the U.S. Supreme Court’s holding in AT&T Mobility v. Concepcion. The two California cases are Broughton v. Cigna Healthplans, 21 Cal. 4th 1066, 988 P.2d 67 (1999) (public injunctive relief claims not arbitrable as a matter of California public policy; California’s Consumer Legal Remedies Act (CLRA) injunctive actions), and Cruz v. PacifiCare Health Systems, Inc., 30 Cal. 4th 303 (2003) (same; UCL injunctive actions).

Specifically at issue in Kilgore is whether public injunctive relief claims under the CLRA and UCL are not arbitrable as a matter of California public policy, as established in Broughton and Cruz. A three-judge Ninth Circuit panel had previously ruled that Concepcion overruled Broughton and Cruz. Additionally, Kilgore was issued just days after the California Supreme Court granted a petition for review in Iskanian v. CLS Transp. Los Angeles, LLC, ___ Cal. App. 4th ___ (2012). In Iskanian, the California Supreme Court will decide whether Concepcion overruled the unconscionability jurisprudence of Gentry v. Superior Court, 42 Cal. 4th 443 (2007). Since both appeals concern the extent of FAA preemption, with an underlying issue of California substantive law, the Kilgore appeal will likely be stayed until there is a disposition of Iskanian (the discussion of which provided a moment of levity during the oral argument as the attorney for KeyBank indicated that he was not familiar with Iskanian). Similarly, some members of the Kilgore panel queried whether a disposition of Kilgore ought to be deferred until the U.S. Supreme Court issues a decision in American Express Co. v. Italian Colors Restaurant, as to which a certiorari petition was just granted, or whether, instead of awaiting the Iskanian ruling, the procedure whereby a question is “certified” to the California Supreme Court ought to be used, thereby obtaining a definitive interpretation as to issues of state substantive law.

The Kilgore appeal has attracted considerable amicus interest, and the oral argument got underway with Chief Judge Kozinski questioning the Chamber of Commerce’s amicus counsel, asking if Concepcion is distinguishable on the most apparent ground: that the public injunctions in Broughton and Cruz are remedies, not claims. Responding to that and other similar inquires, the amicus counsel gave emphasis to the fact that seeking a public injunction under the UCL requires class certification, and was ready with an adept citation to Supreme Court precedent in which punitive damages were preempted by the Federal Arbitration Act (FAA).

Considerable time was devoted to discussing the FAA’s “savings clause,” which Concepcion held did not prevent FAA preemption. But does Concepcion bar any state-created legislation that might limit arbitration, even in circumstances where, as in Broughton and Cruz, public health and safety are implicated? Assuming a judicial posture, amicus counsel reiterated that the FAA had preemptive effect in the case at hand, sidestepping the broader hypothetical.

Judge M. Margaret McKeown pressed as to whether there is an intersection between unconscionability and public policy, and invoked the U.S. Supreme Court’s recent Marmet Health Care Ctr., Inc. v. Brown decision (132 S. Ct. 1201 (2012)), which seemingly puts state-created unconscionability doctrine outside the ambit of FAA preemption, before the proceedings focused on Cruz and Broughton. When questioned whether overruling Broughton and Cruz would be applicable only in federal courts or in California state courts as well, the voluble Chamber of Commerce amicus counsel opted for the more aggressive interpretation, whereby the disposition would be applicable in state and federal courts alike. While the degree to which the amicus parties worked cooperatively with counsel for KeyBank is unknown, but it is often an indication of confidence that an appellate panel is a favorable one when counsel opts for a broader interpretation when a narrower, more risk-averse interpretation is available.

Judge Harry Pregerson, widely viewed as among the most “plaintiff friendly” in the Ninth Circuit, questioned counsel only sparingly, and as to relatively technical issues of standing under the UCL. However, Judge William Fletcher worked off Judge Pregerson’s reference to UCL standing to elicit from KeyBank’s counsel the concession that there would be no injunctive relief available in a private action (i.e., other than in an action brought by the California Attorney General) even if there were a general fraud. Later in the oral argument, and at a moment of abrupt candor, Judge Pregerson asked the plaintiff’s counsel (who Pregerson let it be known is a personal acquaintance): “What is the bottom line of your lawsuit?” Counsel responded in essence that the preservation of the right to bring private actions that seek public injunctions to combat broad wrongs is the “bottom line” in Kilgore.

In addition to the judges referenced above, the 12-member Kilgore en banc panel consisted of Judges Paul Jeffrey Watford, Mary Murguia, Consuelo Callahan, Richard C. Tallman, Milan D. Smith Jr., Morgan Christen, and Andrew Hurwitz.

On November 8, 2011, more than three years after granting review, the California Supreme Court heard oral argument in Brinker v. Super. Ct., 80 Cal. Rptr. 3d 781 (Cal. Ct. App. 2008), rev. granted, 196 P.3d 216 (Cal. Oct. 22, 2008) (No. S166350).  Chiefly at issue is Brinker’s holding that employers “need only provide and not ensure [that meal breaks] are taken.”  Id. at 31.  The hearing also covered rest break issues implicated by Brinkley v. Pub. Storage, Inc., 84 Cal. Rptr. 3d 873, 883 (Cal. Ct. App. 2008), rev. granted, 198 P.3d 1087 (Cal. Jan. 14, 2009) (No. S168806) (“California law does not require an employer to ensure that employees take rest periods.  An employer need only make rest periods available.”).  Video of the oral argument is available at http://www.californiawagelaw.com/wage_law/2011/11/brinker-oral-argument-video.html. 

On the pivotal issue—the interpretation of “provide” and “providing” as used in Labor Code sections 226.7(a) and 512(a)—the justices’ questioning suggested a more formalistic analysis than that seen in previous wage and hour decisions.  Justice Joyce Kennard began the proceedings by asking about whether Sections 226.7 and 512 are “in harmony” with the meal and rest break provisions in California’s IWC Wage Orders.  Chief Justice Tani Cantil-Sakauye, in her first major wage and hour case, then asked her own follow-up questions.  Justice Goodwin Liu, also new to the court, focused his questions on practical matters, asking whether an employee can simply choose to work through a break.

Kimberly Kraweloc, counsel for the real party in interest and the plaintiff at the trial court, responded unequivocally: employers must affirmatively ensure that breaks are taken.  Justice Baxter then asked whether an employer must still pay the premium provided for by Section 226.7(b) when an employee disregards the employer’s instructions and works through a break, to which Kraweloc responded in the affirmative.  As to whether employers can reasonably be expected to implement systems that reliably ensure that all employees take breaks, Kraweloc persuasively argued that, insofar as employers have demonstrated adeptness at otherwise controlling employees’ work schedules, notably in avoiding overtime, it is reasonable to expect that they can do the same as to meal and rest breaks.  Finally, in response to Justice Baxter’s question concerning whether the ruling in Brinker would be applied retroactively, Ms. Kraweloc’s co-counsel, Michael Rubin, responded that the decision would have retroactive effect, pursuant to controlling United States Supreme Court authority.

The Supreme Court must issue its decision within 90 days after the oral argument.

Governor Jerry Brown today nominated Boalt Hall law professor Gordon Liu to the California Supreme Court to replace retiring Justice Carlos Moreno.

If confirmed, Liu would bring sterling credentials and a classically American story of upward mobility to the California Supreme Court. The son of Taiwanese immigrants, Liu attended public schools growing up in Sacramento, before attending college at Stanford and then Yale Law School, after which he clerked for U.S. Supreme Court Justice Ruth Bader Ginsberg. Liu joined the faculty at UC Berkeley’s Boalt Hall School of Law in 2003 after having worked in private practice in Washington, D.C.

The California Bar’s Commission on Judicial Nominees Evaluation will first consider the Liu nomination, and make a non-binding recommendation to the Commission on Judicial Appointments, which will then schedule at least one public hearing. It is the Commission on Judicial Appointments that must ultimately confirm Liu or not.

Despite having withdrawn his nomination by President Obama to the Ninth Circuit Court of Appeals in response to a successful filibuster by Senate Republicans, Professor Liu is expected to enjoy a relatively easy confirmation to the California Supreme Court.