Judges. COUNSEL James P. Stoneman II (argued), Law Offices of James P. Stoneman II,… v. Alaska Airlines, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 KEVIN MURRAY, No. 06-15847
Plaintiff-Appellant, D.C. No.
v. CV-05-03633-MJJ
ALASKA AIRLINES, INC., ORDER
Defendant-Appellee. REQUESTING
THAT THE  SUPREME COURT
OF CALIFORNIA
DECIDE A
QUESTION OF
CALIFORNIA
LAW

Filed April 10, 2008
Before: Stephen Reinhardt, Melvin Brunetti and
Raymond C. Fisher, Circuit Judges.
COUNSEL
James P. Stoneman II (argued), Law Offices of James P.
Stoneman II, Claremont, California, for the plaintiff-
appellant.
David J. Reis (argued), Jason M. Habermeyer, Howard Rice
Nemerovski Canaday Falk & Rabkin, San Francisco, Califor-
nia, for the defendant-appellee.
3723

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ORDER
We respectfully request that the Supreme Court of Califor-
nia exercise its discretion and decide the certified question set
forth in Part I of this order.
I. Question Certified
Pursuant to Rule 8.548 of the California Rules of Court, a
panel of the United States Court of Appeals for the Ninth Cir-
cuit, before which this appeal is pending, requests that the
Supreme Court of California answer the following question:
Should issue-preclusive effect be given to a federal
agency’s investigative findings, when the subsequent
administrative process provides the complainant the
option of a formal adjudicatory hearing to determine
the contested issues de novo, as well as subsequent
judicial review of that determination, but the com-
plainant elects not to invoke his right to that addi-
tional process?
The decisions of the Supreme Court of California and the
California Courts of Appeal do not provide controlling prece-
dent regarding the certified question, the answer to which will
be determinative of this appeal. We understand that the
Supreme Court of California may reformulate our question,
and we agree to accept and follow the court’s decision. To aid
the Supreme Court of California in deciding whether to accept
the certification, we provide the following statement of facts
and explanation.
II. Statement of Facts
Kevin Murray (“Murray”), a quality assurance auditor at
Alaska Airlines (“Alaska”) brought safety concerns to the
attention of the Federal Aviation Administration (“FAA”),
which then conducted an investigation that revealed “signifi-
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cant discrepancies relating to air carrier safety.” Subse-
quently, the maintenance facility at which Murray worked
was closed and his position was outsourced. Murray was not
rehired by Alaska.
In December 2004, Murray filed an administrative com-
plaint with the Secretary of Labor (“Secretary”) under the
Whistleblower Protection Provision of the Aviation Invest-
ment and Reform Act for the 21st Century (“AIR21”), seek-
ing reinstatement, back pay and compensatory damages. See
49 U.S.C. § 42121(b)(1), (b)(3)(B).1 Invocation of AIR21’s
administrative complaint procedure is voluntary and optional.
See § 42121(b)(1). Murray — through his lawyer, Rand Ste-
phens — alleged he had been denied the opportunity to apply
or interview for open positions at other Alaska facilities, “de-
spite [his] stated and documented request to remain” with the
company, “in retaliation for [his] notifying [FAA inspectors]
of Federal Aviation Regulations . . . violations and for serious
airworthiness issues posing a threat to air safety.” He also
alleged that his superiors at Alaska “admonished and chas-
tised [him] . . . for disclosing information to the FAA.”
Pursuant to § 42121(b)(2)(A), the Secretary conducted an
investigation, during which Alaska submitted a written
response to Murray’s complaint, produced relevant documen-
tation and offered witness testimony. Murray was never con-
tacted by the Secretary’s investigator. He was not given a
copy of the documents provided by Alaska or its witness
statements. Nor did he have an opportunity to submit addi-
tional information to the Secretary, or respond to Alaska’s
arguments, before the Secretary rendered her findings.
In June 2005, the Secretary notified Murray of her investi-
gative findings by letter. The Secretary found that Murray
participated in protected whistleblowing activity and that his
1Hereinafter, all citations are to Title 49 of the United States Code
unless otherwise noted.
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termination and Alaska’s subsequent failure to re-hire him
constituted adverse employment action. Notwithstanding that
determination, the Secretary determined there was “no credi-
ble basis to believe [Alaska] violated the employee protection
provisions of AIR21,” because the “record fail[ed] to estab-
lish any connection between [Murray’s] termination and his
involvement in protected activity.” The Secretary found that
Murray applied electronically for positions at other Alaska
facilities and then “inexplicably removed his resume . . . the
same night he applied.” “The evidence showed that it was
impossible for [Alaska] to remove [Murray’s] resume from
the employment website of its own accord.” The Secretary
therefore concluded that Murray “failed to establish a nexus
between his protected activity and the perceived discrimina-
tory action taken against him.” The Secretary dismissed Mur-
ray’s administrative complaint because he failed to
demonstrate that there was “reasonable cause to believe” that
his whistleblowing was a “contributing factor in [Alaska’s]
unfavorable personnel action.” See § 42121(b)(2)(B)(iii); 29
C.F.R. § 1979.105(a).
The Secretary’s letter closed by notifying Murray that he
had “important rights of objection which must be exercised in
a timely fashion.” “AIR21 permits an aggrieved party,
WITHIN 30 DAYS . . . to file objections with the Depart-
ment of Labor and to request a hearing on the record before
an Administrative Law Judge.” (Emphasis in original.) The
letter also warned that if “no objections are filed WITHIN 30
DAYS, this decision shall become final and not subject to
judicial review.” (Emphasis in original.) Murray never filed
objections or requested an on-the-record hearing. Nor did he
take any steps to formally withdraw his administrative com-
plaint. Cf. 29 C.F.R. § 1979.111(a) (allowing complainant to
withdraw his complaint by filing a written withdrawal with
the Assistant Secretary of Labor, who “then determine[s]
whether the withdrawal will be approved”). On July 8, 2005,
by operation of law, the Secretary’s preliminary investigative
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findings were “deemed a final order . . . not subject to judicial
review.” § 42121(b)(2)(A).
On August 2, 2005, Murray, still represented by attorney
Rand Stephens, filed a complaint against Alaska in California
state court, claiming that he had been wrongfully terminated
and retaliated against for whistleblowing in violation of the
public policy of California. See Cal. Labor Code § 1102.5(b).
Invoking diversity jurisdiction, Alaska removed to federal dis-
trict court. The district court, relying on the Secretary’s find-
ings in her final order, granted summary judgment to Alaska
based on collateral estoppel. Murray timely appealed.
III. Explanation
We respectfully submit that the question we pose is worthy
of decision because it will be dispositive in this appeal, it is
not answered by any opinions of the Supreme Court of Cali-
fornia or the California Courts of Appeal and it has important
public policy ramifications. We invoke the certification pro-
cess only after careful consideration and do not do so lightly.
See Kremen v. Cohen, 325 F.3d 1035, 1037-38 (9th Cir.
2003).
In this diversity action, California law controls whether the
Secretary’s findings on causation (i.e., that there was no con-
nection between Murray’s termination and his whistleblowing
activity) have an issue-preclusive effect on Murray’s state-law
claims. See 28 U.S.C. § 1652; Jacobs v. CBS Broad., Inc., 291
F.3d 1173, 1177 (9th Cir. 2002). Murray’s state-law claims
include causation as a required element.2 Therefore, the treat-
2See Turner v. Anheuser-Busch, Inc., 7 Cal. 4th 1238, 1258 (1994)
(holding that plaintiff’s “claim of whistle-blower harassment fails because
he cannot demonstrate the required nexus between his reporting of alleged
statutory violations and his allegedly adverse treatment”) (emphasis
added); Morgan v. Regents of Univ. of Cal., 88 Cal. App. 4th 52, 69, 105
Cal. Rptr. 2d 652 (Ct. App. 2000) (“To establish a prima facie case of
retaliation, a plaintiff must show that she engaged in protected activity,
that she was thereafter subjected to adverse employment action by her
employer, and there was a causal link between the two.”) (emphasis added
and internal quotation marks removed).
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ment of the Secretary’s investigative findings under Califor-
nia’s law of collateral estoppel is determinative of Murray’s
appeal. If the Secretary’s finding that there was “no connec-
tion between [Murray’s] termination and his involvement in
protected activity” is entitled to issue-preclusive effect, then
the district court’s dismissal of Murray’s state-law claims
with prejudice will be affirmed. If, under the circumstances
described above, California law would not accord the admin-
istrative finding preclusive effect, then the district court’s
judgment will be reversed and remanded, and Murray will be
permitted to litigate the issue of causation and the remainder
of his two termination claims in the district court.
Under California law, even when the “traditional” threshold
requirements of collateral estoppel are met, preclusive effect
will not be given to a previously litigated issue unless the
public policies underlying the collateral estoppel doctrine
would be furthered by doing so.3 See Vandenberg v. Superior
Court, 21 Cal. 4th 815, 829, 982 P.2d 229 (1999). In particu-
lar, “[w]hether collateral estoppel is fair and consistent with
public policy . . . depends in part upon the character of the
forum that first decided the issue later sought to be fore-
closed.” Id. (emphasis added); see also Imen v. Glassford, 201
Cal. App. 3d 898, 907-08, 247 Cal. Rptr. 514 (Ct. App. 1988).
As was stated in People v. Sims, 32 Cal. 3d 468, 651 P.2d 321
(1982), superseded by statute on another point as stated in
Gikas v. Zolin, 6 Cal. 4th 841, 851, 863 P.2d 745 (1993),
“[c]ollateral estoppel may be applied to decisions made by
administrative agencies ‘[w]hen an administrative agency is
3The Supreme Court of California has summarized the “traditional”
requirements as follows: “First, the issue sought to be precluded from reli-
tigation must be identical to that decided in a former proceeding. Second,
this issue must have been actually litigated in the former proceeding.
Third, it must have been necessarily decided in the former proceeding.
Fourth, the decision in the former proceeding must be final and on the
merits. Finally, the party against whom preclusion is sought must be the
same as, or in privity with, the party to the former proceeding.” Lucido v.
Superior Court, 51 Cal. 3d 335, 341, 795 P.2d 1223 (1990).
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acting in a judicial capacity and resolves disputed issues of
fact properly before it which the parties have had an adequate
opportunity to litigate.’ ” Id. at 479 (quoting United States v.
Utah Constr. Co., 384 U.S. 394, 422 (1966)) (emphasis
added). In Sims itself, that the “County failed to present evi-
dence or otherwise participate” at the agency’s hearing did
not prove that the hearing process failed to provide the
County with an adequate opportunity to fully litigate the con-
tested issues. Id. at 481; see also Zevnik v. Superior Court,
159 Cal. App. 4th 76, 85, 70 Cal. Rptr. 3d 817 (Ct. App.
2008); Rymer v. Hagler, 211 Cal. App. 3d 1171, 1179, 260
Cal. Rptr. 76 (Ct. App. 1989). In Sims and the other cited
cases, unlike in the present appeal, the administrative agency
actually conducted an adjudicatory hearing.
We are not certain how California law would treat the Sec-
retary’s investigative findings, made at the initial stage of
AIR21’s voluntary administrative process, when the com-
plainant has chosen not to seek further review. There do not
appear to be squarely controlling California cases addressing
whether an “opportunity to litigate” requires that an actual
hearing with adequate procedural safeguards take place, or if
instead it is enough that the agency’s procedures afford the
complainant the right to seek an adjudicatory hearing after the
findings are made.4 Our uncertainty is magnified because Cal-
4An AIR 21 complainant may contest the Secretary’s investigative find-
ings by filing “objections to [those] findings” and “request[ing] a hearing
on the record” within 30 days of receiving them. See § 42121(b)(2)(A); 29
C.F.R. § 1979.106(a). If the Secretary’s findings are timely challenged,
AIR21 provides for a de novo, on-the-record hearing before an Adminis-
trative Law Judge. See 29 C.F.R. § 1979.107(a)-(b); id. at § 1979.109(a)
(written findings and conclusions); 29 C.F.R. § 18.13 (discovery proce-
dures); id. at § 18.24 (subpoena power); id. at § 18.34 (right to personal
appearance and representation by counsel); id. at § 18.38 (prohibition on
ex parte communications); id. at § 18.52 (decision based on record of
hearings). After the ALJ issues a ruling, a party has 10 days to file a peti-
tion for review with the Department of Labor’s Administrative Review
Board. See 29 C.F.R. § 1979.110(a). At its discretion, the Administrative
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ifornia appears to have a comparatively expansive under-
standing of collateral estoppel when judicial proceedings are
involved. In the majority of jurisdictions, collateral estoppel
does not apply to default judgments in judicial proceedings,
where the judgment necessarily is entered against an absent
party without any actual adjudicatory process taking place.
See Gottlieb v. Kest, 141 Cal. App. 4th 110, 148, 46
Cal. Rptr. 3d 7 (Ct. App. 2006); Restatement (Second) of
Judgments § 27, cmt. e. “California, on the other hand,
accords collateral estoppel effect to default judgments, at least
where the judgment contains an express finding on the allega-
tions.” Gottlieb, 141 Cal. App. 4th at 149; see also In re Wil-
liams’ Estate, 36 Cal. 2d 289, 293, 223 P.2d 248 (1950).
Decisions of the Supreme Court of California and the Califor-
nia Courts of Appeal do not yield an answer to whether this
permissive approach to collateral estoppel with respect to
judicial proceedings applies also in the context of unreviewed
administrative agency findings.
Considerations of comity and federalism favor resolution of
this substantial state-law question by the Supreme Court of
California. We respectfully request that the Supreme Court of
California accept and decide the certified question.
IV. Caption
Title and number of appeal:
KEVIN MURRAY, Plaintiff-Appellant, v.
ALASKA AIRLINES, INC.,
Defendant-Appellee, No. 06-15847.
Review Board may accept a case for review and issue a superseding final
order; otherwise, the ALJ’s ruling becomes the final order of the Secretary
of Labor. See § 42121(b)(3)(A). Judicial review of such final orders may
exclusively be had in the appropriate United States Court of Appeals in
accordance with the Administrative Procedure Act. See § 42121(b)(4)(A)-
(B); 5 U.S.C. ch. 7.
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Counsel for Plaintiff-Appellant Kevin Murray:
James P. Stoneman II
Law Offices of James P. Stoneman II
100 West Foothill Boulevard
Claremont, CA 91711
Telephone: 909-621-4987
Fax: 909-624-1427
Counsel for Defendant-Appellee Alaska Airlines, Inc.:
David J. Reis
Jason M. Habermeyer
Howard Rice Nemerovski Canaday Falk & Rabkin
Three Embarcadero Center, Seventh Floor
San Francisco, CA 94111
Telephone: 415-434-1600
Fax: 415-217-5910
If the Supreme Court of California accepts this request, the
Plaintiff-Appellant should be deemed the petitioner.
V.
This case is withdrawn from submission and further pro-
ceedings in this court are stayed pending final action by the
Supreme Court of California. The parties shall notify the
Clerk of this court within 14 days after the Supreme Court of
California accepts or rejects certification. If the Supreme
Court of California accepts certification, the parties shall file
a joint report six months after the date of acceptance and
every six months thereafter advising us of the status of the
proceedings. The parties shall notify the Clerk within 14 days
of the rendering of a decision by the Supreme Court of Cali-
fornia.
The Clerk shall file this order and 10 copies, along with all
briefs in this appeal, with the Supreme Court of California;
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provide certificates of service to the parties; and provide addi-
tional record materials if so requested by the Supreme Court
of California. See Cal. R. Ct. 8.548(c)-(d).
This panel retains jurisdiction over further proceedings.
IT IS SO ORDERED.
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