Litigation Update: July 2018

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

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District
  • Managing Editor, Reuben Ginsburg
  • Editors, John Derrick, Jessica Riggin and Kenneth Wang
Man Will Be Removed From This Country.

A man from the People’s Republic of China overstayed his visa in the U.S. The Department of Justice initiated removal proceedings, and the man applied for asylum. He argued after his wife and he had a son, his wife unexpectedly became pregnant and hid from authorities. They found her and subjected her to an abortion and forced sterilization. The man says he verbally confronted officials and was detained for almost a month. He told the immigration judge he fears future persecution. The judge found the man was not credible on key issues and requested more documentation to support his claims, such as the names of arresting officials, explanations why he was not charged with a crime, and why he was released or “at a minimum, a letter from his wife or a friend corroborating the claimed abortion and sterilization she faced.” When no further evidence was submitted, the immigration judge denied the asylum application. The Ninth Circuit Court of Appeals declined to second guess the order of removal from this country for failure to provide any corroborating evidence, deferring to the findings of the immigration judge. (Liu v. Sessions (9th Cir., June 1, 2018) 891 F.3d 834.)

The Hague Service Convention.

The relationship between two entities in an international business deal soured, and one party pursued contractual arbitration. The other party did not appear or participate in the arbitration, and the arbitrator awarded the pursuing company $414 million. Approximately 15 months later, the pursued company moved to set aside the judgment against it on the grounds it never entered into a binding contract and was not served with the summons and petition to confirm the arbitration award in the manner required by the Hague Service Convention. The trial judge acknowledged that the service of the summons and petition did not comply with the Hague Service Convention, but concluded the parties had privately agreed to accept service by mail, and denied the set aside motion. In reversing, the Court of Appeal stated: “We reverse. As we discuss, the Hague Service Convention does not permit Chinese citizens to be served by mail, nor does it allow parties to set their own terms of service by contract. [The moving party] therefore was never validly served with process. As a result, ‘no personal jurisdiction by the court [was] obtained and the resulting judgment [is] void as violating fundamental due process.’” Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd. (Cal. App. 2nd Dist., Div. 3, June 1, 2018) 24 Cal.App.5th 115.)

Partition Cart Placed Before the Ownership Interest Horse.

Plaintiff and defendant own real estate and disagree on the amount of their respective ownership interests. The trial court ordered the property to be partitioned and sold, with the parties’ ownership interests to be determined at a later date. Plaintiffs appealed. The Court of Appeal treated the appeal as a petition for writ of mandate and granted extraordinary relief, stating, “we hold that the partition statutes do not allow a court to order the manner of a property’s partition, such as the sale here, before it determines the ownership interests in the property.” (Summers v. Superior Court (Cal. App. 1st Dist., Div. 1, June 1, 2018) 24 Cal.App.5th 138.)

“The most dangerous food is wedding cake,” James Thurber.

Plaintiff owns a Colorado bakery; he is also a devout Christian. In 2012, the baker told a same-sex couple he would not make a cake for their wedding celebration because of his religious opposition to same-sex marriages. The couple complained to the Colorado Civil Rights Commission, and the commission found the baker in violation of Colorado law. Eventually the matter ended up in the U.S. Supreme Court. The nation’s highest court described the challenge before it: “The case presents difficult questions as to the proper reconciliation of at least two principles. The first is the authority of a State and its governmental entities to protect the rights and dignity of gay persons who are, or wish to be, married but who face discrimination when they seek goods or services. The second is the right of all persons to exercise fundamental freedoms under the First Amendment, as applied to the States through the Fourteenth Amendment.” The Supreme Court used the words “hostility to religion” in writing about the commission, and said the baker was entitled to a neutral decisionmaker who would give full and fair consideration to his religious objection. The Supreme Court held: “When the Colorado Civil Rights Commission considered this case, it did not do so with the religious neutrality that the Constitution requires. Given all these considerations, it is proper to hold that whatever the outcome of some future controversy involving facts similar to these, the Commission’s actions here violated the Free Exercise Clause; and its order must be set aside.” (Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n(U.S., Jun. 4, 2018) 138 S.Ct. 1719.)

Good Reason Lawyers Want to be Paid Their Fees Up Front.

A business owner fell behind on his legal bills. When the law firm said it was withdrawing representation, the business owner promised he would pay the debt after receiving his tax refund. The law firm continued representing the man. When the refund arrived, the business owner used the funds for other business expenses, and when the law firm inquired, the business owner said he was still awaiting the refund. The law firm continued representing the man. When the legal bills were not paid, the law firm sued the man and won a judgment. The man and his wife filed for chapter 7 bankruptcy. The law firm filed an adversary proceeding against them, arguing the legal bills were nondischargeable pursuant to 11 U.S.C. § 523(a)(2), which bars discharge of specified debts arising from “false pretenses, a false representation, or actual fraud,” or from a materially false written “statement . . . respecting the debtor’s . . . financial condition.” When the matter made its way to the U.S. Supreme Court, the nation’s highest court stated: “This case is about what constitutes a ‘statement respecting the debtor’s financial condition.’ Does a statement about a single asset qualify, or must the statement be about the debtor’s overall financial status? The answer matters to the parties because the false statements at issue concerned a single asset and were made orally.” The high court held: “The statutory language makes plain that a statement about a single asset can be a ‘statement respecting the debtor’s financial condition.’ If that statement is not in writing, then, the associated debt may be discharged, even if the statement was false.” (Lamar, Archer & Cofrin, LLP v. Appling (U.S., June 4, 2018) 138 S.Ct. 1752.)

“The Supreme Court successfully defused a bomb,” The Slatest.

Jane Doe, a minor, was eight weeks pregnant when she unlawfully crossed the border into the United States. She was detained and placed into the custody of the Office of Refugee Resettlement (ORR), part of the Department of Health and Human Services. ORR placed her in a federally funded shelter in Texas. After an initial medical examination, Doe requested an abortion. But ORR did not allow Doe to go to an abortion clinic. Respondent Rochelle Garza, Doe’s guardian ad litem, filed a putative class action on behalf of Doe and “all other pregnant unaccompanied minors in ORR custody” challenging the constitutionality of ORR’s policy. A federal trial court issued an order allowing Doe to obtain an abortion immediately, and the next day a federal appeals panel court vacated that order. Four days later, the Court of Appeals, sitting en banc, vacated the panel order. The government planned to ask the U.S. Supreme Court for emergency review of the en banc order. Believing the abortion would not take place for two days, the government informed opposing counsel and the Supreme Court that it would file a stay application the next morning. The details are disputed, but sometime in the early morning, the abortion was performed. Instead of filing for an emergency stay, the government filed a petition for certiorari, asking that Garza and her team be sanctioned. The U.S. Supreme Court noted that lawyers have ethical obligations to their clients and not all communication breakdowns constitute misconduct, and declined to sanction Garza. The high court found the matter was moot. (Azar v. Garza (U.S., June 4, 2018) 138 S.Ct. 1790.)

Insurance Coverage For Allegations of Negligently Hiring a Child Molester.

A school district hired a construction company to perform a project at a middle school. A 13-year-old girl alleged the construction company’s superintendent sexually abused her. The girl sued the construction company for negligently hiring, retaining and supervising its superintendent. A federal trial court granted the company summary judgment. When the matter reached the Ninth Circuit Court of Appeals, that court certified a question to the California Supreme Court: “When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, does the suit allege an ‘occurrence’ under the employer’s commercial general liability policy?” In the present opinion, the California Supreme Court notes: “It is undisputed that Hecht’s sexual misconduct was a ‘willful act’ beyond the scope of insurance coverage under Insurance Code section 533. [Citation.] However, Hecht’s intentional conduct does not preclude potential coverage for L&M.” California’s high court also noted: “Here, Hecht’s molestation was the act directly responsible for the injury, while L&M’s negligence in hiring, retaining, and supervising him was an indirect cause.” The California Supreme Court held: “Absent an applicable exclusion, employers may legitimately expect coverage for such claims under comprehensive general liability insurance policies, just as they do for other claims of negligence.” (Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co. (Cal., June 4, 2018) 5 Cal.5th 216.)

“On my honor, I will never betray my badge, my integrity, my character or the public trust,” Police Officer’s Oath of Honor.

This lawsuit alleges that a Trinity County deputy sheriff phoned citizens James and Norma Gund—who do not work for the county—and asked them to go check on a neighbor who had called 911 for help. The officer told them it was likely related to inclement weather. The Gunds unwittingly walked into a murder scene and were savagely attacked by the man who apparently had just murdered the neighbor and her boyfriend. The assailant fled. The Gunds sued the County of Trinity and the deputy for negligence and misrepresentation, alleging defendants created a special relationship with the Gunds and owed them a duty of care, which defendants breached by representing that the 911 call was likely weather-related and “probably no big deal” and by withholding information known to defendants suggesting a crime in progress—i.e., that the caller had whispered “help me,” that the dispatcher refrained from calling back when the call was disconnected out of concern the caller was in danger, and that no one answered when another dispatcher called. Defendants filed a motion for summary judgment based on Labor Code § 3366, which provides that any person “engaged in the performance of active law enforcement service as part of the posse comitatus or power of the county, and each person . . . engaged in assisting any peace officer in active law enforcement service at the request of such peace officer, is deemed to be an employee of the public entity that he or she is serving or assisting in the enforcement of the law, and is entitled to receive compensation from the public entity in accordance with the provisions of [workers’ compensation]. . . .” (Italics added.) The trial court granted the county’s summary judgment motion and dismissed the action. The Court of Appeal affirmed “because responding to a 911 call for help of an uncertain nature is active law enforcement, regardless of the deputy’s misrepresentations.” (Gund v. County of Trinity (Cal. App. 3rd Dist., June 4, 2018) 24 Cal.App.5th 185.)

Color and Trademarks.

Plaintiff has produced foam ear plugs with a fluorescent bright green color since 1982. After defendant began using a similar green color for its ear plugs, plaintiff brought the present action to enforce its trademark. Defendant argued the color is functional. A federal trial court granted summary judgment for the defendant, concluding the bright green color was essential to the use or purpose of ear plugs to increase visibility and facilitate safety checks. In reversing, the Ninth Circuit Court of Appeals stated: “[Plaintiff’s] evidence that numerous color shades are equally or more visible than its bright green color and would result in the same function of visibility during compliance checks weighs against a finding of functionality, and a reasonable jury could conclude that [plaintiff’s] green color is not functional.” (Moldex-Metric, Inc. v. McKeon Prods. (9th Cir., June 5, 2018) 891 F.3d 878.)

Probably More Later on This One . . . Male University Student Says He Was Discriminated Against Because of His Male Sex.

Doe, a male UCSB student, sued The Regents and the assistant dean of students after he was disciplined for sexually assaulting a female student during a trip to Lake Tahoe. Doe contends the sexual encounter was consensual. After administrative hearings, UCSB found against Doe. Doe filed a civil action against the Regents in federal court under 42 U.S.C. § 1983, alleging UCSB discriminated against him because of his male sex. He also alleged a claim for writ relief under Code of Civil Procedure § 1094.5. A federal trial court denied UCSB’s motion to dismiss. The Ninth Circuit Court of Appeals reversed because the Eleventh Amendment bars Doe from filing a writ petition in federal court, and Doe failed to exhaust his judicial remedies by filing a writ petition under § 1094.5 in state court. The matter was remanded for the federal trial court to dismiss without prejudice. (Doe v. Regents of the Univ. of Cal.(9th Cir., 2018) 891 F.3d 1147.)

Action to Foreclose a Mechanics Lien & Arbitration.

A company hired a contractor to perform construction work. The construction contract contained an arbitration agreement stating, “If any dispute arises concerning this Contract or the interpretation thereof, or concerning construction of the Improvements, or the Limited Warranty, customer service, defects, damages, or obligations therewith (a ‘Construction Dispute’), such Construction Dispute will be settled by binding arbitration.” There was a dispute. The contractor filed a mechanics lien for unpaid work. The company brought a construction defect action against the contractor. The contractor brought an action to foreclose on the mechanics lien. The contractor petitioned for arbitration in the construction defect action. The court denied the petition. The court explained that when the contractor filed his action, he did not comply with Code of Civil Procedure § 1281.5. The Court of Appeal affirmed, stating that a party who files an action to enforce a mechanic’s lien, but who does not at the same time request that the action be stayed pending arbitration waives any right to arbitration. (Von Becelaere Ventures, LLC v. Zenovic(Cal. App. 4th Dist., Div. 1, June 6, 2018) 24 Cal.App.5th 243.)

Claim of Racism by Defense Counsel in Criminal Case.

In a brief filed in court, a defendant convicted of 1989 crimes, murder, attempted murder and robbery, states that years after his convictions, he received an article about his criminal defense lawyer, who was deceased by then. The article said the lawyer frequently used “deprecating remarks and racial slurs about his clients.” He also received a copy of a dissent filed in another criminal case in which the dissenting judge noted the deceased lawyer harbored “deep and utter contempt for African-Americans.” The defendant filed a writ of habeas corpus alleging that his Sixth Amendment right to conflict-free counsel was violated. The Ninth Circuit Court of Appeals affirmed the denial of defendant’s writ, stating: “When defense counsel does not express his racist views to his client, no conflict will be presumed, and the defendant must show both deficient performance and prejudice to establish a Sixth Amendment violation. Since Ellis fails to do so here, we affirm the district court.” (Ellis v. Harrison(9th Cir., June 7, 2018) 891 F.3d 1160.)

Discrimination Against Bankruptcy Lawyers Claimed.

Defendant provides an Internet-based service that allows people to accept electronic payments without opening up a merchant account with any Visa or MasterCard member bank. Defendant’s agreement states: “By creating a Square Account, you . . . confirm that you will not accept payments in connection with the following businesses . . . bankruptcy attorneys or collection agencies in the collection of a debt.” Plaintiff, a bankruptcy attorney, sued defendant alleging a violation of the Unruh Civil Rights Act’s ban on occupational discrimination (Civ. Code, § 51, subd. (b)). The Ninth Circuit Court of Appeals certified the following question to the California Supreme Court: “Does a plaintiff suffer discriminatory conduct, and thus have statutory standing to bring a claim under the Unruh Act, when the plaintiff visits a business’s website with the intent of using its services, encounters terms and conditions that deny the plaintiff full and equal access to its services, and then departs without entering into an agreement with the service provider? Alternatively, does the plaintiff have to engage in some further interaction with the business and its website before the plaintiff will be deemed to have been denied full and equal treatment by the business?” More later. (White v. Square, Inc. (9th Cir., June 7, 2018) 2018 U.S. App. LEXIS 15369.)

Employment Discrimination Because of Sexual Orientation.

Plaintiff, a cashier at Target, complained to his supervisor and Human Resources and called Target’s “Anonymous Hotline” regarding repeated verbal harassment, sometimes in front of customers, by his coworkers based on the fact that he is gay. In his lawsuit against Target for discrimination, harassment, and constructive discharge, he alleges that rather than take corrective action, Target retaliated against him by denying him a promotion and allowing the hostile work conditions to continue. Prior to resigning, plaintiff filed a claim for workers’ compensation benefits alleging that he suffered workplace injuries as a result of the harassment. When he settled his workers’ compensation case with Target. plaintiff executed a mandatory preprinted Compromise and Release form that is utilized in all workers’ compensation cases. The trial court granted Target’s motion for summary judgment, concluding the language in that release was broad enough to include the allegations in the current complaint. In reversing, the Court of Appeal concluded the language in the settlement document did not amount to a general release. (Camacho v. Target Corp. (Cal. App. 4th Dist., Div. 1, June 8, 2018) 24 Cal.App.5th 291.)

Court Properly Denied Motion to Compel Arbitration.

Plaintiff worked as a driver for both Uber and Lyft. He filed a class action against Uber for unfair business practices. He alleges Uber engaged in a practice of directing its drivers and others to create and use fake Lyft accounts to request rides, thereby sending Lyft drivers on wild goose chases to pick up nonexistent passengers. Uber moved to compel arbitration. The arbitration agreement between plaintiff and Uber contains a delegation clause that delegates to the arbitrator, and not to the court, the task of deciding whether a matter should be arbitrated. The trial court denied Uber’s petition to compel arbitration. In affirming, the Court of Appeal stated that plaintiff brought his action in his capacity as a driver for Lyft, not Uber, and alleges only that he and other Lyft drivers incurred expenses and lost income when they responded to fraudulent ride requests generated at Uber’s instigation. The appellate court went on to state there is no “plausible argument” that those claims are related to or arise out of the agreements plaintiff entered into with Uber. (Smythe v. Uber Technologies, Inc. (Cal. App. 1st Dist., Div. 3, June 8, 2018) 24 Cal.App.5th 327.)

Trimming Voter Rolls.

The National Voter Registration Act (52 U.S.C. § 20501(b)) addresses the removal of ineligible voters from state voting rolls, including those who are ineligible “by reason of” a change in residence (§ 20507(a)(4)). The act prescribes requirements that a state must meet in order to remove a name on change-of-residence grounds, and provides that a state may not remove a name on change-of-residence grounds unless the registrant either (A) confirms in writing that he or she has moved or (B) fails to return a preaddressed, postage prepaid “return card” containing statutorily pre-scribed content and then fails to vote in any election during the period covering the next two general federal elections. (52 U.S.C. § 20507(d).) The State of Ohio has a practice of removing registered voters from its voter rolls when they do not go to the polls and then fail to respond to a notice. The U.S. Supreme Court decided Ohio’s system does not violate the act. (Husted v. A. Philip Randolph Inst. (U.S., June 11, 2018) 201 L.Ed.2d 141.)

Automatic Revocation of Beneficiary Designation.

 A man named his wife as beneficiary on his life insurance policy. He named his children from a prior marriage as secondary beneficiaries. After the man and woman divorced, the man did not change the beneficiaries under the policy. The man died. Minnesota has a law that when one spouse designates the other as his life insurance beneficiary, that designation is automatically revoked if the couple divorces. The U.S. Supreme Court held the law does not violate the Constitution’s contracts clause (art. I, § 10, cl. 1), which bars states from enacting any laws “impairing the obligations of contracts.” (Sveen v. Melin (U.S., June 11, 2018) 138 S.Ct. 181.)

Tolling of Statute of Limitations for a Class Action.

The holding in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 established that the timely filing of a class action tolls the statute of limitations for all persons encompassed by the class complaint, permitting class members in an action that fails certification to timely intervene as individual plaintiffs in a still-pending action. The present case poses the question whether the tolling permitted by American Pipe applies not only to individual claims, but also to successive class actions as well. Underlying the present case was a timely filed class action #1, which was not certified and was settled by individuals. Following that was a timely filed class action #2, which was not certified and settled by other individuals. Class action #3, the present case, was filed a year and one-half after the statute of limitations expired. A federal trial court dismissed the present case based on the statute of limitations. The Ninth Circuit Court of Appeals reversed, finding that American Pipe extends to class claims. The U.S. Supreme Court disagreed with the Ninth Circuit, stating: “The question presented in the case now before us: Upon denial of class certification, may a putative class member, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations? Our answer is no.” (China Agritech, Inc. v. Resh (U.S., June 11, 2018) 138 S.Ct. 1800.)

Police Called to Scene of Man Acting Erratically.

Police responded to a call about a man behaving erratically and brandishing a pair of scissors at a 7-Eleven. Eight police officers were at the scene for about 15 minutes. They had two police cars parked in a V shape and took cover behind the cars. The officers were about 30 feet away from the front door. The shooting occurred when the man unexpectedly charged the doorway of the store with what appeared to be scissors raised above his head. The man ignored two orders to drop his weapon. The officer in charge ordered a specific officer to shoot him; that officer shot the man with a less than lethal weapon. But a few seconds later, two other officers shot the man with their AR-15 rifles, killing him. Later drug tests revealed the dead man’s blood was positive for amphetamine and methamphetamine and that he was schizophrenic. The dead man’s parents sued the city and individual police officers for various causes of action, including using excessive force and failure to accommodate under the Americans With Disabilities Act. A federal trial court granted the defendants’ motion for summary judgment and dismissed the case. In affirming in part and reversing in part, the Ninth Circuit Court of Appeals noted that a reasonable jury could conclude the man did not pose an immediate threat, that the officers had less intrusive force available to them, and that the officers had the time and opportunity to assess the situation and potentially employ accommodations such as de-escalation, communication, and/or specialized help. (Vos v. City of Newport Beach (9th Cir., June 11, 2018) 892 F.3d 1024.)

Sudden Emergency Doctrine Involving Road Rage.

A driver made an obscene gesture to another driver as he passed her and then suddenly braked, causing drivers behind him to do the same. The driver of a tractor-trailer traveling at 55 to 60 mph was unable to stop and hit the car in front of him. The gesturing driver got away. The driver of the car that was struck sued the driver of the tractor-trailer. The trial court granted summary judgment in favor of the driver of the tractor-trailer, finding the emergency was solely the result of the gesturing driver’s sudden and unexpected decision to slam the brakes “in an act of apparent road rage.” In affirming the grant of summary judgment, the Court of Appeal stated: “The sudden emergency doctrine, aka the imminent peril doctrine, shields a defendant from liability in a negligence action. The rule is aptly restated in jury instruction CACI 452. Here we have the rare case when the rule applies at a summary judgment motion. A freeway driver with the right of way is not required to anticipate an act of road rage that unexpectedly causes merging traffic in front of him to come to almost a dead stop. As we shall explain in detail, that is what happened here and why the defendants are not liable.” (Shiver v. Laramee (Cal. App. 2nd Dist., Div. 6, June 12, 2018) 2018 Cal. App. LEXIS 535.)

No Showing of Demand Futility.

Before bringing a shareholder derivative action on behalf of a corporation, the shareholder must demand action from the corporation’s directors or plead why such a demand would have been futile. In the present action brought by shareholders against directors and officers of the one of the largest solar panel manufacturers in the world, the shareholders made no demand before bringing their derivative action. A federal trial court dismissed the action for failure to show demand futility. The Ninth District Court of Appeals discussed at length the two tests for demand futility in Delaware, the state of incorporation. Those tests are set forth in Aronson v. Lewis (Del. 1984) 473 A.2d 805, 814, and Rales v. Blasband (Del. 1993) 634 A.2d 927, 933. The appeals court concluded the district court did not abuse its discretion in dismissing the action. (Tindall v. First Solar (9th Cir., June 13, 2018) 892 F.3d 1043.)

No Attorney Fees for a City.

The holder of a trust deed on an apartment complex sued for judicial foreclosure and moved for the appointment of a receiver. The trial court appointed a receiver. The city intervened, alleging the property was a public nuisance. The city moved to modify the receivership by instructing the receiver to remedy the conditions that make the property a public nuisance. The fund argued the motion was premature and the receiver already had that power. The trial court granted the city’s motion. The city thereafter moved for attorney fees, and the trial court ordered almost $100,000 in fees to be paid by the trust deed holder. The trust deed holder appealed, arguing that if anyone were responsible to pay attorney fees to the city, it was the property owners. In reversing, the Court of Appeal concluded that none of the three statutes cited by the city (Code Civ. Proc, § 568.3; Health & Saf. Code, § 17980.7; and Indio Muni. Code, § 10.20(C)) authorizes the award of fees. (Kaura v. Stabilis Fund II, LLC (Cal. App. 4th Dist., Div. 2, June 13, 2018) 2018 Cal. App. LEXIS 540.)

Right to a Jury Trial on Legal Issues Only in Unfair Business Practices Case.

Several district attorneys sued a business for unfair business practices. The trial court denied the business’s request for a jury trial. The Court of Appeal granted extraordinary relief to the business, stating: “[T]he ‘gist’ of the statutory causes of action asserted against them are legal, thereby giving rise to a right to jury trial. However, following the approach taken by the United States Supreme Court in Tull v. United States (1987) 481 U.S. 412 (Tull), we also conclude the right to jury trial extends only to the issue of liability and that the amount of statutory penalties, as well as whether any equitable relief is appropriate, is properly determined by the trial court.” (Nationwide Biweekly Administration, Inc. v. Superior Court (Cal. App. 1st Dist., Div. 1, June 13, 2018) 2018 Cal. App. LEXIS 541.)

“Free speech is the whole thing, the whole ball game. Free speech is life itself,” Salman Rushdie.

Under Minnesota law, voters may not wear a political badge, political button, or anything bearing political insignia inside a polling place on Election Day. The U.S. Supreme Court held that Minnesota’s ban violates the Free Speech Clause of the First Amendment. (Minnesota Voters Alliance v. Mansky(U.S., June 14, 2018) 138 S.Ct. 1876.)

Interpretation of the Laws of a Foreign Country.

In a class action, U.S. purchasers of vitamin C alleged that Chinese sellers agreed to fix the price and quantity of vitamin C exported to the United States from China, in violation of § 1 of the Sherman Act (15 U.S.C. § 1). The Chinese sellers moved to dismiss the U.S. purchasers’ complaint on the ground that Chinese law required them to fix the price and quantity of vitamin C exports. Therefore, the Chinese sellers urged, they are shielded from liability under U.S. antitrust law by the act of state doctrine, the foreign sovereign compulsion doctrine, and principles of international comity. The Ministry of Commerce of the People’s Republic of China filed a brief as amicus curiae in support of the Chinese sellers, stating that the conspiracy in restraint of trade alleged by the U.S. purchasers was in fact a regulatory pricing regime mandated by the government of China. The trial court denied the motion to dismiss. The U.S. purchaser prevailed a trial, receiving a judgment for $147 million and an injunction against further violations of the Sherman Act. A federal appeals court reversed, deferring to the foreign government’s laws as explained by the ministry. The U.S. Supreme Court granted certiorari on the issue whether a federal court is required to treat as conclusive a submission from a foreign government describing its own law. The nation’s highest court reversed the decision of the Second Circuit Court of Appeals because a federal court is not bound to accord conclusive effect to a foreign government’s statements about its own laws, and remanded the matter for further consideration. (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd. (U.S., June 14, 2018.) 138 S.Ct. 1865.)

“Never go to a doctor whose office plants have died,” Erma Bombeck.

Surgical staff left a sponge in a patient during back surgery, and the patient had to endure a second surgery and treatment with powerful intravenous antibiotics. An administrative law judge issued a proposed decision finding no basis to fine the hospital because it had adequate policies and procedures to guard against such mistakes. The California Department of Public Health rejected the ALJ’s proposal and fined the hospital $50,000. The department’s decision was “effective immediately” and, 15 days later, the hospital filed an unsuccessful motion for reconsideration. The hospital then petitioned the superior court for a writ of mandate, and the court sustained the department’s demurrer without leave to amend because the department’s decision “was effective immediately and was thus not subject to a Request for Reconsideration.” Affirming, the Court of Appeal noted that Government Code § 11523 requires a writ petition challenging an agency’s decision to be filed within 30 days after the last day on which reconsideration can be ordered, and “where, as here, reconsideration is unavailable,” § 11523 means 30 days from the date of the agency’s decision. The appellate court also found the trial court correctly determined that the doctrines of equitable tolling and equitable estoppel did not apply. (Saint Francis Memorial Hospital v. California Department of Public Health (Cal. App. 1st Dist., Div. 1, June 15, 2018) 2018 Cal. App. LEXIS 564.)

I’ll have a coke and cheeseburger, but hold the black widow.

While plaintiff was having lunch with a friend at a patio restaurant, she was bitten on the back. She “was hospitalized with numbness and weakness in her extremities due to demyelination in her thoracic spine.” She sued the restaurant owner for negligence and premises liability, alleging she was bitten by a black widow spider. The trial court granted a defense motion for summary judgment, reasoning that the restaurant did not owe plaintiff a duty to protect her from spider bites. Reversing, the Court of Appeal stated: “. . . it is unclear what, if anything, the Mission Inn did in regard to warning patrons about black widows or controlling the black widow population. . . . there is little burden on restaurants to keep their premises free from black widow spiders because they are already required to keep their premises free from other pests. . . . Once the trier of fact determines the facts of the case, it can decide what reasonable care means in the circumstances of this case.” (Coyle v. Historic Mission In Corporation (Cal. App. 4th Dist., Div. 2, June 18, 2018) 2018 Cal. App. LEXIS 547.)

Going and Coming Rule.

A trial court entered judgment against an employer after an employee driving home from work injured a third party on a day he did not have any work duties outside the office. There was evidence the employee regularly used his personal vehicle for work on other days. The Court of Appeal reversed, stating: “The evidence showed that the employee in this case was driving a routine commute to and from work on the day of the accident. He was not required to use his personal vehicle for work purposes that day, and his employer did not otherwise benefit from his use of a personal vehicle that day. The employer is entitled to judgment as a matter of law.” (Newland v. County of Los Angeles (Cal. App. 2nd Dist., Div. 1, June 18, 2018) 2018 Cal. App. LEXIS 554.)

Finding Lack of Standing, U.S. Supreme Court Does Not Reach the Merits of Gerrymandering Case.

A group of Wisconsin Democratic voters challenged the state’s legislative redistricting as unconstitutional gerrymandering. The U.S. Supreme Court found the plaintiffs lacked Article III standing because they failed to prove that they suffered an injury in fact. Rather than dismiss the case, the high court remanded to allow the plaintiffs an opportunity to prove injury in fact, stating: “We therefore remand the case to the District Court so that the plaintiffs may have an opportunity to prove concrete and particularized injuries using evidence — unlike the bulk of the evidence presented thus far — that would tend to demonstrate a burden on their individual votes.” (Gill v. Whitford (U.S., June 18, 2018) 138 S. Ct. 1916.)

Ducked It Again.

Six registered voters in Maryland alleged their Congressional district was gerrymandered for the purpose of retaliating against them for their political views. They moved to enjoin Maryland from conducting elections under the map drawn in 2011. The district court found plaintiffs failed to show a likelihood of success on the merits and denied the request for a preliminary injunction, and then stayed further proceedings until Gill v. Whitford (above) was decided. The U.S. Supreme Court found the federal trial court did not abuse its discretion. (Benisek v. Maryland Board of Elections (U.S., June 18, 2018) 138 S. Ct. 1942.)

Existence of Probable Cause to Arrest Does Not Preclude Liability for Retaliation.

Plaintiff towed his floating home into a slip in a city-owned marina in Florida. Soon afterward, he became an outspoken critic of the city’s plan to use eminent domain to seize homes along the waterfront for private development. He also filed a lawsuit alleging that the city council’s approval of an agreement with developers violated Florida’s open meetings laws. According to a transcript of a closed meeting, a city councilmember suggested the city should use its resources to intimidate plaintiff and others who had sued the city. Other councilmembers agreed. Five months later, when plaintiff refused to stop speaking during a public comment period of a city council meeting, a councilmember ordered police officers to “carry him out.” That was the genesis of an action alleging violation of 42 U.S.C. § 1983. The district court instructed the jury that, for plaintiff to prevail, he had to prove that the arresting officer was himself motivated by impermissible animus against plaintiff’s protected speech and lacked probable cause to make the arrest. The jury returned a defense verdict, and the Eleventh Circuit Court of Appeals affirmed the judgment for the city. The U.S. Supreme Court held the existence of probable cause did not preclude liability for retaliation, vacated the judgment of the Court of Appeals, and remanded the matter for further consideration, including “whether any reasonable juror could find that the City actually formed a retaliatory policy to intimidate [plaintiff].” (Lozman v. City of Riviera Beach (U.S., June 18, 2018) 138 S. Ct. 1945.)

Nonrefundable Fee When Jury Trial Requested.

Code of Civil Procedure § 631, subdivision (b) provides in part: “At least one party demanding a jury on each side of a civil case shall pay a nonrefundable fee of one hundred fifty dollars ($150), unless the fee has been paid by another party on the same side of the case.” Plaintiffs filed an action for declaratory relief contending the statute is unconstitutional, and the trial court granted the State of California’s motion for judgment on the pleadings. The Court of Appeal affirmed because it is the Judicial Council and not the state that has the “direct institutional interest” necessary to defend the action. (Templo v. State of California (Cal. App. 1st Dist., Div. 3, June 18, 2018) 2018 Cal. App. LEXIS 582.)

Mental State Evidence Required in Copyright Infringement Case.

Plaintiffs are professional real estate photographers who photograph listed properties and license the photographs to real estate agents. The real estate agents upload the photographs to Multiple Listing Services databases using defendant’s software. In this action against the software company, the photographers allege it removed copyright management information from their photographs and distributed the redacted images in violation of 17 U.S.C. § 1202(b)(1)–(3). A federal trial judge granted summary judgment in favor of defendant. The Ninth Circuit Court of Appeals noted that copyright law restricts the removal or alteration of copyright management information, such as title, author, copyright owner, terms and conditions for use of the work, and other identifying information set forth in a copyright notice or conveyed in connection with the work. But the appeals court also noted that § 1202(b) requires an affirmative showing that the defendant knew the prohibited act would “induce, enable, facilitate, or conceal” infringement. As plaintiff offered no evidence to satisfy this mental state, the Ninth Circuit affirmed the summary judgment. (Stevens v. CoreLogic, Inc. (9th Cir., June 20, 2018) 2018 U.S. App. LEXIS 16620.)


In 1991, when a criminal defendant was 21 years old, he was convicted of first degree murder and sentenced to a prison term of 28 years to life. In 1996, while serving his sentence, he pled guilty to battery on another person and was sentenced to another eight years in prison. In 2016, he was found eligible under new laws providing for a youth offender parole hearing (Pen. Code, §§ 3051, 4801). The Board of Parole Hearings determined he was no longer a public safety risk and found him eligible for parole. But the prison refused to release him, stating he must serve his eight-year term. The Court of Appeal determined the parole board expressly considered the in-prison crime, and ordered the man released. The court further ordered that the period of time from the date the parole board’s decision became final until his actual release should be deducted from the period of parole. (In re Antuan Williams, on Habeas Corpus (Cal. App. 2nd Dist., Div. 7, June 20, 2018) 2018 Cal. App. LEXIS 566.)

U.S. Supreme Court Overrules Its Prior Opinions on Required Nexus for Taxation of Retailers.

South Dakota passed a law requiring out-of-state sellers that deliver more than $100,000 of goods or services into the state to collect and remit sales tax “as if the seller had a physical presence” there. South Dakota filed suit when major online retailers, with no employees or real estate in South Dakota, declined to comply with its law. The trial court granted summary judgment to the online retailers on the basis the law was unconstitutional. On review, the United States Supreme Court noted that two of its earlier cases held that an out-of-state seller’s liability to collect and remit sales taxes depended on whether the seller had a physical presence in that state. (National Bellas Hess, Inc. v. Department of Revenue of Ill. (1967) 386 U.S. 753; Quill Corp. v. North Dakota (1992) 504 U.S. 298.) The Supreme Court overruled both Hess and Quill, reducing the issue before it to “whether the tax applies to an activity with a substantial nexus with the taxing State.” It concluded that “here, the nexus is clearly sufficient based on both the economic and virtual contacts respondents have with the State.” The case was remanded for consideration of any remaining claims absent the precedents set by Hess and Quill. (South Dakota v. Wayfair, Inc. (U.S., June 21, 2018) 2018 U.S. LEXIS 3835.)

“Sexual harassment on the job is not a problem for virtuous women,” Phyllis Schlafly.

Plaintiff sued her employer and an individual for sexual harassment. The trial court granted summary adjudication on the cause of action for retaliation against the employer. A jury found for the defendants on the remaining claims. On appeal, plaintiff contended certain evidentiary rulings required reversal and the grant of summary adjudication was erroneous. Plaintiff contended the harasser sent her various sexually explicit text messages, some including the message, “ ‘we should try this.’ ” She could not produce these texts during discovery, however, because she no longer possessed them and her efforts to recover them were unsuccessful. The trial court ruled plaintiff could present evidence about certain texts being of a sexual nature, but otherwise excluded descriptions of them. At trial, defendant testified his texts were jokes. The Court of Appeal reversed, finding the trial court abused its discretion in several evidentiary rulings and that the errors were not harmless. (Meeks v. Autozone, Inc. (Cal. App. 4th Dist., Div. 2, June 21, 2018) 2018 Cal. App. LEXIS 570.)

Cell Site Location Information Protected by the Fourth Amendment.

In a criminal matter, the government was able to obtain 12,898 location points for a defendant’s cell phone’s connection with cell sites. The defendant moved to suppress the evidence based upon the Fourth Amendment, as, while the government had a court order, it did not have a warrant to get the information. In finding that a person’s cell site location information is protected by the Fourth Amendment, the U.S. Supreme Court stated: “Here the progress of science has afforded law enforcement a powerful new tool to carry out its important responsibilities. At the same time, this tool risks Government encroachment of the sort the Framers, ‘after consulting the lessons of history,’ drafted the Fourth Amendment to prevent.” (Carpenter v. United States, (U.S., June 22, 2018) 2018 U.S. LEXIS 3844.)

Lost Profits Under the Patent Act.

Under the Patent Act, a company can be liable for patent infringement if it ships components of a patented invention overseas for assembly. (35 U.S.C. § 271(f)(2).) A patent owner may bring a civil action to recover “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.” (Id., § 284.) Plaintiff owns four patents of technology for surveying the ocean floor. It does not sell or license the technology, but uses it in performing surveys for oil and gas companies. Defendant manufactured components for a competing system in the United States and then shipped them to companies abroad. Those companies combined the components to create a system indistinguishable from plaintiff’s. Plaintiff sued, and a jury awarded it $12.5 million in royalties and $93.4 million in lost profits. A federal appeals court reversed the award for lost profits, reasoning the law does not allow patent owners to recover for lost foreign profits. The U.S. Supreme Court reversed the appellate court, finding the relevant conduct occurred in the United States and that the award for lost profits was a permissible domestic application of § 284. (Westerngeco LLC v. Ion Geophysical Corporation(U.S., June 22, 2018) 2018 U.S. LEXIS 3842.)

Racist, Sexist, Homophobic and Anti-Semitic Text Messages Among Cops.

A criminal investigation of police corruption revealed various racist, sexist, homophobic, and anti-Semitic text messages exchanged among police officers. A former police sergeant and a codefendant were convicted of conspiracy to commit theft, conspiracy to violate civil rights, and wire fraud. After the verdict, the text messages were released to the police department’s internal affairs division, resulting in the disciplining of some police officers. One officer filed a petition for writ of mandate challenging the discipline as untimely. The trial court granted extraordinary relief. Reversing, the Court of Appeal stated: “Under the Public Safety Officers Procedural Bill of Rights Act (POBRA) (Gov. Code, § 3300 et seq.), no punitive action may be taken against a public safety officer for any alleged act, omission, or other misconduct unless the investigation is completed within one year of ‘the public agency’s discovery by a person authorized to initiate an investigation of the allegation of an act, omission, or other misconduct,’ subject to certain statutory exceptions. (§ 3304, subd. (d)(1).) One such exception provides that the one-year time period is tolled while the act, omission, or other alleged misconduct is also the ‘subject’ of a pending criminal investigation or prosecution.” (Daugherty v. City and County of San Francisco (Cal. App. 1st Dist., Div. 3, June 22, 2018) 2018 Cal. App. LEXIS 576.)

Probate Court Had No Subject Matter Jurisdiction Over Life Insurance Policy.

Decedent and his wife were married for 32 years. They had two sons from a prior relationship. In 1993, decedent obtained a life insurance policy naming his wife as the primary beneficiary and the sons as contingent beneficiaries. In 2014, decedent and his wife were divorced. Two years later, decedent executed a codicil stating in part that he did not want his former wife “inheriting anything” from him “under any circumstances by beneficiary designation or otherwise.” The codicil did not specifically mention the life insurance policy. Decedent died three days after he signed the codicil. The probate court ordered the insurance company to pay the proceeds of the life insurance policy to the sons. Reversing because the probate court lacked subject matter jurisdiction, the Court of Appeal stated: “In the present case, decedent’s estate has no interest in the proceeds of the Policy.” (Estate of Jerome Norman Post, Deceased (Cal. App. 1st Dist., Div. 1, June 22, 2018) 2018 Cal. App. LEXIS 580.)

Sanctions Associated with a Motion for Reconsideration.

The issue before the Court of Appeal was whether a trial court may sanction a party for violating Code of Civil Procedure § 1008 without allowing the party the benefit of a 21-day safe harbor to withdraw a motion for reconsideration as required by § 128.7, subdivision (c). The appellate court reversed the grant of sanctions, stating that because plaintiff did not receive the required 21-day notice to withdraw its motion and avoid sanctions, the penalty must be reversed. (Moofly Productions, Inc. v. Favila (Cal. App. 2nd Dist., Div. 1, June 22, 2018) 2018 Cal. App. LEXIS 579.)

Don’t Leave Home Without it.

American Express provides credit card services to both merchants and cardholders. When a cardholder buys something from a merchant who accepts its credit cards, Amex processes the transaction through its network, promptly pays the merchant, and subtracts a fee. If a merchant wants to accept Amex credit cards—and attract Amex cardholders to its business—Amex requires it to agree to an “antisteering” contractual provision. This prohibits merchants from discouraging customers from using their Amex card after they have already entered the store and are about to buy something, thereby avoiding Amex’s fee. The United States and several states sued Amex, claiming its antisteering provisions violate antitrust laws. A federal trial judge found they were anticompetitive, but a federal appeals court reversed. On review, the U.S. Supreme Court held that the antisteering provisions are not anticompetitive. (Ohio v. American Express Co. (U.S., June 25, 2018) 2018 U.S. LEXIS 3845.)

The Law of Preclusion; 1865 Case Overruled.

Plaintiff’s dentist recommended another dentist who performed surgery. Plaintiff sued both dentists for professional negligence, alleging that the referring dentist was vicariously liable for the negligence of the dentist who performed surgery. The trial court granted summary judgment for the dentist who performed surgery based on the statute of limitations and lack of causation. The Court of Appeal affirmed based on the statute of limitations and did not address causation. The trial court then granted summary judgment for the referring dentist, finding he could not be vicariously liable because the dentist who performed the surgery was not liable. The Court of Appeal reversed, finding neither claim nor issue preclusion applied. The California Supreme Court agreed and held that an affirmed judgment is preclusive only as to the basis on which the judgment was affirmed, overruling People v. Skidmore (1865) 27 Cal. 287. The state’s highest court stated: “We hold that the preclusive effect of the judgment should be evaluated as though the trial court had not relied on the unreviewed ground.” (Samara v. Matar (Cal., June 25, 2018) 2018 Cal. LEXIS 4414.)

Denial of Petition to Compel Arbitration Reversed.

After suffering severe injuries, plaintiff was placed in a residential care facility for elder or dependent adults. At the time of his admission, plaintiff’s wife told representatives at the facility that plaintiff had cognitive impairments. Apparently thereafter, the facility’s staff asked plaintiff to sign an agreement, which he did. That agreement, which contained an integration clause, had no arbitration provision. But immediately after plaintiff signed it, he signed a separate agreement to arbitrate disputes. Plaintiff’s wife did not sign either. Shortly after his admission, plaintiff walked away from the facility. Several hours later, he was found in a ditch five miles away. He suffered kidney failure, respiratory arrest, heat stroke and a second traumatic brain injury. Both husband and wife sued the facility and the attending physician for negligence. The trial court denied the facility’s petition to compel arbitration after concluding that the integration clause of the first agreement was “dispositive.” The Court of Appeal reversed, stating: “We reverse the order because the integration clause does not preclude proof of the arbitration agreement, and we remand to the trial court with directions to consider other objections raised by respondents to the arbitration agreement.” (Williams v. Atria Las Posas (Cal. App. 2nd Dist., Div. 6, June 27, 2018) 2018 Cal. App. LEXIS 588.)

Copyright of Lists.

The Ninth Circuit Court of Appeals nicely describes the situation: “The novel federal question in this appeal is whether lists of names with addresses are copyrightable when they are the product of a sophisticated process to ensure accuracy and utility. In other words, whether such lists are more like a telephone book, that the Supreme Court has held lacks any creative spark, or more like Joyce’s Ulysses that changed the course of 20th century literature. The answer, it turns out, lies somewhere in between, but closer to a telephone book.” Plaintiff Experian is in the business of compiling databases and licensing portions of them to companies for use in their marketing campaigns. The seeds of this litigation were sown when a data broker acting on behalf of defendant attempted to sell Experian a database, leading it to suspect that its data had been stolen. The district court granted summary judgment for defendant, holding that Experian did not have a valid copyright or trade secret in its compilation of names and addresses. The appellate court affirmed because, among other reasons, Experian did not submit its version of its database into the record and cannot establish infringement. (Experian Information Solutions, Inc. v. Nationwide Marketing Services Incorporated (9th Cir., June 27, 2018) 2018 U.S. App. LEXIS 17607.)

Presidential Travel Ban Upheld.

Under the Immigration and Nationality Act, foreign nationals seeking entry into the United States undergo a vetting process to ensure that they satisfy the numerous requirements for admission. The act also vests the President with authority to restrict the entry of aliens whenever he finds that it “would be detrimental to the interests of the United States.” (8 U.S.C. § 1182(f).) Relying on that delegation, President Trump concluded that it was necessary to impose entry restrictions on nationals of countries that do not share adequate information for an informed entry determination or that otherwise present national security risks. Previously, federal courts imposed a preliminary injunction on implementation of the President’s Executive Order. The U.S. Supreme Court held the government has set forth a sufficient national security justification to survive rational basis review. With regard to the claim that the order was issued for the unconstitutional purpose of excluding Muslims, the Supreme Court stated: “Three additional features of the entry policy support the Government’s claim of a legitimate national security interest.” The Supreme Court noted that three Muslim countries had already been removed from the ban, and that a fourth was working with the State Department to improve its procedures. Second, the court noted that the President’s order has numerous exceptions that permit persons from the banned countries to enter the United States on a variety of nonimmigrant visas. And, third, United States consular officers have discretion to admit a person if the applicant makes a demonstration of hardship, if that person’s entry would not pose a threat to public safety, and if it would be in the interest of the United States to have that person enter the country. The Supreme Court reversed the grant of the preliminary injunction as an abuse of discretion, and added: “We express no view on the sound-ness of the policy. We simply hold today that plaintiffs have not demonstrated a likelihood of success on the merits of their constitutional claim.” (Trump v. Hawaii (U.S., June 26, 2018) 2018 U.S. LEXIS 4026.)

California Statute Requiring Clinics to Inform Women That Abortions Are Available through the State Found to Be Unconstitutional.

The California Reproductive Freedom, Accountability, Comprehensive Care, and Transparency Act (Health & Saf. Code, § 123470 et seq.) requires clinics that primarily serve pregnant women to provide certain notices. Licensed clinics must notify women that California provides free or low-cost services, including abortions, and give them a phone number to call. The clinics contend this notice requirement violates their rights under the First Amendment. Our nation’s highest court determined that California’s law requires that “licensed clinics must provide a government-drafted script about the availability of state-sponsored services, as well as contact information for how to obtain them.” The U.S. Supreme Court noted that throughout history, governments have manipulated the content of doctor-patient discourse to increase state power and suppress minorities, citing a portion of a law review article to illustrate its point: “For example, during the Cultural Revolution, Chinese physicians were dispatched to the countryside to convince peasants to use contraception. In the 1930s, the Soviet government expedited completion of a con-struction project on the Siberian railroad by ordering doctors to both reject requests for medical leave from work and conceal this government order from their patients. In Nazi Germany, the Third Reich systematically violated the separation between state ideology and medical discourse. German physicians were taught that they owed a higher duty to the ‘health of the Volk’ than to the health of individual patients. Recently, Nicolae Ceausescu’s strategy to increase the Romanian birth rate included prohibitions against giving advice to patients about the use of birth control devices and disseminating information about the use of condoms as a means of preventing the transmission of AIDS.” The high court found that California’s law violates the First Amendment because “by requiring [clinics] to inform women how they can obtain state-subsidized abortions—at the same time [the clinics] try to dissuade women from choosing that option—the notice ‘alters the content’ of [the clinics’] speech.” ( National Institute of Family and Life Advocates v. Beccera (U.S., June 26, 2018) 2018 U.S. LEXIS 4025.)

Public Employee Unions.

In Abood v. Detroit Board of Education (1977) 431 U.S. 209, the U.S. Supreme Court held that public sector employees could be required to pay public union fees. The point of the fees is to recover the costs of collective bargaining, contract administration, and grievance adjustments. In recent years, Abood’s holding has been under attack by employees who wish to avoid the fees, and who view mandated support of public unions as compelled speech in violation of the First Amendment. In ruling that public sector employees cannot be compelled to pay such fees, the U.S. Supreme Court stated about Abood’s holding: “It is inconsistent with other First Amendment cases and has been undermined by more recent decisions. Developments since Abood was handed down have shed new light on the issue of agency fees, and no reliance interests on the part of public-sector unions are sufficient to justify the perpetuation of the free speech violations.” (Janus v. American Federation of State, County, and Municipal Employees (U.S., June 27, 2018) 2018 U.S. LEXIS 4028.)

Attempt to Claw Back College Tuition.

A creditor made loans to a debtor. The debtor is the father of a college student. The father paid the funds directly to his son’s college. The father did not repay the monies borrowed, and the creditor claims the father never intended to make repayment. The creditor sued both the father and the son, asking the court to set aside a fraudulent conveyance. The son’s demurrer contended he was not a beneficiary of the monies, having received only the intangible benefits of an education. Noting that there is no authority on whether creditors may attack college tuition payments as fraudulent transfers under the Uniform Voidable Transactions Act (Civ. Code, § 3439, et seq.), the trial court sustained the son’s demurrer without leave to amend. Affirming, the Court of Appeal concluded the creditor had not adequately alleged a valid transferee beneficiary theory against the son. (Lo v. Lee (Cal. App. 1st Dist., Div. 1, June 27, 2018) 2018 Cal. App. LEXIS 593.)

Police Told a Woman to Stop Praying.

Two police officers went to a woman’s apartment in response to a noise complaint. They gained entry to her home, and cited her for disorderly conduct and interfering with law enforcement. At one point, she knelt and began to pray, and one of the officers ordered her to stop. She sued the officers and police department, asserting a violation of her First Amendment right to the free exercise of religion and her Fourth Amendment right to be free from unreasonable search or seizure. A federal trial court granted the police’s motion to dismiss. A federal appellate court affirmed. The U.S. Supreme Court stated: “There can be no doubt that the First Amendment protects the right to pray. Prayer unquestionably constitutes the ‘exercise’ of religion. At the same time, there are clearly circumstances in which a police officer may lawfully prevent a person from praying at a particular time and place. For example, if an officer places a suspect under arrest and orders the suspect to enter a police vehicle for transportation to jail, the suspect does not have a right to delay that trip by insisting on first engaging in conduct that, at another time, would be protected by the First Amendment. When an officer’s order to stop praying is alleged to have occurred during the course of investigative conduct that implicates Fourth Amendment rights, the First and Fourth Amendment issues may be inextricable. That is the situation here.” Our nation’s highest court remanded the matter for further proceedings consistent with its opinion. (Sause v. Bauer (U.S., June 28, 2018) 2018 U.S. LEXIS 4037.)

Laches in Trademark Infringement Case.

Two manufacturers used the same name for their products; one sold cosmetics and the other clothing. Even though a trademark infringement action was timely filed under the Lanham Act (15 U.S.C. § 1051 et seq.), a federal trial court entered judgment against the plaintiff based on laches. 15 U.S.C. § 1064 limits the grounds for cancellation after five years have passed from the date of registration. The Ninth Circuit Court of Appeals affirmed, finding that laches is an available defense to a cancellation claim under the Act. (Pinkette Clothing, Inc. v. Cosmetic Warriors Limited (9th Cir., June 29, 2018) 2018 U.S. App. LEXIS 17901.)

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