\. j . . ·•

IN THE SUPREME COURT OF THE STATE OF WASHINGTON CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT NO. 91945-3 IN ABELARDO SAUCEDO; FELIPE ENBANC ACEVEDO MENDOZA; JOSE VILLA MEDONZA; JAVIER SAUCEDO; MAR 0 3 2016 SANDRA SAUCEDO, Individually, and on Filed ,. ---'----~- behalf of all other similarly situated persons, Appellees, v. JOHN HANCOCK LIFE & HEALTH INSURANCE CO.; TEXAS MUNICIPAL PLANS CONSORTIUM, LLC, Defendants, NW MANAGEMENT AND REALTY SERVICES, INC.; JOHN HANCOCK LIFE INSURANCE COMPANY, Defendants, FARMLAND MANAGEMENT SERVICES, A ellant. Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3 ABELARDO SAUCEDO; FELIPE ACEVEDO MENDOZA; JOSE VILLA MEDONZA; JAVIER SAUCEDO; SANDRA SAUCEDO, Individually, and on behalf of all other similarly situated persons, Appellees, v. JOHN HANCOCK LIFE INSURANCE COMPANY; JOHN HANCOCK LIFE & HEALTH INSURANCE CO.; TEXAS MUNICIPAL PLANS CONSORTIUM, LLC, Appellants, FARMLAND MANAGEMENT SERVICES; NW MANAGEMENT AND REALTY SERVICES, INC., Defendants. ABELARDO SAUCEDO; FELIPE ACEVEDO MENDOZA; JOSE VILLA MEDONZA; JAVIER SAUCEDO; SANDRA SAUCEDO, Individually, and on behalf of all other similarly situated persons, Appellees, v.

Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

JOHN HANCOCK LIFE INSURANCE COMPANY; JOHN HANCOCK LIFE & HEALTH INSURANCE CO.; TEXAS MUNICIPAL PLANS CONSORTIUM, LLC; FARMLAND MANAGEMENT SERVICES, Defendants, NW MANAGEMENT AND REALTY SERVICES, INC., Appellant. GORDON McCLOUD, J.-This case is a class action lawsuit by farm workers against four corporate defendants. It requires us to answer two questions, certified to this court by the United States Court of Appeals for the Ninth Circuit, about Washington's farm labor contractor act (FLCA), chapter 19.30 RCW. The first question implicates RCW 19.30.010(2). That statute defines a "farm labor contractor" as "any person, or his or her agent or subcontractor, who, for a fee, performs any farm labor contracting activity." Another FLCA provision, RCW 19.3 0.01 0(3 ), then defines "farm labor contracting activity" as "recruiting, soliciting, employing, supplying, transporting, or hiring agricultural employees." The second question implicates RCW 19.30.200. That statute imposes joint and several liability for FLCA violations on "[a]ny person who knowingly uses the services of an Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

unlicensed farm labor contractor" and then states, "In making determinations under this section, any user may rely upon either the license issued by the director [of the Department of Labor & Industries (Department)] to the farm labor contractor under RCW 19.30.030 or the director's representation that such contractor is licensed as required by this chapter." The certified questions require us to decide whether defendant/appellant NW Management and Realty Services Inc. is a "farm labor contractor" under RCW 19.30.01 0(2) and, if so, whether the other defendants "knowingly use[d]" its services under RCW 19.30.200. (There is no dispute that NW was unlicensed at all times relevant to this case.) FACTS Defendant/Appellant John Hancock Life Insurance Company owns defendant/appellant John Hancock Life & Health Insurance Co. (collectively Hancock companies). Together with defendant/appellant Texas Municipal Plans Consortium LLC (TMP), the Hancock companies owned three apple orchards. The Hancock companies and TMP leased all three orchards to defendant/appellant Farmland Management Services. Under the governing lease agreements, the Hancock companies and TMP paid Farmland a "Management Fee" in exchange for either operating and managing the orchards or subleasing the Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

orchards to a third party operator/manager. Appellants' Joint Excerpts of Sealed Record (ESR) at 98 (boldface omitted). The Hancock companies and TMP also reimbursed Farmland for operating costs and collected all profits. Farmland subleased the orchards to NW. Under the governing sublease agreement, Farmland paid NW a per-acre fee, reimbursed NW for all operating costs, and collected all profits. Ultimately, pursuant to all the lease and sublease agreements, the Hancock companies and TMP paid all of NW' s costs and collected all of the orchards' profits, minus Farmland's "Management Fee." Id. (boldface omitted). The sublease agreement between Farmland and NW provided that NW "will hire, employ, discharge and supervise the work of all employees and independent contractors performing labor and/or services on the [orchards and that NW] shall be the employer of record of all persons employed to perform work on the [orchards]." ESR at 38. The agreement left the details of orchard management largely to NW' s discretion, but it provided that NW would "operate and use the orchard Properties for the sole purpose of conducting a first-class agricultural operation" and it required NW to submit to Farmland a yearly "Farm Operating Plan" that included NW's anticipated budget for the coming year. ESR at 37, 40. Farmland then sent this budget to the Hancock companies for approval.

Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

Farmland's lease agreements with the Hancock companies and TMP required Farmland to either obtain necessary licenses or require any third party to do so. A representative for Farmland told a representative for the Hancock companies that Farmland had fulfilled this contractual obligation. It is undisputed, however, that NW never obtained a farm labor contractor license. The plaintiffs/appellees, a class of 722 former NW employees, sued the defendants in the United States District Court for the Eastern District of Washington· for violations of state and federal law, including the FLCA. The district court certified the plaintiff class as to two FLCA claims: (1) that NW violated RCW 19.30.11 0(1) by failing to carry a current farm labor contractor's license, and (2) that NW violated RCW 19.30.11 0(7) by making false and misleading representations about worker compensation. The plaintiffs allege, in part, that Farmland and the Hancock companies are jointly and severally liable for NW' s violations, under RCW 19.30.200, because they used the services of an unlicensed farm labor contractor without either inspecting NW' s license or verifying licensure with the Department. Farmland, the Hancock companies, and TMP each moved to dismiss, arguing that RCW 19.30.200 penalizes only defendants with actual or constructive knowledge that a contractor is unlicensed. The trial court denied the motions, concluding that the FLCA imposes an affirmative duty on such defendants to verify Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

proper licensure. All the defendants then moved for summary judgment on the ground that NW was not a "farm labor contractor" as defined in RCW 19.30.010(2) because it was instead an "agricultural employer" (defined in RCW 19.30.010(4)). The district court also denied that motion, concluding that those two definitions are not mutually exclusive. The plaintiffs then moved for summary judgment, arguing that NW was a farm labor contractor under the FLCA; that NW violated the FLCA by failing to obtain a farm labor contractor's license and by failing to provide the plaintiffs with required disclosures; and that Farmland, the Hancock companies, and TMP are jointly and severally liable for NW's violations. The district court granted the motion and awarded the plaintiffs damages of $500 per class member per violation per year worked, for a total of $1,004,000. The court also awarded the plaintiffs attorney fees. The defendants appealed to the Ninth Circuit, briefing these issues on the merits and filing a joint excerpts of record (ER) containing the relevant documents. Then, on August 5, 20 15, the Ninth Circuit certified the disputed questions to this court. Saucedo v. John Hancock Life & Health Ins. Co., 796 F.3d 1016 (9th Cir. 2015).

Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

ANALYSIS Certified questions are matters of law reviewed de novo and iri light of the record certified by the federal court. Carlsen v. Global Client Solutions, LLC, 171 Wn.2d 486, 493, 256 P.3d 321 (2011). Because the questions in this case pertain to a motion for summary judgment, we perform the same inquiry as the district court. Smith v. Safeco Ins. Co., 150 Wn.2d 478, 483, 78 P.3d 1274 (2003). I. The first certified question: Does the FLCA, in particular RCW 19.30.010(2), include in the definition of a "farm labor contractor" an entity who is paid a per-acre fee to manage all aspects of farming- including hiring and employing agricultural workers as well as making all planting and harvesting decisions, subject to approval-for a particular plot of land owned by a third party? Answer: Yes. As noted above, RCW 19.30.010(2) defines a "farm labor contractor"' as "any person, or his or her agent or subcontractor, who, for a fee, performs any farm labor contracting activity." Another FLCA provision in turn defines "farm labor contracting activity" to mean "recruiting, soliciting, employing, supplying, transporting, or hiring agricultural employees." RCW 19.30.010(3). NW is a farm labor contractor under the plain language of these provisions. Pursuant to their sublease agreement, Farmland paid NW a per-acre fee "[a]s compensation for the services rendered by [NW] under this Agreement." ESR at 43. And pursuant to that agreement, those services included "hir[ing], employ[ing], discharg[ing] and supervis[ing] the work of all employees and independent Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

contractors performing labor and/or services on the 'Properties'." ESR at 38. That contractual arrangement places NW squarely within the plain definition of "farm labor contractor" under the FLCA: at a minimum, NW "employ[s]" and "hir[es] agricultural employees" in exchange "for a fee." RCW 19.30.010(3), (2). The defendants make two main arguments to support their contrary interpretation of the statute. ^[1] First, the defendants point to a provision in the FLCA making that chapter inapplicable to "any person who performs any [farm labor contracting activities] only within the scope of his or her regular employment for one agricultural employer on whose behalf he or she is so acting, unless he or she is receiving a commission or fee, which commission or fee is determined by the number of workers recruited." RCW 19.30.010(6) (emphasis added). The parties refer to this provision as the single-employer exemption. The defendants don't argue that the single-employer exemption actually applies to NW; they argue, instead, that the logic underlying the Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

exemption applies equally to entities like NW. They contend that the legislature exempted single-employer contractors from FLCA coverage because "their ties to one farmer ensured the requisite stability, permanence, and accountability" and that NW possesses all of those qualities, having worked almost exclusively for Farmland and in the same general area for roughly 20 years. Br. ofDefs.-Pet'rs at 22-23. Their unstated conclusion is that these attributes make them as deserving of an exemption as someone actually eligible for the enacted single-employer exemption. But the legislature is the body that gets to make that policy decision by defining "farm labor contractor." RCW 19.30.010(2). If NW fits the definition of a "farm labor contractor," RCW 19.30.010(2), and is not eligible for any statutory exemption, then it must abide by the FLCA's licensure requirements. We have no authority to read a new exception into the statute on policy grounds. See Michigan v. Bay Mills Indian Cmty., 572 U.S._, 134 S. Ct. 2024,2034, 188 L. Ed. 2d 1071 (2014) ("This Court has no roving license, in even ordinary cases of statutory interpretation, to disregard clear language simply on the view that ... Congress 'must have intended' something 'broader."'). Second, the defendants argue NW performs too many farming activities to be a farm labor contractor. They contend that the FLCA embraces a "Tripartite Scheme" that distinguishes between three mutually exclusive categories: Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

"Agricultural employer" (farmer), "Agricultural employee" (workers), and "Farm labor contractor" (broker). Br. ofDefs.-Pet'rs at 24 (boldface omitted). NW argues that because it is an agricultural employer, it cannot also be a farm labor contractor. But the legislature did not make the three categories of "person" defined in RCW 19.30.010(2), (4), and (5) mutually exclusive. As the district court concluded in this case, "The fact that NW ... also meets the statutory definition of 'agricultural employer' is irrelevant; [if it was] paid by a third party to 'recruit,' 'employ' and 'supply' farm laborers, see RCW 19.30.010(3), it was required to register." ER at Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3 Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3 Saucedo etal. v. JohnHancockLifelns. Co. etal., No. 91945-3 Saucedo eta!. v. John Hancock Life Ins. Co. eta!., No. 91945-3 Saucedo et al. v. John Hancock Life Ins. Co. et al., No. 91945-3

purpose by codifying straightforward and easily complied with license verification requirements. ^[4] In fact, as the district court concluded in this case, the defendants' interpretation of RCW 19.30.200 "renders the 'determination' requirement optional." ER at 121-22. Under the defendants' interpretation, if a person elects to verify licensure, he or she may do so by inspecting the contractor's license or inquiring with the Department-or not. As a practical matter, this reading renders RCW 19.30.200's second sentence all but superfluous. The plaintiffs' interpretation is much more persuasive: that the either/or "making determinations" provision in RCW 19.30.200 clarifies the meaning ofthe term "knowingly" in the statute's first sentence.

Saucedo eta!. v. John Jlancock Life Ins. Co. eta!., No. 91945-3

CONCLUSION The plain language of the FLCA compels us to answer yes to both certified questions. Under RCW 19.30.010(2) and (3), the definition of a "farm labor contractor" includes an entity who is paid a per-acre fee to manage all aspects of farming-including hiring and employing agricultural workers as well as making all planting and harvesting decisions, subject to approval-for a particular plot of land owned by a third party. Under RCW 19.30.200, any person who uses the services of an unlicensed farm labor contractor without either inspecting the contractor's license or obtaining a representation from the Department that the contractor is properly licensed is jointly and severally liable with that contractor, even if that person lacked knowledge that the farm labor contractor was unlicensed.

Saucedo et al. v. Farmland Mgmt. Servs. et al., No. 91945-3

WE CONCUR: 18'