Farmers Bros. Coffee v. Wcab

• Decision Date: 17 October 2005
• Docket Number: No. B180839.,B180839.
• Citation: 35 Cal.Rptr.3d 23,133 Cal.App.4th 533
• Court: California Court of Appeals Court of Appeals
• Parties: FARMERS BROTHERS COFFEE, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Rafael Ruiz, Respondents.

35 Cal.Rptr.3d 23

133 Cal.App.4th 533

FARMERS BROTHERS COFFEE, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and Rafael Ruiz, Respondents.

No. B180839.

Court of Appeal, Second District, Division 4.

October 17, 2005.

Law Offices of Dennis J. Hershewe and Dennis J. Hershewe for Petitioner.

No appearance for Respondent Workers' Compensation Appeals Board.

Law Offices of William W. Tiffany and G. Martin Jacobs for Respondent Rafael Ruiz.

Remcho, Johansen & Purcell, James C. Harrison, Margaret R. Prinzing and Kari Krogseng, San Francisco, for California Applicant Attorney's Association as Amicus Curiae on behalf of Respondents.

HASTINGS, J.

BACKGROUND

We issued a writ of review on April 4, 2005, with regard to two workers' compensation matters and consolidated them for argument and decision. Each petition contends that the Immigration Reform and Control Act of 1986 (IRCA), title 8 United States Code section 1101 et seq., preempts Labor Code section 1171.5, which provides that immigration status is irrelevant to the issue of liability under state labor and employment laws, and Labor Code section 3351, which includes aliens in the definition of "employee," even those unlawfully employed.¹ In each case, it was undisputed that the employee was an alien, unauthorized to work in the United States at the time of the injury. We have subsequently severed the two matters, and now proceed only with the petition of Farmer Brothers Coffee.²

The bifurcated issue of Rafael Ruiz against his employer, Farmer Brothers Coffee, whether he was an employee within the context of the California Workers' Compensation scheme was submitted on documentary evidence and depositions, in addition to additional testimony from Ruiz and Andy Lee, the employer's warehouse and shipping manager. On November 5, 2004, the workers' compensation judge issued an opinion and the following finding: "Applicant is an employee per Labor Code Sections 3351 [subdivision] (a) and 3357."

Farmer Brothers then filed a petition for reconsideration by the Board on the grounds of federal preemption and its contention that Ruiz obtained employment and his expectation of benefits by means of fraud, in violation of Insurance Code section 1871.4. The Board rejected the contentions and denied the petition for reconsideration on December 22, 2004.

The petition for review was timely filed in this court within 45 days of the Board's decision, and involves a "threshold issue" reviewable in the appellate court.³

DISCUSSION

1. Federal Preemption

Petitioner contends that sections 3351 and 1171.5 have been preempted by the employment provisions of the IRCA (8 U.S.C. § 1324a).

Section 3351, subdivision (a), defines "employee" as "every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed ..." including aliens. Section 1171.5 reads, in relevant part:

"The Legislature finds and declares the following:

"(a) All protections, rights, and remedies available under state law, except any reinstatement remedy prohibited by federal law, are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state.

"(b) For purposes of enforcing state labor and employment laws, a person's immigration status is irrelevant to the issue of liability, and in proceedings or discovery undertaken to enforce those state laws no inquiry shall be permitted into a person's immigration status except where the person seeking to make this inquiry has shown by clear and convincing evidence that the inquiry is necessary in order to comply with federal immigration law.

"(c) The provisions of this section are declaratory of existing law...."

Under the IRCA, it is unlawful to hire or continue to employ an alien the employer knows to be an "unauthorized alien," defined as one who is not lawfully admitted for permanent residence, or authorized to be so employed by federal immigration and nationality law or by the United States Attorney General. (8 U.S.C. § 1324a(a)(1)-(2), (h)(1).) The statute provides for graduated civil penalties for violations, and criminal penalties for employers who are found to have engaged in a pattern or practice of hiring unauthorized aliens in violation of the law. (8 U.S.C. § 1324a(e)(4)-(5), (f)(1).) It is also a crime to knowingly accept a false immigration document for purposes of satisfying the requirements of the statute. (8 U.S.C. § 1324c(a)(2); 18 U.S.C. § 1546(b).)

"Article VI of the Constitution provides that the laws of the United States `shall be the supreme Law of the Land; ... any Thing in the Constitution or Laws of any state to the Contrary notwithstanding.' Art. VI, cl. 2. Thus, ... state law that conflicts with federal law is `without effect.' [Citation.] Consideration of issues arising under the Supremacy Clause `start[s] with the assumption that the historic police powers of the States [are] not to be superseded by ... Federal Act unless that [is] the clear and manifest purpose of Congress.' [Citation.]" (Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (Cipollone).)

Examples of historic police powers include "[c]hild labor laws, minimum and other wage laws, laws affecting occupational health and safety and workmen's compensation laws...." (De Canas v. Bica (1976) 424 U.S. 351, 356-357, 96 S.Ct. 933, 47 L.Ed.2d 43.) "States possess broad authority under their police powers to regulate the employment relationship to protect workers within the State." (Ibid.) "Accordingly, `"[t]he purpose of Congress is the ultimate touchstone"' of pre-emption analysis. [Citations.] [¶] Congress' intent may be `explicitly stated in the statute's language or implicitly contained in its structure and purpose.' [Citation.] In the absence of an express congressional command, state law is pre-empted if that law actually conflicts with federal law, [citation], or if federal law so thoroughly occupies a legislative field `"as to make reasonable the inference that Congress left no room for the States to supplement it."' [Citations.]." (Cipollone, supra, 505 U.S. at p. 516, 112 S.Ct. 2608.)

There is no preemption language in the IRCA expressly affecting state workers' compensation laws. The only express preemption provision states: "The provisions of this section preempt any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens." (8 U.S.C. § 1324a(h)(2).)

The purpose of the California Workers' Compensation Act is to furnish, expeditiously and inexpensively, treatment and compensation for persons suffering workplace injury, irrespective of the fault of any party, and to secure workplace safety. (Cal. Const., art. XIV, § 4; Sea-Land Service, Inc. v. Workers' Comp. Appeals Bd. (1996) 14 Cal.4th 76, 85, 58 Cal.Rptr.2d 190, 925 P.2d 1309.) It is remedial and humanitarian. (Bartlett Hayward Co. v. Indus. Acc. Com. (1928) 203 Cal. 522, 529, 265 P. 195.) Its benefits are not a penalty imposed upon the employer. (State Dept. of Corrections v. Workmen's Comp.App. Bd. (1971) 5 Cal.3d 885, 890-891, 97 Cal.Rptr. 786, 489 P.2d 818.) There is no provision in the Workers' Compensation Act imposing civil or criminal sanctions for the employment of illegal aliens. Thus, it does not conflict with the IRCA's express preemption provision.

As it stated in its report prior to the passage of the IRCA, the House Judiciary Committee discerned no intention in the statute "that the employer sanctions provisions of the bill be used to undermine or diminish in any way labor protections in existing law, or to limit the powers of federal or state ... labor standards agencies...." (H.R.Rep. No. 99-682(I), 2d Sess. (1986), reprinted in 1986 U.S.Code Cong. & Admin. News, p. 5662; see Montero v. I.N.S. (1997) 124 F.3d 381, 384.)⁴

We conclude that preemption of state workers' compensation laws was not the "`clear [or] manifest purpose of Congress.' [Citation.]" (Cipollone, supra, 505 U.S. at p. 516, 112 S.Ct. 2608.) Thus, we must consider whether California's workers' compensation law actually conflicts with the IRCA, or whether the IRCA so thoroughly occupies the same field "`"as to make reasonable the inference that Congress left no room for the States to supplement it."' [Citations.]" (Ibid.)

"Power to regulate immigration is unquestionably exclusively a federal power. [Citations.] But ... standing alone, the fact that aliens are the subject of a state statute does not render it a regulation of immigration...." (De Canas v. Bica, supra, 424 U.S. at pp. 354-355, 96 S.Ct. 933.) Since the IRCA does not provide for or prohibit compensation for injured workers, Congress has not occupied the field of workers' compensation. We therefore turn to the issue of actual conflict.

To imply preemption, there must be "such actual conflict between the two schemes of regulation that both cannot stand in the same area ..." because the state law "`stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,' [citation]." (Florida Avocado Growers v. Paul (1963) 373 U.S. 132, 141, 83 S.Ct. 1210, 10 L.Ed.2d 248.)

California law has expressly declared immigration status irrelevant to the issue of liability to pay compensation to an injured employee. (§ 1171.5.) Were it otherwise, unscrupulous employers would be encouraged to hire aliens unauthorized to work in the United States, by taking the chance that the federal authorities would accept their claims of good faith reliance upon immigration and work authorization documents that appear to be genuine. Other jurisdictions have come to the same conclusion with regard to their workers' compensation laws. (See e.g., Dowling v. Slotnik (1998) 244 Conn....