Litigation

Litigation Update: May 2020

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, Reuben Ginsburg
  • Editors, Dean Bochner, Julia Shear Kushner, Jessica Riggin, and David Williams
Use of a Decedent’s Photograph.

Plaintiffs’ daughter was sexually assaulted while unconscious. After her assailants distributed intimate photographs taken of her while she was unconscious, she committed suicide. Defendant, who claims to be the decedent’s biological father, posted her photograph on Facebook and showed it at a news conference, purportedly to publicize his efforts to change the law regarding parental rights. Plaintiffs sued defendant for violating Code of Civil Procedure § 3344.1, which prohibits certain unauthorized uses of the name or likeness of “a deceased personality.” The trial court denied defendant’s special motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16). On appeal, defendant argued that plaintiffs’ cause of action targeted his protected speech and that plaintiffs could not show a probability of prevailing because his speech did not come within the ambit of Civil Code § 3344.1. Reversing, the Court of Appeal noted § 3344.1 requires that the unauthorized use relate to a transaction involving products or services. (Pott v. Lazarin (Cal. App. 6th Dist, Mar. 30, 2020) 47 Cal.App.5th 141.)

https://www.courts.ca.gov/opinions/documents/H044587.PDF

Privileged Document.

Plaintiff was struck by a car while walking in a crosswalk on her way to school. She sued the city alleging that the intersection was a dangerous condition of public property. A jury returned a defense verdict. On appeal, plaintiff argued the trial court erred in excluding evidence based on the privilege set forth in 23 U.S.C. § 409. That privilege prohibits the admission of specified documents in any action for damages, including documents submitted by public entities when applying for federal funds to reduce roadway hazards. The city had applied for federal funds and had acknowledged in the application that the intersection was a roadway hazard. Affirming, the Court of Appeal stated: “Congress enacted section 409 ‘to quell states’ fears that “diligent efforts to identify roads eligible for aid under [federal highway safety programs] would increase the risk of liability for accidents that took place at hazardous locations before improvements could be made.” ’ ” (Ford v. City of Los Angeles (Cal. App. 2nd Dist., Div. 8, Apr. 1, 2020) 47 Cal.App.5th 277.)

https://www.courts.ca.gov/opinions/documents/B290236.PDF

Arbitration Agreement Should Have Come With a Magnifying Glass.

Defendants moved to compel arbitration based on an arbitration agreement that was “printed in extremely small font” such that it was “impossible to read without a magnifying glass.” That agreement said: “Customer agrees to arbitrate all controversies between customer and Rosland (including any of Rosland’s current or former officers, directors, managers, members, employees or agents) arising out of or relating in any way to the products or this agreement, including the determination of the scope or applicability of this agreement to arbitrate. . . .” The trial court denied the motion to compel arbitration, concluding the contract was procedurally and substantively unconscionable. Affirming, the Court of Appeal stated: “[T]he arbitration agreement contains numerous unfair and one-sided provisions, and we would have to rewrite the Customer Agreement by severing most of its terms and adding new ones in order to compel arbitration. We believe the Customer Agreement should be rewritten, but we will not do so here.” (Dennison v. Rosland Capital LLC (Cal. App. 2nd Dist., Div. 8, Apr. 1, 2020) 47 Cal.App.5th 204.) 

https://www.courts.ca.gov/opinions/documents/B295350.PDF

Bureaucratic Nightmare.

In 2006, when a lawyer representing a United Kingdom citizen filed papers to extend her legal immigration status, the lawyer did not include two mandatory forms. The foreign citizen has been battling for her right to stay in the United States ever since. Each step of the way, the woman argued she fell out of legal status through no fault of her own, and each time she lost. The Ninth Circuit Court of Appeals granted the woman’s petition for review and remanded the matter to the Board of Immigration Appeals, concluding that “8 C.F.R. § 1245.1(d)(2)(i) is invalid to the extent it excludes reasonable reliance on the assistance of counsel from the circumstances covered by the phrase ‘other than through no fault of his own.’ ” (Peters v. Barr (9th Cir., Apr. 2, 2020) 954 F.3d 1238.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/02/16-73509.pdf

Previously we reported:
The Hague Service Convention.

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

The latest:

Reversing the judgment of the Court of Appeal, the California Supreme Court stated: “The parties here, sophisticated business entities, entered into a contract wherein they agreed to submit to the jurisdiction of California courts and to resolve disputes between them through California arbitration. They also agreed to provide notice and ‘service of process’ to each other through Federal Express or similar courier. The narrow question we address is whether the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters . . . (. . . ‘the Convention’) preempts such notice provision if the Convention provides for a different method of service. Consistent with United States Supreme Court authority, we conclude that the Convention applies only when the law of the forum state requires formal service of process to be sent abroad. We further conclude that, because the parties’ agreement constituted a waiver of formal service of process under California law in favor of an alternative form of notification, the Convention does not apply.” (Rockefeller Technology Investments (Asia) VII v. Changzhou Sinotype Technology Co., Ltd. (Cal., Apr. 2, 2020) 9 Cal.5th 125.)

https://www.courts.ca.gov/opinions/documents/S249923.PDF

A California Attorney on Inactive Status Is Still Admitted to Practice.

A candidate for Attorney General of California in the 2018 election petitioned for a writ of mandate to disqualify Xavier Becerra from running for Attorney General. The candidate contended Becerra, appointed Attorney General in 2016, was not eligible for the office under Government Code § 12503, which states: “No person shall be eligible to the office of Attorney General unless he shall have been admitted to practice before the Supreme Court of the state for a period of at least five years immediately preceding his election or appointment to such office.” Becerra was an “inactive” member of the California State Bar from 1991 to 2016, and the candidate argued that an “inactive” attorney may not practice law in California and therefore is not “admitted to practice” under Government Code § 12503. The trial court denied the petition, and the Court of Appeal affirmed, stating: “Both active and inactive attorneys are members of the State Bar. (Bus. & Prof. Code, § 6003.) The phrase ‘admitted to practice’ refers to the event of admission to the bar and the status of being admitted, and does not require engagement in the ‘actual’ or ‘active’ practice of law. Becerra did not cease to be ‘admitted to practice’ in California when he voluntarily changed his status to ‘inactive.’ ” (Early v. Becerra (Cal. App. 3rd Dist., Apr. 2, 2020) 47 Cal.App.5th 325.) 

https://www.courts.ca.gov/opinions/documents/C087947.PDF

Alienation of Affection.

Rosefield v. Rosefield (1963) 221 Cal.App.2d 431 recognized the tort of intentional interference with parental consortium in a case in which a father and grandfather abducted a two-year-old child from her mother. In the present action, an adult plaintiff sued her sibling and niece for unduly influencing plaintiff’s mother against her, resulting in the mother rejecting plaintiff and depriving her of the mother’s society, care, and affection. The trial court granted judgment on the pleadings for the defendants. Affirming, the Court of Appeal stated: “Although our Supreme Court has recognized the tort of intentional interference with parental consortium, the case the high court cited in support of such a cause of action involved the physical kidnapping of a two-year-old child from her mother, and is readily distinguishable from the instant case.” (Tarin v. Lind (Cal. App. 2nd Dist., Div. 1, Apr. 3, 2020) 47 Cal.App.5th 395.)

https://www.courts.ca.gov/opinions/documents/B295708.PDF

Beneficiaries’ Efforts to Seek Distribution Did Not Amount to Contesting the Trust.

The trustees of a trust interpreted the trust as a continuing spendthrift trust. They petitioned the probate court for instructions because the beneficiaries were trying to force distribution. The probate court ordered distribution “as soon as practicable” and concluded the beneficiaries’ efforts toward distribution did not constitute an action contesting the trust under Probate Code § 16061.8. Affirming, the Court of Appeal agreed on both points. (Donkin v. Donkin (Cal. App. 2nd Dist., Div. 1, Apr. 3, 2020) 47 Cal.App.5th 469.)

https://www.courts.ca.gov/opinions/documents/B293127.PDF

Traffic Stop Was Reasonable.

A Kansas police officer stopped a vehicle after running the license plate and learning that the registered owner had a revoked driver’s license. The traffic stop revealed that the driver’s license had indeed been revoked, and Kansas charged him with driving as a habitual violator. The man moved to suppress all evidence seized during the stop, claiming the police lacked reasonable suspicion to stop him. The U.S. Supreme Court upheld the search. The officer’s “commonsense inference that the owner of a vehicle was likely the vehicle’s driver provided more than reasonable suspicion to initiate the stop,” at least where the officer had no information “negating [that] inference.” (Kansas v. Glover (U.S., Apr. 6, 2020) 140 S.Ct. 1183.)

https://www.supremecourt.gov/opinions/19pdf/18-556_e1pf.pdf

Age Discrimination Under the ADEA.

Plaintiff was a pharmacist who claimed the Department of Veterans Affairs (VA) took personnel actions against her in violation of the federal sector provision of the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 633a(a); ADEA). The district court found that, regardless of the alleged age discrimination, the VA had legitimate non-pretextual reasons for the challenged actions. It therefore granted summary judgment in favor of the VA. Reversing, the U.S. Supreme Court held that discrimination can require some form of relief under section 633a(a) even if it is not a “but-for cause” of the adverse personnel action. Under the statute, personnel actions must “be made free from any discrimination based on age.” Accordingly, “[i]f age discrimination plays any part in the way a decision is made, then the decision is not made in a way that is untainted by such discrimination.” (Babb v. Wilkie (U.S., Apr. 6, 2020) 140 S.Ct. 1168.)

https://www.supremecourt.gov/opinions/19pdf/18-882_3ebh.pdf

Previously we reported:
“When a Man Points a Finger at Someone Else, He Should Remember That Four of His Fingers Are Pointing at Himself,” Louis Nizer.

A chemical company manufactured a pesticide for many years and was found liable for environmental injuries caused by the pesticide. The chemical company sought declaratory relief that it may “electively stack” its excess insurance policies—i.e., that it may access any excess policy issued in any policy year so long as the lower-lying policies for the same policy year have been exhausted. The trial court rejected “elective stacking” in favor of “horizontal exhaustion,” ordering that higher-level excess policies could not be accessed until lower-level policies had been exhausted for all policy years. After the trial court denied the chemical company’s motion for summary adjudication, the company sought extraordinary relief in the Court of Appeal. The appellate court both granted and denied extraordinary relief, stating: “We agree with the trial court that ‘elective stacking” is inconsistent with the policy language of at least some of the more than 115 excess policies at issue and is not compelled by California Supreme Court authority. . . We therefore conclude that the trial court properly denied [the chemical company’s] motion for summary adjudication. Our holding is not as expansive as the trial court’s, however. Specifically, we do not hold that policies must be horizontally exhausted at each coverage level and for each year before higher-level policies may be accessed. Instead, we conclude that the sequence in which policies may be accessed must be decided on a policy-by-policy basis, taking into account the relevant provisions of each policy.” (Montrose Chemical Corp. v. Superior Court (Cal. App. 2nd Dist., Div. 3, Aug. 31, 2017) 14 Cal.App.5th 1306.)

The latest:

Reversing, the California Supreme Court held: “Montrose argues it is entitled to coverage under any relevant policy once it has exhausted directly underlying excess policies for the same policy period. The insurers, by contrast, argue that Montrose may call on an excess policy only after it has exhausted every lower level excess policy covering the relevant years. Reading the insurance policy language in light of background principles of insurance law, and considering the reasonable expectations of the parties, we agree with Montrose: It is entitled to access otherwise available coverage under any excess policy once it has exhausted directly underlying excess policies for the same policy period. An insurer called on to provide indemnification may, however, seek reimbursement from other insurers that would have been liable to provide coverage under excess policies issued for any period in which the injury occurred.” (Montrose Chemical Corporation v. Superior Court (Cal., Apr. 6, 2020) 9 Cal.5th 215.) https://www.courts.ca.gov/opinions/documents/S244737.PDF

Mid-pandemic Election.

Because of the COVID-19 pandemic, the deadline for Wisconsin municipal clerks to receive absentee ballots was extended by the state from April 7 (election day) to April 13. The district court modified this extension, requiring ballots received by April 13 to be counted even if they were mailed after election day. The sole question before the U.S. Supreme Court was whether absentee ballots must be mailed and postmarked by election day, April 7, as state law would require, or could instead be mailed and postmarked after election day, so long as they were received by April 13. The Supreme Court ruled: “. . . in order to be counted in this election a voter’s absentee ballot must be either (i) postmarked by election day, April 7, 2020, and received by April 13, 2020, at 4:00 p.m., or (ii) hand-delivered as provided under state law by April 7, 2020, at 8:00 p.m.” (Republican Nat’l Comm. v. Democratic Nat’l Comm. (U.S., Apr. 6, 2020) 140 S.Ct. 1205.)

https://www.supremecourt.gov/opinions/19pdf/19a1016_o759.pdf

No Gender Bias by Judge.

After a lengthy trial and a detailed explanation of its order, the trial court denied plaintiff’s request for a domestic violence restraining order. On appeal, plaintiff contended gender myths infected the judge’s decision-making and she was denied due process because the trial court was gender biased. Plaintiff was cross-examined about joking with defendant three days after a claimed rape, and the judge made a remark about plaintiff not reporting the alleged rape for several years. The trial court also stated: “I did not see evidence that was consistent with what I would expect following a forcible rape.” Affirming the denial of a restraining order, the Court of Appeal stated: “The trial court’s statement that it ‘did not see evidence that was consistent with what I would expect following a forcible rape’ was a reference to all the evidence in the case, not just appellant’s failure to report the alleged rape earlier.” Additionally, “ ‘while a showing of actual bias is not required for judicial disqualification under the due process clause, neither is the mere appearance of bias sufficient. Instead, based on an objective assessment of the circumstances in the particular case, there must exist the probability of actual bias on the part of the judge or decisionmaker [that] is too high to be constitutionally tolerable.’ ” (Jennifer K. v. Shane K. (Cal. App. 1st Dist., Div. 2, Apr. 7, 2020) 47 Cal.App.5th 558.)

https://www.courts.ca.gov/opinions/documents/A155111.PDF

Plaintiffs Lose in Action for Failure to Get Job Promotion.

Plaintiffs sued their corporate employer, an individual, and two staffing agencies for not promoting them due to their race. The trial court granted summary judgment for the staffing agencies and the individual defendant. Affirming, the Court of Appeal found that the trial court “correctly granted summary judgment for [the staffing agencies] because they were not involved” in promotional decisions. The Court of Appeal also found the claim against the individual was barred by the statute of limitations.  The last promotional decision was made in March 2017, but the person promoted did not begin the new job until May 2017, and the statute of limitations expired between those two dates. The Court of Appeal agreed that the earlier date should be used to evaluate the discriminatory promotional decision claim: “Government Code section 12960, former subdivision (d) bars [plaintiff’s] claims because she did not file her administrative complaint within one year of March 2017, the time that those claims accrued.” (Ducksworth v. Tri-Modal Distribution Services (Cal. App. 2nd Dist., Div. 8, Apr. 7, 2020) 47 Cal.App.5th 532.)

https://www.courts.ca.gov/opinions/documents/B294872.PDF

Federal District Court Properly Denied Motion to Remand Case to State Court.

Plaintiff was an attorney in the Judge Advocate General (JAG) Corps of the California Army National Guard. He was a member of the California State Bar, but not all of his colleagues were; applicable federal law requires only membership in good standing of the bar of any state to practice as a JAG attorney. Plaintiff tried unsuccessfully for a number of years to obtain a State Bar ruling that his JAG colleagues must also be members of the California Bar, but the State Bar concluded that the federal rules were consistent with California law. Plaintiff then initiated this case against a JAG colleague, claiming the colleague was engaged in the unauthorized practice of law because he was not licensed by the California State Bar. Defendant removed the case to federal court, and the district court denied plaintiff’s motion to remand. Affirming, the Ninth Circuit stated: “The provisions of 28 U.S.C. § 1442(a)(1) allow for removal of an action against the United States, an officer of the United States, or an individual acting under such U.S. officer.” The JAG defendant was supervised by a qualifying federal officer. “Thus, a federal forum must be available to [defendant],” and defendant “properly removed this action as someone ‘acting under’ a federal officer.” (Stirling v. Minasian (9th Cir., Apr. 8, 2020) 955 F.3d 795.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/08/18-55834.pdf

Defendant Employer Enjoined from Proceeding in Arbitration.

Pursuant to the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA), plaintiff filed a written notice of wage violation claims with the Labor and Workforce Development Agency. Plaintiff alleged he was “entitled to penalties and wages” from his employer and sought them “on his own behalf and on behalf of other similarly situated” employees. In response, the employer filed a demand for arbitration. Plaintiff subsequently filed a first amended complaint “on behalf of himself and other current and former aggrieved . . . employees” in Ventura County Superior Court. He alleged a single cause of action under PAGA but—unlike the wage violation notice—he did not seek individual recovery for unpaid wages. Instead he sought only “civil penalties,” “costs and attorney[’s] fees,” and “other and further relief the court may deem just and proper.” Plaintiff filed a motion for a preliminary injunction to enjoin arbitration while defendant filed a motion to stay court proceedings pending arbitration. The trial court enjoined the arbitration. Affirming, the Court of Appeal found that the pure PAGA claim was made on behalf of the state and therefore not subject to arbitration. “Where an employee alleges a ‘single representative cause of action under PAGA’ the claim ‘cannot be split into an arbitrable individual claim and a nonarbitrable representative claim.’ ” Additionally, the court found “that the interim harm [plaintiff] would suffer if the injunction was denied outweighed the harm [defendant] would suffer if the injunction was granted.” (Brooks v. AmeriHome Mortgage Co. (Cal. App. 2nd Dist., Div. 6, Apr. 8, 2020) 47 Cal.App.5th 624.)

https://www.courts.ca.gov/opinions/documents/B298132.PDF

“The goal of social media is to turn customers into a volunteer marketing army,” Jay Baer.

Plaintiffs are Facebook users who sued Facebook for various privacy-related claims when it tracked their browsing histories after they had logged out of the Facebook application. Facebook tracks users’ browsing histories when they visit third-party websites and then compiles these browsing histories into personal profiles that are sold to advertisers to generate revenue. The district court dismissed plaintiffs’ claims based on lack of standing. The Ninth Circuit affirmed in part and reversed in part, stating: “In sum, we conclude that Plaintiffs have standing to assert their claims. We affirm the district court’s dismissal of the SCA [Stored Communications Act; 18 U.S.C. § 2701 et seq.], breach of contract, and breach of implied covenant claims. We conclude that Plaintiffs adequately pleaded their remaining claims at this early stage to survive a motion to  dismiss under Rule 12(b)(6). We remand these issues to the district court for further consideration. We do not reach any other issue argued by the parties, leaving those issues for consideration by the district court in the first instance.” (In re Facebook, Inc. Internet Tracking Litigation (9th Cir., Apr. 9, 2020) 956 F.3d 589.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/09/17-17486.pdf

Settlement Credit After Jury Trial.

Plaintiff was seriously injured when she fell through a skylight built into the deck of her apartment. Defendant Lee built the three-unit apartment building and previously owned the property. At the time of the accident, Lee’s adult children owned the property, and it was managed by defendant management company. Prior to trial, plaintiff settled with the Lee children for $2.5 million. A jury awarded plaintiff over $2.6 million in damages . The jury allocated 12 percent fault to plaintiff, 54 percent to Lee, 16 percent to the management company, and 18 percent to the Lee children. After reducing the verdict to reflect plaintiff’s percentage of fault, the trial court offset the entirety of the economic damages by the amount of the settlement attributable to economic damages. However, it denied any credit to Lee and the management company as to noneconomic damages and entered judgment against Lee for $756,000 and against the management company for $224,000. The Court of Appeal affirmed, except that it determined the management company was entitled to a credit against both economic and noneconomic damages. The appellate court noted that the Lee children were not only found independently negligent but also bore imputed liability for the management company’s negligence. (Schreiber v. Lee (Cal. App. 1st Dist., Div. 1, Apr. 9, 2020) 47 Cal.App.5th 745.)

https://www.courts.ca.gov/opinions/documents/A149969.DOCX

Watts Charges Allowed for Spouse’s Post-separation Use of Formerly Separate Property in Which Community Had Gained an Interest Under Moore/Marsden.

During marriage, community funds were used to pay mortgage payments on husband’s separate property. The Moore/Marsden rule sets forth the formula to be used when community funds are used to increase the equity in separate property. In re Marriage of Moore (1980) 28 Cal.3d 366, 371-372; In re Marriage of Marsden (1982) 130 Cal.App.3d 426, 437. The parties agree that application of the Moore/Marsden rule through the date of their separation resulted in the community beneficially owning 33.66 percent of the property. However, by the time of their dissolution trial, husband had lived in the property for more than six years postseparation, paying the mortgage with his separate income. The trial court found that the community interest in the property continued to increase throughout those years, just as if community funds were used to pay the mortgage during that time, resulting in the community obtaining a 64.9 percent interest in the property. Reversing, the Court of Appeal stated: “The Moore/Marsden rule applies only insofar as community funds are used to build equity in an asset, a situation which often terminates, as it did here, upon separation. If the husband obtained a benefit from the community through living in the house beyond the parties’ separation date, the trial court may account for this through so-called Watts charges, a different legal concept than the Moore/Marsden rule. In re Marriage of Watts (1985) 171 Cal.App.3d 366, 373-374. Watts charges equitably compensate the community for one spouse’s use of a community-owned home. We hold, as a matter of first impression, that Watts charges may be levied against a spouse for his or her post-separation occupation of a property where the property is not entirely community property, but rather is treated as partially community property due to the Moore/Marsden rule. We thus vacate the judgment and remand to the trial court for the proper application of Moore/Marsden and calculation of any Watts charges.” (In re Marriage of Mohler (Cal. App. 4th Dist., Div. 2, Apr. 13, 2020) 47 Cal.App.5th 788.)

https://www.courts.ca.gov/opinions/documents/E071314.DOCX

Dismissal of Action by Self-represented Plaintiff Was an Abuse of Discretion.

Plaintiff, a college professor who represented himself, sued his employer for discrimination and retaliation in violation of the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). The employer successfully demurred to the initial complaint, and the court granted leave to amend. When plaintiff failed to timely file an amended complaint, the court granted the employer’s ex parte application for a dismissal with prejudice. Reversing, the Court of Appeal stated: “In Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, the court set forth the principle that self-represented litigants are not entitled to special exemptions from California’s procedural rules, but they are ‘entitled to treatment equal to that of a represented party.’ . . . courts should ‘make sure that verbal instructions given in court and written notices are clear and understandable by a layperson.’ Here, the trial court’s statements at a case management conference about the filing of an amended complaint were not clear aPnd understandable. As a result, plaintiff was misled into believing he had until the next case management conference to seek counsel and file an amended complaint and, relying on this belief, he left the country to attend an educational conference. While plaintiff was out of the country and a month before the date of the next case management conference, defendants requested and obtained an ex parte order dismissing the action with prejudice pursuant to Code of Civil Procedure section 581, subdivision (f)(2). We conclude the court prejudicially abused its discretion by (1) failing to provide clear and understandable instructions to plaintiff that the setting of another case management conference did not extend the deadline for filing an amended complaint and (2) dismissing plaintiff’s action with prejudice prior to that conference.” (Nuno v. California State University, Bakersfield (Cal. App. 5th Dist., Apr. 13, 2020) 47 Cal.App.5th 799.)

https://www.courts.ca.gov/opinions/documents/F077889.DOCX

Consumer Protection Involving Trust Assets.

The trustee of a trust borrowed money to repair a residence that is the main asset of the trust. The beneficiary of the trust, not the trustee, lives in the house. There was a dispute between the trustee and the lender. The trustee filed suit under the Truth in Lending Act (15 U.S.C. § 1601; TILA) and the Real Estate Settlement Procedures Act (12 U.S.C. §§ 2601-2627; RESPA). The federal district court dismissed the case, finding that since the borrower did not intend to live in the house, there was no consumer credit transaction. Reversing, the Ninth Circuit stated: “A consumer, by placing assets in a trust for personal estate planning purposes, does not lose all protection for the trust beneficiary under these federal and state consumer protection laws. We therefore reverse and remand for further proceedings.” (Gilliam v. Levine (9th Cir., Apr. 14, 2020) 955 F.3d 1117.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/14/18-56373.pdf

Bad Faith Case Tossed.

A property owner sued its insurance company for bad faith after denial of a claim allegedly caused by a ruptured underground water main. Defendant moved for summary judgment. Defendant’s expert opined there was a genuine dispute that the pipe rupture (a covered loss) was not the cause of the damage, and that the proximate cause was earth movement or settlement (an excluded loss). Plaintiff’s expert declared the damage was caused by a ruptured water main. Plaintiff also submitted an attorney declaration supporting its request to continue the hearing because “facts essential to justify opposition may exist but cannot . . . be presented.” (Code Civ. Proc., § 437c, subd. (h).) The attorney explained that the insurance company’s person most knowledgeable refused to answer 53 questions in his deposition. The trial court granted the summary judgment motion. The Court of Appeal affirmed, stating: “We agree with the trial court there is no material dispute whether defendants denied the claim in good faith based on an expert report concluding the damage was not caused by the broken water main, and affirm the judgment.” With regard to plaintiff’s request for a continuance, the appellate court stated: “Counsel’s supporting declaration was very general, and did not explain why the answer to any of the questions at the PMK deposition was essential to opposing the summary adjudication motion. The only testimony that plaintiff complains it was unable to obtain was an opinion about whether denial of the claim was ‘appropriate,’ and we see no reason to conclude the PMK’s opinion, whether yes or no, would be a material fact, or that it was essential to oppose the motion.” (501 East 51st Street, Long-Beach-10 LLC v. Kookmin Best Ins. Co. (Cal. App. 2nd Dist., Div. 8, Apr. 16, 2020) 2020 WL 1888819.)

https://www.courts.ca.gov/opinions/documents/B293605.DOC

“Cryptocurrency is freedom. Banking is slavery,” Arif Naseem.

Bitcoin is a form of digital currency based on mathematical algorithms that is not controlled by any country, bank, or individual. Defendant was indicted for money laundering after undercover agents completed a series of transactions with him. At one meeting, a federal agent intimated that the bitcoin he was purchasing from defendant would facilitate illicit activity, explaining that defendant’s discretion was important. A jury found defendant guilty of five counts of money laundering, and he was sentenced to 41 months in prison. On appeal, defendant contended the bitcoin transfers did not have the requisite effect on interstate commerce, an element of each of the charged offenses. Affirming, the Ninth Circuit stated:  “Because we conclude that the transfer in question, which involved the use of an Internet or cellular network connected Personal Computer Device (PCD) to transfer bitcoin (together with the digital code necessary to unlock the bitcoin) to the digital wallet of another Internet or cellular network connected PCD, had the necessary effect on interstate commerce, we affirm.” (United States v. Costanzo (9th Cir., Apr. 17, 2020) 2020 WL 1898836.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/17/18-10291.pdf

No Interactive Accommodation Process Necessary in After-acquired Evidence Situation.

The Americans with Disabilities Act (42 U.S.C. § 12101 et seq.) prohibits discrimination against “a qualified individual on the basis of disability.” Plaintiff’s employer terminated plaintiff from her position as a technical writer—a position that by virtue of a third-party contract required a bachelor’s degree in English, journalism, or a related field—allegedly due to an inability or unwillingness to accommodate her disability. The employer discovered during the course of the litigation that plaintiff lacked the requisite degree. Affirming a summary judgment for the employer, the Ninth Circuit stated: “It is undisputed that Anthony did not satisfy the prerequisites for the Technical Writer position. Because Anthony needed to satisfy those requirements without reasonable accommodation, whether she met the job prerequisites for available reassignment positions is irrelevant. Accordingly, she is not ‘otherwise qualified,’ and TRAX was not obligated to engage in the interactive process.” (Anthony v. Trax Int’l Corp (9th Cir., Apr. 17, 2020) 955 F.3d 1123.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/17/18-15662.pdf

Pay-When-Paid Provision.

A contractor sued a water district for nonpayment and sought payment from the insurance company that issued a public works payment bond. The insurance company contended a pay-when-paid provision in the construction contract precluded any recovery on the payment bond while the contractor’s lawsuit against the water district was pending. The trial court granted summary judgment for the contractor and against the insurance company. Affirming, the Court of Appeal stated that enforcing the pay-when-paid provision would postpone the contractor’s recover on the payment bond until its litigation against the district ended, concluding that “[s]uch a result would unreasonably affect or impair [the] statutory payment bond remedy” under Civil Code § 8122, and would be “unenforceable for the same reasons expressed in Wm. R. Clarke v. Safeco Ins. Co. (1997)15 Cal.4th 882.” (Crosno Construction, Inc. v. Travelers Casualty and Surety Company of America (Cal. App. 4th Dist., Div. 1, Apr. 17, 2020) 2020 WL 1899278.)

https://www.courts.ca.gov/opinions/documents/D075561.PDF

CERCLA Does Not Strip State Court’s Jurisdiction.

For nearly a century, the Anaconda Copper Smelter in Butte, Montana contaminated an area of over 300 square miles with arsenic and lead. Over the past 35 years, the Environmental Protection Agency (EPA) has worked with the current owner, Atlantic Richfield Company, to implement a cleanup plan under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980  (42 U. S. C. §9601 et seq.; CERCLA). EPA projected that the cleanup will continue through 2025. A group of 98 landowners sued Atlantic Richfield in Montana state court for nuisance, trespass, and strict liability. Among other remedies, the landowners sought restoration damages, which, under Montana law, must be spent on rehabilitation of the property. The landowners’ proposed restoration plan included measures beyond those the EPA found necessary to protect human health and the environment. The issues presented to the U.S. Supreme Court were whether CERCLA strips the Montana courts of jurisdiction over the landowners’ claim for restoration damages and, if not, whether CERCLA requires the landowners to seek EPA approval for their restoration plan. The Supreme Court held: “We . . . find the Act does not strip the Montana courts of jurisdiction over this lawsuit. It deprives state courts of jurisdiction over claims brought under the Act. But it does not displace state court jurisdiction over claims brought under other sources of law.” (Atlantic Richfield Co. v. Christian (U.S., Apr. 20, 2020) 2020 WL 1906542.)

https://www.supremecourt.gov/opinions/19pdf/17-1498_8mjp.pdf

Inter Partes Review.

Inter partes review is an administrative process in which a patent challenger may ask the U. S. Patent and Trademark Office to reconsider the validity of earlier granted patent claims. This case concerns a statutorily prescribed limitation of the issues a party may raise on appeal from an inter partes review proceeding. The U.S. Supreme Court held that 35 U.S.C. § 314 precludes judicial review of 35 U.S.C. § 315’s time prescription. (Thryv, Inc. v. Click-to-Call Technologies, LP (U.S., Apr. 20, 2020) 2020 WL 1906544.)

https://www.supremecourt.gov/opinions/19pdf/18-916_new_g3bi.pdf

U.S. Supreme Court Holds the Sixth Amendment Right to Jury Trial Requires a Unanimous Verdict to Convict a Defendant of a Serious Offense.

A week after the U.S. Senate passed a resolution calling for an investigation into whether Louisiana was systematically excluding African Americans from juries, the State of Louisiana first endorsed nonunanimous verdicts for serious crimes at a constitutional convention in 1898. According to one committee chairman, the avowed purpose of that convention was to “establish the supremacy of the white race,” and the resulting document included many of the trappings of the Jim Crow era: a poll tax, a combined literacy and property ownership test, and a grandfather clause that, in practice, exempted white residents from the most onerous of those requirements. The convention delegates sculpted a “facially race-neutral” rule permitting 10-to-2 verdicts in order to ensure that African American juror service would be meaningless. The State of Oregon did something similar in the 1930s, when it adopted a rule permitting nonunanimous verdicts to dilute the influence of racial, ethnic, and religious minorities on Oregon juries. A Louisiana jury convicted defendant of a serious crime by a vote of 10 to 2 and sentenced him to life in prison without the possibility of parole. The U.S. Supreme Court took the present case “to decide whether the Sixth Amendment right to a jury trial—as incorporated against the States by way of the Fourteenth Amendment—requires a unanimous verdict to convict a defendant of a serious offense.” The high court answered this question yes in a case eliciting five separate opinions.  (Ramos v. Louisiana (U.S., Apr. 20, 2020) 2020 WL 1906545.)

https://www.supremecourt.gov/opinions/19pdf/18-5924_n6io.pdf

Hearing on Ability to Post a Bond.

In an administrative hearing, the Labor Commissioner awarded employees $2.5 million. The defendants sought de novo review in the trial court, an action that required them to post an undertaking in the amount of the award or to obtain a waiver. (Lab. Code, § 98.2; Code Civ. Proc., § 995.240.) After a hearing, the trial court denied defendants’ request for a waiver. The issue on appeal was whether the trial court provided an adequate hearing on defendants’ financial ability to post the undertaking. Affirming, the Court of Appeal held defendants failed to show error and that the hearing was adequate and comported with due process.  (Cardinal Care Management v. Afable (Cal. App. 1st Dist., Div. 4, Apr. 20, 2020) 2020 WL 1909143.)

https://www.courts.ca.gov/opinions/documents/A154062.PDF

Pregnant Woman’s Marijuana Use Is an Insufficient Basis for Juvenile Dependency Jurisdiction.

At the time of a baby’s birth, the mother tested positive for marijuana. The mother also had a four-year-old child. The children’s fathers were unknown. The juvenile court took jurisdiction over the two children. The sole basis for the exercise of dependency jurisdiction was the mother’s use of medical marijuana while pregnant with the baby. Reversing, the Court of Appeal stated: “We conclude the evidence is insufficient to establish mother abused marijuana or that any such substance abuse placed the children at risk of serious harm.” (In re J.A. (Cal. App. 2nd Dist., Div. 5, Apr. 20, 2020) 2020 WL 1910305.)

https://www.courts.ca.gov/opinions/documents/B297416.PDF

Compelled, Self-published Defamation.

A criminal defendant pled guilty to disorderly conduct in Arizona and later completed a domestic violence diversion program. The disorderly conduct charge was dismissed as a result. Prior to the dismissal, the defendant’s  employer discharged him for engaging in threatening behavior based on his arrest. Labor Code § 432.7 prohibits employers from using as a factor in employment decisions any record of arrest or detention that did not result in conviction, or any record regarding referral to or participation in a diversion program. The defendant, now plaintiff, sued his former employer for wrongful termination in violation of Labor Code § 432.7 and compelled, self-published defamation. The jury returned a verdict in plaintiff’s favor on all causes of action and awarded him $2,663,137 in compensatory damages and $15,978,822 in punitive damages. The Court of Appeal reversed the judgment insofar as it related to § 432.7, finding that the guilty plea constituted a “conviction” under the statute. But the appellate court affirmed the judgment regarding compelled self-published defamation, finding substantial evidence supported the verdict. The matter was remanded “for the limited review of the proper amount of punitive damages.”  (Tilkey v. Allstate Insurance Company (Cal. App. 4th Dist., Div. 1, Apr. 21, 2020) 2020 WL 1921494.)

https://www.courts.ca.gov/opinions/documents/D074459.PDF

Statutory Fees Despite Contingency Fee Agreement.

Plaintiff prevailed in an action under the Song-Beverly Act (Civ. Code, § 1790 et seq.). Following the verdict, plaintiff filed a motion for statutory attorney fees in the amount of $308,696.25. Defendant Ford Motor Company opposed the fee motion, arguing plaintiff’s counsel was not entitled to recover both a contingency fee and a statutory fee. The trial court awarded plaintiff $201,891 in fees. Affirming the statutory fee award, the Court of Appeal noted the Legislature has provided consumers “ ‘strong encouragement to seek legal redress in a situation in which a lawsuit might not otherwise have been economically feasible.’ ” The appellate court also found that the trial court did not abuse its discretion in awarding fees without considering the contingency fee agreement. (Reynolds v. Ford Motor Company (Cal. App. 1st Dist., Div. 3, Apr. 21, 2020) 2020 WL 1921742.)

https://www.courts.ca.gov/opinions/documents/A154811.PDF

U.S. Supreme Court Resolves Trademark Dispute. . . or Maybe Not.

Romag sells magnetic snap fasteners for use in leather goods. Fossil designs, markets, and distributes a wide range of fashion accessories. Years ago, the two signed an agreement allowing Fossil to use Romag’s fasteners in Fossil’s handbags and other products. Initially, both sides seemed content with the arrangement. But, in time, Romag discovered that the factories Fossil hired in China to make its products were using counterfeit Romag fasteners—and that Fossil was doing little to guard against the practice. Romag sued, alleging that Fossil had infringed its trademark and falsely represented that its fasteners came from Romag. A jury agreed with Romag, and found that Fossil had acted “in callous disregard” of Romag’s rights, but not willfully. Romag sought (among other things) an order requiring Fossil to hand over the profits it had earned due to the trademark violation. But a federal trial court refused this request. The court pointed out that controlling Second Circuit precedent required a plaintiff seeking a profits award to prove that the defendant’s violation was willful. Not all circuits, however, agreed with the Second Circuit’s rule. The U.S. Supreme Court took this case to resolve that dispute. Reversing the Second Circuit, the Court stated: “At the end of it all, the most we can say with certainty is this. Mens rea figured as an important consideration in awarding profits in pre-Lanham Act cases. . . It’s a principle reflected in the Lanham Act’s text, too . . . Given these traditional principles, we do not doubt that a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate. But acknowledging that much is a far cry from insisting on the inflexible precondition to recovery Fossil advances. . . But the place for reconciling competing and incommensurable policy goals like these is before policymakers. This Court’s limited role is to read and apply the law those policymakers have ordained, and here our task is clear.” (Romag Fasteners, Inc. v. Fossil, Inc. (U.S., Apr. 23, 2020) 2020 WL 1942012.)

https://www.supremecourt.gov/opinions/19pdf/18-1233_5he6.pdf

Trade Secret Misappropriation.

A jury found defendant liable for trade secret misappropriation and breach of a mutual nondisclosure agreement with plaintiff. The jury awarded damages only on the breach of contract cause of action after the trial court granted a nonsuit on the trade secret misappropriation claim. An appeal led to a remand for a second trial on damages for the misappropriation. The second jury found no net damages for unjust enrichment and awarded nothing to plaintiff. The trial court then denied plaintiff’s request to seek a reasonable royalty under the California Uniform Trade Secret Act (Civ. Code, §§ 3426-3426.11; CUTSA.) A second appeal followed, and the Court of Appeal reversed, holding that the trial court had the discretion to award payment of a reasonable royalty pursuant to Civil Code § 3426.3, subdivision (b), which states, “[i]f neither damages nor unjust enrichment caused by misappropriation are provable, the court may order payment of a reasonable royalty . . . .” The matter was remanded for the trial court to exercise its discretion under the statute. The trial court held a bench trial on remand to determine whether plaintiff was entitled to a reasonable royalty and in what amount. It ultimately declined to award any royalty to plaintiff and entered judgment for defendant, awarding defendant its costs as the prevailing party in the action. In the third appeal, plaintiff challenged the trial court’s failure to award it a reasonable royalty for defendant’s willful and malicious trade secret misappropriation, as well as the denial of its motion for a new trial and the award of costs. Affirming, the Court of Appeal stated: “We conclude as to the reasonable royalty that the trial court did not abuse its discretion in denying a royalty under the CUTSA based upon [plaintiff’s] failure to carry its burden of proof and to support its royalty theories with credible, reliable, non-speculative evidence. As to the other issues raised on appeal, we find no reversible error . . . .” (Ajaxo, Inc. v. E*Trade Financial Corporation (Cal. App. 6th Dist., Apr. 23, 2020) 2020 WL 1952664.)

https://www.courts.ca.gov/opinions/documents/H042999.PDF

Grave Errors by Trial Judge.

A medical doctor and UCLA professor sued The Regents for gender discrimination, and a jury awarded her upward of $13 million. Reversing the judgment, the Court of Appeal stated: “Unfortunately, the trial court committed a series of grave errors that significantly prejudiced The Regents’ right to a fair trial by an impartial judge.” (Pinter-Brown v. Regents of the University of California (Cal. App. 2nd Dist., Div. 8, Apr. 23, 2020) 2020 WL 1950808.)

https://www.courts.ca.gov/opinions/documents/B290086.PDF

Suit Against a Dead Person.

2003-A woman borrowed $83,000 from a bank to buy a house.

2003-A few months later, Fannie Mae purchased the loan and took ownership of the note and deed of trust.

2008-Congress passed the Housing and Economic Recovery Act (12 U.S.C. § 4617), which contained a provision: “[n]o property of the agency shall be subject to . . . foreclosure . . . without the consent of the Agency.”

2009-The borrower died.

2011-The homeowners association where the decedent lived began foreclosure proceedings on her property and later sold it for $8,030.

2013– Plaintiff filed the present quiet-title action against the decedent and defendant, the bank that became the beneficiary of the deed of trust as Fannie Mae’s loan servicer.

The Ninth Circuit held that a dead person is not a proper party to be sued and that when a dead person is named as a party, the dead person’s prior citizenship is irrelevant for diversity citizenship purposes when a controversy is between citizens of different states. (LN Management, LLC v. JPMorgan Chase Bank, N.A. (9th Cir., Apr. 24, 2020) 2020 WL 1969408.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/24/18-15402.pdf

Authorization to Permit an Employer to Obtain a Credit Report.

Under the Fair Credit Reporting Act (15 U.S.C. § 1681b(b)(2)(A)(i); FCRA), procurement of a consumer report for employment purposes is forbidden unless “a clear and conspicuous disclosure has been made in writing to the consumer . . . in a document that consists solely of the disclosure.” Plaintiff sued his former employer, alleging violation of the FCRA because the employer’s FCRA authorization form was not on a standalone document. The federal district court granted summary judgment in favor of the employer. Affirming, the Ninth Circuit noted the statute only requires that the authorization be in writing, without specifying its format. (Luna v. Hansen & Adkins Auto Transport, Inc. (9th Cir., Apr. 24, 2020) 2020 WL 1969409.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/24/18-55804.pdf

Benefit-of-the-Bargain Damages for Fraud Awarded Alongside Out-of-Pocket Damages.

Plaintiff could not find a house he could afford in San Francisco. He found defendant’s advertisement on the Internet, promoting himself as a real estate agent with “over 25 years of experience as a building contractor” with “an extensive background in historic restorations” and “a deep understanding of quality construction.” Defendant told plaintiff that he could locate a lower-priced fixer-upper home in a choice neighborhood and then renovate it in a cost-effective manner. Plaintiff retained defendant. Defendant found a house, plaintiff purchased it, and defendant undertook a remodel. Defendant was not, in fact, a licensed contractor. Defendant botched the renovations, and plaintiff sued. A jury returned a verdict for plaintiff, awarding him benefit of the bargain damages of $900,000 for the difference between the renovation’s promised cost and the actual cost. Plus, the jury awarded $822,904 for the actual cost to replace the bungled foundation, and $106,920 for lost use of the property. Total damages were $1,934,322. In addition, because the jury found that defendant violated Business & Professions Code § 7160 (Contractors’ State License Law), plaintiff was awarded statutory attorney fees of $2,114,434, plus $104,498 in costs. On appeal, defendant argued that benefit-of-the-bargain damages for fraud cannot be awarded alongside out-of-pocket damages as a matter of law because it amounted to a double recovery. Affirming, the Court of Appeal stated: “We are persuaded by those authorities which have concluded that benefit-of-the-bargain damages are available to fully compensate a plaintiff for all the detriment proximately caused by a fraudulent fiduciary’s actions.” (Moore v. Teed (Cal. App. 1st Dist., Div. 1, Apr. 24, 2020) 2020 WL 1968237.)

https://www.courts.ca.gov/opinions/documents/A153523.PDF

Attorney Fees Under Song-Beverly Act.

In an action under the Song-Beverly Act (Civ. Code, § 1790 et seq.), a jury awarded plaintiff $35,805.08, comprised of $17,902.54 in compensatory damages and $17,902.54 in civil penalties. Plaintiff filed a motion for attorney fees pursuant to Civil Code §1794, subdivision (d), seeking $344,639. This figure consisted of a lodestar of $226,426, a 0.5 multiplier enhancement, and $5,000 for addressing the attorney fee resolution process. The trial court ordered defendant to pay $95,000 in attorney fees. Finding the court’s decision did not amount to an abuse of discretion and was supported by substantial evidence, the Court of Appeal affirmed. (Mikhaeilpoor v. BMW of North America, LLC, April 24, 2020 (Cal. App. 2nd Dist., Div. 1, Apr. 24, 2020) 2020 WL 1973877.)

https://www.courts.ca.gov/opinions/documents/B293987.PDF

No Copyright for Annotations to Legislative Code.

The State of Georgia has one official code, the Official Code of Georgia Annotated. A division of the LexisNexis Group prepares code annotations under the supervision of the Georgia Code Revision Commission, a state entity. The commission then submits the code and annotations to the state legislature for approval. A nonprofit organization that aims to facilitate public access to governmental records posted a digital version of the Georgia code on various websites where it could be downloaded by the public without charge. The commission sent several letters to the nonprofit claiming copyright infringement, limiting its assertion to the annotations to the code. The federal district court held the annotated codes were eligible for copyright protection because they were not “enacted into law.” The Eleventh Circuit Court of Appeals reversed. The U.S. Supreme Court affirmed the circuit court, stating: “The Copyright Act grants potent, decades-long monopoly protection for ‘original works of authorship.’ 17 U. S. C. §102(a). The question in this case is whether that protection extends to the annotations contained in Georgia’s official annotated code. We hold that it does not. Over a century ago, we recognized a limitation on copyright protection for certain government work product, rooted in the Copyright Act’s ‘authorship’ requirement. Under what has been dubbed the government edicts doctrine, officials empowered to speak with the force of law cannot be the authors of—and therefore cannot copyright—the works they create in the course of their official duties.” (Georgia v. Public Resource.org, Inc. (U.S., Apr. 27, 2020) 2020 WL 1978707.)

https://www.supremecourt.gov/opinions/19pdf/18-1150_new_d18e.pdf

Insurers Can Sue the Federal Government for Money Due Under the Affordable Care Act.

Congress passed the Patient Protection and Affordable Care Act in 2010, seeking to make health insurance available to millions of people with inadequate or no health insurance. The act called for the creation of virtual health insurance markets, known as Health Benefit Exchanges, in each state. To encourage insurers to participate in the new exchanges, the act  created several programs to defray the carriers’ costs and cabin their risks. Among these initiatives was the “Risk Corridors” program, a temporary framework meant to compensate insurers for unexpected losses during the first three years of the exchanges. The Risk Corridors statute, 42 U.S.C. §1342, set a formula for calculating payments under the program: If an insurance plan loses a certain amount of money, the federal government “shall pay” the plan; if the plan makes a certain amount of money, the plan “shall pay” the government. (42 U. S. C. §18062.) Some plans made money and paid the government. Many suffered losses and sought reimbursement. The government, under a subsequent administration, however, did not pay. Losses exceeded gains, and after three years the Risk Corridors program’s deficit exceeded $12 billion. Insurers claiming losses sued the federal government claiming a right to payment under § 1342, seeking damages for unpaid amounts. Ruling in favor of the insurers, the U.S. Supreme Court stated: “These cases are about whether petitioners—insurers who claim losses under the Risk Corridors program—have a right to payment under §1342 and a damages remedy for the unpaid amounts. We hold that they do. We conclude that §1342 of the Affordable Care Act established a moneymandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims.” (Maine Community Health Options v. United States (U.S., Apr. 27, 2020) 2020 WL 1978706.)  

https://www.supremecourt.gov/opinions/19pdf/18-1023_m64o.pdf

No Attorney Fees for Representation in Appeal of Immigration Removal Order.

A native and citizen of Mexico petitioned the Ninth Circuit for review of a final removal order of the Board of Immigration Appeals (BIA) denying his applications for asylum, withholding of removal, and protection under the Convention Against Torture. In the agency proceedings, an immigration judge deemed petitioner mentally incompetent to proceed pro se and appointed legal counsel to represent him in his removal hearing and appeal to the BIA. Petitioner then asked the Ninth Circuit to appoint compensated counsel to represent him in connection with his petition for review. The Ninth Circuit appointed pro bono counsel. Thereafter, petitioner asked the court to pay attorney fees. Denying the request, the appeals court stated: “The issue for decision is whether we can and should order the government to compensate appointed counsel for her services in representing Perez before this court. Because Perez and his amici curiae identify no authority allowing us to order the government to do so, we deny the request for compensation.” (Perez v. Barr (9th Cir., Apr. 27, 2020) 2020 WL 1982261.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/28/16-71918.pdf

Summary Judgment in Tenant’s Favor Affirmed.

A landlord attempted to evict a tenant for having an additional occupant not identified in the rental agreement, the tenant’s wife. The City of Los Angeles Rent Stabilization Ordinance bars an eviction based on violation of a rental agreement occupancy restriction when “the additional tenant who joins the occupants of the unit . . . is . . . the sole additional adult tenant,” but the landlord is given “the right to approve or disapprove the prospective additional tenant . . . , provided that the approval is not unreasonably withheld.” (L.A. Mun. Code, § 151.09.A, subd. (2)(b).) The trial court granted summary judgment for the tenant, finding no triable issue of fact that the landlord’s refusal to approve the additional tenant was unreasonable. The appellate division of the superior court affirmed, stating: “We hold an eviction due to a tenant violating an agreement by having an additional adult in a dwelling is only proper when the landlord has reasonably withheld approving the additional tenant,” and,“there was no indication plaintiff reasonably disapproved the additional occupant.” (California Valley Properties LLC v. Berlfein (L.A. Sup. Ct. App. Div., Apr. 27, 2020) 2020 WL 1989232.)

https://www.courts.ca.gov/opinions/documents/JAD20-02.PDF

Superior Court Research Attorneys Are State Employees.

Plaintiff is a member of the State Bar and a fulltime research attorney at the Alameda County Superior Court. In late 2016 and early 2017, plaintiff sent letters to the State Bar stating that he was exempt from the continuing education requirement by virtue of his employment with the superior court. The State Bar rejected his position, contending that he was employed by the superior court, and not by the State of California. The State Bar conceded that superior courts are funded by the state, but reasoned plaintiff was not a state employee because his paychecks were issued by the superior court (rather than the State Controller) and he was “covered by different labor rules and collective bargaining agreements than those of State Employees.” Both the trial court and the appellate court found in favor of plaintiff. The Court of Appeal stated: “The State Bar’s argument hinges on a statutory definition of ‘trial court employee’ that is explicitly limited to the chapter in which it appears (Gov. Code, § 71601, subd. (l) [“For purposes of this chapter . . . .”]). Nothing suggests the Legislature intended to exclude trial court employees from the continuing legal education exemption in section 6070, subdivision (c).” (Obbard v. State Bar of California (Cal. App. 1st Dist., Div. 5, Apr. 28, 2020) 2020 WL 2029261.)

https://www.courts.ca.gov/opinions/documents/A155106.PDF

Expert Testimony Excluded.

The class representative for a proposed class of purchasers and lessees of 2003–2008 Honda Pilot vehicles alleged that window regulators were defectively designed because they failed to properly support the side windows, rendering the windows inoperable. Plaintiff’s expert opined that Honda window regulators were not sufficiently durable when exposed to vibrations at certain frequencies. The federal district court determined that the expert opinion was deficient under Daubert v. Merrell Dow Pharms., Inc. (1993) 509 U.S. 579, reasoning that the opinion was premised on “halfbaked, warmed-over conclusions” that Honda window regulators were defective “because they do not last the life of the vehicle, which [plaintiff’s expert] define[d] as the entire duration  the vehicle is on the road.” Plaintiff appealed the district court’s order excluding the expert opinion and denying class certification. Affirming, the Ninth Circuit stated: “The district court did not abuse its discretion in excluding Akhavein’s expert opinion under Daubert. The district court properly held that Akhavein’s opinion was unreliable due to Akhavein’s failure to utilize a workable standard supporting his design defect theory; the lack of supporting studies or testing to demonstrate a common design defect; and deficiencies in Akhavein’s methodology.” (Grodzitsky v. American Honda Motor Co., Inc. (9th Cir., Apr. 29, 2020) 2020 WL 2050659.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2020/04/29/18-55417.pdf

Constitutionally Excessive Punitive Damages.

A jury awarded plaintiff $1,020,042 in compensatory damages for workplace retaliation and $4,000,000 in punitive damages. On appeal, the employer challenged the punitive damages award, contending there was insufficient evidence to support the findings that the person who engaged in retaliatory conduct was a managing agent and that he acted with malice or oppression. The employer also argued that the award was constitutionally excessive. The Court of Appeal found that substantial evidence supported the findings. As to the amount of punitive damages, the reviewing court found that the amount awarded was constitutionally excessive, concluding that the degree of reprehensibility was low to moderate and the constitutional maximum ratio of punitive damages to compensatory damages was 1.5 to 1. (Colucci v. T-Mobile USA, Inc. (Cal. App. 4th Dist., Div. 1, Apr. 29, 2020) 2020 WL 2059849.)

https://www.courts.ca.gov/opinions/documents/D075932.PDF

Statute of Limitations in Quiet Title Action.

In September 2014, plaintiffs filed an action against defendant bank to quiet title to a home they bought in February 2009. The trial court granted summary judgment against plaintiffs, finding their complaint was time barred. The trial court reasoned that in August 2009, more than three years before they filed suit, plaintiffs were aware of a recorded notice of trustee’s sale posted on the door of their property scheduling its sale to satisfy a delinquent loan secured by a deed of trust in favor of defendant bank as beneficiary. On appeal, plaintiffs contended the notice of sale did not disturb or otherwise interfere with their possession sufficiently to start the running of the statute of limitations. Reversing, the Court of Appeal agreed with plaintiffs, stating: “After receiving the notice of sale, [plaintiffs] immediately provided it to their title insurer to resolve any dispute with [defendant bank]. The trustee’s sale did not take place as scheduled, and [plaintiffs] heard nothing substantive about the matter for several years thereafter. All the while, [plaintiffs] continuously lived in and possessed the home. Under these circumstances, we conclude the statute of limitations did not run and the trial court improperly granted summary judgment for [defendant bank].” (Huang v. Wells Fargo Bank, N.A. (Cal. App. 1st Dist., Div. 3, Apr. 30, 2020) 2020 WL 2059951.)

https://www.courts.ca.gov/opinions/documents/A152074.PDF

No Right to Jury Trial in UCL or FAL Actions.

The California Supreme Court was called upon to decide whether there is a right to a jury trial when the government seeks civil penalties and injunctive relief pursuant to California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.; UCL) or false advertising law (Bus. & Prof. Code, § 17500 et seq.; FAL). California’s highest court concluded: “… in causes of action under the UCL or FAL seeking injunctive relief and civil penalties, the gist of the actions is equitable, and there is no right to a jury trial in such actions under California law either as a statutory or constitutional matter.” (Nationwide Biweekly Administration, Inc. v. Superior Court (Cal.,Apr. 30, 2020) 2020 WL 2107914.)

https://www.courts.ca.gov/opinions/documents/S250047.PDF

Lyft Not Liable for Injuries Caused by Driver While Not Driving for Lyft.

Lyft’s Express Drive program allows its drivers to rent vehicles that are preapproved for use by Lyft. Insurance and maintenance are included in the rental cost. A Lyft driver used his rental car for both personal use and Lyft driving. While driving home from his day job in the Lyft rental, the driver struck and seriously injured plaintiffs. The trial court rejected the driver’s argument that Lyft was liable under the doctrine of respondeat superior because the driver could have logged into the Lyft platform, and granted Lyft’s motion for summary judgment. Affirming the judgment, the Court of Appeal stated: “Gaurano testified he had not driven for Lyft on the day of the accident, and he had no intention of doing so. Rather, Gaurano worked the entire day for another employer. Based on these facts, Gaurano’s driving at the time of the accident could not be interpreted as providing any potential benefit to Lyft or constitute a ‘customary incident of employment.’ ” (Marez v. Lyft, Inc. (Cal. App. 1st Dist., Div. 1, Apr. 30, 2020) 2020 WL 2108643.)

https://www.courts.ca.gov/opinions/documents/A156761.PDF

Grant of Anti-SLAPP Motion Affirmed.

In an employment dispute, the Labor Commissioner ruled in favor of defendant against plaintiffs. Plaintiffs then filed a civil rights case against defendant pursuant to 42 U.S.C. § 1983, alleging defendant, plaintiffs’ former employee, falsely testified at the Labor Commissioner hearing. The trial court granted defendant’s anti-SLAPP motion pursuant to Code of Civil Procedure § 425.16. Affirming, the Court of Appeal found that the causes of action against defendant arose from conduct protected under that statute. As to the second prong of the anti-SLAPP statute, the appeals court noted plaintiffs offered no facts suggesting defendant acted under color of law, so their 1983 claim could not survive. (Patel v. Chavez (Cal. App. 2nd Dist., Div. 1, Apr. 30, 2020) 2020 WL 2109599.)

https://www.courts.ca.gov/opinions/documents/B291695.PDF

FEHA Case Remanded for Higher Attorney Fee Award Based on Rates in Out-of-town Counsel’s Home Market.

Plaintiff prevailed in an action under the Fair Employment and Housing Act (FEHA), and moved under Government Code § 12965, subdivision (b) for attorney fees, requesting a lodestar of $1,234,182.50 and a multiplier of 2.0, for a total of $2,468,365.00. The trial court awarded only $810,067.50. Reversing, the Court of Appeal stated: “Here, Caldera could not find a local attorney to take his discrimination lawsuit, so he hired an out-of-town firm. But when calculating attorney fees, the court set the attorneys’ hourly rate based on a lower local rate, rather than a higher out-of-town rate. The court then applied the extrinsic Ketchum factors [Ketchum v. Moses (2001) 24 Cal.4th 1122] to the hourly rate, rather than applying a multiplier to the lodestar. In sum, Caldera’s attorneys were not adequately compensated consistent with the purposes of the FEHA.” The appeals court ordered as follows: “To conclude and reiterate, as far as the loadstar, we direct the trial court on remand to set the hourly rate “based on counsel’s ‘home’ market rate.’ [] And because the court will be determining the lodestar based on counsel’s home market rate rather than a local rate, the court’s ultimate ruling on attorney fees will be more easily understood if the court recognizes the Ketchum factors through the use of a multiplier rather than by an adjustment of the lodestar. Finally, the total attorney fee award must support the purposes of the FEHA, consistent with the court’s exercise of its discretion.” (Caldera v. Department of Corrections and Rehabilitation (Cal. App. 4th Dist., Div. 3, Apr. 30, 2020) 2020 WL 2109751.)

https://www.courts.ca.gov/opinions/documents/G057343.PDF

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