A monthly publication of the Litigation Section of the California Lawyers Association.
- Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
- Managing Editor, Julia C. Shear Kushner
- Editors, Dean Bochner, Jonathan Grossman, Jennifer Hansen, Gary A. Watt, David Williams, Ryan Wu
Questions Whether Residents of Sober Living Homes Are Disabled.
Plaintiffs operate sober living homes in Costa Mesa for persons recovering from drug and alcohol addiction. In 2014, the City of Costa Mesa began amending its zoning code to reduce the number and concentration of sober living homes in its residential neighborhoods. Two of its new ordinances made it unlawful to operate sober living homes without a permit. Unlike addiction treatment facilities, sober living homes do not require a license from the state of California. Until the ordinances were adopted, the city did not regulate sober living homes differently from other residences. The city issued citations to plaintiffs for operating the sober living homes without approval. Plaintiffs sued the city, arguing that the ordinances and the city’s enforcement practices discriminated against them on the basis of disability under the Fair Housing Act (42 U.S.C. § 3601 et seq.), the Americans with Disabilities Act (42 U.S.C. § 12131 et seq.), and the California Fair Employment and Housing Act (Gov’t Code, § 12900 et seq.). The district court granted summary judgment for the city, finding plaintiffs did not establish that residents in their sober living homes were actually disabled. Reversing and remanding, the Ninth Circuit stated: “In the context of zoning discrimination against a home that aims to serve people with disabilities, we hold that courts must look at the evidence showing that the home serves or intends to serve individuals with actual disabilities on a collective basis, including the home’s policies and the standards the municipality uses to evaluate the residence.” (SoCal Recovery, LLC v. City of Costa Mesa (9th Cir., Jan. 3, 2023) 56 F.4th 802.)
Overtime on Overtime Not Required Under California Wage Laws.
Plaintiff appealed from a judgment for his employer, after plaintiff sued under the Private Attorneys General Act (Lab. Code, § 2698 et seq.), alleging his employer improperly calculated the overtime due on a nondiscretionary bonus paid to him and other similarly situated employees. The employer successfully moved for summary judgment on the ground its formulation of the overtime payment comported with the Fair Labor Standards Act of 1938 (29 U.S.C. § 207(a)(1)). On appeal, plaintiff argued California authorities required a different method of calculation and superseded federal authority in this instance because California provides greater protection to employees like him. The Court of Appeal affirmed, rejecting plaintiff’s contentions because they amounted to requiring employers to pay overtime on bonuses that already included overtime pay. (Lemm v. Ecolab Inc. (Cal. App. 2nd Dist., Div. 5, Jan. 3, 2023) 87 Cal.App.5th 159.)
Superior Court Erred in Granting Writ of Administrative Mandate.
Plaintiff was a captain in the Barstow Fire Protection District. The City of Barstow fired him for criminal and perjurious acts, for willful refusal to comply with official orders, and for setting a poor professional example for his subordinates, as well as for other charges no longer at issue. Plaintiff filed a petition for writ of administrative mandate in the superior court. The trial court held: (1) that the city abused its discretion by firing plaintiff based on the three sustained allegations; and (2) that the case was remanded to the city to redetermine plaintiff’s discipline. Reversing, the Court of Appeal stated: “The trial court erred by remanding this case for the City to reconsider Griego’s discipline. There is no real doubt the City would terminate Griego, so there is no reason to remand the case.” (Griego v. City of Barstow (Cal. App. 2nd Dist., Div. 8, Jan. 3, 2023) 87 Cal.App.5th 133.)
Cross-Complaint Against City Was Attempt to Curb City’s Right to Petition.
A city sued a corporation with which it had done business, accusing it of fraud and unfair business practices. The corporation filed a cross-complaint against the city for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. The city filed a special motion to strike the cross-complaint under Code of Civil Procedure § 425.16, the anti-SLAPP statute, arguing the corporation’s claims arose from the city’s protected activity—namely, its lawsuit against it. Granting the city’s motion to strike, the trial court reasoned “the only alleged harm was the bringing of the lawsuit, and that would be privileged.” Affirming, the Court of Appeal stated: “The trial court was right to grant the City’s motion. On the first step, Cordoba’s cross-complaint sought to curb the City’s protected right to petition. (§ 425.16, subd. (b)(1).) On the second, it did not demonstrate a probability of success on its claims because each of its three causes of action failed to state a case.” (Cordoba Corporation v. City of Industry (Cal. App. 2nd Dist., Div. 8, Jan. 3, 2023) 87 Cal.App.5th 145.)
Arbitration Denied Where Agreement Excluded Time Working for Staffing Agencies.
Plaintiffs initially worked for defendant through staffing agencies before signing employment letters that contained arbitration agreements. Language in the letters’ arbitration provisions excluded from arbitration those claims based on conduct occurring during periods plaintiffs were employed by staffing agencies rather than directly by defendant. The trial court denied defendant’s petition to compel arbitration. Affirming, the Court of Appeal stated: “We determine the trial court properly relied on the language in an arbitration provision contained in the letters to exclude from arbitration those claims based on conduct occurring during periods Plaintiffs were employed by staffing agencies rather than directly by Defendant.” (Vaughn v. Tesla, Inc. (Cal. App. 1st Dist., Div. 5, Jan. 4, 2023) 87 Cal.App.5th 208.)
What Constitutes Notice of Intent to Commence Action for Medical Malpractice.
The primary issue in this medical malpractice action was the statute of limitations vis-à-vis a notice of intent to commence action pursuant to Code of Civil Procedure § 364.
- 11/07/2015—Incident in hospital occurred.
- 03/09/2016—In a letter, counsel for plaintiff described the incident and included a request that the hospital preserve evidence. The letter concluded by stating that counsel would be “gathering more necessary information” and would present it to the hospital’s insurance carrier with a pre-litigation demand.
- 10/27/2016—Plaintiff’s counsel sent the hospital a “Notice of Intent to Commence Action For Medical Negligence Pursuant to Code of Civil Procedure §364.
- 01/20/2017—Plaintiff filed suit.
The trial court granted defendant’s motion for summary adjudication of plaintiff’s medical malpractice causes of action after finding the March 8, 2016 letter constituted a § 364 notice and that the October 27, 2016 notice did not extend the statute of limitations. Reversing, the Court of Appeal held the March 9, 2016 letter was not a notice of intent. (McGovern v. BHC Fremont Hospital, Inc. (Cal. App. 1st Dist., Div. 1, Jan. 4, 2023) 87 Cal.App.5th 181.)
Allegation COVID-19 Virus Physically Altered Restaurant Premises Sufficient to Withstand Demurrer.
Plaintiff sued defendant for breach of an insurance contract and related claims after defendant insurance company denied coverage for plaintiff restaurant’s lost business income as a result of its suspension of restaurant operations in March 2020 due to the COVID-19 pandemic and associated government shutdowns. The trial court sustained defendant’s demurrer without leave to amend. Reversing, the Court of Appeal stated: “We agree La Cava’s allegations that contamination by the COVID-19 virus physically altered its restaurant premises were sufficient to withstand demurrer, and we reverse.” (Shusha, Inc. v. Century-National Insurance Company (Cal. App. 2nd Dist., Div. 7, Jan. 5, 2023) 87 Cal.App.5th 250.)
Plaintiffs Lacked Standing to Challenge Medical Malpractice Statutes.
Plaintiffs, who had sued for medical malpractice, filed a separate suit against the California Attorney General and certain private healthcare defendants, challenging two California statutes (1):Civil Code § 3333.2, which caps the amount of damages a plaintiff may recoup for noneconomic losses at $250,000; and (2) Business and Professions Code § 6146, which sets limits on the amount of contingency fees a law firm may charge in representing a plaintiff in a professional negligence action against a health care provider. The trial court dismissed the action. Affirming, the Court of Appeal held that plaintiffs lacked standing to challenge the statutes. (Dominguez v. Bonta (Cal. App. 5th Dist., Jan. 6, 2023) 87 Cal.App.5th 389.)
Arbitration Agreement, as Well as a Collective Bargaining Agreement.
Plaintiffs are nurses employed by defendant medical center pursuant to a collective bargaining agreement (CBA) negotiated between the medical center and the union. The nurses agreed to submit non-CBA covered claims or disputes to final and binding arbitration before the American Arbitration Association. The disputes came in two main categories: (1) grievances brought by the union under the CBA on behalf of the nurses; and (2) claims decided by the labor commissioner. The appeal concerned the trial court’s order denying the medical center’s petition to compel arbitration of the nurses’ individual claims. Affirming, the Court of Appeal found the medical center actively participated in a five-day labor commissioner hearing of the nurses’ individual claims and also delayed for four years before requesting arbitration. (Desert Regional Medical Center, Inc. v. Miller (Cal. App. 4th Dist., Div. 2, Jan. 6, 2023) 87 Cal.App.5th 295.)
Where Can Sexual Predators Be Safely Placed in a Community?
A criminal defendant was convicted of kidnapping, rape, and forcible oral copulation in 1980. He was sentenced to 20 years in prison but soon escaped and committed another rape against a 15-year-old in 1981. He was sentenced to an additional 11 years and 4 months. When his prison term neared its end, the district attorney successfully petitioned to have him declared a sexually violent predator (SVP) under the Sexually Violent Predators Act (Welf. & Inst. Code, § 6600 et seq.; SVPA). Once it is determined that a person no longer meets the definition of SVP, he or she must be released. Alternatively, if an offender remains an SVP but can be treated in a less restrictive setting—and the public can be adequately protected by conditions allowing for close supervision—the offender can be conditionally released to the community under the supervision of the Department of State Hospitals. In 2019, the Department of State Hospitals deemed him an appropriate candidate for conditional release. The trial court found he would not endanger the community and could be adequately supervised in a less restrictive setting, making him eligible for conditional release. The site proposed was a rental home in rural Santa Cruz County, in a small town with a population of just over 3,000. There was no cellular service at the property, though cell phone calls could be made by connecting to the home’s wireless internet. The staff responsible for supervising him would be approximately 65 miles away with an estimated response time of 75 minutes. The surrounding community was given notice, and the notice prompted a significant community response, with hundreds of residents sending letters to the court urging against the placement. Included was a declaration from the administrator of a school operating in a home less than a quarter mile from the proposed placement site. The school had four full time students and six part time students enrolled, and three applicants for future enrollment. Ultimately, the trial court ordered him released to the proposed site, after concluding that a home school should not be considered as a school under the SVPA. The district attorney petitioned the Court of Appeal for a writ of mandate. The department argued that including home schools “would allow residents living in the vicinity of a proposed SVP placement to unilaterally block the placement by simply registering their residence as a home school after receiving notice of the proposed placement.” The Court of Appeal issued the writ and ordered the trial court to vacate its order because the court lacked the authority to add a material requirement in the statute that prevented placement near a school. (People v. Superior Court of Santa Cruz County (Cal. App. 6th Dist., Jan. 6, 2023) 87 Cal.App.5th 373.)
Online Arbitration Agreement Not Valid for In-Store Purchase.
Costs After Demand Letter Under the Voting Rights Act
Elections Code § 10010 contains a safe harbor procedure that requires a prospective plaintiff to notify a political subdivision before filing suit. Here, a law firm sent a demand letter, stating it would identify its client should the demand letter be unsuccessful. After the demand letter, the political subdivision, defendant school district, changed its at-large voting system to district-based voting. The statute has a mechanism for a prospective plaintiff to claim costs. The prospective plaintiff claimed costs, but the trial court declined to award them. Reversing, the Court of Appeal stated: “We conclude that the trial court’s finding that Appellant did not represent a prospective plaintiff is based on an overly restrictive interpretation of the statute. We further conclude that the ‘cost of work product’ for which a prospective plaintiff is entitled to reimbursement is not limited to out-of-pocket expenditures by the prospective plaintiff, but also includes costs advanced by their lawyer. We remand to the trial court to determine in the first instance, in light of our decision, what costs are recoverable by Perez Firm.” (Law Offices of Carlos R. Perez v. Whittier Union High School Disrict (Cal. App. 2nd Dist., Div. 8, Jan. 11, 2023) 2023 WL 164430.)
Access to Records of Public University.
An assistant professor at a public university submitted four articles on topics in her field of study to various academic journals unaffiliated with her university. All four of the articles were later either retracted or corrected by the journals, at least in part, due to inaccurate references or text overlap from uncited sources. Soon after that, the professor left her position at the university. A third party investigating the article retractions sent the university a request under the California Public Records Act (Gov. Code, § 7920.000 et seq.; CPRA), seeking certain post-publication communications between the professor, the university, and the journals regarding the retracted articles. The university determined the requested documents were subject to disclosure. The professor disagreed, filed a petition for writ of mandate, and sought a preliminary injunction to prevent disclosure. The trial court denied the professor’s motion for preliminary injunction, concluding she had not met her burden of establishing a likelihood of prevailing on the merits. Affirming, the Court of Appeal stated, “Finding no abuse of discretion, we affirm. As explained below, the requested communications qualify as public records under the CPRA, and the professor did not establish the records are otherwise exempt from disclosure.” (Iloh v. Regents of the University of California (Cal. App. 4th Dist., Div. 3, Jan. 13, 2023) 2023 WL 179714.)
Plaintiff Did Not Show Federal Government Employer’s Stated Reason for Terminating Her Was Pretextual.
The Treasury Department’s Internal Revenue Service (IRS) terminated plaintiff after determining that she had committed several Unauthorized Access of Taxpayer Data (UNAX) offenses. Prior to her termination, plaintiff served as an IRS Revenue Officer for 27 years. She was responsible for using the IRS’s integrated data retrieval system to access information for taxpayers assigned to her as part of her regular work. Accesses giving rise to UNAX offenses are outside of official channels and are not otherwise within the employee’s official duties. Plaintiff was unsuccessful in her Equal Employment Opportunity complaint and thereafter filed an action for age and national origin discrimination. The district court granted summary judgment for the Treasury Department. Affirming, the Ninth Circuit decided the Treasury Department articulated sufficient reason for firing plaintiff and plaintiff’s evidence did not raise a genuine issue of pretext. (Opara v. Yellen (9th Cir., Jan. 17, 2023) 57 F.4th 709.)
Coroner’s Records Are Public Records.
The family of a decedent hired a forensic pathologist to undertake a forensic autopsy review after a coroner reported the death was by suicide. In response to a request under the California Public Records Act (Govt. Code, § 6250 et seq.), the coroner declined to provide photographs of the scene or the autopsy and declined to provide the full Summary and Investigation Notes Report prepared by the coroner’s investigator, explaining that the decedent’s widow had not consented to such disclosure. The trial court ruled in favor of the coroner. Reversing, the Court of Appeal concluded “the records in question are public records and may not, for the most part, be withheld.” (Edais v. San Mateo County Coroner’s Office (Cal. App. 1st Dist., Div. 3, Jan. 17, 2023) 2023 WL 194559.)
Full Time High School Student and Child Support Payments.
Family Code § 3901, subdivision (a)(1), provides that child support continues for an unmarried child who has turned 18 years old, is a full-time high school student, and is not self-supporting, until he or she finishes 12th grade or turns 19 years old, whichever happens first. A teenage girl, the daughter of divorced parents, received treatment for a chronic eating disorder for most of her teen years and consequently did not follow a traditional school calendar. During the first month of her inpatient treatment in September 2020, she was not permitted to attend classes. Her transcript reflects that she took one class through Grossmont Adult School in the fall of 2020, and no classes during the winter from late 2020 to early 2021, while she was still in inpatient treatment. However, after her discharge, she took two classes in the spring of 2021, and earned a high school diploma in May 2021 from an adult school, four years after starting high school in the fall of 2017. The father went to court and obtained a refund in his child support payments because his daughter was not a full-time student. Reversing, the Court of Appeal concluded “that ‘full-time’ in Family Code section 3901 generally has the same meaning as set forth in Education Code section 48200 regarding compulsory education for minor children: ‘the length of the schoolday [designated] by the governing board of the school district in which the residency of either the parent or legal guardian is located.’ (Ed. Code, § 48200.) Because the trial court did not apply this definition, we reverse the court’s order and remand for further proceedings and additional discovery, if necessary, so that the court may make appropriate findings and enter a new order consistent with this opinion.” (In re the Marriage of D.H. and B.G. (Cal. App. 4th Dist., Div. 1, Jan. 17, 2023) 2023 WL 195722.)
Cannabis-Related Business Lacked Standing to Pursue RICO Claim.
Plaintiff is a cannabis farmer and entrepreneur who operates a business that grows, markets, and sells cannabis in California. Her cannabis businesses are also plaintiffs. After California voters passed a ballot proposition permitting the sale of cannabis for recreational use, plaintiff sought to expand her operation and engaged defendant as a business partner. Plaintiffs alleged that defendant and others subsequently engaged in unlawful, fraudulent conduct that injured plaintiffs’ cannabis businesses and related property. Plaintiffs asserted dozens of claims against defendant, two of which allege mail and wire fraud under the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. § 1961 et seq.; RICO). The district court granted defendant’s motion to dismiss with prejudice, holding that plaintiffs lacked standing to bring the RICO claims. Noting it was not clear whether the district court dismissed the RICO claims for lack of statutory standing or Article III standing, the Ninth Circuit affirmed, stating: “Looking to RICO as a whole, it is clear that Congress did not intend ‘business or property’ to cover cannabis-related commerce. . . . We hold that while [plaintiffs] have Article III standing, they lack statutory standing under RICO.” (Shulman v. Kaplan (9th Cir., Jan. 18, 2023) 58 F.4th 404.)
Family Code § 3044’s Presumption Against Award of Custody to Perpetrator Who Committed Domestic Violence Within Five Years Runs from Time of the Custody Order. Not the Filing of the Dissolution Petition.
In a marriage dissolution, the family court found that both parties “committed acts that could be seen as domestic violence.” To invoke Family Code § 3044’s presumption against the award of custody of a child to a perpetrator of domestic violence, the trial court must find that domestic violence occurred within five years of its custody order. In January 2015, the mother filed for dissolution of the marriage and in February 2021, the court held a hearing on child custody and visitation. After a six-day trial on custody and visitation issues, the family court made final custody orders, directing both parents to share joint legal and physical custody of the couple’s then-seven-year-old daughter. On appeal, the mother argued that the five-year period provided for in section 3044 runs backwards from the filing of the dissolution petition, not from the date of the family court’s custody ruling. Affirming, the Court of Appeal stated: “Here, the trial court’s proposed statement of decision included a factual finding that there were no incidents of domestic violence within five years of the court’s hearing and resulting custody order.” (In re Marriage of Destiny and Justin C. (Cal. App. 4th Dist., Div. 1, Jan. 19, 2023) 2023 WL 312849.)
Previously we reported: School District Cannot Set Double Standards.
The Fellowship of Christian Athletes (FCA) requires students serving in leadership roles to abide by a Statement of Faith, which includes the belief that sexual relations should be limited within the context of a marriage between a man and a woman. The San Jose Unified School District revoked FCA’s status as an official student club at its high schools, claiming that FCA’s religious pledge requirement violates the School District’s non-discrimination policy. Reversing the district court’s denial of FCA’s motion for a preliminary injunction, the Ninth Circuit stated: “While this clash of values may pose a difficult policy choice, the legal outcome is much more straightforward based on the record before us. Under the First Amendment, our government must be scrupulously neutral when it comes to religion: It cannot treat religious groups worse than comparable secular ones. But the School District did just that. The School District engaged in selective enforcement of its own non-discrimination policy, penalizing FCA while looking the other way with other student groups. For example, the School District blessed student clubs whose constitutions limited membership based on gender identity or ethnicity, despite the school’s policies barring such restricted membership. The government cannot set double standards to the detriment of religious groups only. We thus reverse the district court’s denial of FCA’s motion for preliminary injunction and direct the district court to enter an order reinstating FCA as an official student club.” (Fellowship of Christian Athletes v. San Jose Unified School District (9th Cir., Aug. 29, 2022) 46 F.4th 1075.)
The Ninth Circuit ordered that this matter be reheard en banc. The three-judge panel opinion was vacated. (Fellowship of Christian Athletes v. San Jose Unified School District Board of Education (9th Cir., Jan. 23, 2023) 2023 WL 248320.)
Teacher Does Not Have Either a Constitutional or Statutory Right to Representation by the Union as an Alleged Misclassified Employee.
Plaintiff, a teacher, alleged the union breached its duty to represent her in her claim against a school district, wherein she claimed to be misclassified as a substitute teacher. The Public Employment Relations Board declined to file a complaint against the union based on plaintiff’s charge because plaintiff, as a substitute teacher, was not entitled to union representation. Substitute teachers were excluded from representation by virtue of the collective bargaining agreement between the union and the school district. Plaintiff petitioned the superior court to issue a writ of mandate. The court sustained defendants’ demurrers. Affirming, the Court of Appeal stated: “In cases involving the Board’s refusal to file an unfair practice complaint, our review is limited to whether the Board violated the Constitution, misinterpreted a statute, or exceeded its authority. [Citation.] [Plaintiff] argues she has a constitutional right to union representation as a misclassified teacher and as a substitute teacher. She further argues she has a statutory right to representation by the union that could not be circumvented by a collective bargaining agreement. [¶] We disagree with [plaintiff] that she has a constitutional or statutory right to representation by the union as an alleged misclassified employee or as a substitute teacher.” (Wu v. Public Employment Relations Board (Cal. App. 3rd Dist., Jan. 19, 2023) 2022 WL 18360391.)
Plaintiffs Offered No Admissible Evidence Creating a Dispute as to the Authenticity of Their Signatures on Arbitration Agreements.
Defendant moved to compel arbitration of the employment-related claims of three plaintiffs. In response, each plaintiff declared that on his first day of work, he was given a stack of documents, was told “to quickly sign the documents so I could get to work,” and “signed the stack of documents immediately and returned them.” Each added, “I do not recall ever reading or signing any document entitled Binding Arbitration Agreement . . . . I do not know how my signature was placed on [the document].” Each plaintiff stated further that if he had understood that the agreement waived his right to sue defendant, he would not have signed it. The trial court concluded that defendant had not borne its burden of proving the authenticity of the signatures and, alternatively, that the agreement was unconscionable. Reversing, the Court of Appeal concluded that plaintiffs “offered no admissible evidence creating a dispute as to the authenticity of their physical signatures.” (Iyere v. Wise Auto Group (Cal. App. 1st Dist., Div. 4, Jan. 19, 2023) 2023 WL 314122.)
Securities Fraud Case Tossed.
Plaintiff, a shareholder at the time of the sale of defendant company, sued defendants under § 14(e) of the Securities Exchange Act of 1934 (15 U.S.C. § 78n(e)). He contended the management of the company deflated revenue projections in a buyout in order to encourage shareholders to agree to the sale. He further contended the reason was that management feared a hostile takeover and the loss of their jobs. The district court dismissed the suit. Reviewing de novo, the Ninth Circuit affirmed, stating: “It is not reasonable to infer from the allegations of the second amended complaint that Finjan management believed that the sale price was too low. Thus, Grier failed sufficiently to allege subjective falsity, a critical element of his claim.” (In re Finjan Holdings, Inc. (9th Cir., Jan. 20, 2023) 58 F.4th 1048.)
Force Majeure and Impossibility Arguments About Not Paying Rent During the Pandemic Failed.
Plaintiff sued defendant for nonpayment of rent. On appeal from summary judgment in favor of defendant, plaintiff contended the trial court erred because its obligation to pay rent was excused due to the COVID-19 pandemic and resulting government orders prohibiting it from operating its fitness facility for several months. Affirming, the Court of Appeal stated: “[T]he lease explicitly excludes from the definition of force majeure event any ‘failures to perform resulting from lack of funds or which can be cured by the payment of money.’ [¶] . . .[¶] . . . Fitness seems to be conflating impossibility with frustration of purpose . . . .” (SVAP III Poway Crossings, LLC v. Fitness International, LLC (Cal. App. 4th Dist., Div. 1, Jan. 20, 2023) 2023 WL 333705.)
Arbitration Award Vacated Because the Underlying Contract Was Unenforceable so the Arbitrator Exceeded Her Powers.
The trial court vacated an arbitration award in favor of a contractor after finding the contractor was not duly licensed because its responsible managing employee [RME] did not meet the criteria required by law. The appellate court affirmed, stating: “[The contractor] . . . contend[ed] the trial court misapplied the burden of proof regarding whether [he] was a duly licensed contractor. We reject this argument. The trial court correctly determined that [the contractor] had the burden of proof on this issue. [¶] [The contractor] also argue[d] the trial court erroneously denied it an evidentiary hearing. In the trial court, however, [the contractor] did not seek an evidentiary hearing. . . . [¶] . . . [¶] . . . The arbitration award therefore must be vacated because the arbitrator exceeded her powers.” (Vascos Excavation Group LLC v. Gold (Cal. App. 2nd Dist., Div. 5, Jan. 20, 2023) 2022 WL 18398783.)
Qui Tam Action Tossed.
In a qui tam action against a hospital and others to impose civil penalties for violation of the Insurance Fraud Prevention Act (Ins. Code, § 1871 et seq.). The State of California and the relator appealed from a judgment entered after a bench trial in which the court found insufficient evidence supported their allegations that defendants engaged in insurance fraud by billing insurers for services performed in a detox center for which they had no appropriate license, and by employing a referral agency to steer patients to the center. Affirming, the Court of Appeal stated: “Here, CDI alleged that Encino Hospital misrepresented to insurers that it was properly licensed to provide detox services when it was not. The trial court found no evidence suggesting that defendants presented a false claim to any insurer. We agree; no authority of which we are aware or to which we have been directed obligates Encino Hospital to hold any license other than its license as a general acute care hospital.” (State ex rel. Rapier v. Encino Hospital Medical Center (Cal. App. 2nd Dist., Div. 1, Dec. 21, 2022) 2022 WL 18396584.)
United States Supreme Court Denied Veteran’s Requested Relief.
A veteran served in the Navy from 1977 until his honorable discharge in 1981. Approximately 30 years later, the Department of Veteran Affairs (“VA”) received the veteran’s application for disability compensation based on his psychiatric disorders. After finding that the veteran’s disorders resulted from trauma that he suffered while serving on an aircraft carrier that collided with another ship, the VA regional office granted the veteran benefits for his service-connected disabilities—schizoaffective disorder bipolar type with posttraumatic stress disorder. It assigned an effective date of June 3, 2011, the day that the VA received his claim. The veteran wanted his claim to be as of his date of discharge. The U.S. Supreme Court denied his request, stating: “The governing statute [38 U. S. C. §§1110, 1131] provides that the effective date of the award ‘shall not be earlier’ than the day on which the [VA] receives the veteran’s application for benefits. But the statute specifies 16 exceptions, one of which is relevant here: If the VA receives the application within a year of the veteran’s discharge, the effective date is the day after the veteran’s discharge. We must decide whether this exception is subject to equitable tolling, a doctrine that would allow some applications filed outside the 1-year period to qualify for the ‘day after discharge’ effective date. We hold that the provision cannot be equitably tolled.” (Arellano v. McDonough (U.S., Jan. 23, 2023) 143 S. Ct. 543.)
Previously we reported: The Attorney-Client Privilege When Attorney Wears Two Hats.
A grand jury issued subpoenas for a company and a law firm to produce documents as part of a criminal investigation targeting the company’s owner, who was the law firm’s client. Both the company and the law firm produced some documents to comply with the subpoenas, but withheld others. The district court ruled for the government with regard to some of the withheld documents, explaining those documents were either not protected by any privilege or else were discoverable under the crime-fraud exception. The government filed motions to hold the company and law firm in contempt, both of which the trial court granted. Analyzing the situation, the Ninth Circuit discussed the “primary purpose” test and the “because of” test. In the former, courts look at whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice, and that the natural implication of this inquiry is that a dual-purpose communication can only have a single “primary” purpose. The “because of” test instead considers the totality of the circumstances, and “when it can fairly be said that the document was created because of anticipated litigation, and would not have been created in substantially similar form but for the prospect of that litigation,” it is protected. Affirming the contempt orders, the Ninth Circuit held that “the primary-purpose test,” rather than the “because of” test, “governs in assessing attorney-client privilege for dual-purpose communication.” However, the court expressly left open the question of whether it should adopt “a primary purpose” test as distinguished from“the primary purpose” test should apply. (In re Grand Jury (9th Cir., Sep. 13, 2021) 23 F.4th 1088.)
The U.S. Supreme Court issued the following per curiam opinion: “The writ of certiorari is dismissed as improvidently granted.” (In re Grand Jury (U.S., Jan. 23, 2023) 143 S. Ct. 543.)
Serial ADA Litigant.
Plaintiff has paraplegia. He is a disability advocate and serial litigant. He uses a wheelchair and drives a van that deploys a ramp from the passenger side. For him to park and exit his vehicle, a parking lot must have an accessible parking space with an adjacent access aisle. Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. § 12182; ADA) prohibits places of public accommodation from discriminating against people on the basis of disability, and the ADA Accessibility Guidelines (§ 208.1; 502.1 (2010) (codified at 28 C.F.R. pt. 36, subpart D and apps. B and D); ADAAG) require parking lots of a certain size to have van-accessible spaces with access aisles. When plaintiff comes across a place that he believes is not compliant with the ADA, he takes photos to document the condition of the premises and often sues. The district court held for the business owner and against plaintiff. The central question on appeal was whether a place of public accommodation violates the ADA by opening up its private parking lot to customers without making it accessible to customers with disabilities. Reversing, the Ninth Circuit stated: “Because the business owner in this case testified that he allowed customers to park in the parking lot, we must reverse the district court’s judgment in favor of the defendant property owners, regardless of what the terms of their lease with the business owner specified. A business cannot offer parking to customers without disabilities while not offering that same benefit to customers with disabilities—that discrimination goes to the heart of the ADA. A second question raised by this appeal is whether a district court may rely on a plaintiff’s litigation history to question his credibility and intent to return to a place of public accommodation. We hold that a district court may not reject an ADA litigant’s stated intent to return to a location simply because the litigant is a serial litigant who brings numerous ADA cases.” (Langer v. Kiser (9th Cir., Jan. 23, 2023) 57 F.4th 1085.)
Trial Court Erred in Granting Summary Judgment for Defendant Because Defendant’s Expert Declaration Did Not Shift the Burden to Plaintiff.
Plaintiff sued defendant after she developed mesothelioma following the use of defendant’s product, which she began using 50 years prior. Based on a declaration from defendant’s employee, who was not employed by defendant until 1994, the trial court granted summary judgment for defendant. Finding that defendant’s evidence was inadmissible and could not shift the burden to plaintiff, the Court of Appeal reversed the grant of summary judgment. (LAOSD Asbestos Cases (Cal. App. 2nd Dist., Div. 8, Jan. 23, 2023) 2023 WL 354915.)
Court Erred in Issuing a Domestic Violence Restraining Order Without a Hearing.
The family court issued a domestic violence restraining order based on declarations of the parties without further inquiry. Reversing, the Court of Appeal stated: “Indeed, the language of [Family Code] section 6300, subdivision (a) permits the issuance of a restraining order based solely on an affidavit . . . . But section 6300 should not be read to override the due process requirements that provide for a hearing under section 6340.” Moreover, “given A.S.’s declaration that D.S. was violent on several occasions, we conclude that due process also requires that she be provided the opportunity to present evidence at a hearing so that the trial court can determine whether such incidents occurred, whether they constitute abuse under section 6203, and whether a restraining order should issue.” (In re the Marriage of D.S. and A.S. (Cal. App. 6th Dist., Jan. 23, 2023) 2023 WL 355833.)
Merely Pointing Out Things a CCP § 998 Offer Does Not Include Does Not Render It Ambiguous.
In a lemon law case, the car manufacturer made an offer to compromise pursuant to Code of Civil Procedure § 998. The offer was to pay plaintiff $160,000; he would be required to return the car with clean title; and he would be allowed to seek an award of attorney fees and costs by noticed motion, the amount to be determined by the court. Plaintiff did not accept the offer. The litigation continued for another two years. The parties settled on the day of trial for terms essentially identical to the § 998 offer. The trial court found the § 998 offer to be valid, and denied plaintiff his post-offer attorney fees because he did not obtain a more favorable result. On appeal, plaintiff contended the trial court erred because the offer was ambiguous in that “it did not expressly deem him the prevailing party and did not state whether [defendant] would brand the defective vehicle as a ‘Lemon Law’ buyback.” Plaintiff further contended the trial court should have awarded him additional attorney fees accrued after defendant’s offer to compromise. Affirming, the Court of Appeal stated: “[M]erely pointing out things the offer did not include does not render it ambiguous. Not specifying the prevailing party or articulating how the vehicle would be classified after its return are technical details that would not prevent a reasonable person from evaluating the offer against the prospects of proceeding to trial.” “There was no error in enforcing the statutory prohibition against awarding post-offer attorney fees and costs.” (Chen v. BMW of North America, LLC (Cal. App. 6th Dist., Jan. 23, 2023) 2023 WL 18407504.)
Motion to Quash Service of Summons Granted After Finding No General or Specific Jurisdiction.
This litigation arises from a bus accident that occurred on Interstate 15 in San Diego County, resulting in death and bodily injury. The defendants included the manufacturer of the bus’s chassis, the only defendant in this appeal. Defendant specially appeared in the action and filed a motion to quash service of summons based on lack of personal jurisdiction pursuant to Code of Civil Procedure § 418.10. Defendant’s motion was supported with evidence: (1) it is a Delaware corporation with its principal place of business in South Carolina; (2) it does not own property in California; (3) it does not manufacture and/or assemble vehicles in California, it has one employee in California who works remotely from home; and (4) it has 800 employees in South Carolina. The trial court denied plaintiffs request for a continuance to take discovery and granted the motion to quash. With regard to the plaintiffs’ argument on appeal that the trial court erred in not granting a continuance to conduct discovery, the Court of Appeal stated that plaintiffs failed to identify any specific area of inquiry that they would pursue if they were allowed to conduct discovery. Affirming the motion to quash, the appeals court found that plaintiffs had not established either general or specific personal jurisdiction. (Preciado v. Freightliner Custom Chassis Corporation (Cal. App. 4th Dist., Div. 1, Jan. 24, 2023) 2023 WL 369108.)
Attempted Coercion and Enticement of a Child.
Federal investigators discovered instant messages in which a criminal defendant negotiated with adult intermediaries in the Philippines and sent them money for sexually explicit images and livecam shows involving minors. Defendant was unequivocal in making these requests—he repeatedly insisted that children appear in these videos and images, and detailed the sexual acts that they should perform for money. Defendant requested children as young as five years old. A jury convicted defendant of attempted coercion and enticement of a child in violation of 18 United States Code §§ 2422(b). On appeal, defendant contended he never spoke with any minors or tried to coerce any minors to do anything. Affirming the conviction, the Ninth Circuit stated: “[Defendant] used money as a negotiating tool to persuade the adult intermediaries and, in turn, the children to participate in the sexual acts he described. . . . [¶] . . . The statute applies whether the minors are real or fictional . . . . There need not be any minor at all . . . .” “[O]ur ‘focus always remains on the defendant’s subjective intent because the statute is designed to protect children from the act of solicitation itself.’” (United States v. Eller (9th Cir., Jan. 25, 2023) 57 F.4th 1117.)
Question Whether Treatment Amounted to Persecution.
On review to the Ninth Circuit after an immigration judge (IJ) denied petitioner asylum and the Board of Immigration Appeals (BIA) affirmed, there was evidence petitioner was discriminated against because she was a lesbian. But neither the IJ nor the BIA was convinced there was persecution warranting asylum. Petitioner was verbally and physically harassed and received death threats because her community in Guatemala perceived her to be a lesbian, including because she wore men’s clothing to work. Granting the petition, the appeals court stated: “The agency erred in finding that the harm Antonio suffered did not rise to the level of persecution. The agency also failed to analyze the correct social group and may have failed to analyze all probative evidence regarding the government’s acquiescence in Antonio’s persecution. Accordingly, we grant the petition for review and remand for further proceedings consistent with this opinion.” (Antonio v. Garland (9th Cir., Jan. 26, 2023) 2023 WL 411361.)
Petition to Vacate/Correct Arbitration Award Must Be Timely.
Under the California Arbitration Act (Code Civ. Proc., § 1280 et seq.), a party seeking to vacate or correct an arbitration award must do so prior to the expiration of the Act’s statutory deadlines. Sometimes, the party seeking such relief misses those deadlines. If another party to the arbitration has filed a competing petition to confirm that award, is the trial court allowed to consider any of the objections to confirmation raised in untimely filings seeking to vacate or correct the award? And if the judgment confirming the award is appealed, may the party who untimely sought to vacate or correct the award renew on appeal their challenges to the award’s confirmation? The Court of Appeal answered both questions: “We conclude that the answer to both questions is ‘no.’ Because well-settled law dictates the finding that the appealing party in this case did not meet the Act’s deadlines for vacating or correcting the arbitration award, we affirm the judgment confirming that arbitration award and grant the prevailing party her attorney fees on appeal.” (Darby v. Sisyphian, LLC (Cal. App. 2nd Dist., Div. 2, Jan. 26, 2023) 2023 WL 409701.)
Nurses Cannot Sue State for Sexual Harassment by Prisoners.
Plaintiffs were employed as licensed vocational nurses by defendant and respondent California Department of Corrections and Rehabilitation (CDCR). They filed a class action against CDCR alleging that: (1) while assigned to duties that included one-on-one suicide monitoring, they were subjected to acts of sexual harassment by prison inmates; and (2) CDCR failed to prevent or remedy the situation in violation of the California Fair Employment and Housing Act (Gov. Code, § 12940 et seq.; FEHA). The trial court granted summary judgment for CDCR on the ground that it was entitled to statutory immunity under Government Code § 844.6, which generally provides that “a public entity is not liable for . . . [a]n injury proximately caused by any prisoner.” Affirming, the Court of Appeal declined to exempt FEHA claims from § 844.6. (Bitner v. Department of Corrections and Rehabilitation (Cal. App. 4th Dist., Div. 2, Jan. 26, 2023) 2023 WL 416241.)
Defendants Not Permitted to Enforce Arbitration Agreement They Had Not Signed.
Plaintiff signed an arbitration contract with an employer called Intelex Enterprises, LLC. While working for Intelex, she also worked for other firms. After termination, plaintiff sued the other firms but not Intelex; Intelex has never been a party to this case. The other firms moved to compel arbitration based on plaintiff’s agreement with Intelex. Plaintiff alleged the other firms shared the same legal and physical address; the same human resources person; the same controller; the same payroll department; the same risk management and legal services; and the same centralized information technology. Plaintiff declared the other firms were “jointly owned and operated.” All employees work in the same building and share the same facilities, including tools, desks, supplies, resources, and the like. The trial court denied the other firms’ motion to enforce a contract they had not signed. Affirming, the Court of Appeal stated: “The trial court was right. The Other Firms cannot equitably estop Hernandez because they do not show she is trying to profit from some unfair action. They have no proof of agency. And they are not third party beneficiaries of Intelex’s contract. Consequently, we affirm.” (Hernandez v. Meridian Management Services, LLC (Cal. App. 2nd Dist., Div. 8, Jan. 30, 2023) 2023 WL 1097324.)
Stop, Frisk and Key Fob.
One week after an armed robbery of a Sprint store in Los Angeles, a man was stopped and frisked by the Los Angeles Police Department. Although no weapons or contraband were found on him, an officer removed a car key from his belt loop without his consent and walked to a nearby parking lot in search of the car associated with the key. The man denied having a car. When officers located a red Buick whose flashing headlights responded to the key fob, the man fled and was apprehended a short distance away. A handgun was recovered from the car and later introduced at his trial as the weapon used in the Sprint store robbery. He was convicted of robbery and conspiracy to commit robbery in violation of 18 U.S.C. § 1951(a), and brandishing a firearm in violation of 18 U.S.C. § 924(c)(1)(A)(ii). The Ninth Circuit held the gun was illegally seized, but that there was substantial independent evidence establishing the defendant’s involvement in the robbery. However, the court reversed his conviction for brandishing a firearm. (United States v. Baker (9th Cir., Jan. 30, 2023) 2023 WL 1095359.)
Digital Treasure Hunt to Find Arbitration “Agreement.”
Plaintiff’s former supervisor liked to talk about his sex life, sexual acts, and also made unwanted sexual advances. Plaintiff reported the misconduct. Plaintiff alleged defendant never conducted an investigation, but that she was later informed the supervisor was no longer with the company. Thereafter, plaintiff alleged that defendant engaged in retaliatory behavior against her, including denying her needed support and refusing to promote her. Eight months after she filed her complaint, defendant moved to compel arbitration. According to defendant’s motion, all new hires are sent a welcome email containing a link to defendant’s system/portal, as well as a unique user name and temporary password to access the portal. After creating a personal password, new hires are directed to “GE Hire home page,” which contain several “tasks assigned to the new hire.” One task was to review an electronic copy of a document titled “‘SOLUTIONS: An Alternative Dispute Resolution Procedure.’” Another task was to review and electronically sign the “Acknowledgment Conditions of Employment.” Based on this process and GE’s other security measures, the declarant in defendant’s motion concluded an electronic signature on the Acknowledgment was made by plaintiff. The SOLUTIONS manual is 29 pages long, and contains a provision stating it “may be amended, without notice.” The trial court granted the motion to compel arbitration. Reversing, the Court of Appeal stated: “The agreement is factually distinguishable from existing case authority upholding employment adhesion contracts and exemplifies why the legislature drafted House Bill No. 4445 [(9 U.S.C. §§ 401, 402; Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021)].” (Murrey v. Superior Court of Orange County (Cal. App. 4th Dist., Div. 3, Jan. 30, 2023) 2023 WL 1098156.)
Free Appropriate Public Education.
A school district appealed the district court’s ruling that it denied a child, D.O., a Free Appropriate Public Education (FAPE) by failing to timely assess him for autism. The child’s mother did not immediately send a report she obtained from a clinical psychologist who concluded D.O. appeared to meet the criteria for autism spectrum disorder. The school district needed to review the report before conducting its own assessment of D.O. for autism because certain tests for autism would return invalid results if administered more than once in a year. D.O.’s mother filed a complaint alleging that the school district’s delay in assessing D.O. for autism was a procedural violation of the Individuals with Disabilities Education Act (20 U.S.C. § 1400 et seq.; IDEA) and a denial of a FAPE. The school district proposed to assess D.O. for autism in April 2017, but D.O.’s mother did not consent to an assessment until August 2017. The school district’s assessment was completed in October 2017 found that D.O. did not qualify for special education for autism. D.O.’s mother did not dispute or challenge that determination. In October 2017, an administrative law judge (ALJ) ruled that the school district’s delay in assessing D.O. for autism was neither a procedural violation of IDEA nor a denial of a FAPE. The district court reversed the ALJ in part, holding that the school district’s four-month delay in assessing D.O. constituted a procedural violation of IDEA and that this procedural violation denied D.O. a FAPE by depriving him of educational benefits. The Ninth Circuit reversed, holding D.O. was not denied a FAPE. (D.O. v. Escondido Union School District (9th Cir., Jan. 31, 2023) 2023 WL 1157654.)
Requisite Factual Finding Needed Before Marital Presumption Is Applied.
In adulthood, a man’s mother told him that the father who raised him was not his biological father. Upon learning the identity of his biological father, the man connected with his biological father who told others that the man was his son. The purported biological father died intestate, and his sisters sought to keep the man from inheriting from their brother’s estate. When the man was born, his mother was married to another man who raised him as their child. Under Family Code § 7540 (a), “the child of spouses who cohabited at the time of conception and birth is conclusively presumed to be the child of the marriage.” The probate court granted summary judgment for the sisters of thedeceased, finding their brother’s purported biological son to be the child of his mother and her former husband who raised him and not entitled as an heir of the estate. Noting that the man’s mother and her husband had separated for a while, the Court of Appeal reversed for lack of evidence of the requisite finding that the man’s mother and the father who raised him were cohabiting at the time of the man’s conception and birth. (Estate of Franco (Cal. App. 1st Dist., Div. 3, Jan. 31, 2023) 2023 WL 1098086.)
Time Rule Formula for Qualified Domestic Relations Order.
In this marital dissolution case, the wife appealed from a postjudgment order denying her request for the entry of a qualified domestic relations order (QDRO) and instead adopting the QDRO proposed by the husband. A 1997 stipulated judgment provided: “The parties stipulate and the Court orders that [Darrell’s LAPD pension] . . . shall be divided pursuant to the ‘time rule’ formula”—citing In re Marriage of Judd (1977) 68 Cal.App.3d 515 and In re Marriage of Henkle (1987) 189 Cal.App.3d 97—“by [QDRO]. The parties further stipulate and the Court orders that the parties will take action to join the pension to this action as a Claimant if necessary and that the Court shall reserve jurisdiction over the issue of the pension, and any [QDRO] necessary to divide the parties’ interests.” After 1997, the husband was promoted several times and his contributions to his pension increased significantly. Characterizing the wife’s request as a windfall, the family court adopted the husband’s position that the wife’s interest in the husband’s pension was determined at the 1997 state of the pension. Reversing, the Court of Appeal agreed with the wife that the family court erroneously used the husband’s rank and salary at the time of the parties’ separation to calculate the community interest in the husband’s pension instead of his final rank and salary at the time of his retirement, as required by the time rule. The court also determined the family court committed legal error by ordering that the wife’s property interest in the pension revert to the husband if she predeceases him. (In re Marriage of Belthius (Cal. App. 2nd Dist., Jan. 31, 2023) 2023 WL 1155352.)