This Week At The Ninth: Contractor Speech And Seized Cars – Employment and HR

This week, the Court confronted constitutional challenges to a
California statute altering the test for determining whether
workers are employees or independent contractors and an Arizona
statute governing civil forfeitures.

AMERICAN SOCIETY OF JOURNALISTS AND
AUTHORS, INC. v. BONTA

The Court holds that California’s AB 5, which modified the
test for determining whether a worker is an employer or independent
contractor, does not violate the First Amendment as applied to
freelance writers and similar professionals.

The panel: Judges Callahan, Forrest, and
Seeborg (N.D. Cal.), with Judge Callahan writing the opinion.

Key highlight: “[T]he statute is aimed at
the employment relationship-a traditional sphere of state
regulation. See DeCanas v. Bica, 424 U.S. 351, 356 (1976).
Such rules understandably vary based on the nature of the work
performed or the industry in which the work is performed, and
section 2778 is no different in this regard. But whether employees
or independent contractors, workers remain able to write, sculpt,
paint, design, or market whatever they wish.”

Background: In AB 5, California codified a new
3-part test for determining whether workers are employees or
independent contractors. The law exempts certain “professional
services” occupations from its scope, including certain
freelance writers and photographers. For freelance writers, the
exception applied to anyone who submitted fewer than 35 pieces of
work to a single entity in a year (an exception that was then
changed while the litigation was underway to turn on where
freelancers work and whether they work for more than one entity).
The exception for photographers applied to anyone not working on a
“motion picture.”

The American Society of Journalists and Authors and the National
Press Photographers Association brought suit to enjoin AB 5. They
contended the law violated the First Amendment and the Equal
Protection Clause because, by categorizing them as employees, it
burdened the writers and photographers not covered by the
“professional services” exception. The district court
granted California’s motion to dismiss.

Result: The Ninth Circuit affirmed. First, the
Court rejected the plaintiffs’ First Amendment argument,
holding that AB 5 regulated economic conduct and not speech. As the
Court explained, AB 5 does not “limit what someone can or
cannot communicate,” or “restrict when, where, or how
someone can speak,” but “instead governs worker
classification” and “is aimed at the employment
relationship.”  While AB 5’s application might, as
the plaintiff organizations claim, conceivably reduce job
opportunities for their members and thereby reduce their ability to
practice their “speaking” professions, the Court
concluded that “such an indirect impact on speech” does
not implicate the First Amendment. Nor did AB 5 pose the First
Amendment concerns raised by regulations that focus only on certain
types of speech, as AB 5 applies “across California’s
economy,” its exemptions “do not single out the press as
an institution” or otherwise target particular speakers, and
its applicability turns “not on what workers say” but
“on the service they provide or the occupation in which they
are engaged.” The Court held that was true even with respect
to AB 5’s specific application to freelancers working on
“motion pictures,” explaining that this statutory
carveout “refers to an industry or medium through which
content is conveyed,” and does not differentiate based on
content itself.

The Court also rejected the plaintiffs’ Equal Protection
Challenge. Because AB 5 did not implicate any fundamental right to
speech, the court applied rational basis scrutiny. And, the Court
held, AB 5 readily met that forgiving standard, as it was
“certainly conceivable that differences between occupations
warrant differently contoured rules for determining which
employment test better accounts for a worker’s
status.”

PLATT v. MOORE

The Court holds that plaintiffs whose car was
seized pursuant to Arizona’s civil forfeiture scheme had stated
a claim for violation of their state-law due process rights.

Panel: Judges Tashima, Berzon, and Collins,
with Judge Berzon writing the opinion, and Judge Collins concurring
in part and dissenting in part.

Key Highlight: The Arizona civil forfeiture
statute “on its face permitted the state’s attorney
unilaterally to deny those who chose to contest forfeiture by
filing a petition the procedural protections applicable in
contested forfeiture proceedings.”

Background: Police stopped William and Maria
Platts’ son while he was driving their car, found marijuana,
and arrested him. The Platts’ car was seized pursuant to
Arizona’s civil forfeiture statutes. Under those statutes, when
property is seized, the owner may file either a claim with the
court or a petition for remission or mitigation of forfeiture with
the attorney for the state. If the property owner does not pursue
either option, the state’s attorney may proceed with an
uncontested forfeiture, in which case forfeiture is virtually
assured. Although the Platts filed a petition for remission or
mitigation, a Deputy Navajo County Attorney unilaterally treated
the petition as defective, without giving them any notice of the
defect or opportunity to correct it, and proceeded with an
uncontested forfeiture. The vehicle was eventually returned to the
owners, but only after it had been impounded for five months.

The Platts sued state and local officials and entities, alleging
that the seizure of their car and the deprivation of its use for
five months violated their rights to due process under the federal
and state constitutions. The district court dismissed all the
claims. The Platts appealed the dismissed of their state-law claims
only. Arizona, which had intervened to defend the constitutionality
of its civil forfeiture scheme, cross-appealed and sought a ruling
that its statutory scheme governing forfeiture is facially valid
under the federal and Arizona constitutions.

Result: The Ninth Circuit affirmed in part and
reversed in part. The Court first held that the Platts’
state-law claims were not barred by Arizona’s notice of claim
statute, which generally requires those asserting Arizona law
claims against a public entity to file a notice of claim before
filing suit. As interpreted by Arizona courts, the statute does not
apply to claims for declaratory judgment. And the Court predicted
that Arizona courts would likewise conclude that it does not apply
to claims, like the Platts’ claims, for nominal damages.

On the merits, the Court held that the Platts had stated a claim
based on the fact that the County Attorney, an individual with an
alleged pecuniary interest in the forfeiture proceedings, had made
an undisclosed determination that no timely petition had been
filed.  Under Arizona’s scheme, that determination would
have been unreviewable had the County Attorney pressed forward with
forfeiture proceedings, and thus would have deprived the Platts of
the procedural protections of a contested forfeiture proceeding.
The Court also found that the Platts had Article III standing to
bring this claim because being subjected to a constitutionally
deficient forfeiture process was itself an injury even though their
car had ultimately been returned. The Court agreed, however, that
the Platts’ claim against the Navajo County Drug Task Force was
properly dismissed because the Task Force was not amenable to suit
under Arizona law.

As to Arizona’s cross-appeal, the Court concluded that
Arizona was seeking an advisory opinion as to the validity of its
forfeiture scheme in circumstances not before the Court, and thus
declined to address the issue.

Judge Collins concurred in part and dissented in part. He agreed
that the Navajo County Drug Task Force lacks capacity to be sued
under Arizona law, but would have held that Plaintiffs lacked
standing to pursue a claim based on the County Attorney’s
biased adjudication of their petition because the County
Attorney’s actions had not lengthened the forfeiture
proceedings or prolonged the period during which the Platts were
deprived of their car. Judge Collins also would have held that
Arizona’s notice-of-claim statute does bar Arizona due process
claims for nominal damages.

Because of the generality of this update, the information
provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
situations.

© Morrison & Foerster LLP. All rights reserved