SOLUS INDUSTRIAL INNOVATIONS v. S.C.

Real Party in Interest, The People, Reply Brief on the Merits

Cal.April 28, 2015

No. 8222314 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA SOLUS INDUSTRIAL INNOVATIONS, LLC; EMERSON POWER TRANSMISSION CORPORATION; and EMERSON ELECTRIC CO Petitioners, Vv. THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF ORANGE, Respondent. . THE PEOPLE OF THE STATE OF CALIFORNIA. Real Parties in Interest. Petition for Review of a Decision of the Court of Appeal, Fourth Appellate District, Division 3, No. 0047661 Superior Court, County of Orange Civil Case No. 30-2012-00581868-CU-MC-CXC Frank & ofeeSciee Clerk The Honorable Kim G. Dunning cree REPLY BRIEF ON THE MERITS TONY RACKAUCKAS, DISTRICT ATTORNEY COUNTY OF ORANGE, STATE OF CALIFORNIA BY: KELLY A. ROOSEVELT DEPUTY DISTRICT ATTORNEY STATE BAR NO.222969 Post Office Box 808 Santa Ana, California 92702 Telephone: (714) 834-3600 Attorneys for Real Parties in Interest No. §$222314 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA SOLUS INDUSTRIAL INNOVATIONS, LLC; EMERSON POWER TRANSMISSION CORPORATION; and EMERSON ELECTRIC CO Petitioners, Vv. THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF ORANGE, Respondent. THE PEOPLE OF THE STATE OF CALIFORNIA. Real Parties in Interest. Petition for Review of a Decision of the Court of Appeal, Fourth Appellate District, Division 3, No. 0047661 Superior Court, County of Orange Civil Case No. 30-2012-00581868-CU-MC-CXC The Honorable Kim G. Dunning REPLY BRIEF ON THE MERITS TONY RACKAUCKAS, DISTRICT ATTORNEY COUNTY OF ORANGE, STATE OF CALIFORNIA BY: KELLY A. ROOSEVELT DEPUTY DISTRICT ATTORNEY STATE BAR NO.222969 Post Office Box 808 Santa Ana, California 92702 Telephone: (714) 834-3600 Attorneys for Real Parties in Interest TABLE OF CONTENTS INTRODUCTIIOON............ccccscsscsscscscecsscncsscssesscssacnscecscseeseucees 1 I, DEFENDANTSFAILED TO ESTABLISH ANY BASIS FOR EXPRESS PREEMPTION.............ccccscsscsscscecscccccncsescecens 2 A. The State Plan Approval Requirement Does Not Apply To Non-Worker Safety Laws Like The UCL Or FAL......... 3 B. The 9th Circuit’s Unpublished Kelly Decision Is Off-Base And Unpersuasive To TheIssues Presented...................55 4 C. Proposition 65 Is Nothing Like The UCL Or FAL............ 5 D. None Of The Other Published Cases Cited By Defendants Support A Finding Of Preemption...................c0ccecceeeens 8 E. Defendants Fail To Distinguish This Case From The Body | Of Law Rejecting Preemption Under The OSHA Savings Clause ....... 0... cc ccecccececencceceeeueesusseeecreneeens 10 F. Prosecutorial Standing To Seek Civil Penalties Under The State Plan Is Not Relevant To The Preemption Questions Presented ................ccececcssecesuceesseeeeeeaeucs 11 Il. THE UCL AND FAL DO NOT INTERFERE WITH FEDERAL LAW UNDERTHEACT.............+.ta sccescersevens 13 I. CONCURRENT JURISDICTION OF CALOSHA AND PROSECUTORSDOES NOT VIOLATE PUBLIC POLICY..15 IV. THE AMOUNT OF PENALTIES AUTHORIZED UNDER THE UCL AND FAL ARE NOT AGAINST PUBLIC POLICY..........ccccesscceccsccnsceceecsecseesersscssenseseeceseecessens 18 CONCLUSION...........cccccccssccscsccscssscessscsscsscescsscscecescsneseeeees 22 CERTIFICATE OF WORD COUNT..........cccssccsscsscescecscescesenss 24 PROOF OF SERVICE...........cccccscscsscscssescscesscesceccssccsceees [END] TABLE OF AUTHORITIES Cases Board ofSupervisors v. Simpson (1951) 36 Cal.2d 671 oo ceccccccssssssscsscssesscsecssesesesessesscessscccsssssscssssesssssesscsseesenssases 12 Cal. Labor Federation v. CalOSHA (1990) 221 Cal.App.3d 1547 .cccccccccscssccsscsssscsecsessscsscessssssccsesssescssssssssceseens 5, 6, 7 Cal. Trout, Inc. v. Superior Court (1990) 218 CalApp.3d 187 ...ccccccccscssccsessscsseccsssssssssscssssscssscssssssessccsvesssasesteceeeees 16 Elsner v. Uveges (2004) 34 Cal4th 915 occcceccscccsscsscssesessecsseessseesssesssessesssccssssssssssssssssecssssseeeates 19 Farm Raised Salmon Cases (2009) A2 CalAth 1077 .oo.ccccccccssscessesscssesscsnscssccseccsssecsscessccessssassesscsssssssseateace 2,5,6 Florida Citrus Packers v. Cal., (D.C. Cal., 1982) 549 F. Supp. 213 oo...cc ecsecsessscsssesscsssccsscsscssssscsecssssuscsscussesecsessnseseenasenscenss 14 Fresno Unified School District v. Nat’l Education Ass’n (1981) 125 Cal.App.3d 259 .....ccceccccsscssesessecssecssesceessessscsesessecsssssesssssssssseecesnseneees 16 Gade v. Nat. Solid Wastes ManagementAssn. (1995) S05 US. 88ceccssccessecsscssesseessecsscesesesseesesssssesseeessssssssecsesucsusesceseereseeasenss 14 Kodadek v. MTVNetworks, Inc. (9th Cir., 1998) 152 F.3d 1209 oeecscetessccescssecsteesscecsssecsscssssssscnssssesssessesssssssessssseesvaeeenes 8 McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457 ooocccccsscccsssscssessssssssessssesssessessssssecesenereeeres 13 People v Chicago Magnet Wire Corp. (1989) 126 TN.2d 356 .....eeeescesscessssscenscescesesessececsecesscssseseeessesenessceseesssscsscsassaneessees 10 People v. Dollar Rent-A-Car Sys., Inc. (1989) 211 CalApp.3d 119 occccccssccssccssceccsssessssssssssssssssscsssesssssssseessetssaseaees 16 People v. Naegele Outdoor Advertising Co. of Cal., Inc. (1985) 38 Cal.3d 509 oo. ceccecsccsssssesssssesscssesscesececsecsessesseesecesssesssescscsssssssassecarceasenees 8 People v. Pacific Bell (2003) 31 Cal.4th 1132oeececseescessscsecesseecessssssssssesssecssesessssesssscsscsesaseens 16, 17 People v. Parmar (2001) 86 Cal.App.4th 781 oo... ceccccsccsssssescsscsssssssessssessseccsecescsseeesssesscsssssesseessacass 12 People v. Superior Court (Solus I) (2014) 224 Cal.App.4th 33 ooo. ccseeecsssccsessessssesescsssscsessesccssesessessesecsesecsesesessesesses 1] People v. Toomey (1984) 157 Cal.App.3d 1, 22 .ecccccccscssessssssscscessescssscsssscsssessescsssersvsesesessssssesenes 16 Rauber v. Herman (1991) 229 Cal.App.3d 942 ooo ceccccsssssssscsesesessscssssssssssessscsssssscsesesavecscscseseseseateseas 12 Rice v. Santa Fe Elevator Corp. (1947) B31 US. 218 ieceececssssessssescsceseessscsesecessvsssssessssecsssesscussaveceeersessavensesasees 9 Rose v. Bank ofAmerica (2013) D7 Cal.4th 390 oieccccsssesssssssssscsesssesescssssssscscsssssevsssavsvausasecsecesrsasseasatanses 1 Safer v. Superior Court (1975) 15 Cal.3d 230 ooeeccsssscsessssscessescessssessecesscscsssscssssssessssessccsessacecasssscacanenes 12 Silvas v. E*Trade Mortgage Corp. (9th Cir. 2008) SI4 F.3d LOO)eeeecssscecsssessesesescscseceesescsceesessssssssevscsuvavassssnensecacareneases 8 State v. Far West Water & Sewer, Inc. (2010) 224 ATIZ. 173 oe eecsecescssscssesssssesesesssccscsesesesessscsssssscessssssscsssecacssesececstscseaesnseas 10 United Airlines, Inc. v. Occupational Safety and Health Appeals Board (1982) 32 Cal.3d 762 oeeeessccsssssssssssssssscssssscesesesessessesssesssscsssscscsesaessecestsaeseasscsnscaces 4 Washington Mutual Bank, F.A. y. Superior Court (2002) 95 CalApp.4th 606 ooo. ccccccscessesessssssssessssesesssscsssscsssscsessecaceessesseasaestasasene 8 YamahaCorp. ofAm. v. State Bd. ofEqualization (1998) 19 Cal.4th Doicccsseessssesesessssesesesssesesesesssscsssssscessssasssssvecsecasaestaveeaeas 21 Statutes 29 U.S.C. §§ 651, 653(b)(4) & 667(D) oo. cceescccccssssssesssscseseecsesrsrseeees passim Bus. & Prof. Code §§ 17206 & 17536 ....cccccccccsccsscesesscrscsseceescserseseess 12,19 Bus. & Prof. Code, §§ 17205 & 17534.5 vccccccccessssssssssceeserstesstetsessens 16, 21 Government Code Section 26500........cccccccsesssssssssssssssssssssesscssssesveessasscanseseas 12 Lab. Code, § 6423 ef S€Q. .ccccccccsssccsscsssssssssscsscssscsvsessesscscsecsesscsacssseasavassescaenes 19 Lab. Code, § 6425(a) .....eccssssessssssesessesessssesessssssssesessusscsessssssevasecesssacssacesstens 20 Other Authorities 62 Fed. Reg. 31159, 31159 & 31163 [June 6, 1997] woeeeeeeeeseeseeeee passim Senate Rules Committee, A.B. 1127 Bill Analysis (Sept.3, 1999)... 20 Regulations 29 CFR. § 1910.1200 cecsccscsccscsscessssssesceseeessesesseeeeeeeseeseeceseeeeecoeecccc 6 29 CER. §§ 1952.170-1952.7-175 cccccsssssssssssssssceseseesssssssssesttteeececceseeeeecc. 3,21 INTRODUCTION In their AnswerBrief on the Merits (the “Answer”), Defendants neglect to point to any express or implied Congressional intentions to preempt California’s UCL or FAL under the federal worker safety Act.! This is because there are none and express federal intentions are to the contrary. Defendants also do not, and cannot, dispute that California’s UCLandFALareState laws of general applicability that are subject to a presumption against preemption. Defendants simply ignore the relevant standards of preemption, congressional intentions, and legal presumptions in their Answeralmost entirely. Setting aside the relevant considerations, Defendants arguethat California’s consumerprotection laws are preempted by the federal Act because the U.S. Secretary of Labor did not “approve them”for use as “enforcement mechanisms”ofthe worker safety laws. The premise of Defendants’ argument is legally unsound andfatally flawed for a number of reasons. First, as this Court recognizes, the consumerprotection laws are not “mere enforcement mechanism[s]” of other laws. (Rose v. Bank of America (2013) 57 Cal.4th 390, 396-397 [explaining that the UCL ““borrows’ violations of other laws and treats them as unlawful practices ; Unless otherwise defined herein,all capitalized terms shall have the same meaningas defined in the Peoples’ Opening Brief on the Merits (the “Opening Brief”). that the [UCL] makes independently actionable”); see also Farm Raised Salmon Cases (2009) 42 Cal.4th 1077, 1095.) Neither the UCL northe FALare occupational safety laws or regulations, and theyare not being used to “enforce” such lawsin this case. Second, the Act does not require “approval” of non-occupational safety laws such as these. Defendants cite no languagein the Actto support such a requirement, because, of course, there is none. Not only that, but FedOSHAexpressly confirmed it has no jurisdiction over non- occupational safety and health matters, including “consumer”protection concerns. (62 Fed. Reg. 31159, 31159 & 31163 [June 6, 1997] [confirming that federal OSHA “hasno authority to address ... non-occupational applications” of California State law, including “consumer”protection laws, and that “lawsof general applicability are not preempted”].) There is thus nobasis to find preemption of the UCL or FAL under any ofthe traditional principles ofpreemption or under Defendants’ “approval” theory either. As such, and as further explained in the Opening Brief and below,the Fourth District’s Opinion should be reversed and the matter remanded accordingly. I. DEFENDANTSFAILED TO ESTABLISH ANY BASIS FOR EXPRESS PREEMPTION In the Opening Brief, the People argued that there is no express Congressional intent to preempt California’s consumerprotection laws in 2 the Act. There is no reference to these laws of general applicability in the Actat all. Moreover, the Act expressly grants authority to the State to exercise its own sovereign jurisdiction over worker safety laws with only a few narrow express exceptionsthat are not applicable to the UCL and FAL claimsalleged in this case. (Opening Brief at pp.24-39.) A. The State Plan Approval Requirement Does Not Apply To Non- WorkerSafety Laws Like The UCL Or FAL In responseto these arguments, Defendants contend the “express requirement that state plans for development and enforcement of workplace safety laws must be approved by the U.S. Secretary of Labor”establishes an intent to preempt laws of general applicability like the UCL and FAL, unless and until they are each separately approved by the U.S. Secretary of Labor. (Answerat p.12.) This is not so. On its face, the “approval” requirement applies only to regulate “occupational safety and health” laws and regulations, not laws of general applicability that govern other concerns like the UCL or FAL.’ (29 U.S.C. §§ 651, 653(b)(4) & 667(b); 29 C.F.R. §§ 1952.170-1952.7-175; 62 Fed. Reg. 31159, 31159, 31163 [June 6, 1997].) ? Underthis “approval” theory, if correct, a// of California’s non-labor laws would be preempted by the OSHA Acctif violations occur in a work place becausethey are not part of the State Plan. There is no congressional or other intent to support such an absurd federal reach underthe Act. 3 Moreover, the “approval” argument is also negated by the express provisions of the Act, including the savings clause under the Act, which confirms that the approval requirementshall not “be construed to supersede or in any manner... diminish or affect in any other manner the common law orstatutoryrights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employees arising outof, or in the course of, employment.” (29 U.S.C. 653(b)(4).) Furthermore, as this Court recognizes, the “approval” requirementis not intended to “confer federal poweron a state — like California — that has adopted such a plan.” (United Airlines, Inc. v. Occupational Safety and Health Appeals Board (1982) 32 Cal.3d 762, 772.) Rather, once state plan is approved, “it merely removes federal preemption so thatthestate may exercise its own sovereign powers over occupational safety and health.” (d.) B. The 9th Circuit’s Unpublished Kelly Decision Is Off-Base And Unpersuasive To The Issues Presented In support of their novel “approval” theory ofpreemption, Defendants cite to only one outdated, unpublished and non-binding decision of the 9th Circuit, Kelly v. USS-OOSCO Industries (9th Cir. 2003) 101 Fed.Appx. 182. (AnswerBrief at pp.10-11.) In that case, the 9th Circuit held, with little to no analysis, that a private right of action under Section 17200 was preempted by the Act. The opinion has no bearing on 4 the District Attorney’s express authority to pursue civil penalties under the Business and Professions Code here. Indeed, it says nothing about Section 17500 at all. The holding is further contradicted by more recent binding authority from this Court, confirming the “strong presumption against preemption”that applies to consumerprotection actions. (Farm Raised Salmon Cases, supra, 42 Cal.4th at p.1088 [rejecting a selective preemption argument similar to that raised by Defendantsin this case].) As such, the Kelly decision is not relevant or persuasive authority regarding either of the issues presented. C. Proposition 65 Is Nothing Like The UCL Or FAL Defendants next cite to California’s Proposition 65, enacted in 1986, (which required warnings with respect to toxic substances in workplaces, and elsewhere), and argue that because provisions of Proposition 65 were eventually incorporated into the State Plan and submitted for partial federal approval underthe Act, so too must California’s UCL and FAL. (Answer at pp.14-18 & 25-26 [citing Cal. Labor Federation v. CalOSHA (1990) 221 Cal.App.3d 1547].) This argumentalso fails. Proposition 65 is nothing like the UCL or FAL. First, Proposition 65 was enacted long after the UCL and FAL,and long after the federal Act was enacted and California’s State Plan was approved. Business and Professions Code Sections 17200 and 17500 are laws of general applicability that have long been enforced underthehistoric 5 police powersofthe State. Unlike Proposition 65, therefore, the UCL and FALare lawsprotected by a presumption against preemption. (Farm Raised Salmon Cases, supra, 42 Cal.4th at p.1088.) Second, there is no federal occupational and safety law in potential conflict with California’s UCL or FAL, which prompted the need for federal review and approval of Proposition 65. (See Cal. Labor Federation, supra, 221 Cal.App.3d at pp.1553-54.) Indeed, unlike here, there was a “possibility of federal preemption”with respect to Proposition 65’s warning requirements: because in August 1987 the Hazard Communication Standard (HCS) under Fed/OSHA was amendedto require employers to warn employees of potential exposure to certain hazardous materials in the workplace. (29 C.F.R. § 1910.1200.) Since the HCS covers the general subject area of employee warnings for exposure to hazardous substances, Proposition 65 might be deemed preempted by 29 United States Code section 667 unless it is includedas a part of the state plan. (Cal. Labor Federation, supra, 221 Cal.App.3d at pp.1553-54.) Third, when reviewing the relevant portions of Proposition 65 following the mandate of Cal. Labor Federation, FeAOSHAexpressly confirmedthat “non-occupational” lawsare not intended to be preempted by the federal workplace safety Act. (62 Fed. Reg. 31159, 31163 [June 6, 1997]; Cal. Labor Federation, supra, 221 Cal.App.3d at p.1557 n.8 .[same].) Because Business and Professions Code Sections 17200 and 17500 are wholly non-occupational laws of general applicability that in no 6 way interfere with or conflict with federal law, therefore, there is no requirementthat they be submitted to the Secretary of Labor for approval as part of California’s workplace safety plan. Finally, the procedural posture and legal questions addressed by the court in Cal. Labor Federation with respect to Proposition 65 are not the sameas those presented here. In Cal. Labor Federation,the First District was presented witha petition for a writ of mandate seeking to compel CalOSHAto: (a) incorporate the newly enacted portions of Proposition 65 “applicable to the workplace”into the State Plan; and then (b) submit the amendmentsto the Secretary for approval. (Cal. Labor Federation, supra, 221 Cal.App.3d at p.1559.)? The Petition wasfiled after the California Labor Federation, and others, demanded that CalOSHA amendtheState Plan to incorporate the new law, but CalOSHArefused to do so. There is no new law,or changein lawatissue here, and noparty is seeking any similar type of relief from this Court that would warrant such similar ; Defendants’ arguments regarding the “approval” requirementare not only legally unsupported but they are circular as well. On the one hand, they contend the Court should hold that the UCL and FALare occupational safety laws that mustbe includedin the state plan and approved before they can be enforced in the State. On the other hand, they contend“it is not the judiciary’s role to decide whether the UCL and FAL should beinclude[d] in the State’s workplace safety plan” and suggest the Court should defer to the “California Legislature.” (Answerat p.28.) Neither argument addresses the relevant inquiry ofpreemption, however, whichis the judiciary’s role to determine here: whether there is any federalintent to preempt the UCL or FAL law under the Act. Defendants do not, and cannot, meet their burden to demonstrate an intent to preempt such laws. 7 mandate or holding. Thus, the applicable analysis of Proposition 65 in Cal LaborFederationis oflittle value to resolving the issues to be decided in this case. D. None Of The Other Published Cases Cited By Defendants Support A Finding Of Preemption Defendants argue “courts routinely hold that other federal laws completely preempt the UCL and/or FAL onspecific areas of regulation.” (Answerat p.15.) The cases cited by Defendants in support, however, involve express congressional intentions to regulate either the particular subject matter or the “entire field” of the law alleged in the consumer protection lawsuit. (See, e.g., People v. Naegele Outdoor Advertising Co. ofCal., Inc. (1985) 38 Cal.3d 509, 523 [holding federal law preempted state enforcement of any laws “on Indian reservations”); Washington Mutual Bank, FA. v. Superior Court (2002) 95 Cal.App.4th 606, 621 [holding “preemption of state law claims, premised on the theory that the charging of preclosing interest by a federal savings and loan association is unlawfulis explicit” under federal law]; Kodadek v. MTVNetworks, Inc. (9th Cir., 1998) 152 F.3d 1209, 1212-1213 [holding state law claims preempted because they covered the “subject matter” of copyrights whichis expressly preempted underthe federal Copyright Act]; Silvas v. E*Trade Mortgage Corp. (9th Cir. 2008) 514 F.3d 1001, 1007 & n.3 [holding claims preempted under express preemption provisionsindicating that “federal law 8 preempts a field” because “it leaves ‘no room for the States to supplement it’” (quoting Rice v. Santa Fe Elevator Corp. (1947) 331 U.S. 218, 230)].) Unlike the issues in these cases, Congress has declared neither an intent to preemptthe “entire field,” nor the general “subject matter” of workplace safety. In fact, the relevant Congressionalintent hereis directly to the contrary. (Opening Brief at pp.24-38.) Moreover, in each of these cases, state enforcement wasentirely preempted andreserved for federal enforcement. Yet, here, Defendants do not dispute that CalOSHAhasthe authority to enforce California’s workplace safety laws andthat the legal violations alleged in this case are federally approved parts of California’s State Plan. Such violations are therefore within the powerof the State (and not the federal government) to enforce. Without citing any federal intent in support, Defendants contend that somehow only the District Attorney’s separate action, based on these same unpreempted laws,is selectively preempted. This novel “time, place and manner,”or “method of enforcement” preemption argument has never been recognized or adopted inthis State, and noneof the cases cited by Defendants support such a stretch. There is no such thing as a “time, place or manner” preemption like that urged by the Defendants. Such a theory wasalso expressly rejected by FedOSHAas well. (See Opening Brief at pp. 36-38 [noting FedOSHAleavesit to the states to decide what types of supplemental actions may be appropriate].) 9 Theviolations alleged are either entirely preempted from enforcement under California law, or they are not; and here, they are not. E. Defendants Fail To Distinguish This Case From The Body Of Law Rejecting Preemption Under The OSHASavings Clause In the Opening Brief, the People cited numerousopinions from courts across the country rejecting preemption arguments with respect to supplementary prosecutions. (See Opening Brief at pp.35-36.) In these cases, courts upheld supplemental state enforcement actions against challenges ofpreemption under the “OSHA Savings Clause” whichstates that: Nothing in this chapter shall be construed to supersede or in any manneraffect any workmen’s compensation law orto enlarge or diminish or affect in any other manner the commonlaw orstatutory rights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employeesarising out of or in the course of, employment. (29 U.S.C. § 653(b)(4).) These authorities hold that there is no intent to preempt supplemental actions by prosecutorsin the federal Act. As noted in these opinions, such actions do not conflict with the goals and purposes ofthe federal Act and “surely further OSHA’sstated goal” to protect workersafety. (See, e.g., State v. Far West Water & Sewer, Inc. (2010) 224 Ariz. 173, 183 [quoting People v Chicago Magnet Wire Corp. (1989) 126 Ill.2d 356].) 10 In response, Defendants argue these cases are distinguishable because they involve criminalstatutes, rather than civil penalty statutes. Thedistinction is without meaning. The federal Act states nointent to distinguish between civil and criminal supplementary actions. The Savings Clauseprotects “any law” whethercivil or criminal against preemption. (29 U.S.C. § 653(b)(4); see also 62 Fed. Reg. 31159, 31167-31170 [June 6, 1997] [confirming “The OSH Act,therefore, does not bar the States from adopting supplemental enforcement mechanisms”without distinction between being criminalorcivil in nature].) F. Prosecutorial Standing To Seek Civil Penalties Under The State Plan Is Not Relevant To The Preemption Questions Presented In responseto a separate petition in this case involving different causesofaction, the Fourth District held that the District Attorney did not have standing to seek thecivil penalties authorized under Labor Code Sections 6428 and 6429 of the State Plan. (People v. Superior Court (Solus J) (2014) 224 Cal.App.4th 33.) The Fourth District did not hold that the action was preempted by federal law. Rather, as a question of California (not federal) law, the Fourth District determined that prosecutorial standing to seek civil penalties must be “expressly” stated in the relevantstatute under this Court’s “Safer rule” and held the Labor Code did not “expressly” grant the District Attorney standing to seek such penalties. (Safer v. 11 Superior Court (1975) 15 Cal.3d 230.)* Thus, the Court affirmedthetrial court’s order sustaining the Defendants’ Demurrerto these two causes of action. Defendants suggest that this holding renders the District Attorney’s prosecution under the UCL and FAL preempted underthe “law of the case.” (Answerat pp.169-24.) This is not correct. First, unlike Labor CodeSections 6428 and 6429 there is no dispute the District Attorney is expressly authorized to seek civil penalties under the UCL and FAL. (Bus. & Prof. Code §§ 17206 & 17536; Answerat p.23 [admitting as such].) Thereis thus no question with respect to the District Attorney’s standing to pursue the UCL and FALcausesofaction at issue here. ‘ Believing that the Fourth District improperly applied the Safer rule and ignored the applicable “Simpson rule”in this case, the People sought review of the opinion so as “to resolve conflicting interpretations ofthis Court’s prior rulings in Safer v. Superior Court (1975) 15 Cal.3d 230, and Board ofSupervisors v. Simpson (1951) 36 Cal.2d 671, with respect to prosecutorial standing to pursue civil actions on behalf of the People for public offenses. The People also argued that the Fourth District’s published ruling and analysis regarding prosecutorial standing is in conflict with the express provisions of Government Code Section 26500 (which authorizes the district attorney to act as the public prosecutorfor all public offenses “except as otherwise provided by law’) and the opinions of the First and Third District Courts of Appeal in Rauber v. Herman (1991) 229 Cal.App.3d 942 and People v. Parmar (2001) 86 Cal.App.4th 781, which followed the Simpson rule recognizing (contrary to Safer) that a district attorney has the authority to participate in “noncriminal actions or proceedingsthat arein aid of or auxiliary to the district attorney’s usual duties.” Nevertheless, this Court denied the petition for review on June 18, 2014. (Supreme Court Case No. 8217653.) 12 Second, the Solus J decision involved a matter of State law, not the scope of preemption under the federal workplace safety Act. Whether and to what extent California wishes to grant prosecutors standing to enforce civil penalties under Section 6428 and 6429,is a matter solely of state law concem. (62 Fed. Reg. 31159, 31170 [June 6, 1997] [noting whether the State wishes to use supplemental actions by prosecutors as “a useful or appropriate addition to State plan authority is a matter for the State to decide”’].) The holding, thus, has no precedential value with respect to the issues offederal preemption involvedhere. The fact remainsthat there is no federal intent to preempt the UCL or FAL. Even if the District Attorney lacks standing to seek othercivil relief for the violations of law alleged under the State Plan, the State still has enforcementjurisdiction over such violations through CalOSHA. Hence, there is nothing preempting the District Attorney from asserting these un-preempted violationsas a basis for relief under the consumer protection laws. UCL actions can be based on “any law,civil or criminal, statutory or judicially made[,] federal, state or local,” regardless. (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1474.) Il. THE UCL AND FAL DO NOT INTERFERE WITH FEDERAL LAW UNDER THE ACT In the Opening Brief, the People argued there is no basis to find the UCL or FAL preempted underany of the recognized theories of implied 13 preemption. (Opening Brief at pp.39-41.) Defendants do not dispute these — arguments. Defendants simply cite Gade and note that state consumer protection laws may be preempted if the law “interferes with the methods by which the federal statute was designed”or if such laws “regulate an issue of worker safety for which a federal standardis in effect.” (Answerat p.14; [citing Gade v. Nat. Solid Wastes Management Assn. (1995) 505 U.S. 88, 103-104].) While these may be accurate statements of the law, Defendants fail to explain how such legal provisions are applicable to the analysis required here. This is because they are not. There is no interference between the UCL or FAL and the federal OSHA Act. Defendants further fail to identify any competing federal standards or policies at issue, because there are none.’ Accordingly, there is no basis to support an implied finding of preemption on either of these grounds. ° This is not a case, for example, involving possible interference with interstate commerce. “[A]n attack based upon unduly burdening commerce”in relation to a state workplace safety law “is limited to those situations where the product standard applies.” (62 Fed. Reg. 31159, 31164 [June 6, 1997] [quoting Florida Citrus Packers v. Cal., (D.C. Cal., 1982) 549 F. Supp. 213, 215]; 29 U.S.C. § 667(c)(2)].) The “product standard” governs lawsthat apply to products that are shipped between states. There is no basis for asserting that California’s workplace safety lawsrelated to the safe operation of stationary machinery in the state of California, or its UCL, whichare at issue here, fall under the “product standard” such that interstate commerceis in any way affected by the enforcement of California’s UCL or FAL inthis case. 14 Il. CONCURRENT JURISDICTION OF CALOSHA AND PROSECUTORSDOES NOT VIOLATE PUBLIC POLICY Althoughnotarticulated as such, Defendants also suggest that the UCLand FAL should impliedly be preempted because one of the purposes of the federal Act was to prevent “duplicative and possibly counterproductive regulation” and the District Attorney’s consumer protection action is duplicative of CalOSHA’s administrative authority and action. (Answerat p.26 [arguing public policy arguments weigh against “supplemental actions by prosecutors”].) There are a numberofproblems with this argument. First, it is not true that “duplicative” actions are being taken by CalOSHAandthe District Attorney in this case. CalOSHAcited one of the three Defendants here in an administrative proceeding for violating Title 8 of California’s Code of Regulations regarding worker safety. Twoof the three Defendants in this case were not even named in the CalOSHA administrative action. The citations by CalOSHAarelitigated in an administrative forum, whereas the present action seeks penalties undera wholly separate set of laws (namely, the consumerprotection laws under the Business and Professions Code) in a court of law. The parties, forum and enforcementactions being taken in the administrative action are quite different than those alleged in the present Complaint. 15 Second, penalties under Business and Professions Code Sections 17200 and 17500 are expressly meantto be “cumulative”of other penalties assessed, including anythat have beenor will be assessed by CalOSHA or under any other lawsofthe State. (Bus. & Prof. Code, §§ 17205 & 17534.5 [stating that “[uJnless otherwise expressly provided,” civil penalties under Business and Professions Code Sections 17200 and 17500 are intended to be “cumulative to each other and to the remedies or penalties available underall other lawsofthis state.”’]; see also People v. Toomey (1984) 157 Cal.App.3d 1, 22; People v. Dollar Rent-A-Car Sys., Inc. (1989) 211 Cal.App.3d 119, 132.). Third, there is no “public policy” against the dual authority granted to state agencies and prosecutors under the worker safety and consumer protection laws to aid law enforcementefforts. Concurrent jurisdiction exists and is fully supported by public policy. As a matter of law, this concurrent jurisdiction can be properly exercised as long as: (1) the actions of the administrative agency and the prosecution are consistent; and (2) the prosecution does not underminethe authority of the state agency. (See People v. Pacific Bell (2003) 31 Cal.4th 1132, 1155 [public utilities commission actions and public prosecutions permitted]; see also Cal. Trout, Inc. v. Superior Court (1990) 218 Cal.App.3d 187, 203 [water board actions and related court actions both permitted]; Fresno Unified School District v. Nat’l Education Ass’n (1981) 125 Cal.App.3d 259, 274 [public 16 employment relations board and court have concurrentjurisdiction].) In People v. Pacific Bell, the trial court dismissed a public prosecution bydistrict attorneys acting on behalf of the People against a telephone companythat argued, similar to Defendants here, that the district attorneys could not prosecute a caserelated to violations that were also being charged in a related administrative proceeding by the Public Utilities Commission. This Court overruled the dismissal on this basis, holding that the trial court: erred in relying solely upon the circumstancesthat the allegations of the complaint in the present action were the sameasthe allegations in the PUC proceeding, rather than considering the extent to which the remedies in the two proceedings werelikely to be inconsistent and thus were likely to undermine any ongoing authority or regulatory program of the PUC. Enforcementofthe vast array of consumerprotection laws to which public utilities are subject is a task that would be difficult to accomplish by a single regulatory agency, and the applicable statutes clearly contemplate that other public law enforcementofficials, in addition to the PUC must be involvedin the effort to enforce such laws. No actions by the district attorneys in the present case would interfere with the authority of the PUC; on the contrary, the proceedings they have instituted assist the enforcementefforts of the PUC by ensuring that public utilities to the same degrees as other types of businesses are subject to liability in actions initiated by public officials. (Pacific Bell, supra, 31 Cal.4th at p.1155.) The sameis true here: there is nothing about the District Attorney’s action that interferes with CalOSHA’s administrative jurisdiction or authority. Fourth, contrary to Defendants’ public policy concern, there is no risk of “conflicting” appellate decisions or regulations presented in this _ 17 case. (Answerat pp.26-27.) This case involves a single facility doing business in the County of Orangein violation of basic provisions of California law. There are no conflicting regulations at issue and only one set of appellate courts has jurisdiction to determinethe legal issues presented. Thereis thus no possibility of obtaining “two contrary pronouncements from the very same court” that could supposedly confuse the Defendants here (or any other employers in the State for that matter). For each of the foregoing reasons, the fact that CalOSHA has administrative authority to take its own actions, separate and apart from those taken by the District Attorney, does not interfere with federal law or violate public policy under the Act in any wayso as to support a finding of preemption on these grounds. IV. THE AMOUNT OF PENALTIES AUTHORIZED UNDER THE UCL AND FAL ARE NOT AGAINST PUBLIC POLICY Citing to misplaced dicta from the Fourth District’s Opinion, Defendants conclude their Answer arguing that the Court should affirm the holding of preemption because the amount ofpenalties could be significant in this case. (Answerat pp.27-28.) The amountofpenalties demanded by way ofthe People’s Complaint, however,is not relevant to the question of preemption and should not have been considered by the Fourth District in its analysis. 18 The People’s prayer for civil penalties was the subject of a motion to strike that was not before the Fourth District to decide, and thus involves issues that were not properly briefed or heard in the Fourth District. As the People argued,andthetrial court agreed, there is nothing wrong with the mannerofpleading civil penalties in the People’s Complaint. The prayer simply demands the maximum penalties -- “up to $2,500 perviolation”-- as expressly authorized under the statutes. What the appropriate measure of penalties wouldbeafter trial in this case is subject to numerous considerationsthatare to be addressed and determinedbythetrial court under Business and Professions Code Section 17206at the appropriate time. (Bus. & Prof. Code, § 17206(b)[listing numerous factorsfortrial courts to consider whenassessing penalties under the UCL].) The Fourth District necessarily failed to consider any such factors (because the issue was not before them) when opining about the amountofpenalties that may be assessed if the action proceeds. More importantly, the Fourth District’s discussion regarding the supposed “massive” amountofpenalties materially misstates legislative intent with respect to the penalties intended for workplacesafety violations. Public policy andlegislative intentions are fully in favorof, not against, substantial fines and penalties when workplace violations cause employee deaths. (See Lab. Code, § 6423 et seq.; Elsner v. Uveges (2004) 34 Cal.4th 915, 930 [confirming the intent of the federally approved 1999 increases in 19 civil and criminal penalties under California’s Labor Code wasto “increase significantly the sanctionsavailable against those in control of workplace safety, with the goal of deterring unsafe practices and reducing the number and severity of future accidents.” (emphasis added)]; see also Senate Rules Committee, A.B. 1127 Bill Analysis (Sept.3, 1999) [expressing dissatisfaction with a $70,000 penalty because “there are greater penalties under pollution laws for discharges that threaten wildlife than for safety violations[that] kill or maim workers”as a basis for authorizing increases in civil and criminal penalty amounts in 1999].) To besure, a criminal violation of Labor Code Section 6425(a) can subject an employerlike Solus to a monetary fine of $/.5 million per death, plus all mandatory court fees and assessments, which could subject an employerlike Solus to a criminal fine of well over $10 million for the alleged misconduct hereif it were successfully prosecuted criminally. (Lab. Code, § 6425(a).)® Given the high penalties expressly set forth and undoubtedly approved under the criminal enforcementstatutes,it is undisputed that both the California Legislature and the federal Secretary that approvesand regularly audits California’s State Plan intendedpenalties 6 Defendants do not challenge the District Attorney’s standing or authority to seek such penalties in a criminal prosecution under Labor Code Section 6425(a). There is also no dispute that such an action is federally approved under the State Plan and not preempted. There is thus no dispute that the federal government supports substantial monetary fines and penalties when workplace violations cause death. 20 to be far in excess of the $98,000 administrative penalty that was assessed against Solus here. There is no reasonto believe that the intent of the law is different whether monetary penalties are assessed in a criminalorcivil forum, and nolegislative history that supports drawing such an arbitrary distinction. Finally, as noted above,it is the express intent of the California Legislature to treat penalties under the UCL and FAL as “cumulative”to penalties that may be assessed under“all other lawsofthis state,” including any that may be assessed under California’s workplace safety plan. (Bus. & Prof. Code, §§ 17205 & 17534.5.) The federal Act says nothing about limiting the amountofpenalties that can be assessed in worker safety actions, let alone any other actions based on non-occupational safety laws like these.’ Hence, the potential amountofpenalties that could eventually 7 In practice, such penalties have been awarded in numerous UCL prosecutionsthat were referred by CalOSHAbased on workplaceviolations causing employee deaths. All such prosecutions are public recordsthat are reported annually by CalOSHA. Defendants claim that the fact that the UCL and FALhavebeen used -- for decades-- in such a way does not mean these prior actions were appropriate. Defendants miss the point. Under FedOSHA’s oversight function, the Secretary of Labor is required to review reports, conduct investigation and continually monitor CA state plan related activities, which would naturally include all prosecutions related thereto. (29 U.S.C. § 667(f); 29 C_F.R. § 1952.172(c).) Yet, FedOSHA has said nothing to suggest an intent to preempt these actions or an intent to reassert federal jurisdiction over California’s State Plan as a result. Instead, FedOSHAconfirmedits intentions not to preempt suchactions, andthis interpretation is entitled to “presumptive value” with respect to the issues presented here. (62 Fed. Reg. 31159, 31159 & 31163 [June 6, 1997]; Yamaha Corp. ofAm. v. State Bd. ofEqualization (1998) 19 Cal.4th 1,11.) 21 be assessed in this case under California law is not a basis to hold the UCL or FAL claims preempted underthe federal Act. CONCLUSION Thereis no intent by the District Attorney to “bypass Legislative amendmentofthe California state workplace safety plan to create new and potentially larger fines under the UCL and FAL,” as Defendants contend. (Answerat p.25.) The District Attorney’s UCL and FAL actions are already expressly intended bythe Legislature in the Business and Professions Code, and the penalties are expressly approved to be “cumulative”of “all other laws” of this State. These consumerprotection statutes are laws of general applicability that the State has the power to enforce under the historical police powers of this State, and have been used for decades by State prosecutors, without interfering with federal law. Moreover,there is no federal intent to include non-occupational laws within the reach of the federal Act and nointent, either express or implied, to preempt State consumerprotection actions such as this. Rather, the federal intent under the Actis directly to the contrary. Thus,there is no basis to hold the People’s UCL and FAL causesof action preemptedin this case. Accordingly, the Opinionis legally in error and should be reversed and the matter remanded to the Fourth District with instructions to enter a new order denying the Petition for Writ of Mandate andthereby affirming 22 the Respondent Court’s Order overruling the Defendant’s Demurrerto the Third and Fourth Causes of Action in the People’s Complaint. Dated this 27th day of April, 2015. Respectfully submitted, TONY RACKAUCKAS,DISTRICT ATTORNEY COUNTY OF ORANGE, STATE OF CALIFORNIA wv Clune KELLY A. ROOBEVELT DEPUTY DISTRICT ATTORNEY 23 CERTIFICATE OF W ORD COUNT [California Rules of Court, Rules 8.520(b) and 8.204(c)] The text of this Opening Brief on the Merits (excluding tables and caption pages) consists of 6328 wordsas counted by the word- processing program usedto generatethis brief. Dated this 27th day of April, 2015. Respectfully submitted, TONY RACKAUCKAS,DISTRICT ATTORNEY COUNTY OF ORANGE, STATE OF CALIFORNIA wwLuda KELLY A. RQOSEVELT DEPUTY DISTRICT ATTORNEY 24 S o O o S N D H O o F P WY O Y N = O o N O H N K N N H N H H N K O R O R w — w e e e e e le e a o NA N K N O H SF P W w N Y F H D O C O O H DH KR OU ON U B U L L Y O U L U l U L L LU C PROOF OF SERVICE BY MAIL I, Christina Lajos, am employedin the Office of the District Attorney for the County of Orange, State of California. I am over the age of eighteen years and I am not a party to the within action. My business address is 401 Civic Center Drive West, Santa Ana, California 92701. On April 27, 2015, I served a copy of the following document(s): REPLY BRIEF ON THE MERITS by placing a true copy of each documentin a sealed envelope and placing such envelope, in the United States Postal Service mail at Santa Ana, California, that same day, in the ordinary course ofbusiness, postage thereon fully prepaid, addressed as follows: Appellate Coordinator Office of the Attorney General California Department of Justice 300 S. Spring Street Los Angeles, CA 90013-1230 TEL:(213) 897-2000 The Honorable Kim G. Dunning Orange County Superior Court Civil Complex Center 751 West Santa Ana Blvd., Dept. CX104 Santa Ana, CA 92701 TEL: (657) 622-5304 4" District Court ofAppeal — Division 3 601 W. Santa Ana Blvd. Santa Ana, California 92701 I declare under penalty ofperjury under the laws of the State of California that the forgoing is true and correct. Executed on April 27, 2015, at Santa Ana, Califo Christina Lajos THO.» (Type or print name) ( (Signature) PROOF OF SERVICE o O O o H N D A F F W O N Y N O N O HN O N Y W H K O K N K N N O m m m w e e e l a o N N D O OH O F F W O NY O K§ F§ F D C O O H Y D HD B w T B R W D N H F H O C PROOF OF SERVICE BY OVERNIGHT MAIL SERVICE I, Christina Lajos, am employed in the Office of the District Attorney for the County of Orange, State of California. I am overthe age of eighteen years and J am not a party to the within action. My business address is 401 Civic Center Drive West, Santa Ana, California 92701. On April 27, 2015, I served a copy of the following document(s): REPLY BRIEF ON THE MERITS by placing a true copy of each documentin a sealed envelope. I caused each envelope to be delivered by Overnight/Express Mail Delivery to the addressee(s) noted in this Proof of Service. Supreme Court of California Clerk ofthe Court 350 McAllister Street San Francisco, CA 94102-4797 (8 Copies and | for Conforming) Brian A. Sun, Esq. Frederick D. Friedman, Esq. JONES DAY 555 South FlowerStreet, Fiftieth Floor Los Angeles, CA 90071-2300 TEL: (213) 498-3939 Attorneyfor SOLUS INDUSTRIAL INNOVATIONS, LLC; EMERSONPOWER TRANSMISSION CORPORATION;andEMERSONELECTRIC CO. Patrick D. McVey Riddell WilliamsP.S. 1001 Fourth Avenue, Suite 4500 Seattle, WA 98154-1192 TEL:(206) 389-1576 Attorneyfor SOLUS INDUSTRIAL INNOVATIONS, LLC; EMERSONPOWER TRANSMISSION CORPORATION, and EMERSONELECTRIC CO. I declare under penalty ofperjury under the laws of the State of California that the forgoingis true and correct. Executed on April 27, 2015, at Santa Ana, California. \Christina Lajos (? J>(Type or print name) . (Signature) PROOFOF SERVICE O o o O NI N D H U T F P W D N O = N O N Y N D D N K N K N K R K R N O w m RR ; e w e e e e e a o sa y H n v A f F W w NH N K F CG S O O D W I T D B W A B R W O H O K F C O PROOF OF SERVICE BY EMAIL I, Christina Lajos, am employed in the Office of the District Attorney for the County of Orange, State of California. I am overthe age of eighteen years and I am not a party to the within action. My business address is 401 Civic Center Drive West, Santa Ana, California 92701. On April 27, 2015, I served a copy ofthe following document(s): REPLY BRIEF ON THE MERITS by causing said documentto be served by transmitting said documents via email to the person(s)listed below: Brian A. Sun, Esq. Frederick D. Friedman, Esq. JONES DAY 555 South Flower Street, Fiftieth Floor Los Angeles, CA 90071-2300 TEL: (213) 498-3939 EMAIL: ffriedman@JonesDay.com Attorneyfor SOLUSINDUSTRIAL INNOVATIONS, LLC; EMERSONPOWER TRANSMISSION CORPORATION; and EMERSONELECTRIC CO. I declare under penalty of perjury underthe laws of the State of California that the forgoing is true and correct. Executed on April 27, 2015, at Santa Ana, California. Christina Lajos TO ) (Type or print name) \ (Sigfature)_ PROOF OF SERVICE