FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DONALD SULLIVAN; DEANNA EVICH;
RICHARD BURKOW,
Plaintiffs-Appellants, No. 06-56649
v.
D.C. No.
CV-05-00392-AHS
ORACLE CORPORATION, a Delaware
corporation; ORACLE UNIVERSITY, OPINION
form unknown,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Alicemarie H. Stotler, District Judge, Presiding
Argued and Submitted May 6, 2008
Submission Withdrawn Feb. 17, 2009
Resubmitted December 6, 2011
Pasadena, California
Filed December 13, 2011
Before: William A. Fletcher and Ronald M. Gould,
Circuit Judges, and Louis H. Pollak,*
United States District Judge.
Opinion by Judge William A. Fletcher
*The Honorable Louis H. Pollak, Senior United States District Judge
for the Eastern District of Pennsylvania, sitting by designation.
20965
20968 SULLIVAN v. ORACLE CORPORATION
COUNSEL
Charles Scott Russell, Robert Thompson, CALLAHAN
McCUNE & WILLIS, Tustin, California, for the appellants.
Stephen L. Berry, Paul W Cane, Jr., PAUL, HASTINGS,
JANOFSKY & WALKER, Costa Mesa, California, for the
appellees.
OPINION
W. FLETCHER, Circuit Judge:
Oracle Corporation (“Oracle”), a large software company,
has employed hundreds of workers to train Oracle customers
in the use of its software. During the period relevant to this
suit, Oracle classified these workers as teachers who were not
entitled to compensation for overtime work under either fed-
eral or California law. Three nonresidents of California
brought a would-be class action against Oracle seeking dam-
ages under California law for failure to pay overtime. Plain-
tiffs performed only some of their work for Oracle in
California. Plaintiffs’ first two claims are based on work per-
formed in California. Their third claim is based on work per-
formed anywhere in the United States.
The district court granted summary judgment to Oracle on
all three claims, on the ground that the relevant provisions of
California law did not, or could not, apply to the work per-
formed by Plaintiffs. After certifying several questions of
state law to the California Supreme Court and receiving
answers from that Court, we reverse the summary judgment
on the first two claims and affirm on the third claim.
I. Background
Oracle is a Delaware corporation with its principal place of
business in California. Plaintiffs are “Instructors” — to use
SULLIVAN v. ORACLE CORPORATION 20969
Oracle’s term — who trained customers to use Oracle soft-
ware. The parties stipulated that from April 1999 to June 2006
(the date of the stipulation) Oracle “utilized Instructors on a
contract basis through its subsidiary, Oracle Corporation Can-
ada, to perform work inside the United States [and] inside the
State of California.” Oracle provided the training materials
used by Plaintiffs. Oracle “recognized revenue” for work per-
formed by Plaintiffs in the United States (including Califor-
nia). Oracle “required its Instructors to travel to destinations
within the United States away from their city of domicile for
the purpose of performing work for Oracle.” At all relevant
times, all three plaintiffs resided in the United States. All
three of them received their letters of employment in their
home states.
Plaintiff Donald Sullivan worked as an Oracle Instructor
from June 1998 to January 2004. During this period, Sullivan
resided in Colorado. During 2001, Sullivan worked in Colo-
rado “on at least 150 days”; he worked in California “on 32
days”; and he worked in other states “on at least” 52 days.
During 2002, he worked in Colorado “on at least 150 days”;
he worked in California “on 12 days”; and he worked in other
states “on at least” 20 days. During 2003, he worked in Colo-
rado “on at least 150 days”; he worked in California “on 30
days”; and he worked in other states “on at least” 19 days.
The record does not reflect how many days, if any, Sullivan
worked in Canada.
Plaintiff Deanna Evich worked as an Oracle Instructor from
August 1999 to July 2004. During this period, Evich resided
in Colorado. During 2001, Evich worked in Colorado “at least
150 days”; she worked in California “on 33 days”; and she
worked in other states “on at least” 3 days. During 2002, she
worked in Colorado “on approximately 30 days”; she worked
in California “on 11 days.” During 2003, she worked in Colo-
rado “on approximately 30 days”; she worked no days in Cali-
fornia. During 2004, she worked in Colorado “on at least 100
days”; she worked in California “on 36 days”; and she worked
20970 SULLIVAN v. ORACLE CORPORATION
in other states “on at least” 4 days. The record does not reflect
how many days, if any, Evich worked in Canada.
Plaintiff Richard Burkow worked as an Oracle Instructor
from March 1998 to April 2002. During this period, Burkow
resided in Arizona. During 2001, Burkow worked in Arizona
“on at least 100 days”; he worked in California “on 15 days”;
and he worked in other states “on at least” 68 days. During
2002, he worked in Arizona “on at least 60 days”; he worked
in California “on five days”; and he worked in other states
“on at least” 12 days. The record does not reflect how many
days, if any, Burkow worked in Canada.
For a number of years, Oracle classified its Instructors as
“teachers.” Teachers are exempt from the overtime provisions
of California’s Labor Code (“Labor Code”) and the federal
Fair Labor Standard Act (“FLSA”). See, e.g., 29 U.S.C.
§ 213(a)(1) (providing exemptions from the FLSA’s overtime
provisions); 29 C.F.R. § 541.303(a)-(b) (applying FLSA
exemption to certain categories of teachers); Cal. Sch. of Culi-
nary Arts v. Lujan, 4 Cal. Rptr. 3d 785, 791-92 (Ct. App.
2003) (describing regulations establishing exemption for
teachers from the Labor Code’s overtime provisions). The
parties stipulated that Oracle’s California offices were primar-
ily responsible for the decision to classify the Instructors as
“teachers” who were exempt from the overtime provisions of
the Labor Code and the FLSA.
In 2003, Oracle reclassified its California-based Instructors
and began paying them overtime under the Labor Code. In
2004, Oracle reclassified all of its Instructors working in the
United States and began paying them overtime under the
FLSA. Oracle has not retroactively provided overtime pay-
ments to Plaintiffs for the work they performed prior to the
reclassification.
Oracle’s reclassification of its Instructors appears to have
been prompted by a 2003 class action in federal district court
SULLIVAN v. ORACLE CORPORATION 20971
for the Central District of California. Plaintiffs in that suit
claimed that Oracle misclassified its Instructors under the
Labor Code and the FLSA. Gabel & Sullivan v. Oracle
(“Sullivan I”), Case No. SACV 03-348 AHS (MLGx) (C.D.
Cal. Mar. 29, 2005). The district court certified two classes.
The first class consisted of plaintiffs seeking damages under
the Labor Code; the second consisted of plaintiffs seeking
damages under the FLSA. That suit was settled, resulting in
a dismissal with prejudice of the claims of both classes. How-
ever, claims brought by plaintiffs under California law “for
periods of time they may have worked in the State of Califor-
nia when they were not a resident of the State” were excepted
from the settlement. Those claims were dismissed without
prejudice.
Plaintiffs brought the present suit in state court shortly
thereafter. Oracle removed the suit to the federal district court
for the Central District of California, where it was assigned to
the same district judge as Sullivan I, the first suit. Plaintiffs
allege three claims in the present suit. They seek class certifi-
cation for all three claims.
The first claim, brought by all three named Plaintiffs,
alleges a violation of the California Labor Code. See, e.g.,
Cal. Lab. Code § 510(a); see also Burnside v. Kiewit Pac.
Corp., 491 F.3d 1053, 1073 n.18 (9th Cir. 2007). Plaintiffs
allege that Oracle failed to pay overtime for work performed
in California to Instructors domiciled in other states who
worked complete days in California. We refer to this claim as
the “Labor Code claim.”
The second claim, brought by all three Plaintiffs, alleges a
violation of California’s Unfair Competition Law, commonly
referred to as § 17200. See Cal. Bus. & Prof. Code § 17200
et seq. This claim is predicated on the violations of the Labor
Code alleged in the first claim. We refer to this claim as the
“§ 17200/Labor Code claim.”
20972 SULLIVAN v. ORACLE CORPORATION
The third claim, brought only by Plaintiffs Evich and Bur-
kow, alleges a different violation of § 17200. This claim is
predicated on violations of the FLSA. Plaintiffs allege that
Oracle failed to pay overtime for work performed throughout
the United States. Class members in Sullivan I who settled
their claims against Oracle are not included in the would-be
class for this third claim. We refer to this claim as the
“§ 17200/FLSA” claim.
The district court granted summary judgment to Oracle on
all three claims. On the first and second claims, the court held
that California’s Labor Code (and, derivatively, § 17200) does
not apply to nonresidents who work primarily in other states.
Further, the court held that if the Labor Code were construed
to apply to such work, it would violate the Due Process
Clause of the Fourteenth Amendment. On the third claim, the
court held that § 17200 does not apply to work performed out-
side California for which payment was less than that required
by the FLSA; to the extent the third claim involved work per-
formed in California the claim failed “for the same reasons
that Plaintiffs’ § 17200 claim based on Labor Code provisions
fails.” Plaintiffs timely appealed.
In a published opinion, we reversed in part and affirmed in
part the decision of the district court. Sullivan v. Oracle Corp.
(Sullivan II), 547 F.3d 1177 (9th Cir. 2008). We reversed on
the first and second claims, holding that the Labor Code and
§ 17200 apply to the overtime work that Plaintiffs performed
in California. Id. at 1181-86. We affirmed on the third claim,
holding that § 17200 does not apply to Plaintiffs’ overtime
work performed outside of California even if the employer
violated the FLSA. Id. at 1186-87.
Oracle filed a petition for rehearing en banc of our decision
on the first and second claims. Plaintiffs filed a petition for
rehearing by the panel on the third claim. The California
Employment Law Council, the California Restaurant Associa-
tion, and the Employers’ Group each filed amicus briefs in
SULLIVAN v. ORACLE CORPORATION 20973
support of Oracle’s petition for rehearing en banc on the first
and second claims.
We withdrew our published opinion, and certified the fol-
lowing questions of state law to the California Supreme
Court:
First, does the California Labor Code apply to
overtime work performed in California for a
California-based employer by out-of-state plaintiffs
in the circumstances of this case, such that overtime
pay is required for work in excess of eight hours per
day or in excess of forty hours per week?
Second, does § 17200 apply to the overtime work
described in question one?
Third, does § 17200 apply to overtime work per-
formed outside California for a California-based
employer by out-of-state plaintiffs in the circum-
stances of this case if the employer failed to comply
with the overtime provisions of the FLSA?
Sullivan v. Oracle Corp. (“Sullivan III”), 557 F.3d 979, 983
(9th Cir. 2009). The California Supreme Court agreed with
the answers we had given in our original opinion to these
three questions. Sullivan v. Oracle Corp. (“Sullivan IV”), 51
Cal. 4th 1191 (2011). In answer to the first question, the Court
concluded that California’s overtime law applies to the work
described in the question that had been performed in Califor-
nia by nonresidents. Id. at 1196-1206. In answer to the second
question, the Court concluded that § 17200 applies to the
work described in the first question. Id. at 1206. In answer to
the third question, the Court concluded that § 17200 does not
reach Plaintiffs’ FLSA claims for work performed outside
California under the circumstances of this case. Id. at
1206-09.
20974 SULLIVAN v. ORACLE CORPORATION
We address the few remaining issues below.
II. Standard of Review
“We review the district court’s decision to grant summary
judgment de novo. Thus, viewing the evidence in the light
most favorable to the nonmoving party, we must determine
whether there are any genuine issues of material fact and
whether the district court correctly applied the relevant sub-
stantive law.” Fichman v. Media Ctr., 512 F.3d 1157, 1159
(9th Cir. 2008) (internal citation omitted).
III. Discussion
A. Labor Code Claim
[1] Oracle makes two arguments against Plaintiffs’ Labor
Code claim. First, Oracle argues that the overtime provisions
of California’s Labor Code do not apply to work performed
in California by residents of Colorado and Arizona. The Cali-
fornia Supreme Court disagreed and concluded: “The Califor-
nia Labor Code does apply to overtime work performed in
California for a California-based employer by out-of-state
plaintiffs in the circumstances of this case, such that overtime
pay is required for work in excess of eight hours per day or
in excess of forty hours per week.” Sullivan IV, 51 Cal. 4th
at 1206. The Court’s answer to Oracle’s state-law argument
is conclusive.
Second, Oracle argues that if California’s Labor Code
applies to Plaintiffs’ work in California the Code violates the
Due Process Clause of the Fourteenth Amendment and the
Dormant Commerce Clause of the United States Constitution.
We disagree with both the due process clause and commerce
clause arguments.
1. Due Process Clause
[2] We apply the same test under the Due Process Clause
of the Fourteenth Amendment and the Full Faith and Credit
SULLIVAN v. ORACLE CORPORATION 20975
Clause to determine whether a state’s law may be applied in
a particular case. “[F]or a State’s substantive law to be
selected in a constitutionally permissible manner, that State
must have a significant contact or significant aggregation of
contacts, creating state interests, such that choice of its law is
neither arbitrary nor fundamentally unfair.” Phillips Petro-
leum Co. v. Shutts, 472 U.S. 797, 818 (1985) (quoting Allstate
Ins. Co. v. Hague, 449 U.S. 302, 312-13 (1981)). A state court
is rarely forbidden by the Constitution to apply its own state’s
law. Compare Phillips, 472 U.S. at 814-23 (holding that a
Kansas court may not apply Kansas prejudgment interest rules
to all of the natural gas leases at issue in a class action involv-
ing royalties from 6,232 leases, of which only four were
located in Kansas, and 14,477 royalty owners, of whom only
504 were Kansas residents) with Allstate Ins. Co., 449 U.S. at
304-20 (holding that a Minnesota court may apply Minnesota
rule permitting “stacking” of motorcycle insurance policies
because plaintiff now lived in Minnesota and her deceased
spouse had worked in Minnesota, even though plaintiff had
lived in Wisconsin at the time of the accident, and even
though decedent had lived in Wisconsin, had taken out the
insurance policies in Wisconsin, and had been killed in Wis-
consin).
[3] The contacts creating California interests are clearly
sufficient to permit the application of California’s Labor Code
in this case. The employer, Oracle, has its headquarters and
principal place of business in California; the decision to clas-
sify Plaintiffs as teachers and to deny them overtime pay was
made in California; and the work in question was performed
in California.
2. Dormant Commerce Clause
[4] If a statute “regulates even-handedly to effectuate a
legitimate local public interest, and its effects on interstate
commerce are only incidental, it will be upheld unless the
burden imposed on such commerce is clearly excessive in
20976 SULLIVAN v. ORACLE CORPORATION
relation to the putative local benefits.” Pike v. Bruce Church,
Inc., 397 U.S. 137, 142 (1970). California applies its Labor
Code equally to work performed in California, whether that
work is performed by California residents or by out-of-state
residents. There is no plausible Dormant Commerce Clause
argument when California has chosen to treat out-of-state res-
idents equally with its own.
B. § 17200/Labor Code Claim
[5] Oracle argues that California Business and Professions
Code § 17200 does not apply to the overtime work performed
by Plaintiffs, described above. The California Supreme Court
held: “Business and Professions Code section 17200 does
apply to the overtime work” performed by Plaintiffs. Sullivan
IV, 51 Cal. 4th at 1206. The Court’s answer to Oracle’s state-
law argument is conclusive.
C. § 17200/FLSA Claim
[6] Plaintiffs Evich and Burkow argue that § 17200 applies
to alleged violations of the FLSA outside of California. The
California Supreme Court held: “Business and Professions
Code section 17200 does not apply to overtime work per-
formed outside California for a California-based employer by
out-of-state plaintiffs in the circumstances of this case based
solely on the employer’s failure to comply with the overtime
provisions of the FLSA.” Id. at 1209. The Court’s answer to
Oracle’s state-law argument is conclusive.
Conclusion
[7] Based on the foregoing, we reverse the district court’s
grant of summary judgment to Oracle on Plaintiffs’ first two
claims. We affirm the district court’s grant of summary judg-
ment to Oracle on Plaintiffs’ third claim.
SULLIVAN v. ORACLE CORPORATION 20977
REVERSED in part, AFFIRMED in part, and
REMANDED for further proceedings. Costs to Plaintiffs-
Appellants.