Metropolitan News-Enterprise

 

Monday, March 8, 2021

 

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California State University System Not Exempt From PAGA, C.A. Declares

 

By a MetNews Staff Writer

 

Div. One of the First District Court of Appeal on Friday rejected the contention that a statute bars claims under the Labor Code’s Private Attorneys General Act of 2004 against the California State University system.

At issue was the breadth of Education Code §66606.2, enacted as part of the California State University Management Efficiency Act of 1996. It provides:

“[I]it is the intent of the Legislature that both of the following occur:

“(a) Before legislation that, by its terms, applies to the state or its agencies, departments, or boards, may apply to the California State University, the legislation should be compatible with the mission and functions of the California State University.

“(b) The California State University not be governed by any statute enacted after January 1, 1997, that does not amend a previously applicable act and that applies generally to the state or to state agencies, departments, or boards, unless the statute expressly provides that the California State University is to be governed by that statute.”

California State University (“CSU”) argued that in light of that statute, the Sonoma Superior Court improperly awarded to health-and-safety technician Thomas Sargent $2,905,200 based on Labor Code violations and $7,793,030 in attorney fees. In a published portion of the opinion Presiding Justice James M. Humes rejected the argument that PAGA does not apply to CSU, but said:

“Here, Sargent brought some viable PAGA claims, but he ultimately failed to establish CSU’s liability for them because the jury found that he was not personally affected by the underlying statutory violations. Thus, we reverse the award of PAGA penalties.”

In a portion of the opinion that was not certified for publication, the opinion upholds the award of attorney fees.

No §66606.2 Immunity

Humes said, as to the effect of the Education Code provision:

“Despite appellants’ insistence of the sweeping effect of Education Code section 66606.2, the statute has not been applied to a single piece of legislation since its enactment more than 20 years ago. So far as we are aware, it has been cited in only one appellate opinion, as dicta in a footnote….It appears that even CSU’s trial counsel was not initially aware of the statute. Our record suggests that CSU did not cite the statute until more than a year after the initial complaint was filed in connection with the demurrer to Sargent’s third amended complaint. And even then, CSU did not cite the statute when it first filed the demurrer in December 2015 or at the hearing on that motion, but waited until it filed post-hearing supplemental briefing.

“We conclude that Education Code section 66606.2 clarifies the Legislature’s intent to exempt CSU from new laws directed to state agencies, not to exempt it from all generally applicable new laws. Because PAGA is not a statute that is directed to state agencies, we hold that section 66606.2 does not exempt CSU from its application.”

Attorney Fees

In the portion of the opinion upholding an award of attorney fees under Code of Civil Procedure §1021.5, the private attorney general statute authorizing attorney fees for actions creating a public benefit, Humes said:

“Sargent vindicated the fundamental rights of CSU employees to be protected from retaliation when they report what they reasonably believe to be unlawful conduct and share information about unsafe working conditions….Sargent’s retaliation causes of action advanced the ability of CSU employees to report violations of the law affecting CSU campuses.”

The fact that the penalties must be stricken, he said, does not affect the award of fees because it remains that a public benefit was conferred. He noted that Sargeant’s efforts “prompted radical change in health and safety practices at Sonoma State University” and otherwise brought to light conditions that were remedied.

The case is Sargent v. Board of Trustees, A154926.

 

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