Gateway Community Charters v. Spiess

Filed 3/8/17
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----

GATEWAY COMMUNITY CHARTERS, C078677

Plaintiff and Appellant, (Super. Ct. No. 34-2013-
00149018-CU-PT-GDS)
v.

HEIDI SPIESS,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Sacramento County,
Christopher E. Krueger, Judge. Affirmed.

Young, Minney & Corr, Paul C. Minney, James E. Young, William J. Trinkle and
Rachel B. Tillman for Plaintiff and Appellant.

Procopio, Cory, Hargreaves & Savitch, Wendy L. Tucker; California Charter
Schools Association, Ricardo J. Soto, Julie Ashby Umansky and Phillipa L. Altmann for
California Charter Schools Association as Amici Curiae on behalf of Plaintiff and
Appellant.

Outten & Golden, Jennifer S. Schwartz and Menaka N. Fernando for Defendant
and Respondent.

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 In this appeal, we are called upon to answer a novel question of statutory
interpretation: whether Gateway Community Charters (Gateway), a nonprofit public
benefit corporation that operates charter schools, is an “other municipal corporation” for
purposes of Labor Code section 220, subdivision (b) (hereafter section 220(b)),1 thereby
exempting it from assessment of waiting time penalties described in section 203. We
conclude it is not; therefore, we affirm the judgment of the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

Gateway is a California nonprofit public benefit corporation that operates public
charter schools, including the school at which Heidi Spiess worked as an at-will
employee. Gateway was the statutory “exclusive public school employer” of all the
employees at the charter school, including Spiess. Following her termination, Spiess
filed a claim with the labor commissioner alleging Gateway failed to pay timely her
wages due and owing as required by section 201. In its decision awarding Spiess $640 in
wages, $128 in liquidated damages, $105.20 in interest, and $8,538 as a penalty pursuant
to section 203, the labor commissioner expressly concluded Gateway did not qualify as
an “ ‘other municipal corporation’ ” under section 220(b).2

1 Undesignated statutory references are to the Labor Code.

2 Though the position of the labor commissioner may be persuasive authority as to an
issue within its purview where the labor commissioner takes a consistent stance as to that
issue, where, as here, the labor commissioner has not taken a consistent position, as
demonstrated by the cases presented by Gateway in exhibits 1 and 5 of its request for
judicial notice, its interpretation is not entitled to “ ‘significant deference.’ ” (Murphy v.
Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105, fn. 7.) Therefore, we
grant Gateway’s request for judicial notice as to those two exhibits; we deny the request
as to the other exhibits because they are not facially relevant to the instant case.
Additionally, in light of its inconsistent position on this issue, we proceed with our
analysis without deference to the labor commissioner’s decision.

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 Gateway appealed that decision to the trial court pursuant to section 98.2, claiming
it was exempt from section 203 penalties as an “other municipal corporation” pursuant to
section 220(b). Following a trial de novo, the trial court too entered judgment finding
that Gateway is not an “other municipal corporation” for purposes of section 220(b) and
was not exempt from paying waiting time penalties pursuant to section 203. It ordered
Gateway to pay Spiess $640 in wages, $128 in liquidated damages, $105.20 in interest,
and $8,538 in waiting time penalties, plus costs, interest, and attorney fees.

DISCUSSION

Gateway contends it qualifies as an “other municipal corporation” for purposes of
section 220(b), thereby exempting it from the assessment of waiting time penalties as
described in section 203. Section 220(b) provides that the waiting time penalty codified
in section 203, subdivision (a) does not apply “to the payment of wages of employees
directly employed by any county, incorporated city, or town or other municipal
corporation.” (§ 220(b).) Contrary to Gateway’s contention, we conclude Gateway is not
an “other municipal corporation” for purposes of the statutory exemption from waiting
time penalties codified in section 220(b).

As we have frequently explained, “ ‘[o]ur fundamental task in construing’ . . . any
legislative enactment[] ‘is to ascertain the intent of the lawmakers so as to effectuate the
purpose of the statute.’ [Citation.] We begin as always with the statute’s actual words,
the ‘most reliable indicator’ of legislative intent, ‘assigning them their usual and ordinary
meanings, and construing them in context. If the words themselves are not ambiguous,
we presume the Legislature meant what it said, and the statute’s plain meaning governs.
On the other hand, if the language allows more than one reasonable construction, we may
look to such aids as the legislative history of the measure and maxims of statutory
construction. In cases of uncertain meaning, we may also consider the consequences of a
particular interpretation, including its impact on public policy.’ ” (Even Zohar

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Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830,
837-838.)

The term “other” is inherently ambiguous. (Zumbrun Law Firm v. California
Legislature (2008) 165 Cal.App.4th 1603, 1619.) Thus, to assist us in the interpretation
of the phrase in question here—“other municipal corporation”—we turn to the related
maxims of construction of noscitur a sociis (“literally, ‘it is known from its associates’ ”)
and ejusdem generis (“literally, ‘of the same kind’ ”). (California Farm Bureau
Federation v. California Wildlife Conservation Bd. (2006) 143 Cal.App.4th 173, 189.)
“Noscitur a sociis . . . means that a word may be defined by its accompanying words and
phrases, since ‘ordinarily the coupling of words denotes an intention that they should be
understood in the same general sense.’ [Citation.] Ejusdem generis . . . means that where
general words follow specific words, or specific words follow general words in a
statutory enumeration, the general words are construed to embrace only things similar in
nature to those enumerated by the specific words.” (Ibid.)

Here, the specifically listed words that precede “other municipal corporation” are
“any county, incorporated city, or town.” (§ 220(b).) As “other” is an “inherently
relational” term, its use suggests that the previously referenced entities in the sequence
share the same characteristic or characteristics as the entity mentioned immediately
thereafter, that is those of a “municipal corporation.” (See People v. Hubbard (2016)
63 Cal.4th 378, 387.) We must then ascertain what key characteristics are common to a
“county, incorporated city, or town” that another entity must possess to enable it to be
characterized as an “other municipal corporation.”

Gateway relies on Division of Labor Law Enforcement v. El Camino Hosp. Dist.
(1970) 8 Cal.App.3d Supp. 30 (El Camino) in support of its claim that it is an “other

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municipal corporation.”3 El Camino was primarily concerned with whether the term
“other municipal corporation” should be read strictly—thereby limiting it to incorporated
cities or towns—or more broadly—to include public or quasi-municipal corporations.
(El Camino, supra, at p. Supp. 35.) It concluded only the broad interpretation was
reasonable and would give effect to all language included in the provision. (Ibid.) In
reaching this conclusion, El Camino further noted that the “ ‘characteristic feature of the
municipal corporation, as that term is used in its strict or proper sense, is the power and
right of local self-government,’ ” and that “ ‘quasi-municipal corporations are public
agencies created or authorized by the Legislature to aid the state in some form of public
or state work, other than community government.’ ” (Id. at p. Supp. 33.) Finally, it held,
without further analysis, that the public hospital district in question was a quasi-
municipal corporation that qualified for purposes of section 220(b) as an “other municipal
corporation,” thereby exempting it from waiting time penalties. (El Camino, at
pp. Supp. 33, 36.)

Gateway also relies on Kistler v. Redwoods Community College Dist. (1993)
15 Cal.App.4th 1326. Relying on El Camino without any additional analysis, Kistler
concluded that the community college district at issue was “a ‘municipal corporation’ ”
for purposes of section 220(b). (Kistler, at p. 1337; see Ed. Code, § 70900 et seq.
[powers, governance, and regulation of community college districts].)

Based on El Camino and Kistler, one might deduce, as Gateway and amicus curiae
California Charter Schools Association (CCSA) appear to do, that the only showing that
must be made to qualify as a quasi-municipal corporation or “other municipal
corporation” for purposes of section 220(b), is that (1) the entity was created or

3 We note that this case, though persuasive, is not binding precedent as it comes from the
appellate division of a superior court. (Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d
774, 782, fn. 9.)

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authorized by the Legislature, and (2) it performs some kind of public or state work. We
disagree with that deduction, however. The entity at issue in El Camino, a public hospital
district, bore other characteristics reminiscent of a municipal corporation that are not
present here and that were not expressly discussed in El Camino. (See Health & Saf.
Code, § 32000 et seq. [powers, governance, and regulation of local health care or hospital
districts].) The same is true of the community college district at issue in Kistler. These
characteristics were described in some detail in Johnson v. Arvin-Edison Water Storage
Dist. (2009) 174 Cal.App.4th 729 (Johnson), which considered whether a water storage
district qualified as an “other municipal corporation” for purposes of section 220(b).

Johnson began by noting that in other contexts irrigation and water districts had
been deemed municipal corporations, and that a water storage district provided the same
principal function and bore no essential difference from irrigation or water districts.
(Johnson, supra, 174 Cal.App.4th at p. 741.) Johnson detailed the identifying
characteristics of these entities, explaining that “water storage districts are governed by
elected boards of directors that have regulatory and police powers to operate facilities for
storage and distribution of water,” including the power to “set[] tolls and charges for the
use of water, issu[e] bonds, and acquir[e] property through eminent domain.” (Ibid.)
They are subject to open meeting laws and their records are subject to public disclosure.
(Ibid.) “Thus, water storage districts perform an essential governmental function for a
public purpose, i.e., the development, preservation and conservation of water for the
beneficial use of the district’s inhabitants [citation], through an elected board of directors
with regulatory powers. As such, water storage districts qualify as other municipal
corporations under section 220, subdivision (b).” (Ibid.)

Johnson thus makes clear that while the performance of “an essential
governmental function for a public purpose” is crucial to determining whether an entity is
an “other municipal corporation,” it is not the only factor to be considered. (Johnson,

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supra, 174 Cal.App.4th at p. 741.) We must also consider, for example, whether the
entity is governed by an elected board of directors; whether the entity has regulatory or
police powers; whether it has the power to impose taxes, assessments, or tolls; whether it
is subject to open meeting laws and public disclosure of records; and whether it may take
property through eminent domain.

Gateway and amicus curiae CCSA rely on El Camino and on the language of
Johnson highlighting the importance of whether the entity provides a public purpose to
contend that it should be considered an “other municipal corporation.” We are not
persuaded. We acknowledge Gateway undoubtedly provides an essential governmental
function, in that it provides public education through the charter schools it operates. It is
also subject to the open meeting laws of the Ralph M. Brown Act and the California
Public Records Act. (Gov. Code, §§ 54950-54952, 6250 et seq.; see Yoffie v. Marin
Hospital Dist. (1987) 193 Cal.App.3d 743, 748-749.) These factors are in its favor.

However, Gateway does not have the power to acquire property through eminent
domain; it may not impose taxes and fees upon those who live within its geographical
jurisdiction, indeed it has no geographical jurisdiction but exists pursuant to its charter; it
has no independent regulatory or police powers but remains subject to the limitations of
its charter throughout its existence; and its board of directors is not comprised of
members elected by the public. Without these multiple crucial characteristics that are
common to municipal and quasi-municipal corporations, we cannot conclude Gateway, a
nonprofit public benefit corporation, is an “other municipal corporation” for purposes of
section 220(b). In truth, without the publicly elected board, the geographical
jurisdictional boundary, and the power to forcefully raise funds or acquire property from
people within its geographical jurisdiction, Gateway bears little resemblance to a
“county, incorporated city, or town” or to the quasi-municipal districts that have been
deemed to qualify as “other municipal corporations” (for purposes of section 220(b)), i.e.,

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public school districts, hospital districts, and water storage districts. Therefore, it does
not appear the Legislature intended nonprofit public benefit corporations operating
charter schools to be exempt from waiting time penalties as “other municipal
corporations” pursuant to section 220(b).

Nor are we persuaded by Gateway and CCSA’s reliance on specific statutory
designations naming charter schools “part of the Public School System” (Ed. Code,
§ 47615), as “school districts” for funding purposes (Ed. Code, § 47612, subd. (c)), and
as “exclusive public school employers” for collective bargaining purposes (Ed. Code,
§ 47611.5; Gov. Code, § 3540.1, subd. (k)) as evidence that the Legislature intended
charter schools to be deemed “other municipal corporations,” just as public school
districts are (El Camino, supra, 8 Cal.App.3d at pp. Supp. 34, 36 [public school district is
public corporation or quasi-municipal corporation]). Even setting aside that these
express, specific, and limited statutory designations are in other codes and for other
purposes not at issue here, this position is untenable given that for a variety of other
purposes, charter schools are treated differently than public school districts. Charter
schools are expressly permitted to opt out of various regulations controlling public school
employment (Ed. Code, §§ 47605, 47611.5), including, for example, teacher tenure rules
(Ed. Code, § 44929.21, subd. (b)), presuspension or dismissal notice and hearing
requirements (Ed. Code, § 44934), a right to continued employment (see Ed. Code,
§ 44955), and employment of only credentialed teachers (Ed. Code, § 47605, subd. (l)).
Thus, though charter schools in some ways and for some purposes are treated as public
school districts, for other purposes they are not.

Additionally, the Education Code has been amended, as highlighted by Gateway
and CCSA, to expressly treat charter schools like school districts for purposes of payment
methods (i.e., over 10, 11, or 12 months, regardless of months worked). (Ed. Code,
§§ 45038-45039.) However, that the statutes were amended to expressly identify charter

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schools separately from school districts is a further indication that charter schools are not
school districts for all purposes. (See Tuolumne Jobs & Small Business Alliance v.
Superior Court (2014) 59 Cal.4th 1029, 1038-1039 [“courts should give meaning to
every word of a statute and should avoid constructions that would render any word or
provision surplusage”].) Therefore, the statutory designations identified by Gateway and
CCSA are clearly not intended to render charter schools public school districts for all
purposes, nor is it likely charter schools actually desire to be treated as public school
districts for all purposes. Moreover, these arguments fail to address the underlying
question addressed above: that is, whether a charter school bears the same characteristics
as a municipal corporation that would suffice to qualify it as an “other municipal
corporation” for purposes of section 220(b).4

Finally, Spiess suggests the public policy demanding full and prompt payment of
earned wages (see Smith v. Superior Court (2006) 39 Cal.4th 77, 82) weighs against
finding Gateway to be an “other municipal corporation” exempt from assessment of
waiting time penalties. Gateway argues the public policy underlying the waiting time

4 For the same reason, we do not address the reasoning of Wells v. One2One Learning
Foundation (2006) 39 Cal.4th 1164 (nonprofit public benefit corporations operating
charter schools are “persons” for purposes of the California False Claims Act (Gov.
Code, § 12650 et seq.) and the unfair competition law (Bus. & Prof. Code, § 17200 et
seq.)), Knapp v. Palisades Charter High School (2007) 146 Cal.App.4th 708 (nonprofit
public benefit corporation is not a public entity for purposes of the Government Tort
Claims Act), Wright v. Compton Unified Sch. Dist. (1975) 46 Cal.App.3d 177 (a public
school district is a public entity for purposes of the Government Tort Claims Act (Gov.
Code, § 900 et seq.)), and Caviness v. Horizon Cmty. Learning Ctr., Inc. (9th Cir. 2010)
590 F.3d 806 (charter school operator not a state actor for purposes of 42 U.S.C. § 1983
action), cited by the parties. Whether an entity is a “person” subject to the California
False Claims Act or unfair competition law, or a “public entity” for purposes of the
Government Tort Claims Act, or a “state actor” for purposes of a civil rights lawsuit, is
inapposite to the question presented here—whether Gateway, a nonprofit public benefit
corporation operating a charter school, is an “other municipal corporation” for purposes
of section 220(b).

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penalty is inapplicable to it as a nonprofit public benefit corporation because it, contrary
to “private employers,” is not motivated by financial gain and therefore needs no
“disincentive . . . to pay final wages late.” (Pineda v. Bank of America, N.A. (2010)
50 Cal.4th 1389, 1400.) It further claims it should be exempt from the waiting time
penalty because such a penalty would “reduce the funds available to educate” because it
is funded (at least in part) by average daily attendance funds provided by the state. Such
policy arguments are best left to the Legislature to decide. (Cassel v. Superior Court
(2011) 51 Cal.4th 113, 124 [“Where competing policy concerns are present, it is for the
Legislature to resolve them.”].) Our role is merely to interpret the statute as written, not
to establish policy. (Los Angeles County Metropolitan Transportation Authority v.
Alameda Produce Market, LLC (2011) 52 Cal.4th 1100, 1112-1113.) If the Legislature
desires to exempt charter schools from the waiting time penalties, it can do so. But it
does not appear the Legislature so intended, for if it did it would have used clearer
language than that found in section 220(b) to express such an intent.

In conclusion, as described above, Gateway does not bear the defining
characteristics that qualify an entity as an “other municipal corporation” for purposes of
section 220(b). Accordingly, we conclude that Gateway is not an “other municipal
corporation” exempt from assessment of waiting time penalties, and we affirm the
judgment of the trial court.

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 DISPOSITION

The judgment is affirmed. Spiess is awarded her costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1), (2).) (CERTIFIED FOR PUBLICATION)

BUTZ , J.

We concur:

RAYE , P. J.

DUARTE , J.

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