Huh v. Mono County Office of Education ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 JENNIFER HUH, an individual, No. 2:19-cv-00170 WBS KJN 13 Plaintiff, 14 v. ORDER RE: DEFENDANTS’ MOTION TO DISMISS 15 MONO COUNTY OFFICE OF EDUCATION, STACEY ADLER, and DOES 1 through 16 30, inclusive, 17 Defendants. 18 19 ----oo0oo---- 20 Plaintiff Jennifer Huh brought this action against 21 defendants Mono County Office of Education (“the County”) and 22 Stacey Adler (“Adler”) (collectively, “defendants”) asserting 23 violations of 42 U.S.C. § 1983 and California state law arising 24 out of her employment and subsequent termination by the County. 25 Before the court is defendants’ motion to dismiss for failure to 26 state a claim and motion to strike. (Docket No. 32.) 27 I. Facts 28 Plaintiff was employed by the County from January 2011 1 until June 2018. (Second Am. Compl. (“SAC”) ¶ 17 (Docket No. 2 30).) In July 2017, plaintiff was promoted to Deputy 3 Superintendent and took on the added responsibility of serving as 4 human resources director. (Id. ¶ 20.) As Deputy Superintendent, 5 plaintiff reported directly to defendant Adler, the 6 Superintendent of the County. (Id. ¶¶ 5, 19-20.) Plaintiff 7 alleges that several months after she began working as Deputy 8 Superintendent, she learned that defendant Adler was issuing 9 stipend checks to herself and others without first getting 10 approval from the County’s Board of Trustees (“the Board”), 11 accounting for the payments in the public record, or notifying 12 the union. (Id. ¶ 21.) In total, members of Adler’s cabinet 13 were paid $73,000 in stipend checks and Alder herself was paid 14 $24,000. (Id.) 15 Plaintiff confronted Adler about the payments and Adler 16 allegedly offered to issue her a payment, “apparently in an 17 effort to silence [her] about the illegal ‘stipends’.” (Id. ¶ 18 23.) Plaintiff declined the payment, and instead reported 19 Adler’s conduct to the Board. (Id. ¶¶ 23-24.) 20 In December 2017, plaintiff claims community members 21 and County staff members began urging her to run for 22 Superintendent to replace Adler. (Id. ¶ 25.) The local 23 newspaper formally announced plaintiff’s candidacy on January 26, 24 2018. (Id. ¶ 28.) On February 4, 2018, Adler notified plaintiff 25 that she would no longer serve as the director of human resources 26 or as a member of Adler’s cabinet. (Id. ¶ 29.) Plaintiff, 27 believing that her demotion was a retaliatory act that violated 28 the California Education Code, reported it to the Board on 1 February 12, 2018. (Id. ¶ 30.) The Board asked Adler to repay 2 the money she had paid to herself shortly thereafter. (Id. ¶ 3 31.) 4 Plaintiff responded to the local newspaper’s questions 5 about the stipend payments Adler made to herself and others 6 allegedly in her capacity as a private citizen and political 7 candidate in March 2018. (Id. ¶ 32.) Plaintiff alleges that, in 8 response, Adler instructed the County’s human resources staff to 9 send plaintiff’s private personnel file to Adler’s campaign 10 office. (Id. ¶ 33.) The staff members did so, allegedly under 11 protest. (Id.) 12 In April 2018, the County sent, and plaintiff signed, 13 an “Intent to Return” letter to renew her employment contract 14 with the County from July 1, 2018-June 30, 2019. (Id. ¶¶ 35-36.) 15 Plaintiff alleges that she and Mono County “mutually understood 16 that the submission by [d]efendant to [p]laintiff of an Intent to 17 Return letter constituted an offer for continued employment . . . 18 under [d]efendants’ policies and/or practices.” (Id. ¶ 35.) 19 Plaintiff promptly signed and returned the Intent to Return 20 letter, and the human resources department finalized plaintiff’s 21 employment contract, although that contract was never signed. 22 (Id. ¶ 36.) On June 29, 2018, Adler fired plaintiff and notified 23 her that the County would not be renewing her contract for the 24 2018-2019 term. (Id. ¶ 39.) Plaintiff alleges that defendants 25 did not give her notice or the opportunity for a hearing on the 26 revocation of her contract renewal. (Id. ¶ 41.) 27 Plaintiff’s Second Amended Complaint alleges violation 28 of (1) her First Amendment rights under 42 U.S.C. § 1983; (2) 1 deprivation of property without due process in violation of the 2 Fourteenth Amendment under 42 U.S.C. § 1983; (3) retaliation in 3 violation of California Education Code § 44113; (4) retaliation 4 in violation of California Labor Code §§ 98.6 and 1102.5; (5) 5 representative action under California Labor Code § 2699; (6) 6 violation of the right of privacy under the California 7 Constitution and (7) wrongful demotion and termination in 8 violation of California public policy. Defendants move to 9 dismiss plaintiff’s second, third, and fourth causes of action.1 10 (Docket No. 32.) 11 II. Legal Standard 12 On a Rule 12(b)(6) motion, the inquiry before the court 13 is whether, accepting the allegations in the complaint as true 14 and drawing all reasonable inferences in the plaintiff’s favor, 15 the plaintiff has stated a claim to relief that is plausible on 16 its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A 17 claim has facial plausibility when the plaintiff pleads factual 18 content that allows the court to draw the reasonable inference 19 that the defendant is liable for the misconduct alleged.” Id. A 20 complaint that offers mere “labels and conclusions” will not 21 survive a motion to dismiss. Id. (citations and quotations 22 omitted). 23 III. Discussion 24 A. Fourteenth Amendment 25 1 Defendants also moved to strike plaintiff’s claim for punitive damages against the County. (Docket No. 32.) However, 26 the parties filed a joint stipulation agreeing that plaintiff 27 will only seek punitive damages against Adler on October 14, 2019. (Docket No. 42.) Accordingly, the court will deny 28 defendant’s motion to strike as moot. 1 Title 42 U.S.C. § 1983 provides that “[e]very person 2 who, under color of [state law] subjects, or causes to be 3 subjected, any citizen of the United States ... to the 4 deprivation of any rights, privileges, or immunities secured by 5 the Constitution and laws, shall be liable to the party injured.” 6 Section 1983 does not create substantive rights, but instead 7 provides the procedural mechanism for vindicating federal 8 constitutional rights. Baker v. McCollan, 443 U.S. 137, 144 n.3 9 (1979). 10 To establish a due process violation, plaintiff must 11 show that she has a protected property interest under the Due 12 Process Clause and she was deprived of such property without 13 receiving the process that was constitutionally due. Levine v. 14 City of Alameda, 525 F.3d 903, 905 (9th Cir. 2008). State law 15 determines whether a protected property interest exists. 16 Clements v. Airport Authority of Washoe Cty., 69 F.3d 321, 331 17 (9th Cir. 1995) (citing Board of Regents v. Roth, 408 U.S. 564, 18 577 (1972)). “[A] state law which limits the grounds upon which 19 an employee may be discharged, such as conditioning dismissal on 20 a finding of cause,’ creates a constitutionally protected 21 property interest.” Dyack v. Commonwealth of N. Mariana Islands, 22 317 F.3d 1030, 1033 (9th Cir. 2003) (quoting Brady v. Gebbie, 859 23 F.2d 1543, 1548 (9th Cir. 1988)). 24 Under California law, an employment contract for a 25 specified term2 may be terminated only if the employee commits a 26 27 2 A “specified term” is defined as “for a period greater than one month.” Cal. Lab. Code § 2922. 28 1 willful breach of duty, habitually neglects her duty, or is 2 incapable of performing her duties. Cal. Lab. Code § 2924. When 3 the court first considered this claim, plaintiff did not 4 reference this statute or attach supporting documents to her 5 complaint. (See First Amended Complaint (Docket No. 12).) 6 Accordingly, the court dismissed plaintiff’s second claim without 7 prejudice. See Huh v. Mono County Office of Education, No. 2:19- 8 cv-00170-WBS-KJN, 2019 WL 3253921, at *4 (E.D. Cal. July 19, 9 2019) (Docket No. 25). But in amending her complaint, plaintiff 10 provided a copy of her Intent to Return letter, her 2017-2018 11 contract (in effect at the time of her firing) and the “processed 12 and finalized” 2018-2019 contract she would have signed on July 13 1, 2018.3 (SAC ¶ 36, Exs. A-C.) Together, these documents 14 15 3 If attached documents accompany a complaint, the documents become part of the complaint and may be considered by 16 the court. Roth v. Garcia Marquez, 942 F.2d 617, 625 n.1 (9th Cir. 1991). Accordingly, the court can consider plaintiff’s 17 2014-2015 Intent to Return letter and her employment contracts 18 from 2018-2018 and 2018-2019 on this motion to dismiss because they were attached to her Second Amended Complaint. (See SAC, 19 Exs. A-C (Docket No. 30-3).) Plaintiff attached her 2014-2015 Intent to Return 20 letter to her complaint because she did not have possession of the 2018-2019 copy. (SAC ¶ 55.) Parties concede that the 21 language from the 2014-2015 letter and the 2018-2019 letter at 22 issue are identical, save the specified year. (See Defs.’ ERRATA, ¶ 2 (Docket No. 40).) The signed 2018-2019 Intent to 23 Return was included with defendant’s ERRATA. (Id., Ex. A.) Ordinarily, when deciding a motion to dismiss, a court may not 24 consider material outside of that which is attached to the complaint. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). 25 But the court may consider documents outside of the complaint under certain circumstances. Id. The court finds it appropriate 26 to consider the 2018-2019 signed Intent to Return letter because 27 it is relied on by both parties and its authenticity is uncontested. (Defs.’ ERRATA, Ex. A.) 28 1 support the plausibility of plaintiff’s allegation that she was 2 deprived of a protected property interest without due process. 3 Although plaintiff and Adler did not sign the 2018-2019 4 contract (id. ¶ 36), the Intent to Return letter states that the 5 County “may employ someone else for [a] position” if an employee 6 fails to return the letter. (Defs.’ ERRATA, Ex. A.) This gives 7 rise to at least the implication that returning the letter and 8 expressing an intent to return means that the County cannot 9 employ someone else, and the employee cannot be terminated but 10 for the occurrence of one of the events specified by the 11 employee’s contract. (See SAC, Exs. B, C.) Plaintiff signed and 12 returned the 2018-2019 Intent to Return letter in a timely 13 fashion. (SAC ¶ 36; Defs.’ ERRATA, Ex. A.) The conditions under 14 which plaintiff could be fired, including abandonment, 15 retirement, or failure to maintain a credential, were not 16 present. (See SAC, Exs. B, C.) Consequently, plaintiff has 17 plausibly alleged that she had a protected property interest 18 under the Due Process Clause of the Fourteenth Amendment. 19 Accordingly, at this stage of the proceeding, the court will deny 20 defendants’ motion to dismiss this claim. 21 B. California Education Code § 44113 22 California Education Code Section 44113(a) prohibits an 23 employee working in a supervisory position from “directly or 24 indirectly us[ing]” their “official authority” to interfere with 25 the right of another to disclose “improper governmental activity” 26 to an “official agent.” Cal. Educ. Code § 44113(a); see also 27 Conn v. W. Placer Unified School Dist., 186 Cal. App. 4th 1163, 28 1167-68 (3d Dist. 2010). The statute defines the “use of 1 official authority or influence to include,” inter alia, 2 “promising to confer or conferring any benefit; affecting or 3 threatening to affect any reprisal; or taking, directing others 4 to take, recommending, processing, or approving any personnel 5 action, including, but not limited to appointment, promotion, 6 transfer, assignment[.]” Cal. Educ. Code. § 44113(b). “Improper 7 governmental activity” includes activities undertaken in the 8 performance of the employee’s official duties that violates 9 either a state or federal law or is “economically wasteful.” 10 Cal. Educ. Code § 44112(c). 11 Defendants contend that plaintiff has not alleged facts 12 sufficient to meet the pleading standards under Rule 12(b)(6). 13 Defs.’ Mot. to Dismiss at 10. However, plaintiff’s complaint is 14 largely founded on allegations that Adler committed a series of 15 improprieties as Superintendent that fall within § 44113, 16 including the potentially illegal stipend payments (SAC ¶¶ 21- 17 22), bribery (SAC ¶ 23 (Adler “offered to issue [p]laintiff a 18 payment herself, apparently in an effort to silence [p]laintiff 19 about the illegal stipends”)), demotion (SAC ¶ 29), intimidation 20 (SAC ¶ 42), and wrongful termination (SAC ¶ 39). These 21 allegations raise a plausible claim that defendant Adler violated 22 Section § 44113’s prohibition on the use of official authority by 23 a public school employee in order to interfere with plaintiff’s 24 disclosure of improper governmental activities. Accordingly, the 25 court will deny defendant’s motion to dismiss as to the § 44113 26 claim. 27 C. California Labor Code §§ 98.6 and 1102.5 28 Plaintiff’s fourth claim is that defendant County 1 violated California’s so-called whistle-blower protection laws, 2 California Labor Code Sections 98.6 and 1102.5. Together, these 3 two sections prohibit employers from retaliating against 4 employees who disclose information to “a person with authority 5 over the employee or another employee who has the authority to 6 investigate, discover, or correct the violation or noncompliance” 7 if the employee “has reasonable cause to believe that the 8 information discloses a violation of state or federal statute, or 9 a violation of or noncompliance with a local, state, or federal 10 rule or regulation.” See Cal. Labor Code § 1102.5(b). 11 The County offers four arguments against plaintiff’s 12 retaliation claim in its brief. First, defendant argues 13 plaintiff has not properly alleged that she exhausted 14 administrative remedies before initiating this action. (Mot. to 15 Dismiss at 11-12.) Second, defendant argues plaintiff filed her 16 complaint with the labor commissioner after her alleged 17 termination and has not alleged any facts showing that she was 18 discriminated against as a result of her complaint with the labor 19 commissioner. (Id. at 12.) Third, defendant challenges 20 plaintiff’s claim on the grounds that plaintiff’s disclosures did 21 not concern illegal conduct. (Id. at 13; Reply to Opp. to Mot. 22 to Dismiss at 6 (Docket No. 43).) Fourth, the County argues that 23 plaintiff has inadequately alleged a causal relationship between 24 her reports to the Board of Trustees and the adverse actions she 25 suffered. (Mot. to Dismiss at 14; Reply to Opp. to Mot. to 26 Dismiss at 6.) The court will address each argument in turn. 27 In its brief, defendant argued that actions brought 28 under California Labor Code Section 98.6 are subject to Section 1 98.7’s pre-filing administrative remedies provision, relying 2 primarily on federal law. (Mot. to Dismiss at 11.) But at oral 3 argument, counsel for defendant conceded that Section 98.6 of the 4 Labor Code does not contain an exhaustion requirement. (Docket 5 No. 44.) Plaintiff need not exhaust the remedies set forth in § 6 98.7 before bringing her claim under §§ 98.6 and 1102.5, and 7 consequently, her claim will not be dismissed for failure to 8 exhaust. 9 Next, defendant is correct that “[p]laintiff has not 10 alleged any facts showing that she was discriminated against as a 11 result of filing a complaint [in September 2018] with the Labor 12 Commissioner.” (Mot. to Dismiss at 12 (emphasis in original).) 13 But as discussed above, she did not need to file a complaint with 14 the Labor Commissioner before bringing suit. Plaintiff alleges 15 that her June 2018 termination was in retaliation for her 16 September 2017 and February 2018 disclosure to the Board of what 17 she believed to be illegal acts. (SAC ¶¶ 30, 40.) As alleged, 18 the County as her employer took “adverse action against [an] 19 employee” who “engaged in [] conduct described in . . . Chapter 20 5,” which includes § 1102.5(b). Cal. Lab. Code § 98.6. 21 Plaintiff alleges that she was retaliated against for 22 “disclos[ing] information . . . to a person with authority over 23 the employee or another employee who has the authority to 24 investigate, discover, or correct the violation.” Cal. Lab. Code 25 § 1102.5. Accordingly, defendant’s argument that plaintiff’s 26 claim should be dismissed because she failed to allege she was 27 retaliated against as a result of filing a complaint fails. 28 Defendant next argues that plaintiff’s fourth claim 1 should be dismissed because plaintiff “has merely stated a 2 laundry list of codes but fails to state any supporting facts 3 that the payment of the stipends was actually a violation of 4 [those codes].” (Mot. to Dismiss at 14.) But under the statute, 5 plaintiff need only allege that she had “reasonable cause to 6 believe that the information discloses a violation of state or 7 federal statute, or a violation of or noncompliance with a local, 8 state, or federal rule or regulation.” Cal. Lab. Code § 9 1102.5(b). The relevant inquiry is not whether the stipend 10 payments actually violated any specific statute or regulation, 11 but rather, whether she reasonably believed they did at the time 12 she reported them. See Carter v. Escondido Union High Sch. 13 Dist., 148 Cal. App. 4th 922, 933-34 (4th Dist. 2007). Here, 14 plaintiff’s allegations support a reasonable belief that a 15 violation of state or local law was occurring, and the court will 16 not dismiss the claim on this ground. 17 Finally, defendant’s fourth argument against 18 plaintiff’s Labor Code claims is that plaintiff has not 19 sufficiently alleged a causal link between her report to the 20 Board and any subsequent employment action. Time gaps between a 21 protected activity and an alleged adverse action can defeat the 22 inference of causation. Manatt v. Bank of Am., NA, 339 F.3d 792, 23 802 (9th Cir. 2003) (finding nine months between plaintiff’s 24 complaint and an adverse employment action was too attenuated). 25 But “timing of an adverse employment action is only one of the 26 many ways a plaintiff can establish causation.” Gwin v. Target 27 Corp., No. 12–05995 JCS, 2013 WL 5424711, *13 (N.D. Cal. Sep. 27, 28 2013) (collecting cases). Here, however, plaintiff’s complaint 1 contains additional allegations indicating she may be able to 2 establish causation by other means. While plaintiff was not 3 terminated from her position until June 2018, plaintiff was 4 demoted in February 2018 after announcing her candidacy against 5 Adler in January 2018 and reporting Adler’s conduct to the Board 6 in September 2017. (SAC 24, 28, 30, 39.) At this early 7 stage, then, the court cannot conclude that plaintiff has not 8 plausibly alleged causation. Accordingly, the court will deny 9 | defendant’s Motion to Dismiss as to plaintiff’s fourth claim. 10 IT IS THEREFORE ORDERED that defendants’ Motion to 11 Dismiss (Docket No. 32) be, and thereby is, DENIED in full. 12 IT IS FURTHER ORDERED that defendants’ motion to strike 13 (Docket No. 32) be, and the same thereby is, DENIED AS MOOT. 14 | Dated: November 6, 2019 he bloom HK fid..t€-—- 15 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 12