SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO
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1 MICHAEL A. CONGER, ESQUIRE (State Bar #) LAW OFFICE OF MICHAEL A. CONGER P.O. Box San Dieguito Road, Suite - Rancho Santa Fe, CA 0 Telephone: () -000 Facsimile: () - Attorneys for Plaintiffs JANET M. WOOD individually, and on behalf of all others similarly situated SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO JANET M. WOOD, individually, and on ) CASE NO: CU-CR-CTL behalf of all others similarly situated, ) ) Plaintiff, ) v. ) MEMORANDUM OF POINTS AND ) AUTHORITIES IN SUPPORT OF THE CITY OF SAN DIEGO; and DOES ) ) PLAINTIFF'S MOTION FOR SUMMARY ADJUDICATION OF THE CITY'S FIFTH through 0, inclusive, ) AFFIRMATIVE DEFENSE ) Defendants. ) ) Date: March, 0 ) Time: :00 a.m. ) Judge: Hon. Richard E. L. Strauss ) Dept: C- ) Action Filed: December, 0 ) Trial: Not yet set 0 Memorandum of Points and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
2 TABLE OF CONTENTS. INTRODUCTION... II. III. IV. ST ATEMENT OF MATERIAL FACTS... STATEMENT OF PROCEDURE... THE STANDARDS FOR SUMMARY ADJUDICATION OF AN AFFIRMATIVE DEFENSE... V. WOOD IS ENTITLED TO SUMMARY ADJUDICATION OF THE CITY'S FIFTH AFFIRMATIVE DEFENSE... VI. A. General Principles of Rule-Making Authority... B. The FEHA Prohibits "Marital Status" Discrimination... C. The FEHC Has Adopted a Regulation Exempting Bona Fide Fringe Benefit Plans Which Provide Spousal Benefits from the Statutory Prohibition of Marital Status Discrimination... D. Section. of Title of the California Code ofregulations Is Invalid Because That Regulation Narrows the Scope of Government Code Section, Subdivision (a)... CONCLUSION... 0 Memorandum ofpoints and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
3 TABLE OF AUTHORITIES Cases Agricultural Labor Relations Bd v. Superior Court () Ca.d... Aguilar v. Atlantic Richfield Co. (00) Ca.th... Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris () U.S.... California Employment Commission v. Kovacevich () Ca.d... California School Bds. Assn. v. State Bd. ofeducation (0) Cal.AppAth 0..., County ofsanta Cruz v. State Bd offorestry () Cal.AppAth... Hinman v. Department ofpersonnel Admin. () Cal.App.d... - Los Angeles Depart. ofwater & Power v. Manhart () U.S Nortel Networks Inc. v. Board ofequalization (0) Cal.AppAth... Wood v. City ofsan Diego (th Cir. 0) F.d... 0 Statutes Code of Civil Procedure c, subd. (a)... c, subd. (c)... c, subd. (f)() Memorandum ofpoints and Authorities in Support ofplaintiffs Motion for Summary Adjudication [etc.]
4 Government Code , subd. (e)......,, subd. (a)..., -,, subd. (a)()(b)... -, United States Code Title 000e-... Regulations 0 California Code ofregulations Title , subd. (a)....0, subd. (b)...,., subd. (a) , -., subd. (a)(l)(a)..., Municipal Laws San Diego Municipal Code , et seq... Memorandum ofpoints and Authorities in Support ofplaintiff's Motion for Summary Adjudication [etc.]
5 .00(c)()... Other Authorities Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 0), '!l:0. p IV Memorandum of Points and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
6 I. INTRODUCTION 0 Government Code section, which is part ofthe Fair Employment and Housing Act ("FERA"), prohibits marital status discrimination in employment compensation. It provides in relevant part: "It is an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California: (a) For an employer, because ofthe... marital status... of any person... to discriminate against the person in compensation or in terms, conditions, or. privileges of employment." (Italics added.) This is a marital status discrimination action challenging a City ofsan Diego ("City") ordinance that provides higher compensation to employees who are married than to those who are not. This higher compensation to married employees is provided in the form of a fifty percent (0 %) surviving spouse continuance pension benefit ("SSCB"). The SSCB is provided only to married City employees. Those employees unmarried on the day they retire, such as plaintiff Janet M. Wood, who worked for the City for more than years, did not receive the valuable SSCB. Because the City funds a portion of the SSCB, it pays higher compensation to employees who are married. Therefore, the City's ordinance violates the marital status discrimination prohibition of the FERA. In its May, 0 answer to Wood's first amended complaint, the City raised as its fifth affirmative defense a contention that the SSCB is authorized by a regulation. In this motion for summary adjudication, Wood seeks a order adjudicating that the City's fifth affirmative defense is without merit, because the regulation relied upon by the City is inalid because it impermissibly narrows the scope of a controlling statute, Government Code section. II. STATEMENT OF MATERIAL FACTS Wood is a former long-time employee of the City, who retired "from a distinguished career with the City... that spanned classifications in three different departments over years." (First Amended Complaint for Discrimination ("FAC"), j.) Wood is vested in a retirement plan established by San Diego Municipal Code section.00, et seq., known as the San Diego City Employees' Retirement System ("SDCERS"). (F AC, ~.) SDCERS was Memorandum of Points and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
7 expressly established, in part, "to recognize a public obligation to City employees for their long service in public employment by making provision for retirement compensation and death benefits as additional elements ofcompensation" for services rendered in the employ ofthe City of San Diego. (San Diego Municipal Code ("SDMC").00, attached to the accompanying Request for Judicial Notice in Support ofmotion for Summary Adjudication [etc.] ("RJN"), Exh., italics added.) Wood's retirement allowance was established in 00, when she joined the City's deferred retirement option plan ("DROP"). (F AC, ~.) Because Wood was unmarried at the time ofher retirement, she received retirement benefits worth less than her married counterparts. (F AC, ~~ -.) Specifically, SDMC section.00 (c)() provides: "When a retired Member dies, the System will pay the Member's surviving spouse a monthly allowance equal to 0% of the Member's monthly retirement allowance if... the spouse was married to the Member on the date the Member retired..." (RJN, Exh..) The City created and has maintained this discriminatory compensation scheme despite its facially discriminatory payout disparity to married employees. (FAC,"-~ -.) III. STATEMENT OF PROCEDURE On September,00, Wood filed a complaint in the United States District Court for 0 the Southern District of California alleging gender discrimination in violation of Title VII ( U.s.C. 000e~) and marital status discrimination in violation ofthe FEHA (Gov. Code,, subd. (a». On January,00, the district court, acting sua sponte, dismissed Wood's Title VII claim for lack of standing. Wood appealed that dismissal. On April, 00, the United States Court ofappeals for the Ninth Circuit reversed that dismissal and remanded the case to the district court. In August 0, the City moved to dismiss Wood's Title VII gender discrimination A llth()tltlp~ in Support Motion for Summary Adjudication [etc.]
8 claim.! The City expressly requested the district court to dismiss Wood's pendant state law claims, for marital status discrimination and for sex discrimination "without prejudice." On November,0, the district court granted the City's motion to dismiss and dismissed Wood's state law claims vvithout prejudice. On November,0, Wood appealed the dismissal ofher Title VII gender discrimination claims. On May, 0, in a published opinion, the Ninth Circuit Court of Appeal upheld the district court's dismissal of Wood's Title VII gender discrimination claim, but on grounds different from those stated by the district court. (Woodv. City o/san Diego (th Cir. 0) F.d.) Meanwhile, on December,0, Wood commenced this state court action to pursue her state law claims. Wood filed her first amended complaint on January, 0. On March, 0, the City filed general and special demurrers to Wood's first amended complaint. On April,0, the Court overruled the City's general and special demurrers. On May,0, the City filed its answer to Wood's first amended complaint, raising as its fifth affirmative defense its contention that the SSCB is authorized by section. oftitle of the California Code of Regulations. (City's Answer, p. :-0.) In this motion for summary adjudication, Wood seeks an order adjudicating that the City's fifth affirmative defense lacks merit. 0 IV. THE STANDARDS FOR SUMMARY ADJUDICATION OF AN AFFIRMATIVE DEFENSE "[T]he court may summarily adjudicate that an affirmative defense to any cause of action is without merit." (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 0), ~ :0. p. -; Code Civ. Proc., c, subd. ()().) "Under summary judgment law, any party to an action, whether plaintiff or defendant, 'may move' the court 'for summary judgment' in his [or her] favor on a cause of action... or defense (Code Civ. Proc., c, subd. (a)-a plaintiff 'contend[ing]... that there is no defense status. Unlike the FEHA, Title VII does not prohibit discrimination based on marital Points and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
9 0 to the action,' a defendant 'contend[ingj that the action has no merit' [Citation.]. The court must 'grant[]' the 'motion' 'ifall the papers submitted show' that 'there is no triable issue as to any material fact' [citation ]-that is, there is no issue requiring a trial as to any fact that is necessary under the pleadings and, ultimately, the law [citations ]-and that the 'moving party is entitled to a judgment as a matter oflaw' (Code Civ. Proe., c, subd. (c)." (Aguilar v. Atlantic Richfield Co. (00) CaLth,.) The issue presented by this motion is purely one of law: the validity of section. of title ofthe California Code of Regulations. V. WOOD IS ENTITLED TO SUMMARY ADJUDICATION OF THE CITY'S FIFTH AFFIRMATIVE DEFENSE. A. General Principles of Rule-Making Authority Government Code section. provides in part: "Each regulation adopted, to be effective, shall be within the scope of authority conferred and in accordance with standards prescribed by other provisions oflaw." Government Code section. provides: "Whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or othenvise carry out the provisions ~f the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose ofthe statute." (Italics added.) Consistent with this statutory law, in Agricultural Labor Relations Bd v. Superior Court () Ca.d, -0, the Supreme Court reaffirmed: "It is settled that 'administrative regulations that violate acts of the Legislature are void and no protestations that they are merely an exercise of administrative discretion can sanctify them. They must conform to the legislative will ifwe are to preserve an orderly system of government.' (Morris v. Williams ()... Ca.d,,...) Nor is the motivation ofthe agency relevant: 'It is fundamental that an administrative agency may not usurp the legislative function, no matter how altruistic its motives are.' (City ojsan Joaquin v. State Bd ajequalization () Cal.App.d,...) The doctrine has been most frequently invoked to strike down administrative regulations in conflict with the statute which created the agency or which the agency is authorized to administer. (See, e.g., California Welfare Rights Organization v. Brian () Ca.d, -... ; Mooney v. Authorities in Support Motion for Summary Adjudication [etc.]
10 0 Pickett () Ca.d,0-... ; California Sch. Employees Ass'n v. Personnel Commission () Ca.d, -...) But the principle is equally applicable when the regulation contravenes a provision of a different statute. (See, e.g., Orloffv. Los Angeles TurfClub () Ca.d... ; Tolman v. Underhill () Ca.d 0... ; Harris v. Alcoholic Bev., etc., Appeals Bd. () Cal.App.d...)" "An agency does not have discretion to promulgate regulations that are inconsistent with the governing statute, alter or amend the statute, or enlarge its scope. [Citation.]" (California School Bds. Assn. v. State Bd. ofeducation (0) Cal.AppAth 0,.) "Where regulations are void because of inconsistency or conflict with the governing statute, a court has a duty to strike them down. (Littoral Development Co. v. San Francisco Bay Conservation Etc. Com. () Cal.AppAth 0,...) 'In the end, "[t]he court, not the agency, has 'final responsibility for the interpretation of the law' under which the regulation was issued. '" (Communities for a Better Environment v. California Resources Agency (00) Cal.AppAth,,...,fn. omitted.) [Courts] must conduct an independent examination to determine whether the agency "'reasonably interpreted the legislative mandate'" in enacting the regulation. [Citation.] '[T]he standard governing... resolution of the issue is one of"respectful nondeference.'" [Citation.]" (Ibid.) B. The FEHA Prohibits "Marital Status" Discrimination. Government Code secti'on provides in relevant part: "It is an unlawful employment practice, unless based upon a bona fide occupational qualification, or, except where based upon applicable security regulations established by the United States or the State of California: (a) For an employer, because of the... marital status... of any person... to discriminate against the person in compensation[] or in terms, conditions, or privileges of employment." (Italics added.) Subdivision (a)()(b) of that same section creates a limited exception by providing in "[P]ension benefits, and the contributions that maintain them, are 'compensation'..." (Los Angeles Depart. ofwater & Power v. Manhart () U.S. 0,, fn. ; Arizona Governing Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris () U.S., ["[t]here is no question that the opportunity to participate in a deferred compensation plan constitutes a 'conditio [ n] or privileg[e] of employment, [citation] and that retirement benefits constitute a form of 'compensation"'].) Memorandum ofpoints and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
11 0 part: "Nothing in this part relating to discrimination on account of marital status shall... prohibit bona fide health plans from providing additional or greater benefits to employees with dependents than to those employees without or with fewer dependents." (Italics added.) However, there is no such statutory exemption for fringe benefit plans other than health plans. C. The FEHC Has Adopted a Regulation Exempting Bona Fide Fringe Benefit Plans Which Provide Spousal Benefits from the Statutory Prohibition of Marital Status Discrimination. Under Government Code section, subdivision (e), the Fair Employment and Housing Commission (FEHC; see Gov. Code, ) is given statutory authority and power "[t]o adopt, promulgate, amend, and rescind suitable rules and regulations to carry out the [statutory] functions and duties of the department..." Pursuant to that authority and power, FEHC has adopted several regulations regarding marital status discrimination. (Cal. Code Regs., tit.,.0, subd. (a).) They are contained in title of the California Code of Regulations. (Cal. Code Regs., tit.,.0-..) Section.0, subdivision (b), properly recognizes that "[t]he purpose of the law prohibiting marital status discrimination is to make it unlawful for an employer or other covered entity to deny or grant employment benefits for the reason that an applicant or employee is either married or unmarried." Section., subdivision (a), defines "marital status" as "[a]n individual's state of marriage, non-marriage, divorce or dissolution, separation, widowhood, annulment, or other marital state" and "spouse" as "[a] partner in marriage as defined in Civil Code Section 0." Section. provides: "Marital status discrimination may be established by showing that an applicant or employee has been denied an employment benefit by reason of: (a) The fact that the applicant or employee is not married; (b) An applicant's or employee's 'single' or 'married' status, or In its answer, the City misstates Government Code section, subdivision (a)()(b), asserting that it permits bona fide "fringe benefit" plans. (City's Answer, filed May,0, p. :-.) Section, subdivision (a)()(b) actually only permits bona fide "health plans." The words "fringe benefit" do not appear in the statute. Support ofplaintif:fs Motion for Summary Adjudication (etc.]
12 0 (c) The employment or lack ofemployment of an applicant's or employee's spouse." However, section. creates a broad exception for "bona fide fringe benefit plans" that provide benefits to spouses and dependents: "(a) Fringe Benefits. () The availability ofbenefits to any employee shall not be based on the employee's marital status. However:. (A) Bona fide fringe benefit plans or programs may provide benefits to an employee's spouse or dependents; (B) Such bona fide fringe benefit plans or programs may decline to provide benefits to any individual who is not one ofthe following: an employee of the employer, a spouse ofan employee ofthe employer, or a dependent of an employee ofthe employer. () Insofar as an employment practice discriminates against individuals on the basis ofmarital status, fringe benefits shall not be conditioned upon whether an employee is 'head ofhousehold,' 'principal wage earner,' 'secondary wage earner,' or other similar status." (Italics added.) Thus, section. exempts "bona fide fringe benefit plans or programs" which provide "benefits to an employee's spouse" from the prohibition ofmarital status discrimination. For the purpose ofthis motion, it is undisputed that the surviving spouse benefit is such an exempted plan or program. The issue is whether section., subdivision (a)(l)(a), is () consistent with Government Code section '0, subdivision (a), and therefore enforceable or () inconsistent with that statute and therefore void. D. Section. of Title of the California Code of Regulations Is Invalid Because That Regulation Narrows the Scope of Government Code Section, Subdivision (a). Government Code section, subdivision (a), prohibits marital status discrimination in "compensation or in terms, conditions, or privileges ofemployment." Although subdivision (a)()(b) excludes certain "bona fide health plans" from that prohibition, the statute does not exclude all "bona fide fringe benefit[]" plans from that prohibition. The SSCB is a form ofdeferred "compensation." It is funded with employee and employer contributions. It has monetary value, just like a spousal annuity, and it is dispensed solely on the basis ofmarital status. Moreover, the surviving spouse benefit is a "privilege[] of Memorandum ofpoints and Authorities in Support ofplaintiff s Motion for Summary Adjudication [etc.]
13 0 employment." It is dispensed only to retiring employees. Therefore, section. effectively narrows the scope of Government Code section, subdivision (a), by authorizing discriminatory, and otherwise unlawful, "bona fide fringe benefit plans or programs" that are not health plans. If an administrative agency does not have discretion to promulgate regulations that "enlarge [the] scope" of a governing statute (California School Bds. Assn. v. State Bd. of Education, supra, Cal.App.th at p., italics added), by parity ofreasoning, it should not have authority to narrow the scope of a governing statute. If an employment program would be illegal under a governing statute, an administrative agency should lack the authority to declare such a program to be legal. "The task of the reviewing court in this regard has been described as '''decid[ing] whether the [agency] reasonably interpreted the legislative mandate." [Citation.]' (Credit Ins. Gen. Agents Assn. v. Payne () Ca.d,...) As was explained in California Beer & Wine Wholesalers Assn. v. Department ofalcoholic Beverage Control () 0 Cal.App.d 0,..., '[w]hat deference should be accorded an administrative construction ofa statute itself requires a judicial construction of the limits of the claimed source of rulemaking authority, whether that be the substantive provisions of an ~pplicable statute or the statutory boundaries of a delegated power.... Where the language ofthe governing statute is intelligible to judges their task is simply to apply it, whether that be language ofsubstantive limitation or the boundaries of a delegation ofrulemaking authority. Where the intelligibility of the statutory language depends upon the employment of administrative expertise, which it is the purpose of a statutory scheme to invoke, the judicial role "is limited to determining whether the [agency] has reasonably interpreted the power which the Legislature granted it." [Citation.]' (Id. at p.,...)" (County ofsanta Cruz v. State Bd. offorestry () Cal.App.th,-, italics added.) Section, subdivision (a)()(b) demonstrates that the Legislature understood very well how to create an exemption (for "bona fide health plans [which provide] additional or greater benefits to employees with dependents than to those employees without or with/ewer Memorandum of Points and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
14 dependents," italics added.) It did not exempt other "fringe benefit" plans. It is not the role of an administrative agency, or even a court (Code Civ. Proc., ), to construe the statute to include additional exemptions that would undermine the statutory purpose. For example, if section., subdivision (a)()(a), were valid, an employer could provide $,000 to an employee's spouse after years ofservice, or a college tuition stipend of $,000 for the children ofmarried employees. If"[t]he purpose ofthe law prohibiting marital status discrimination is to make it unlawful for an employer or other covered entity to deny or grant employment benefits for the reason that an applicant or employee is either married or unmarried" (Cal. Code Regs., tit.,.0, subd. (b», then such "fringe benefit" plans should lobe unlawful. The controlling principle is that "[a]n administrative agency may not promulgate a regulation that is 'inconsistent with the governing statute,' or that alters, amends, enlarges, or impairs the scope o/the statute. (Woods v. Superior Court () Ca.d,... ; Nicolle-Wagner v. Deukmejian () 0 Cal.App.d,...)" (Norte! Networks Inc. v. Board o/equalization (0) CaLApp.th, -, italics added; California Employment Commission v. Kovacevich () Cal.d, ["An administrative agency may not, under the guise ofits rule-making power, exceed the scope ofits authority and act contrary to the statute which is the source ofits power."].) No case has decided the validity of section. in this context. In Hinman v. 0 Department 0/Personnel Admin. () Cal.App.d, "[t]he sole issue presented [wa]s whether denial ofdental benefits to unmarried partners of state employees, including those ofthe same sex, unlawfully discriminate [ d] against homosexual employees. The basis of the denial of the governmental benefits... was that [the plaintiffs] were not married. Pursuant to the contracts for dental benefits, only spouses or unmarried children up to age [we]re eligible to receive the benefits." (Id at pp. -.) After rejecting the plaintiffs' claim that the dental plan unconstitutionally denied equal protection to homosexual employees (id at pp. -), the court turned to the issue ofmarital status discrimination (id at pp. -0). The court held that the employment plan was a bona Memorandum ofpoints and Authorities in Support of Plaintiffs Motion for Summary Adjudication [etc.]
15 fide fringe benefit plan within the meaning of section. and therefore lawful. It relied on a United States Supreme Court case to interpret the meaning of "bona fide": "In United Air Lines, Inc. v. McMann () U.S.,0-0,..., the United States Supreme Court held that 'bona fide' status of a plan or system under attack is determined by whether the primary purpose at issue was adopted before the passage ofthe statute. If so, an intent to discriminate will not be implied and the employer is entitled to a presumption of validity." (Id at pp. -0.) The dental plan at issue in Hinman predated the statutory prohibition of marital status discrimination. (Ibid) Therefore, the court held that "( t]he eligibility ofspouses and umnarried children for dental plan coverage [wa]s a 'bona fide fringe benefit provision.'" (ld at p..) Because the dental plan at issue in Hinman was a "health" plan. it clearly came within the exclusion ofsection, subdivision (a)()(b), as well as regulation section.-provided it was "bona fide." No issue was presented in Hinman regarding whether the FEHC could enlarge the scope of the legislative exemption of subdivision (a)()(b) beyond "bona fide health plans"-and thereby narrow the statutory prohibition of marital status discrimination--by creating an exemption for non-health benefit plans, such as the surviving spouse benefit. For that reason, Hinman is distinguishable and does not support the validity ofsection. as a basis for a meritorious affirmative defense. VI. CONCLUSION The City'S fifth affinnative defense lacks merit because the regulation relied upon by the 0 City is void. It impermissibly narrows the scope of a controlling statute, Government Code section, subdivision (a). Therefore, Wood is entitled to summary adjudication of that affirmative defense. Dated: December 0, 0 LAW OFFICE OF MICHAEL A. CONGER By: /lm~ ~ Mtc~ Conge~\ Attorney for Plaintiff Memorandum of Points and Authorities in Support ofplaintifrs Motion for Summary Adjudication [etc.]
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