United States of America v. State of California et al

Filing 208

OPPOSITION by Xavier Becerra, Edmund Gerald Brown, Jr, State of California to 207 Motion to Stay. (Chuang, Christine)

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1 2 3 4 5 6 7 8 9 10 XAVIER BECERRA Attorney General of California THOMAS S. PATTERSON MICHAEL NEWMAN Senior Assistant Attorneys General SATOSHI YANAI ANTHONY HAKL Supervising Deputy Attorneys General CHRISTINE CHUANG CHEROKEE DM MELTON MAUREEN ONYEAGBAKO LEE I. SHERMAN Deputy Attorneys General State Bar No. 272271 300 S. Spring Street Los Angeles, CA 90013 Telephone: (213) 269-6404 Fax: (213) 897-7605 E-mail: Lee.Sherman@doj.ca.gov Attorneys for Defendants 11 IN THE UNITED STATES DISTRICT COURT 12 FOR THE EASTERN DISTRICT OF CALIFORNIA 13 SACRAMENTO DIVISION 14 15 16 THE UNITED STATES OF AMERICA, Plaintiff, 17 18 Case No. 2:18-cv-00490-JAM-KJN DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR STAY PENDING APPEAL v. 19 20 21 22 October 16, 2018 1:30 p.m. 6 The Honorable John A. Mendez Trial Date: None set Defendants. Action Filed: March 6, 2018 THE STATE OF CALIFORNIA; EDMUND GERALD BROWN, JR., Governor of California, in his official capacity; and XAVIER BECERRA, Attorney General of California, in his official capacity, Date: Time: Courtroom: Judge: 23 24 25 26 27 28 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 2 INTRODUCTION The United States’ requested stay—which will keep in place an injunction against enforcing 3 a duly enacted law of the State of California—has no specific end-date given the uncertainty 4 about when the United States’ interlocutory appeal will ultimately reach final resolution. 5 Accordingly, the Court should reject the United States’ attempt to delay proceedings in this 6 action. The United States has failed to meet its burden of establishing a need for a stay and thus, 7 this action should proceed to the merits so that there is a timely determination of the remaining 8 claims brought by the United States relating to Assembly Bill 450 (AB 450). There is no basis 9 for a stay where there is minimal overlap in discovery between the issues on appeal and those 10 before this Court, and where resolution of the distinct questions on appeal will not dispose of the 11 remaining claims. Most importantly, the United States has not demonstrated any hardship or 12 inequity in being required to move forward in a case that it initiated. California, however, is 13 suffering irreparable harm as a result of the preliminary injunction—and will continue to do so— 14 as long as any portion of AB 450 is subject to an injunction. A stay should be denied so that 15 California can promptly put forth a defense and present evidence that AB 450 is neither 16 preempted nor invalid under the doctrine of intergovernmental immunity. California therefore 17 respectfully requests that the Court deny the United States’ motion and issue a scheduling order 18 incorporating California’s previously proposed dates for discovery, dispositive motions, pre-trial 19 conference, and trial. See Joint Status Report (Sept. 4, 2018), ECF No. 205. 20 FACTUAL AND PROCEDURAL BACKGROUND 21 The United States filed this action on March 6, 2018, seeking to invalidate three of 22 California’s duly enacted state laws: (1) Senate Bill 54 (SB 54); (2) part of Assembly Bill 103 23 (AB 103); and (3) AB 450, as it relates to private employers. 1 Since the filing of the complaint, 24 the parties have engaged in limited, expedited discovery focused on irreparable harm and 25 26 27 28 1 A detailed factual background of the three laws is set forth in California’s Opposition to Plaintiff’s Motion for Preliminary Injunction (May 4, 2018) (ECF No. 74) and Motion to Dismiss (May 4, 2018) (ECF No. 77), as well as in the Court’s Order Re: The United States of America’s Motion for Preliminary Injunction (July 5, 2018) (ECF No. 193) (“PI Order”) and Order Re: State of California’s Motion to Dismiss (July 9, 2018) (ECF No. 197) (“MTD Order”). 1 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 extensive motion practice aimed at narrowing the issues in this case, including litigating a 2 preliminary injunction motion and a motion to dismiss. 3 After a hearing on June 20, 2018, the Court granted in part and denied in part the United 4 States’ Motion for Preliminary Injunction, finding that the United States was not likely to prevail 5 on the merits of its claims relating to SB 54 and AB 103, or regarding one provision of AB 450 6 requiring that employers notify employees within seventy-two hours of receiving a Notice of 7 Inspection (the “Notice provision,” codified at California Labor Code section 90.2). PI Order at 8 12-19, 26-28, 31-57. But concerning the three remaining provisions of AB 450 (set forth at 9 California Government Code sections 7285.1 and 7285.2 and California Labor Code section 10 1019.2(a) and (b)), the Court determined that the United States was likely to prevail on the merits 11 of its claims and granted the United States’ request for a preliminary injunction. Id. at 22-26, 28- 12 31. In doing so, though, the Court specifically noted that further development of the evidentiary 13 record regarding one of those provisions—California Labor Code section 1019.2(a)—could 14 impact the Court’s ultimate analysis on the merits. Id. at 29-30. 15 In a subsequent order, the Court dismissed the United States’ claims challenging SB 54, AB 16 103, and the Notice provision, without leave to amend, and denied California’s motion to dismiss 17 the remainder of the AB 450 provisions that were preliminarily enjoined. MTD Order at 7. 18 As a result of the Court’s orders, the only remaining claims in this case relate to the three 19 provisions of AB 450 that have been preliminarily enjoined. California Government Code 20 section 7285.1 limits employers from providing “voluntary consent to an immigration 21 enforcement agent to enter any nonpublic areas of a place of labor” unless the agent produces a 22 judicial warrant (the “Access provision”). Cal. Gov’t Code § 7285.1(a)(1). California 23 Government Code section 7285.2 limits employers from providing “voluntary consent to an 24 immigration enforcement agent to access, review, or obtain the employee’s records” unless in 25 connection with a Form I-9 inspection or if an agent produces a judicial warrant or subpoena (the 26 “Records provision”). Cal. Gov’t Code § 7285.2(a). These two subsections are operative “except 27 as otherwise required by federal law.” Cal. Gov’t Code §§ 7285.1(a), 7285.2(a)(1). Lastly, 28 section 1019.2(a) of the California Labor Code prohibits employers from re-verifying current 2 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 employees’ employment eligibility when not required by federal law (the “Reverification 2 provision”). Cal. Lab. Code § 1019.2(a). None of the three provisions restricts or limits 3 employers from complying with a memorandum of understanding governing the use of the 4 federal E-Verify system. Cal. Gov’t Code § 7285.3; Cal. Lab. Code § 1019.2(c). AB 450’s 5 provisions are severable. 2017 Cal. Stat., ch. 492, § 6 (AB 450). 6 On August 7, 2018, the United States filed a Notice of Appeal concerning the Court’s 7 denial of the United States’ preliminary injunction motion (ECF No. 201). The United States’ 8 motion for a stay followed. 9 10 LEGAL STANDARD “A district court has inherent power to control the disposition of the causes on its docket in 11 a manner which will promote economy of time and effort for itself, for counsel, and for litigants.” 12 CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). The factors that the Court considers in 13 determining the propriety of a stay are: (1) “the possible damage which may result from the 14 granting of a stay”; (2) “the hardship or inequity which a party may suffer in being required to go 15 forward”; and (3) “the orderly course of justice measured in terms of the simplifying or 16 complicating of issues, proof, and questions of law which could be expected to result from a 17 stay.” Id. (citing Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)); see also Lockyer v. Mirant 18 Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). 19 The United States bears the burden of establishing a need for a stay. See Clinton v. Jones, 20 520 U.S. 681, 708 (1997) (burden lies with proponent of a stay). The United States “must make 21 out a clear case of hardship or inequity in being required to go forward, if there is even a fair 22 possibility that the stay for which he prays will work damage to some[one] else.” Landis, 299 23 U.S. at 255. In cases where there are related proceedings, a stay should not be granted where the 24 other proceeding is unlikely to be determinative of the factual or legal issues before the Court. 25 Lockyer, 398 F.3d at 1112-13 (reversing order granting stay where proceeding in other court was 26 unlikely to decide or contribute to the decision of the district court); Perez v. Leprino Foods Co., 27 No. 1:17-cv-00686-AWI-BAM, 2017 WL 2628249, at *3 (E.D. Cal. June 16, 2017) (denying stay 28 3 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 where an appellate decision was unlikely to impact the scope of discovery and economy of time 2 and effort). 3 Moreover, where the other proceedings will not be concluded within a reasonable time, a 4 stay should be denied. Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 5 1066-67 (9th Cir. 2007) (district court abused discretion by granting stay where it was unclear 6 when stay might lift). “If a stay is especially long or its term is indefinite, [the Ninth Circuit] 7 require[s] a greater showing to justify it.” Yong v. I.N.S., 208 F.3d 1116, 1119 (9th Cir. 2000). 8 9 ARGUMENT I. A STAY WILL CAUSE IRREPARABLE DAMAGE TO CALIFORNIA 10 The indefinite stay requested by the United States will cause ongoing irreparable harm to 11 California because the State cannot enforce portions of a duly enacted statute and will prejudice 12 California’s ability to develop evidence and present a defense. The United States asserts that any 13 stay will be “brief,” Mot. at 1, but it has provided no specific end-date for its requested stay and it 14 is unclear when the United States’ appeal will reach final resolution. See Dependable Highway 15 Express, Inc., 498 F.3d at 1066-67, 1070 (reversing stay order because there was no indication 16 that other proceedings would conclude within a reasonable time); Yong, 208 F.3d at 1119, 1121 17 (district court abused its discretion in granting indefinite, potentially lengthy stay that terminated 18 upon the resolution of an appeal because the stay could remain in effect for years). 19 In fact, California is already suffering irreparable harm because a large part of AB 450 is 20 preliminarily enjoined and the State will continue to suffer harm as long as it is prevented from 21 presenting a defense. See Maryland v. King, 133 S. Ct. 1, 3 (2012) (“Any time a State is enjoined 22 by a court from effectuating statutes enacted by representatives of its people, it suffers a form of 23 irreparable injury.”). A stay will also cause ongoing harm to employees throughout the State 24 because they too have an interest in the protections provided by AB 450 and a prompt 25 determination of AB 450’s validity. See Lockyer, 398 F.3d at 1112-13 (vacating stay where there 26 was more than a “fair possibility” of harm to the Attorney General and the interests of consumers 27 in California if action was stayed). In addition, private employers in California have an interest in 28 a timely resolution of this case so that they know with certainty whether AB 450’s provisions 4 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 apply to their conduct. Although the Court enjoined portions of AB 450 at the preliminary 2 injunction phase, the Court did not have the benefit of a developed evidentiary record. A more 3 complete factual record will ultimately demonstrate that the remaining AB 450 provisions are 4 neither preempted nor invalid under the doctrine of intergovernmental immunity. 5 Furthermore, while California did not appeal this Court’s preliminary injunction of AB 450, 6 the State did not “accept[] that injunction” for the litigation and pendency of any appeal by the 7 United States. See Mot. at 3. Rather, as ordered by the Court, California set forth a reasonable 8 proposed schedule that allows the State the opportunity to proceed towards the merits and 9 develop an adequate factual record that the Court has already indicated would be helpful. To the 10 extent the United States claims that the proposed schedule is lengthy, see id., that schedule was 11 intended to accommodate the United States’ stay motion after the parties met and conferred and 12 to allow sufficient time to conduct discovery, and any discovery-related motion practice, so as to 13 minimize the burden on the United States. See Joint Status Report (Sept. 4, 2018), ECF No. 205, 14 at 2-3 (noting that California would like to proceed “without further delay” but proposing a 15 schedule that would allow time for briefing and the Court’s consideration of the United States’ 16 stay motion). In addition, the length of the discovery period proposed by California is in line with 17 scheduling orders set by this Court in other matters and is meant to take into account all motion 18 practice on any discovery disputes. 19 Finally, delaying California’s ability to proceed with discovery will prejudice the State’s 20 ability to defend itself and test the United States’ allegations. Evidence relating to the United 21 States’ workplace inspections conducted in California during the period of time that the enjoined 22 AB 450 provisions were in effect may become stale and potential witnesses who can speak to 23 those inspections may be difficult to locate if a stay is granted. See Clinton, 520 U.S. at 707-08 24 (abuse of discretion for district court to grant a stay where “delaying trial would increase the 25 danger of prejudice resulting from the loss of evidence, including the inability of witnesses to 26 recall specific facts, or the possible death of a party”); cf. CMAX, Inc., 300 F.2d at 269 (upholding 27 delay of trial but noting that because all discovery proceedings had been concluded, there was no 28 issue with preserving evidence). Such witnesses and evidence could be probative to California’s 5 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 defense, since the State could demonstrate that the United States was not in fact burdened by AB 2 450 to such a degree to justify invalidation. 3 For these reasons, there is more than a “fair possibility” that California will suffer harm if 4 an indefinite stay is granted. See Landis, 299 U.S. at 255. The Court therefore should deny the 5 United States’ motion. 6 II. THE UNITED STATES HAS FAILED TO DEMONSTRATE HARDSHIP OR INEQUITY 7 A stay should also be denied because the United States has failed to demonstrate any 8 hardship or inequity if this case moves forward. See id. Being required to proceed towards trial 9 does not constitute a “clear case of hardship or inequity.” See Lockyer, 398 F.3d at 1112; 10 Dependable Highway Express, Inc., 498 F.3d at 1066 (movant failed to establish sufficient case 11 of hardship by being required to defend a lawsuit in absence of a stay). The United States’ appeal 12 includes two entirely different statutes, SB 54 and AB 103, and only the Notice provision of AB 13 450. Discovery relating to the challenged Access, Records, and Reverification provisions of AB 14 450 will have minimal overlap with any potential discovery relating to the Notice provision and 15 no bearing on any potential discovery relating to SB 54 and AB 103. See Perez, 2017 WL 16 2628249, at *3 (denying stay where scope of discovery would not be impacted by questions on 17 appeal and the likelihood of waste from conducting discovery was low). 18 Each AB 450 provision places a discrete set of obligations on employers, and an analysis of 19 each section under preemption and intergovernmental immunity principles is based on a different 20 set of circumstances. Thus, the United States’ reliance on McMenemy v. Colonial First Lending 21 Grp., Inc., No. 2:14-cv-001482-JAM-AC, 2015 WL 1137344 (E.D. Cal. Mar. 12, 2015), Mot. at 22 2, is misplaced. In McMenemy, the appealed order related to the threshold question whether one 23 of two corporate defendants that were alleged to have common ownership 2 could be properly 24 served and a Ninth Circuit ruling would impact which parties were subject to the litigation and 25 the resulting scope of discovery. Id. at *1, *3. The district court found that permitting plaintiffs 26 2 27 28 See Pls.’ Mot. Cert. Ruling Under FRCP 54(b); McMenemy v. Colonial First Lending Grp., Inc., No. 2:14-cv-001482-JAM-AC, 2015 WL 12681323 (E.D. Cal. Jan. 6, 2015) (discussing claims that defendants had common ownership and alleging that one was operated by the other). 6 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 to proceed with discovery against one of the defendants while the appeal was pending would not 2 promote judicial economy and would be potentially unfair to defendants. See id. at *3. 3 Here, denying a stay is unlikely to result in a waste of judicial resources or much 4 overlapping discovery. For instance, facts relevant to the United States’ purported burdens in 5 obtaining a judicial warrant to enter a nonpublic area of a workplace for immigration enforcement 6 purposes and how the federal verification system works would not be duplicative of any facts 7 relating to how posting of notices by employers may impact workplace inspections. Any 8 dispositive motions will apply preemption and intergovernmental immunity standards to a 9 separate set of statutes and facts. Therefore, there is a low likelihood of waste resulting from 10 conducting discovery and litigating the merits at this juncture. See Perez, 2017 WL 2628249, 11 at *3. 12 III. THE ORDERLY COURSE OF JUSTICE WARRANTS A DENIAL OF A STAY 13 Lastly, the orderly course of justice warrants a denial of a stay because the questions on 14 appeal relating to SB 54, AB 103, and the Notice provision will not dispose of the merits of the 15 claims before the Court. See Lockyer, 398 F.3d at 1112 (stay not justified because it was highly 16 doubtful that other proceeding would provide legal resolution to Attorney General’s claim); 17 Perez, 2015 WL 2628249, at *3 (even though questions on appeal may impact the claims in 18 district court, stay denied because appeal was unlikely to be determinative). During the pendency 19 of an appeal from a denial of a preliminary injunction, this Court has jurisdiction to proceed on 20 the merits with the claims before it. Phelan v. Taitano, 233 F.2d 117, 119 (9th Cir. 1956); Plotkin 21 v. Pac. Telephone and Telegraph Co., 688 F.2d 1291, 1293 (9th Cir. 1982); Jamul Action Comm. 22 v. Chaudhauri, No. 3:13-cv-01920-KJM-KJN, 2015 WL 6744531, at *2 (E.D. Cal. Nov. 4, 2015). 23 Although the United States challenges each of the three state laws on preemption and 24 intergovernmental immunity grounds, any appellate rulings will be based on a review of the 25 Court’s denial of a preliminary injunction. SB 54 and AB 103 are wholly separate laws with 26 distinct requirements. And even regarding AB 450, the appeal only encompasses the obligation 27 of employers to post notices in the workplace. An appellate decision will not dispose of the 28 issues remaining before this Court—whether the State can regulate an employer’s discretion to 7 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN) 1 consent to an immigration enforcement agent or prohibit the reverification of eligibility for 2 employment when not required by federal law. 3 Contrary to the United States’ claim, a stay would not “avoid possible inconsistent 4 decisions,” Mot. at 3, since each AB 450 provision is severable and stands on its own. 2017 Cal. 5 Stat., ch. 492, § 6 (AB 450). Indeed, this Court conducted separate analyses of the four 6 provisions. See PI Order at 60. The United States’ reliance on Sims v. AT&T Mobility Servs. 7 LLC, No. 2:12-cv-02702-JAM-AC, 2013 WL 753496 (E.D. Cal. Feb. 27, 2013), Mot. at 3, is also 8 misplaced. The underlying issue in that case—the validity of a waiver under the Class Action 9 Fairness Act and impact on federal jurisdiction—was being considered by the Supreme Court and 10 thus, the higher court’s decision would be determinative of the legal issue relating to the validity 11 of the waiver and the district court’s resulting jurisdiction. Id. at *7-8. Unlike Sims, a ruling 12 from the Ninth Circuit on SB 54, AB 103, or the Notice provision will not simplify or narrow the 13 remaining issues in this case, nor will it provide a legal resolution concerning the Access, 14 Records, and Reverification provisions. See Lockyer, 398 F.3d at 1112-13. The United States, 15 which initiated this action, will still have to devote resources and time in seeking to show that 16 those provisions are separately preempted by federal law and that they discriminate against the 17 federal government. Thus, economy of time and effort would not be furthered by a stay. 18 19 20 CONCLUSION For the foregoing reasons, the United States’ motion should be denied. Dated: October 2, 2018 Respectfully Submitted, 21 XAVIER BECERRA Attorney General of California 22 23 /s/Christine Chuang CHRISTINE CHUANG Deputy Attorney General Attorneys for Defendants 24 25 26 27 28 8 Defendants’ Opposition to Plaintiff’s Motion for Stay Pending Appeal (18-cv-00490-JAM-KJN)

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