California Legal Cases

Date: September 20, 2013 Last Edit: November 08, 2016

616 Croft LLC v. City of West Hollywood  – Property Rights

U.S. Supreme Court – cert petition

Once again, NFIB Legal Center is calling upon the Supreme Court to hear an important case, asking what sort of conditions can government lawfully impose on permits issued to small business owners. In this case, the City of West Hollywood argues that conditions imposed by statute or ordinance may be enforced even if they require a business to pay money to fund unrelated public programs. As we argue, the Constitution forbids the imposition of permitting conditions that are unrelated to the impact that a proposed project might have on the public.   

Status: PENDING. Amicus brief filed 4/18/17.

 

AMB Industries Inc. v. Castro – Regulatory Reform

U.S. Supreme Court – cert petition

The law allows employees to initiate legal action as a private attorney general when they believe their employer has violated the Labor Code. In such a case, the employee is authorized to initiate the action “on behalf of himself or herself and other current and former employees” to collect civil penalties. The question presented in this case is whether an action brought under such a private attorney general act should be viewed as a class action claim for the purposes of the federal Class Action Fairness Act (CAFA), which allows federal defendants to remove class action claims to federal court whenever the plaintiff(s) seek more than $5 million dollars. NFIB Legal Center contends that private attorney general suits are in all practical senses analogous to a class action claim and should thus be treated as class actions for the purposes of the CAFA.

 

Status: PENDING. Amicus brief filed 6/24/16. 

 

American Trucking Assoc. v. Port of Los Angeles – Regulatory and Commerce

The case will determine whether the Port Authority of Los Angeles is violating the Federal Aviation Administration Authorization Act (FAAAA) by imposing rules and conditions upon trucks entering the Port of Los Angeles. NFIB’s brief argues that the Port of Los Angeles’ rules reduce the business opportunities of motor carriers and violate the Commerce Clause.

 

California Building Industry Assoc. v. U.S. Dept. of Commerce – Regulatory Reform

U.S. Supreme Court

Under the Endangered Species Act, the U.S. Fish & Wildlife Service may designate certain areas as “critical habitat” for species listed as either endangered or threatened. Once lands or waters are so designated, they are subject to severe federal restrictions that will in many prohibit development or make it economically unfeasible. In this case a trade association representing homebuilders sought to challenge Fish & Wildlife Service’s critical habitat designation for the green sturgeon; they argued that the agency was required by statute to at least consider economic impacts when deciding upon the scope of the designation. But the Ninth Circuit federal court of appeal disagree, ruling that the agency was only required to consider economic impacts to the federal government—not to private industry. Accordingly, NFIB Small Business Legal Center joined with other concerned groups in urging the Supreme Court to take this case in order to make clear that regulators must engage in an even-handed cost-benefit analysis before making these sort of decisions.

Status: PENDING. Amicus brief filed 6/6/16.


CA Public Utilities Commission – 3/13/15

In the Matter of the Application of PG&E – Tax Reform

PG&E is a privately owned public utilities company, governed by the California Public Utilities Commission. PG&E has submitted an application to install electric vehicle (EV) charging stations throughout its service area in order to help facilitate California’s goal of encouraging consumers to purchase low emission vehicles, so as to reduce the greenhouse gas emissions. But the request asks the Commission to approve a rate hike for existing utilities consumers to pay for this infrastructure project. NFIB Legal Center filed an objection arguing that it was unreasonable to allow a public utilities to force existing consumers to pay for a service that is not directly benefiting them, and further that PG&’s proposal would amount to an illegal tax under California law.


Bettie Page Clothing v. NLRB
– Challenge to NRLB Social Media Policy

In April 2013, the National Labor Relations Board held that the Bettie Page clothing company unlawfully fired employees who used Facebook to discuss complaints about their supervisor’s conduct and other work-related concerns, rejecting the employer’s claim it was tricked into firing the workers.

 

Bluford v. Safeway Stores, Inc. – Wage and Hour

 
NFIB filed an amicus brief encouraging the court to review a decision regarding the method in which an employer calculates piece rate compensation.

 

California Insurance Association v. Jones – Legal Reform
California Supreme Court

In this case the California Supreme Court is to determine whether the State Insurance Commissioner has been vested with authority to promulgate regulations further defining prohibited “unfair or deceptive” insurance practices, beyond the list of practices expressly prohibited by the statute. The Commissioner invokes a broad gap-filling theory and argues—with support from an amicus—that his regulatory authority should be presumed in the absence of an express statement limiting his power to promulgate regulations. NFIB Small Business Legal Center argues that this turns first principles on their head. Agencies are creatures of statute and have no powers but those expressly conferred, and that an agency cannot infer rulemaking powers from statutory silence. Further, NFIB argues that agencies are not entitled to deference on questions of the scope of their own powers and that it is imperative that a reviewing court determine the best interpretation of the governing statute in full context, in consideration of the canons of construction.

 Status: PENDING. Amicus brief filed 4/13/16.  


Center for Environmental Health v. A Baby Inc
– Legal Reform

 In this case an environmental organization sued a business for alleged violations of Proposition 65, which requires persons doing business in California to post warnings when consumers may come in contact with chemicals known to the State to cause cancer. But, the plaintiffs have used this lawsuit in order to force the business to stop using chemicals that are perfectly legal and in no way governed by Proposition 65’s regime. We joined with the American Chemistry Council in arguing that plaintiffs should not be allowed to coerce businesses into changing lawful business practices, and that it is lawsuit abuse to allow a plaintiff to wield Proposition 65 so as to force concessions unrelated to that Act. 

 

 

City of Perris v. Stamper – Property Rights

It is well established that government must compensate a landowner for the value of what it is taking. It is also well established that government cannot force a landowner to dedicate his or her land to the public without compensation, unless there is a nexus between that condition and some adverse impact that a proposed development project might have on the public. Accordingly, NFIB Legal Center joined with Pacific Legal Foundation in arguing—as amicus in this case—that the City of Perris should not be allowed to devalue a commercial property that it is taking for a road on the theory that it would have denied a building permit unless the owner had agreed to dedicate the road in question. The joint amicus brief argues that the “project influence rule” precludes a City from devaluing a property in this way, and argues further that the City’s argument raises constitutional problems.

 

 

 

 

CLS Transportation Los Angeles LLC v. Iskanian  – Employment
U.S.  Supreme Court – cert petition

NFIB is asking the Supreme Court to take a case that would affirm whether employers have the right to resolve legal disputes through arbitration rather than through costly court battles. The case asks whether the Federal Arbitration Act preempts state laws that would inhibit employers from entering arbitration agreements with employees on terms that may require an employee to waive the right to impose additional penalties—on top of a judgment for damages.

 

 

Cooper v. Takeda Pharmaceuticals – Legal Reform

California Supreme Court – petition for review

 

The state’s highest court is being asked to determine how Daubert is to be applied in California courts following the California Supreme Courts adoption of Daubert a few years ago in the Sargon case. Takeda succeeded at the trial court in getting plaintiff’s specific causation expert excluded, but the California court of appeals reversed. Takeda is now seeking review from the California Supreme Court.  

 

Cooper v. United Airlines – Employment

U.S. Court of Appeals for the Ninth Circuit

Plaintiff Cooper filed discrimination and equal pay act claims against United Airlines following its merger with Continental. The district court granted the defendant’s motion for summary judgment finding that Cooper failed to show that the airline based its pay and hiring decisions on anything but its policies and processes. The amicus brief filed by NFIB argues that the EEOC’s interpretation of the EPA must be rejected because making gender-based “pay equity” adjustments to compensation would potentially expose an employer to liability under Title VII.

 

Status: PENDING. Amicus brief filed 2/2/16.

 

Encino Motorcars v. Navarro – Employment

U.S. Supreme Court

Hector Navarro was employed as a service advisors by Encino Motorcars.  Navarro brought an action against Encino Motorcars for several violations under the FLSA, including failure to pay overtime wages. The district court dismissed the failure to pay claim because it concluded the service advisors fell within the FLSA exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” On appeal, the U.S. Court of Appeals for the Ninth Circuit held that where there is more than one reasonable interpretation of an administrative regulation, and the administrative agency has already accepted one of those interpretations, the court must defer to that decision under Chevron , U.S.A., Inc. v. Natural Res. Def. Council, Inc. Therefore, because the regulation does not define “salesman, partsman, or mechanic,” and the agency reasonably read the statutory text to mean that service advisors do not fit into any of those definitions, the court deferred to the agency’s interpretation. NFIB is asking the Supreme Court to overturn the 9th Circuit opinion.

 

Status: PENDING. Amicus brief filed 3/7/16.

 

Friedrichs v. CA Teachers Assoc. – Labor

U.S. Supreme Court

 

The Court has been asked to decide whether Abood v. Detroit Bd. of Ed. should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment; and whether it violates the First Amendment to require that public employees affirmatively object to subsidizing nonchargeable speech by public-sector unions, rather than requiring that employees affirmatively consent to subsidizing such speech.

 

Gerawan Farming v. ALRB – Labor

California Supreme Court

California’s Mandatory Mediation and Conciliation regime enables unions to force businesses into collective bargaining agreements, which are written by an “arbitrator” on behalf of the parties. Under this regime, collective bargaining agreements can be imposed regardless of whether the business ever agrees to the terms. NFIB Small Business Legal Center filed in this case previously in the Court of Appeals and helped secure a victory for small business. Thereafter the California Agricultural Labor Relations Board petitioned the State Supreme Court for review. NFIB Legal Center filed again, this time arguing that the regime allows government to unconstitutionally single-out businesses for individualized rules, and unconstitutionally delegates legislative powers to an assigned arbitrator. 

Status: PENDING. Amicus brief filed 4/23/14. Amicus brief filed 5/6/14.

 

Gonzalez v. Downtown LA Motors – Wage and Hour
NFIB filed a brief urging the state supreme court to take up an hour regarding piece rate wage calculations.

Haver v. BNSF Railway – Legal Reform
California Supreme Court – 3/11/15

The court will determine whether take home asbestos exposure claims are barred under California asbestos medical criteria law and also fail under a negligence theory because no duty is owed to persons exposed off-site.  The intermediate appellate court allowed the claims to proceed. 

 

High Speed Rail Authority v. Sacramento Superior Court – Regulatory
Supreme Court – petition for review

NFIB submitted a brief asking the California Supreme Court to review an appellate decision ordering a superior court to validate $8.6 billion in bonds for the California High-speed Rail Project. NFIB maintains that state agencies should not be able to incur debt without judicial oversight.


Horne v. USDA –
Property Rights
U.S. Supreme Court – cert petition and merits (2012, 2013)
U.S. Supreme Court – cert petition (2014)

Under the Agricultural Marketing Agreement Act of 1937, raisin growers must turn over a substantial portion of their crop (sometimes reaching percentages as high as 30 or 47 percent of the annual crop) for below-market or no compensation in exchange for the “privilege” of selling the remainder on the open market. The Ninth Circuit denied growers the right to appropriately contest monetary fines imposed on the growers who allegedly failed to comply with the set-aside.

 

 

Jisser v. City of Palo Alto – Property Rights

Ninth Circuit Federal Court of Appeal

NFIB Legal Center filed in this case to defend the right of business owners to freely close their business at the time of their choosing. In this case, the Jisser Family sought to close an existing trailer-park on their land; however, the City of Palo Alto ordered that they must pay approximately $8 million as a condition of the city granting a necessary permit to do so. The Jissers contend this imposed condition is extortionate and unconstitutional. But the federal district court dismissed their claim—holding that their case could only be heard in state court. But as argued in our amicus brief, the right to vindicate federal rights in federal courts is sacrosanct and cannot be impinged. Accordingly, the Jisser Family should be allowed to have their day in federal court to seek invalidation of the contested condition.

 

Status: PENDING. Amicus brief filed 11/07/16.

 

Kesner v. Superior Court – Legal Reform
California Supreme Court – 3/11/15

The court will determine whether take home asbestos exposure claims are barred under California asbestos medical criteria law and also fail under a negligence theory because no duty is owed to persons exposed off-site.  The intermediate appellate court allowed the claims to proceed. 

 

 

 

Mach Mining v. EEOC – Employment

The Court will consider whether the EEOC’s compliance with pre-suit administrative requirements, including conciliation, is subject to judicial review and, if so, what level of review is warranted. EEOC sued Mach Mining alleging that it engaged in unlawful disparate impact and pattern-or-practice discrimination on the basis of sex in its hiring for non-office positions. In its answer, Mach asserted that the EEOC failed to satisfy its statutory duty to conciliate prior to filing suit.

Mendoza v. Nordstrom – Employment & Labor Law

 

NFIB Legal Center argues in this case that the California Labor Code should be construed to allow employers flexibility in scheduling, and that this is good for employees as well. Specifically, we argued that the Labor Code’s day of rest requirement should be construed as applying on a fixed weekly basis because applying the requirement on a rolling basis would result in practical difficulties for employers and employees alike. Further, the brief argues that employees should allowed to choose to work on the seventh day of a workweek if they like—and that it would be absurd to construe the Labor Code as requiring employers adopt a policy prohibiting employees from working on the seventh day of a workweek. Finally, NFIB maintains that if the Court should adopt a new interpretation—in conflict with longstanding guidance from state regulators—that the new interpretation should only apply prospectively.

MHC Financing v. City of San Rafael – Property Rights

In 1999, San Rafael enacted an amendment eliminating owners’ ability to increase rents to keep up with inflation. MHC then brought suit in 2000, alleging claims under the Takings Clause of the Fifth Amendment, arguing the government must provide compensation when taking property.  The district court ruled in favor of MHC on its claims that the city had affected both a regulatory taking and a private taking. The Ninth Circuit reversed the district court’s ruling, finding that since one rent regulation existed before MHC bought the property, it was not entitled to bring claims regarding any new regulations.

 

Morning Star Packing Co. v. California Air Resource Board – Environmental

NFIB filed a motion to intervene in Morning Star v. California Air Resource Board, challenging California’s “cap and trade” auction regulation (AB 32). NFIB argued that the California Air Resources Board’s caution regulations are illegal and that the auctioning of revenues is an unconstitutional tax.

Morning Star. / Cal. Chamber v. Cal. Air Resources Board – Regulatory Reform
CA Court of Appeal – 5/15/15

In this case, the NFIB Small Business Legal Center leads a coalition of industry groups challenging the legality of regulations promulgated by the California Air Resources Board, which provide for the auctioning of emission allowances under California’s cap-and-trade program. The brief argues that the auctioning of emission allowances unreasonably raises the cost of compliance for the regulated community and needlessly results in higher energy costs for the small businesses. NFIB Legal Center specifically argues that the Board exceeded its statutory authority in choosing to force businesses to pay billions of dollars for the right to continue their operations.  

Morrical  v. Rogers – Legal Reform

The California Supreme Court is being asked to review an intermediate appellate court decision that makes it easier for a disgruntled shareholder in a closed corporation to challenge the election proceedings of the board of directors.


Nelson v. So. Calif. Gas Co. – Employment & Labor
 
The court has been asked to decide whether a trial court’s determination that a class claim does not exist under state wage and hour law also means that a class claim is defeated for purposes of the State’s Private Attorney General Act or whether a separate analysis must be undertaken.

Paintcare v. Mortensen – Regulatory Reform
California Supreme Court –2/17/15

This case raises the question of whether a state agency has general “gap-filling” authority to regulate on matters for which a statute is silent. We urged the California Supreme Court to take the case because we think this is a fundamental question of administrative law on which California courts are divided. Our position is that an agency’s authority should generally be narrowly construed consistent with text and structure of the statute in question.

 

People v. Atlantic Richfield Co. et al. – Tort Liability (Public Nuisance)
California Court of Appeal

In this case, companies that once manufactured lead-paint appeal a superior court decision holding them liable for a public nuisance. The opinion was radical in holding that lead paint constitutes a nuisance, no matter where it is found, no matter what condition its maintained in, and regardless of whether only trace amounts are present. This ruling was controversial in part because current statutes permit landowners to maintain buildings with lead paint under certain specified conditions. Further, the case has serious implications for small businesses property owners—at least for those owning older properties that may contain lead paint. Accordingly, NFIB filed an amicus brief arguing that the superior court’s decision should be reversed.

 

Peri & Sons v. Rivera – Regulatory

Peri & Sons Farms hired farm-workers through the United States Department of Labor’s H-2A program. The H-2A farm-workers claimed they had expenses related to their employment with Peri & Sons including hiring/recruitment fees, H-2A visas, and lodging. Peri & Sons Farms argued that that reimbursement was not necessary because the expenses were incurred for the benefit of the employee and not the employer. However, the Ninth Circuit deferred to regulations the DOL issued in 2009 requiring employers of H-2A guest workers to reimburse the workers for most travel and immigration expenses within the first week of their employment. The brief argues that this rule is a scam which creates perverse incentives for agencies to issue ambiguous regulations, and that constitutional principles require courts—not federal agencies—to determine what the law actually is.  

Property Reserve v. DWR– Property Rights
California Court Supreme Court – 3/19/15

In this case landowners successfully argued before the Court of Appeal that the state had effected a taking—requiring payment of just compensation—for a temporary physical invasion of their land when state agents entered the property for the purposes of conducting environmental and engineering studies necessary to determine whether a contemplated project public works project was feasible. During these studies state agents entered the properties repeatedly over the course of several months, and bore holes in the ground. But the State maintains that those studies were conducts for the purpose of determining whether the State wanted to actually exercise its eminent domain powers and that it would make it logistically very difficult for the State to carry out public works projects if it could not do preliminary studies without effecting a taking. In response, NFIB Legal Center argued in the California Supreme Court that any non-trivial physical invasion of property is a per se taking.

Rocky Mountain Farmers Union v. ARB – Regulatory

California’s Air Resources Board promulgated regulations under AB 32 that impose standards on gasoline sold in California. The goal is to reduce greenhouse gas emissions by requiring that fuel sold in-state must be created through a process minimizing emissions; however, this effectively means that California is regulating out-of-state conduct. Accordingly, several out-of-state energy producers brought suit, arguing that California’s fuel standard regulations violate the Dormant Commerce Clause. The Ninth Circuit refused to strike down the regulations. Now the NFIB Legal Center has joined with other concerned groups in asking the Supreme Court to take the case because the Ninth Circuit’s opinion opens the door for states to regulate out-of-state conduct.

 

Snyder v. CIGA – Labor & Employment

Snyder v. California Insurance Guarantee Association calls into question a safety-net that California has set-up to ensure that individuals and businesses can receive a pay-out for covered claims, even when their insurance company has become financially insolvent. To protect businesses and individuals who have secured insurance policies, and paid premiums in reliance thereof, California law requires the California Insurance Guarantee Association (CIGA) to pay on covered claims once the insurance company becomes insolvent. But, in this case, the court of appeal held that CIGA cannot pay on a claim until after the claimant has pursued his or her rights in a bankruptcy proceeding. For small business employers, this is problematic especially when their workmen’s compensation carrier goes insolvent. To be sure, CIGA paid over 18,000 workmen’s compensation claims in the first nine months of 2014. But if the court of appeal’s decision stands, CIGA would be forbidden from making such payment until after the employee has pursued a claim in bankruptcy court. In the interim, the employer would be on the hook for the costs of the claim—at least until the employer can be reimbursed at the conclusion of the bankruptcy proceeding. Accordingly, to avoid immediate financial burdens for employers, the NFIB Legal Center has asked the California Supreme Court to take the case on a petition for review.

 

Snyder v. CIGA  – Regulatory
California Supreme Court – Letter Brief

This case raises an important issue that may affect businesses dealing with workmen’s compensation claims. Unless the California Supreme Court takes the case, small business owners may be forced to pay workmen’s compensation claims out-of-pocket in the event their insurance company should become insolvent. Because this may disrupt the workmen’s compensation system, and may have adverse impacts on small business owners paying into workmen’s compensation insurance, the NFIB Legal Center is asking the state Supreme Court to take the case now. 

 

 

Solus Innovations LLC v. Superior Court – Legal Reform
California Supreme Court – 5/27/15

Our amicus brief argued that California district attorneys lack authority to impose penalties on top of those already assessed by Cal/OSHA for workplace safety violations. Specifically, we contend that the federal Occupational Safety and Health Act preempts all state regulation of workplace safety issues, except as authorized by the Secretary of Labor in an approve state workplace safety plan. Since in this case the District Attorney of Orange County sought to impose penalties exponentially greater than those already imposed by Cal/OSHA, and without any authority under California’s approved plan, we argue that the Supreme Court should rule in favor of the employer-defendants.

 

Spokeo Inc. v. Robins – Legal Reform

U.S. Supreme Court

Under Article III of the U.S. Constitution, a plaintiff must allege that he or she has suffered an “injury-in-fact” to establish standing to sue in federal court. In this case, the Court will decide whether Congress may confer Article III standing by authorizing a private right of action based on a bare violation of a federal statute, even though the plaintiff has not suffered any concrete harm.

 

 

Vanacore and Associates v. Rosenfeld – Legal Reform

California Supreme Court

In this case a company sued to enforce a contract to assist a consumer with retaining assets that would otherwise escheat to the State of California. The defendant argued that the contract was unenforceable because it violated California law, in part because the company failed to make mandatory disclosures. In response the company invoked First Amendment concerns; however, the Court of Appeals ruled that there were no First Amendment protections with regard to an illegal transaction. NFIB Small Business Legal Center filed a letter brief encouraging the Supreme Court to clarify the proper to mode of analysis for reviewing regulations compelling speech and raised concerns that the Court of Appeals’ decision may be construed as taking away important First Amendment protections for commercial actors.  

Status: PENDING. Amicus brief filed 6/8/16.

 

Verdugo v. Target – Challenging Defibrillator Requirement

 

This case poses the risk of placing unprecedented burdens upon California businesses to maintain emergency medical equipment on their premises, to train personnel in using the equipment and in performing CPR, and to use the equipment and perform CPR in the event a customer suffers a medical emergency while on the premises. The cost of these requirements could be substantial, and could imperil smaller businesses.

 

 

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If you have a case that impacts small business, please contact us at:  1-800-552-NFIB as we are actively looking for opportunities to weigh in on important issues in this state. NFIB Small Business Legal Center is involved in many cases that impact this state and others; to see our complete list of Supreme Court cases click on Washington, DC on the interactive map.

Thank You

 

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