Unpublished Disposition, 872 F.2d 429 (9th Cir. 1989)

MEMORANDUM^* 

We must determine whether, due to its agreement to market the play, The Last Prostitute, Morgenstern Productions is a "talent agency" subject to the jurisdiction of the California Labor Commission.

FACTS

In 1980, appellee William Borden, a professor and author, wrote The Last Prostitute. In May 1983, he and Morgenstern Productions, Ltd. entered an agreement giving Morgenstern the right to market the television, motion picture, and video cassette rights. As part of this agreement, Morgenstern and Borden entered a "deal memorandum" with Universal Television in September 1985.

A dispute arose between Morgenstern and Borden regarding their respective rights under the agreement. In January 1988, Morgenstern filed a complaint in district court alleging breach of contract, bad faith denial of contract, and intentional interference with contractual relations. Borden filed a motion to dismiss the complaint for lack of subject matter jurisdiction. The court granted the motion, concluding Morgenstern was a talent agent pursuant to California Labor Code Sec. 1700.4(a) and was required to bring its dispute before the Labor Commissioner under Sec. 1700.44(a).

DISCUSSION

We review de novo the district court's refusal to exercise subject matter jurisdiction. See Peter Starr Prod. Co. v. Twin Continental Films, Inc., 783 F.2d 1440, 1442 (9th Cir. 1986).

Our jurisdiction turns on whether the dispute arises under the California Talent Agencies Act. See Cal. Labor Code Sec. 1700, et seq. Section 1700.44(a) provides:

In cases of controversy arising under this chapter, the parties involved shall refer the matters in dispute to the Labor Commissioner, who shall hear and determine the same, subject to an appeal within ten days after determination, to the superior court where the same shall be heard de novo....

The Labor Commissioner has original jurisdiction to hear and determine the cases of controversy arising under the Act. Buchwald v. Superior Court, 62 Cal. Rptr. 364, 372 (Ct.App.1967).

The court concluded that Morgenstern was required to bring its dispute before the Labor Commissioner because it was a "talent agency" under Sec. 1700.4(a). That section states:

'Talent agency' means a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists,.... Talent agencies may, in addition, counsel or direct artists in the development of their professional careers. (emphasis supplied).

Morgenstern concedes that Borden is an artist under Sec. 1700.4(b).¹ 

Once Borden has made a prima facie showing that the contract is subject to the Talent Agencies Act, the Labor Commissioner has the power and the duty to determine, in the first instance, whether the controversy is within the Act's grant of jurisdiction. See Buchwald, id. at 373. Borden argues that the Act applies due to the subject matter of the agreement and his status as "artist."

To assess whether Borden has made the requisite prima facie showing we must determine whether his agreement with Morgenstern falls within the terms "employment or engagements" used in Sec. 1700.4(a). Although a talent agency may "counsel or direct" an artist in the development of his professional career, as well as procure employment or engagements, see Sec. 1700.4(a), the record does not indicate that this occurred here, and Borden failed to make this argument. He also failed to argue that the terms of the contract were a "mere sham and pretext designed by [Morgenstern] to misrepresent and conceal the true agreement of the parties" to evade the jurisdiction of the Labor Commission, and no evidence in the record would support this. See Buchwald, id. at 370; Raden v. Laurie, 262 P.2d 61, 65 (Cal.Ct.App.1953).

The jurisdiction of the Labor Commission turns on the words "employment or engagements," but the California Labor Code does not define these terms. Morgenstern argues that the legislature intended to refer to agency law concepts. We need not resolve this because we rely on other grounds.

We conclude that the court erred in requiring Morgenstern to bring its dispute before the Labor Commissioner. We construe Sec. 1700.4(a), by the terms "employment or engagements," to refer to labor or services. Morgenstern does not qualify as a "talent agency" because the contract at issue involved the marketing of a completed play.

We adopt this construction of the statute for several reasons. First, where the terms of a statute are not defined, we presume that the legislature intended their usual and ordinary meaning. See, e.g., People Ex. Rel. Younger v. Superior Court, 127 Cal. Rptr. 122, 130, 544 P.2d 1322 (S. Ct. 1976). The terms "employment or engagements" ordinarily mean providing labor or services. The use of these terms together, both having this associated meaning, further supports our interpretation. Section 1700.44 subjects the dispute to the jurisdiction of the Labor Commission, and it follows therefore that these terms refer to labor or services rather than the sale of a completed product.

Second, we find Borden's position unacceptable when comparing Sec. 1700.4 with Sec. 9902 of the Cal.Bus. & Prof.Code, a provision of the Employment Agency Act. Although we have uncovered no cases construing these terms for Sec. 1700.4, we note that both Sec. 1700.4 and Sec. 9902 originate from the same legislation enacted in 1913 to regulate private employment agencies. See Cohen v. Board of Supervisors, 219 Cal. Rptr. 467, 482 n. 13, 707 P.2d 840 (S. Ct. 1985); Humes v. Margil Ventures, Inc., 220 Cal. Rptr. 186, 190-91 (Ct.App.1985); Sinnamon v. McKay, 191 Cal. Rptr. 295, 297-98 n. 4 (Ct.App.1983). Under subsection (a), the definition of "employment agency" includes "... any agency, business or office which procures, offers, promises, or attempts to procure employment or engagements for others or employees for employers...." Because the statutes originate from the same legislation and use virtually identical language, the California legislature must have intended the same meaning for the words "employment and engagements" in both statutes. See, e.g., Buchwald, 62 Cal. Rptr. at 371 (" [T]here is a very strong presumption of intent to adopt the construction as well as the language of the prior enactment ...").

In a recent opinion, the California Supreme Court had the opportunity to address the scope of Sec. 9902. See Cohen v. Board of Supervisors, 219 Cal. Rptr. at 482.²  The appellant, Cohen, challenged a San Francisco ordinance regulating escort services. Id. at 469. He argued that the Employment Agency Act preempted the ordinance. Id. at 481. The Court rejected the argument stating:

The [employment] agency's goal is to foster an employment relationship where the employer will compensate the employee on a continuing basis for services rendered. That cannot reasonably be said to be the purpose of an escort service, ...

Id. at 482; see also Garson v. Division of Labor Enforcement, 206 P.2d 368, 369 (Cal.S. Ct. 1949) ("Generally speaking, an employment agency is any person or corporation engaged in the business of finding positions or employment.") (arising under predecessor statutes, Labor Code Secs. 1550-1663);³  Sacramento Data Processing, Publication, & Sales v. Department of Consumer Affairs, 181 Cal. Rptr. 51, 55 (Ct.App.1982) ("The definition of 'employment agency' ... was to regulate those who for a fee actively seek to obtain employment for the individual, i.e., those who seek to bring together the employer and prospective employee.").⁴  This supports our conclusion that Sec. 1700.4 refers to labor or services rather than completed products.

Here, under the terms of the contract, the play, including any revisions, had to be delivered before the contract became effective. The parties had a marketing contract to sell a completed literary work. No evidence indicates any understanding or attempt by Morgenstern to seek purchasers for Borden's services rather than his play.

Because Morgenstern is not a talent agency, Sec. 1700.44 does not apply. The court below had subject matter jurisdiction.⁵ 

REVERSED AND REMANDED.