Discrimination
Civil Rights Dept. v. SpaceX (2d Dist., 2026): FEHA Investigatory Subpoenas Can Reach Out-of-State Conduct
Updated
In Civil Rights Department v. Space Exploration Technologies Corp., the Second District Court of Appeal affirmed a trial court order compelling SpaceX to comply with an investigatory subpoena issued by the California Civil Rights Department (CRD). SpaceX argued the federal constitution, the presumption against extraterritorial application of laws, and the Fair Employment and Housing Act (FEHA) barred CRD from investigating a complaint alleging conduct outside FEHA’s territorial reach. The court held that SpaceX had not met its burden to show error on any of those grounds. The opinion was certified for partial publication on September 9, 2026.
Background
In April 2024, a former SpaceX employee filed a complaint with CRD alleging the company had discriminated and retaliated against her in violation of FEHA. She alleged she was paid less than a comparable male employee, passed over for promotion, and later terminated for helping draft and circulate an open letter criticizing the company and its CEO.
CRD served interrogatories and a subpoena duces tecum. SpaceX objected, arguing CRD lacked jurisdiction because the employee lived and worked in Washington and FEHA does not apply outside California. It produced some records but declined to answer further requests.
CRD narrowed its focus to jurisdictional questions, identifying discovery requests about where the alleged conduct occurred. Based on SpaceX’s supplemental responses, CRD concluded it had jurisdiction over the retaliation claim but needed more information on the discrimination claims.
In April 2025, CRD petitioned the Los Angeles County Superior Court to compel compliance. The court granted the petition without stating its reasons, and SpaceX appealed.
What the Court Held on SpaceX’s Jurisdictional Arguments
The Court of Appeal applied the settled rule that an order challenged on appeal is presumed correct, and that the appellant bears the burden of affirmatively demonstrating error with cogent argument supported by legal analysis. Measured against that standard, SpaceX’s arguments fell short.
The court treated SpaceX’s federal constitutional arguments as forfeited, describing its roughly two-page discussion as too cursory to identify or apply any governing test, including for the commerce clause. An unreasonable-search argument raised for the first time in the reply brief was also forfeited.
On the presumption against extraterritoriality, the court explained that under Ward v. United Airlines, Inc. the question is what California connections suffice to trigger a given provision. SpaceX addressed the connections needed to trigger FEHA’s substantive provisions but not those governing CRD’s separate investigatory authority—a distinct inquiry, given the reduced potential for conflict with other states when an agency merely investigates.
An employer challenging enforcement of a CRD investigatory subpoena must affirmatively show error, and it cannot do so by conflating FEHA’s substantive territorial reach with the separate question of the connections needed to trigger CRD’s investigatory authority.
Whether the Complaint Placed the Conduct Outside FEHA
Assuming without deciding that CRD cannot investigate conduct outside FEHA’s reach, the court held SpaceX still had to show the employee’s allegations fell outside that reach, which turns on how far FEHA’s substantive provisions extend under Ward. SpaceX instead proposed categorical rules the court found unpersuasive.
The court rejected the argument, drawn from Kearney v. Salomon Smith Barney, Inc., that FEHA applies only where the adverse employment action occurred, and found SpaceX had not shown all the alleged actions occurred exclusively in Washington. It also declined to read wage-and-hour cases such as Tidewater, Sullivan, Ward, and Oman—none of which involved FEHA—as compelling a categorical rule that FEHA never applies to employees working outside California.
The court distinguished Campbell v. Arco Marine, Inc., where the connections to California were settled, noting that here one purpose of the subpoena was to determine whether sufficient connections exist. The order was affirmed.
What This Means for You
This decision addresses when the Civil Rights Department may investigate a FEHA complaint involving an employee based outside California. It treats the connections needed to trigger the agency’s investigatory subpoena power as a question separate from FEHA’s substantive territorial reach, and it declines to adopt a categorical rule that FEHA never applies to workers outside the state.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.