Litigation Update: March 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, Herb Fox, Jessica Riggin, Anne Voigts and Kenneth Wang
Police and the Mentally Ill.

An 18-year-old man used various drugs and contemplated suicide in the months prior to being evaluated in an emergency room by a crisis team. The team determined he was not suicidal and discharged him. Two weeks later, he slashed a tire on his girlfriend’s car and was then arrested. One of the arresting officers returned to the station about 30 minutes after the young man was placed in a holding cell awaiting transportation to a jail. The young man’s mother called the station and spoke to the arresting officer, telling the officer about her son’s recent depression, suicidal ideations, and drug abuse, and asked that he be watched closely. While the officer was speaking to his mother, the young man removed his belt, and hanged himself in his cell. He survived, but with severe brain damage due to lack of oxygen to his brain. His mother sued the county and the police officer for violation of her son’s civil rights. A federal district court denied the defendants’ motion for summary judgment, finding there was an issue of fact as to whether the police department had acted with deliberate indifference. As to the individual police officer who had spoken with the mother, however, the Ninth Circuit Court of Appeals reversed, holding the officer was entitled to qualified immunity and the claims against him should be dismissed. The appeals court therefore remanded the matter to the district court for further action regarding the claims under 42 U.S.C. § 1983 against the county, but affirmed the denial of summary judgment with regard to plaintiff’s claims under Government Code § 845.6. (Horton v. City of Santa Maria (9th Cir., Feb. 1, 2019) 2019 U.S. App. LEXIS 3313.)

“A band is as solid as its drummer is,” Joey Kramer of Aerosmith.

Plaintiff was the drummer in defendant Eddie Money’s band for 41 years, until plaintiff developed cancer, the chemotherapy treatment for which caused urinary incontinence and the need for diapers. Defendant allegedly made fun of plaintiff publicly, during concerts, calling him “Chemo the Drummer,” and stating sarcastically that the concert had been sponsored by “Depends.” After concerts, plaintiff would be especially exhausted and would ask for short breaks before working in the merchandise booth. Defendant laid off the entire band, and then rehired everyone but plaintiff, who was then 61 years old. Defendant hired a younger drummer who had no physical disabilities. Plaintiff sued defendant for discrimination on the basis of age, disability and medical condition. Defendant filed an anti-SLAPP motion under Code of Civil Procedure § 425.16, arguing that his selection of bandmates involved his constitutional right of free speech as a singer, songwriter, and performer and was an issue of public interest. The trial court denied the motion, finding the allegations arose from discriminatory conduct, and did not implicate defendant’s free speech rights. The Court of Appeal reversed, agreeing with Eddie Money that the decision to terminate plaintiff arose from protected conduct. The appeals court remanded for the trial court to go to the second step of the anti-SLAPP analysis and determine if plaintiff demonstrated a probability of prevailing on the merits of his claim. (Symmonds v. Mahoney (Cal. App. 2nd Dist., Div. 1, Feb. 1, 2019) 31 Cal.App.5th 1096.)

Previously We Reported: Mixed-Motive Claims of Racism are Cognizable Under 42 U.S.C. § 1981.

Plaintiff, an African American-owned operator of television networks, sought a contract with defendant, a communications business usually referred to as a “cable company.” Plaintiff contended defendant’s refusal to enter into a carriage contract was racially motivated and violated 42 U.S.C. § 1981. A federal district court denied defendant’s motion to dismiss the action, recognizing that defendant has some First Amendment protection, but declining to apply strict scrutiny and bar the § 1981 claim. Affirming, the Ninth Circuit Court of Appeals held the First Amendment does not bar plaintiff’s claim and stated: “mixed-motive claims are cognizable under § 1981. Even if racial animus was not the but-for cause of a defendant’s refusal to contract, a plaintiff can still prevail if she demonstrates intent was a factor in that decision such that she was denied the same right as a white citizen.” (Nat’l Ass’n of African American-Owned Media v. Charter Communications (9th Cir., Nov. 19, 2018) 908 F.3d 1190.)

The latest:

The panel that issued the previous opinion withdrew it and issued a new opinion, arriving at a similar conclusion but for different reasons. This time, the panel held that mixed-motive claims are cognizable under 42 U.S.C. § 1981 based on the plain text of the statute. (Nat’l Ass’n of African American-Owned Media v. Charter Communications, Inc. (9th Cir., Feb. 4, 2019) 2019 U.S. App. LEXIS 3448.)

On-call Shifts.

Plaintiff is a former employee of a clothing store that has a policy of assigning employees to on-call shifts. Under that policy, the employee is required to call in two hours before the shift begins; at that time, the employee is told whether to come in to work. If told to come in, the employee is paid for the shift; if not called into work, the employee receives no compensation. Wage Order No. 7-2001, codified in the California Code of Regulations (tit. 8, § 11070), requires employers to pay employees “reporting time pay” for each workday “an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work.” Plaintiff filed suit, alleging violation of the wage order, and the trial court sustained the employer’s demurrer without leave to amend. Reversing, the Court of Appeal stated: “As we explain, on-call shifts burden employees, who cannot take other jobs, go to school, or make social plans during on-call shifts—but who nonetheless receive no compensation from Tilly’s unless they ultimately are called in to work. This is precisely the kind of abuse that reporting time pay was designed to discourage” (Ward v. Tilly’s, Inc. (Cal. App. 2nd Dist., Div. 3, Feb. 4, 2019) 31 Cal.App.5th 1167.)

Attorney Sanctioned $50,000 for Unprofessional Conduct.

After a marriage was dissolved, child custody issues remained, and the trial court ordered a confidential child custody evaluation, followed by a confidential psychological evaluation. As the case progressed, the mother remarried, had another child, and was involved in another child custody dispute. The same lawyer represented the mother in both actions. In the second action, the lawyer took the deposition of the husband/father in the first action and asked numerous questions about what he and the child told the child custody evaluator, and about what the evaluator concluded. The husband/father in the first action then moved for sanctions under Family Code §§ 3025.5 and 3111, subdivision (d) for disclosing information contained in a confidential custody evaluation. The trial court found the lawyer made disclosures “maliciously, recklessly, without substantial justification, and [that they] were not in the best interest of the child,” and ordered both the lawyer and the mother jointly and severally to pay $50,000. Affirming as to the lawyer, but not as to the mother, the Court of Appeal stated: “California Rules of Court, rule 9.7, pertaining to the oath required when an attorney is admitted to practice law, concludes with, ‘As an officer of the court, I will strive to conduct myself at all times with dignity, courtesy, and integrity.’ These cautions are designed to remind counsel that when in the heat of a contentious trial, counsel’s zeal to protect and advance the interest of the client must be tempered by the professional and ethical constraints the legal profession demands. Unfortunately, that did not happen here.” ( In re Marriage of Anka and Yeager (Cal. App. 2nd Dist., Div. 6, Feb. 4, 2019) 31 Cal.App.5th 1115.)

Hospital Did Not Give Doctor Required Notice and Hearing Before Terminating Him. 

Plaintiff, an anesthesiologist, was terminated from practicing at a hospital and sued, arguing that he had been fired without due process. A jury agreed and awarded him almost $4,000,000 for lost income, future lost income, tax consequences, emotional distress, and interest. The hospital appealed. The background is that plaintiff’s medical group and the hospital had a contract whereby the medical group would supply anesthesiologists to the hospital when needed. In July 2011, the California Department of Public Health conducted an unannounced “medication error reduction plan” survey at the hospital to determine its compliance with state law, and found that plaintiff was responsible for numerous deficiencies regarding the use of the drug droperidol. The surveyor declared that the hospital was in “immediate jeopardy” until a written plan correcting the violations was prepared and accepted. The hospital and the medical group agreed that plaintiff would be taken off the schedule. The hospital’s peer review committee made recommendations that plaintiff followed. Nonetheless, the hospital terminated plaintiff. Affirming, the Court of Appeal stated: “The hospital violated plaintiff’s rights by suspending his hospital privileges without providing the required notice and hearing.” (Economy v. Sutter East Bay Hospitals (Cal. App. 1st Dist., Div. 4, Feb. 4, 2019) 31 Cal.App.5th 1147.)

Cost of Expensive Bond on Appeal Found to be a Legitimate Cost.

Plaintiff obtained summary judgment against defendant but in a first appeal, the Court of Appeal reversed and ordered costs to defendant. Defendant had posted a surety bond on appeal for $1.4 million, secured by a letter of credit. Plaintiff moved to tax the cost of the bond, arguing the amount was unreasonable because defendant had enough assets to secure a cash-collateralized bond without needing a letter of credit. The trial court denied plaintiff’s motion to tax the cost of the surety bond. Affirming, the Court of Appeal stated that “the mere fact that an alternative procedure, which would have been less expensive, was available does not mandate that the option chosen was unreasonable or unnecessary.” (Rostack Investments, Inc. v. Sabella (Cal. App. 2nd Dist., Div. 8, Feb. 6, 2019) 32 Cal.App.5th 70.)

Independent Payroll Provider Not Liable in Wage and Hour Case.

The California Supreme Court answered the question whether when an employer hires an independent payroll service provider to handle all payroll tasks for it, the employee may bring a civil action against not only his or her employer but against the payroll company as well. California’s high court answered “no” for all claims: 1) With regard to a breach of contract claim, an employee should not be viewed as a third party beneficiary who may maintain an action against a payroll company because such payroll companies are engaged for the employer’s convenience, not the employees’ benefit; 2) With regard to negligence and negligent misrepresentation claims, it is neither necessary nor appropriate to impose upon a payroll company a tort duty of care with regard to obligations owed to an employee. ( Goonewardene v. ADP, LLC (Cal., Feb. 7, 2019) 6 Cal.5th 817.)

Peremptory Challenge to Judge Found to be Untimely.

A San Diego superior court judge was assigned to an action. Five months later, the parties moved to transfer and consolidate cases filed in other counties into the San Diego action. The parties in the cases in other counties filed an opposition to the transfer motion in the San Diego action, but the San Diego judge granted the transfer motion 14 days later. Six days after the trial court’s transfer order, the parties in the cases that were transferred from other counties into the San Diego action filed a peremptory challenge pursuant to Code of Civil Procedure § 170.6 against the San Diego judge, which the San Diego judge denied as untimely. The court of appeal affirmed, concluding: “[T]he court properly found the . . . defendants’ section 170.6 challenge was untimely because defendants filed the challenge more than 15 days after they made an appearance in the action by filing an opposition to the section 403 transfer/consolidation motion.” (Sunrise Financial, LLC v. Superior Court (Cal. App. 4th Dist, Div. 1, Feb. 7, 2019) 32 Cal.App.5th 114.)

The Abortion Wars Continue.

Louisiana passed a law requiring every doctor who performs abortions to have active hospital admitting privileges at a hospital within 30 miles of where abortions are performed. A federal trial judge permanently enjoined the law, finding it imposed an undue burden on women’s due process rights to choose abortion and was unconstitutional. The Fifth Circuit Court of Appeals reversed. The U.S. Supreme Court granted a stay of the Fifth Circuit’s mandate pending disposition of a petition for a writ of certiorari, noting that in the event the petition for a writ of certiorari were granted, the stay would terminate. Justices Thomas, Alito, and Gorsuch said they would have denied the application for stay. Justice Kavanaugh wrote a dissent, noting that Louisiana has four doctors who perform abortions and an automatic transition period of 45 days gives those doctors time to seek admission privileges. (June Medical Services, L.L.C. v. Gee (Feb. 7, 2019) 139 S.Ct. 663.)

No Mandatory Relief From Voluntary Dismissal of Action.

In 2015, a pro se plaintiff sued defendant for discrimination under the Fair Employment and Housing Act. In 2016, she retained an attorney to advise and assist her, but not to represent her. Acting on the lawyer’s advice, she dismissed the action without prejudice, intending to refile, but she later learned that the statute of limitations had already expired. Thereafter, she retained the attorney for the limited purpose of seeking relief from dismissal under the mandatory relief provision of Code of Civil Procedure § 473, subdivision (b). The trial court denied the motion, and the Court of Appeal affirmed, concluding that the mandatory relief provision does not apply in the context of a voluntary dismissal. The court explained that mandatory relief is only available in matters that are the procedural equivalent to a default, and a voluntary dismissal is not such a matter. (Jackson v. Kaiser Foundation Hospitals, Inc. (Cal. App. 1st Dist., Div. 3, Feb. 8, 2019) 32 Cal.App.5th 166.)

Lawful Permanent U.S. Residents Apparently Always Here on a Trial Basis.

When someone faces removal from the United States, removal orders are affirmed when an alien has performed an act that in and of itself constitutes a complete and distinct crime. The alien is deportable when he again commits such an act, even though one may closely follow the other. In this case, the alien was a four-year-old citizen of Hungary when he was admitted to the United States as a lawful permanent resident in 1957. In 1981, when he was 28 years old, he forced three women to commit sexual acts under threat of violence over a five to six-hour period after a day of heavy drinking. He was convicted of four felonies for committing those acts, two of which were forced oral copulation, one act immediately following the other. In 2005, when he was 52 years old, the government began removal proceedings to deport him, and he was ordered removed. The Ninth Circuit noted that the Board of Immigration Appeals (BIA) recognized the alien’s “lengthy residence in the country, military service, steady employment, payment of taxes, charitable work, citizen sister, and various disabilities that require medical treatment,” but concluded the BIA did not abuse its discretion in ordering him removed. He is now 67 years old and will be deported back to Hungary. (Szonyi v. Whitaker (9th Cir., Feb. 13, 2019) 915 F.3d 1228.)

Spill on the High Seas and Forum Non Conveniens.

While traveling on a cruise ship in South America, plaintiff was using the spa. When a storm caused the ship to tip, plaintiff fell and broke his hip. He sued the cruise line in state court for failing to close the gym and warn passengers of an impending storm, even though his contract with the cruise line stated that all personal injury actions “shall be litigated before the United States District Courts for the Central District of California in Los Angeles.” The cruise line specially appeared in superior court to move to dismiss the case under Code of Civil Procedure § 410.30. The trial court granted the motion and dismissed the action without prejudice. Concluding that the contract’s forum non conveniens clause is mandatory, the Court of Appeal affirmed. (Korman v. Princess Cruise Lines, Ltd. (Cal. App. 2nd Dist., Div. 4, Feb. 14, 2019) 32 Cal.App.5th 206.)

Trial Court Erred in Denying Class Certification.

In a wage-and-hour case, the trial court denied plaintiffs’ motion for class certification. On appeal, plaintiffs argued that the claims of the proposed class are based on statutory and regulatory requirements and uniform policies of defendant, which present predominantly common issues of law and fact suitable for determination on a class basis. Reversing, the Court of Appeal concluded that the trial court used improper criteria or erroneous legal assumptions, which affected its analysis of whether plaintiffs’ claims and one of defendant’s defenses presented predominantly common issues suitable for determination on a class basis. The appeals court remanded the case to the trial court to reconsider the certification motion. (Jimenez-Sanchez v. Dark Horse Express, Inc. (Cal. App. 5th Dist., Feb. 14, 2019) 32 Cal.App.5th 224.)

Physical Location of Affiant in Limited Civil Cases.

In limited civil cases, a sworn written statement, the contents of which otherwise might constitute inadmissible hearsay, may sometimes be admitted on the same terms applicable to live witness testimony. One example is when a party offers into evidence an affidavit, a copy of which has been served on the party against whom it is offered at least 30 days before trial, together with a current address of the affiant that is within 150 miles of the place of trial, and the affiant is available for service of process at that place for a reasonable period, during the 20 days before trial. (Code Civ. Proc., § 98, subd. (a).) The Ninth Circuit certified the following question to the California Supreme Court: “Under section 98(a) . . . must the affiant be physically located and personally available for service of process at the address provided in the declaration that is within 150 miles of the place of trial?” California’s high court responded: “Section 98(a). . . does not categorically require that allaffiants be personally present for service at an address within 150 miles of the place of trial for a reasonable period during the 20 days prior to trial. Such personal presence is required only if it is necessary for lawful service, at the specified location, of process that directs the affiant to appear at trial, under the standard rules prescribing the pertinent types of process and how such process is to be served.” (Meza v. Portfolio Recovery Associates, LLC (Cal., Feb. 15, 2019) 6 Cal.5th 844.)

No Equitable Tolling for Successive Identical Class Action Claims.

The trial court sustained a demurrer without leave to amend to wage-and-hour class claims based on the statute of limitations. Shortly thereafter, the U.S. Supreme Court issued China Agritech, Inc. v. Resh (2018) 138 S.Ct. 1800, which held that upon denial of class certification, a putative class member may not commence a new class action asserting the same claim if the statute of limitations has run. The Supreme Court reasoned that the efficiency and economy of litigation, which support tolling the statutes of limitations for individual claims during the pendency of the initial class action, do not support tolling the statutes of limitations for class claims. Here, the Court of Appeal reversed and remanded with directions to the trial court to develop the record on issues related to the timeliness of the class claims. (Fierro v. Landry’s Restaurant Inc. (Cal. App. 4th Dist., Div. 1, Feb. 15, 2019) 32 Cal.App.5th 276.)

In Sickness and in Health and in Debt.

In 2005, plaintiff obtained a $600,000 bankruptcy judgment against defendant. In 2014, defendant entered into a premarital agreement with his future spouse providing that the earnings, income, and property acquired by each spouse during the marriage would be separate property. In 2016, plaintiff conducted several judgment debtor examinations of defendant, who claimed he had no assets and that he never intended to work again so that he would not have to pay the judgment. Plaintiff subsequently filed this action against defendant and his wife, asserting a single cause of action for violation of the Uniform Fraudulent Transfer Act, which was renamed the Uniform Voidable Transactions Act (Civ. Code § 3439 et seq.). The trial court dismissed the action. Reversing, the Court of Appeal concluded that in light of the statutory framework, legislative history, and public policy, the act applies to a premarital agreement in which the prospective spouses agree that each spouse’s earnings, income, and other property acquired during marriage will be separate property. (Sturm v. Moyer (Cal. App. 2nd Dist., Div. 4, Feb. 15, 2019) 32 Cal.App.5th 299.)

Relief for Intellectually Disabled Man Sentenced to Death.

When defendant was a child, his father, teachers, and peers called him stupid for his slow reading and speech. He failed every subject in the ninth grade and dropped out of high school. Cast out of his home, he survived on the streets eating out of trash cans. At the age of 13, he did not know the days of the week or the months of the year, and could barely tell time. As an adult, he was convicted and sentenced to death after he shot and killed a man while committing a robbery. A Texas state court subsequently found he was ineligible for the death penalty due to an intellectual disability, but the Texas Court of Criminal Appeals reversed, relying heavily on adaptive improvements defendant had made in prison. Finding the analysis of the appeals court “wanting,” the U.S. Supreme Court granted certiorari, reversed the judgment, and remanded the case for further proceedings. (Moore v. Texas (U.S., Feb. 19, 2019) 2019 U.S. LEXIS 821.)

“The Excessive Fines Clause is . . . incorporated by the Due Process Clause of the Fourteenth Amendment,” the U.S. Supreme Court.

A criminal defendant pled guilty to a drug offense in Indiana state court. The sentence required him to pay fees and costs totaling $1,203. When he was arrested, the police seized a vehicle he had purchased for $42,000. A state trial court found the vehicle had been used in a crime, but declined to order forfeiture of the vehicle because it would be grossly disproportionate to the gravity of the offense. The Indiana Supreme Court reversed, holding that the excessive fines clause constrains only federal action and does not apply to state action. Reversing the Indiana Supreme Court, the U.S. Supreme Court held that the excessive fines clause is incorporated by the due process clause of the Fourteenth Amendment and therefore applies to state action. (Timbs v. Indiana (U.S., Feb. 20, 2019) 2019 U.S. LEXIS 1350.)

Discrimination in Tax Exemptions.

In West Virginia, a person who spends a career working for state law enforcement is eligible for a generous tax exemption upon retirement. But if his or her career was in federal law enforcement, that tax exemption is not available. Plaintiff retired from the U.S. Marshal’s Service, and his pension benefits were taxed. He brought this action alleging a violation of 4 U.S.C. § 111, which provides that the United States has consented to state taxation of the pay or compensation of officers or employees of the United States, but only if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation. The U.S. Supreme Court found that West Virginia may not discriminate against federal officers, stating: “Because West Virginia’s statute unlawfully discriminates against Mr. Dawson, we reverse the judgment of the West Virginia Supreme Court of Appeals.” (Dawson v. Steager (U.S., Feb. 20, 2019) 2019 U.S. LEXIS 1349.)

No Showing of Good Cause to Obtain Medical Records.

During an investigation involving opioid prescriptions, the Medical Board of California filed a petition in superior court for an order compelling production of a doctor’s medical records for five patients. The trial court granted the petition. On appeal, the doctor argued that the government’s interest in his patients’ medical records was insufficient to overcome their right to privacy and that the board lacked authority to issue subpoenas for records of noncomplaining witnesses. Reversing, the Court of Appeal held that the board failed to demonstrate good cause, stating: “Good cause requires something more than the mere fact that a specialist in pain medication prescribed doses slightly greater than 100 MED [morphine equivalent doses] to three patients and two others received prescriptions for drugs which, used in combination, resulted in increased sedative effects.” ( Grafilo v. Cohanshohet (Cal. App. 2nd Dist., Div. 8, Feb. 21, 2019) 2019 Cal. App. LEXIS 136.)

Elder Abuse Restraining Order Against Next-door Neighbor. 

An 81-year-old woman filed a request for an elder abuse restraining order on Judicial Council form EA-100, alleging her next-door neighbor and the neighbor’s boyfriend harassed and intimidated her by taunting her, threatening her, destroying a hedge, letting their dogs menace her, trespassing on her property, defacing a barrier fence, and twice removing a wire boundary fence between the properties. The boyfriend ordered the dogs to “kill” the woman. Finding there was no special relationship between the woman and the next-door neighbor, the trial court denied the restraining order request. Reversing, the Court of Appeal held: “The trial court was clearly incorrect in its interpretation of the Elder Abuse Act. Nothing in the text of [Welfare and Institutions Code] section 15610.07, subdivision (a)(1), or elsewhere in the Elder Abuse Act requires a special relationship between abuser and victim.” ( Darrin v. Miller (Cal. App. 1st Dist., Div. 2, Feb. 21, 2019) 2019 Cal. App. LEXIS 141.)

Previously we reported: Past Persecution in China.

Petitioner is a citizen of China. He testified that he was beaten, arrested, jailed, and denied food, water, sleep, and medical care because he tried to stop the police from forcing his wife to have an abortion. The Board of Immigration Appeals (BIA) found he was not eligible for asylum or withholding of removal. The Ninth Circuit Court of Appeals held that petitioner’s evidence was sufficiently persuasive and compelled the conclusion that the harm he suffered from resisting his wife’s forced abortion rose to the level of past persecution. The case was remanded to the BIA for further proceedings. (Dai v. Sessions (9th Cir., Mar. 8, 2018) 884 F.3d 858.)

The latest:

While petitions for rehearing and rehearing en banc were pending, the dissenting judge, Hon. Stephen S. Trott, amended his dissenting opinion. Judge Trott is critical of the majority opinion, stating: “Over the years, our Circuit has manufactured misguided rules regarding the credibility of political asylum seekers.” “By omitting from their opinion the IJ’s [Immigration Judge’s] fact-based explanation of his decision, the majority elides eight material findings of fact the IJ did make, each of which is entitled to substantial deference. The majority’s assertion that ‘there is no finding to which we can defer’ is false.” (Dai v. Barr (9th Cir., Feb. 22, 2019) 916 F.3d 731.)

Short-term Rentals in a Homeowners Association.

A 93-unit residential community is governed by covenants, conditions and restrictions (CC&R’s) supplemented by rules and regulations prohibiting short term rentals of units for durations less than 30 days. But when the homeowners association (HOA) attempted to enforce its rule against short term rentals, a court held the rule was unenforceable because it was not contained in the CC&Rs. So the HOA put the issue to a vote of the homeowners. After balloting was completed, 62 percent of the owners voted to prohibit short-term rentals, but that percentage was less than the super-majority required to amend the CC&R’s. The HOA then sought authorization to reduce the percentage of affirmative votes required to adopt the amendment, pursuant to Civil Code § 4275. The trial court granted the HOA’s petition, and the owners who favored short-term rentals appealed. Affirming the trial court’s order, the appellate court noted that section 4275 requires adequate notice, balloting conducted in accordance with the governing documents, and a reasonably diligent effort to permit all eligible members to vote, and found those requirements were satisfied. ( Orchard Estate Homes, Inc. v. Orchard Homeowner Alliance (Cal. App. 4th Dist., Div. 2 (Feb. 22, 2019) 2019 Cal. App. LEXIS 144.)

Previously we reported: It’s Apparently Still Permissible to Pay Women Less for the Same Work.

Plaintiff is a school district employee. She discovered her male counterparts are paid more than she is paid for doing the same work. Plaintiff sued under the federal Equal Pay Act (29 U.S.C. § 206(d)), Title VII of the Civil Rights Act of 1964 (42 USC § 2000e-5), and the California Fair Employment and Housing Act (Gov. Code, § 12940). The county argued it is true that the woman makes less money than her male counterparts who do the same work, but that’s because one’s salary is based upon one’s past salary, and the woman made less in the past than the men did. The federal trial court denied the county’s motion for summary judgment. The Ninth Circuit Court of Appeals reversed, citing Kouba v. Allstate Insurance Company (9th Cir. 1982) 691 F.2d 873. In Kouba, the Ninth Circuit held the law does not strictly prohibit the use of prior salary as a basis for current salary, despite the fact an employer is able to “manipulate its use of prior salary to underpay female employees.” (Rizo v. Yovino (9th Cir., Apr. 27, 2017) 854 F.3d 1161.)


The Ninth Circuit Court of Appeals, sitting en banc, agreed with the district court’s denial of summary judgment and overruled Kouba v. Allstate Ins. Co. (9th Cir. 1982) 691 F.2d 873. Time may really be up when it comes to one’s gender and equal pay. ( Rizo v. Yovino(9th Cir., Apr. 9, 2018) 887 F.3d 453.)

The latest:

In a per curiam opinion, the U.S. Supreme Court addressed the following question: “May a federal court count the vote of a judge who dies before the decision is issued?” The high court stated that the Hon. Stephen Reinhardt died on March 29, 2018, but the Ninth Circuit counted his vote on cases after that date, and he was listed as the author of the en banc opinion issued on April 9, 2018, 11 days after he passed away. The U.S. Supreme Court held the Ninth Circuit erred in counting Judge Reinhardt’s vote, stating: “[F]ederal judges are appointed for life, not for eternity.” (Yovino v. Rizo (U.S., Feb. 25, 2019) 2019 U.S. LEXIS 1354.)

Ability to Pay.

A juvenile threw an object at a vehicle, damaged highway signs, and trespassed. He admitted his violations of the law and successfully completed probation other than paying restitution of $36,381 at the rate of $25/month for the damage he caused. The California Supreme Court accepted the People’s concession that the proper disposition of the case is to reverse the judgment and remand for a new ability to pay hearing that includes the juvenile’s current financial circumstances and his future ability to pay the ordered restitution. (In re J.G. (Cal., Feb. 25, 2019) 2019 Cal. LEXIS 1126.)

Charter City Must Pay Minimum Wages.

Plaintiffs filed a class action against a charter city for failure to pay them California’s minimum wage. The city demurred, arguing that wages set by charter cities are municipal affairs, not subject to state regulation. Finding authority in article XI, section 5 of the California Constitution, the trial court agreed with the city. Reversing, the Court of Appeal stated: “[T]he Legislature may constitutionally exercise authority over minimum wages, despite the constitutional reservation of authority in charter cities to legislate as to their municipal affairs.” ( Marquez v. City of Long Beach (Cal. App. 2nd Dist., Div. 7 (Feb, 25, 2019) 2019 Cal. App. LEXIS 148.)

Insurance Coverage Dispute.

Plaintiff purchased more than 100 excess and umbrella insurance policies from 1958 through 1986 and sought a declaration of coverage and compensatory damages, claiming the policies covered asbestos personal injury claims. The trial court found in favor of the insurance companies. The appellate court considered two issues: “(1) whether the higher-layer excess policies were triggered once the first-layer excess policy limits, which were subject to a self-insured retention (SIR) paid by Deere, had been exhausted; and (2) whether the insurers’ indemnity obligation extended to Deere’s defense costs incurred in asbestos claims that had been dismissed.” Reversing, the Court of Appeal held the retained limits are not incorporated into the higher-layer excess policies, and the excess policies obligate the excess insurers to indemnify plaintiff for its defense costs in the underlying cases, irrespective of whether those cases were resolved by adjudication or settlement. (Deere & Co. v. Allstate Insurance Co. (Cal. App. 1st Dist., Div. 4 (Feb. 25, 2019) 2019 Cal. App. LEXIS 147.)

Motions for Reconsideration Confuse Timing for Appeals in Federal Courts . . . Much as in California Courts.

To take an immediate appeal from a federal district court’s order granting or denying class certification, a party must first seek permission from the appellate court within 14 days after the order is entered.This is the timing in this case:

Day 1—class action decertified.

Day 10—plaintiff’s counsel informed the court of intention to file a motion for reconsideration.

Day 20—as scheduled by the trial court, the motion for reconsideration was filed.

Day 94—the trial court denied the motion for reconsideration.

Day 108—plaintiffs petitioned the Court of Appeals for permission to appeal the decertification order.

The Court of Appeals deemed the petition timely, finding the deadline should be tolled under the circumstances. The U.S. Supreme Court was not so forgiving, stating: “This case poses the question whether a court of appeals may forgive on equitable tolling grounds a failure to adhere to that deadline when the opposing party objects that the appeal was untimely. The applicable rules of procedure make clear that the answer is no.” (Nutraceutical Corporation v. Lambert (U.S., Feb. 26, 2019) 2019 U.S. LEXIS 1593.)

Common Knowledge Theory. 

Buyers purchased an expensive home, and learned the next day that their new next-door neighbor was about to begin a remodel that would cut off much of their view, a fact known by the sellers’ broker prior to the sale. Buyers sued the sellers for failure to disclose. An arbitrator ruled in the buyers’ favor and rescinded the sale, also ordering the sellers to pay various costs and fees in excess of $1 million. In the present action, the sellers sued their own broker to recover the money they were ordered to pay to the buyers. The broker moved for summary judgment arguing that the sellers could not prove a breach of duty to the sellers because they failed to designate an expert witness. The trial court granted summary judgment to the broker. At the appellate level, the sellers raised the common knowledge theory for the first time. That theory states that an expert is not needed to establish a standard of care in a professional negligence cause of action when the conduct required by the particular circumstances is within the common knowledge of a layperson. Reversing, the Court of Appeal held that the broker failed to show that an expert witness was necessary to establish the scope of a broker’s duty or breach of that duty. ( Ryan v. Real Estate of the Pacific, Inc. (Cal. App. 4th Dist., Div. 1, Feb. 26, 2019) 2019 Cal. App. LEXIS 155.)

Super-priority Lien for Receiver’s Remediation Loan.

The trial court approved super-priority lien status for a receiver’s loan of $250,000 to remediate residential property that had been declared a public nuisance. On appeal, the mortgage lender argued that Health and Safety Code § 17980.7, which authorizes the appointment of a receiver in cases involving remediation of substandard buildings, does not explicitly provide that a court may grant a super-priority lien displacing prior liens. Rejecting the mortgage lender’s argument and affirming the trial court’s order, the Court of Appeal noted that the use of super-priority liens has been approved in California since at least 1915. (City of Sierra Madre v. Suntrust Mortgage, Inc. (Cal. App. 2nd Dist., Div. 3, Feb. 26, 2019) 2019 Cal. App. LEXIS 154.)

Compensation for Loss of Goodwill in Condemnation Action.

Plaintiff sued defendant in eminent domain to take one of its donut shops that was in the path of a proposed rail line. Defendant sought compensation for loss of goodwill pursuant to Code of Civil Procedure § 1263.510. Under the statute, a condemnee must establish that the loss of goodwill cannot be prevented by relocating or making other reasonable mitigation efforts. The trial court concluded defendant was not entitled to compensation for loss of goodwill because it unreasonably refused to relocate the shop to one of three proposed sites. Reversing, the Court of Appeal stated: “[A] condemnee need only prove some or any unavoidable loss of goodwill to satisfy the condemnee’s burden to demonstrate entitlement to compensation for goodwill under section 1263.510. We conclude the trial court erred in finding that Yum Yum’s failure to mitigate some of its loss of goodwill precluded compensation for any loss of goodwill, reverse, and remand for a jury trial on the value of Yum Yum’s lost goodwill.” (Los Angeles County Metropolitan Transportation Authority v. Yum Yum Donut Shops, Inc. (Cal. App. 2nd Dist., Div. 1, Feb. 26, 2019) 2019 Cal. App. LEXIS 156.)

U.S. Supreme Court Rules on Immunity Issue for International Organizations.

In the wake of World War II, the United States and many of its allies joined together to establish a host of new international organizations. Those organizations, which included the United Nations, the International Monetary Fund, and the World Bank, were designed to allow member countries to collectively pursue goals such as stabilizing the international economy, rebuilding war-torn nations, and maintaining international peace and security. Anticipating that those and other international organizations would locate their headquarters in the United States, Congress passed the International Organizations Immunities Act of 1945 (22 U.S.C. § 288 et seq.; IOIA). The act grants international organizations a set of privileges and immunities, such as immunity from search and exemption from property taxes. International Finance Corporation (IFC) is headquartered in the United States and finances private sector development projects in poor and developing countries around the world. About 10 years ago, the IFC financed the construction of a power plant in Gujarat, India. Petitioners are local farmers and fishermen and a small village. They allege that the power plant has polluted the air, land, and water in the surrounding area. Petitioners sued the IFC for damages and injunctive relief in federal district court, but the IFC claimed absolute immunity from suit. Petitioners argued that the IFC was entitled under the IOIA only to the limited or “restrictive” immunity that foreign governments currently enjoy. The U.S. Supreme Court agreed with petitioners, stating: “The International Organizations Immunities Act grants international organizations the ‘same immunity’ from suit ‘as is enjoyed by foreign governments’ at any given time. Today, that means that the Foreign Sovereign Immunities Act governs the immunity of international organizations. The International Finance Corporation is therefore not absolutely immune from suit.” (Jam v. Int’l Fin. Corp.(U.S., Feb. 27, 2019) 2019 U.S. LEXIS 1594.)

Death Penalty Issues for a Man who Developed Dementia While in Prison.

A criminal defendant killed a police officer in 1985 during a domestic dispute. An Alabama jury convicted him of capital murder, and he was sentenced to death. He has been in prison long enough to develop dementia and now has no memory of his crime. The Eighth Amendment prohibits the execution of a prisoner whose mental illness prevents him from rationally understanding why the state seeks to impose the death penalty.The U.S. Supreme Court asked and answered two questions: “First, does the Eighth Amendment forbid execution whenever a prisoner shows that a mental disorder has left him without any memory of committing his crime? We (and, now, the parties) think not, because a person lacking such a memory may still be able to form a rational understanding of the reasons for his death sentence. Second, does the Eighth Amendment apply similarly to a prisoner suffering from dementia as to one experiencing psychotic delusions? We (and, now, the parties) think so, because either condition may—or, then again, may not—impede the requisite comprehension of his punishment.” The matter was ordered back to Alabama for consideration of how these holdings relate to this case. (Madison v. Alabama (U.S., Feb. 27, 2019) 2019 U.S. LEXIS 1595.)

Errors in Granting Motion in Limine and Costs of Proof Award.

In a case involving a residential construction project, the trial court granted a motion in limine to exclude evidence of the cost of work done by an unlicensed contractor. Finding the grant of that motion was error, the Court of Appeal stated: “To begin with, there is no doubt that the payments would have provided evidence of the reasonable value of repairs. . . . There is also no doubt the lack of evidence of the cost of repairs led to the court granting directed verdicts against appellants . . . .” Another issue involved the trial court’s award of $113,196.50 for costs of proof based in part on responses to requests for admissions, which requests were propounded by someone other than the recipient of the costs of proof award. The appellate court reversed, stating that Code of Civil Procedure § 2033.420 says nothing about standing in the shoes of someone else. ( Design Built Systems v. Sorokine (Cal. App. 1st Dist., Div. 1, Feb. 26, 2019) 2019 Cal. App. LEXIS 158.)

Recorded Judgment Lien has Priority Over Unperfected Security Interest. 

A judgment creditor properly recorded a judgment lien. An assignee did not file a financing statement with respect to distributions irrevocably assigned to it by the judgment debtor before the judgment lien was recorded. The court had to decide who was entitled to the money. Affirming the trial court, the Court of Appeal stated: “The answer depends on whether the assignment created a security interest that had to be perfected (but was not) by the filing of a financing statement under California’s Uniform Commercial Code (UCC or the Code). We agree with the trial court that although the assignment created a security interest, the judgment creditor is entitled to the interpleaded funds because its recorded judgment lien has priority over the unperfected security interest.” (MDQ, LLC v. Gilbert, Kelly, Crowley & Jennett LLP (Cal. App. 2nd Dist., Div. 8, Feb. 27, 2019) 2019 Cal. App. LEXIS 160.)

Greed in PAGA Action.

In 2013 and 2014, plaintiff was a security guard employed by an agency that supplies security services to entertainment companies. In 2015, he sued his former employer and the agencies under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA) alleging various wage and hour violations. The agencies were dismissed, and a default was entered against the employer. But the trial court denied plaintiff’s request to enter a default judgment and dismissed the complaint because plaintiff refused to comply with the court’s order to divide 25 percent of the proposed judgment pro rata among the 23 aggrieved employees alleged in the complaint. Plaintiff wanted to pocket the entire 25 percent himself. Since the law requires 75 percent of PAGA penalties to be allocated to the Labor and Workforce Development Agency and 25 percent distributed among aggrieved employees, the Court of Appeal affirmed. (Moorer v. Noble L.A. Events, Inc. (Cal. App. 2nd Dist., Div. 7, Feb. 11, 2019) 2019 Cal. App. LEXIS 161.)

Evidence to be Considered on the Second Prong of an Anti-SLAPP motion.

A school district sued to void construction contracts due to bribery. Defendants brought a special motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16), arguing their activities stemmed from constitutionally protected political expression. The school district responded with evidence that included guilty and no contest pleas and grand jury testimony in criminal actions. The trial court denied the motion, and the Court of Appeal affirmed. The question addressed by the California Supreme Court was what evidence a court ruling on an anti-SLAPP motion consider in determining the plaintiff’s probability of success. Finding the trial court properly considered the school district’s evidence, the California Supreme Court stated: “In sum, at the second stage of an anti-SLAPP hearing, the court may consider affidavits, declarations, and their equivalents if it is reasonably possible the proffered evidence set out in those statements will be admissible at trial. Conversely, if the evidence relied upon cannot be admitted at trial, because it is categorically barred or undisputed factual circumstances show inadmissibility, the court may not consider it in the face of an objection. If an evidentiary objection is made, the plaintiff may attempt to cure the asserted defect.” (Sweetwater Union High School Dist. v. Gilbane Building Co. (Cal., Feb. 28, 2019) 2019 Cal. LEXIS 1127.)

Anti-Muslim Discrimination Alleged Against the FBI.

Three Muslim residents of Southern California allege that, for more than a year, the FBI paid a confidential informant to conduct a covert surveillance program that gathered information about Muslims based solely on their religious identity. The three plaintiffs filed a putative class action against the United States, the FBI, and two FBI officers in their official capacities, and against five FBI agents in their individual capacities. Alleging that the investigation involved unlawful searches and anti-Muslim discrimination, they pleaded eleven constitutional and statutory causes of action. The government asserted the state secrets privilege and moved to dismiss the discrimination claims, but not the Fourth Amendment or the Foreign Intelligence Surveillance Act (FISA) claims. Both the government and the individuals moved to dismiss plaintiffs’ discrimination and unlawful search claims based on arguments other than privilege. A federal trial court dismissed all but the FISA claim. Plaintiffs appealed the dismissal of their claims, and the individual agents appealed the denial of qualified immunity on the FISA claim. In a 103-page opinion, the Ninth Circuit concluded that some of plaintiffs’ claims stated a cause of action and that the individual agents were entitled to immunity on some but not all causes of action. The matter was remanded for further action in the trial court. (Fazaga v. Federal Bureau of Investigation(9th Cir., Feb. 28, 2019) 2019 U.S. App. LEXIS 6028.)

Attorney Reported to State Bar for Misconduct on Appeal and Gender Bias.

This is what the Court of Appeal stated: “[W]e are reporting plaintiff’s attorney Benjamin Pavone to the California State Bar for manifesting gender bias. The notice of appeal signed by Mr. Pavone on behalf of plaintiff referred to the ruling of the female judicial officer as “succubustic.” A succubus is defined as a demon assuming female form that has sexual intercourse with men in their sleep. We publish this portion of the opinion to make the point that gender bias by an attorney appearing before us will not be tolerated, period. [¶] We also report Mr. Pavone to the State Bar for the statement in the notice of appeal suggesting the trial court attempted to thwart service of the signed judgment on plaintiff in an effort to evade appellate review and statements in the appellate briefs he signed on behalf of plaintiff accusing the judicial officer who ruled on the motion for attorney fees of intentionally refusing to follow the law. None of these serious charges is supported by any evidence.” (Martinez v. O’Hara (Cal. App. 4th Dist., Div. 3, Feb. 28, 2019) 2019 Cal. App. LEXIS 164.)

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