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Shepherd v. Kohl's Department Stores, Inc.

United States District Court, E.D. California

August 2, 2016



         This matter is before the court on defendant’s motion for summary judgment on all claims. A hearing on the motion was held on July 5, 2016. Attorneys Anthony Sperber and Kurt Dreger appeared at that hearing on behalf of plaintiff and attorney Leila Narvid appeared for the defendant. The court has considered the parties’ briefs and arguments. For the reasons discussed below, the court will grant defendant’s motion in part and deny it in part.


         The facts of this case are largely undisputed. Plaintiff was hired by Kohl’s to work as a material handler at its distribution center in Patterson, California in June 2006. As part of his hiring, he signed a written agreement which included a provision which stated he was an at-will employee. Plaintiff had generally positive attendance and performance reviews, and was promoted to assistant shift supervisor in 2007. Plaintiff experienced some negative performance reviews during 2010 and early 2011. In August 2011, plaintiff was diagnosed with acute and chronic anxiety and received a recommendation for medical marijuana. Plaintiff did not disclose that recommendation for, or his use of, medical marijuana to his employer. In 2012, defendant updated its personnel policies to include exceptions to its drug testing and substance abuse policies, stating (as described further below) that employees in certain states, including California, who had a valid medical marijuana recommendation would not be discriminated against on that basis in hiring, termination, or other employment actions. Plaintiff testifies he reviewed those policies and relied on them in electing to continue using medical marijuana to treat his anxiety and to cease looking for a new job.

         On January 14, 2014, plaintiff strained his back at work while unloading cargo from a trailer. His supervisor advised him to go to U.S. HealthWorks, which is defendant’s health care provider for worker’s compensation purposes. There is some dispute about whether plaintiff was told he would be required to take a drug test in order for treatment to be provided. Ultimately, he signed a form consenting to a drug test. Two days later, on January 16, 2014, plaintiff received a call from U.S. HealthWorks advising him he had tested positive for trace amounts of marijuana metabolites. Plaintiff knew he had used marijuana while off-duty several days prior to the injury and that metabolites of the drug remained in one’s system for some time, and was therefore unsurprised by the test results.

         Five days after the call from U.S. HealthWorks, on January 21, 2014, plaintiff was called into a meeting with Maurice Barrera and Irma Ochoa, respectively the local operations manager and human resources manager for defendant. Barrera and Ochoa asked plaintiff about his drug test results. Plaintiff advised them he used medical marijuana to treat his anxiety. Plaintiff showed Barrera and Ochoa the recommendation for his medicinal marijuana, which he had in his locker at work. At the end of the meeting, Barrera and Ochoa suspended plaintiff from work.

         The next day, on January 22, 2014, plaintiff left a voicemail for Elizabeth Barnick, a corporate human resources director and Ochoa’s superior. Barnick returned plaintiff’s call on January 23, 2014, and was apparently unreceptive to any assertions that plaintiff was not under the influence at work, and only used marijuana in conjunction with his valid diagnosis for anxiety, stating, “You should have chosen a different medication.” On January 24, 2014, Ochoa left plaintiff a voicemail, saying he was terminated from employment, effective immediately, with no further explanation. Shortly thereafter, he received an “associate counseling form” from defendant, which asserted he had violated three of the company’s guidelines: (1) he reported to work in a condition unfit to perform his duties or under the influence of a controlled substance; (2) he violated a safety rule pertaining to specific work areas; and (3) he acted “in conflict with the interest of Kohl’s.” (Doc. No. 54 at 7.) This suit followed.

         This case was removed here on diversity grounds from Stanislaus County Superior Court on December 1, 2014. (Doc. No. 1.) Plaintiff’s second amended complaint states seven state law causes of action: (1) disability discrimination in violation of California’s Fair Employment and Housing Act (“FEHA”); (2) failure to engage in an interactive process in violation of the FEHA; (3) failure to reasonably accommodate in violation of the FEHA; (4) invasion of privacy in violation of the California Constitution; (5) wrongful termination in violation of public policy; (6) breach of implied contract and the covenant of good faith and fair dealing; and (7) defamation. (Doc. No. 44.) Defendant filed a motion for summary judgment on June 6, 2016. (Doc. No. 46.) Plaintiff filed an opposition on June 21, 2016. (Doc. No. 52.) Defendant filed its reply on June 28, 2016. (Doc. No. 56.)

         Legal Standard

         Summary judgment is appropriate when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         In summary judgment practice, the moving party “initially bears the burden of proving the absence of a genuine issue of material fact.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The moving party may accomplish this by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” or by showing that such materials “do not establish the absence or presence of a genuine dispute, or that the adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56(c)(1)(A), (B). When the non-moving party bears the burden of proof at trial, “the moving party need only prove that there is an absence of evidence to support the nonmoving party’s case.” Oracle Corp., 627 F.3d at 387 (citing Celotex, 477 U.S. at 325.). See also Fed. R. Civ. P. 56(c)(1)(B). Indeed, summary judgment should be entered, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial. See Celotex, 477 U.S. at 322. “[A] complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Id. In such a circumstance, summary judgment should be granted, “so long as whatever is before the district court demonstrates that the standard for entry of summary judgment . . . is satisfied.” Id. at 323.

         If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue as to any material fact actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In attempting to establish the existence of this factual dispute, the opposing party may not rely upon the allegations or denials of its pleadings but is required to tender evidence of specific facts in the form of affidavits, and/or admissible discovery material, in support of its contention that the dispute exists. See Fed. R. Civ. P. 56(c)(1); Matsushita, 475 U.S. at 586 n.11; Orr v. Bank of America, NT & SA, 285 F.3d 764, 773 (9th Cir. 2002) (“A trial court can only consider admissible evidence in ruling on a motion for summary judgment.”). The opposing party must demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987), and that the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the nonmoving party. See Wool v. Tandem Computers, Inc., 818 F.2d 1433, 1436 (9th Cir. 1987).

         In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing versions of the truth at trial.” T.W. Elec. Serv., 809 F.2d at 631. Thus, the “purpose of summary judgment is to ‘pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.’” Matsushita, 475 U.S. at 587 (citations omitted).

         “In evaluating the evidence to determine whether there is a genuine issue of fact, ” the court draws “all reasonable inferences supported by the evidence in favor of the non-moving party.” Walls v. Central Costa County Transit Authority, 653 F.3d 963, 966 (9th Cir. 2011). It is the opposing party’s obligation to produce a factual predicate from which the inference may be drawn. See Richards v. Nielsen Freight Lines, 602 F.Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 810 F.2d 898, 902 (9th Cir. 1987). Finally, to demonstrate a genuine issue, the opposing party “must do more than simply show that there is some metaphysical doubt as to the material facts . . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Matsushita, 475 U.S. at 587 (citation omitted).


         1. The FEHA Claims

         Plaintiff’s first three causes of action allege defendant violated the FEHA. The analysis of each of these claims is instructed by the application of the decision in Ross v. RagingWire Technologies, 42 Cal.4th 920 (2008). In RagingWire, the California Supreme Court held the FEHA was not impacted by the Compassionate Use Act, which ostensibly legalized medical marijuana in California. Id. at 924. That act, which provides immunity against criminal prosecution under two state statutes, made no other changes in the legal status of marijuana. Id. at 924. Because the understanding of the holding in that case informs the analysis of each of these claims, the FEHA claims are addressed in reverse order, starting with plaintiff’s cause of action for failure to accommodate, which is squarely controlled by the decision in RagingWire.

         a. Third Cause of Action - Failure to Accommodate Under the FEHA

         California Government Code § 12940 states “[i]t shall be an unlawful employment practice . . . (a) For an employer, because of the . . . physical disability [or] medical condition . . . of any person, to refuse to hire or employ the person . . . or to bar or to discharge the person from employment.” See also RagingWire, 42 Cal.4th at 925. Because an employer may discharge or refuse to hire someone who would be “unable to perform his or her essential duties even with reasonable accommodations, ” California Government Code § 12940(a)(1)-(2), the statute “inferentially requires employers in their hiring decisions to take into account the feasibility of making reasonable accommodations.” RagingWire, 42 Cal.4th at 925-26. However, the FEHA “does not require employers to accommodate the use of illegal drugs, ” as “[n]o state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law, even for medical users.” Id. at 926 (citations and quotations omitted). Because the “operative provisions of the Compassionate Use Act (Health & Saf. Code, § 11362.5) do not speak to employment law, ” but rather merely provide immunity to criminal prosecution under California Health and Safety Code §§ 11357 and 11358, the court held that a “plaintiff cannot state a cause of action under the FEHA based on defendant’s refusal to accommodate his use of marijuana.” Id. at 928-31.

         Since the decision in RagingWire conclusively forecloses his third cause of action for failure to reasonably accommodate in violation of the FEHA, plaintiff instead advances several other arguments. First, plaintiff argues defendant waived its right to rely on RagingWire as a defense because it implemented policies prohibiting discrimination against medical marijuana card holders who test positive for medical marijuana in 2012, four years after the RagingWire decision. (Doc. No. 52 at 40-41.) Second, plaintiff claims defendant is estopped from relying on RagingWire as a defense for similar reasons. (Doc. No. 52 at 41-44.) Third, plaintiff argues RagingWire is inapplicable, essentially because his FEHA claims are based on defendant’s failure to follow its own policies. (Doc. No. 52 at 44-45.) Finally, plaintiff argues his FEHA claims are based on defendant’s withdrawal of an already existing accommodation they provided to him, an issue not litigated in RagingWire. (Doc. No. 52 at 45-46.) None of plaintiff’s arguments in this regard are persuasive.

         “[W]aiver is the intentional relinquishment of a known right after knowledge of the facts.” Waller v. Truck Ins. Exch., Inc., 11 Cal.4th 1, 31 (1995) (quotations and citations omitted). “The object of estoppel is to prevent a person from asserting a right which has come into existence by contract, statute or other rule of law where, because of his conduct, silence or omission, it would be unconscionable to allow him to do so.” Westoil Terminals Co. v. Ind. Indem. Co., 110 Cal.App.4th 139, 151-52 (2003).

         In contrast to both of these affirmative defenses stands the California Supreme Court’s holding in RagingWire. As defendant correctly argues, RagingWire did not “create a right” under the FEHA which employers can relinquish: it simply acknowledged a plaintiff cannot state a claim under the FEHA based on an employer’s failure to accommodate medicinal marijuana usage. See 42 Cal.4th at 931 (“[P]laintiff cannot state a cause of action under the FEHA based on defendant’s refusal to accommodate his use of marijuana.”). Put another way, it does not violate the FEHA to terminate an employee based on their use of marijuana, regardless of why they use it, and the Compassionate Use Act did not change that. Id. at 926-28. A defendant cannot waive into the ability to be sued for something that does not violate the law. See, e.g., Nyberg v. Portfolio Recovery Assocs., LLC, Case. No. 3:15-cv-01175-PK, 2016 WL 3176585, at *3 (D. Ore. June 2, 2016) (“[F]ailure to state a claim for relief is a negative defense, not an affirmative defense.”); Phelps v. City of Parma, Case No. 1:14-cv-00085-EJL-REB, 2015 WL 893112, at *2 (D. Idaho Mar. 2, 2015) (noting that, even if negative defenses were stricken from the pleadings, plaintiff “would still have the burden of proving his prima facie case and Defendants would still be entitled to argue that he does not state a claim upon which relief can be granted”).

         To the extent plaintiff attempts to argue around the holding in RagingWire by asserting his FEHA claim is based on defendant’s failure to follow its own policies, the court is unpersuaded. (Doc. No. 52 at 45.) Plaintiff presents no authority, and this court has found none, suggesting a cognizable FEHA claim can be based simply on an employer’s failure to abide by policies not required by FEHA. While the failure to abide by its own policies may be a breach of an implied-in-fact contract, for the reasons discussed below, refusing to accommodate an employee’s marijuana usage does not violate FEHA. See RagingWire, 42 Cal.4th at 931.

         Similarly, plaintiff’s attempt to distinguish RagingWire by characterizing his termination as a withdrawal of a pre-existing accommodation is unavailing. The undisputed evidence before the court on summary judgment establishes that the first time defendant knew of either plaintiff’s disability or his medical marijuana recommendation was on January 21, 2014, when plaintiff advised Ochoa and Barrera of these facts in his meeting following his positive drug test. (Doc. No. 53 at 3, 6.) Plaintiff was terminated via voicemail three days later, and was suspended in the intervening time. In no sense of the word can defendant be described as having accommodated plaintiff’s use of marijuana given these undisputed facts. Given the above, defendant’s motion for summary judgment must be granted as to plaintiff’s third cause of action.

         b. Second Cause of Action - Failure to Engage in an Interactive Process Under FEHA

         California Government Code § 12940 states it is “an unlawful employment practice . . . [f]or an employer . . . to fail to engage in a timely, good faith, interactive process with the employee or applicant to determine effective reasonable accommodations, if any, in response to a request for reasonable accommodation by an employee or applicant with a known physical or mental disability or known medical condition.” Cal. Gov’t Code § 12940(n). California courts have held this requirement requires employers to engage in an interactive process “only if a reasonable accommodation was possible.” Nadaf-Rahrov v. Neiman Marcus Grp., Inc., 166 Cal.App.4th 952, 980-81 (2008). See also Nealy v. City of Santa Monica, 234 Cal.App.4th 359, 379 (2015); Scotch v. Art Inst. Of Cal.-Orange Cty., Inc., 173 Cal.App.4th 986, 1018-19 (2009). ...

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