Litigation Update: December 2018

A monthly publication of the Litigation Section of the California Lawyers Association

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District
  • Managing Editor, Reuben Ginsburg
  • Editors, Dean Bochner, Glenn Danas, Herb Fox, Jessica Riggin, Anne Voigts and Kenneth Wang
A Substantial Limitation in a Life Activity under the Americans with Disabilities Act.

Plaintiff, a delivery driver who primarily loaded and unloaded five-gallon water bottles, injured his shoulder and asked to be transferred to a part-time, less physical warehouse job. His request was approved and all set to go through until he informed his employer about his shoulder injury. Two days later, the employer allegedly rejected his transfer request and forced him to resign. Plaintiff sued his employer under the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.). A federal trial court granted the employer’s motion for summary judgment. Reversing, the Ninth Circuit Court of Appeals found the trial court erred in relying on evidence that plaintiff continued working even though he was in pain to conclude that he was not substantially limited in his ability to work. The appeals court stated, “for an impairment to substantially limit a major life activity it ‘need not prevent, or significantly or severely restrict’ the activity.’ [Citation.] In our view, a stabbing pain when raising one’s arm above chest height substantially limits the major life activity of lifting and possibly working.” (Nunies v. HIE Holdings, Inc. (9th Cir., Nov. 1, 2018) 908 F.3d 428.)

Confidentiality and Nondisclosure Agreements; Private Attorney General Fees.

Plaintiff sued a business competitor and several individuals who left their employment with plaintiff to work for the competitor. The former employees had signed a Confidentiality and Non-Disclosure Agreement (CNDA), which included a provision preventing them from soliciting any other employee of plaintiff for a one-year period. Plaintiff alleged various causes of action including breach of contract and misappropriation of trade secrets. Defendants filed a cross-complaint for declaratory relief and unfair competition. The trial court granted defendants summary judgment on both the complaint and cross-complaint. The Court of Appeal affirmed, finding that the CNDA was void under Business and Professions Code § 16600 as applied to the former employees. The appellate court also affirmed the granting of an injunction against future enforcement of the CNDA, and affirmed an award of private attorney general attorney fees to defendants pursuant to Code Civil Procedure § 1021.5. (AMN Healthcare, Inc. v. AYA Healthcare, Inc. (Cal. App. 4th Dist., Div. 1, Nov. 1, 2018) 28 Cal.App.5th 923.)

No Settlement Credit for Defendant Who Decided to go to Trial When Others Settled.

Plaintiff suffered from mesothelioma due to exposure to asbestos in defendants’ products. He settled with some defendants and went to trial against the others. A jury found in plaintiff’s favor. The defendants appealed, and plaintiff died while the appeal was pending. His children filed a wrongful death action. A jury found the children were entitled to damages. The trial court determined a defendant was entitled to credit for a prior settlement with one defendant, but was not entitled to credit for prior settlements with other defendants. The defendant challenged that ruling on appeal. Deferring to the trial court’s determination under the abuse of discretion standard of review, the Court of Appeal affirmed, noting the defendant had the burden of proving the children were bound by the underlying settlements, and defendant failed to meet its burden. (LAOSD Asbestos Cases (Cal. App. 2d Dist., Div. 4, Oct. 5, 2018) 28 Cal.App.5th 862.)

Remote Video Does Not Satisfy Confrontation Clause.

A criminal defendant was convicted of seven counts of trafficking and prostitution of seven minor girls. By the time of trial, one of the victims was seven months pregnant and unable to travel, so a federal trial court permitted her to testify remotely by two-way video. The Ninth Circuit Court of Appeals vacated the convictions on the two counts involving that victim and remanded the matter for resentencing on the remaining counts, stating: “Criminal defendants have a right to ‘physical, face-to-face confrontation at trial,’ and that right cannot be compromised by the use of a remote video procedure unless it is ‘necessary’ to do so and ‘the reliability of the testimony is otherwise assured.’ [Citation.] Because alternatives were available for obtaining [the witness’s] testimony that would have preserved [defendant’s] right to physical confrontation, the use of a remote video procedure was not necessary in this case.” The court added the most obvious alternative was to continue the trial until the witness could safely travel. (United States v. Carter (9th Cir., Nov. 2, 2018) 907 F.3d 1199.)

Petition for Review of Immigration Removal Denied Notwithstanding “Painful Outcome”.

A Chinese citizen with a bachelor’s degree in computer science accepted a job as a computer analyst in a small law office in California. The law firm successfully applied for an H-1B specialty occupation visa on his behalf. Shortly before the visa was due to expire, the law firm applied for an extension. Six months later, it was denied due to lack of evidence that he continued performing duties in line with a specialty occupation. Eventually, the Department of Homeland Security initiated removal proceedings, and the man petitioned for review of the order of removal. The governing statute, 8 U.S.C. § 1255(k), allows petitioners to apply for adjustment of status as long as they, among other requirements, “ ‘ha[ve] not, for an aggregate period exceeding 180 days . . . failed to maintain, continuously, a lawful status.’ ” The Ninth Circuit Court of Appeals noted that petitioner excelled at his job and was settled in his role of caring for his parents, both of whom were forced to flee China in 2012. The appeals court noted that removal would also mean that he would not be able to return to this country, and see his parents, for at least 10 years. But the court concluded that as moving as these considerations may be, the law required it to deny the petition. (Ma v. Sessions (9th Cir., Nov. 2, 2018) 907 F.3d 1191.)

Law Firm Fails to Enforce Arbitration Agreement in a Gender Discrimination Case.

An experienced litigator and patent practitioner with a doctorate in biophysics was hired as an “Income Partner” at a law firm. After allegedly being denied recognition for her work, excluded from career advancement opportunities, evaluated based on the success of her male colleagues, and denied compensation and bonuses to which she was entitled, the lawyer sued, alleging various state law causes of action for discrimination, retaliation, wrongful termination, and anti-fair-pay practices. The law firm moved to compel arbitration pursuant to a partnership agreement. Opposing arbitration, plaintiff argued she was an employee, not a partner; the arbitration agreement failed to comply with the requirements of Armendariz v. Foundation Health Psychcare Services (2000) 24 Cal.4th 83; and the arbitration agreement was unconscionable. The trial court found some provisions were unconscionable, severed those provisions, and ordered the case into arbitration. Plaintiff petitioned the Court of Appeal for a writ of mandate. The appellate court granted the petition, stating: “Under the framework set forth by our Supreme Court in Armendariz, we find the parties’ arbitration agreement is unconscionable. Further, because we cannot remove the taint of illegality by severing the unlawful provisions without altering the nature of the parties’ agreement, we must void the entire agreement to arbitrate.” (Ramos v. Superior Court (Cal. App. 1st Dist., Div. 1, Nov. 2, 2018) 28 Cal.App.5th 1042.)

Attorney Fees for Successful Plaintiff on Fair Labor Standards Act Claim.

A jury awarded plaintiff $380,500 on her claim for wrongful termination in violation of the Fair Labor Standards Act (29 U.S.C. § 201 et seq.; FLSA). The court awarded plaintiff an additional $689,310.04 in attorney fees and $50,591.69 in costs. Defendant challenged the award of fees and costs on appeal. Affirming, the Court of Appeal stated: “We hold, in this case of first impression, that federal law applies to the determination of what type of costs are recoverable by a prevailing party in an FLSA action filed in state court. Section 216(b) provides that any employer who wrongfully terminates the employment of an employee in retaliation for filing an FLSA action shall . . . pay the employee’s reasonable attorney fees and costs. . . . Federal courts have construed section 216(b) to authorize awarding a prevailing employee a broad measure of costs, which include copying, postage, and mediation expenses.” (Quiles v. Parent (Cal. App. 4th Dist., Div. 3, Nov. 2, 2018) 28 Cal.App.5th 1000.)

Father Balks at Being Restrained from Seeing His Children Because They Were Never in the Line of Fire When He Beat Their Mother.

In a juvenile dependency case, the superior court issued a permanent restraining order that restricted the father from contacting the mother and their children. On appeal, the father argued that the portion of the order protecting the children was not supported by substantial evidence because the children “were ‘never in the line of fire’” when he beat their mother. Affirming, the Court of Appeal concluded that “the children were indeed at risk of physical harm and, in any event, father’s lengthy history of domestic violence against mother and the parents’ frequent reconciliations justify the minors’ inclusion in the restraining order.” (In re Bruno M. (Cal. App. 2nd Dist., Div. 3, Nov. 2, 2018) 28 Cal.App.5th 990.)

Drawing Attention to One’s Vehicle May Have Consequences.

A police officer stopped defendant because he was driving a car with illegally tinted windows. Accompanying the officer was a narcotics-certified dog. Another officer arrived at the scene and was in the process of writing defendant a citation for the tinting violation when the dog alerted the officers to something inside the car. Various bags of illegal substances were subsequently found in the vehicle. The trial court denied defendant’s pretrial motion to suppress evidence, and defendant was ultimately convicted of possessing a controlled substance. On appeal, he argued that the trial court should have suppressed evidence of drugs in the vehicle because the stop was unreasonably prolonged by the dog sniff. The Court of Appeal affirmed the conviction, concluding that the stop was not unreasonably prolonged. (People v. Vera (Cal. App. 4th Dist., Div. 2, Nov. 5, 2018) 28 Cal.App.5th 1081.)

State and Local Governments Are Employers Covered by ADEA.

After the Mount Lemmon Fire District laid off its two oldest full-time firefighters, the firefighters sued, alleging age discrimination in violation of the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.; ADEA). The district sought dismissal on the ground it was too small to qualify as an employer under § 630(b) of the act, which defines “employer” as “a person engaged in an industry affecting commerce who has twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State . . . .” The U.S. Supreme Court held that state and local governments are employers covered by ADEA regardless of their size, explaining that the statute’s “two-sentence delineation, and the expression ‘also means’ at the start of the second sentence, combine to establish separate categories: persons engaged in an industry affecting commerce with 20 or more employees; and States or political subdivisions with no attendant numerosity limitation. ‘[T]wenty or more employees’ is confining language, but the confinement is tied to [the statute’s] first sentence, and does not limit the ADEA’s governance of the employment practices of States and political subdivisions thereof.” (Mount Lemmon Fire District v. Guido(U.S., Nov. 6, 2018) 139 S.Ct. 22.)

Dinosaur Fossils Found to be Minerals.

An amateur paleontologist uncovered valuable dinosaur fossils on a ranch owned by plaintiffs. A year earlier, the previous owners sold their surface estate and one-third of the mineral estate to plaintiffs, expressly reserving the remaining two-thirds of the mineral estate. Plaintiffs and the previous owners brought dueling declaratory relief actions, each claiming ownership of the fossils. The district court granted summary judgment for the plaintiffs. Reversing, the Ninth Circuit held that the fossils were minerals. (Murray v. BEJ Minerals, LLC, (9th Cir., Nov. 6, 2018) 908 F.3d 437.)

Claim Preclusion.

Plaintiff came to this country with his parents in 1990 at age 11. In 1995, he created a false Social Security number (SSN) to get a job. Plaintiff used the made-up SSN for the next two years, until he obtained a legitimate SSN. He became a U.S. citizen in 2011. Plaintiff twice applied for a correctional officer position with the California Department of Corrections and Rehabilitation (CDCR). Both times he answered “yes” to the question: “Have you ever had or used a social security number other than the one used on this questionnaire?” After he was told he was not eligible to become a correctional officer, plaintiff appealed unsuccessfully to the State Personnel Board (SPB). He subsequently sued CDCR and SPB in federal court, alleging employment discrimination in violation of federal and state statutes. The district court dismissed the state claims, which limited his potential recovery. Plaintiff filed an action in superior court, seeking general damages. After final judgment was entered for plaintiff in the federal action, the superior court dismissed the state action under claim preclusion principles. The Court of Appeal reversed, stating: “Under federal law, . . . there is a well-recognized exception to claim preclusion rules where jurisdictional limitations in a prior suit blocked the plaintiff’s request for complete relief, as was the case here.” (Guerrero v. California Department of Corrections and Rehabilitation (Cal. App. 1st Dist., Div. 4, Nov. 6, 2018) 28 Cal.App.5th 1091.)

No Anti-SLAPP Motion in Limited Jurisdiction Case.

The superior court appellate division ordered the trial court to decide the merits of an anti-SLAPP motion brought against a homeowners association (HOA). The HOA petitioned for a writ of mandate, arguing that an anti-SLAPP motion may not be made in a limited civil action. Granting writ relief, the Court of Appeal concluded that “the restrictive language of [Code of Civil Procedure] section 92(d), which limits the type of motions to strike that may be brought in a limited civil case, precludes the filing of a special motion to strike in such a case.” (1550 Laurel Owner’s Association, Inc. v. Appellate Division of Superior Court of Los Angeles County (Cal. App. 2nd Dist., Div. 3, Nov. 7, 2018) 28 Cal.App.5th 1146)


A group of educators, public entities, unions, and individuals filed suit in federal court in California challenging the Department of Homeland Security’s rescission of Deferred Action for Childhood Arrivals (DACA). DACA allows those noncitizens who entered the United States as children, who have clean criminal records and meet various other requirements, to apply for two-year renewable periods of deferred action as to deportation. In 2017, the government moved to end the DACA program, arguing it was illegal from its inception. The district court granted plaintiffs an injunction. Affirming, the Ninth Circuit Court of Appeals stated: “The government’s decision to rescind DACA is subject to judicial review. And, upon review, we conclude that plaintiffs are likely to succeed on their claim that the rescission of DACA—at least as justified on this record—is arbitrary, capricious, or otherwise not in accordance with law.” (Regents of the University of California v. United States Department of Homeland Security (9th Cir., Nov. 8, 2018) 908 F.3d 476.)

Grand Jury Subpoenas and the Fifth Amendment.

A man is the subject of an ongoing grand jury investigation concerning obstruction of justice, tax evasion, and bankruptcy fraud. A grand jury issued 12 subpoenas to the custodian of records of the various entities in which the man has an interest. The man is the custodian of records for each, and he objected and refused to produce the requested documents. He argued that he was either sole shareholder, officer, or member of the various entities and that because he was the individual responsible for accounting and document preparation the compelled production of the documents would incriminate him personally. He therefore contended his Fifth Amendment right against self-incrimination protected him from complying with the subpoenas. A federal district court ordered him to comply with the subpoenas. He again refused, so he was held in contempt. Affirming, the Ninth Circuit Court of Appeals stated: “We join all of our sister circuits to have considered the issue in holding that the Fifth Amendment provides no protection to a collective entity’s records custodians—and that the size of the collective entity and the extent to which a jury would assume that the individual seeking to assert the privilege produced the documents are not relevant.” (In re Twelve Grand Jury Subpoenas(9th Cir., Nov. 8, 2018) 908 F.3d 525.)

Child Has Two Fathers.

A married woman bore the child of a coworker. Her marriage remained intact. The biological father (the coworker) filed a petition seeking confirmation of his parental rights. The trial court found the child was bonded with all three parents and that both the husband and the biological father were presumed fathers of the child. On appeal, the mother and her husband contended that by statute (Fam. Code, § 7540) the husband was conclusively presumed to be the child’s father, and that the child cannot have more than one father. The Court of Appeal affirmed, noting mother’s and husband’s argument was that a conclusive presumption is exclusive, stating, “this view does not comport with the statutory scheme or extant precedent.” (C.A. v. C.P. (Cal. App. 3rd Dist., Nov. 13, 2018) 29 Cal.App.5th 27.)

No Code of Civil Procedure § 998 Award of Costs and Fees in a FEHA Action Unless the Lawsuit Was Frivolous.

A restaurant worker was fired after a physical altercation with another worker. The jury found against his claim for harassment under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). Postjudgment, the trial court found plaintiff’s suit was not frivolous and denied defendant’s motion for attorney fees and costs under Government Code § 12965, but awarded defendant $50,000 in costs and expert fees under Code of Civil Procedure § 998 because plaintiff had rejected defendant’s offer to compromise. The Court of Appeal reversed the award of costs and fees because § 998 does not apply in nonfrivolous FEHA actions when a plaintiff refuses a defendant’s reasonable offer to compromise. The appellate court noted a statutory amendment effective January 1, 2019, will prohibit an award of fees and costs in favor of a prevailing defendant in a FEHA action unless the lawsuit was frivolous, and stated: “For litigation that predates the application of the amended version of section 12965(b), we hold section 998 does not apply to nonfrivolous FEHA actions and reverse the order awarding defendant costs and expert witness fees pursuant to that statute.” (Huerta v. Kava Holdings, Inc. (Cal. App. 2nd Dist., Div. 8, Nov. 14, 2018) 29 Cal.App.5th 74.)

Statute of Limitations in a Legal Malpractice Action.

The plaintiff alleged his former lawyers committed malpractice in a transaction involving the sale of two private companies in 2005. Specifically, the plaintiff contended the sale initially was structured as a buyout, but his former lawyers restructured it as a redemption without properly advising him. He filed his malpractice action on December 31, 2013, further alleging that he had later been sued for failing to properly disclose the nature of the transaction to others. The trial court granted the law firm’s motion for summary judgment. Affirming, the Court of Appeal found the plaintiff was on inquiry notice by October 2012 when he hired other lawyers to defend him after he was sued over not disclosing the nature of the 2005 transaction. With regard to whether plaintiff had sustained actual injury, the appellate court stated there was evidence that plaintiff incurred more than $2,000 in attorney fees more than a year before he filed the legal malpractice lawsuit, and he was seeking those fees as damages in the malpractice action. Thus, plaintiff’s claim was not timely under the one-year statute of limitations found in Code of Civil Procedure § 340.6, subdivision (a). (Genisman v. Carley (Cal. App. 6th Dist., Nov. 14, 2018) 29 Cal.App.5th 45.)

No Class Action Permitted in Construction Defect Case Where Defendant’s Products Were Manufactured Entirely Offsite.

Homeowners filed a class action against the manufacturer of plumbing products that were installed at the time the condominiums were constructed. The Right to Repair Act (Civ. Code. §§ 895-945.5) establishes a prelitigation dispute resolution process for alleged construction defects before homeowners have a right to sue. In this case, the Court of Appeal concluded that class actions are not allowed under the act except in one limited context: “to assert claims that address solely the incorporation into a residence of a defective component, unless that component is a product that is completely manufactured offsite.” The allegedly defective products in this case were manufactured entirely offsite, precluding a class action. (Kohler Co. v. Superior Court (Cal. App. 2nd Dist., Div. 4, Nov. 14, 2018) 29 Cal.App.5th 55.)

Jury Selection.

A minor suffered injuries when he fell from a tree branch at his middle school. The trial court denied plaintiff’s request to permit mini-opening statements during voir dire. The Court of Appeal affirmed, finding no abuse of discretion. The appellate court also rejected a challenge to the trial court’s refusal to excuse two jurors for cause. The appellate court noted that both jurors expressly stated they could keep an open mind. (Alcazar v. Los Angeles Unified School Dist. (Cal. App. 2nd Dist., Div. 1, Nov. 15, 2018) 29 Cal.App.5th 86.)

Travel Time Not Compensable.

In a class action, plaintiffs sought compensation for the time they spent traveling in a company vehicle loaded with equipment and tools between their homes and the worksite. The trial court concluded the travel time was not compensable. Affirming, the Court of Appeal stated: “The Home Dispatch Program is not compulsory; because plaintiffs here were not required to use the company vehicle to commute to work, they were not under the control of the employer. Further, simply transporting tools and equipment during commute time is not compensable work where no effort or extra time is required to effectuate the transport.” (Hernandez v. Pacific Bell Telephone Co. (Cal. App. 3rd Dist., Nov. 15, 2018) 29 Cal.App.5th 131.)

Mixed-Motive Claims of Racism Are Cognizable Under 42 U.S.C. § 1981.

Plaintiff, an African American-owned operator of television networks, sought a contract with defendant, a communications business usually referred to as a “cable company.” Plaintiff contended defendant’s refusal to enter into a carriage contract was racially motivated and violated 42 U.S.C. § 1981. A federal district court denied defendant’s motion to dismiss the action, recognizing that defendant has some First Amendment protection, but declining to apply strict scrutiny and bar the § 1981 claim. Affirming, the Ninth Circuit Court of Appeals held the First Amendment does not bar the plaintiff’s claim and stated: “mixed-motive claims are cognizable under § 1981. Even if racial animus was not the but-for cause of a defendant’s refusal to contract, a plaintiff can still prevail if she demonstrates intent was a factor in that decision such that she was denied the same right as a white citizen.” (Nat’l Ass’n of African American-Owned Media v. Charter Communications., Inc. (9th Cir., Nov. 19, 2018) 908 F.3d 1190.)

Drawing City Council Districts.

At least once every ten years, the City of Los Angeles must redraw the boundaries of its council districts. Certain ethnic communities have been divided between council districts for decades, diluting their voting power. Plaintiffs contended the city was motivated predominantly by racial considerations in drawing the current council districts. A federal district court granted summary judgment to the city. Affirming, the Ninth Circuit Court of Appeals stated: “On this record, we conclude that Plaintiffs have failed to raise a genuine issue of material fact on whether racial considerations predominated the City’s redistricting process. We further agree with the district court that legislative privilege protects local officials from being deposed. We therefore affirm the district court’s protective order and its order granting summary judgment in favor of the City.” (Lee v. City of Los Angeles (9th Cir., Nov. 19, 2018) 908 F.3d 1175.)

Personal Injury Jury Verdict Reversed Because Court Abused its Discretion in Permitting Hearsay Evidence.

Plaintiff alleges he developed mesothelioma as a result of exposure to asbestos-containing products supplied by the defendant. Plaintiff’s former supervisor testified that he observed plaintiff cut and bevel asbestos-cement pipe without any respiratory protection, and that the pipe had been manufactured by another entity. However, the supervisor thought the pipe was supplied by defendant because he saw defendant’s name on the invoices, but he could not recall how defendant’s name was written on the invoices. Prior to trial, defendant unsuccessfully moved to exclude the supervisor’s testimony, arguing it was based upon inadmissible hearsay. A jury found in plaintiff’s favor and awarded substantial damages. Reversing, the Court of Appeal found the trial court abused its discretion by admitting the supervisor’s testimony, stating: “[The supervisor’s] belief that [defendant] supplied the asbestos-cement pipe was based on his review of invoices or delivery tickets. The wording on these invoices or delivery tickets were out-of-court statements offered to prove the truth of the matter asserted: namely, that [defendant] supplied the pipes. The invoices described by [the supervisor] were hearsay. . . . [¶] Furthermore, [the supervisor’s] testimony, standing alone, was insufficient to prove the pipe [he] saw on the truckers’ loads was asbestos-cement pipe supplied by [defendant]. . . . Critically, he lacked personal knowledge of who the supplier was. His testimony was inadmissible for this reason.” (Hart v. Keenan Properties, Inc. (Cal. App. 1st Dist., Div. 5, Nov. 21, 2018) 2018 Cal. App. LEXIS 1077.)

Police Officer Shot a Man in the Back.

Police received a report that a man was approaching a shopping center armed with a concealed handgun. A police officer, who suspected a robbery was about to occur since the shopping center had experienced two recent robberies, approached the man to investigate. The man fled, and the police officer fatally shot him in the back. In the subsequent civil rights action, the decedent’s family alleged that the police officer violated the decedent’s Fourth and Fourteenth Amendment rights. A federal district court denied the police officer’s qualified immunity-based motion for summary judgment. The Ninth Circuit Court of Appeals dismissed the appeal as to the Fourteenth Amendment claim, and reversed as to the Fourth Amendment claim, stating with regard to the initial stop that the district court erred because the police officer did not violate any clearly established law. (Foster v. City of Indio (9th Cir., Nov. 20, 2018) 908 F.3d 1204.)

Action for Trademark Infringement to go Before a Jury.

Plaintiff is the creator of a popular YouTube video about a honey badger. He trademarked honey badger catchphrases for assorted goods, including greeting cards. At a point in time when plaintiff was negotiating licensing agreements for the use of his trademarked material in various products, including greeting cards, defendants began using the same catchphrases in their own greeting cards. The plaintiff brought this suit for trademark infringement, and the district court granted summary judgment for defendants, holding that plaintiff’s claims were barred by the test set forth in Rogers v. Grimaldi (2d Cir. 1989) 875 F.2d 994. The Rogers test construes the Lanham Act (15 U.S.C. § 1051) to apply to expressive works “only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.” Reversing, the Ninth Circuit Court of Appeals found the Rogers test tipped in favor of protection, stating: “A jury could determine that this use of [plaintiff’s] mark is explicitly misleading as to the source or content of the cards.” (Gordon v. Drape Creative, Inc. (9th Cir., Nov. 20, 2018) 909 F.3d 257.)

Unjust Enrichment.

Plaintiff and the owner of a vacant lot entered into a contract by which plaintiff agreed to seek tax reductions on the lot on a contingency fee basis. Plaintiff succeeded in reducing the tax by almost $140,000, and was to receive $42,000 in fees. Before the tax refund was paid, however, defendants acquired the property in a nonjudicial foreclosure sale. Upon assuming ownership, defendants paid the delinquent taxes in the reduced amount achieved by plaintiff’s successful tax appeals. Plaintiff filed an action for unjust enrichment and conversion. The trial court sustained defendants’ demurrer to both causes of action. The Court of Appeal affirmed with regard to the conversion cause of action, but reversed as to the cause of action for unjust enrichment, stating, “the complaint states sufficient facts that defendants knew or had reason to know of plaintiff’s right and interest in a percentage of the tax refund, they benefitted in the form of a reduced tax liability, and their retention of those benefits without payment to plaintiff was unjust.” (Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (Cal. App. 2nd Dist., Div. 8, Nov. 20, 2018) 2018 Cal. App. LEXIS 1051.)

The Five-year Rule in a Class Action.

Stuntmen, Inc., a loan-out company for the services of a writer and director, brought a class action seeking class members’ share of profits from the distribution of motion pictures on home video formats. The case was filed on January 29, 2013. At the outset of the case, a 43-day stay was issued. Assuming 43 days of tolling, the case had to be brought to trial by April 16, 2018. The defense moved to dismiss the action on March 26, 2018 for failure to bring it to trial within five years pursuant to Code of Civil Procedure §§ 583.310 and 583.360. At that point, the petition for class certification had not yet been decided. The trial court denied the motion to dismiss and advanced the case on the trial calendar, setting it for a trial to start on April 10, 2018, the same date as the hearing on plaintiffs’ motion for class certification. Defendants filed a petition for writ of mandate in the Court of Appeal. Granting the petition and ordering the trial court to dismiss the entire case, the appellate court stated that even assuming there was a 43-day tolling period, “the trial court’s order granting trial preference and setting the trial for April 10, 2018, the same date on which plaintiff’s motion for class certification was to be heard, was a manifest abuse of discretion.” (Warner Bros. Entertainment Inc. v. Superior Court (2nd Dist., Div. 8, Nov. 20, 2018) 2018 Cal. App. LEXIS 1054.)

County Owed a Duty of Due Care in Rescue Efforts.

Going for a ride on his mountain bike, a bicyclist told his wife and four children he was going to ride through the Cleveland National Forest. He was due to return at 2:00 p.m. His wife tried calling him at 3:00 p.m. and finally reached him at 5:14 p.m. The bicyclist stated he had fallen and was injured; he sounded disoriented and confused. The wife called various governmental agencies for help, but no one answered. She then called 911. A sheriff’s lieutenant who was not trained in search and rescue techniques was appointed the “Incident Commander” for the case. The sheriff’s department decided to delay looking for the bicyclist until the next morning. The bicyclist succumbed to hypothermia and was found dead midmorning by a member of a volunteer rescue unit. The family sued the county for wrongful death. The trial court sustained defendant’s demurrer without leave to amend. Reversing, the Court of Appeal stated: “Assuming the foregoing facts are true, the Sheriff’s Department, through its actions, undertook the responsibility of rescuing the victim because the Sheriff’s Department was actively involved in all aspects of locating the victim, and by appointing an Incident Commander, the Sheriff’s Department signaled that it was taking control of the rescue. Therefore, the Sheriff’s Department had the duty to exercise due care in performing the rescue, which means (a) using reasonable care not to increase the risk of harm, and (b) following through in a reasonable manner after inducing reliance on the rescue. [¶] . . . [¶] In sum, the trial court erred by ruling the County did not owe a duty of care.” (Arista v. County of Riverside (4th Dist., Div. 2, Nov. 21, 2018) 2018 Cal. App. LEXIS 1056.)

Double Jeopardy.

A criminal defendant in federal court was convicted of four separate crimes of possessing child pornography. The government argued that storing child pornography images on separate media, a Dropbox and three separate hard drives, amounted to four separate offenses. He was sentenced to four concurrent 66-month terms in prison. He appealed, arguing the double jeopardy clause of the Fifth Amendment protects against multiple criminal punishments for the same offense. The Ninth Circuit Court of Appeals reversed, finding that simultaneous possession of the same images on separate devices constitutes a single violation. The appeals court instructed the district court to vacate the convictions on three counts and resentence defendant on one count of possession of child pornography. (United States v. Chilaca (9th Cir., Nov. 26, 2018) 2018 U.S. App. LEXIS 33136.)

Intimate Contact Does Not Constitute Minimum Contacts.

A woman living in California conceived a child in another state. She filed a paternity and child support suit in California against a man living in Connecticut. The man moved to quash service of summons based on lack of personal jurisdiction. The trial court denied the motion. The Court of Appeal reversed, stating the man’s knowledge that the mother resided in California and the foreseeability of California effects (the birth of a child) from their out-of-state sexual intercourse were insufficient to establish the requisite minimum contacts. The appellate court explained that special jurisdiction rests on the man’s own suit-related contacts with California, not merely contacts with a plaintiff who lives here. (David L. v. Superior Court (Cal. App. 4th Dist., Div. 1, Nov. 26, 2018) 2018 Cal. App. LEXIS 1067.)

Evidence Inadmissible at Trial May be Considered on a Class Certification Motion.

Nurses filed a class action against a medical center, alleging wage and hour violations. In support of their motion for class certification, plaintiffs filed a declaration by a paralegal at plaintiff’s counsel’s firm describing how plaintiffs had not been fully compensated. A federal trial court sustained defendant’s objections to the declaration, concluding it was inadmissible, and denied class certification. The Ninth Circuit Court of Appeals reversed for several reasons, including the district court’s error in striking the declaration at a preliminary stage. The appeals court stated that in ruling on class certification the trial court may not decline to consider evidence solely on the basis that the evidence is inadmissible at trial. (Sali v. Corona Regional Medical Center (9th Cir., Nov. 27, 2018) 2018 U.S. App. LEXIS 33250.)

Critical Habitat.

A group of landowners challenged the designation made by the Secretary of the Interior pursuant to the Endangered Species Act (16 U.S.C. § 1531) that their land is critical habitat for the endangered dusky gopher frog. More than 98% of the forests where the frogs had lived have been removed to make way for urban development, agriculture, and timber plantations. By 2001, the known wild population of the dusky gopher frog had dwindled to a group of 100 at a single pond in southern Mississippi. The landowners claim land cannot be critical habitat because it is not habitat, which they contend refers only to areas where the frog could currently survive. In its opinion, the U.S. Supreme Court notes that when the dusky gopher frog was designated an endangered species in 2001, there was no designation of its critical habitat “due to resource restraints.” In 2010, however, the Fish and Wildlife Service proposed the landowners’ property as critical habitat, adding that designating those lands “would not adequately ensure the frog’s conservation.” Vacating a decision of the Fifth Circuit Court of Appeals, the high court stated the Endangered Species Act requires that when the secretary designates an endangered species he must also designate any critical habitat. The matter was remanded to the lower court for a determination of the term “habitat.” (Weyerhaeuser Co. v. United States Fish and Wildlife Service (U.S., Nov. 27, 2018) 139 S. Ct. 361.)

Plaintiff Excused from Producing Evidence of Defendant’s Financial Condition to Support Award of Punitive Damages.

Defendant’s two dogs entered plaintiff’s property and attacked his alpacas. Plaintiff caught and leashed one of the dogs, an unneutered pitbull, and held it for animal control, as he had previously been instructed to do by animal control. Defendant, her teenage son, and another young man demanded the return of the pitbull. Plaintiff explained why he was not returning the dog. Defendant and the two men then entered plaintiff’s property and punched and beat plaintiff, causing serious injuries. The trial court awarded plaintiff $9,000 in special damages, $100,000 in general damages, and $100,000 in punitive damages. On appeal, defendant argued that plaintiff failed to produce evidence of her net worth, so the punitive damages award was unsupported. The Court of Appeal found that defendant’s failure to comply with discovery demands excused plaintiff from presenting evidence of defendant’s financial condition. (Morgan v. Davidson (4th Dist., Div. 2, Nov. 27, 2018) 2018 Cal. App. LEXIS 1082.)


A former employee and participant in defendant’s retirement plans sued the company for allegedly investing retirement funds in violation of the Employee Retirement Income Security Act (29 U.S.C. § 1001 et seq.). Relying on the statute of limitations, a federal trial court granted summary judgment for defendant. Reversing, the Ninth Circuit Court of Appeals held that, while defendant produced evidence that plaintiff knew about the investments for years, “he was required to have actual knowledge both that those investments occurred, and that they were imprudent.” (Sulyma v. Intel Corp. Investment Policy Committee (9th Cir., Nov. 28, 2018) 2018 U.S. App. LEXIS 33361.)

Voluntary Undertaking and Gross Negligence.

Plaintiff, a parent of a child who plays water polo, brought a putative class action against USA Water Polo alleging negligence, breach of voluntary undertaking, and gross negligence, contending USA Water Polo failed to implement concussion-management and return-to-play protocols for its youth water polo league. Plaintiff’s daughter was returned to play as a goalie in a youth water polo tournament after being hit in the face by the ball and while manifesting concussion symptoms. After her return to the game, the child received additional hits to the head that aggravated her initial injury. As a result, she suffered from severely debilitating post-concussion syndrome. A federal trial court dismissed the suit under Federal Rules of Civil Procedure, rule 12(b)(6) for failure to state a claim under California law. Reversing, the Ninth Circuit Court of Appeals held: “The failure of USA Water Polo to promulgate safety rules that would have protected [the child] is sufficient to support a voluntary undertaking claim.” With regard to gross negligence, the appeals court stated: “USA Polo was well-aware of the severe risk of repeat concussions and of the need to implement a policy to remove players from play after suffering a head injury. USA Water Polo’s inaction in the face of substantial evidence of risk of harm, constitutes ‘an extreme departure from the ordinary standard of conduct,’ and amounts to gross negligence under California law.” (Mayall v. USA Water Polo(9th Cir., Nov. 28, 2018) 2018 U.S. App. LEXIS 33359.)

“Beauty may be in the eye of the beholder but legal ambiguity is not,” Court of Appeal regarding an easement.

An easement was granted in 1994. The grantor, then owner of the burdened property, granted to the owner of the dominant property an easement: “Providing Grantee access, ingress and egress to vehicles and pedestrians over Grantors’ real property from Green Meadows Road to Grantees’ real property.” Years later, both the grantor and grantee of the easement sold their property to the present litigants. Respondent purchased the grantor’s property, and appellant purchased the grantee’s property. The original intention for the easement was to provide access for a gardener who worked on the dominant estate about three times a month. But the present owner of the dominant property, appellant here, is a licensed real estate broker who purchased the property with the intention of developing it as an estate property. The easement was “necessary to carry out his plan.” The trial court ruled the easement was ambiguous and limited the easement to its historical use. The Court of Appeal reversed, remanding the matter to the trial court to prepare a new judgment consistent with these general principles: “1. A broad grant of a right-of-way easement ‘will ordinarily be construed as creating a general right of way capable of use . . . for all reasonable purposes.’ . . . 2. ‘[A] bona fide purchaser for value who acquires his interest in real property without notice of another’s asserted rights in the property takes the property free of such unknown rights.’” (Zissler v. Saville (Cal. App. 2d Dist., Div. 6, Nov. 29, 2018)

Another Slant on Code of Civil Procedure § 998.

Under Probate Code §§ 500-550, in some circumstances a plaintiff may serve a complaint on the decedent’s insurer, and recovery of damages is limited to the policy limits. Plaintiff was injured when the insured ran a red light and collided with her vehicle. By the time of the lawsuit, the insured was deceased and there was no estate from which plaintiff could recover. However, the decedent had purchased $100,000 insurance policy from Allstate prior to the accident. Plaintiff served the complaint on Allstate, and prior to trial also served an offer to compromise pursuant to Code of Civil Procedure § 998 for $99,999. Allstate did not accept the offer, and a jury awarded plaintiff $180,613.86. The trial court declined to award plaintiff costs under § 998 because the named defendant was an estate. Reversing, the Court of Appeal stated the named defendant was a legal fiction and the insurance company accepted service of process, hired counsel, and made all the litigation decisions, and, “we find it manifestly unfair that section 998 could be employed by Allstate to recover costs from the plaintiff (which costs it would have no obligation to pay to the estate), but Allstate would have no corresponding responsibility to pay costs merely because it is not a named party.” (Meleski v. Estate of Hotlen (Cal. App. 3d Dist, Nov. 29, 2018) 2018 Cal. App. LEXIS 1094.)

Private Attorney General Attorney Fees; Poverty as a Factor.

An association of retired police officers intervened in an action by the City of Oakland relating to the calculation of retirement benefits. The association was successful on appeal. On remand, the trial court denied the association’s motion for attorney fees under California’s private attorney general statute (Code Civ. Proc., § 1021.5). The Court of Appeal reversed, stating: “In sum, we believe that the facts mentioned above—including the relative poverty of the Association and its members—are all valid considerations in a section 1021.5 fee analysis and tip the scales decisively in favor of a fee award in these proceedings . . . .” (City of Oakland v. Oakland Police & Fire Retirement System (Cal. App. 1st Dist., Div. 4, Nov. 29, 2018) 2018 Cal. App. LEXIS 1097.)

Me Too Class Action.

Plaintiffs filed a class action against defendant alleging various wage and hour violations. Different plaintiffs later filed a second and separate class action against the same defendant, making similar allegations. The original plaintiffs amended their complaint to include the allegations of the second class action and then entered into a settlement with defendant. At that point, the plaintiffs in the second class action moved to intervene in the original class action. The trial court denied the motion. Agreeing with the trial court that the proposed intervenors were not entitled to mandatory intervention (Code Civ. Proc., § 387, subd. (b)) and that the trial court did not abuse its discretion in denying permissive intervention (Code Civ. Proc., § 387, subd. (a)), the Court of Appeal affirmed. (Edwards v. Heartland Payment Systems, Inc. (Cal. App. 2d Dist., Div. 8, Nov. 30, 2018) 2018 Cal. App. LEXIS 1104.)

An Insurer May Not File an Action Asserting Claims Solely as a Subrogee of a Suspended Corporation.

An insurance company sued certain subcontractors to recover attorney fees and costs it incurred in defending developers in a prior construction defect action. The insurer’s claims are based on subrogation to the rights of its additional insureds, the developers. The developers and related entities are suspended corporations and could not assert these claims on their own behalf. Defendant contractor moved for judgment on the pleadings, arguing the insurer is barred from prosecuting these claims. The trial court granted the motion. Affirming, the Court of Appeal stated: “An insurer may not file its own action to assert claims solely as a subrogee of a suspended corporation.” (Travelers Property Casualty Co. v. Engel Insulation, Inc. (Cal. App. 3d Dist., Nov. 30, 2018) 2018 Cal. App. LEXIS 1101.)


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