Opinion
F085385
08-25-2023
AUGUST MORAN et al., Plaintiffs and Appellants, v. TULARE COUNTY OFFICE OF EDUCATION et al., Defendants and Respondents.
Howard Williams, Emilio Martinez and Dana Oviedo for Plaintiffs and Appellants. Herr Pedersen &Berglund, Leonard C. Herr, Caren L. Curtiss and Ron Statler for Defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Tulare County, No. VCU292736, Nathan D. Ide, Judge.
Howard Williams, Emilio Martinez and Dana Oviedo for Plaintiffs and Appellants.
Herr Pedersen &Berglund, Leonard C. Herr, Caren L. Curtiss and Ron Statler for Defendants and Respondents.
OPINION
HILL, P. J.
Plaintiffs August Moran and Shanna Brisendine appeal the trial court's order sustaining the defendants' demurrer to plaintiffs' complaint, without leave to amend.Plaintiffs were placed on unpaid administrative leave from their employment at their respective schools within the Tulare County Office of Education (TCOE) after refusing to either provide verification of their COVID-19 vaccination status or undergo weekly testing as required by a then-operative order of the State Public Health Officer.
The order at issue also denied as moot defendants' motion to strike the complaint's prayer for damages, but because that aspect of the order is not challenged in this appeal, we do not discuss it herein.
Although not explained in the complaint, TCOE appears to be an office headed by the Tulare County Superintendent of Schools, defendant Tim Hire, that provides support and guidance for the school districts within the county. (See <https://tcoe.org/about/mission-core-values> [as of Aug. 25, 2023].)
Plaintiffs brought suit under the Confidentiality of Medical Information Act (CMIA) (Civ. Code, § 56 et seq.) against defendants TCOE, TCOE Director of Human Resources John Rodriguez, and Superintendent Tim Hire. Plaintiffs assert two causes of action under the CMIA, alleging (1) discrimination due to their respective refusals to authorize release of their medical information and (2) unauthorized use of their medical information. The trial court sustained defendants' demurrer without leave to amend, finding each claim failed as a matter of law due to certain statutory exceptions.
All further statutory references are to the Civil Code unless otherwise stated.
This appeal is related to two other contemporaneous appeals (Rossi v. Sequoia Union Elementary School (Aug. 25, 2023, No. F085416) __ Cal.App.5th __ (Rossi); Dennis v. Tulare City School District (Aug. 25, 2023, F085428) [nonpub. opn.] (Dennis)) from nearly identical orders by judges of the Tulare County Superior Court dismissing identical CMIA causes of action by similarly situated school-worker plaintiffs. The plaintiff-appellants in all three cases were represented by the same counsel; the cases were argued on the same day before the same panel of this court; and we now issue opinions affirming the trial court's orders on substantially identical grounds in all three cases.
FACTS AND PROCEDURAL HISTORY
From March 2020 through February 2023, California was in a State of Emergency due to COVID-19. (Governor's Proclamation (Feb. 28, 2023) [terminating state of emergency declared Mar. 4, 2020] <https://mclist.us7.list-manage.com/track/ click?u=afffa58af0d1d42fee9a20e55&id=edc0e06ca6&e=0b26ba1b5> [as of Aug. 25, 2023]; see Gov. Code, § 8627.) Midway through this period, on August 11, 2021, the State Public Health Officer issued an order requiring K-12 schools to verify the COVID-19 vaccination status of all school workers (State Dept. of Public Health, State Public Health Officer Order of Aug. 11, 2021 <https://www.cdph.ca.gov/Programs/CID/DCDC/ Pages/COVID-19/Order-of-the-State-Public-Health-Officer-Vaccine-Verification-for-Workers-in-Schools.aspx> [as of Aug. 25, 2023]) (Order or Public Health Order). Because this Order forms the basis of the trial court's dismissal order, we describe its contents in some detail.
On our own motion, we take judicial notice of the dates indicated in the Governor's February 28, 2023 Proclamation, a matter which is not of substantial consequence to the determination of the action. (See Evid. Code, §§ 452, subd. (h), 459, subds. (c), (d).)
At defendants' request, and without objection by plaintiffs, the trial court took judicial notice of the Public Health Order both as to its existence and as to the truth of its statements. On appeal, plaintiffs argue it was improper for the trial court to take judicial notice of the statements contained in the Order because they are reasonably disputable. We disagree. The statements in the Order requiring certain actions by certain entities and individuals are not reasonably disputable, even if their impact on defendants' legal duties is. We grant defendants' renewed request for judicial notice of the Public Health Order in this court, which is also unopposed. (See Evid. Code, § 459, subd. (a).)
As described in the prefatory text, the Public Health Order "require[d] verification of vaccination status among eligible K-12 school workers, and establishe[d] diagnostic screening testing of unvaccinated workers to minimize the risk that they will transmit while on K-12 school campuses, where a majority of students are not vaccinated and younger students are not yet eligible for vaccines." The Order provided that all covered schools "must verify [the] vaccine status of all workers" and listed specific modes of proof of vaccination. (Public Health Order, part II.A.) Further, "[a]symptomatic unvaccinated or incompletely vaccinated workers [were] required to undergo diagnostic screening testing" at least once per week, using either PCR (molecular) or antigen tests. (Id., part III.A., B., boldface omitted.) Of particular importance to this appeal, the Order specified that "[w]orkers who are not fully vaccinated, or for whom vaccine status is unknown or documentation is not provided, must be considered unvaccinated." (Id., part II.C.) The Order also stated that schools whose workers were required to test "must report results to local public health departments." (Id., part III.D.) The Order defined school" 'worker[s]'" as all paid and unpaid adults serving in K-12 school settings both public and private, including on-site volunteers. (Id., parts I., IV.F.)
The Public Health Order, which took effect on August 12, 2021, provided that "[f]acilities must be in full compliance" by October 15, 2021. (Public Health Order, supra, part VII.) The Order remained in effect until its rescission, effective September 17, 2022, almost one year after plaintiffs were placed on unpaid leave. (See State Dept. of Public Health, State Public Health Officer Order of Sept. 13, 2022 [rescinding Aug. 11, 2021 Public Health Officer Order effective Sept. 17, 2022] <https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Order-of-the-State-Public-Health-Officer-Vaccine-Verification-for-Workers-in-Schools.aspx> [as of Aug. 25, 2023].)
On our own motion, we take judicial notice of the rescission date of the Public Health Order, a matter which is not of substantial consequence to the determination of the action. (See Evid. Code, §§ 452, subd. (h), 459, subds. (c), (d).)
When the Public Health Order went into effect, plaintiffs Moran and Brisendine were working as special education teachers at separate TCOE schools. In preparing to comply with and implement the terms of the Public Health Order, TCOE circulated an electronic "COVID-19 Vaccine Verification" form, or survey, to plaintiffs (and presumably to all TCOE school workers). TCOE's communications advised that, pursuant to the Public Health Order, staff whose vaccination status was unknown or who had not provided "verification documentation" would be required to undergo weekly diagnostic screening testing. TCOE instructed staff to complete the form and "upload requested documentation." Both plaintiffs selected the option of "decline to state" as their response to the vaccination status survey question, and both refused to participate in weekly testing based on their religious convictions. TCOE placed both plaintiffs on unpaid administrative leave effective October 15, 2021 (the Public Health Order's compliance deadline), subject to any change in their willingness to participate in weekly testing or modification of the Public Health Order. Plaintiffs allege, and defendants do not dispute, that their placement on unpaid leave "effectively terminated" their employment.
Although the Public Health Order was rescinded in September 2022, plaintiffs' counsel stated at oral argument that plaintiffs have not since returned to work.
Plaintiffs filed the instant complaint in July 2022, shortly after the complaint was filed in Rossi. The complaint asserts two causes of action under the CMIA, which are substantially identical to the Rossi causes of action: (1) discrimination due to plaintiffs' refusals to authorize a release of their medical information, in violation of section 56.20, subdivision (b) (section 56.20(b)); and (2) unauthorized use of their medical information, in violation of section 56.20, subdivision (c) (section 56.20(c)).
Section 56.20(b) reads in full: "(b) No employee shall be discriminated against in terms or conditions of employment due to that employee's refusal to sign an authorization under this part. However, nothing in this section shall prohibit an employer from taking such action as is necessary in the absence of medical information due to an employee's refusal to sign an authorization under this part." (§ 56.20(b).)
Section 56.20(c) reads, in relevant part: "(c) No employer shall use, disclose, or knowingly permit its employees or agents to use or disclose medical information which the employer possesses pertaining to its employees without the patient having first signed an authorization under [s]ection 56.11 or [s]ection 56.21 permitting such use or disclosure, except as follows: "(1) The information may be disclosed if the disclosure is compelled by judicial or administrative process or by any other specific provision of law." (§ 56.20(c).)
Demurrer and Trial Court Ruling
Defendants, who are represented by different counsel than were the defendants in Rossi and Dennis, filed a demurrer and request for judicial notice of the Public Health Order. In their demurrer, defendants argued the complaint (1) failed to state a section 56.20(b) claim because plaintiffs were never required to sign an "authorization" to obtain medical information from their health care providers, as required by the statute; (2) alternatively, failed to state a section 56.20(b) claim because the COVID-19 testing requirement was "otherwise lawful" and therefore satisfied the standard purportedly set in Loder v. City of Glendale (1997) 14 Cal.4th 846, 862 (Loder) for invoking the necessity exception; (3) failed to state a section 56.20(c) claim because there was no allegation that plaintiffs ever provided their medical information to defendants; and (4) failed to state a claim under either subdivision as to the individual defendants because they were not plaintiffs' employers.
This case was assigned to Judge Nathan D. Ide, while Rossi and Dennis were assigned to Judge Bret D. Hillman. Judge Ide issued a tentative ruling sustaining the demurrer without leave to amend in this case about one month before Judge Hillman issued the tentative rulings sustaining the demurrers in Rossi and Dennis. Plaintiffs requested oral argument, and a hearing was held, but no transcript is included in the record. Judge Ide adopted the tentative ruling as the order of the court in an October 10, 2022 minute order.
Given their largely identical text and organization, it appears Judge Hillman later used this minute order as a template for his own minute orders sustaining the demurrers in Rossi and Dennis on November 8, 2022.
At the outset of the analysis, the trial court granted defendants' unopposed request for judicial notice of the Public Health Order both as to its existence and as to its contents, observing, "The truth of the statements contained in the Order do not appear to be reasonably disputable." Regarding the sufficiency of the discrimination cause of action, the trial court found the complaint satisfactorily pleaded all elements of a section 56.20(b) claim, which it correctly noted were as follows, drawing from CACI No. 3071:
"1. That Defendants asked Plaintiffs to sign an authorization so that Defendants could obtain medical information about Plaintiff[s] from their health care providers;
"2. That Plaintiffs refused to sign the authorization;
"3. That Defendants terminated Plaintiffs' employment;
"4. That Plaintiffs' refusal to sign the authorization was a substantial motivating reason for Defendants' decision to terminate employment;
"5. That Plaintiffs were harmed; and "6. That Defendants' conduct was a substantial factor in causing Plaintiffs' harm."
As to the first two elements-request for an authorization and refusal to authorize-the trial court noted the absence of any literal request for plaintiffs to "sign an authorization" allowing defendants to obtain their medical information from a health care provider. (§ 56.20(b).) However, the trial court found these elements satisfied based on two CMIA cases cited in the complaint (Loder, supra, 14 Cal.4th 846; Kao v. University of San Francisco (2014) 229 Cal.App.4th 437 (Kao)), which the trial court viewed as treating the plaintiffs' refusals to take a test or release medical information as refusals to sign an authorization. The trial court found the remaining elements clearly satisfied or presumed satisfied on demurrer.
However, the trial court noted that Loder, supra, 14 Cal.4th 846 and Kao, supra, 229 Cal.App.4th 437 recognize a "business necessity defense," referring to the necessity exception in section 56.20(b)'s second sentence. The trial court found that this necessity exception-which was quoted but not expressly asserted in defendants' moving papers- precluded liability for the section 56.20(b) claim because defendants were required to follow the Order. The court reasoned that, in the absence of the vaccine status or weekly test results required by the Public Health Order, defendants' placement of plaintiffs on unpaid leave was" 'necessary in the absence of the medical information.'" Unlike in Loder and Kao, where the court acknowledged factual questions were essential to determining business necessity, the court held in this case the exception was rooted in the Public Health Order and therefore applied as a matter of law.
The trial court then turned to the unauthorized use cause of action under section 56.20(c). The court rejected defendants' argument that because plaintiffs never provided their vaccination status, defendants could not have used such medical information. The court reasoned that plaintiffs' refusals to provide their vaccination status resulted in a determination that plaintiffs were unvaccinated, "which is, to a degree, 'medical information' [regarding] [p]laintiffs' medical history or treatment as it was in Loder and Kao." However, relying on a ground not raised at all by defendants, the court sustained the demurrer as to this cause of action based on another statutory exception. The court quoted the language of subdivision (c)(1) of section 56.20 (section 56.20(c)(1)) as providing "a built-in defense for disclosure of [medical] information when 'compelled by judicial or administrative process or by any other specific provision of law.'" For the same reasons discussed for the section 56.20(b) cause of action, the court found "as a matter of law, that [d]efendants were compelled [by the Order] to take the actions described in the complaint and therefore have an applicable defense to this cause of action."
Discerning no set of facts that plaintiffs could plead to overcome the above statutory defenses, the court sustained the demurrer without leave to amend. This appeal followed. We invited supplemental briefing in this case regarding the same issues on which supplemental briefing was received in Rossi. Noting that plaintiffs are represented by the same counsel as in Rossi, we invited plaintiffs to provide responses to the supplemental issues in their reply brief, or to indicate their consent for the court to rely upon the arguments provided in the supplemental briefs filed in Rossi. Defendants filed a supplemental brief; but plaintiffs filed no reply brief, no supplemental brief, and no consent for us to consider the arguments supplementally briefed in Rossi. We therefore deny plaintiffs' request at oral argument that we consider the arguments provided in the plaintiff's supplemental brief filed in Rossi. These three CMIA appeals (Rossi, supra, Cal.App.5th; Dennis, supra, F085428; &the present case) are related, not consolidated, and filings in one do not automatically apply to the other two. Even if we were to consider the supplemental arguments offered by the plaintiff in Rossi, they would not change our resolution of the issues in this appeal.
A judgment of dismissal following defendants' successful demurrer does not appear in the record, and "[a]n order sustaining a demurrer is usually not immediately appealable, because it is not on its face a final judgment. [Citation.] However, it may be treated as a judgment for purposes of appeal when, like a formal judgment, it disposes of the action and precludes further proceedings." (Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 1098.) Because the demurrer was sustained as to all causes of action, without leave to amend, we deem the order sustaining the demurrer to constitute an appealable judgment of dismissal.
DISCUSSION
I. Standard of Review
On appeal from a final order sustaining a demurrer, we review the record de novo-without deference to the trial court's ruling or its reasoning-to determine the legal question of whether the facts alleged state a claim for relief. (See Bichai v. Dignity Health (2021) 61 Cal.App.5th 869, 876; Visalia Unified School Dist. v. Superior Court (2019) 43 Cal.App.5th 563, 568 [describing de novo review].) We accept as true all of the pleading's material factual allegations, unless contrary to law or judicially noticed fact. (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865; SLPR, L.L.C. v. San Diego Unified Port Dist. (2020) 49 Cal.App.5th 284, 317.) An order sustaining a demurrer must be affirmed if it is correct on any ground asserted in the demurrer, independent of the trial court's stated reasons. (Bichai, at p. 877; see Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)
"In determining the sufficiency of a complaint against demurrer a court will consider matters that may be judicially noticed. (Javor v. State Board of Equalization (1974) 12 Cal.3d 790, 796; Code Civ. Proc., §§ 430.30, 430.70.) 'Accordingly, a complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective.'" (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) A demurrer may be sustained not only when the complaint fails to plead facts sufficient to state a cause of action, but also when the complaint includes" 'allegations that clearly disclose some defense or bar to recovery.'" (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183, italics omitted; accord, California Dept. of Tax &Fee Administration v. Superior Court (2020) 48 Cal.App.5th 922, 929.)
II. Analysis
Plaintiffs' counsel filed plaintiffs' opening brief in this case a few days before filing a virtually identical opening brief on behalf of the plaintiff-appellant in Rossi. Defendants filed a response brief offering a few different arguments for affirmance than did the defendants' briefs in Rossi and Dennis. We do not address all of defendants' arguments because, as noted in our supplemental briefing order, we prefer to resolve all three of these related appeals-in which the appellants make identical arguments for reversal of the three substantively identical orders of their respective trial courts-on similar grounds.
Like the plaintiff in Rossi, plaintiffs primarily argue their claims should not have been dismissed on demurrer because it is a factual question for the jury whether defendants' disciplinary actions were "necessary," given that the Public Health Order did not dictate how to enforce its requirements and imposed no penalties for noncompliance. Relatedly, plaintiffs argue the trial court erred by treating the Public Health Order as superseding the CMIA when the Order was not intended to do so. Plaintiffs appear to assert these arguments as a basis to revive both causes of action, without addressing the distinct language of section 56.20(c)(1)'s exception.
A. Preliminary Procedural Issues
Before addressing plaintiffs' substantive contentions, we must first address plaintiffs' argument that the trial court erred by sustaining the demurrer on grounds not raised by defendants. Plaintiffs argue the trial court "exceeded its jurisdiction when it sua sponte inserted its own necessity argument" in its ruling because "[n]either [plaintiffs] nor [defendants] raised the issue of necessity in the pleadings or in the demurrer." Plaintiffs further argue the trial court "did not give proper notice or a reasonable time for [plaintiffs] to reply to the trial court's [s]ua sponte argument."
Our review of the record confirms that defendants did not expressly assert the necessity or compelled disclosure exceptions as a basis for dismissal in their demurrer or moving papers. As a general rule, trial courts may consider only the grounds stated in the notice of motion and supporting papers. (See Kinda v. Carpenter (2016) 247 Cal.App.4th 1268, 1277; Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1125.) "The purpose of these requirements 'is to cause the moving party to "sufficiently define the issues for the information and attention of the adverse party and the court." '" (Luri, at p. 1125.) However, we see no reversible error on this ground because defendants' moving papers sufficiently invoked the necessity exception by implication; and, even assuming the trial court erred by dismissing the section 56.20(c) claim on an unasserted legal ground, affirmance is warranted on the independent ground that plaintiffs failed to state a prima facie section 56.20(c) claim, as discussed herein.
We assume plaintiffs intend their challenge to the trial court's "sua sponte ... necessity argument" to target the trial court's application of both the necessity exception to preclude the section 56.20(b) claim and the compelled disclosure exception to preclude the section 56.20(c) claim.
In their points and authorities in support of demurrer, defendants opened their attack on the section 56.20(b) claim by quoting the statutory text of the necessity exception and quoting the standard purportedly set in Loder, supra, 14 Cal.4th at p. 862 for invoking the necessity exception. Elsewhere in their points and authorities, defendants also argued that "TCOE was acting under its legal duty in carrying out the terms of the [P]ublic [H]ealth [O]rder" and that "[f]ollowing the law is something schools and their superintendents should do," before chronicling the Public Health Order's directives. Notwithstanding their present argument that they were blindsided by the trial court's application of the necessity exception to dismiss their section 56.20(b) claim, plaintiffs' brief in opposition to the demurrer acknowledged that defendants were arguing for application of the necessity exception; and plaintiffs responded with their argument (which they renew on appeal) that the exception should not apply until trial, when a jury would make what plaintiffs view as an inherently factual determination of necessity. Accordingly, defendants' opening brief to the trial court adequately asserted the necessity exception, and plaintiffs were not deprived of an opportunity to argue against its application. (See Luri v. Greenwald, supra, 107 Cal.App.4th at p. 1125.)
The trial court's application of the compelled disclosure exception to preclude the section 56.20(c) claim, by contrast, truly was sua sponte. Defendants' only briefed trial court arguments for dismissal of the section 56.20(c) claim were that (1) they could not have detrimentally used plaintiffs' medical information because plaintiffs did not allege ever having provided them such information, and (2) the claim could not be asserted against the individual defendants. The trial court rejected the first argument, reasoning that plaintiffs' refusals to provide their vaccination status resulted in a determination that plaintiffs were unvaccinated, which the trial court viewed as qualifying medical information; and it did not address defendants' latter argument. Instead, the trial court, sua sponte, found that the section 56.20(c)(1) compelled disclosure exception applied. As discussed below, we conclude the trial court misread the statutory text of section 56.20(c)(1), and the compelled disclosure exception does not apply in this case. However, we affirm because we agree with defendants' primary trial court argument- which they renew in their supplemental brief-that plaintiffs failed to state a prima facie section 56.20(c) unauthorized use claim because they did not allege use of their "medical information" (§ 56.05, subd. (i)). Therefore, even assuming the trial court also erred procedurally by inserting the section 56.20(c)(1) defense, reversal is not warranted.
We now turn to plaintiffs' claims of substantive error regarding the dismissal of their CMIA causes of action.
B. Section 56.20 of the CMIA
The CMIA, as amended and reenacted in 1981, "is intended to protect the confidentiality of individually identifiable medical information obtained from a patient by a health care provider, while at the same time setting forth limited circumstances in which the release of such information to specified entities or individuals is permissible." (Loder, supra, 14 Cal.4th at p. 859.)
The original CMIA enacted in 1979 met with heavy criticism and was blocked from taking effect until its repeal and reenactment as amended in 1981. (See Pettus v. Cole (1996) 49 Cal.App.4th 402, 425.)
The CMIA mostly governs disclosures of patient medical information by health care providers, but one chapter governs the use and disclosure of employee medical information by employers. (See Civ. Code, div. 1, pt. 2.6, ch. 3.) The substantive employer prohibitions-and their relevant exceptions-are found in the four subdivisions under section 56.20. The present complaint asserts violations of subdivisions (b) and (c) of section 56.20. Although plaintiffs' briefs appear to subsume their arguments on the section 56.20(c) claim within the discussion of the section 56.20(b) claim, we find it more appropriate to address each claim separately.
1. The Section 56.20(b) Discrimination Claim
Section 56.20(b) consists of two sentences-the first a prohibition on discrimination, and the second a "necessity" exception:
"(b) No employee shall be discriminated against in terms or conditions of employment due to that employee's refusal to sign an authorization under this part. However, nothing in this section shall prohibit an employer from taking such action as is necessary in the absence of medical information due to an employee's refusal to sign an authorization under this part." (§ 56.20(b).)
The term "authorization" features heavily in the CMIA, and it is defined as a written document permitting a health care provider or an employer to disclose one's medical information to others. (See §§ 56.05, subd. (a), 56.11 [providers], 56.21 [employers].)
The CMIA's proscriptions for health care providers also apply to health care service plans, pharmaceutical companies, and contractors, but for simplicity we refer only to health care providers in this decision.
To be valid, a provider authorization must be signed by the patient (except in circumstances not applicable here), identify the parties authorized to disclose and receive the medical information, specify an end date for the permissive disclosure, and advise that the signer has a right to receive a copy of the authorization. (§ 56.11.) "Medical information" is also specifically defined in the CMIA (§ 56.05, subd. (i)), but its definition is more relevant to our analysis, post, of the section 56.20(c) cause of action.
Thus, as explained by our Supreme Court:
"An employer 'discriminates' against an employee in violation of section 56.20, subdivision (b), if it improperly retaliates against or penalizes an employee for refusing to authorize the employee's health care provider to disclose confidential medical information to the employer or others (see Civ. Code, § 56.11), or for refusing to authorize the employer to disclose confidential medical information relating to the employee to a third party (see Civ. Code, § 56.21)." (Loder, supra, 14 Cal.4th at p. 861.)
i. The Limited Case Law on Section 56.20(b)
The only two published cases substantively addressing a section 56.20(b) discrimination claim are our Supreme Court's decision in Loder, supra, 14 Cal.4th 846 and the First Appellate District's decision in Kao, supra, 229 Cal.App.4th 437.
Loder was a taxpayer's suit to enjoin the City of Glendale's policy requiring drug testing of all city job applicants and current city employees seeking promotion. (Loder, supra, 14 Cal.4th at pp. 852, 856.) Under the policy, job or promotion seekers were automatically disqualified from consideration if they refused to sign a form authorizing the physician conducting the drug testing to inform the city of the test results. (Id. at p. 860.) Despite sustaining certain constitutional challenges to the policy, the Supreme Court rejected the plaintiff's statutory claim that the policy violated section 56.20(b). The court explained:
"[A]n employer who disqualifies an employee or job applicant for refusing to permit the employer to be informed of the ultimate results of an employer-mandated medical examination or drug test, like an employer who disqualifies an employee or applicant who fails or refuses to take the required examination or test, has not 'discriminated' against the employee or applicant for refusing to sign an authorization of disclosure, but instead simply has taken 'such action as is necessary in the absence of medical information due to [the] employee's refusal _,' as specifically authorized by section 56.20, subdivision (b)." (Loder, supra, 14 Cal.4th at p. 861.)
The court viewed the city's disqualification of those refusing to authorize disclosure as necessary because the testing policy "obviously would be totally ineffective if an employer could not treat an individual who refuses to permit the employer to learn the ultimate results of the examination in the same fashion as an individual who refuses to complete the test." (Ibid.) Rejecting the plaintiff's argument that employers must justify the necessity of their actions under a" 'compelling interest'" standard (ibid.), the court concluded that, "so long as an employer-mandated medical examination or drug testing program is otherwise lawful, section 56.20, subdivision (b), does not prohibit an employer from disqualifying an applicant or employee who refuses to authorize disclosure to the employer of the ultimate results of the examination or test" (id. at p. 862).
Many of Loder's statements of law regarding section 56.20(b) appear helpful to defendants' efforts to show that they were not discriminating against plaintiffs for failure to authorize disclosure but rather acting as necessary in the absence of information about plaintiffs' COVID-19 vaccination or testing status. In the trial court, defendants argued that plaintiffs failed to allege discrimination in violation of section 56.20(b) because their COVID-19 testing requirement was "otherwise lawful" under Loder, supra, 14 Cal.4th at p. 862; but defendants did not renew their reliance on Loder on appeal until we requested supplemental briefing on Loder's impact.
For instance, in addition to the above quoted passages, Loder also states that section 56.20(b) "cannot reasonably be interpreted to regulate the circumstances under which an employer may require job applicants or current employees to submit to a medical examination or drug test." (Loder, supra, 14 Cal.4th at p. 862.)
Based on the arguments presented, we are not prepared to treat Loder as establishing a standard that an employer-mandated medical exam/testing policy is only subject to section 56.20(b)'s discrimination prohibition if the program is shown not to be "otherwise lawful." (Loder, supra, 14 Cal.4th at p. 862.) We also decline to rest our decision on the other potentially significant passages from Loder, given that we can affirm without their application.
Turning to the second of the published section 56.20(b) cases, the First Appellate District's decision in Kao, supra, 229 Cal.App.4th 437 comes closer to the facts of our case but contains fewer pronouncements of CMIA law. Kao offers an example of the necessity exception being successfully invoked to defeat an individual employee's section 56.20(b) claim challenging his termination as discriminatory. In Kao, a university directed the plaintiff professor to undergo a fitness-for-duty examination after colleagues reported that his behavior was frightening them, and the university terminated his employment when he refused to participate in the examination. (Kao, at pp. 439440.) The Court of Appeal upheld the jury's adverse verdict on each of the professor's statutory claims, including those under the CMIA and the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.). Citing the professor's multiple instances of threatening behavior, the court concluded the jury had ample evidence to find the medical examination" 'job related and consistent with business necessity'" as required to defeat his Fair Employment and Housing Act claim and therefore also" 'necessary'" within the meaning of section 56.20(b). (Kao, at pp. 451, 453.)
ii. Application
Plaintiffs argue Loder and Kao show that the question of whether an employer's action was "necessary" is an inherently factual question which must be left for the fact finder to answer-and therefore cannot be resolved on a demurrer. We disagree. Although the necessity exception might generally require factual determinations, it does not always require them. Where, as here, an employer demonstrates that it acted out of a legal necessity to comply with a lawful order-as opposed to acting based on a general business necessity-the exception's application can be determined as a matter of law. Plaintiffs are correct that, in general, "reasonable minds can differ about what constitutes necessity." In the typical case, as exemplified in Kao, supra, 229 Cal.App.4th 437, the fact finder will be the one to decide whether the employer provided enough evidence to show its actions were "necessary in the absence of medical information" or were simply discriminatory (§ 56.20(b)).
But neither Kao nor Loder addresses the scenario presented in this case, where the employer was acting not out of a general sense of duty or business efficiency but so as to comply with a lawful order of the State Public Health Officer. It is undisputed the Public Health Order carried the full force of law while it was in effect, owing to the active state of emergency during its lifespan. (See Gov. Code §§ 8567(a), 8627; Governor's Proclamation of Feb. 28, 2023, supra [noting dates of state of emergency].) Contrary to plaintiffs' assertion, the lack of any express enforcement provisions within the Order, such as imposing penalties for noncompliance, does not change the Order's legal effect. Plaintiffs cite a completely separate doctrine requiring" 'certain and severe ... penalties'" to establish a de facto reimbursable state mandate under article XIII B, section 6 of the California Constitution. (See Department of Finance v. Commission on State Mandates (2003) 30 Cal.4th 727, 754.) The present case has nothing to do with reimbursable state mandates, and in any event our case involves an actual (de jure) order mandating certain action by schools like the ones where plaintiffs worked. No penalty provisions were needed to make the Order fully binding on its covered entities and individuals.
Plaintiffs' principal contention on appeal, however, is that the Public Health Order did not specify "what to do with individual employees not complying" and did not mandate their termination; plaintiffs argue defendants' disciplinary actions were therefore undertaken at their discretion, not necessitated by the Order. This argument requires interpreting the Order's provisions, a quintessential legal inquiry properly conducted by the court-not a factual one for the jury. In this rather unique case, the question is whether defendants took "such action as [was] necessary [to comply with the Public Health Order] in the absence of medical information." (§ 56.20(b).) This is a purely legal question, one which we answer in the affirmative, like the trial court.
The Public Health Order required "full compliance" by facilities and mandated that all K-12 schools "must verify vaccine status of all workers" and that those schools with workers who must test (i.e., with workers not reporting complete vaccination) "must report results to local public health departments." (Italics added.) Notably, TCOE could not fulfill either of these requirements without the cooperation of plaintiffs (and all staff in TCOE schools). The administration could not verify their vaccination status on its own, and it could not transmit test results it did not have. Although the Order did not literally state that unvaccinated and non-testing workers could not be present on school campuses, the Order's prefatory text makes clear that its goal was to "minimize the risk that [workers] will transmit [COVID-19] while on K-12 school campuses," to prevent endangering their students-the majority of whom were not yet vaccinated and the youngest of whom were not yet vaccine eligible. (Italics added.) Faced with plaintiffs' refusal to allow defendants to comply with either their verification or test-reporting obligations, defendants had no choice but to impose disciplinary consequences precluding plaintiffs from working in person until they at least started reporting test results weekly. Plaintiffs argue a fact finder might reasonably conclude that other reasonable accommodations could have been reached besides putting them on unpaid leave-positing "plexiglass [or] physical distancing" as other possible solutions. However, we do not see how other potential arrangements like these would allow defendants to bring TCOE schools into "full compliance" with the Public Health Order. Even if defendants allowed plaintiffs to return to work in the classroom from behind a plexiglass shield, that would not allow them to either verify their vaccination status or report all unvaccinated-worker test results to local health departments. There is no room for factual debate about how else defendants could have complied with the Order's requirements without directing plaintiffs to stay home until they provided test results- and placing them on unpaid leave when it was clear they were refusing to test.
In reaching this conclusion, we reject plaintiffs' corollary argument that this interpretation of the Public Health Order allows it to "supersede" the CMIA without any indication the Order was meant to do so. As the trial court noted, section 56.20(b) expressly provides a necessity exception. Thus, the Order-giving rise to the necessity in this case-operates within the framework contemplated by the CMIA, not over and above it.
The trial court properly sustained the demurrer as to plaintiffs' section 56.20(b) discrimination claim.
2. The Section 56.20(c) Unauthorized Use Claim
We likewise conclude that the demurrer was properly sustained for the second cause of action, under section 56.20(c), but not for the reasons stated by the trial court.
Section 56.20(c) provides that "[n]o employer shall use, disclose, or knowingly permit its employees or agents to use or disclose medical information which the employer possesses pertaining to its employees," unless the employee signs an authorization permitting such disclosure, or one of several statutory exceptions applies. The first of the statutory exceptions, and the only one at issue in this case, is found in section 56.20(c)(1), which states: "The information may be disclosed if the disclosure is compelled by judicial or administrative process or by any other specific provision of law."
Interpreting these provisions on a nearly blank judicial slate, we understand section 56.20(c) and its compelled disclosure exception to apply differently in this case than did the trial court. The trial court was incorrect in finding section 56.20(c)(1)'s exception applied to defendants' actions; however, dismissal of plaintiffs' section 56.20(c) cause of action was still proper because plaintiffs failed to state a prima facie claim for defendants' unauthorized use of their medical information.
We have found only one published case by a California court that substantively discusses section 56.20(c), and that case did not involve the compelled disclosure exception. (See Pettus v. Cole, supra, 49 Cal.App.4th at p. 451 [addressing exceptions under § 56.20, subd. (c)(2), (3)].) Loder, supra, 14 Cal.4th 846 and Kao, supra, 229 Cal.App.4th 437 solely address discrimination claims under section 56.20(b), not unauthorized use claims under section 56.20(c).
i. Section 56.20(c)(1)'s Compelled Disclosure Exception Does Not Cover Defendants' Actions
As discussed above, the trial court decided, sua sponte, that section 56.20(c)(1)'s compelled disclosure exception applied to preclude plaintiffs' section 56.20(c) claim. The trial court found that, for the same reasons discussed for section 56.20(b), "[d]efendants were compelled to take the actions described in the complaint" by the Order. The trouble with this reasoning is that "the actions described in the complaint" with respect to section 56.20(c) do not involve any "disclosure" of plaintiffs' medical information by defendants, and section 56.20(c)(1)'s exception applies only to disclosures-not uses.
Section 56.20(c)'s prohibitory clause forbids both unauthorized "use[s]" and "disclos[ures]" of employee medical information by an employer. However, the four exceptions laid out in the paragraphs that follow this prohibition do not all uniformly apply to both uses and disclosures. As just mentioned, paragraph 1 allows information to be "disclosed if the disclosure is compelled by judicial or administrative process or by any other specific provision of law." (§ 56.20(c)(1), italics added.) Paragraph 2 permits relevant parts of medical information to be "used or disclosed" in connection with legal disputes between the employer and employee where the employee's medical history, condition, or treatment is in issue. (§ 56.20, subd. (c)(2), italics added.) Paragraph 3 permits medical information to be "used" for specific purposes like administering employee benefit plans and determining eligibility for medical leave. (§ 56.20, subd. (c)(3).) And paragraph 4 permits medical information to be "disclosed" to health care providers to aid in patient diagnosis or treatment where the patient is unable to authorize the disclosure. (§ 56.20, subd. (c)(4).) Given the Legislature's differential use of the verbs "disclosed" and "used" in each of the four exception paragraphs, we cannot conclude that it intended the exception in paragraph 1 to permit both "disclosure" and "use" whenever compelled by judicial process or other provisions of law.
The legislative history of section 56.20 confirms that section 56.20(c)(1) permits only disclosures compelled by law, not uses compelled by law. The CMIA bill (Sen. Bill No. 889) (1981-1982 Reg. Sess.) underwent various pre-enactment amendments, some in the Assembly and some in the Senate, before being chaptered in September 1981. (Stats. 1981, ch. 782, § 1, p. 3040.) The bill was introduced in the Senate and went to the Assembly in June of 1981, where it headed first to the Assembly Committee on Health. (Sen. Bill No. 889, approved by Governor, Sept. 25, 1981, Sen. Final Hist. (1981-1982 Reg. Sess.) p. 561.) When it arrived at the Assembly, the section of the bill that would become section 56.20(c)(1) read as follows:
"(1) The information may be disclosed when the employer reasonably believes that disclosure is compelled by judicial or administrative process or by any other specific provision of law." (Sen. Amend. to Sen. Bill No. 889 (1981-1982 Reg. Sess.) May 14, 1981.)
On August 24, 1981, the Assembly Committee on Health amended that provision of Senate Bill No. 889 by removing the "reasonable belief" reference and adding a "use" component of the exception. The deletions and additions are reflected here:
"(1) The information may be disclosed when the employer reasonably believes that if the disclosure is compelled by judicial or administrative process or by any other specific provision of law, and may be used to comply with other requirements mandated by law." (Assem. Amend. to Sen. Bill No. 889 (1981-1982 Reg. Sess.) August 24, 1981.)
Three days later, however, the Assembly Committee on Health again amended this provision and largely returned it to its original text (while still omitting the "reasonable belief" qualifier) as follows:
"(1) The information may be disclosed if the disclosure is compelled by judicial or administrative process or by any other specific provision of law, and may be used to comply with other requirements mandated by law. other specific provision of law." (Assem. Amend. to Sen. Bill No. 889 (1981-1982 Reg. Sess.) August 27, 1981.)
There were no further amendments to this provision of Senate Bill No. 889.
This chronology shows the Legislature actively considered and then rejected adding an exception to permit employers to use employee medical information "to comply with other requirements mandated by law." We will not rewrite this statute by interpreting it in a way that would override the express legislative intent to limit the scope of section 56.20(c)(1)'s exception to permit employer disclosures of employee medical information when compelled by law.
The complaint pleads a section 56.20(c) cause of action arising purely from defendants' unauthorized use of plaintiffs' purported medical information (that is, their presumed unvaccinated status) to place them on unpaid leave. There is no allegation that defendants disclosed plaintiffs' vaccination status to any third party. Again, section 56.20(c)(1)'s exception states: "The information may be disclosed if the disclosure is compelled by judicial or administrative process or by any other specific provision of law." (Italics added.) In their supplemental brief, defendants do not argue how their actions could constitute a disclosure, nor do they argue for a broader reading of section 56.20(c)(1). We conclude that defendants' challenged conduct does not fall within section 56.20(c)(1)'s compelled disclosure exception, and the trial court erred by concluding otherwise.
Defendants do not identify any other applicable exception under section 56.20(c), nor do we see how any of its other three subparagraphs would apply. Defendants do, however, argue for the first time on appeal that the necessity exception appearing in section 56.20(b) also applies to preclude liability for the section 56.20(c) claim. The language of section 56.20(b)'s necessity exception supports an argument that it applies across all subdivisions within section 56.20. (See § 56.20(b) ["nothing in this section shall prohibit an employer from taking such action as is necessary in the absence of medical information due to an employee's refusal to sign an authorization under this part" (italics added)].) However, there was no discussion in the trial court of this broad application of the necessity exception, and because no prima facie section 56.20(c) claim was stated, we need not reach the application of the necessity exception to that cause of action.
ii. Affirmance Is Warranted on an Alternative Ground
Nevertheless, defendants' primary ground for dismissal asserted in their demurrer and renewed in their supplemental briefing to this court still provides a basis to affirm. (See Bichai v. Dignity Health, supra, 61 Cal.App.5th at p. 877 [Courts of Appeal must affirm if dismissal is correct on any ground stated in the demurrer, independent of the trial court's reasoning].) In our view, the complaint fails to adequately plead the prima facie elements of a section 56.20(c) cause of action because there are no allegations from which we can infer that defendants used "medical information which [they] possesse[d] pertaining to [plaintiffs]." (§ 56.20(c).)
Defendants argued in their points and authorities supporting their demurrer that because plaintiffs never provided their respective vaccination statuses, defendants could not have used that medical information when they never possessed it. The trial court, somewhat equivocally, rejected this argument, reasoning that plaintiffs' refusal to provide their vaccination status resulted in a determination that plaintiffs were unvaccinated, "which is, to a degree, 'medical information' [regarding] [their] medical history or treatment as it was in Loder and Kao." We conclude defendants have the better reading:
The complaint does not allege their use of plaintiffs' "medical information" as that term is defined in the statute.
"Medical information" is defined in the CMIA as "any individually identifiable information, in electronic or physical form, in possession of or derived from a provider of health care ... regarding a patient's medical history . . ., mental or physical condition, or treatment." (§ 56.05, subd. (i).) If plaintiffs had alleged that they gave the employer defendants proof of their COVID-19 vaccination from a health care provider and that defendants used that information detrimentally (without plaintiffs' authorization), they would state a section 56.20(c) cause of action. To use a scenario closer to the actual allegations, if plaintiffs had alleged that they gave defendants electronic or physical information from a health care provider confirming plaintiffs' lack of such vaccination and that defendants used that information detrimentally, they would also state a section 56.20(c) cause of action. However, what the complaint actually alleges is that, due to plaintiffs' failure to inform defendants of their vaccination status one way or the other, defendants presumed that plaintiffs were "unvaccinated," as they were required to do by the Public Health Order. (See Public Health Order, supra, part II.C. ["Workers who are not fully vaccinated, or for whom vaccine status is unknown or documentation is not provided, must be considered unvaccinated." (Italics added.)].)
We cannot identify any allegation that defendants "possesse[d]" (§ 56.20(c)) "individually identifiable information, in electronic or physical form, in possession of or derived from a provider of health care ... regarding [plaintiffs' vaccination status]" (§ 56.05, subd. (i)). Plaintiffs' administrative classification as "unvaccinated" was not based on any information defendants received about them from any medical source. It was simply the default administrative classification required under the Public Health Order. We cannot agree with the trial court that this automatic classification was, to any degree, "medical information" as defined under the CMIA.
Without any factual allegations that defendants received any "medical information," such as medical records, a medical certification, or other information in "electronic or physical form ... derived from a provider of health care" (§ 56.05, subd. (i)), the complaint fails to state a cause of action for unauthorized use of such information under section 56.20(c). (See Erhart v. Bofi Holding, Inc. (S.D.Cal. 2017) 269 F.Supp.3d 1059, 1077-1078.) Despite our invitation, plaintiffs offer no argument on appeal as to how they could amend the complaint to show use of their "medical information." (See Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924 [leave to amend is warranted when "on the pleaded and noticeable facts there is a reasonable possibility of an amendment that would cure the complaint's legal defect or defects"].) Indeed, the complaint asserts that plaintiffs refused to provide any medical information to defendants.
Accordingly, dismissal of plaintiffs' section 56.20(c) unauthorized use claim, without leave to amend, was also warranted.
DISPOSITION
The order of the trial court is affirmed. Defendants are awarded their costs on appeal.
WE CONCUR: LEVY, J., FRANSON, J.