Case Name: Gowan v. Stryker Corporation, et al.
Case No.: 18CV338388

Defendant Lindsay Conley (“Conley”) moves to quash service of the summons and complaint filed by plaintiff Molly Gowan (“Plaintiff” or “Gowan”) for lack of personal jurisdiction. Defendants Stryker Corporation and Stryker Sales Corporation (collectively, “Stryker” or “Defendants”) demur to the Second Amended Complaint (“SAC”) filed by Plaintiff.

I. Background

A. Factual

This is an action for wrongful termination, among other things. According to the allegations of the operative SAC, Plaintiff was formerly employed as a Sales Representative, particularly in the Endoscopy Business Unit, for Stryker from April 2006 through May 2013 and July 2014 through December 2017. (SAC, ¶ 9.) In or around December 2014, shortly after Conley became Plaintiff’s manager, she shared the news of her pregnancy with him and other members of the company’s management. (Id., ¶ 12.) After Gowan returned from her maternity leave, Conley remarked that that was why he did not hire women. (Id., ¶ 12b.)

Around that time, Plaintiff learned of an open position and expressed interest in the role to Conley. (SAC, ¶ 12c.) After Conley told Plaintiff that this wasn’t her chance and to focus on her family and “getting back into [her] territory,” the position was filled by two men. (Id.) After several other incidents in which Conley displayed discriminatory and retaliatory animus towards her and other women in the company, Plaintiff spoke with her HR Manager, Olivia Cream (“Cream”), to express her concerns about his conduct, as well as feedback she had heard from others about his vendetta towards women and Gowan in particular. (Id., ¶ 12e-f, i.) Cream told Gowan to ignore Conley, thereby directly ratifying his unlawful conduct. (Id.)

Conley subsequently engaged in several unlawful adverse employment actions against Plaintiff, including removing her from Regional Manager training due to alleged performance issues. (SAC. ¶ 12j.) After receiving no help from Cream, Plaintiff decided that she needed to escalate her complaints about Conley’s behavior and did so. (Id., ¶ 12n.) The company against failed to do anything about Conley’s behavior, and Plaintiff was encouraged to leave the “boys club” in sales and apply for a women’s job in HR. (Id.) Feeling she had no other choice in order to avoid Conley’s behavior, Plaintiff applied for and received the position of HR Manager for Stryker. (Id., ¶ 12o.) During the interview process, Plaintiff again mentioned the ongoing harassment issues to various executives, to no avail. (Id.)

After Plaintiff accepted the new position and ceased working with Conley, she leaned that he was still disparaging her, sometimes in writing and sometimes with customers. (SAC, ¶ 12p.) In July 2017, Plaintiff began to receive complaints from female employees regarding Conley’s behavior towards them. (Id., ¶ 12q.) Plaintiff brought forth those complaints to HR, which indicated they were unable to open a complaint based on hearsay and encouraged her to tell her own story, which she did. (Id.) In August 2017, a formal investigation was initiated into Plaintiff’s complaint that she was working in a hostile work environment, that Conley was subjecting her to harassment and discrimination based on her sex, and that Conley was retaliating against her and trying to get her terminated. (Id., ¶ 12r.)

In October or November, Plaintiff, whose efforts to make things improve had been ignored by the company, reached her breaking point and submitted her resignation. (SAC, ¶ 13a.) Plaintiff requested and met with various company VPs to express her disappointment in the company’s failure to address the well-known sexism issue at Stryker, her complaints about it and Conley’s conduct towards her. (Id.) No longer able to endure the disparate treatment, Plaintiff ended her career at Stryker on December 31, 2017. (Id., ¶ 12b.)

B. Procedural

Based on the foregoing, Plaintiff initiated the instant action on November 21, 2018. On September 10, 2019, she filed the operative SAC, asserting the following causes of action: (1) violation of the FEHA (discrimination, failure to prevent discrimination, harassment, retaliation) (against all defendants); (2) violation of the FEHA (failure to promote) (against Stryker); (3) negligent hiring, supervision and retention (against Stryker); (4) wrongful constructive termination in violation of public policy (the FEHA and Labor Code § 1102.5) (against Stryker); (5) violation of Labor Code § 1102.5 (against Stryker); (6) defamation (against all defendants); and (7) intentional infliction of emotional distress (“IIED”) (against all defendants).

On October 10, 2019, Conley filed a motion to quash service of summons on the ground that the Court lacks personal jurisdiction over him. Plaintiff opposes the motion.

On October 28, 2019, Stryker filed the instant demurrer to the SAC and each of the seven causes of action asserted therein on the grounds that the court lacks jurisdiction over the subject of the causes of action and that the SAC fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., ¶ 430.10, subds. (a) and (e).) Plaintiff also opposes this motion.

II. Conley’s Motion to Quash Service of Summons

With the instant motion, Conley moves to quash service of the summons and the SAC pursuant to Code of Civil Procedure section 418.10, based on his contention that the Court lacks personal jurisdiction over him, a Colorado resident.

A. Conley’s Request for Judicial Notice

In support of his motion to quash, Conley requests that the Court take judicial notice of a declaration of Olivia Cream filed by Stryker in support of their demurrer to the SAC. While the Court can take judicial notice of this document as a court record (see Evid. Code, § 452, subd. (d), it cannot accept its contents as true. (See Fremont Indem. Co. v. Fremont Gen. Corp. (2007) 148 Cal.App.4th 97, 113 [stating that judicial notice of court records is limited to matters which are indisputably true].) As the existence of this declaration bears no relevance to the disposition of Conley’s motion (see Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [stating that judicial notice is limited to relevant matters]), his request for judicial notice is DENIED.

B. Substantive Merits

“[W]here a defendant properly moves to quash service of summons the burden is on the plaintiff to prove facts requisite to the effective service.” (Sheard v. Superior Court (1974) 40 Cal.App.3d 207, 211.) The burden is on the plaintiff to demonstrate by a preponderance of the evidence that all jurisdictional criteria are met. (Ziller Electronics Lab Gmbh v. Superior Court (1988) 206 Cal.App.3d 1222.) “Jurisdictional facts must be proved by competent evidence at the hearing on the motion to quash. This generally requires affidavits or declarations by competent witnesses.” (Id.)

The three “traditional” bases for personal jurisdiction are: (1) service on persons physically present in the forum state; (2) domicile within the state; and (3) consent or appearance in the action. (Weil & Brown, supra, at ¶ 3:131; also see Pennoyer v. Neff (1877) 95 U.S. 714, 733.) If none of the foregoing are implicated, as is the case here, the plaintiff is left with application of the “minimum contracts” doctrine in order to demonstrate jurisdiction.

Pursuant to Code of Civil Procedure section 410.10, California’s long-arm statute, “[a] court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.” The long-arm statute “manifests an intent to exercise the broadest possible jurisdiction,” limited only by constitutional considerations of due process. (Sibley v. Superior Court (1976) 16 Cal.3d 442, 445; Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th434, 44.) The general rule is that a state may exercise personal jurisdiction over a nonresident defendant “if the defendant has such minimum contacts with the state that the assertion of jurisdiction does not violate ‘traditional notions of fair play and substantial justice.’” (Vons Companies, Inc., supra, 14 Cal.4th at 444, quoting International Shoe Co. v. Washington (1945) 326 U.S. 310, 326.) Stated another way, “the forum state may not exercise jurisdiction over a nonresident unless his [or her] relationship to the state is such as to make the exercise of such jurisdiction reasonable.” (Cornelison v. Chaney (1976) 16 Cal.3d 143, 147.) As these tests suggest, the question of jurisdiction cannot be answered by the application of precise formulas or mechanical rules. Each case must be decided on its own facts. (Id. at 150.)

Personal jurisdiction may be either general or specific. (Helicopteros Nacionales de Columbia, S.A. v. Hall (1984) 466 U.S. 408, 414-415; Vons Companies, supra, 14 Cal.4th at 445.) General jurisdiction may lie for all purposes if a defendant has established a presence in the forum state by virtue of activities in the state which are “extensive or wide-ranging” (Buckeye Boiler Co. v. Superior Court (1969) 71 Cal.2d 893, 898-899) or “substantial … continuous and systematic.” (Cornelison, supra, 16 Cal.3d at 148.) In such case a defendant’s contacts “take the place of physical presence in the forum as a basis for jurisdiction.” (Vons Companies, Inc., 14 Cal.4th at 446.)

If a nonresident defendant’s activities in the state are not sufficient to allow the forum state to exercise general jurisdiction for all purposes, the state may nonetheless exercise specific jurisdiction “if the defendant purposefully availed himself or herself of forum benefits (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 472-473) and the ‘controversy is related to or “arises out of” the defendant’s contacts with the forum.’ (Helicopteros, supra, 466 U.S. at 414.) Once a court decides that a defendant has purposefully established contacts with the forum state and that the plaintiff’s cause of action arose out of those forum-related contacts, the final step in the analysis involves balancing the convenience of the parties and the interests of the state in order to determine whether the exercise of personal jurisdiction is fair and reasonable under all of the circumstances. (Burger King Corp, supra, 471 U.S. at 477-478; Vons Companies, Inc., 14 Cal.4th at 447-448.)

Here, it is Plaintiff’s position that (1) Conley already acquiesced to this Court’s jurisdiction (i.e., through his conduct made what constitutes a general appearance) and (2) that even if he did not, specific jurisdiction over him exists.

1. General Appearance

As a general matter, personal jurisdiction may be asserted over nonresident defendants who make a general appearance in the action, thereby dispensing with the necessity of personal service. (Code Civ. Proc., ¶ 410.50, subd. (a) [“[a] general appearance by a party is equivalent to personal service of summons on such party”].) A general appearance is participation in the action in a manner that recognizes the court’s jurisdiction before filing a motion to quash. (See Factor Health Mgmt. v. Superior Court (2005) 132 Cal.App.4th 246, 250 [“[i]f the defendant raises an issue for resolution or seeks relief available only if the court has jurisdiction over the defendant, then the appearance is a general one”].) “If the defendant raises any other question [than a lack of jurisdiction], or asks for relief which can only be granted upon the hypothesis that the court has jurisdiction of his person, his appearance is general ….” (California Overseas Bank v. French American Banking Corp. (1984) 154 Cal.App.3d 179, 184.)

Plaintiff maintains that Conley recognized this Court’s jurisdiction over him, and therefore made a general appearance, by responding to discovery propounded by her on issues beyond personal jurisdiction and making substantive objections to some of her requests. There is a significant body of case law which establishes that a party who propounds discovery without challenging jurisdiction has made a general appearance. (See, e.g., See Factor Health Mgmt., supra, 132 Cal.App.4th at 250; Creed v. Schultz (1983) 148 Cal.App.3d 733, 739-740.) There is significantly less authority dealing with the issue of whether responding to discovery propounded by another party constitutes a general appearance. However, in Chitwood v. County of Los Angeles (1971) 14 Cal.App.3d 522, the court was tasked with determining whether, by filing answers to interrogatories, a defendant had entered a general appearance.

Before setting forth its determination, the Chitwood court explained that it was not aware of any California authority on the question of whether responding to interrogatories amounts to a general appearance. (Chitwood, 14 Cal.App.3d at 526.) It then noted the unique factual situation before it: the plaintiff filed a complaint against the County of Los Angeles (the “County”) alleging property damage that the County answered. The plaintiff then propounded interrogatories on the County, but they were answered by “defendant Los Angeles County Flood Control District” (the “District”) which was an entirely separate entity. The County subsequently moved for, and obtained, summary judgment on the ground that it did not own the property on which the construction that damaged the plaintiff’s property was located, the District did. The plaintiff then attempted to amend her complaint by substituting in the District for the County, and ran into statute of limitations issues if the District was not deemed by the court to have made an appearance earlier in the action. The court ultimately determined that by responding to the interrogatories, the District had made a general appearance, implicitly consenting that it was appearing as one of the Does in the action that could be substituted as the true defendant. In reaching this conclusion, however, the court did not just rely on the fact that responses had been made, but on the nature of those responses. The court observed that the District’s responses showed that it took “extensive and affirmative steps in ferreting out the requested information, preparing it in an appropriate fashion, and filing it in the Superior Court where the action was pending.” (Id. at 527.) Moreover, the court reasoned, while the answers filed by the District did not constitute a request for relief (such a request presumes a court has jurisdiction), its action of filing and serving them was “evidently predicated on the assumption that the court has jurisdiction over the answering party- otherwise there would be no need for the answers.” (Id. at 527-528.)

Here, however, Conley was named as a defendant at the outset and has, in all of his responses to discovery, stated his intention to quash the summons and complaint for lack of personal jurisdiction over him. None of his responses to the interrogatories propounded by Plaintiff provide substantive information, and instead are comprised solely of objections- both the lack of personal jurisdiction and other, more typical objections to discovery requests (e.g., relevance, attorney-client privilege, etc.). Conley did not provide any of the information requested by the discovery requests, and in stating his intention to move to quash the service of summons and complaint for lack of personal jurisdiction, explained that it might obviate the need to respond to any discovery. He otherwise explained that responses were being provided solely to preserve his objections to the pending discovery.

Thus, there are significant differences between Conley’s actions and those of the defendant in Chitwood in the manner in which they responded to discovery such that this Court does not view Conley as having made a general appearance in this action. Whenever he has participated in this action (with the instant motion and his responses to the discovery requests), he has asserted his objection that the Court lacks jurisdiction over him. There is otherwise nothing which indicates that he has acted in a way which can be viewed as him recognizing that this Court has jurisdiction over him. Because of this, and in the absence of any other authority which supports Plaintiff’s position that merely responding to discovery requests constitutes a general appearance, the Court finds that no such appearance has been made by Conley.

2. Specific Jurisdiction

Plaintiff next insists that Conley is subject to specific jurisdiction in California, a form of jurisdiction which requires her to establish by competent evidence that Conley “purposefully availed” himself of the state of California’s benefits and that the controversy that is the subject of the instant action arises out of his contacts with the forum. (See Burger King Corp., supra, 471 U.S. at 472-473.) She must also establish that the exercise of jurisdiction over Conley would be fair and reasonable under all of the circumstances. (Id. at 477-478.)

At the outset, it should be noted that it is undisputed that Conley is a Colorado resident and was at all times during the events upon which this action is based. According to a declaration submitted by Conley, he has never lived in California, and does not own property, residences or maintain a bank account or office in the state. (Declaration of Lindsay Conley in Support of Motion to Quash Service of Summons (“Conley Decl.”), ¶¶ 2-3, 4-12.) While he was employed with Stryker (which ended in December 2018), Conley states that his sales territory was limited to Colorado, Utah, New Mexico, Wyoming, South Dakota and Nevada. (Id., ¶ 4.) He explains that he did not work in California and did not have responsibility over the sales territories in the state. (Id.)

Despite the foregoing, Plaintiff maintains that specific jurisdiction exists over Conley based on the following: (1) Conley defamed her in California; (2) Conley harassed Plaintiff while she was employed in California; (3) Conley purposefully availed himself of California’s benefits in knowingly working for a company, Stryker, that was based in the state; and (4) Conley cannot establish that exercising jurisdiction over him would be unreasonable.

The first portion of the analysis on whether specific jurisdiction exists, purposeful availment, relates to Conley’s actual contacts with the state of California. “The purposeful availment inquiry … focuses on the defendant’s intentionality. [Citation.] This prong is only satisfied when the defendant purposefully and voluntarily directs his activities toward the forum so that he should expect, by virtue of the benefit he receives, to be subject to the court’s jurisdiction based on his contacts with the forum. [Citation.]” (Pavolich v. Superior Court (2002) 29 Cal.4th 262, 269.) As stated above, Plaintiff asserts that Conley specifically availed himself of the benefits of California by working for a company, Stryker, that was based in the state. But as Conley’s declaration establishes (and Plaintiff offers nothing to rebut its contents), his sales territory while working for Stryker never included California, and thus his work activities do not appear to have been directed towards the state. In her own declaration, Plaintiff describes Conley’s connections with the state as follows: Conley attended a meeting or training in San Jose in early 2017 and defamed Plaintiff there to another employee; in July 2017, an employee who worked in San Jose complained to Plaintiff that Conley was degrading her; and in August 2017, Conley sent an email to Hillary Pequeno, an employee who worked in San Jose near Plaintiff, stating that Plaintiff would not have been effective in closing a particular deal. (Declaration of Molly Gowan in Support of Opposition to Motion to Quash (“Gowan Decl.”), ¶ 4, 7.)

The foregoing “connections” are slight and evidence, at most, a tenuous connection between Conley and California that this Court finds is insufficient to establish jurisdiction over him. It is not clear from the pleadings that Plaintiff’s defamation claim is predicated on what was said at the training that took place in San Jose in early 2017, as opposed to statements that were made elsewhere. Plaintiff notes in her declaration that from July 2017 until 2018 she worked in San Jose for approximately one week each month; it is otherwise undisputed that she worked in Colorado at all other times. (Gowan Decl., ¶ 5.) But Plaintiff’s connection to California as HR Manager has no relation to her claims against Conley and the question of his intentionality, i.e., the directing of his own conduct towards the state for the purposes of determining whether he has sufficient contacts for the Court to exercise jurisdiction. The conduct on which Plaintiff’s claims against Conley in particular are predicated occurred when she worked under him in Colorado, a time which notably preceded her presence in California as HR Manager. Once Plaintiff took that position, she ceased working directly for Conley, who was still in Colorado. (SAC, ¶ 12p.) Plaintiff otherwise offers nothing which establishes that she continued to personally experience discriminatory conduct or harassment by Conley after she began working portions of each month in California and it is certainly not pleaded in the SAC. In sum, Plaintiff has not demonstrated that Conley expressly aimed or intentionally targeted his conduct towards California such that that the element of purposeful availment is met. Without purposeful availment by Conley, there is no basis to exercise specific jurisdiction over him. Consequently, Conley’s motion to quash service of summons and complaint is GRANTED.

III. Stryker’s Demurrer or, in the Alternative, Motion to Dismiss for Forum Non Conveniens

Stryker demur to the SAC and each of the seven causes of action asserted therein on the grounds that the court lacks jurisdiction over the subject of the causes of action and the SAC fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., ¶ 430.10, subds. (a) and (e).) Alternatively, they move to dismiss the SAC for forum non conveniens.

A. Subject Matter Jurisdiction

The first ground that Stryker demur on to the SAC and all of the claims asserted therein, that provided by subdivision (a) of Code of Civil Procedure section 430.10, that the Court has no jurisdiction of the subject matter of this action, can easily be disposed of. Given the nature of Stryker’s argument in support of this ground, that no claims for violations of California law can be stated because the conduct at issue occurred entirely outside of the state in Colorado, it is clear that they misunderstand the concept of subject matter jurisdiction.

“Subject matter jurisdiction is conferred by constitutional or statutory law. The California Supreme Court has defined subject matter jurisdiction thusly: Subject matter jurisdiction … is the power of the court over a cause of action or to act in a particular way. By contrast, the lack of subject matter jurisdiction means the entire absence of power to hear or determine a case; i.e., an absence of authority over the subject matter.” (Cummings v. Stanley (2009) 177 Cal.App.4th 493, 503 (internal quotation marks and citations omitted); see also Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1148-1149.) Thus, “[t]he principle of ‘subject matter jurisdiction’ relates to the inherent authority of the court involved to deal with the case or matter before it.” (Harnedy v. Whitty (2003) 110 Cal.App.4th 1333, 1343-1344.) A typical example of a California court lacking subject matter jurisdiction is where the action is based on claims over which federal courts have exclusive jurisdiction. (See Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238 (lack of subject matter jurisdiction over claims arising under federal patent laws).) Additional examples include cases in which jurisdiction is vested in another tribunal (e.g., claims subject to workers’ compensation exclusivity), cases that would hinder or interfere with the exercise by the Public Utilities Commission of its regulatory authority, and cases involving religious or ecclesiastical disputes. (See Long v. Forty Niners Football Co., LLC (2019) 33 Cal.App.5th 550, 556, fn. 7 [citing text].)

Here, in arguing that that Plaintiff’s claims must fail because California law does not apply extraterritorially, Stryker is actually arguing that Plaintiff cannot state a claim under California law, and not that the Court lacks the jurisdiction to decide whether or not she can state such a claim in the first instance. Consequently, there is no basis to sustain the demurrer on this basis and therefore it is OVERRULED.

B. Failure to State Facts

1. Application of the FEHA to Plaintiff’s Claims

As stated above, it is Stryker’s contention that Plaintiff fails to state claims under California law as they argue that neither her statutory claims nor her common law claims, which are predicated on conduct that took place entirely in Colorado, have extraterritorial effect. Stryker maintain that the connection to California alleged by Plaintiff, its San Jose management’s purported “ratification” of Conley’s discriminatory and harassing behavior towards her, is insufficient to support the conclusion that California law applies to his conduct.

As a general matter, California’s state statutes “are presumed not to have an extraterritorial effect.” (Cotter v. Lyft, Inc. (N.D. Cal. 2014) 60 F.Supp.3d 1059, 1061; see also Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191, 1207 [“However far the Legislature’s power may theoretically extend, we presume the Legislature did not intend a statute to be operative, with respect to occurrences outside the state, … unless such intention in clearly expressed or reasonably to be inferred from the language of the act or from its purpose, subject matter, or history”]; The California Supreme Court has twice ruled against the extraterritorial application of California wage laws to conduct in other states. (See Tidewater Marine W., Inc. v. Bradshaw (1996) 14 Cal.4th 557, 578 [holding only a “wage earner in California” is subject to state wage orders, meaning, an employee who works exclusively or principally in California]; see Sullivan v. Oracle Corp. (2011) 51 Cal.4th 1191, 1208 [holding California law did not apply to unfair competition law for overtime work performed outside of California, even where employer was California-based].)

Lower courts that have considered the issue have agreed that the Labor Code and the FEHA will not extend beyond the state’s geographical boundaries to employees who work or conduct that occurs outside of California. (See e.g., Ward v. United Airlines, Inc. (N.D. Cal. 2016) 2016 WL 3906077, *3 [finding California focuses on a “job situs test” to determine whether state wage and hour and workplace-discrimination laws apply]; Campbell v. Arco Marine, Inc. (1996) 42 Cal.App.4th 1850, 1858 [holding that FEHA “should not be construed to apply to nonresidents employed outside of [California] when the tortious conduct did not occur in California”].) Moreover, as relevant here, none of the foregoing cases have found that a company, merely by being based in California, is required to comply with California Labor law for all of its nationwide employees; to the contrary, the determinative factor for deciding the applicability of these laws has been on where the work at issue was performed. Thus, the determinative question here is where the wrongful conduct took place.

While Stryker maintain that none of the tortious conduct at issue occurred in California, Plaintiff insists to the contrary, arguing that Conley defamed her while he was in the state and that Stryker’s senior level management decided, in California, to ratify his harassing and discriminatory conduct against her while she worked under him in Colorado. Stryker insist that general allegations by Plaintiff that employees Tiffany Zakszeski (“Zakszeski”), Kim Larson (“Larson”) and Paul Glynn (“Glynn”) ratified Conley’s conduct by doing nothing about it is insufficient to support application of the FEHA because Glynn was at all times a citizen of Iowa and while Zakszeski and Larson are citizens of California, Plaintiff merely informed them of conduct by Conley that occurred in Colorado. Stryker cite to Gonsalves v. Infosys Technologies, Inc. (N.D. Cal. 2010) 2010 1854146, *5-6, for the proposition that “mere allegations of ratification of California employees were insufficient for FEHA to apply to out-of-state conduct ….” (Stryker’s Memo. at 5:22-23.)

At the outset, this Court finds that Stryker’s characterization of Gonsalves is highly inaccurate. The court did not hold that allegations of ratification in California of wrongful conduct that occurred elsewhere, as a general matter, are insufficient to support liability under the FEHA and state common law. Instead, the court concluded that the particular plaintiff before it, in generally alleging that unnamed company personnel in California had approved, ratified and/or implemented the discriminatory policies that had led to his injuries, had failed to provide the specific information necessary to adjudicate his FEHA claims, including who was responsible for demoting and firing him and where those individuals were located when they engaged in such conduct. Thus, the basis for the court’s dismissal was not that ratification, in California, of extraterritorial tortious conduct could not support FEHA claims, but that general, formulaic and conclusory allegations of ratification were insufficient to do so.

With that in mind, Stryker do not otherwise appear to contest that an employer can be liable for discriminatory conduct and/or harassment by one employee to another based on a ratification theory. “A principal is liable when it ratifies an originally unauthorized tort.” (Murillo v. Rite Stuff Food, Inc. (1998) 65 Cal.App.4th 833, 852.) “If the employer, after knowledge of or opportunity to learn of the agent’s misconduct, continues the wrongdoing in service, the employer may become an abettor and may make himself liable ….” (McChristian v. Popkin (1946) 75 Cal.App.2d 249, 256; see also Roberts v. Ford Aero. & Communications Corp. (1990) 224 Cal.App.3d 793, 801 [“ratification may be inferred from the fact that the employer, after being informed of the employee’s actions, does not fully investigate and fails to repudiate the employee’s conduct by redressing the harm done and punishing or discharging the employee”].) If ratification of extraterritorial tortious conduct takes place in California, the necessary nexus between the tortious conduct and the state is established in order to support claims under the FEHA and California common law. (See, e.g., Campbell, supra, 42 Cal.App.4th at 1858 [reasoning that because no one in the defendant’s California headquarters participated in or ratified the extraterritorial tortious conduct, FEHA did not apply].)

According to the allegations of the SAC, Stryker’s ratification of Conley’s conduct occurred in the following circumstances: in February 2017 and subsequent months, Plaintiff reported her interactions with Conley to her HR Manager, Cream (in Colorado) and Cream merely instructed her to ignore his conduct (¶ 12i, l and m); Plaintiff escalated her complaints to Glynn and Tommy Van Galder (Director of Sales located in California), both of whom failed to take any action and in fact suggested that Plaintiff should consider HR instead (¶ 12n); in June 2017, while interviewing for the position of HR Manager, a position Plaintiff pursued only because she hoped to limit the discrimination and harassment she was experience, Plaintiff mentioned the ongoing harassment issues with Brent Lass (General Manager and VP based in California), Kim Larson (VP of HR based in California) and Zakszeski (Director of HR based in California), and was once again met with inaction (¶ 12 o); and in December 2017, after submitting her resignation, Plaintiff met with Larson and Zakszeski and expressed her disappointment in the company not addressing her complaints or doing anything about Conley’s conduct towards her (¶ 13a).

The foregoing is significantly more than the general, formulaic and conclusory allegations of ratification that were deemed insufficient in Gonsalves. Plaintiff has identified several corporate officers, based in California, who were made aware of Conley’s purported misconduct towards her in Colorado but failed to take any action, thereby ratifying his tortious behavior. The Court finds that these allegations are sufficient to establish the requisite nexus between California and Conley’s purported conduct and thus that FEHA does apply to Plaintiff’s claims. Consequently, Stryker’s demurrer to the SAC will not be sustained on this basis. It follows that Stryker’s demurrer to the FEHA-related claims and Plaintiff’s claim for negligent hiring/retention/supervision (which involves actions taken or not taken by individuals in California) on the ground of failure to state facts sufficient to constitute a cause of action is OVERRULED.

2. Labor Code § 1102.5

Stryker next argue that Plaintiff also cannot state a statutory claim for violation of California’s Labor Code section 1102.5 (“Section 1102.5”), which prohibits an employer from retaliating against an employee for disclosing information to a government agency or those with authority over the employee or authority to investigate the employer’s violation or noncompliance with a local, state or federal rule or regulation, because the statute does not apply to extraterritorial conduct. (Lab. Code, § 1102.5, subd. (b); Green v. Ralee Eng. Co. (1998) 19 Cal.4th 66, 77.) In making this argument, Stryker principally rely on Weinberg v. Valeant Pharm. Int’l (C.D. Cal. 2017) 2017 WL 6543822, *6, for the proposition that Section 1102.5 does not apply to conduct that occurs outside of California. While this is not an inaccurate statement of law, here Plaintiff alleges that conduct that violated Section 1102.5 did occur in California. The Court agrees that if the ratification of Conley’s prohibited conduct (retaliation) by Stryker happened in California, as alleged by Plaintiff, a claim can be stated against the company for violation of Section 1102.5. Accordingly, Stryker’s demurrer to the fifth cause of action for violation of Section 1102.5 will not be sustained on this basis and the demurrer to this claim on the ground of failure to state facts sufficient to constitute a cause of action is OVERRULED.

3. Defamation

Stryker next argue that their demurrer to Plaintiff’s defamation claim should be sustained for the following reasons: (1) California’s defamation laws do not have extraterritorial effect; (2) even if California law applies, the statements at issue are nonactionable opinions; and (3) the statements are nonactionable because they are privileged.

With regard to Stryker’s first argument, Plaintiff does not challenge their contention that California common law does not apply extraterritorially, but argues that she has validly stated a claim under California law because the allegedly defamatory statements occurred in California and were targeted at the state. However, this is not apparent from the face of the SAC, which is what the Court is limited to when considering whether Plaintiff has stated a valid claim. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [a demurrer can only be used to challenge defects that appear on the face of the pleading under attack, or from matters outside the pleading that are judicially noticeable]; see also Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [stating that no extrinsic evidence can be considered on demurrer].) The Court cannot consider the contents of Plaintiff’s declaration (actually filed in support of her opposition to Conley’s motion to quash), which is what she cites to in support of her assertion that Conley defamed her California. Based on what is actually pleaded, any defamatory statements made by Conley occurred when both he and Plaintiff were living and working in Colorado. Consequently, Plaintiff has not stated a claim for defamation under California law.

Next, assuming, for the sake of argument, that such conduct had been pleaded, Stryker argue that it would not be actionable because Conley’s statements about Plaintiff’s work performance were merely his opinions.

Only false statements of fact, not opinion, are actionable as defamation. (CACI No. 1707; Gregory v. McDonnell Douglas Corp. (1976) 17 Cal.3d 596, 601.) Whether a statement is one of fact or opinion is generally a question of law to be decided by the court. (Baker v. Los Angeles Herald Examiner (1986) 42 Cal.3d 254, 260.) However, if the defamatory statement is ambiguous and could be understood by the ordinary reader as stating either a fact or an opinion, the issue must be left to the jury’s determination. (ZL Technologies, Inc. v. Does 1-7 (2017) 13 Cal.App.5th 603, 624.) In determining whether a statement is fact or opinion, courts apply a “totality of the circumstances test,” which includes factors such as the words used, the context of the publication, its nature and content and audience knowledge and understanding. (Id. at 624-625.)

Here, Plaintiff alleges in the SAC that Conley defamed her by stating to others that she was “not effectively forming relationships with surgeons” and that she was no longer with Stryker because she was a poor performer. (SAC, ¶¶ 12k and p, 52.) Stryker argues that Conley’s statement that Plaintiff was a poor performer is not actionable because under California law, calling an individual a poor performer is an opinion and cannot constitute defamation. Indeed, with regards to a worker’s performance, unless the statement at issue accuses the employee of criminal behavior or suggests a lack of honesty, integrity, competency or reprehensible personal characteristics or behavior, accusing someone of a “poor performance” is a statement of opinion and not actionable. (See Gould v. Md. Sound Indus., Inc. (1995) 31 Cal.App.4th 1137, 1153-1154.) However, in allegedly stating that Plaintiff was no longer with the company because she was a poor performer, Conley did more than express an opinion regarding her performance- he identified a factual basis for why Plaintiff was no longer in the position that she previously had been, which could injure Plaintiff’s professional reputation, and thus qualifies as defamatory. (See Civ. Code, § 46 [stating that slander includes a “false and unprivileged publication, orally uttered” which tends “directly to injure” a person “in respect to his [or her] office, profession, trade or business”], emphasis added.)

Stryker’s remaining argument is that even if the foregoing was not an opinion (and was stated in California), it is still not actionable because it is protected under the so-called “common interest privilege.” An employer has a conditional (i.e., qualified) privilege to communicate, without malice, with persons who have a “common interest” in the subject matter of the communication. (Civ. Code, § 47, subd. (c); Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1369.) But Stryker does not offer any analysis in this regard, and in any event, the Court disagrees with their contention that malice by Conley has not been pleaded given the allegations in the SAC of his animus towards Plaintiff because of her sex.

Ultimately, however, the Court finds that Plaintiff has not stated a claim for defamation because she has not pleaded defamatory conduct by Conley that took place within California. Consequently, Stryker’s demurrer to the sixth cause of action on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.

4. IIED

With regard to Plaintiff’s remaining cause of action for IIED, Stryker again argue that no such claim has been stated because California common law does not apply extraterritorially. They further contend that no claim has been stated because Plaintiff has not pleaded conduct that qualifies as extreme and outrageous and such a claim is preempted by the California Workers’ Compensation Act (“WCA”).

Although it is generally true that California law does not apply extraterritorially, Plaintiff has alleged that Stryker’s California-based executives and officers ratified Conley’s conduct, thereby creating a sufficient nexus with the forum to state claims under California common law. Thus, the demurrer to this claim will not be sustained on this basis.

Next, with respect to Stryker’s second argument, a claim for IIED requires conduct that is “so extreme and outrageous as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” (Alcorn v. Anbro Eng., Inc. (1970) 2 Cal.3d 493, 499, fn. 5.) Stryker maintain that such conduct has not been pleaded by Plaintiff based on her merely alleging that Conley made three comments to her about women, generally, over a three-year period, discouraged her from applying for a leadership position, and provided negative feedback on her work performance. The Court agrees. While Plaintiff has pleaded facts which establish discriminatory animus and conduct by Conley, she had not set forth acts by him that can properly be described as “so extreme and outrageous as to go beyond all possible bounds of decency.”

Stryker’s remaining argument can be disposed of quite readily. While the WCA provides a comprehensive system of remedies for job related injuries that are the “sole and exclusive remedy” for such injuries and are available only in proceedings before the Workers’ Compensation Appeals Board (see Lab. Code, §§ 3602, subd. (a) and 5300), this exclusivity rule does not bar lawsuits for emotional distress damages attributed to unlawful discrimination because such misconduct may be deemed to “exceed[] the normal risks of the employment relationship.” (See, e.g., Fretland v. County of Humboldt (1999) 69 Cal.App.4th 1478, 1492; see Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 946 [plaintiff can pursue IIED claim in employment context where conduct at issue violates the FEHA, but finding plaintiff failed to satisfy IIED elements].)

Ultimately, because Plaintiff has not pleaded extreme and outrageous conduct, Stryker’s demurrer to the seventh cause of action on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.

5. Motion to Dismiss for Forum Non Conveniens

Lastly, Stryker contends that the SAC should be dismissed based on forum non conveniens because Colorado is a more suitable forum then California.

Even if a court has subject matter and personal jurisdiction, it may stay or dismiss the action on the ground of an inconvenient forum if it finds that “in the interest of substantial justice” such actions are warranted. (Code Civ. Proc., § 418.10, subd. (a).) The common law doctrine of forum non conveniens is not jurisdictional, but rather “an equitable doctrine invoking the discretionary power of a court to decline to exercise jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.” (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.) Where such a request is made, the defendant bears the burden of proof, meaning that he or she must provide the trial court with sufficient evidence to enable it to carry out its weighing and balancing analysis. (National Football League v. Fireman’s Fund Ins. Co. (2013) 216 Cal.App.4th 902, 926-927.) While Plaintiff is a nonresident, her choice of forum is entitled to “due deference.” (National Football League v. Fireman’s Fund Ins. Co. (2013) 216 Cal.App.4th 902, 929-930.)

Here, Stryker suggest that Colorado is a more suitable forum because Plaintiff and Conley are both Colorado residents and where the allegedly wrongful conduct occurred and Plaintiff has not identified any California witnesses who are not current or former Stryker employees, making Colorado a more convenient forum. Moreover, Stryker continue, Colorado provides a means of compelling unwilling Colorado witnesses to testify, whereas they are beyond the reach of a California subpoena, and Colorado’s interest in the litigation in resolving a dispute between two of its citizens outweigh California’s interest in the matter.
A plaintiff’s choice of forum will not be disturbed unless the court is convinced that (1) a suitable alternative forum exists (i.e., one in which a valid judgment can be obtained against the defendant) and (2) the balance of private and public interest factors makes it “just” that the litigation proceed in the alternative forum. (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751-752.) Private interest factors include such matters as access to sources of proof, the cost of obtaining the attendance of witnesses, and the availability of compulsory process of attendance of unwilling witnesses. (Id.) Public interest factors include avoiding overburdening local courts with congested calendars and weighing California’s interest in regulating the activities involved. (Id.)

While it is true that Plaintiff and Conley are located in Colorado and much of the wrongful conduct at issue took place in that state, the Court is not persuaded that it would be more “just” to have this action proceed there. Stryker’s request to dismiss based on forum non conveniens rests largely on their incorrect assertion that no relevant witnesses or conduct took place in California. But as discussed above, a nexus exists between the conduct in Colorado and California in that the alleged ratification of Conley’s conduct by Stryker executives and officers took place in the latter. Because of this, California has a significant interest in this action because the purpose of the FEHA is to prevent employees from suffering from discrimination and harassment, and individuals who were in a position to stop Plaintiff from experiencing such conduct failed to do so, thereby exposing Stryker to liability. California has an interest in ensuring that California-based individuals are treating employees properly and not condoning wrongful employment practices.

The Court is otherwise not persuaded that Colorado is a more suitable forum or that allowing the case to proceed here would create significant burdens with regard to access to sources of proof, i.e., witnesses. Accordingly, Stryker’s alternative motion to dismiss for forum non conveniens is DENIED.

– oo0oo –

Calendar line 3

See line 2.

– oo0oo –