To view this oral arguement click here. Please note that the arguement for this case ends at 33:18.

Summary

We are pleased and proud to share this recent decision from the CA 6th District Court of Appeal reversing the trial court’s grant of summary judgment against us. The State of California, through the California Military Department (aka CA National Guard), claimed that our client, a dual-status technician, could not bring his lawsuit in state court against the Adjutant General, as USERRA provides.

The State claimed, inter alia, our client was exclusively a Federal employee, and therefore needed to sue the United States in either the Merit Systems Protection Board or the Court of Federal Claims. The Court soundly rejected these arguments.

Transcript

Speaker 1:

All rise to the Court of Appeal for the Sixth Appellate District is now in session, acting presiding, Justice Honorable Patricia Bamattre-Manoukian, Associate Justice Honorable Allison M. Danner, and Associate Justice Honorable Charles E. Wilson.

Honorable Patricia Bamattre-Manoukian:

Good morning and be seated. We’ll be calling the cases one at a time today, and we will have a panel change on the third case. When I call your case, please stand and announce your appearance, and provide the court please with a time estimate. The first case is Park versus California Military Department.

Brian Lawler:

Good morning, Your Honor. Brian Lawler, on behalf of the appellant, Charles Park, we would like ten minutes for our [inaudible 00:03:16] and reserve five minutes for rebuttal if necessary.

John McLaughlin:

And good morning, Your Honor, John McLaughlin for the respondent, State Adjudent General, and if we could take the 15 minutes.

Honorable Patricia Bamattre-Manoukian:

That would be fine. So we are ready to proceed, counsel, at your convenience. And when you’re arguing you don’t have to wear your masks. It’s totally up to you.

Brian Lawler:

Thank you, Your Honor, I prefer not to. May I please the court? As I indicated, my name is Brian Lawler, I represent the appellant in this case, Charles Park. We have a unique set of facts to be sure. A rule status technician, Mr. Park is a National Guard rule status technician. Those terms are probably not thrown around this courtroom very often, but that does not change the fact that the case before us is actually pretty simple. And the statutory scheme that Congress enacted to protect all service members from discriminatory acts or violations of the Uniform Services Employment and Re-Employment Rights Act, USSERA, is clear, and Congress knew that there were enough dual status technicians, as they’re called, to specifically provide four remedies in case of violations of USSERA by their civilian employers.

In that case, like Mr. Park’s case, the civilian employer is the National Guard. California calls it the California Military Department, but it’s a National Guard. And specifically the defendant is the adjuvant general him or herself, in this case Major General Baldwin.

Congress is clear that a dual status technician by definition is both a state and a federal employee. Most of the time, he or she’s a federal employee, for the various benefits that are conferred to that person when filling his or her job as a technician. Congress is also clear that in an act for a violation of USSERA, the correct defendant is the adjuvant general. The adjuvant general is considered a state employer, and therefore any action for a violation of USSERA must go forth in state court.

There really is no ambiguity candidly, and statutory interpretation isn’t really required to determine that. That’s really all we’re here to determine, what court has jurisdiction to hear Mr. Park’s appeals?

Honorable Patricia Bamattre-Manoukian:

Well that was my question to you. We really only have one question today, right?

Brian Lawler:

Yes, ma’am.

Honorable Patricia Bamattre-Manoukian:

And that is, essentially does the state court have jurisdiction?

Brian Lawler:

Yes, ma’am. That is the only question.

Honorable Patricia Bamattre-Manoukian:

That’s the only question we have.

Brian Lawler:

Correct.

Honorable Patricia Bamattre-Manoukian:

Okay. And your position is, the state court has jurisdiction, we should reverse the trial court, and send it back?

Brian Lawler:

Correct.

Honorable Patricia Bamattre-Manoukian:

Okay. You’ve given us a couple of cases, McQueen and another case?

Brian Lawler:

McQueen and Staglin are Merit Systems Protection Board cases. McQueen’s an MSPB case, Staglin’s a federal circuit case, that hold unequivocally the MSPB, Merit Systems Protection Board, does not have jurisdiction over a dual status technician because his or her employer is the state. And Staglin says in the case of Hawaii, this case has to go forward in Hawaii State Court. And on June 29th of last year, this entire situation candidly was put to bed by the Supreme Court of the United States in Torres versus the Texas Department of Public Safety.

Honorable Patricia Bamattre-Manoukian:

Well that’s what you’re telling us. You’re telling us in your briefs and the additional cases that you’ve submitted, that the issue is clear. State Court has jurisdiction.

Brian Lawler:

That’s what we’re telling you.

Honorable Patricia Bamattre-Manoukian:

So how are we going to write this disposition? We reverse the trial court, and remand it for further proceedings because?

Brian Lawler:

Because the Supreme Court of the United States has held that 38 US code, 4323B, which is USSERA’s jurisdiction provision, that reads, “Actions against state employers may be heard in state courts of competent jurisdiction, in accordance with the laws of the state.” Well, justice Breyer last June said, “No, that word is, ‘must’, and therefore they must be.” So candidly, I’m pretty done. Pending any questions from Your Honor, that’s all I have to say.

Honorable Patricia Bamattre-Manoukian:

So that’s what I was going to ask you, unless my colleagues have questions. It seems to me you may want to reserve the rest of your time. Your position’s pretty straightforward. State Court has jurisdiction period, based on the legal authority you’ve presented.

Brian Lawler:

Yes, ma’am.

Honorable Patricia Bamattre-Manoukian:

So if you want to reserve the rest of your time, we can hear from respondent at this point.

Brian Lawler:

That’s fine, Your Honor. Thank you.

Honorable Patricia Bamattre-Manoukian:

Thank you.

John McLaughlin:

Thank you, Your Honor. May it please the court, John McLaughlin, Deputy Attorney General appearing for the respondent, State Adjutant General in this case. So, as the court is notes, this is about jurisdiction, and about whether the state court has jurisdiction over this matter.

Honorable Patricia Bamattre-Manoukian:

So why doesn’t the state court have jurisdiction? The law seems pretty clear on that point, in my opinion.

John McLaughlin:

So the reasons that the state court does not have jurisdiction is, first of all, the Torres case, that the appellant cites, actually has nothing to do with our circumstances. This is not a case in which state sovereign immunity is the issue.

Instead, this is a case where federal sovereign immunity is the issue. Torres, the US Supreme Court case, from about two or three years ago, would be applicable if hypothetically we had a situation, say the highway patrol, a state employer, one of its officers, is also an Army reservist. The Army reservist goes on active duty, comes back, and either isn’t put into the same position, or is not accommodated, or some issue like that.

The CHP, the state, could not assert sovereign immunity as to a USSERA claim in that circumstance. That’s all well and good, but that’s not the circumstance we’re presented here with the appellant, Major Park. Major Park was a federal employee, a civilian technician, as they’re called. And the words thrown around for them are dual status.

And what dual status means, is not state employee, and federal employee, but rather federal employee and National Guardsman. Those are the two hats. He never wears the state employee hat. And so because of that, in looking at Park’s situation, what we are really dealing with, the analogy would be, a civilian employee of say the Internal Revenue Service, or the Homeland Security Department, who is a reservist, deploys on active duty, comes back, and asserts entitlement to the same pay and benefits rights that Major Park is asserting here.

The only way that Park can claim these entitlements is because he is a federal employee. And, this gets into what the US Supreme Court… I wanted to note one of the cases we cited in our brief, is actually currently pending reviewed by the US Supreme Court. And that’s the Ohio Adjutant General versus Federal Labor Relations Authority case, Sixth Circuit case 21F.4th 401. The US Supreme Court heard argument on that case earlier this year, and is likely to issue its decision this term, I assume before June.

But that’s a case also dealing with the authority of the State Adjutant General, and how it relates to this unique, what the Supreme Court is called, “Rare Bird,” in federal employment, the civilian technicians. California has about 1500 of these positions, thousands more sprinkled around the country.

And what Congress has said, just to begin with Congress… We have Congress, we have how the courts, mostly the federal courts, have interpreted this, and then we have federal regulations. In looking at how the Congress has addressed the employment position of these federal technicians… What Congress has said is, “They are an employee of the United States.” And that’s entitled 32 US Code Section 709 subsection E, an employee of the US. And they not only say that once, but they say that again in another section of the US Code in Title 10 of the US code, section 10, 216, subsection A-1, where Congress goes even further.

They say, “For purposes of this, and any other provision of law, these individuals are federal civilian employees.” And the courts who have looked at the role of the state adjutant generals, who are this unique function where they’re appointed by the governors, but they swear allegiance both to the governor and to the president. They’re also part of the national National Guard. They can be activated for federal duty. They can be sent on state duty. They wear two hats, depending on who they are dealing with in their employment chain.

Our state adjutant general has regular California state employees working for him. And those state employees would go through the box of tools that are applicable to state employees. If a state employee has a disciplinary issue, it goes to the California State Personnel Board. If there’s issues about their contracts, their union rights, it tends to go through the Department of Human Resources.

Their benefits go through CalPERS. All of that can go in a box and just be set aside in the situation of the appellant. For the appellant, the applicable control agencies tend to be how they’re referred to, are federal. They’re the Office of Personnel Management, they’re the Federal Defense Accounting Financial Service, back in Indianapolis that actually pays the appellant.

And what the courts have said in Lipscomb, which we cited, in Gillum, and also applicable to the current case, the Ohio case, pending before the Supreme Court, is the state adjutant general is really wearing the hat of a federal executive agency, in dealing with that federal employee, hiring them, firing them, and adjusting their pay and benefits claims.

And why that’s significance of Mr. Park’s situation, is that, “Federal employees,” Congress has said, “Cannot sue under USSERA in federal courts. They have to go through the administrative process provided by the Merit Systems Protection Board.” Or, potentially they can go through the Federal Court of claims. We’ve cited cases in our brief in which both of those options were pursued by federal employees.

So, because Major Park falls into that category, that is why it’s not proper in state courts. It really belongs in the federal system. And not only are we dealing with a federal employee… Basically a dispute between a federal employee, and his federal employer, over pay and benefits, but we’re dealing with federal money. His pay, his benefits, is through the federal government. And that gets into the practicalities of this case.

If this case were to go through to judgment, typically a monetary judgment against the state agency will go to the state controller. State controller will issue the check. In this instance, the state controller might very well say, “Why are we paying a federal employee’s wages? Isn’t this a gift of public funds at this point?” And well, he’s also praying for equitable relief. What if the Superior Court were to order… Well, the Federal Benefits Agency that controls these benefits, one of his claims has to do with his benefits, you have to allow him to make a contribution. What if that federal agency then says, “Wait a second, what jurisdiction do you have over us, to be ordering us to take these actions?”

Honorable Patricia Bamattre-Manoukian:

Well, that’s what this case is going to decide, right? You’ve asked us to decide the issue of jurisdiction. And if I’m correct here, within the State Military Department, there’s a human resources officer that worked with Major Park here. Is that right?

John McLaughlin:

That’s correct, Your Honor.

Honorable Patricia Bamattre-Manoukian:

Okay. And they work with the federal government obviously. And Major Park brought three issues having to do with differential pay, presidential leave, and contributions to his retirement account. And so the state did consult with the DFAS with respect to the federal retirement account. And part of that was worked out. Contributions were made by the federal government, but Major Park alleges he wasn’t able to make his contributions. But on the other two issues, it appears to me from the record, but correct me if I’m wrong, that the state did not confer with the federal government concerning differential pay and presidential leave.

John McLaughlin:

I believe that they did check with the Office of Personnel Management, or they certainly relied upon guidance from the Office of Personnel Management, identifying as looking at major park’s orders and seeing what code sections was he activated under, whether under those guidelines of the Federal Office of Personnel Management, whether those guidelines met that criteria.

And actually, how this relates to the broader federal issue, one of the cases cited, Adams versus Department of Homeland Security, was actually a case in which this issue of differential pay came forward. And in that case, someone making a very similar claim as to Major Park as to whether his duty qualified for differential pay under the broader federal wars on terrorism, the federal court there said, “No, it doesn’t meet that criteria.” And that individual was activated under the very same code section as Major Park. And the court in that case looked at the Office of Personnel Management guidelines, same ones being relied on here, and said, “Yeah, and it’s consistent with that.”

So another issue just to be concerned about, would be if a state superior court starts issuing orders inconsistent with positions being taken by the federal court on this issue, we could end up with a situation where California decides, yes, it does qualify. Nevada says, “No.” Arizona says, “All the time.” And maybe another state says, “Well, we don’t like sending our troops to that country, so no, we’re not going to do that.” And we end up with hodgepodge situations.

Honorable Patricia Bamattre-Manoukian:

But we don’t really have to decide all those issues. We just have to decide here whether or not the state court has jurisdiction. And your position is, I think simply stated, it’s the California HRO director that rejected the request for differential pay. It’s the same director who denied presidential leave, and it’s the same director who did consultation with the DFAS regarding the contributions. Your position is even understanding all those actions were taken by the state director that the state of California doesn’t have jurisdiction.

John McLaughlin:

Correct, Your Honor. And again, it goes to the hat that the state adjutant general is wearing, and in this case the state adjutant general’s employees, as their delegates, are wearing in regard to making decisions as to Major Park. The evidence tends to show, a way to think about it being a tap with water coming through it. If that’s the state adjutant general, and money coming through that tap, there’s handles controlling that, whether it’s hot or cold, whether the water flows. The evidence here is those handles are federal handles. They’re waiting on decisions from Indianapolis, from the federal agencies, and there’s no evidence showing that the state adjutant general has any authority to say, “No, we disagree with you with our control agencies.” And we’re just going to go ahead and say, “Yes, let’s give Mr. Park the money.” There’s no evidence that they have that right.

They are really a conduit. And that’s the way Congress set up the state adjutant general under Title 32, section 709, where individuals such as Major Park, they’re employees of, in his case the Department of the Army. But Congress has delegated the state adjutant general to be their employer, to be their hiring party, their firing party, if that be the case.

But with the way the federal courts have reviewed this, they’ve said that when the state adjutant general is wearing the hat, making those decisions, they’re a federal agency. And that brings us back again to that Title 10 section that I began with, that Congress provides that these dual status employees are federal employees for purposes of that, and every other provision of federal law. That’s the issue. And that’s what prevents the state court from having jurisdiction, because it would be essentially making an order, rendering a judgment, against a federal agency.

And apart from regulations, Congress, there’s nowhere appellant cites to where Congress waived federal sovereign immunity, as to state adjutant generals acting under their federal hats, making decisions about federal employees. And that’s the issue here. That’s why there’s no jurisdiction. USSERA, he can bring his claim. There’s no statute of limitations for a USSERA claim to be brought before the Merit Systems Protection Board, the federal equivalent of our state personnel board.

So, he can march in there and make that claim. There’s also, I believe the Dempsey case that we cited in our briefing, which indicated it didn’t even think a claim like this for differential pay was a USSERA claim at all. I’m sorry, the Downey versus United States case, 147, federal Claims 171, that was a reservist claim for differential pay. And the court there said, “Yes, we have jurisdiction over this, under the Federal Tucker Act,” because it’s essentially a claim over money owed.

And we don’t even see this as a USSERA claim. There’s no claim being made here that we’re not putting him back in the same position, that we’re singling him out for some adverse treatment. In fact, in this case, the only evidence is, we’re treating Major Park, as far as we know, because we’re just getting information from the federal government, the same as everybody else in his position, which analogies would be, employees of the Internal Revenue Service, or employees of Homeland Security.

Other federal agencies who are reservists go on active duty, come back, and assert these entitlements to pay and benefits. He’s falling under the same categories. And the money that would go into that, is federal money. And so, this is a very unique situation. California courts haven’t dealt with it very much. Federal courts have, but when they have, they have really focused on this distinction between what hat is the state adjutant general wearing? Whether in the Lipscomb case, we cited, the Gillum case, or the case pending before the US Supreme Court, which not the same scenario as ours, not having to do with state court jurisdiction, but rather, having to do with what is the state adjutant general’s role in collective bargaining, on behalf of the Federal Department of Defense, with these federal technicians who happen to be working in their-

John McLaughlin:

With these federal technicians who happen to be working in their state. And so it is a unique rare bird situation as I think the Supreme Court has referred to it as. There was also another Supreme Court case just to reference, I don’t think it came up in the briefing, but it was from 2022 called Babcock versus Kijakazi-

Honorable Patricia Bamattre-Manoukian:

So normally you need to include the case in your briefing. So do you want to conclude here? I think we’re understanding your position and we have read the briefs obviously both sides and we’ve considered all the points raised. So if you want to conclude, counsel.

John McLaughlin:

Thank you, Your Honor. And I apologize for bringing up that case. So in summary, Your Honor, this is a dispute between federal employee and federal employer over federal money. It belongs in the federal system and to the extent that appellant points to a few administrative decisions, for example, the McQueen decision, which is just an administrative law decision, not a precedential decision, was not appealed up to the federal circuit as it could have been. So it doesn’t have much weight. Those cases are wrong. Adding another wrong to it wouldn’t make it right. And that’s our case.

Honorable Patricia Bamattre-Manoukian:

Okay, thank you very much, counsel.

John McLaughlin:

Thank you. Thank you, Your Honor.

Honorable Patricia Bamattre-Manoukian:

So if you could just address some of the points raised, why shouldn’t Major Park go to the Merit Service Protection Board?

Brian Lawler:

And let’s correct the record, Lieutenant Colonel Park has since been promoted, so-

Honorable Patricia Bamattre-Manoukian:

I’m sorry, Lieutenant Colonel.

Brian Lawler:

Yes, ma’am. He was a major when we pled this-

Honorable Patricia Bamattre-Manoukian:

Okay, so Lieutenant Colonel, yes, park. Why shouldn’t he go to the Merit Service Protection Board?

Brian Lawler:

Merit Systems Protection Board. Sorry to correct your Honor. He can’t. And despite my esteemed colleagues’ reference to an administrative decision that was never appealed, conveniently forgets that the Staglin case is a federal circuit case and Staglin holds very clearly as do two other cases which we didn’t include. So I won’t mention them, that the Merit Systems Protection Board does not have jurisdiction over a dual status technicians use error claims, period. Analysis is over. They don’t.

And I want to bring up a couple of things that my colleague has kind of conveniently worked around bringing up this Title X that suggests that National Guard technicians are federal employees for all purposes. That’s completely not true. And I want to correct the record because both USERRA and the National Guard Technicians Act, which the state relies on so heavily, say the following, this is from the code of Federal Regs 20 CFR 1002.306, which we cite. “A National Guard technician is a state employee for USERRA purposes. Although considered a federal employee for most other purposes.”

The National Guard Technician’s Act says he’s a federal employee status, “but separate and distinct class of federal employee.” And the same statute, the National Guard Technicians Act, that the State of California relies on so heavily to suggest that we can’t possibly bring a case in state court, says he’s a federal employee for “some purposes employed by the state as in general.” Now we can look to all these acute cases, the Ohio National Guard case, which has absolutely nothing to do with USERRA and it simply characterizes the adjutant’s general dual status and in some cases they are federal. I get that. We understand that. The state has made our case for us quite nicely, most of the way saying he’s a federal employee and these are federal funds. We agree, absolutely, 100% unequivocally we agree. He is a federal employee. He’s employed by a state agency.

Honorable Patricia Bamattre-Manoukian:

So he’s also paid by the federal government.

Brian Lawler:

That’s the whole point. There’s no state comptroller that’s going to have to pay this judgment. It’s going to go through DFAS, the Defense Finance and Accounting Service, the same agency that pays him when he is on military-

Honorable Patricia Bamattre-Manoukian:

I know, but counsel’s concern was how can a state court judge order the federal government to pay-

Brian Lawler:

The state court-

Honorable Patricia Bamattre-Manoukian:

Your client.

Brian Lawler:

I’m sorry, Your Honor, I didn’t mean to interrupt you.

Honorable Patricia Bamattre-Manoukian:

It’s okay.

Brian Lawler:

The state court judge is going to order the California Military Department’s Human Resources office, the same one that denied him these benefits in the first place to go back to OPM, the Office of Personnel Management, and to go to DFAS, the Defense Finance and Accounting Service, and say, “Pay this man what he has owed the difference in pay between his GS-13 attorney advisor position as a civilian and his then Major in later Lieutenant Colonel pay on active duty.” That’s it. And the state’s attempt to kind of weave the Adams decision in here. That’s a merit decision. That is what the trial court in this case will ultimately have to decide, whether Lieutenant Colonel Park’s orders were qualifying and entitle him to the differential pay. That’s not before this court at all today.

And raising Adams is interesting because it is entirely a merits based decision. I would submit to the court that one person standing at the dais is pretty familiar with Adams because it’s my case. And we petitioned the Supreme Court for cert. We lost in the Merit Systems Protection Board. We lost at the federal circuit. We did not get a rehearing en banc, and the Supreme Court decided not to hear it. Dozens of other differential pay cases are going through the federal circuit right now to try and get Adams reversed. It’s a terrible decision. But that’s not before us today.

Honorable Patricia Bamattre-Manoukian:

But, sir, wouldn’t you agree though that your best language, I don’t want to use the word statute, it’s really from the regulations, actually the statute is not very clear.

Brian Lawler:

There is not-

Honorable Patricia Bamattre-Manoukian:

About-

Brian Lawler:

I’m sorry.

Honorable Patricia Bamattre-Manoukian:

No, no, but I wasn’t really ending a… But you get my point. I mean the federal regulations is not Congress. So you’re… Or am I wrong? Is the statute very clear?

Brian Lawler:

The statute does not… I mean the statute does say only, give me one second. The statute, 38 US code 4303 per four-am-Bravo, which is USERRA, says “In the case of a National Guard technician employed under 32 USC 709,” the Technicians Act, “the employer is the adjuvant general of the state.” That’s-

Honorable Patricia Bamattre-Manoukian:

Right. But that doesn’t answer the question-

Brian Lawler:

Well. Correct.

Honorable Patricia Bamattre-Manoukian:

That’s the question.

Brian Lawler:

So to clarify. So when Congress passed USERRA in 1994, it… And it’s the third statute since 1940 with the Selective Training Service Act. That is a long history of protecting service members when they volunteer or call to active duty and they have to leave their civilian employers. Congress has charged the Department of Labor with implementing, I think is the best word, USERRA. So Congress writes USERRA and the Department of Labor wrote the Code of Federal Regulations, 20 CFR 1002 et se. The way I explain it to people is it’s really a layperson’s explanation of USERRA. There are far more sections in 20 CFR 1002 than there are in USERRA and they break it down so conveniently and clearly… And I understand it’s not the statute but the quote I want to read is from 20 CFR 1002.305 Delta. “An action brought against the State Adjuvant General is considered an action against the state for determining which court has jurisdiction.” Candidly, that’s why when Your Honor asked, I sat down, I think we can just hang our hat on that passage right there. There really isn’t much more to discuss-

Honorable Patricia Bamattre-Manoukian:

I guess my point is when the State of California says Congress hasn’t spoken on this issue, I mean it’s a bit of a fair point in the sense that the regulations are not Congress. That’s all-

Brian Lawler:

That is a fair point. But I think we’re mincing works here. I think because Congress has empowered the Department of Labor to implement the regulations that explain the statute that Congress passed, tom-ay-to, tom-ah-to. Quite candidly, Your Honor.

Honorable Patricia Bamattre-Manoukian:

Maybe depending on what… That’s not really the question before us, but it can be a big difference, especially under this US Supreme Court.

Brian Lawler:

I think as I was asked when I first stood up, isn’t the only issue here determining which court has jurisdiction. I think that is clearly the only issue before this court today. I don’t really think there’s a lot of interpretation involved quite candidly, or I would use the whole ten minutes and start. So any further questions from the court?

Honorable Patricia Bamattre-Manoukian:

Yeah, I don’t hear any further questions. Thank you very much, Counsel.

Brian Lawler:

Thank you for your time, Your Honor.

Honorable Patricia Bamattre-Manoukian:

Thank you very much to both of you for your arguments today. We appreciate your observations and comments. We’ll submit the matter today and you’ll have a written decision within 90 days. Thank you.

John McLaughlin:

Thank you, Your Honor.