Title: Murray v. Alaska Airlines

State: california

Issuer: California Supreme Court

Document:

1 
Filed 8/23/10 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
KEVIN MURRAY, 
) 
 
 
) 
S162570 
 
Plaintiff and Petitioner, 
) 
 
 
) 
Ninth Cir.Ct.App. 
 
v. 
) 
No. 06-15847 
 
 
) 
ALASKA AIRLINES, INC., 
) 
U.S. Dist.Ct. 
 
 
) 
No. CV-05-03633-MJJ 
 
Defendant and Respondent. 
) 
 
____________________________________) 
 
The doctrine of collateral estoppel, or issue preclusion,1 is firmly embedded 
in both federal and California common law.  It is grounded on the premise that 
―once an issue has been resolved in a prior proceeding, there is no further fact-
finding function to be performed.‖  (Parklane Hosiery Co. v. Shore (1979) 439 
U.S. 322, 336, fn. 23.)  ―Collateral estoppel . . . has the dual purpose of protecting 
litigants from the burden of relitigating an identical issue with the same party or 
his privy and of promoting judicial economy, by preventing needless litigation.‖  
(Id. at p. 326, fn. omitted.) 
We granted the request of the United States Court of Appeals, Ninth 
Circuit, to answer the following question of California law pertaining to collateral 
estoppel:  Should issue-preclusive effect be given to a federal agency‘s 
investigative findings, when the subsequent administrative process provides the 
                                              
1  
Many courts have used these terms interchangeably, and we do so here. 
 
2 
complainant the option of a formal adjudicatory hearing to determine the contested 
issues de novo, as well as subsequent judicial review of that determination, but the 
complainant elects not to invoke his right to that additional process, and the 
agency‘s findings and decision thereby become a final, nonappealable order by 
operation of law?2  (See Murray v. Alaska Airlines, Inc. (9th Cir. 2008) 522 F.3d 
920 (Murray v. Alaska).) 
The Ninth Circuit has furnished the following statement of facts and 
procedural history (substantially reproduced here with minor nonsubstantive and 
stylistic modifications) to more fully explain the context in which the question 
arises.  (Murray v. Alaska, supra, 522 F.3d at pp. 921-922.) 
Factual and Procedural Background 
Kevin Murray (Murray), a quality assurance auditor at Alaska Airlines, Inc. 
(Alaska), brought safety concerns to the attention of the Federal Aviation 
Administration (FAA), which then conducted an investigation that revealed 
―significant discrepancies relating to air carrier safety.‖  Subsequently, the 
maintenance facility at which Murray worked was closed and his position was 
outsourced.  Murray was not rehired by Alaska. 
In December 2004, Murray filed an administrative complaint with the 
United States Secretary of Labor (Secretary) under the whistleblower protection 
provision of the Wendell H. Ford Aviation Investment and Reform Act for the 
21st Century (AIR 21), seeking reinstatement, back pay, and compensatory 
                                              
2  
We have reformulated the question to reflect that the federal agency‘s 
investigative findings here at issue have become a final nonappealable order by 
operation of law, which appropriately narrows the focus of the inquiry.  (Cal. 
Rules of Court, rule 8.548(a).) 
 
3 
damages.  (See 49 U.S.C. § 42121(b)(1), (b)(3)(B).)3  Invocation of AIR 21‘s 
administrative complaint procedure is voluntary and optional.  (§ 42121(b)(1).)  
Murray — through his lawyer, Rand Stephens — alleged he had been denied the 
opportunity to apply or interview for open positions at other Alaska facilities, 
―despite [his] stated and documented request to remain‖ with the company, ―in 
retaliation for [his] notifying [FAA inspectors] of Federal Aviation Regulations 
. . . violations and for serious airworthiness issues posing a threat to air safety.‖  
He also alleged that his superiors at Alaska ―admonished and chastised [him] . . . 
for disclosing information to the FAA.‖ 
Pursuant to section 42121(b)(2)(A), the Secretary conducted an 
investigation, during which Alaska submitted a written response to Murray‘s 
complaint, produced relevant documentation, and offered testimonial evidence.  
Murray was never contacted by the Secretary‘s investigator.  He was not given a 
copy of the documents provided by Alaska or its witnesses‘ statements.  Nor did 
Murray have an opportunity to submit additional information to the Secretary, or 
respond to Alaska‘s arguments, before the Secretary rendered her findings. 
In June 2005, the Secretary notified Murray by letter of her investigative 
findings.  The Secretary found that Murray had participated in protected 
whistleblowing activity and that his termination and Alaska‘s subsequent failure to 
rehire him constituted adverse employment action.  Notwithstanding that 
determination, the Secretary further determined there was ―no credible basis to 
believe [Alaska] violated the employee protection provisions of AIR 21,‖ because 
the ―record fail[ed] to establish any connection between [Murray‘s] termination 
and his involvement in protected activity.‖  The Secretary found that Murray had 
                                              
3  
Hereinafter, all statutory citations are to title 49 of the United States Code 
unless otherwise noted. 
 
4 
applied electronically for positions at other Alaska facilities and then ―inexplicably 
removed his resume . . . the same night he applied.‖  ―The evidence showed that it 
was impossible for [Alaska] to remove [Murray‘s] resume from the employment 
website of its own accord.‖  The Secretary therefore concluded that Murray ―failed 
to establish a nexus between his protected activity and the perceived 
discriminatory action taken against him.‖  The Secretary dismissed Murray‘s 
administrative complaint because he failed to demonstrate there was ―reasonable 
cause to believe‖ (§ 42121(b)(2)(A)) that his whistleblowing was a ―contributing 
factor in [Alaska‘s] unfavorable personnel action.‖  (§ 42121(b)(2)(B)(iii); see 
29 C.F.R. § 1979.105(a) (2010).) 
The Secretary‘s letter closed by notifying Murray that he had ―important 
rights of objection which must be exercised in a timely fashion.‖  ―AIR 21 permits 
an aggrieved party, WITHIN 30 DAYS . . . to file objections with the Department 
of Labor and to request a hearing on the record before an Administrative Law 
Judge.‖  (Original capitalization.)  The letter also warned that if ―no objections are 
filed WITHIN 30 DAYS, this decision shall become final and not subject to 
judicial review.‖  (Original capitalization.)  Murray never filed objections or 
requested an on-the-record hearing.  Nor did he take any steps to formally 
withdraw his administrative complaint.  (Cf. 29 C.F.R. § 1979.111(a) [allowing 
complainant to withdraw his complaint by filing a written withdrawal with the 
Asst. U.S. Sect. of Labor, who ―then determine[s] whether the withdrawal will be 
approved‖].)  On July 8, 2005, by operation of law, the Secretary‘s preliminary 
investigative findings were ―deemed a final order . . . not subject to judicial 
review.‖  (§ 42121(b)(2)(A).) 
On August 2, 2005, Murray, still represented by counsel, filed a complaint 
against Alaska in California state court, claiming that he had been wrongfully 
terminated and retaliated against for whistleblowing, in violation of the public 
 
5 
policy of California.  (See Lab. Code, § 1102.5, subd. (b).)  Invoking diversity 
jurisdiction, Alaska removed the action to federal district court.  The district court, 
relying on the Secretary‘s findings in her final order, granted summary judgment 
to Alaska based on collateral estoppel.  Murray timely appealed. 
Discussion 
The Ninth Circuit has asked this court to determine whether certain factual 
findings made in the Secretary‘s final nonappealable order in the AIR 21 
administrative action that preceded this state court lawsuit (removed to federal 
court on grounds of diversity jurisdiction) may now be afforded issue-preclusive 
effect under California law.  Given the particular factual and procedural 
circumstances of this case, and the particular provisions of the AIR 21 statutory 
scheme here at issue, we conclude that they should. 
Collateral estoppel is a distinct aspect of res judicata.  ― ‗The doctrine of res 
judicata gives conclusive effect to a former judgment in subsequent litigation 
between the same parties involving the same cause of action.  A prior judgment 
for the plaintiff results in a merger and supersedes the new action by a right of 
action on the judgment.  A prior judgment for the defendant on the same cause of 
action is a complete bar to the new action.  (4 Witkin, Cal. Procedure (2d ed. 
1971) Judgment, §§ 147-148, pp. 3292-3293.)  Collateral estoppel . . . involves a 
second action between the same parties on a different cause of action.  The first 
action is not a complete merger or bar, but operates as an estoppel or conclusive 
adjudication as to such issues in the second action which were actually litigated 
and determined in the first action.  (Id., § 197, at p. 3335.)‘  (Preciado v. County of 
Ventura (1982) 143 Cal.App.3d 783, 786-787, fn. 2.)‖  (Rymer v. Hagler (1989) 
211 Cal.App.3d 1171, 1178 (Rymer).) 
This case involves the doctrine of collateral estoppel as applied to the final 
decision of a federal administrative agency, as well as a corollary of that doctrine 
 
6 
sometimes described as ―judicial exhaustion.‖  It is settled that the doctrine of 
collateral estoppel or issue preclusion is applicable to final decisions of 
administrative agencies acting in a judicial or quasi-judicial capacity.  (See Astoria 
Federal S. & L. Assn. v. Solimino (1991) 501 U.S. 104, 107 [extending the 
doctrine to the final adjudications of both state and federal agencies]; United 
States v. Utah Constr. Co. (1966) 384 U.S. 394, 421-422 (Utah Constr. Co.); 
People v. Sims (1982) 32 Cal.3d 468, 479 (Sims); French v. Rishell (1953) 40 
Cal.2d 477, 480-481; Knickerbocker v. City of Stockton (1988) 199 Cal.App.3d 
235, 242.)  As we explained in McDonald v. Antelope Valley Community College 
Dist. (2008) 45 Cal.4th 88, judicial exhaustion ―may arise when a party initiates 
and takes to decision an administrative process—whether or not the party was 
required, as a matter of administrative exhaustion, to even begin the administrative 
process in the first place.  Once a decision has been issued, provided that decision 
is of a sufficiently judicial character to support collateral estoppel, respect for the 
administrative decisionmaking process requires that the prospective plaintiff 
continue that process to completion, including exhausting any available judicial 
avenues for reversal of adverse findings.  (Johnson v. City of Loma Linda (2000) 
24 Cal.4th 61, 69-72.)  Failure to do so will result in any quasi-judicial 
administrative findings achieving binding, preclusive effect and may bar further 
relief on the same claims.  (Id. at p. 76.)‖  (McDonald, supra, at p. 113.) 
This court has further explained that ―[i]ndicia of [administrative] 
proceedings undertaken in a judicial capacity include a hearing before an impartial 
decision maker; testimony given under oath or affirmation; a party‘s ability to 
subpoena, call, examine, and cross-examine witnesses, to introduce documentary 
evidence, and to make oral and written argument; the taking of a record of the 
proceeding; and a written statement of reasons for the decision.‖  (Pacific Lumber 
 
7 
Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921, 944 (Pacific 
Lumber).) 
Ultimately, ―the inquiry that must be made is whether the traditional 
requirements and policy reasons for applying the collateral estoppel doctrine have 
been satisfied by the particular circumstances of this case.‖  (Sims, supra, 
32 Cal.3d 468, 483.)  Here, Murray, who has been represented by counsel at every 
stage of the prior administrative and present court proceedings, voluntarily 
instituted an action against his former employer, Alaska, under the federal 
whistleblower protection statute, AIR 21.  At the conclusion of the Secretary‘s 
preliminary investigation, and upon receipt of her adverse factual findings and 
decision, Murray effectively abandoned his administrative action and brought suit 
against Alaska in state court, raising claims that would ultimately turn on the same 
key factual matter of causation resolved against him in the earlier proceedings.4  
He failed to take the steps required to lawfully withdraw his adminstrative 
complaint, failed to exercise his absolute statutory right to a formal de novo 
hearing of record before an administrative law judge (ALJ), and, consequently, 
failed to exercise his statutory right to appeal any adverse findings and decision of 
the ALJ to the Ninth Circuit.  All such omissions occurred in the face of clear 
statutory notice to Murray that his forfeiture of such rights would result in the 
Secretary‘s preliminary factual findings and decision becoming a final 
nonappealable order by operation of law.  (§ 42121(b)(2)(A).) 
                                              
4  
As the Ninth Circuit‘s order explains, Murray‘s state law claims include 
causation as a required element.  (Murray v. Alaska, supra, 522 F.3d at p. 922, 
fn. 2.)  Claims of whistleblower harrassment and retaliatory termination may fail 
where the complainant ―cannot demonstrate the required nexus between his 
reporting of alleged statutory violations and his allegedly adverse treatment by 
[the employer].‖  (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1258.) 
 
8 
In short, this case involves a variation of the usual factual pattern that 
implicates the doctrine of collateral estoppel and its corollary principle of judicial 
exhaustion.  The AIR 21 statutory scheme afforded Murray an absolute right to a 
full de novo trial-like hearing before an ALJ, a hearing we find would fully 
comport with the requirements set forth in Pacific Lumber for establishing that the 
administrative proceedings were ―undertaken in a judicial capacity.‖  (Pacific 
Lumber, supra, 37 Cal.4th at p. 944.)5  Here, however, Murray admittedly failed to 
invoke, and thereby forfeited, his right to such a formal adversarial hearing of 
record.  None of this court‘s previous decisions directly addresses whether adverse 
administrative findings may be given collateral estoppel effect in a subsequent 
court suit if the complainant against whom estoppel is being sought forfeited his 
right to such a hearing, resulting in the agency‘s findings becoming a final, 
nonappealable order by operation of law. 
The high court has explained that the focus of our inquiry should be on 
whether the party against whom issue preclusion is being sought had ―an adequate 
opportunity to litigate‖ the factual finding or issue in the prior administrative 
proceeding.  (Utah Constr. Co., supra, 384 U.S. at p. 422.)  We followed Utah 
Constr. Co. in Sims, supra, 32 Cal.3d 468, 479, commenting that ―[t]his standard 
                                              
5  
The Ninth Circuit‘s order observes, ―An AIR 21 complainant may contest 
the Secretary‘s investigative findings by filing ‗objections to [those] findings‘ and 
‗request[ing] a hearing on the record‘ within 30 days of receiving them.  See 
§ 42121(b)(2)(A); 29 C.F.R. § 1979.106(a).  If the Secretary‘s findings are timely 
challenged, AIR 21 provides for a de novo, on-the-record hearing before an 
Administrative Law Judge.  See 29 C.F.R. § 1979.107(a)-(b); id. at § 1979.109(a) 
(written findings and conclusions); 29 C.F.R. § 18.13 (discovery procedures); id. 
at § 18.24 (subpoena power); id. at § 18.34 (right to personal appearance and 
representation by counsel); id. at § 18.38 (prohibition on ex parte 
communications); id. at § 18.52 (decision based on record of hearings).‖  (Murray 
v. Alaska, supra, 522 F.3d at p. 923, fn. 4.) 
 
9 
formulated by the Supreme Court is sound . . . .‖  Appellate courts of this state 
have followed suit, likewise recognizing that ―[i]t is the opportunity to litigate that 
is important in these cases, not whether the litigant availed himself or herself of 
the opportunity.  (Teitelbaum Furs, Inc. v. Dominion (1962) 58 Cal.2d 601, 
607 . . . .)‖  (Rymer, supra, 211 Cal.App.3d at p. 1179, italics added [no showing 
complainant was denied opportunity to present relevant evidence in administrative 
proceeding]; see also Castillo v. City of Los Angeles (2001) 92 Cal.App.4th 477, 
482 [same].) 
Focusing the inquiry on the opportunity to litigate issues in the prior 
administrative proceeding is particularly appropriate where the party who initiates 
an administrative complaint apparently abandons his action upon receiving an 
adverse ruling, thereby forfeiting his statutory rights to a formal de novo hearing 
of record before an ALJ, and then seeks to relitigate the same issues decided in the 
agency‘s final order against the same party in a subsequently filed court action. 
We confronted facts somewhat analogous to those now before us in Sims, 
supra, 32 Cal.3d 468.  There, the issue was whether a party to an administrative 
action who simply refused to meaningfully participate in the proceedings was 
estopped from relitigating, in a subsequent court action against the same party, 
identical factual issues decided in the earlier administrative action.  The county 
department of social services (County) in Sims informed the respondent, a welfare 
recipient, that she had received monies and food stamp benefits to which she was 
not entitled, allegedly procured by fraud.  The County demanded that the 
respondent make restitution payments, and she agreed.  The County additionally 
served notice on her, proposing to reduce her future cash grants to further 
compensate for the alleged overpayments.  The respondent then exercised her 
statutory right to a ―fair hearing‖ before a hearing officer of the California 
Department of Social Services (DSS) to challenge the propriety of the County‘s 
 
10 
action.  Meanwhile, the district attorney, on behalf of the state, filed criminal 
charges against the respondent alleging violations of the Welfare and Institutions 
Code based on the same allegations of welfare fraud raised in the administrative 
action.  (Sims, supra, 32 Cal.3d at p. 473.) 
While the criminal charges were pending, the respondent‘s hearing was 
held before a DSS hearing officer.  ―The County declined to present any evidence 
against respondent at the hearing.  It contended that the DSS lacked jurisdiction to 
hear the case since criminal charges were still pending in the superior court.  
Respondent submitted the County‘s investigation report to the hearing officer and 
presented evidence to disprove the allegation of fraud.  [Her husband] testified that 
during the time in question he lived at addresses other than that of respondent.‖  
(Sims, supra, 32 Cal.3d at p. 474.)  The hearing officer concluded the agency had 
jurisdiction to hear the case, and that the County, through its inaction, had failed to 
meet its burden of proving welfare fraud.  The director of the DSS adopted the 
hearing officer‘s result.  The County neither requested a rehearing nor sought 
judicial review of the agency‘s decision.  (Ibid.) 
Thereafter, in the criminal proceeding, the superior court applied the 
doctrine of collateral estoppel to dismiss the criminal charges against the 
respondent.  We affirmed on appeal, concluding that the agency‘s determination of 
an issue (welfare fraud) common to both the administrative and criminal 
proceedings could properly be accorded collateral estoppel effect in the later 
criminal prosecution because the traditional requirements and policy reasons for 
applying collateral estoppel had been satisfied.  The administrative hearing was a 
quasi-judicial adversarial proceeding, since the administrative agency resolved 
disputed issues of fact properly before it, and since the hearing process provided 
both parties with an adequate opportunity to fully litigate the issues underlying 
their claims.  Although the hearing was not conducted according to the rules of 
 
11 
evidence applicable to judicial proceedings, we found this distinction did not 
preclude a finding that the administrative agency was acting in a quasi-judicial 
capacity.  The welfare fraud issue litigated in the administrative proceeding was 
identical to that involved in the criminal prosecution.  (Sims, supra, 32 Cal.3d at 
pp. 484-489.)  We further found that the public policy considerations underlying 
the doctrine were satisfied, in that according the administrative agency‘s final 
decision collateral estoppel effect promoted judicial economy, avoided the 
possibility of inconsistent judgments, and protected the accused from harassment 
through repetitive litigation.  (Ibid.) 
Sims explained that ―[a]n issue is actually litigated ‗[w]hen [it] is properly 
raised, by the pleadings or otherwise, and is submitted for determination, and is 
determined . . . .  A determination may be based on a failure of . . . proof . . . .‘ 
(Rest.2d, Judgments (1982) § 27, com. d, p. 255, italics added.)  [¶]  Here, the 
welfare fraud issue was ‗properly raised‘ by respondent‘s request for a fair hearing 
pursuant to Welfare and Institutions Code section 19050.  After the fair hearing, 
the controversy was ‗submitted‘ to the DSS for a ‗determination‘ on the merits.  
The hearing officer found that the County had failed to prove that respondent had 
fraudulently obtained welfare benefits.  [¶]  Thus, it is clear that respondent‘s guilt 
or innocence of welfare fraud was actually litigated at the DSS fair hearing.  The 
County‘s failure to present evidence at the hearing did not preclude the fraud issue 
from being ‗submitted‘ to and ‗determined‘ by the DSS.‖  (Sims, supra, 32 Cal.3d 
at p. 484.) 
Sims explained as well that ―the fair hearing process provided both the 
County and respondent with an adequate opportunity to fully litigate their claims 
before the DSS.  That the County failed to present evidence or otherwise 
participate at the hearing does not prove the contrary.  The failure of a litigant to 
introduce relevant available evidence on an issue does not necessarily defeat a plea 
 
12 
of collateral estoppel.  (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra, 
58 Cal.2d at p. 607.)  Even a judgment of default in a civil proceeding is ‗res 
judicata as to all issues aptly pleaded in the complaint and defendant is estopped 
from denying in a subsequent action any allegations contained in the former 
complaint.‘  (Fitzgerald v. Herzer (1947) 78 Cal.App.2d 127, 132.)  [¶]  What is 
significant here is that the County had notice of the hearing as well as the 
opportunity and incentive to present its case to the hearing officer.‖  (Sims, supra, 
32 Cal.3d at p. 481.)  ―The People cannot now take advantage of the fact that the 
County avoided its litigation responsibilities and chose not to present evidence at 
the prior proceeding.‖  (Id. at pp. 481-482, italics added.) 
California intermediate appellate courts have likewise invoked the 
principles we explained in Sims in various factual settings.  For example, in 
Rymer, supra, 211 Cal.App.3d at page 1179, an employee (Rymer) filed an 
administrative complaint with the Workers‘ Compensation Appeals Board 
(WCAB) against his employer, seeking compensation for injuries resulting from a 
work-related accident.  He later filed a civil complaint for damages against the 
employer in the superior court, predicated on the same injuries received in the 
same accident, alleging the employer had failed to provide workers‘ compensation 
benefits to him when injured.  The two proceedings progressed concurrently.  (Id. 
at p. 1175.) 
Thereafter, Rymer brought a motion in the WCAB proceeding to exclude 
Fremont Indemnity Company (Fremont) as a party to the proceeding, on the basis 
that Fremont was not the workers‘ compensation carrier for the employer at the 
time of his injuries.  The WCAB judge denied the motion, ruling that Fremont 
either provided workers‘ compensation coverage to the employer on the date of 
the injury, or was estopped from denying coverage based on its admission of such 
coverage.  The parties were each notified they had a statutory right to petition for 
 
13 
reconsideration of the decision.  Further testimony on the merits of the workers‘ 
compensation claim was heard that same day, but the hearing was not concluded.  
A second day of testimony was set for a later date, but was never held.  Thereafter, 
upon being served with a written copy of the minutes of the hearing at which the 
WCAB judge issued his coverage order as well as the order itself, Rymer 
successfully petitioned for a voluntary dismissal of his workers‘ compensation 
claim without seeking reconsideration of the administrative law judge‘s coverage 
ruling.  (Rymer, supra, 211 Cal.App.3d at pp. 1175-1176.) 
The employer in Rymer subsequently filed a motion for judgment on the 
pleadings in the superior court action under the exclusivity rule of workers‘ 
compensation law, on the ground that the WCAB judge‘s ruling on the issue of 
workers‘ compensation coverage was binding on Rymer and dispositive of his 
claim.  The trial court granted the motion, and judgment on the pleadings was 
entered in the employer‘s favor.  The Court of Appeal affirmed, explaining that 
―the parties were given an opportunity to present evidence and to litigate the 
coverage issue.  The decision in the WCAB proceeding resolved a disputed issue 
by applying a rule of law . . . to a specific set of facts.  (See People v. Sims, supra, 
32 Cal.3d at p. 480.)  [Rymer] was afforded a full hearing to present evidence 
under oath or affirmation.  Each party was represented by counsel.  Each party was 
provided an opportunity to present oral argument.  While no evidence was 
introduced on the issue of coverage and the WCAB judge heard only argument of 
counsel, there is no showing that [Rymer] was denied the opportunity to introduce 
evidence on the issue.  He simply chose not to do so.  It is the opportunity to 
litigate that is important in these cases, not whether the litigant availed himself or 
herself of the opportunity.)‖  (Rymer, supra, 211 Cal.App.3d at p. 1179.) 
Similarly, in Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464 
(Takahashi), a public school teacher claiming she was wrongfully terminated for 
 
14 
incompetency was found collaterally estopped from pursuing her civil and 
constitutional claims in court because she had failed to raise those claims as 
defenses to the charges of incompetency at the administrative hearing conducted 
before the Commission on Professional Competence, instead asserting that the 
commission had no jurisdiction to proceed.  (Id. at pp. 1467-1468, 1470.)  The 
Takahashi court observed, ―There can be no justification for plaintiff‘s position 
that she should be permitted to fail to assert at the administrative hearing 
constitutional and civil rights violations as reasons that made her termination 
wrongful, fail to prevail on the writ without attempting to urge or to bring before 
the court those reasons, and then be allowed to recover damages in this 
consolidated [court] action that resulted from termination of her employment 
alleged to be wrongful based on those same reasons.‖  (Id. at p. 1485.) 
In Sims, Rymer, and Takahashi, the parties against whom issue preclusion 
was sought were afforded hearings in their prior administrative proceedings, but 
failed to take full advantage of the opportunity to fully establish their claims at 
those hearings.  In Rymer, the complainant was afforded the opportunity to present 
evidence on the relevant issue at his hearing and simply chose not to do so.  
(Rymer, supra, 211 Cal.App.3d at p. 1179.)  In Takahashi, the plaintiff chose to 
contest the jurisdiction of the agency to proceed with the hearing rather than argue 
her specific claims.  (Takahashi, supra, 202 Cal.App.3d at p. 1470.)  In Sims, the 
County ―avoided its litigation responsibilities‖ altogether by ―fail[ing] to present 
evidence or otherwise participate‖ in the prior administrative hearing process.  
(Sims, supra, 32 Cal.3d at pp. 481, 482.)  We see no significant distinction 
between the situation here, where Murray forfeited his absolute right to a formal 
adversarial hearing of record before an ALJ, a hearing that would have plainly 
satisfied the requirement that the administrative proceeding be ―undertaken in a 
judicial capacity‖ (Pacific Lumber, supra, 37 Cal.4th at p. 944) in order for 
 
15 
collateral estoppel to apply, and the case of a party who appears at such a hearing 
but then chooses to present no evidence or otherwise refuses to participate in the 
proceedings.  (Sims, at pp. 481-482.) 
Our research reveals that federal and state courts in other jurisdictions have 
reached similar conclusions on similar facts.  One particularly noteworthy decision 
is the federal district court decision in Fadaie v. Alaska Airlines, Inc. (W.D.Wn. 
2003) 293 F.Supp.2d 1210 (Fadaie).  In that case, plaintiff Fadaie, a former 
employee of Alaska like Murray, filed an AIR 21 administrative action raising 
wrongful discharge claims based on allegations that the airline had retaliated 
against him for whistleblowing activity.  (Id. at p. 1217.)  ―For whatever reason, 
Mr. Fadaie opted not to request a hearing before an Administrative Law Judge.‖  
(Id. at p. 1219.)  In a subsequent court action, Alaska moved to dismiss the 
plaintiff‘s suit on various grounds, including res judicata or estoppel.  (Id. at 
pp. 1217-1220.)  The plaintiff opposed the motion, ―argu[ing] that res judicata is 
inappropriate as to any of the claims asserted in [the court] litigation because the 
procedures used by the [Secretary‘s] Regional Administrator did not afford 
Mr. Fadaie a full and fair opportunity to present his claims.‖  (Id. at p. 1219.) 
The Fadaie court first observed that ―[p]ursuant to the Restatement 
(Second) of Judgments § 83:  [¶]  ‗An adjudicative determination by an 
administrative tribunal is conclusive under the rules of res judicata only insofar as 
the proceeding resulting in the determination entailed the essential elements of 
adjudication, including . . . the right on behalf of a party to present evidence and 
legal argument in support of the party‘s contentions and fair opportunity to rebut 
evidence and argument by opposing parties . . . .‘ ‖  (Fadaie, supra, 293 F.Supp.2d 
at p. 1219, fn. omitted.) 
The court went on to explain, ―Plaintiff argues that the [Secretary‘s] 
decision was based on an investigation, rather than an adjudicative proceeding, 
 
16 
and that he was never given an opportunity to contradict evidence presented by the 
employer.  To the contrary, the procedures governing Mr. Fadaie‘s whistleblower 
complaint afford ample opportunity to fully present his claims, including avenues 
of appeal that provided direct and apparently unique access to the federal appellate 
courts.  As stated in the [Secretary‘s] decision letter issued on March 7, 2003, the 
statute under which plaintiff filed his administrative complaint provides for an 
agency determination, followed by a formal hearing on the merits before an 
Administrative Law Judge (‗ALJ‘).  49 U.S.C. § 42121(b)(2)(A).  The proceedings 
before the ALJ are adversarial in nature and involve taking evidence, hearing 
testimony, and considering the arguments of the parties.  The Secretary of Labor 
then makes his or her final decision based on the ALJ‘s recommendation and can 
choose from a full range of remedies when providing relief to the complainant.  
Any party aggrieved by the Secretary‘s decision can take a direct appeal to the 
Ninth Circuit.  49 U.S.C. § 42121(b)(4)(A).  [¶]  For whatever reason, Mr. Fadaie 
opted not to request a hearing before an Administrative Law Judge.  After 
receiving the [Secretary‘s] decision letter, he decided not to follow through on the 
procedures set forth in the letter, thereby waiving his right to an adversarial 
hearing.  Contrary to [plaintiff‘s] argument, [AIR 21] provides complainants with 
an opportunity to fully and fairly litigate their claims:  plaintiff cannot now argue 
that the procedures utilized by the agency were insufficient when it was 
Mr. Fadaie‘s choice to forgo the admittedly sufficient procedures to which he was 
entitled.‖  (Fadaie, supra, 293 F.Supp.2d at pp. 1219-1220, fn. omitted.)6 
                                              
6  
The dissent asserts that ―Fadaie‘s conclusions have been rejected by a more 
recent district court case considering the same question we face—whether a 
title 49 United States Code section 42121 investigation alone, without a hearing, is 
a worthy basis for collateral estoppel—and concluding, as I would, that it is not.  
(See Hanna v. WCI Communities, Inc. (S.D.Fla. 2004) 348 F.Supp.2d 1322, 1330-
footnote continued on next page 
 
17 
                                                                                                                                      
 
(footnote continued from previous page) 
1331 [Hanna].)‖  (Dis. opn. of Werdegar, J., post, at p. 7, fn. 3.)  The dissent 
misreads the Hanna decision.  Hanna did not involve a whistleblower protection 
claim under the AIR 21, as did Fadaie, and as does this case.  Rather, Hanna 
involved a claim for whistleblower retaliation under the Sarbanes-Oxley Act of 
2002 (116 Stat. 745; see 18 U.S.C § 1514A), which ― ‗provides that no company 
subject to the Securities Exchange Act of 1934 may retaliate against an employee 
who lawfully cooperates with an investigation concerning violations of the Act or 
fraud on the shareholders.‘ ‖  (Hanna, supra, 348 F.Supp.2d at p. 1325.)  The 
Hanna court explained that the Sarbanes-Oxley Act ―specifically mandates‖ that 
where a claimant alleges discharge or other discrimination under the Act, and 
― ‗the Secretary has not issued a final decision within 180 days of the filing of the 
[administrative] complaint and there is no showing that such delay is due to the 
bad faith of the claimant,‘ ‖ the claimant may bring an action ― ‗for de novo 
review in the appropriate district court of the United States, which shall have 
jurisdiction over such an action without regard to the amount in controversy.‘ ‖  
(Hanna, at pp. 1325-1326, quoting 18 U.S.C. § 1514A(b)(1)(B), italics omitted.)  
The court then observed, ―it is undisputed that [the Secretary] issued [the] 
preliminary findings 199 days after Mr. Hanna filed his administrative complaint.‖  
(Hanna, at p. 1326.) 
 
In short, rejection of principles of collateral estoppel and judicial 
exhaustion was not the basis for the Hanna court‘s denial of the defendants‘ 
motion to dismiss the claimant‘s subsequent federal court action.  Rather, the court 
expressly held, as a matter of law, that the plain language of the Sarbanes-Oxley 
Act (18 U.S.C. § 1514A(b)(1)(B)) authorized the claimant to bring his securities 
retaliation action in federal district court because of a procedural irregularity in the 
prior administrative proceeding; the Secretary had failed to issue the agency‘s 
final decision within 180 days of the filing of the administrative complaint, as 
required under that particular whistleblower statute.  (Hanna, supra, 348 
F.Supp.2d at p. 1328.)  Indeed, the court carefully explained that ―defendants‘ 
reliance on [Fadaie] is inapposite to the circumstances of this case.  Fadaie 
addresses the failure to exhaust administrative remedies in the context of filing a 
claim under [the AIR 21].  While it is true that the Sarbanes-Oxley Act uses the 
same administrative procedures as [the AIR 21], . . . it is fundamentally different 
in that [the AIR 21] allows plaintiffs to ‗file [their] whistleblower claims directly 
in a court of law.‘  Fadaie, 293 F.Supp.2d at 1220.  Thus, under [the AIR 21], a 
whistleblower plaintiff has the option of seeking either an administrative or a 
judicial remedy from the moment his claim arises.  Consequently, the Fadaie court 
held that ‗once plaintiff initiated the administrative process. . . .  the statute 
obligated him to complete the administrative process, such that the only avenues 
footnote continued on next page 
 
18 
There is yet another aspect of the AIR 21 statutory scheme that buttresses 
our conclusion that factual findings made in the Secretary‘s final order can be 
given preclusive effect in a subsequent court action between the same parties.  The 
―opportunity for judicial review of adverse rulings‖ is an important procedural 
protection against a potentially erroneous determination and is a factor to consider 
in determining whether collateral estoppel applies.  (Vandenberg v. Superior Court 
(1999) 21 Cal.4th 815, 829; see also Rest.2d Judgments, § 28(1), p. 273 [issue 
preclusion will not apply if the party to be precluded could not, as a matter of law, 
obtain review].)  As noted, the AIR 21 statutory scheme gave Murray the right to a 
formal de novo hearing of record before an ALJ, and further gave him the right to 
appeal the Secretary‘s order to the appropriate United States Court of Appeals in 
accordance with the Administrative Procedure Act.  (§ 42121(b)(4)(A)-(B).)7  The 
statute further expressly reflects Congress‘s intent that ―[a]n order of the Secretary 
of Labor with respect to which review could have been obtained under 
                                                                                                                                      
 
(footnote continued from previous page) 
of relief available to him were a hearing before the ALJ and a direct appeal to the 
[relevant] Circuit.‘ ‖  (Hanna, supra, 348 F.Supp.2d at p. 1330.)  The Hanna 
court‘s brief comments, following this holding, on the application of the doctrine 
of issue preclusion to prior administrative findings under the Eleventh Circuit‘s 
case law were plainly dicta, and should not be read as undermining the rationale of 
Fadaie, an AIR 21 decision which the Hanna court itself carefully distinguished 
from the matter directly before it. 
7 
―After the ALJ issues a ruling, a party has 10 days to file a petition for 
review with the Department of Labor‘s Administrative Review Board.  See 29 
C.F.R. § 1979.110(a).  At its discretion, the Administrative Review Board may 
accept a case for review and issue a superseding final order; otherwise, the ALJ‘s 
ruling becomes the final order of the Secretary of Labor.  See § 42121(b)(3)(A).  
Judicial review of such final orders may exclusively be had in the appropriate 
United States Court of Appeals in accordance with the Administrative Procedure 
Act.  See § 42121(b)(4)(A)-(B); 5 U.S.C. ch. 7.‖  (Murray v. Alaska, supra, 
522 F.3d at p. 923, fn. 4.) 
 
19 
subparagraph (A) shall not be subject to judicial review in any criminal or other 
civil proceeding.‖  (§ 42121(b)(4)(B).) 
This court‘s decision in Johnson v. City of Loma Linda (2000) 24 Cal.4th 
61 (Johnson) explains that unless a party to ―a quasi-judicial administrative 
agency proceeding‖ exhausts available judicial remedies to challenge the adverse 
findings made in that proceeding, those findings may be binding in later civil 
actions.  (Id. at p. 65.) 
In Johnson, an assistant city manager was dismissed and challenged his 
dismissal on discrimination grounds through the city‘s administrative grievance 
procedure.  The administrative adjudication resulted in findings that the dismissal 
was for economic reasons and not the product of unlawful discrimination.  The 
employee then filed a discrimination complaint under the state Department of Fair 
Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA), received a 
right-to-sue letter, and filed suit under the FEHA challenging the actions of the 
personnel board and the city council.  The trial court granted summary judgment, 
finding the FEHA discrimination claim failed because the employee was bound by 
the city‘s administrative findings.  (Johnson, supra, 24 Cal.4th at pp. 65-67.)  The 
Court of Appeal held that the employee‘s failure to timely challenge the 
administrative finding by the city that his dismissal was for economic reasons 
barred his FEHA cause of action alleging that his termination was for 
discriminatory reasons.  (Johnson, at p. 67.) 
We affirmed the judgment in Johnson with respect to the FEHA cause of 
action, explaining that the city‘s ―administrative process provides internal 
remedies‖ and that the employee had ―fail[ed] to obtain the requisite judicial 
review of [the] adverse administrative finding.‖  (Johnson, supra, 24 Cal.4th at 
p. 72.)  We concluded on the particular procedural facts of the case that ―when, as 
here, a public employee pursues administrative civil service remedies, receives an 
 
20 
adverse finding, and fails to have the finding set aside through judicial review 
procedures, the adverse finding is binding on discrimination claims under the 
FEHA.‖  (Id. at p. 76.)  Although Johnson involved the claims of a public 
employee, we find that a distinction of little difference here.  The Ninth Circuit‘s 
cases are also in accord.  (See, e.g., Eilrich v. Remas (9th Cir. 1988) 839 F.2d 630, 
632, quoting Plaine v. McCabe (9th Cir. 1986) 797 F.2d 713, 719, fn. 12 [― ‗If an 
adequate opportunity for review is available, a losing party cannot obstruct the 
preclusive use of the state administrative decision simply by forgoing [the] right to 
appeal.‖].) 
We conclude that under the particular facts and procedural posture of this 
case, Murray may be precluded from relitigating the factual issue of causation 
against Alaska in his state court wrongful termination action, removed to federal 
court on grounds of diversity jurisdiction.  Although without doubt, Murray‘s 
claims would have been more fully litigated in the prior AIR 21 administrative 
proceeding had he invoked his right to a formal hearing before an ALJ, he never 
did so.  Under California law, however, the dispositive issue of causation was 
nonetheless ― ‗actually litigated‘ ‖ (Sims, supra, 32 Cal.3d at p. 484) in the 
administrative proceeding once the matter was ― ‗ ―properly raised‖ ‘ ‖ by 
Murray‘s AIR 21 complaint, along with his written statements and other 
supporting documentation, and then ― ‗ ―determined‖ ‘ ‖ by the Secretary in her 
written findings and order.  (Sims, supra, 32 Cal.3d at p. 484.)  Moreover, 
Murray‘s ―fail[ure] to obtain the requisite judicial review of [the] adverse 
administrative finding‖ available to him under the ―internal remedies‖ provided by 
the AIR21 whistleblower statute further supports our conclusion that the 
 
21 
Secretary‘s adverse finding on causation, embodied in a final order, may be 
afforded preclusive effect.  (Johnson, supra, 24 Cal.4th at p. 72.)8 
We recognize that Murray‘s initiation of the AIR 21‘s administrative 
complaint procedure was voluntary and optional (§ 42121(b)(1)), and not a 
                                              
8  
Our recent decision in State Bd. of Chiropractic Examiners v. Superior 
Court (2009) 45 Cal.4th 963, does not dictate a different conclusion here.  In that 
matter, we considered whether the State Personnel Board‘s adverse finding on a 
whistleblower-retaliation claim should be given preclusive effect in the 
employee‘s subsequent court action based on California‘s whistleblower-
protection statute (see Gov. Code, § 8547.8), notwithstanding that the employee 
had failed to exhaust available administrative and judicial remedies.  Citing 
Johnson, supra, 24 Cal.4th at page 76, we acknowledged the general rule that 
―writ review of an adverse administrative decision is a necessary step before 
pursuing other remedies that might be available,‖ and that ―if a litigant fails to take 
this step, and if the administrative proceeding possessed the requisite judicial 
character (see Pacific Lumber, supra, 37 Cal.4th at p. 944), the administrative 
decision is binding in a later civil action brought in superior court.‖  (State Bd. of 
Chiropractic Examiners v. Superior Court, supra, at pp. 975-976.)  But we went 
on to explain that Johnson was distinguishable from the matter there before us, 
because ―[h]ere . . . we have specific statutory language suggesting that adverse 
findings by the State Personnel Board are not binding in a [subsequent 
Government Code] section 8547.8[, subdivision (c)] damages action . . . .‖  (State 
Bd. of Chiropractic Examiners v. Superior Court, at p. 976.)  We explained further 
that ―the Legislature expressly authorized a damages action in superior court for 
whistleblower retaliation [citation], and in doing so it expressly acknowledged the 
existence of the parallel administrative remedy.  It did not require that the board‘s 
findings be set aside by way of a mandate action; rather, it gave as the only 
precondition to the damages action authorized in [Government Code] section 
8547.8[, subdivision (c)], that a complaint be filed with the board and that the 
board ‗issue[], or fail[] to issue, findings.‘  (Ibid.)  The bareness of this statutory 
language suggests that the Legislature did not intend the State Personnel Board‘s 
findings to have a preclusive effect against the complaining employee.‖  (State Bd. 
of Chiropractic Examiners v. Superior Court, at p. 976.) 
 
Here, in contrast to State Bd. of Chiropractic Examiners v. Superior Court, 
there is no language in the AIR 21 statute suggesting Congress intended that 
conclusive findings made by the Secretary in a final nonappealable order should 
not have preclusive effect in a subsequent state court action. 
 
22 
prerequisite to filing this state court retaliation–wrongful termination action.  But 
Murray, represented by counsel at all times, surely appreciated that when he 
instituted the administrative proceeding against his former employer, Alaska, it 
would have to retain counsel and defend the action.  He was on statutory notice 
that, if unsatisfied with the Secretary‘s findings, he could request a formal hearing 
de novo before an ALJ at which he would be afforded the full panoply of trial 
rights and protections; that he could then seek discretionary review of any adverse 
decision with the Department of Labor‘s administrative review board; and 
ultimately, that he could appeal any adverse decision to the Ninth Circuit.  Both 
Murray and his attorney were on further notice that, under applicable agency 
regulations, if he wanted to withdraw his complaint he could do so only by filing a 
formal written withdrawal with the Assistant United States Secretary of Labor, 
who would then have to approve the withdrawal.  (29 C.F.R. § 1979.111(a) 
(2010).)  Yet Murray never requested a formal hearing, never exercised his rights 
of appeal, and never attempted to formally withdraw his complaint, even though 
the statute placed him on notice that, if he took no action, the Secretary‘s findings 
and decision would become a final nonappealable order by operation of law.  
(§ 42121(b)(2)(A).) 
Once Murray failed to exercise his rights to a formal hearing and judicial 
review, the Secretary‘s investigative findings became ―a final order . . . not subject 
to judicial review.‖  (§ 42121(b)(2)(A).)  Where Congress evinces a clear intent to 
preclude judicial review of final administrative decisions, a failure to properly 
appeal a final order must be given preclusive effect.  (See Tice v. Bristol-Myers 
Squibb Co. (W.D.Pa. 2007) 515 F.Supp.2d 580, 584 [plaintiff collaterally 
estopped from relitigating factual issues resolved by ALJ where his failure to 
appeal ALJ‘s decision dismissing administrative whistleblower complaint under 
 
23 
Sarbanes-Oxley Act (18 U.S.C § 1514A) resulted in final order].)  California law 
is in accord. 
Last, ―[e]ven assuming all the threshold requirements are satisfied . . . [w]e 
have repeatedly looked to the public policies underlying the doctrine before 
concluding that collateral estoppel should be applied in a particular setting.‖  
(Lucido v. Superior Court (1990) 51 Cal.3d 335, 342-343.)  We find that the 
public policies underlying the doctrine of collateral estoppel will best be served by 
applying the doctrine to the particular factual setting of this case.  Those policies 
include conserving judicial resources and promoting judicial economy by 
minimizing repetitive litigation, preventing inconsistent judgments which 
undermine the integrity of the judicial system, and avoiding the harrassment of 
parties through repeated litigation.  (Allen v. McCurry (1980) 449 U.S. 90, 94; 
Montana v. United States (1979) 440 U.S. 147, 153-154; Sims, supra, 32 Cal.3d at 
pp. 488-489; Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869, 
878.) 
Considerations of comity and federalism further support application of the 
doctrine of collateral estoppel in this case.  The AIR 21 whistleblower statute 
offers complainants strong incentives to invoke the administrative remedies as an 
alternative to a court action.  If the Secretary finds a statutory violation, she must 
provide relief that includes immediate reinstatement with back pay and other 
compensatory damages.  (§ 42121(b)(3)(B).)  By choosing to proceed under the 
AIR 21‘s federal administrative whistleblower protection scheme, Murray availed 
himself of these distinct advantages.  To allow him to relitigate the factual issue of 
causation decided against him in the Secretary‘s final nonappealable order in this 
subsequent court action between the same parties would reduce the AIR 21 
statutory scheme to a mere ―rehearsal[] for litigation‖ (Johnson, supra, 24 Cal.4th 
at p. 72) should the complainant not prevail. 
 
24 
Conclusion 
Given the factual and procedural circumstances of this case as reported in 
the Ninth Circuit‘s published order, we conclude the Secretary‘s factual findings 
on the issue of causation, embodied in a final nonappealable order, should, under 
California law, be afforded preclusive effect in this subsequent court action 
between the same parties. 
 
 
 
 
 
 
BAXTER, J. 
 
WE CONCUR: 
 
CHIN, J. 
MORENO, J. 
CORRIGAN, J. 
 
 
1 
 
 
 
 
 
 
 
 
DISSENTING OPINION BY WERDEGAR, J. 
 
 
Kevin Murray alleges he was wrongfully discharged by Alaska Airlines, 
Inc. (Alaska).  In the course of the investigation of his administrative complaint, 
he received no hearing.  He was not contacted to provide evidence.  He was not 
permitted to confront the witnesses against him, to review the evidence submitted 
by Alaska, or to make oral or written arguments before findings were made.  No 
testimony was submitted under oath and no record was prepared.  (See Murray v. 
Alaska Airlines, Inc. (9th Cir. 2008) 522 F.3d 920, 921.)  The majority holds that 
after such an investigation, Murray may be collaterally estopped based on the 
resulting administrative findings, and forever barred from seeking redress, because 
he failed to appeal those findings and have them set aside.  I respectfully dissent. 
I 
Murray, a quality assurance auditor for Alaska, brought safety concerns 
about Alaska‘s operations to the attention of the Federal Aviation Administration.  
An investigation revealed ― ‗significant discrepancies related to air carrier 
safety.‘ ‖  (Murray v. Alaska Airlines, Inc., supra, 522 F.3d at p. 921.)  
Subsequently, Murray‘s position was outsourced, and he was unable to find 
another job with Alaska.  Although not required to do so, Murray voluntarily filed 
2 
a federal administrative complaint with the United States Department of Labor,1 
contending that Alaska‘s adverse actions were in retaliation for his protected 
whistleblower activity.  (See 49 U.S.C. § 42121(b).) 
In the ensuing investigation, ―Alaska submitted a written response to 
Murray‘s complaint, produced relevant documentation and offered witness 
testimony.‖  (Murray v. Alaska Airlines, Inc., supra, 522 F.3d at p. 921.)  The 
investigation‘s treatment of Murray was in marked contrast:  ―Murray was never 
contacted by the Secretary [of Labor]‘s investigator.  He was not given a copy of 
the documents provided by Alaska or its witness statements.  Nor did he have an 
opportunity to submit additional information to the Secretary, or respond to 
Alaska‘s arguments, before the Secretary rendered her findings.‖  (Ibid.)  
Unsurprisingly, given these procedures, the Secretary of Labor, acting through her 
agent, a regional administrator for the Occupational Health and Safety 
Administration, issued findings in favor of Alaska:  while Murray had engaged in 
protected activity and suffered an adverse employment action, the Secretary 
concluded there was no connection between the two. 
Rather than appeal the adverse decision and seek an administrative hearing, 
Murray filed suit, alleging wrongful termination and retaliation for whistleblowing 
in violation of public policy.  (See Lab. Code, § 1102.5, subd. (b); Tameny v. 
Atlantic Richfield Co. (1980) 27 Cal.3d 167.)  The question here is whether the 
administrative findings, rendered without the benefit of a hearing or even 
consultation with Murray, are entitled to issue preclusive effect so as to bar 
Murray‘s suit. 
                                              
1  
There was no statutory exhaustion requirement that obligated him to pursue 
an administrative remedy.  (See Murray v. Alaska Airlines, Inc., supra, 522 F.3d at 
p. 921; 49 U.S.C. § 42121(b)(1).) 
3 
That administrative findings may give rise to issue preclusion is of course 
long settled.  (See United States v. Utah Constr. Co. (1966) 384 U.S. 394, 419-
422; People v. Sims (1982) 32 Cal.3d 468, 479.)  However, before an 
administrative finding may operate as a bar to judicial relief, a court must assure 
itself that the proceeding giving rise to it had a sufficiently ―judicial character.‖  
(McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 
113; Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 
921, 944 (Pacific Lumber Co.); Sims, at pp. 479-480.)  ―Indicia of [administrative] 
proceedings undertaken in a judicial capacity include a hearing before an impartial 
decision maker; testimony given under oath or affirmation; a party‘s ability to 
subpoena, call, examine, and cross-examine witnesses, to introduce documentary 
evidence, and to make oral and written argument; the taking of a record of the 
proceeding; and a written statement of reasons for the decision.‖  (Pacific Lumber 
Co., at p. 944.) 
Comparing the features that demonstrate an administrative proceeding‘s 
judicial character with the prefinding procedures afforded here leads ineluctably to 
the conclusion the administrative findings in this case are not entitled to preclusive 
effect.  Testimony was not taken ―under oath or affirmation‖ (Pacific Lumber Co., 
supra, 37 Cal.4th at p. 944); Murray had no ―ability to subpoena, call, examine, 
and cross-examine witnesses‖ (ibid.); he had no opportunity ―to introduce 
documentary evidence‖ (ibid.); he had no opportunity ―to make oral and written 
argument‖ (ibid.); and there was no ―taking of a record of the proceeding‖ (ibid.), 
for indeed there was no hearing at all.  There were, it is true, written findings, but 
that alone is manifestly insufficient to support collateral estoppel.  (See, e.g., 
McDonald v. Antelope Valley Community College Dist., supra, 45 Cal.4th at 
pp. 113-114.)  Indeed, I do not read the majority opinion as disputing that the 
proceedings Murray actually received do not come close to satisfying the judicial 
4 
character requirement.  For purposes of whether estoppel applies, that should be 
the end of the matter. 
II 
The majority reaches a contrary conclusion by attending not to the 
proceedings that actually preceded the administrative findings, but to those that 
could have occurred, but did not, after the findings were made.  We have never 
done so before; indeed, we have previously dismissed as unsupported by authority 
a similar argument to the one now embraced by the majority.  In Pacific Lumber 
Co., we expressly declared:  ―For an administrative decision to have collateral 
estoppel effect, it and its prior proceedings must possess a judicial character.‖  
(Pacific Lumber Co., supra, 37 Cal.4th at p. 944, italics added.)  We there 
considered the proceedings leading up to the California Department of Forestry 
and Fire Protection‘s approval of a timber harvesting plan for land subsequently 
acquired by Scotia Pacific Company LLC and Pacific Lumber Company, a plan 
that did not call for water quality monitoring, and concluded those prior 
proceedings were of an insufficiently judicial character to bar a regional water 
board from thereafter mandating such monitoring.  (Id. at pp. 944-945.) 
The lumber companies had argued that in assessing the judicial character of 
the department of forestry‘s decision, we should take into account the appeal 
procedures available to the water board.  (Pacific Lumber Co., supra, 37 Cal.4th at 
p. 945, fn. 13; see Pub. Resources Code, § 4582.9.)  We declined to accept the 
argument, noting a complete absence of authority for the proposition that 
postfinding appeal proceedings that could have been, but were not, pursued could 
rescue prefinding proceedings otherwise lacking in judicial character.  (Pacific 
Lumber Co., at p. 945, fn. 13.) 
Pacific Lumber Co. is no anomaly; to the contrary, existing precedent 
entirely justified its pronouncement that the assessment of an administrative 
5 
decision‘s judicial character depends upon the ―prior proceedings‖ leading up to 
the decision.  (Pacific Lumber Co., supra, 37 Cal.4th at p. 944.)  The United States 
Supreme Court approved administrative collateral estoppel in United States v. 
Utah Constr. Co., supra, 384 U.S. 394.  Both that case and every case the high 
court relied on for recognition of administrative estoppel involved prefinding 
proceedings that justified the imposition of estoppel.  (See id. at p. 422 [findings 
entered after a party ―had a full and fair opportunity to argue their version of the 
facts‖ at an evidentiary hearing]; Sunshine Coal Co. v. Adkins (1940) 310 U.S. 
381, 390-391 [findings followed a public hearing, taking of evidence, and oral 
argument]; Fairmont Aluminum Co. v. Commissioner of Int. Rev. (4th Cir. 1955) 
222 F.2d 622, 625 [taxpayer had an opportunity to submit evidence before 
findings were issued]; Seatrain Lines v. Pennsylvania R. Co. (3d Cir. 1953) 207 
F.2d 255, 258-259 [findings followed hearings and argument from both sides]; 
Goldstein v. Doft (S.D.N.Y. 1964) 236 F.Supp. 730, 732 [findings followed 
hearings and written argument], affd. per curiam (2d Cir. 1965) 353 F.2d 484.) 
We embraced the Utah Construction rule in People v. Sims, supra, 32 
Cal.3d 468.  In Sims and every published state case since, including every case the 
majority relies on, courts have applied issue preclusion only after determining the 
prefinding proceedings were of a sufficiently judicial character to warrant it.  (See, 
e.g., Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 71 & fn. 3 [estoppel 
based on findings made after an evidentiary hearing with live testimony]; Sims, at 
pp. 479-480 [estoppel based on findings made after a full evidentiary hearing with 
the opportunity to subpoena, call, and cross-examine witnesses]; Page v. Los 
Angeles County Probation Dept. (2004) 123 Cal.App.4th 1135, 1142 [issue 
preclusion based on a comprehensive decision issued after a three-day adversarial 
evidentiary hearing]; Castillo v. City of Los Angeles (2001) 92 Cal.App.4th 477, 
482 [estopped party ―had ample opportunity to raise issues and present evidence‖ 
6 
at a full evidentiary hearing]; Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1179 
[estopped party was ―afforded a full hearing to present evidence under oath or 
affirmation‖]; Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464, 
1470 & fn. 5 [barred party was afforded full hearing with a right of discovery].)2 
Similarly, those decisions that have declined to find a basis for preclusion 
have likewise considered the character of the prefinding procedures.  (See, e.g., 
McDonald v. Antelope Valley Community College Dist., supra, 45 Cal.4th at 
pp. 113-114 [no basis for requiring judicial exhaustion where the administrative 
decision was not based on a hearing and the plaintiff had no opportunity to call 
witnesses or present evidence]; Pacific Lumber Co., supra, 37 Cal.4th at pp. 944-
945 [rejecting estoppel and finding no basis for considering an unpursued 
postdecision appeal]; Ahmadi-Kashani v. Regents of University of California 
(2008) 159 Cal.App.4th 449, 458 [no basis for estoppel where the plaintiff ―was 
afforded no hearing at all, let alone a ‗quasi-judicial‘ one, prior to abandoning her 
grievance process‖]; id. at pp. 458-460.)  In short, we have always insisted on 
certain minimum prefinding procedures. 
The reason for demanding that prefinding proceedings have a judicial 
character is clear.  One of the core values of our judicial system is accuracy in 
decisionmaking.  (E.g., Tehan v. Shott (1966) 382 U.S. 406, 416 [the ―basic 
purpose of a trial is the determination of truth‖].)  Many if not most of our rules 
                                              
2  
The majority emphasizes language in these cases that explains that issue 
preclusion depends in part on whether there was an ―opportunity to litigate‖ an 
issue, rather than on whether the estopped party actually litigated the issue.  (Maj. 
opn., ante, at pp. 8-15.)  But what the majority ignores is the context:  in each and 
every one of the cases relied upon, the opportunity to litigate was afforded before 
the decision being given preclusive effect was reached.  Thus, as noted above, 
each case involved a full hearing and a party‘s decision, at that full hearing, not to 
step forward with better evidence. 
7 
for court proceedings have as a central purpose the promotion of accuracy.  
Consequently, cases dating to the inception of the administrative collateral 
estoppel doctrine have always considered the judicial character of the proceedings 
that actually transpired before findings were rendered.  Where the litigant was 
given an opportunity to present his or her best case before the administrative 
findings were issued, we can have faith in the findings reached thereafter.  Here, in 
contrast, we have no reason to have faith in the accuracy or fairness of the 
findings, nor, consequently, do we have any justification for placing our 
imprimatur on them and according the findings preclusive effect. 
We have in the past identified the availability of postfinding review as an 
additional necessary factor in determining whether to permit issue preclusion (see 
Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829; maj. opn., ante, at 
p. 18); never, until today, has the availability of a postfinding appeal been treated 
as a sufficient condition for imposition of estoppel.  In short, no California case 
has allowed what the majority countenances here—issue preclusion for findings 
rendered without any prior opportunity for a hearing, the submission of evidence, 
the confrontation of witnesses, or the presentation of argument.3 
                                              
3  
The majority relies on a federal district court case, Fadaie v. Alaska 
Airlines, Inc. (W.D.Wn. 2003) 293 F.Supp.2d 1210, for the opposite view.  As 
Fadaie was decided under Washington law (see id. at p. 1219, fn. 3), it has limited 
relevance here.  Moreover, Fadaie‘s conclusions have been rejected by a more 
recent district court case considering the same question we face—whether a 
title 49 United States Code section 42121 investigation alone, without a hearing, is 
a worthy basis for collateral estoppel—and concluding, as I would, that it is not.  
(See Hanna v. WCI Communities, Inc. (S.D.Fla. 2004) 348 F.Supp.2d 1322, 1330-
1331.)  The majority attempts at exhaustive length to paint Hanna‘s discussion of 
collateral estoppel as dicta.  (Maj. opn., ante, at pp. 16-18, fn. 6.)  While I disagree 
with this characterization, it matters little; the views of a lone federal trial judge in 
Fadaie on an estoppel question under Washington law, which have been disagreed 
footnote continued on next page 
8 
III 
Explicit or implicit in the majority opinion are three rationales for why we 
should disregard past precedent and place our faith in administrative findings 
rendered in such a nonjudicial fashion:  Murray acquiesced in the findings; he was 
obligated to exhaust the title 49 United States Code section 42121 procedure once 
he invoked it; and federalism and comity considerations warrant according such 
findings effect.  None has merit. 
Running through the majority opinion is the implication that Murray knew, 
or should have known, that failing to seek a full hearing before an administrative 
law judge would result in his forfeiture of any remedies—in essence, that he was 
on notice he must appeal or face a bar, and that by failing to appeal he acquiesced 
in the investigative findings.  (See maj. opn., ante, at pp. 7, 20-22.)  The regional 
administrator‘s findings letter certainly put Murray on notice that he would 
relinquish federal remedies unless he took further action.4  But the administrative 
proceedings were voluntary; exhaustion of them was, for state purposes, not 
mandatory.  Murray rationally could have elected to forgo his federal remedies 
                                                                                                                                      
 
(footnote continued from previous page) 
with elsewhere in holding or dicta, simply cannot sustain the majority‘s conclusion 
against the mass of contrary authority under California law. 
4  
It is in this sense that failure to act would render the preliminary findings 
final.  Finality is a necessary, but not a sufficient, condition for imposition of issue 
preclusion.  (See Vandenberg v. Superior Court, supra, 21 Cal.4th at p. 835; 
Sanderson v. Niemann (1941) 17 Cal.2d 563, 573-575; Rest.2d Judgments, § 13.)  
The majority‘s attempt to make more of the findings‘ finality, suggesting that so 
long as a decision is final it ―must be given preclusive effect‖ (maj. opn., ante, at 
p. 22), is without any semblance of support.  Decisions may have preclusive effect 
if they are final and the proceedings leading up to them were sufficiently judicial 
in character.  (Pacific Lumber Co., supra, 37 Cal.4th at p. 944.)  The case the 
majority relies upon, Tice v. Bristol-Myers Squibb Co. (W.D.Pa. 2007) 515 
F.Supp.2d 580, says no more than that. 
9 
after receiving the initial regional administrator letter, deciding to focus his 
energies on seeking state relief instead.  Nothing in his actions can be interpreted 
as acquiescence, i.e., as a concession that he lacked any evidence supporting 
contrary findings, such as might elevate our faith in the accuracy of the 
preliminary findings.5  Nor would anything in the letter, or in any of our prior 
decisions, have alerted Murray or his counsel that failing to act would subject him 
to a bar and a sacrifice of his independent, parallel state remedies.  Fairness is a 
necessary precondition to the application of estoppel (see Vandenberg v. Superior 
Court, supra, 21 Cal.4th at p. 835; Lucido v. Superior Court (1990) 51 Cal.3d 335, 
343); in the absence of foreseeability, application of a bar here is profoundly 
inequitable.6 
                                              
5  
The majority chides Murray for failing formally to seek approval to 
withdraw his complaint, as if that failure adds weight to the investigative findings.  
(Maj. opn., ante, at pp. 7, 22; 29 C.F.R. § 1979.111(a).)  However, the approval 
requirement was inserted to benefit complainants, as a way of protecting against 
coercion.  (See 68 Fed.Reg. 14100, 14106 (Mar. 21, 2003) [the regulations permit 
―a complainant to freely withdraw his or her complaint without prejudice. . . .  The 
purpose of the Assistant Secretary‘s approval is to help ensure that the 
complainant‘s withdrawal is, indeed, made freely without threat of coercion or 
unlawful promise.‖])  To turn such a protection into the basis for a quasi-
exhaustion requirement is unwarranted and unsound. 
6  
Numerous courts and commentators have recognized the significance of 
foreseeability in deciding whether the application of preclusion in a given case is 
appropriate.  (See, e.g., Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 330; 
The Evergreens v. Nunan (2d Cir. 1944) 141 F.2d 927, 929 (opn. of Hand, J.); see 
also Levine, Preclusion Confusion: A Call for Per Se Rules Preventing the 
Application of Collateral Estoppel to Findings Made in Nontraditional Litigation, 
1999 Ann. Surv. Am. L. 435 [discussing ways in which the unforeseeable 
application of preclusion undermines the policies justifying it]; Note, For One 
Litigant's Sole Relief: Unforeseeable Preclusion and the Second Restatement 
(1992) 77 Cornell L.Rev. 905, 923 [―A court that invokes preclusion in an 
unforeseeable manner cannot legitimately dismiss the precluded party‘s 
complaints by repeating the old slogan that ‗[t]he predicament in which [he] finds 
himself is of his own making.‘ ‖].) 
footnote continued on next page 
10 
In a related vein, the majority suggests Murray can be fairly barred from 
proceeding because he failed to exhaust available remedies.  (E.g., maj. opn., ante, 
at pp. 7-8, 19-22.)  But this rationale depends on a substantial expansion of the 
previously marked bounds of judicial exhaustion.  Judicial exhaustion is simply a 
logical corollary of collateral estoppel principles:  if an administrative decision is 
rendered, then, ―provided that decision is of a sufficiently judicial character to 
support collateral estoppel‖ (McDonald v. Antelope Valley Community College 
Dist., supra, 45 Cal.4th at p. 113), the losing party must exhaust available avenues 
for reversing the decision or be bound by the underlying findings.  The proviso—
that judicial character is a necessary precondition to trigger any obligation to 
exhaust—has until today been crucial.  (See Ahmadi-Kashani v. Regents of 
University of California, supra, 159 Cal.App.4th at pp. 460-461 [in the absence of 
a ― ‗quasi-judicial‘ ‖ hearing, the plaintiff was free to abandon an internal 
grievance process and pursue her claim in court without exhausting any internal 
remedies].) 
Now, through legerdemain, this precondition has been erased.  The 
procedures Murray actually was afforded lacked even minimal judicial character; 
                                                                                                                                      
 
(footnote continued from previous page) 
 
The need for foreseeability is especially keen in the administrative context, 
where uncertainty over the application of estoppel will be greater and may 
significantly impact how parties elect to proceed.  The fairness of imposing 
preclusion in such a context should hinge in part on whether the parties could have 
foreseen the significance of an issue for later proceedings.  (See Bowen v. U.S. 
(7th Cir. 1978) 570 F.2d 1311, 1322; see also Note, Collateral Estoppel Effects of 
Administrative Agency Determinations: Where Should Federal Courts Draw the 
Line? (1988) 73 Cornell L.Rev. 817, 826.)  Here of course, given the paucity of 
prior authority, Murray had no basis to foresee the preliminary administrative 
findings would have any bearing on his state rights; the imposition of estoppel is 
thus especially unjust. 
11 
under extant precedent, he should have been under no obligation to exhaust further 
administrative remedies.  Instead, the majority reasons (with a certain circularity) 
that if a party has the right to appeal (but fails to do so), the findings will achieve a 
judicial character, and if the findings achieve a judicial character, the party is 
required to pursue an appeal.  The right of appeal in title 49 United State Code 
section 42121 proceedings is thus employed to serve a remarkable double duty, 
both to mandate its own exercise by transforming into having judicial character 
findings wholly lacking in such, and then, by its mere availability, to bar the 
pursuit of all other avenues of relief.7 
As a policy matter, the likely consequence of the majority‘s novel rule is 
that parties in the future will be more cautious in initiating available voluntary 
proceedings, with the inevitable result that fewer grievances will be resolved 
informally.  Instead, lawsuits will be filed at the outset, thus increasing the burdens 
                                              
7  
The majority relies for support on Johnson v. City of Loma Linda, supra, 24 
Cal.4th 61, but Johnson did not purport to require exhaustion of judicial avenues 
for overturning administrative findings except insofar as those findings were the 
product of quasi-judicial proceedings.  (See McDonald v. Antelope Valley 
Community College Dist., supra, 45 Cal.4th at p. 114 [citing and distinguishing 
Johnson because it involved a full opportunity to litigate at an evidentiary 
hearing]; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1090 
[explaining that Johnson held administrative findings binding only when a party 
had ―received an adverse quasi-judicial finding‖ and thereafter failed to set it 
aside].) 
The majority today does precisely what I cautioned against in Johnson:  
imposes a collateral estoppel bar for neglecting to seek review of an adverse 
administrative decision without regard to whether the specific decision satisfied all 
the requirements for issue preclusion so as to trigger an exhaustion requirement.  
(See Johnson v. City of Loma Linda, supra, 24 Cal.4th at p. 81 (conc. opn. of 
Werdegar, J.); see also State Bd. of Chiropractic Examiners v. Superior Court 
(2009) 45 Cal.4th 963, 975.) 
12 
on the court system.  (See Ahmadi-Kashani v. Regents of University of California, 
supra, 159 Cal.App.4th at p. 459.) 
As its final justification, the majority invokes ―[c]onsiderations of comity 
and federalism‖ (maj. opn., ante, at p. 23), but neither has any bearing here.  
Insofar as federalism is concerned, Congress could have, but did not, preempt 
parallel state remedies when it adopted a federal whistleblower administrative 
remedy.  (See Gary v. Air Group, Inc. (3d Cir. 2005) 397 F.3d 183, 190; Branche 
v. Airtran Airways, Inc. (11th Cir. 2003) 342 F.3d 1248, 1261-1264.)  Nothing 
offends federalism principles in permitting an unpreempted parallel state 
proceeding to go forward. 
Nor is comity a concern.  Notably, the majority accords the results of the 
administrative investigation a weight it is not clear the Department of Labor or the 
federal courts would grant them.  In Hanna v. WCI Communities, Inc., supra, 348 
F.Supp.2d 1322, the court considered whether preliminary findings issued in 
response to a title 49 United States Code section 42121 complaint should be 
accorded collateral estoppel effect. 8  The court pointed out that, in a proceeding 
brought under section 42121, ―the [Department of Labor]‘s own regulations state 
that res judicata or collateral estoppel treatment is only appropriate when ‗a 
complainant brings a new action in Federal court following extensive litigation 
before the Department that has resulted in a decision by an administrative law 
                                              
8  
Hanna arose under a whistleblowers‘ protection provision of the Sarbanes-
Oxley Act (see 18 U.S.C. § 1514A) that borrows the procedures of 49 U.S.C. 
section 42121 for its effectuation.  (Id., § 15141A(b)(2)(A).)  As the majority 
necessarily recognizes in relying on Tice v. Bristol-Meyers Squibb Co., supra, 515 
F.Supp.2d 580, another Sarbanes-Oxley case, cases arising under other statutory 
schemes that use section 42121‘s procedures may be fully relevant, at least insofar 
as they address the effect of section 42121 proceedings rather than any substantive 
aspects of the underlying claims. 
13 
judge or the Secretary.‘  68 [Fed.Reg.] § 31860, 31863 (2003).‖  (Hanna, at 
p. 1331.)  There, as here, no decision had been issued by either an administrative 
law judge or the review board responsible for issuing final decisions in the 
Secretary of Labor‘s name; accordingly, findings based only on an investigation 
and not a ― ‗trial-court like hearing‘ ‖ were an insufficient basis for collateral 
estoppel.  (Ibid.)  I see no warrant for according the Department of Labor‘s 
informal investigation a status equal to that of a fully litigated trial or 
administrative hearing when neither the Department nor the federal courts would 
uniformly do so. 
IV 
Application of collateral estoppel depends not only on whether the strict 
requirements for estoppel have been satisfied, but also on whether the core public 
policies underlying it—―preservation of the integrity of the judicial system, 
promotion of judicial economy, and protection of litigants from harassment by 
vexatious litigation‖—support its invocation.  (Lucido v. Superior Court, supra, 51 
Cal.3d at p. 343; see also Vandenberg v. Superior Court, supra, 21 Cal.4th at 
p. 829; People v. Sims, supra, 32 Cal.3d at p. 483.)  As well, we have cautioned 
that preclusion in the administrative context must be applied more flexibly than 
where the prior decision was judicial.  (George Arakelian Farms, Inc. v. 
Agricultural Labor Relations Bd. (1989) 49 Cal.3d 1279, 1290-1291.)9 
                                              
9  
This flexibility is an outlet to ensure that preclusion is not imposed in 
unpredictable and unforeseeable circumstances.  (See, e.g., Heiser, California’s 
Confusing Collateral Estoppel (Issue Preclusion) Doctrine (1998) 35 San Diego 
L.Rev. 509, 531-532; Note, The Collateral Estoppel Effect of Administrative 
Agency Actions in Federal Civil Litigation (1977) 46 Geo. Wash. L.Rev. 65, 83-84 
[―When according estoppel effect to agency findings would foster harsh, 
unforeseeable effects, the court should invoke the judicially recognized principle 
of applying collateral estoppel flexibly to avoid injustice.‖].) 
14 
Here, no loss of judicial integrity would ensue were estoppel denied, 
because the prior findings were issued in a nonjudicial forum; thus no risk of 
inconsistent judicial outcomes is present.  (See Vandenberg v. Superior Court, 
supra, 21 Cal.4th at p. 833.)10  Second, judicial economy is not an issue because 
the original proceeding involved no expenditure of judicial resources.  (See 
Vandenberg, at p. 833.)  Third, if the possibility of a whistleblower pursuing both 
federal and state remedies were deemed vexatious, Congress could have seen fit to 
preempt state remedies.  It did not. 
In the end, the majority turns its back on precedent, imposing collateral 
estoppel as a form of sanction for failing to exhaust that which, as an initial matter, 
was never required to be exhausted.  Collateral estoppel should not be about  
punishment, but about the reliability of the administrative findings we substitute 
for a full and fair judicial hearing, appropriate if and only if we have faith in the 
processes that produced those findings.  As such faith is unwarranted here, I 
respectfully dissent. 
 
 
 
 
 
WERDEGAR, J. 
WE CONCUR: 
 
GEORGE, C.J. 
KENNARD, J. 
                                              
10  
Moreover, the United States Supreme Court has made clear that 
―[r]edetermination of issues is warranted if there is reason to doubt the quality, 
extensiveness, or fairness of procedures followed in prior litigation.‖  (Montana v. 
United States (1979) 440 U.S. 147, 164, fn. 11.)  The one-sided investigation in 
this case certainly offers reason for such doubt. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Murray v. Alaska Airlines, Inc. 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal XXX (on certification pursuant to rule 8.548, Cal. Rules of Court) 
Original Proceeding 
Review Granted 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S162570 
Date Filed: August 23, 2010 
__________________________________________________________________________________ 
 
Court: 
County: 
Judge: 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Law Offices of James P. Stoneman II and James P. Stoneman II for Plaintiff and Petitioner. 
 
 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
Howard Rice Nemerovski Canady Falk & Rabkin, David J. Reis and Jason M. Habermeyer for Defendant 
and Appellant. 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
James P. Stoneman II 
Law Offices of James P. Stoneman II 
100 West Foothill Boulevard 
Claremont, CA  91711 
(909) 621-4987 
 
David J. Reis 
Howard Rice Nemerovski Canady Falk & Rabkin 
Three Embarcadero Center, 7th Floor 
San Francisco, CA  94111-4024 
(415) 434-1600