2017-00219989-CU-WT

Heather Martarella vs. Center For Interventional Spine

Nature of Proceeding: Hearing on Demurrer

Filed By: Joost, Shawn M.

Defendants Center for Interventional Spine and Carl Shin’s Demurer and Motion to Strike the Plaintiff’s Verified Complaint is SUSTAINED in part and OVERRULED in part, with leave to amend. The Motion to Strike is MOOT as leave to amend has been granted.

A declaration reflecting meet and confer in compliance with C.C.P., sec. 430.41 has been filed.

The Court notes that the paragraphs in the Complaint have been erroneously

numbered, as it appears that the causes of action were rearranged without renumbering the paragraphs. Plaintiff may have leave to amend to correct this inconsistency.

Plaintiff’s Verified Complaint sets forth six causes of action against three defendants: the 1st for violation of Labor Code, sec. 1102.5; the 2nd for sex harassment; the 3rd for sex discrimination; the 4th for failure to prevent harassment and discrimination; the 5 th for wrongful termination in violation of public policy; and the 6th for violation of Labor Code, sec. 201 and 203.

Plaintiff alleges that Defendants Carl Shin and CI Spine acquired the Sacramento Pain Clinic on April 28, 2016, thereby becoming Plaintiff’s [Dr. Heather Martarella] employer. (Complaint ¶ ¶ 8-9.) On May 2, 2016, Dr. Martarella began her employment as an employee of CI Spine. (Comp. ¶ 12.) On or about May 11, 2016, Plaintiff noted HIPAA violations occurring at her workplace and on June 10, 2016, Plaintiff emailed Dr. Shin and CI Spine management complaining of ongoing HIPAA violations. (Comp. ¶ ¶ 14, 16.) Plaintiff continued to oppose practices which violated HIPAA and made regular complaints. (Comp. ¶ ¶ 17, 20-23.) On or about September 7, 2016, Plaintiff discovered that a chiropractor working for CI Spine was illegally prescribing opiates to patients and immediately reported this to Defendants. (Comp. ¶ ¶ 29-30.) Defendant Dr. Shin responded to Plaintiff’s complaints of illegal activity by stating that he believed chiropractors were allowed to prescribe medications. (Comp. ¶ 32.) Instead of listening to Plaintiff’s complaints of HIPAA violations and unlawful activity, Defendants terminated her employment on October 3, 2016. (Comp. ¶ 37.)

Plaintiff’s 1st cause of action alleges that she was subjected to unlawful retaliation as she refused to violate HIPAA and because she made complaints about CI Spine’s failure to comply with HIPAA and a chiropractor’s illegal writing of prescriptions. Plaintiff’s 6th cause of action alleges that she was not paid wages for her final day of work.

Demurrer to the PAGA allegations SUSTAINED

Both the 1st and the 6th causes of action allege, in conclusionary language, that Plaintiff seeks to enforce her rights and the rights of current and former employees pursuant to the Private Attorney Generals Act of 2004 codified at Labor Code section 2698, et seq. seq. In that regard, Plaintiff complied with the provisions of section 2699.3 as they pertain to actions seeking to enforce statutory provisions referenced in section 2699.5. (Compl. ¶ ¶ 65 and 53.)

However, the complaint fails to allege any facts to reflect that any other employee was retaliated against for complaining about any illegal conduct (1st cause of action) or that any other employee was not paid wages for his or her final day of work. (6th cause of action). Only general allegations that the causes of action are brought on behalf of the rights of current and former employees are alleged. A claim for PAGA penalties is representative, not individual. (See Brown v. Ralph’s Grocery Co. (2011) 197 Cal.App.4th 489, 503, fn. 8 [citing federal case holding that “a PAGA claim cannot be brought on an individual basis, but rather only as a representative action”]; Thomas v. Aetna Health of Cal, Inc. (E.D. Cal. June 2, 2011) 2011 U.S. Dist. LEXIS 59377, *30 [“[T]here are no individual claims for PAGA penalties.”].)

The PAGA statute does not enable a single aggrieved employee to litigate his or her

claims, but requires an aggrieved employee “on behalf of herself or himself and other current or former employees” to enforce violations of the Labor Code by their employers. (Reyes v. Macy’s, Inc. (2011) 202 Cal.App.4th 1119, 1123-1124.)

“[I]f an employee plaintiff prevails in an action under the [PAGA] act for civil penalties by proving that the employer has committed a Labor Code violation, the defendant employer will be bound by the resulting judgment. Nonparty employees may then, by invoking collateral estoppel, use the judgment against the employer to obtain remedies other than civil penalties for the same Labor Code violations.” (Arias v. Superior Court (2009) 46 Cal.4th 969, 987.)

As plaintiff has failed to explain how either cause of action applies to any employee other than herself, the demurrers to the 1st for violation of Labor Code, sec. 1102.5 (retaliation) and 6th for violation of Labor Code, sec. 201 and 203 (waiting time penalties) causes of action are sustained, with leave to amend.

Demurrer by Dr. Shin – OVERRULED

Dr. Shin demurs to the 1st cause of action for violation of Labor Code, sec. 1102.5 on the grounds that he was not plaintiff’s employer.

Lab Code § 1102.5 (b) provides: “An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information, or because the employer believes that the employee disclosed or may disclose information, to a government or law enforcement agency, to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance, or for providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.”

The cases relied upon by moving party are FEHA cases (Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158; Reno v. Baird (1998) 18 Cal.4th 640) or merely dicta, and do not interpret Labor Code, sec. 1102.5.

Labor Code, sec. 1102.5 was amended in 2014 to add “or any person acting on behalf of the employer”. A corresponding amendment to Labor Code, sec. 1103, to add “or any person” is guilty of a misdemeanor punishable by imprisonment reflects the Legislative intent to make this statutory scheme applicable to individuals, as well as employers.

Unpublished Federal Court decisions interpreting Labor Code, sec. 1102.5, on distinguishable facts, have held that section 1102.5 precludes individual liability, while conceding that the question has not yet been determined in the California courts.( Tillery v. Lollis (E.D.Cal. Aug. 12, 2015) 2015 U.S.Dist.LEXIS 106845, at *21.) In Tillery, the district court analogized to FEHA language [ prohibiting “an employer . . . or any other person” from harassing an employee.”) (§ 12940, subd. (h)(1)], noting the California Supreme Court [Reno v Baird (1998) 18 Cal.4th 640.] has interpreted statutory language similar to the new language in section 1102.5 to preclude individual liability. With respect to the district court, the Court finds this analysis to be unpersuasive. First, the language is not similar [“An employer, or any person acting on

behalf of the employer, shall not retaliate against an employee for disclosing information…”] And, of course, after Reno v. Baird, supra, was decided “the California Legislature amended FEHA’s harassment provision expressly holding individual employees liable for their harassment.” (Scott v. Solano County Health & Soc. Orders Servs. Dep’t (E.D. Cal. 2006) 459 F.Supp.2d 959, 966, citing Gov. Code, § 12940, subd. (j).) It remains, however, that individual employees cannot be liable for discrimination in employment under Reno.

The demurrer on this ground is OVERRULED.

Motion to Strike – MOOT

Defendants’ motion to strike specified portions of the Complaint, on the grounds that the allegations contained in the specified paragraphs are improper, irrelevant, and not in conformity with the law, pursuant to Code of Civil Procedure sections 435 and 436, is based on the same PAGA analysis set forth above.

As leave to amend has been granted on the demurrer, the motion to strike is moot.

Plaintiff shall file and serve her First Amended Complaint not later than Monday, Jan. 22, 2018. The responsive pleading shall be due filed and served 30 days later (35 days if service is by mail).