2012-00135527-CU-OE

Kathleen Carroll vs. State of California

Nature of Proceeding: Hearing on Demurrer

Filed By: Slager, Susan E.

Defendants Commission on California Teacher Credentialing (“CTC”), Lee Pope, Mary
Armstrong, Ani Kindall, and Dale Janssen’s demurrer to Plaintiff Kathleen Carroll’s
second amended complaint (“SAC”) is ruled upon as follows.

Defendants’ request for judicial notice is granted.

In this action Plaintiff, former staff counsel for CTC asserts a cause of action for
violation of the California Whistleblower Protection Act (“WPA”) against all defendants
and a cause of action against defendant CTC for violation of Labor Code § 1102.5.

Plaintiff appealed her termination from the CTC to the State Personnel Board (SPB).
Subsequently, she also filed a whistleblower complaint with SPB claiming she was
terminated and subjected to other adverse action as a result of making protected
disclosures with respect to her concerns regarding a backlog of document processing
in the CTC related to credential applicants and credential holders. The two matters
were consolidated and an 11 day hearing was conducted and the SPB found against
Plaintiff on both her disciplinary appeal and her whistleblower complaint. The SPB
found that CTC had a sufficient basis to terminate Plaintiff, which was not related to
her protected disclosures. Plaintiff did not file a petition for writ of mandate with
respect to her disciplinary appeal or her whistleblower complaint.

First Cause of Action (Violation of the WPA-Government Code § 8547.8)

Res Judicata/Collateral Estoppel

Defendants first argue that the WPA cause of action is barred by res judicata/collateral
estoppel because she filed the instant action without having filed a petition for writ of
mandate. They reason that only if she had filed such a petition and prevailed in setting
aside the SPB decision could she have filed the lawsuit and absent such action, the
SPB decision has preclusive effect. As mentioned above, Plaintiff’s disciplinary appeal was consolidated with her whistleblower retaliation complaint and the matter was
heard by the SPB. The SPB dismissed the action, finding that CTC substantiated its
charges and that termination was appropriate.

Defendants recognize that the California Supreme Court has held that the SPB’s
findings with respect to a whistleblower complaint are not entitled to preclusive or
binding effect in a superior court action. (State Board of Chiropractic Examiners v.
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Superior Court (Arbuckle) (2009) 45 Cal.4 963.) Defendants, however, argue that
Arbuckle does not apply because Arbuckle only dealt with a whistleblower complaint
before the SPB and not disciplinary appeals. They reason that the SPB issued
findings in connection with Plaintiff’s disciplinary appeal (which was consolidated with
her whistleblower complaint) that preclude her from succeeding on her WPA claim
because the SPB found that there was no causal link between Plaintiff’s dismissal and
her protected disclosure and that the evidence supported her dismissal based on non-
protected conduct.

The Court rejects this argument. Indeed, allowing such a result would undermine the
California Supreme Court’s rationale in Arbuckle . Indeed, the Supreme Court
recognized that pursuant to Government Code § 8547.8(c), the Legislature authorized
a damages action in superior court in tandem with a parallel administrative remedy and
that according preclusive effect to SPB findings would run contrary to the Legislature’s
intent to afford the parallel remedy of an action for damages and would unduly restrict
the remedy of a damages action in superior court. (Id. at 976-977.) The express
language of Government Code § 8547.8(c) did not require that the SPB’s findings be
set aside by way of a mandate action and rather gave as the only precondition to the
damages action authorized that a complaint be filed the SPB and that the SPB issue,
or fail to issue, findings. Thus, once an employee filed a complaint with the SPB and
the SPB issued or failed to issue findings, the employee is free to bring an action for
damages in the superior court without having to bring a petition for writ of mandate to
challenge the findings and the SPB’s findings have no preclusive effect. (Id. at 976-
977, 979.)

The Court also rejects the argument that Arbuckle does not apply here because the
consolidated proceeding involved a contested evidentiary hearing while Arbuckle did
not actually involve a contested hearing with a right to cross-examine witnesses.
Arbuckle did not suggest that its ultimate conclusion turned on whether the SPB
whistleblower proceeding was a contested one.

Here, the Court concludes that allowing the SPB findings with respect to Plaintiff’s
disciplinary appeal to have preclusive effect with respect to her WPA cause of action
would similarly run contrary to the Legislature’s intent in authorizing an action for
damages pursuant to Government Code § 8547.8(c). As recognized in Arbuckle ,
when discussing limitations on collateral estoppel flowing from an administrative
proceeding, “[A] court may not give preclusive effect to the decision in a prior
proceeding if doing so is contrary to the intent of the legislative body that established
the proceeding in which res judicata or collateral estoppel is urged.” (Id. at 976.) In
any event, even if Defendants were correct that findings from the disciplinary appeal
have preclusive effect on the WPA cause of action, this would not be fatal to the WPA
claim. Indeed, the main finding which Defendants rely upon from the SPB, specifically,
the finding that there was no causal link between Plaintiff’s dismissal and her protected
disclosure was a finding with respect to Plaintiff’s whistleblower complaint not her
disciplinary appeal. (Defs’ RJN, Exh. 1. p.53.) Such finding clearly has no preclusive
effect in the instant whistleblower cause of action under Arbuckle . Thus, the demurrer
on the basis that the SPB’s findings in Plaintiff’s disciplinary action have preclusive
effect and therefore bar Plaintiff’s WPA claim is overruled.

Exhaustion of Administrative Remedies

Defendants Kindall and Janssen argue that Plaintiff failed to exhaust her administrative
remedies as the SPB determined that she did not meet the filing requirements and did
not accept the whistleblower complaint as to them. The Court agrees that Plaintiff
failed to allege that she exhausted her administrative remedies as to these two
defendants. Indeed, while she alleged that she filed a whistleblower complaint against
all defendants, including Kindall and Jansen, she also alleged that “[o]n or about April
5, 2011, the SPB determined that [Plaintiff] met all necessary filing requirements
against the CTC, Ms. Armstrong, and Mr. Pope.” (SAC ¶ 28.) As seen from
Defendants’ request for judicial notice, Plaintiff was informed by that same April 5,
2011, letter that she had not met the filing requirements for defendants Kindall and
Janssen. (RJN, Exh. 1. p.1, fn.1.)

Plaintiff’s argument that she complied with the exhaustion requirement as to Kindall
and Janssen because she filed a complaint upon which the SPB failed to issue
findings is unpersuasive. Indeed, she does not dispute the above, specifically, that
she alleged that the SPB only determined that she met the filing requirements with
respect to defendants CTC, Armstrong and Pope. Government Code § 8547.8(c)
provides that an action for damages is not available unless the injured party has first
filed a complaint with the SPB pursuant to § 8547.8(a), and the SPB issued or failed to
issue findings pursuant to § 19683. Plaintiff’s allegations, by necessary implication,
demonstrate that she failed to file a sufficient complaint to exhaust her administrative
remedies as to Kindall and Janssen, as compared to the other three defendants. At
most she alleged that she attempted to file a complaint. An attempt to exhaust an
administrative remedy is not equivalent to exhausting an administrative remedy. The
failure to allege exhaustion with respect to a WPA claim under § 8547.8 is subject to
demurrer. (Hood v. Hacienda La Puente Unified School Dist. (1998) 65 Cal.App.4th
435, 441.)

As a result, defendants Kindall and Janssen’s demurrer to the second cause of action
on the basis that Plaintiff failed to allege exhaustion of administrative remedies is
sustained without leave to amend. Leave to amend is not given as Plaintiff neither
requested leave nor does there appear to be any reasonable possibility that Plaintiff
could cure the defect.

Statute of Limitations

Defendants next argue that the WPA is time barred with respect to the individual
defendants pursuant to Government Code § 19630 which provides that an action “shall
not be brought by any person having or claiming to have a cause of action or
complaint or ground for issuance of any complaint or legal remedy for wrongs or
grievances based on or related to any civil service law in this state, unless that action
or proceeding is commenced and served within one year after that cause of action or
complaint or ground for issuance of any writ or legal remedy first arose.” They argue
that the statute bars the action against all individual defendants for any participation in
Plaintiff’s termination on November 29, 2010.
Plaintiff first argues that § 19630 does not apply because that statute is located within
the Civil Service Act and a WPA cause of action is not related to civil service law and
the action is instead governed by CCP § 338. Plaintiff is incorrect. Indeed, the WPA
statutes expressly refer to the Civil Service Act statutes. In fact, § 8547.8, the very
statute upon which this claim is brought, provides that the action for damages pursuant
to § 8547.8 is subject to an exhaustion requirement contained in § 19683. (Gov’t Code
§ 8547.8(c).) This negates Plaintiff’s contention that a WPA cause of action is not
related to civil service.

The Court, however, agrees with Plaintiff that this cause of action as alleged in the
SAC relates back with respect to the individual defendants Pope and Armstrong.
Here, there is no question that the original complaint was filed within one year of the
SPB’s May 7, 2012, ruling or that the action is timely as to CTC. The individual
defendants were named in the original complaint in Plaintiff’s 42 USC 1983 cause of
action but not the WPA cause of action. They were added to the WPA cause of action
in the amended complaint by separate ruling of this court, and contrary to Defendants’
argument, the amended complaint relates back to the filing of the original complaint as
recovery is sought against them on the same set of general facts. (Lamont v. Wolfe
(1983) 142 Cal.App.3d 375, 378; see also Austin v. Massachusetts Bonding & Ins. Co.
(1961) 56 Cal.2d 596, 600.) The authority cited by Defendants addresses the situation
where relation back will not apply against a party that was neither a named party or
fictitiously designated party to the action. (Ingram v. Superior Court (1979) 98
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Cal.App.3d 483; Woo v. Superior Court (1999) 75 Cal.App.4 169, 176.) Such is not
the case here as the individual defendants have been parties to the action at all times.

Given that the SAC relates back with respect to Pope and Armstrong the Court need
not address Plaintiff’s alternate arguments based upon equitable tolling.

In sum, Pope and Armstrong’s demurrer to the WPA cause of action on statute of
limitations grounds is overruled.

Given that the Court sustained Defendants’ Kindall and Janssen’s demurrer to this
cause of action based on the failure to exhaust administrative remedies, the Court
need not address their specific statute of limitations arguments, nor does it address
Kindall’s argument that she cannot be sued pursuant to the WPA because

Second Cause of Action (Labor Code § 1102.5–Against CTC only)

CTC first demurs to this cause of action on the basis that it is barred by barred by
collateral estoppel/res judicata because Plaintiff failed to file a petition for writ of
mandate challenging the SPB’s decision.

Res judicata describes the preclusive effect of a final judgment on the merits. Res
judicata, or claim preclusion, prevents relitigation of the same cause of action in a
second suit between the same parties or parties in privity with them. Collateral
estoppel, or issue preclusion, “precludes relitigation of issues argued and decided in
prior proceedings.” ’ [Citation.]” (Johnson v. GlaxoSmithKline, Inc. (2008) 166
Cal.App.4th 1497, 1507, fn. omitted.) Collateral estoppel, or issue preclusion, has
been described as a species of the doctrine of res judicata. (Id. at p. 1507, fn. 5, citing
Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, [doctrine of collateral estoppel
is one aspect of the concept of res judicata though each has a distinct meaning].)The
doctrine of collateral estoppel bars a party to a prior action from relitigating any issues
finally decided against him or her in the earlier action. ( City of Sacramento v. State of
California (1990) 50 Cal.3d 51, 64.)

Generally, a civil service employee who appeals a termination to the SPB, as Plaintiff
did here, must exhaust judicial remedies prior to proceeding in court and the failure to
do so will result in the SPB’s findings having preclusive effect. (Johnson v. City of
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Loma Linda (2000) 24 Cal.4 61, 69.)

In order to succeed on a retaliation claim under Labor Code § 1102.5, a plaintiff must
show that he or she engaged in a protected activity and that the employer subjected
him or her to an adverse action because of the protected activity. (Mokler v. County of
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Orange (2007) 157 Cal.App.4 1212, 138.) According to CTC, these issues were
resolved against Plaintiff in the SPB proceedings. The SPB’s decision shows that the
SPB found that Plaintiff did not prove that her disclosures were a factor in the adverse
employment actions taken against her and in any event that CTC had reasons
unrelated to her disclosures to terminate her. (RJN, Exh. 1, p. 51-53.)

Plaintiff argues first that the issues in her disciplinary appeal were not identical to an
essential issue to be determined in her Labor Code § 1102.5 cause of action,
specifically, because the statute provides a “mixed motive” or “same decision” defense
where an employee shows by a preponderance of the evidence that a protected
activity contributed to the adverse action, the employer can assert a defense that the
adverse action would have occurred for legitimate independent reasons. (Labor Code
§ 1102.6.) Plaintiff argues that any finding from her disciplinary appeal, specifically,
that CTC proved the misconduct charges against her and that such charges
constituted a basis for discipline under Government Code § 19572 simply go towards a
“mixed motive” defense that CTC could raise under Labor Code § 1102.6. Plaintiff’s
argument with respect to the findings by the SPB in connection with her disciplinary
hearing are well taken. Indeed, the findings in connection with the disciplinary
proceeding (as opposed to the whistleblower complaint) were that CTC proved the
misconduct charges against her by a preponderance of the evidence and that such
charges constituted a basis for discipline under Government Code § 19572. These
issues are not essential to Plaintiff’s Labor Code § 1102.5 cause of action, only a
potential defense that Defendants might have under Labor Code § 1102.6. Further,
even if such findings were entitled to preclusive effect, they would not doom this cause
of action as a matter of law because even a mixed motive defense does not bar a
cause of action as a matter of law, though it may limit the applicability of certain
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remedies. (Harris v. City of Santa Monica (2013) 56 Cal.4 203, 232-235.)

CTC also argues that the findings in connection with Plaintiff’s whistleblower
complaint, specifically, that Plaintiff’s protected activities were not a contributing factor
to the adverse actions are entitled to preclusive effect as to the Labor Code § 1102.5
cause of action. Here, there is no dispute that this issue is identical to an essential
issue to be decided in the instant cause of action. Plaintiff, however, argues that any
finding with respect to her whistleblower complaint has no preclusive effect as seen
from the Arbuckle decision holding that SPB findings with respect to a whistleblower
complaint had no preclusive effect with respect to a Government Code § 8457.8(c)
cause of action. Plaintiff also cites to a decision of the United States Supreme Court,
relied upon by Arbuckle which held that the purpose of a statute may create an
exception to the rule of the preclusive effect of findings in an administrative
proceeding. (University of Tennessee v. Elliott (1986) 478 U.S. 788, 795-796.) There,
the United States Supreme Court concluded that statutory language in title VII of the
federal Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) demonstrated Congress’
intent that state administrative findings not have preclusive effect in title VII actions. (
Id. at 795-796.) As discussed above in connection with the first cause of action, the
California Supreme Court in Arbuckle similarly found that the specific statutory
language in Government Code § 8547.8(c) which specifically authorizes an action for
damages evidenced a similar intent that SPB findings in connection with a
whistleblower complaint before the SPB not be binding in a section 8547.8(c) action.

Here, the Court agrees with Plaintiff that Arbuckle should apply such that the SPB’s
findings with respect to her whistleblower complaint are not binding with respect to the
Labor Code § 1102.5 cause of action. Indeed, both Labor Code § 1102.5 and
Government Code § 8547.8(c) prohibit employers from retaliating against employees.
The Court finds that allowing the SPB findings from Plaintiff’s whistleblower complaint,
brought pursuant to Government Code § 8547.8, to have preclusive effect with respect
to her Labor Code § 1102.5 whistleblower cause of action while at the same time not
allowing those findings to have preclusive effect with respect to her Government Code
§ 8547.8(c) as required by Arbuckle would undermine the rationale of Arbuckle .
Indeed, both causes of action are expressly based upon statutory schemes that
protect an employee’s right to be free from retaliation in connection with disclosing
certain protected information. This right, of course, was the subject of Plaintiff’s
whistleblower complaint before the SPB. It would be inconsistent on the one hand to
allow the findings from the SPB regarding her whistleblower complaint to have
preclusive effect as to the § 1102.5 cause of action while at the same time disallowing
the findings from having such preclusive effect as to the § 8547.8(c) claim, despite the
fact that both are based upon protecting an employee from retaliation based on
protected disclosures. Indeed, allowing the findings which Arbuckle specifically stated
cannot have preclusive effect with respect to a § 8547.8(c) cause of action to have
such effect simply because relief is sought under a different statute, though based on
the same facts and essentially the same wrongdoing, would contravene the spirit of
the Arbuckle rationale.

The Court rejects CTC’s contention that Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4
th 860, 877, fn. 8, rejected Plaintiff’s argument that SPB findings with respect to a
whistleblower complaint filed pursuant to Government Code § 8547.8 are not
preclusive as to Labor Code § 1102.5 whistleblower cause of action. Indeed, Murray
did not address SPB findings with respect to a whistleblower complaint and the
potential preclusive effect on a Labor Code § 1102.5 cause of action. Rather Murray
dealt with the preclusive effect of the findings made by a federal administrative body in
connection with a voluntary and optional administrative complaint filed with the United
States Secretary of Labor under the whistleblower protection provision of the Wendell
st
H. Ford Aviation Investment and Reform Act for the 21 Century on a later action in
federal court for violation of Labor Code § 1102.5. Thus, Murray did not involve the
specific statutory scheme of Government Code § 8547.8 pursuant to which the
whistleblower complaint in the instant action was brought.

As a result, CTC’s demurrer to the second cause of action is overruled.

In sum, Defendants’ demurrer is overruled as to the first cause of action except as to
defendants Janssen and Kindall as to whom it is sustained without leave to amend.
CTC’s demurrer is also overruled to the second cause of action.