Title: Grande v. Eisenhower Medical Center
Citation: N/A
Docket Number: S261247A
State: California
Issuer: California Supreme Court
Date: July 1, 2022

IN THE SUPREME COURT OF 
CALIFORNIA 
 
LYNN GRANDE, 
Plaintiff and Respondent, 
v. 
EISENHOWER MEDICAL CENTER, 
Defendant; 
FLEXCARE LLC, 
Intervener and Appellant. 
 
EISENHOWER MEDICAL CENTER, 
Petitioner, 
v. 
THE SUPERIOR COURT OF RIVERSIDE COUNTY, 
Respondent; 
LYNN GRANDE, 
Real Party in Interest. 
 
S261247 
 
Fourth Appellate District, Division Two 
E068730, E068751 
 
Riverside County Superior Court 
RIC1514281 
 
 
June 30, 2022 (reposting corrected version) 
 
Chief Justice Cantil-Sakauye authored the opinion of the Court, 
in which Justices Corrigan, Liu, Kruger, Groban, Jenkins, and 
Guerrero concurred. 
 
GRANDE v. EISENHOWER MEDICAL CENTER 
S261247 
 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
A staffing agency (FlexCare LLC) arranged for a nurse 
(Lynn Grande) to work at a hospital (Eisenhower Medical 
Center).  The nurse sued the staffing agency for violating the 
Labor Code and the Unfair Competition Law.  The parties 
settled and the court entered judgment upon the settlement.  
The hospital was not a party to that initial lawsuit and the 
settlement did not name the hospital as a released party. 
The nurse then sued the hospital based on the same 
alleged violations.  The hospital argued that, because of the first 
judgment, claim preclusion foreclosed the nurse’s second suit.  
The Court of Appeal disagreed, criticizing the reasoning of a 
published opinion that found claim preclusion on similar facts.  
(Grande v. Eisenhower Medical Center (2020) 44 Cal.App.5th 
1147, 1162–1163 (Grande), criticizing Castillo v. Glenair, Inc. 
(2018) 23 Cal.App.5th 262, 278–281 (Castillo).)  We granted 
review to resolve this tension in the case law.   
The core of this dispute concerns privity.  Judgments bind 
not only parties, but also “those persons ‘in privity with’ parties.”  
(Armstrong v. Armstrong (1976) 15 Cal.3d 942, 951.)  Questions 
about privity typically arise when a litigant attempts to use a 
judgment against someone who was not party to that judgment.  
(See DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 826, 
fn. 9 (DKN Holdings).)    
This case does not present a typical privity question.  
Because the nurse was a party to the initial judgment, the 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
2 
judgment can be used against her whether or not she was in 
privity with some other party.  But for claim preclusion, the 
affirmative defense asserted by the hospital, that is not enough.  
Instead, we have frequently explained that claim preclusion can 
be asserted only by a party in the first action or someone in  
privity with a party in the first action.  In this case, a nonparty 
(the hospital) argues that it is in privity with a party (the 
staffing agency) to benefit from the claim-preclusive effect of a 
judgment that undoubtedly binds an opposing party (the nurse).  
That argument is not persuasive.  We recently explained 
that privity “requires the sharing of ‘an identity or community 
of interest,’ with ‘adequate representation’ of that interest in the 
first suit, and circumstances such that the nonparty ‘should 
reasonably have expected to be bound’ by the first suit.”  (DKN 
Holdings, supra, 61 Cal.4th at p. 826.)  There is no such privity 
here because of the hospital and staffing agency’s different legal 
interests.  Nor can preclusion be based on a claimed 
indemnification or agency relationship between those litigants.  
We will thus affirm the judgment of the Court of Appeal. 
I.  BACKGROUND 
Intervener FlexCare LLC is a temporary staffing agency.  
Plaintiff Lynn Grande is a nurse.  FlexCare assigned Grande to 
work at defendant Eisenhower Medical Center, which she did 
for about a week in February 2012.  Under the terms of an 
agreement between the staffing agency (FlexCare) and the 
hospital 
(Eisenhower), 
the 
staffing 
agency 
purportedly 
“retain[ed] . . . exclusive and total legal responsibility as the 
employer of Staff,” including “the obligation to ensure full 
compliance 
with 
and 
satisfaction 
of” wage 
and 
hour 
requirements.  The hospital retained discretion to assign shifts.  
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
3 
Nurses were to use the hospital’s time and attendance system. 
The staffing agency agreed to indemnify the hospital for certain 
obligations concerning this staffing arrangement.  The two 
lawsuits relevant here, described below, relate to that 
arrangement.    
A. First Suit, Against the Staffing Agency 
A person not party to the case now before us filed a 
putative class action against the staffing agency and others in 
state court.  The nurse who filed the present case (Grande) 
joined the prior action as a named plaintiff, alleging wage and 
hour violations during the time she worked at the hospital.  Both 
plaintiffs sought to represent a class that included a broad group 
of the staffing agency’s employees, not merely nurses placed at 
Eisenhower.  The hospital was not named as a defendant in this 
prior action and did not intervene in it.   
The parties to the first suit reached a stipulation and 
settlement agreement, with the staffing agency to pay no more 
than $750,000.  The trial court approved the agreement and 
entered judgment.  For purposes of the judgment, the court 
certified a class of “ ‘all persons who at any time from or after 
January 30, 2008 through April 8, 2014 were non-exempt 
nursing employees of [the staffing agency] employed in 
California.’ ”  Contingent on payment of the amounts due, the 
court “barred and enjoined” all class members “from 
prosecuting” certain claims “against the Released Parties.”  The 
term “Released Parties” was defined to include the staffing 
agency and its agents but did not mention the hospital by name.  
The court further ordered that “the Released Parties” could use 
records from the case “to support a defense of res judicata, 
collateral estoppel, release, waiver or other theory of claim 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
4 
preclusion, issue preclusion or similar defense.”  By the time of 
judgment, the hospital had not communicated with the staffing 
agency regarding the settlement.  There is no dispute that the 
staffing agency paid the amounts owed.  
B. Second Suit, Against the Hospital  
After the judgment in the first suit became final, the nurse 
filed this putative class action against the hospital.  The suit is 
based on alleged wage and hour violations while the nurse 
worked there.  The scope of the (putative) class at issue in this 
second action differs from the class at issue in the first.  Unlike 
the first suit, which concerned nonexempt employees of the 
staffing agency placed throughout the state (not just at 
Eisenhower), this second suit concerns nonexempt employees of 
the hospital placed by any staffing agency (not just by FlexCare).   
The staffing agency (FlexCare) filed a complaint in 
intervention, seeking declaratory relief.  The staffing agency 
and the hospital argued both that the hospital was entitled to 
the benefit of the earlier release, and that the first judgment 
precludes the nurse from bringing this second suit.   
The court held a bench trial on the release and preclusion 
issues.  The court found that “the language in the release clause 
cannot reasonably be construed to extend to claims Plaintiff may 
have against [the hospital] in this case.”  The court further 
concluded that because the hospital “is not in privity with [the 
staffing agency], as that term is understood for claim preclusion 
(res judicata) purposes, Plaintiff’s claim against [the hospital] in 
this case is not barred by the Final Judgment” in the first action.  
The court reasoned that “if Plaintiff were attempting to hold [the 
hospital] derivatively liable for [the staffing agency’s] violation 
of the Labor Code, one might be able to argue that claim 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
5 
preclusion should apply to bar this suit.”  But the court “found 
no support for the proposition that joint employer liability is a 
derivative claim”; on the contrary, “case law supports the view 
that joint employer liability is joint and several, with each 
employer having a separate and independent duty to comply 
with the Labor Code.”     
The staffing agency and the hospital sought review in the 
Court of Appeal.  The trial court entered judgment on the 
staffing agency’s complaint in intervention, from which the 
staffing agency appealed.  At the hospital’s request, the trial 
court issued an interlocutory order certifying that the litigation 
between the nurse and the hospital presented an issue 
warranting immediate review.  (See Code Civ. Proc., § 166.1; 
McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 
248.)  The hospital petitioned for writ of mandate.   The Court 
of Appeal issued an order to show cause and consolidated the 
matter with the staffing agency’s appeal.  
A divided panel of the Court of Appeal affirmed the trial 
court’s judgment against the staffing agency and denied the 
hospital’s petition for writ of mandate.  (Grande, supra, 
44 Cal.App.5th at p. 1168.)  The court first concluded that 
preclusion was inappropriate because the hospital was not in 
privity with the staffing agency.  (Id., at pp. 1157–1163.)  In 
doing so, the court criticized the privity analysis in the Castillo 
opinion.  (Grande, at p. 1162.)  The court also found no error in 
the trial court’s conclusion that the settlement did not release 
claims against the hospital.  (Grande, at pp. 1163–1167.) 
Presiding Justice Ramirez dissented.  He “would follow 
Castillo, as a matter of stare decisis,” concluding that it was not 
“so plainly wrong as to justify creating a split of authority.”  
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
6 
(Grande, supra, 44 Cal.App.5th at p. 1168 (dis. opn. of Ramirez, 
P. J.).) 
We granted review.  Below, we first briefly confirm that 
the trial court’s interpretation of the release was supported by 
substantial evidence.  That interpretation may well be 
dispositive of the preclusion question; there is a strong 
argument — not meaningfully addressed in Castillo, the 
appellate opinion below, or the briefing here — that an 
agreement giving rise to a judgment should control the 
preclusive effect of that judgment.  Regardless, even under 
ordinary principles of claim preclusion, the hospital and staffing 
agency have not demonstrated that the Court of Appeal erred. 
II.  SCOPE OF RELEASE AND 
RELATIONSHIP TO PRECLUSION   
A. Scope of Release 
We begin with the text of the agreement giving rise to the 
first judgment.  In most pertinent part, it released “FlexCare, 
LLC, . . . [several individuals], and all present and former 
subsidiaries, 
affiliates, 
divisions, 
related 
or 
affiliated 
companies, 
parent 
companies, 
franchisors, 
franchisees, 
shareholders, and attorneys, and their respective successors and 
predecessors in interest, all of their respective officers, directors, 
employees, administrators, fiduciaries, trustees and agents, and 
each of their past, present and future officers, directors, 
shareholders, 
employees, 
agents, 
principals, 
heirs, 
representatives, accountants, auditors, consultants, insurers 
and reinsurers, and their counsel of record.”  (Italics added.)  
The release does not name the hospital or specify a group of 
clients of the staffing agency, even though the underlying 
complaint mentions the facilities at which the plaintiff nurses 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
7 
worked.  Nor, viewed in context of the list of released parties, is 
the hospital unambiguously an “agent[]” within the meaning of 
the agreement, notwithstanding the hospital’s participation in 
the nurse’s employment.   
The trial court resolved this ambiguity following a bench 
trial, relying at least in part on evidence extrinsic to the 
agreement.  For example, the court emphasized “[t]he facts 
surrounding” the first action, identifying testimony that “if 
claims against [the hospital] were intended to be waived or 
released, Plaintiff would have named [the hospital] and pursued 
discovery against it, and obtained money from it in a 
settlement — none of which occurred.”  The trial court’s fact-
specific determination — construing this particular release, 
based on the evidence adduced at this particular trial — is 
supported by substantial evidence.  We affirm on that basis.   
Our decision on this issue is thus fact- and case-specific.  
We note, however, that the broader notion that a client is an 
“agent” of a staffing agency is not free from doubt.  We have 
described “the right of control” as “the essential characteristic” 
of an agency relationship.  (Edwards v. Freeman (1949) 
34 Cal.2d 589, 592.)  Accordingly, while some courts have relied 
on the presence of a joint employment relationship as a means 
of establishing agency (see, e.g., Garcia v. Pexco, LLC (2017) 
11 Cal.App.5th 782), it is not self-evident that interdependence 
between a client and staffing agency reflects that right of 
control, nor that two entities’ joint employment of and control 
over the same employee entails control over each other.  We do 
not resolve these issues, but courts confronted with similar 
questions in the future should consider them closely, bearing in 
mind the facts of each case.  And, of course, future litigants can 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
8 
specify that their releases extend to staffing agency clients — if 
that result is intended.   
B. Relationship Between Release and Preclusion 
There is a substantial argument that our conclusion 
regarding the scope of the release should also resolve the 
preclusion question.  “The basically contractual nature of 
consent judgments has led to general agreement that preclusive 
effects should be measured by the intent of the parties.”  (18A 
Wright et al., Fed. Practice and Procedure (3d. ed. 2017) 
Jurisdiction and Related Matters, § 4443, pp. 254–255 
(hereafter FPP).)  One might reasonably ask why, if the hospital 
is not entitled to the benefit of the release, the hospital should 
nevertheless be entitled to assert claim preclusion because of the 
judgment entered upon that release.  (Wojciechowski v. Kohlberg 
Ventures, LLC (9th Cir. 2019) 923 F.3d 685, 689–690; U.S. ex 
rel. May v. Purdue Pharma L.P. (4th Cir. 2013) 737 F.3d 908, 
913; Boguslavsky v. South Richmond Securities, Inc. (2d Cir. 
2000) 225 F.3d 127, 130; Keith v. Aldridge (4th Cir. 1990) 900 
F.2d 736, 740–741; Bandai America Inc. v. Bally Midway Mfg. 
Co. (3d Cir. 1985) 775 F.2d 70, 74–75; cf. Kim v. Reins 
International California, Inc. (2020) 9 Cal.5th 73, 91–92; but see 
Russell v. SunAmerica Securities, Inc. (5th Cir. 1992) 962 F.2d 
1169, 1173, fn. 1; FPP, supra, § 4443, p. 271.)  
We can decide this case without resolving whether the 
scope of the release controls the preclusive effect of the 
judgment.  If the release is controlling, then based on our 
conclusion above, the judgment does not preclude the nurse’s 
claim against the hospital.  If the release is not controlling, the 
judgment still does not preclude the nurse’s claim against the 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
9 
hospital, based on the ordinary principles of preclusion to which 
we now turn. 
III.  OVERVIEW OF PRECLUSION  
Preclusion comes in two main forms: claim preclusion and 
issue preclusion.  (See Samara v. Matar (2018) 5 Cal.5th 322, 
326 & fn. 1 (Samara).)  As the names suggest, claim preclusion 
prevents relitigation of entire claims (or “causes of action”) (id., 
at p. 326), while issue preclusion prevents relitigation of specific 
issues (id., at p. 327).  Like many courts, we previously used the 
terms “res judicata” and “collateral estoppel” when discussing 
claim and issue preclusion, respectively.  (Samara, supra, 
5 Cal.5th at p. 326; see also id., at p. 326, fn. 1. [also noting our 
prior use of “ ‘ “res judicata” as an umbrella term’ capable of 
referring to claim preclusion, issue preclusion, or both”].) 
Claim and issue preclusion have different requirements.  
We have described claim preclusion as applying “only when ‘a 
second suit involves (1) the same cause of action (2) between the 
same parties [or their privies] (3) after a final judgment on the 
merits in the first suit.’ ”  (Samara, supra, 5 Cal.5th at p. 327, 
italics added.)  Issue preclusion, by contrast, “applies only 
‘(1) after final adjudication (2) of an identical issue (3) actually 
litigated and necessarily decided in the first suit and (4) asserted 
against one who was a party in the first suit or one in privity with 
that party.’ ”  (Ibid., italics added.)   
Privity is thus relevant under both doctrines, but with one 
significant difference.  “The loose term ‘privity’ refers to some 
relationship or connection with the party that makes it proper 
to hold ‘privies’ bound with the actual parties.”  (7 Witkin, Cal. 
Procedure (5th ed. 2008) Judgments, § 456, p. 1113; see also 
pt. IV.A., post.)  For both claim and issue preclusion, a judgment 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
10 
can be used against only a party to that judgment or someone in 
privity with a party — in other words, against only a person or 
entity that is bound by the judgment.  (Samara, supra, 5 Cal.5th 
at p. 327.)  The doctrines diverge, however, concerning by whom 
a judgment can be used.  Only claim preclusion contains a 
“ ‘between the same parties [or their privies]’ ” inquiry, which 
restricts the set of litigants who can benefit from a prior 
judgment to those who could have had the judgment used 
against them.  (Ibid.; but see pt. IV.C., post.) 
This 
between-the-same-parties-or-privies 
formulation 
reflects claim preclusion’s longstanding mutuality requirement.  
(See DKN Holdings, supra, 61 Cal.4th at p. 827, fn. 10.)  “For 
many years, most courts followed the general rule that the 
favorable preclusion effects of a judgment were available only to 
a person who would have been bound by any unfavorable 
preclusion effects.  This rule, known as the rule of mutuality, 
established a pleasing symmetry — a judgment was binding 
only on parties and persons in privity with them, and a 
judgment could be invoked only by parties and their privies.”  
(FPP, supra, § 4463, pp. 666–667; cf. Bernhard v. Bank of 
America (1942) 19 Cal.2d 807, 811 (Bernhard) [“The estoppel is 
mutual if the one taking advantage of the earlier adjudication 
would have been bound by it, had it gone against him”].)  In 
short, litigants “could only take advantage of an earlier 
judgment if that judgment would have bound them, had it been 
decided differently.”  (DKN Holdings, at p. 827, fn. 10.)  In 
Bernhard, “we repudiated the mutuality rule for issue 
preclusion” (ibid.) — but not for claim preclusion.  Claim 
preclusion can prevent reassertion of a claim without regard to 
whether a plaintiff won or lost in an initial action.  (See Busick 
v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal.3d 967, 973 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
11 
[describing merger and bar]; see also Mycogen Corp. v. Monsanto 
Co. (2002) 28 Cal.4th 888, 896–897; Rest.2d Judgments (1982) 
§ 17, p. 148.)  Allowing nonmutual claim preclusion would thus 
exert pressure akin to a mandatory joinder rule.  If claims 
against nonparties would be extinguished by a judgment in an 
initial action — regardless of who wins that initial action — 
then a plaintiff would be required to either join the nonparties 
in the initial action or lose its claims against them.   
IV.  THE HOSPITAL WAS NOT IN PRIVITY 
WITH THE STAFFING AGENCY 
With this context regarding the same-parties-or-privies 
requirement in mind, the hospital stands in privity with the 
staffing agency only if circumstances would permit binding the 
hospital to an unfavorable judgment against the staffing agency 
in the first action.  (See DKN Holdings, supra, 61 Cal.4th at 
p. 827, fn. 10; see also id., at p. 826.)  In other words, “privity” is 
not merely a term that describes a close relationship between 
two entities; it implies that a judgment against one could have 
been used against the other, even though that entity was not a 
party to the judgment.  There is no such privity on the facts of 
this case because the staffing agency did not adequately 
represent the hospital’s interests in the first action.1 
The term privity is sometimes used more broadly, to 
convey that nonparties may take advantage even of judgments 
that could not bind them.  There is a fair argument that such 
 
1  
Our decision here concerns only whether the hospital 
could be bound as a privy under our state-law privity inquiry.  
We do not address whether a nonparty asserting claim 
preclusion as a privy must further demonstrate that it would 
have been constitutional to bind that nonparty to a loss.  (Martin 
v. Wilks (1989) 490 U.S. 755, 761–762 [discussing due process].)   
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
12 
preclusion should be instead described as nonmutual claim 
preclusion.  (See pt. IV.C., post.)  But as we will discuss, no 
matter the label, such preclusion is inappropriate in this case.  
A. General Principles 
As mentioned, “[t]he loose term ‘privity’ refers to some 
relationship or connection with the party that makes it proper 
to hold ‘privies’ bound with the actual parties.”  (7 Witkin, Cal. 
Procedure, supra, § 456, p. 1113; cf. Taylor v. Sturgell (2008) 553 
U.S. 880, 894, fn. 8.) 
The circumstances recognized as creating privity have 
evolved over time.  Our older decisions often define privity in 
terms of a nonparty’s acquisition of an interest in the subject 
matter of litigation.  Bernhard, for example, described “[a] 
privy” as “one who, after rendition of the judgment, has acquired 
an interest in the subject matter affected by the judgment 
through or under one of the parties, as by inheritance, 
succession, or purchase.”  (Bernhard, supra, 19 Cal.2d at p. 811.)  
Other decisions and a statutory provision are to similar effect.  
(See Code Civ. Proc., § 1908, subd. (a)(2); see also, e.g., Holt Mfg. 
Co. v. Collins (1908) 154 Cal. 265, 273–274; Flandreau v. 
Downey (1863) 23 Cal. 354, 357.)  More recently, privity has been 
described as “such an identification in interest of one person 
with another as to represent the same legal rights” or “a 
relationship between the party to be estopped and the 
unsuccessful party in the prior litigation which is ‘sufficiently 
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Opinion of the Court by Cantil-Sakauye, C. J. 
 
13 
close’ so as to justify” preclusion.  (Clemmer v. Hartford 
Insurance Co. (1978) 22 Cal.3d 865, 875 (Clemmer).)2  
Our latest decision to address the concept described 
privity as “requir[ing] the sharing of ‘an identity or community 
of interest,’ with ‘adequate representation’ of that interest in the 
first suit, and circumstances such that the nonparty ‘should 
reasonably have expected to be bound’ by the first suit.”  (DKN 
Holdings, supra, 61 Cal.4th at p. 826.)  We apply that inquiry 
below.   
B. The Hospital Would Not Have Been Bound by 
an Adverse Judgment in the Initial Action  
As the litigants asserting preclusion, the hospital and 
staffing agency bear the burden of establishing that they were 
in privity in the first action.  (Vella v. Hudgins (1977) 20 Cal.3d 
251, 257; cf. Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.)  
As mentioned, to do so here, they must establish that they 
shared “ ‘an identity or community of interest,’ with ‘adequate 
representation’ of that interest in the first suit, and 
circumstances such that the nonparty ‘should reasonably have 
expected to be bound’ by the first suit.”  (DKN Holdings, supra, 
61 Cal.4th at p. 826.)  Our recent decision in DKN Holdings 
illustrates this inquiry. 
In DKN Holdings, a litigant purported to be in privity with 
a party to an earlier judgment to assert claim preclusion based 
 
2  
It may sometimes be appropriate to bind a nonparty to a 
loss, without allowing that nonparty to benefit from a win.  (See, 
e.g., FPP, supra, § 4451, pp. 366–367 [discussing nonparties 
that secretly control litigation]; Dillard v. McKnight (1949) 
34 Cal.2d 209, 216 [suggesting such nonparties should not be 
termed “privies”].)   
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Opinion of the Court by Cantil-Sakauye, C. J. 
 
14 
on that judgment.  (DKN Holdings, supra, 61 Cal.4th at pp. 825–
826 & fn. 19.)  A landlord had prevailed on a claim against one 
of three jointly and severally liable lessees.  (Id., at pp. 818–819.)  
The landlord sued the other two lessees in a separate action.  
(Id., at p. 819.)  A defendant in the second action argued that 
the landlord’s “rights under the lease had been adjudicated” in 
the first action, precluding the second suit.  (Ibid.)   
We disagreed.  After setting out the privity inquiry quoted 
above, we explained, “A nonparty alleged to be in privity must 
have an interest so similar to the party’s interest that the party 
acted as the nonparty’s ‘ “ ‘virtual representative’ ” ’ in the first 
action.  [Citation.]  Joint and several liability alone does not 
create such a closely aligned interest between co-obligors.  The 
liability of each joint and several obligor is separate and 
independent, not vicarious or derivative.”  (DKN Holdings, 
supra, 61 Cal.4th at p. 826.)  We distinguished Court of Appeal 
decisions addressing situations in which “a defendant’s liability 
[was] entirely deriv[ative] [of] that of a party in an earlier 
action.”  (Id., at pp. 827–828, italics added.)  “The concepts of 
joint and several liability and derivative liability,” we explained, 
“are not coextensive.”  (Id., at p. 828.)  Instead, “[e]ach joint and 
several obligor is separately responsible for breach of the 
contract; the basis of each one’s liability is independent, 
although all have contributed to the same loss.”  (Ibid.)3 
DKN Holdings makes clear that privity does not exist 
merely because two entities are allegedly liable for the same 
 
3  
Although we held that virtual representation was 
necessary to sustain the theory of privity at issue, we had no 
occasion to consider precisely what sort of representation would 
have justified preclusion.   
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
15 
wrong to the same plaintiff.  Likewise, then, privity does not 
exist merely because two entities share an interest in 
establishing that no wrong occurred.  Accordingly, whether the 
staffing agency had an interest in showing that neither it nor 
the hospital was liable to the nurse cannot end the inquiry.   
Here, even if, as a factual matter, the hospital and staffing 
agency worked together to satisfy their payment obligations, 
that does not mean their legal interests were not distinct.  
Although the staffing agency describes this second case as 
concerning “the exact same wage and hour violations” that were 
at issue in the first action, at oral argument the staffing agency 
declined to concede that it would need to indemnify the hospital 
for all liability arising from the conduct at issue in this second 
action.  The implication is that at least some of the alleged 
violations could, in the staffing agency’s view, result in liability 
for the hospital but not for the staffing agency.  This suggests a 
conflict of incentives rather than adequate representation.  
Likewise, the hospital may have had an interest in shifting fault 
to the staffing agency had it been party to that action — and the 
staffing agency, quite obviously, would not have represented 
that interest.  (Cf. Clemmer, supra, 22 Cal.3d at p. 874 
[“plaintiffs’ interests in litigating the issue of willfulness 
differed from those of Dr. Lovelace and were therefore not 
adequately represented by him in his prior criminal trial”].)  
The hospital and staffing agency nevertheless contend 
that their position is supported by the Court of Appeal’s decision 
in Castillo.  Castillo concerned a temporary staffing agency 
(GCA), the agency’s employees, and its client (Glenair).  (See 
Castillo, supra, 23 Cal.App.5th at p. 266.)  A lawsuit was filed 
against the staffing agency on behalf of a class that included 
employees Andrew and David Castillo.  (Id., at pp. 266–267.)  
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
16 
The action resulted in a court-approved settlement, which 
included a release.  (Id., at pp. 267–268.)  The Castillos 
separately sued the staffing agency’s client Glenair, at which 
they had been placed to work.  (Id., at p. 266.)  The Court of 
Appeal concluded, in portions of its opinion not essential to our 
discussion here, that Glenair was entitled to summary judgment 
on the theory that the release in the class action extinguished 
the Castillos’ claims against Glenair.  (See id., at pp. 281–282.)   
The court further held that client-employer Glenair was in 
privity with staffing agency GCA for purposes of claim 
preclusion.  (Castillo, supra, 23 Cal.App.5th at pp. 278–281.)  
The court reasoned that “privity, ‘ “as used in the context of res 
judicata or collateral estoppel, does not embrace relationships 
between persons or entities, but rather it deals with a person’s 
relationship to the subject matter of the litigation.” ’ ”  (Castillo, 
at p. 277.)  Applying that understanding, the court thought it 
was “clear” that the client-employer and staffing agency were in 
privity for purposes of the claim involved.  (Id., at p. 279.)  “The 
subject matter of this litigation is the same as the subject matter 
of the [other] litigation — namely, both cases involve the same 
wage and hour causes of action arising from the same work 
performed by the same GCA employees (the Castillos) at GCA’s 
client company Glenair.  Based on the undisputed facts, it is 
apparent Glenair and GCA share the same relationship to the 
Castillos’ claims here.  Both Glenair and GCA were involved in 
and responsible for payment of the Castillos’ wages.  Glenair 
was authorized by GCA and responsible for recording, reviewing 
and transmitting the Castillos’ time records to GCA.  GCA paid 
the Castillos based on those time records.  And, by virtue of the 
[other] settlement, the Castillos were compensated for any 
errors made in the payment of their wages.  Thus, with respect 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
17 
to the Castillos’ wage and hour causes of action, the interests of 
Glenair and GCA are so intertwined as to put Glenair and GCA 
in the same relationship to the litigation here.  Accordingly, we 
conclude they are in privity for purposes of the instant 
litigation.”  (Id., at pp. 279–280.)  
The court also remarked on our decision in DKN Holdings.  
“This case is distinguishable” from DKN Holdings, the Castillo 
court reasoned, “because, assuming Glenair and GCA are jointly 
and severally liable, our finding of privity does not rely on any 
such relationship.  Rather, as explained above, Glenair and GCA 
are in privity for present purposes based both on their 
interdependent relationship with respect to payment of the 
Castillos’ wages as well as on the fact that this litigation 
revolves around alleged errors in the payment of the Castillos’ 
wages.  DKN Holdings does not preclude our conclusion here.”  
(Castillo, supra, 23 Cal.App.5th at p. 280; see also id., at p. 287.)  
In doing so, Castillo appears to have focused on the factual 
circumstances surrounding defendants’ compliance with wage 
and hour obligations, rather than the nature of defendants’ legal 
obligations to the plaintiffs.  (But see DKN Holdings, supra, 
61 Cal.4th at pp. 822–823.) 
Building on Castillo, the hospital and the staffing agency 
here contend that they are in privity because of their similar 
relationship to the “subject matter” of the initial action.  None 
of their briefing on this point explores the fact that the initial 
suit concerned a different class of plaintiffs than this second 
suit — and thus, at least arguably, concerned a rather different 
“subject matter.”  Recall, too, that the first suit concerned 
nonexempt employees of the staffing agency placed throughout 
California.  The hospital and staffing agency’s reliance on their 
similar relationship to the “subject matter” of the initial action 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
18 
seems to imply that all California clients of the staffing agency 
were in privity in the first action — effectively requiring the 
nurse to join them all as defendants and threatening to bind 
them to a judgment based on little more than their contractual 
relationship with the agency.  This concept of privity would 
stretch remarkably broadly.  
To be sure, Castillo is correct that the privity inquiry 
focuses on the relationship between supposed privies in the 
context of the litigation — not a static analysis of the 
relationship between them.  Two litigants may be privies in 
some circumstances yet strangers in others.  But even viewed in 
the context of the initial litigation, the staffing agency and 
hospital’s divergent interests prevent a finding of privity.4   
C. The Hospital Is Not Otherwise Entitled to 
Benefit from Claim Preclusion   
The briefing reflects two other theories of privity 
suggesting that, in the hospital’s view, the hospital is entitled to 
benefit from the claim preclusive effect of the first judgment 
even if it could not have been bound by that judgment.  Although 
we recognize that the term privity is sometimes used in this 
manner, such preclusion might more appropriately be termed 
nonmutual claim preclusion.  A doctrine of privity that allows a 
nonparty to benefit from a judgment, but not to be bound by a 
judgment, is in effect an exception to the mutuality 
requirement.  (FPP, supra, § 4463, p. 667.)  “[F]indings of 
 
4  
We do not address whether the nurse’s suit against the 
hospital concerns the same cause of action as her suit against 
the staffing agency, nor whether considerations unique to the 
class action context would alone authorize splitting such a cause 
of action across multiple suits.   
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
19 
privity” made under such a doctrine “may cloud reasoning as 
later courts confront real privity questions[] and may prevent 
the present court from considering and articulating the factors 
that make it appropriate to allow nonmutual claim preclusion.”  
(Id., § 4464.1, p. 705; cf. DKN Holdings, supra, 61 Cal.4th at 
p. 824 [imprecise terminology can impede careful preclusion 
analysis].)  For purposes of this case, however, the terminology 
is not critical; the theories, however named, lack merit.5 
1. Contractual Indemnification Provision 
The hospital contends that claim preclusion is appropriate 
because the staffing agency agreed to indemnify it.  We can 
assume for purposes of this argument that the agreement covers 
all the hospital’s potential liability in this action.  
We acknowledge the position that an indemnitee should, 
in at least some circumstances, be able to assert claim 
preclusion based on a judgment in favor of an indemnitor.  (FPP, 
supra, § 4463, p. 671; cf. Bradley v. Rosenthal (1908) 154 Cal. 
420, 425.)  If a plaintiff were to lose to an indemnitor and then 
prevail against an indemnitee, a question would arise regarding 
the right to indemnification.  “To allow the right of 
indemnification would be to destroy the victory won by the 
indemnitor in the first action.  To deny the right of 
indemnification would be to destroy the indemnitee’s right by 
the result of an action in which he took no part.”  (FPP, supra, 
§ 4463, p. 673.)  One might afford the benefit of claim preclusion 
 
5  
 Although the hospital appears to argue for nonmutual 
preclusion, we express no view concerning whether the theories 
discussed below could support the use of a judgment against a 
nonparty.  (See fn. 1, ante.)  We conclude only that the theories 
lack force on the facts of this case. 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
20 
to the nonparty indemnitee based on a view that it is “better to 
preclude the [plaintiff], who has already had one opportunity to 
litigate, and who often could have joined both adversaries in the 
first action.”  (Ibid.; cf. Lamb v. Wahlenmaier (1904) 144 Cal. 91, 
93–97 [surety entitled to benefit of judgment in favor of 
principal, lest surety be held liable to plaintiff but unable to 
recover from principal].) 
Regardless, this argument fails at least because the 
hospital has not established that the staffing agency was sued 
in 
its 
capacity 
as 
indemnitor. 
 
(Cf. 
Grande, 
supra, 
44 Cal.App.5th at p. 1161 [“[the nurse] sued [the staffing 
agency] based on labor law violations [the staffing agency] 
committed on its own.  She didn’t allege it was derivatively or 
vicariously liable as [the hospital’s] indemnitor.”].)  When a 
contractual indemnitor is sued based on its own conduct, it is 
possible to simultaneously allow (i) the plaintiff to then sue the 
indemnitee for the indemnitee’s conduct, (ii) the indemnitee to 
obtain indemnification, and (iii) the indemnitor to retain any 
initial (own-conduct-related) victory.  That possibility renders 
this argument for preclusion unpersuasive.  (See F.T.C. v. 
Garvey (9th Cir. 2004) 383 F.3d 891, 898 [“If the indemnitor is 
sued for its own actions and is not sued as an indemnitor for the 
acts of another, the rationale favoring preclusion no longer 
holds”].)6  
 
6  
The staffing agency and the hospital do not appear to 
press, and in any event have not adequately briefed, any 
argument that preclusion should arise from a duty to indemnify 
imposed on the staffing agency by operation of law. 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
21 
2. Derivative Liability 
In DKN Holdings, we identified Court of Appeal decisions 
indicating that “[w]hen a defendant’s liability is entirely derived 
from that of a party in an earlier action, claim preclusion bars 
the second action because the second defendant stands in privity 
with the earlier one.”  (DKN Holdings, supra, 61 Cal.4th at 
pp. 827–828, italics added.)  The hospital and staffing agency 
argue that this case concerns such derivative liability and, at 
least implicitly, they suggest that our case law should or does 
include the “entirely deriv[ative]” doctrine. 
Here, too, DKN Holdings provides important context.  Our 
decision in that case makes clear that liability cannot be 
“entirely deriv[ative]” (DKN Holdings, supra, 61 Cal.4th at 
p. 827) merely because, as a matter of factual causation, the 
alleged liability of two defendants is related.  Joint and several 
obligors on a contract can extinguish each other’s liability by 
paying a shared debt, for example, but it would be odd to treat 
their relationship as creating privity merely because one obligor 
could discharge the debt of the other.  (Id. at p. 825.)  The nature 
of the duty at issue matters.  Put somewhat differently, a joint 
and several obligor may no longer be liable if a co-obligor has 
already satisfied the obligation at issue, but that does not mean 
the obligor’s liability is or was “derivative” of its co-obligor’s. 
With this context in mind, the hospital and staffing 
agency’s arguments fail to persuade.  The staffing agency 
contends that the hospital’s liability “is necessarily entirely 
derivative because [the staffing agency] was responsible for 
paying [the nurse]” based on a private agreement between the 
agency and the hospital.  But at issue here is the hospital’s 
independent duty to comply with the Labor Code, and the 
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
22 
staffing agency’s alleged failure to make full payment did not 
give rise to that duty.7  It may be possible for the parties to 
satisfy their statutory duties by contract, but the duties exist 
independent of those efforts.  The hospital relatedly urges that 
it is “sufficient to show that the two companies’ alleged liability 
is ‘derivative’ of one another” to point out that “[the nurse’s] 
nine-day assignment at [the hospital], and [the hospital’s] time 
records, provision of meal and rest periods, and day-to-day 
control of [the nurse’s] work formed part of the basis of her wage-
hour claims.”  As discussed, DKN Holdings counsels that this 
factual overlap between the claims does not establish derivative 
liability in the relevant sense. 
For these reasons, the hospital and staffing agency have 
not demonstrated that the Court of Appeal erred in rejecting 
their claim preclusion argument. We do not decide whether 
preclusion would have been appropriate on any other ground. 
 
7  
The Court of Appeal held that joint employers are each 
independently liable for their own conduct.  (Grande, supra, 
44 Cal.App.5th at p. 1160.)  We decline to reach that subsidiary 
conclusion; we express no opinion on the nature of liability 
under the Labor Code, nor on the significance, if any, of recent 
legislative activity in this area.  (See Lab. Code, § 2810.3.)   
GRANDE v. EISENHOWER MEDICAL CENTER 
Opinion of the Court by Cantil-Sakauye, C. J. 
 
23 
 
V.  DISPOSITION 
We affirm the judgment of the Court of Appeal and 
disapprove Castillo v. Glenair, Inc., supra, 23 Cal.App.5th 262 
to the extent it is inconsistent with this opinion.   
 
 
CANTIL-SAKAUYE, C. J. 
 
We Concur:  
CORRIGAN, J. 
LIU, J. 
KRUGER, J. 
GROBAN, J. 
JENKINS, J. 
GUERRERO, J. 
 
 
See next page for addresses and telephone numbers for counsel who 
argued in Supreme Court. 
 
Name of Opinion  Grande v. Eisenhower Medical Center 
__________________________________________________________  
 
Procedural Posture (see XX below) 
Original Appeal  
Original Proceeding 
Review Granted (published) XX 44 Cal.App.5th 1147 
Review Granted (unpublished)  
Rehearing Granted 
__________________________________________________________  
 
Opinion No. S261247 
Date Filed:  June 30, 2022 
__________________________________________________________  
 
Court:  Superior  
County:  Riverside 
Judge:  Sharon J. Waters 
__________________________________________________________   
 
Counsel: 
 
Downey Brand, Cassandra M. Ferrannini, Bradley C. Carroll and 
Alexandra K. LaFountain for Intervener and Appellant. 
 
Procopio, Cory, Hargreaves & Savitch, Kendra J. Hall and Robert G. 
Marasco for Sharp Memorial Hospital as Amicus Curiae on behalf of 
Intervener and Appellant and Defendant and Petitioner. 
 
The Dion-Kindem Law Firm, Peter R. Dion-Kindem; The Blanchard 
Law Group and Lonnie C. Blanchard III for Plaintiff and Respondent 
and for Real Party in Interest. 
 
Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Ruben D. 
Escalante, Karin Dougan Vogel and John D. Ellis for Defendant and 
for Petitioner. 
 
Atkinson, Andelson, Loya, Ruud & Romo, Susan M. Steward; and 
Brittany Sakata for American Staffing Association as Amicus Curiae 
on behalf of Defendant and Petitioner. 
 
 
 
Seyfarth Shaw, Jeffrey A. Berman and Kiran Aftab Seldon for 
California Hospital Association as Amicus Curiae on behalf of 
Defendant and Petitioner. 
 
No appearance for Respondent.
 
 
Counsel who argued in Supreme Court (not intended for 
publication with opinion): 
 
Cassandra M. Ferrannini 
Downey Brand LLP 
621 Capitol Mall, 18th Floor 
Sacramento, CA 95814 
(916) 444-1000  
 
Richard J. Simmons 
Sheppard, Mullin, Richter & Hampton LLP 
333 South Hope Street, 43d Floor 
Los Angeles, CA 90071 
(213) 620-1780 
 
Peter R. Dion-Kindem 
The Dion-Kindem Law Firm 
2945 Townsgate Road, Suite 200 
Westlake Village, CA 91361 
(818) 883-4900