Wood v. City of San Diego

678 F.3d 1075, 2012 WL 1606565, 2012 U.S. App. LEXIS 9418, 95 Empl. Prac. Dec. (CCH) 44,518, 114 Fair Empl. Prac. Cas. (BNA) 1552
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 9, 2012
Docket10-56826
StatusPublished
Cited by96 cases

This text of 678 F.3d 1075 (Wood v. City of San Diego) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Wood v. City of San Diego, 678 F.3d 1075, 2012 WL 1606565, 2012 U.S. App. LEXIS 9418, 95 Empl. Prac. Dec. (CCH) 44,518, 114 Fair Empl. Prac. Cas. (BNA) 1552 (9th Cir. 2012).

Opinion

OPINION

B. FLETCHER, Circuit Judge:

Janet Wood (“Wood”) brought suit under Title VII of the Civil Rights Act of 1964, alleging that the surviving spouse benefit provided by the City of San Diego (“the City”) to its retired employees discriminates on the basis of sex. The district court dismissed Wood’s disparate treatment and disparate impact claims and entered judgment in favor of the City. We affirm.

I.

Wood retired in 2005 after over thirty-two years as an employee of the City. 1 Like all City employees, Wood participated in the City’s defined benefit pension plan, which is administered by the San Diego City Employee Retirement System (“SDCERS”). City employees are required to contribute a percentage of their salary to their pensions, see San Diego Municipal Code (“SDMC”) § 24.0104(a), and the City is required to make “substantially equal” contributions. San Diego City Charter art. IX, § 143. City employees are also required to contribute a percentage of their salary to fund survivor benefits as well as their pensions. 2 SDMC *1078 § 24.0601. Pension contributions and benefits are calculated by ordinance and are neutral with respect to sex (the characteristic relevant to this case). See SDMC §§ 24.0201, 24.0601.

When a City employee retires, she must choose among several options for allocating the pension benefit and the survivor benefit. We will refer to the option at issue in this case, codified at SDMC § 24.0601(e), as the “surviving spouse benefit.” If a City employee is married (or has a registered domestic partner) at the time of retirement and chooses the surviving spouse benefit, the employee will receive her full monthly pension benefit until her death. At that time, if the employee’s spouse or registered domestic partner survives her, the spouse or partner will receive a monthly allowance equal to half of the employee’s monthly pension benefit. 3 SDMC § 24.0601(c).

If a City employee is single at the time of retirement and has chosen the surviving spouse benefit, the City either refunds the employee her contributions to the survivor benefit (plus interest) as a lump sum, or treats the employee’s survivor contributions as voluntary additional contributions made to provide a larger monthly pension benefit. SDMC § 24.0601(e). Wood was single when she retired and had chosen the surviving spouse benefit. She elected to have her survivor contributions treated as additional voluntary contributions, adding to her monthly benefit.

On September 24, 2003, Wood filed this class action against the City alleging that the surviving spouse benefit violates Title VII of the Civil Rights Act of 1964 (“Title VII”) and California’s Fair Employment and Housing Act (“FEHA”). Wood’s theory of liability is that because, in the aggregate, the City pays a larger amount of money to the married retirees who select the surviving spouse benefits than it does to single retirees who do the same, and male retirees are more likely to be married, the surviving spouse benefit has an unlawful disparate impact on female retirees. The City does not dispute that, in the aggregate, it costs more to fund surviving spouse benefits for married retirees than it does to refund the survivor contributions made by single retirees.

On May 19, 2004, the City filed a motion for summary judgment arguing that Wood failed to state a claim for relief under Title VII and that she had failed to properly exhaust her administrative remedies. After briefing on the summary judgment motion, the district court dismissed sua sponte Wood’s Title VII claim for lack of Article III standing and declined to exercise supplemental jurisdiction over her state law claim. The district court reasoned that Wood had not suffered a concrete injury because she had alleged only that unmarried retirees as a group receive a smaller benefit, and had not alleged that her pension benefit “has been impacted at all, adversely or positively.”

On appeal, a different panel of our court reversed the district court in a memorandum disposition. Wood v. City of San Diego, 239 Fed.Appx. 310 (9th Cir.2007). Our decision was based in large part on the fact that “[njeither side was alerted to the need to present evidence or argument about the concreteness or redressability of Wood’s injury.” Id. at 311. We cautioned that “[i]f the district court determines to *1079 pursue the standing issue sua sponte, then it should afford both parties the opportunity to develop a factual and legal record.” Id. at 312. We also held that Wood had adequately exhausted her administrative remedies. Id.

On remand in June 2008, the City filed a motion arguing that intervening law required dismissal of Wood’s Title VII claim for failure to exhaust administrative remedies. 4 The district court denied the City’s motion and granted Wood’s motion for class certification. The district court also granted Wood leave to amend her complaint in order to, among other things, add a claim for disparate treatment under Title VII in addition to her claim based on disparate impact.

The City filed a motion to dismiss Wood’s amended complaint. The City’s sole argument with respect to the disparate impact claim was that the surviving spouse benefit is part of a bona fide seniority system, which is permitted as a matter of law under Title VII. See 42 U.S.C. § 2000e-2(h). The City also argued that Wood failed to state a claim for disparate treatment because she had not alleged discriminatory intent.

The district court denied the motion to dismiss with respect to the disparate impact claim. The district court found that while SDCERS as a whole is a bona fide seniority system, the surviving spouse benefit is a “component of the system [that] is not based on longevity of service.” Although the amount of an employee’s monthly pension (and thus the surviving spouse benefit) is based on seniority, the ability to receive the surviving spouse benefit is based only on marital status at the time of retirement.

The district court granted, however, the motion to dismiss the disparate treatment claim. The district court observed that Wood had alleged only that the City was aware of the disparate impact of the surviving spouse benefit at the time it adopted the policy and failed “to allege any facts establishing that the City deliberately adopted an employment practice ... in order to discriminate based on gender.” Citing Supreme Court and Ninth Circuit case law, the district court ruled that “[a] plaintiff alleging disparate treatment must allege facts showing intentional discrimination .... The fact that an employer was aware of, or totally indifferent to the discriminatory impact of, its policy is not sufficient to state a claim for relief.” The district court also denied Wood further leave to amend her complaint, finding that the any attempt to amend her disparate treatment claim would be futile.

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678 F.3d 1075, 2012 WL 1606565, 2012 U.S. App. LEXIS 9418, 95 Empl. Prac. Dec. (CCH) 44,518, 114 Fair Empl. Prac. Cas. (BNA) 1552, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wood-v-city-of-san-diego-ca9-2012.