Ibew Local 595 v. B-Side Inc.

FILED
NOT FOR PUBLICATION JUN 11 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ZOOM ELECTRIC, INC., No. 13-15441
Petitioner, D.C. No. 4:11-cv-01699-CW
and
MEMORANDUM*
INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS, LOCAL
595; ET AL.,
Counter-plaintiffs - Appellees,
v.
VEIKO HORAK; DOES, One through
Ten,
Counter-defendants,
and
B-SIDE, INC.,
Counter-cross-claimant-
defendant - Appellant.
Appeal from the United States District Court
for the Northern District of California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Claudia Wilken, Senior District Judge, Presiding
Argued and Submitted May 14, 2015
San Francisco, California
Before: PAEZ and CLIFTON, Circuit Judges, and DUFFY, District Judge.**
Appellant B-Side (“B-Side”) appeals the district court’s grant of summary
judgment and attorneys’ fees in favor of Appellees, a Union and related Trust
Funds (the “Union”). B-Side is a general contractor who engaged an unlicensed
subcontractor, Zoom Electric, Inc. (“ZEI”), on a public works project. In the
course of the project, ZEI failed to hire Union labor and failed to pay certain
benefits, in violation of the Project Labor Agreement (“PLA”). The Union
successfully brought a claim against ZEI through the PLA’s grievance arbitration
procedure. B-Side was not named in the Union’s grievance, but its representative
attended the hearing before the Joint Administrative Committee (“JAC”). ZEI
moved in district court to vacate the JAC award. In a cross-complaint, the Union
added B-Side as a party before the district court. The district court determined that
B-Side was vicariously liable for the amounts that ZEI owed to the Union, granted
summary judgment and awarded attorneys’ fees in favor of the Union. The district
court had jurisdiction pursuant to 29 U.S.C. §§ 185 and 1132, and we have
**
The Honorable Kevin Thomas Duffy, District Judge for the U.S. District
Court for the Southern District of New York, sitting by designation.
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jurisdiction over the appeal pursuant to 28 U.S.C. § 1291. For the reasons set forth
herein, we affirm the judgment of the district court.
We review “de novo the district court’s grant of summary judgment to
determine whether, viewing all evidence in the light most favorable to the
nonmoving party, there are any genuine issues of material fact and whether the
district court correctly applied the relevant substantive law.” Whitman v. Mineta,
541 F.3d 929, 931 (9th Cir. 2008).
The primary question on appeal is whether California Labor Code section
2750.5 (“section 2750.5”) applies to assign liability for the JAC award.1 If a
subcontractor lacks a required license, section 2750.5’s presumption that the
general contractor is its employer is “conclusive.” Cedillo v. Workers’ Comp. App.
Bd., 130 Cal. Rptr. 2d 581, 585 (Ct. App. 2003); see also Ramirez v. Nelson, 188
P.3d 659, 661 (Cal. 2008); State Comp. Ins. Fund v. Workers’ Comp. App. Bd., 706
P.2d 1146, 1153 (Cal. 1985). Section 2750.5 thereby operates to impose liability
on a general contractor for liabilities incurred by an unlicensed subcontractor, see,
e.g., Hunt Bldg. Corp. v. Bernick, 93 Cal. Rptr. 2d 883, 888 (Ct. App. 2000), and
makes B-Side liable to the Union for the JAC award.
1
B-Side purports to appeal a number of other district court rulings, but
makes no argument about those rulings in its briefs, thereby waiving any challenge
to those rulings. See Christian Legal Soc’y Chapter of Univ. of Cal. v. Wu, 626
F.3d 483, 485 (9th Cir. 2010).
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B-Side acknowledges that ZEI was required to have a license and did not
have one, but argues that section 2750.5 applies to workers’ compensation and tort
claims only. B-Side’s argument is undermined by the California appellate courts’
interpretation of the statute.2 See Sanders Constr. Co. v. Cerda, 95 Cal. Rptr. 3d
911, 913, 915 (Ct. App. 2009) (applying section 2750.5 against a general
contractor for wages, interest, and penalties owed to six laborers employed by an
unlicensed subcontractor); Hunt, 93 Cal. Rptr. 2d at 885, 888 (applying section
2750.5 to hold general contractor liable for the unlicensed subcontractor’s unpaid
benefits contributions and withholding taxes). Likewise, the policy rationales for
section 2750.5, as explained by the California courts, support its application to B-
Side in this case. See Hunt, 93 Cal. Rptr. 2d at 889-90 (“social insurance tax
obligations” and “employee pension funds” are among the benefits to be protected
by the statute).
Awards of attorneys’ fees are reviewed for abuse of discretion. Fischer v.
SJB-P.D. Inc., 214 F.3d 1115, 1118 (9th Cir. 2000). “The district court’s factual
determinations will not be set aside absent clear error. Any element of legal
2
In the absence of “convincing evidence that the state supreme court would
decide the issue differently,” we “look to the decisions of the intermediate state
courts of appeal” in deciding questions of state law. Miller v. Fairchild Indus.,
Inc., 797 F.2d 727, 735 (9th Cir. 1986).
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analysis which figures in the district court’s decision is reviewed de novo.” Id.
(internal citations omitted).
B-Side fails to identify any abuse of discretion in the district court’s fee
award. First, B-Side’s argument that the award was improper under California
Labor Code section 218.5 is unpersuasive because the district court expressly
declined to reach that fee-shifting provision. Second, B-Side’s argument that it is
not vicariously liable and that the Union is not a prevailing party fails because we
affirm the district court’s summary judgment ruling, and thus the Union remains
the successful party under California Code of Civil Procedure section 1021.5. See
Tuthill v. City of San Buenaventura, 167 Cal. Rptr. 3d 820, 831 (Ct. App. 2014).
Third, B-Side’s argument that the “special circumstances” doctrine should preclude
a grant of fees against B-Side for the portion of litigation that predated the cross-
complaint fails because B-Side sets forth no special circumstance that would place
it within that narrow exception. See Vasquez v. Rackauckas, 734 F.3d 1025, 1055
(9th Cir. 2013).
Accordingly, the grant of summary judgment in favor of the Union and the
award of attorneys’ fees are AFFIRMED.
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