Litigation Update: January 2023

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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, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Jonathan Grossman, Jennifer Hansen, Gary A. Watt, David Williams, Ryan Wu
Action Against Tootsie Roll’s Use of PHOs Preempted.

In this putative class action, plaintiff sued defendant Tootsie Roll Industries, Inc., alleging violations of federal and state law arising from the use of partially hydrogenated oils (PHOs) in defendant’s products between 2010 and 2016. In her first amended complaint (FAC), plaintiff asserted the use of PHOs was unlawful and unfair under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.; UCL), and breached the implied warranty of merchantability. The trial court sustained defendant’s demurrer to the FAC without leave to amend. The appeals court noted that plaintiff relied on general state laws “while federal law expressly sets a compliance date for PHO use.” Affirming, the Court of Appeal concluded that “the FAC does not state a claim under the UCL and that portions of that claim are preempted by federal law. We also conclude the claim for breach of warranty is preempted.”(Beasley v. Tootsie Roll Industries, Inc. (Cal. App. 1st Dist., Div. 4, Nov. 30, 2022) 85 Cal.App.5th 901.)

Equitable Estoppel and Arbitration.

Plaintiffs signed informed consent agreements and arbitration agreements with some, but not all, defendants. The defendants who did not have arbitration agreements nevertheless filed motions to compel arbitration on equitable estoppel grounds. The trial court denied those motions. On appeal, those defendants continued to press their equitable estoppel arguments. Affirming, the Court of Appeal stated: “In the context of arbitration, there are two circumstances in which equitable estoppel can apply. The first is ‘“when the signatory to a written agreement containing an arbitration clause ‘must rely on the terms of the written agreement in asserting [its] claims’ against the nonsignatory.” [Citations.]’ The second is ‘when the claims against the nonsignatory are founded in and inextricably bound up with the obligations imposed by the agreement containing the arbitration clause. In other words, allegations of substantially interdependent and concerted misconduct by signatories and nonsignatories, standing alone, are not enough: the allegations of interdependent misconduct must be founded in or intimately connected with the obligations of the underlying agreement.’ [Citations.]” The appeals court found neither circumstance applied in this case. (Pacific Fertility Cases (Cal. App. 1st Dist., Div. 1, Dec. 1, 2022) 85 Cal.App.5th 887.)

Murder Conviction Reversed Because of Miranda Violation.

Police arrested an 18-year-old high school student on a murder charge and questioned him in an interrogation room at a police station. During the interview, a forensic technician removed the student’s shirt, pants, socks, and shoes, and gave him a paper gown to wear. After about five hours of questioning by police, the young man said, “I wanna talk to a lawyer.” After some further dialog, a detective said, “I respect your decision that you wanna talk to a lawyer, but if for some reason you want to change your mind and you wanna talk to me, you can, just ask for me. I don’t care if it’s 2:00, 3:00 in the morning I’ll come back. Okay? Because I care about you getting your story the right way out. Okay?” (Emphasis added.) After spending the night in a holding cell, the student told one of the jailers he wanted to speak to the detectives again. The student was brought back to the same interrogation room for a second interview, still apparently wearing the same paper gown from the day before. He asked, “You guys don’t have any socks do you?” An officer asked him if he was cold, and the student said it had been colder where he was being held. The student asked, “Whatever I tell my lawyer, he’s going to tell you the same thing, right?” After waiving his Miranda rights, the student admitted shooting the murder victim, stating: “I, I self-defended myself, you know?” He was convicted of murder with a firearm enhancement and a substantive gang crime. Reversing the murder conviction, the Court of Appeal stated: “Once a suspect invokes the right to counsel, everything changes; that is, the police can no longer engage in efforts to convince the suspect to speak to them. . . . This is because ‘“a change of mind prompted by continued interrogation and efforts to convince the defendant to communicate with the officers cannot be considered a voluntary, self-initiated conversation.”’ “Here, given [defendant’s] state of mind and the surrounding circumstances ([defendant] was in high school with no record of prior arrests, his confusion about the role of a detective versus a lawyer, the apparent coldness, his clothes being taken away, and he was wearing a paper gown), we find [defendant] did not make a voluntary, knowing, and intelligent Miranda waiver prior to the second interview. Further, given the detective’s statement encouraging [defendant] to speak to her because she cared about him getting his ‘story the right way out’—after he had invoked the right to counsel—it appears the detective, rather than [defendant], initiated the second interview.” (People v. Avalos (Cal. App. 4th Dist., Div. 3, Dec. 2, 2022) 85 Cal.App.5th 926.)

Injunction Against Employer Vacated.

An employer told a union it was withdrawing its recognition of the union due to its belief the union no longer enjoyed the majority support of the employees. The union claimed unfair labor practices. While the matter was pending before an administrative law judge, the union filed a petition in federal court for a preliminary injunction. The district court granted the injunction. Vacating the injunction, the Ninth Circuit concluded the district court mistakenly believed it was bound by a mandatory presumption to a likelihood of irreparable harm. (Hooks for and on Behalf of National Labor Relations Board v. Nexstar Broadcasting, Inc. (9th Cir., Dec. 5, 2022) 54 F.4th 1101.)

No Liability Under the Communications Decency Act.

Prager University sued Google alleging it restricted access to, and third-party advertising on, the university’s YouTube videos due to its political and religious views. After sustaining defendant’s demurrer without leave to amend, the trial court dismissed the action. Section 230(c)(1) of the Communications Decency Act (47 U.S.C. § 230; CDA), provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The Court of Appeal provided numerous reasons for affirming, including “that defendants’ generalized public statements regarding their monitoring and filtering practices do not give rise to a state law contractual obligation to regulate their publishing decisions.” (Prager University v. Google LLC (Cal. App. 6th Dist., Dec. 5, 2022) 85 Cal.App.5th 1022.)

PAGA Goes to Arbitrator.

The trial court denied defendant’s motion to compel arbitration of an action brought under the Private Attorneys General Act of 2004 (Labor Code, § 2698 et seq.; PAGA). The motion was based on plaintiff’s predispute agreement to arbitrate all claims arising from their employment relationship. Reversing, the Court of Appeal stated: “The trial court understandably denied the motion based on a rule followed by numerous California Courts of Appeal that predispute agreements to arbitrate PAGA claims are unenforceable. We hold that this rule cannot survive the U.S. Supreme Court’s recent decision in Viking River Cruises, Inc. v. Moriana (2022) ___U.S.___ [142 S.Ct. 1906] (Viking River). We further hold that the scope of the arbitration clause is to be determined by the arbitrator, in accordance with the arbitration agreement. Specifically, the parties’ dispute about whether nonindividual PAGA claims are governed by the arbitration agreement, in the same way individual PAGA claims are, is an issue for the arbitrator to address.” (Lewis v. Simplified Labor Staffing Solutions, Inc. (Cal. App. 2nd Dist., Div. 8, Dec. 5, 2022) 85 Cal.App.5th 983.)

No Antitrust Violation.

Plaintiff contended defendant Google’s revision of its algorithm caused plaintiff’s organic search ranking to decline. According to plaintiff, Google violated the Sherman Act (15 U.S.C. § 2) by maintaining a monopoly in the online search advertising market. The district court dismissed the action. Affirming, the Ninth Circuit held that the record did not support plaintiff’s contention that it defined the relevant market to include the online, organic search market in addition to the online search advertising market. (, LLC v. Google LLC (9th Cir., Dec. 6, 2022) 54 F.4th 1130.)

Competing Requests for Protective Orders.

Husband and wife filed competing requests for domestic violence restraining orders under the Domestic Violence Prevention Act (Fam. Code, § 6200 et seq.; DVPA). The trial court granted wife’s petition and denied husband’s petition. On appeal, husband argued: (1) the trial court misunderstood the scope of its discretion to the extent it believed Family Code § 6305 constrained its authority to simultaneously grant both requests for protective orders in this case; (2) even if § 6305 applied, the trial court abused its discretion by choosing between two identified aggressors in order to grant relief to only one of them; and (3) the trial court abused its discretion by failing to grant his request for custody of the parties’ children. Affirming, the Court of Appeal stated: “We conclude that section 6305 does govern the parties’ competing requests for protective orders; the statute expressly permits the trial court to weigh the acts of the parties to determine if one should be considered the dominant aggressor before issuing a mutual restraining order; and the trial court did not abuse its discretion in denying [h]usband’s custody request.” (Salmon v. Salmon (Cal. App. 4th Dist., Div. 2, Dec. 6, 2022) 85 Cal.App.5th 1047.)

Lease Greater than 99 Years Is Void.

This is a commercial landlord-tenant dispute. Plaintiff is the landlord; defendant is the tenant. The lease had a term greater than 99 years. Civil Code § 718 provides in relevant part: “No lease or grant of any town or city lot, which reserves any rent or service of any kind, and which provides for a leasing or granting period in excess of 99 years, shall be valid.” The main issue on appeal was whether a lease that violates § 718 is void or voidable. The Court of Appeal held: “No published case has directly answered this question. It makes a difference here because if the lease is voidable, [defendant] can assert equitable defenses against [plaintiff’s] claims for declaratory relief. We hold the part of the lease exceeding 99 years is void.” (Tufeld Corporation v. Beverly Hills Gateway, L.P. (Cal. App. 2nd Dist., Div. 5, Dec. 7, 2022) 86 Cal.App.5th 12.)

No Antitrust Violation Shown.

Two entertainment journalists who challenged the membership policies of the Hollywood Foreign Press Association brought an antitrust action under the federal Sherman Act (15 U.S.C. §§ 1, 2), as well as California’s Cartwright Act (Cal. Bus. & Prof. Code, §§ 16700–16770). The HFPA is a California non-profit mutual benefit corporation whose members are involved in reporting for media outlets outside of the United States. The members are offered advantages such as access to Hollywood talent granted by movie studios. The district court dismissed the action. Affirming, the Ninth Circuit held that the journalists did not establish a per se restraint of trade under § 1 on either a theory that the HPFA’s membership practices have produced an anti-competitive group boycott of all nonmember foreign entertainment journalists, or a theory that the HFPA members have unlawfully agreed to divide the foreign entertainment news market among themselves. (Flaa v. Hollywood Foreign Press Association (9th Cir., Dec. 8, 2022) 55 F.4th 680.)

Plaintiff Alleged Selective Enforcement of School District Policy.

Plaintiff is an enrolled member of a Native American tribe. She asked her school district to accommodate her religious practice by allowing her to wear an eagle feather on her cap during high-school graduation. The district declined the request on the ground that the policy permitted no exceptions. Plaintiff arrived at graduation wearing an eagle feather, and district officials prohibited her from attending. But that same day, as alleged in the complaint based on 42 U.S.C. § 1983 (among other things), the district permitted other students to wear secular messages on their graduation caps. The district court dismissed the complaint. Reversing, the Ninth Circuit held that plaintiff plausibly alleged, at the motion-to-dismiss stage, that the school district selectively enforced its policy in violation of her First Amendment rights. (Waln v. Dysart School District (9th Cir., Dec. 9, 2022) 54 F.4th 1152.)

No Fourth Amendment Violation.

Plaintiff employer alleged under 42 U.S.C. § 1983 that defendant Washington State Department of Labor and Industries wrote citations and assessed administrative fines against plaintiff based on information obtained from disgruntled employees and without a warrant. It claimed the employees gave the department cell-site location and GPS coordinates for plaintiff’s vehicles, which showed movement of other employees in the field. The district court granted summary judgment for defendants. Affirming, the Ninth Circuit found no Fourth Amendment violation. (Kleiser v. Chavez (9th Cir., Dec. 9, 2022) 55 F.4th 782.)

Trial Court Erred in “Correcting” an Arbitrator’s Award.

An arbitrator determined that a borrower and lender were liable to each other for similar amounts, each roughly two and a half million dollars. He then offset the awards against each other, resolving the disputed issue of whether a setoff was proper. A bank, however, had also lent money to the borrower. That bank (the intervenor and not a party to the arbitration) believed that the setoff effectively circumvented another agreement. Instead of being offset against the other lender’s award, the bank believed, the borrower’s award should go toward satisfying the bank’s loan. It thus convinced the trial court to correct the arbitrator’s award by eliminating the setoff. Reversing, the Court of Appeal stated: “Per statute, the trial court could correct the award only ‘without affecting the merits of the decision upon the controversy submitted.’ (Code Civ. Proc., § 1286.6, subd. (b).) This helps ensure that a party cannot use a petition to correct an arbitration award as an appeal of an arbitrator’s considered decision. We hold that, on the facts presented, the correction affected the merits of the arbitrator’s decision. Accordingly, the correction was improper, and we reverse.” (E-Commerce Lighting, Inc. v. E-Commerce Trade LLC (Cal. App. 4th Dist., Div. 2, Dec. 9, 2022) 86 Cal. App. 5th 58.)

The Juvenile Court Did Not Authorize the Probation Officer to Impose Sanctions.

The juvenile court adjudged a minor to be a ward of the court and ordered him to reside in his parent or guardian’s home under several conditions of probation. The court further ordered: “Probation is authorized to offer the minor up to 50 hours of community service, or up to a cumulative total of 10 days on the community service work program as an option to work off alleged probation violations.” On appeal, the minor attacked this provision of the court’s dispositional order as a constitutionally improper delegation of judicial authority to the probation department and as a deprivation of due process. Both challenges rested on the premise that the court’s order allowed the probation department itself to determine that the minor had violated his probation and to impose community service as a sanction for the violation. Rejecting the minor’s contentions, the California Supreme Court stated: “The juvenile court did not authorize the probation officer to adjudicate violations or impose sanctions for them, but only to ‘offer’ minor the ‘option’ of performing community service when a violation is ‘alleged.’ In effect, the juvenile court gave its advance approval to an agreement that might be reached between minor and the probation officer for the performance of a certain amount of community service in lieu of having an alleged probation violation adjudicated in a judicial proceeding. The court’s order did not thereby improperly delegate any part of the judicial function to the probation officer, nor did it deprive minor of any judicial process constitutionally due him. Under the challenged provision, minor remained free to reject any offer the probation department made and to invoke the ordinary statutory procedures for adjudication of an alleged probation violation.” (In re D.N. (Cal., Dec. 12, 2022) 301 Cal.Rptr.3d 801.)

Trial Court Erred in Dismissing Action Under the Five-Year Statute.

On appeal, plaintiffs argued the trial court erred by dismissing their complaint pursuant to Code of Civil Procedure §§ 583.310 & 583.360 because the court’s calculation of the five-year deadline improperly failed to exclude a period of approximately six months between when the parties signed a settlement agreement and when defendants abandoned it. Finding the trial court erred in dismissing the action, the Court of Appeal stated: “[W]e agree with plaintiffs that the court miscalculated the five-year period under sections 583.310 and 583.340 because it erroneously viewed the failure to satisfy a condition precedent to performance as a bar to valid contract formation.” (Seto v. Szeto (Cal. App. 1st Dist., Div. 4, Dec. 12, 2022) 302 Cal.Rptr.3d 243.)

No Flavored Tobacco Sales in California.

In 2019, Health and Safety Code § 104559.5, subdivision (b)(1) was enacted, set to go into effect on January 21, 2021. It provided that tobacco retailers shall not sell a flavored tobacco product in California. A referendum challenging the law qualified to be on the ballot for the November 8, 2022 election. Accordingly, the referendum suspended the operation of the law unless and until it was approved by a majority of voters. Californians approved the law by a margin of 63.6 percent to 36.5 percent. On November 28, 2022, the Ninth Circuit denied a tobacco company’s request for an injunction pending appeal. Thereafter, the company petitioned the United States Supreme Court for an emergency injunction. The company argued it faced irreparable harm, stating: “In no fewer than 22 days, Applicants will be shut out of one of the Nation’s largest markets for flavored tobacco products.” With considerably less angst, the nation’s highest court denied the request. (R.J. Reynolds Tobacco Co. v. Bonta (U.S., Dec. 12, 2022) 2022 WL 17576427.)

Deceptive Letters Concerning Student Loans and Scholarships.

Defendant mailed millions of solicitations to current and prospective college students, advertising a targeted program for assisting those students in applying for scholarships. The Consumer Financial Protection Bureau (CFPB) filed an enforcement action in a federal court alleging the solicitations were deceptive. The Consumer Financial Protection Act (12 U.S.C. §§ 5481(15)(A)(viii), 5536(a)(1)(B)) prohibits providers of “financial advisory services” from engaging in deceptive conduct. The letters featured official-looking letterhead with college-themed seals and an arbitrary filing deadline. They advised students to avoid taking out loans until they had applied to all of the available “free” financial aid programs. The letters asked students and their parents to disclose basic demographic information in the Demographic Form and pay defendant a $59 to $78 “processing” fee. In exchange, the letters vaguely promised to enroll the students in a financial aid program. Meanwhile, the Demographic Form promised “to provide as many targeted financial aid opportunities as possible to each and every student.” In fine print footnotes, the letters disclaimed any affiliation with governmental or educational institutions. The district court granted summary judgment for the CFPB. Affirming, the Ninth Circuit stated: “The district court did not err by concluding that no issue of material fact existed as to the deceptive nature of Aria’s conduct based upon the net impression created by his entire solicitation packet.” (Consumer Financial Protection Bureau v. Aria (9th Cir., Dec. 13, 2022) 54 F.4th 1168.)

Plaintiff May Proceed with Legal Malpractice Claim Against Her Bankruptcy Attorney.

Prior to filing the present legal malpractice action, plaintiff had filed for bankruptcy under Chapter 11. After she settled claims against her for fraud, embezzlement and misappropriation, the bankruptcy court dismissed the bankruptcy case. Thereafter, without seeking leave from the bankruptcy court, plaintiff brought the instant action against her court-approved bankruptcy counsel. Following the holding in Barton v. Barbour (1881) 104 U.S. 126—which requires that before filing a lawsuit against officers appointed or approved by the court, a plaintiff must obtain leave from the bankruptcy court that appointed or approved them—the superior court dismissed the lawsuit with prejudice. Reversing, the Court of Appeal stated: “The Barton doctrine did require [plaintiff] to obtain leave from the bankruptcy court for claims arising out of bankruptcy counsel’s court-approved representation of her as a debtor in possession. However, the Barton doctrine did not require [plaintiff] to obtain leave to file claims arising out of bankruptcy counsel’s representation after the bankruptcy court appointed a Chapter 11 trustee and [plaintiff] was no longer a debtor in possession.” (Akhlaghpour v. Orantes (Cal. App. 2nd Dist., Div. 7, Dec. 13, 2022) 2022 WL 17592463.)

Agreement to Arbitrate Unconscionable.

Defendant employer moved to compel arbitration, arguing plaintiff employee had signed a valid arbitration agreement when he was hired. The trial court found the agreement unconscionable to the extent that severance would not cure the defects, and declined to enforce it. Affirming, the Court of Appeal held the trial court did not abuse its discretion in finding it was unconscionable, and the appellate court further rejected the defendant’s contention the arbitrator, not the court, should have decided the issue of unconscionability. (Beco v. Fast Auto Loans, Inc. (Cal. App. 4th Dist., Div. 3, Dec. 14, 2022) 2022 WL 17665377.)

Motion to Compel Production of Personal Records Brought Under the Wrong Statute.

A non-party consumer objected to the production of personal records. The subpoenaing party brought a motion to enforce the subpoena more than 20 days after the objection, citing Code of Civil Procedure § 2025.480, a statute that provides a party seeking discovery may move the court for an order compelling an answer or a production within 60 days after the completion of the deposition. The trial court granted the motion. Reversing, the Court of Appeal stated: “The subpoenaing party may [] bring a motion to enforce the subpoena within 20 days of the objection. (§ 1985.3, subd. (g).) We hold that after this 20-day deadline expires, the subpoenaing party cannot move to enforce the subpoena over the objection through a motion to compel under section 2025.480, which has a 60-day deadline.” (Thai v. Richmond City Center, L.P. (Cal. App. 4th Dist., Div. 1, Dec. 14, 2022.) 2022 WL 17665005.)

Conflicting Online Agreements.

When plaintiffs created their online accounts with defendant, they agreed to the “Coinbase User Agreement,” which contained an arbitration provision. Later, they opted into the “Official Rules,” which included a forum selection clause providing that California courts had exclusive jurisdiction for controversies involving sweepstakes. Plaintiffs sued under various California statutes, and the district court denied defendant’s motion to compel arbitration. Affirming, the Ninth Circuit stated: “The district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties’ dispute must be resolved by an arbitrator or by a California court, the Official Rules’ forum selection clause supersedes the User Agreement’s arbitration clause.” (Suski v. Coinbase, Inc. (9th Cir., Dec. 16, 2022) 2022 WL 17726673.) 

Revenue and Taxation Code § 402.1.

Plaintiff purchased property from the City and County of San Francisco with an agreement that limited the buyer’s use of the land. Thereafter, the buyer and seller disagreed about the value of the property for tax assessment purposes, after the assessor evaluated the property as if there were no limits on the use. The Court of Appeal held “that ‘enforceable restrictions’ for purposes of section 402.1 of the Revenue and Taxation Code, mean land use restrictions imposed by government acting under its police power, not restrictions agreed to by a public entity selling property to a private buyer in an ordinary arm’s-length transaction.” (290 Division (EAT), LLC v. City and County of San Francisco (Cal. App. 1st Dist., Div. 2, Dec. 16, 2022) 2022 WL 17729917.)

Gun Violence Restraining Order.

Police received several reports expressing concerns about a man who possessed guns, and the police had several contacts with him as a result. In a petition for a gun violence restraining order (Penal Code, § 18175; GVRO), a police officer declared: “Based on the content of the attached [police] reports, I hold the opinion that a GVRO is necessary to protect the public and prevent harm to the respondent or others. There are no less restrictive means to ensure public safety.” The Court of Appeal held hearsay evidence is admissible in a GVRO hearing, and the evidence submitted was sufficient to establish by clear and convincing evidence that defendant posed a significant danger of causing personal injury by gun violence. (San Diego Police Department v. Geoffrey S. (Cal. App. 4th Dist., Div. 1, Dec. 19, 2022) 2022 WL 17749277.)

Corporations Code § 1604.

Plaintiff shareholder appealed from the trial court’s order denying his request, pursuant to Corporations Code § 1604, for an award of his reasonable expenses related to his demand for the inspection of defendant’s corporate records. Plaintiff argued the trial court “made erroneous factual conclusions.” Corporations Code § 1604 provides that, in any action or proceeding to enforce a shareholder’s inspection rights, “if the court finds the failure of the corporation to comply with a proper demand thereunder was without justification, the court may award an amount sufficient to reimburse the shareholder . . . for the reasonable expenses incurred by such holder, including attorneys’ fees, in connection with such action or proceeding.” The phrase “without justification” is not defined. Affirming, the Court of Appeal stated: “None of [plaintiff’s] assertions establish that the trial court abused its discretion in finding that he was not entitled to an award of expenses under section 1604. The trial court, recognizing that the language of section 1604 is permissive rather than mandatory, evaluated [plaintiff’s] motion utilizing the proper rubric and determined that [defendant] did not act ‘without justification.’” (Farnum v. Iris Biotechnologies Inc. (Cal. App. 6th Dist., Dec. 19, 2022) 2022 WL 17750546.)

Applicable Test for Determining Whether a Real Estate Salesperson Is an Employee or an Independent Contractor.

Plaintiff pursued a claim under the Private Attorney General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA) against defendants to enforce civil penalties for violations of the Labor Code. The trial court sustained defendants’ demurrer to the complaint without leave to amend. Affirming, the Court of Appeal stated: “This appeal involves issues of statutory interpretation with regard to the following question: What is the applicable test or governing standard for determining whether a real estate salesperson is an ‘employee’ or an ‘independent contractor’ for purposes of the Labor Code’s wage and hour provisions. Resolution of this question turns on interpreting recently enacted Labor Code section 2778, subdivision (c)(1), and other provisions incorporated therein. [¶] We conclude the applicable test for the purpose at hand is the test set forth in Unemployment Insurance Code sections 650 and 13004.1, as incorporated in Business and Professions Code section 10032, subdivision (b), which is itself incorporated in Labor Code section 2778, subdivision (c)(1).” (Whitlach v. Premier Valley, Inc. (Cal. App. 5th Dist., Dec. 19, 2022) 2022 WL 17551550.)

Allegations of Forced Labor in Immigration Facilities.

U.S. Immigration and Customs Enforcement contracted with CoreCivic, Inc., a for-profit corporation, to incarcerate detained immigrants in 24 facilities across 11 states. Individuals who were incarcerated in private immigration detention facilities owned and operated by CoreCivic filed class action suits. The district court certified three class actions. Plaintiffs—detained solely due to their immigration status and neither charged with, nor convicted of, any crime—alleged that the overseers of their private detention facilities forced them to perform labor against their will and without adequate compensation. Affirming, the Ninth Circuit stated: “Our inquiry on appeal concerns only whether the district court properly certified three classes of detainees. Considering the significant deference we owe to the district court when reviewing a class certification, as well as the district court’s extensive and reasoned findings, we affirm the certification of all three classes.” (Owino v. CoreCivic, Inc. (9th Cir., Dec. 20, 2022) 36 F.4th 839.)

Autistic Child Not Required to Be in a Special Education Classroom.

A dispute arose under the Individuals with Disabilities Education Act (20 U.S.C. § 1400 et seq.; IDEA) between the parents of a child with autism and the school district in which he was enrolled. The parents believed their son should spend most of the school day being educated in a traditional classroom with his non-disabled peers. School officials believed the child would be better served spending more of his school day in a special education classroom receiving instruction with other disabled students. The lower court ruled for the school district. Reversing in part, the Ninth Circuit stated: “Given the IDEA’s strong preference for educating children with disabilities alongside their non-disabled peers, we conclude that the law supports the parents’ position. However, we hold that the parents are not entitled to reimbursement for the expenses they incurred after unilaterally removing their son from school and hiring a private instructor to educate him in a one-on-one setting.” (D.R. by and through R.R. v. Redondo Beach Unified School District (9th Cir., Dec. 20, 2022) 2022 WL 17815549.)

Artistic Work Exception Argument in Anti-SLAPP Motion Fails.

According to the complaint, defendant approached the city with a proposal for an adventure park. He “trumpeted his unrivaled experience and expertise in developing amusement and adventure parks” in Texas and furnished the city with a financial statement to demonstrate that, “if the [c]ity invested millions of dollars to build the park, [defendant] would make it a financial success.” After defendant’s promised results did not pan out, the city investigated and allegedly found reason to conclude defendant had misrepresented and concealed important information about his business dealings. The city sued defendant. Defendant filed an anti-SLAPP motion pursuant to Code of Civil Procedure § 425.16. The parties did not actively dispute that the speech at issue was commercial speech to which section 425.16 does not apply. Instead, the primary issue was whether the speech concerning the theme park qualified under the “artistic work” exception to the commercial speech exemption. In the motion to strike, defendant filed an expert declaration that differentiated theme parks from amusement parks: “‘theme’ is another word for ‘story.’ So as you visit a theme park, you are visiting a ‘story park’ because the attractions are based upon stories or ideas rather than just being rides or conveyance systems set on an asphalt parking lot.” The trial court denied defendants’ special motion to strike, and, concluding the motion was frivolous, granted the city’s request for attorney fees. Defendants appeal from the subsequent order in which the trial court awarded the city specified attorney fees and costs. Noting that “while the parameters of what constitutes art may not be precisely clear, not everything can be called art,” the Court of Appeal affirmed and remanded for the trial court to tack on and award the city its attorney fees on appeal. (City of Rocklin v. Legacy Family Adventures-Rocklin, LLC (Cal. App. 3rd Dist., Dec. 21, 2022) 2022 WL 17827565.)

Social Media Solicitations May Qualify as Violations Under the Securities Act.

Plaintiff brought claims under § 12(a)(2) of the Securities Act of 1933 (15 U.S.C. § 77a et seq.) against all defendants, and a claim pursuant to § 15 against two defendants. At issue was whether those two defendants, Cardone and Cardone Capital, counted as persons who offer or sell securities under § 12(a) based on their social media communications to prospective investors. The district court concluded that Cardone and Cardone Capital did not qualify as statutory sellers. Reversing, the Ninth Circuit stated: “For the foregoing reasons, we conclude that § 12 contains no requirement that a solicitation be directed or targeted to a particular plaintiff, and accordingly, join the Eleventh Circuit in holding that a person can solicit a purchase, within the meaning of the Securities Act, by promoting the sale of a security in a mass communication.” (Pino v. Cardone Capital, LLC (9th Cir., Dec. 21, 2022) 2022 WL 17834235.)

“The Environmental Protection Agency comes before this court once more because of its failure to abide by the law,” Ninth Circuit Court of Appeals.

Seven years ago, the Ninth Circuit vacated approval of a pesticide, sulfoxaflor, by the Environmental Protection Agency (EPA) because Dow Agrosciences LLC had not provided sufficient scientific evidence that this pesticide would not harm honeybees. In 2019, the EPA announced that it had reviewed additional studies provided by Dow and had given “unconditional approval” for sulfoxaflor on various usages that it had earlier canceled. Granting the Center for Food Safety’s and Center for Biological Diversity’s petition for review, the appeals court stated: “We hold that EPA violated [the Endangered Species Act’s (ESA)] mandate that it determine whether the pesticide may affect endangered or threatened species or their habitat, and (if so) consult other wildlife agencies to consider its impact on endangered species. EPA admits it did not comply with the ESA but defends itself by claiming that it lacks the resources to do so. EPA cannot flout the will of Congress—and of the people—just because it thinks it is too busy or understaffed.” (Center for Food Safety v. Regan (9th Cir., Dec. 21, 2022) 56 F.4th 648.)

Grant of Anti-SLAPP Motion Reversed.

A teacher was terminated by a school after the school found out about his text exchanges with a 19-year-old former student. The teacher sued the school and its head for breach of contract and defamation. Defendants filed an anti-SLAPP motion pursuant to Code of Civil Procedure § 425.16. The trial court granted defendants’ anti-SLAPP motion as to the defamation claims but denied it as to the contract claim. Affirming in part and reversing in part, the Court of Appeal stated: “(1) defendants did not meet their burden to show that [plaintiff’s] allegations regarding the termination letter, which supports the defamation claim, or the termination itself, which supports the contract claim, involve protected activity; (2) defendants met their burden to show that [the head of the school’s] statement was protected activity, and [plaintiff] failed to show that the defamation claim as based on that activity had minimal merit; and (3) without having filed a writ petition, there is no basis for the [s]chool to seek writ relief from the court’s order overruling its demurrer ruling on the contract claim.” (Bishop v. The Bishop’s School (Cal. App. 4th Dist., Div. 1, Dec. 21, 2022) 2022 WL 17828330.)

Ineligibility of Sex Offender Registrants for Jury Service Withstands Rational Basis Scrutiny.

In 2019, the Legislature eliminated former Code of Civil Procedure § 203(a)(5)’s exclusion of persons convicted of felonies from serving on juries and added new, narrower categories of persons ineligible for jury service. Plaintiffs Alliance for Constitutional Sex Offense Laws, Inc. and John Doe sued the clerk of the Alameda County Superior Court alleging the new law’s categorical exclusion of current sex offender registrants from jury service denies registrants equal protection under the California Constitution. The trial court sustained a demurrer to the first amended complaint without leave to amend and entered a judgment of dismissal. Affirming, the Court of Appeal stated: “Keeping in mind the ‘exceedingly deferential’ nature of our inquiry [], we conclude the statutory disparity at issue withstands rational basis scrutiny and there is no denial of equal protection.” (Doe v. Finke (Cal. App. 1st Dist., Div. 2, Dec. 21, 2022) 2022 WL 17828594.)

Family Court Judge Erred in Sanctioning a Party and Her Attorney.

A family court judge ordered a party, the mother, and her attorney to each pay $10,000 in sanctions pursuant to Family Code § 271 to the other party on its findings they unjustifiably accused the judge of being biased. Regarding the sanctions against the objecting attorney, the Court of Appeal stated: “Because an attorney may not be ordered to pay a sanction under that statute, the family court’s order compelling [the mother’s attorney] to pay $10,000 in sanctions was improper and must be reversed.” The appeals court found sanctions were not warranted against the mother either, stating: “The family court itself had it right when it stated during an earlier hearing that ‘Petitioner has the right to believe I was biased.’” (Featherstone v. Martinez (Cal. App. 2nd Dist., Div. 5, Dec. 21, 2022) 2022 WL 17828630.)

Plaintiff Lost a Job Offer After Defendant’s Background Check.

Plaintiff was released from prison in 2011 and placed on parole. Parole ended in 2014. In 2020, offered him a job. After defendant provided Amazon with a background check that included plaintiff’s conviction, Amazon withdrew its job offer. Plaintiff sued defendant, alleging violation of the California Investigative Consumer Reporting Agencies Act (Civ. Code, § 1786.10 et seq.; ICRAA) and the California Consumer Reporting Agencies Act (Civ. Code, § 1785 et seq.). Under those acts, an agency is prohibited from reporting a “conviction of a crime that, from the date of disposition, release, or parole, antedate the report by more than seven years.” In the trial court, defendant contended that parole didn’t begin until the plaintiff was released from parole, and that the California statutes were preempted under federal law. The trial court overruled defendant’s demurrer in part, finding that plaintiff’s parole began at the start date of the parole, but sustained the demurrer on the preemption issue. The Court of Appeal affirmed in part and reversed in part, stating: “We hold the phrase from the date of parole refers to the start date of parole, and the [Fair Credit Reporting Act (15 U.S.C. § 1681c(a)(5))] does not preempt the ICRAA.” (Kemp v. Superior Court (Cal. App. 4th Dist., Div. 3, Dec. 22, 2022) 2022 WL 17843980.)

Duty to Preserve Electronic Evidence.

Real parties in interest John Doe and his guardians ad litem sued petitioner Victor Valley Union High School District for negligence and other causes of action arising from an alleged sexual assault on Doe while he was a high school student. During discovery, real parties in interest learned that video capturing some of the events surrounding the alleged sexual assault had been erased. They then moved the superior court for terminating sanctions or, in the alternative, evidentiary and issue sanctions against the school district under Code of Civil Procedure § 2023.030. The trial court concluded the erasure of the video was the result of negligence, not intentional wrongdoing, and denied the request for terminating sanctions. However, the court granted the request for evidentiary, issue, and monetary sanctions because it concluded that, even before the lawsuit was filed, the school district should have reasonably anticipated the alleged sexual assault would result in litigation and, therefore, was under a duty to preserve all relevant evidence including the video. In this original proceeding, the school district argued the trial court applied the wrong legal standard when it ruled it had the duty to preserve the video before it was erased and, therefore, that the school district was not shielded from sanctions by the safe-harbor provision of § 2023.030, subdivision (f). Granting the school district’s petition for a writ of mandate, the Court of Appeal stated: “As explained post, we hold the safe-harbor provision of § 2023.030(f) shields a party from sanctions for the spoliation of electronic evidence only if the evidence was altered or destroyed when the party was not under a duty to preserve the evidence, and the duty to preserve relevant evidence is triggered when the party is objectively on notice that litigation is reasonably foreseeable, meaning litigation is probable and likely to arise from an incident or dispute and not a mere possibility.” (Victor Valley Union High School District v. Superior Court (Cal. App. 4th Dist., Div. 2, Dec. 22, 2022) 2022 WL 17842606.)

School District’s Expulsion of Student Reversed.

A school district expelled a student, I.O., under its discretionary authority. At an expulsion hearing, the district heard evidence that I.O. brought two unloaded BB guns and a sealed bag of plastic BBs to his middle school, showed the guns to two friends, and fired one of the unloaded guns at the ground. The district also heard evidence that one of the friends who saw the guns feared testifying at the expulsion hearing because I.O. and his mother had asked the student’s family to speak about I.O.’s character. Based on this evidence, the district found I.O. unlawfully intimidated a witness. It reasoned that he committed an expellable offense in possessing the BB guns and posed a continuing danger to himself or others—a conclusion it reached after preventing I.O. from presenting character witnesses and excluding his evidence tending to show his classmates did not believe he posed a danger. On I.O.’s appeal from the trial court’s judgment in the district’s favor, the Court of Appeal reversed for two reasons: “First, we find the [d]istrict’s ‘continuing danger’ finding was flawed. In the [d]istrict’s view, it could consider only I.O.’s immediate misconduct when evaluating whether he posed a continuing danger to himself or others. But under the relevant standard, the [d]istrict should have considered all the relevant facts, including evidence of I.O.’s general character. Because the [d]istrict misunderstood the appropriate inquiry, it improperly limited I.O.’s ability to present a defense and excluded relevant evidence. Second, we find the [d]istrict’s witness intimidation finding was flawed. To support a claim of witness intimidation in a school disciplinary proceeding, the evidence must show the student either intended to prevent another student from testifying or to retaliate against another student for testifying. But no evidence in this case shows I.O. had any improper intent.” (Natomas Unified School District v. Sacramento County Board of Education (Cal. App. 3rd Dist., Dec. 22, 2022) 2022 WL 17843949.)

Once Again, the Party Who Wanted to Arbitrate Failed to Timely Pay Its Share of Arbitration Fees.

Code of Civil Procedure §§ 1281.97 and 1281.98 provide that a company or business pursuing arbitration of a dispute under a predispute arbitration agreement is in material breach and default of that agreement—thereby waiving its right to arbitrate—if it fails to timely pay its share of arbitration fees. Among the consumer’s potential remedies for this material breach is to eschew arbitration and litigate. The trial court ordered that this case proceed in superior court instead of in arbitration. On appeal, defendant argued plaintiffs were required to first obtain an arbitrator’s determination of defendant’s default before returning to the trial court. Rejecting defendant’s argument and affirming, the Court of Appeal stated: “Because nothing in the statute authorizes the restrictive interpretation that West Coast posits, we affirm the trial court’s order permitting the resumption of litigation.” (Williams v. West Coast Hospitals, Inc. (Cal. App. 6th Dist., Dec. 22, 2022) 2022 WL 17881773.)

Judgment Against County and Social Workers in Dependency Case Upheld.

A mother sued a county and two of its social workers for civil rights violations under 42 U.S.C. § 1983 in connection with a dependency proceeding. A jury awarded $1,248,000 in compensatory damages against the county, and awarded punitive damages against the social workers of $5,700 and $9,500. Affirming the judgment, the Court of Appeal held the employees were not entitled to qualified immunity and the verdicts were supported by substantial evidence. The appeals court added: “We publish this case for two reasons. First, we reiterate the need for sufficient and appropriate training for all Agency employees. Second, we reinforce the absolute necessity of complete, accurate, and honest reports by the Agency in dependency cases, given the juvenile court’s reliance on the knowledge and expertise of the Agency in making its decisions.” (Casey N. v. County of Orange (Cal. App. 4th Dist., Div. 3, Dec. 23, 2022) 2022 WL 17881777.)

Plaintiffs in Class Action Are Not Outside Salespersons.

“Outside salespersons” in California are exempt from statutory overtime, minimum wage, reporting time, and meal-and-rest break requirements. (Lab. Code, § 1171.) The question presented here is whether an employee working at a fixed site, not owned or leased by the employer, is subject to the outside salesperson exemption where the employer controls the employee’s hours and working conditions. The employer employs persons who perform demonstrations of various products inside Costco warehouses. Demonstrators are generally assigned to a single Costco and do not travel from warehouse to warehouse. Employees clock in and out on a tablet device. Plaintiffs filed a class action against their employer, alleging various Labor Code violations. The trial court granted summary judgment for the employer. Reversing, the Court of Appeal held plaintiffs were not outside salespersons as they did not work away from their employer’s place of business, stating: “The purpose of the exemption would not be served here where appellant’s hours and schedule were carefully monitored and controlled by respondent.” (Espinoza v. Warehouse Demo Services, Inc. (Cal. App. 1st Dist., Div. 5, Dec. 23, 2022) 2022 WL 17881722.)

Verdict Against Talc Manufacturers/Distributors Upheld.

Plaintiff alleged defendants’ talc powder caused her mesothelioma. A jury awarded a total award of $12,003,006. The jury allocated 40 percent responsibility to Colgate, 40 percent to Johnson & Johnson (J&J), and 20 percent to Avon. As to punitive damages, the jury found that plaintiff failed to prove malice, oppression, or fraud as to Colgate, but deadlocked as to J&J. In this appeal, defendants J&J argued: (1) the trial court abused its discretion by admitting certain expert testimony; (2) the trial court gave an adverse inference instruction that was unjustified and prejudicial; (3) the trial court erred when it failed to grant a mistrial after certain references to talc causing ovarian cancer; (4) the trial court failed to instruct the jury on a critical element of fraudulent concealment; and (5) the trial court erred in entering judgment nunc pro tunc. Defendant Colgate argued: (1) the trial court abused its discretion by admitting certain expert testimony; (2) the jury instructions on causation were erroneous; (3) the evidence was insufficient to support a verdict against Colgate for fraudulent concealment; and (4) the trial court erred in entering judgment nunc pro tunc. Finding no error, the Court of Appeal affirmed. (Bader v. Johnson & Johnson (Cal. App. 1st Dist., Div. 4, Dec. 23, 2022) 2022 WL 17883561.)

Discipline for High School Bullying Off-Campus

A high school student created a private Instagram account to share comments “privately with my small group of friends.” The student used the account to make a number of cruelly insulting posts about various students. He posted a screenshot of texts in which he and a Black classmate were arguing, and he added the caption “Holy shit I’m on the edge of bringing my rope to school on Monday.” Other posts, although not referencing specific students, contained images either depicting, or making light of, Ku Klux Klan violence against Black people. One post included what appeared to be a historical photograph of a lynched man still hanging from a tree; another depicted a Klan member in a white hood; and a third combined the caption “Ku klux starter pack” with pictures of a noose, a white hood, a burning torch, and a Black doll. And there were other racist rants. Messages from the account leaked and several students became very upset with them. Three students were suspended for five days. The student who launched the account was expelled. All the students who were disciplined filed lawsuits and a federal court deemed them related. They filed motions for summary judgment, contending their free speech rights were violated by the discipline process. The trial court held in the school district’s favor with regard to three students, rejecting their First Amendment claims. Affirming, the Ninth Circuit stated: “We hold that, under the circumstances of this case, the school properly disciplined two of the involved students for bullying. We therefore affirm the district court’s judgment rejecting the students’ First Amendment claims against the high school and others.” (Chen v. Albany Unified School District (9th Cir., Dec. 27, 2022) 2022 WL 17957458.)

Business Permitted to Amend in Business Interruption Case Due to COVID-19.

Plaintiff alleged that defendant insurance company wrongfully denied its claim for business interruption coverage for losses sustained in connection with the COVID-19 pandemic. The trial court sustained defendant’s demurrer on the ground that its business insurance policy afforded no coverage for the claim. Reversing, the Court of Appeal stated: “[I]n the published portion of the opinion, we conclude that the court erred in sustaining the demurrer without leave to amend. [¶] . . .[¶] . . . Unlike the undefined term ‘direct physical loss of or damage to’ property in almost all of the COVID-19 business interruption cases decided to date, Sentinel’s policy, by endorsement, (1) contains an affirmative grant of coverage specifically for ‘loss or damage’ caused by a virus, and (2) a special definition of ‘loss or damage’ that includes ‘[d]irect physical loss or direct physical damage to’ property, but is broad enough to encompass pervasive infiltration of virus particulates onto the surfaces of covered property, which is what is alleged here.” (John’s Grill, Inc. v. The Hartford Financial Services Group, Inc. (Cal. App. 1st Dist., Div. 4, Dec. 27, 2022) 2022 WL 17959561.)

Collecting Personal Information About Children.

Plaintiffs are children who contended Google and YouTube illegally collected personal information about them. They sued Google and You Tube for violations of state law of several states, including California. The district court dismissed the action on preemption grounds under Children’s Online Privacy Protection Act (15 U.S.C. §§ 6501–06; COPPA), which gives the Federal Trade Commission authority to regulate the online collection of personal identifying information about children under the age of 13. Reversing, the Ninth Circuit stated: “Hewing closely to the language of the preemption clause, we determine that Congress intended to preempt inconsistent state laws, not state laws that are consistent with COPPA’s substantive requirements, such as the state law causes of action pleaded in the complaint here.” (Jones v. Google, LLC (9th Cir., Dec. 28, 2022) 2022 WL 17972558.)

Ninth Circuit Certified Question About Business Loss Resulting from COVID-19 to the California Supreme Court.

An insured sued for breach of contract, bad faith, and fraud when its insurer denied coverage for business income losses that the insured incurred following government closure orders issued during the COVID-19 pandemic. The insured alleged that the COVID-19 virus was present on its premises before the orders were issued, or would have been present, had the insured not closed its venues in compliance with the orders. It sought coverage under several provisions of its commercial property insurance policy that require “direct physical loss or damage to property” to trigger coverage. The district court dismissed the insured’s suit for failure to state a claim. The issue here was whether the insured’s allegations, if taken as true, were sufficient to show “direct physical loss or damage to property” as defined by California law. Accordingly, the Ninth Circuit certified the following question to the California Supreme Court pursuant to Rules of Court, Rule 8.548(a): “Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy?” (Another Planet Entertainment, LLC v. Vigilant Insurance Company (9th Cir., Dec. 28, 2022) 2022 WL 17972557.)

“God Bless Saturday,” Song Title Sung by Kid Rock.

Labor Code § 204 (d) provides that wages for employees who are paid weekly are deemed timely if paid “not more than seven calendar days following the close of the payroll period.” In this situation, the seventh calendar day fell on a Saturday. Plaintiff argued the wages must be paid on that Saturday. Defendant employer argued the wages may be paid the following Monday, because Code of Civil Procedure § 12a provides that weekends are holidays, and further provides, “If the last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is hereby extended to and including the next day that is not a holiday.” Plaintiff lost in both the trial and appellate courts. (Parsons v. Estenson Logistics, LLC (Cal. App. 3rd Dist., Dec. 28, 2022) 2022 WL 17972774.)

Presumed Parent-Child Relationship for Purposes of Intestate Succession.

Judy lives in San Diego. When she was two years old, Charles and his wife Frances Bloodgood took her into their home after she was abandoned by her birth parents, and for the duration of their lifetimes, held Judy out as their own child while domiciled in Indiana. Probate Code § 6453 provides the rules for determining who is a “natural parent” for purposes of intestate succession, and it includes a presumed parent-child relationship under the Uniform Parentage Act (Fam. Code §§ 7600 et seq., 6453, subd. (b)(2); UPA). Applying California law to undisputed facts jointly submitted by the parties, the probate court found Judy was the presumed natural child of Charles under the UPA; that plaintiff, a first cousin of decedent Loch David Crane (whose estate was at issue), and who had opposed Judy’s petition, had failed to proffer any facts to rebut that presumption; and that Judy therefore was decedent Crane’s heir by way of Charles openly holding her out as his own child during his lifetime. On appeal, plaintiff argued the probate court erred in applying California law to determine the existence of a natural parental relationship, arguing the court should have applied Indiana law, where that relationship was effectuated. Unlike California, Indiana law does not recognize the existence of a natural parent and child relationship for purposes of determining heirship when a parent openly holds out a child as that parent’s own. Affirming, the Court of Appeal stated: “Exercising independent review, we conclude California law applies in determining parentage between Judy and Charles for purposes of intestate succession. Based on the undisputed facts, we further conclude clear and convincing evidence supports the probate court’s finding that Charles was the presumed natural parent of Judy under the UPA; that [plaintiff] did not meet her burden to produce clear and convincing evidence to rebut that presumption; and that the presumption cannot be rebutted purely on the grounds of public policy.” (Wehsener v. Jernigan (Cal. App. 3rd Dist., Dec. 28, 2022) 2022 WL 17974394.)

Teacher Sued After Principal Ordered Him to Leave His MAGA Hat Home.

A school principal told a teacher he could not bring his Make America Great Again (MAGA) hat with him to teacher-only trainings on threat of disciplinary action. When the principal learned that the teacher brought his hat with him again the second day, she called him a racist and a homophobe, among other things, and said that he would need to have his union representative present if she had to talk to him about the hat again. The teacher filed a harassment complaint against the principal, and the school district denied the complaint. The teacher sued the principal, the human resources manager, and the school district under 42 U.S.C. § 1983 for retaliating against him for engaging in protected political speech in violation of the First Amendment. The district court granted summary judgment for all defendants. The Ninth Circuit affirmed regarding the HR officer and the school district, but reversed as to the principal, stating: “Taking the facts in the light most favorable to [plaintiff], a jury could find that Principal Garrett retaliated against him for engaging in political speech protected by the First Amendment. Moreover, any violation of [plaintiff’s] First Amendment rights by Principal Garrett was clearly established where long-standing precedent has held that concern over the reaction to controversial or disfavored speech itself does not justify restricting such speech.” (Dodge v. Evergreen School District #114 (9th Cir., Dec. 29, 2022) 2022 WL 17984059.)

Court Refused to Set Aside Default.

Plaintiff obtained a default judgment against defendants in an action to enforce a commission agreement related to the sale of property. The trial court denied defendants’ motion to set aside the default. On appeal, defendants contended the trial court was incorrect to find that substituted service of the original summons and complaint was properly effected. Regarding service, the process server described unsuccessfully trying to serve defendants in a gated community on seven occasions through an intercom system. The eighth time, a resident of the home explained defendants were not home, and that resident was served. The process server later mailed the documents to that address. Finding that substituted service was properly effected, the Court of Appeal affirmed. (First American Title Insurance Company v. Banerjee (Cal. App. 6th Dist., Dec. 29, 2022) 2022 WL 17985699.)

Court Declined to Uphold Arbitration Agreement Supposedly on a Hyperlink on a Tablet Plaintiff Was Handed When She Checked in for Appointment.

Plaintiff sued defendant, contending she was sexually assaulted during a massage at one of defendant’s locations. The trial court denied defendant’s request to order the matter into arbitration. On appeal, defendant contended that the “Terms of Use Agreement,” was available to plaintiff via hyperlink on the electronic tablet she was given at the franchise location to check in for her massage. Defendant argued it was a valid and enforceable “clickwrap” agreement of the sort that courts routinely enforce. Affirming, the Court of Appeal stated: “In the circumstances here, plaintiff did not have reasonable notice that she was entering into any agreement with MEF, much less notice of the terms of the agreement.” (Doe v. Massage Envy Franchising, LLC (Cal. App. 1st Dist., Div. 2, Dec. 29, 2022) 2022 WL 17984107.) 

No Qualified Immunity Because of Conflicting Evidence Over a Warning Before Use of Deadly Force.

A police officer shot and killed a man during a failed arrest in the men’s locker room of a gym. Before the trial court, the officer maintained that he killed the man because he was pummeling the officer’s partner, and the officer feared the man’s next blow would kill her. The officer also claimed that he yelled “stop” before shooting, but no such warning could be heard on the officers’ body-cam recordings. The decedent’s mother sued the officer for his allegedly unreasonable use of deadly force. The district court denied the officer’s motion for summary judgment on qualified immunity grounds. Affirming, the Ninth Circuit stated: “First, the district court recognized that a reasonable jury could reject the officers’ account of the shooting because there were significant discrepancies between their versions of events and other evidence in the record. Second, we have long held that the Fourth Amendment requires officers to warn before using deadly force when practicable. [Citation.] The defense cannot argue that it was not possible for Agdeppa to give Dorsey a deadly force warning because Agdeppa’s sworn statements show that he had time to tell Dorsey to ‘stop.’ The encounter lasted approximately four minutes after the officers first attempted to handcuff Dorsey, and the officers tased Dorsey at least five times during that interval. Agdeppa never claimed that he warned Dorsey that he would switch from using his taser to using his firearm if Dorsey did not submit to being handcuffed, nor did he argue that it was impracticable to do so. The district court correctly ruled that a jury could decide Agdeppa’s use of deadly force violated clearly established law.” (Smith v. Agdeppa (9th Cir., Dec. 30, 2022) 2022 WL 17999612.)

Jailed Plaintiff Could Not Retrieve His Money Upon Release Without Allegedly Agreeing to Arbitrate Any Dispute Involving Handling Fees.

Plaintiff was incarcerated in a jail. His cash was confiscated by jail officers when he was booked. Upon his release, plaintiff received a debit card, known as a “release card.” Plaintiff was not provided an option to receive his money in any other form. Text on the back of the cards advised that “[b]y accepting and or using this card, you agree to the Account Agreement . . . This Cardholder Agreement sets forth the terms of your non-reloadable prepaid Card. Please read it carefully and retain it for your records. If you do not agree to these terms, do not use the Card and cancel it by calling Customer Service at 1-877-287-2448. Otherwise, your acceptance and/or use of the Card will be evidence of your agreement to these terms.” The agreement contains an arbitration provision. On the day he was released, plaintiff withdrew $80 using the debit card. That transaction involved a $2.95 fee; the card also required a weekly maintenance fee. Plaintiff sought relief via a class action against the financial institution for the costs in using the card. The district court denied defendant’s motion to compel arbitration. Affirming, the Ninth Circuit Court of Appeals stated: “In sum, we hold that Moyer did not accept Rapid’s cardmember agreement and the arbitration clause it contained. We therefore affirm the district court’s denial of Rapid’s motion to compel arbitration and remand for further proceedings.” (Reichert v. Rapid Investments, Inc. (9th Cir., Dec. 30, 2022) 2022 WL 17999660.)

Trial Court Refused to Calendar Defendant’s Motion for Summary Judgment.

Defendants sought a writ of mandate to compel the trial court to calendar their timely motion for summary judgment for hearing before the start of trial. Here, trial was set to begin on January 20, 2023, and petitioners served the notice for the motion for summary judgment electronically on October 5, 2022. Code of Civil Procedure § 437c does not expressly reference any extension of the notice period for electronic service. However, Code of Civil Procedure § 1010.6, which sets forth the rules for electronic service generally, provides that: “If a document may be served by mail, express mail, overnight delivery, or facsimile transmission, electronic service of that document is deemed complete at the time of the electronic transmission of the document or at the time that the electronic notification of service of the document is sent.” The statute further provides that “[a]ny period of notice . . . which time period or date is prescribed by statute or rule of court, shall be extended after service by electronic means by two court days.” The statute lists three exceptions to this general rule, but the list does not include motions for summary judgment. The statute also provides that “[t]his extension applies in the absence of a specific exception provided by any other statute or rule of court.” Issuing the writ, the Court of Appeal stated: “[A]pplying section 1010.6’s two-day extension to section 437c, petitioners were required to serve their motion for summary judgment, at the latest, 107 days before trial. Accordingly, their motion filed on October 5 was timely, but with no time to spare.” (Cole v. Superior Court (Cal. App. 4th Dist., Div. 1, Dec. 30, 2022) 2022 WL 17999483.)

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