Docket No. S245607
Melendez v. S.F. Baseball Associates LLC
IN THE SUPREME COURT OF
CALIFORNIA
GEORGE MELENDEZ et al.,
Plaintiffs and Respondents,
v.
SAN FRANCISCO BASEBALL ASSOCIATES LLC,
Defendant and Appellant.
S245607
First Appellate District, Division Three
A149482
San Francisco City and County Superior Court
CGC-13-530672, CGC-15-549146
April 25, 2019
Justice Chin authored the opinion of the court, in which Chief
Justice Cantil-Sakauye and Justices Corrigan, Liu, Cuéllar,
Kruger, and Groban concurred.
MELENDEZ v. SAN FRANCISCO BASEBALL ASSOCIATES LLC
S245607
Opinion of the Court by Chin, J.
Under California’s labor laws, “[i]f an employer discharges
an employee, the wages earned and unpaid at the time of
discharge are due and payable immediately.” (Lab. Code, § 201,
subd. (a).) Plaintiffs, security guards at what used to be named
AT&T Park in San Francisco and is now named Oracle Park (the
park), are suing San Francisco Baseball Associates LLC (the
Giants) for allegedly violating this provision. They claim they
are discharged after every Giants homestand, at the end of the
baseball season, and after other events at the park, and they are
entitled under Labor Code section 201 to receive their unpaid
wages immediately after each such discharge. The Giants deny
that the security guards are discharged on those occasions.
They contend that Labor Code section 204, which generally
requires semimonthly payment of employees’ wages, applies to
the guards.
The merits of this action are not now before us. Rather,
we must consider the Giants’ contention that this lawsuit
requires interpretation of the collective bargaining agreement
(hereafter sometimes CBA) that the guards’ union has entered
into with the Giants. If so, this lawsuit is preempted under
federal law and must be submitted to arbitration. (See, e.g.,
Livadas v. Bradshaw (1994) 512 U.S. 107 (Livadas).
We conclude that, although the agreement between the
union and the Giants may be relevant to this lawsuit and may
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MELENDEZ v. SAN FRANCISCO BASEBALL ASSOCIATES LLC
Opinion of the Court by Chin, J.
need to be consulted to resolve it, the parties’ dispute turns on
an interpretation of state law — namely, the meaning of
“discharge” under Labor Code section 201 — rather than an
interpretation of the agreement itself. Because no party has
identified any provision of the agreement whose meaning is
uncertain and that must be interpreted to resolve plaintiffs’
claim, this lawsuit is not preempted and state courts may decide
it on the merits. We reverse the judgment of the Court of
Appeal, which concluded otherwise.
I. FACTUAL AND PROCEDURAL HISTORY
We draw these facts, which are generally undisputed,
primarily from the Court of Appeal opinion. (Melendez v. San
Francisco Baseball Associates LLC (2017) 16 Cal.App.5th 339
(Melendez).
George Melendez, a security guard at the park, is the lead
plaintiff in this putative class action against the Giants. He
“contends that he and other security guards were employed
‘intermittingly’ for specific job assignments (baseball games or
other events) and were discharged ‘at the end of a homestand,
at the end of a baseball season, at the end of an inter-season
event like a fan fest, college football game, a concert, a series of
shows, or other events,’ and that therefore under Labor Code
section 201 [they] were entitled to but did not receive immediate
payment of their final wages upon each such ‘discharge.’ ”
(Melendez, supra, 16 Cal.App.5th at p. 341.) Plaintiffs seek to
recover penalties under Labor Code section 203 for the Giants’
failure to pay them immediately after each such discharge.
The Giants contend that the “security guards are not
intermittent employees but are ‘year-round employees who
remain employed with the Giants until they resign or are
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Opinion of the Court by Chin, J.
terminated pursuant to the CBA.’ ” (Melendez, supra, 16
Cal.App.5th at p. 341.) To support this contention, they cite
provisions of the agreement entered into between the Giants
and the union that represents the security guards, the Service
Employees International Union, United Services Workers West
of San Francisco. (Ibid.
As relevant here, the Giants moved to compel arbitration,
arguing that the action is preempted by the Labor Management
Relations Act of 1947. The trial court denied the motion. It
“held that resolution of the controversy does not require
interpretation of the CBA, but simply a determination of
whether the security guards are discharged within the meaning
of Labor Code section 201 at the conclusion of an event or series
of baseball games.” (Melendez, supra, 16 Cal.App. 5th at pp.
345-346.) The Giants appealed. (See Code Civ. Proc., § 1294,
subd. (a) [an aggrieved party may appeal from “[a]n order
dismissing or denying a petition to compel arbitration”].
The Court of Appeal agreed with the Giants and reversed
the order denying the motion to compel arbitration. It explained
that, “[a]lthough no provision of the CBA provides an explicit
answer, the duration of the employment relationship must be
derived from what is implicit in the agreement.” (Melendez,
supra, 16 Cal.App.5th at p. 346.) It cited numerous provisions
of the agreement that it believed must be interpreted to resolve
this controversy: “There are numerous provisions from which
inferences may logically be drawn. The classification of
employees is based on the number of hours worked in a year,
itself suggesting that employment is considered to continue
beyond the conclusion of each event. Continued classification as
a ‘regular’ employee requires at least 1,700 hours of work in a
year. ‘All employees shall be probationary employees for their
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Opinion of the Court by Chin, J.
first five hundred (500) hours of work with the Giants.’
Employees rise to ‘senior’ and ‘super senior’ status by working a
minimum of 300 hours each year for the last five or 10 years,
hardly possible if each event is deemed a separate
employment. . . . [T]he CBA provides that ‘All new applicants for
employment as security personnel shall be subject to prehire
drug screening and background investigation’; the language
seems to imply that such screening and investigation will occur
only once prior to the start of a single employment, and practice
under the agreement confirms this interpretation. The
specification of holidays in the CBA certainly implies yearlong
employment. And under the CBA, the Giants have the right to
discharge an employee only for cause. Other provisions may
also support inferences as to the intended term of employment.”
(Id. at pp. 346-347.
We granted plaintiffs’ petition for review limited to the
question of whether this action is preempted because it requires
interpretation of a collective bargaining agreement.
II. DISCUSSION
Section 301(a) of the Labor Management Relations Act of
1947 (29 U.S.C. § 185(a)) (hereafter section 301(a)) provides:
“Suits for violation of contracts between an employer and a labor
organization representing employees in an industry affecting
commerce as defined in this chapter, or between any such labor
organizations, may be brought in any district court of the United
States having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizenship of the
parties.” (See Lingle v. Norge Division of Magic Chef, Inc. (1988
486 U.S. 399, 403 (Lingle).) “Courts typically refer to the
statutory provisions at issue as ‘section 301(a)’ rather than by
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Opinion of the Court by Chin, J.
citation to the United States Code.” (Knutsson v. KTLA, LLC
(2014) 228 Cal.App.4th 1118, 1126.
“In a series of opinions, the Supreme Court concluded that
§ 301’s jurisdictional grant required the ‘complete preemption’
of state law claims brought to enforce collective bargaining
agreements.” (Balcorta v. Twentieth Century-Fox Film Corp.
(9th Cir. 2000) 208 F.3d 1102, 1107 (Balcorta).) The main
policies behind this preemption rule are to “ensure nationwide
uniformity with respect to the interpretation of collective
bargaining agreements and preserve arbitration as the primary
means of resolving disputes over the meaning of collective
bargaining agreements.” (Sciborski v. Pacific Bell Directory
(2012) 205 Cal.App.4th 1152, 1163 (Sciborski), citing Lingle,
supra, 486 U.S. at p. 404, Allis-Chalmers Corp. v. Lueck (1985
471 U.S. 202, 211, 219 (Allis-Chalmers).
After reviewing the high court opinions that developed the
preemption rule, the Balcorta court explained that “[a]lthough
the language of § 301 is limited to ‘[s]uits for violation of
contracts,’ courts have concluded that, in order to give the
proper range to § 301’s policies of promoting arbitration and the
uniform interpretation of collective bargaining agreement
provisions, § 301 ‘complete preemption’ must be construed to
cover ‘most state-law actions that require interpretation of labor
agreements.’ [Citations.] One reason for expanding complete
preemption beyond the textual confines of § 301 is that any
claim the resolution of which requires the interpretation of a
collective bargaining agreement presents some risk to the policy
of uniformity if state law principles are employed in that
interpretation, even if the claim is not one for breach of contract.
[Citing Lingle, supra, 486 U.S. at pp. 405-406, Livadas, supra,
512 U.S. at pp. 121-123.] Moreover, extending complete
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Opinion of the Court by Chin, J.
preemption to cover claims involving interpretation of collective
bargaining agreements promotes the federal policy favoring
arbitration of labor disputes . . . .” (Balcorta, supra, 208 F.3d at
p. 1108, fn. omitted.
Critically, Balcorta also explained that “[t]here is another
strand to this aspect of federal labor law, however. Despite the
breadth of § 301 complete preemption, ‘not every claim which
requires a court to refer to the language of a labor-management
agreement is necessarily preempted.’ [Citation.] In order to
help preserve state authority in areas involving minimum labor
standards, the Supreme Court has distinguished between
claims that require interpretation or construction of a labor
agreement and those that require a court simply to ‘look at’ the
agreement. See Livadas, supra, 512 U.S. at 123-126, 124, 114
S.Ct. 2068 (“[W]hen the meaning of contract terms is not subject
to dispute, the bare fact that a collective bargaining agreement
will be consulted in the course of state-law litigation plainly does
not require the claim to be extinguished.”). We have stressed
that, in the context of § 301 complete preemption, the term
‘interpret’ is defined narrowly — it means something more than
‘consider,’ ‘refer to,’ or ‘apply.’ ” (Balcorta, supra, 208 F.3d at p.
1108.) Moreover, “ ‘look[ing] to’ the CBA merely to discern that
none of its terms is reasonably in dispute does not require
preemption.” (Cramer v. Consolidated Freightways, Inc. (9th
Cir. 2001) 255 F.3d 683, 692 (en banc) (Cramer), citing Livadas,
supra, 512 U.S. at p. 125.
“Preemption does not arise when interpretation is
required only by a defense. [Citing Caterpillar Inc. v. Williams
(1987) 482 U.S. 386, 398-399, Cramer, supra, 255 F.3d at p. 690.]
Preemption occurs when a claim cannot be resolved on the
merits without choosing among competing interpretations of a
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Opinion of the Court by Chin, J.
collective bargaining agreement and its application to the claim.
The determination of whether a claim is preempted depends on
the particular facts of each case.” (Sciborski, supra, 205
Cal.App.4th at pp. 1164-1165.) “The primary point of reference
in the preemption analysis is . . . not state law writ large . . . but
the plaintiff’s pleading.” (Alaska Airlines Inc. v. Schurke (9th
Cir. 2018) 898 F.3d 904, 923 (en banc) (Alaska Airlines).) The
inquiry is not “into the merits of a claim; it is an inquiry into the
claim’s ‘legal character’ — whatever its merits — so as to ensure
it is decided in the proper forum. . . . Our only job is to decide
whether, as pleaded, the claim ‘in this case is “independent” of
the [CBA] in the sense of “independent” that matters for . . . pre-
emption purposes: resolution of the state-law claim does not
require construing the collective-bargaining agreement.’ ” (Id.
at p. 924.
The high court has also said that preemption applies
“when resolution of a state-law claim is substantially dependent
upon analysis of the terms of an agreement made between the
parties in a labor contract.” (Allis-Chalmers, supra, 471 U.S. at
p. 220.
These concepts are not bright lines. “ ‘[T]he line between
reference to and interpretation of an agreement may be
somewhat hazy’ ” (Balcorta, supra, 208 F.3d at p. 1108), and
“ ‘[s]ubstantial dependence’ on a CBA is an inexact concept,
turning on the specific facts of each case . . . .” (Cramer, supra,
255 F.3d at p. 691.) But “the totality of the policies underlying
§ 301 — promoting the arbitration of labor contract disputes,
securing the uniform interpretation of labor contracts, and
protecting the states’ authority to enact minimum labor
standards — guides our understanding of what constitutes
‘interpretation.’ ” (Balcorta, at pp. 1108-1109.
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As an overarching principle, the high court has also
“emphasized that ‘pre-emption should not be lightly inferred in
this area, since the establishment of labor standards falls within
the traditional police power of the State.’ ” (Lingle, supra, 486
U.S. at p. 412.) Although a policy exists in ensuring uniformity
of interpretation of collective bargaining agreements, no such
policy exists in favor of uniformity of state labor standards.
Federal law “does not provide for, nor does it manifest any
interest in, national or systemwide uniformity in substantive
labor rights.” (Alaska Airlines, supra, 898 F.3d at p. 919.
Sciborski summarized the analytical process a court
should use to apply these principles. “Under section 301
preemption analysis, it is helpful to apply a two-part test to
determine whether a claim is preempted. First, the court should
evaluate whether the claim arises from independent state law
or from the collective bargaining agreement. If the claim arises
from the collective bargaining agreement, the claim is
preempted as a matter of law. [Citation.] However, if the claim
arises from independent state law, the court must then proceed
to the second step. In this step, the court determines whether
the claim requires ‘interpretation or construction of a labor
agreement,’ or whether a collective bargaining agreement will
merely be ‘reference[d]’ in the litigation. [Citations.] A state
law claim is preempted if a court must interpret a disputed
provision of the collective bargaining agreement to determine
whether the plaintiff’s state law claim has merit.” (Sciborski,
supra, 205 Cal.App.4th at p. 1164; see Kobald v. Good
Samaritan Regional Medical Center (9th Cir. 2016) 832 F.3d
1024, 1032-1033 [similar].) “At this second step of the analysis,
‘claims are only preempted to the extent there is an active
dispute over “the meaning of contract terms.” ’ ” (Curtis v. Irwin
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MELENDEZ v. SAN FRANCISCO BASEBALL ASSOCIATES LLC
Opinion of the Court by Chin, J.
Industries, Inc. (9th Cir. 2019) 913 F.3d 1146, 1153, quoting
Alaska Airlines, supra, 898 F.3d at p. 921; see McCray v.
Marriott Hotel Services, Inc. (9th Cir. 2018) 902 F.3d 1005, 1013
[a “speculative possibility” that a collective bargaining
agreement dispute may arise later in the course of litigation will
not preempt a state law claim when none of the collective
bargaining agreement’s terms are presently in dispute].
The first step in this analytical process is easy in this case.
Plaintiffs’ claim arises solely from independent state law —
Labor Code section 201 — and is not based on the collective
bargaining agreement.
Because the difference between interpreting and merely
referencing a collective bargaining agreement is inherently
“ ‘hazy’ ” (Balcorta, supra, 208 F.3d at p. 1108), the second step
is more difficult. But, bearing in mind that preemption should
not be lightly inferred because establishing minimum labor
standards comes within a state’s traditional police power, we
conclude this lawsuit is not preempted. The parties’ dispute
turns on an interpretation of California’s independent labor
laws, not on an interpretation of the collective bargaining
agreement.
As noted, Labor Code section 201, subdivision (a),
provides, “If an employer discharges an employee, the wages
earned and unpaid at the time of discharge are due and payable
immediately.” In Smith v. Superior Court (2006) 39 Cal.4th 77
(Smith), we construed the word “discharge” in this statute.
There, L’Oreal USA, Inc. hired the plaintiff to be a “hair model”
working for a single day. At the end of that day, the employment
relationship ended. But L’Oreal failed to pay her for more than
two months. She sued, claiming a violation of Labor Code
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Opinion of the Court by Chin, J.
section 201. Because the employment relationship was
voluntarily terminated, L’Oreal argued she was not discharged
under the statute. We stated the issue as “whether the
discharge element of [Labor Code sections 201 and 203] requires
an involuntary termination from an ongoing employment
relationship, such as when an employer fires an employee, or
whether this element also may be met when an employer
releases an employee after completion of a specific job
assignment or time duration for which the employee was hired.”
(Smith, at p. 81.) We concluded that “the statutory element
contemplates both types of employment terminations.” (Ibid.
In reaching this conclusion, we noted that a “commonly
understood meaning of ‘discharge’ includes the action of an
employer who, having hired an employee to work on a particular
job or for a specific term of service, formally releases the
employee and ends the employment relationship at the point the
job or service term is deemed complete.” (Smith, supra, 39
Cal.4th at p. 84.) We held that “discharge” in this context
includes this commonly understood meaning. (Id. at p. 90.
The parties debate at length how Smith, supra, 39 Cal.4th
77, applies here. The Giants argue that “[a]n employee cannot
be simultaneously discharged under statute while continuing to
remain continuously and gainfully employed by contractual
agreement.” They contend that “[t]his is a case about which
Labor Code protections apply.” In their view, Labor Code
section 204 — which applies to wages not governed by other
provisions such as Labor Code section 201, and which requires
semimonthly wage payments and places strict limits on the time
that may elapse between performance of labor and payment for
that labor — governs security guards. They also rely on a
declaration by the Giants’ senior director of security explaining
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Opinion of the Court by Chin, J.
the employment process that, they contend, shows plaintiffs are
not continually discharged. Plaintiffs argue that they are
“temporarily laid off” every time a specific job assignment ends,
and such layoffs are discharges within the meaning of Labor
Code section 201. They are willing to concede that, by the terms
of the collective bargaining agreement, their employment
relationship with the Giants is a continuing one. But they
contend that “[e]ven if the CBA contained an undisputed term
providing that security guards are employed for life, the layoffs
they endure would still trigger the employer obligations
contained in Labor Code section 201.” The parties also discuss
the legislative history behind the statute and the meaning and
significance of interpretations of it by the Division of Labor
Standards Enforcement.
These are credible arguments, and they will have to be
considered when the trial court resolves the merits of this
lawsuit on remand. But they are arguments concerning the
meaning of “discharge” under Labor Code section 201, not
concerning the meaning of the collective bargaining agreement.
The parties have pointed us to no disagreement concerning the
meaning of any provision of the agreement.
Closely on point is Balcorta, supra, 208 F.3d 1102. In that
case, the plaintiff, an electrical rigger in the film industry,
“worked several short-term ‘calls’ ” for Twentieth Century Fox
Film Corporation. (Id. at p. 1104.) He sued the corporation,
claiming a violation of Labor Code former section 201.5, which,
he alleged, required him to be paid within 24 hours of each call.
As here, the reviewing court had to decide whether the lawsuit
was preempted under section 301(a). The court held it was not.
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Balcorta concluded that the collective bargaining
agreement in that case had to be consulted but not interpreted.
“Although the provisions do detail fairly complicated procedures
and contain a hefty dose of industry jargon, their meaning is
neither uncertain nor ambiguous. A court may be required to
read and apply these provisions in order to determine whether
an employee was discharged from his ‘call’ at the end of his shift,
but no interpretation of the provisions would be necessary.”
(Balcorta, supra, 208 F.3d at pp. 1109-1110.) “[D]etermining
whether Balcorta was discharged does not require a court to
interpret the collective bargaining agreement . . . , and thus does
not render Balcorta’s claims subject to complete preemption.”
(Id. at p. 1110.
Balcorta also explained that labor law rights such as that
under Labor Code former section 201.5, are not negotiable and
that section “301 does not permit parties to waive, in a collective
bargaining agreement, nonnegotiable state rights . . . .”
(Balcorta, supra, 208 F.3d at p. 1111; see Lab. Code, § 219 [“no
provision of this article can in any way be contravened or set
aside by a private agreement, whether written, oral, or
implied”].) Accordingly, the collective bargaining agreement did
not have to be interpreted to determine whether it waived the
right to timely payment of wages under state law. (Balcorta, at
pp. 1111-1112.
Although this case involves Labor Code section 201, not
Labor Code former section 201.5, we believe the same result
applies. The collective bargaining agreement must be consulted
or referenced, but not interpreted. Nor is resolution of the state
law claim “substantially dependent upon analysis of the terms
of” the collective bargaining agreement. (Allis-Chalmers, supra,
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MELENDEZ v. SAN FRANCISCO BASEBALL ASSOCIATES LLC
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471 U.S. at p. 220.) Instead, Labor Code section 201 must be
interpreted.
The Court of Appeal in this case concluded that plaintiffs’
claim was preempted based on “inferences . . . drawn” from
several provisions of the collective bargaining agreement.
(Melendez, supra, 16 Cal.App.5th at p. 346.) It cited provisions
that define seniority and wage levels, pre-hire drug screening
and background investigation, and annual holidays. Those
provisions may be relevant, but none directly address whether
the Giants, at the end of each event or series of home games,
“discharge” plaintiffs pursuant to Labor Code section 201. As
the Court of Appeal recognized, no provision of the agreement
“provides an explicit answer.” (Melendez, at p. 346.) Nor do
those provisions require interpretation in the narrow sense in
which that word is used for preemption purposes. The parties
have not identified any provision of the collective bargaining
agreement whose meaning is “ambiguous” (Balcorta, supra, 208
F.3d at p. 1109) or subject to “active dispute.” (Alaska Airlines,
supra, 898 F.3d at p. 921.) Indeed, nothing in the agreement
addresses the timing of wage payments, which shows that
plaintiffs’ complaint is aimed at an issue separate from the
benefits bargained for in the agreement.
Our finding that the action is not preempted is consistent
with the policies underlying section 301(a). Allowing a state
court to interpret Labor Code section 201 does not threaten the
policies of “promoting the arbitration of labor contract disputes”
or “securing the uniform interpretation of labor contracts.”
(Balcorta, supra, 208 F.3d at pp. 1108-1109.) But, importantly,
it does “protect[] the states’ authority to enact minimum labor
standards.” (Id. at p. 1109.) It is up to state courts, not an
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Opinion of the Court by Chin, J.
arbitrator, to interpret state labor law standards applicable to
all workers.
We express no view on the parties’ interpretations of
Labor Code section 201 or the ultimate merits of this lawsuit,
which are not before us in this appeal from the denial of the
motion to compel arbitration, and on which no court has yet
ruled. We hold only that section 301(a) does not preempt this
lawsuit. The merits will have to be resolved when the matter is
remanded to the trial court.
III. CONCLUSION
The trial court correctly denied the motion to compel
arbitration. Accordingly, we reverse the judgment of the Court
of Appeal and remand the matter to that court for further
proceedings consistent with this opinion.
CHIN, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
14
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Melendez v. San Francisco Baseball Associates LLC
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 16 Cal.App.5th 339
Rehearing Granted
Opinion No. S245607
Date Filed: April 25, 2019
Court: Superior
County: San Francisco
Judge: Curtis E. A. Karnow
Counsel:
Sheppard, Mullin, Richter & Hampton, Nancy Pritikin, Babak Yousefzadeh, Karin Dougan Vogel and
Brian S. Fong for Defendant and Appellant.
Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Jason W. Kearnaghan, Daniel J. McQueen
and Ryan J. Krueger for Los Angeles Dodgers LLC, Athletics Investment Group LLC, Padres L.P., and
San Jose Arena Management, LLC, as Amici Curiae on behalf of Defendant and Appellant.
Sahag Majarian II; Moss Bollinger and Dennis F. Moss for Plaintiffs and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Karin Dougan Vogel
Sheppard, Mullin, Richter & Hampton
Four Embarcadero Center, 17th Floor
San Francisco, CA 94111-4109
(415) 434-9100
Dennis F. Moss
Moss Bollinger
15300 Ventura Boulevard, Suite 207
Sherman Oaks, CA 91403
(310) 773-0323
Opinion Information
Date: | Docket Number: |
Thu, 04/25/2019 | S245607 |