Litigation
Litigation Update: March 2025
A monthly publication of the Litigation Section of the California Lawyers Association.
- Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
- Managing Editor, Julia C. Shear Kushner
- Editors, Dean Bochner, Colin P. Cronin, Austin Evans, Jenn French, Jennifer Hansen, Ryan Wu
“Copyright, estate law, and religious writings make for strange bedfellows,” Ninth Circuit Court of Appeals.
This case involves ownership, licensing, and claimed infringement of copyrights in the spiritual teachings of Keith Milton Rhinehart, the late founder and ecclesiastical head of the Aquarian Foundation, a non-profit religious organization. Aquarian sued after its leadership discovered that defendant, an active member of Aquarian from the 1970s until 1997, had uploaded copyrighted works to various websites. Defendant claimed he had obtained a license from Rhinehart in 1985, before Rhinehart died in 1999 and bequeathed his estate to Aquarian. The district court found that defendant had a valid license, that he did not breach the license agreement, and that Aquarian lacked authority to terminate the license. Affirming in part and reversing in part, the Ninth Circuit stated: “Rhinehart licensed his works to [defendant] in 1985; [defendant] did not breach the licensing agreement; and upon Rhinehart’s death in 1999, ownership in the underlying copyrights transferred to Aquarian via will. We . . . affirm the decision not to award [defendant] attorneys’ fees under the Lanham Act. [¶] We depart, however, from the district court’s determination that, under 17 U.S.C. § 203(a), Aquarian did not terminate the Rhinehart license. Section 203’s requirements for terminating copyright licenses relate to authors and statutory heirs and have no bearing in a case like this one, where Aquarian is not a statutory heir and came into Rhinehart’s copyrights via will.” (Aquarian Foundation, Inc. v. Lowndes (9th Cir., Feb. 3, 2025) 127 F.4th 814.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/03/22-35704.pdf
Federal Law Preempts Choice of Law Provision in Arbitration Agreement.
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (9 U.S.C. §§ 401–402; EFAA) permits plaintiffs to elect to render arbitration agreements unenforceable in cases relating to a sexual harassment dispute. Here, plaintiff sued her former employer and one of its employees for sexual harassment and other claims. Defendants moved to compel arbitration, which the trial court granted based on an employment/arbitration agreement that specified California law governed. Granting plaintiff’s petition for extraordinary relief, the Court of Appeal held that “the EFAA preempts attempts under state law to compel arbitration of cases relating to a sexual harassment dispute, and parties cannot contract around the law by way of a choice-of-law provision.” (Casey v. Superior Court of Contra Costa County (Cal. App. 1st Dist., Div. 1, Feb. 3, 2025) 108 Cal.App.5th 575.)
Plaintiff Can’t Afford Cost of Arbitration.
Plaintiff sued defendant for legal malpractice. The trial court granted defendant’s motion to compel arbitration, despite plaintiff’s claim that he could not afford arbitration fees and costs and that the arbitration agreement was adhesive and unconscionable. Granting extraordinary relief, the Court of Appeal stated: “[T]he contract purported to have the parties agree to the arbitration rules as promulgated by ‘JAMS, Judicate West, or equivalent.’ This language made it virtually impossible for [plaintiff] to knowingly agree to the rules, as he would not only have had to research the two named arbitration providers’ respective rules, but he would have to guess which additional unnamed providers were deemed ‘equivalent’ in the drafter’s mind and research them as well. . . . Here, the undisputed facts show [plaintiff] currently cannot pay court filing fees of $435. No evidence suggests he can pay the much higher $2,000 arbitration filing fees or the $25,000 to $30,000 arbitration costs. Defendants presented no evidence disputing [plaintiff’s] present inability to pay the arbitral fees and costs.” (Sanchez v. Superior Court of Orange County (Cal. App. 4th Dist., Div. 3, Feb. 3, 2025) 108 Cal.App.5th 615.)
Trial Court Erred in Denying Petition to Arbitrate and Stay Court Proceedings.
Plaintiff employee signed an employment arbitration agreement with defendant employer. After plaintiff was terminated and sued defendant for violations of the Fair Employment and Housing Act (Gov. Code, § 12940; FEHA), defendant moved to compel arbitration and stay all proceedings. The trial court denied the motion, finding the arbitration agreement unconscionable due to the arbitrator’s inability to compel prehearing third party discovery. Defendant appealed. The Court of Appeal reversed, noting that the JAMS rules in effect at the time stated: “‘[t]he necessity of additional depositions shall be determined by the [a]rbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing [p]arties and the witness.’ . . . Rule 17(d) gives the arbitrator the authority to decide all ‘dispute[s] . . . regarding discovery issues.’” (Vo v. Technology Credit Union (Cal. App. 6th Dist., Feb. 4, 2025) 108 Cal.App.5th 632.)
“Teachers make a lasting impact in the lives of their students,” Solomon Ortiz.
Plaintiff was a high school student when he and a friend started a fistfight during art class. The teacher, who weighed 375 pounds and had recently been using a walker because of a back condition, immediately intervened to prevent the boys from hurting themselves or someone else. While pulling the larger boy away from plaintiff—and being hit himself by plaintiff, who continued to throw punches after the other boy stopped—the teacher lost his balance and fell onto plaintiff, breaking plaintiff’s leg. Plaintiff sued the teacher and the school district for negligence, contending that the teacher should not have tried to stop the fight because of his weight and physical condition, and that he should have done something else to prevent the fight. Plaintiff also alleged that the school district had failed to train its teachers how to safely intervene in physical altercations between students. After a 15-day trial, the jury, who viewed the video of the incident many times during the trial, concluded that neither the teacher nor the school district was negligent, and that plaintiff and the other boy were each 50 percent responsible for plaintiff’s harm. Affirming, the Court of Appeal said it was plaintiff’s burden to prove that the school district failed to do something a reasonably careful person would have done in the same situation. (I.C. v. Compton Unified School District (Cal. App. 2nd Dist., Div. 8, Feb. 6, 2025) 2025 WL 414242.)
Attorney Fees Under Penal Code § 502.
Plaintiff alleged defendant retained an unauthorized copy of her computer hard drive in violation of Penal Code § 502. A jury found for defendant, who later moved for an award of attorney fees as the prevailing party. The trial court denied the motion, finding there was no evidence plaintiff’s claim was frivolous or abusive. Affirming, the Court of Appeal concluded that “section 502 defendants may only recover attorney fees where the plaintiff’s claim was objectively without foundation when brought, or the plaintiff continued to litigate after it clearly became so.” (Hay v. Marinkovich (Cal. App. 4th Dist., Div. 1, Feb. 6, 2025) 2025 WL 414655.)
Postjudgment Costs Incurred in Connection with Efforts to Enforce Judgment Not Governed by Code of Civil Procedure § 998.
Plaintiff resolved this case for less than defendant’s offer made under Code of Civil Procedure § 998, so plaintiff’s prejudgment costs and attorney fees were limited to those he incurred before that offer was made. Plaintiff later moved for additional attorney fees and costs he incurred in efforts to enforce the judgment. The trial court denied the motion. Reversing, the Court of Appeal stated: “Postjudgment costs incurred in connection with efforts to enforce the judgment are not governed by section 998.” (Elmi v. Related Management Company, L.P. (Cal. App. 4th Dist., Div. 3, Feb. 6, 2025) 2025 WL 435646.)
Despite Debris and Smoke Damage from Nearby Fire, Courts Concluded There Was No Evidence of Direct Physical Loss to Plaintiffs’ Property.
A fire burned about a half mile away from plaintiff’s property. Even though plaintiffs kept their doors and windows closed, debris and smoke still entered their home, and more debris fell outside the home and into their swimming pool. Plaintiffs’ insurance company agreed to pay for some loss, but not the amount plaintiffs demanded, so plaintiffs sued their insurance company. Plaintiffs’ homeowner insurance policy stated it would “insure against direct physical loss to property.” The trial court granted summary judgment to the insurance company. Agreeing with the trial court there was no evidence of direct physical loss to plaintiffs’ property, the Court of Appeal affirmed. (Gharibian v. Wawanesa General Insurance Company (Cal. App. 2nd Dist., Div. 2, Feb. 7, 2025) 329 Cal.Rptr.3d 574.)
Fourth Amendment Violation.
A woman gave Idaho police permission to search her phone and police copied its contents. In the woman’s car, police found the business card of a Grant County, Oregon deputy sheriff. Idaho police gave the contents of the phone to the Sheriff of Grant County, Oregon. The contents of the woman’s phone, including intimate photos of the woman and the deputy sheriff, were passed around the Sheriff’s office. Finding a constitutional violation, the Ninth Circuit stated: “We conclude . . . there was a constitutional violation. This case presents a troubling example of the intrusion on Fourth Amendment rights that can occur with respect to highly sensitive cell phone data. More specifically, this circumstance involved a law enforcement agency accessing highly sensitive cell phone data from another jurisdiction in the absence of a warrant, consent, or even any investigation or suspicion of criminal activity on the part of a suspect.” (Olson v. County of Grant (9th Cir., Feb. 10, 2025) 127 F.4th 1193.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/10/23-35365.pdf
Abetting a Fraudulent Transfer.
In a previous action, plaintiff in this case achieved a $50 million verdict against a Chinese company. Plaintiff contended defendant in this case and the Chinese company conspired to have pay the Chinese company a multi-million dollar debt that was not yet due, in violation of the Uniform Voidable Transactions Act (Civil Code, § 3439 et seq.; UVTA), and amounting to tortious interference with prospective economic advantage. The Court of Appeal reversed in part and stated: “Although Orion did not demonstrate that Celestron is a debtor or a transfer beneficiary under the UVTA, the facts alleged in Orion’s complaint were sufficient to state a cause of action for conspiracy or aiding and abetting a fraudulent transfer. We therefore find that the demurrer to the fraudulent transfer cause of action should have been overruled.” (Optronic Technologies, Inc. v. Celestron Acquisition, LLC (Cal. App. 2nd Dist., Div. 4, Feb. 10, 2025) 2025 WL 444853.)
Sanctions Awarded for Filing Opposition to Motion to Confirm Arbitration Award.
The prevailing party in an arbitration filed a petition to confirm the arbitration award in the trial court. The losing party filed opposition to the motion to confirm the award. The trial court confirmed the award and awarded sanctions under Code of Civil Procedure § 128.7 against the opposing party in the amount of $37,000. Affirming, the Court of Appeal stated: “A party’s abstract right to oppose a petition, or to preserve arguments for appeal, is not an entitlement to pursue frivolous arguments in the trial court or this court.” (Plantations at Haywood 1, LLC v. Plantations at Haywood, LLC (Cal. App. 4th Dist., Div. 3, Feb. 10, 2025)2025 WL 444857.)
High School Student’s Due Process Rights Violated.
All students involved in a lunchtime fight at a high school were suspended. Plaintiff was suspended for three days. In his handwritten statement, plaintiff said another student had been bullying him because of his race, using the “n” word and calling him a monkey. When plaintiff asked the bully why he was being racist, the bully shoved him into a wall and starting “kneeing him in the face.” Plaintiff’s friends intervened and another student was injured. The day after plaintiff’s parents met with school officials, the present lawsuit was filed. The district court entered summary judgment for the school district and school officials. Reversing, the Ninth Circuit stated: “Fifty years ago, Goss [Goss v. Lopez, 419 U.S. 565, 580 (1975)] articulated the due process rights of a student facing suspension—oral or written notice of the charges against him, an explanation of the evidence the authorities have, and an opportunity to present his side of the story.” (K. J. by and through Johnson v. Jackson (9th Cir., Feb. 11, 2025) 127 F.4th 1239.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/11/23-3052.pdf
Bakery Refused to Sell Wedding Cake to Same-Sex Couple.
Plaintiffs brought a claim under the Unruh Civil Rights Act (Civ. Code, § 51 et seq.; UCRA) due to a bakery’s refusal to sell a predesigned white cake, popularly sold for a variety of events, because it was intended for use at the customers’ same-sex wedding reception. The trial court concluded there was no violation of the UCRA because the Civil Rights Department of the state of California (CRD) failed to prove intentional discrimination, and concluded the bakery’s referral of plaintiffs to another bakery constituted full and equal access under the UCRA. Reversing, the Court of Appeal stated: “Application of the policy here pivots upon the sexual orientation of the end user—the policy cannot apply or operate until the same-sex status of the couple is identified. Despite that the underlying rationale for the policy is rooted in a sincerely held religious belief about marriage, held in good faith without ill will or malice, the policy nonetheless requires a distinction in service that is based solely on, and because of, the end users’ sexual orientation. The relevant and undisputed facts about the policy and its application here necessarily establish intentional discrimination. [¶] We also conclude Miller’s referral to a separate business did not satisfy the UCRA’s full and equal access requirement. . . . Under such a rule, business establishments would be free to refuse service to anyone on account of protected characteristics so long as they told those customers there was another comparable business in existence confirmed to have no objection to providing service.” (Civil Rights Department v. Cathy’s Creations, Inc. (Cal. App. 5th Dist., Feb. 11, 2025,) 2025 WL 457642.)
No Requirement of Actual Damages to Claim Statutory Damages Under Fair Debt Act.
The Fair Debt Buying Practices Act (Civ. Code, § 1788.50 et seq.) prohibits a debt buyer from writing to a consumer to collect a debt unless the debt buyer possesses and can promptly produce sufficient records of the debt, the consumer’s liability for that debt, and the debt buyer’s entitlement to collect instead of the original creditor. To ensure consumers have meaningful access to those records, the act also requires that the debt buyer’s first written communication to the consumer inform the consumer of the right to obtain those records and how to request them. And the act authorizes private enforcement of its requirements, making a debt buyer liable to the consumer for statutory damages. The trial court granted defendant’s motion for judgment on the pleadings. Reversing, the Court of Appeal stated that plaintiff’s appeal “calls for us to determine whether a consumer must establish actual damages from a debt buyer’s violation of the Act to pursue a claim for statutory damages. In our independent judgment, nothing in section 1788.62 conditions a consumer’s individual or class claim for statutory damages on the availability of actual damages.”
(Chai v. Velocity Investments, LLC (Cal. App., 6th Dist., Feb. 13, 2025) 2025 WL 485265.)
Communications App Immunity.
Under the Communications Decency Act of 1996 (47 U.S.C. § 230), interactive computer service providers are immune from state law liability when plaintiffs seek to treat those providers as publishers of third-party content. Here, plaintiff alleged defendant owners and operations of a communications app were liable for injuries he incurred as an underage user of the app. Plaintiff also alleged a federal sex trafficking claim under the Trafficking Victims Protection Reauthorization Act (18 U.S.C. § 1595(a); TVPRA). The district court dismissed both claims under 47 U.S.C. § 230. Affirming, the Ninth Circuit stated: “Because Doe’s state law claims necessarily implicate Grindr’s role as a publisher of third-party content, § 230 bars those claims. Doe fails to state a plausible TVPRA claim, so Doe cannot invoke a statutory exception to § 230 immunity.” (Doe v. Grindr Inc. (9th Cir., Feb. 18, 2025) 128 F.4th 1148.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/18/24-475.pdf
Medical Doctor’s Administrative Writ Affirmed After His Privileges Were Suspended.
Plaintiff, a medical doctor, conducted an office visit with a female patient in her mid-seventies. The patient’s son was present during the visit. After the visit, both the patient and her son complained about plaintiff’s conduct. Specifically, the patient stated that while arguing with her about the need for a prescription, plaintiff hit her hand or her arm “really hard,” and “it hurt.” The son stated that plaintiff hit his mother’s wrist for “60 seconds.” Plaintiff’s notes from the office visit stated: “She showed me one of her skin creams which is clotrimazole topical cream and she wants a refill. I told her that this is an antifungal cream and right now she does not need it. She would not listen and kept arguing with me. I grabbed her left wrist and shook her hand trying to stop her arguing, but she would not stop. Finally she stopped. She accused me that I hit her, but I told her that the reason I grabbed her hand was to stop her from keeping arguing.” The Board of Directors suspended plaintiff’s privileges the next day. The trial court granted a writ of administrative mandate under Code of Civil Procedure § 1094.5. Affirming, the Court of Appeal stated: “The trial court therefore properly granted Lin’s petition for writ of administrative mandamus on the ground that the Board exceeded its jurisdiction and committed a prejudicial abuse of discretion when it reversed the decision of the [Judicial Hearing Committee].” (Lin v. Board of Directors of PrimeCare Medical Network, Inc. (Cal. App. 4th Dist., Div. 1, Feb. 19, 2025) 2025 WL 544022.)
Trial Court Erred in Lifting Stay in the Superior Court After Case Submitted to Arbitration.
The trial court granted defendant’s motion to compel arbitration, but when neither party took any action to initiate arbitration, the court lifted the stay. The arbitration agreements at issue require any person having “employment related legal claims” to “submit them to . . . arbitration.” They also require the “party who wants to start the [a]rbitration [p]rocedure” to begin the process by filing a demand for arbitration. The trial court concluded that the obligation to commence arbitration lay with defendant. Reversing, the Court of Appeal stated: “In context, the agreements’ language concerning the ‘party who wants to start the [a]rbitration [p]rocedure’ refers to the party that wants to assert a legal claim governed by the arbitration agreements. In this case, that is the plaintiffs, not ACE.” (Arzate v. ACE American Insurance Company (Cal. App. 2nd Dist., Div. 1, Feb. 19, 2025) 2025 WL 546179.)
Ninth Circuit Certifies Question About Life Insurance to the California Supreme Court.
California Insurance Code §§ 10113.71 and 10113.72 concern an insured’s right to receive notice and a grace period before termination of a life insurance policy. These sections apply to policies “issued or delivered in this state.” The Ninth Circuit certified this question to the California Supreme Court: “Do California Insurance Code §§ 10113.71 and 10113.72 apply to life insurance policies originally issued or delivered in another state but maintained by a policy owner in California?” (Pitt v. Metropolitan Tower Life Insurance Company (9th Cir., Feb. 20, 2025) 2025 WL 556052.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/20/23-55566.pdf
Point of Workers’ Compensation Law Clarified by California Supreme Court.
California’s workers’ compensation law guarantees a certain level of recovery for employees who are injured on the job, regardless of whether the employer was at fault. If, however, the employee was injured because of the employer’s serious and willful misconduct, the employee is entitled to a 50 percent increase in the “amount of compensation otherwise recoverable.” (Lab. Code, § 4553.)] The term “compensation” is defined specifically to mean “compensation under” the workers’ compensation law. The question in this case is whether, for purposes of calculating the 50 percent premium under § 4553, “compensation otherwise recoverable” includes industrial disability leave payments, a benefit that the Government Code makes available to certain public employees in lieu of workers’ compensation disability payments. The California Supreme Court disagreed with the Workers’ Compensation Appeals Board, which said the answer to the question is yes. California’s high court agreed with the Court of Appeal, which held the board’s conclusion is plainly inconsistent with the statutory definition of “compensation” in workers’ compensation law. (Department of Corrections and Rehabilitation v. Workers’ Compensation Appeals Board (Cal., Feb. 20, 2025) 2025 WL 561367.)
Foreign Sovereign Immunities Act.
Under theForeign Sovereign Immunities Act of 1976, plaintiffs may sue foreign sovereigns who expropriate their property, provided certain conditions are satisfied, including that the property (or any property “exchanged for” the expropriated property) has a commercial nexus to the United States. (28 U. S. C. §1605(a)(3); FSIA.) Here, Jewish survivors of the Hungarian Holocaust and their heirs filed suit against Hungary and one of its agencies, seeking damages for the alleged expropriation of their property during World War II. Plaintiffs maintained that the expropriated property has had a commercial nexus to the United States because the Hungarian defendants liquidated it, commingled the proceeds from that property with money in a government treasury account, and then used, decades later, funds from that account in connection with commercial activity in the United States. The U.S. Supreme Court held that the alleged commingling of funds alone cannot satisfy the commercial nexus requirement of the expropriation exception of the FSIA. (Republic of Hungary v. Simon (U.S., Feb. 21, 2025) 145 S.Ct. 480.)
The False Claims Act and the Telecommunications Act Intersect.
Established under the Telecommunications Act of 1996 (110 Stat. 56), the Education-Rate (E-Rate) program disburses funds collected from telecommunications carriers and managed by a private corporation to cover a substantial percentage of a school’s internet costs. The funds are payable under Federal Communications Commission regulations to either a carrier or a school upon receipt of a reimbursement request. Here, the issue was whether such a request can count as a claim under the False Claims Act ( 31 U.S.C. §§ 3729-3733), which protects government funds and programs by imposing civil liability on any person who knowingly presents a false or fraudulent claim. The U.S. Supreme Court stated: “We hold today that the E-Rate reimbursement requests at issue satisfy that requirement because the Government provided (at a minimum) a ‘portion’ of the money applied for. In the years in which those requests were made, the Government transferred more than $100 million from the Treasury into the pool of funds used to pay E-Rate subsidies. That is enough to create a ‘claim’ under the Act, and to allow a suit alleging fraud to go forward.” (Wisconsin Bell, Inc. v. United States ex rel. Heath (U.S., Feb. 21, 2025) 145 S.Ct. 498.)
https://www.supremecourt.gov/opinions/24pdf/23-1127_k53l.pdf
United States Supreme Court Identifies a Catch-22 in Alabama.
Several unemployed workers met with delays in the processing of their unemployment benefits claims. So the claimants sued the Alabama Secretary of Labor in state court under 42 U.S.C. § 1983. They raised due process and federal statutory arguments and sought a court order requiring the Alabama Department of Labor to process their claims more quickly. The Alabama Supreme Court ruled that the claimants could not sue under § 1983 to challenge delays in the administrative process until the claimants completed that process. Reversing, the U.S. Supreme Court stated: “But that ruling created a catch-22: Because the claimants cannot sue until they complete the administrative process, they can never sue under §1983 to obtain an order expediting the administrative process.” (Williams v. Reed (U.S., Feb. 21, 2025) 145 S. Ct. 465.)
Criminal Defendant Asked to be Acquitted, Stating He Set Fire Out of Necessity.
A criminal defendant began an approximately nineteen-mile hike on a trail near Sedona, Arizona. He brought some food and water with him as well as camping gear. He had a GPS feature on his smartphone, but he did not bring a paper map or compass. The weather was very hot and dry, and he knew that fire restrictions in the area prohibited starting any fire without a permit. About ten hours into the hike, he lost the trail. He had not seen anyone on the trail and was running low on water, with no means of replenishing his supply. He tried to use his phone to call for help, but he had no signal. He decided to set a signal fire. The United States Forest Service (USFS) later named the resulting fires the “Taylor Fire,” the “Sycamore Fire,” and the “Sycamore 2 Fire.” Firefighters contained the fires after approximately nine days, incurring $293,413.71 in fire suppression costs. The government charged the man with numerous crimes. At trial, the man asserted that he had set the fires out of necessity and should be acquitted because he was out of food and water, did not have cell phone service, his physical condition was deteriorating, and his death was imminent. A federal magistrate judge rejected his necessity defense and found him guilty on all counts, sentenced him to supervised probation, and ordered him to pay restitution to the USFS. The Ninth Circuit affirmed, finding he did not act reasonably in setting the fire. (United States v. Powers (9th Cir., Feb. 24, 2025) 2025 WL 583113.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/24/23-2218.pdf
Long Imprisonment for Defrauding Investors.
Elizabeth Holmes was convicted of defrauding investors with regard to her blood-testing technology company, Theranos. She claimed to investors her technology could run fast, accurate, and affordable tests with just a drop of blood drawn from the prick of a finger, in contrast to traditional testing methods that require large needles to draw blood from a vein. The district court sentenced her to 135 months imprisonment and ordered restitution of $452 million. Affirming her convictions, the Ninth Circuit stated: “The grandiose achievements touted by [Elizabeth] Holmes and [Ramesh] Balwani were half-truths and outright lies.” (United States v. Holmes (9th Cir., Feb. 24, 2025) 2025 WL 583307.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/24/23-1040.pdf
Class Action Settlement Approved, But Award of Attorney Fees Reversed.
Defendant is a restaurant chain that suffered a cyberattack that compromised the personal information of over 100,000 former and current employees. One group of plaintiffs quickly struck a settlement with defendant for cash payments and credit monitoring. The monetary value of the class claims was about $950,000 and claimed attorney fees was $800,000. A competing group of plaintiffs’ lawyers challenged that settlement, contending that they could deliver a deal for the class that would top it. Despite expressing some reservations, the district court approved the settlement. Affirming the settlement, but reversing the award of attorney fees, the Ninth Circuit stated: “Our review of the record shows that the district court neither procedurally erred nor abused its discretion in finding the settlement substantively acceptable. We thus affirm the approval of the class settlement. But we reverse the fee award because the district court did not assess the actual value of the settlement and compare it to the fees requested.” (In re California Pizza Kitchen Data Breach Litigation (9th Cir., Feb. 24, 2025) 2025 WL 583419.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/24/23-55288.pdf
One Letter About Debt Enough for Action Under the Fair Debt Collection Practices Act.
Defendant debt collector acquired a debt obligation for plaintiff concerning a residential lease. Plaintiff had learned about the alleged debt and had mailed a letter to Equifax disputing the debt and asking for documentation. That same day, plaintiff’s counsel mailed a letter directly to defendant providing notice that plaintiff was represented, and that all correspondence should be sent to counsel. Two weeks later, defendant sent a letter to plaintiff about the debt. Plaintiff sued defendant and the district court dismissed the action, finding it lacked subject matter jurisdiction in an action under the Fair Debt Collection Practices Act because plaintiff had received only one letter. The Ninth Circuit reversed, finding plaintiff had standing under 15 U.S.C. § 1692(a)(2). (Six v. IQ Data International, Inc. (9th Cir., Feb. 24, 2025) 2025 WL 583306.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/24/23-15887.pdf
Petition to Reform a Trust to Correct Alleged Mistake Not Subject to 12-Day Statute of Limitations.
Plaintiff is the beneficiary of a family trust. He petitioned the probate curt to reform the trust to correct an alleged mistake in the deceased settlor’s expression of intent. The court granted the trustor’s motion for judgment on the pleadings because of the 120-day statute of limitations found in Probate Code § 16061.7. Reversing, the Court of Appeal stated: “We conclude that Scott’s petition was one to reform the trust to correct an alleged mistake in the trustor’s expression of his intent, rather than a trust contest, and it was therefore not subject to the 120-day statute of limitations period.” (Packard v. Packard (Cal. App. 4th Dist., Div. 1, Feb. 24, 2025) 2025 WL 585677.)
Severing Unconscionable Arbitration Provisions Would Not Further the Interests of Justice.
Plaintiff sued defendant, her former employer, asserting claims under the California Fair Employment and Housing Act (Gov. Code, § 12940 et seq.; FEHA). Defendant moved to compel arbitration based on the parties’ arbitration agreement. The trial court concluded the agreement contained unconscionable provisions and declined to enforce it. The California Supreme Court concurred that three of the four provisions were substantively unconscionable and remanded the matter to the lower appellate court to consider the severance question anew. (Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 517–518.) On remand, the Court of Appeal agreed with the trial court that severing the unconscionable provisions would not further the interests of justice. (Ramirez v. Charter Communications, Inc. (Cal. App. 2nd Dist., Div. 4, Feb. 24, 2025) 2025 WL 586455.)
No Attorney Fees for Plaintiffs Who Secured a Preliminary Injunction.
Plaintiffs are Virginia drivers whose licenses were suspended due to their failure to pay court fines or costs. The drivers sued the Commissioner of the Virginia Department of Motor Vehicles under 42 U.S.C. § 1983, arguing that the Virginia statute requiring suspension of their licenses was unconstitutional. The district court preliminarily enjoined the commissioner from enforcing the statute. But before the case reached final judgment, the Virginia General Assembly repealed the challenged law, rendering the action moot. The question presented to the U.S. Supreme Court was whether the drivers were prevailing parties who qualify for an award of attorney’s fees under 42 U.S.C. § 1988(b). Deciding that plaintiffs were not entitled to an award for their attorney fees, the Supreme Court stated: “Because preliminary injunctions do not conclusively resolve the rights of parties on the merits, they do not confer prevailing party status.” (Commissioner of the Virginia Department of Motor Vehicles v. Stinnie (U.S., Feb. 25, 2025) 2025 WL 594737.)
Death Row Inmate to Get New Trial.
Nearly two decades after a man was sentenced to death for murder, the State of Oklahoma disclosed eight boxes of previously withheld documents that show the main prosecution witness suffered from a mental disorder and used drugs. That witness testified he beat the victim to death at the behest of the convicted man. The boxes contained evidence that the witness’s mental disorder and drugs caused impulsive outbursts of violence, and that Oklahoma allowed the witness to falsely testify. The U.S. Supreme Court reversed the judgment and ordered a new trial because Oklahoma violated its obligations under Napue v. Illinois (1959) 360 U.S. 264. (Glossip v. Oklahoma (U.S., Feb. 25, 2025) 2025 WL 594736.)
https://www.supremecourt.gov/opinions/24pdf/22-7466_5h25.pdf
Requirement of Documentary Proof of Citizenship to Vote in Arizona.
Plaintiffs challenged two Arizona laws regulating voter registration, contending they are preempted or in violation of the National Voter Registration Act, the LULAC consent decree, the Civil Rights Act, and the equal protection clause of the U.S. Constitution. To register to vote in Arizona, an applicant may use the federal form created by the U.S. Election Assistance Commission or a state form prescribed by Arizona law. The federal form requires applicants to check a box under penalty of perjury indicating they are United States citizens but does not require applicants to disclose their birthplace. Under Arizona law, federal-form applicants without documentary proof of citizenship may be registered as federal-only voters but are not eligible to vote for president or to vote by mail, and state-form applicants must check a box confirming their citizenship, disclose their birthplace, and provide documentary proof of residency. A district court judge enjoined the law’s requirements. The Ninth Circuit held that the lower court imposed a higher evidentiary standard than required and remanded for the court to apply a totality of circumstances analysis. (Mi Familia Vota v. Petersen (9th Cir., Feb. 25, 2025) 2025 WL 598127.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/25/24-3188.pdf
Hospital Is a Designated Facility for Treatment of Mentally Ill Patients Under the Lanterman-Petris-Short Act.
One of the purposes of the Lanterman-Petris-Short Act is to “provide prompt evaluation and treatment of persons with mental health disorders or impaired by chronic alcoholism.” (Welf. & Inst. Code, § 5001, subd. (b); LPS Act). Plaintiff hospital challenged the order of the superior court denying its motion for a preliminary injunction that sought an order prohibiting defendant county and the director of County Health and Human Services Agency from taking any person to the hospital’s emergency room or “requesting or forcing” the ER to “keep” the person pursuant to the LPS Act, when the person does not have a “physical, organic cause.” Affirming the judgment of the superior court, the Court of Appeal stated: “The parties disagree as to whether [the hospital] is a ‘designated facility’ within the meaning of the LPS Act, such that [the hospital] is the proper facility for the County to bring persons presenting with symptoms of a psychiatric emergency medical condition for a 5150 hold. [The hospital] contends that because it is not licensed to provide acute-level psychiatric care, the County cannot lawfully bring persons to its emergency department who are suffering from a psychiatric emergency medical condition and insist that such patients be held there for up to 72 hours without receiving any SMHS [specialty mental health services] for their condition. [¶] . . . [¶] . . . For purposes of the LPS Act, a ‘hospital’ included a ‘general acute care hospital.’ (Health & Saf. Code, § 1250, subd. (a).) Here, it is undisputed that [the hospital] is a general acute care hospital. Accordingly, under a straightforward reading of the statutory text, Fairchild was a designated facility within the meaning of the LPS Act.” (Siskiyou Hospital, Inc. v. County of Siskiyou (Cal. App. 3rd Dist., Feb. 25, 2025.) 2025 WL 601168.)
Federal Case Dismissed Without Prejudice Reopened.
The U.S. Supreme Court explained the issue regarding relief of judgment for voluntarily dismissed cases and its holding as follows: “Federal Rule of Civil Procedure 60(b) permits a court, ‘[o]n motion and just terms,’ to ‘relieve a party . . . from a final judgment, order, or proceeding.’ The question in this case is whether Rule 60(b) permits a district court to reopen a case that was voluntarily dismissed without prejudice under Rule 41(a). We hold that such a dismissal counts as a ‘final judgment, order, or proceeding,’ and thus qualifies for Rule 60(b) relief.” (Waetzig v. Halliburton Energy Services, Inc. (U.S., Feb. 26, 2025) 2025 WL 608110.)
Federal Court Erred in Awarding Damages in Trademark Infringement Case.
In a trademark infringement case involving a prevailing plaintiff entitled to an award of the defendant’s profits, the lower court totaled the profits of the named corporate defendant with those of separately incorporated affiliates that were not parties to the lawsuit. The U.S. Supreme Court reversed, stating: “Under the pertinent statutory provision, the court could award only profits properly ascribable to the defendant itself.” (Dewberry Group, Inc. v. Dewberry Engineers Inc. (U.S., Feb. 26, 2025) 2025 WL 608108.)
Summary Judgment Reversed Regarding Disparate Treatment at the Post Office.
Plaintiff is a woman of Chinese ethnicity in her late fifties. She has worked for United States Postal Service (USPS) since 1992 and has been a postmaster since 2004. In 2014, she was appointed as Postmaster of the Post Office in Shelton, Washington. Plaintiff contended her supervisor and other employees began targeting her with a series of false complaints and grievances after her appointment as Shelton Postmaster. She brought suit under Title VII of the Civil Rights Act alleging disparate treatment, a hostile work environment, and unlawful retaliation. The district court granted summary judgment for USPS. The Ninth Circuit affirmed in part but reversed as to plaintiff’s claim of disparate treatment, holding there was error in finding plaintiff failed to establish a prima facie case of discrimination. The appeals court also found that plaintiff had exhausted her administrative remedies for her hostile work environment claim. (Lui v. Dejoy (9th Cir., Feb. 26, 2025) 2025 WL 611041.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/26/23-35378.pdf
Denial of Disability Retirement Payments Does Not a FEHA claim make.
The Court of Appeal noted that the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA) requires employers to hire and retain individuals with disabilities able to perform their essential duties with or without reasonable accommodations; they are qualified employees. Here, plaintiff was denied disability retirement payments and sued his former employer under FEHA. The superior court granted summary judgment for defendant. Affirming, the Court of Appeal stated: “We hold that an individual who is not a qualified employee cannot bring a disability discrimination claim under FEHA for the denial of disability retirement payments.” (Lowry v. Port San Luis Harbor District (Cal. App. 2nd Dist., Div. 6, Feb. 26, 2025) 2025 WL 615281.)
No Arbitration When Plaintiff Asserted PAGA Claims, But Not Individual Claims.
Plaintiff was employed by defendant and later sued for violation of the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). The superior court denied defendant’s petition to compel arbitration. Affirming, the Court of Appeal stated: “We will affirm the order on the ground that [plaintiff] is not asserting individual PAGA claims in this case, and the trial court therefore could not have erred by failing to compel such claims to arbitration.” (Rodriguez v. Packers Sanitation Services Ltd. (Cal. App. 4th Dist., Div. 1, Feb. 26, 2025) 2025 WL 615064.)
Plaintiff Did Not Agree to Arbitration When She Bought an Online Subscription to a Gym.
A woman joined a gym online just before the pandemic closed everything down. Many months into the pandemic, the gym began charging her. She filed a class action. The gym petitioned for arbitration. The website provided a link to the Terms of Use, but did not require the user to actually read them before moving onto purchase a gym subscription. The district court denied the gym’s petition to compel arbitration. Affirming, the Ninth Circuit stated: “Neither the landing page nor screen 1 provided Chabolla with reasonably conspicuous notice of the Terms of Use. Even if screens 2 and 3 did, at no point did Chabolla unambiguously manifest her assent to the Terms of Use on those screens.” (Chabolla v. ClassPass Inc. (9th Cir., Feb. 27, 2025) 2025 WL 630813.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/27/23-15999.pdf
Arbitration Stymied by Consolidation Order of Arbitration Provider.
Thousands of claimants represented by the same law firm initiated proceedings against defendant pursuant to defendant’s Terms of Use. The arbitration provider, JAMS, designated in the Terms of Use ordered consolidation of the filings to be presided over by a single arbitrator. The arbitration has since remained stalled in an apparent procedural stalemate, after a substantial number of the claimants repeatedly disqualified arbitrators appointed by JAMS. Plaintiff petitioned a federal court to compel individual arbitration. The court denied the petition, holding that plaintiff was not “aggrieved” within the meaning of the Federal Arbitration Act ( 9 U.S.C. § 1; FAA), and that the court’s limited role did not extend to the procedural issue of consolidation. Affirming, the Ninth Circuit stated: “The FAA provides that a ‘party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate’ may petition a federal district court to compel arbitration. . . . [¶] . . . We agree with the district court that Starz has not failed, neglected, or refused to arbitrate . . . .” (Jones v. Starz Entertainment, LLC (9th Cir., Feb. 28, 2025) 2025 WL 649705.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/28/24-1645.pdf
Medical Doctor’s Claim Returned to Trial Court.
A hospital terminated plaintiff’s (a medical doctor) staff privileges and plaintiff sued the county that operates the hospital. The trial court sustained the county’s demurrer to the Health and Safety Code § 1278.5 claim. A jury awarded plaintiff noneconomic damages of $2.1 million for violation of Government Code § 12653. The court awarded him costs and attorney fees in excess of $3 million. The Court of Appeal held: “(1) The County was entitled to judgment notwithstanding the verdict on the Government Code section 12653 claim; (2) the trial court erred by sustaining the County’s demurrer to the Health and Safety Code section 1278.5 claim . . . . [¶] . . . We therefore enter judgment for the County on the Government Code section 12653 claim, return the Health and Safety Code section 1278.5 claim to the trial court for further proceedings, and otherwise affirm the judgment. (Ryan v. County of Los Angeles (Cal. App. 2nd Dist., Div. 3, Feb. 28, 2025) 2025 WL 653610.)
Third Party Lacks Standing to Challenge PAGA Settlement.
Plaintiff and the movant in plaintiff’s action each filed separate suits against defendant alleging claims under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). Plaintiff and defendant settled their action. In a prior appeal, the Court of Appeal held that the movant had standing to challenge the fairness of that settlement. Back in the trial court, the superior court approved a modified settlement. The movant once again appealed. In the meantime, the California Supreme Court issued its decision in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664, which disapproved of the reasoning of the prior opinion in the current action between plaintiff and defendant. Dismissing the present appeal, the Court of Appeal stated: “After reexamining the question of Correa’s appellate standing in light of Turrieta, we conclude Correa and her counsel lack standing to challenge the judgment and the appeals therefore must be dismissed.” (Moniz v. Adecco USA, Inc. (Cal. App. 1st Dist., Div. 4, Feb. 28, 2025) 2025 WL 654555.)