Litigation
LITIGATION UPDATE: AUGUST 2023
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, Colin P. Cronin, Jonathan Grossman, Jennifer Hansen, Gary A. Watt, Ryan Wu
Child Injured at School.
A jury returned a verdict for an eighth-grade student and against a school district and physical education teacher after the student sustained a knee injury when another student ran into him at full speed during a touch football game. The Court of Appeal reversed, finding the trial court erred by failing to instruct the jury on the primary assumption of risk doctrine and by not allowing the jury to apportion fault to the other student, thus precluding defendants from reducing liability for noneconomic damages. The appeals court also held there was insufficient evidence that the school district breached a mandatory duty. The Court of Appeal ordered the trial court to enter judgment for the school district and to conduct a new trial limited to the issue of apportionment of fault between the physical education teacher and the other student. (Nigel B. v. Burbank Unified School District (Cal. App. 2nd Dist., Div. 5, July 3, 2023) 93 Cal.App.5th 64.)
Law Prohibiting Unannounced Recordings of Conversations Held Unconstitutional.
Oregon enacted a law that prohibits unannounced recordings of conversations. The district court dismissed an action challenging the constitutionality of the law. Reversing, the Ninth Circuit stated: “[W]e conclude that it is a content-based speech restriction that cannot survive strict scrutiny because Oregon has not asserted a compelling government interest and because the statute is not narrowly tailored. The statute is also not a valid time, place, or manner restriction because it does not leave open ample alternative channels for communication.” (Project Veritas v. Schmidt (9th Cir., July 3, 2023) 72 F.4th 1043.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/03/22-35271.pdf
Entry of Default and Default Judgment Set Aside.
Plaintiff sued defendant over a dispute about real property they jointly owned. Plaintiff filed a proof of service stating she herself served a copy of the summons and complaint on defendant. The trial court entered default and a default judgment for plaintiff. Nearly two years later, defendant moved under Code of Civil Procedure § 473, subdivision (d) to vacate the default and default judgment, arguing he was never effectively served with the summons and complaint. The trial court granted the motion. The Court of Appeal affirmed, finding the motion was timely because under § 473, subdivision (d), a court may set aside a default judgment that is void due to improper service. The appeals court stated this situation did not involve a mere technicality, but amounted to an issue of fundamental jurisdiction, explaining that Code of Civil Procedure § 414.10 provides that persons permitted to serve a summons and complaint may not be parties to the action. (Braugh v. Dow (Cal. App. 2nd Dist., Div. 8, July 3, 2023) 93 Cal.App.5th 76.)
“Minimum Contacts” for Personal Jurisdiction When Defendant Is Non-Resident and Sale of Product Is Via a website.
Plaintiff, which has its principal place of business in Arizona, manufactures and sells health, wellness, fitness, and nutrition products under various trademarks and brands. Defendants are New York residents that sell products via Amazon.com storefronts. Plaintiff filed this action in Arizona, alleging that defendants’ unauthorized sale of plaintiff’s products on Amazon.com violated the Lanham Act (15 U.S.C. § 1125(a)) and state law. The district court denied plaintiff’s request for jurisdictional discovery and dismissed the complaint on the ground that the court lacked personal jurisdiction over defendants. Reversing, the Ninth Circuit held that “if a defendant, in its regular course of business, sells a physical product via an interactive website and causes that product to be delivered to the forum, the defendant has purposefully directed its conduct at the forum such that the exercise of personal jurisdiction may be appropriate.” (Herbal Brands, Inc. v. Photoplaza, Inc. (9th Cir., July 5, 2023) 72 F.4th 1085.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/05/21-17001.pdf
Previously we reported: One of the Many Legal Issues Resulting from the Pandemic.
During the pandemic, after a health order allowing certain essential industries to reopen, plaintiff went back to work at a construction company. According to plaintiff, defendant employer knowingly transferred workers from an infected construction site to plaintiff’s jobsite without following the safety procedures required by the order. Plaintiff was forced to work in close contact with these employees and soon developed COVID-19, which he brought back home. Plaintiff’s wife was over 65 years old and was at high risk from COVID-19 due to her age and health. She tested positive and developed severe respiratory symptoms. She was hospitalized for more than a month and was kept alive on a respirator. Both husband and wife filed suit alleging the wife’s injuries were caused by defendant’s violation of the order. The Ninth Circuit stayed the action and, pursuant to Rule 8.548(b)(2) of the California Rules of Court, certified two questions to the California Supreme Court: 1. If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer? 2. Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19? (Kuciemba v. Victory Woodworks, Inc. (9th Cir., Apr. 21, 2022) 31 F.4th 1268.)
The latest:
The California Supreme Court Responds to the Ninth Circuit.
Question #1 from the Ninth Circuit: If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer?
Response to question #1 by the California Supreme Court: The answer is no. Exclusivity provisions of the Workers’ Compensation Act do not bar a nonemployee’s recovery for injuries that are not legally dependent upon an injury suffered by the employee.
Question #2 from the Ninth Circuit: Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?
Response to question #2 by the California Supreme Court: The answer is also no. “Although it is foreseeable that an employer’s negligence in permitting workplace spread of COVID-19 will cause members of employees’ households to contract the disease, recognizing a duty of care to nonemployees in this context would impose an intolerable burden on employers and society in contravention of public policy. These and other policy considerations lead us to conclude that employers do not owe a tort-based duty to nonemployees to prevent the spread of COVID-19.” (Kuciemba v. Victory Woodworks, Inc. (Cal., July 6, 2023) 14 Cal.5th 993.)
In State Law Claims for False Arrest and Negligence, the Question of Whether Police Had Probable Cause to Arrest Is One for the Jury.
Plaintiff was arrested after an encounter with several members of the San Francisco Police Department, including individual defendants. Plaintiff brought several federal claims under 42 U.S.C. § 1983, stemming from her alleged unlawful and unreasonable arrest and subsequent separation from her children, as well as state law claims based on her alleged unlawful arrest. The district court granted summary judgment for all the defendants, finding the officers had probable cause to arrest plaintiff. Affirming in part and reversing in part, the Ninth Circuit stated: “We affirm the district court’s grant of summary judgment to the Defendants on Johnson’s federal claims based on qualified immunity. Because we hold that the question of whether police officers had probable cause is properly a question for the jury, we remand to the district court Johnson’s state law claims for false arrest and negligence. We affirm the district court’s grant of summary judgment to the Defendants on the remaining state law claims.” (Johnson v. Barr (9th Cir., July 6, 2023) 73 F.4th 644.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/06/21-16547.pdf
Restraint of Parents After a Tip Their Son Planned a School Shooting.
Sheriff’s deputies encountered the two plaintiffs at their home during an investigation into allegations their son planned a shooting at his school that day. The parents said their son was at his grandmother’s house, but refused to give the address to the deputies, and then attempted to get into their car and leave their home. When the father reached into a duffel bag apparently to retrieve something, deputies perceived a safety issue, not knowing if the father was retrieving a gun. During the interaction, the deputies held the mother’s arms and used a twist-lock to prevent her from leaving, and they pointed a gun at the father and put him in handcuffs. Based on these actions, the plaintiffs filed a lawsuit under 42 U.S.C. § 1983 against the Sacramento County Sheriff’s Department and the deputies, alleging, among other things, violations of their Fourth Amendment rights. The district court granted summary judgment for the deputies, concluding they did not violate the Fourth Amendment by detaining the plaintiffs even in the absence of reasonable suspicion. Affirming in part and reversing in part, the Ninth Circuit stated that once it became apparent the father held a cell phone and not a weapon, deputies were on notice he posed no threat. The appeals court affirmed the grant of summary judgment as to the mother and reversed as to the father. (Bernal v. Sacramento County Sheriff’s Department (9th Cir., July 7, 2023) 73 F.4th 678.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/07/22-15690.pdf
Corporations and the Alien Tort Statute.
Members of a religious group in China sued Cisco Systems, Inc. and two of its officers, including its CEO, for human rights abuses under the Alien Tort Statute (28 U.S.C. § 1350; ATS) after the Chinese government targeted the religious group with the goal of convincing adherents to renounce their beliefs. To monitor the religion’s internet activity and identify individual practitioners based on that activity, the Chinese Communist Party envisioned an online tool that became known as the “Golden Shield,” a surveillance system of a scale and capacity that could surveil the entire country’s internet use. To develop such a system, the government required technology not then available in China. Defendants worked with the Chinese government to develop this system. The district court dismissed plaintiffs’ claims. Reversing, the Ninth Circuit held that recognizing aiding and abetting under the ATS does not raise separation-of-powers or foreign policy concerns, so liability under the ATS is cognizable. It also held that allegations against Cisco’s individual corporate defendants satisfied the elements for aiding and abetting. The appeals court further held that plaintiff’s allegations were sufficient to allege that Cisco took actions domestically that aided and abetted violations of international law. (Doe I v. Cisco Systems, Inc. (9th Cir., July 7, 2023) 73 F.4th 700.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/07/15-16909.pdf
FDA Denied Tobacco Company’s Application to Sell Flavored E-Liquids in U.S.
In response to applications of two tobacco companies for authorization to sell nicotine-containing e-liquids in the United States, the Food and Drug Administration (FDA) issued denials. The FDA found the applications lacked sufficient evidence showing their flavored products would provide a benefit for adult users that outweighed the risks posed to youth. Denying a petition for review, the Ninth Circuit stated: “We hold that the text of the Tobacco Control Act [21 U.S.C. § 387a] plainly authorizes the FDA to require that manufacturers submit comparative health risk data, which necessarily includes comparisons of flavored e-liquids to tobacco-flavored e-liquids.” (Lotus Vaping Technologies, LLC v. U.S. Food & Drug Administration (9th Cir., July 7, 2023) 73 F.4th 657.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/07/21-71321.pdf
County May Be Sued for Reimbursement of Emergency Medical Care Provided by Hospital.
A patient’s medical insurance carrier must pay a hospital the reasonable and customary value of services provided if the plan does not have a contract with the medial provider addressing the reimbursement rate. If the plan fails to pay the reasonable and customary value of such services, the medical provider may sue the plan directly for reimbursement under a quantum meruit theory. That was what happened here. The California Supreme Court granted review “to decide whether a similar claim for reimbursement of emergency medical services may be maintained against a health care service plan when the plan is operated by a public entity, or whether the Government Claims Act (Gov. Code, § 810 et seq.) immunizes a public entity from such a claim.” California’s high court held that the Government Claims Act did not bar the hospital’s action against the county. (County of Santa Clara v. Superior Court (Cal., July 10, 2023) 14 Cal.5th 1034.)
No Courtrooms Available.
The Riverside County District Attorney filed charges against defendant, alleging he committed assault with a machete, and he personally used a deadly and dangerous weapon and personally inflicted great bodily harm. After four continuances, trial was set for January 12, 2022. An order suspending jury trials because of the pandemic expired on February 25, 2022. After jury trials resumed, defendant’s case was delayed multiple times in 30-day increments under the emergency order then in effect. In total, there were 12 continuances. Penal Code § 1382 imposes a presumptive 60-day deadline to bring a felony case to trial after a defendant is arraigned. The trial court granted defendant’s motion to dismiss the case because there was not an available judge or courtroom to try the case by the time the 60-day deadline expired. The District Attorney petitioned for a writ of mandate. Denying the petition, the Court of Appeal stated: “For almost two decades, the Superior Court for the County of Riverside has not had enough judges to adequately serve the county’s ever-increasing population.” The court held “Judge Monterosso did not abuse his discretion in determining that there was no good cause under section 1382 to continue the trial over [defendant]’s objection.” (People v. Superior Court of Riverside County (Cal. App. 4th Dist., Div. 2, July 11, 2023) 93 Cal.App.5th 394.)
Employees’ Case Against Employer for Reimbursement of Costs for Working at Home During the Pandemic Is Returned to Trial Court.
Pursuant to a directive from the governor that California residents remain at home, except for those working in critical sectors, defendant directed its employees to work from home. To accomplish their duties while working at home, plaintiffs used internet access, telephone service, telephone headsets, computers, and accessories. Plaintiffs sought penalties against defendant under California’s Private Attorneys General Act (Lab. Code, § 2699 et seq.; PAGA) for alleged violations of § 2802, subdivision (a) of the act, which requires an employer to reimburse an employee “for all necessary expenditures . . . incurred by the employee in direct consequence of the discharge of his or her duties.” Defendant did not do so. The trial court sustained defendant’s demurrer and dismissed the complaint. The Court of Appeal concluded: “Because the court’s conclusion is inconsistent with the statutory language, we reverse.” (Thai v. International Business Machines Corp., (Cal. App. 1st Dist., Div. 5, July 11, 2023) 93 Cal.App.5th 364.)
Ordinance Relating to Short Term Rentals.
This appeal challenged the constitutionality of a municipal ordinance that prohibited short-term or vacation rental housing. In 2018, voters in the City of South Lake Tahoe enacted Measure T, an initiative that prohibited the use of dwellings in residential zones as short-term or vacation rentals. Measure T amended the city’s vacation home rental ordinances to bar the city from issuing any new permits for vacation home rentals in residential zones except for permanent residents’ dwellings, and declared all existing and new permits would expire by the end of 2021. Measure T also imposed stricter occupancy limits on vacation rental homes, which were to be effective immediately. Plaintiff brought an action against the city to have Measure T declared unconstitutional. On cross-motions for summary judgment, the trial court granted summary judgment for the city and denied plaintiff’s motion. The Court of Appeal affirmed the trial court’s rejection of claims concerning asserted property and privacy rights. However, it reversed in part, stating: “Because Measure T’s permanent resident exception facially discriminates against interstate commerce, it is per se invalid unless the [c]ity can justify the discrimination by showing that the resident exception ‘advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.”’ (South Lake Tahoe Property Owners Group v. City of South Lake Tahoe (Cal. App. 3rd Dist., July 12, 2023) 92 Cal.App.5th 735.)
Privacy of Children.
Google owns YouTube, which is particularly popular among children, who increasingly have smartphones and tablets that allow them to access the platform without age verification. As a testament to YouTube’s popularity among children, several popular toy and cartoon brands maintain YouTube channels, where they post content and run advertisements designed to appeal to a young audience. Google keeps track of its users. In a class action, a group of children sought damages and injunctive relief alleging Google collected data about them for behavioral advertising without their consent. The district court dismissed the action, finding that defendants were regulated under a federal statute that does not permit a private cause of action, the Children’s Online Privacy Protection Act (15 U.S.C. § 6502(d); COPPA). The Ninth Circuit reversed after concluding there is no preemption under COPPA. (Jones v. Google, LLC (9th Cir., July 13, 2023) 73 F.4th 636.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/13/21-16281.pdf
Action Against Medicare Advantage Plan Preempted.
A man at a skilled nursing home developed severe bed sores that were not properly treated. He was discharged to his home and died shortly thereafter. His son sued his father’s Medicare Advantage plan (MA) as well as the health maintenance organization (HMO) that administered his father’s MA plan. The son alleged negligence, wrongful death, and elder abuse based on allegations that the HMO and healthcare services administrator breached a duty to ensure his father received skilled nursing benefits to which he was entitled under his MA plan. Defendants contended the son’s claims were expressly preempted by Medicare Part C’s preemption provision which provides that the standards under Part C “shall supersede any State law or regulation” concerning MA plans. (42 U.S.C. § 1395w-26(b)(3).) Agreeing the son’s action was preempted, the California Supreme Court held: “Because Quishenberry’s state-law claims are based on allegations that his father’s HMO plan and healthcare services administrator breached state-law duties that incorporate and duplicate standards established under Part C, we agree and hold that the provision preempts them.” (Quishenberry v. UnitedHealthCare, Inc. (Cal., July 13, 2023) 14 Cal.5th 1057.)
Disneyland Obligated to Pay Its Employees a Living Wage.
Employees of Disneyland filed a class action against the Walt Disney Company, contending Disney did not pay them according to a 2018 Anaheim ordinance (Anaheim Mun. Code, § 6.99 et seq.) that provides workers must be paid a living wage. The trial court granted a motion for summary judgment for Disney. The Court of Appeal reversed the decision and noted that Disney has the right to receive a rebate or return of taxes and therefore receives a “City Subsidy,” and held that Disney is “obligated to pay its employees the designated minimum wages.” (Grace v. Walt Disney Company (Cal. App. 4th Dist., Div. 3, July 13, 2023) 93 Cal.App.5th 549.)
One-Year Statute of Limitations for Action Under the Fair Debt Collection Practices Act.
From 2003 to 2007, plaintiff took out ten student loans to attend college. Defendants purchased plaintiff’s loans and hired co-defendant to service the loans. Several years later, plaintiff filed for Chapter 13 bankruptcy relief. After discharge, defendants pursued payment of the balance of the loans and eventually filed an action in Washington state court. The trial court granted summary judgment for plaintiff because the defendants could not prove that the debts had been properly assigned to them. The trial court dismissed the debt collection suit. Defendants did not appeal. On April 6, 2020, plaintiff filed this putative class action in Washington state court, alleging violation of the Fair Debt Collection Practices Act (15 U.S.C. § 1692k(d); FDCPA), because he claimed defendants sued him to collect debts that were discharged in bankruptcy. The district court dismissed the case for failure to state a claim. Reversing in part and affirming in part, the Ninth Circuit stated: “We first reiterate that Walls v. Wells Fargo Bank, 276 F.3d 502 (9th Cir. 2002), precludes FDCPA and other claims based on violations of Bankruptcy Code § 524 (11 U.S.C. § 524). We then conclude that certain litigation acts—including service and filing—can constitute distinct violations of the FDCPA that each trigger the FDCPA’s one-year statute of limitations.” (Brown v. Transworld Systems, Inc. (9th Cir., Jul. 14, 2023) 73 F.4th 1030.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/14/22-35244.pdf
Huge Jury Award for Retaliatory Termination of Employment.
A jury found that defendant production company wrongfully terminated plaintiff’s employment after he refused to work on an equipment installation at a theater because the work would violate the law and because plaintiff reasonably believed that the work would violate the law. The jury awarded plaintiff over $7 million. Plaintiff didn’t think the theater ceiling would support the heavy equipment and feared it might fall onto the audience from above. The jury further found that defendant terminated plaintiff’s employment with malice, oppression, or fraud. The trial court denied defendant’s motions for judgment notwithstanding the verdict (JNOV) and for a new trial. The Court of Appeal affirmed. It found no error and found that the punitive damages award was not constitutionally excessive. (Zirpel v. Alki David Productions, Inc. (Cal. App. 2nd Dist., Div. 4, June 20, 2023) 93 Cal.App.5th 563.)
Representative PAGA Claims May Be Pursued in Court Despite Arbitration of Plaintiff’s Individual Claims.
In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __ [142 S.Ct. 1906], the United States Supreme Court considered a predispute employment contract with an arbitration provision specifying that “in any arbitral proceeding, the parties could not bring any dispute as a class, collective, or representative [Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA)] action.” The contract also contained a severability clause specifying that if the waiver was found invalid, any class, collective, representative, or PAGA action would presumptively be litigated in court. The question before the California Supreme Court in the instant case was whether an aggrieved employee who has been compelled to arbitrate claims under PAGA that are “premised on Labor Code violations actually sustained by” the plaintiff maintains statutory standing to pursue PAGA claims arising out of events involving other employees in court. California’s highest court held: “We hold that the answer is yes. To have PAGA standing, a plaintiff must be an “aggrieved employee”—that is, (1) “someone ‘who was employed by the alleged violator’” and (2) “‘against whom one or more of the alleged violations was committed.’ [] Where a plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.” (Adolph v. Uber Technologies, Inc. (Cal., July 17, 2023) 14 Cal.5th 1104.)
Association Suffers Injury in Fact Under UCL When It Expends Its Resources to Combat Unfair Competition Vis-à-Vis Its Members.
The California Medical Association (CMA) sued an insurance company for violation of California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.; UCL) by engaging in unlawful business practices. The UCL confers standing on a private plaintiff to seek relief under the statute only if that plaintiff has “suffered injury in fact” and “lost money or property as a result of the unfair competition” at issue. The question here was whether CMA suffered injury in fact by using its resources on behalf of its 37,000 physician members to combat allegedly unfair competition. The trial court granted summary judgment for the insurance company and the Court of Appeal affirmed. Reversing the judgment of the Court of Appeal, the California Supreme Court held: “We hold that the UCL’s standing requirements are satisfied when an organization, in furtherance of a bona fide, preexisting mission, incurs costs to respond to perceived unfair competition that threatens that mission, so long as those expenditures are independent of costs incurred in UCL litigation or preparations for such litigation.” (California Medical Association v. Aetna Health of California Inc. (Cal., July 17, 2023) 14 Cal.5th 1075.)
Statute Prohibiting Solicitation of Political Contributions Found to be Unconstitutional.
Government Code § 3205 prohibits local government employees in California from soliciting political contributions from their coworkers. State government employees are not similarly barred from soliciting contributions from their colleagues. A political organization and two of the organization’s officers challenged the statute responsible for this distinction as violative of the First and Fourteenth Amendments. The Ninth Circuit ruled in their favor and stated: “Because the statute’s discrimination against local employees is not justified under any arguably applicable standard, we hold that Section 3205 is unconstitutional and reverse the district court.” (Progressive Democrats for Social Justice v. Attorney General of California (9th Cir., July 19, 2023) 73 F.4th 1118.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/19/22-15323.pdf
Families of Victims of Active Shooter May Proceed Against Gun Seller.
This litigation arises from the April 2019 shooting at the Chabad of Poway synagogue. The plaintiffs in two consolidated lawsuits against San Diego Guns, LLC sought a peremptory writ of mandate directing the trial court to vacate its ruling that granted summary adjudication to defendant on plaintiffs’ causes of action for negligence per se because it sold a rifle to the 19-year-old shooter. The trial court’s analysis was based on the shooter’s hunting license, which had not yet commenced. Granting the writ, the Court of Appeal explained that “in light of the Legislature’s subsequent enactment of [Penal Code] section 16685, which clarifies that ‘a valid and unexpired ‘hunting license’ means a hunting license . . . for which the time period authorized for the taking of birds or mammals has commenced but not expired,’ the trial court erred in concluding that the shooter’s hunting license was valid for the purpose of purchasing a firearm. We accordingly grant plaintiffs’ petition for writ of mandate.” (Goldstein v. Superior Court of San Diego County (Cal. App. 4th Dist., Div. 1, July 19, 2023) 93 Cal.App.5th 736.)
Unfair Competition Case Tossed.
Plaintiff production company sued the Walt Disney Company and affiliated entities for breach of an implied-in-fact contract, breach of confidence, and unfair competition, alleging Disney had used its creative ideas in Disney’s animated motion picture “Zootopia” without compensating it. The trial court sustained without leave to amend Disney’s demurrer regarding the individual elements of the works and the works as a whole, finding they were not substantially similar as a matter of law. The court overruled Disney’s demurrer as to the title “Zootopia.” Three years later the court granted Disney’s motion for summary judgment, ruling there was no evidence the creators of Disney’s “Zootopia” had access to plaintiff’s work and, even if there was evidence of access, any inference of copying was rebutted by the undisputed evidence a Disney employee had independently created the title “Zootopia.” Affirming judgment for Disney, the Court of Appeal found there was no evidence that plaintiff and defendant shared ideas about “Zootopia.” (Esplanade Productions, Inc. v. The Walt Disney Company (Cal. App. 2nd Dist., Div. 7, July 19, 2023) 93 Cal.App.5th 793.)
Summary Judgment Reversed in Product Liability Case Involving Human Factors.
Plaintiff was installing glass panels when he fell out of a scissor lift manufactured by defendant. Plaintiff failed to latch a chain designed to guard the lift’s entrance and was severely injured. He sued the manufacturer for strict products liability, failure to warn, and related claims. At a jury trial, plaintiff alleged the scissor lift as designed with the chain invited human error, and the foreseeable risk of harm could have been avoided if defendant had marketed only its alternative design with a self-closing gate. Plaintiff also alleged there was a defective warning label on the lift. At the close of evidence, defendant moved for a directed verdict. The trial court granted the motion. Reversing, the Court of Appeal stated: “[T]he jury could have reasonably inferred that had a self-closing gate been in place, Camacho’s fall would have been prevented. Of course, we are uncertain how the jurors would have ultimately decided the issue, but they should have been permitted to do so. [Citation.][¶] We also find the jurors could have reasonably inferred JLG’s allegedly defective warning label was also a substantial factor in causing Camacho’s injuries.” (Camacho v. JLG Industries, Inc. (Cal. App. 4th Dist., Div. 3, July 19, 2023) 93 Cal.App.5th 809.)
Automatic Recording of Business’s Telephone Calls.
Plaintiff sued defendant credit card company under the California Invasion of Privacy Act (Pen. Code, § 630 et seq.). Plaintiff’s daughter was defendant’s employee and called plaintiff hundreds of times from her workplace. Plaintiff alleges defendant intentionally recorded these confidential calls without her consent in violation of Penal Code §§ 632(a) and 632.7(a). The trial court granted summary judgment for defendant, but the Court of Appeal reversed in Rojas v. HSBC Card Services Inc. (2018) 20 Cal.App.5th 427. On remand, defendant made an offer to settle under Code of Civil Procedure § 998, and the case proceeded to a bench trial. The trial court entered judgment for defendant. Defendant sought costs, including pursuant to its § 998 offer, which plaintiff moved to strike or tax. The court ruled the § 998 offer was valid and denied plaintiff’s motion. Plaintiff appealed both the judgment and the postjudgment costs order. Affirming both, the Court of Appeal noted that “a business’s full-time recording of calls without adequate notice creates conditions ripe for potential liability.” But the appeals court found there was evidence plaintiff was aware her calls were being recorded. On the costs order, the appeals court concluded the trial court did not abuse its discretion. (Rojas v. HSBC Card Services Inc. (Cal. App. 4th Dist., Div. 1, July 20, 2023) 93 Cal.App.5th 860.)
Justice Sotomayor, Joined by Justices Kagan and Jackson, Dissented from Denial of Application to Stay Execution.
The majority denied a prisoner’s application to stay his execution. Justice Sotomayor wrote a separate dissent, which begins: “Just last year in Alabama, in three consecutive executions by lethal injection, prison officials spent multiple hours digging for prisoners’ veins in an attempt to set IV lines. Two of the men survived and reported experiencing extreme pain, including, in one case, nerve pain equivalent to electrocution. After those executions failed, the State began what it claimed would be a ‘top-to-bottom’ review of its lethal injection process. . . . [¶] Now, the State seeks to execute James Edward Barber.” The dissent further states: “Alabama plans to kill him by lethal injection in a matter of hours, without ever allowing him discovery into what went wrong in the three prior executions and whether the State has fixed those problems. The Eighth Amendment demands more than the State’s word that this time will be different. The Court should not allow Alabama to test the efficacy of its internal review by using Barber as its ‘guinea pig.’ [Citation.] It should grant Barber’s application for a stay of his execution.” (Barber v. Ivey (U.S., July 21, 2023) 2023 WL 4669437.)
Trial Court Determined Arbitrability Despite Clause Delegating That Decision to the Arbitrator.
The district court denied defendant’s petition to compel arbitration in an employment related case after finding the delegation clause was unconscionable because the agreement contained the following term: “IF THIS AGREEMENT IS DETERMINED TO BE UNENFORCEABLE, ANY CLAIMS BETWEEN YOU AND THE COMPANY RELATED TO YOUR EMPLOYMENT SHALL BE SUBJECT TO A NON-JURY TRIAL IN THE FEDERAL OR STATE COURT THAT HAS JURISDICTION OVER THE MATTER.” Reversing, the Ninth Circuit stated: “The Agreement’s jury waiver provision applies only ‘if th[e] agreement is determined to be unenforceable.’ . . . [¶] . . . If the arbitrator agrees with [plaintiff], then [plaintiff] would be free to pursue his claims in either federal or state court. And, if [defendant] were to try to enforce the jury waiver provision in that forum, [plaintiff] would have an opportunity to argue why the provision should not be enforced. On the other hand, if the arbitrator disagrees with [plaintiff] and concludes that the Agreement is enforceable, the jury waiver provision becomes irrelevant . . . .” (Holley-Gallegly v. TA Operating, LLC (9th Cir., July 21, 2023) 2023 WL 4674372.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/21/22-55950.pdf
Previously we reported: Petition to Compel Arbitration Denied.
Three delivery drivers sued Domino’s Pizza on behalf of themselves and a putative class, asserting violations of various California labor laws. Domino’s moved to compel arbitration pursuant to its contracts with the drivers. The district court denied the motion, finding that the drivers are a “class of workers engaged in foreign or interstate commerce,” and are therefore exempt from the requirements of the Federal Arbitration Act (9 U.S.C. § 1; FAA). Affirming, the Ninth Circuit compared this situation with the one in Rittmann v. Amazon.com, Inc. (9th Cir. 2020) 971 F.3d 904, stating: “Like Amazon, Domino’s is directly involved in the procurement and delivery of interstate goods; the D&S drivers, like the Amazon package delivery drivers, transport those goods ‘for the last leg’ to their final destinations. [Citation.] Like Amazon, Domino’s is involved in the process from beginning to the ultimate delivery of the goods to their destinations and its ‘business includes not just the selling of goods, but also the delivery of those goods.’ ” (Carmona v. Domino’s Pizza, LLC (9th Cir., Dec. 23, 2021) 21 F.4th 627.)
The next thing that happened:
The United States Supreme Court vacated the judgment of the Ninth Circuit, stating: “The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Ninth Circuit for further consideration in light of Southwest Airlines Co. v. Saxon, 596 U. S. ___ (2022).” (Domino’s Pizza, LLC v. Carmona (U.S., Oct. 17, 2022) 143 S. Ct. 361.)
The latest:
Finding that Southwest Airlines Co. v. Saxon (2022) 142 S.Ct. 1783, did not address the question in this case, the Ninth Circuit once again affirmed denial of Domino’s petition to order the case to arbitration. (Carmona Mendoza v. Domino’s Pizza, LLC (9th Cir., July 21, 2023) 73 F.4th 1135.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/21/21-55009.pdf
No Towing of Legally Parked Vehicles Based on Unpaid Parking Tickets.
Plaintiff sued defendant public entities to challenge the policy of towing safely and lawfully parked vehicles without a warrant based solely on the accrual of unpaid parking tickets. The trial court denied plaintiff’s petition for writ of mandate. Reversing, the Court of Appeal stated: “In particular, we reject respondents’ argument that their interest in deterring parking violations and nonpayment of parking fines justifies warrantless tows under the vehicular community caretaking exception. Such deterrence does not justify warrantless tows of lawfully registered and lawfully parked vehicles. We also reject the proposition that the tows at issue may be justified by analogy to warrantless property seizures in the forfeiture context.” (Coalition on Homelessness v. City and County of San Francisco (Cal. App. 1st Dist., Div. 5, July 21, 2023) 93 Cal.App.5th 928.)
CCP § 170.6 Challenge to Judge in Criminal Case Rejected.
After a posttrial motion for resentencing pursuant to Penal Code §§ 1170.85 and 1172.6 was denied, the criminal defendant successfully appealed. Upon remand to the trial court, the defendant filed a post-appeal peremptory challenge of the judge who denied her petition pursuant to Code of Civil Procedure § 170.6. The trial court denied the petition. Denying the defendant’s petition for writ of mandate, the Court of Appeal stated: “We hold that the hearing required in Penal Code section 1172.6, subdivision (d)(3), after reversal and remand is not a “new trial” within the meaning of section 170.6, subdivision (a)(2).” (Estrada v. Superior Court (Cal. App. 2nd Dist., Div. 4, July 21, 2023 ) 93 Cal.App.5th 915.)
Ruling Exceeded Jurisdiction of Temporary Judge in Family Law Matter.
A privately compensated temporary judge’s appointment terminated on April 1, 2020. On April 30, 2019, the wife filed a request for an accounting. On June 26, 2020, the wife withdrew her request. Four months later, the husband successfully moved to restore the accounting. The next year, the temporary judge ruled. Reversing, the Court of Appeal held the temporary judge had lost jurisdiction by the time the ruling was made. (In re Marriage of DeWolfe (Cal. App. 2nd Dist., Div. 5, July 21, 2023) 93 Cal.App.5th 906.)
Knowledge Requirement in Trademark Infringement.
Plaintiff manufactures its own clothing, home goods, and other items. It owns several trademarks. Defendant owns and operates an online marketplace where artists can upload their artwork to be printed on various products and sold. Defendant collects payment, sends the order to a manufacturer, arranges shipping, and handles refunds. Defendant does not inspect goods before shipping, as third parties fulfill orders and ship products in defendant’s branded packaging. In 2018, plaintiff notified defendant of infringing products listed on defendant’s website. Defendant removed those listings and requested that plaintiff notify it of additional listings it wanted removed. After finding additional infringing products, plaintiff sent a second notice the next day. A year later, plaintiff sued defendant under various trademark theories. The district court granted summary judgment for defendant on all of plaintiff’s claims except the contributory infringement and counterfeiting claims. The parties went to trial on those claims, and a jury found defendant liable for: (1) willful contributory counterfeiting of two of plaintiff’s marks; (2) contributory infringement of those two marks; and (3) contributory infringement of unregistered trademarks variations. After the verdict, the district court granted defendant’s motion for judgment as a matter of law on the contributory counterfeiting claim for one of the marks. The lower court let the verdict stand for the remaining claims, and denied plaintiff a permanent injunction, attorney fees, and prejudgment interest. Affirming in part and denying in part, the Ninth Circuit stated: “We hold that contributory trademark liability requires knowledge of specific infringers or instances of infringement.” (Y.Y.G.M. SA v. Redbubble, Inc. (9th Cir., July 24, 2023) 2023 WL 4697350.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/24/21-56150.pdf
DACA Student Denied Loan Doesn’t Have to Arbitrate Her Discrimination Claim.
Plaintiff is a noncitizen and participant in the Deferred Action for Childhood Arrivals program (DACA). In 2010, plaintiff applied for and received a student loan from a bank to pay for graduate school. The loan agreement included an arbitration agreement which provided that either party, including the bank’s successors or assigns, could elect binding arbitration for any claims “arising out of or in connection with [the] loan.” The agreement also included a delegation clause delegating to arbitration questions of “the application, enforceability or interpretation” of the arbitration provision. Defendant here, another bank, took ownership of the first bank loan in 2011 and currently holds the note. Defendant denied plaintiff a consolidation loan, and she sued claiming the denial was because defendant unlawfully discriminated against her based on citizenship and immigration status. The district court denied defendant’s motion to compel arbitration. Affirming, the Ninth Circuit stated: “Because [plaintiff] and [defendant] never formed an agreement to arbitrate her discrimination claims via the [first bank’s] agreement, [citation], that agreement does not require [plaintiff] to arbitrate her discrimination claims.” (Perez v. Discover Bank (9th Cir., July 24, 2023) 2023 WL 4697253.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/24/22-15322.pdf
Manageability of PAGA Claims in Trial Court.
In this wage and hour case, with a cause of action under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA), the trial court denied defendant’s motion to dismiss the case as unmanageable. There is a split in the appellate courts over whether trial courts may strike or dismiss PAGA claims for lack of manageability. (See Wesson v. Staples the Office Superstore, LLC (Cal. App. 2nd Dist., Div. 4, 2021) 68 Cal. App. 5th 746, 756 (holding that courts have inherent authority to strike unmanageable PAGA claims); Estrada v. Royalty Carpet Mills, Inc. (Cal. App. 4th Dist., Div. 3, 2022) 76 Cal. App. 5th 685, 697, review granted June 22, 2022, S274340 (holding that courts cannot strike PAGA claims on the basis of manageability concerns).) Affirming the trial court’s order in this case, the Court of Appeal stated: “We agree with the court in Estrada and hold that trial courts may not strike or dismiss a PAGA claim for lack of manageability. When faced with unwieldy PAGA claims, trial courts may limit the scope of the claims or the evidence to be presented at trial but may not prohibit PAGA plaintiffs from presenting their claims entirely.” (Woodworth v. Loma Linda University Medical Center (Cal. App. 4th Dist., Div. 2, July 24, 2023) 2023 WL 4701976.)
Plaintiff Must Bring Cause of Action Under 42 U.S.C. § 1983 When Seeking to Enforce Rights Secured by § 1981.
In Federation of African American Contractors v. City of Oakland (9th Cir. 1996) 96 F.3d 1204, the Ninth Circuit held that 42 U.S.C. § 1981 contains an implied cause of action against state actors. In the present case, the Ninth Circuit reversed itself, stating: “Our circuit has long held that a plaintiff may bring a cause of action against state actors alleging violations of 42 U.S.C. § 1981 under both § 1981 and 42 U.S.C. § 1983. Each of our sister circuits with jurisdiction over this question has disagreed. A majority of the active judges in our court voted to rehear this case en banc to reconsider our ruling that § 1981 provides an implied cause of action. Today, we join our sister circuits in holding that it does not.” (Yoshikawa v. Seguirant (9th Cir., July 25, 2023) 2023 WL 4722982.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/25/21-15970.pdf
Burden of Moving Party in Anti-SLAPP Motion.
In defendant’s anti-SLAPP motion brought pursuant to Code of Civil Procedure § 425.16, defendant did not link the specific claims for relief to protected activity, prompting the trial court to ask: “I’m supposed to guess what you want?” Affirming the lower court’s denial of the motion, the Court of Appeal stated: “If a defendant wants the trial court to take a surgical approach, whether in the alternative or not, the defendant must propose where to make the incisions.” (Park v. Nazari (Cal. App. 2nd Dist., Div. 5, July 25, 2023) 2023 WL 4729968.)
Federal Court Lacked Jurisdiction to Award Attorney Fees After Case Was Dismissed.
The district court dismissed an action brought under the Americans with Disabilities Act (42 U.S.C. § 12205; ADA) for lack of standing. Thereafter, the same court awarded attorney fees under the ADA to the defendant. The Ninth Circuit reversed because the lower court lacked jurisdiction to award fees after the case had been dismissed. (Fernandez v. 23676-23726 Malibu Road, LLC (9th Cir., July 26, 2023) 2023 WL 4754577.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/07/26/22-55626.pdf
Evidence of Later Molestation of Child Plaintiff.
Jane Doe sued her fourth-grade teacher for child molestation when she was eight years old. The teacher wanted to present evidence the child was later molested by someone else in order to show that he didn’t cause all of her emotional distress. The trial court ruled that evidence of later molestation was admissible. The California Supreme Court analyzed the various statutes involved:
· Evidence Code § 1106 (a) shields civil litigants who allege “sexual harassment, sexual assault, or sexual battery” by barring evidence of a “plaintiff’s sexual conduct;
· Evidence Code § 1106 (e) states that (a) does not render inadmissible evidence offered to attack the credibility of the plaintiff as provided in § 783; and
· Evidence Code § 783 (d) permits evidence of the sexual conduct of a plaintiff so long as it’s relevant and not more prejudicial than probative under Evidence Code § 352.
The Supreme Court held: “We conclude that section 1106, subdivision (e), may permit admission of evidence that would otherwise be excluded under section 1106, subdivision (a). But such admissibility is subject to the procedures set out in section 783 and especially careful review and scrutiny under section 352.” (Doe v. Superior Court of Los Angeles County (Cal., July 27, 2023) 2023 WL 4777801.)
Out-of-Network Health Care Provider Could Not Produce Evidence It Should Have Received More Money from Patients’ Insurance Company.
A health care provider contended an insurance company underpaid it for substance abuse treatment to patients. The process for out-of-network providers, such as plaintiff, is that before providing treatment to a patient, plaintiff contacts defendant to confirm the patient’s entitlement to benefits. This is known as a verification of benefits (VOB) call. During those calls, plaintiff asked only about benefits and not about the amount plaintiff could expect to be paid. Defendant paid plaintiff less money than plaintiff wanted, and plaintiff sued defendant for breach of oral contract, intentional and negligent misrepresentation, and other causes of action. The trial court entered summary judgment for the insurance company. Affirming, the Court of Appeal stated: “The difficulty with [plaintiff]’s challenge is that contrary to its contentions, no evidence was introduced showing United representatives conducting VOB calls used words objectively manifesting contractual offers or promises of payment.” (Aton Center, Inc. v. United Healthcare Insurance Company (Cal. App. 4th Dist., Div. 1, July 27, 2023) 2023 WL 4782433.)
Trial Court Erred in Denying Motion to Set Aside Default and Default Judgment.
Defendant filed a motion to set aside a default and default judgment due to attorney fault under Code of Civil Procedure § 473, subdivision (b). The trial court denied the motion without giving a reason. Vacating both entry of default and the default judgment, the Court of Appeal stated: “Here, the trial court denied defendant’s motion and gave no reason for its ruling. The record shows the filing was timely and was accompanied by an attorney’s affidavit of fault. Thus, the only bases for denying the motion to vacate the default judgment were that the application was not in proper form or that the default “was not in fact caused by” the attorney’s neglect. (§ 473(b).) We have considered both possibilities and conclude neither justifies denying the motion.” (Dollase v. Wanu Water, Inc. (Cal. App. 2nd Dist., Div. 8, July 28, 2023) 2023 WL 4835032.)
Woman to Stand Trial for Murder After Her Baby Died Shortly After Birth.
A pregnant woman had two previous babies removed by social services because she had drugs in her system when they were born. She delivered her third baby at home and cut the umbilical cord but did not properly clamp it. The baby bled to death. She was charged with implied malice murder and child endangerment. After she was bound over in a preliminary hearing, a new law came into effect on January 1, 2023, providing immunity from criminal or civil liability for a person’s acts or omissions with respect to their pregnancy or pregnancy outcome, including “perinatal death due to causes that occurred in utero.” (Health & Saf. Code, § 123467, subd. (a).) In a petition for writ of mandate, the woman contended she is immune from prosecution under the new law. Denying the writ, the Court of Appeal stated: “We agree that Carpenter cannot be prosecuted for her decision to have an unattended home birth or any effect that her alleged drug use or lack of prenatal care during pregnancy may have had on her baby. We conclude, however, that the law does not preclude the People’s prosecution of Carpenter for her acts and omissions after her daughter was born alive. Given the minimal showing the prosecution is required to make at a preliminary hearing, and after conducting an independent review of the record, we also conclude that there was sufficient cause—albeit by the thinnest of margins— to bind over Carpenter on the implied malice murder and felony child endangerment charges.” (Carpenter v. Superior Court of San Diego County (Cal. App. 4th Dist., Div. 1, July 28, 2023) 2023 WL 4835942.)
Father Not Entitled to His Daughter’s Therapy Records in Advance of Upcoming Custody Hearing.
Plaintiff is the father and sole guardian of minor, Jane Doe. Defendant is a licensed marriage and family therapist. When his daughter was seven years old, plaintiff was concerned for her well-being and brought her to defendant for treatment. Defendant provided therapy for the minor patient, which plaintiff paid for. On April 24, 2018, plaintiff emailed defendant, stating, “I would like all records that you have of my daughter from the first session to present.” Defendant responded stating that she was denying plaintiff’s request for his daughter’s treatment records because she had determined that it would have a detrimental impact on the minor patient’s well-being regarding the minor patient’s ability to trust in general and would negatively impact the patient-counselor relationship. Under Health and Safety Code § 123110, the personal representative of a minor is entitled to access the minor’s patient records with certain statutory exceptions. Plaintiff filed suit against defendant to compel release of his daughter’s therapy records. The trial court granted summary judgment for defendant. Affirming, the Court of Appeal noted that Health and Safety Code § 123115, subdivision (a)(2) mandates that the representative of a minor shall not be entitled to the minor’s patient records when the health care provider determines that access to them would have a detrimental effect on the provider’s professional relationship with the minor. The appeals court also pointed out that the defendant was concerned that plaintiff would use the records to coach his daughter in an upcoming custody hearing. (Vilches v. Leao (Cal. App. 1st Dist., Div. 4, July 28, 2023) 2023 WL 4839283.)
Procedures Universities Must Follow when Investigating Sexual Misconduct.
A University of Southern California (USC) student was found to have committed sexual misconduct and was expelled. The Court of Appeal held that USC’s disciplinary procedures were unfair because they denied the student a meaningful opportunity to cross-examine critical witnesses at an in-person hearing. Reversing the judgment of the Court of Appeal, the California Supreme Court stated: “We hold that, though private universities are required to comply with the common law doctrine of fair procedure by providing accused students with notice of the charges and a meaningful opportunity to be heard, they are not required to provide accused students the opportunity to directly or indirectly cross-examine the accuser and other witnesses at a live hearing with the accused student in attendance, either in person or virtually. . . . Instead, private organizations should ‘retain the initial and primary responsibility for devising a method’ to ensure adequate notice and a meaningful opportunity to be heard. (Ibid.) We accordingly reverse the Court of Appeal’s judgment.” (Boermeester v. Carry (Cal., July 31, 2023) 2023 WL 4858023.)
Sanctions Award for Misuse of the Discovery Process Reversed.
Plaintiff sued directors and staff of a structured sober living facility for dependent adult abuse. The trial court found plaintiff (Pollock) failed to comply with Code of Civil Procedure § 2031.210 because his statement of compliance in response to real party’s document requests failed to identify which documents would relate to which specific requests. The court imposed sanctions against plaintiff and his attorney in the amount of $910 for misusing the discovery process. Granting a writ of mandate, the Court of Appeal stated: “Based on the plain language of section 2031.210, a statement of compliance need not identify the specific request to which each document will pertain. Because Pollock substantially complied with his discovery responsibilities in this regard, the court’s imposition of sanctions was an abuse of discretion.” (Pollock v. Superior Court of Los Angeles County (Cal. App. 2nd Dist., Div. 1, July 31, 2023) 2023 WL 4861786.)