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P. BOBBY SHUKLA (SBN 229736)
SHUKLA LAW
353 Sacramento Street, Suite 400 “FILED a
San Francisco, CA 94111 a Tec latetelrcalsteleik
Tel: (415) 986-1338 ‘County of San Francisco
Email: bshukla@shuklalawfirm.com eo
12/04/2017
KATHRYN BURKETT DICKSON (SBN: 70636) Pevoavis woe EE
EMILY A. NUGENT (SBN: 255048) Deputy Clerk
ZOE TELLMAN (SBN: 298698)
DICKSON GEESMAN LLP
1999 Harrison Street, Suite 2000
Oakland, CA 94612
Tel: (510) 899-4670
Fax: (510) 899-4671
E-Mail: kathy@dicksongeesman.com
E-Mail: emily@dicksongeesman.com
E-Mail: zoe@dicksongeesman.com
Attorneys for Plaintiff
Julie Ortiz
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
UNLIMITED JURISDICTION
JULIE ORTIZ, CASE NO.: CGC-16-549915
Plaintiff, PLAINTIFF'S SUPPLEMENTAL BRIEF
7 RE MERITS OF FEHA RELIGIOUS
EXEMPTION
MERCY HIGH SCHOOL, SAN
FRANCISCO, and DOES ONE through Date Filed: December 4, 2017
TWENTY, inclusive,
Defendant.
Plaintiff's Supplemental Brief re Merits of FEHA Religious Exemption - Case No. CGC-16-549915Ce DN DAW FF BN
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I. INTRODUCTION.
The court has granted the parties leave to file short supplemental briefs on the merits of
Defendant’s claim that it is exempt from the Fair Employment and Housing Act as a religious
entity. Resolving this issue involves questions of allocating the burden of proof, discerning the
legislative intent, applying principles of statutory construction, and formulating and applying
the proper test for deciding whether an employer is a religious entity the Legislature intended to
exempt from FEHA, or effectively a non-profit public benefit corporation which the Legislature
intended to include within FEHA’s jurisdiction. Each will be briefly addressed.
Tl. BURDEN OF PROOF.
Defendant bears the burden of proving it is entitled to the exemption from FEHA’s
jurisdiction. It is a familiar and longstanding legal principle that those who assert an exemption
from a statutory or regulatory scheme bear the burden of entitlement to such an exemption.
Meacham v. Knolls Atomic Power Laboratory (2008) 554 U.S. 84, 128. The same is true under
California jurisprudence. One claiming an exemption from a general statute has the burden of
proving that he comes within the exemption. Simpson Strong-Tie Co., Inc. v. Gore (2010) 49
Cal. 4th 12, 22.
Ill. ©FEHA COVERAGE MUST BE CONSTRUED BROADLY AND THE
RELIGIOUS EXEMPTION MUST BE CONSTRUED NARROWLY.
In Vernon v. State (2004) 116 Cal. App. 4th 114, the court held “Because the FEHA is
remedial legislation, which declares “[t]he opportunity to seek, obtain and hold employment
without discrimination” to be a civil right (§ 12921), and expresses a legislative policy that it is
necessary to protect and safeguard that right ($ 12920), the court must construe the FEHA
broadly, not ... restrictively." /d. 116 Cal. App. 4th at 123.The FEHA itself in Section 12993,
subdivision (a) directs: “The provisions of this part shall be construed liberally for the
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accomplishment of the purposes thereof.” If there is ambiguity that is not resolved by the
legislative history of the FEHA or other extrinsic sources, courts must construe the FEHA to
facilitate the exercise of jurisdiction by the Fair Employment and Housing Commission. Kelly v.
Methodist Hospital of So. California (2000) 22 Cal. 4th 1108, 1114; Vernon v. State (2004) 116
Cal. App. 4th 114, 123.
On the other hand, it is a familiar rule that courts “must construe statutory exemptions
narrowly.” Sacramento Cty. Employees’ Ret. Sys. v. Superior Court (2011)195 Cal. App. 4th
440, 463.
Where, as here, the Legislature has determined that religiously-affiliated schools and
hospitals which are open to the public, should be subject to FEHA’s jurisdiction (except for a
limited carve-out for employment decisions based on religion as opposed to other protected
characteristics), the court must liberally construe FEHA’s coverage and narrowly construe the
religious exemption.
IV. THE LEGISLATIVE AMENDMENT TO INCLUDE RELIGIOUSLY-
AFFILIATED HOSPITALS AND SCHOOLS MUST NOT BE INTERPRETED IN
A WAY THAT WOULD NULLIFY THE LEGISLATURE’S INTENT.
With her initial brief, Plaintiff submitted the legislative history of Government Code
section 12926.2(f). In summary, the Legislature clarified its intent to expressly exclude from
the religious exemption those religiously affiliated schools open to the public. Plaintiff
contends Mercy High School is exactly the kind of religiously-affiliated educational institution
—a Catholic college preparatory high school open to the public — the Legislature intended to be
regulated by the FEHA.
If Mercy High School — like any of the many other conventional Catholic schools — can
claim it is a religious entity because it has some religious characteristics, then there is no
religiously-affiliated school that would be covered by the Act. They would all be exempt. The
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Legislative amendment would be rendered a nullity, and these major employers would
effectively escape the obligations imposed by FEHA, which is contrary to principles of statutory
construction.
The Legislature clearly understood that through the amendment creating section
12926.2(f), it was subjecting to FEHA jurisdiction, certain institutions with both religious and
secular characteristics. It was responding to the detailed discussion by the California Supreme
Court in Kelly and McKeon v. Mercy Healthcase System (1998) 19 Cal. 4th 321, about separate
entities created by a religious organization — like schools and hospitals — which have
indisputably secular and religious characteristics. Kelly, supra, 22 Cal. 4that 1124-1126. The
Supreme Court said it was up to the Legislature to clarify whether these hybrid religious-secular
institutions should be covered by the Act. That is exactly what the Legislature did in enacting
section 12926.2(f). It subjected these entities to FEHA jurisdiction.
Prior to the amendment, the Supreme Court in Kelly, read the “religious-entity
exemption as encompassing any entity with colorable religious motivation and substantial bona
fide religious affiliations.” Jd., at 1124-1125. That all changed with the amendment. Mercy
High School is making these same pre-amendment arguments — that since Mercy High School
has religious aspects, it should come within the exemption from FEHA. In doing so, it ignores
the specific actions taken by the Legislature after Kelly and McKeon.
Vv. THE PRIMARY PURPOSE OF THE ENTITY IS THE TOUCHSTONE FOR
DETERMINING WHETHER IT IS EXEMPT.
Courts have recognized that what an entity chooses for its corporate label is not
conclusive in determining whether an employer is a “religious corporation” or a “nonprofit
public benefit corporation.” The entity's primary purpose in operation can be considered.
Younger v. Wisdom Society (1981) 121 Cal. App. 3d 683690; McKeon, supra, 19 Cal. 4th at
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325-326. For an entity to be a true “religious corporation,” its purpose must be exclusively or
primarily religious. If the entity’s primary purpose is college preparatory education which it
offers to the public — a more secular function as the Supreme Court recognized in Kelly — then
it is properly characterized as a nonprofit public benefit corporation. It then is not a religious
entity entitled to the exemption.
Mercy High School properly characterized itself as a nonprofit public benefit
corporation for 12 years, from 1990 to 2012. (Exh. 311, certification pending from the
Secretary of State, expected on 12/6/2017) Within a year after the Legislature clarified that
religiously-affiliated nonprofit public benefit corporation schools were subject to FEHA
jurisdiction, Mercy amended its articles of incorporation to claim it was now a religious
corporation. It did so without changing anything about its operations or stated primary
educational purpose. (Exh. 312)
Fashioning a test to determine an entity’s “primary purpose” beyond its self-stated
purposes in its articles of incorporation has proven to be a somewhat vexing task for both state
and federal courts. In the context of schools claiming a religious exemption, Plaintiff has found
only two directly relevant cases. The first is Henry v. Red Hill Evangelical Lutheran Church of
Tustin (2012) 201 Cal. App. 4th 1041, discussed in Plaintiff's opening brief on the religious
exemption. (Pl. Mem. at 5). The Ninth Circuit, which has struggled like other circuits in trying
to divine a test to use in these cases, addressed the issue in the context of a school in EEOC v.
Kamehameha Schools/Bishop Estate (1993) 990 F.2d 458. The test the court developed in that
context included the following factors: 1) ownership and affiliation; 2) stated purpose; 3)
faculty; 4) student body; 5) student activities; and 6) curriculum. A careful review of the Henry
v. Red Hill case shows that the court there employed similar factors in determining whether the
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school was a religious entity entitled to the religious exemption from FEHA.
Plaintiff suggests that the factors employed in Kamehmeha and Henry be used by the
court here. The results of that analysis have to be weighed in light of the Legislature’s clear
intent to subject religiously-affiliated schools to FEHA jurisdiction. Once the evidence has
been completed in this trial, and with appropriate judicial notice of the legislative history,
Plaintiff contends that the factors strongly demonstrate that Mercy High School has not met its
heavy burden of establishing its entitlement to the FEHA religious exemption. At the closing
argument to the court on this issue, Plaintiff will present citations to all of the evidence which
supports its position that Mercy High School is precisely the kind of institution the Legislature
carved out of the religious exemption, ensuring that its employees like Julie Ortiz were
protected by the state’s anti-discrimination laws.
Respectfully submitted,
Dated: December 4, 2017 DICKSON GEESMAN LLP
By KeThen (Qurkete Ouh, br
KATHRYN BURKETT DICKSON
Attorneys for Plaintiff
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PROOF OF SERVICE
SUPERIOR COURT OF CALIFORNIA, COUNTY OF ALAMEDA
Tam employed in the County of Alameda, State of California; I am over the age of 18
years and not a party to the within entitled action; my business address is 1999 Harrison Street,
Suite 2000, Oakland, California 94612.
On December 4, 2017, I served the foregoing documents, described as PLAINTIFF’S
SUPPLEMENTAL BRIEF RE MERITS OF FEHA RELIGIOUS EXEMPTION on the
interested parties to said action by the following means:
oO ( By Facsimile Transmission) By transmitting via facsimile the document(s) listed
above to the fax number(s) set forth below.
Oo (By Mail) By placing the document(s) listed above in a sealed envelope with postage
thereon fully prepaid, in the United States Mail at Oakland, California addressed as set
forth below.
oO ( By Hand Delivery) By causing a true copy thereof, enclosed in a sealed envelope, to
be delivered by hand to the addresses shown below.
Oo (By Overnight Delivery) By placing a true copy thereof, enclosed in a sealed envelope,
with delivery charges prepaid, to be sent by Federal Express, addressed as shown
below.
oO (By Personal Service) By personally delivering a true copy thereof, enclosed in a
sealed envelope, to the addressees shown below.
i (By E-Mail) By electronically transmitting the document(s) listed above, by agreement
between the parties, or by court order, addressed as set forth below. I did not receive an
electronic message indicating any errors in transmission.
Paul E. Gaspari Also served:
Shauna N. Correia
Michelle L. Covington Marilynn J. Cooper: mcooper@weintraub.com
Weintraub Tobin Chediak Coleman Grodin | Edith S. Sanchez: esanchez@weintraub.com
475 Sansome Street, Suite 1800 Justine T. Woodland:jwoodland@weintraub.com
San Francisco, CA 94111
Telephone: 415.433.1400
Facsimile: 415.433.3883
E-Mail: pgaspari@weintraub.com
E-Mail: scorreia@weintraub.com
E-Mail: mcovington@weintraub.com
Attorneys for Defendant
MERCY HIGH SCHOOL, SAN FRANCISCO
(State) 1 declare under penalty of perjury under the laws of the State of California
that the above is true and correct.
Executed on December 4, 2017, at Oakland, California ‘ ? ( a
PETRA WACH
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Plaintiff's Supplemental Brief re Merits of FEHA Religious Exemption - Case No. CGC-16-549915