E.E.O.C. v. Luce, Forward, Hamilton & Scripps, CV00-01322(FMC)(AIJx).

• Decision Date: 21 November 2000
• Docket Number: No. CV00-01322(FMC)(AIJx).,CV00-01322(FMC)(AIJx).
• Citation: 122 F.Supp.2d 1080
• Court: U.S. District Court — Central District of California
• Parties: EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. LUCE, FORWARD, HAMILTON & SCRIPPS, LLP, Defendant.

122 F.Supp.2d 1080

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. LUCE, FORWARD, HAMILTON & SCRIPPS, LLP, Defendant.

No. CV00-01322(FMC)(AIJx).

United States District Court, C.D. California.

November 21, 2000.

COPYRIGHT MATERIAL OMITTED

Pamela J. Thomason, Peter F. Laura, Anat Ehrlich, U.S. Equal Employment Opportunity Commission, Los Angeles District Office, Los Angeles, CA, for U.S. Equal Employment Opportunity Commission, plaintiff.

Kelly Capen Douglas, Julie A Vogelzang, Michael L Jensen, Luce Forward Hamilton & Scripps, San Diego, CA, for Luce Forward Hamilton & Scripps, defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S PARTIAL MOTION FOR SUMMARY JUDGMENT

COOPER, District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment: specifically, the Motion for Partial Summary Judgment of Plaintiff Equal Employment Opportunity Commission ("EEOC") filed on August 25, 2000, and the Motion for Summary Judgment of Defendant Luce, Forward, Hamilton & Scripps, LLP ("LFHS") filed on October 6, 2000. For the reasons stated and in the manner stated herein, Plaintiff's Motion for Partial Summary Judgment is hereby GRANTED IN PART AND DENIED IN PART, and Defendant's Motion for Summary Judgment is hereby GRANTED IN PART AND DENIED IN PART.

I. Uncontroverted Facts

The parties agree that the relevant facts in this case are undisputed. In September 1997, Donald Lagatree applied for and was offered a full-time legal secretary position with the LFHS. Lagatree was asked to report to work on September 16, 1997. On that day, Lagatree was presented with an offer letter¹ which set forth the terms and conditions of his employment, "should [he] accept." The offer letter also contained an arbitration clause. Under this provision, Lagatree would agree to submit all "claims arising from or related to [his] employment or termination of [his] employment" to binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1 et. seq.

On September 18, 1997, Lagatree informed the Defendant that he thought the arbitration clause was "unfair" and that he would not sign the offer letter. Defendant terminated Lagatree's conditional employment.²

On or about February 13, 1998, Lagatree filed an action in the Los Angeles Superior Court against the Defendant ("the prior action"). Lagatree's Complaint in the prior action alleged that he was wrongfully terminated in violation of public policy for refusing to waive his constitutional rights to a jury trial and a judicial forum. Lagatree also asserted that his discharge violated the California Unfair Competition Law, Cal.Bus. & Prof.Code §§ 17200-17209, and Cal.Civ.Code § 1668, which prohibit parties from contracting away liability for fraudulent, intentional, or negligent violations of statutory law. Lagatree sought lost wages, damages for emotional distress, and punitive damages.

The trial court in the state court action sustained the Defendant's demurrer, agreeing that Defendant did not violate public policy by discharging employees who refused to sign pre-dispute arbitration agreements as a condition of employment. The Court of Appeals affirmed the lower court's holding.³ That Court reasoned that in order for Lagatree's termination to be wrongful, the right underlying Lagatree's wrongful termination claim must be one that could not be bargained away or circumvented by agreement. The Court concluded, however, that an individual's constitutional right to a jury trial and a judicial forum for the resolution of disputes are rights that are subject to waiver. The California Supreme Court denied review.

The EEOC brings the present action on behalf of Lagatree based on the facts set forth above.⁴ The EEOC's Complaint alleges that Defendant engaged in unlawful retaliatory activity when Defendant failed to hire Lagatree in violation of § 704(a) of Title VII, § 4(d) of the Age Discrimination in Employment Act, § 503(a) of the Americans with Disability Act, and § 15(a)(3) of the Equal Pay Act. The EEOC seeks lost wages, lost benefits, and damages for emotional distress on Lagatree's behalf. The EEOC also asks this Court for punitive damages as well as a permanent injunction on behalf of the public interest precluding Defendant from conditioning employment on a prospective employee agreeing to arbitrate all and any future claims against the Defendant.⁵

II. Summary Judgment Standard

Summary judgment is proper only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there are no issues as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.Rule Civ.Pro. 56(c); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Whether a fact is material is determined by looking to the governing substantive law; if the fact may affect the outcome, it is material. Id. at 248, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202.

If the moving party meets its initial burden, the "adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Mere disagreement or the bald assertion that a genuine issue of material fact exists does not preclude the use of summary judgment. Harper v. Wallingford, 877 F.2d 728 (9th Cir.1989).

The Court construes all evidence and reasonable inferences drawn therefrom in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Brookside Assocs. v. Rifkin, 49 F.3d 490, 492-93 (9th Cir.1995).

III. Res Judicata and Collateral Estoppel (Claim Preclusion and Issue Preclusion)

Defendant argues that the EEOC's action is barred because of Lagatree's prior state court litigation against Defendant. In that litigation, Plaintiff asserted wrongful discharge in violation of public policy based on his constitutional right to a jury trial and a judicial forum for the resolution of disputes.

A. Standards

Defendant correctly noted that federal courts must give a state court judgment the same preclusive effect as would be given that judgment under the law of the state in which the judgment was rendered. See Migra v. Warren City School Dist. Bd. of Ed., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984).

Under California law, res judicata, or claim preclusion, bars relitigation of a claim when a prior action adjudicated 1) the same claim, 2) resulted in a final judgment on the merits, and 3) the party against whom the claim is asserted was a party to or was in privity with a party to the prior action. Cal. State Auto. Ins. Ass'n v. Superior Court, 50 Cal.3d 658, 268 Cal.Rptr. 284, 788 P.2d 1156 (1990); Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098 (1978); Victa v. Merle Norman Cosmetics, Inc., 19 Cal.App.4th 454, 24 Cal.Rptr.2d 117 (1993).

Collateral estoppel precludes a party from relitigating an issue that was litigated and decided in a prior proceeding when 1) the issue sought to be precluded is identical to that decided in the former proceeding, 2) the issue was actually litigated, 3) the issue was necessarily decided, 4) there was a final judgment on the merits, and 5) the party was the same as, or was in privity with, a party to the prior proceeding. Gikas v. Zolin, 6 Cal.4th 841, 25 Cal.Rptr.2d 500, 863 P.2d 745 (1993).

B. Res Judicata

1. The Parties Agree that the Prior Action Resulted in a Final Judgment on the Merits.

In its Opposition to LFHS's Motion, the EEOC concedes that the prior action resulted in a final judgment on the merits.⁶

2. The Claim Asserted In the Present Action on Behalf of Lagatree in his Individual Capacity Is Identical to the Claim Asserted in the Prior Action.

The EEOC's claims on behalf of Lagatree in the present action are identical to the claims presented in the prior action, even though these claims are based on wholly different legal theories. California follows the "primary right" theory of what constitutes a cause of action. Under this theory, a claim, or "cause of action" is based on the harm suffered, not the particular theory asserted by the litigant. Peiser v. Mettler, 50 Cal.2d 594, 328 P.2d 953 (1958). The primary rights theory provides that a "cause of action" is comprised of a "primary right" of the plaintiff, a corresponding "primary duty" of the defendant, and a wrongful act by the defendant constituting a breach of that duty. Crowley v. Katleman, 8 Cal.4th 666, 34 Cal.Rptr.2d 386, 881 P.2d 1083 (1994). The violation of a single primary right gives rise to but a single cause of action. Id. As far as its content is concerned, the primary right is simply the plaintiff's right to be free from the particular injury suffered. Id. "Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief." Id. at 668-69, 34 Cal.Rptr.2d 386, 881 P.2d 1083. The primary right theory applies when a previous action has resulted in a final judgment on the merits and a defendant in a second action asserts that the second action is precluded under the principles of res judicata. Id.

California courts, in determining whether the primary right at issue is the same in two actions, have focused on both the nature of the dispute and the nature of the damages sought.

In focusing on the nature of the dispute, a California appellate court held that the same primary rights were implicated in two separate...