Litigation
Litigation Update: May 2021
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, Reuben Ginsburg, Jessica Riggin, David Williams, Ryan H. Wu, and Greg Wolff.
Telemarketing Practices.
The Telephone Consumer Protection Act (47 U.S.C. § 227) proscribes abusive telemarketing practices by, among other things, making calls with an automatic telephone dialing system. The question before the U.S. Supreme Court was whether that proscription encompasses equipment that can “store” and dial telephone numbers, even if the device does not “us[e] a random or sequential number generator.” The high court held: “To qualify as an ‘automatic telephone dialing system,’ a device must have the capacity either to store a telephone number using a random or sequential generator or to produce a telephone number using a random or sequential number generator.” (Facebook, Inc. v. Duguid (U.S., Apr. 1, 2021) 141 S.Ct. 1163.)
Previously we reported:
Special Relationship.
Plaintiffs sued the U.S. Olympic Committee (USOC), USA Taekwondo (USAT) and others for sexual abuse by their taekwondo coach, Marc Gitelman. The trial court sustained the demurrers of USOC and USAT without leave to amend. As to USAT, the appellate court reversed, stating: “We conclude USAT, which is the national governing body for the Olympic sport of taekwondo, had a special relationship with Gitelman because Gitelman was required to register with USAT to coach taekwondo at USAT-sponsored competitions, athletes could only compete in competitions with registered coaches, USAT could (and later did) implement policies and procedures to protect athletes from sexual abuse by their coaches, and USAT could (and later did) bar Gitelman from coaching athletes at taekwondo competitions for his violations of USAT’s policies and procedures. USAT was therefore in a unique position to protect taekwondo youth athletes from harm.” As to USOC, the Court of Appeal affirmed “because [USOC] did not have a special relationship with Gitelman or plaintiffs. Although USOC had the ability to control USAT, including requiring it to adopt policies to protect youth athletes, it did not have direct control over the conduct of coaches.” (Brown v. USA Taekwondo (Cal. App. 2nd Dist., Div. 7, Oct. 8, 2019) 40 Cal.App.5th 1077.)
The latest:
Affirming the judgment of the Court of Appeal, the California Supreme Court stated: “Brown alleged that USAT and USOC acted negligently by failing to take steps to protect her from her coach’s abuse. To evaluate her claim, the Court of Appeal first asked whether a duty existed based on a special relationship. Concluding that USOC had no such relationship with Brown, the court ended its analysis with respect to that defendant. This approach was sound. And after concluding that USAT did have a special relationship with plaintiffs, the court went on to apply Rowland [v. Christian (1968) 69 Cal.2d 108] to determine whether to limit that potential duty — deciding the answer to that question was no. This, too, was the correct approach. [¶] The Court of Appeal’s judgment does not mark the end of the case. It affirms the trial court’s decision to dismiss one of several named defendants, USOC, for failure to adequately allege a special relationship giving rise to an affirmative duty to protect. Having concluded the Court of Appeal did not err by declining to apply the Rowland factors as an alternative source of duty, we now affirm the court’s judgment. On remand, Brown may continue to pursue her suit against USAT and the other remaining defendants.” (Brown v. USA Taekwondo (Cal., Apr. 1, 2021) 11 Cal.5th 204.)
Previously we reported:
Recording Telephone Calls.
Plaintiff filed a class action alleging defendant violated the California Invasion of Privacy Act (Pen. Code, § 630 et seq.) by recording a phone call without his consent. Plaintiff contends a beep tone at the beginning of the call was not sufficient notice that defendant was recording the call. The trial court dismissed plaintiff’s action after a bifurcated trial. Affirming, the Court of Appeal stated: “We conclude that section 632.7 prohibits only third party eavesdroppers from intentionally recording telephonic communications involving at least one cellular or cordless telephone. Conversely, section 632.7 does not prohibit the participants in a phone call from intentionally recording it. Consequently, [plaintiff] failed to state a claim against [defendant] under section 632.7.” (Smith v. LoanMe, Inc. (Cal. App. 4th Dist., Div. 2, Dec. 20, 2019) 2019 WL 6974386.)
The latest:
Reversing the Court of Appeal, the California Supreme Court held that “section 632.7 applies to parties as well as nonparties. This interpretation reflects the most sensible reading of the statutory text, is consistent with the relevant legislative history, and advances the Legislature’s apparent intent by protecting privacy in covered communications to a greater degree than the Court of Appeal’s construction would.” (Smith v. LoanMe, Inc. (Cal., Apr. 1, 2021) 11 Cal.5th 183.)
Knowledge of Defects After Quiet Title Action.
Under California’s Quiet Title Act (Code Civ. Proc., § 760.010 et seq.), a third party who “act[s] in reliance on” a quiet title judgment retains its property rights—even if that quiet title judgment is subsequently invalidated as void—as long as the third party qualifies as a “purchaser or encumbrancer for value . . . without knowledge of any defects or irregularities in [the earlier quiet title] judgment or the proceedings.” (Code Civ. Proc., § 764.060.) The Court of Appeal was asked to decide whether “knowledge” means only actual knowledge or both actual and constructive knowledge. The court held “it is the latter, such that the Act insulates a third party from the effect of a subsequent invalidation of an earlier quiet title judgment only if the third party has no actual or constructive knowledge of any defects or irregularities in that judgment.” (Tsasu LLC v. U.S. Bank Trust, N.A. (Cal. App. 2nd Dist., Div. 2, Apr. 1, 2021) 62 Cal.App.5th 704.)
Copyrighted Computer Program.
Oracle owns a copyrighted computer program. Without permission, Google copied a portion of that program that enables a programmer to call up prewritten software that, together with the computer’s hardware, carries out a large number of specific tasks. The U.S. Supreme Court held that Google’s copying did not violate copyright law because the copying here amounted to fair use. (Google LLC v. Oracle America, Inc. (U.S., Apr. 5, 2021) 141 S.Ct. 1183.)
https://www.supremecourt.gov/opinions/20pdf/18-956_new_0e04.pdf
An Expensive Stairway.
Beachfront homeowners built a stairway providing them private access to the beach without the permission of the California Coastal Commission. The Commission asked subsequent buyers to remove the stairway so that a structure allowing public access to the beach could be built. The buyers refused, and the Commission ultimately imposed a fine of $4,185,000. The trial court set aside the fine, but the Court of Appeal reversed, concluding that “the Commission did not violate the [buyers’] due process rights by imposing a $4,185,000 penalty, even though its staff recommended a smaller penalty, because the Commission had previously advised the [buyers] it could impose a penalty of up to $11,250 per day and the Commission staff specifically advised the [buyers] that the Commission could impose a penalty of up to $8,370,000.” (Lent v. California Coastal Commission (Cal. App. 2nd Dist., Div. 7, Apr. 5, 2021) 62 Cal.App.5th 812.)
A Woman’s Liberation.
An immigration judge granted a Mexican woman asylum under the Convention Against Torture. The Board of Immigration Appeals reversed, and the woman petitioned for review in the Ninth Circuit. Petitioner alleged that since the age of five, she had been told that men will beat her if she does not submit. Her mother demanded that she learn how to do housework, how to accept spousal abuse, and how “to obey everything that [her] husband would say.” She beat petitioner with various objects almost daily, in part to prepare petitioner for future beatings from her husband. Petitioner’s husband began a regime of grueling abuse months after they married. When he once wanted food at 1:00 a.m., for example, he awakened her by sticking a lit cigarette into her arm and ordered her to cook. When she told him to do it himself, he grabbed her hair and dragged her into the kitchen. On another occasion, he burned her face with a cigarette because she refused to leave her job as a teacher. Concluding the woman could not relocate safely to Mexico, the Ninth Circuit held that petitioner was eligible for asylum and entitled to withholding of removal. (Rodriguez-Tornes v. Garland (9th Cir., Apr. 5, 2021) 993 F.3d 743.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/05/19-71104.pdf
If You Can’t Pay the Fine, Don’t Do the Crime.
A California Highway Patrol (CHP) officer injured on the job began collecting disability payments. Between April 2012 and October 2013, he received over $80,000. Based on a tip, the worker’s compensation fraud unit began investigating the officer. In October 2013, CHP investigators showed surveillance videos to the officer’s doctor, who agreed that if she had been aware of his activities, she would have released him to work in April 2012. She also agreed the officer’s complaints had been a “gross misrepresentation.” The doctor subsequently released the officer for full duty with no restrictions. After a negotiated guilty plea, the officer was placed on probation. The trial court ordered him to repay the state for fraudulent disability payments and to repay the CHP for the costs of investigating him, which totaled $183,372.69. On appeal, the officer did not challenge the order to return the fraudulent disability payments, but did contest the investigative costs. He argued that the investigative costs and salaries of public employees who were performing their normal job duties did not constitute an economic loss and therefore those entities are not entitled to restitution for those costs. Finding no error in the restitution order, the Court of Appeal affirmed. (People v. Clapp (Cal. App. 3rd Dist., Apr. 5, 2021) 62 Cal.App.5th 862.)
Statistical Evidence to Show Predominance in Class Actions.
Defendants, packaged tuna producers, appealed from an order certifying three classes in a multidistrict antitrust case alleging a price-fixing conspiracy. Defendants challenged the district court’s determination that Rule 23(b)(3)’s “predominance” requirement was satisfied by expert statistical evidence finding class-wide impact based on averaging assumptions and pooled transaction data. Affirming in part and reversing in part, the Ninth Circuit stated: “We ultimately conclude that this form of statistical or ‘representative’ evidence can be used to establish predominance, but the district court abused its discretion by not resolving the factual disputes necessary to decide the requirement before certifying these classes. We thus vacate the district court’s order certifying the classes and remand for the court to determine the number of uninjured parties in the proposed class based on the dueling statistical evidence. Only then should the district court rule on whether predominance has been established.” (Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC (9th Cir., Apr. 6, 2021) 993 F.3d 774.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/06/19-56514.pdf
Denial of Motion for Class Certification Reversed.
Plaintiffs are apartment dwellers who sought to proceed as a class against the owners and operators of an apartment complex. Plaintiffs alleged the property was advertised as being safe, habitable, and luxurious, but it was littered with used condoms and had drug use, broken security gates, violence, no security patrols, dirty pools, and broken fitness equipment. The trial court denied plaintiffs’ motion for class certification. Reversing, the Court of Appeal stated: “In regard to false advertising, the trial court erred by relying on incorrect legal factors. [] For habitability and nuisance, the trial court misconstrued the causes of action by not recognizing that they are solely focused on the common areas. In sum, we conclude the trial court erred by denying certification of the advertising and habitability class.” (Peviani v. Arbors at California Oaks Property Owner, LLC (Cal. App. 4th Dist., Div. 2, Apr. 6, 2021) 62 Cal.App.5th 874.)
Nonprofit Organizations That Represent Asylum Seekers Prevail on Appeal of Preliminary Injunction.
On July 16, 2019, the Department of Justice and the Department of Homeland Security published a joint interim final Rule entitled “Asylum Eligibility and Procedural Modifications.” With limited exceptions, the Rule categorically denies asylum to aliens arriving at the border with Mexico unless they have first applied for, and have been denied, asylum in Mexico or another country through which they have traveled. Plaintiffs are nonprofit organizations that represent asylum seekers. They sued in federal court seeking an injunction against enforcement of the Rule, contending that the Rule is invalid on three grounds: (1) the Rule is not “consistent with” § 208 of the Immigration and Nationality Act, 8 U.S.C. § 1158; (2) the Rule is arbitrary and capricious; and (3) the Rule was adopted without notice and comment. The district court found that plaintiffs had a likelihood of success on all three grounds and entered a preliminary injunction against enforcement of the Rule, to take effect in the four states on our border with Mexico. The Ninth Circuit affirmed, stating: “We hold that plaintiffs have shown a likelihood of success on the first and second grounds. We do not reach the third ground.” (East Bay Sanctuary Covenant v. Garland (9th Cir., Apr. 8, 2021) 994 F.3d 962.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/08/19-16487.pdf
“Mere negligence—even head-scratching mistakes—does not amount to [securities] fraud,” Ninth Circuit Court of Appeals.
An investment bank analyst published a report setting a target price of $7 per share for a company’s stock. That stock surged 26% that day. But later that evening, the same bank announced that it would act as the placing agent for a dilutive offering that priced that stock at $6 per share. The stock price, not surprisingly, declined the next day. This securities fraud class action lawsuit against the investment bank soon followed, alleging that the bank fraudulently sought to inflate the price of the company’s stock price. The district court dismissed the complaint. Affirming, the Ninth Circuit stated that “the plaintiff has not articulated with particularity or plausibility the bank’s motive for doing so. If anything, the bank’s actions tarnished its reputation and likely frayed its relationship with its client. Because the complaint does not offer a plausible motive for the bank’s actions or provide compelling and particularized allegations about scienter, it does not support a strong inference that the defendant intentionally made false or misleading statements or acted with deliberate recklessness.” (Prodanova v. H.C. Wainwright & Co., LLC (9th Cir., April 8, 2021) 993 F.3d 1097.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/08/19-56048.pdf
Supreme Court Rejects Ninth Circuit’s COVID-19 Restrictions on Religious Exercise.
On February 5, 2021, the district court denied a motion for a preliminary injunction to prohibit California’s restrictions on private gatherings such as in-home Bible studies. On March 30, 2021, the Ninth Circuit denied a motion for an emergency injunction pending appeal to prohibit enforcement of the restrictions. On April 9, 2021, the U.S. Supreme Court issued a per curiam opinion finding that “[t]he Ninth Circuit’s failure to grant an injunction pending appeal was erroneous.” The Supreme Court then listed four reasons why the Ninth Circuit erred, and concluded: “Applicants are likely to succeed on the merits of their free exercise claim; they are irreparably harmed by the loss of free exercise rights ‘for even minimal periods of time;’ and the State has not shown that ‘public health would be imperiled’ by employing less restrictive measures. [] This is the fifth time the Court has summarily rejected the Ninth Circuit’s analysis of California’s COVID restrictions on religious exercise.” (Tandon v. Newsom (U.S., Apr. 9, 2021) 141 S.Ct. 1294.)
Arbitration Agreement Did Not Waive the Right to a Judicial Forum for Claims Based on Statutes.
In both individual and class claims, plaintiffs sued their employers for violations of various wage and hour laws in the California Labor Code. Pursuant to a collective bargaining agreement with plaintiffs’ union, the employers moved to compel arbitration. The trial court denied the motion to compel. Affirming, the Court of Appeal stated: “The collective bargaining agreement between SSP and the union provides for arbitration of claims arising under the agreement, but it does not waive the right to a judicial forum for claims based on statutes. The trial court therefore correctly denied SSP’s motion to compel arbitration.” (Wilson-Davis v. SSP America, Inc. (Cal. App. 2nd Dist., Div. 3, Apr. 9, 2021) 2021 WL 1338078.)
Another Action Against County Social Workers.
Parents brought a civil case against a county and two of its social workers contending social workers deceived the court when it sought medical examinations of their two children. The district court dismissed the action. The parents contended they had a right to consent and to be present at the medical examinations under a county policy. The medical examinations included “a full body inspection including the children’s genital and/or anal areas, obtaining urine to test, and drawing blood and/or vaccinations.” The parents were not informed of until after the examinations happened, did not consent, and were not present or given the opportunity to be present. On appeal, the county argued the parents’ claims constituted a de facto appeal of the juvenile court’s decision, and thus the district court had no jurisdiction. The Ninth Circuit held the parents’ claims were not a de facto appeal from the juvenile court orders, but instead they alleged that the misrepresentations by the social workers resulted in violations of their constitutional rights, concluding the lower federal court had subject matter jurisdiction. The appellate court further concluded the parents sufficiently pleaded their 42 U.S.C. § 1983 claim against the social workers, but not against the county, affirming the dismissal of the county, but reversing as to the two social workers, permitting the case against them to proceed. (Benavidez v. County of San Diego (9th Cir., Apr. 12, 2021) 993 F.3d 1134.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/12/19-55274.pdf
Plaintiffs Got to Appeal from the Order Granting Motion to Compel Arbitration . . . But Had to Wait Until All Proceedings Had Ended.
Plaintiffs, both decedent’s estate and his surviving family, sued defendant hospital for negligence and elder abuse. Defendant filed a petition to stay the action and compel arbitration. The trial court granted the petition to compel arbitration as to the elder abuse cause of action and stayed the other causes of action. Ultimately, the court entered judgment for defendant. On appeal, plaintiffs sought reversal of the grant of the motion to compel arbitration, contending defendant failed to satisfy its burden of producing a valid arbitration agreement and failure to comply with the requirements of Health and Safety Code § 1363.1, which requires that the enrollment form signed by a subscriber contain a prominently displayed arbitration notice. Affirming, the Court of Appeal held the evidence established the existence of a valid arbitration agreement, and that, pursuant to Government Code § 22869, defendant satisfied the requirements of Health and Safety Code § 1363.1. (Kuntz v. Kaiser Foundation Hospital (Cal. App. 3rd Dist., Apr. 12, 2021) 62 Cal.App.5th 1135.)
Denial of Motion to Compel Arbitration Reversed.
Plaintiff sued her former employer for sex discrimination and civil rights violations. However, plaintiff had signed a compensation agreement, which provided that all disputes arising from her employment would be resolved through binding arbitration. She also signed a second document that specified the arbitration procedures, and signed Form U4, as required by the Financial Industry Regulatory Authority. The district court denied the employer’s motion to compel arbitration, holding that plaintiff did not knowingly waive her right to pursue these types of claims in court. Reversing, the Ninth Circuit found that the claims were employment disputes, “employment disputes are encompassed by the arbitration provisions, and [plaintiff] knowingly waived her right to a judicial forum.” (Zoller v. GCA Advisors, LLC (9th Cir., Apr. 14, 2021) 993 F.3d 1198.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/14/20-15595.pdf
$500,000 Punitive Damages Award Affirmed for $15,000 Economic Damages Verdict.
Defendant fired plaintiffs’ deceased mother because she had cancer. A jury awarded $15,057 in economic damages, and the trial court thereafter awarded $500,000 in punitive damages. In calculating punitive damages, the court found the decedent’s noneconomic damages to be between $100,000 and $150,000, but not recoverable after her death due to the provisions of Code of Civil Procedure § 377.34, which limits damages to what the decedent sustained before death. On appeal, defendant contended the punitive damages award was excessive, at more than thirty times the economic damages award. Affirming, the Court of Appeal stated: “We agree that a punitive damages award based on such a large multiplier would be troubling.” However, ‘it is the ratio between . . . actual harm and the punitive damages which should be considered,’ not merely the ratio between economic harm and punitive damages. Since the decedent suffered substantial noneconomic harms, that comparison—based on harms of up to $165,000—yielded a permissible ratio of only three-and-a-half to one.” (Rubio v. CIA Wheel Group (Cal. App. 2nd Dist., Div. 8, Apr. 15, 2021) 63 Cal.App.5th 82.)
Plaintiffs Retired, Then Learned the Real Amounts of Their Pensions.
Defendant employer sponsored and administered an employee pension plan subject to the requirements of the Employee Retirement Income Security Act (ERISA). The employer contracted with an outside administrator to generate account statements. Using an online platform provided by the employer, plaintiffs requested statements of their expected incomes when they retired. Relying on those statements, they both retired. But instead of the $2,000 and $1,600 per month specified on their statements, plaintiffs were only entitled to receive $807 and $823 per month, respectively. The district court granted defendants’ motion to dismiss. Affirming in part and reversing in part, the Ninth Circuit stated: “Calculation of benefits pursuant to a formula is not a fiduciary function, so Plaintiffs failed to state a claim for breach of a fiduciary duty by any of the three defendants. Furthermore, Plaintiffs did not adequately plead that they submitted written requests for pension benefit statements as required to state a claim for violation of 29 U.S.C. § 1025(a)(1)(B)(ii). . . . However, because Plaintiffs could plead facts adequate to allege they made written requests, we direct the district court to permit Plaintiffs to file an amended complaint. Finally, Plaintiffs’ state-law professional negligence and negligent misrepresentation claims are not preempted by ERISA because they do not have a ‘reference to or connection with’ an ERISA plan.” (Bafford v. Northrop Grumman Corporation (9th Cir., Apr. 15, 2021) 994 F.3d 1020.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/15/20-55222.pdf
An Accommodation Too Far.
Plaintiff suffers from serious spinal conditions that make it painful to walk. He lived with his father in a mobile home on land rented from the city to provide housing for low-income persons—but he never signed the lease or paid any rent and, after his father’s death, he refused to vacate the premises. He then sued the city for denying a request to park his car in a non-designated area next to the mobile home. The district court dismissed the action for failure to file a timely governmental claim. Affirming, the Ninth Circuit stated: “The question presented in this appeal is whether the Fair Housing Amendments Act of 1988 (“FHAA”), 42 U.S.C. § 3601 et seq., requires landlords to accommodate the disability of an individual who neither entered into a lease nor paid rent in exchange for the right to occupy the premises. We conclude the FHAA applies to rentals only when the rental arrangement is supported by adequate consideration and therefore affirm the judgment of the district court.” (Salisbury v. City of Santa Monica (9th Cir., Apr. 16, 2021) 994 F.3d 1056.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/16/20-55039.pdf
The Wheels on the Case Go Round and Round.
An employee brought a wage and hour class action against her employer. The action settled prior to certification: The employer paid a sum to the employee to resolve her individual claims, and she dismissed the class claims without prejudice, with court approval. Thereafter, the employer brought a malicious prosecution action against the employee and her counsel. The employee and her counsel each filed anti-SLAPP motions to strike. (Code Civ. Proc., § 425.16.) The trial court denied the anti-SLAPP motions, finding that the employer made a prima facie showing of prevailing on its malicious prosecution cause of action. Reversing, the Court of Appeal stated: “As the prior action resolved by settlement, the employer is unable to establish the action terminated in its favor as a matter of law. We therefore reverse and remand for determination of one unadjudicated anti-SLAPP issue, and whether the employee and her counsel are entitled to an award of attorney fees.” (Citizens of Humanity, LLC v. Ramirez (Cal. App. 2nd Dist., Div. 5, Apr. 19, 2021) 63 Cal.App.5th 117.)
No Failure to Disclose on the Part of the Arbitrator.
The trial court confirmed an arbitration award and the losing party appealed, contending the JAMS arbitrator failed to disclose grounds for disqualification. The arbitrator had made pre-arbitration disclosures. However, after the final arbitration award, the losing party asked whether the arbitrator had an ownership interest in JAMS and asked about the scope of the business relationship between JAMS and the prevailing party’s law firm, O’Melveny & Myers. JAMS responded the arbitrator was “an owner panelist of JAMS,” with less than a 0.1% revenue share, and that O’Melveny & Myers had participated in 245 JAMS matters in the prior five years. But JAMS added that the losing party’s law firm, Alston & Bird, had also participated in 245 JAMS matters in the prior five years. Affirming, the Court of Appeal stated “that the arbitrator’s and JAMS’s disclosures were sufficient, and the arbitrator was not required to disclose more information about the extent of JAMS’s business with O’Melveny & Myers, or the arbitrator’s own ownership interest in JAMS. There is no issue of a repeat party or lawyer being favored over a non-repeat party or lawyer; the parties in this business dispute are sophisticated; and the law firms were both frequent users of JAMS to the same extent.” (Speier v. The Advantage Fund, LLC (Cal. App. 4th Dist., Div. 3, Apr. 19, 2021) 63 Cal.App.5th 134.)
Reverse Confusion Theory of Trademark Infringement.
Plaintiff Ironhawk asserted claims under the Lanham Act (15 U.S.C. § 1051 et seq.), and California’s Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). Ironhawk alleged that defendant Dropbox’s use of a junior registered trademark “Smart Sync” intentionally infringed upon Ironhawk’s senior registered trademark “SmartSync,” and was likely to cause confusion among consumers as to the relationship between Ironhawk’s product and Dropbox. The district court granted summary judgment to Dropbox, finding the term to be “descriptive,” thereby substantially reducing the risk of confusion. Reversing and remanding for trial, the Ninth Circuit held that a reasonable trier of fact could find the marks merely “suggestive” rather than “descriptive,” and “the line between descriptive and suggestive marks is elusive.” Moreover, “[w]hether descriptive or suggestive, the important question in a reverse confusion case is ‘whether the junior mark is so [commercially] strong as to overtake the senior mark.’ ” In this case, “a reasonable jury could find that Dropbox’s Smart Sync is commercially strong, and when considered against the conceptual strength of Ironhawk’s SmartSync mark, is able to swamp Ironhawk’s reputation with a much larger advertising campaign.” (Ironhawk Technologies, Inc. v. Dropbox, Inc. (9th Cir., Apr. 20, 2021) 994 F.3d 1107.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/20/19-56347.pdf
Affordable Housing Statute Trumps Shellmound.
A city denied a request to approve plans to build affordable housing pursuant to Government Code § 65913.4. The land on which the development was planned was part of a three-block area designated by the city as a Native American shellmound, and listed in the California Register of Historical Resources. The developers asked the trial court to issue a writ of mandate. Applying a “highly deferential” standard of review, the trial court denied the petition because there was some evidence that the project would require the demolition of a historic structure within the meaning of § 65913.4, subdivision (a)(7)(C). Reversing, the Court of Appeal found that the “highly deferential” standard was inappropriate because § 65913.4 requires streamlined ministerial approval of affordable housing projects. Additionally, “[n]othing remains of the Shellmound above ground,” so there was no structure to be demolished. (Ruegg & Ellsworth v. City of Berkeley (Cal. App. 1st Dist., Div. 2, Apr. 20, 2021) 2021 WL 1541065.)
Equitable Monetary Relief Was Error.
Petitioner controlled several companies that provided borrowers with short-term payday loans. The companies, operating online, would show a potential customer a loan’s essential terms. When the companies explained those terms, they misled many customers. The Federal Trade Commission filed suit alleging that the companies were engaging in “unfair or deceptive acts or practices in or affecting commerce,” in violation of § 5(a) of the Federal Trade Commission Act. Pursuant to § 13(b) of the act, the district court ordered a permanent injunction to prevent future violations, and, relying on the same authority, directed petitioner to pay $1.27 billion in restitution and disgorgement. The Circuit Court affirmed. The U.S. Supreme Court reversed, stating: “The question presented is whether this statutory language authorizes the Commission to seek, and a court to award, equitable monetary relief such as restitution or disgorgement. We conclude that it does not.” (AMG Capital Management, LLC v. Federal Trade Commission (U.S., Apr. 22, 2021) 141 S.Ct. 1341.)
15-Year-Old Sentenced to LWOP.
Under Miller v. Alabama (2012) 567 U.S. 460, an individual who commits a homicide when he or she is under 18 may be sentenced to life without parole, but only if the sentence is not mandatory and the sentencer therefore has discretion to impose a lesser punishment. Montgomery v. Louisiana (2016) 577 U.S. 190, holds that Miller applies retroactively. A Mississippi trial judge sentenced a 15-year-old boy to life in prison without parole. The boy’s case eventually made its way to the U.S. Supreme Court where he argued that to satisfy Miller’s requirements, the sentencing judge must make a separate factual finding that the defendant is permanently incorrigible, and that the judge did not make such a finding in his case. After the boy’s grandfather found him in his bedroom with his girlfriend and ordered the girl out of the house, the boy stabbed his grandfather eight times, killing him. The high court declined to impose the additional requirement of permanent incorrigibility but noted that “our holding today does not preclude the States from imposing additional sentencing limits in cases involving defendants under 18 convicted of murder.” (Jones v. Mississippi (U.S., Apr. 22, 2021) 141 S.Ct. 1307.)
https://www.supremecourt.gov/opinions/20pdf/18-1259_8njq.pdf
Court May Consider a Supporting Spouse’s Payment of Adult Children’s College Expenses in Determining Ability to Pay Spousal Support.
The family court considered mother’s payment of college expenses for two adult children in determining her ability to pay spousal support to father. Father argued that this was error. Affirming the spousal support award, the Court of Appeal stated: “We acknowledge, of course, that David cannot be required to support his adult child. Family Code section 3901, subdivision (a) prohibits that. But the question here—whether Laurie’s choice to spend her discretionary income on their adult child’s educational expenses may be considered on equal footing with her other expenses—is distinctly different. As explained, both Epstein [In re Marriage of Epstein (1979) 24 Cal.3d 76] and [Family Code] section 4320 compel the conclusion that a trial court may appropriately consider a supporting spouse’s payment of adult children’s college expenses in determining ability to pay spousal support.” (In re Marriage of Maher and Strawn (Cal. App. 4th Dist., Div. 1, Apr. 22, 2021) 2021 WL 1572568.)
Postjudgment Interest on Prejudgment Costs.
In a civil case where the prevailing party is entitled to recover certain litigation expenses and attorney fees from the losing party, when does postjudgment interest on an award of prejudgment costs begin to run? The Court of Appeal said it’s “on the date of the judgment or order that establishes the right of a party to recover a particular cost item, even if the dollar amount has yet to be ascertained.” (Felczer v. Apple, Inc. (Cal. App. 4th Dist., Div. 1, Apr. 23, 2021) 2021 WL 1588981.)
Wage Order No. 4 Does Not Apply to the Regents.
A former employee filed a class action complaint against the Regents of the University of California, alleging that the Regents’ practice of rounding hours and automatically deducting 30-minute meal breaks resulted in employees not receiving the minimum wage for all hours worked. Plaintiff also sought penalties under the Private Attorneys General Act of 2004 (Labor Code, § 2698 et seq.; PAGA). The trial court sustained the Regents’ demurrer without leave to amend. Affirming, the Court of Appeal stated: “In light of California courts’ consistent deference to the Regents regarding the setting of wages and benefits for employees [citations], we conclude the superior court did not err in sustaining the demurrer without leave to amend as to the first cause of action. The Regents’ timekeeping procedures are matters of internal affairs of the university that do not come within any of the exceptions to the Regents’ constitutional immunity.” (Gomez v. The Regents of the University of California (Cal. App. 4th Dist., Div. 1, Apr. 23, 2021) 2021 WL 1588982.)
Investigating Allegations of Police Misconduct.
The Public Safety Officers Procedural Bill of Rights Act (Gov. Code, § 3300 et seq.; POBRA) mandates the disclosure of complaints, reports, and other materials to a peace officer under investigation for misconduct. Following the complaint of a citizen, the police department cleared its officers of misconduct. A civilian oversight agency with independent authority to investigate claims of police misconduct conducted its own investigation. Before the civilian’s formal interrogation of the police officers, the officers’ counsel demanded copies of “reports and complaints” prepared or complied. The civilian oversight agency refused to disclose those materials. The police officers’ association petitioned for a writ of mandate, citing POBRA. The trial court granted the petition. Reversing, the Court of Appeal stated: “We conclude that mandatory disclosure of complaints and reports prior to any subsequent interrogation of an officer suspected of misconduct is inconsistent with the plain language of the statute and undermines a core objective under POBRA—maintaining the public’s confidence in the effectiveness and integrity of law enforcement agencies by ensuring that internal investigations into officer misconduct are conducted promptly, thoroughly, and fairly.” (Oakland Police Officers’ Association v. City of Oakland, (Cal. App. 1st. Dist., Div. 1, Apr. 26, 2021) 2021 WL 1608876.)
Amazon Is in the Chain of Distribution.
Plaintiff sued Amazon.com, LLC for injuries she suffered from an allegedly defective hoverboard. The hoverboard was sold by a third-party seller through the Amazon website. The trial court concluded that Amazon was not in the chain of distribution and granted summary judgment for Amazon. Plaintiff argued that summary adjudication of her strict and negligent products liability claims was improper because Amazon was in the chain of distribution. Reversing, the Court of Appeal concluded that Amazon was in the chain of distribution and that triable issues of fact precluded summary adjudication of the strict and negligent products liability claims. (Loomis v. Amazon.com, LLC (Cal. App. 2nd Dist., Div. 8, Apr. 26, 2021) 2021 WL 1608878.)
Trying to Regulate 3D-Printed Guns.
At the request of 22 states, including California, and the District of Columbia, the district court enjoined the Department of State (DOS) from removing 3D-printed guns from the U.S. Munitions List. When DOS designates an item for the Munitions List, the International Traffic in Arms Regulations regulates the item. Congress authorized the President to designate the items to include on the list, and the President delegated his authority to the Secretary of State. To further complicate matters, the Department of Commerce regulates a separate list of items, and the DOS prefers that 3D-printed guns be regulated by the Department of Commerce. Reversing and vacating the injunction, the Ninth Circuit stated: “Congress expressly barred judicial review of designations and undesignations of defense articles under the Control Act and of any functions exercised under the Reform Act. Accordingly, the district court erred in reviewing the DOS and Commerce Final Rules, and its injunction is therefore contrary to law.” (State of Washington v. United States Department of State (9th Cir., Apr. 27, 2021) 2021 WL 1621320.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/27/20-35391.pdf
Coerced Confession to Murder; Qualified Immunity.
At age 13, plaintiff confessed to a murder—that all now agree he did not commit—after interrogation by three LAPD detectives who ignored his request for an attorney. He was convicted in juvenile court and sentenced to 25 years’ imprisonment, but the conviction was reversed on appeal. Plaintiff then sued the three detectives under 42 U.S.C. § 1983. The district court denied the detectives’ claim of qualified immunity and their motion for summary judgment. Affirming in part and denying in part, the Ninth Circuit stated: “We affirm the denial of qualified immunity on the Fifth Amendment claims that the officers continued to question Tobias after he invoked his right to silence and that they engaged in unconstitutional coercive questioning tactics. We reverse the denial of qualified immunity on Tobias’s Fourteenth Amendment substantive due process claim because it was not clearly established that the abusive interrogation techniques used by the officers rose to the level of ‘abuse of power that shocks the conscience.’ ” (Tobias v. Arteaga (9th Cir., Apr. 27, 2021) 2021 WL 1621323.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/27/18-56360.pdf
After You Make Your Bed, Pay Your Bills.
Plaintiffs lost their Santa Rosa home in the 2017 Tubbs fire. They promptly submitted a claim under their homeowner’s insurance policy to defendant insurance company, which denied the claim because the policy was canceled for nonpayment of premium six days before the fire. Plaintiffs immediately paid the past due premium, and the policy was reinstated, but defendant continued to deny the claim, arguing that reinstatement did not retroactively cover the loss that occurred when the policy was out of force. Plaintiffs sued for breach of contract and breach of the implied covenant of good faith and fair dealing, and the parties filed cross-motions for summary judgment or summary adjudication. The trial court agreed with plaintiffs that the undisputed facts showed that defendant waived its forfeiture of the policy argument and reinstatement was retroactive with no lapse in coverage. Accordingly, the court granted summary adjudication for plaintiffs on the issue of defendant’s duty to provide coverage and denied defendant’s motion in its entirety. Pursuant to stipulation, judgment was then entered for plaintiffs. Defendant appealed, arguing: (1) the loss-in-progress rule precludes coverage for a known loss, so it could not, as a matter of law, reinstate the policy retroactively to provide coverage for the loss that occurred while the policy was out of force; and (2) even if defendant could have reinstated the policy without a lapse in coverage, the undisputed facts show it did not do so and that it reinstated the policy subject to a lapse of nine days that included the date plaintiffs lost their home. Affirming in part and reversing in part, the Court of Appeal stated: “We reject Mid-Century’s first argument. Its second argument hinges on its intent when it reinstated the policy, and as to this, there exists a triable issue of material fact. Thus, we conclude Mid-Century’s motion was properly denied but plaintiffs’ motion was improperly granted.” (Antonopoulos v. Mid-Century Insurance Co. (Cal. App. 1st Dist., Div. 2, Apr. 27, 2021) 2021 WL 1625053.)
Janitors May Have Picketed the Wrong Employer.
The manager of an office building in San Francisco hired a cleaning service. The cleaning service subcontracted the work to another janitorial service, a sole proprietorship owned by Rafael Ortiz. The janitorial employees at the center of this dispute regarded the manager of the building as their principal employer, although Rafael Ortiz was the source of some of their workplace grievances. In Fall 2014, several of the janitorial employees sought help from their union in addressing concerns about low wages and poor working conditions. The union president suggested the employees picket outside the building. The employees staged two pickets. Joined by union members, the employees walked in a circle on the sidewalk in front of the building’s main entrance. The National Labor Relations Act, § 8(b)(4)(ii)(B) allows unions to engage in primary picketing—picketing aimed at the primary employer—but it prohibits secondary picketing—picketing aimed at a neutral third party—to force the third party to take action to give the union leverage in its dispute with the primary employer. The National Labor Relations Board held that the employees lost the protection of the NLRA because their picketing was unlawful. The Ninth Circuit granted the union’s petition for review and reversed the decision, stating: “[T]he Board failed to identify substantial independent evidence rebutting the presumption that the employees’ picketing was lawful. The Union never made any statements or took any actions indicating that an objective of its picketing was to coerce [the manager of the building] into pressuring [the cleaning service] to meet the employees’ demands.” (Service Employees International Union Local 87 v. National Labor Relations Board (9th Cir., Apr. 28, 2021) 2021 WL 1655900.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/28/19-70334.pdf
Statute Based on Dynamex’s ABC Test Is Not Preempted.
The Federal Aviation Administration Authorization Act of 1994 (F4A) preempts any state law “related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.” (49 U.S.C. § 14501(c)(1).) In 2020, the California Legislature codified, in Labor Code § 2775, the California Supreme Court’s holding in Dynamex Operations v. Superior Court (2018) 4 Cal.5th 903, which adopted the ABC test (AB-5). Plaintiff is a group of truckers who prevailed before the district court when it issued a preliminary injunction barring enforcement of California’s statute against any motor carrier doing business in California. Reversing, the Ninth Circuit stated: “This appeal raises the question whether application of AB-5 to motor carriers is preempted by the F4A. Because AB-5 is a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services of motor carriers, we conclude that it is not preempted by the F4A.” (California Trucking Association v. Bonta (9th Cir., April 28, 2021) 2021 WL 1656283.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/28/20-55106.pdf
Family Court Abused Its Discretion in Not Awarding Attorney Fees.
In marital dissolution proceedings, a wealthier party may be compelled to pay another party’s attorney fees. (Fam. Code, § 2030.) The wealthier spouse’s funds were in a trust, and the trustee asked the family court to deny a request for attorney fees because, under California law, a trustee cannot be compelled to disburse money absent a showing of bad faith. The trustee argued that the claim for attorney fees was subject to the Probate Code’s restrictions on claims against spendthrift trusts. Finding the family court abused its discretion, the Court of Appeal reversed, stating: “[The] modern approach allows third parties to obtain relief from the trust for matters arising out of the trust’s administration, and is not limited by spendthrift provisions. Section 2030 provides for the award of attorney fees against parties other than spouses, like the trustee. Since the award of attorney fees stems from the administration of the trust and does not involve a claim against the beneficiary, payment from a spendthrift trust is not contingent on the bad faith of the trustee.” (In re Marriage of Wendt and Pullen (Cal. App. 3rd Dist., Apr. 28, 2021) 2021 WL 1660595.)
If a Contract Says Something Shall Be Determined by a Third Person, That Person’s Determination Is Binding Absent Fraud or Mistake.
Three neighboring property owners incurred damages from a mudslide. In a settlement agreement, they agreed to do mitigation and repair work on their own properties according to their own separate plans. The “Final Approval” provision stated: “Upon completion of the work, each party shall obtain a written report by the design engineer or geologist that the work performed is in substantial compliance with that Parties’ plan . . . and will provide a copy to all other Parties within 30 days of completion.” In a second lawsuit, two owners sued the third. Plaintiffs alleged defendants breached the settlement agreement because their work was not in substantial compliance with their plan. But, in a bench trial, the court found defendants complied with the contract by providing a copy of an engineer’s report stating their work was “ ‘substantially completed in accordance with the approved plans.’ ” The court also found no evidence of bad faith, fraud, or gross negligence. Plaintiff argued on appeal that the trial court misinterpreted the settlement agreement. Affirming, the Court of Appeal stated: “Courts are not in the business of rewriting ill-advised contract provisions. Plaintiffs are stuck with the contract they signed. We agree with the trial court’s interpretation of the Settlement Agreement and we find no merit to any claimed evidentiary errors. . . ‘Nothing is better settled than the rule that where the parties agree that the performance or nonperformance of the terms of a contract, or the quantity, price, or quality of goods sold, is to be left to the determination of a third person, his judgment or estimate is binding, in the absence of fraud or mistake.’ ” (Coral Farms, L.P. v. Mahony (Cal. App. 4th Dist., Div. 3, Apr. 28, 2021) 2021 WL 1659843.)
In Limine Motions That Function as Nonstatutory Motions for Judgment on the Pleadings May Be a “Recipe for Reversal.”
After the court resolved a quiet title dispute, a party sought to recover his attorney fees as damages. The trial court granted a motion in limine and ruled that the party seeking the fees could not offer evidence of the attorney fees he paid because they were not specifically alleged as an item of damages. He was also not permitted to offer evidence of the rent he paid, his lost rental income, or fees incurred defending against his unlawful detainer actions because they were too speculative. His motion to amend to allege attorney fees as damages was denied by the trial court as untimely and because it was prejudicial to the other side. Reversing, the Court of Appeal stated: “In addition, we caution trial judges to be wary when choosing to decide an in limine motion that, no matter how captioned, functions as a nonstatutory motion for judgment on the pleadings, particularly when the motion is filed on the eve of trial. Doing so, under circumstances like those presented here, is a recipe for reversal.” (Tung v. Chicago Title Company (Cal. App. 1st Dist., Div. 3, Apr. 28, 2021) 2021 WL 1660795.)
What Triggers the Stop-Time Rule for Aliens?
An alien seeking to remain in the U.S. by way of the Attorney General’s discretionary relief must demonstrate a continuous presence in the country for at least 10 years. But under 8 U.S.C. § 1229b(d)(1), the period is deemed to end when the alien is served a notice to appear. The U.S. Supreme Court granted certiorari to decide what qualifies as a notice to appear that would trigger that stop-time rule. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (110 Stat. 3009–546), requires the government to serve “a notice to appear” on individuals it wishes to remove from this country. The U.S. Supreme Court noted: “At first blush, a notice to appear might seem to be just that—a single document containing all the information an individual needs to know about his removal hearing. But, the government says, supplying so much information in a single form is too taxing. It needs more flexibility, allowing its officials to provide information in separate mailings (as many as they wish) over time (as long as they find convenient). The question for us is whether the law Congress adopted tolerates the government’s preferred practice.” In a 6–3 decision, the high court held that the stop-time rule is triggered when the government serves a single document containing all the information about an individual’s removal hearing. Justice Gorsuch, writing for the majority, stated that “the law’s terms ensure that, when the federal government seeks a procedural advantage against an individual, it will at least supply him with a single and reasonably comprehensive statement of the nature of the proceedings against him. If men must turn square corners when they deal with the government, it cannot be too much to expect the government to turn square corners when it deals with them.” (Niz-Chavez v. Garland (U.S., Apr. 29, 2021) 141 S.Ct. 1474.)
https://www.supremecourt.gov/opinions/20pdf/19-863_new_5426.pdf
Court of Appeal Cautions Against Counsel Taking Jurors Out to Dinner.
The jury awarded borrowers (Superior) $256.45 million in compensatory and punitive damages for negligent misrepresentation and fraudulent concealment. The trial court granted the commercial lender’s motion for new trial based on juror misconduct in providing false or misleading responses on voir dire and denied the lender’s motion for judgment notwithstanding the verdict (JNOV). Both sides appealed. The Court of Appeal affirmed, finding substantial evidence supported both the finding of juror misconduct and the denial of JNOV. While the new trial order was not based on on the prevailing party’s taking the jury out to dinner after the verdict, the appeals court cautioned against the practice: “Jury service doesn’t end with a verdict. There is always the possibility of a new trial motion based on alleged juror misconduct, in which discharged jurors could be percipient witnesses to the alleged misconduct. . . . Although Superior’s trial counsel claimed there was nothing wrong with the juror dinner, rule 3.5, subdivisions (g) and (h) of the Rules of Professional Conduct . . . forbids attorneys from attempting to influence jurors regarding their ‘present or future jury service,’ even after those jurors have been discharged. . . . A postverdict dinner at an upscale restaurant poses a . . . substantial risk of influencing jurors to favor counsel and his client at a new trial motion.” (Nissan Motor Acceptance Cases (Cal. App. 4th Dist., Div. 3, Apr. 29, 2021) 2021 WL 1686268.)
The Gravamen of a Molestation Action Is Molestation, Not Speech.
Seven adults alleged they were molested by a priest when they were children. They sued the archdiocese and related entities, alleging it was vicariously liable for ratifying the molestation and directly liable for its own negligence in failing to supervise the priest. The archdiocese filed a special motion to strike the complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16), arguing that some of the acts by which it purportedly ratified the molestation or failed to supervise the priest constituted protected speech or litigation conduct. The trial court denied the motion. Affirming, the Court of Appeal found that the archdiocese mischaracterized the complaint and concluded, “the gravamen of the suit against the Archdiocese is not speech—it is the molestation and failure to supervise. We therefore affirm the trial court’s denial of the anti-SLAPP motion.” (Ratcliff v. The Roman Catholic Archbishop of Los Angeles (Cal. App. 2nd Dist., Div. 5, Apr. 29, 2021) 2021 WL 1685720.)
Dismissal of a Teacher’s FEHA Action Against the School District Under Anti-SLAPP Statute Reversed.
A teacher sued a school district for discrimination under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). The school district moved to strike the operative complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16), and the trial court granted the motion. Reversing, the Court of Appeal found defendant’s actions did not arise from the investigation of plaintiff’s claims, which would be a protected activity. Instead, it found that defendant’s decision to put plaintiff on leave and terminate his employment “are not protected activity within the meaning of section 425.16, subdivision (e)(2), even if those decisions were made in conjunction with an official investigation.” The Court of Appeal also rejected defendant’s claim that there is a “constitutionally protected right of free expression that a school district has in its teacher assignment and hiring decisions,” finding that defendant failed to show that the hiring choice furthered speech and that the speech was in the public interest. (Verceles v. Los Angeles Unified School District (Cal. App. 2nd Dist., Div. 7, Apr. 19, 2021) 2021 WL 1702346.)
https://www.courts.ca.gov/opinions/documents/B303182.PDF
Landowner Did Not Owe a Duty of Care to Provide Adequate Onsite Parking.
Unable to find a parking space at the apartment complex she was visiting, plaintiff parked her car across the street. Instead of walking to a marked crosswalk, she traversed a five-lane highway at night and was struck by a car, sustaining traumatic brain injuries. She sued the owner of the apartment complex for negligence and premises liability for having too few parking spots. The trial court granted defendant’s motion for summary judgment. The Court of Appeal affirmed, holding that the owner did not owe a duty of care to invitees to provide adequate onsite parking under either common law or a city ordinance. The appeals court found that plaintiff’s harm was not foreseeable, and that public policy would not support “imposing a duty upon landowners to provide onsite parking to avoid injury to invitees as they travel from offsite parking locale,” which would be impracticable and would not prevent future harm in any event. (Issakhani v. Shadow Glen Homeowners Association, Inc. (Cal. App. 2nd Dist., Div. 2, Apr. 30, 2021) 2021 WL 1711584.)
Whether a Plaintiff Is an Employee or an Independent Contractor Is for the Court to Decide, Not an Arbitrator.
Plaintiff worked as an Uber driver under a written agreement stating that she was an independent contractor and all disputes would be resolved by arbitration under the Federal Arbitration Act (9 U.S.C. § 1 et seq.). Under the agreement, decisions on the enforceability or validity of the arbitration provision were delegated to the arbitrator. Defendant Uber Technologies, Inc. moved to compel arbitration of plaintiff’s complaint alleging a single cause of action for wage violations under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). The trial court denied the motion. On appeal, defendant contended plaintiff could not bring a PAGA claim in court unless or until an arbitrator first decided whether she had standing to bring a PAGA claim—that is, whether she was an employee who could seek penalties under PAGA on behalf of the state, or an independent contractor who could not. Affirming the trial court’s order denying the motion to compel arbitration, the Court of Appeal stated: “We conclude, as has every other California court presented with this or similar issues, that the threshold question whether plaintiff is an employee or an independent contractor cannot be delegated to an arbitrator.” (Rosales v. Uber Technologies, Inc. (Cal. App. 2d Dist., Div. 8, Apr. 30, 2021) 2021 WL 1711585.)
Third Time’s the Charm: Jury Awards Big in Wrongful Termination Case.
Plaintiff filed suit against her former employer, Rite Aid Corporation, and her former supervisor, alleging causes of action for wrongful termination in violation of public policy and intentional infliction of emotional distress, among others. The case was tried three times before a jury. Each time the jury awarded damages against the defendants. The latest judgment awarded plaintiff $2,012,258 on her wrongful termination cause of action against Rite Aid and $4 million on her intentional infliction of emotional distress causes of action against Rite Aid and the supervisor. On review, the Court of Appeal ordered that plaintiff’s post-termination earnings be deducted from the past economic damages award for wrongful termination but affirmed the judgment in all other respects. (Martinez v. Rite Aid Corporation (Cal. App. 2nd Dist., Dist. 7, Apr. 30, 2021) 2021 WL 1711617.)
Famous Last Words: “It’s just a couple of trees on vacant land.”
A conservation easement is a voluntary agreement between a landowner and a land trust or government agency that permanently limits land uses to protect a property’s “natural, scenic, historical, agricultural, forested, or open-space condition.” (Civ. Code, §§ 815.1, 815.3.) When a person violates a conservation easement, a court may award injunctive relief and monetary damages, including the cost of restoration and compensation for the loss of scenic, aesthetic, and environmental value, as well as attorney fees. (Civ. Code, §§ 815.7, subds. (b), (c), 815.7, subd. (d).) Landowners uprooted and dragged mature oak trees from land subject to a conservation easement and bulldozed a road through the area. The trust filed suit. Following a bench trial, the court awarded the trust $575,899, including $318,870 for the cost of restoring the property, as well as injunctive relief. The trial court also awarded the trust attorney fees and costs of $2,961,264.29. Affirming the fee award, the Court of Appeal found that the trial court did not abuse its discretion in not reducing the award by $500,000 for the trust’s insurance coverage for that amount of attorney fees. The appeals court also concluded that the trial court did not abuse its discretion in awarding a 1.4 multiplier for contingent risk, even though the matter was only partially contingent. The Court of Appeal rejected the notion that the multiplier “double-counted” contingent risk and skill of representation, stating that the factors overlap and the enhancement properly focuses on “something extra.” (The Sonoma Land Trust v. Thompson (Cal. App. 1st Dist., Div. 5, Apr. 30, 2021) 2021 WL 1712151.)