People v. Yeager-Reiman

318 Cal.Rptr.3d 368

The PEOPLE, Plaintiff and Respondent,

v.Charles YEAGER-REIMAN, Defendant and Appellant.

B331175

Court of Appeal, Second District, Division 5.

Filed February 16, 2024

APPEAL from a judgment of the Superior Court of Los Angeles County, Michael E. Pastor, Judge. Affirmed. (Los Angeles County Super. Ct. No. BA464429)

Hickey & Chung and Brendan M. Hickey for Defendant and Appellant.

Rob Bonta, Attorney General, Lance E. Winters, Chief Assistant Attorney General, James G. Root, Assistant Attorney General, Michael W. Whitaker and Gregory B. Wagner, Deputy Attorneys General, for Plaintiff and Respondent.

KIM, J.

I. INTRODUCTION

Defendant Charles Yeager-Reiman pleaded guilty to misdemeanor grand theft. (Pen. Code, § 487, subd. (a)¹.) The trial court, placed him on probation for two days under certain terms and conditions. On appeal, defendant contends his prosecution was preempted by federal law because he was a veteran and his alleged offenses concerned the theft of benefits from the United States Department of Veterans Affairs (VA). We affirm.

II. BACKGROUND

On April 2, 2018, the California Department of Justice filed a felony complaint charging defendant and others with conspiracy to commit grand theft, identity theft, forgery, making a false and fraudulent claim, and preparing false evidence (§182, subd. (a)) (count 1); grand theft of personal property (§ 487, subd. (a)) (count 2); and making false and fraudulent claims (§ 550, subd. (a)(5)) (count 5).

The complaint alleged that in 2011 and 2012, Amit Marshall, the owner, president, and director of the Alliance School of Trucking (Alliance) obtained approval from the California State Approving Agency for Veterans Education for Alliance to provide non-college degree trucking programs to veterans eligible for benefits under the "Post-9/11 GI Bill" (38 U.S.C., Pt. III, Ch. 33). That approval authorized Alliance to receive tuition and other payments from the VA. Marshall and Alliance director Robert Waggoner falsely certified to the VA that they would truthfully report veteran students’ enrollment status and attendance records and maintain current knowledge of VA rules and benefits.

Between October 1, 2011, and April 22, 2015, Marshall, Waggoner, and Alliance employee Aaron Solomona recruited and caused others to recruit eligible veterans to enroll in the approved Alliance trucking programs. Solomona told prospective students that together they could defraud the VA—students would not have to attend classes, but Alliance would report to the VA that they did, and each student would receive between $2,000 and $3,000 per month in benefits.

Between October 1, 2011, and April 22, 2015, Marshall, Waggoner, and Solomona provided and caused to be provided enrollment paperwork to veterans, including defendant, to fill out, and obtained information from the veterans to enable them to fill out paperwork on the veterans’ behalf. Marshall, Waggoner, and Solomona submitted or caused to be submitted the recruited veterans’ enrollment paperwork to the VA.

Between September 1, 2011, and April 22, 2015, Marshall, Waggoner, Solomona, and Sandor Greene created and caused to be created fraudulent student files for the purported students that contained false attendance records, false grades, and false certificates of completion. Through the completion of a VA form, Marshall and Waggoner falsely and fraudulently certified that defendant and/or other veteran students had attended classes at Alliance.

Between December 8, 2011, and April 22, 2015, as a direct result of their fraudulent scheme, Marshall, Waggoner, Solomona, Greene, and Ivanova Jimenez caused the VA to pay Alliance approximately $2,351, 658.19 in tuition and fees and approximately $1,957,715.89 in education benefits to veteran students, including defendant, who fraudulently claimed to have attended Alliance trucking programs.

Defendant moved to dismiss the complaint, in part on the ground that the prosecution was barred by federal preemption. The trial court denied the motion.

On May 2, 2019, defendant filed a petition for writ of prohibition in the trial court. The court denied the petition.

On June 13, 2019, defendant filed a petition for writ of prohibition in this court challenging the trial court’s jurisdiction on federal preemption grounds. (See Yeager-Reiman v. Superior Court of Los Angeles County (July 19, 2019, B298320) [nonpub. order].) On July 12, 2019, we denied the petition because defendant had "not met his burden to establish that the People’s prosecution of him is preempted." (Ibid.) On December 11, 2019, after further proceedings in this court and the Supreme Court (B301606, S257343), the Supreme Court denied defendant’s petition for review (S259032).

On August 2, 2021, pursuant to a plea agreement, defendant pleaded guilty to count 1, a felony. As part of the plea agreement, the prosecution agreed to reduce the charge to a misdemeanor if defendant satisfied certain terms and conditions. On April 28, 2022, defendant, having satisfied those terms and conditions, pleaded guilty to misdemeanor grand theft.

III. DISCUSSION

[1] Defendant contends his prosecution was preempted by federal law—"field" and "obstacle" preemption—and the trial court was thus without jurisdiction to hear his case.² We disagree.

A. Standard of Review

[2] Because federal preemption presents a pure question of law, our standard of review is de novo. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 10, 72 Cal.Rptr.3d 112, 175 P.3d 1170.)

B. General Preemption Principles

[3–5] " ‘ "The supremacy clause of the United States Constitution establishes a constitutional choice-of-law rule, makes federal law paramount, and vests Congress with the power to preempt state law." [Citations.] Similarly, federal agencies, acting pursuant to authorization from Congress, can issue regulations that override state requirements. [Citations.] Preemption is foremost a question of congressional intent: did Congress, expressly or implicitly, seek to displace state law?’ (Quesada v. Herb Thyme Farms, Inc. (2015) 62 Cal.4th 298, 307–308, 195 Cal.Rptr.3d 505, 361 P.3d 868 (Quesada).)" (Soto Industrial Innovations, LLC v. Superior Court (2018) 4 Cal.5th 316, 331, 228 Cal.Rptr.3d 406, 410 P.3d 32 (Solus).)

[6–9] "Our Supreme Court has " ‘identified several species of preemption.’ " ([Solus], supra, 4 Cal.5th at p. 332, 228 Cal.Rptr.3d 406, 410 P.3d 32.) ‘Express preemption occurs when Congress defines the extent to which its enactments preempt state law. [Citation.] Conflict preemption is found when it is impossible to comply with both state and federal law simultaneously. [Citation.] Obstacle preemption occurs when state law stands as an obstacle to the full accomplishment and execution of congressional objectives. [Citation.] Field preemption applies when federal regulation is comprehensive and leaves no room for state regulation. [Citation.]’ [Citation.]" (People v. Salcido (2019) 42 Cal.App.5th 529, 537, 255 Cal.Rpfr.3d 628 (Salcido).)

[10–12] "Ordinarily, there is a presumption against preemption. ([Solus], supra, 4 Cal.5th at p. 332, 228 Cal.Rptr.3d 406, 410 P.3d 32.) ‘The presumption is founded on "respect for the States as ‘independent sovereigns in our federal system’ "; that respect requires courts "to assume that ‘Congress does not cavalierly pre-empt state-law causes of action.’ " [Citation.] The strength of the presumption is heightened in areas where the subject matter has been the long-standing subject of state regulation in the first instance; where federal law touches "a field that " ‘has been traditionally occupied by the States,’ " " the party seeking to show preemption "bear[s] the considerable burden of overcoming ‘the starting presumption that Congress does not intend to supplant state law.’ " [Citations.]’ ([Quesada, supra,] 62 Cal.4th [at p.] 313, 195 Cal.Rptr.3d 505, 361 P.3d 868.)" (Salcido, supra, 42 Cal. App.5th at pp. 537–538, 255 Cal.Rpfr.3d 628.)

[13] "[T]here is a strong presumption against federal preemption when it comes to the exercise of historic police powers of the states. [Citations.] That presumption will not be overcome absent a clear and manifest congressional purpose. [Citation.]" (People v. Boultinghouse (2005) 134 Cal.App.4th 619, 625, 36 Cal.Rptr.3d 244.) The prosecution of theft and criminal fraud is within the state’s historic police powers. (People v. Dillard (2018) 21 Cal.App.5th 1205, 1221, 231 Cal.Rpfr.3d 106 (Dillard).)

C. Field Preemption

[14] Field preemption exists "when ‘Congress … intended "to foreclose any state regulation in the area," irrespective of whether state law is consistent or inconsistent with "federal standards." [Citation.] In such situations, Congress has forbidden the State to take action in the field that the federal statute pre-empts.’ [Citation.]" (Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677, 704–705, 220 Cal.Rptr.3d 812, 399 P.3d 37.)

[15] Defendant states that in enacting the Post-9/11 GI Bill Congress declared, " ‘Educational assistance for veterans helps reduce the costs of war, assist veterans in readjusting to civilian life after wartime service, and boost the United States economy, and has a positive effect on recruitment for the Armed Forces.’ " (Quoting Post-9/11 Veterans Educational Assis- tance Act of 2008 (Pub.L. No. 110–252, § 5002(3) (June 30, 2008), 122 Stat. 2323.) He argues field preemption applies because "Congress sought to ‘occupy the field’ by placing the administration of the [Post-9/11 G.I.] Bill within the national security realm, thus preempting any state from disrupting that federal administration …."

According to defendant, Congress implemented a statutory and regulatory framework that addresses false statements, misrepresentations, and fraud against the VA in the Post-9/11 G.I. Bill, but that also disfavors criminal prosecution of veterans, reserving the right to pursue such prosecutions to the Attorney...