Department of Corrections & Rehabilitation v. State Personnel Bd.

Facts

The statutory framework. The California Fair Employment and Housing Act (FEHA) makes it “an unlawful employment practice, unless based upon a bona fide occupational qualification … [¶] (a) [f]or an employer, because of the race, … sex, … [or] age, … of any person, to refuse to hire or employ the person … or to discriminate against the person in compensation or in terms, conditions, or privileges of employment.’” (Mabry-Height, supra, 74 Cal.App.5th at p. 923, quoting Gov. Code, § 12940, subd. (a).) Because direct evidence of intentional discrimination is rare, California courts adjudicate disparate-treatment claims under the three-stage McDonnell Douglas burden-shifting framework adopted in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317. (Id. at pp. 923–924.)

The claimant and her qualifications. The real party in interest, Vickie Mabry-Height, M.D., is “an African-American female who was 52 years old in May 2008.” (Mabry-Height, supra, 74 Cal.App.5th at p. 913.) The Department of Corrections and Rehabilitation never seriously contested her credentials; the court noted that “[b]ecause Dr. Mabry-Height’s qualifications are not in question, we decline to recount her educational and employment background in any detail,” observing only that she was concurrently employed as a full-time medical consultant for the Department of Social Services and also worked for the Medical Board of California. (Id. at p. 914, fn. 2.) She applied, sat for the qualifying examinations, scored 95 percent and later 85 percent, and was placed on the eligibility list for physician/surgeon positions. (Id. at pp. 913–914.)

The three categories of alleged discrimination. The court confined its recitation to the three episodes Mabry-Height identified: “(1) May 2008, when she was told there were no vacant physician/surgeon positions in the Department’s southern region; (2) July through September 2008, when she was denied the opportunity to interview for vacant positions; and (3) October 2008, when her credentialing to work for the Department as a registry physician/surgeon was revoked.” (Mabry-Height, supra, 74 Cal.App.5th at pp. 913–914.) Only the second and third categories survived for decision; the agency carried its burden as to the first, where Dr. Barnett would have hired her for a central-region position had she been willing to relocate, and she was not. (Id. at pp. 915, 917–918.)

The failures to interview. In June 2008, Mabry-Height began working registry shifts for the Department through a third-party provider, seeing “approximately 575 patients” at Centinela State Prison between June and October. (Mabry-Height, supra, 74 Cal.App.5th at p. 915.) In July she told Dr. Ritter — the southern-region medical director and hiring authority — she was interested in an open position at Chuckawalla Valley State Prison (CVSP). “However, no one at the Department contacted her to schedule an interview.” (Id. at p. 915.) Four days after she expressed interest, the Department hired Dr. James Veltmeyer, “a Hispanic male between 21 and 39 years of age,” who had not completed residency until June 30, was not board-eligible until July, and whose application had specified he was “only interested in a position in the San Diego area.” (Id. at pp. 915–916.) A second CVSP position went to Dr. Patricia James, whose “qualifications were comparable to those of Dr. Mabry-Height.” (Id. at p. 916.) A Centinela position went to Dr. Ko, “an Asian male.” “Once again, Dr. Mabry-Height was not invited to interview for this position.” (Id. at p. 916.)

The credentialing revocation. In October 2008 the Department revoked Mabry-Height’s registry credentials. It first told her “‘authorization to hire [her] as a Physician and Surgeon is denied due to not meeting the [Department’s] requirements,’” then — when she appealed and asked which requirement — shifted to “‘adverse recommendations from CSP, and that [she] did not consistently meet the needs of [the Department].’” (Mabry-Height, supra, 74 Cal.App.5th at pp. 916–917.) The ALJ found these reasons “‘vague, ambiguous, and inconsistent with the stated objective purpose of credentialing,’” noting that Dr. Ritter testified the credentialing process “is a standard, objective verification process,” that nothing had changed about her license or board certification, and that “Dr. Ritter testified that he was unaware of any Department requirement Dr. Mabry-Height failed to meet.” (Id. at pp. 918–919.)

Procedural history

The matter wound through an unusually long administrative and judicial path. After an evidentiary hearing before ALJ Eileen T. Deimerly in March 2011, the ALJ first proposed sustaining the complaint, but the State Personnel Board remanded with directions to apply Guz; on remand the ALJ concluded Mabry-Height had failed to establish a prima facie case, and the Board approved that decision. (Mabry-Height, supra, 74 Cal.App.5th at p. 917.)

Mabry-Height obtained a writ from the Los Angeles County Superior Court in December 2012, which held that “‘[t]he ALJ’s application of the undisputed facts to the [Guz analytical framework] was erroneous’” because she “established a prima facie case of unlawful discrimination by producing evidence that she was not interviewed for positions for which she was well qualified and less-qualified persons were hired for those positions.” (Mabry-Height, supra, 74 Cal.App.5th at p. 917.) On the second remand, the ALJ accepted the prima facie case and turned to stage two, finding the Department rebutted the presumption as to the May 2008 failure to hire but not as to the failures to interview or the credentialing revocation. (Id. at pp. 917–918.) The Board adopted that decision in February 2014. (Id. at p. 919.)

The Department then petitioned the Sacramento County Superior Court (Chang, J.), which denied the petition, distinguishing Harris v. City of Santa Monica (2013) 56 Cal.4th 203 as inapposite where “‘the Board found in many instances [the Department] offered no evidence in support of any legitimate reasons for its actions.’” (Mabry-Height, supra, 74 Cal.App.5th at p. 922.) The Department appealed; the Court of Appeal affirmed in a unanimous opinion. (Id. at pp. 912, 931.)

Issue

The court narrowed the Department’s contentions to “the two that are dispositive of this appeal,” asking whether the Board abused its discretion by “(A) not requiring Dr. Mabry-Height to demonstrate by a preponderance of the evidence that discrimination was a substantial motivating factor in the Department’s challenged decisions, and (B) concluding the Department did not satisfy its stage-two burden of producing substantial evidence of legitimate, nondiscriminatory reasons for the challenged conduct.” (Mabry-Height, supra, 74 Cal.App.5th at p. 924.) The decisive sub-question was whether an employer discharges its stage-two burden of production when its hiring authorities testify only that they did not know why the claimant was not interviewed.

Holding

Reasoning

1. The standard of review favored the Board. Because the Personnel Board “is vested with quasi-judicial powers,” the reviewing court asks only whether substantial evidence supports the Board’s findings, “indulg[ing]” all presumptions and resolving conflicts “in favor of the Board’s decision.” (Mabry-Height, supra, 74 Cal.App.5th at pp. 922–923.) Critically, the appellate court “independently determines whether substantial evidence supports the [Board’s] findings, not the trial court’s conclusions,” reviewing pure questions of law de novo. (Id. at p. 923.) The operative question thus became whether the Board abused its discretion in finding the Department failed to carry its burden of production — a deferential frame that made the agency’s evidentiary vacuum dispositive.

2. The three-stage framework and the “legally mandatory” presumption. The court grounded its analysis in Guz. At stage one the plaintiff’s “‘not onerous’” prima facie burden requires only a showing that the employer’s unexplained actions make it “‘“more likely than not”’” that they rested on a prohibited criterion. (Mabry-Height, supra, 74 Cal.App.5th at p. 924.) Once made, “a presumption of discrimination arises,” which “‘though “rebuttable,” is “legally mandatory.”’” (Ibid.) The consequence is structural: “‘[i]f the trier of fact believes the plaintiff’s evidence, and if the employer is silent in the face of the presumption, the court must enter judgment for the plaintiff because no issue of fact remains in the case.’” (Ibid.) Only at stage two does the burden shift “to the employer to rebut the presumption by producing admissible evidence … that its action was taken for a legitimate, nondiscriminatory reason.” (Id. at pp. 924–925.) If — and only if — the employer carries that burden does the presumption “disappear[]” and the plaintiff proceed to stage three. (Id. at p. 925.)

3. Harris’s substantial-factor standard belongs to stage three, not stage two. The Department leaned on Harris v. City of Santa Monica, decided a month after the Board’s second remand, arguing it “‘increased the burden by requiring plaintiffs to prove that “an illegitimate criterion,” i.e., discrimination, was a substantial motivating factor.’” (Mabry-Height, supra, 74 Cal.App.5th at p. 919.) The court agreed the substantial-factor burden exists “‘and must be carried by the plaintiff,’” but held “it applies to the third stage of the McDonnell Douglas analysis, i.e., only where a prima facie case … has been made … and the employer successfully rebuts the presumption.” (Id. at p. 926.) Walking through Harris — the pregnant probationary bus driver fired two days after submitting a doctor’s note, where the city undisputedly produced a legitimate reason (preventable accidents and missed shifts) — the court explained that Harris itself was a stage-three case: “the fact that the case went to trial before a jury indicates that stage three of the analysis was underway.” (Id. at p. 927.) The court accepted the Department’s narrower point that the substantial-factor standard “‘is not limited to mixed motive cases,’” citing California Code of Regulations, title 2, section 11009, subdivision (a), and CACI Nos. 2500 and 2507. (Id. at p. 927.) But it drew the line that mattered: “this does not mean the plaintiff must establish causation by this standard before the employer is required to supply evidence of a legitimate, nondiscriminatory reason.” (Id. at p. 928.) Sequence governs — the employer must produce before the plaintiff must persuade.

4. “I don’t know” is not evidence of a nondiscriminatory reason. This is the heart of the opinion. As to the CVSP position filled by Dr. Veltmeyer — hired “just four days after” Mabry-Height expressed interest, before he had finished residency or become board-eligible — the court conceded the Department “could have had legitimate, nondiscriminatory reasons.” (Mabry-Height, supra, 74 Cal.App.5th at pp. 929–930.) But hypotheticals are not proof: “no one with hiring authority at the Department testified that this was actually what happened. The only evidence on the matter … is Dr. Ritter’s testimony that he did not know why Dr. Mabry-Height was not interviewed. That is not sufficient.” (Id. at p. 930.) The same defect doomed the Department as to Dr. James — whose qualifications were “comparable” — and as to Dr. Ko, where “both Dr. Ritter and Dr. Barreras were unaware of any legitimate reasons for the failure to interview her.” (Id. at p. 930.) The court underscored that timing arguments and résumé comparisons advanced for the first time in briefing were not enough: “Had someone with hiring authority testified that this was the actual reason, we might well conclude the Department carried its stage-two burden of production. But no one did.” (Ibid.) From this the court distilled its rule of decision. (Ibid.)

5. The credentialing revocation failed for a related reason — shifting, contradicted explanations. Here the Department had offered reasons, but they were “‘vague, ambiguous, and inconsistent with the stated objective purpose of credentialing,’” and were “contradicted by the testimony offered at the hearing.” (Mabry-Height, supra, 74 Cal.App.5th at pp. 918, 931.) No one from the credentialing unit testified that the proffered reasons were the actual reasons; Dr. Barreras — who reported the cafeteria incident — nonetheless “considered [Dr. Mabry-Height] to be a capable physician,” and told the registry the credential was revoked because she could not work three days a week, not for any failure to meet requirements. (Id. at pp. 918–919, 931.) On that record the court “cannot conclude there was an abuse of discretion.” (Id. at p. 931.)

6. The burden-of-persuasion footnote. The court rejected the Department’s argument that the Board had improperly required the agency to persuade rather than merely produce. “All the Department was required to do was produce sufficient evidence of legitimate, nondiscriminatory reasons, from which a trier of fact could conclude those reasons actually motivated the challenged conduct.” (Mabry-Height, supra, 74 Cal.App.5th at p. 928, fn. 6.) Reading the decision “in its entirety,” the court was satisfied “the ALJ/Board understood this was a burden of production … not a burden of persuasion.” (Ibid.) The unanimous panel — Hoch, J., joined by Raye, P. J., and Blease, J. — therefore affirmed. (Id. at p. 931.)

Significance

The opinion sits squarely in the Guz–Harris line and performs two doctrinal services. First, it polices the sequence of the burden-shifting test against employers who would import Harris’s substantial-factor causation standard into stage two to short-circuit the analysis. The court’s holding that the substantial-factor burden “applies to the third stage … only where … the employer successfully rebuts the presumption” reaffirms that a plaintiff who clears stage one and faces an employer that produces nothing wins on the “‘legally mandatory’” presumption alone — without ever litigating causation. (Mabry-Height, supra, 74 Cal.App.5th at pp. 926, 928.) That is a meaningful structural protection: it preserves Guz’s allocation against the gravitational pull of Harris.

Second, and more practically, the decision gives content to the otherwise “‘not onerous’” stage-two burden by identifying what does not satisfy it. A hiring authority’s candid “I don’t know why she wasn’t interviewed” is not merely weak evidence of a legitimate reason — it is the absence of any reason, and so leaves the presumption intact. (Mabry-Height, supra, 74 Cal.App.5th at p. 930.) The court’s parallel refusal to credit “after-the-fact possible nondiscriminatory reasons” assembled in briefing closes the back door: counsel cannot supply at the appellate stage the reason the decisionmaker never articulated. (Ibid.) The holding’s limits should be marked, too. It does not lower the prima facie threshold, does not disturb the plaintiff’s ultimate burden of persuasion at stage three, and arises on deferential substantial-evidence review of an administrative finding — features that distinguish it from a contested summary-judgment posture.

Key quotes

“[W]here a plaintiff establishes a prima facie case of discrimination based on a failure to interview her for open positions, the employer must do more than produce evidence that the hiring authorities did not know why she was not interviewed. Nor is it enough for the employer, in a writ petition or on appeal, to cobble together after-the-fact possible nondiscriminatory reasons. While the stage-two burden of production is not onerous, the employer must clearly state the actual nondiscriminatory reason for the challenged conduct.” (Mabry-Height, supra, 74 Cal.App.5th at p. 930.)

“The only evidence on the matter, aside from the timeline of events highlighted by the Department, is Dr. Ritter’s testimony that he did not know why Dr. Mabry-Height was not interviewed. That is not sufficient.” (Id. at p. 930.)

“[T]his does not mean the plaintiff must establish causation by this [substantial-factor] standard before the employer is required to supply evidence of a legitimate, nondiscriminatory reason for the adverse employment decision.” (Id. at p. 928.)

Read the full opinion (official slip opinion, PDF) →

Practice pointer

Open questions

The unreached substantial-factor and pretext inquiry. Because the Department never carried its stage-two burden, Mabry-Height “was not required to proceed to the third stage of the analysis,” so the court expressed no view on whether she could have proven discrimination was a substantial motivating factor or that any proffered reason was pretextual. (Mabry-Height, supra, 74 Cal.App.5th at p. 928.)

The waiver argument the court declined to reach. The court found it “unnecessary to address the Department’s additional argument that ‘[t]he trial court erred in ruling that [the Department] waived its arguments regarding the DFEH regulations and CACI jury instructions by not reiterating them in its reply brief’ at trial.” (Mabry-Height, supra, 74 Cal.App.5th at p. 927, fn. 5.) Whether that waiver ruling was correct remains undecided.

The remedy question reserved below. Mabry-Height’s separate 2011 dismissal from her Department of Social Services post — relevant “to the question of appropriate remedy, on which the ALJ ordered the parties to submit briefing” — was “immaterial to the issues raised in this appeal,” and the court “mention[ed] it no further,” leaving any remedial consequences outside the opinion. (Mabry-Height, supra, 74 Cal.App.5th at p. 918, fn. 3.)