Metropolitan News-Enterprise
Wednesday,
December 29, 2004
Page
7
PERSPECTIVES
(Column)
Justice Miriam Vogel Raps Colleagues for Not Signing Her Opinion
By
ROGER M. GRACE
Court
of Appeal Justice Miriam Vogel is at it again.
In
a dissent filed Dec. 15, Vogel took a sideswipe at two of her colleagues,
Presiding Justice Vaino Spencer and Justice Robert Mallano. Spencer and Mallano
are not new targets of Vogel’s wrath. See my column of Jan. 2, 2002, “Vogel’s
Assaults on Colleagues Give Rise to Query: Was Roth Right?”
Lately,
Vogel has been on good behavior. Not so on Dec. 15. Dissenting from a
not-for-publication opinion by Mallano which was joined in by Spencer, Vogel
went beyond voicing a disagreement with the majority’s view of the law, calling
into question the integrity of her fellow jurists by accusing them of
“manipulations.”
The
real party in interest in the case, Michael Gnesda, had sued United Parcel
Service, Inc. in Los Angeles Superior Court for wrongful discharge in violation
of public policy. He attributed his firing to his having reported to higher-ups
that customers with oversized and irregular packages were routinely being
charged amounts in excess of the advertised shipping rates.
(The
dissent enlightens us as to Gnesda’s precise complaint. It was that UPS represented
that the standard rate would apply, rather than an extra charge of up to $50
being tacked on based on packages being oversize or irregular, if the packages
were assembled in accordance with UPS do’s and don’ts. Nonetheless, the
surcharge was invariably imposed for big or odd-shaped parcels, denying the
promised standard rate to customers whose packaging complied with UPS
instructions.)
UPS
sought a writ ordering Los Angeles Superior Court Judge Brian F. Gasdia to
scrap his order denying summary adjudication and to grant the motion. On July
29, Div. One ordered the Superior Court to
show cause why the requested relief should not be granted. Vogel signed the
order as acting presiding justice.
Gnesda’s
lawyers, Thomas H. Bienert Jr. and Steven L. Krongold of the San Clemente Law
Firm of Bienert & Krongold, on Aug. 27 filed a return to the petition for a
writ of mandate, accompanied by a memorandum of points and authorities. They
cited Haney v. Aramark Uniform Services,
Inc. (2004) 121 Cal.App.4th 623, a case first handed down by the
Fifth District July 12, with a revamped opinion substituted on Aug. 11. The
fact situation was, in all material respects, the same as in Gnesda’s case.
Mallano
and Spencer opted to follow Handy—which
Mallano quoted at length in his opinion—resulting in a denial of the writ.
Vogel protested:
“First,
the majority’s opinion ignores the gist of the claim asserted by Michael
Gnesda, ignores the evidence, ignores Gnesda’s admissions, and bestows upon
Gnesda the benefits of a claim he never asserted.
“Second,
the majority hides its manipulations behind the screen of an unpublished
opinion. This case differs substantially from the case relied on by the
majority and, whatever the result, ought to be published.
“As
will be obvious to even the most casual reader, that which follows was drafted
as a proposed opinion for the panel hearing this case, and I have amended it
only to change ‘we’ to ‘I,’ and to otherwise show this is now a dissent rather
than the opinion of this court. If nothing else, I hope the following
paragraphs will show the basis for my disagreement with the majority’s
reasoning and conclusions.”
Did Mallano and Spencer engage in “manipulation”
to reach a result? No.
Peeved
that her colleagues would not sign her opinion, Vogel retaliated with
deprecatory twaddle.
See
for yourself. Although the opinions in United
Parcel Service v. Superior Court are not to be published in the
Official Reports, they appear on Westlaw at 2004 WL 2897999 and will be on the
Judicial Council website until mid-February.
In
her dissent, Vogel pointed out that the tort of a wrongful discharge in
violation of public policy requires that the firing be contrary to a policy
that is articulated in a specific statutory or constitutional provision. Gnesda
failed to point to any such provision, she insisted. The plaintiff did point to
Business & Professions Code §17200 et seq., the Unfair Competition Law,
Vogel acknowledged, but the UCL, she declared, is too general and doesn’t
count. And Haney, the case relied
upon by the majority, does not support the decision, she asserted, explaining:
The
language Vogel put in bold face was not ignored in the majority opinion.
Mallano also quoted it. And Mallano expressed no disagreement with the premise
that the firing of an employee for grumbling about contractual breaches by the
company does not give rise to a cause of action for a termination in violation
of public policy.
Mallano,
however, viewed UPS’s alleged conduct as a fraudulent practice visited upon the
public, rendering applicable the Fifth District’s opinion in Haney. Justice Betty L. Dawson said in her
opinion in Haney:
“Haney’s
allegations that he was terminated for complaining about and refusing to engage
in fraudulent billing practices are sufficient to state a claim for retaliatory
discharge in violation of a public policy,”
Mallano,
echoing that verbiage, wrote:
“Similarly,
‘[Gnesda’s] allegations that he was terminated for complaining about and
refusing to engage in fraudulent billing practices are sufficient to state a
claim for retaliatory discharge in violation of public policy.’ ”
(The
words “and refusing to engage in” should probably have been replaced by Mallano
with an ellipses, for reasons that will appear in a moment.)
Mallano
continued:
“Finally,
the billing practices such as those alleged here go beyond any breach of
contract because they are fraudulent. And we reject the notion stated by UPS
in its petition that it would not have ‘known that its [fraudulent business
practices], as alleged by Gnesda, [were] prohibited by a public policy that is so
fundamental that it could not terminate any of its employees for complaining
about such conduct.’ Surely the morals of the marketplace have not sunk that
low.”
The argument that systematic overcharging of customers entails
merely a breach of contract, and not a fraudulent practice, is curious.
The
California Supreme Court did hold in 2001 that an advertisement can constitute
an offer. UPS posted its rates on the Internet. So, if a customer saw UPS’s
rates listed there and came to a UPS office in reliance upon those rates (with
a properly bundled package), and the clerk refused to accept the package for
shipping at the advertised price, insisting on a greater sum, there would
undoubtedly be a breach of contract.
That
does not mean, however, that there would only
be a breach of contract. Enticing customers with advertised rates without an
intention to honor them unmistakably smacks of fraud. Under Civil Code §1572,
actual fraud is committed where a person is induced to enter into a contract
based on “[a] promise made without any intention of performing it.” Where the
customer is a consumer, there is a breach of the Consumers Legal Remedies Act
which, in Civil Code §1770, forbids “[a]dvertising goods or services with
intent not to sell them as advertised.”
Of
course, most customers do not choose UPS because of advertised rates. Here,
certainly, is the more common scenario:
A
customer comes up to a UPS counter and presents a package. The clerk weighs it
and announces, “The cost is”—whatever.
The
clerk is representing that the price quoted is that which has been established
for a package of that weight going to the given destination. If, in fact, the
cost which the clerk has stated is greater than the rate that has been publicly
posted, and if such overcharging is intentional on the part of UPS and pursuant
to its standard operating procedure, there is plainly a fraudulent business
practice.
Again,
this is actual fraud under §1572 inasmuch as it entails “[t]he suggestion, as a
fact, of that which is not true, by one who does not believe it to be true” and
“[t]he suppression of that which is true, by one having knowledge or belief of
the fact.”
Here
are a couple of analogous situations. An operator, pursuant to a company
policy, tells a pay phone user, “That will be an additional 50-cents for three
minutes, please” when the established rate for an extra three minutes is
25-cents. An attendant at an airline counter exacts a $200 payment for passage
on a flight when the set rate is $150, and this is done pursuant to standing
instructions. Under Vogel’s view, there is simply a breach of contract. As most
would see it, there’s fraud—a wrong condemned by specific civil and penal
statutes.
Vogel’s
proposition that Haney entailed
fraud and UPS involves only a
breach of contract is based on reasoning that is tenuous, at best, and her slap
at Mallano and Spencer for refusing to sign an opinion that’s on such feeble
footing is regrettable.
Vogel also pointed to another
supposed distinction. In a footnote, she set forth:
“Gnesda
does not allege that he was ever asked or required to ‘commit[
] fraud or other crimes,’ or that he was fired because he refused ‘to directly
participate in a fraudulent billing practice’ as claimed by the plaintiff in Haney….The majority simply ignores this
distinction between Haney and the
case presented by Gnesda.”
Dawson’s
Fifth District opinion did say:
“Haney’s
allegations that he was terminated for complaining about and refusing to engage in fraudulent
billing practices are sufficient to state a claim for retaliatory discharge in
violation of a public policy.” Emphasis added.
And
a look at the First Amended Complaint shows that Gnesda did not plead that he
had refused to participate in the unlawful overcharging.
However,
the opinion in Haney was not
tethered to the fact that the plaintiff had been fired after refusing to be a
participant in fraudulent conduct. The opinion leaves no doubt that the same
result would have been reached (the reversing of a judgment for the employer)
had Haney been fired solely for having brought the allegedly fraudulent
practice to the attention of upper management.
Dawson
recited that the tort requires a retaliatory firing in derogation of a
well-established, fundamental public policy. This requirement is met, she said,
“[w]here the policy is reflected in a [long-standing] provision of the Penal
Code.” The provision in point, Penal Code §484,
provides: “Every person...who shall knowingly and designedly, by any false or
fraudulent representation or pretense, defraud any other person of money...is
guilty of theft.” Firing an employee who beseeches the employer to stop
violating that provision is clearly as offensive to the policy underlying the
statute as firing the employee for refusing to commit the proscribed conduct.
If
Gnesda was fired for having attempted to bring a fraudulent practice by UPS to
an end, he would, under the reasoning set forth in Haney, have a cause of action.
Moreover,
he would have a cause of action under Collier
v. Superior Court (1991) 228 Cal.App.3d 1117 and under Holmes v. General Dynamics Corp. (1993) 17
Cal.App.4th 1418, both cases which were cited by Gnesda. In neither case was
the employee terminated for refusing to engage in statutorily forbidden
conduct; in each, the employee, like Gnesda, sought to persuade the employer to
put an end to criminal conduct by other employees.
The parties will, in all likelihood,
be back before Div. One soon. In a proceeding set for today in Norwalk,
UPS is asking Gasdia to terminate another of Gnesda’s causes of action. This
one, predicated on §17200 et seq., seeks an injunction against the alleged
over-charging of the public and an order to make restitution to those customers
from whom UPS obtained purportedly excessive fees. The complaint declares that
overcharges amount to “tens of millions of dollars per year.”
The
issue is whether Gnesda, who was not personally over-charged for a bulky
package, may continue to maintain a cause of action under the UCL in light of
Prop. 64, passed by voters Nov. 2. That proposition bars §17200 actions by
anyone not personally affected by the allegedly unlawful, fraudulent or unfair
practice.
Prop.
64, which took effect immediately, is silent as to retroactivity. Predictably,
UPS—represented by William D. Claster, T. Kevin Roosevelt and Lori
Ginex-Orinion of Gibson, Dunn & Crutcher—contends the amendments to §17200
must be applied to pending actions while Gnesda insists that they pertain only
to cases filed after the effective date.
Developments
in the case will be worth watching…as will be the future conduct of the
irrepressible Miriam Vogel.
Copyright 2004, Metropolitan News Company