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July 2001 
Vol. 7 No. 7 ISSN 1087-6219
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The Third District Court of Appeal in Sacramento has ruled that the First Amendment does not excuse Catholic Charities from compliance with a California state statute requiring employers who provide a prescription drug benefit to include prescription contraceptives in the coverage.
Catholic Charities provides social services to disadvantaged members of society, regardless of their religious beliefs. Seventy-four percent of its employees are not Catholic. According to its lawsuit, the Catholic faith obliges employers to provide adequate health insurance, but prohibits them from facilitating the sin of contraception. Forcing Catholic Charities to include prescription contraceptives in its health plan infringes on its religious freedom.
The California legislature imposed prescription drug benefit requirement to eliminate discriminatory insurance practices that had undermined the health and economic well-being of women. It included an exemption for "religious employers," which (1) have as their purpose the inculcation of religious values, (2) primarily employ persons who share the religious tenets of the entity, (3) primarily serve persons who share its religious tenets, and (4) is tax-exempt under Internal Revenue Code section 6033(a)(2)(A)(i) or (iii). Catholic Charities did not meet any of the requirements.
The statute does not violate the Free Exercise Clause because it is a neutral law of general application. It does not require any employer to offer prescription drug benefits. Employers who do offer such benefits cannot discriminate against women by excluding prescription contraceptives.
The religious employers exemption does not violate the Establishment Clause because it does not distinguish among religions either by name or in practical effect. The Catholic Church benefits from the exemption, but not all its organizations do. Other churches and sects are equally burdened and benefited.
Catholic Charities of Sacramento, Inc. v. Superior Court, 2001 WL 738085 (Cal. Ct. App. Jul. 2, 2001).
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The First District Court of Appeal in San Francisco has ruled that the California National Guard may not apply the "Don't ask, don't tell" policy to individuals on state active duty employment. Because of federal preemption, the Guard may remove individuals who violate the policy from positions that require federal recognition.
The National Guard consists of two overlapping, but legally distinct organizations, the federal National Guard, and the separate National Guards of the individual states. Persons who enlist in the California National Guard simultaneously enlist in the federal National Guard.
Such persons remain part of the California National Guard unless ordered into active duty in the federal military service. During any time of federal active duty, their state affiliation is suspended, and they are subject to all United States military laws and regulations. "[A]ll of them must keep three hats in their closets-a civilian hat, a state militia hat, and an army hat-only one of which is worn at any particular time." Perpich v. Department of Defense, 496 U.S. 334, 348 (1990).
The United States military grants "federal recognition" to those members of the California National Guard who meet all the requirements for federal service. A state reserve with federal recognition is eligible to be called into active duty in the United States military. Under federal law, those who do not have federal recognition may remain on state active duty for assignments that do not require federal recognition. However, a California National Guard regulation bars from state active duty anyone who has been released from federal service "for cause."
The United States military's "Don't ask, don't tell" policy requires that any member of the armed forces who discloses that he or she is homosexual be separated from military service for cause.
Andrew Holmes enlisted in the California National Guard in 1986, and thereafter received a commission in the United States Army National Guard. He earned many honors, including a promotion to first lieutenant. In June 1993, he wrote the following to his commanding officer: "[A]s a matter of conscience, honesty and pride, I am compelled to inform you that I am gay." As a result, Holmes lost his federal recognition. The California National Guard discharged him from the state guard position that required federal recognition. His status thereafter was unclear. The National Guard asserted that he remained a member of the California military reserves. Holmes claimed that he was never told that he remained a member of the California National Guard, and received no further pay or communications from the state. Holmes brought a class action challenging the California regulation.
Application of the California regulation to those who violate the "Don't ask, don't tell" policy violates the equal protection clause of the California Constitution. However, federal law preempts any state regulation of the National Guard when employed in the service of the United States. That preemption extends to those wearing their state militia hats who are in assignments that require federal recognition.
The California National Guard should be enjoined from enforcing its regulation in a way that prohibits persons who have been released from federal service under the "Don't ask, don't tell" policy from serving in state active duty positions that do not require federal recognition.
Holmes v. California Nat'l Guard, 2001 WL 729204 (Cal. Ct. App. Jun. 29, 2001).
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The Ninth Circuit has ruled that a USC soccer player may not mount an antitrust challenge to a conference rule that discourages transfers among its member institutions. She did define an appropriate market.
Rhiannon Tanaka enrolled in USC based on promises about its soccer program. She claims to have been told that she could transfer without penalty as long as she remained at USC for one year and met minimum academic requirements.
After a year, Tanaka transferred to UCLA because she was dissatisfied with the USC soccer program. USC and UCLA are both members of the Pacific-10 Conference, which requires transferring athletes to sit out two years and lose two years of athletic eligibility. After USC successfully insisted that Tanaka sit out for a year, she brought an antitrust action against USC and the Pac- 10. She alleged that the transfer rule was an unreasonable restraint on trade.
An antitrust plaintiff has the initial burden of showing that the challenged restraint produces significant anti- competitive effects within a relevant market. Tanaka alleged that the defendants restrained competition in Los Angeles in the market for the UCLA women's soccer program.
Tanaka's market definition was too restricted. Although Tanaka alleged that she did not wish to travel outside the Los Angeles area, her personal preferences could not define a market. Her complaint revealed that she had been recruited by schools around the country. That strongly suggested that the relevant geographic market was a national one. It certainly extended beyond UCLA.
Further, she did not adequately allege significant anticompetitive effects. If the market were national, there would be little anticompetitive effect, because the Pac-10 rule only applied to transfers between Pac-10 schools. If the market were the Pac-10 schools, the claim would fail because Tanaka had alleged that she was the only transferring athlete on whom the rule's sanctions had ever been imposed.
Tanaka v. University of Southern California, 252 F.3d 1059 (9th Cir. 2001).
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The Third District Court of Appeal in Sacramento has ruled that an employee may be able to prove that she was fired for exercising her Family Rights Act leave rights even if her leave extended beyond the period required by law.
After Carla Dudley was diagnosed with diabetes, she took several medical leaves of absence, amounting to over six months within a 12-month period. After imposing lesser discipline for excessive absences, her employer, the Department of Transportation terminated Dudley's employment.
The California Family Rights Act provides that an employee is entitled to 12 weeks of leave within a 12- month period to attend to his or her own serious health condition. It forbids employers from taking adverse action against employees for exercising their rights under the Act.
Although the Department did not fire Dudley until she had used leave in excess of the 12 mandated weeks, Dudley could recover for retaliation if she could prove that the Department based its decision on the leave that was covered by the Act.
Dudley v. Department of Transportation, 2001 WL 722827 (Cal. Ct. App. Jun. 28, 2001).
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The San Diego division of the Fourth District Court of Appeal has ruled that homeowners have no duty to supervise teenagers in their home in the absence of knowledge of a dangerous propensity.
Jay (16) sexually assaulted Ryan (13) while both were visiting the teenage son of Nicanor and Gail Romero. When Ryan's mother dropped her off, she said that she did not allow Ryan to be left anywhere without adult supervision. The Romeros left the teenagers at home while they went to get pizza. While they were away, Jay assaulted Ryan.
Although there was a special relationship between Ryan and the Romeros, their duty only extended to protection against known dangers. Ryan provided no evidence that the Romeros must have known about Jay's propensity to assault female minors.
Ryan's claim that the Romeros were liable for misfeasance in making her situation worse also failed. They were not on notice that their actions would increase the danger to Ryan.
Romero v. Superior Court, 89 Cal. App. 4th 1068 (2001).
Subsequent treatment of decisions reported on in earlier issues:
Bolter v. Superior Court (April 2001 issue), petition for review filed (Apr., 18, 2001).
Hufford v. McEnaney (June 2001 issue), now reported at 249 F.3d 1142 (9th Cir. 2001).
Humphrey v. Memorial Hospitals Ass'n (March 2001 issue), petition for certiorari filed (Jun. 13, 2001).
In re Aaron Collins (March 2001 issue), review denied (May 23, 2001).
Luo Yu Jie v. Liang Tai Knitwear Co. (June 2001 issue), now reported at 89 Cal. App. 4th 654 (2001).
McCoy v. Superior Court (April 2001 issue) review denied and official reporter directed not to publish the decision (Jun. 20, 2001). The decision may no longer be cited. Cal. R. Ct. 976(d), 977.
M.G. v. Time Warner, Inc. (June 2001 issue), now reported at 89 Cal. App. 4th 623 (2001).
Pichly v. Nortech Waste LLC (April 2001 issue), review denied and official reporter directed not to publish the decision (Jun. 20, 2001). The decision may no longer be cited. Cal. R. Ct. 976(d), 977.
Saelzler v. Advanced Group 400 (June 2001 issue) now reported at 25 Cal. 4th 763 (2001).
Streit v. County of Los Angeles (February 2001 issue), petition for certiorari filed (Jun. 12, 2001).
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