Litigation

Litigation Update: August 2021

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, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Reuben Ginsburg, Jessica Riggin, David Williams, Ryan H. Wu, and Greg Wolff
Identity of Charitable Donors May Remain Anonymous.

To solicit contributions in California, charitable organizations must disclose the identities of their major donors to the state Attorney General’s Office. The state contends that having this information on hand makes it easier to police misconduct by charities. Petitioners are tax-exempt charities that solicit contributions in California and are subject to California’s registration and renewal requirements. When petitioners resisted disclosing their contributors’ identities, the Attorney General threatened to suspend their registrations and fine their directors and officers. Petitioners alleged that the state had violated their First Amendment rights and the rights of their donors, alleging that disclosure would make their donors less likely to contribute and would subject them to the risk of reprisals. The district court granted preliminary injunctions prohibiting the state from collecting donor information. The Ninth Circuit vacated the injunctions. The U.S. Supreme Court agreed with the district court and reversed the Ninth Circuit, concluding “that the Attorney General’s disclosure requirement imposes a widespread burden on donors’ associational rights. And this burden cannot be justified on the ground that the regime is narrowly tailored to investigating charitable wrongdoing, or that the State’s interest in administrative convenience is sufficiently important.” (Americans for Prosperity Foundation v. Bonta (U.S., July 1, 2021) 141 S.Ct. 2373.)

ttps://www.supremecourt.gov/opinions/20pdf/19-251_p86b.pdf

Previously we reported:
The Right to Vote.

In 2016, the Democratic National Committee (DNC) and others sued Arizona, challenging its voting policies on constitutional grounds and alleging violations of the Voting Rights Act of 1965 (VRA). The DNC challenged Arizona’s policy of wholly discarding, rather than counting or partially counting, ballots cast out-of-precinct (OOP) and alleged that Arizona’s House Bill 2023, which criminalizes the collection and delivery of another person’s ballot, violated Section 2 of the VRA. DNC argued that the OOP policy and H.B. 2023 caused a disparate adverse impact on American Indians, Hispanics, and African Americans, that H.B. 2023 was enacted with discriminatory intent, and that the OOP policy and H.B. 2023 unduly burdened minorities’ voting rights.  The district court found in favor of Arizona after a bench trial.  The Ninth Circuit reversed, stating: “We hold that Arizona’s OOP policy violates the results test of Section 2. We hold that H.B. 2023 violates both the results test and the intent test of Section 2. We hold that H.B. 2023 also violates the Fifteenth Amendment. We do not reach Plaintiffs’ other constitutional challenges. We reverse the judgment of the district court and remand for further proceedings consistent with this opinion.” (Democratic National Committee v. Hobbs (9th Cir., Jan. 27, 2020) 948 F.3d 989.)

http://cdn.ca9.uscourts.gov/datastore/opinions/2020/01/27/18-15845.pdf

The latest:

The U.S. Supreme Court reversed the judgment of the Ninth Circuit and remanded, stating: “Arizona’s out-of-precinct policy and HB 2023 do not violate § 2 of the VRA, and HB 2023 was not enacted with a racially discriminatory purpose.” (Brnovich v. Democratic National Committee (U.S., July 1, 2021) 141 S.Ct. 2321.)

https://www.supremecourt.gov/opinions/20pdf/19-1257_new_4g15.pdf

Three-Year or Four-Year Statute of Limitations?

After renovating a property, defendant sold it to plaintiff. The purchase agreement obligated defendant to disclose known material facts and defects affecting the property. Defendant disclosed it was not aware of any significant defects or malfunctions, including water intrusion or problems with the sewers and drainage. While inspecting the property, plaintiff discovered various leaks and “peculiar” construction. Defendant agreed to conduct repairs, including to the sump pump and sewer connection. 

  • December 2, 2011—escrow closed, even though the repairs had not been completed.
  • January 2012—a large amount of water flooded into the basement, apparently because the repairs to the sewer line were not done correctly.
  • December 5, 2014—plaintiff filed instant complaint, alleging negligence, breach of warranty, breach of contract, fraud, and negligent misrepresentation.

The trial court granted defendant’s motion for summary judgment, ruling the action was barred by a three-year statute of limitations for actions based on fraud (Code Civ. Proc., § 338, subd. (d)). Affirming, the Court of Appeal stated that all claims, even the breach of contract claim, were “based on fraud and therefore subject to section 338(d).” (Vera v. REL-BC, LLC (Cal. App. 1st Dist., Div. 4, June 30, 2021) 66 Cal.App.5th 57.)

https://www.courts.ca.gov/opinions/documents/A155807.PDF

Requirement to Have a Contractor’s License.

Plaintiffs contracted to have work done on their property but refused to pay defendant contractor after completion, claiming it was done by an unlicensed contractor. After the defendant contractor attempted to collect, the trial court ordered the mechanic’s lien removed from the property. 

Plaintiff claimed:

  1. The contractor defendant who had a contractor’s license began work on plaintiff’s property.
  2. The licensed contractor formed a corporation, JDSS.
  3. JDSS, the new corporation, not yet holding a contractor’s license, continued work on the project under the contract.
  4. The licensed contractor transferred the contractor’s license to JDSS.

Defendant claimed:

  1. Defendant, who had a contractor’s license, began work on plaintiff’s property.
  2. The licensed contractor formed a corporation, JDSS.
  3. The licensed contractor assigned to JDSS all rights and obligations under the contract with plaintiff; that agreement was signed by the contractor in his individual capacity as well as on behalf of JDSS.
  4. At all times the contractor continued work on the property in his individual capacity.

Thus, the parties disputed whether the contractor continued the work in his personal capacity or as an agent of JDSS. Business and Professions Code, § 7031, subdivision (a), prohibits a contractor from collecting any compensation under a construction contract if the contractor is not licensed at all times during performance. Reversing the order of removal of the mechanic’s lien, the Court of Appeal noted that the trial court incorrectly viewed the assignment agreement as evidence that JDSS began performance under the contract. Instead, the record supported the conclusion that only the licensed contractor performed the work, and, therefore, that JDSS did not perform before it was licensed. (Manela v. Stone (Cal. App. 2nd Dist., Div. 1, July 1, 2021) 66 Cal.App.5th 90.)

https://www.courts.ca.gov/opinions/documents/B302660.PDF

Next-Door Neighbors.

Plaintiffs alleged that their neighbors invaded their right to privacy by recording images of the plaintiffs’ backyard and audio of their private conversations with their iPhones and Nest security cameras. Defendants moved for summary adjudication of plaintiffs’ privacy claims. The trial court concluded that any privacy intrusion was insubstantial and granted summary adjudication in defendants’ favor. Affirming, the Court of Appeal noted: “The few discernable words and phrases recorded by defendants were spoken at elevated volumes, which plaintiffs could not reasonably expect to remain private in an outdoor residential setting, with neighbors nearby.” (Mezger v. Bick (Cal. App. 2nd Dist., Div. 8, July 1, 2021) 66 Cal.App.5th 76.)

https://www.courts.ca.gov/opinions/documents/B305745.PDF

Jury Award in Wrongful Termination Case Reduced.

Plaintiff, a fireman, complained to various city officials about safety issues, and later complained that his supervisor retaliated against him for reporting his concerns. The city conducted an investigation and concluded plaintiff’s complaints were unfounded, then conducted a second investigation into plaintiff himself. In the end, the city fired plaintiff. Plaintiff then filed this action against the city, alleging retaliation under Labor Code § 1102.5. At trial, the jury found for plaintiff and awarded him about $4 million, including $2 million in past noneconomic damages and $1.5 million in future noneconomic damages. The trial court denied the city’s motion for a new trial. On appeal, the city argued that the $3.5 million noneconomic damages component of the verdict was so excessive as to suggest it resulted from passion or prejudice. Reversing in part and affirming in part, the Court of Appeal agreed: “We . . . vacate the awards for past and future noneconomic damages and remand for a new trial on these issues, unless Briley accepts a reduction of the awards to $1 million and $100,000, respectively. In all other respects, the judgment is affirmed.” (Briley v. City of West Covina (Cal. App. 2nd Dist., Div. 4, July 1, 2021) 66 Cal.App.5th 119.)

https://www.courts.ca.gov/opinions/documents/B295666M.PDF

Plaintiff Is a Beneficial Owner, Not a Registered Owner, of Defendant’s Stock.

Defendant is a leader in the development and commercialization of HIV/AIDS treatments. Recent legal actions have alleged defendant intentionally withheld a safer and potentially more effective medication in order to extend the sales window for its older, more dangerous treatment. Plaintiff, a beneficial owner of defendant’s stock, sought to inspect defendant’s books and records pursuant to Corporations Code § 1601, which extends a right of inspection to “any shareholder or holder of a voting trust certificate.” Affirming the trial court’s denial of plaintiff’s demand to inspect, the Court of Appeal observed that beneficial owners are not “shareholders.” It therefore held that they have no right to inspect: “. . . Ramirez lacks standing to pursue his California inspection demand under section 1601 because he is not a holder of record of Gilead stock.” (Ramirez v. Gilead Sciences, Inc. (Cal. App. 1st Dist., Div. 3, July 2, 2021) 66 Cal.App.5th 218.)

https://www.courts.ca.gov/opinions/documents/A159428.PDF

Practicing Medicine Without a License.

Plaintiff is a physician assistant who performed many liposuction procedures under the guidance of a physician. After he grew dissatisfied with the arrangement with the physician, plaintiff sought out another doctor to satisfy the requirements under Business and Professions Code § 3500 et. seq. He selected an anesthesiologist who had never performed liposuction or any other surgery and hadn’t practiced medicine for 12 years. The new arrangement was that plaintiff would be titled “Medical Director,” and the anesthesiologist would review charts. The Physician Assistant Board filed an accusation charging plaintiff with unlicensed practice of medicine, gross negligence, and false advertising. An administrative law judge (“ALJ”) found the accusations established by clear and convincing evidence and recommended the revocation of plaintiff’s physician assistant license. The Board adopted the ALJ’s findings and recommendations. The trial court denied plaintiff’s petition for writ of mandate. Affirming, the Court of Appeal “conclude[d] that the Board did not commit a manifest abuse of discretion in choosing to revoke Davis’s license.” (Davis v. Physician Assistant Board (Cal. App. 3rd Dist., July 2, 2021) 66 Cal.App.5th 227.)

https://www.courts.ca.gov/opinions/documents/C084559.PDF

Defendant Gave Up the Benefit of a Section 998 Offer By Asking for Too Much.

Plaintiff and his wife alleged that he contracted mesothelioma caused by exposures to asbestos while he was an Iranian citizen working for the National Iranian Oil Company (“NIOC”). Plaintiffs claimed the NIOC Abadan refinery was controlled by the predecessors to the Chevron defendants, Exxon Mobil Corporation, and ExxonMobil Oil Corporation. The trial court concluded the Chevron and Exxon defendants did not owe plaintiffs a duty of care and awarded the Chevron defendants their expert witness fees as costs based on the plaintiffs failure to accept defendants’ statutory settlement offers made under Code of Civil Procedure § 998. On appeal, plaintiffs contended the trial court erred by denying their motion to strike costs because the settlement offers required the couple to indemnify the Chevron defendants against possible future claims of nonparties, making the offers impossible to value. Reversing, the Court of Appeal stated: “We recognize the desire by defendants to reach a settlement that protects them from all liability for the conduct alleged in the complaint, whether as to the plaintiffs or their heirs in a wrongful death action. But if defendants seek that protection through indemnification, they may well need to give up the benefit of section 998.”  (Khosravan v. Chevron Corporation (Cal. App. 2nd Dist., Div. 7, July 6, 2021) 66 Cal.App.5th 288.)

https://www.courts.ca.gov/opinions/documents/B307482.PDF

Non-Signatory’s Motion to Compel Arbitration Denied.

Defendant is a non-signatory to a partnership deed containing an arbitration provision for disputes “arising between the parties.”  The federal district court denied defendant’s motion to compel arbitration. Affirming, the Ninth Circuit explained that “the claims have no relationship with the partnership deed containing the arbitration agreement at issue in this appeal.” (Setty v. Shrinivas Sugandhalaya LLP (9th Cir., July 7, 2021) 3 F.4th 1166.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/07/18-35573.pdf

In a Partition Action, Does a Judgment Creditor Who Was Deemed the Priority Lien Holder Lose That Status If It Does Not Renew Its Judgment?

Defendant obtained a judgment in 2008. In the instant partition action, the trial court determined that defendant was the priority lien holder in 2015. Defendant’s judgment expired in March 2018, by operation of law, at a time when only one of the four subject properties had been sold. When the next phase of trial began in January 2019, the trial court determined that defendant lost its priority status because it no longer had a valid, enforceable judgment, and that another judgment holder held the status of priority lien holder. Defendant argued on appeal that the trial court’s initial determination of priority lien status was final and non-reviewable. The Court of Appeal framed the issue as follows: “Does the partition action statutory scheme excuse [defendant’s] non-compliance with the Enforcement of Judgments Law?” Affirming, the appeals court concluded: “The connection between the partition action statutory scheme and the Enforcement of Judgments Law is found in [Code of Civil Procedure] section 872.040, which provides that ‘[n]othing in this title excuses compliance with any applicable laws, regulations, or ordinances governing the division, sale, or transfer of property.’ ” (Starcevic v. Pentech Financial Services, Inc. (Cal. App. 4th Dist., Div. 1, July 7, 2021) 66 Cal.App.5th 365.)

https://www.courts.ca.gov/opinions/documents/D076320.PDF

Police May Conduct Warrantless Searches of Closely Regulated Industries.

The owner of a massage parlor sued a city for violating his civil rights under the Fourth Amendment by conducting warrantless searches of his business. The district court dismissed the action after concluding the California massage industry is a closely regulated industry, coming under the Fourth Amendment’s warrantless search exception. Noting that there was no question that curtailing prostitution and human trafficking is a substantial government interest, the Ninth Circuit affirmed. (Killgore v. City of South El Monte (9th Cir., July 8, 2021) 3 F.4th 1186.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/08/20-55666.pdf

Previously we reported:
Dismissal of Wrongful Death Action as Filed One Day Late, Reversed.

Plaintiff brought a wrongful death action pursuant to 42 U.S.C. § 1983. The trial court dismissed the action because it was filed one day beyond the two-year statute of limitations. The parties stipulated to the following facts: (1) plaintiff’s date of birth is December 3, 1993; (2) plaintiff reached the age of majority on December 3, 2011; and (3) plaintiff filed his original complaint in this suit on December 3, 2013. Reversing, the Court of Appeal concluded the limitations period began on plaintiff’s 18th birthday, when he was first able to file his lawsuit, and he timely filed his complaint within two years after that date. (Shalabi v. City of Fontana (Cal. App. 4th Dist., Div. 2, May 21, 2019) 35 Cal.App.5th 639.)

The latest:

The California Supreme Court granted review and issued the final word on this statute of limitations issue: “Under [Code of Civil Procedure §] 352, subdivision (a), the statute of limitations was tolled during the time when plaintiff was a minor. His 18th birthday — December 3, 2011 — was the triggering event because that was the first day he was no longer a minor. Excluding this date and including the last date two years later, plaintiff was required to file suit no later than December 3, 2013. . . . He did so. His lawsuit was therefore timely filed.” (Shalabi v. City of Fontana (Cal., July 12, 2021) 2021 WL 2908526.)

https://www.courts.ca.gov/opinions/documents/S256665.PDF

Miranda Advisements Not Given to 17-Year-Old.

The issue before the Court of Appeal was whether a 17-year-old boy was in custody when he was questioned by the police. If it was a custodial interrogation, the police were required to provide advisements pursuant to Miranda v. Arizona (1966) 384 U.S. 436. In J.D.B. v. North Carolina (2011) 564 U.S. 261, 277, the U.S. Supreme Court concluded that a child’s age may be considered in the Miranda analysis “so long as the child’s age was known to the officer at the time of police questioning, or would have been objectively apparent to a reasonable officer.” The J.D.B. court recognized that “a reasonable child subjected to police questioning will sometimes feel pressured to submit when a reasonable adult would feel free to go.” Here, after a stabbing, the police came to the boy’s home at 6:00 a.m. His mother woke him up to say the police wanted to speak with him. The first thing the police did was pat him down for weapons. The boy said he was cold and scared, so the police allowed him to wrap in a blanket. The police asked his mother to remain while they questioned the boy. He was not advised of his Miranda rights. The boy’s statements were used against him in juvenile court. The boy testified, “I was scared because of their presence, because I thought I was getting in trouble, and my mind was all over the place.” The juvenile court found no Miranda violation, admitted his pre-arrest statements, and sustained the allegation of assault with a deadly weapon. Reversing, the Court of Appeal found the police officers created a coercive atmosphere such that a reasonable 17-year-old would have experienced a restraint tantamount to arrest. (In re Matthew W. (Cal. App. 1st Dist., Div. 2, July 8, 2021) 66 Cal.App.5th 392.)

https://www.courts.ca.gov/opinions/documents/A159931.PDF

Allegations of Insurance Fraud.

Strategic lawsuits against public participation (SLAPP) are meritless lawsuits designed to punish parties for constitutionally protected activities such as free speech or the right to petition. A defendant can seek to strike a SLAPP suit by filing an anti-SLAPP motion under Code of Civil Procedure § 425.16.  Here, an insurance company filed a qui tam case against defendant medical doctor and other related medical providers for preparing fraudulent medical reports and billing statements in support of insurance claims. The doctor filed an anti-SLAPP motion to strike, arguing the preparation and submission of its medical reports and bills were protected litigation activities. The trial court denied the motion. Affirming, the Court of Appeal stated: “Litigation is not ‘under [serious] consideration’—and thereby protected activity under the anti-SLAPP statute—if the li[ti]gation is merely a ‘ “possibility.” ’ [Citation.] Here, [defendant doctor] failed to show its medical reports and bills were prepared outside of its usual course of business in anticipation of litigation that was ‘under [serious] consideration.’ ” (The People ex rel. Allstate Insurance Company v. Rubin (Cal. App. 4th Dist., Div. 3, July 12, 2021) 2021 WL 2910656.)

https://www.courts.ca.gov/opinions/documents/G059446.PDF

Trademark Dispute.

This case was a race to engage in the bona fide use of the MEMOJI mark in commerce as required by the Lanham Act (15 U.S.C. § 1051). The district court granted summary judgment to defendant after finding that, while plaintiff filed an intent-to-use trademark application before defendant, plaintiff’s actions regarding MEMOJI were promotional prior to defendant’s bona fide use of that mark. Affirming, the Ninth Circuit stated: “Because the court concludes that [plaintiff] did not engage in bona fide use of the MEMOJI mark in commerce, its registration is invalid, and [defendant] is entitled to cancellation of [plaintiff’s trademark].” (Social Technologies LLC v. Apple Inc. (9th Cir., July 13, 2021) 2021 WL 2933217.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/13/20-15241.pdf

Criminal Defendant Did Not Know the Immigration Consequences When He Pleaded Guilty.

A criminal defendant’s motion to withdraw his guilty plea pursuant to Penal Code § 1018 was denied because the trial court did not find there was ineffective assistance of counsel at the time of the plea. The man’s trial counsel testified for the prosecution at the hearing on the motion to withdraw his plea that he (defendant’s counsel) was not aware of the specific immigration consequences of the individual charges the man was facing. The Court of Appeal concluded that since counsel did not know the immigration consequences: “Therefore, he could not have provided accurate and affirmative advice as to the consequences of a guilty plea to any particular count.” The appeals court noted that, since 2016, criminal defense attorneys in California have had a statutory duty to “provide accurate and affirmative advice” about potentially adverse immigration consequences of any plea agreement. (Pen. Code, § 1016.3, subd. (a).) Reversing, the appellate court stated: “It is no longer necessary for a defendant to clear the high bar of ineffective assistance of counsel in order to establish his or her defense attorney did not meet the relevant standard. Further, what was once adequate advice may no longer meet the statutory requirements of [Penal Code] section 1016.3. Such is the case here.” (People v. Lopez (Cal. App. 4th Dist., Div. 3, July 14, 2021) 2021 WL 2948578.)

https://www.courts.ca.gov/opinions/documents/G059146.PDF

Not All Issues of Title Are Precluded in Unlawful Detainer Action.

Plaintiffs lost title to their home in a foreclosure sale. The purchaser then brought an unlawful detainer action under Code of Civil Procedure § 1161a, subdivision (b)(3). A default judgment was issued, and plaintiffs were evicted from their property. Plaintiffs sued defendants’ bank, loan servicing companies, and their lender. Generally, they alleged defendants carelessly failed to credit several payments to their loan balance. Thus, plaintiffs contended they were never in default and defendants wrongfully foreclosed on the property. The trial court sustained defendants’ demurrer. It found all of plaintiffs’ claims were precluded by the unlawful detainer judgment except for a claim under the Truth in Lending Act, which was defective for other reasons. The court denied plaintiffs leave to amend on all claims, and plaintiffs appealed the resulting judgment. Reversing, the Court of Appeal stated: “We find the court erred in ruling plaintiffs’ claims were precluded, and we publish this case to clarify the preclusive effect of an unlawful detainer action under section 1161a. In such a proceeding, the court must determine whether the purchaser duly perfected title. But this is a limited inquiry focusing on how the trustee’s sale is conducted. Issues of title outside this narrow scope need not be raised and are not precluded in subsequent lawsuits. Here, plaintiffs’ claims were not directly related to the conduct of the sale and were not at issue in the unlawful detainer action. Nor were plaintiffs required to bring their claims against defendants in that proceeding.” (Struiksma v. Ocwen Loan Servicing, LLC (Cal. App. 4th Dist., Div. 3, July 14, 2021) 2021 WL 2948579.)

https://www.courts.ca.gov/opinions/documents/G059223.PDF

Busy Bees Make for a Sticky Situation.

Plaintiffs contend defendant food retailer has been deceptive by mislabeling its store brand honey as “100% New Zealand Manuka Honey,” when actually only between 57.3% and 62.6% of the honey is derived from the Manuka flower. Plaintiffs sued defendant, alleging adulteration under 21 U.S.C. §342(b). The district court dismissed the action without leave to amend. Affirming, the Ninth Circuit stated that the “guidelines account for the fact that busy bees cannot be prevented from foraging on different types of flowers, despite their keepers’ best efforts. As a result, it is impossible for bees to produce honey that is 100% derived from the Manuka flower.” (Moore v. Trader Joe’s Co. (9th Cir., July 15, 2021) 2021 WL 2965445.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/15/19-16618.pdf

The Unhappiest Place on Earth.

Plaintiff is an heir to the Disney fortune. As a beneficiary of several trusts, he should have received his inheritance distributions on his 35th, 40th, and 45th birthdays. Despite being over 50 years old, he has yet to receive a distribution, because the trust agreements included a caveat that allowed trustees to withhold the money if he lacked the maturity or financial acumen to manage the funds. The heir claims that certain trustees, along with some “estranged” family members, have stymied his efforts to receive the distributions by casting him as mentally incompetent. A probate judge found it questionable whether or not plaintiff has Down Syndrome and ordered a guardian ad litem without holding a hearing. Frustrated, the heir sued the judge and the superior court in federal court, arguing the appointment of the guardian without notice or hearing violated his due process rights under 42 U.S.C. § 1983. The district court dismissed the complaint. Affirming, the Ninth Circuit stated: “We affirm because most of Lund’s claims are now moot after Judge Cowan removed the guardian ad litem and relinquished this case to another judge. And while Judge Cowan’s statement may have been inaccurate and inappropriate, any claim challenging it is barred by judicial immunity, which shields judges from liability for conduct or speech arising from their judicial duties.” (Lund v. Cowan (9th Cir., July 15, 2021) 2021 WL 2965447.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/15/20-55764.pdf

California Supreme Court Clarifies Meaning of Wage and Hour Labor Code Sections.

Under California law, employers must provide employees with overtime pay when employees work more than a certain amount of time. (Lab. Code § 510, subd. (a)). To calculate overtime pay, § 510(a) requires an employer to compensate an employee by a multiple of the employee’s “regular rate of pay.” California law also provides for meal, rest, and recovery periods. If an employer does not provide an employee with a compliant meal, rest, or recovery period, Labor Code § 226.7, subdivision (c), requires the employer to “pay the employee one additional hour of pay at the employee’s regular rate of compensation.” The question was whether the Legislature intended “regular rate of compensation” under § 226.7(c) to have the same meaning as “regular rate of pay” under § 510(a), such that the calculation of premium pay for a noncompliant meal, rest, or recovery period, like the calculation of overtime pay, must account for not only hourly wages but also other nondiscretionary payments for work performed by the employee. The California Supreme Court held: “We hold that the terms are synonymous: ‘regular rate of compensation’ under section 226.7(c), like ‘regular rate of pay’ under section 510(a), encompasses all nondiscretionary payments, not just hourly wages.” (Ferra v. Loews Hollywood Hotel, LLC (Cal., July 15, 2021) 2021 WL 2965438.)

https://www.courts.ca.gov/opinions/documents/S259172.PDF

Contra Proferentem.

In a wage and hour case, the employer moved for arbitration. As the parties briefed the motion, it became apparent that the severability clause in the Spanish version of the arbitration agreement plaintiff signed indicated the parties agreed to nonbinding arbitration, whereas the severability clause in the original English version of that document suggested the parties consented to binding arbitration. Construing the words against defendant, who drafted the arbitration agreement, the trial court ordered the parties to arbitrate on a nonbinding basis. Reversing, the Court of Appeal stated: “[W]e conclude the FAA preempted the trial court’s use of contra proferentem. Next, assuming arguendo there is an ambiguity regarding whether the parties consented to binding or nonbinding arbitration, we employ the FAA’s default rule that any ambiguities about the scope of an arbitration agreement must be resolved in favor of arbitration as envisioned by the FAA, a fundamental attribute of which is a binding arbitral proceeding. We thus grant Western Bagel’s petition and direct the trial court to enter a new order compelling the parties to arbitrate their dispute via binding arbitration in accordance with the terms of their arbitration agreement.” (Western Bagel Company, Inc. v. Superior Court of Los Angeles County (Cal. App. 2nd Dist., Div. 1, July 16, 2021) 2021 WL 3021350.)

https://www.courts.ca.gov/opinions/documents/B305625.PDF

LGBT Bill of Rights.

The California Legislature enacted the Lesbian, Gay, Bisexual, and Transgender (LGBT) Long-Term Care Facility Residents’ Bill of Rights. (See Health and Safety Code § 1439.51.) Plaintiff is an “unincorporated association which includes at least one California citizen and taxpayer who has paid taxes to the state within the last year.” Plaintiff sought a writ of mandate asserting facial challenges to two provisions of the statute. The first, § 1439.51, subdivision (a)(5), prohibits staff members of long-term care facilities from willfully and repeatedly referring to a facility resident by other than the resident’s preferred name or pronoun when clearly informed of the name and pronoun. Plaintiff challenged that provision on the bases that it violates staff members’ rights to free speech, free exercise of religion, and freedoms of thought and belief, and is vague and overbroad. The second challenged provision, § 1439.51, subdivision (a)(3), makes it unlawful for long-term care facilities or facility staff to assign, reassign, or refuse to assign rooms, where such decisions are based on gender, other than in accordance with a transgender resident’s gender identity, unless at the transgender resident’s request. Plaintiff challenged the provision as a violation of non-transgender residents’ right to equal protection under the law, contending non-transgender residents are not afforded the same opportunity to request a roommate who does not conform to the resident’s gender identity. The trial court denied plaintiff’s petition for extraordinary relief, and plaintiff appealed. Affirming in part and reversing in part, the Court of Appeal stated: “[W]e agree with Taking Offense that section 1439.51, subdivision (a)(5), to which we refer as the pronoun provision, is a content-based restriction of speech that does not survive strict scrutiny. [¶] We disagree that section 1439.51, subdivision (a)(3), to which we refer as the room assignment provision, creates an unconstitutional gender-based classification and conclude Taking Offense’s equal protection argument lacks merit.” (Taking Offense v. State of California (Cal. App., 3rd Dist., July 16, 2021) 2021 WL 3013112.)

https://www.courts.ca.gov/opinions/documents/C088485.PDF

Biology Isn’t Everything.

M.M. and a woman were in a relationship in 2015. In December 2015, the woman informed M.M. he might be the father of a baby she was carrying. The next month she told him he probably was not the father after she spoke with her doctor about the due date. The child was born in July 2016. Another man stepped forward as the baby’s father. That man and the woman were married when the baby was seven months old, and later had another child. In 2019, due to DNA testing, it was discovered that M.M. was the biological father of the child. Later in 2019, M.M. filed a petition in court requesting that he be permitted to establish a parental relationship with the child. Finding that M.M. had not done enough to come forward and promptly assume parental responsibilities, such as demanding testing when he was first informed of the possibility that he was the father, the trial court denied M.M.’s petition. Affirming, the Court of Appeal stated: “[W]e conclude that the trial court properly determined that M.M. should not be adjudged a third parent due to his lack of an existing relationship with Child.” (M.M. v. D.V. (Cal. App. 4th Dist., Div. 1, July 19, 2021) 2021 WL 3027952.)

https://www.courts.ca.gov/opinions/documents/D077468.PDF

Courts Do Not Have Discretion to Increase the 14-Hour Limit on Taking Depositions.

When a man was suffering from mesothelioma and had six months to live, he and his wife filed an action against defendants. After defendants deposed the man for 14 hours, they asked the court to lift the 14-hour cap under Code of Civil Procedure § 2025.295, subdivision (b)(2), in order to effectively prepare for trial. The trial court denied defendants’ motion. Defendants sought extraordinary relief in the Court of Appeal. Denying the petition for writ of mandate, the appeals court stated: “Cahill Construction Company, Inc.’s petition for writ of mandate presents an issue of first impression: may a trial court grant deposition time in excess of the 14-hour cap set forth in section 2025.295, subdivision (b)(2). The answer—based on the unambiguous language of section 2025.295 and the evident legislative purpose underlying its enactment—is no. Indeed, the arguments advanced by Cahill are identical to those considered, and rejected, by the Legislature when it enacted section 2025.295. Other Code of Civil Procedure provisions addressing a court’s right to control discovery do not alter our conclusion. Nor are we persuaded that section 2025.295’s limitation on deposition time violates Cahill’s due process rights under the federal Constitution.” (Cahill Construction Co., Inc. v. Superior Court (Cal. App. 1st Dist., Div. 5, July 19, 2021) 2021 WL 3030225.)

https://www.courts.ca.gov/opinions/documents/A162885.PDF

California Labor Laws Applied to Airline.

Plaintiffs are California-based flight attendants who were employees of an airline. Approximately 25% of the airline’s flights were between California airports. Approximately 75% of flights took off or landed at a non-California airport, but the vast majority of those flights retained some connection to California. The airline’s fleet of aircraft were registered with the Federal Aviation Administration at its headquarters in Burlingame, California, and the record did not reflect any other business headquarters. Plaintiffs alleged various wage and hour violations under California law. The airline disputed that it was subject to California law, but did not contend that any other state’s labor laws applied. The district court certified a class action and granted summary judgment in plaintiffs’ favor. The Ninth Circuit held: “In sum, we affirm the district court’s summary judgment to Plaintiffs on their claims for overtime ([Lab. Code,] § 510); for violation of meal and rest break requirements (§§ 226.7, 512); for wage statement deficiencies (§ 226); and for waiting time penalties (§§ 201 and 202). We also affirm the district court’s decision on class certification. We reverse the district court’s summary judgment to Plaintiffs on their claims for minimum wage (§ 1182.12); for payment for each hour worked (§ 204); and for heightened penalties for subsequent violations under PAGA. We vacate the district court’s order granting attorney’s fees and costs to Plaintiffs, and we remand for further proceedings consistent with this opinion.” (Bernstein v. Virgin America (9th Cir., July 20, 2021) 3 F.4th 1127.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/20/19-15382.pdf

California Labor Laws Not Applied to Oil Platforms.

Defendant operates oil platforms off the coast of California. Plaintiff was employed by defendant and sued defendant for various wage and hour violations under California law. The district court denied defendant’s motion to dismiss the action. The Ninth Circuit noted that all law on the Outer Continental Shelf is federal and that state law applies only if it is not inconsistent with federal law. Reversing, the appeals court stated: “Because federal law addresses meal and rest periods, we conclude there is no gap in the applicable federal law.”(Mauia v. Petrochem Insulation, Inc. (9th Cir., July 20, 2021) 2021 WL 3045400.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/20/20-15810.pdf

Pyrrhic Victory Means Zero Attorney Fees.

Plaintiff leased commercial space from defendant, and defendant cross-complained against plaintiff. This appeal concerns the attorney fee clause in their lease. The litigation continued for nearly three years and culminated in a seven-day jury trial. Jurors heard their mutual recriminations. Plaintiff asked the jury for $200,000. The jury awarded him $6,450 on his contract claim, which was three percent of his request and which the court offset and reduced in the final judgment. Plaintiff’s lawyers requested $296,744.68 in attorney fees from defendant. The trial court denied the fee request on the ground there was no prevailing party. Affirming, the Court of Appeal stated: “When the demand is $200,000 and the verdict is $6,450 or less, the trial judge has discretion to decide the ‘victory’ is pyrrhic and nobody won.” (Harris v. Rojas (Cal. App. 2nd Dist., Div. 8, July 21, 2021) 2021 WL 3046421.)

https://www.courts.ca.gov/opinions/documents/B305848.PDF

Something Not Often Seen . . . a Legal Malpractice Case Against a Criminal Defense Lawyer.

Plaintiff sued his criminal defense lawyer alleging he negligently advised him to sign “closing agreements” by which plaintiff agreed to pay civil tax fraud penalties as part of the disposition of his criminal case. The lawyer demurred on the ground that actual innocence of the criminal charges, which plaintiff did not allege, is a necessary element of a cause of action for legal malpractice arising out of a criminal proceeding. The trial court agreed, found that the obligation was incurred as part of a plea agreement to resolve criminal charges, and sustained the demurrer without leave to amend. Affirming, the Court of Appeal stated: “Genis was required to allege actual innocence.” (Genis v. Schainbaum (Cal. App. 2nd Dist., Div. 8, July 22, 2021) 2021 WL 3087920.)

https://www.courts.ca.gov/opinions/documents/B304968.PDF

Temporary Judge Failed to Disclose . . . No More Brangelina.

California Rules of Court, rule 2.831(e) provides a temporary judge must disqualify himself or herself as “required by law” and “as provided under the Code of Judicial Ethics.” In a family law case, petitioner filed a statement of disqualification challenging a privately compensated temporary judge selected by the parties. She asserted the judge failed to disclose, as required by the California Code of Judicial Ethics, several matters involving her former spouse’s counsel in which the judge had been retained to serve as a temporary judge. The superior court ruled the challenge was untimely. Petitioner filed a petition for writ of mandate in the Court of Appeal. Granting the petition, the appellate court stated: “Judge Ouderkirk’s failure to make mandatory disclosures violated his ethical obligations; and, under the circumstances here, Judge Ouderkirk’s ethical breach, when considered with the information disclosed concerning his recent professional relationships with Pitt’s counsel, might cause an objective person, aware of all of the facts, reasonably to entertain a doubt as to Judge Ouderkirk’s ability to be impartial.” (Jolie v. Superior Court (Cal. App. 2nd Dist., Div. 7, July 23, 2021) 2021 WL 3123763.)

https://www.courts.ca.gov/opinions/documents/B308958.PDF

Ninth Circuit Vacates Order for a Lead Plaintiff in Securities Fraud Class Action.

This litigation consists of several proposed federal securities class actions. Plaintiffs allege they suffered losses from buying defendant’s securities after a non-party report described apparent false statements made by the founder and contained in company advertising materials. Plaintiffs filed eight motions to consolidate, with six movants seeking to be named lead plaintiff. After granting consolidation, the district court turned to the question of lead plaintiff appointment, which is governed by the three-step process set out in the Private Securities Litigation Reform Act (15 U.S.C. § 78u-4). That statute requires a district court to the identify the presumptive lead plaintiff, who is the movant with the largest financial interest and who has made a prima facie showing of adequacy and typicality. The district court ultimately selected Baio, the investor with the fourth largest losses of just over $700,000. Petitioners sought extraordinary relief in the Ninth Circuit, asking the appeals court to vacate the order and appoint their group as lead plaintiff instead. Granting the petition in part, the appeals court stated: “We grant Mersho, Chau, and Karczynski’s petition for a writ of mandamus to the extent it seeks to vacate the district court’s order appointing Angelo Baio as lead plaintiff. We remand to the district court to redetermine the lead plaintiff.” (In re Mersho (9th Cir., July 23, 2021) 2021 WL 3121385.) 

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/23/20-73819.pdf

Constitutional Challenge to School Closures During Pandemic.

Plaintiffs are parents and a student who challenged California’s extended prohibition on in-person schooling during the COVID-19 pandemic. The district court granted summary judgment in favor of California and dismissed the case. Affirming in part and reversing in part, the Ninth Circuit stated: “Because the State’s evidentiary showing was insufficient to establish, as a matter of law, that its school-closure order was narrowly tailored as applied to the five private-school Plaintiffs, we reverse the district court’s grant of summary judgment to the State on those Plaintiffs’ substantive due process claim, and we remand for further proceedings. We remand also for the district court to consider the private-school Plaintiffs’ challenge under the Equal Protection clause in light of our conclusion that the State’s actions implicate a fundamental right of those Plaintiffs. We otherwise affirm the district court’s grant of summary judgment.” (Brach v. Newsom (9th Cir., July 23, 2021) 2021 WL 3124310.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/23/20-56291.pdf

California Supreme Court Answered FEHA Questions.

Plaintiff contends she was passed over for promotion in part because she refused to have sex with defendant employer’s executive vice-president. The superior court granted defendants’ motion for summary judgment. The Court of Appeal affirmed and granted costs on appeal to defendants. The California Supreme Court granted review to answer two questions:

1.     When does the statute of limitations begin to run in a failure to promote case brought under the harassment provision of the Fair Employment and Housing Act (Gov. Code, §§ 12940, subd. (j) and 12960; FEHA)? California’s high court held: “[A] FEHA claim accrues, and thus the statute of limitations begins to run, at the point when an employee knows or reasonably should know of the employer’s allegedly unlawful refusal to promote the employee.”

2.     Does Government Code § 12965, subdivision (b)’s directive that a prevailing FEHA defendant “shall not be awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so,” apply to an award of costs on appeal? The Supreme Court held: “The answer is yes. The Court of Appeal in this case erred in awarding costs on appeal to defendants without first finding that [plaintiff’s] underlying claim was objectively groundless.” (Pollock v. Tri-Modal Distribution Services, Inc. (Cal., July 26, 2021) 2021 WL 3137429.)

https://www.courts.ca.gov/opinions/documents/S262699.PDF

Constitutional Right to Medical Screening and Safety Checks When Jailed.

A man died within 30 hours of admission as a pretrial detainee in a county jail. His mother, the plaintiff, asserted a  42 U.S.C. § 1983 claim of inadequate medical care under the due process clause of the Fourteenth Amendment. The district court granted summary judgment to the individual defendants. The Ninth Circuit found legal error and reversed as to two of those individuals, stating: “[W]e conclude that the district court committed legal error by using a subjective standard in analyzing the clearly established prong of the qualified immunity test. Further, as to Nurse Finley, summary judgment was not proper because the available law at the time of the incident clearly established Gordon’s constitutional rights to proper medical screening to ensure the medically appropriate protocol was initiated. However, as to Deputy Denney, although we now hold that Gordon had a constitutional right to direct-view safety checks, that right was not clearly established at the time of the incident.” (Gordon v. County of Orange (9th Cir., July 26, 2021) 2021 WL 3137954.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/26/19-56032.pdf

Agriculture Promotional Ads Exempt from First Amendment Scrutiny.

The Beef Promotion and Research Act of 1985 (7 U.S.C. §§ 2901(b), 2904(8)(C)), imposes a $1 assessment on each head of cattle sold in the United States to fund consumption promotions to “maintain and expand domestic and foreign markets and uses for beef and beef products.” The Ranchers Cattlemen Action Legal Fund challenges this mandatory assessment on cattle sales to fund ads for beef products. The question before the court was whether the speech involved is government speech. The Ninth Circuit held the promotional materials are exempt from First Amendment scrutiny, stating: “Promotional campaigns by QSBCs [qualified state beef councils] and contracted third parties subject to the Secretary’s pre-approval are therefore plainly government speech.” (Ranchers Cattlemen Action Legal Fund v. Vilsack (9th Cir., July 27, 2021) 2021 WL 3161201.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/27/20-35453.pdf

New Trial Grant Due to Improper Attorney Argument.

After a vehicular accident where the defendant had an elevated blood alcohol level, a jury returned a verdict in favor of plaintiff but awarded much less than the amount requested. The superior court granted a new trial in favor of plaintiff after finding defense counsel committed multiple acts of improper argument. Defendant appealed. Affirming, the Court of Appeal stated: “It is improper for counsel to assert or imply facts not in evidence that counsel knows could be refuted by evidence the court has excluded. It is also improper to argue facts not in the record, and to continue to argue those facts after the court has instructed counsel to stop.” (Jackson v. Park (Cal. App. 2nd Dist., Div. 7, July 27, 2021) 2021 WL 3162526.)

https://www.courts.ca.gov/opinions/documents/B297616.PDF

Breach of Contract and Fraud Award Against Food Manufacturer.

A pepper farmer sued the manufacturer of a pepper-based hot sauce for breach of contract and fraud. In 2006, the hot sauce company asked the farmer to significantly increase its pepper acreage. But the farmer also farmed diverse crops such as lemons and vegetables, and was reluctant to assume the risk of growing more peppers. The farmer rejected the offer, suggesting the hot sauce company supplement with peppers from other sources. Instead of seeking other sources, the hot sauce company proposed that it would assume some of the risk of a disappointing yield by paying the farmer by the acre grown instead of pounds produced. The farmer agreed to the arrangement. The farmer acquired millions of dollars of increased acres to farm and spent over a year preparing the land to grow peppers. After that, the hot sauce company refused to pay the agreed amount. A unanimous jury found the hot sauce company in breach of contract and that it committed fraud, awarding the farmer $13.3 million in compensatory damages and $10 million in punitive damages. In its analysis, the Court of Appeal noted that “[e]ven if we were to consider the reprehensibility factor to be in the middle range, the low punitive to compensatory damages ratio supports the award.” The appeals court affirmed the judgment. (Huy Fong Foods, Inc. v. Underwood Ranches, LP (Cal. App. 2nd Dist., Div. 6, July 27, 2021) 2021 WL 3162568.)

https://www.courts.ca.gov/opinions/documents/B303096.PDF

Mother’s Conduct, Although Poor Co-parenting, Was Not Abuse.

After a mother acted in an abusive and controlling manner vis-à-vis a child’s father while they were at a monitored visit for mother and then at an urgent care facility with their sick child, the superior court issued a three-year domestic violence restraining order. Reversing, the Court of Appeal stated: “We conclude Mother’s conduct—although demonstrating poor co-parenting—did not rise to the level of destroying Father’s mental and emotional calm to constitute abuse within the meaning of the Domestic Violence Prevention Act (DVPA) (Fam. Code, § 6200 et seq.).” (In re the Marriage of L.R. and K.A. (Cal. App. 4th Dist., Div. 1, July 27, 2021) 2021 WL 3161560.)

https://www.courts.ca.gov/opinions/documents/D077533.PDF

Unconscionable Arbitration Clause.

Induced to do so by a scammer, a 63-year-old veteran with poor eyesight transferred money from two Walmart stores in California to two eastern U.S. cities. He was asked to complete a “Send Form” to accomplish his transactions. He did not read the terms and conditions because the print was too small, even with his trifocals. He later sued MoneyGram, alleging it knew its system was used by scammers but failed to warn or protect him from “the scheme he had fallen victim to.” The superior court denied MoneyGram’s petition to compel arbitration. Affirming, the Court of Appeal noted the arbitration clause in the “Send Form” reduced the statute of limitations, required high commercial arbitrator fees, and also required consumers to bear their own costs for experts and attorneys. The appeals court then stated: “We conclude the arbitration provision is unconscionable largely because it was hidden on the back side of a money transfer order form, in tiny 6-point print that we deem virtually illegible. Because the arbitration provision operated largely to benefit defendant MoneyGram International, Inc. at plaintiff Jonathan Fisher’s expense, we affirm the superior court’s order denying MoneyGram’s petition to compel arbitration.” (Fisher v. MoneyGram International, Inc. (Cal. App. 1st Dist., Div. 4, July 27, 2021) 2021 WL 3168602.)

https://www.courts.ca.gov/opinions/documents/A158168.PDF

No Jury Trial on Labor Code § 3706 Issue.

After a man was accidentally killed while working, his family filed a wrongful death suit against defendant employer, contending defendant lacked the required workers’ compensation insurance. Under Labor Code, § 3706, “If any employer fails to secure the payment of compensation, any injured employee or his dependents may bring an action at law against such employer for damages . . . .” After denying plaintiffs’ request for a jury trial on the factual issues, the superior court determined defendant was insured by a workers’ compensation policy at the time of  death, and therefore the Workers’ Compensation Appeals Board had exclusive jurisdiction over the matter. Affirming, the Court of Appeal stated: “Although a jury may determine questions relevant to workers’ compensation exclusivity when the issue is raised as an affirmative defense to common law claims, jurisdiction under Labor Code section 3706 is an issue of law for the court to decide.” (Hollingsworth v. Heavy Transport, Inc. (Cal. App. 2nd Dist., Div. 4, July 27, 2021) 2021 WL 3162564.)

https://www.courts.ca.gov/opinions/documents/B306127.PDF

Dormant Commerce Clause.

In 2018, California voters passed Proposition 12, which bans the sale of whole pork meat from animals confined in a manner inconsistent with California standards. Plaintiffs pork and farmers associations filed an action for declaratory and injunctive relief in federal court on the ground that Proposition 12 violates the dormant commerce clause. (The dormant commerce clause denies the states the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.) The district court dismissed the action for failure to state a claim. Affirming, the Ninth Circuit stated: “Taking the plausible allegations in the complaint as true and making all reasonable inferences in the Council’s favor, we conclude that these alleged cost increases to market participants and customers do not qualify as a substantial burden to interstate commerce for purposes of the dormant Commerce Clause.” (National Pork Producers Council v. Ross (9th Cir., July 28, 2021) 2021 WL 3179247.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/28/20-55631.pdf

Domestic Relations Exception to Federal Diversity Jurisdiction.

Plaintiff sued the son of her deceased former husband in federal court alleging diversity jurisdiction. She alleged the son and a Utah business colluded to deny plaintiff compensation allegedly due under an agreement in contemplation of divorce. The district court dismissed the action for lack of subject matter jurisdiction. Affirming, the Ninth Circuit held that because plaintiff was seeking modification of her divorce decree, the domestic relations exception to diversity jurisdiction applied. (Bailey v. MacFarland (9th Cir., July 28, 2021) 2021 WL 3179421.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2021/07/28/19-17143.pdf

Retired Judges Who Are Precluded from Sitting on Assignment.

Plaintiffs are retired superior court judges who have participated in the Temporary Assigned Judges Program (TAJP). They challenged recent changes to the program made by the Chief Justice. These changes include limits on the duration of service in the program but provide for some exceptions. Plaintiffs claimed these changes discriminate against “older” retired judges and filed a lawsuit alleging disparate impact age discrimination under the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.; FEHA). The trial court sustained defendants’ demurrer without leave to amend on the ground legislative immunity barred the suit. The Court of Appeal noted that the Judicial Council’s immunity did not foreclose suit to the extent plaintiffs’ claim was based on defendants’ enforcement of the challenged provisions of the TAJP through individual judicial assignments. Concluding a disparate impact age discrimination claim under FEHA was not foreclosed solely because it was predicated on alleged discriminatory impact on a sub-group within the protected age class under plaintiffs’ allegations, the appeals court reversed. Plaintiffs were granted leave to amend to state a viable disparate impact age discrimination claim. (Mahler v. Judicial Council of California (Cal. App. 1st Dist., Div. 1, July 28, 2021) 2021 WL 3185736.)

https://www.courts.ca.gov/opinions/documents/A158696.PDF

Anti-SLAPP in Context of Hospital Peer Reviews.

Plaintiff, a physician, alleged defendant hospitals and members of its medical staff unlawfully retaliated against him for raising concerns about patient care. He stated this retaliation began with the suspension of his staff privileges and culminated in the termination of those privileges after peer review. The hospitals moved to strike the retaliation claims under the anti-SLAPP statute (Code Civ. Proc., § 425.16). Defendants contended any claim from the peer review process necessarily targets protected speech or petitioning activity and therefore must be afforded anti-SLAPP protection. In Kibler v. Northern Inyo County Local Hospital District (2006) 39 Cal.4th 192, the California Supreme Court held that the anti-SLAPP statute’s protections extend to speech and petitioning in connection with hospital peer review. Considering the scope and limits of anti-SLAPP protections in the instant case, the California Supreme Court held: “While some of the forms of retaliation alleged in the complaint — including statements made during and in connection with peer review proceedings and disciplinary reports filed with official bodies — do qualify as protected activity, the discipline imposed through the peer review process does not. Thus, while the hospitals may seek to strike some of the physician’s retaliation claims, they are not entitled to wholesale dismissal of these claims under the anti-SLAPP law.” (Bonni v. St. Joseph Health System (Cal., July 29, 2021) 2021 WL 3201090.)

https://www.courts.ca.gov/opinions/documents/S244148.PDF

Anti-SLAPP in Context of Statement of Economic Interests.

Plaintiff filed a complaint alleging that defendant violated the Political Reform Act of 1974 (Gov. Code, § 81000 et seq.) during her terms serving as a councilmember and then as the mayor of the City of Santa Clara by failing to disclose on her Statement of Economic Interests California Form 700 filings her interest in, and income she received from, an entity known as Public Property Advisors. Plaintiff argued his lawsuit was not subject to challenge under Code of Civil Procedure § 425.16 because it fell within the public interest exemption codified at § 425.17, subdivision (b). Plaintiff contended the trial court erred by concluding that an exception to that exemption, set forth in § 425.17, subdivision (d)(2) applied and rendered the exemption inapplicable. Affirming, the Court of Appeal stated: “Code of Civil Procedure section 425.17 exempts lawsuits filed in the public interest from the purview of California’s anti-SLAPP law. [Fn. omitted.] The same statute also contains an exception to the exemption for complaints based on the ‘creation, dissemination, exhibition, advertisement, or other similar promotion of’  a political work. (§ 425.17, subd. (d)(2).) The issue in this case is whether completion of the Statement of Economic Interests California Form 700 (Form 700) by a public official, which publicly reports certain financial information, is covered by the exception to the exemption. We hold that the exception applies to completion of the Form 700 and the complaint in this case is therefore subject to the anti-SLAPP law.” (Exline v. Gillmor (Cal. App. 4th Dist, Div. 3, July 29, 2021) 2021 WL 3204199.)

https://www.courts.ca.gov/opinions/documents/G060034.PDF

Anti-SLAPP in Context of OSC re Contempt and Subsequent Malicious Prosecution Action.

In a previous action, R Consulting sued Kim for breach of contract. When it obtained a judgment, R Consulting filed an Order to Show Cause (“OSC”) re contempt against Kim for his conduct during enforcement proceedings. The trial court found Kim not guilty of contempt and dismissed all charges. In the current action, Kim sued R Consulting and its law firm for malicious prosecution. Defendants filed motions to strike the complaint under Code of Civil Procedure § 425.16, the anti-SLAPP statute. The trial court granted the motions. Kim appealed. The Court of Appeal affirmed, holding that an OSC re contempt does not form a basis for a malicious prosecution action. (Kim v. R Consulting & Sales, Inc. (Cal. App. 4th Dist., Div. 1, July 30, 2021) 2021 WL 3240297.)

https://www.courts.ca.gov/opinions/documents/D076923.PDF

District Split on Whether Continuance of Summary Judgment Motion for Discovery to Oppose It Requires a Showing Why Discovery Not Completed Sooner.

Plaintiff sued defendant for personal injuries and other damages plaintiff sustained from slipping and falling on the floor of an Albertson’s grocery store. The trial court granted Albertson’s motion for summary judgment after denying plaintiff’s request to continue the hearing on the motion to allow plaintiff time to conduct discovery necessary to oppose the motion. On appeal from the judgment for Albertson’s, plaintiff claimed the trial court abused its discretion in denying her request to continue the hearing on Albertson’s motion. Affirming, Division Two of the Fourth District Court of Appeal continued a split of authority by disagreeing with two published decisions of Division Three of that district. The court followed instead a decision by Division Five of the Second District and found the declaration of plaintiff’s attorney did not show why necessary discovery to oppose the motion could not have been completed sooner, and accordingly, ruled the trial court did not abuse its discretion. (Braganza v. Albertson’s LLC (Cal. App. 4th Dist., Div. 2, July 29, 2021) 2021 WL 3204494.)

https://www.courts.ca.gov/opinions/documents/E073073.PDF

Motion to Vacate Arbitration Award Filed Too Late.

A panel of three arbitrators issued a modified award on September 18, 2019. The prevailing party filed a petition in superior court to confirm the award on October 1, 2019. Four months later, 130 days after issuance of the modified award, the losing party filed a motion to vacate the award. The trial court vacated the award. Reversing, the Court of Appeal stated: “Code of Civil Procedure section 1288 requires that a petition to vacate an arbitration award must be filed and served not later than 100 days after service of the award. . . . Thus, the trial court lacked jurisdiction to consider Key’s request to vacate, and the arbitration award must be confirmed.” (Law Finance Group, LLC v. Key (Cal. App. 2nd Dist., Div. 2, July 30, 2021) 2021 WL 3240276.)

https://www.courts.ca.gov/opinions/documents/B305790.PDF 

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