Case Name: Lydia Ortega v. Board of Trustees of the Cal. State University, et al.
Case No.: 17CV309628

This is an employment discrimination lawsuit brought by plaintiff Lydia Ortega (“Plaintiff”) against defendant the Board of Trustees of the California State University doing business as San Jose State University (“SJSU”) and its employee, defendant Colleen Haight (“Haight”). In brief, Plaintiff served as the Chair of the Department of Economics at SJSU for nearly 15 years and alleges SJSU wrongfully demoted and replaced her with Haight. Plaintiff alleges Haight thereafter made defamatory statements about her. Plaintiff asserts causes of action against SJSU for wrongful demotion and gender discrimination and against SJSU and Haight for defamation.

SJSU now challenges the sufficiency of Plaintiff’s first cause of action for the third time. It demurs to the first cause of action for wrongful demotion in the operative second amended complaint (“SAC”) on the ground of failure to state facts sufficient to constitute a cause of action and seeks to strike Plaintiff’s request for attorney’s fees in the first cause of action.

In the first cause of action, Plaintiff alleges SJSU Policy No. S14-8, entitled “Selection and Review of Department Chairs and Directors,” authorizes administrative removal of a department chair only for “compelling reasons, such as criminal activity, manifest breach of ethics, gross malfeasance of duties, or other extremely serious personnel matters.” (SAC, ¶ 70 & Ex. C at p. 9.) Plaintiff claims she was unjustifiably removed from her position as Chair of the Department of Economics more than a year before the expiration of her term. (SAC, ¶ 73.) She alleges there was no compelling reason for her administrative removal and she was not provided with any statement of the compelling reasons for removal despite her repeated requests. (SAC, ¶¶ 74, 77-80.) Plaintiff asserts article I, section 7 of the California Constitution gives her a due process right to this statement of compelling reasons. (SAC, ¶¶ 79-81.)

On this basis, Plaintiff seeks a declaration stating she was wrongfully demoted in violation of her right to due process, the policy requires a statement of compelling reasons, and she is entitled to a statement of compelling reasons. (SAC, ¶ 82.) Plaintiff also seeks reinstatement, or alternatively, for “SJSU to pay the equitable relief of restitution” and reimbursement of the attorney’s fees and costs incurred in this lawsuit. (SAC, ¶ 82.)

SJSU first argues these allegations are still insufficient to state a cause of action in light of the Court’s previous rulings and requests judicial notice of prior pleadings and rulings to substantiate its argument. SJSU’s request for judicial notice of the original complaint, the first amended complaint, orders on the demurrers and motions to strike portions of these superseded pleadings, and the tentative ruling on the demurrer and motion to strike portions of the first amended complaint is GRANTED because they are subject to judicial notice under Evidence Code section 452, subdivision (d). The Court first summarizes these records and the evolution of the complaint reflected therein before addressing the merits of SJSU’s argument.

In the original complaint, Plaintiff’s first cause of action for wrongful demotion was based on the theory that SJSU Policy S14-8 was an implied term of her employment contract. SJSU incorrectly interpreted it as a claim for wrongful demotion in violation of public policy based on Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 (a “Tameny claim”). SJSU relied on this interpretation for purposes of its demurrer to the first cause of action in the original complaint, arguing Plaintiff failed to state a cause of action because public entities are immune from Tameny claims pursuant to Government Code section 815. In ruling on the demurrer, the Court acknowledged that Government Code section 815 does bar Tameny claims (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 899) but rejected SJSU’s argument because Plaintiff asserted a contract-based claim that was permitted under Government Code section 814. On this basis, the Court originally indicated in its tentative ruling that it intended to overrule the demurrer to the first cause of action.

But SJSU thereafter argued for the first time in its reply in support of the demurrer that Plaintiff also failed to state a claim based on an implied-in-fact contract because the terms of her employment were determined by statute. And so the Court ultimately sustained the demurrer to the first cause of action with leave to amend “to allow the parties to clarify the pleading allegations and properly address their legal arguments as to each [ ].” (Order of 08/17/17 at p. 9:1-3.)

In the first amended complaint, as in the operative SAC, Plaintiff pleaded a claim for wrongful demotion in violation of her right to due process under article I, section 7 of the California Constitution. SJSU demurred to this claim on the ground of failure to state facts sufficient to constitute a cause of action. It argued Plaintiff was not authorized to amend the pleading to change her legal theory and failed, in any event, to state a claim for violation of her right to due process. In opposition, Plaintiff conceded her contract-based theory lacked merit and confirmed she was abandoning it. But Plaintiff argued the language in the Court’s previous order did not prohibit her from advancing a new, due process theory. Ultimately, the Court reached the merits of the parties’ arguments about the new theory and concluded Plaintiff failed to state a viable due process claim.

The Court discussed the analogous case of Zumwalt v. Trustees of California State Colleges (1973) 33 Cal.App.3d 665 in which the Third District held the provisions of the California Code of Regulations governing academic-administrative positions, such as the position of department chair, take precedence over the individual rules or policies established by a particular institution and its faculty. As the Third District explained: “When a faculty member in the California state college system becomes a department chair[person], he [or she] accepts an academic-administrative assignment under a published, codified governing rule which permits the college president to remove him [or her] ‘at any time’ with the consent of the Chancellor.” (Id. at p. 678, quoting Cal. Code Regs., tit. 5, § 43594.) “Having accepted the chairmanship at the pleasure of the college president, the faculty member may not later claim constitutional protection against deprivation at the pleasure of the college president.” (Zumwalt, supra, 33 Cal.App.3d at p. 678.) And so the Court explained that here, as in Zumwalt, the California Code of Regulations controls over SJSU Policy No. S14-8, which policy cannot give rise to a constitutional claim. For this reason, the Court concluded Plaintiff failed to state a viable claim for wrongful demotion in violation of her right to due process.

Nevertheless, the Court gave Plaintiff an additional opportunity to amend the first cause of action. As explained previously, the Third District in Zumwalt also considered whether, irrespective of any local policy or rule, the removal of the plaintiff violated his right to procedural due process because it was accomplished with force and in a manner that damaged his reputation and career. (Zumwalt, supra, 33 Cal.App.3d at pp. 678-79.) Although the university never revealed whether the professor was removed as department chair based on serious charges, his removal was “accompanied by campus police, changed locks and sealed files” such that it “was as damaging as though serious charges had in fact been made.” (Id. at p. 679.) Here, Plaintiff did not allege in the first amended complaint that such circumstances surrounded her removal, and so the Court gave her an opportunity to do so. SJSU argues Plaintiff has not alleged such facts in the SAC and the demurrer is sustainable on that basis.

SJSU is correct that Plaintiff has not alleged new facts to state a claim for violation of her right to procedural due process based on the manner of her removal. She does not allege facts analogous to those in Zumwalt. Indeed, Plaintiff does not present any argument or identify any allegations to support a contrary conclusion.

Instead, Plaintiff stands on her unviable theory that SJSU Policy No. S14-8 gives her a constitutional right to a statement of compelling reasons for her removal from the position of Chair of the Department of Economics. Although Plaintiff now additionally describes the policy as giving rise to a “mutually explicit understanding,” her attempt to recast her theory is not persuasive for two reasons. (Opp. at p. 2:27.)

First, “[f]ollowing an order sustaining a demurrer [ ] with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court’s order.” (See Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) In the order on the demurrer to the first amended complaint, the Court did not give Plaintiff leave to assert a new claim based on a “mutually explicit understanding.” The Court gave Plaintiff leave to allege facts about the manner in which she was removed from her position to support a recognized, procedural due process theory. Plaintiff failed to do so, and so the demurrer to the first cause of action is sustainable.

Second, Plaintiff’s claim simply is not viable. In attempting to restyle her theory as one based on a “mutually explicit understanding, Plaintiff relies on Chan v. Judicial Council of California (2011) 199 Cal.App.4th 194. In Chan, the Second District explained that “[w]hile the lack of a specific statute or contract that creates a property interest ‘does not necessarily foreclose the possibility that a property interest might have been created,’ ‘the absence of such formal sources is “highly relevant” to the due process question.’ [Citations.]” (Chan, supra, 199 Cal.App.4th at pp. 200-01.) It went on to state that “even without the appropriate statutory language, a property interest can still be created ‘based on the conduct and representations of government officials when their actions lead to the creation of a “mutually explicit understanding.”’ [Citations.]” (Id. at p. 201.) Plaintiff’s reliance on Chan is misguided because the issue here is not whether she can allege facts showing a property interest for due process purposes despite the absence of a statute or contract conferring such an interest. Here, there is law explicitly establishing Plaintiff has no such interest. (See Zumwalt, supra, 33 Cal.App.3d at p. 678, citing Cal. Code Regs., tit. 5, § 43594.)

Indeed, the Court in Zumwalt rejected the proposition that even an informal or unwritten understanding confers a right to an administrative-academic position. (See Zumwalt, supra, 33 Cal.App.3d at pp. 671-73.) The Third District acknowledged that “[i]n matters of academic rank and tenure, amorphous attitudes slowly evolve into oral traditions and unofficial statements of policy, eventually crystallizing in official rules and statutes.” (Zumwalt, supra, 33 Cal.App.3d at p. 671.) It also acknowledged that “[r]elatively unofficial practices and expectations may congeal in an unwritten ‘common law’ at a particular university, creating a de facto status similar to tenure.” (Ibid.) The Third District concluded that despite such norms and practices, whether unspoken or written in a handbook, a faculty member could not rely thereupon and could be removed at any time as chair of an academic department. (Id. at pp. 672-73.) And so here, as in Zumwalt, the California Code of Regulations and not a “mutually explicit understanding” controls.

In conclusion, the demurrer to the first cause of action is sustainable because the Court did not authorize Plaintiff to plead a new theory based on a “mutually explicit understanding” and her theory simply is not viable.

When sustaining a demurrer, a court may deny leave to amend if the plaintiff cannot demonstrate there is any reasonable possibility of curing the pleading defect through amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The Court already gave Plaintiff an opportunity to amend her pleading. She declined to take advantage of this opportunity and now confirms she does not intend to allege any new facts to state a viable due process claim. Consequently, the demurrer to the first cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.

SJSU also moves to strike Plaintiff’s request for attorney’s fees in the first cause of action. In light of the foregoing conclusion, the motion to strike is MOOT.