Litigation Update: July 2019
A monthly publication of the Litigation Section of the California Lawyers Association.
- Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District
- Managing Editor, Reuben Ginsburg
- Editors, Dean Bochner, Glenn Danas, Jessica Riggin, Anne Voigts and Kenneth Wang
Use it or Lose it.
As a precondition to suing for employment discrimination under 42 U.S.C. § 2000e-2(a)(1), a complainant must first file a charge with the Equal Employment Opportunity Commission. The U.S. Supreme Court held that the precondition is not jurisdictional. Rather, it is a “claim processing rule that must be timely raised to come into play.” (Fort Bend County v. Davis (U.S., June 3, 2019) 139 S.Ct. 1843.)
Trying to Collect a Debt After Bankruptcy Discharge.
At the conclusion of a bankruptcy proceeding, a bankruptcy court typically enters an order releasing the debtor from liability for most prebankruptcy debts. This order, known as a discharge order, bars creditors from attempting to collect any debt covered by the order. (11 U.S.C. § 524(a)(2).) The question presented was when a court may hold a creditor in civil contempt for attempting to collect a debt that a discharge order has immunized from collection. The U.S. Supreme Court concluded: “[A] court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct. In other words, civil contempt may be appropriate if there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful.” (Taggart v. Lorenzen (U.S., June 3, 2019) 139 S.Ct. 1795.)
Tort Damages for Trying to Avoid Paying a Judgment.
Plaintiff sued defendants for fraudulent transfer. Defendants then paid the judgment, but instead of dismissing his complaint, plaintiff amended it to seek damages caused by the delay in paying the judgment. The trial court sustained defendants’ demurrer. On appeal, plaintiff contended his amended complaint asserted a common law fraudulent transfer claim, which gives rise to consequential and punitive damages. Reversing, the Court of Appeal agreed with plaintiff, stating: “Accordingly, the damages alleged by Berger fall within the scope of recoverable tort damages and satisfy the damage element for a fraudulent transfer claim for purposes of demurrer.” (Berger v. Varum (Cal. App. 1st Dist., Div. 1, June 3, 2019) 35 Cal.App.5th 1013.)
Plaintiff sued retailers, alleging they copied its fabric design and blouses with that design. A retailer counterclaimed, seeking invalidation of plaintiff’s copyright. A federal trial court found the copyright invalid and dismissed plaintiff’s complaint. The Ninth Circuit Court of Appeals affirmed, concluding plaintiff’s copyright registration was invalid under 17 U.S.C. § 411(b). (Gold Value Int’l Textile, Inc. v. Sanctuary Clothing, LLC (9th Cir., June 4, 2019) 2019 U.S. App. LEXIS 16675.)
Challenge to Disciplinary Action Related to Sexual Assault Off Campus.
After a female college student accused three male student athletes of forcing her to engage in nonconsensual sex at an off-campus apartment, the local county attorney decided not to prosecute. However, the university proceeded with a formal disciplinary process. The university found the accused students violated the Student Conduct Code by “engaging in penetration without explicit consent.” The accused students were suspended for at least four years. The accused students brought an action in federal court based on sex discrimination and due process violations. The trial court dismissed their action. Affirming, the Ninth Circuit stated: “What is missing for each theory of liability are sufficient, nonconclusory allegations plausibly linking the disciplinary action to discrimination on the basis of sex.” and, “they received ‘the hallmarks of procedural due process’: notice and a meaningful opportunity to be heard.” (Austin v. University of Oregon (9th Cir., June 4, 2019) 2019 U.S. App. LEXIS 16674.)
Running Away from Police, by Itself, Does Not Amount to Reasonable Suspicion of Criminal Activity.
Police received an anonymous tip that a black man was carrying a gun—which is not a criminal offense in the state of Washington. A patrol unit spotted the man and activated the patrol car lights, but did not order him to stop. He reacted by running for about a block before the officers stopped him at gunpoint. They placed him in handcuffs and found a firearm in his waistband. A further search revealed drugs, cash, and other items. The man moved to suppress evidence, and a federal trial court denied the motion. The Ninth Circuit noted that almost 20 years ago in Illinois v. Wardlow (2000) 528 U.S. 119 the U.S. Supreme Court stated: “Among some citizens, particularly minorities and those residing in high crime areas, there is also the possibility that the fleeing person is entirely innocent, but, with or without justification, believes that contact with the police can itself be dangerous, apart from any criminal activity associated with the officer’s sudden presence.” Reversing, the appeals court held: “In the end, the totality of the circumstances here does not add up to enough: no reliable tip, no reasonable inference of criminal behavior, no police initiative to investigate a particular crime in an identified high crime area, and flight without any previous attempt to talk to the suspect. We conclude that the Metro officers did not have reasonable suspicion of criminal activity when they stopped and frisked Brown.” (United States v. Brown (9th Cir., June 5, 2019) 2019 U.S. App. LEXIS 16886.)
Duty to Defend and “Care, Custody, or Control” Exclusion.
A general contractor was covered as an additional insured in a commercial general liability policy issued to a roofing subcontractor. The policy excluded coverage for damage to property in an additional insured’s “care, custody, or control.” The insurer refused to defend the general contractor after it was sued by homeowners for roofing construction defects. The general contractor sued the insurance company for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing. After a bench trial, the trial court concluded the insurer owed no duty to defend. Reversing, the Court of Appeal stated: “As judicially construed, the care, custody, or control exclusion requires exclusive or complete control. [Citation.] The facts indicate only shared control between the general contractor and its roofing subcontractor. Because the insurer did not prove coverage for the underlying construction defect litigation was impossible, it owed the general contractor a duty to defend the homeowner claim.” (McMillin Homes Construction, Inc. v. National Fire & Marine Insurance Co. (Cal. App. 4th Dist., Div. 1, June 5, 2019) 35 Cal.App.5th 1042.)
Real Parties in Interest Filed Anti-SLAPP Motions.
Several individuals filed a petition for writ of mandate challenging land use decisions by the California Coastal Commission and the City of Los Angeles. The real parties in interest filed anti-SLAPP motions (Code of Civ. Proc., § 425.16). The trial court denied the motions and granted petitioners’ motions for sanctions against the real parties for filing frivolous anti-SLAPP motions on the ground that the petition asserted claims against the respondent and not against the real parties. Reversing the sanctions award, the Court of Appeal stated: “Real Parties could have reasonably concluded that the Petition asserted a claim against them arising from conduct protected under section 425.16, subdivision (e). The trial court’s decision to the contrary was an abuse of discretion.” (Rudisill v. California Coastal Commission (Cal. App. 2nd Dist., Div. 2, June 5, 2019) 35 Cal.App.5th 1062.)
Anti-SLAPP Motion Erroneously Granted in Malicious Prosecution Case.
Plaintiff filed a malicious prosecution action against his former employer after prevailing on summary judgment. The former employer filed a special motion to strike the complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16). The trial court granted the motion to strike, based on Jarrrow Formulas Inc. v. LaMarche (2003) 31 Cal.4th 728, which held that the entry of summary judgment for the defense based on insufficient evidence does not, by itself, establish a probability of prevailing on the merits of a subsequent malicious prosecution claim. Because plaintiff did not rely only on the grant of summary judgment in the prior action in opposing the motion to strike, but presented evidence that, if credited by a trier of fact, would support a verdict in his favor, the Court of Appeal reversed. (Cuevas-Martinez v. Sun Salt Sand, Inc. (Cal. App. 4th Dist., Div. 2, June 6, 2019) 35 Cal.App. 5th 1109.)
Deposit of Disputed Funds with the Court Does Not Satisfy a Judgment for Purposes of Postjudgment Costs.
A creditor obtained a money judgment. The debtor appealed and obtained a bond. The judgment was affirmed on appeal. After a few more rounds of litigation, the creditor moved for postjudgment costs pursuant to Code of Civil Procedure § 685.080, which requires that such costs be sought by noticed motion before the judgment is “satisfied.” The trial court denied the motion as untimely on the ground the bond issuer’s deposit of appeal-bond funds with the superior court satisfied the judgment. Reversing, the Court of Appeal stated: “Disputed funds on deposit with the superior court do not satisfy a judgment for purposes of a postjudgment motion for costs.” (Wertheim, LLC v. Currency Corporation (Cal. App. 2nd Dist., Div. 1, June 6, 2019) 35 Cal.App.5th 1124.)
Law on the Outer Continental Shelf.
Plaintiff worked for defendant on oil drilling platforms off the California coast. He was paid well above the California and federal minimum wages, but was not paid for standby time. He brought a class action in state court alleging violations of several California wage and hour laws, including a law that requires compensation for standby time. Defendant removed the action to federal court. The Outer Continental Shelf Lands Act (43 U.S.C. § 1331 et seq.; OCSLA) provides that federal law governs the outer continental shelf and the states have no jurisdiction, but the laws of the adjacent state are deemed to be federal law to the extent the state’s laws are “applicable and not inconsistent with” federal law. Following precedent from the Fifth Circuit Court of Appeals, the federal district court determined that state law applied only if necessary to fill a gap in federal law, and there were no gaps in federal law, so California law did not apply. The district court therefore granted defendants’ motion for judgment on the pleadings. The Ninth Circuit disagreed, finding state law was “applicable” if it pertained to the subject matter. The Ninth Circuit found California law was applicable and not inconsistent with OCSLA, and reversed and remanded the matter. Resolving the split between the Fifth and Ninth Circuits and deciding “a close question of statutory interpretation,” the U.S. Supreme Court held that “state laws can be ‘applicable and not inconsistent with’ federal law under §1333(a)(2)(A) only if federal law does not address the relevant issue.” Federal law addressed the relevant issues, so California law was not adopted as federal law, and the district court properly granted judgment on the pleadings. (Parker Drilling Management Services, Ltd. v. Newton (U.S., June 10, 2019) 139 S.Ct. 1881.)
Federal Agency Found Not To Be a Person for Purposes of Seeking Patent Review.
Plaintiff owns a patent for a method of processing mail that is undeliverable. Beginning in 2003, the U.S. Postal Service allegedly began exploring the possibility of licensing plaintiff’s invention, but the parties never reached an agreement. In 2006, the U.S.P.S. began a new method of processing its undelivered mail, and plaintiff contented it infringed on its patent. The U.S.P.S petitioned for reexamination of plaintiff’s patent, and the Patent Office confirmed the validity of plaintiff’s patent. Plaintiff then sued the U.S.P.S. for unauthorized use of its invention. While the suit was pending, the U.S.P.S petitioned for another form of administrative review, and the Patent Board concluded plaintiff’s invention was ineligible to be patented. A federal appeals court affirmed. The U.S. Supreme Court reversed the federal appeals court, finding a federal agency such as the U.S.P.S. is not a person for purposes of seeking this type of patent review. (Return Mail, Inc. v. U.S. Postal Service (U.S., June 10, 2019) 139 S.Ct. 1853.)
Previously we reported: Under Some Circumstances, Works in the Public Domain Can Be Copyrightable.
Plaintiff claims the rock group Led Zeppelin copied key portions from its song “Taurus” in its hit “Stairway to Heaven.” A jury returned a verdict in favor of Led Zeppelin. Reversing, the Ninth Circuit Court of Appeals held the trial court misinstructed the jury, stating: “In sum, we conclude that the district court’s originality jury instructions erroneously instructed the jury that public domain elements are not copyrightable, even if they are modified in an original manner or included as part of a selection and arrangement.” (Skidmore v. Led Zeppelin (9th Cir., Sept. 28, 2018) 905 F.3d 1116.)
The Ninth Circuit will rehear the case en banc, so the prior opinion may not be cited as precedent.
Uh oh…it Looks Like the Courts Are Getting Serious About Civility.
A client, represented by a lawyer, sued her family law attorney for legal malpractice. The day after a responsive pleading was due, plaintiff’s lawyer sent defendant a letter and an email telling her that the time to respond was past due and threatening entry of default if a responsive pleading was not filed by the next business day. When a pleading was not filed by 3:00 p.m. the next business day, plaintiff’s counsel filed a request for entry of default. Defendant quickly hired a lawyer who filed a motion to set aside the default pursuant to Code of Civil Procedure § 473, subdivision (b). The trial court denied defendant’s motion to set aside the default, despite a fact-filled declaration describing how defendant had been up to her neck taking care of urgent personal circumstances. Reversing, the Court of Appeal quoted from Code of Civil Procedure § 583.130 that “. . . all parties shall cooperate in bringing the action to trial or other disposition,” and concluded: “Attorneys who do not do so are practicing in contravention of the policy of the state and menacing the future of the profession.” (LaSalle v. Vogel (Cal. App. 4th Dist., Div. 3, June 11, 2019) 36 Cal.App.5th 127.)
Estate Administrator Removed.
A deceased’s granddaughter was ordered removed as an estate administrator pursuant to Probate Code § 8502 after the probate court found she (1) had failed to comply with the court’s 2001 instructions that she and her co-administrator (who died in 2003) sell the estate’s remaining real estate holdings and distribute the net proceeds to the beneficiaries; and (2) acted in bad faith toward the beneficiaries by trying to buy them out for much less than they would have received if she had timely sold the properties. Finding no abuse of discretion, the Court of Appeal affirmed. (Estate of Sapp (Cal. App. 4th Dist., Div. 2, June 11, 2019) 36 Cal.App.5th 86.)
ICE Raid at Factory.
Immigration and Customs Enforcement (ICE) agents implemented a preconceived plan to “target” over 200 factory workers for detention and interrogation as to their immigration status. The plan turned on obtaining and executing search warrants for employment records at the factory. Two days after the warrants were issued, approximately 100 armed and uniformed ICE agents streamed into the factory where plaintiff was working. He was detained, searched, arrested, and kept in an ICE facility overnight. Plaintiff was released the next day, and about a month later he received a notice to appear for a removal proceeding. He was ordered removed. Plaintiff appealed. The Ninth Circuit reversed. In Michigan v. Summers (1981) 452 U.S. 692, the U.S. Supreme Court held that a warrant to search for contraband founded on probable cause implicitly carries with it the limited authority to detain the occupants of the premises while a proper search is conducted. The Ninth Circuit stated: “In sum, Perez Cruz’s seizure was not a permissible Summers detention. The government suggests no other basis for Perez Cruz’s suspicionless detention and mandatory questioning. The agents thus violated 8 C.F.R. § 287.8(b)(2) by detaining and questioning Perez Cruz without ‘reasonable suspicion, based on specific articulable facts, that the person being questioned is, or is attempting to be, engaged in an offense against the United States or is an alien illegally in the United States.’ ” (Perez Cruz v. Barr (9th Cir., June 13, 2019) 2019 U.S. App. LEXIS 17674.)
Expert Ordered to Repay Fees for Deficient Work.
Evidence Code § 730 authorizes a court to appoint an expert to investigate and report to the court. It states in relevant part: “The court may fix the compensation for these services, if any, rendered by any person appointed under this section, in addition to any service as a witness, at the amount as seems reasonable to the court.” A family law court appointed an expert to conduct a child custody evaluation. However, the court determined the report was deficient and of no value to the court. The court found that “$0 is a reasonable fee for the evaluation,” and ordered the expert to repay the parties all of the expert fees they had paid him. When the repayment was not made, the court granted a party’s petition to join the expert as a party to the action. The expert moved to strike the petition pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16), and the trial court denied the motion. The Court of Appeal affirmed, but noted the expert did not have to be joined as a party to order him to repay fees, and outlined the proper procedure: “Accordingly, on remand, the trial court is directed to issue an order affording [the parties and the expert] notice of the court’s intent to hold an evidentiary hearing with respect to whether to order [the expert] to repay to [the parties] fees that he has received pursuant to his appointment under Evidence Code section 730.” (In re Marriage of Paul and Rebecca Benner (Cal. App. 4th Dist., Div. 1, June 12, 2019) 36 Cal.App.5th 177.)
Lawyer Contacts Witness Employed by Defendant.
Jane Doe sued her employer and three of its employees for sexual harassment. In her complaint, she alleges that two other women, one of them named Andrea, were also sexually harassed. Prior to Andrea’s deposition, plaintiff’s lawyer contacted her. The trial court granted the employer’s motion to disqualify plaintiff’s lawyer for violating rule 4.2 of the California State Bar Rules of Professional Conduct, which generally prohibits a lawyer from communicating with “a person the lawyer knows to be represented by another lawyer in the matter.” Plaintiff challenged the disqualification order by filing a petition for writ of mandate in the Court of Appeal. Granting the petition, the Court of Appeal noted that plaintiff did not seek to impose liability on defendants for what Andrea did, and stated: “The purpose of Rule 4.2 is to prevent ex parte contact with employees who engaged in acts or conduct for which the employer might be liable. It is not designed to prevent a plaintiff’s lawyer from talking to employees of an organizational defendant who might provide relevant evidence of actionable misconduct by another employee for which the employer may be liable.” (Doe v. Superior Court (Cal. App. 4th Dist., Div. 1, June 13, 2019) 36 Cal.App.5th 199.)
Repercussions from Tweet on Transgender Persons and Military Service.
In July 2017, President Trump announced on Twitter that transgender individuals would not be allowed to serve in the military. Plaintiffs are transgender individuals who serve in the military or seek to do so. They filed a lawsuit alleging that the policy unconstitutionally discriminated against transgender individuals. A federal trial court in the State of Washington issued a preliminary injunction against enforcement of the President’s policy. Based on a recommendation of the Department of Defense, the President revoked the policy in 2018 and replaced it with another policy. The 2018 policy differentiated persons diagnosed with gender dysphoria (persons with “clinically significant destress” because their gender identity does not match their birth-assigned sex) from persons with transgender status. The 2018 policy states in part: “Transgender persons who require or have undergone gender transition are disqualified from military service,” and, “Transgender persons without a history or diagnosis of gender dysphoria, who are otherwise qualified for service, may serve, like all other Service members, in their biological sex.” Because the injunction was issued on the 2017 policy and that policy was replaced by the 2018 policy, the government requested the trial court to dissolve the injunction, but the trial court refused to do so. Meanwhile, on January 22, 2019, the U.S. Supreme Court stayed the injunction pending action by the Ninth Circuit. On June 14, 2019, the Ninth Circuit ordered the trial court to consider the merits of the government’s motion to dissolve the preliminary injunction. (Karnoski v. Trump (9th Cir., June 14, 2019) 2019 U.S. App. LEXIS 17878.)
Petition for Writ of Supersedeas Denied.
The Medical Board of California sought the medical records of three minors for whom a doctor provided vaccination exemptions. The doctor refused to produce the records, and the Director of the Department of Consumer Affairs filed a petition with the superior court to compel compliance. The superior court ordered the doctor to comply. The doctor appealed and filed a petition for a writ of supersedeas to stay the order pending his appeal. The Court of Appeal granted a temporary stay and ordered further briefing. In a published order, the Court of Appeal held that the superior court’s order was not stayed under Code of Civil Procedure § 916 or 917.2. (Kennedy v. Superior Court (Cal. App. 1st Dist., Div. 4, June 14, 2019) 36 Cal.App.5th 306.)
Childcare Costs for Mother with Sole Physical Custody of Minor Child to Pursue Further Education.
The mother of a minor child is the child’s custodial parent. She has supported herself and the child on a combination of public assistance and earnings from part-time temporary employment. She sought an award for childcare costs so she could obtain a paralegal certification with the goal of becoming fully self-supporting without the need of public assistance. Family Code § 4062 mandates child support for childcare costs related to a parent’s employment or for reasonably necessary education or training for employment skills. The father of the child opposed such an award, arguing § 4062 does not apply to such a goal. The trial court ruled mother’s request exceeded the scope of § 4062 because the statute does not allow an award of childcare costs incurred while a parent pursues education to expand existing employment skills if a parent’s currently marketable skills are sufficient to secure employment or capable of being used to secure employment even if being underutilized. The Court of Appeal reversed and remanded, instructing the family court to consider the mother’s request on the merits and to also consider whether the mother’s educational endeavors were reasonably necessary education or training for employment skills, whether mother actually incurred reimbursable childcare costs associated with her educational endeavors, and the amount and appropriate apportionment of any childcare costs. (Greiner v. Keller (Cal. App. 1st Dist., Div. 3) June 14, 2019) 36 Cal.App.5th 332.)
Redistricting Plan Based on Race Enjoined.
The Commonwealth of Virginia redrew its legislative districts. Voters in 12 impacted districts sued Virginia, charging that the redrawn districts were racially gerrymandered in violation of the Fourteenth Amendment’s equal protection clause. A federal district court concluded that in 11 of those districts Virginia had sorted voters based on the color of their skin, and enjoined Virginia from conducting any elections in the challenged districts until a new redistricting plan was adopted. Despite the decision of the Virginia Attorney General not to ask for review by the U.S. Supreme Court, the Virginia House of Delegates filed an appeal to that court. Virginia moved to dismiss the appeal for lack of standing. The U.S. Supreme Court dismissed the appeal, stating: “The House, we hold, lacks authority to displace Virginia’s Attorney General as representative of the State. We further hold that the House, as a single chamber of a bicameral legislature, has no standing to appeal the invalidation of the redistricting plan separately from the State of which it is a part.” (Virginia House of Delegates v. Bethune-Hill (U.S., June 17, 2019) 139 S.Ct. 1945.)
A criminal defendant was convicted under Alabama’s felon in possession of a firearm statute. He then faced prosecution by the United States under the federal felon in possession of a firearm statute. He attacked the federal prosecution on double jeopardy grounds and asked the U.S. Supreme Court to overrule the dual-sovereignty doctrine. The high court explained: “That Clause provides that no person may be ‘twice put in jeopardy’ ‘for the same offence.’ Our double jeopardy case law is complex, but at its core, the Clause means that those acquitted or convicted of a particular ‘offence’ cannot be tried a second time for the same ‘offence.’ ” The U.S. Supreme Court affirmed longstanding precedent that a crime under one sovereign’s laws is not the same “offence” as a crime under the laws of another sovereign, and declined to overrule the dual-sovereignty doctrine. (Gamble v. United States (U.S., June 17, 2019) 139 S.Ct. 1960.)
Operator of Public Access Television Channel Is Not a State Actor.
The public access channels on Time Warner’s cable system in Manhattan are operated by a private nonprofit corporation known as MNN. Two producers produced a film about MNN’s alleged neglect of the East Harlem community, and MNN aired the film. Afterward, MNN fielded multiple complaints about the film and suspended the producers from using the public access channels, and later from all MNN services and facilities. The two producers sued MNN, claiming violation of their First Amendment free speech rights. MNN moved to dismiss on the ground that MNN is not a state actor and therefore not subject to First Amendment restrictions. The U.S. Supreme Court concluded, “a private entity such as MNN who opens its property for speech by others is not transformed by that fact alone into a state actor . . . and MNN therefore is not subject to First Amendment constraints on its editorial discretion.” (Manhattan Community Access Corp. v. Halleck (U.S., June 17, 2019) 139 S.Ct. 1921.)
Injunction Against Law Firms Upheld.
The Federal Trade Commission (FTC) sued lawyers and law firms in Nevada, alleging violations of the Federal Trade Commission Act (15 U.S.C. § 45) and a regulation. A federal district court entered an injunction freezing all of defendants’ assets in connection with their loan modification business operations. Defendants contended the district court erred as a matter of law because the court presumed irreparable harm, rather than requiring that the FTC demonstrate a likelihood of irreparable harm. The Ninth Circuit affirmed, stating: “Although in the ordinary case a showing of irreparable harm is required to obtain injunctive relief, no such showing is required when injunctive relief is sought in conjunction with a statutory enforcement action where the applicable statute authorizes injunctive relief.” (Federal Trade Commission v. Consumer Defense, LLC (9th Cir., June 17, 2019) 2019 U.S. App. LEXIS 18053.)
Wrongful Death Action Not a SLAPP.
A man attacked his mother with a pair of scissors and was taken to a county medical center for a 72-hour mandatory hold pursuant to Welfare and Institutions Code § 5150. The medical center released him before the expiration of the 72 hours. He returned to his family home and bludgeoned his father, his uncle, and an alarm company technician to death. The families of the decedents filed an action against the county for wrongful death, alleging, “the county left Brandon in a waiting room and discharged him for lack of space before the expiration of the 72-hour period, then provided him a bus pass to return home.” They further alleged the man was not seen by a psychiatrist. The county filed an anti-SLAPP motion (Code Civ. Proc., § 425.16), arguing that a § 5150 hold was an official proceeding under § 425.16, subdivision (e). The trial court denied the motion. The Court of Appeal affirmed the denial because the action did not arise from protected speech. (Swanson v. County of Riverside (Cal. App. 4th Dist., Div. 1, June 17, 2019) 2019 Cal. App. LEXIS 550.)
Trial Court Did Not Abuse Discretion in Reducing Damages.
An African American city employee who was a supervisor requested a disciplinary investigation of a subordinate for subpar performance. The city twice transferred the supervisor to less favorable positions while conducting its investigation. Suspecting his transfers were a result of race discrimination, the supervisor filed an administrative complaint with the Department of Fair Employment and Housing and eventually filed a lawsuit against the city for harassment and failure to prevent harassment and retaliation in violation of the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.). A jury awarded him $17,394,972, including $10 million in past and $5 million in future noneconomic damages. The city moved for a new trial. Finding that at least some of the jury’s award for past noneconomic harm was intended to punish the city rather than compensate plaintiff, the trial court conditionally granted the city’s new trial motion unless plaintiff agreed to a remittitur reducing past noneconomic damages by $5 million. Plaintiff accepted the remittitur, so the trial court denied the city’s new trial motion and entered an amended judgment in the amount of $12,394,972, exclusive of attorney fees and costs. On appeal, the city contended the jury’s award amounted to a defective verdict, namely, an improper award of punitive damages, requiring a new trial rather than a remittitur. Affirming the reduced award, the Court of Appeal found the trial court properly utilized the remittitur procedure under Code of Civil Procedure § 662.5. (Pearl v. City of Los Angeles (Cal. App. 2nd Dist., Div. 7, June 18, 2019) 2019 Cal. App. LEXIS 557.)
Attorney Fees Under Song-Beverly Act.
Plaintiff sued defendant for violation of the refund-or-replace provisions of the Song-Beverly Consumer Warranty Act (Civ. Code § 1790 et seq.). The parties agreed to settle all issues except the amount of attorney fees. Plaintiff moved for $259,068.75 in fees based on a lodestar calculation. The trial court awarded only $60,869 in fees, limiting the fee recovery based on the court’s interpretation of a percentage-based contingency fee provision in the retainer agreement between plaintiff and her counsel. On appeal, plaintiff contended the trial court abused its discretion by failing to apply the lodestar method to determine the fee award. The Court of Appeal agreed with plaintiff and reversed, remanding the matter to the trial court to recalculate the fee award using the lodestar method. (Hanna v. Mercedes-Benz USA, LLC (Cal. App. 2nd Dist., Div. 7, June 18, 2019) 2019 Cal. App. LEXIS 556.)
Restraining Order Under the Elder Abuse Act.
Petitioner, a 74-year-old man, obtained a restraining order against his neighbor under the Elder Abuse Act (Welf. & Inst. Code, § 15657.03). Among other allegations, petitioner said that every trash day the neighbor blocked his driveway with trash cans, preventing petitioner from getting to his medical appointments and going on errands. Petitioner also told the court the neighbor sprayed him with a garden hose through a fence separating the properties. The Court of Appeal affirmed the order, finding the neighbor forfeited his arguments by not raising them at the trial level. (Tanguilig v. Valdez (Cal. App. 1st Dist, Div. 2, June 18, 2019) 2019 Cal. App. LEXIS 558.)
Class Action Under the Telephone Act.
Petitioners produce the Physicians’ Desk Reference (PDR), a compilation about the uses and side effect of various prescription drugs. In 2013, petitioners advertised their new PDR e-book by sending faxes stating that providers could reserve a free copy. Respondent is one of the fax recipients. In 2006, the Federal Communications Commission (FCC) issued an order stating that the term “unsolicited advertisement” in the Telephone Consumer Protection Act of 1991 (Telephone Act) includes certain faxes that “promote goods or services even at no cost,” including “free magazine subscriptions” and “catalogs.” Respondent brought a class action against petitioners, claiming violation of the Telephone Act (47 U.S.C. § 227 (b)(1)(C)). A federal trial court found in petitioners’ favor, concluding that the fax was not an “unsolicited advertisement” under the act. The Fourth Circuit Court of Appeals vacated the district court’s judgment, holding that the district court should have applied the FCC’s 2006 interpretation of the Telephone Act. The U.S. Supreme Court noted vacated the judgment of the Fourth Circuit and remanded the case for the Fourth Circuit to consider preliminary issues arising under the Administrative Orders Review Act (Hobbs Act) relating to the nature and effect of the FCC’s 2006 order. (PDR Network, LLC v. Carlton & Harris Chiropractic, Inc. (U.S., June 20, 2019) 2019 U.S. LEXIS 4181.)
The Bladensburg Peace Cross Is Not Unconstitutional.
Since 1925, the Bladensburg Peace Cross has stood on public land in Maryland as a tribute to 49 area soldiers who gave their lives in the First World War. Respondents filed a lawsuit, claiming they are offended by the sight of the memorial on public land and that its presence there and the expenditure of public funds to maintain it violate the establishment clause of the First Amendment. A federal trial court granted summary judgment to the American Legion and the commission that maintains the cross. The Fourth Circuit Court of Appeals found the memorial violates the First Amendment and reversed. The U.S. Supreme Court reversed the Fourth Circuit, stating: “The cross is undoubtedly a Christian symbol, but that fact should not blind us to everything else that the Bladensburg Cross has come to represent. For some, that monument is a symbolic resting place for ancestors who never returned home. For others, it is a place for the community to gather and honor all veterans and their sacrifices for our Nation. For others still, it is a historical landmark. For many of these people, destroying or defacing the Cross that has stood undisturbed for nearly a century would not be neutral and would not further the ideals of respect and tolerance embodied in the First Amendment. For all these reasons, the Cross does not offend the Constitution.” (American Legion v. American Humanist Assn. (U.S., June 20, 2019) 2019 U.S. LEXIS 4182.)
Statute of Limitations for Professional Negligence Claim Against Accountant.
Plaintiff hired defendant to prepare business tax returns. On defendant’s advice, plaintiff took a certain position. In May 2010, the Franchise Tax Board (FTB) notified plaintiff it considered a certain transaction to be taxable and that plaintiff owed more than $1 million in taxes. Plaintiff hired professionals to contest the tax issue. After more than three years of dispute and spending more than $50,000, plaintiff settled with the FTB on May 19, 2015. On August 28, 2015, plaintiff sued defendant for professional negligence and other torts. The trial court found that the professional negligence claim was barred by the two-year statute of limitations in Code of Civil Procedure § 339. Reversing, the Court of Appeal held the statute of limitations did not begin to run until plaintiff settled the tax deficiency with the FTB. (Moss v. Duncan (Cal. App. 4th Dist., Div. 1, June 20, 2019) 2019 Cal. App. LEXIS 564.)
Summary Judgment Reversed in Disability Discrimination Action.
A deputy district attorney sued a county under the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) for disability discrimination, failure to reasonably accommodate or engage in the interactive process, and failure to prevent disability discrimination. The trial court granted summary judgment in favor of the county. Reversing, the Court of Appeal held there was a question of fact whether plaintiff was disabled, noting that repeated or extended absences from work for medical appointments constitute a limitation on the major life activity of working. (Ross v. County of Riverside (Cal. App. 4th Dist., Div. 1, June 20, 2019) 2019 Cal. App. LEXIS 565.)
“This is America. Anyone is free to protest anything they want,” Nikki Haley.
Appellant is an animal rights activist who appealed the entry of a permanent injunction forbidding him from demonstrating outside Six Flags Discovery Kingdom, a privately owned amusement park located in Vallejo, California. Reversing, the Court of Appeal stated: “[W]e hold as a matter of first impression that the exterior, unticketed areas of the amusement park are a public forum for expressive activity under article I, section 2 of the California Constitution.” (Park Management Corp. v. In Defense of Animals (Cal. App. 1st Dist., Div. 2, June 20, 2019) 2019 Cal. App. LEXIS 568.)
Taking by the Government.
Petitioner owns 90 acres of land in Scott Township, Pennsylvania. She lives in a single-family home on the property and uses the rest of her land for horses and other farm animals. The property includes a small graveyard where her neighbors’ ancestors are buried. Backyard graveyards have long been permitted in Pennsylvania. In 2012, the township passed an ordinance requiring all cemeteries to be kept open during daylight hours. In 2013, the township notified petitioner she was in violation of the ordinance by failing to keep her land open to the public during daylight hours. Petitioner sued the township for an unlawful taking of her property. The township withdrew its violation notice. Nonetheless, the petitioner continued with her lawsuit. The U.S. Supreme Court was asked to decide whether ongoing enforcement action by the township was necessary for petitioner to proceed with her action for unlawful taking and whether property owners must first seek just compensation under state law in an inverse condemnation proceeding before seeking redress under 42 U.S.C. § 1983. The high court ruled: “A property owner may bring a takings claim under §1983 upon the taking of his property without just compensation by a local government.” (Knick v. Township of Scott (U.S., June 21, 2019) 2019 U.S. LEXIS 4197.)
Gutter Language Permissible in Trademark.
The Lanham Act (15 U.S.C. § 1052(a)) prohibits the registration of “immoral or scandalous” trademarks. Respondent founded a clothing line that uses the trademark FUCT. The U.S. Patent and Trademark office decided the trademark was prohibited under the Lanham Act. The U.S. Supreme Court held that the prohibition on “immoral or scandalous” trademarks was facially unconstitutional, stating: “There are a great many immoral and scandalous ideas in the world (even more than there are swearwords), and the Lanham Act covers them all. It therefore violates the First Amendment.” (Iancu v. Brunetti (U.S., June 24, 2019) 2019 U.S. LEXIS 4201.)
Settlement Discussions or Extortion? Lawyer Convicted.
Prior to filing an action against a woman, a lawyer told the woman’s lawyer that he possessed information that would blow the case out of the water. Later, in an in-person meeting, the lawyer showed the woman’s lawyer photographs and letters purportedly showing an affair between his client and the woman, who was married, promising to destroy that evidence if the woman paid $350,000. The woman agreed to pay the money, and her lawyer reported the matter to the police. The lawyer was convicted of conspiracy to commit extortion. The Court of Appeal reversed, stating: “We conclude sufficient evidence supported the jury’s verdict, but we reverse the judgment because [defendant] suffered prejudice in the trial court’s decision not to instruct on [defendant’s] affirmative defense his actions were protected under the litigation privilege.” (People v. Toledano (Cal. App. 4th Dist., Div. 3, June 24, 2019) 2019 Cal. App. LEXIS 573.)
Special Needs Trust.
A court ordered the proceeds of a medical malpractice settlement into a special needs trust. The purpose of placing the proceeds in the trust was to preserve the child beneficiary’s eligibility for Medi-Cal benefits while sheltering assets to be used for her medical needs that would not be covered by Medi-Cal. The beneficiary died at age 21; $1.6 million remained in the trust. Her parents requested the probate court to order the remainder of the trust to be distributed to them rather than to the Department of Health Care Services. The probate court denied the parents’ request. Affirming, the Court of Appeal stated: “The court properly found the Department was entitled to reimbursement for these Medi-Cal expenses.” (Gonzalez v. City National Bank (Cal. App. 2nd Dist., Div. 7, June 24, 2019) 2019 Cal. App. LEXIS 575.)
Previously we reported: The Ministerial Exception Does Not Apply.
Plaintiff was fired from her job as a fifth grade teacher in a Catholic school after she told her employer that she had breast cancer and would need to miss work to undergo chemotherapy. She sued her employer under the Americans with Disabilities Act (42 U.S.C. § 12101). A federal trial court granted the employer’s motion for summary judgment. Reversing, the Ninth Circuit stated: “We hold that, assessing the totality of [plaintiff’s] role at [the Catholic school], the ministerial exception does not foreclose her claim.” The appeals court recognized the U.S. Supreme Court’s holding in Hosanna-Tabor Evangelical Lutheran Church & School v. E.E.O.C. (2012) 565 U.S. 171, noting that religious organizations enjoy a broad right to select their own leaders. Finding the present case does not come within the ministerial exception discussed in Hosanna-Tabor, the appeals court found defendant did not hold plaintiff out as a minister and her job duties did not include important religious functions. (Biel v. St. James School (9th Cir., Dec. 17, 2018) 911 F.3d 603.)
The Ninth Circuit denied a petition for rehearing en banc. Dissenting from the denial of rehearing en banc, Judge R. Nelson, joined by Judges Bybee, Callahan, Bea, M. Smith, Ikuta, Bennett, Bade, and Collins, wrote that the panel’s opinion embraced the narrowest construction of the ministerial exception, split from the consensus of other circuits that the employee’s ministerial function should be the key focus, and conflicted with the Supreme Court’s decision in Hosanna-Tabor. (Biel v. St. James School (9th Cir., June 25, 2019.)
Medi-Cal Lien Honored.
A guardian sued medical care providers for a minor’s catastrophic birth injuries. Through the Medi-Cal system, the Department of Health Care Services paid for the child’s care before and during the lawsuit. The guardian settled the case for $4 million. The Department moved to impose a $267,159.60 lien on the settlement, and the trial court granted the motion. The guardian appealed the order granting the Medi-Cal lien. On appeal, the guardian raised three arguments: 1) federal law blocks the Medi-Cal lien; 2) because the superior court previously approved a minor’s compromise, collateral estoppel bars the lien; and 3) the reasonable value of the case was much higher than its settlement value, so the lien should be reduced accordingly. Finding none of the arguments persuasive, the Court of Appeal affirmed the trial court’s order. (Lomeli v. State Department of Health Care Services (Cal. App. 2nd Dist., Div. 8, June 25, 2019) 2019 Cal. App. LEXIS 577.)
Court of Appeal Affirms Denial of Attorney Fees to Civil Rights Plaintiffs.
In 2007, in the predawn hours following a huge Halloween party, 100 SWAT officers raided the mansion where a party had taken place. The SWAT team forcibly detained plaintiffs and restrained their hands behind their backs with zip ties. About an hour later, defendant and a team of around 40 officers entered the mansion to conduct a warrant-based search for evidence of illegal gaming. Defendant coordinated the search. She interviewed and released each plaintiff separately. Plaintiffs’ detention lasted “for as long as 14 hours.” A jury awarded damages to nine plaintiffs. 42 U.S.C. § 1988 authorizes courts to award a reasonable attorney fees award to prevailing parties in civil rights litigation. The trial court denied plaintiffs’ request for attorney fees. Affirming, the Court of Appeal stated: “Here, in light of plaintiffs’ minimal success and inflated fee request, the trial court properly exercised its discretion to deny their section 1988 motion.” (Guillory v. Hill (Cal. App. 4th Dist., Div. 3, June 25, 2019) 2019 Cal. App. LEXIS 578.)
Tennessee Favors its own Residents in Granting Liquor Licenses.
Tennessee law requires first-time applicants for a liquor license to have resided in the state for the prior two years. The U.S. Supreme Court held that the law violates the commerce clause, stating: “Because Tennessee’s 2-year residency requirement for retail license applicants blatantly favors the State’s residents and has little relationship to public health and safety, it is unconstitutional.” (Tennessee Wine and Spirits Retailers Assn. v. Thomas (U.S., June 26, 2019) 2019 U.S. LEXIS 1499.)
Decision Whether to Defer to Agency’s Interpretation of Its Own Ambiguous Regulation Depends on the Circumstances.
Plaintiff is a veteran seeking disability benefits from the U.S. Department of Veterans Affairs (VA). He first applied for benefits in 1982, alleging he had developed posttraumatic stress disorder (PTSD) as a result of his participation in a military action called Operation Harvest Moon. The VA denied that application based on a report of the agency’s evaluating psychiatrist, who noted plaintiff’s involvement in that battle but found that he did not suffer from PTSD. Plaintiff moved to reopen his claim in 2006. This time the VA agreed that plaintiff suffered from PTSD based on a new psychiatric report, but granted benefits only from the date of the motion to reopen, not the date of the first application. The Board of Veterans’ Appeals affirmed based on its interpretation of an agency rule that authorizes the agency to grant retroactive benefits if it finds there are “relevant official service department records” that it did not consider in its initial denial. The board acknowledged that plaintiff had produced two new records confirming his participation in Operation Harvest Moon, but concluded that those records were not relevant because they did not pertain to the reason for the denial—that plaintiff did not have PTSD. The Court of Appeals for Veterans Claims affirmed, deferring to the Board’s interpretation of the rule. The Federal Circuit also affirmed. The U.S. Supreme Court reversed and remanded the matter to the Federal Circuit to decide whether the VA’s interpretation of its own regulation should govern, explaining that there are limits on when deference under Auer v. Robbins (1997) 519 U.S. 452 is appropriate. (Kisor v. Wilkie (U.S., June 26, 2019) 2019 U.S. LEXIS 4397.)
Costs of Proof After Requests for Admission Are Denied.
Plaintiff sustained personal injuries in two separate rear-end collisions. After settling with the two underinsured drivers, plaintiff made claims against his insurer pursuant to an underinsured motorist policy. The two claims were combined into a single arbitration. Plaintiff propounded eight requests for admission (RFA’s) concerning the first accident. The insurer denied all eight RFA’s. Shortly before the arbitration, the insurer agreed to pay plaintiff’s claims arising from the second accident; consequently, the arbitration concerned only the first accident. After the arbitrator issued an award in plaintiff’s favor, plaintiff moved for costs to prove the issues the insurer denied under Code of Civil Procedure § 2033.40, but the arbitrator declined to consider the motion. Plaintiff then sought the same relief from the superior court. The superior court denied the motion, after allocating to plaintiff the burden to prove that none of the exceptions set forth in § 2033.420, subdivision (b) applied. The Court of Appeal reversed and remanded the matter to the superior court to determine plaintiff’s reasonable costs of proof. (Samsky v. State Farm Mutual Automobile Ins. Co. (Cal. App. 2nd Dist., Div. 8, June 26, 2019) 2019 Cal. App. LEXIS 586.)
Burden on Defendant to Prove Present Cash Value of Future Damages Award.
To compensate plaintiff for injuries he sustained in a traffic accident, the trial court awarded roughly $1.65 million for past and future medical expenses and past and future lost earnings. The defendant moved for a new trial, in part because the future damages were not reduced to present cash value. The trial court denied the motion. Affirming, the Court of Appeal stated: “The trial judge is not obligated, sua sponte, to determine an appropriate discount rate or method without evidence, and should not do so.” The court added that, “in a contested case, a party (typically a defendant) seeking to reduce an award of future damages to present value bears the burden of proving an appropriate method of doing so, including an appropriate discount rate. A party (typically a plaintiff) who seeks an upward adjustment of a future damages award to account for inflation bears the burden of proving an appropriate method of doing so, including an appropriate inflation rate. This aligns the burdens of proof with the parties’ respective economic interests. A trier of fact should not reduce damages to present value, or adjust for inflation, absent such evidence or a stipulation of the parties.” (Lewis v. Ukran (Cal. App. 2nd Dist., Div. 4, June 26, 2019) 2019 Cal. App. LEXIS 588.)
Not My Circus; Not My Monkeys.
Voters and other plaintiffs in North Carolina and Maryland challenged their respective states’ congressional districting maps as unconstitutional partisan gerrymanders. In both cases, federal district courts ruled for the plaintiffs, and the defendants appealed directly to the U.S. Supreme Court. The nation’s highest court vacated the district court judgments, concluding that the gerrymandering claims present political questions beyond the reach of the federal courts. (Rucho v. Common Cause (U.S., June 27, 2019) 2019 U.S. LEXIS 4401.)
“If you can’t explain it simply, you don’t understand it well enough,” Albert Einstein.
Until 1950, one question asked of all households on the census questionnaire concerned citizenship. That question was removed. The U.S. Census Bureau and former bureau officials have resisted occasional proposals to resume including a citizenship question on the questionnaire on the ground that doing so would discourage noncitizens from responding to the census and result in a less accurate count of the total population. But the U.S. Secretary of Commerce decided to reinstate a citizenship question on the 2020 census questionnaire. Two separate lawsuits were filed in federal court: one alleged that the secretary’s decision violated the enumeration clause of the U.S. Constitution and the requirements of the Administrative Procedure Act, while the other asserted an equal protection claim. The district court dismissed the enumeration clause claim but allowed the other claims to proceed. The U.S. Supreme Court affirmed the district court’s order referring the matter back to the Department of Commerce to explain its decision to reinstate the citizenship question on the census questionnaire. (Department of Commerce v. New York (U.S., June 27, 2019) 2019 U.S. LEXIS 4402.)
Testing the Blood of an Unconscious Driver.
It is settled law that a police officer may conduct a warrantless blood alcohol test of a motorist if the facts bring the matter within the exigent circumstances exception to the Fourth Amendment’s general warrant requirement. And if an officer has probable cause to arrest a motorist for drunk driving, the officer may conduct a breath test, but not a blood test, without a warrant. Here, the U.S. Supreme Court considered whether police officers may administer a warrantless blood test to an unconscious driver who cannot be given a breath test. The high court held: “In such cases, . . . the exigent-circumstances rule almost always permits a blood test without a warrant. When a breath test is impossible, enforcement of the drunk-driving laws depends upon the administration of a blood test. And when a police officer encounters an unconscious driver, it is very likely that the driver would be taken to an emergency room and that his blood would be drawn for diagnostic purposes even if the police were not seeking [blood alcohol concentration] information.” (Mitchell v. Wisconsin (U.S., June 27, 2019) 2019 U.S. LEXIS 4400.)
Previously we reported: Predispute Arbitration Agreement Limiting Remedies
During oral argument in the Court of Appeal, the plaintiff credit card holder asserted that the defendant’s arbitration agreement was unenforceable because it purported to prohibit her from pursuing claims for public injunctive relief, not just in arbitration, but in any forum. The Court of Appeal did not mention this argument in its opinion. The card holder reasserted the argument in a petition for rehearing, which the Court of Appeal denied without addressing the issue. The California Supreme Court stated that was the issue that needed to be addressed: “The question we address in this case is the validity of a provision in a predispute arbitration agreement that waives the right to seek this statutory remedy in any forum. We hold that such a provision is contrary to California public policy and is thus unenforceable under California law. We further hold that the Federal Arbitration Act (9 U.S.C. § 1 et seq.) does not preempt this rule of California law or require enforcement of the waiver provision.” (McGill v. Citibank, N.A. (Cal., Apr. 6, 2017) 2 Cal.5th 945.)
Plaintiff brought a class action alleging defendant charged excessive prices for its rent-to-own plans for household items. The complaint sought a public injunction to enjoin future violations of certain laws. The transactions between the named plaintiff and the defendant were conducted under an arbitration agreement that stated: “This agreement to arbitrate is intended to be interpreted as broadly as the FAA allows. Claims subject to arbitration include . . . claims that are based on any legal theory whatsoever, including . . . any statute, regulation or ordinance. [¶] You and [defendant] agree that arbitration shall be conducted on an individual basis, and that neither you nor [defendant] may seek, nor may the Arbitrator award, relief that would affect [defendant] account holders other than you.” The agreement also had a severance clause. The district court concluded that the agreement violated the McGill rule, so it severed the issues, granted defendant’s petition to compel arbitration as to the usury claim, and denied the petition as to the request for public injunctive relief. On appeal, the Ninth Circuit was asked to determine whether the Federal Arbitration Act (9 U.S.C. § 1 et seq.) preempts the McGill rule. The court concluded that the McGill rule is not preempted. (Blair v. Rent-A-Center, Inc. (9th Cir., June 28, 2019) 2019 U.S. App. LEXIS 19476.)
Previously we reported: Ninth Circuit’s Wage & Hour Inquiry Answered by the California Supreme Court.
Plaintiff brought a class action alleging his employer’s computerized software required employees to clock out on every closing shift before initiating the software’s “close store procedure” on a separate computer in a different office. The close store procedure transmitted daily sales, profit and loss, and store inventory to the company’s corporate headquarters. After the close store procedure was completed, employees had to activate the alarm and lock the doors. The action was originally filed in state court and was removed by defendant to a federal court. Defendant successfully moved for summary judgment. The Ninth Circuit Court of Appeals certified the following question to the California Supreme Court: “Does the federal Fair Labor Standards Act’s de minimis doctrine, as stated in Anderson v. Mt. Clemens Pottery Co. (1946) 328 U.S. 680, 692, 66 S.Ct. 1187, 90 L.Ed. 1515, and Lindow v. United States (9th Cir. 1984) 738 F.2d 1057, 1063, apply to claims for unpaid wages under California Labor Code sections 510, 1194, and 1197?” In answering the question, the California Supreme Court stated: “We approach the question presented in two parts: First, have California’s wage and hour statutes or regulations adopted the de minimis doctrine found in the federal Fair Labor Standards Act (FLSA)? We conclude they have not. There is no indication in the text or history of the relevant statutes and Industrial Welfare Commission (IWC) wage orders of such adoption. [¶] Second, does the de minimis principle, which has operated in California in various contexts, apply to wage and hour claims? In other words, although California has not adopted the federal de minimis doctrine, does some version of the doctrine nonetheless apply to wage and hour claims as a matter of state law? We hold that the relevant wage order and statutes do not permit application of the de minimis rule on the facts given to us by the Ninth Circuit, where the employer required the employee to work ‘off the clock’ several minutes per shift. We do not decide whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded.” (Troester v. Starbucks Corporation (Cal., July 26, 2018) 5 Cal.5th 829.)
In defendant’s retail stores, employees must undergo exit inspections when they leave the stores, after they are “off the clock.” In this class action alleging violation of California’s Labor Code, plaintiffs seek compensation for the time spent on these exit inspections. A federal district court granted summary judgment for the defendant, concluding plaintiffs’ claims are barred by the de minimis doctrine, which precludes recovery for otherwise compensable amounts of time that are small. The Ninth Circuit reversed, citing Troester. (Rodriguez v. Nike Retail Services, Inc. (9th Cir., June 28, 2019) 2019 U.S. App. LEXIS 19475.)
Protected Conduct vs. Ordinary Business Decision.
Tenants in a shopping center alleged that the landlord unreasonably withheld consent to assign their leases. While the litigation was pending, the tenants made an amended lease assignment request, which the landlord rejected. The tenants filed an amended complaint, adding allegations about the landlord’s refusal to consent to their most recent assignment request. The landlord filed a special motion to strike the amended complaint under Code of Civil Procedure § 425.16 (the anti-SLAPP statute), claiming the latest refusal was a settlement communication protected by the litigation privilege. The trial court denied the motion, and the Court of Appeal affirmed, concluding that the latest denial of an assignment request amounted to nothing more than an ordinary business decision. (Valuerock TN Properties, LLC v. PK II Larwin Square SC L.P. (Cal. App. 4th Dist., Div. 3, June 28, 2019) 2019 Cal. App. LEXIS 595.)