Litigation Update: February 2019

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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
Attorney Fees for Representing Someone Placed on the No Fly List.

In 2005, a doctor was detained at San Francisco International Airport while en route to Malaysia for a Stanford University conference. The doctor’s name was on the TSA’s No Fly list. After nine years of vigorous and fiercely contested litigation against the government, the doctor won a complete victory in 2014. Throughout the doctor’s ordeal, a civil rights firm represented her interests without pay, but with the understanding that if the doctor prevailed the firm could recover reasonable attorney fees and expenses pursuant to the Equal Access to Justice Act (28 U.S.C. § 2412). A federal trial court reduced the requested amount by 90 percent. The Ninth Circuit Court of Appeals sitting en banc held that in evaluating whether the government’s position is substantially justified, a trial court should look at whether the government’s positions were justified as a whole—not at whether they were justified at each stage of the litigation. Accordingly, the appeals court held the trial court erred in approaching the fees issue piecemeal. The matter was remanded for a determination of whether the government acted in bad faith, in which case the statutory limit of $125/hour would not be imposed, and for an award of reasonable fees, using the proper standard. (Ibrahim v. U.S. Dep’t of Homeland Sec. (9th Cir., Jan. 2, 2019) 912 F.3d 1147.)

There is a 30-day Statutory Stay Following a Judgment Permitting a Parent to Take a Child and Move out of California.

In a marital dissolution proceeding, on November 7, 2018, the trial court granted the mother permission to move with the couple’s child to another country. When the father became aware the move was planned for November 22, 2018, he filed an ex parte application for an order preventing the move until after December 7, which application the trial court denied. The father then petitioned the Court of Appeal for extraordinary relief. The appellate court granted the petition and ordered the lower court to vacate its order denying the ex parte application and enter a new order granting the application because Code of Civil Procedure § 917.7 requires a 30-day stay of a judgment or order allowing the removal of a child from California. (Lief v. Superior Court(Cal. App. 4th Dist., Div. 1, Jan. 2, 2019) 30 Cal.App.5th 868.)

♪♬♪♬“Potato, Potahto, tomato, tomahto. Let’s call the whole thing off,” ♪♬♪♬ George and Ira Gershwin.

A California administrative agency determined that three of plaintiff’s products are pesticides that should have been registered as such before being sold in California pursuant to Food and Agricultural Code §§ 12993 and 12999.4. Plaintiff was fined $784,000. A superior court denied plaintiff’s petition for administrative mandamus, and plaintiff appealed, contending its three products are a fertilizer, a soil penetrant, and a natural plant growth regulator. The Court of Appeal found that substantial evidence supported the agency’s determinations. (Caltec Ag Inc. v. Department of Pesticide Regulation (Cal. App. 5th Dist., Jan. 2, 2019) 30 Cal.App.5th 872.)

Previously we reported: Unclear if Unlimited vs. Limited Civil Action Vis-à-vis Attorney Fees in Labor Action.

The Labor Commissioner awarded $6,000 for unpaid wages to an employee. Pursuant to Labor Code § 98.2, the employer filed an unlimited civil case, which is actually a trial de novo pursuant to § 98.2, subdivision (a). In this de novo action, the Labor Commissioner gave notice it would represent the employee, but the caption on that notice, as well as other documents filed by both parties, indicated the de novo action was a limited civil case. Later, the superior court ordered discovery to proceed under limited civil jurisdiction statutes, Code of Civil Procedure §§ 94-96. Fifty-eight days after the employee prevailed again, the employee moved for attorney fees pursuant to Labor Code § 98.2, subdivision (c), which was within the permissible 60 days for an unlimited action, but not within the permissible 30 days for a limited civil action. The superior court awarded the employee $31,365 in attorney fees. In affirming the award of fees, the Court of Appeal noted there was evidence the employer intentionally withheld wages from the employee, and that the claim had a potential of a $60,000 recovery. (Stratton v. Beck (Cal. App. 2nd Dist., Div. 4, Feb. 14, 2017) 9 Cal.App.5th 483.)

The latest:

At the conclusion of its opinion, the Court of Appeal stated: “In the interest of justice, the parties are to bear their own costs of appeal.” When the case returned to the trial court, the court awarded the employee $57,420 in fees incurred on appeal and an additional $9,020 for fees incurred in opposing the employer’s motion to reconsider. The employer appealed, contending the appellate court’s order regarding costs deprived the trial court of jurisdiction to award appellate attorney fees. Affirming again, the Court of Appeal found that a denial of costs on appeal does not necessarily bar the prevailing party on appeal from an award of appellate attorney fees. (Stratton v. Beck (Cal. App. 2nd Dist., Div. 4, Jan. 2, 2019) 30 Cal.App.5th 901.)

When a 998 Offeree Has Reasonable Access to the Facts Necessary to Intelligently Evaluate the Offer.

In addition to a totality of the facts involved, an appellate court has delineated three factors “especially pertinent” for an offeree to have enough facts necessary to intelligently evaluate an offer to compromise made pursuant to Code of Civil Procedure § 998: “(1) how far into the litigation the 998 offer was made; (2) the information available to the offeree prior to the 998 offer’s expiration; and (3) whether the offeree let the offeror know it lacked sufficient information to evaluate the offer, and how the offeror responded.” Applying these three factors, the Court of Appeal concluded the trial court did not abuse its discretion in finding that plaintiff’s offer was not made in good faith. (Licudine v. Cedars-Sinai Medical Center (Cal. App. 2nd Dist., Div. 2, Jan. 3, 2019) 30 Cal.App.5th 918.)

Right to a Jury Trial and “Two Obscure and Previously Unaddressed State Constitutional Issues.”

Defendant is a debt collector trying to collect payment for a dentist. The patient brought an action against the debt collector contending it transmitted confidential medical information to three major consumer credit reporting agencies. The trial court denied plaintiff’s request for a jury trial was denied by the trial court because the claim involved only nominal damages under the Confidentiality of Medical Information Act (Civ. Code, § 56 et seq.). The act provides for “nominal damages of $1,000” without proof of injury and for “the amount of actual damages, if any, sustained by the patient.” The Court of Appeal framed the issues as follows: “Does article I, section 16 of the California Constitution guarantee the right to a jury trial for (1) nominal statutory damages claims, and/or (2) claims for attorneys’ fees, under the Confidentiality of Medical Information Act . . . ?” The appellate court reversed the trial court’s decision, stating: “We hold that jury trial is guaranteed for CMIA’s nominal statutory damages claims brought before 2013 under section 56.36, subdivision (b)(1), but not for attorneys’ fees claims under section 56.35.” (Brown v. Mortensen (Cal. App. 2nd Dist., Div. 1, Jan. 3, 2019) 30 Cal.App.5th 931.)

Previously we reported: Delegation Clause in Arbitration Agreement.

Parties to a dispute had entered into an agreement to submit their disputes to arbitration. The arbitration provision contained a delegation clause delegating to the arbitrator the authority to rule on disputes concerning the enforceability of the arbitration provision. Once in court, the defendant moved to compel arbitration, and the trial court denied the petition. On appeal, defendant argues the arbitrator, not the court, should have decided the validity of the arbitration provision and the delegation clause. In affirming the trial court order, the Court of Appeal held the trial court had to first rule on the question of the enforceability of the delegation clause before deciding whether to order the matter into arbitration. (Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (Cal. App. 4th Dist., Div. 1, May 3, 2018) 22 Cal.App.5th 1096.)

A similar but unrelated recent case:

In the present case, there was also a delegation clause and the trial court also denied a defendant’s request to compel arbitration.The arbitration provision was in effect an endorsement to a workers’ compensation insurance policy. However, even though Insurance Code § 11658 requires approval of such policies and endorsements by the Insurance Commissioner, the delegation/arbitration endorsement here was not vetted by the Insurance Commissioner, even though the underlying insurance policy was. Affirming denial of the motion to compel arbitration, the Court of Appeal stated the trial court’s determination that the delegation clause and the arbitration provision are void is supported by § 11658 and relevant precedent. (Luxor Cabs, Inc. v. Applied Underwriters Captive Risk Assurance Co. (Cal. App. 1st Dist., Div. 4, 2018) 30 Cal.App.5th 970.)

Failure to Specify Amount of Damages Voids Default Judgment.

The complaint in a construction defect action prayed for “not less than $10 million dollars” in damages. The general contractor cross-complained against some subcontractors for “compensatory damages according to proof.” The plaintiff and the general contractor settled the complaint, and the general contractor assigned its cross-complaint rights to the plaintiff. The plaintiff obtained a $1.2 million default judgment on the cross-complaint against one of the subcontractors. Plaintiff then filed the present action to collect on the default judgment. The trial court voided the default judgment, finding the cross-complaint did not state an amount of damages. Plaintiff appealed, arguing the damage amount of “not less than $10 million dollars” was incorporated by reference in the cross-complaint. The Court of Appeal affirmed, stating the general contractor’s cross-complaint did not allege an amount of damages; it merely prayed for “damages according to proof.” (Yu v. Liberty Surplus Ins. Corp. (Cal. App. 4th Dist., Div. 3, Jan. 4, 2019) 30 Cal.App.5th 1024.)

USC’s Sexual Misconduct Policy.

University of Southern California has a Student Conduct Code that prohibits sexual activity if “there is no affirmative conscious and voluntary consent, or consent is not freely given.” Plaintiff was formerly an undergraduate student who was expelled from the university for engaging in nonconsensual sex with another student. He appealed from the denial of his petition for writ of administrative mandate in the superior court. He argued he was denied a fair hearing because the disciplinary procedure at the university is fundamentally flawed in that it does not provide a mechanism for a person accused of sexual misconduct to question witnesses before a neutral fact finder vested with power to make credibility determinations. Reversing, the Court of Appeal stated that when a student is accused of sexual misconduct and faces severe disciplinary sanctions, the credibility of witnesses is central to the adjudication of the allegation. The appeals court held that fundamental fairness requires the university to provide a mechanism for cross-examination and that “USC’s disciplinary review process failed to provide these protections and, as a result, denied Doe a fair hearing.” (Doe v. Allee (Cal. App. 2nd Dist., Div. 4, Jan. 4, 2019) 30 Cal.App.5th 1036.)

Erroneous Sustaining of Demurrer Based on Litigation Privilege.

Plaintiffs’ home and pickup truck were damaged by fire. Their insurance company denied their claim on the grounds that one of the insureds had intentionally set the fire and the other insured concealed evidence of that wrongful conduct. One of the insureds was prosecuted for arson, but the criminal case was dismissed. The insureds thereupon sued both the insurance company and its lawyer and law firm. The causes of action against the lawyer and law firm were for invasion of privacy and elder abuse. The invasion of privacy action against the lawyer and law firm concerned a discovery request for plaintiffs’ tax returns. According to the allegations, plaintiffs declined to waive their privilege vis-à-vis the tax returns, but authorized their accountant to send the lawyer the underlying documents. The accountant mistakenly sent the tax returns as well as the underlying documents. Plaintiffs allege they notified the lawyer they were not waiving their privilege, but the lawyer sent the tax returns to the insurance company anyway, and the insurance company and its accountants used the returns in their claim analysis. The trial court sustained a demurrer to the claims against the lawyer and law firm without leave to amend. The court found the litigation privilege barred the invasion of privacy claim. Reversing as to the cause of action for invasion of privacy, the Court of Appeal stated the lawyer’s transmission of the tax returns to the insurance company was at a time when an investigation was taking place and no litigation was pending, and that “this timing alone raises at least a question as to whether litigation was ‘imminent’ at the time.” (Strawn v. Morris, Polich & Purdy, LLP (Cal. App. 1st Dist., Div. 2, Jan. 4, 2019) 30 Cal.App.5th 1087.)

Attorney Disqualification.

Richie was formerly the president and chief operating officer for cross-complainant. Cross-complainant had no formal in-house counsel, but Richie had a law degree and acted as the primary contact for cross-complainant’s outside counsel on many legal matters. Richie’s employment with cross-complainant ended in February 2016. In 2017, Richie was admitted to the State Bar and launched his own law firm. Richie’s law firm represented some of the individuals who filed suit against cross-complainant. The trial court denied cross-complainant’s motion to disqualify Richie’s law firm. The Court of Appeal reversed, holding that Richie’s firm could not act as counsel because Richie obtained privileged information relating to the pending litigation when he was employed as cross-complainant’s president and chief operating officer. (O’Gara Coach Company, LLC v. Ra, (Cal. App. 2nd Dist., Div. 7, Jan. 7, 2019) 30 Cal.App.5th 1115.)

Death Sentence of “Mentally Retarded” Defendant.

In 1985, a 12-year-old rode his bike to a friend’s house. He was later found naked, beaten, and burned in a field, and died two days later. A few days later, defendant voluntarily went to the police station and asked about a reward that had been offered for information regarding the boy’s homicide. Defendant’s conversation with a police sergeant revealed that defendant had knowledge of facts that had not been made public. Defendant was convicted of torturing, raping, and murdering the boy. At trial, experts said defendant’s IQ ranged from 55 to 68 and his moral development was “primitive.” After he was sentenced to death, the Sixth Circuit Court of Appeals granted his habeas petition on the ground that the Ohio courts’ finding defendant was not intellectually disabled was contrary to U.S. Supreme Court precedent that was clearly established at the time. The nation’s highest court found the Sixth Circuit’s reliance on Moore v. Texas (2017) 137 S.Ct. 1039 was “plainly improper” because Moore came down years after the relevant Ohio court decisions and therefore could not serve as “clearly established” law at the time the state courts decided defendant’s claim. The Supreme Court reversed and remanded the case to the Sixth Circuit with instructions to determine whether its conclusions can be sustained based strictly on legal rules that were clearly established at the relevant time. (Shoop v. Hill (U.S., Jan. 7, 2019) 139 S.Ct. 504.)

Qualified Immunity.

Police were called to a scene of domestic violence. No one would answer the phone in the apartment or open the door. At some point, a man came out the front door. The officer standing at the front door told him not to close the door, but he closed it anyway and brushed by the officer. The officer “took him down,” and he was later arrested for resisting an officer. He subsequently sued two officers for excessive force, even though only one officer was present at the door he exited. The federal district court granted summary judgment to both officers. As to the officer who used force at the front door, the district court reasoned that the law did not clearly establish that the officer could not take down an arrestee in these circumstances. The Ninth Circuit reversed, but the U. S. Supreme Court reversed the Ninth Circuit. As to the officer who used force, the Supreme Court concluded that the Ninth Circuit failed to properly analyze whether clearly established law barred that officer from stopping and taking down the plaintiff. (City of Escondido v. Emmons (U.S., Jan. 7, 2019) 139 S.Ct. 500.)

Statutory Attorney Fees for Representing Social Security Claimants.

Petitioner is a lawyer who represented a Social Security claimant. The claimant was denied benefits at the agency level and thereafter filed an action in federal district court. The claimant entered into a contingency fee agreement “to pay [the lawyer] a fee of 25 percent of the total of past-due benefits to which [the claimant] is entitled,” but the agreement excluded fees incurred for representing the claimant before the agency. After the claimant prevailed in the lawsuit, the district court granted petitioner attorney fees under the Equal Access to Justice Act (28 U.S.C. § 2412(d)(1)(A) and 2(A); EAJA). On remand, the agency withheld 25 percent of the claimant’s benefits to pay any attorney fees that might ultimately be awarded. Petitioner was awarded fees for representing claimant at the agency level and thereafter sought an additional fee award for services rendered in connection with the federal action. After accounting for the previous EAJA fee award, petitioner requested 25 percent of claimant’s past-due benefits. The district court awarded petitioner additional fees, but subtracted the amount he was awarded for representing the claimant at the agency level. The U.S. Supreme Court held that the fees for agency representation should not have been subtracted from the additional fee award because the 25 percent cap found in the Social Security Act applies only to fees for court representation. (Culbertson v. Berryhill (U.S., Jan. 8, 2019) 139 S.Ct. 517.)

Who Decides that Threshold Arbitrability Question?

When a contract delegates the arbitrability question to an arbitrator, some federal courts will short-circuit the process and decide the arbitrability question themselves if the argument that the arbitration agreement applies to the dispute is “wholly groundless.” In the first opinion authored by Justice Kavanaugh, the U.S. Supreme Court held that this “wholly groundless” exception is not consistent with the Federal Arbitration Act: “When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision as embodied in the contract.” (Henry Schein, Inc. v. Archer & White Sales, Inc. (U.S., Jan. 8, 2019) 139 S.Ct. 524.)

“I’ll have a pepperoni pizza and an amplifier.”

A restaurant patron who suffered from partial hearing loss alleged that he was denied a listening device that would have allowed him to hear background music playing in the restaurant. He sued the restaurant for violation of the Unruh Civil Rights Act (Civ. Code, § 51) premised on an alleged violation of the Americans with Disabilities Act (42 U.S.C. § 12101). The trial court sustained the restaurant’s demurrer and dismissed the action. Affirming, the superior court’s appellate division explained: “To the extent [the restaurant] provided food, drink, and the hospitality services normally associated with restaurants, [plaintiff] has failed to state a valid claim since his suit does not relate to the unequal enjoyment of those goods and services . . . there are no facts alleged indicating the music was integrated or otherwise connected with the food and services in any meaningful way . . . .” (Martinez v. California Pizza Kitchen, Inc. (San Bern. Sup. Ct. App. Div., Jan. 8, 2019) 30 Cal.App.5th Supp. 14.)

Free Ride.

An indigent criminal defendant pleaded no contest to driving without a license. She was placed on probation and ordered to pay $220 in mandatory fines and fees. The superior court further ordered that if an outstanding debt remains at the end of the probation period, the amount due would go to collections without further court order. The Court of Appeal reversed the fee order and remanded the matter with directions to stay execution of the fine until the prosecution proves defendant’s ability to pay, stating: “Because the only reason [defendant] cannot pay the fine and fees is her poverty, using the criminal process to collect a fine she cannot pay is unconstitutional.” (People v. Duenas (Cal. App. 2nd Dist., Div. 7, Jan. 8, 2019) 30 Cal.App.5th 1157.)

Fannie May.

Plaintiffs alleged that the Federal National Mortgage Association, commonly called “Fannie Mae,” falsely informed potential mortgage lenders that plaintiffs had a prior foreclosure. The federal district court ruled that Fannie Mae is a consumer reporting agency under the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) The Ninth Circuit reversed, concluding that “Fannie Mae is not a consumer reporting agency.” (Zabriskie v. Federal National Mortgage Ass’n (9th Cir., Jan. 9, 2019) 912 F.3d 1192.)

Trial Court Abused its Discretion in Awarding Costs of Proof for Failure to Admit Requests for Admission.

Plaintiff denied several requests for admissions propounded by defendant. In a postjudgment order, the trial court awarded defendant $615,000 for costs of proof under Code of Civil Procedure § 2033.420. On appeal, plaintiff argued the award was improper because plaintiff had reasonable grounds to believe it would prevail on the matters at issue. Reversing in part, the Court of Appeal concluded that the trial court “abused its discretion in awarding costs for certain RFAs because the [plaintiff] reasonably relied on percipient witness testimony, undisputed scientific testing, and the opinions of a qualified expert in denying the RFAs. The court did not err with respect to other RFAs, which covered matters the [plaintiff] did not pursue at trial.” (Orange County Water District v. The Arnold Engineering Co. (Cal. App. 4th Dist., Div. 1, Jan. 10, 2019) 31 Cal.App.5th 96.)

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former,” Albert Einstein.

A jury convicted a criminal defendant of robbery for the benefit of a criminal street gang. On appeal, the defendant argued that his Fourth Amendment rights were violated when a police detective saved a copy of a video he had posted on social media showing him wearing a chain taken in the robbery. A search of defendant’s residence revealed other loot stolen in the robbery. Affirming the conviction, the Court of Appeal found that defendant voluntarily shared his social media posting, and the fact that he chose a platform where posts disappear after a period of time did not increase his expectation of privacy. (People v. Pride (Cal. App. 4th Dist., Div. 1, Jan. 10, 2019) 31 Cal.App.5th 133.)

Is Domestic Worker an Employee or Independent Contractor?

The Domestic Worker Bill of Rights (Lab. Code § 1450 et seq.; DWBR) requires that domestic work employees receive overtime wages for all hours worked more than nine hours per day or 45 hours per week. Plaintiff is a professional caregiver who entered into a contract with defendant stating that defendant “is a caregiver placement agency whose business is to obtain contracts for caregivers in dwellings and to refer by subcontract such contracts to professional independent caregivers.” Plaintiff sued defendant for failure to pay overtime wages pursuant to the DWBR. She produced evidence she was paid wages as determined by defendant, that defendant performs the initial assessment of the client’s needs and matches caregivers according to the client’s needs, negotiates the amount charged to the client, and determines what portion of that amount will be paid to the caregiver. The trial court found that plaintiff was an independent contractor and granted summary judgment for defendant. On appeal, the court discussed Martinez v. Combs (2010) 49 Cal.4th 35, noting that in Martinez “employment” is defined as control over wages, hours or working conditions, “and thus control over any one of the three creates an employment relationship.” Reversing, the Court of Appeal found there is a triable issue of fact whether plaintiff is an independent contractor or an employee. (Duffey v. Tender Heart Home Care Agency, LLC (Cal. App. 1st Dist., Div. 5, Jan. 11, 2019) 31 Cal.App.5th 232.)

Another Arbitrability Decision from U.S. Supreme Court.

Plaintiff, “at least on paper” not an employee but an independent contractor, drives for defendant, an interstate trucking company. When a wages dispute arose between the two, plaintiff sued defendant in a class action. The parties’ contract states that any disputes arising out of their relationship should be resolved by an arbitrator, “even disputes over the scope of the arbitrator’s authority.” Interestingly, a provision in the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA) says that “nothing herein” may be used to compel arbitration in disputes involving the “contracts of employment” of certain transportation workers. Thus, the court was presented with two questions: 1) When a contract delegates questions of arbitrability to an arbitrator, must a court leave disputes over the application of § 1’s exception for the arbitrator to resolve? and, 2) Does the term “contracts of employment” refer only to contracts between employers and employees, or does it also reach contracts with independent contractors? The United States Supreme Court, in an opinion authored by Justice Gorsuch, answered the first question as follows: “[A] court should decide for itself whether §1’s ‘contracts of employment’ exclusion applies before ordering arbitration.” As to the second question, the nation’s highest court noted that in 1925 when the FAA was first enacted, “a contract of employment did not necessarily imply the existence of an employer-employee or master-servant relationship. . . . Congress spoke of ‘workers,’ a term that everyone agrees easily embraces independent contractors.” The high court held that plaintiff is entitled to that same understanding, that his agreement with defendant falls within § 1’s exception and that the court “lacked authority under the Act to order arbitration.” (New Prime Inc. v. Oliveira (U.S., Jan. 15, 2019) 2019 U.S. LEXIS 724.)

A Website Can Be a Place of Public Accommodation Under the ADA.

Plaintiff is blind. He sued a pizza restaurant under the Americans with Disabilities Act (42 U.S.C. § 12101) for failing to design, construct, maintain, and operate its website and mobile application to be fully accessible to him. He contends on at least two occasions he unsuccessfully attempted to order online a customized pizza from a nearby Domino’s, but he could not order the pizza because Domino’s failed to design its website and app so his software could read them. A federal trial judge granted Domino’s motion for summary judgment. Reversing, the Ninth Circuit Court of Appeals held that Domino’s website is a place of public accommodation, stating: “[T]he ADA applies to Domino’s website and app, which connect customers to the goods and services of Domino’s physical restaurants. . . .” (Robles v. Domino’s Pizza (9th Cir., Jan. 15, 2019) 2019 U.S. App. LEXIS 1292.)

Class Counsel Awarded $175 million in Fees; Non-class Counsel Awarded Zilch.

A class action against an automobile manufacturer accused of installing devices to defeat emissions testing settled for more than $10 billion, and the federal district court awarded class counsel $175 million in attorney fees. The court also received 244 fee applications from non-class counsel and denied them all because the attorneys did not conduct pretrial activities that materially drove settlement. The court vacated their attorney fee liens. The trial court stated, however, that non-class counsel “may be entitled to payment of certain fees and costs pursuant to attorney-client fee agreements.” Non-class counsel appealed. Affirming, the Ninth Circuit stated: “We ultimately conclude that the district court did not abuse its discretion when it determined that the efforts of non-Class Counsel for which they sought fees did not benefit the class such that they would be entitled to compensation.” (Hill v. Volkswagen, AG (In re Volkswagen “Clean Diesel” Litigation) (9th Cir., Jan. 24, 2019) 2019 U.S. App. LEXIS 2520.)

Life on the Pharma.

Defendant, a drug company, sought approval from the Food and Drug Administration to market a generic form of a drug. Plaintiff, another drug company, sued defendant for infringing on its patents. Defendant claims plaintiff’s patent is invalid because the drug involved was “on sale” more than a year before plaintiff filed its patent application. It seems that plaintiff and a third party drug company joined as marketing partners for the future sale and distribution of the drug, and the third party drug company agreed to keep confidential any proprietary information received under the agreement. The Leahy-Smith America Invents Act (35 U.S.C. § 100 et seq.; AIA) precludes a person from obtaining a patent on an invention that was “on sale” before the effective date of the patent application. The issue before the U.S. Supreme Court was whether the sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention “on sale” within the meaning of § 102(a) of the AIA. The nation’s high court decided that a commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under the AIA. (Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc. (U.S., Jan. 22, 2019) 202 L. Ed. 2d 551.)

Previously we reported: Superior Court’s Policy of Not Providing Free Court Reporter to in Forma Pauperis Litigants Is Invalid.

An in forma pauperis plaintiff was not provided the opportunity to have a court reporter at his civil trial because the San Diego Superior Court in response to a significant reduction of its judicial budget adopted a policy under which the court did not make official ones available at most civil trials even for persons who qualified for a fee waiver. In holding the policy to be invalid, the California Supreme Court stated: “[W]e conclude that, as applied to in forma pauperis litigants who are entitled to a waiver of official court reporter fees, the San Diego Superior Court’s general policy of not providing official court reporters in most civil trials while permitting privately retained court reporters for parties who can afford to pay for such reporters is inconsistent with the general teaching of prior California in forma pauperis judicial decisions and the public policy of facilitating equal access to the courts embodied in [Government Code] section 68630, subdivision (a). By precluding an indigent litigant from obtaining the attendance of an official court reporter (to which the litigant would be entitled without payment of a fee), while at the same time preserving the right of financially able litigants to obtain an officially recognized pro tempore court reporter, the challenged court policy creates the type of restriction of meaningful access to the civil judicial process that the relevant California in forma pauperis precedents and legislative policy render impermissible.”(Jameson v. Desta (Cal., July 5, 2018) 5 Cal.5th 594.)

The latest: 

As a result of a superior court’s policy of not providing a free court reporter to an indigent plaintiff in a personal injury case, there was no reporter’s transcript for plaintiff’s appeal of the trial court’s grant of defendant’s motion for nonsuit. The Court of Appeal found the California Supreme Court’s decision in Jameson v. Desta is retroactive. The appellate court reversed the grant of nonsuit and remanded for a new trial at which an official court reporter will be furnished to the indigent defendant. (Dogan v. Comanche Hills Apartments, Inc. (Cal. App. 4th Dist., Div. 1, Jan. 22, 2019) 2019 Cal. App. LEXIS 57.)

Grant of Motion to Quash for Lack of Personal Jurisdiction Reversed.

A woman cleaned her humidifier with a cleaning agent manufactured in Korea. Thereafter, she was diagnosed with a lung disease and died. Her children filed a wrongful death action against defendant manufacturer, alleging their mother’s death was caused by her long term use of the cleaning agent. Plaintiffs never served the operative complaint on defendant manufacturer, but did serve the complaint on the defendant distributor. The distributor cross-complained against the Korean manufacturer. The Korean manufacturer specially appeared, and the trial court granted its motion to quash service of summons on the cross-complaint for lack of personal jurisdiction. Reversing, the Court of Appeal concluded the cross-complainant distributor satisfied its burden of demonstating facts justifying the exercise of specific jurisdiction and that the cross-defendant Korean manufacturer did not make the requisite showing that jurisdiction in California would be unfair or unreasonable. (Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (Cal. App. 2nd Dist., Div. 7, Jan. 22, 2019) 2019 Cal. App. LEXIS 56.)

“The key to good eavesdropping is not getting caught,” Lemony Snicket.

Defendant secretly recorded conversations with plaintiff and introduced the recordings as evidence in an arbitration. The arbitrators ultimately issued an award in favor of defendant. Plaintiff then filed the current action for invasion of privacy and eavesdropping in violation of Penal Code §§ 631 and 637.2. Defendant filed a special motion to strike pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16). The trial court denied the motion, finding that neither making the recordings nor using them as evidence in the arbitration was protected activity. Affirming, the Court of Appeal held the trial court was correct because the recordings were not made in connection with a judicial or official proceeding. (Zhang v. Jenevein (Cal. App. 2nd Dist., Div. 7, Jan. 23, 2019) 2019 Cal. App. LEXIS 62.)

Previously we reported: Kneeling & Praying Not Permitted.

A high school football coach appealed to the Ninth Circuit Court of Appeals after a federal trial court denied his request for a preliminary injunction that would have required the high school to allow him to kneel and pray for about 30 seconds to give thanks for player safety, sportsmanship, and spirited competition on the fifty-yard line in view of the students and parents immediately after school football games. When the coach first started at the high school, he prayed by himself. Several games into his first season, however, a group of players asked him whether they could join him. “This is a free country,” the coach replied, “You can do what you want.” Hearing that response, the students elected to join him. Over time, the group grew to include the majority of the team. Sometimes the players even invited the opposing team to join. Eventually, the coach’s religious practice evolved to something more than his original prayer. He began giving short motivational speeches at midfield after the games. Students, coaches, and other attendees from both teams were invited to participate. During the speeches, the participants kneeled around the coach, who raised a helmet from each team and delivered a message containing religious content. The coach subsequently acknowledged that these motivational speeches likely constituted prayers. At some point, the coach was placed on administrative leave for violating the policy of the school district which states: “[s]chool staff shall neither encourage nor discourage a student from engaging in non-disruptive oral or silent prayer or any other form of devotional activity.” The Ninth Circuit found the coach spoke as a public employee, and not as a private citizen, when he prayed on the fifty-yard line. Therefore, the appeals court held, petitioner cannot show a likelihood of success of the merits of his First Amendment retaliation claim. (Kennedy v. Bremerton School District(9th Cir., Aug. 23, 2017) 869 F.3d 813.)

The latest:

The U.S. Supreme Court denied certiorari. Justice Alito explained why he denied the petition, and Justices Thomas, Gorsuch and Kavanaugh joined in the explanation, which included: “I concur in the denial of the petition for a writ of certiorari because denial of certiorari does not signify that the Court necessarily agrees with the decision (much less the opinion) below. In this case, important unresolved factual questions would make it difficult if not impossible at this stage to decide the free speech question that the petition asks us to review.” (Kennedy v. Bremerton School District (U.S., Jan. 22, 2019) 139 S.Ct. 634.)

“When a party cannot litigate a claim without disclosing privileged information, the claim must be dismissed,” General Dynamics Corp. v. Superior Court (1994) 7 Cal.4th 1164.

Plaintiff alleges she was fired in retaliation for reporting her employer’s failure to pay taxes to the employer’s management and the Board of Equalization. The trial court granted defendants’ motion for summary judgment in this wrongful discharge action, finding plaintiff could not prove her case because she did not have copies of the employer’s tax returns. Reversing, the Court of Appeal found that plaintiff never acknowledged she couldn’t prove her case without the tax returns, stating: “Through her own testimony and the testimony of other witnesses, perhaps adverse witnesses, she may well be able to prove that she was impermissibly discharged for the reason she asserts.” (Siri v. Sutter Home Winery, Inc. (Cal. App. 1st Dist., Div. 4, Jan. 23, 2019) 2019 Cal. App. LEXIS 58.)

Wording of Offer to Compromise Results in Denial of Attorney Fees to Plaintiff.

In a personal injury case involving a woman who was injured because she was not secured in a wheelchair, defendants accepted plaintiff’s offer to compromise pursuant to Code of Civil Procedure § 998. Postjudgment, plaintiff moved for an attorney fee award, which the trial court denied. The Court of Appeal rejected plaintiff’s argument that Code of Civil Procedure § 998 incorporates Code of Civil Procedure § 1032, and provides a statutory right to fees because she is the prevailing party. Noting that the statutes involved with plaintiff’s personal injury claim, the Disabled Persons Act (Civ. Code, § 54 et seq.) and the Unruh Civil Rights Act (Civ. Code, § 51 et seq.), both provide for a fee award, the appeals court stated that both statutes require a finding of liability, but the offer to compromise did not include such a finding. With regard to plaintiff’s argument the offer to compromise provided a contractual right to fees, the appeals court quoted from the offer and discussed the boxes plaintiff could have checked or supplemented on Judicial Council form CIV-090. The appellate court affirmed, concluding “no such fees were in fact ‘allowed by law.’” (Linton v. County of Contra Costa (Cal. App. 1st Dist., Div. 1, Jan. 23, 2019) 2019 Cal. App. LEXIS 63.)

Former Congressman’s Defamation Claim Tossed.

A challenger to a California congressman’s seat in the 2016 election ran television ads. The congressman filed a lawsuit contending the ads were false and defamatory. The challenger filed an anti-SLAPP motion, which the trial court granted. Affirming, the Court of Appeal stated: “We ultimately conclude that the trial court properly granted the respondent’s anti-SLAPP motion because Issa cannot demonstrate that the statements about which he complains are demonstrably false statements of fact.” (Issa v. Applegate (Cal. App. 4th Dist., Div. 1, Jan. 24, 2019) 2019 Cal. App. LEXIS 67.)

Lack of Personal Jurisdiction.

One sister resides in Utah and the other in California. The Utah sister in her capacity as guardian ad litem for their mother sued the California sister in California over a real property transaction. The California sister cross-complained against the Utah sister. A California court granted the Utah sister’s motion to quash service of the summons, finding that California lacks personal jurisdiction over the Utah sister. Affirming, the Court of Appeal stated: “Because [the Utah sister] did not personally avail herself of California’s benefits, we conclude the state may not exercise personal jurisdiction over her.” (Jensen v. Jensen (Cal. App. 2nd Dist., Div. 6, Jan. 24, 2019) 2019 Cal. App. LEXIS 65.)

Fences and Airbnb Tenants Do Not Good Neighbors Make.

This dispute is between two neighbors whose parcels are close to sand dunes in a state park. A path that accesses the dunes runs across plaintiff’s parcel and then across defendant’s parcel. Historically, plaintiff used the path to visit the dunes. In September 2015, plaintiff began hosting vacation renters through Airbnb. In October 2015, defendant erected a fence that blocked persons on plaintiff’s parcel from accessing the dunes via the path. Plaintiff filed the present action to establish a prescriptive easement from plaintiff’s parcel through defendant’s parcel along the path. By the time of trial, 146 separate Airbnb reservations had been made. The trial court granted the prescriptive easement. On appeal, defendant contended that Civ. Code § 1009 provides that the public’s use of another’s property for recreational purposes will never ripen into a vested right, so the trial court erred in granting the prescriptive easement. In affirming, the Court of Appeal stated: “Although the trial court’s judgment does not specify the nature of the easement, it is plainly an easement ‘appurtenant’ to [plaintiff’s] property. . . . ‘An easement appurtenant to the land is “attached to the land of the owner of the easement, and benefits him as the owner or possessor of that land.” ’ ” (Ditzian v. Unger (Cal. App. 1st Dist., Div. 5, Jan. 24, 2019) 2019 Cal. App. LEXIS 69.)

Wage & Hour Claim.

Plaintiff filed a class action alleging his employer denied him overtime pay, meal breaks and failed to pay him minimum wage at required times. A federal trial court dismissed the action. The Ninth Circuit affirmed regarding the claim for overtime pay, holding the claim was preempted under the Labor Management Relations Act (29 U.S.C. § 185) because California’s overtime law does not apply to an employee working under a qualified collective bargaining agreement (Lab. Code, § 514). As to plaintiff’s other claims, the appeals court reversed and remanded for the district court to consider delineated issues. (Curtis v. Irwin Industries (9th Cir., Jan. 25, 2019) 2019 U.S. App. LEXIS 2569.)

Plaintiff’s Expert Declaration Not Strong Enough to Defeat Summary Judgment.

After plaintiff fractured her wrist, her doctor placed it in a splint and told her to return in three weeks. Several months later, another doctor performed surgery and inserted a plate and screws, which were later removed in another surgical procedure. Plaintiff sued her first doctor for medical malpractice. The doctor moved for summary judgment, attaching an expert declaration stating his treatment was within the standard of care. In opposing summary judgment, plaintiff’s expert stated defendant “failed to supervise [an assistant]; failed to X-ray plaintiff’s wrist on her first visit to his office (instead he used the X-ray she brought with her that had been done on the day she fell, 10 days earlier)”; and “failed to recommend, encourage and failed to perform surgery to Plaintiff’s left wrist, instead ordering a cast to be placed on her wrist, all of which were a breach of the standard of care which caused further injury to Plaintiff’s hand.” The trial court granted the defendant doctor’s motion for summary judgment. Affirming, the Court of Appeal found plaintiff’s expert declaration lacking, stating: “None of this explains, for example, how the failure to obtain a new X-ray at the initial consultation caused the further deformity in plaintiff’s wrist, or how the failure to discuss surgery at the initial consultation caused the further deformity shown by the imaging at the second consultation.” (Fernandez v. Alexander(Cal. App. 2nd Dist., Div. 8, Jan. 28, 2019) 2019 Cal. App. LEXIS 74.)

Where’s Waldo?

The Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.; FCRA) requires an employer to provide a job applicant with a clear and conspicuous standalone document that a credit report will be obtained. When plaintiff applied for a job, she signed a separate form entitled “Disclosure Regarding Background Investigation,” written in Arial Narrow, size 8 font. That document was not only about the FCRA, but also provided numerous details about the disclosure requirements of California, Maine, Minnesota, New York, Oklahoma, Oregon, and Washington. Plaintiff was hired and voluntarily terminated employment after five months. She then filed a class action against the employer claiming it failed to make a proper FCRA disclosure and failed to make a proper disclosure under California’s Investigative Consumer Reporting Agencies Act (Civ. Code § 1786 et seq.) A federal trial court granted summary judgment to the employer on plaintiff’s FCRA claim and remanded on the California claim. The Ninth Circuit reversed on the FCRA claim, holding the employer violated the FCRA “by including extraneous information relating to various state disclosure requirements.” (Gilberg v. California Check Cashing Stores, LLC (9th Cir., Jan. 29, 2019) 2019 U.S. App. LEXIS 2940.)

Arbitration Agreement Signed by Hiring Agency, but Not Entity Where Employees Worked.

Two employees and a hiring agency agreed in writing to arbitrate “all disputes that may arise within the employment context.” The two employees were assigned to work for defendant produce company, a nonsignatory to the arbitration agreement. The two employees later sued defendant produce company for labor code violations. The produce company cross-complained against the employer. The trial court denied the petition to compel arbitration brought by both the signatory employer and the nonsignatory defendant. Reversing, the Court of Appeal found the claims against defendant were “rooted in their employment relationship.” (Vasquez v. San Miguel Produce, Inc. (Cal. App. 2nd Dist., Div. 6, Jan. 30, 2019) 2019 Cal. App. LEXIS 79.)

Federal Tort Claims Act.

Plaintiff alleges that when he was a minor, a federal agency negligently caused his father’s death. Because he was a minor, his mother sued the United States pursuant to the Federal Torts Claims Act (28 U.S.C. § 2671; FTCA). At the time of the presentation of the administrative claim to a federal agency, plaintiff was 15 years old, and at the time the lawsuit was filed, he was 16. A federal trial court dismissed the case after finding the claim had accrued more than two years before plaintiff’s mother presented it to a federal agency. On appeal, plaintiff argued the statute of limitations on his claim was tolled because he was a minor. The Ninth Circuit affirmed, stating: “Because we conclude that prior decisions holding that there is no minority tolling for the FTCA’s statute of limitations remain binding, and conclude that minority tolling is a separate statutory matter from equitable tolling, we affirm the district court’s decision.” (Booth v. United States (9th Cir., Jan. 31, 2019) 2019 U.S. App. LEXIS 3174.)

Previously we reported: A Nanny State is “a government that tries to give too much advice or make too many laws about how people should live their lives, especially about eating, smoking or drinking alcohol,” Cambridge Dictionary.

Citing the First Amendment, a beverage association challenged a San Francisco ordinance requiring warnings about the health effects of certain sugar-sweetened beverages on fixed advertising, which ordinance states: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.” A federal trial court denied the association’s motion for a preliminary injunction. The Ninth Circuit Court of Appeals concluded that the association was likely to succeed on the merits of the claim that the ordinance is an unjustified or unduly burdensome disclosure requirement that might offend the First Amendment by chilling protected commercial speech. The appeals court concluded the association met each of the requirements for a preliminary injunction and found the trial court abused its discretion in denying the association’s motion for a preliminary injunction. (American Beverage Association v. City and County of San Francisco (9th Cir., Sept. 19, 2017) 871 F.3d 884.)

The latest:

Sitting en banc, the Ninth Circuit Court of Appeals reversed the trial court’s denial of a preliminary injunction, concluding plaintiffs are likely to succeed on the merits of their claims. (American Beverage Association v. City and County of San Francisco (9th Cir., Jan. 31, 2019) 2019 U.S. App. LEXIS 3175.)

Asking for “Affirmative Relief” in a Responsive Pleading.

The Court of Appeal’s introductory paragraph says it best: “When a party to a dissolution proceeding moves to modify an existing order, the other party may ask the court for ‘affirmative relief’ in a responsive pleading, but only if that relief is ‘ alternative to that requested by the moving party’ and ‘on the same issues raised by the moving party.’ (Fam. Code, § 213, subd. (a).) Is a responding party’s request for sanction-based attorney fees under section 271 a request for ‘affirmative relief’? We conclude that it is not.” (In re Marriage of Perow and Uzelac (Cal. App. 2nd Dist., Div. 2, Jan. 31, 2019) 2019 Cal. App. LEXIS 85.)

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