• Senior Editor, Eileen C. Moore, Associate Justice,
California Court of Appeal, Fourth District
• Managing Editor, Reuben Ginsburg
• Editor, Jessica Riggin
Table of Contents of This Issue
Reputation Within Securities Industry.
A publicly accessible record of plaintiff’s securities disciplinary history is maintained by defendant, the Financial Industry Regulatory Authority, Inc. (FINRA). Plaintiff filed the current action seeking an order requiring FINRA to expunge his disciplinary history from its records. The trial court sustained FINRA’s demurrer. The Court of Appeal affirmed, stating: “Because federal securities laws and regulations provide [plaintiff] with a process by which he may challenge FINRA's publication of his disciplinary history, and [plaintiff] has not pursued that process, he may not now, by way of a civil action, seek that relief from the trial court.” (Flowers v. Financial Industry Regulatory Authority, Inc. (Cal. App. 4th Dist., Div. 1, Nov. 2, 2017) 16 Cal.App.5th 946.) http://www.courts.ca.gov/opinions/documents/D071392.DOC
No Batteries in Back-up System For Traffic Lights When There Was a Power Outage.
On the night of plaintiffs’ accident, there were no batteries in a traffic signal’s battery backup unit. During a power outage, plaintiffs’ vehicle entered the dark intersection and was struck by another car. Plaintiffs sued the entity responsible for maintaining the battery backup system, alleging negligence. Defendant argued it needed authorization from the city’s traffic engineer in order to replace a battery, and it did not have such authorization. According to the city’s traffic engineer, the city expected defendant to provide notification when there was a problem with a traffic signal, including whether a backup system battery required replacement at a particular location. The trial court granted defendant’s motion for summary judgment on the basis that defendant owed no duty of care to plaintiffs as a matter of law. The Court of Appeal reversed, noting: “If defendant negligently failed to install the batteries, a trier of fact could reasonably conclude defendant’s conduct increased the risk of harm to plaintiffs.” (Lichtman v. Siemens Industry, Inc. (Cal. App. 2nd Dist., Div. 5, Nov. 2, 2017) 16 Cal.App.5th 914.) http://www.courts.ca.gov/opinions/documents/B265373.DOC
Another Employer Who Didn’t Want to Provide Equal Pay to a Returning Service Member.
Plaintiff was commissioned as an officer in the United States Air Force Reserve in 1985 and retired in 2006. He was hired by FedEx in 2001 to pilot a Boeing 727 aircraft, which was classified as a “narrow body” aircraft for pay grade purposes. Plaintiff was later selected by FedEx for training to be a first officer on a McDonnell Douglas MD-11 aircraft-a “wide-body” aircraft—that would qualify him for a higher pay grade. That training was to begin on February 19, 2003. However, on February 7, 2003, plaintiff was mobilized for active Air Force duty. He was deployed overseas until August 31, 2006. After completing his military service, he returned to active pay status at FedEx on December 1, 2006. Upon his return, plaintiff was given the option to continue to work as a second officer on the narrow-body 727 aircraft or receive training for one of ten other open positions. He chose to enter training to become a first officer on the wide-body MD-11, as he had been selected by FedEx to do prior to his Air Force mobilization. Plaintiff filed this suit against FedEx alleging that FedEx violated the Uniformed Services Employment and Reemployment Rights Act (USERRA; 38 U.S.C. §§ 4301– 4335) when it improperly paid him a $7,400 bonus instead of the $17,700 bonus he would have earned had he not served. A federal trial court entered judgment in favor of plaintiff. The Ninth Circuit Court of Appeals affirmed, noting that FedEx should have paid the returning service member the higher bonus paid to those who did not serve, as well as his litigation costs and attorney’s fees. (Huhmann v. Fed. Express Corp. (9th Cir., Nov. 2, 2017) 874 F.3d 1102.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/02/15-56744.pdf
Opioid Crisis and the Duty to Defend.
The County of Orange and the County of Santa Clara brought an action alleging a pharmaceutical company engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain, a purpose for which the pharmaceutical company allegedly knew its opioid products were not suited. The defendant’s insurers brought the current action for declaratory relief, asking the court for a declaration they have no duty to either defend or indemnify the defendant in the underlying action. After a bench trial, the trial court found the insurers had no duty to defend. In affirming, the Court of Appeal stated: “The policies cover damages for bodily injury caused by an ‘accident,’ a term which has been interpreted to exclude the insured’s deliberate acts unless the injury was caused by some additional, unexpected, independent, and unforeseen happening.” (Traveler’s Property Casualty Co. of America v. Actavis, Inc. (Cal. App. 4th Dist., Div. 3, Nov. 6, 2017) 16 Cal.App.5th 1026.) http://www.courts.ca.gov/opinions/documents/G053749.DOCX
Petitioner is a citizen of Mexico. He entered the United States in 1993, when he was a ten-year-old child, when he was “waved through inspection” by an officer at the port of entry in San Ysidro, California. In 2001, he married a U.S. citizen, and the couple has three children, who are also U.S. citizens. After petitioner was convicted of possession of a controlled substance in 2012, the U.S. Department of Homeland Security began proceedings to remove him from this country, and he was ordered to be removed. The Board of Immigration Appeals held that he was ineligible for cancellation of removal because he could not establish he was living in this country after having been “admitted in any status,” one of the requirements to cancel a removal order. Before the Ninth Circuit Court of Appeals, the government argued that “in any status” means “in any lawful status.” But the appeals court noted the word “lawful” is absent from the statute (8 U.S.C. § 1229b(a)) and found the Board of Immigration Appeals erred in concluding petitioner was ineligible to have his removal order cancelled since he was admitted to the U.S. “in any status,” which here was in an unlawful status. (Saldivar v. Sessions (9th Cir., Nov. 7, 2017) 2017 U.S. App. 877 F.3d 812 22331.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/07/13-72643.pdf
Appeal Is From Statement of Decision.
The child of a decedent appeals from a 2016 statement of decision removing him as the personal representative of the probate estate. The child had previously been removed pursuant to a 2015 order, which “explicitly referred to a forthcoming written decision that would set forth the basis for the removal order.” Respondents challenged the appealability of the statement of decision. The Court of Appeal recognized that a statement of decision ordinarily is not appealable, but stated: “The Statement of Decision includes a section entitled ‘Orders,’ which includes the following: ‘Finds that it is in the best interest of the Estate to remove [William] from his position as executor of the Estate.’ This is most reasonably construed as an order removing a fiduciary, an appealable order under the Probate Code. (Prob. Code, § 1300, subd. (g).) Because the Probate Code provides for an appeal from an order removing a fiduciary, the appeal should not be dismissed on the ground that the order appears in a statement of decision rather than a separate order or judgment.” The court also concluded that the 2015 order, which explicitly referenced a forthcoming written decision on the findings underlying the order, was not a final appealable order removing the child as representative. (Estate of Reed (Cal. App. 1st Dist., Div. 5, Nov. 8, 2017) 16 Cal.App.5th 1122.) http://www.courts.ca.gov/opinions/documents/A148678.DOC
Discipline by the Physical Therapy Board.
Petitioner, a licensed physical therapist, pled guilty to a misdemeanor count of hit and run with property damage, and in exchange for her plea two alcohol-related charges were dismissed. The Physical Therapy Board of California subjected her to discipline. Petitioner filed a petition for administrative mandamus in the superior court, arguing the discipline was not sufficiently related to her fitness to practice physical therapy. The superior court ruled that the board’s discipline was appropriate. The Court of Appeal agreed with the superior court that discipline was appropriate pursuant to Business & Professions Code §§ 2239 and 2260 and that a separate showing that the therapist’s conduct affected her profession was not necessary. (Walker v. Physical Therapy Board of California (Cal. App. 4th Dist., Div. 1, Nov. 8, 2017) 16 Cal.App.5th 1219.) http://www.courts.ca.gov/opinions/documents/D071984M.DOC
Manipulating Matters in Order to Achieve a Continuance of Trial and Pretrial Appellate Review.
The Court of Appeal begins its opinion by stating: “This is an appeal borne in sharp practices.” Defendant unilaterally orchestrated the issuance of an appealable order by: (1) applying ex parte, a mere 11 days before trial, for an order shortening time to hear its motion to compel arbitration; (2) voluntarily submitting a proposed order to the trial court that not only reflected the court’s denial of the ex parte application — the only ruling reflected in the trial court’s own minute order — but also included a denial of the motion on the merits; and (3) promptly appealing from that order, which then stayed the scheduled trial and permitted a pretrial appellate review of defendant’s unsuccessful motion for summary judgment. The Court of Appeal was not amused, stating: “We conclude [defendant] and its counsel acted in bad faith, generating an appealable order they knew the trial court had not intended to issue at the ex parte hearing, for the purpose of obtaining a delay of trial. . . . Finally, we also impose monetary sanctions against [defendant] and its counsel, E. Sean McLoughlin and William A. Meyers, for bringing a frivolous appeal. . . . We conclude instead that [defendant]and its counsel acted in bad faith.” (Diaz v. Professional Community Management, Inc. (Cal. App. 4th Dist., Div. 3, Nov. 8, 2017) 16 Cal.App.5th 1190.) http://www.courts.ca.gov/opinions/documents/G053909.DOC
$4,000/day Discovery Sanctions…Ouch!
The allegations in the action concern child molestation by an agent of a religious organization. A defendant steadfastly refused to comply with a discovery order involving production of documents, and the superior court awarded sanctions in the amount of $4,000 per day for noncompliance with the order. The defendant appealed from that order, and the Court of Appeal affirmed, stating that “where a party has been given ample opportunity to argue its position, a discovery referee and the court have thoroughly considered the party’s arguments and rejected those arguments (considering pleadings, evidence, and oral argument), and the party willfully refuses to comply with the court’s order, a court may ‘impose a significant monetary penalty’ on the party.” (Padron v. Watchtower Bible & Tract Society of New York, Inc. (Cal. App. 4th Dist., Div. 1, Nov. 9, 2017) 16 Cal.App.5th 1246.) http://www.courts.ca.gov/opinions/documents/D070723.DOCX
Duty of Landowner.
A church’s parking lot is located across a public street from the church. A parishioner was struck by a car crossing the public street on his way to church and contends the church owed him a duty of care. The church argued it had no control over the public street and did not create the danger in the street, and therefore did not owe plaintiff a duty of care. The trial court granted summary judgment in favor of the church; a divided panel of the Court of Appeal reversed. The California Supreme Court reversed the decision of the Court of Appeal, stating: “Because [plaintiff] does not allege that the Church did anything other than maintain a parking lot on the other side of that street, we find that the Church did not owe him a duty to prevent his injury.” (Vasilenko v. Grace Family Church (Cal., Nov. 13, 2017) 3 Cal.5th 1077.) http://www.courts.ca.gov/opinions/documents/S235412.DOC
Review on the Internet and the First Amendment.
An anonymous reviewer posted the following review of a tax accountant on Yelp: “Too bad there is no zero star option! I made the mistake of using them and had an absolute nightmare. Bill was way more than their quote; return was so sloppy I had another firm redo it and my return more than doubled. If you dare to complain get ready to be screamed at, verbally harassed and threatened with legal action. I chalked it up as a very expensive lesson, hope this spares someone else the same.” The accountant filed a complaint for trade libel against an individual and served Yelp with a deposition subpoena. Yelp objected, asserting the First Amendment rights of the anonymous reviewer. The trial court found Yelp lacked standing to assert those rights and ordered Yelp to produce documents. The Court of Appeal held that the trial court erred in that Yelp does have standing to assert the First Amendment rights of an anonymous reviewer. However, the appellate court concluded plaintiff made a prima facie showing the challenged review was defamatory, and that finding supports the trial court’s order compelling Yelp to produce the subpoenaed documents. (Yelp, Inc. v. Superior Court (Cal. App. 4th Dist., Div. 3, Nov. 13, 2017) 17 Cal.App.5th 1.) http://www.courts.ca.gov/opinions/documents/G054358.DOCX
Social Worker Was Between a Rock and a Hard Place.
Plaintiff worked as a social worker for a county. After her supervisors ordered her to submit misleading information and doctored photographs to the court, she sought legal advice pertaining to any personal liability she might incur. Her counsel prepared a filing for the juvenile court to apprise it of the falsified information, and plaintiff was immediately placed on administrative leave for disclosing confidential information to an unauthorized person. Upon being informed she would be terminated for the breach, plaintiff resigned her position and filed a whistle blower action against the county. The county filed a special motion to strike the complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16), which the trial court denied. The county appealed the denial. The Court of Appeal affirmed, finding plaintiff presented evidence sufficient to establish a probability of prevailing on the merits. (Whitehall v. County of San Bernardino (Cal. App. 4th Dist., Div. 2, Nov. 15, 2017) 17 Cal.App.5th 352.) http://www.courts.ca.gov/opinions/documents/E065672.DOC
No Protected Activity.
Plaintiff owns and operates chain grocery stores. Two of its stores have entrances providing customer access from a parking lot. The sidewalk and aprons in front of the stores are not public. Defendants operate petition signature gathering companies in Southern California, paying individuals to obtain signatures for various petitions and initiatives. On a typical day, defendants set up a table in the sidewalk/apron area directly between the stores and a fire lane while soliciting signatures. Plaintiff alleges defendants obstruct customers’ ingress and egress from the stores, stand in the fire lanes, and harass customers by following them into the parking lot. Plaintiff called the police, but police declined to remove defendants. Ultimately, plaintiff filed a lawsuit, alleging causes of action for trespass and injunction. Defendants filed an anti-SLAPP motion pursuant to Code of Civil Procedure § 425.16. The trial court determined the cause of action for trespass arises out of protected activity and that plaintiff cannot establish a probability of prevailing on the merits, and struck plaintiff’s complaint. The Court of Appeal reversed, finding the trespass cause of action did not arise out of protected activity because the defendants were on private property. (Ralphs Grocery Company v. Victory Consultants, Inc. (Cal. App. 4th Dist., Div. 1, Nov. 15, 2017) 17 Cal.App.5th 245.) http://www.courts.ca.gov/opinions/documents/D070804.DOC
Domestic Violence Restraining Orders.
The juvenile court issued a domestic violence restraining order. At some point, the juvenile court terminated its jurisdiction in the matter. After termination of jurisdiction by the juvenile court, the protected person moved a family law court to renew the restraining order, and the family court concluded it lacked jurisdiction to renew the order. The Court of Appeal noted that Family Code § 6345 governs renewal of a protective order and held, “after a juvenile court has terminated its jurisdiction, the family court has jurisdiction over domestic violence orders and may issue a renewal.” (Garcia v. Escobar (Cal. App. 2nd Dist., Div. 8, Nov. 15, 2017) 17 Cal.App.5th 267.) http://www.courts.ca.gov/opinions/documents/B279530.DOC
Fair Labor Standards Act.
Plaintiffs brought a wage and hour class action against their employer, alleging the employer’s payment plan violates the Fair Labor Standards Act (FLSA; 29 U.S.C. § 206(a)(1)(C)) by compensating above minimum wage for some hours and below minimum wage for others. The Ninth Circuit Court of Appeals concluded compliance with the FLSA is decided by looking at the workweek as a whole, rather than each individual hour within the workweek. (Douglas v. Xerox Business Services, LLC (9th Cir., Nov. 15, 2017) 875 F.3d 884.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/15/16-35425.pdf
The Empire Strikes Back.
Empire Distribution is a well-known and respected record label that records and releases albums in the urban music genre, which includes hip hop, rap, and R&B. In 2015, Fox premiered a television show titled Empire, which portrays a fictional hip hop music label named “Empire Enterprises” that is based in New York. The show features songs in every episode, including some original music. Under an agreement with Fox, Columbia Records releases music from the show after each episode airs, as well as soundtrack albums at the end of each season. Fox has also promoted the Empire show and its associated music through live musical performances, radio play, and consumer goods such as shirts and champagne glasses bearing the show’s “Empire” brand. In response to a claim letter from Empire Distribution, Fox filed suit seeking a declaratory judgment that the Empire show and its associated music releases do not violate Empire Distribution’s trademark rights under either the Lanham Act (15 U.S.C. § 1051 et seq.) or California law. Empire Distribution counterclaimed for trademark infringement, trademark dilution, unfair competition, and false advertising under the Lanham Act and California law, and sought both injunctive and monetary relief. A federal trial court granted summary judgment to Fox on all claims and counterclaims. The Ninth Circuit Court of Appeals observed that in general, claims of trademark infringement under the Lanham Act are governed by a likelihood-of-confusion test, but when the allegedly infringing use is in the title of an expressive work, courts instead apply a test developed by the Second Circuit in Rogers v. Grimaldi (2nd Cir. 1989) 875 F.2d 994 to determine whether the Lanham Act applies. The appeals court noted that plaintiff used the common English word “Empire” for artistically relevant reasons such as the show’s setting is New York, the Empire State, and its subject matter is a music and entertainment conglomerate, “Empire Enterprises,” and, in affirming, concluded use of the name “Empire” was protected by the First Amendment and was therefore outside the reach of the Lanham Act. (Twentieth Century Fox Television v. Empire Distribution, Inc. (9th Cir., Nov. 16, 2017) 875 F.3d 1192.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/16/16-55577.pdf
The Bane Act.
Plaintiff was a police officer trainee. While off-duty and in street clothes, he went for a run one morning in a city park, stopping for a brief rest at a place known as Hippie Hill. Two uniformed patrol officers in the area spotted him, thought he looked “worried,” and grew suspicious because the bushes on Hippie Hill are known for illicit drug activity. As the patrolmen began to approach plaintiff, but before they reached him or said anything to him, he resumed his run. The officers gave chase, joined in pursuit by two other officers who responded to a call for backup. One of the officers, with his gun drawn, eventually caught up to him. Plaintiff had no idea he was being chased or that the officers wished to speak with him. He heard a shout from behind, “I will shoot you,” and looked over his shoulder to see a dark figure pointing a gun at him. He darted away, ultimately finding refuge with another police officer . He was arrested at gun-point, searched, handcuffed, interrogated, and eventually taken to a hospital for a drug test, which was negative. The police found no evidence of involvement with drugs, released plaintiff after nearly six hours in custody, and cited him for evading arrest in violation of Penal Code § 148. Plaintiff was never prosecuted, but he lost his job as a result of the arrest and citation. Plaintiff sued the four arresting officers, the chief of police, and the city and county under Civil Code § 52.1 (the Bane Act), which provides protection from threats, intimidation, and interference with one’s constitutional rights, and also alleged claims for negligence, assault and battery, false arrest and imprisonment, and tortious interference with contract and/or economic advantage. In a bifurcated trial, the trial court found plaintiff was arrested without probable cause based on the jury’s findings in the first phase, and in the second phase the jury found defendants liable under the Bane Act and for tortious interference, and awarded total damages of $575,231. Following trial, the court awarded $2,027,612.75 in attorney fees and costs. In affirming, the Court of Appeal noted the nub of the action was that plaintiff was kept in jail and stated “a rational jury could have concluded not only that [the police officers] were unconcerned from the outset with whether there was legal cause to detain or arrest him, but that when they realized their error, they doubled-down on it, knowing they were inflicting grievous injury on their prisoner.” (Cornell v. City and County of San Francisco (Cal. App. 1st Dist., Div. 4, Nov. 16, 2017) 17 Cal.App.5th 766.) http://www.courts.ca.gov/opinions/documents/A141016M.DOC
In Class Actions, California Courts May Look to Rule 23 of the Federal Rules of Civil Procedure in the Absence of State Precedent.
Plaintiffs filed a class action lawsuit seeking a declaratory judgment that form contracts signed by emergency room patients authorize charges for only the reasonable amount of services. The trial court denied plaintiffs’ motion for class certification, concluding that the class was not ascertainable, that common issues did not predominate, and that class action litigation was not a superior means of proceeding. On appeal, plaintiffs contended the trial court erred in denying class certification because, as the complaint seeks only declaratory relief, the motion for class certification was brought under the equivalent of Federal Rules of Civil Procedure, rule 23(b)(1)(A) or (b)(2), so they were not required to establish the ascertainability of the class, that common issues predominate, and that class action litigation is a superior means of proceeding. In affirming the order denying class certification, the Court of Appeal noted the trial court followed established California law and that California courts may look to federal rule 23 only in the absence of state precedent. (Hefczyc v. Rady Children's Hospital-San Diego (Cal. App. 4th Dist., Div. 1, Nov. 17, 2017) 17 Cal.App.5th 518.) http://www.courts.ca.gov/opinions/documents/D071264.DOC
Sometimes it May be Better to Act First and Talk Later.
A city fire department examined a night club and determined it violated the city’s code regarding improvements and construction. The fire department would not approve any occupant loads until a sprinkler system was installed. The city issued an “order to comply.” The night club and city officials engaged in continued discussions. Disagreements about occupancy loads and dance hall permits continued. More than two years after the order, the night club sued the city, the fire department, and others for damages. The trial court sustained defendants’ demurrer without leave to amend. The Court of Appeal affirmed for failure to exhaust administrative remedies. The relevant municipal code provision stated: “The revocation, suspension or denial of any Permit, Special Permit, General Approval, or Certificate of Fitness may be appealed to the Board [of fire commissioners] within 15 days after such revocation, suspension or denial.” (Los Globos Corporation v. City of Los Angeles (Cal. App. 2nd Dist., Div. 1, Nov. 20, 2017) 17 Cal.App.5th 627.) http://www.courts.ca.gov/opinions/documents/B275224.DOCX
Defendant is a publicly traded company that generates revenue by selling advertising to businesses on its website. Plaintiffs sued defendant for securities fraud in a class action, alleging the falsity of statements regarding the independence and authenticity of reviews posted on defendant’s website, after a Wall Street Journal article disclosed more than 2,000 complaints from businesses claiming manipulation of reviews. Some complaints alleged defendant’s salespersons would remove good reviews or promote bad reviews when businesses did not agree to buy advertising. Other complaints reported the suppression of bad reviews of businesses that purchased advertising. A federal trial court dismissed the complaint for failure to state a claim. In affirming the dismissal, the Ninth Circuit Court of Appeals stated: “We hold that the disclosure of consumer complaints, without more, in the circumstances of this case did not form a sufficient basis for a viable loss causation theory.” (Curry v. Yelp Inc (9th Cir., Nov. 21, 2017) 875 F.3d 1219.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/21/16-15104.pdf
Dismissal on Forum Selection Grounds.
Plaintiff contends by including a request for dismissal on forum selection grounds in its demurrer, rather than by a separate motion, defendant forfeited its forum selection argument. Code of Civil Procedure § 418.10, subdivision (e)(3) states: “Failure to make a motion under this section at the time of filing a demurrer or motion to strike constitutes a waiver of the issues of lack of personal jurisdiction, inadequacy of process, inadequacy of service of process, inconvenient forum, and delay in prosecution.” In affirming the trial court’s dismissal of the action, the Court of Appeal stated: “[S]ection 410.30, subdivision (a), expressly authorizes the trial court to raise and address forum issues on its own motion. Although section 418.10 provides a basis for parties to file preanswer forum challenges, that does not mean the court may not also consider such challenges under section 410.30, which invests the court with independent discretion to consider the proper forum and does not limit that discretion to the postanswer period. Timely alerted to the forum issue in [defendant’s] demurrer, the trial court acted within its authority under section 410.30, subdivision (a), in providing [defendant] the opportunity to file a separate motion so both parties could brief the forum issue. In essence, the court simply had [defendant] recast a portion of its demurrer explicitly in the form of a motion rather than captioned as a demurrer. Nothing prevented the court from doing so.” (Laboratory Specialists International, Inc. v. Shimadzu Scientific Instruments, Inc. (Cal. App. 4th Dist., Div. 3, Nov. 21, 2017) 17 Cal.App.5th 755.) http://www.courts.ca.gov/opinions/documents/G054056.DOC
Federal Arbitration Act Preempted By McCarran-Ferguson Act.
The contract between the parties in a dispute over insurance issues provides: “This Agreement shall be exclusively governed by and construed in accordance with the laws of Nebraska. . . .” Nebraska law prohibits arbitration of any agreement concerning or relating to an insurance policy. 15 United States Code § 1012(b) states: “No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, . . . unless such Act specifically relates to the business of insurance.” The trial court denied a party’s petition to order the matter into arbitration. The Court of Appeal affirmed, stating: “The threshold issue of whether the FAA applies or is preempted by the McCarran-Ferguson Act and section 25-2602.01(f) of the NUAA (Nebraska Uniform Arbitration Act) was for the court, and not the arbitrator, to decide. The trial court did not err by adjudicating this gateway issue. [¶] The trial court did not err by concluding that section 25-2602.01(f) of the NUAA is a statute that regulates the business of insurance within the meaning of the McCarran-Ferguson Act. [¶] Application of the FAA would operate to invalidate or impair section 25-2602.01(f) of the NUAA. The trial court did not err by concluding that the McCarran-Ferguson Act applies and reverse preempts the FAA. . . . The trial court accordingly did not err by denying the petition to compel arbitration.” (Citizens of Humanity, LLC v. Applied Underwriters, Inc. (Cal. App. 2nd Dist., Div. 2, Nov. 22, 2017) 17 Cal.App.5th 806.) http://www.courts.ca.gov/opinions/documents/B276601.DOC
Anti-SLAPP Statute & Suing a Public Entity.
Plaintiffs sued a city for issuing a permit. The city filed a special motion to strike pursuant to the anti-SLAPP statute, Code of Civil Procedure § 425.16. The trial court denied the motion. In affirming, the Court of Appeal stated: “Governments speak. They also petition. And they act in ways that are neither speaking nor petitioning. It is important to distinguish between the three, because Code of Civil Procedure section 425.16 (section 425.16) may apply to the first two, but not the third.” The appeals court held: “We conclude section 425.16 does not protect a governmental entity’s decisions to issue or deny permits, and we agree with the trial court that granting a special motion to strike in these circumstances would chill citizens’ attempts to challenge government action.” (Shahbazian v. City of Rancho Palos Verdes (Cal. App. 2nd Dist., Div. 7, Nov. 22, 2017.) 17 Cal.App.5th 823.) http://www.courts.ca.gov/opinions/documents/B271562.DOC
The United Farm Workers of America (UFW) filed a Mandatory Mediation and Conciliation request (MMC; Lab. Code, § 1164) with the Agricultural Labor Relations Board after failing to reach a collective bargaining agreement with petitioner, a farming business. When mediation failed to produce an agreement, the mediator submitted a report fixing the contractual terms, which the board adopted in its final order. Petitioner petitioned for review of the board’s order, contending, among other things, the MMC statutory scheme was unconstitutional. The Court of Appeal agreed, holding, “‘the MMC statute on its face violates equal protection principles.’” The California Supreme Court disagreed, concluding the MMC statute does not violate equal protection and does not unconstitutionally delegate legislative authority. Petitioner also claimed that the UFW, the labor union certified as the employees’ bargaining representative, had abandoned its employees after a lengthy absence and therefore forfeited its status as representative. Applying the settled rule that a union remains certified until decertified by the employees in a subsequent election, the board concluded that the Agricultural Labor Relations Act (ALRA; Lab. Code, § 1140.2) precludes employers from raising an abandonment defense to an MMC request. The California Supreme Court concluded employers may not refuse to bargain with unions—whether during the ordinary bargaining process or during MMC—on the basis that the union has abandoned its representative status, stating: “As the Board and lower courts have consistently observed, the Legislature intended to reserve the power to decertify labor organization representatives to employees and labor organizations alone. Allowing employers to raise an abandonment defense would frustrate that intent and undermine the ALRA’s comprehensive scheme of labor protections for agricultural employees.” (Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (Cal., Nov. 27, 2017) 2017 Cal. Gerawan Farming, Inc. v. Agricultural Labor Relations Bd.: 3
Failure to Issue Statement of Decision Subject to Harmless Error Review.
Code of Civil Procedure § 632 provides that “upon the trial of a question of fact by the court,” the court “shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial.” In this case, after a court trial, a defendant timely requested a statement of decision. The trial court entered a judgment without issuing a statement of decision. The judgment explained the basis for the decision. The California Supreme Court granted review to decide whether a court’s error in failing to issue a statement of decision as required is reversible per se. The Supreme Court held: “[A] trial court’s error in failing to issue a requested statement of decision is not reversible per se, but is subject to harmless error review. Nothing in the language of section 632 as it now stands establishes a rule of automatic reversal, and nothing in the statute’s legislative history suggests the Legislature intended the current statute to have that effect.” (F.P. v. Monier (Cal., Nov. 27, 2017) 2017 Cal. F.P. v. Monier: 3 Cal.5th 1099 8923.) http://www.courts.ca.gov/opinions/documents/S216566.DOC
CLRA Provides Cumulative Remedies.
Plaintiff filed an action under the Consumers Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq. ) against a car dealer to enjoin false advertising. Plaintiff also sued for fraud and violation of the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.). After a nonjury trial, the trial court awarded plaintiff damages for fraud and imposed an injunction under the UCL on the dealer’s advertising. The dealer appealed arguing the CLRA is the exclusive remedy for conduct encompassed by the CLRA. The Court of Appeal rejected the argument, concluding remedies under the CLRA are cumulative. (Flores v. Southcoast Automotive Liquidators, Inc. (Cal. App. 2nd Dist., Div. 5, Nov. 27, 2017) 2017 Cal. App. Flores v. Southcoast Automotive Liquidators, Inc.: 17 Cal.App.5th 841 1040.) http://www.courts.ca.gov/opinions/documents/B268271.DOC
PAGA and Arbitration.
An employer appealed the trial court’s denial of its petition to compel arbitration of its former employee’s PAGA claim (Private Attorneys General Act; Lab. Code, § 2698 et seq.). The employer contended arbitration was appropriate since the plaintiff had agreed to arbitration while an employee. In affirming the denial, the Court of Appeal stated: “We hold that an agreement to arbitrate a PAGA claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver.” (Julian v. Glenair, Inc. (Cal. App. 2nd Dist., Div. 4, Nov. 27, 2017) 2017 Cal. App. Julian v. Glenair, Inc.: 17 Cal.App.5th 853 1041.) http://www.courts.ca.gov/opinions/documents/B277064.DOC
May Attorney-in-Fact Agree to Arbitration in Admitting Principal into Residential Care Facility?
A woman appointed her niece her attorney-in-fact to make health care decisions. Four years later, the woman appointed both her sister and the niece as attorneys-in-fact to make personal care decisions for her. Thus, the niece had both the power of attorney to make health care decisions and the power of attorney to make personal care decisions, but the sister had only the power of attorney to make personal care decisions. The sister voluntarily admitted the woman into a residential care facility for the elderly, signing an admission agreement that included an arbitration clause. At some point, the woman died. The niece and the sister sued the facility, seeking damages for elder abuse and fraud. The facility petitioned the court to compel arbitration. The trial court ruled the arbitration clause was invalid. The Power of Attorney (POA) statute is found in Probate Code, § 4401, and the Health Care Decisions Law in Probate Code § 4671(a). Here, the court noted that a POA does not authorize an attorney-in-fact to make decisions regarding the principal’s health care (Prob. Code § 4050(a)(1)). The Court of Appeal concluded that admission of a patient to a residential care facility in this instance was a health care decision, and the attorney-in-fact who admitted her was not authorized to make health care decisions on behalf of the principal. Consequently, the appeals court affirmed denial of the facility’s petition to compel arbitration. (Hutcheson v. Eskaton Fountainwood Lodge (Cal. App. 3rd Dist., Nov. 28, 2017) 2017 Cal. App. Hutcheson v. Eskaton Fountainwood Lodge: 17 Cal.App.5th 937 1044.) http://www.courts.ca.gov/opinions/documents/C074846A.DOCX
Make a Note of This . . . Regarding Code of Civil Procedure § 664.6 Settlements . . . Litigants Did Not Ask the Court to Retain Jurisdiction.
The parties entered into a written settlement agreement providing that the court would retain jurisdiction to enforce the settlement pursuant to Code of Civil Procedure § 664.6, but the parties never actually asked the court to retain jurisdiction and the court never did so. The parties dismissed the complaint and cross-complaint. Later, plaintiff filed a motion to enforce the settlement pursuant to Code of Civil Procedure § 664.6. The trial court denied the motion on the merits. The Court of Appeal concluded the order was void for lack of jurisdiction and directed the trial court to vacate the order, stating: “Because the parties failed to request, before dismissal, that the trial court retain jurisdiction to enforce the settlement, or alternatively seek to set aside the dismissals, we find the court lacked jurisdiction to entertain the motion.” (Sayta v. Chu (Cal. App. 1st Dist., Div. 5, Nov. 29, 2017) 2017 Cal. App. Sayta v. Chu: 17 Cal.App.5th 960 1054.) http://www.courts.ca.gov/opinions/documents/A148823.DOC
Court Reporter Overcharged.
Plaintiff is an attorney with her own law firm. Defendant is a California corporation that provides certified shorthand reporting services. Plaintiff retained defendant to serve as an official court reporter pro tempore at a superior court hearing. Plaintiff filed the instant action against defendant alleging overcharging in two causes of action: violation of Government Code §§ 69950 and 69954, and violation of the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) predicated on violations of §§ 69950 and 69954. Plaintiff sought, on behalf of herself and others similarly situated, declaratory relief, damages, fees, and costs. Defendant brought a motion for judgment on the pleadings, arguing that the statutory transcription rates apply only to official court reporters employed by the courts, and not to privately retained certified shorthand reporters, and the trial court granted the motion. The Court of Appeal reversed, stating: “We hold that the statutory transcription rates prescribed by sections 69950 and 69954 apply to any court reporter producing a transcript of a civil court proceeding, regardless of whether the reporter is employed by the superior court or privately retained by a party. We therefore reverse the judgment.” But the appeals court also said: “The statutes do not prevent a private reporter from charging contract rates for court appearances and costs incurred while serving as an official reporter pro tempore or for producing deposition transcripts.” (Burd v. Barkley Court Reporters, Inc. (Cal. App. 2nd Dist., Div. 2, Nov. 29, 2017) 2017 Cal. App. Burd v. Barkley Court Reporters, Inc.: 17 Cal.App.5th 1037 1050.) http://www.courts.ca.gov/opinions/documents/B271694.DOC
The Impossible Labyrinth of Government Claims.
A Los Angeles School Police Department (LASPD) vehicle ran a red light and struck plaintiffs. Plaintiffs were given a card bearing the name, seal, address and website of LASPD and were given the name of an LASPD officer. After presenting a government claim for damages with LASPD within the time specified by Government Code § 911.2, plaintiffs filed the instant lawsuit. Over a year later, plaintiffs were provided a traffic collision report identifying the driver as an employee of LASPD and the vehicle as insured by Los Angeles Unified School District (LAUSD). Plaintiffs thereafter amended their complaint to add LAUSD as a defendant. LAUSD moved for summary judgment, arguing plaintiffs failed to timely present a government claim against LAUSD. LAUSD explained that LASPD is not a separate entity, but part of LAUSD. Plaintiffs opposed the summary judgment motion based on equitable estoppel. The trial court found that equitable estoppel was inapplicable and granted summary judgment in favor of LAUSD. The Court of Appeal reversed, stating: “For the reasons set forth below, we conclude that appellants have demonstrated triable issues of fact with respect to the existence of equitable estoppel. Accordingly, we reverse.” (Santos v. Los Angeles Unified School District (Cal. App. 2nd Dist., Div. 4, Nov. 29, 2017) 2017 Cal. App. Eichenberger v. ESPN, Inc.: 876 F.3d 979 1057.) http://www.courts.ca.gov/opinions/documents/B278391.DOC
“Privacy? We Don’t Need No Stinkin’ Privacy.”
Plaintiff filed an action under the Video Privacy Protection Act of 1988 (VPPA; 18 U.S.C. § 2710(b)(1)). This is what he alleged: ESPN produces sports-related news and entertainment. It offers access to content through the WatchESPN Channel, which is available on the Roku digital streaming device. Plaintiff downloaded the WatchESPN Channel on his Roku device and used it to watch sports-related news and events. Every time plaintiff and others watch something, ESPN knowingly discloses their Roku device serial number and what they watched to Adobe Analytics. Thereafter, Adobe connects the information provided by ESPN with publicly available data, including the ESPN-user’s email address, Facebook profile, photos and usernames. Adobe gives the resulting aggregate information back to ESPN, and ESPN provides advertisers with its users’ demographics. A federal trial court dismissed the action for failure to state a claim that ESPN disclosed information that was “personally identifiable information” within the meaning of the VPPA. The appeals court affirmed, concluding an ordinary person could not use the information ESPN allegedly disclosed to identify an individual, unless it is combined with other data in Adobe’s possession, data that ESPN never disclosed and apparently never possessed. (Eichenberger v. ESPN, Inc. (9th Cir., Nov. 29, 2017) 2017 U.S. App. LEXIS 24168.) http://cdn.ca9.uscourts.gov/datastore/opinions/2017/11/29/15-35449.pdf
The California WARN Act.
Under a California law known as the California WARN Act, employers must provide 60 days’ notice to affected employees before ordering a "mass layoff." (Labor Code, § 1400 et seq.). A labor union and several employees sued an employer, alleging the employer violated this law by failing to provide notice before ordering about 90 employees not to return to work for four to five weeks. The employer countered that the California WARN Act was inapplicable because its action was a temporary furlough and not a “mass layoff.” The parties filed cross summary judgment/adjudication motions raising primarily the duty issue: did the employer have a statutory duty to notify the affected employees even though the layoff was temporary, rather than permanent? The trial court ruled in plaintiffs’ favor and awarded the workers $211,405 in backpay and lost pension benefits. On appeal, the employer contends the court erred in finding the California WARN Act applies to temporary layoffs. The Court of Appeal affirmed, stating: “Based on our analysis of the statutory language, statutory scheme, legislative history, federal WARN law, and policies underlying the California WARN Act, we determine the employer had a duty to provide statutory notice under the particular circumstances of this case, even if the layoffs were not permanent and were for less than six months.” (International Broth. of Boilermakers, etc. v. NASSCO Holdings Inc. (Cal. App. 4th Dist., Div. 1, Nov. 30, 2017) 2017 Cal. App. International Broth. of Boilermakers, etc. v. NASSCO Holdings
Inc.: 17 Cal.App.5th 1105
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