Thursday, July 10, 2003
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State Supreme Court Denies Review of Ruling Barring Whistleblower Suit Against University of California
By KENNETH OFGANG, Staff Writer/Appellate Courts
The state Supreme Court yesterday declined to review the dismissal of a suit by a former UCLA employee who claims she was laid off as retaliation for reporting rules violations.
Justices voted 4-1 to leave standing a ruling by this district’s Court of Appeal, which held that a common-law wrongful termination suit may be dismissed if the employee failed to exhaust the employer’s internal grievance procedures.
Only Justice Joyce L. Kennard voted to grant review in Palmer v. Regents of the University of California (2003)107 Cal.App.4th 899. Chief Justice Ronald M. George and Justice Janice Rogers Brown were absent from the weekly conference and did not participate in the vote.
Palmer had asked the high court to review the ruling by a divided panel of Div. Seven, which affirmed Los Angeles Superior Court Judge Helen Bendix’s order granting summary judgment to the university.
Palmer, a clinical laboratory technologist at the UCLA Medical Center for 21 years, was laid off in 1997. She claims that she was terminated for reporting to university officials that the lab was not complying with state regulations regarding review of results and accuracy of data.
Initially, her case was dismissed on the ground that she was limited to a statutory whistleblower action under Labor Code Sec. 1102.5(b), prohibiting retaliation against an employee for reporting a violation of law to a government agency, and could not make out a claim because she had only reported the matters internally.
The Court of Appeal reversed that decision two years ago in an unpublished opinion, saying she had stated a common law wrongful termination claim under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167.
But the university successfully moved for summary judgment a second time, asserting that Palmer failed to follow either of two comprehensive grievance procedures—one being the systemwide UC complaint resolution policy, the other being a specific “whistleblower” policy adopted by UCLA.
Presiding Justice Dennis Perluss, writing for the appellate court, said the trial judge was correct. He cited Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, in which the Supreme Court held a physician’s failure to pursue a hospital’s internal grievance process barred his civil suit for damages based on the hospital’s purportedly improper denial of staff privileges.
He distinguished California Supreme Court decisions such as Rojo v. Kliger (1990) 52 Cal.3d 65 and Stevenson v. Superior Court (1997) 16 Cal.4th 880, which allowed plaintiffs to bring common-law wrongful termination suits even though their failure to pursue administrative remedies barred the bringing of Fair Employment and Housing Act suits.
The distinction, Perluss explained, is that Westlake deals with internal administrative procedures, while the other cases deal with external procedures created by state law.
“[V]ery different policy considerations support the requirement that an employee pursue to completion internal grievance procedures before initiating a lawsuit concerning an adverse employment decision—principally, the desire to provide an opportunity for the employer (not an outside administrative agency) to quickly and efficiently redress a grievance and thereby minimize or even eliminate injury to the plaintiff,” Perluss, joined by Justice Fred Woods, wrote.
Perluss also noted that the California Whistleblower Protection Act, which creates new remedies for employees—specifically including those of the UC—who have been subjected to retaliation for disclosing improper acts, has a mandatory exhaustion of remedies requirement.
Justice Earl Johnson Jr. dissented, arguing that Westlake should not apply because it is not an employment case.
In other conference matters, the justices:
•Denied a request by Attorney General Bill Lockyer and San Francisco District Attorney Terrence Hallinan to depublish the First District Court of Appeal decision in Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496. The panel ruled that an advertisement is not misleading unless it would leave a “reasonable consumer” with an erroneous impression.
The court upheld a San Francisco Superior Court judge’s application of that standard in ruling that ads for the pain reliever Aleve did not mislead consumers into thinking they could use the product without fear of gastrointestinal side effects. Lockyer had argued for a “least sophisticated consumer” test, a position which Justice Paul Haerle called “troubling and startling” in a concurring opinion.
The “least sophisticated consumer” test has been rejected by every court that has considered it, because it lacks “common sense,” Haerle declared. “That position would, I suggest, allow a...cause of action to the consumer who interprets literally the radio ads saying ‘Albertson’s is your store’ and goes to court when he is not given access to his local store’s daily receipts.”
•Left standing a ruling by this district’s Court of Appeal that a contact lens discounter’s suit against a lawyer/optometrist, who had joined with the discounter’s former house counsel to solicit other optometrists for financial support to back lobbying for laws regulating businesses like the plaintiff’s, implicated the First Amendment and was properly stricken under the anti-SLAPP law. The case is 1-800-Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568.
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