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Jeffra v. Cal. State Lottery

Opinion

James Thomas JEFFRA, Plaintiff and Respondent, v. CALIFORNIA STATE LOTTERY, Defendant and Appellant.

Xavier Becerra, Attorney General, Chris A. Knudsen, Senior Assistant Attorney General, Kenneth C. Jones, Supervising Deputy Attorney General, and Nancy James, Deputy Attorney General, for Defendant and Appellant. Santiago & Jones, David G. Jones and Alex V. Vo, Woodland Hills, for Plaintiff and Respondent.

Xavier Becerra, Attorney General, Chris A. Knudsen, Senior Assistant Attorney General, Kenneth C. Jones, Supervising Deputy Attorney General, and Nancy James, Deputy Attorney General, for Defendant and Appellant.

Santiago & Jones, David G. Jones and Alex V. Vo, Woodland Hills, for Plaintiff and Respondent.

Plaintiff James Thomas Jeffra was an investigator employed by defendant California State Lottery. He sued defendant, alleging retaliation in violation of the California Whistleblower Protection Act. ( Gov. Code, § 8547.8, subd. (c).) He alleged defendant engaged in a pretextual investigation, ultimately forcing him to retire, after he filed a whistleblower complaint with the California State Auditor.

Defendant filed an anti-SLAPP (strategic lawsuit against public participation) motion to strike the complaint ( Code Civ. Proc., § 425.16 ), contending the complaint arose from protected activity, namely, defendant’s investigation of possible misconduct by plaintiff. The trial court denied the motion, finding the complaint arose “from non-protected retaliation, not protected investigations.”

After plaintiff’s ensuing appeal was briefed, the California Supreme Court decided Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 249 Cal.Rptr.3d 569, 444 P.3d 706 ( Wilson ). In Wilson , the court disapproved the precedent on which the trial court here relied, and held that retaliation claims “arise from the adverse actions allegedly taken” – here, the investigation – “notwithstanding the plaintiff’s allegation that the actions were taken for an improper purpose.” ( Id. at p. 892, 249 Cal.Rptr.3d 569, 444 P.3d 706.) We conclude, consistent with Wilson , that plaintiff’s complaint arose from protected activity.

The trial court did not consider whether plaintiff had established a probability of prevailing on the merits of his claim. Giving “careful attention to the limited nature of a plaintiff’s second-step showing” ( Wilson, supra , 7 Cal.5th at p. 892, 249 Cal.Rptr.3d 569, 444 P.3d 706 ), we conclude plaintiff has made the necessary showing. Consequently, we affirm the trial court’s order denying the anti-SLAPP motion.

FACTS

1. Plaintiff’s Complaint and Declaration

Plaintiff was hired by defendant as a Lottery Investigator in October 2011. His duties included investigating complaints and allegations of administrative misconduct of Lottery ticket retailers, claimants, distributors, suppliers, and contractors to the Lottery. Until November 2016, when he was placed on “administrative time off,” his performance was exemplary.

Plaintiff alleges that from 2013 through 2016, he reported to his superiors that prizes were paid to claimants of winning Lottery tickets who did not provide substantial proof that they were the genuine owners of the winning tickets. He also reported fraud among retailers of Lottery tickets and their employees, such as narrowly scratching tickets to see if they were winners and, if not, selling them to unsuspecting members of the public; and widespread theft of tickets. He also reported defendant had inadequate systems to prevent fraud. Some superiors, in effect, told him to stay quiet because sales were good.

Plaintiff made a telephonic whistleblower report in April 2016. He and investigator Gary Galbreath made a joint written report in late September 2016. They appended to their report copies of documents they had created or obtained in the course of their duties. They only provided the documents to the Auditor’s office, and to no one else.

On November 14, 2016, Kelly Dixon, the special assistant to the deputy director of the Security/Law Enforcement Division (for which plaintiff worked) told plaintiff he was being put on administrative leave. Plaintiff was required to turn in his equipment and peace officer credentials and was escorted off the premises. He was interrogated by Mr. Dixon on November 17, including about his whistleblower complaint – which he had not told anyone about. He was later told he would lose pension and health benefits if he was terminated while on administrative leave. He knew of two former coworkers who had been terminated after submitting whistleblower complaints within the previous year. So he retired.

The complaint alleged defendant’s actions were “solely based on retaliation because of Plaintiff’s protected conduct,” and the reasons given for the investigation and for placing him on administrative time off were “wholly pretextual.”

2. Defendant’s Anti-SLAPP Motion

Defendant filed an anti-SLAPP motion, including a declaration from James Libby, an assistant chief with the California Highway Patrol, who was assigned to perform the duties of deputy director of the Lottery’s Security/Law Enforcement Division. (The parties refer to this division as SLED.) Mr. Libby was the chief law enforcement officer for the Lottery, and oversaw a staff that included plaintiff. Among many other duties, he was charged with “investigating employee misconduct when I became aware of possible misconduct.”

Mr. Libby explained that, when questions arise about a claim for Lottery winnings, an investigator is assigned to investigate the claim. The investigator’s report includes confidential information, such as a claimant’s name, address, phone number, date of birth, social security number, and so on. The investigation files are kept confidential, accessible only to investigative and legal staff on a need to know basis.

In late October 2016, Mr. Libby saw an advertisement promoting an investigative report scheduled to air on a CBS television affiliate on October 27 and October 28. The advertisement indicated the reporter (David Goldstein) was looking into payments made to a specific Lottery winner whose claim was not accessible to investigators for various reasons.

The promotion for the CBS show indicated that Lottery insiders were giving confidential information to Mr. Goldstein. Mr. Libby testified he had a duty to investigate the potentially criminal disclosure of confidential information.

Before the Goldstein investigative report was broadcast, Mr. Libby began an investigation to determine who was releasing confidential information from the Lottery. The investigation revealed that plaintiff and two other Lottery employees had viewed two files they were not authorized to access and printed copies of confidential reports.

On October 31, 2016, Mr. Libby initiated a formal administrative investigation into potential misconduct by plaintiff to determine whether he had committed misconduct by accessing investigative files without authority and/or disseminating confidential information.

On November 10, 2016, Mr. Libby issued a memorandum to plaintiff notifying him that “he would be the subject of a formal administrative interrogation on November 17, 2016.”

On November 14, 2016, defendant notified plaintiff it was placing him on “Administrative Time Off” pending its investigation, which was standard procedure “when there are concerns that misconduct could continue, or that the investigation could be compromised, if the employee remains in the workplace.”

On November 16, 2016, Manuel Ortiz, plaintiff’s supervisor, received a package from plaintiff “containing separation documents and advising that he intended to retire,” with November 26, 2016 as his last day on the payroll.

Also on November 16, 2016, another investigator, Mr. Galbreath, was interviewed “in connection with the investigation into [plaintiff’s] possible misconduct.” Plaintiff was interviewed the following day, November 17. Following one or both of these interviews, Mr. Libby “was notified by the interviewer that [plaintiff] and the other employee revealed in their administrative interviews that they had submitted a joint whistleblower complaint to the California State Auditor. This was the first I learned that either [plaintiff] or the other employee had filed any sort of whistleblower complaint.”

3. Plaintiff’s Opposition

Plaintiff submitted several declarations in opposition to defendant’s anti-SLAPP motion, including his own.

In addition to facts already recounted, plaintiff described his work investigating “numerous instances of theft and embezzlement of Lottery ‘scratchers’ tickets, often in amounts exceeding $100,000.” He learned these crimes “were made possible by flaws in the Lottery’s Retailer Compliance Program.” He stated that “throughout the years 2013 through 2016, I notified my direct supervisors about my findings and apprised them of the widespread fraud I have observed upon bona fide Lottery ticket purchasers, the Lottery, and the state of California, as well as the inadequacies I had observed in the Lottery’s Retailer Compliance Program that enabled such fraud and theft to go on without detection.” He described his findings in detail, and identified some of his superiors to whom he reported the concerns he described.

On April 16, 2016, plaintiff submitted a telephonic whistleblower complaint to the Auditor. He “reported the . flaws in the Lottery’s Retailer Compliance Program as well as the Lottery’s failure to implement notification systems to flag and apprise investigators in advance of suspicious transactions and activities. In reporting the Lottery’s failure to employ sufficient oversight and safeguards to prevent theft and embezzlement of scratchers tickets,” plaintiff identified two specific cases “whereby scratchers tickets retailers or their employees were able to abscond with approximately $123,000 and $270,000 worth of tickets . months before the Lottery even became suspicious and began to investigate.” He reported that defendant uses notification systems for its other games, but not for scratchers tickets, and he “apprised the Bureau of the statements I had received from other Lottery[ ] supervisors and staff indicating that the Lottery was more concerned about sales of Lottery tickets than with preventing fraud.”

Also in April 2016, plaintiff met with Mr. Libby, Mr. Ortiz, and two fellow investigators. The investigators voiced their concerns, but Mr. Libby “was not receptive to our concerns. Instead, Deputy Director Libby stated, ‘we are corporate security with police powers,’ and that there is ‘shrinkage in all corporations.’ I understood Deputy Director Libby’s statements to imply that if we [the three investigators] continued to voice our concerns about the Lottery’s investigatory practices, we would be subject to termination.” Plaintiff stated Mr. Libby “responded flippantly to our concerns that we were being hindered in effectuating investigations and arrests,” and plaintiff understood another comment Mr. Libby made “to mean that SLED [the enforcement division] did not take our concerns seriously and that we were being warned to stop voicing our concerns and disagreements with the Lottery’s investigatory practices.”

In late September 2016, “investigator Gary Galbreath and I prepared and submitted a detailed joint whistleblower complaint, signed by both Galbreath and I, to the California State Auditor describing all of the above matters. The joint whistleblower complaint also addressed issues regarding: (1) the Lottery’s payment of prizes to unqualified persons despite investigators’ findings and recommendations to the contrary; (2) the Lottery’s failure to address widespread ‘pinning,’ an illegal practice whereby Lottery ticket retailers apply small scratches to scratchers tickets to determine their value and then knowingly sell losing tickets to unknowing buyers while keeping winning tickets for themselves; (3) the Lottery’s failure to address widespread theft of Lottery tickets by unscrupulous retailers; and (4) the Lottery’s reluctance to penalize repeat violators of Lottery rules and regulations and its reluctance to authorize investigators to investigate such persons and activities.”

“Per the request of the California State Auditor, investigator Galbreath and I included with our whistleblower complaint various investigative reports we had authored or obtained in the course of our duties, which we believed evidenced ongoing failure by the Lottery to follow the law in awarding prizes to claimants. The information accessed and obtained by investigator Galbreath and I was obtained solely for the purpose of submission to the California State Auditor and we did not forward or share any of the information with any other persons or entities.”

Plaintiff was interrogated on November 17, 2016, by Special Assistant Dixon. “Among the matters that I was interrogated on were the contents and the grounds for the contentions made in the whistleblower complaint . Prior to this time, I had not spoken to anyone or otherwise made the existence of the whistleblower complaint known to anyone other than Gary Galbreath and the office of the California State Auditor.”

Plaintiff’s declaration stated his understanding that there had still been no resolution of the allegations he misused the Lottery’s information technology resources, and that his personnel records reflect “that my employment with the Lottery ended while I was still under investigation, which will effectively bar me from future employment in law enforcement.”

Plaintiff explained he was advised that he risked losing significant pension and health benefits if he were terminated while under investigation or if the investigation resulted in an adverse finding. He was also aware that two other investigators, former chief investigator Helen Brean and former deputy director Stephen Tacchini, “had previously made complaints similar to the ones investigator Galbreath and I had made and were terminated soon afterwards.” Plaintiff described the circumstances of those terminations. In Ms. Brean’s case, after investigating and recommending denial of a claim, defendant disregarded her report and granted the prize to the claimant. Shortly after she filed a whistleblower complaint on the matter, Ms. Brean was terminated. Her ensuing lawsuit was settled; plaintiff included a copy of her complaint with his declaration.

Plaintiff’s declaration concluded: “Because of the humiliating treatment that I was subjected to during the interrogation, the fact that the interrogation was based largely on the contents of my whistleblower complaint, a clear pattern by the Lottery in terminating those who report concerns of waste, abuse, and fraud, and . the indefinite nature of the compulsory leave that I was placed on, it was apparent to me that there was a concerted effort by the Lottery to intimidate both me and investigator Galbreath and to fabricate reasons for terminating us.” Plaintiff was fearful of being terminated and losing the pension and health benefits that “my wife and I both need in order to survive.” Because of the “inordinate amount of stress and anxiety,” plaintiff “saw no other option but to retire prior to my intended retirement age and I did so, reluctantly, in the end of November of 2016.” Plaintiff also submitted a declaration from Mr. Galbreath, the investigator who filed the joint whistleblower complaint with plaintiff. Mr. Galbreath largely corroborated plaintiff’s testimony. Their whistleblower complaint “implicated Deputy Director James Libby . and others as being either complicit in the conduct alleged in the complaint or negligent in their duty to enforce Lottery rules and regulations.”

Mr. Galbreath stated that until he was interrogated by Mr. Dixon, “I did not discuss or otherwise make known the existence of the joint whistleblower complaint to anyone other than [plaintiff] and the office of the California State Auditor.”

Mr. Galbreath stated that, “[t]o my surprise, Kelly Dixon presented me during the interrogation with a copy of the first page of the whistleblower complaint” he and plaintiff had submitted in September 2016. He was “baffled that Mr. Dixon would have this document since I had never provided or even discussed any portion of it with anyone other than [plaintiff] and the office of the . Auditor.” According to Mr. Galbreath, Mr. Dixon said “that he found it on the desk of another former . investigator, Robin Chan” on November 14, 2016.

Mr. Galbreath found this explanation “unbelievable,” because neither he nor plaintiff had provided the whistleblower complaint to anyone but the Auditor; he knew of no involvement by Mr. Chan with the Auditor’s office; and Mr. Chan had been terminated from the enforcement division approximately six months before he and plaintiff were suspended, “and would therefore not have had any access or reason to be in any of [the division’s] offices.” Further, Mr. Galbreath physically drafted the complaint, and never worked on it on any of the computers in the division’s offices. Mr. Galbreath stated it was clear to him that Mr. Dixon was aware of the contents of the joint whistleblower complaint “in advance of both the interrogation and the investigation,” as Mr. Dixon “proceeded to interrogate me on the contents of the complaint, as he questioned the propriety of me and [plaintiff] submitting specific information to the California State Auditor, and as he repeatedly challenged the grounds for the specific contentions made in the whistleblower complaint.”

Mr. Galbreath was terminated from his employment as an investigator in April 2017.

Plaintiff’s opposition included copies of the transcripts of the interrogations of plaintiff and Mr. Galbreath. 4. The Trial Court’s Ruling

The court denied defendant’s motion, concluding plaintiff’s causes of action arose “from non-protected retaliation, not protected investigations.” The court did not reach the question whether plaintiff demonstrated a probability of prevailing on the merits of his retaliation claim.

Defendant filed a timely appeal of the court’s ruling.

DISCUSSION

The anti-SLAPP statute and procedures have been described many times. A defendant may bring a special motion to strike any cause of action “arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue . ” ( Code Civ. Proc., § 425.16, subd. (b)(1) ( section 425.16 ).)

When ruling on an anti-SLAPP motion, the trial court employs a two-step process. The moving defendant bears the initial burden of establishing that the challenged allegations or claims ” ‘ “aris[e] from” protected activity in which the defendant has engaged. [Citations.] If the defendant carries its burden, the plaintiff must then demonstrate its claims have at least “minimal merit.” ’ [Citation.] If the plaintiff fails to meet that burden, the court will strike the claim.” ( Wilson, supra , 7 Cal.5th at p. 884, 249 Cal.Rptr.3d 569, 444 P.3d 706.) In making its determination, the trial court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” ( § 425.16, subd. (b)(2).)

Our review is de novo. ( Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3, 46 Cal.Rptr.3d 638, 139 P.3d 30.)

1. The First Prong: Protected Activity

As Wilson tells us, the defendant’s first-step burden “is to identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute. A ‘claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.’ ” ( Wilson, supra , 7 Cal.5th at p. 884, 249 Cal.Rptr.3d 569, 444 P.3d 706.) “To determine whether a claim arises from protected activity, courts must ‘consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’ ” ( Ibid. ) The court then evaluates “whether the defendant has shown any of these actions fall within one or more of the four categories of ‘ “act[s]” ’ protected by the anti-SLAPP statute.” ( Ibid. )

In Wilson , the court decided a question that had created a “growing divide” in the courts of appeal. ( Wilson, supra , 7 Cal.5th at p. 883, 249 Cal.Rptr.3d 569, 444 P.3d 706.) Wilson concluded that “for anti-SLAPP purposes discrimination and retaliation claims arise from the adverse actions allegedly taken, notwithstanding the plaintiff’s allegation that the actions were taken for an improper purpose. If conduct that supplies a necessary element of a claim is protected, the defendant’s burden at the first step of the anti-SLAPP analysis has been carried, regardless of any alleged motivations that supply other elements of the claim.” ( Id. at p. 892, 249 Cal.Rptr.3d 569, 444 P.3d 706.)

The court disapproved Nam v. Regents of University of California (2016) 1 Cal.App.5th 1176, 205 Cal.Rptr.3d 687 to the extent it was inconsistent with Wilson’s conclusion. (Wilson, supra , 7 Cal.5th at p. 892, 249 Cal.Rptr.3d 569, 444 P.3d 706.)
——–

The principle stated in Wilson governs this case. As Wilson also tells us, “[t]o prove unlawful retaliation, [plaintiff] must . show [defendant] subjected him to adverse employment actions for impermissible reasons – namely, because he exercised rights guaranteed him by law.” ( Wilson, supra , 7 Cal.5th at p. 885, 249 Cal.Rptr.3d 569, 444 P.3d 706.) Defendant points out that its investigation of plaintiff was the allegedly adverse employment action at the heart of plaintiff’s complaint, and we cannot disagree: the investigation was the “wrong complained of” – the adverse action that supplies a necessary element of plaintiff’s retaliation claim. And the other adverse actions (plaintiff’s administrative leave and his forced retirement) are inextricably tied to the investigation; plaintiff could not omit reference to the investigation and still have a retaliation claim.

Thus, if plaintiff’s complaint arises from the investigation – as it surely does, as that is the very wrong complained of – and if the investigation falls within one or more of the four categories of acts protected by the anti-SLAPP statute, defendant has satisfied its initial burden. That is the case here.

Defendant correctly asserts the investigation was protected activity under section 425.16, subdivision (e)(2) (“any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law”). The authorities support the proposition that an internal investigation by a state-created entity is an “official proceeding authorized by law.” (See Hansen v. Department of Corrections & Rehabilitation (2008) 171 Cal.App.4th 1537, 1544, 90 Cal.Rptr.3d 381 [state entity’s internal investigation into allegations that the plaintiff had engaged in misconduct and criminal activity “itself was an official proceeding authorized by law”].) “Although [the plaintiff] was never formally charged with misconduct or a crime, communications preparatory to or in anticipation of the bringing of an official proceeding are within the protection of section 425.16.” ( Id. at p. 1544, 90 Cal.Rptr.3d 381, citing Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115, 81 Cal.Rptr.2d 471, 969 P.2d 564.)

Plaintiff does not suggest otherwise, instead arguing only that “the ‘protected’ conduct on which [defendant] based its motion, i.e., its ‘investigation,’ was in fact a sham done in retaliation for the complaints made of waste, abuse and violations of law,” and therefore was not activity protected under the anti-SLAPP statute. As we have seen, Wilson definitively rejects that view of the anti-SLAPP statute, refusing to “treat[ ] a plaintiff’s allegations of illicit motive as a bar to anti-SLAPP protection.” ( Wilson, supra , 7 Cal.5th at p. 889, 249 Cal.Rptr.3d 569, 444 P.3d 706.) Rather, defendant’s allegedly impermissible reason for taking the adverse employment action is an issue plaintiff must raise and support at the second step of the analysis. ( Id. at p. 888, 249 Cal.Rptr.3d 569, 444 P.3d 706.) We turn to that issue now.

2. The Second Prong: Probability of Prevailing on the Merits

To prove unlawful retaliation, plaintiff must show defendant “subjected him to adverse employment actions for impermissible reasons – namely, because he exercised rights guaranteed him by law.” ( Wilson, supra , 7 Cal.5th at p. 885, 249 Cal.Rptr.3d 569, 444 P.3d 706.) Here, that law is the Whistleblower Protection Act. Among other things, the act provides that “any person who intentionally engages in acts of reprisal, retaliation, threats, coercion, or similar acts against a state employee . for having made a protected disclosure shall be liable in an action for damages . by the injured party.” ( Gov. Code, § 8547.8, subd. (c).)

Wilson describes the plaintiff’s burden. “[T]he plaintiff’s second-step burden is a limited one. The plaintiff need not prove her case to the court [citation]; the bar sits lower, at a demonstration of ‘minimal merit’ [citation]. At this stage, ‘ “[t]he court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law.” ’ ” ( Wilson, supra , 7 Cal.5th at p. 891, 249 Cal.Rptr.3d 569, 444 P.3d 706.)

Defendant contends plaintiff did not demonstrate the necessary minimal merit because, as a matter of law, there was no adverse employment action, and even if there were, plaintiff “cannot establish a causal link” between the adverse action and “his alleged whistleblowing activity.” We disagree.

First, it is not correct that defendant took no adverse action against plaintiff. If plaintiff’s evidence is believed, defendant subjected him to a pretextual investigation and, in the course of doing so, placed him on administrative leave, required him to surrender his equipment, stripped him of his peace officer status, and escorted him off the premises. That the investigation was pretextual may be inferred from evidence that he was interrogated on “the contents and the grounds for the contentions made in the whistleblower complaint”; that Mr. Galbreath, too, was interrogated on the contents of the whistleblower complaint, and was also confronted with the first page of the complaint, with no plausible explanation of how defendant obtained it; and that two other investigators “had previously made complaints similar to the ones investigator Galbreath and [plaintiff] had made and were terminated soon afterwards.”

Defendant does not acknowledge this evidence in its opening brief. Defendant simply insists that an investigation is not an adverse action, citing McRae v. Department of Corrections & Rehabilitation (2006) 142 Cal.App.4th 377, 392-393, 48 Cal.Rptr.3d 313 ( McRae ). McRae does not stand for that proposition. McRae reversed a jury award to the plaintiff on her retaliation claim, finding the verdict was not supported by substantial evidence. ( Id. at p. 390, 48 Cal.Rptr.3d 313.) Among several other deficiencies, the plaintiff did not meet her burden of establishing her employer’s asserted reasons were pretextual. ( Ibid. ) In the course of a lengthy discussion of the evidence (or lack thereof) of actionable conduct, the court stated that “[u ]nder the circumstances here , the investigation and decision [to transfer the plaintiff rather than discipline her] were not themselves actionable, but were intermediate steps that led to the transfer.” ( Id. at pp. 392-393, 48 Cal.Rptr.3d 313, italics added.)

Needless to say, the circumstances in McRae are not the circumstances here. McRae does not support the proposition that a pretextual investigation is not an adverse employment action, and defendant cites no other authority that does so. (See also Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1052, 32 Cal.Rptr.3d 436, 116 P.3d 1123 [“Retaliation claims are inherently fact-specific, and the impact of an employer’s action in a particular case must be evaluated in context. Accordingly, although an adverse employment action must materially affect the terms, conditions, or privileges of employment to be actionable, the determination of whether a particular action or course of conduct rises to the level of actionable conduct should take into account the unique circumstances of the affected employee as well as the workplace context of the claim.”]; cf. Whitehall v. County of San Bernardino (2017) 17 Cal.App.5th 352, 366-367, 225 Cal.Rptr.3d 321 [administrative leave may constitute an adverse employment action].) We thus reject defendant’s claim that “[n]one of the adverse actions specified in plaintiff’s operative complaint” meets the legal criteria for actionable conduct.

Second, defendant contends that plaintiff “cannot establish a causal link between any alleged adverse action and his alleged whistleblowing activity.” This is said to be because Mr. Libby made the decisions to place plaintiff on administrative leave and to investigate plaintiff, and when he did so he did not know about the whistleblower complaints. Plaintiff’s evidence, defendant tells us, does not directly refute Mr. Libby’s declaration that he first heard about the whistleblower complaint after plaintiff’s and Mr. Galbreath’s interviews.

As McRae states, however, “[f]or purposes of making a prima facie showing, the causal link element may be established by an inference derived from circumstantial evidence.” ( McRae, supra , 142 Cal.App.4th at p. 388, 48 Cal.Rptr.3d 313.) Defendant was in possession of a portion of plaintiff’s whistleblower complaint before Mr. Dixon – who was special assistant to Mr. Libby – interviewed plaintiff and Mr. Galbreath. Defendant presented no declaration from Mr. Dixon explaining how he came into possession of the whistleblower complaint. Mr. Galbreath’s declaration shows the explanation given to him on this point was implausible. Plaintiff also produced evidence that other investigators who filed whistleblower complaints were terminated shortly thereafter.

In short, while plaintiff did not produce a declaration that “directly refutes” Mr. Libby’s declaration, we cannot ignore reasonable inferences that might be drawn from the circumstances plaintiff did show, particularly at this stage of the case.

Defendant cites Morgan v. Regents of University of California (2000) 88 Cal.App.4th 52, 105 Cal.Rptr.2d 652 ( Morgan ), where the court held that the causal link necessary for a retaliation claim cannot be established “[i]n the absence of evidence that the individuals who denied appellant employment were aware of his past filing of a grievance.” ( Id. at p. 73, 105 Cal.Rptr.2d 652.) Morgan , however, was a summary judgment case, with multiple declarations from the decisionmakers explaining their reasons for not rehiring the plaintiff and stating they had no knowledge of his previous grievance. ( Id. at pp. 60-61, 105 Cal.Rptr.2d 652.)

This is not a summary judgment case like Morgan ; it is an anti-SLAPP case where there has been no discovery. We look for a prima facie factual showing, we do not weigh the evidence, we accept plaintiff’s evidence as true, and we evaluate defendant’s evidence ” ‘ “only to determine if it defeats the plaintiff’s claim as a matter of law.” ’ ” ( Wilson, supra , 7 Cal.5th at p. 891, 249 Cal.Rptr.3d 569, 444 P.3d 706.) Indeed, even in a summary judgment case, the court may deny summary judgment in its discretion “if the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual who was the sole witness to that fact; or if a material fact is an individual’s state of mind, or lack thereof, and that fact is sought to be established solely by the individual’s affirmation thereof.” ( Code Civ. Proc., § 437c, subd. (e).) In the circumstances here, we cannot say Mr. Libby’s declaration defeats plaintiff’s claims as a matter of law. We find plaintiff has demonstrated the minimal merit necessary to permit his case to proceed.

DISPOSITION

The order is affirmed. Plaintiff shall recover his costs on appeal.

Read Jeffra v. Cal. State Lottery, 39 Cal.App.5th 471, see flags on bad law, and search Casetext’s comprehensive legal database

california lottery investigator

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California Lottery cops questioned a $2 million jackpot. Then they lost their jobs.

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The California State Lottery has paid more than $500,000 to settle lawsuits filed by two former investigators who claimed they were fired for calling attention to jackpots they believed the lottery improperly awarded to recipients who could not prove they were winners.

The two ousted lottery cops had flagged a $2 million jackpot in 2015 and a $750,000 prize in 2016 that they argued should not have been paid.

“It was a travesty the way they were both handled,” said Steve Tacchini, a retired San Francisco police captain and former lottery deputy director. A third and related lawsuit from another former investigator is still in play.

The ongoing costs to taxpayers stem from discipline the lottery handed down two years ago when a group of investigators grew frustrated by what they considered to be preventable fraud among lottery retailers as well as questionable payouts.

Between Tacchini and three subordinates, the former employees attempted to raise concerns about the payouts with the attorney general, state auditor and a reporter at the CBS station in Los Angeles.

They say their punishment sent a chilling message to other employees.

“I don’t regret doing what was right, but there are so many people who just don’t say anything,” said Gary Reid Galbreath, one of the employees who sued the department after his dismissal in 2017.

The four worked in the lottery’s Security and Law Enforcement Division, a branch of the department charged with conducting background checks on employees and lottery retailers, as well as investigating lottery-related crimes. Under Tacchini, the division favored an attention-grabbing approach to enforcement, including stings against retailers.

“They didn’t like us because we arrested people,” said Helen Brean, a former chief lottery agent who sued the department after her dismissal. “We put them in handcuffs. We got in the news, and that told people that retailers were crooked.”

In written statements, the lottery declined to discuss personnel disputes. It said the totality of evidence in the cases the former employees contested supported the department’s decisions to pay the jackpots.

A ticketless winner

The case that most severely split the lottery’s law enforcement arm under Tacchini and its executive staff involved a Beverly Hills man who lost a Powerball ticket but believed he was the winner of a $2 million prize.

Investigative records show the man bought a ticket in January 2015. No one claimed the prize. The lottery contacted the gas station where the man bought the ticket to figure out who deserved the jackpot.

After looking at surveillance footage, the retailer and lottery officials identified one of the store’s regular customers as the winner.

In June 2015, the gas station owner told the man he won the Powerball. He filed a claim to obtain it as a “ticketless” winner.

Images from surveillance video were not sufficient because the camera’s timing was not set correctly and other people bought tickets within minutes of his purchase. That meant the presumptive winner had to present additional evidence to demonstrate he bought the ticket.

Brean conducted the lottery’s final interview with him in July 2015. He told her he paid for his usual $6 bet when he bought his lottery ticket that day, according to a report The Bee obtained through the California Public Records Act. Lottery records showed that the winning ticket was a $20 wager.

“There was nothing. If the information he gave was accurate, there was no way he could be the winner,” Brean said.

Against her recommendation, the lottery paid the jackpot and said it stands by its decision.

Brean was suspended soon after her report. The lottery moved to fire her in June 2016.

Brean filed her lawsuit on Aug. 11, 2016. The Lottery settled with her within a week. She received 18 months pay, about $150,000.

Tacchini, too, opposed paying the man. The governor’s office ended Tacchini’s appointment as a deputy director in May 2016 and brought in a new law enforcement team led by California Highway Patrol officers.

Down the ranks

The departures of Brean and Tacchini alarmed at least two of their subordinates.

By then, Galbreath and fellow investigator Jim Jeffra had grown frustrated by what they viewed as preventable fraud among retailers. They wanted the lottery to invest in new technology that might give the department an early warning if retailers turned in a suspicious number of winning tickets, which could signal that they were finding winning Scratchers and keeping them for themselves.

Galbreath also was disturbed, although there was no evidence of fraud, by a lottery decision to pay a $750,000 prize to a San Francisco small business owner who had given money to an employee for lottery tickets.

The worker bought the ticket, scratched it and checked that it was a winner at retail stores. By lottery rules, he “exercised the acts of ownership” and could have claimed the prize. The worker was an undocumented immigrant who did not want to claim the winnings, according to documents The Bee obtained through the Public Records Act.

The business owner gave conflicting statements to the lottery about claiming the prize, according to a lottery investigation. Ultimately, he and his employee suggested that they wanted the owner to claim it. The lottery agreed to pay the owner despite an initial recommendation from a lottery investigator against awarding him the money.

About that time, Galbreath and Jeffra each separately called the state auditor. They talked and decided to write a joint complaint to the auditor urging an investigation into the lottery itself.

They knew Brean had contacted the state auditor and Tacchini had reached out to the attorney general prior to losing their lottery jobs. They worried they’d be dismissed, too, if word got out that they were calling for an investigation, according to court records.

Galbreath downloaded lottery investigations to give to the auditors. Then, he decided to contact a reporter at KCAL in Los Angeles who had covered lottery fraud in the past.

‘Bringing embarrassment to your employer’

The KCAL pieces aired in October 2016. Brean and Tacchini spoke on camera, alleging that the lottery was paying prizes inappropriately.

Galbreath and Jeffra spoke, too. The news program concealed their identities by disguising their faces and voices.

CHP Assistant Chief James Libby opened an investigation into the CBS report and placed Galbreath and Jeffra on administrative leave. The department checked who had looked at the files; records pointed to the two investigators.

Both sat for interviews with Kelly Dixon, Libby’s special assistant, in November 2016. Galbreath and Jeffra denied handing records to the reporter; they said they downloaded the reports for the auditor.

“You clearly accessed data owned by the lottery that you were directed not to access. In addition to that, both of you appeared on a news program in which you make some allegations that members of the lottery are doing things that are in violation of law, regulation statute. Why did you do this?” Dixon said when he interviewed Jeffra.

Jeffra replied, “For three and a half years, I’ve been told, ‘Oh they’re working on it.’ I’ve been lied to. They’re not working on anything.”

Dixon asked both former investigators whether they intended to discredit or embarrass the lottery by appearing on the news program. “We have a policy about bringing embarrassment to your employer,” he said, citing a state law that permits discipline of public employees.

“My intention was not to damage the reputation of the lottery in any way,” Galbreath said, according to the 2016 transcript. “My intention was to simply try to go back to having that sense of pride that I had in my employer when I first started.”

Dixon at the hearings said the investigators did not have the full picture of evidence available to lottery executives.

‘The risk I took’

Shortly after his interview with Dixon, Jeffra submitted retirement paperwork. Galbreath remained on administrative leave until April 2017, when the department served him with a dismissal notice. It accused him of conducting an “unauthorized investigation” and disseminating confidential information to the public.

Galbreath appealed his dismissal and filed a lawsuit contesting it in August 2017. The department settled with him two months later. He received $375,000, a sum equivalent to about five years of his salary.

Jeffra filed his lawsuit in January of this year with the same attorney who represented Galbreath. The attorney did not respond to requests for comment. The case has not settled and the department has moved to dismiss it.

California Lottery cops questioned a $2 million jackpot. Then they lost their jobs. Share this: Click to share on Facebook (Opens in new window) Click to share on Twitter (Opens in

State Lottery Investigators Assist in Lucky Lotto Bandits Investigation

San Jose Police Department Photo

SAN JOSE – On January 18, 2018, the San Jose Police Department announced its conclusion of a months-long, multi-agency investigation of a six-person burglary crew responsible for lottery ticket heists throughout Northern California. Five of the six suspects have been arrested and charged.

Targeting mostly gas stations and liquor or convenient stores, the suspects committed approximately 20 burglaries in San Jose and more than 30 burglaries within Santa Clara County. They also broke into businesses in Campbell, Santa Clara, Cupertino, Sunnyvale, Los Altos, Fremont, Livermore, Dublin, San Ramon, Danville, Tracy, Brentwood, Rio Vista, Elk Grove, Sacramento County, Rancho Cordova, and Calaveras County.

“California State Lottery investigators are an excellent law enforcement resource for these types of crimes,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona. “Lottery investigators can provide valuable investigative information to local law enforcement officers who can then identify, investigate, track down and arrest suspects. This was an excellent job by all law enforcement officers involved, including our CSLEA Director Dennis Maffei, president of the California Association of Criminal Investigators (CACI) and a very gifted investigator with California State Lottery.”

The suspects often used a rock to smash the window of a business to gain entry. Items commonly stolen included: California lottery scratchers, cash registers, US currency, and cigarettes. The stolen California lottery scratchers were cashed in San Jose, Brentwood, Discovery Bay, Stockton, and other jurisdictions.

The crime spree which began in September 2017, ended on December 20, 2017, when police identified the suspects. The suspects fled from police in the Fairfield area and crashed in Travis Air Force Base. The following five suspects were taken into custody and are being charged in Santa Clara County:

  • Jared McEssy, 21, of San Jose.
  • Alexander Castillo, 21, of San Jose.
  • Alexander Rosiles, 19, of Stockton.
  • Roque Soto Sierra, 19, of Stockton.
  • Sergio Beltran Jr., 21, of Stockton.

A sawed-off shot gun was recovered inside the suspect vehicle along with stolen property from the burglaries.

Suspect McEssy pleaded guilty on January 3, 2018 to 32 commercial burglary counts and received a court offer of eight years.

Suspect Beltran Jr. is currently outstanding with a felony want for his arrest. A sixth suspect was identified as being part of the Lucky Lotto Bandits and is currently outstanding with a felony want for his arrest: Sergio Aguirre, 18, of San Jose.

The San Jose Police Department’s Burglary Unit worked closely on the investigation with Campbell PD, Santa Clara PD, Santa Clara SO, Sunnyvale DPS, the California Lottery, Fremont PD, and the Santa Clara County District Attorney’s Office.

State Lottery Investigators Assist in Lucky Lotto Bandits Investigation San Jose Police Department Photo SAN JOSE – On January 18, 2018, the San Jose Police Department announced its conclusion

California Lottery cops questioned a $2 million jackpot. Then they lost their jobs. Share this: Click to share on Facebook (Opens in new window) Click to