2013-00153803-CL-MC

United Farm Workers of America vs. Gerawan Farming, Inc.

Nature of Proceeding: Hearing on Demurrer

Filed By: Schwarz, David A.

Defendant Gerawan Farming, Inc. (“Defendant” or “Gerawan”) filed a Demurrer to the
Complaint of Plaintiff United Farm Workers of America (“Plaintiff” or “UFW”) and a
Request for Stay. Plaintiff filed an opposition. For the reasons that follow, Defendant’s
Request for Stay is DENIED. Defendant’s demurrer is OVERRULED in part and
SUSTAINED in part, WITH LEAVE TO AMEND.

Requests for Judicial Notice
Plaintiff’s Request for Judicial Notice (“Pl.’s RJN”), which seeks judicial notice of court
filings, is unopposed and GRANTED pursuant to Evidence Code §§ 452(d) and 453.

Defendant’s two Requests for Judicial Notice (“Def.’s RJN”), which seek judicial notice
of court filings and decisions/orders of the Agricultural Labor Relations Board, are
unopposed and GRANTED pursuant to Evidence Code §§ 452(c)-(d) and 453.

In taking judicial notice of these documents, the Court accepts the fact of their
existence, not the truth of their contents. (See Professional Engineers v. Dep’t of
Transp. (1997) 15 Cal.4th 543, 590 (judicial notice of findings of fact does not mean
that those findings of fact are true); Steed v. Department of Consumer Affairs (2012)
204 Cal.App.4th 112, 120-121.)

Background
On November 27, 2013, the Court issued an Order (“Order”) denying Plaintiff’s
application for a temporary restraining order (“TRO”) seeking enforcement of the
Agricultural Labor Relations Board’s (“Board”) decision of November 19, 2013. In the
Order denying Plaintiff’s requested TRO, the Court explained that until the Court of
Appeal had affirmed the Board’s decision or the time for review had passed, this Court
could not enforce the Board’s decision because there is “no legal mechanism”
permitting it to do so, and because doing so would be “inconsistent with [Labor Code]
§ 1164.9.” (Order at 3-4 (applying Ace Tomato Co. and UFW (2012) 38 ALRB No. 8 at
p.7).) In a nutshell, the Order denied the requested TRO on grounds that the Court
lacked the authority to enforce the Board’s order unless and until other conditions
occurred. Following denial of its requested TRO, Plaintiff appealed the Order to the
Third District Court of Appeal.

Defendant argues that this case should be dismissed for lack of subject matter
jurisdiction or, in the alternative, stayed pending Plaintiff’s appeal of the Order denying
a TRO. (Def.’s Ps & As at 2, 6-11.)

Request for Stay
Defendant urges that Civil Code § 916 (“Section 916”) automatically stays this case in
light of Plaintiff’s pending appeal of this Court’s order denying TRO. Section 916 provides:

[T]he perfecting of an appeal stays proceedings in the trial court upon the judgment or
order appealed from or upon the matters embraced therein or affected thereby,
including enforcement of the judgment or order, but the trial court may proceed upon
any other matter embraced in the action and not affected by the judgment or order.

(Code Civ. Proc. § 916(a).) Plaintiff argues that it is improper to stay an entire action
based upon an appeal of an order denying temporary relief like a TRO (Pl.’s Oppo. at
2-4).

The Court is not persuaded that this action should be stayed pending Plaintiff’s appeal.
The Varian case, upon which Defendant relies upon in arguing for a stay, does not
compel the requested stay. Indeed, that decision succinctly explained that: “an appeal
from the denial of a preliminary injunction does not stay further trial court proceedings
on the merits.” ( Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 196-98
(emphasis added) (citing Gray v. Bybee (1943) 60 Cal.App.2d 564, 571).) The Varian
court further explained, “Because the injunction ‘amounts to a mere preliminary or
interlocutory order to keep the subject of litigation in status quo pending the
determination of the action on its merits,’ the affirmance or reversal of its denial does
not and cannot eliminate the need for additional proceedings on the merits. Section
916 therefore does not automatically stay such proceedings.” (Id. (citation to Gray and
internal quotation marks omitted).) While the Varian court went on to hold that a case
should be stayed as to “matters” embraced in an appeal of an order denying an anti-
SLAPP motion, Varian did not involve an appeal from an order denying a TRO and
therefore it does not control here, especially given that court’s clarification that an
appeal of an order denying a TRO “does not stay further trial court proceedings on the
merits.” (Id. (emphasis added).)

Defendant would have the Court make new law and stay this case under Varian and
Civil Code § 916(a), when the court in Varian succinctly explained that appeals of
orders denying TROs do not trigger an automatic stay under Civil Code § 916(a) . (See
id.) Defendant failed to identify any authorities interpreting Varian as requiring an
automatic stay upon the appeal of an order denying preliminary injunctive relief on
grounds that such order embraces issues central to the underlying litigation, such as
the order in this case, which arguably embraces the threshold issue of the trial court’s
authority to adjudicate the case. (Def.’s Ps & As at 6-7.) In light of the above-quoted
unequivocal language from Varian explaining that appeals from orders denying TROs
do not trigger an automatic stay, the Court is not persuaded by Defendant’s argument
that Varian requires an automatic stay in this particular case. (See Varian, supra, 35
Cal.4th at 196-98.) Accordingly, Defendant’s request for a stay is DENIED.

Demurrer
Plaintiff first argues that Defendant’s demurrer should be dismissed as untimely. (Pl.’s
Oppo. at 2.) Defendant argues that the parties had stipulated to extend Defendant’s
deadline to file a response to the pleading. (Def.’s Reply at 5-6 (citing Declaration of
Michael A. Behrens (“Behrens Decl.”) Exh. B).) On the Court’s review of the relevant
correspondence, the demurrer was filed before January 18, 2014, which was the
extended deadline implied in Plaintiff’s counsel’s letter. (Exh. B to Behrens Decl.)
Plaintiff has not argued that it has been prejudiced by the timing of the filing, and in the
furtherance of justice, the Court in its discretion considers the demurrer. (See
McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 281-82 (appellate court held that trial court properly acted in “its broad discretion” in permitting a late-filed
demurrer where the parties’ correspondence reflected a stipulation regarding an
extension to respond to a pleading, and where the non-moving party had not shown it
had been prejudiced by the filing delay).)

A demurrer challenges only the legal sufficiency of a complaint, not the truth or the
accuracy of its factual allegations or the plaintiff’s ability to prove those allegations. (
Ball v. GTE Mobilnet of California (2000) 81 Cal.App.4th 529, 534-35.)

Defendant first demurs to Plaintiff’s two causes of action on grounds that this case
should be dismissed for lack of subject matter jurisdiction. (Def.’s Ps & As at 1-2, 10-
11.) The basis for Defendant’s argument is the Board’s decision in the case of Ace
Tomato Co. and UFW (2012) 38 ALRB No. 8. (Id.)

This Court’s Order denying the TRO analyzed Ace , applied it to the facts of this case,
and found that until a Court of Appeal either affirms the Board’s decision or the time for
review has passed, this Court cannot “enforce” the Board’s decision because there is
“no legal mechanism” permitting it to do so. (Order at 3-4 (applying Ace Tomato Co.
and UFW (2012) 38 ALRB No. 8 at p.7).) The Court’s Order denying TRO is
incorporated in its entirety by reference here.

The Order denying the TRO turned on the fact that the Court did not have the authority
to, in effect, order immediate enforcement of the Board’s decision, which would have
been the consequence of the requested TRO. (See id. at 4 (“There is thus no legal
mechanism by which UFW may seek to enforce the CBA at this time. The Ace
decision makes clear that what the UFW sought in that case and now seeks in the
instant case is the “immediate implementation of the agreement . . .”) (emphasis
added).) In denying the TRO, the Court found that it could not, at present, order
immediate “enforcement” of the Board decision. (Id.) However, such finding is not
tantamount to a finding that this Court lacks jurisdiction over this enforcement action.
Indeed, the plain text of Labor Code § 1164.3(f) provides that, “Within 60 days after the
order of the board takes effect, either party or the board may file an action to enforce
the order of the board, in the superior court for the County of Sacramento . . . .” (Labor
Code § 1164.3(f) (emphasis added).) Accordingly, outside the context of a request for
immediate preliminary affirmative injunctive relief, at some point this Court undoubtedly
has jurisdiction to “enforce” Board decisions. (See Labor Code § 1164.3(f).) The
question is when it may do so.

The answer is patent. “Within 60 days after the order of the board takes effect, either
party or the board may file an action to enforce the order of the board, in the superior
court for the County of Sacramento . . . .” (Labor Code § 1164.3(f) (emphasis added).)
Similarly, the plain text of Labor Code § 1164.5(a) provides that, “Within 30 days after
the order of the board takes effect, a party may petition for a writ of review in the court
of appeal or the California Supreme Court . . .” (Labor Code § 1164.5(a) (emphasis
added).) Both sections refer to a Board decision “taking effect,” and Labor Code §
1164.5(a) uses this language even though it describes the process of appellate review
of the Board’s decision. Courts should construe all provisions of a statute together, (
Turner v. Board of Trustees (1976) 16 Cal.3d 818) significance being given when
possible to each word, phrase, sentence, and part of the act in pursuance of the
legislative purpose. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal. 4th
1106.) Accordingly, taking both of the above-quoted sections together, they indicate
that a Board decision “takes effect” as soon as the Board issues its decision.
On this reading of the relevant statutes, then, Labor Code § 1164.3(f) requires actions
to “enforce the order of the Board” to be filed within 60 days of the Board issuing its
final decision, suggesting that this Court at least has jurisdiction to decide whether or
not to “enforce” Board decisions in actions filed within such time frame. Labor Code §
1164.3(f) does not, however, specify what preconditions must be satisfied before this
Court can actually “enforce” a Board’s decision and make a merits-based finding in the
filing party’s favor, which is where Ace comes in. (See Order denying TRO at 3-4
(Section “1164.3(f) establish[es] procedures for reducing a Board decision to a
judgment where no appellate court review has been sought . . . .”) (emphasis added)
(quoting Ace).)

In Ace, the Board clarified that Labor Code § 1164.3(f) is the mechanism to enforce a
Board decision where no Court of Appeal determination of the Board’s decision has
been sought. (Ace, supra, 38 ALRB at 5-7 (“where a judgment of the Court of Appeal
affirming the Board’s order has been entered, it would be unnecessary to bring a
separate proceeding in superior court under section 1164.3, subdivision (f), or any
other provision, in order to transform the Board’s order into a judgment.”).) The Board
explained, “the Board’s decisions are not self-enforcing. Rather, in order to enforce its
decisions, the Board must first obtain a judgment. That can occur in two ways. First . . .
an order of an appellate court affirming the Board’s decision constitutes a judgment.
Second, where a Board order becomes final because the time for appellate court
review has lapsed, the Board must get a court order reducing the Board’s decision to a
judgment .” (Id. (emphasis added).) The Board also held that: “[a]t this time, the
Board’s decision has neither been affirmed by a reviewing court nor has the time for
review lapsed. Consequently, there is no legal mechanism through which the Board
can seek to enforce its decision at this time.” (Id. (emphasis in Ace).)

The Court looks to the pleaded facts in analyzing a demurrer, and here, the Complaint
is silent as to whether any Court of Appeal has affirmed or rejected the Board’s order.
The Complaint is also silent as to whether any Court of Appeal has been asked to
render judgment upon the Board’s order. However, through judicially noticeable
documents properly considered on demurrer (see Bach v. McNelis (1989) 207
Cal.App.3d 852, 864), it appears that Defendant has filed an appeal of the Board’s
decision and that such appeal is currently pending in the Fifth District Court of Appeal.
(Def.’s RJN Exhs. F-I.) Applying the above-quoted portions of Ace, while such appeal
is pending this Court cannot order “enforcement” of the Board’s decision — however,
this is not necessarily tantamount to this Court’s lacking jurisdiction to decide the issue
of enforcement. The Ace holding does not speak to whether or when a trial court will
have jurisdiction to decide whether to enforce the Board’s decision. Accordingly,
Defendant has not persuaded the Court that it lacks jurisdiction to decide the issue of
enforceability of the Board’s decision under Labor Code § 1164.3(f). Defendant’s
demurrer is OVERRULED in this regard.

However, Defendant also demurs on the ground that Plaintiff’s pleading fails to allege
facts sufficient to support enforcement of the Board’s decision under Labor Code §
1164.3(f). (Demurrer at 1-2; Def.’s Ps & As at 11-12.) This argument is well-taken. As
described above, the Complaint does not allege facts indicating that either
precondition for “enforcement” under Section 1164.3(f) has been satisfied. The Board
has explained that its own “decisions are not self-enforcing. Rather, in order to enforce
its decisions, the Board [or a party] must first obtain a [court] judgment [affirming the
Board’s decision]. That can occur in two ways. First . . . an order of an appellate court affirming the Board’s decision constitutes a judgment. Second, where a Board order
becomes final because the time for appellate court review has lapsed, the Board must
get a court order reducing the Board’s decision to a judgment.” (Ace, supra, 38 ALRB
at 5-7.)

Plaintiff’s pleading is silent as to whether either of these conditions precedent to
enforcement has occurred. Moreover, Plaintiff’s Opposition to the demurrer fails to
address the issue of the sufficiency of the factual allegations underlying its claims.
Accordingly, the demurrer to the first cause of action is SUSTAINED WITH LEAVE TO
AMEND. (Code Civ. Proc. § 430.10(e).)

Plaintiff will have the opportunity to amend its pleading to include additional factual
allegations. Given the judicially noticeable fact that Defendant has appealed the
Board’s decision, Plaintiff’s pleading can be amended to include factual allegations
regarding the timing of the outcome of such appeal, if any, and/or factual allegations
regarding the lapse of the time for appellate court review of the Board’s decision. In
other words, Plaintiff’s amended pleading should include factual allegations pertaining
to the “two ways” a Board decision can be “enforced” as described in Ace . (Ace,
supra, 38 ALRB at 5-7.)

Defendant makes a similar argument as to the sufficiency of the factual allegations
underlying Plaintiff’s second cause of action for “breach of labor contract” under Labor
Code § 1165. (Demurrer at 2; Def.’s Ps & As at 11-12 (“because the Board Order is
not enforceable at this time, Plaintiff cannot plead facts sufficient to show the existence
of an enforceable contract between Gerawan and the UFW for purposes of the Second
Cause of Action; the existence of a valid and enforceable contract is, indisputably, an
element of a cause of action for breach of contract”).)

Plaintiff’s Opposition fails to address Defendant’s argument regarding the sufficiency of
the factual allegations underlying its claim for breach of labor contract under Labor
Code § 1165. Plaintiff has not cited authorities indicating that the factual allegations in
its pleading are sufficient to support a claim for breach of labor contract even though
the Board’s decision regarding such contract has not yet been deemed enforceable.

Accordingly, the demurrer to the second cause of action is SUSTAINED WITH LEAVE
TO AMEND. (Code Civ. Proc. § 430.10(e).) Plaintiff will have the opportunity to
amend its pleading to include additional factual allegations pertaining to the formation
and validity of the labor contract it alleges, and factual allegations pertaining to the
enforceability of that “contract” insofar as it takes the form of a Board decision that has
not yet been affirmed by an appellate court.

In accordance with the foregoing, Plaintiff shall file and serve a first amended
complaint (“FAC”) by no later than May 9, 2014. Defendant’s response thereto to be
filed and served within 10 days thereafter, 15 days if the FAC is served by mail.
(Although not required by any statute or rule of court, Plaintiff is requested to attach a
copy of the instant minute order to the FAC to facilitate the filing of that pleading.)

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or other notice is required.