Opinion
CV-21-01025-PHX-DWL
10-05-2022
Jennifer Chen, Plaintiff, v. Cozzoli LLC, Defendant.
ORDER
DOMINIC W. LANZA UNITED STATES DISTRICT JUDGE
Jennifer Chen (“Plaintiff”) alleges that she was subjected to discriminatory treatment and retaliation before she was wrongfully terminated from her job as an assistant manager at Villa Restaurant Group (“VRG”), which is operated by Cozzoli LLC (“Defendant”). In a March 2022 order, the Court dismissed Plaintiff's wrongful termination claims for failure to state a claim but authorized Plaintiff to attempt to cure the deficiencies in the dismissal order by filing an amended complaint with more detailed allegations. (Doc. 22.) Plaintiff has now filed a Second Amended Complaint (“SAC”) that reasserts the wrongful termination claims and Defendant has again moved to dismiss those claims under Rule 12(b)(6). (Doc. 33.) For the following reasons, the motion to dismiss is granted in part and denied in part.
BACKGROUND
I. Factual History
The following facts, presumed true, are derived from the SAC. (Doc. 30.)
Plaintiff is an Asian-American woman who was hired to work at VRG in July 2016. (Doc. 30 ¶¶ 5, 8-9.) Plaintiff resigned for personal reasons in April 2018 but was rehired in August 2019 as a Catering Hourly Assistant Manager. (Id. ¶¶ 14-15.) At relevant times, Plaintiff reported to Interim District Manager Patricia Cobian. (Id. ¶¶ 28-29.)
During her course of employment, Plaintiff was subjected to recurrent race- and national origin-based insults, harassment, and acts of discrimination. (See, e.g., id. ¶ 65 [“For example, [a coworker] . . . frequently referred to [Plaintiff] as ‘the Chinese Girl' . . . .”].) Plaintiff repeatedly reported those incidents to VRG representatives. (See, e.g., id. ¶ 87 [“On August 20, 2019, [Plaintiff] emailed District Vice President Kelly Hernandez to request a meeting with her. In that email, [Plaintiff] reported that she believed Cobian was providing preferential treatment to Hispanic employees and that she was being subjected to a hostile work environment.”].)
Plaintiff also reported three other categories of perceived illegal conduct-missing money, assault and battery, and food-safety violations-to VRG representatives. (Id. ¶¶ 34-36, 40-49, 95-115.) As for the first category, on two separate occasions, Plaintiff reported to VRG representatives that a store safe was missing money. (Id. ¶ 40 [“On August 8, 2019, [Plaintiff] reported to Cobian verbally and by text that the safe was missing $21.00. She also reported she believed one or more employees stole this money.”]; id. ¶ 46 [On August 20, 2019, [Plaintiff] texted Cobain, notifying her that the safe was missing approximately $60.00. She also reported she believed one or more employees stole this money.”].)
As for the second category, on August 23, 2019, a coworker “aggressively approached [Plaintiff], cornered her, and began shouting at her” and “physically exerted himself over [Plaintiff] by sticking his chest out and driving her into the back of the store.” (Id. ¶¶ 50, 96-98.) This incident, which “lasted approximately five minutes until [Plaintiff] was able to escape the room,” “caused [Plaintiff] to fear for her physical safety.” (Id. ¶¶ 99100.) Plaintiff “immediately reported this incident to Cobian, but Cobian took no action.” (Id. ¶ 101.) Then, on September 24, 2019, a second coworker threw “VRG property and equipment” at Plaintiff, including two “full-size stainless-steel chafers,” while standing “only a few feet from [her].” (Id. ¶¶ 24, 104-06.) After Plaintiff “told [him] to stop and warned him that she would call Cobian if he did not calm down,” he “walk[ed] behind [Plaintiff]” and “using his shoulder, physically shoved [Plaintiff] out of the way in [an] attempt to grab equipment.” (Id. ¶¶ 107-08.) Plaintiff reported the incident by phone to Cobian, General Manager Eric Lingzhi Wang, and Human Resources (“HR”) representative Mike Serchia, and by email to HR, but Plaintiff believes “no investigation occurred and [the coworker] experienced no consequences.” (Id. ¶¶ 18, 111-16.)
As for the third category, on August 6, 2019, Plaintiff “observed multiple food safety violations as set forth by the Arizona Administrative Codes” at a store in Maricopa County, including “failing to utilize cut gloves when preparing food,” the use of “bare hands to handle food,” “failing to wash and sanitize hands,” “failing to utilize a temperature log,” and failing to “obtain the temperature of the food” for storage. (Id. ¶ 34.) “If observed by a food safety inspector,” such violations “often give rise to fines and/or penalties.” (Id. ¶ 35.) Plaintiff “verbally reported the above-referenced violations to the [store's] Assistant Manager.” (Id. ¶ 36.)
Additionally, on October 9, 2019, Plaintiff observed a VRG employee creating food-handling guidelines for an upcoming event in the Gila River Indian Community that would “require[] VRG employees to violate numerous food safety regulations.” (Id. ¶¶ 127-28.) Specifically, the guidelines “required employees to return all leftover food from the event to the store and to attempt to resell it.” (Id. ¶ 129.) In response, Plaintiff “consulted with both the Maricopa County Food Inspector and the Gila River Supervisor of Environmental Health,” and she “was advised that [the guidelines] did not comport with food safety regulations and that VRG did not even have the food permit required to cater events at Gila River.” (Id. ¶¶ 130-33.) On October 13, 2019, Plaintiff “texted Cobian to express her concerns regarding VRG's unsafe food handling, specifically stating that the health inspector asked for only ‘closed' vehicles for catering events.” (Id. ¶ 144.) The following day, on October 14, 2019, Plaintiff “reported her concerns regarding unsafe food transportation and regulations to Catering Sales Manager Joanna Zabor,” but “Zabor ignored [Plaintiff's] concerns and expected [Plaintiff] to proceed in a manner that violated food safety regulations.” (Id. ¶¶ 134, 136.) In the same conversation, Plaintiff “reported that the stores needed new thermal, temperature-controlled bags as the ones they used (on both the Gila River Reservation and throughout Maricopa County) were torn and would be unsafe for food delivery and temperature control.” (Id. ¶ 135.)
On an unspecified date, the “District Vice President of Catering, Stephanie Beamer, instructed the Stores to proceed with catering events as planned.” (Id. ¶ 137.) Plaintiff “attempted to explain that [the Gila River Supervisor of Environmental Health] advised the store required [a] catering permit from Gila River.” (Id. ¶ 138.)
On October 14, 2019, Plaintiff “again expressed her concerns by email to Zabor about unsafe food transportation and handling, both on and off the Gila River Tribal Community reservation.” (Id. ¶ 145, emphasis omitted.)
“On more than one occasion throughout October of 2019, [Plaintiff] expressed her concerns verbally and by email to Cobian, Wang, and Hernandez that VRG violated or would violate requirements set forth by governmental entities charged with regulating food handling and/or service within Arizona.” (Id. ¶ 147.) In response, “Cobain told [Plaintiff] not to worry about these issues because there were no pending issues with the health inspector.” (Id. ¶ 148.) On unspecified dates, Plaintiff “refused to engage in this illegal conduct” by “cancelling] a Fooda event and another VRG store handled the catering.” (Id. ¶ 149.)
On October 24, 2019, Plaintiff was scheduled to attend a catering event in Scottsdale by herself. (Id. ¶ 164.) This staffing approach violated health code regulations, which “requir[ed] at least two people to attend such events so that the person responsible for handling food would not also be required to handle money.” (Id. ¶ 171.) Thus, “to remain in compliance with applicable health codes,” as well as for other reasons, Plaintiff asked a former VRG employee “to work the event with her.” (Id. ¶ 166.) When Cobian “arrived at the event unannounced” and saw that Plaintiff was not alone, Cobian “immediately reprimanded [the former employee] in Spanish for providing assistance to [Plaintiff].” (Id. ¶ 167.)
On October 25, 2019, Plaintiff reported to Wang “that she felt discriminated and retaliated against, that her superiors were instructing her to violate food safety regulations, and that she was reprimanded for refusing to do so.” (Id. ¶ 172.)
On October 27, 2019, Plaintiff reminded Cobian that she had been approved to take paid sick time on October 28, 29, and November 11. (Id. ¶ 173.) The next day, Plaintiff received a voice message that she had been terminated. (Id. ¶ 174.)
On March 5, 2020, Plaintiff filed a charge of discrimination with the Arizona Attorney General's Office. (Doc. 15-2.)
On June 25, 2020, Plaintiff filed a charge of discrimination with the EEOC. (Doc. 30 ¶ 182.)
On October 27, 2020, the parties entered into a written tolling agreement with an expiration date of January 26, 2021. (Id. ¶ 184.)
II. Procedural History
On May 4, 2021, Plaintiff initiated this action by filing her original complaint in Maricopa County Superior Court, alleging federal claims under Title VII of the Civil Rights Act of 1964, state-law claims under the Arizona Employment Protection Act (“AEPA”), the Arizona Civil Rights Act (“ACRA”), and the Arizona Fair Wages and Healthy Families Act, and a state-law tort claim of intentional interference with contract. (Doc. 1-3 at 2-20.)
On June 11, 2021, Defendant removed the action to this Court. (Doc. 1.)
On August 23, 2021, Defendant filed a motion to dismiss. (Doc. 15.)
On March 22, 2022, after full briefing (Docs. 18, 21), the Court granted Defendant's motion with respect to the AEPA claims and the intentional interference claim and denied it with respect to the ACRA claim. (Doc. 22.) The Court also granted Plaintiff leave to file an amended complaint. (Id. at 13-14.)
On April 5, 2022, Plaintiff filed a first amended complaint (“FAC”). (Doc. 24.)
On April 18, 2022, the parties jointly requested a two-week extension to Defendant's response deadline to allow the parties to meet and confer regarding the FAC. (Doc. 25.)
On April 29, 2022, the Court granted the parties' Stipulation for Filing of Second Amended Complaint. (Doc. 27-1.)
On May 19, 2022, Plaintiff filed the SAC. (Doc. 30.)
On June 9, 2022, Defendant filed the pending motion to dismiss Counts One and Two of the SAC. (Doc. 33.) The motion is fully briefed. (Docs. 34, 35.)
Defendant's request for oral argument is denied because the issues are fully briefed and argument would not aid the decisional process. See LRCiv 7.2(f).
DISCUSSION
I. Legal Standard
“[T]o survive a motion to dismiss under Rule 12(b)(6), a party must allege ‘sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” In re Fitness Holdings Int'l, Inc., 714 F.3d 1141, 1144 (9th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). “[A]ll well-pleaded allegations of material fact in the complaint are accepted as true and are construed in the light most favorable to the non-moving party.” Id. at 1444-45 (citation omitted). However, the Court need not accept legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 679-80. Moreover, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 679. The court also may dismiss due to “a lack of a cognizable theory.” Mollett v. Netflix, Inc., 795 F.3d 1062, 1065 (9th Cir. 2015) (citation omitted).
II. Count One
A. The Parties' Arguments
In Count One, Plaintiff asserts a claim for wrongful termination in violation of A.R.S. § 23-1501(A)(3)(c)(ii). (Doc. 30 ¶¶ 188-202.) Plaintiff contends she was wrongfully terminated in retaliation for her efforts to report to VRG that the company (or an employee of the company) had engaged in three discrete categories of illegal conduct: (1) theft in violation of A.R.S. § 13-1802(A); (2) assault and battery in violation of “A.R.S. § 13-1201 et. seq.”; and (3) failing to abide by various statutory and regulatory food safety laws and permitting requirements. (Id. ¶¶ 190-99.)
Defendant moves to dismiss Count One for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (Doc. 33 at 3-12.) Nearly all of Defendant's objections to Count One flow from the premise that none of the laws and regulations that Plaintiff allegedly believed (and reported) were violated can support a wrongful termination claim under AEPA. First, Defendant argues that AEPA's exclusive-remedies provision, A.R.S. § 23-1501(B), bars AEPA claims premised on Arizona's criminal theft and assault statutes because they “have their own remedial scheme[s] (i.e., prosecution).” (Id. at 5-7, 11.) Second, Defendant argues that food-safety regulations cannot support an AEPA claim because protection under § 23-1501(A)(3)(c)(ii) is limited to reported violations of “the Constitution of Arizona or statutes of this state,” and in any event, the complaint fails to identify the food-safety regulations with the necessary degree of specificity. (Id. at 5-11.) Third, Defendant argues that Plaintiff could not have reasonably believed that Defendant violated A.R.S. §§ 11-269.12 and 11-269.24 by failing to obtain a permit because neither statute imposes permitting requirements on private entities like Defendant. (Id. at 11-12.)
Plaintiff opposes Defendant's dismissal request. (Doc. 34 at 5-16.) As for the theft and assault statutes, Plaintiff contends that criminal prosecution is not “a remedy to an employee for a violation of the statute” precluding an AEPA claim. (Id. at 6-9, emphasis omitted.) As for the food-safety regulations, Plaintiff argues that administrative regulations may support an AEPA claim where “the regulations at issue were promulgated by an administrative body pursuant to Arizona statutes.” (Id. at 9-14.) Plaintiff also contends that the SAC adequately identifies the specific food-safety rules she believed were violated because it cites “the Food, Recreational, and Institutional Sanitation Code (A.A.C. R9-8-102, et. seq.)” (“Food Code”), identifies “the statutes under which [those regulations] were promulgated,” and describes the perceived violations (e.g., “employees failing to wash and/or sanitize hands”). (Id. at 4, 9-10, 14-15.) As for her reports of permitting violations, Plaintiff argues that “[Defendant] asks the Court to supplant the role of the jury by asserting it is impossible for anyone to believe VRG violated [A.R.S. §§ 11-269.12 and 269.24].” (Id. at 15-16.)
Plaintiff also argues that the SAC fulfills the notice requirements of Federal Rule of Civil Procedure 8 because it is “nearly thirty pages long and contains nearly 250 separately numbered paragraphs.” (Doc. 34 at 1.) However, the length of Plaintiff's pleading does not determine sufficiency or plausibility.
In reply, Defendant reiterates that the criminal theft and assault statutes “provide a remedy in the form of criminal liability against the coworker.” (Doc. 35 at 6.) Defendant also argues that the “unequivocal language of the AEPA” indicates that “only the Arizona Constitution or Arizona statutes can form the basis of a wrongful termination claim,” and thus Plaintiff's reliance on regulations is misplaced. (Id. at 4.) Defendant also contends that it “should not be required to search through eighteen sections of the [Food Code] to guess as to which sections Plaintiff believed were being violated.” (Id. at 5.) Finally, Defendant reiterates that “there is no conceivable way that a private company like Defendant or its employees could violate [A.R.S. §§ 11-269.12 or 11-269.24] because these statutes merely place certain requirements upon counties and food handler certificate training courses.” (Id. at 6, emphasis omitted.)
B. Analysis
Under A.R.S. § 23-1501(A)(3)(c)(ii), “[a]n employee has a claim against an employer for termination of employment” if:
The employer has terminated the employment relationship of an employee in retaliation for . . . [t]he disclosure by the employee in a reasonable manner that the employee has information or a reasonable belief that the employer, or an employee of the employer, has violated, is violating or will violate the Constitution of Arizona or the statutes of this state to either the employer or a representative of the employer who the employee reasonably believes is in a managerial or supervisory position and has the authority to investigate the information provided by the employee and to take action to prevent further violations of the Constitution of Arizona or statutes of this state or an employee of a public body or political subdivision of this state or any agency of a public body or political subdivision.Id. Thus, to prevail on a claim under this provision of AEPA (which gives rise to Plaintiffs claim in Count One), Plaintiff “must establish: (1) she had information or a reasonable belief that her employer or another employee had violated an Arizona statute or constitutional provision; (2) she disclosed the information or belief to an employer or a representative of the employer whom she reasonably believed was in a managerial or supervisory position and had the authority to investigate the information and take action to prevent further violations of the Arizona constitution or statutes; and (3) she was terminated because of the first two steps.” Denogean v. San Tan Behavioral Health Servs., LLC, 2017 WL 4922035, *3 (D. Ariz. 2017).
To avoid dismissal of Count One, the SAC need only plausibly establish that Plaintiff engaged in protected activity under AEPA with respect to one Arizona law (and specify the underlying law). However, because the parties assert distinct arguments for each type of illegal conduct reported by Plaintiff-(1) violations of Arizona criminal laws, (2) violations of food-safety regulations, and (3) violations of permitting requirements- the Court will address each in turn.
1. Reported Criminal Violations
As an initial matter, Defendant objects to Plaintiff's use of “et. seq.” when identifying the criminal statutes she believed her coworkers violated during the alleged “assault and battery” incidents-specifically, Plaintiff's repeated references to “A.R.S. § 13-1201, et. seq.” (See, e.g., Doc. 30 ¶ 193.) Although the Court agrees that the phrase “et seq.” adds unnecessary ambiguity, the SAC provides sufficient factual details to plausibly establish Plaintiff's reasonable belief that her coworkers' conduct violated one or more of Arizona's assault statutes, including 13-1201 (reckless endangerment), § 13-1202(A)(1)-(2) (threats or intimidation), and § 13-1203 (assault). To avoid further ambiguity and streamline the analysis, the Court will assume that “§ 13-1201, et seq. ” means only §§ 13-1201 through -1203 (rather than an undetermined number of additional provisions within Chapter 12 of Title 13).
On the merits, § 23-1501(B) provides that if a “statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy prescribed in or arising out of the statute.” Id. Courts have concluded that this provision precludes a plaintiff from premising an AEPA retaliatory-termination claim on disclosures regarding workplace discrimination or wage violations. See, e.g., Baron v. Arizona, 270 Fed.Appx. 706, 710 (9th Cir. 2008) (“[B]ecause ACRA provides a remedy for sex discrimination, [a plaintiff] cannot bring [a claim premised on an ACRA violation] under the AEPA.”); Ferren v. Westmed Inc., 2021 WL 2012654, *3 (D. Ariz. 2021) (dismissing an AEPA claim based on “reported wage violations protected by Arizona's wage law” because that statute authorizes employees to recover against an employer for unpaid wages).
Here, Plaintiff alleges that she reasonably believed (and reported) that VRG employees stole money from the safe and committed assault and battery. (Doc. 30 ¶¶ 40, 46, 96-101, 105-116.) Defendant contends that, because the offending employees could be prosecuted for theft under A.R.S. § 13-1802(A) or for assault and battery under §§ 13-1201 through -1203, Plaintiff has a remedy for the underlying conduct, which in turn means that Plaintiff is precluded, under § 23-1501(B), from pursuing an AEPA retaliatory-termination claim premised on disclosures related to those offenses. (Doc. 33 at 11.)
Defendant's argument lacks merit. Most important, Defendant's position is not supported by the relevant statutory language. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241 (1989) (“The task of resolving the dispute over the meaning of [the statutory provision] begins where all such inquiries must begin: with the language of the statute itself.”); Lowing v. Allstate Ins. Co., 859 P.2d 724, 726 (Ariz. 1993) (“The best and most reliable index of a statute's meaning is its language.”). As noted, § 23-1501(B) provides that “[i]f the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute.” Although Defendant appears to believe the phrase “the statute” within § 23-1501(B) means any statute enacted by the Arizona Legislature touching on any subject matter, this interpretation would not make sense for several reasons. First, § 23-1501(B) specifies that the statutes with an AEPA displacement effect are those that provide a remedy “to an employee.” This suggests that § 23-1501(B) only displaces AEPA retaliatory-termination claims based on disclosures concerning one particular category of statutes-those that regulate the employee-employer relationship. Criminal statutes, such as the theft and assault statutes identified in the SAC, would not fall within this definition.
This understanding of the term “the statute” in § 23-1501(B) is bolstered by § 23-1501(A)(3), which discusses in more depth when and how the availability of remedies under another statute may displace the availability of an AEPA claim. After stating that “[i]f the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute,” § 23-1501(A)(3) goes on to provide a non-exclusive list of the statutes that might have such a displacement effect. The enumerated statutes are “[t]he civil rights act prescribed in title 41, chapter 9”; “[t]he occupational safety and health act prescribed in chapter 2, article 10 of this title”; “[t]he statutes governing the hours of employment prescribed in chapter 2 of this title”; “[t]he agricultural employment relations act prescribed in chapter 8, article 5 of this title;” and “[t]he statutes governing disclosure of information by public employees prescribed in title 38, chapter 3, article 9.” These are all employment-specific statutes that regulate the employee-employer relationship. This, too, suggests that § 23-1501(B) is not meant to apply to criminal statutes of general applicability. See generally Yates v. United States, 574 U.S. 528, 543 (2015) (“[W]e rely on the principle of noscitur a sociis-a word is known by the company it keeps-to avoid ascribing to one word a meaning so broad that it is inconsistent with its accompanying words, thus giving unintended breadth to the Acts of Congress.”) (citation omitted).
The inclusion of the phrase “provide a remedy” within § 23-1501(B) further undermines Defendant's contention that this provision precludes retaliatory-termination claims based on disclosures regarding criminal statutes. See generally Terry v. United Parcel Serv., Inc., 508 P.3d 1137, 1140 (Ariz.Ct.App. 2022) (“[T]he AEPA distinguishes between statutes that provide a remedy and statutes that do not.”). Criminal statutes, unlike civil statutes, are not typically thought of as providing a remedy to private citizens. This is because “[a] prosecutor has discretion to prosecute such cases as he or she deems appropriate; thus, whether a case is prosecuted is not controlled by the victim or anyone else.” Fappani v. Bratton, 407 P.3d 78, 83 (Ariz.Ct.App. 2017). See generally State v. Lamberton, 899 P.2d 939, 941-42 (Ariz. 1995) (“The parties to a criminal action are the defendant and the state. No private citizen, however personally aggrieved, may institute criminal proceedings independently, and the prosecutor's own discretion is not subject to judicial control at the behest of persons other than the accused.”) (citation and internal quotation marks omitted). At most, it might be said that some criminal statutes indirectly provide a remedy to crime victims, via the availability of a restitution award. Fay v. Fox, 494 P.3d 1105, 1108-10 (Ariz. 2021) (noting that Arizona has “recognized constitutional protections for crime victims that are among the nation's most sweeping,” including a “right to restitution” that is “squarely conferred by the Constitution”). But here, Plaintiff was not the victim of one of the categories of disclosed criminal offenses (the theft offenses) and there is no allegation in the SAC that Plaintiff sustained a financial loss arising from the other category of disclosed criminal offenses as to which she was the victim (assault and battery). Accordingly, it is difficult to understand how either set of criminal statutes could be viewed as providing “a remedy” to Plaintiff, such that their existence implicates § 23-1501(B).
This understanding of § 23-1501(B) is further supported by the Arizona Supreme Court's decision in Cronin v. Sheldon, 991 P.2d 231 (Ariz. 1999). There, the court noted that exclusive-remedy provisions make sense “in the employment relationship, [where] overlapping theories of recovery . . . make the calculation of damages uncertain.” Id. at 241. That concern is inapplicable here-the amount that Plaintiff could recover under AEPA, should she prevail, is not made uncertain by the fact that other VRG employees could face criminal liability for the reported misconduct.
Finally, Defendant has conspicuously failed to identify any case suggesting that criminal prosecution is a “remedy to an employee” for purposes of § 23-1501(B). On the other hand, courts have repeatedly allowed retaliatory-termination claims under § 23-1501(A)(3)(c)(ii) to proceed based on reported violations of Arizona criminal statutes. See, e.g., Murar v. AutoNation Inc., 2021 WL 3912849, *8 (D. Ariz. 2021) (“Murar has offered evidence that he had information or a reasonable belief that Defendants waived sales taxes using a falsified bill of lading in violation of A.R.S. §§ 42-1125, 42-1127, forged a customer's signature in violation of A.R.S. § 13-2002, and made false repair orders in violation of A.R.S. §§ 13-2002, 13-2310, and 45-1251. Murar also offered evidence that he disclosed these alleged violations to Brown, the Arizona market president of AWR. The Court, therefore, finds that Murar offered enough evidence from which a reasonably jury could find he engaged in protected activity.”); Revit v. First Advantage Tax Consulting Servs., LLC, 2012 WL 1230841, *3 (D. Ariz. 2012) (allowing AEPA claim to proceed based on alleged retaliation for disclosing the existence of “a deceptive business practice and a fraudulent scheme under the Arizona criminal code” and “false statements in preparing tax returns and SEC filings [in violation of] Arizona law”); Levine v. Terros, 2010 WL 864498, *10-11 (D. Ariz. 2010) (plaintiff engaged in protected activity when she “reasonably believed that [her employer's] billing practice violated A.R.S. [§] 13-1802's prohibition against theft”).
2. Reported Violations Of Food-Safety Regulations
As noted, A.R.S. § 23-1501(A)(3)(c)(ii) requires that the plaintiff had “information or a reasonable belief that the employer, or an employee of the employer, has violated, is violating or will violate the Constitution of Arizona or the statutes of this state. ” Id. (emphasis added). Accordingly, it is well-established that a violation of a federal law or regulation cannot support an AEPA claim for retaliatory termination. See, e.g., Galati v. Am. W. Airlines, Inc., 69 P.3d 1011, 1014 (Ariz.Ct.App. 2003) (“The language chosen by our legislature is unequivocal . . . . No mention is made of any federal provision, statute or regulation . . . . The statute reiterates that it is against violations of the Arizona Constitution and Arizona statutes that protection is provided.”). However, neither the Ninth Circuit nor the Arizona Supreme Court has addressed the issue presented here- whether reported violations of administrative regulations may give rise to such a claim.
See also Nelson v. Newmark Knight Frank, 2019 WL 6875469, *6 (D. Ariz. 2019) (dismissing an AEPA claim where the plaintiff “thought a federal violation occurred” and admitted that he “didn't look at [the situation] from an Arizona standpoint”); Rowberry v. Wells Fargo Bank NA, 2015 WL 7273136, *4-5 (D. Ariz. 2015) (finding that the plaintiff “did not engage in activity protected by AEPA” when she refused to violate “federal reserve rules, regulations, and the like” but “did not know whether [the underlying conduct] violates Arizona law”).
Plaintiff identifies two cases in which reports of regulatory violations were deemed sufficient to support an AEPA claim: Ward v. Life Care Ctrs. of Am., Inc., 2018 WL 5017004 (D. Ariz. 2018), report and recommendation adopted, 2018 WL 5807111 (D. Ariz. Nov. 6, 2018), and Vera v. Sun Land Beef Co., 2009 WL 532625 (Ariz.Ct.App. 2009) (unpub.). However, both cases involved reported regulatory violations that constituted direct violations of specific state statutes. In Ward, an Arizona statute (A.R.S. § 36-140) provided that a violation of regulations adopted pursuant to a different statutory provision (A.R.S. § 36-132) was a class 3 misdemeanor. 2018 WL 5017004 at *4. Thus, the court concluded that, by disclosing his reasonable belief that his employer had violated those regulations, the plaintiff reported “violations of the statutes of this state.” Id. The court also clarified that the mere fact “[t]hat the [administrative regulations] in question [have] been incorporated by reference in the Arizona Administrative Code does not in itself satisfy AEPA's requirement that a plaintiff identify an Arizona statute to support an actionable claim.” Id. at *3 (emphasis added). Similarly, in Vera, the reported misconduct, which violated Arizona Department of Environmental Quality rules R18-4-104(B)(1) and R202(A)(2), also constituted a class 5 felony under A.R.S. § 49-263.01(G). 2009 WL 532625 at *2.
Here, Plaintiff alleges that she reported violations of various provisions of the Food Code, which is codified at “A.A.C. R9-8-102, et. seq.,” that involved “failing to appropriately handle food, sanitize hands, control temperature, among other violations.” (Doc. 30 ¶ 194.) Plaintiff further alleges that these provisions of the Food Code “were promulgated pursuant to Arizona statutes conferring authority upon various bodies to promulgate food and safety handling regulations, including without limitation” A.R.S. §§ 9-485.01, 11-251(17), and 36-1761. (Doc. 30 ¶ 195.) These allegations are insufficient because the underlying statutory provisions, unlike the provisions at issue in Ward and Vera, do not provide that a violation of the regulations is actionable or otherwise constitutes a violation of Arizona law. The fact that the Department of Health's enforcement power (as well the enforcement power of local regulatory authorities) is conferred by statute does not transform administrative code violations into violations of the authorizing statutes.Thus, Plaintiff's alleged disclosure of violations of various food-safety regulations does not qualify as a disclosure of perceived violations of “the Constitution of Arizona or the statutes of this state,” as required to state a claim under A.R.S. § 23-1501(A)(3)(c)(ii). See also Torrez v. City of Scottsdale, 1997 WL 580326, *1 (Ariz. Sup. Ct. 1997) (“Under Arizona law, public policies expressed in federal statutes or municipal ordinances do not support a state wrongful discharge claim.”).
In her response, Plaintiff contends that A.R.S. §§ 9-485.01, 11-251, and 36-1761 provide “broad statutory enforcement mechanism[s]” for the Food Code. (Doc. 34 at 12-13.) This is incorrect. Section 9-485.01 simply grants municipalities the power to regulate mobile food vendors. Section 11-251(17) grants county supervisory boards the power to “[a]dopt provisions necessary to preserve the health of the county, and provide for the expenses thereof.” Section 36-1761 instructs the state Director of Health and Safety to establish certain food-safety standards. These statutes do not authorize a penalty for violation of the regulations that might be promulgated by the relevant regulatory authorities or otherwise create enforcement provisions applicable to food-safety violations by private parties.
A.A.C. R9-8-111, the Compliance and Enforcement section of the Food Code, adopts by incorporation most of the enforcement provisions of the FDA's model food-safety code but specifically excludes the federal provision that provides that “[a] person who violates a provision of [the food-safety code] shall be guilty of a misdemeanor.” U.S. Public Health Service, FDA, Food Code (2017) Annex 1 at 8-911.10(B), available at https://www.fda.gov/media/110822/download.
3. Reported Permitting Violations
As noted, A.R.S. § 23-1501(A)(3)(c)(ii) provides that the plaintiff must have possessed “information or a reasonable belief' of a violation of a state statutory or constitutional provision. Id. “An actual violation of the predicate statute or Arizona's constitution need not occur.” Nelson v. Newmark Knight Frank, 2019 WL 6875469, *5 (D. Ariz. 2019) (quotation and brackets omitted). “But an employee's belief that Arizona law was violated must be reasonable.” Id.
Plaintiff alleges she “reported her reasonable belief that VRG failed to obtain appropriate permits” in violation of A.R.S. §§ 11-269.12 and 11-269.24. (Doc. 30 ¶ 197.) More specifically, Plaintiff alleges, based on consultations with “both the Maricopa County Food Inspector and the Gila River Supervisor of Environmental Health,” she reasonably believed and reported that VRG did not “have the food permit required to cater events at Gila River.” (Id. ¶¶ 130-31, 138, 142, 197.)
The Court agrees with Defendant that Plaintiff cannot premise her retaliatory-termination claim in Count One of these disclosures. A.R.S. § 11-269.12 simply provides that, “[i]f a county requires food handling training and a certificate for employment in the food service industry,” the county must follow various standards. It doesn't go further and provide that a violation of any such optional county-level regulatory requirements is a violation of state law. Similarly, A.R.S. § 11-269.24 simply authorizes county boards of supervisors to issue ordinances and regulations governing mobile food vendors and mobile food units. Like § 11-269.12, it doesn't provide that a violation of any such optional county-level regulatory requirements is a violation of state law. Given this backdrop, Plaintiff could not have reasonably believed that VRG violated either statute by failing to obtain a permit before catering an event that took place on the Gila River Indian Community. This is because the statutes don't create permitting requirements-they simply authorize county-level officials to promulgate such requirements. Thus, even assuming that Plaintiff acted in good faith when reaching the mistaken determination that VRG's conduct violated the aforementioned statutes, and acknowledging that “[a]n actual violation of the predicate statute . . . need not occur,” Nelson, 2019 WL 6875469 at *5, the Court has little trouble concluding that Plaintiff's determination was unreasonable as a matter of law. And because § 23-1501(A)(3)(c)(ii) requires that the plaintiff's belief regarding the perceived violation of state law be “a reasonable belief,” it follows that Count One cannot be premised on this set of allegations. See also Gray v. Motorola, Inc., 2009 WL 3173987, at *18 (D. Ariz. 2009), aff'd, 407 Fed.Appx. 103 (9th Cir. 2010) (concluding that the facts pled “[did] not support a reasonable belief' that the employer was committing fraud in violation of state law in part because “[p]laintiffs citation to A.R.S. § 13-2311 is inapposite as it merely prohibits the use of fraudulent practices in matters related to business conducted by agencies and entities of the State of Arizona”).
Finally, and in a related vein, Plaintiff argues in her response that she “believed VRG did not have permits and/or certifications required by local jurisdictions.” (Doc. 34 at 15-16.) Not only is this different from the theory articulated in the SAC (i.e., that Plaintiff disclosed violations of state statutory law, not violations of local regulatory requirements), but as discussed in Part II.B.2 above, the violation of local regulations promulgated pursuant to statutory authority does not alone qualify as a violation of Arizona constitutional or statutory law, as required for a claim under A.R.S. § 23-1501(A)(3)(c)(ii).
4. Summary As To Count One
Count One is not dismissed to the extent it is premised on Plaintiff's disclosure of perceived violations of Arizona's criminal theft and assault-and-battery statutes. In contrast, Count One cannot be premised on Plaintiff's disclosure of perceived violations of food-safety regulations or permitting requirements.
II. Count Two
A. The Parties' Arguments
In Count Two, Plaintiff asserts a claim for wrongful termination in violation of § 23-1501(A)(3)(c)(i). (Doc. 30 ¶¶ 203-12.) Specifically, Plaintiff contends she was wrongfully terminated in retaliation for (1) “reporting] her reasonable belief that VRG would violate food safety laws and regulations” and (2) “reporting] her reasonable belief that VRG would violate Arizona statutes by failing to obtain appropriate permits as required by . . . § 11-269.12 . . . [and/or] . . . § 11-269.24 . . . .” (Id. ¶¶ 205-06.).
Defendant moves to dismiss Count Two for failure to state a claim. (Doc. 33 at 12-14.) As an initial matter, Defendant contends that the SAC “does not allege that [Plaintiff] was terminated for her refusal to commit an act or omission that would violate the Arizona Constitution or an Arizona statute. Rather, the claim reads similar to Count One, alleging that she was terminated in retaliation for reporting her reasonable belief that Defendant would violate the Arizona Administrative Code and Arizona statutes.” (Id. at 13.) Defendant also contends that Count Two fails for the same reasons as Count One- an AEPA claim “cannot be premised on a violation of [the Food Code]” and Plaintiff “cannot have possibly reasonably believed Defendant or its employees were violating [A.R.S. §§ 11-269.12 and 11-269.24] because they are not statutes that any specific individual or private company . . . could violate.” (Id. 13-14.)
Plaintiff opposes Defendant's dismissal request. (Doc. 34 at 16-17.) As for whether the SAC alleges retaliation for her personal refusal to engage in illegal activity, Plaintiff argues that her factual allegations establish that she “refused to engage in . . . illegal conduct,” including catering in Gila River without a permit and working an event alone in violation of “applicable health codes,” and was terminated soon afterward. (Id. at 16, citing Doc. 30 ¶¶ 127-50, 165-68, 171-72).) Plaintiff contends that “the Court must consider the [SAC] in its entirety,” and thus her failure to “expressly include the word ‘refused'” in Count Two, “while perhaps inartful,” is not fatal. (Id. at 17.) Plaintiff also reiterates that, because violations of the Food Code and local permitting requirements constitute violations of the state statutes under which those regulatory requirements were promulgated, they may give rise to a viable AEPA claim. (Id. at 16.)
In reply, Defendant reiterates that the SAC does not allege that Plaintiff was terminated “for her own refusal to commit an act or omission in violation of the Arizona Constitution or [a] statute” and that the “claim is improperly premised on alleged violations of [the Food Code] . . . [and] A.R.S. §§ 11-269.12 and 11-269.24.” (Doc. 35 at 7-9.).
B. Analysis
Under A.R.S. § 23-1501(A)(3)(c)(i), “[a]n employee has a claim against an employer for termination of employment” if the “employer has terminated the employment relationship of an employee in retaliation for . . . [t]he refusal by the employee to commit an act or omission that would violate the Constitution of Arizona or the statutes of this state.” Thus, to prevail under this provision of AEPA (which gives rise to Plaintiff's claim in Count Two), Plaintiff must establish that she refused to commit a violation of an Arizona statute or constitutional provision and was terminated due to that refusal. Id.
For the reasons discussed in Part II.B.2 above, Count Two cannot be premised on a refusal to violate the Food Code or tribal or county permitting requirements-a violation of those provisions would not qualify as a violation of “the Constitution of Arizona or the statutes of this state.” And for the reasons discussed in Part II.B.3 above, Count Two also cannot be premised on Plaintiff's purported refusal to violate A.R.S. §§ 11-269.12 and 11-269.24 by failing to obtain a permit-again, such conduct would not qualify as a violation of “the Constitution of Arizona or the statutes of this state.” Given these deficiencies, the Court need not address whether the SAC adequately alleges that Plaintiff personally refused to engage in the purportedly illegal conduct.
III. Leave To Amend
Defendant anticipatorily opposes any request for leave to amend in the event of dismissal. (Doc. 33 at 3.) Specifically, Defendant contends that “Plaintiff has now had three opportunities to file an operative complaint but her claims for wrongful termination remain defective.” (Id.) In response, Plaintiff asserts that the “parties have had numerous conversations about what [Defendant] alleges are deficiencies in [Plaintiff's] complaints” and “[e]ach time [Plaintiff] amended her complaints pursuant to [Defendant's] request, [Plaintiff] believed that the amendments adequately addressed [Defendant's] raised concerns.” (Doc. 34 at 2, 17.) Plaintiff contends that Defendant has “used . . . extensions [of various responsive deadlines] as opportunities to raise new ‘deficiencies' and further delay this proceeding.” (Id. at 2.) In reply, Defendant contends that “the parties' stipulations to extend deadlines” are irrelevant and reiterates that “Plaintiff has already had multiple opportunities to properly plead her wrongful termination claims.” (Doc. 35 at 9.)
Rule 15(a)(2) provides that the Court “should freely give leave [to amend] when justice so requires,” and the Ninth Circuit has emphasized that “[t]his policy is ‘to be applied with extreme liberality.'” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citation omitted). Nevertheless, an amendment request may be denied if it would produce an undue delay in the litigation or be futile. AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 951 (9th Cir. 2006). Additionally, “the district court's discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint.” Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1072 (9th Cir. 2008) (quotation omitted).
Here, Plaintiff has already been given several opportunities to amend her complaint, the parties (and the Court) have expended significant resources addressing the sufficiency of those amendments, this case is now more than a year old, and Plaintiff offers no indication that any future iteration of the complaint would be based on new factual allegations that could cure the deficiencies identified above. The Court thus concludes that further amendment would result in undue delay and be futile.
Accordingly, IT IS ORDERED that Defendant's motion to dismiss (Doc. 33) is granted in part and denied in part. Count Two is dismissed without leave to amend.