Current News and Events from the State Bar of California Business Law Section.
Here is your November eNews from the Business Law Section (“BLS”) :
On February 1, 2018, practicing members of the State Bar of California in Group 2 (H-M) will need to report compliance with the Bar’s MCLE requirements. The Business Law Section (BLS) is proud of the live programs and webinars it offers to California practitioners. To sign up for previously-presented programs, including special requirement credits (legal ethics, elimination of bias, and competence issues), click HERE.
In addition to the above library of previously-recorded programs, the BLS offers the following upcoming live webinars for lawyers, including members of Group 2 who are still completing their MCLE hours:
I encourage BLS members to take advantage of the above high-quality, low-cost programs to help you complete your MCLE requirements.
Uzzi O. Raanan
Danning, Gill, Diamond & Kollitz, LLP (Los Angeles)
Chair, Business Law Section
State Bar of California
Why are the Sections separating from the State Bar?
The California Legislature passed a law, SB 36, following discussion with the State Bar and Sections with input from the Chief Justice of the California Supreme Court. Separation will allow the State Bar to focus on admissions and discipline.
When will the separation occur?
January 1, 2018
What is the new entity?
The California Lawyers Association is a 501(c)(6) nonprofit organization. The Bar, Sections volunteers and others are working together to ensure that the entity is fully operational for a seamless transition by January 1, 2018.
Who is in charge of the separation activity?
The separation process has been conducted jointly by State Bar staff and the Council of Sections, the leadership body through which all Sections interact. Pam Wilson & Associates was selected as the Sections’ consultant to assist in the transition. Pam Wilson served as Senior Director of Education for the State Bar and retired last year after 36 years of service to the Sections.
Where are the Sections going?
The California Lawyers Association will be the new home for the Sections effective January 1, 2018. The staff and employees will be located for at least six months in subleased space at the State Bar headquarters at 180 Howard Street in San Francisco, California.
What do I have to do to become a member of CLA?
If you are now a member of any one or more Sections, your membership will continue in the CLA until the end of the year, unless you affirmatively terminate your membership. Your Section membership will be renewed when you pay your license fees to the State Bar. Section dues will remain the same through 2018.
Will CLA offer the same education offerings, events, and conferences that are offered by the Sections now?
Yes. The CLA will continue to offer the same quality educational programs, conferences and events as they have in the past. Current Section membership benefits, such as Newsletters and eBulletins, will continue. The CLA looks forward to offering even more as a new entity separate from the regulatory Bar.
Who tracks my MCLE activity after separation?
The State Bar will continue to do so through its website. You will report your MCLE certification to the State Bar as you now do. You do not report your MCLE certification to CLA.
Will the CLA operate differently from the way the Sections operate now?
There will be virtually no change from the current Section operations. The goal is to make the transition entirely seamless to Section members. Every service that is now available will continue to be available and will be provided with greater efficiency and speed. There are two major changes. First, as an independent, non-profit entity, the CLA will not be compelled to operate under restrictions on communication, operations and policy that are required of government agencies. Second, the CLA will operate pursuant to a legislatively mandated “one section one vote” principle, whereby each of the 17 Sections elect a representative to serve on the CLA Board and all Sections, large and small, will have an equal voice in governance.
The Insolvency Law Committee (ILC) published eBulletins with judicial profiles of the Honorable Laura S. Taylor, Chief Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of California and the Honorable Sheri Bluebond, Chief Bankruptcy Judge of the United States Bankruptcy Court for the Central District of California. The profiles are part of the ILC’s ongoing series of profiles of judges of the United States Bankruptcy Court in the Ninth Circuit. The ILC’s judicial profiles of Judge Taylor and Judge Bluebond discuss the judges’ personal and professional backgrounds, including their experiences as practitioners, and on the bench, and tips for attorneys. The profile on Judge Taylor was written by ILC member Gary Rudolph with editorial contributions by immediate past BLS Chair Jim Hill, both of Sullivan Hill (San Diego). The profile on Judge Bluebond was written by ILC member Michael W. Davis and Business Law Section Executive Committee member Corey R. Weber, both of Brutzkus Gubner Rozansky Seror Weber LLP, immediate past ILC Co-Chair Asa Hami of SulmeyerKupetz A.P.C. and past ILC Co-Chair Leib Lerner of Alston & Bird LLP. The eBulletin on Judge Taylor can be found HERE.
The eBulletin on Judge Bluebond can be found HERE.
The ILC welcomes its new leadership for the 2017-2018 Bar year—Co-Chairs, Radmila Fulton and John Tedford, Co-Vice Chairs, Rebecca Winthrop and Marcus Colabianchi, and Secretary, Kyra Andrassy. Please contact John Tedford (JTedford@dgdk.com) or Radmila Fulton (Radmila@rfultonlaw.com) if you are interested in getting involved with the ILC or drafting Insolvency Law eBulletins on case updates or other topics of interest.
The ILC kicked off the new Bar year with the webinar presentation, “Benefits of Chapter 7 Corporate Bankruptcy,” held on Thursday, November 30, from 12-1 p.m. with speaker, Michael O’Halloran. The myth is that a corporate Chapter 7 bankruptcy is pointless because there is no corporate discharge. In reality, a corporate bankruptcy terminates most litigation and tells creditors the likelihood of recovery is low. The challenges for management in closing a business can be substantially reduced and shortened. The program addressed the benefits of a corporate bankruptcy and how to prepare the case for filing.
To access this program CLICK HERE.
The Internet & Privacy Law Committee is pleased to co-sponsor an upcoming conference, “Content Moderation and Removal at Scale,” being held at Santa Clara University School of Law on February 2, 2018. This conference will explore how internet companies operationalize the moderation and removal of third-party/user-generated content (UGC). UGC services routinely say that moderating and removing content is hard and expensive. This conference will explain the operational challenges and how companies are trying to solve them.
The conference was organized by the High Tech Law Institute and Professor Eric Goldman, who have put together an all-star roster of panelists from Automattic, Facebook, Google, Yelp, Wikimedia, and other companies handling mass amounts of UGC. Forum topics include an overview of each company’s UGC policies, outsourcing, transparency, and the issue of “human vs. machine” moderation. This conference is the first time representatives from each of these industry giants are coming together to discuss their UGC practices and the future of content moderation.
Attendees can earn up to 6.25 hours of California CLE. (Note: MCLE is not provided by the State Bar.) The conference is expected to sell out, so early registration is recommended. The details are as follows:
Event: Content Moderation and Removal at Scale
Organizer: The High Tech Law Institute (law.scu.edu/hightech)
Date: Friday, February 2, 2018
Time: 8:40 a.m. to 6 p.m.
Place: Mission Room, Benson Center,
Santa Clara University,
500 El Camino Real,
Santa Clara, CA 95053
Cost: Conference registration is $195, with discounts for Santa Clara Law alumni, and several categories for free registration.
The Internet & Privacy Law Committee is chaired by Mark Adlrich of Aldrich Law Group and Ginny Sanderson of Kronenberger Rosenfeld, LLP.
Do financial charts and spreadsheets cause your eyes to glaze over? Does your mind yearn for generalized numbers? If any of the above apply to you, congratulations: You are a typical lawyer who thinks in concepts and impressions rather than in decimal point details. On November 7, 2017, the Partnerships and LLCs Committee presented "How to Read Financial Statements" to allay discomfort and improve their practices by learning from an empathetic Seiler CPA. The Palo Alto Area Bar Association co-sponsored this event with the Partnerships and LLC Committee and BNY Mellon Menlo Park hosted the venue.
Debbie McCall, Audit Partner at Seiler LLP, presented on the subject of financial reporting and how to evaluate data and numbers. In order to set the context, Ms. McCall reviewed the roles of those who request these reports, and those who prepare the financial statements; discussed the differences between audited, reviewed and compiled financial statements and outlined the purpose for financial statement preparation. The participants were guided through the different bases of accounting, key line items on the balance sheet and what the metrics represent. Ms. McCall finished by providing tips on how to spot potential red flags and what might require further inquiry. Handouts provided presentation materials as well as key financial statement ratios and what they represent. In attendance were attorneys in the practice areas of criminal law, estate planning, business, intellectual property, investment banking, employment and mediation counseling as well as professionals in banking, wealth management and accounting. The Chair of the Partnership and LLC Committee is Soyeun D. Choi, Soyeun@SoyeunEsq.com.
The Health Law Committee November meeting featured Shanley Curran, who spoke on the U.S. Supreme Court’s Oct. 2 decision in GlaxoSmithKline v. MM, ex rel Meyers (upholding the decision authorizing specific personal jurisdiction over out-of-state drug manufacturers for claims of out-of-state plaintiffs filed in states where the drug manufacturer conducted clinical trials on the involved drug). Mr. Curran also addressed the impact of the revised Common Rule governing human subjects research set to become effective on January 19, 2018; and newly-issued FDA Guidance for device approvals and related billing compliance issues. The Health Law Committee is chaired by Craig Rutenberg, Manatt Phelps & Phillips, LLP.
Courtesy of CEB, we are bringing you selected legal developments in areas of California business law that are covered by CEB’s publications. This month’s feature is from the November 2017 update to Trade Secrets Practice in California. References are to the book’s section numbers. See CEB’s BLS Landing Page for special discounts for Business Law Section members. The most significant legal developments since the last update include developments in such important topic areas as trade secrets protection, workplace issues, trade secrets misappropriation, procedural issues in litigation, and insurance issues.
The Defend Trade Secrets Act of 2016 (DTSA) (Pub L 114–153, 130 Stat 376) (18 USC §§1831–1839)), which became effective in May, 2016, provided for the first time a federal private civil action for trade secret misappropriation and accompanying federal jurisdiction. A chart comparing key provisions of the California Uniform Trade Secrets Act (UTSA) (CC §§3426–3426.11) and the DTSA has been added in Chapter 1. See §1.1C.
Waymo LLC v Uber Technols., Inc. (ND Cal, July 5, 2017, No. 17–cv–00939–WHA (JSC)) 2017 US Dist Lexis 103663, presents an example of the risks of accidentally copying unintended recipients when e-mailing sensitive documents. In this case, Uber’s supplier accidentally copied Google’s affiliate, Waymo, on an e-mail that contained machine drawings that Waymo considered to be confidential. See §4.33.
Three recent decisions from the U.S. District Court for the Southern District of California discussed contractual language concerning ownership of trade secrets in employer-employee agreements. Allergia, Inc. v Denis Borboulis (SD Cal, June 13, 2017, No. 14–CV–1566 JLS (RBB)) 2017 US Dist Lexis 90844; Freeman Inv. Mgmt. Co. v Frank Russell Co. (SD Cal, July 18, 2016, No. 13–CV–2856 JLS (RBB)) 2016 US Dist Lexis 93201; Odyssey Wireless, Inc. v Apple, Inc. (SD Cal, June 30, 2016, No. 15–cv–01735–H–RBB) 2016 WL 4496844. See §2.26.
The U.S. Court of Appeals for the District of Columbia Circuit held that an employer’s overbroad confidentiality agreement violated the National Labor Relations Act (NLRA) (29 USC §§151–169). Banner Health Sys. v NLRB (DC Cir 2017) 851 F3d 35. See §4.6.
Under the DTSA, employee confidentiality agreements must contain a notice that the disclosure of trade secrets by an informant or whistleblower in good faith to attorneys or government agents investigating corporate wrongdoing grants immunity to the informant. 18 USC §1833(b)(3)(C). See §10.3 and form provisions in §§6.20, 6.24, 6.39, and 6.54.
A motion to dismiss a trade secret misappropriation claim under the DTSA was denied when the claim was based on the inevitable disclosure doctrine. Molon Motor & Coil Corp. v Nidec Motor Corp. (ND Ill, May 11, 2017, No. 16 C 03545) 2017 US Dist Lexis 71700. See §4.11A.
Plaintiff demonstrated wrongful misappropriation sufficient to support an injunction when it offered evidence suggesting that defendants obtained unfair advantage from their use—or threatened use—of plaintiff’s source code, specifications, and customer list by identifying multiple customers for which plaintiff and defendants were directly or indirectly competing. Bartech Sys. Int’l, Inc. v Mobile Simple Solutions, Inc. (D Nev, May 24, 2016, No. 2:15–cv–02422–MMD–NJK) 2016 US Dist Lexis 68030. See §1.11.
In granting in part and denying in part a motion to dismiss in a misappropriation case, the U.S. District Court for the Northern District of California, San Jose Division, cogently opined on the issue of standing. Bladeroom Group Ltd. v Facebook, Inc. (ND Cal 2017) 219 F Supp 3d 984. See §2.1.
The U.S. District Court for the Northern District of California has ruled that, for purposes of summary judgment, “permission to look at data does not equate with permission to take it.” Opperman v Path, Inc. (ND Cal 2016) 205 F Supp 3d 1064. See §13.5.
An employer could not compel a third party publisher’s disclosure of an anonymous online poster’s identity, absent a prima facie showing that the poster had breached the parties’ nondisclosure agreement. Glassdoor, Inc. v Superior Court (2017) 9 CA5th 623. See §11.68.
In the first published decision to address the DTSA’s whistleblower immunity provision, a Massachusetts federal district court characterized the whistleblower immunity defense as an affirmative defense. Unum Group v Loftus (D Mass 2016) 220 F Supp 3d 143. See §§4A.13, 11.119.
The federal district court in Delaware dismissed, without prejudice, DTSA claims that failed to allege any nexus between interstate or foreign commerce and trade secrets. Hydrogen Master Rights, Ltd. v Weston (D Del, Jan. 9, 2017, No. 16–474–RGA) 2017 US Dist Lexis 2694. See §11.119.
A Northern California federal district court found that seizure under the DTSA was not necessary and instead ordered the defendants to preserve and deliver the items at issue. OOO Brunswick Rail Mgmt. v Sultanov (ND Cal, Jan. 6, 2017, No. 5:17–cv–00017–EJD) 2017 US Dist Lexis 2343. See §11.119.
A California federal district court has held that the unauthorized use of another company’s logo, without copying or implementing its training program, does not constitute “advertising injury” arising out of “the use of another’s advertising idea.” Infinity Micro Computer, Inc. v Continental Cas. Co. (CD Cal, Sept. 29, 2016, No. CV 15–04777 DDP (SSx)) 2016 US Dist Lexis 134957. See §14.9.
An Illinois federal district court held that misappropriation of trade secrets that relate primarily to technology, manufacture, and sale of products, not to advertising and marketing of such products, does not trigger coverage by the company’s insurance policy against advertising injury (Zurich Ins. Co. v Sunclipse, Inc. (ND Ill 2000) 85 F Supp 2d 842), while another Illinois federal district court held that stealing confidential business information to contact customers does not constitute a covered advertising injury (Sentinel Ins. Co. v Yorktown Indus. (ED Ill, Feb. 2, 2017, No. 14–cv–4212) 2017 US Dist Lexis 14439). See §14.9.
The California Supreme Court held that attorney fees awarded for an insurer’s bad faith conduct may be considered as compensatory damages in calculating damages if the ratio of punitive to compensatory damages exceeds due process limits. Nickerson v Stonebridge Life Ins. Co. (2016) 63 C4th 363. See §12.22.
The 15 BLS Standing Committees publish eBulletins announcing developments in their area of law and upcoming events open to BLS members. Click HERE to sign up to receive these eBulletins from any BLS Standing Committee completely free of charge.
Help a Victim of Domestic Violence
The Women Lawyer’s Association of Los Angeles (WLALA) is looking for attorneys to volunteer one hour per month at the WLALA SOJOURN LEGAL CLINC. The free clinic is open every Monday from 6:00 p.m. to 7:00 p.m. and volunteers are asked to commit to attend at least once per month. The clinic is hosted by Sojourn, which is a provider of services to victims of domestic violence, and is held in Santa Monica, California. Attorneys who volunteer at the clinic each week are there to answer legal questions but do not represent clients.
The vast majority of WLALA SOJOURN CLINIC attendees need assistance with obtaining or maintaining a restraining order and are enmeshed in family court issues – divorce, custody, restraining orders, etc. Many have basic questions about the court process, what is appropriate to say to a judge, and how to prepare for a hearing. A few come with questions about criminal court issues, and a few are struggling with Dependency Court. Occasionally, attorneys are asked about landlord/tenant issues, bankruptcy, small claims, etc. The clinic provides an extensive guide on the basics of family law for volunteers as well as periodic trainings for volunteers. For more information please contact firstname.lastname@example.org.
If you know of other opportunities for pro bono help from BLS members, please contact Dennis Wickham, email@example.com.
We all know that social media can help drive new business. Did you know that the BLS maintains a presence on LinkedIn, Twitter, and Facebook where it posts regular updates about new cases, new regulations, key legislative developments, and news and events from the BLS’s Standing Committees? What you may not know is that you can not only send items to the BLS to post or tweet, but also suggest items from your own social media pages for the BLS to re-post, re-tweet, or like. Doing so expands the reach of what you have to say to everyone who likes or follows the BLS on its various social media platforms, and may result in the BLS following you! Please submit your suggested items for consideration or direct any questions to BLS Social Media Coordinator, Dennis J. Wickham (firstname.lastname@example.org) and join the ever expanding discussion!
Standing Committees continue to accept applications to fill vacant seats. Practitioners and other legal professionals who are members of the BLS and who have at least five years of experience are eligible to apply. Membership on a committee affords unique opportunities to participate in the creation of law in your practice area, to get to know and be known by other practitioners, to work with the recognized leaders in your field, and to stay on the cutting edge of developments and practice techniques. Membership is a rewarding experience that keeps one ahead of, and in touch with, business law developments. Most committees meet once a month, often by phone. A description of the required commitment and application process, along with a link to the application, can be found HERE.
The BLS achieves its goals through the work of its 15 Standing Committees. You are invited to attend the regular monthly meeting of any BLS Standing Committees (see below for meeting dates). These monthly meetings provide attendees an excellent opportunity to chat with committee members and other lawyers with a similar expertise. Some committees even offer free MCLE credit! Please see the contact person listed below to RSVP or request more information. Follow us on Twitter @calbarbuslaw. Use a Standing Committee’s hashtag to search for tweets by that committee in its designated field and to re-tweet.
For a list of upcoming meeting dates and contact persons, click HERE.
Dennis Wickham, Editor-in-ChiefKristina Del Vecchio, Contributing Editor
Cathryn S. Gawne, Contributing Editor
Kenneth Minesinger, Contributing Editor
Corey R. Weber, Contributing Editor
Monique D. Jewett-Brewster, BLS Vice Chair of Publications
Uzzi O. Raanan, BLS Chair
For contact information, see the Executive Committee Roster HERE.
To join the BLS and receive membership benefits