Court Opinion

ID: 6323844
Source: CourtListenerOpinion
Date Created: 2022-03-16 17:01:49.534569+00
Date Added: 2024-06-11T09:21:44.473829
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

KRISTINA RAINES; DARRICK FIGG,                No. 21-55229
individually and on behalf of all others
similarly situated,                             D.C. No.
                    Plaintiffs-Appellants,   3:19-cv-01539-
                                               DMS-DEB
                   v.

U.S. HEALTHWORKS MEDICAL GROUP,                 ORDER
a corporation; SELECT MEDICAL                 CERTIFYING
HOLDINGS CORPORATION, a                      QUESTION TO
corporation; CONCENTRA GROUP                 THE SUPREME
HOLDINGS LLC, a corporation; U.S.              COURT OF
HEALTHWORKS, INC., a corporation;             CALIFORNIA
SELECT MEDICAL CORPORATION, a
corporation; CONCENTRA, INC., a
corporation; CONCENTRA PRIMARY
CARE OF CALIFORNIA, a medical
corporation; OCCUPATIONAL HEALTH
CENTERS OF CALIFORNIA, a medical
corporation; DOES 4 and 8 through 10,
inclusive,
                 Defendants-Appellees.

                    Filed March 16, 2022
2       RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

Before: Johnnie B. Rawlinson and Paul J. Watford, Circuit
        Judges, and Jed S. Rakoff, * District Judge.

                                Order

                          SUMMARY **

                         California Law

    The panel certified to the Supreme Court of California
the following question:

         Does California’s Fair Employment and
         Housing Act, which defines “employer” to
         include “any person acting as an agent of an
         employer,” Cal. Gov’t Code § 12926(d),
         permit a business entity acting as an agent of
         an employer to be held directly liable for
         employment discrimination?

    *
     The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP             3

                         ORDER

    We respectfully ask the Supreme Court of California to
exercise its discretion to decide the certified question set
forth in section II of this order.

             I. Administrative Information

    We provide the following information in accordance
with California Rule of Court 8.548(b)(1). The caption of
this case is:

       No. 21-55229

       KRISTINA RAINES; DARRICK FIGG,
       individually and on behalf of all others
       similarly situated, Plaintiffs-Appellants,

       v.

       U.S.      HEALTHWORKS            MEDICAL
       GROUP, a corporation; SELECT MEDICAL
       HOLDINGS          CORPORATION,         a
       corporation;    CONCENTRA         GROUP
       HOLDINGS LLC, a corporation; U.S.
       HEALTHWORKS, INC., a corporation;
       SELECT MEDICAL CORPORATION, a
       corporation; CONCENTRA, INC., a
       corporation; CONCENTRA PRIMARY
       CARE OF CALIFORNIA, a medical
       corporation; OCCUPATIONAL HEALTH
       CENTERS OF CALIFORNIA, a medical
       corporation; DOES 4 and 8 through 10,
       inclusive, Defendants-Appellees.
4     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

The names and addresses of counsel for the parties are:

       For Plaintiffs-Appellants Kristina Raines and
       Darrick Figg, individually and on behalf of
       all others similarly situated: Nicholas A.
       Carlin, R. Scott Erlewine, Kyle P. O’Malley,
       and Leah Romm, Phillips, Erlewine, Given &
       Carlin, LLP, 39 Mesa Street, Suite 201, San
       Francisco, California 94129.

       For Defendants-Appellees U.S. Healthworks
       Medical Group, Select Medical Holdings
       Corporation, Concentra Group Holdings
       LLC, U.S. Healthworks, Inc., Select Medical
       Corporation, Concentra, Inc., Concentra
       Primary Care of California, and Occupational
       Health Centers of California: Raymond A.
       Cardozo, Reed Smith, LLP, 101 2nd Street,
       Suite 1800, San Francisco, CA 94105;
       Cameron O’Brien Flynn and Timothy L.
       Johnson, Ogletree, Deakins, Nash, Smoak &
       Stewart, P.C., 4370 La Jolla Village Drive,
       Suite 990, San Diego, California 92122.

       For Defendants-Appellees Does 4 and 8
       through 10, inclusive: Raymond A. Cardozo,
       Reed Smith, LLP, 101 2nd Street, Suite 1800,
       San Francisco, California 94105.

    We designate Kristina Raines and Darrick Figg as the
petitioners if our request for certification is granted. They
are the appellants before our court.
      RAINES V. U.S. HEALTHWORKS MEDICAL GROUP               5

                   II. Certified Question

    We certify to the Supreme Court of California the
following question of state law:

       Does California’s Fair Employment and
       Housing Act, which defines “employer” to
       include “any person acting as an agent of an
       employer,” Cal. Gov’t Code § 12926(d),
       permit a business entity acting as an agent of
       an employer to be held directly liable for
       employment discrimination?

    We certify this question pursuant to California Rule of
Court 8.548. The answer to this question may determine the
outcome of the appeal currently pending in our court. We
will accept and follow the decision of the California
Supreme Court on this question. Our phrasing of the
question should not restrict the California Supreme Court’s
consideration of the issues involved.

                  III. Statement of Facts

    Plaintiffs in this case represent themselves and a putative
class of current and former job applicants. They seek to hold
defendants, providers of pre-employment medical
screenings, liable for asking allegedly invasive and
impermissible questions during medical screening exams.
The crucial question of state law is whether the Fair
Employment and Housing Act (FEHA) allows employees to
hold a business entity directly liable for unlawful conduct
when the business entity acted only as the agent of an
employer, rather than as an employer itself.

   It is generally illegal under California law for an
employer (1) to require “any medical or psychological
6     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

examination . . . [or] inquiry of an applicant,” (2) to make
“any inquiry whether an applicant has a mental disability or
physical disability or medical condition,” or (3) to make
“any inquiry regarding the nature or severity of a physical
disability, mental disability, or medical condition.” Cal.
Gov’t Code § 12940(e)(1). Employers may, however,
require applicants to undergo medical or psychological
examinations and make related inquiries after an
employment offer has been made, provided that the
examination or inquiry is “job related and consistent with
business necessity.” Id. § 12940(e)(3).

    Plaintiffs allege that they received job offers from
employers that were conditioned on successful completion
of a pre-employment medical screening. Defendants, who
collectively are the largest providers of occupational health
services in California, conducted these screenings on behalf
of employers in the State. Plaintiffs allege that they were
required by their employers to use defendants’ facilities and
services, and that defendants’ recommendations regarding
an applicant’s suitability for the position were adopted as a
matter of course.

    The crux of plaintiffs’ complaint is that defendants,
while conducting the screening exams on behalf of
plaintiffs’ prospective employers, asked questions that
violated FEHA.         Specifically, plaintiffs allege that
defendants required applicants to complete a written
questionnaire that asked numerous health-focused and non-
job-related questions, including whether the applicant has or
ever had: venereal disease; painful or irregular vaginal
discharge or pain; problems with menstrual periods;
irregular menstrual periods; penile discharge, prostate
problems, or genital pain or masses; cancer; mental illness;
HIV; permanent disabilities; painful or frequent urination;
hair loss; hemorrhoids; diarrhea; black stool; constipation;
     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP               7

tumors; an organ transplant; a stroke; or a history of tobacco
or alcohol use. Defendants also asked whether job
applicants were pregnant, asked about all medications they
were taking, and required that they reveal information about
prior on-the-job injuries or illnesses. Positive responses on
the questionnaire were then followed by additional verbal
questioning.

    The two named plaintiffs in this case, Kristina Raines
and Darrick Figg, both underwent this medical screening
exam after receiving job offers from prospective employers.
Raines received a job offer from Front Porch Communities
and Services, a company that provides housing and services
to California residents, to work as a food service aide. The
offer was conditioned upon Raines’s passing a pre-
employment medical screening exam administered by
defendants. Raines alleges that she answered all questions
on the written questionnaire and during the verbal follow-up,
except for the question about the date of her last menstrual
period. The exam was terminated after Raines repeatedly
declined to answer the question, and her job offer was
subsequently revoked by Front Porch.

    Figg received a job offer from the San Ramon Valley
Fire Protection District to serve as a member of the
Volunteer Communication Reserve. Figg’s offer was also
conditioned on his passing a pre-employment medical
screening exam administered by defendants. Figg, unlike
Raines, answered all questions, although he allegedly found
many of them to be inappropriate, intrusive, and
inapplicable. He was subsequently deemed medically
acceptable and officially hired for the position.

    After her job offer was revoked, Raines filed an
individual action against Front Porch and a subset of the
defendants in California state court. She subsequently filed
8     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

a first amended complaint adding claims on behalf of a class
of similarly situated job applicants, which allowed
defendants to remove the suit to federal court under the Class
Action Fairness Act, 28 U.S.C. § 1332(d). Following
removal, Raines settled with Front Porch and filed a second
amended complaint that added Figg as a plaintiff and
additional occupational health care providers as defendants.
Defendants filed a motion to dismiss the action under
Federal Rule of Civil Procedure 12(b)(6), which the district
court granted with leave to amend. Plaintiffs then filed the
operative third amended complaint. That complaint alleges
claims for violations of FEHA, the Unruh Civil Rights Act,
and California’s Unfair Competition Law (UCL), as well as
a common law claim for intrusion upon seclusion.

    Defendants again moved to dismiss the third amended
complaint for failure to state a claim. The district court
granted the motion without leave to amend as to plaintiffs’
FEHA, Unruh Act, and intrusion-upon-seclusion claims. As
to the FEHA claim, the district court held that plaintiffs had
adequately alleged that defendants were the agents of
prospective employers, but the court determined that FEHA
does not impose direct liability on agents. After dismissing
their UCL claim with prejudice, plaintiffs timely appealed to
this court. The State of California and a group of
organizations experienced with disability discrimination
filed amicus briefs in support of plaintiffs, and we held oral
argument in this case on January 12, 2022.

        IV. Explanation of Certification Request

    Whether FEHA’s definition of the term “employer”
includes a business entity acting as an employer’s agent is
an unresolved question of California law with significant
public policy implications. California has millions of
employees who could be impacted by a decision defining the
     RAINES V. U.S. HEALTHWORKS MEDICAL GROUP               9

scope of liability for business entities acting as agents of
their employers. To protect employees, FEHA instructs
courts to construe its provisions “liberally” in accordance
with its broad remedial purposes, Cal. Gov’t Code
§ 12993(a), but it is unclear whether the Legislature intended
FEHA’s definition of “employer” to create direct liability for
business entities acting only as agents of an employer.

    FEHA’s plain language bars discrimination, including
the asking of certain non-job-related questions, by “any
employer.” Id. § 12940(e). Elsewhere in the statute,
“employer” is defined to include “any person regularly
employing five or more persons, or any person acting as an
agent of an employer, directly or indirectly.” Id. § 12926(d)
(emphasis added).       The statute therefore appears to
encompass direct liability for any individual or business
entity acting as an agent of an employer. See id. § 12925(d)
(defining “person” in FEHA to include “one or more
individuals, partnerships, associations, corporations, limited
liability companies, legal representatives, trustees, trustees
in bankruptcy, and receivers or other fiduciaries”).

    The California Supreme Court, however, has twice
limited the reach of the phrase “person acting as an agent of
an employer” in FEHA’s definition of the term “employer.”
Both decisions exempt individuals acting as agents of an
employer from liability, but neither addresses the issue
before us.

    In Reno v. Baird, 18 Cal. 4th 640, 643 (1998), the Court,
relying heavily on the reasoning in Janken v. GM Hughes
Electronics, 46 Cal. App. 4th 55 (1996), held that individual
supervisory employees are not directly liable as agents of
their employers for engaging in discriminatory conduct
under FEHA. The Reno Court first acknowledged that the
“agent” language in FEHA is amenable to more than one
10    RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

construction. Reno, 18 Cal. 4th at 647. The Court then
reasoned that several policy concerns—the incongruity
between holding individual nonemployers liable while
exempting small employers, the need to avoid conflicts of
interest and chilling effects in the workplace, and the
collective nature of corporate decision-making—all
supported construing the statute to exempt individual
employees from being held directly liable as agents of their
employers when discrimination was alleged. Id. at 651–53.
The Court emphasized the narrowness of its decision and
expressly declined to offer any opinion on “whether the
‘agent’ language merely incorporates respondeat superior
principles or has some other meaning.” Id. at 658.

    Later, in Jones v. Lodge at Torrey Pines Partnership,
42 Cal. 4th 1158 (2008), the California Supreme Court,
relying in part on the reasoning of Reno, held that
nonemployer individuals are not liable for retaliation under
FEHA. The Jones Court held that the same concerns
underlying Reno applied with equal or greater force when
the conduct at issue was retaliation. Id. at 1167–68. Again,
however, the Court made no mention of liability for business
entities acting as agents. Both decisions acknowledged that
while the text of FEHA imposes liability on agents of
employers, that language is ambiguous and subject to
competing interpretations depending on the context.

    We are therefore confronted with two potentially
plausible interpretations of the phrase “person acting as an
agent of an employer” in FEHA. Plaintiffs and their amici
argue that we should treat Reno and Jones as narrow
exceptions to FEHA’s broad language and hold that business
entities, such as defendants, are directly liable under the
statute even when they act only in their capacity as agents of
an employer. In their view, the policy concerns underlying
the Reno and Jones decisions are less relevant when the
      RAINES V. U.S. HEALTHWORKS MEDICAL GROUP              11

defendant is a business entity, and the plain language of the
statute should thus control in the absence of compelling
evidence to the contrary. Defendants, on the other hand,
argue that Reno and Jones articulated a definitive limitation
on the scope of an agent’s liability under FEHA, whether the
agent is an individual or a business entity. They insist that
the phrase “person acting as an agent of an employer” is
intended simply to incorporate respondeat superior
principles and to guarantee that employees who are victims
of discrimination have some form of recourse. Defendants
also argue that there is no textual basis for drawing a
distinction between individual and entity agents, which
supports the position that decisions limiting the scope of
individual agent liability are equally applicable to entity
agents. Because the California Supreme Court reserved
judgment on this issue in Reno, and because resolution of
this issue will have significant ramifications not only for the
litigants in this case but also for employees and employers
throughout the State, we certify this question to the
California Supreme Court.

               V. Accompanying Materials

    The clerk of this court is hereby directed to file in the
Supreme Court of California, under official seal of the
United States Court of Appeals for the Ninth Circuit, copies
of all relevant briefs and excerpts of the record, and an
original and ten copies of this order and request for
certification, along with a certification of service on the
parties, pursuant to California Rule of Court 8.548(c), (d).

   This case is withdrawn from submission. Further
proceedings before us are stayed pending final action by the
Supreme Court of California. The Clerk is directed to
administratively close this docket pending further order.
The parties shall notify the clerk of this court within seven
12    RAINES V. U.S. HEALTHWORKS MEDICAL GROUP

days after the Supreme Court of California accepts or rejects
certification, and again within seven days if that court
accepts certification and subsequently renders an opinion.
The panel retains jurisdiction over further proceedings.