Stone v. Alameda Health System

Filed 2/6/23 (unmodified opinion attached)
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

TAMELIN STONE et al., A164021

Plaintiffs and Appellants, (Alameda County Super Ct.
v. No. RG21092734)
ALAMEDA HEALTH SYSTEM, ORDER MODIFYING
Defendant and Respondent. OPINION
[CHANGE IN JUDGMENT]

THE COURT:
It is ordered that the published opinion filed on February 3, 2023, be
modified as follows:

1. After the last sentence in the last full paragraph on page 16, under
the “Disposition” section beginning with “On remand, the trial court
shall enter a new order overruling the demurrer as to the first,
second, third, fifth, sixth, and seventh causes of action in the first
amended complaint,” the following should be added:

Costs on appeal are awarded to appellants. (Cal. Rules of Court, rule
8.278(a)(3).)

This modification changes the judgment.

Date: ____02/06/2023___________ _____Jackson, P. J._______ P. J.

1
Tamelin Stone et al. v. Alameda Health System

(A164021)

Trial Court: Alameda County

Trial Judge: Hon. Noël Wise

Attorneys:
Law Offices of David Y. Imai and David Y. Imai for Plaintiffs and Appellants.

Renne Public Law Group, Ryan P. McGinley-Stempel, Geoffrey Spellberg,
and Anastasia Bondarchuk for Defendant and Respondent.

2
Filed 2/3/23 (unmodified opinion)
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

TAMELIN STONE et al.,

Plaintiffs and Appellants, A164021
v.
(Alameda County Super Ct.
ALAMEDA HEALTH SYSTEM, No. RG21092734)
Defendant and Respondent.

In this appeal from an order sustaining a demurrer without leave to
amend, we are called upon to decide whether seven claims for violations of
the Labor Code 1 lie against respondent Alameda Health System. In
answering that call, we address the following issues: (1) whether the
“sovereign powers” doctrine renders respondent liable for certain Labor Code
violations, notwithstanding the general rule of statutory construction
exempting government agencies from such liability; (2) whether respondent is
an exempt “municipal corporation” under section 220, subdivision (b); (3)
whether respondent is an exempt “governmental entity” under section 226,
subdivision (i); and (4) whether respondent can be sued under the Private
Attorneys General Act (PAGA, § 2698 et seq.).
Observing that respondent conspicuously lacks many of the hallmarks
of sovereignty, we hold that the sovereign powers doctrine applies. For

All subsequent references to statute are to the Labor Code, unless
1

otherwise noted.

1
similar reasons, we are guided by precedent to conclude that respondent is
not a “municipal corporation.” (§ 220, subd. (b).) However, in the absence of
such precedent, we do not exclude respondent from the category of
“governmental entit[ies].” (§ 226, subd. (i).) Finally, we hold that there are
at least some Labor Code violations for which a PAGA suit against
respondent may proceed.
In their first amended complaint against respondent Alameda Health
System, appellants Tamelin Stone and Amanda Kunwar alleged seven class
action claims related to wages and hours, and six individual claims for race
and sex discrimination. 2 When respondent demurred, the trial court
sustained the demurrer as to all seven class action claims. With respect to
the first six, the trial court reasoned that respondent was a “statutorily
created public agency” beyond the reach of the Labor Code 3 sections and
Industrial Welfare Commission (IWC) Wage Order invoked in the complaint.
As to the seventh, a PAGA claim (PAGA, § 2698 et seq.), the trial court held
that such an action would not lie because respondent is not a “person” within
the meaning of section 18, there was no underlying statutory violation from
which the PAGA claim could derive, and respondent’s “public agency” status
exempted it from paying punitive damages.
We disagree with that reasoning and therefore reverse the order as to
the first, second, third, fifth, sixth, and seventh causes of action. For the
reasons given below, we affirm the order sustaining the demurrer as to
appellant’s fourth claim.

2 The individual claims are not at issue in this appeal.

2
 I. BACKGROUND
In response to “the challenges facing the Alameda County Medical
Center arising from changes in the public and private health industries,” the
Legislature in 1997 enacted Health and Safety Code section 101850,
authorizing the Alameda County Board of Supervisors “to create a hospital
authority.” (Health & Saf. Code, § 101850, 4 subd. (a)(1).) In turn, the Board
of Supervisors created respondent hospital authority to govern the various
hospital facilities formerly known as the Alameda County Medical Center. 5
In so doing, the board deemed respondent “a public agency for purposes of
eligibility with respect to grants and other funding and loan guarantee
programs pursuant to” the enabling statute.
Appellants Stone and Kunwar worked for respondent as a medical
assistant and a licensed vocational nurse, respectively. Their first amended
complaint alleged that respondent “automatically deducted ½ hour from each
workday” as if to account for a meal period, when in fact, employees “were not
allowed or discouraged from clocking out for meal periods.” This alleged

4 Below, we refer to this section as respondent’s “enabling statute.”
5 We grant appellant and respondent’s respective unopposed requests
for judicial notice under Evidence Code sections 451, subdivision (a), and 452,
subdivisions (c) and (h). (Rules of Court, rule 8.252, subd. (a).) Of particular
note among appellant’s exhibits are Chapter 2.120 of the Alameda County
Code (establishing respondent), the Legislative Analyst’s Office’s “Overview
of Health Care Districts” as established under section 32000 et seq., and a
bill analysis prepared in anticipation of the Assembly vote for the enabling
statute. This analysis notes that the creation of respondent might give
Alameda County new “options . . . includ[ing] contracting out for selected
services, reduced emphasis on the use of civil service county employees, and
the ability to make quasi-independent business decisions.” Respondent’s
exhibits are its filings with the Secretary of State, which conform to
Government Code section 53051’s requirements for “the governing body of
each public agency.”

3
conduct formed the basis of seven class action claims: (1) failure to provide
off-duty meal periods (§§ 226.7, 512; IWC Wage Order 5 (Wage Order)); (2)
failure to provide off-duty rest breaks (§ 226.7, Wage Order); (3) failure to
keep accurate payroll records (§§ 1174, 1174.5, 1175; Cal. Code Regs., tit. 8,
§ 11050); (4) failure to provide accurate itemized wage statements (§§ 226,
226.3); (5) unlawful failure to pay wages (§§ 204, 222, 223, 225.5, 218.6,
218.5, 510, 1194, 1194.2, and 1198); (6) failure to timely pay wages (§§ 204,
210, 222, 223, 225.5, 218.6, 218.5); and (7) PAGA (§ 2698 et seq.).
Respondent demurred, arguing that the first six claims were “not
authorized against public entities under any of the cited Labor Code
sections.” As to the seventh claim, respondent contended that it was not a
“person” capable of being sued under PAGA, that the “PAGA claim [was]
derivative of” the first six unauthorized claims, and that Government Code
section 818 exempted respondent from liability. Crediting respondent’s
arguments, the trial court ultimately sustained the demurrer as to all seven
class action Labor Code claims, leaving intact only a few of the complaint’s
individual race and sex discrimination claims.
This appeal followed.
II. DISCUSSION
A. Appealability
Under the “death knell” doctrine, “an order is appealable when ‘it
effectively terminates the entire action as to [a] class, in legal effect being
“tantamount to a dismissal of the action as to all members of the class other
than plaintiff.” ’ ” (Williams v. Impax Laboratories, Inc. (2019) 41
Cal.App.5th 1060, 1066.) Here, although appellants’ individual claims for
race and sex discrimination survive, the trial court’s order sustaining
respondent’s demurrer as to all seven class action claims under the Labor

4
Code terminated the action as to all members of the class, rendering the
order directly appealable.
In support of its argument against applying the death knell doctrine,
respondent cites Young v. RemX, Inc. (2016) 2 Cal.App.5th 630, Munoz v.
Chipotle Mexican Grill, Inc. (2015) 238 Cal.App.4th 291, and Haro v. City of
Rosemead (2009) 174 Cal.App.4th 1067, all of which are distinguishable. In
those cases, specific causes of action that appeared in the complaint as class
action claims survived to be litigated as individual claims. Here, no cause of
action that was pleaded as a class action claim remains in any form. Thus, if
appellants had “fail[ed] to appeal from” this order sustaining the demurrer to
their Labor Code claims, they would have “los[t] forever the right to attack
it.” (Stephen v. Enterprise Rent-A-Car (1991) 235 Cal.App.3d 806, 811.)
In sum, the death knell doctrine applies.
B. Merits
1. Standard of Review
“In determining whether plaintiffs properly stated a claim for relief,
our standard of review is clear: ‘ “We treat the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or
conclusions of fact or law. [Citation.] We also consider matters which may be
judicially noticed.” [Citation.] Further, we give the complaint a reasonable
interpretation, reading it as a whole and its parts in their context. [Citation.]
When a demurrer is sustained, we determine whether the complaint states
facts sufficient to constitute a cause of action. [Citation.] And when it is
sustained without leave to amend, we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can be, the trial
court has abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm. [Citations.] The burden of proving such

5
reasonable possibility is squarely on the plaintiff.’ ” (Zelig v. County of Los
Angeles (2002) 27 Cal.4th 1112, 1126, quoting Blank v. Kirwan (1985) 39
Cal.3d 311, 318.)
“ ‘We apply the usual rules of statutory interpretation to the Labor
Code, beginning with and focusing on the text as the best indicator of
legislative purpose. [Citation.] “ [I]n light of the remedial nature of the
legislative enactments authorizing the regulation of wages, hours and
working conditions for the protection and benefit of employees, the statutory
provisions are to be liberally construed with an eye to promoting such
protection.” ’ ” (McLean v. State of California (2016) 1 Cal.5th 615, 622,
quoting Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004,
1026–1027.)
2. First, Second, and Third Causes of Action
Appellants argue that the court erred by sustaining the demurrer as to
the first, second, and third causes of action because respondent is not a
sovereign governmental entity falling within an exception to “the general rule
of statutory construction [whereby] governmental agencies are not liable
unless [that is] expressly stated.” We agree.
“[T]raditionally, ‘absent express words to the contrary, governmental
agencies are not included within the general words of a statute.’ ” (Johnson
v. Arvin-Edison Water Storage Dist. (2009) 174 Cal.App.4th 729, 736
(Johnson), quoting Wells v. One2One Learning Foundation (2006) 39 Cal.4th
1164, 1192 (Wells).) “However, under the ‘sovereign powers’ maxim,
government agencies are excluded only if their inclusion would result in an
infringement upon sovereign governmental powers.” (Johnson, at p. 738.)
“ ‘ “ ‘Where . . . no impairment of sovereign powers would result, the reason
underlying this rule of construction ceases to exist and the Legislature may

6
properly be held to have intended that the statute apply to governmental
bodies even though it used general statutory language. . . .’ ” ’ ” (Ibid.,
quoting Regents of University of California v. Superior Court (1976) 17 Cal.3d
533, 536.) “Nevertheless, ‘[w]hile the “sovereign powers” principle can help
resolve an unclear legislative intent, it cannot override positive indicia of a
contrary legislative intent.’ ” (Ibid., quoting Wells, supra, 39 Cal.4th at
p. 1192.)
Following Johnson, we conduct a three-part inquiry. First, we look for
“express words” that include governmental agencies “within the general
words of” the relevant statutes. (Wells, supra, 39 Cal.4th at p. 1193.) If not,
we look for “positive indicia” of a legislative intent to exempt such agencies
from those statutes. (Ibid.) Then, if no such indicia appear, we ask whether
applying the statutes to respondent “would result in an infringement upon
sovereign governmental powers.” (Id. at p. 1192.) Accordingly, because the
statutes underlying the first, second, and third causes of action 6 do not
expressly include governmental agencies, we proceed to the second part of the
Johnson inquiry: asking whether there are “positive indicia” of legislative
intent to exempt respondent.
a. Positive Indicia of Contrary Legislative Intent
Respondent discerns such indicia in subdivisions (a)(2)(C) and (m) of
the enabling statute: The former defines “[h]ospital authority” as a “public
agency,” and the latter provides that “a transfer of control or ownership of the
medical center shall confer onto the hospital authority all the rights and

6 Those statutes are sections 226.7 (mandated meal, rest, or recovery
periods), 512 (meal periods), 1174 (record-keeping duties of employers),
1174.5 (failure to maintain records), and 1175 (misdemeanor status of certain
section 1174 violations). The Wage Order is codified in the California Code of
Regulations, title 8, section 11050, and similarly lacks any explicit,
categorical application to government agencies.

7
duties set forth in state law with respect to hospitals owned or operated by a
county.”
However, subdivision (j) of the enabling statute designates respondent
as “a government entity separate and apart from the county, . . . not [to] be
considered to be an agency, division, or department of the county.” (Health &
Saf. Code, § 101850, subd. (j).) This stands in stark contrast to agencies
found in previous cases to be outside the ambit of the sovereign powers
doctrine. For example, the respondent water storage district in Johnson,
supra, 174 Cal.App.4th at page 733, was “ ‘a public agency of the state of
California.’ ” (Italics added.) The same is true for the California Department
of Corrections and Rehabilitation—another state agency. (California
Correctional Peace Officers’ Assn. v. State of California (2010) 188
Cal.App.4th 646.) Here, far from identifying respondent with the state (or
one of its political subdivisions), respondent’s enabling statute actively
discourages such an identification. For that reason, we find in the portions of
the enabling statute cited by respondent no “positive indicia of a contrary
legislative intent.” (Wells, supra, 39 Cal.4th at p. 1193.)
As for the Wage Order, it provides an exemption for “employees directly
employed by the State or any political subdivision thereof, including any city,
county, or special district.” (Cal. Code of Regs., tit. 8, § 11050, subd. (1)(C).)
But respondent’s employees are not employed directly by the state or the
county; they are employed by “a hospital authority” created by the county
under authorization from the state. (Health & Saf. Code, § 101850, subd.
(a)(1).) Nor is respondent a special district like the “health care district[s]”
authorized by Health and Safety Code sections 32000 et seq. Indeed,
respondent’s enabling statute distinguishes respondent from these districts
by observing “that there is no general law under which [respondent]

8
authority could be formed.” (Health & Saf. Code, § 101850, subd. (a)(1).) In
short, the Wage Order’s express exemptions, mentioned above, are not indicia
of the Legislature’s intent to exempt respondent from liability under the
Wage Order.
Thus, because there are no “positive indicia of a contrary legislative
intent” in either the statutes or the Wage Order, we turn to the task of
applying the sovereign powers doctrine to respondent. (Wells, supra, 39
Cal.4th at p. 1193.)
b. Infringement Upon Sovereign Governmental Powers
Finally, there is the matter of whether any “infringement of sovereign
governmental powers” would result from subjecting respondent to the Wage
Order or sections 226.7, 512, 1174, 1174.5, or 1175. (Wells, supra, 39 Cal.4th
at p. 1192.) Citing its enabling statute, respondent argues that doing so
would infringe upon the county’s ability to “fulfill its commitment to the
medically indigent, special needs, and general populations of Alameda
County,” “in a manner consistent with the county’s obligations under Section
17000 of the Welfare and Institutions Code.” (Health & Saf. Code, § 101850,
subd. (a)(1).) The latter law requires counties to “relieve and support all
incompetent, poor, indigent persons, and those incapacitated by age, disease,
or accident, lawfully resident therein, when such persons are not supported
and relieved by their relatives or friends, by their own means, or by state
hospitals or other state or private institutions.” (Welf. & Inst. Code, § 17000.)
As our colleagues in the Third District recently observed, however,
“[p]overty alleviation” under Welfare and Institutions Code section 17000 “is
not a core government function that cannot be delegated to the private
sector.” (The Community Action Agency of Butte County. v. Superior Court
(2022) 79 Cal.App.5th 221, 239.) Although Welfare and Institutions Code

9
section 17000 refers to “state hospitals” as well, it presupposes that much
poverty will be alleviated by a variety of non-governmental actors—relatives,
friends, and private institutions—before any remaining poverty is to be
addressed by the county. Respondent has failed to draw any principled
distinction between powers wielded by itself, on one hand, and those that
might be wielded by a private institution to whom the county has delegated
its function of poverty alleviation, on the other. It has therefore failed to
implicate any sovereign governmental powers.
In sum, subjecting respondent to liability for the first, second, and third
causes of action would not infringe upon any sovereign governmental powers.
Thus, the trial court erred by finding that respondent was not included
within the statutes underlying those causes of action and in sustaining the
demurrer as to those claims. 7
3. The Fifth and Sixth Causes of Action
Appellants argue that the trial court erred in sustaining the demurrer
as to their fifth and sixth causes of action because respondent is not an

7 Our conclusion in this respect is not disturbed by the Fourth District’s
recent decision in Allen v. San Diego Convention Center Corp., Inc. (2022) 86
Cal.App.5th 589 (Allen), holding that the respondent convention center’s
“public entity” status rendered several Labor Code provisions inapplicable.
In Allen, the respondent was “defined by the City of San Diego’s municipal
code as part of the city” and was “an agent of the City of San Diego.” (Id. at
p. 600.) Here, as we have already noted, respondent’s enabling statute
provides that respondent “shall be a government entity separate and apart
from the county, and shall not be considered to be an agency . . . of the
county.” (Health & Saf. Code, § 101850, subd. (j).) Similarly, under Chapter
2.120.030 of the Alameda County Code, respondent is “not to be an agent of
the county except where specifically provided.”

10
exempt “municipal corporation” for the purposes of section 204 (requiring
that employers timely pay wages semimonthly). We agree.
Section 220, subdivision (b), provides that section 204 does “not apply
to the payment of wages of employees directly employed by any county,
incorporated city, or town or other municipal corporation.” Because it is
beyond dispute that respondent is not a county, incorporated city, or town, we
turn to the question of whether it is a “municipal corporation” in the relevant
sense.
In Gateway Community Charters v. Spiess (2017) 9 Cal.App.5th 499,
506, the Third District set forth “multiple crucial characteristics that are
common to municipal and quasi-municipal corporations.” These include “the
power to acquire property through eminent domain,” possession of a
geographical jurisdiction and the power to “impose taxes and fees upon those
who live within” it, “independent regulatory or police powers,” and a “board of
directors . . . elected by the public.” (Ibid.) The respondent water storage
district in Johnson, supra, 174 Cal.App.4th at page 741, qualified as a
municipal corporation in part because its “powers include[d] setting tolls and
charges for the use of water, issuing bonds, and acquiring property through
eminent domain.” Respondent has none of the characteristics discussed in
Gateway and lacks any powers analogous to the ones discussed in Johnson.
In short, there is no reason to ascribe to respondent the status of a “municipal
corporation” within the meaning of section 220, subdivision (b).
In sum, the trial court erred in sustaining the demurrer as to the fifth
and sixth causes of action. 8

Because we reverse the order as to the fifth cause of action on these
8

grounds, we do not reach appellant’s contention that this claim alleged a
minimum wage violation, which “expressly appl[ies] to public entities.”

11
 4. Fourth Cause of Action
Appellants argue that the trial court erred in sustaining the demurrer
as to the fourth cause of action because respondent is not an “other
governmental entity” within the meaning of section 226. We disagree.
Section 226, subdivision (a), requires employers to provide employees
with “an accurate itemized statement in writing showing” the employee’s
wages and hours worked, along with other information. Subdivision (i)
exempts from this requirement “the state, . . . any city, county, city and
county, district, and “any other governmental entity.” (§ 226.)
“ ‘Under settled canons of statutory construction, in construing a
statute we ascertain the Legislature’s intent in order to effectuate the law’s
purpose. [Citation.] We must look to the statute’s words and give them
“their usual and ordinary meaning.” [Citation.] “The statute’s plain meaning
controls the court’s interpretation unless its words are ambiguous.”
[Citations.]’ ” (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 527.)
The plain meaning of “other governmental entity” is expansive: An
entity is anything “that has a real existence,” while “governmental” means
“[o]f or relating to (a) government.” (Oxford English Dict. (2d ed. 1989).)
Here, there is little doubt as to respondent’s existence. As for its relationship
to the government, respondent was established by the government of
Alameda County, an act which required special authorization from the state
Legislature. (Health & Saf. Code, § 101850.) It also bears “all the rights and
duties set forth in state law with respect to hospitals owned or operated by a
county.” (Id., subd. (m).) Consequently, while we have held that respondent
is not a sovereign governmental agency or a “municipal corporation” under
section 220, there is no reason to doubt that it is a “governmental entity” of
some kind.

12
 Appellants urge us to read the term “other governmental entity” to
“include only sovereign governing entities,” but cites no authority that would
justify this departure from applying the broader plain meaning. As
appellants acknowledge, Gateway, supra, 9 Cal.App.5th at page 502, was
concerned with the meaning of “other municipal corporation” under section
220, not “other governmental entity” under section 204. Because the plain
meaning of “other governmental agency” is more capacious than that of
“other municipal corporation,” we decline appellants’ invitation to conflate
the two.
In sum, the demurrer was properly sustained as to the fourth cause of
action.
5. Seventh Cause of Action (PAGA)
Respondent’s demurrer as to the PAGA claim was sustained by the
trial court on three grounds: (1) “PAGA applies to claims against a ‘person’,” a
category from which section 18 excludes respondent; (2) “a PAGA claim is
derivative of the underlying statutory violation,” but respondent’s “public
agency” status exempts it from the relevant statutes; and (3) “as a public
agency,” respondent is “not liable for damages imposed by way of punishing
the defendant, such as PAGA civil penalties. (See Government Code, § 818.)”
As we have already shown, the trial court’s order is mistaken as to the second
ground because respondent’s public agency status does not shield it from
liability for at least five of the statutory violations alleged in the first
amended complaint. Therefore, only the trial court’s first and third grounds
remain to be addressed below.
a. Section 18
“In 2003, citing inadequate funding for enforcement of labor laws, the
Legislature enacted PAGA to ‘authorize[ ] an employee to bring an action for

13
civil penalties on behalf of the state against his or her employer for Labor
Code violations committed against the employee and fellow employees, with
most of the proceeds of that litigation going to the state.’ (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 360 [abrogated on
another ground by Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct.
1906, 1924].) The statute was intended ‘ “to punish and deter employer
practices that violate the rights of numerous employees under the Labor
Code.” ’ . . . ([Iskanian, at p. 360, 173 Cal.Rptr.3d 289, 327 P.3d 129].)”
(Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746,
759–760.)
To that end, “[f]or all provisions of [the Labor Code] except those for
which a civil penalty is specifically provided,” section 2699, subdivision (f),
establishes “a civil penalty for a violation of these provisions, as follows: [¶]
(1) If, at the time of the alleged violation, the person does not employ one or
more employees, the civil penalty is five hundred dollars ($500). [¶] (2) If, at
the time of the alleged violation, the person employs one or more employees,
the civil penalty is one hundred dollars ($100) for each aggrieved employee
per pay period for the initial violation and two hundred dollars ($200) for
each aggrieved employee per pay period for each subsequent violation. [¶]
(3) If the alleged violation is a failure to act by the Labor and Workplace
Development Agency, or any of its departments, divisions, commissions,
boards, agencies, or employees, there shall be no civil penalty.” (§ 2699, subd.
(f), italics added.) “For purposes of this part, ‘person’ has the same meaning
as defined in Section 18.” (Id., subd. (b).)
Under section 18, a “person” is “any person, association, organization,
partnership, business trust, limited liability company, or corporation.”
Where a defendant is a “public entity,” it “does not fit this definition of

14
person.” (Sargent v. Board of Trustees of California State Univ. (2021) 61
Cal.App.5th 658, 672.) Here, as discussed above, respondent is a public
entity of some sort and therefore is not a “person” for purposes of PAGA.
However, PAGA’s “person” requirement is limited to statutory violations
subject to the default penalties set forth above in section 2699, subdivision (f);
it does not apply to those statutory violations “for which a civil penalty is
specifically provided.”
Here, a civil penalty is specifically provided for by at least two of the
statutes underlying appellants’ class action claims. Section 210, subdivision
(a)(1), for example prescribes “[f]or any initial violation,” a civil penalty of
“one hundred dollars ($100) for each failure to pay each employee.” Section
225.5, subdivision (a), is nearly identical in this respect, establishing “[f]or
any initial violation” a $100 civil penalty “for each failure to pay each
employee.” Notwithstanding section 18, then, a PAGA claim would lie for at
least two of the statutory violations alleged in the first amended complaint. 9
For that reason, section 18 provides no ground for sustaining the demurrer as
to the seventh cause of action.

9 Appellant asserts in passing that a third such statute is section
1194.2. That law allows for the recovery of liquidated damages “[i]n any
action under Section 98, 1193.6, 1194, or 1197.1 to recover wages because of
the payment of a wage less than the minimum wage fixed by an order of the
commission or by statute.” (§ 1194.2, subd. (a).) And indeed, those liquidated
damages “are in effect a penalty equal to the amount of unpaid minimum
wages.” (Martinez v. Combs (2010) 49 Cal.4th 35, 48, fn. 8.) But appellant
has not attempted to show that this penalty is a “civil penalty” within the
meaning of section 2699, subdivision (f). (Italics added.) In any event, the
fact that PAGA claims would lie for violations of sections 210 and 225.5 is
dispositive, so we do not reach the question of whether “liquidated damages”
under section 1194.2 are a “civil penalty” under section 2699, subdivision (f).

15
 b. Government Code Section 818
Finally, there is the trial court’s citation of Government Code section
818, which provides that “a public entity is not liable for . . . damages
imposed primarily for the sake of example and by way of punishing the
defendant.” As appellant rightly notes, however, PAGA penalties are not
punitive damages. Like the Civil Code section 52 penalties found not to be
punitive damages in Los Angeles County Metro. Transportation Auth. v.
Superior Court (2004) 123 Cal.App.4th 261, 271, PAGA penalties provide an
“economic incentive” and “the means to retain counsel to pursue perpetrators
under the statute.” More generally, the “primary purpose” of civil penalties
“is to secure obedience to statutes and regulations imposed to assure
important public policy objectives.” (Kizer v. County of San Mateo (1991) 53
Cal.3d 139, 147–148.) A meritorious PAGA claim serves precisely the same
purpose because the “PAGA plaintiff acts ‘as the proxy or agent of the state’s
labor law enforcement agencies.’ ” (Wesson v. Staples the Office Superstore,
LLC, supra, 68 Cal.App.5th at page 760, quoting Arias v. Superior Court
(2009) 46 Cal.4th 969, 986.)
Consequently, because PAGA penalties are not punitive damages,
section 818 presents no obstacle to appellants’ seventh class action claim.
III. DISPOSITION
We affirm the order as to the fourth cause of action and reverse it as to
the first, second, third, fifth, sixth, and seventh. On remand, the trial court
shall enter a new order overruling the demurrer as to the first, second, third,
fifth, sixth, and seventh causes of action in the first amended complaint.

16
 _________________________
Wiseman, J. *

We concur:

_________________________
Jackson, P.J.

_________________________
Burns, J.

Stone v. Alameda Health System (A164021)

* Retired Associate Justice of the Court of Appeal, Fifth Appellate
District, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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Tamelin Stone et al. v. Alameda Health System
(A164021)

Trial Court: Alameda County

Trial Judge: Hon. Noel Wise

Attorneys:
Law Offices of David Y. Imai and David Y. Imai for Plaintiffs and Appellants.

Renne Public Law Group, Ryan P. McGinley-Stempel, Geoffrey Spellberg and
Anastasia Bondarchuk for Defendant and Respondent.

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