A monthly publication of the Litigation Section of the California Lawyers Association
• 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
998 Offer by Multiple Plaintiffs to Multiple Defendants Valid. After two people died in a rented home, their families sued the homeowners, a couple. Defendants rejected plaintiffs’ joint offer to compromise (Code Civ. Proc., § 998), and the case went to trial. A jury awarded plaintiffs substantially more than the amount in their offer to compromise, awarding one decedent’s heirs an amount greater than the total offer and a lesser amount to the other decedent’s heirs. After trial, the plaintiffs asked for almost $80,000 for their expert witness costs, and the defendants moved to tax costs. The trial court denied the motion to tax costs. Defendants argued on appeal that an unallocated joint offer from multiple parties should always be invalid because it precludes the receiving party from evaluating the claims of the offering parties separately. In affirming, the Court of Appeal stated: “Under the unique circumstances of this case, we conclude the joint offer was valid and affirm the court’s order.” (Gonzalez v. Lew (Cal. App. 2nd Dist., Div. 3, Feb. 1, 2018) 20 Cal.App.5th 155.) http://www.courts.ca.gov/opinions/documents/B271312.DOCX
Opt Out or Forever Hold Your Tongue. A class action against a now defunct real estate seminar provider reached a settlement. A lone objector to the settlement sought to opt out of the class and bring her claims in a separate lawsuit, which would derail the settlement. The objector concedes she received a court-approved notice of her right to exclude herself from the class at the class certification stage, but did not do so by the deadline. She argues she should be given another opportunity to opt out. A federal trial court approved the settlement, and the objector appealed. With regard to whether the objector has standing to appeal the settlement approval, the Ninth Circuit Court of Appeals found she did, stating: “[S]he claims that the settlement’s approval improperly denied her a second, settlement-stage opportunity to remove herself from the class. [The objector] therefore ‘has an interest in the settlement that creates a ‘case or controversy’ sufficient to satisfy the constitutional requirements of injury, causation, and redressability.’” The appeals court thereafter rejected the objector’s argument that the class notice language provided a second settlement-stage opportunity to opt out of the class and, further found that, even if it did, that due process did not compel a second opt out opportunity. (Low v. Trump Univ., LLC (9th Cir., Feb. 6, 2018) 881 F.3d 1111.) http://cdn.ca9.uscourts.gov/datastore/opinions/2018/02/06/17-55635.pdf
No Civil Enforcement of Workplace Safety by Prosecutors Under Consumer Protection Statute. Defendant manufactures plastic products. In 2009, a water heater exploded, killing two workers instantly. After the incident, California’s Division of Occupational Safety and Health (Cal/OSHA) opened an investigation and determined the explosion had been caused by a failed safety valve and the lack of “any other suitable safety feature on the heater” due to “manipulation and misuse.” Based on its investigation, Cal/OSHA charged defendant with five serious safety violations. As required by Labor Code § 6315, Cal/OSHA forwarded its results to the district attorney, who filed felony charges against two persons, including defendant’s plant manager. The district attorney also filed a civil action against defendant. One of the causes of action is an unlawful, unfair and fraudulent business practice under Business and Professions Code § 17200 and another alleges violation of § 17500, and the district attorney requested imposition of civil penalties of up to $2,500/day per employee from November 29, 2007 through March 19, 2009 in each cause of action. Defendant demurred to these two causes of action, contending they were preempted under Fed/OSHA, because a prosecutor’s pursuit of civil penalties under the UCL is not part of California’s workplace safety plan approved by the Secretary. The trial court disagreed, and overruled the demurrer to the district attorney’s two causes of action based on violations of the UCL. The trial court subsequently granted a request to certify the preemption issue as appropriate for early appellate review under Code of Civil Procedure § 166.1. Defendant filed a petition for writ of mandate, which the appellate court denied, but the California Supreme Court granted review and transferred the case back to the appellate court with directions to issue an order to show cause. The second time around, the appellate court granted the writ of mandate, stating: “California’s workplace safety plan, as approved by the Secretary, does not include any provision for civil enforcement of workplace safety standards by a prosecutor through a cause of action for penalties under the UCL. Under controlling law, any part of a state plan not expressly approved is preempted.” (Solus Industrial Innovations, LLC v. Superior Court (Cal. App. 4th Dist., Div. 3, Feb. 24, 2014) 224 Cal.App.4th 17.)
Anti-Retaliation Provision in Dodd-Frank Act Protects Whistleblower Employees Who Make Internal Disclosures About Securities Irregularities. Plaintiff was employed as a vice president by defendant. He reported several times to senior management that the company was possibly violating securities laws, and was fired. The Dodd-Frank Act (DFA; 15 U.S.C. § 78u-6(h)(1)(A)(iii)) has a provision prohibiting employers from retaliating against employees who report irregularities. There has been a split within the federal courts whether that anti-retaliation provision protects only employees who make reports to the Securities and Exchange Commission (SEC), or whether it also protects employees who make internal reports, such as the plaintiff here. Both the federal trial court and the Ninth Circuit Court of Appeals concluded the anti-retaliation provision reflects congressional intent to provide protection for those who made internal disclosures as well as those who make disclosures to the SEC. (Somers v. Digital Realty Trust, Inc. (9th Cir., Mar. 8, 2017) 850 F.3d 1045.)
Table of Contents for this Issue