LITIGATION UPDATE: MAY 2022
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, Jonathan Grossman, Jennifer Hansen, Judith Sklar, David Williams, Greg Wolff, Ryan Wu
Ninth Circuit Certified a Question to the California Supreme Court About Failure to Warn Liability for a Medical Device.
Plaintiffs sued a medical device company alleging misbranding and failure to warn about certain risks of its electroconvulsive therapy (ECT) device. The district court granted summary judgment for the device manufacturer on the ground that the plaintiffs failed to establish causation due to an absence of evidence that stronger warnings would have affected their physicians’ decision to prescribe ECT. The Ninth Circuit certified the following question to the California Supreme Court: “Under California law, in a claim against a manufacturer of a medical product for a failure to warn of a risk, is the plaintiff required to show that a stronger risk warning would have altered the physician’s decision to prescribe the product? Or may the plaintiff establish causation by showing that the physician would have communicated the stronger risk warnings to the plaintiff, either in their patient consent disclosures or otherwise, and a prudent person in the patient’s position would have declined the treatment after receiving the stronger risk warning?” (Himes v. Somatics, LLC (9th Cir., Apr. 1, 2022) 29 F.4th 1125.)
Favorable Termination Element of Malicious Prosecution Claim.
A New York man was charged with state crimes, but the charges were dismissed without explanation. The man subsequently sued the police for malicious prosecution under the Fourth Amendment, alleging a violation of 42 U.S.C. § 1983. To prevail, the man was required to demonstrate, among other things, that he obtained a favorable termination of the underlying criminal prosecution. The U.S. Supreme Court held: “To demonstrate a favorable termination of a criminal prosecution for purposes of the Fourth Amendment claim under §1983 for malicious prosecution, a plaintiff need only show that his prosecution ended without a conviction. [Plaintiff] satisfied that requirement in this case. We therefore reverse the judgment of the U. S. Court of Appeals for the Second Circuit and remand for further proceedings consistent with this opinion.” (Thompson v. Clark (U.S., Apr. 4, 2022) 142 S.Ct. 1332.)
Title IX and Girls’ Sports.
Female high school student athletes who played water polo and varsity soccer and participated on the swim team at Hawaii’s largest public high school brought this putative class action seeking declaratory and injunctive relief to redress multiple alleged violations of Title IX. They alleged systematic discriminatory deficiencies in their school’s athletic programs, which failed “ ‘to provide female student athletes . . . with treatment and benefits that are comparable to the treatment and benefits provided to male student athletes.’ ” Plaintiffs claimed, for example, that “ ‘male athletes . . . have exclusive access’ to a very large ‘stand-alone athletic locker room facility that is located near the athletic fields,’ while ‘female athletes . . . must carry their athletic gear around with them all day and have resorted to changing in teachers’ closets, in the bathroom of the nearest Burger King, and even on the practice field, potentially in full view of bystanders.’ ” The students further alleged that the school retaliated against them when they brought noncompliance with Title IX to the school’s attention. The district court denied plaintiffs’ motion for class certification. Reversing, the Ninth Circuit Court of Appeals held that the district court abused its discretion by concluding that plaintiffs did not satisfy the requirements of class “numerosity, commonality, typicality, and adequate representation” and remanded the case with instructions to the trial court to consider whether plaintiffs satisfied the requirements of Federal Rules of Civil Procedure, rule 23(b). (A.B. v. Hawaii State Department of Education (9th Cir., Apr. 4, 2022) 30 F.4th 828.)
“Men are afraid that women will laugh at them. Women are afraid that men will kill them,” Margaret Atwood.
A man and a woman, both attorneys, ended their relationship in 2013. In 2015, he shot arrows and discharged a firearm into her business. He stalked her while in disguise and under cover of darkness, and assaulted her. In a criminal action, he pled guilty to stalking with personal use of a dangerous and deadly weapon. In this civil action, a jury found in her favor, awarding $1.3 million. The trial court subsequently awarded her approximately $850,000 in attorney fees and $60,000 in costs. The Court of Appeal affirmed, rejecting his evidentiary and instructional error arguments. (Quintero v. Weinkauf (Cal. App. 1st Dist., Div. 4, Apr. 1, 2022) 77 Cal.App.5th 1.)
Previously we reported:
Arbitration Agreement Just a Click Away.
In this unrelated case, plaintiffs used defendants’ websites but did not see a notice containing an arbitration agreement that appeared in fine print. The district court denied defendant’s petition to compel arbitration. On appeal, the Ninth Circuit began its opinion with: “We revisit an issue first addressed by our court in Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014): Under what circumstances can the use of a website bind a consumer to a set of hyperlinked ‘terms and conditions’ that the consumer never saw or read?” Affirming the order denying arbitration, the Court of Appeals explained that “[c]onsumers cannot be required to hover their mouse over otherwise plain-looking text or aimlessly click on words on a page in an effort to ‘ferret out hyperlinks.’ ” The court concluded that “the design and content of the webpages [plaintiffs] visited did not adequately call to their attention eitherthe existence of the terms and conditions or the fact that, by clicking on the ‘continue’ button, they were agreeing to be bound by those terms. The district court properly denied defendants’ motion to compel arbitration because an enforceable agreement to arbitrate was never formed.” (Berman v. Freedom Financial Network, LLC (9th Cir., Apr. 5, 2022) 30 F.4th 849.)
Law School Didn’t Follow Its Own Rules in Expelling Plaintiff.
Plaintiff was expelled from law school. The trial court denied plaintiff’s request to issue a writ of administrative mandate. On appeal, plaintiff claimed, among other things, that the law school failed to provide him with a fair administrative process in expelling him. Reversing, the Court of Appeal noted that “ ‘[w]here student discipline is at issue, [a] university must comply with its own policies and procedures’ ” and concluded that the law school violated this rule by failing to provide the student with an opportunity to cross-examine witnesses, as required by the school’s policies and procedures. (Teacher v. California Western School of Law (Cal. App. 4th Dist., Div. 1, Apr. 5, 2022) 77 Cal.App.5th 111.)
The First Sale Doctrine.
Plaintiff, a nonprofit that administers standards for short-range wireless technology, owns the word mark “Bluetooth,” its design mark, as well as the composite word/design mark. To use any of these marks, a product manufacturer must join plaintiff’s organization, execute a licensing agreement, submit declarations of compliance, and pay fees. Defendant makes cars under the brands Fiat, Chrysler, Dodge, Jeep, and Ram. Defendant’s vehicles contain Bluetooth-equipped head units, and defendant uses plaintiff’s marks on its head units and in product publications, but defendant has not taken the additional steps required by plaintiff to qualify the Bluetooth capabilities of its cars. Plaintiff brought trademark claims against defendant, and defendant asserted numerous defenses, including the first sale doctrine. Under the first sale doctrine, the right of a producer to control the distribution of its trademarked product does not extend beyond the first sale of the product. The district court granted summary judgment for plaintiff and then certified the following question to the Ninth Circuit: “[D]oes the first sale doctrine apply ‘when a trademarked product has been incorporated in a new product?’ ” The Court of Appeals answered “yes” and vacated the summary judgment. (Bluetooth SIG Inc. v. FCA US LLC (9th Cir., Apr. 6, 2022) 30 F.4th 870.)
Airbnb and the Coastal Commission.
A beach city contended it does not need Coastal Commission approval to enact a new prohibition on short-term rentals within the coastal zone. The city reasoned that while Coastal Commission approval is required for an amendment, there had been no amendment here because the city’s old ordinances always prohibited short-term rentals. The trial court disagreed, concluding that the city’s old ordinances permitted short-term rentals. Affirming, the Court of Appeal stated: “This means the City’s recent laws against platforms like Airbnb indeed are amendments requiring Commission approval, which the City never got.” (Keen v. City of Manhattan Beach (Cal. App. 2nd Dist., Div. 8, Apr. 6, 2022) 77 Cal.App.5th 142.)
How to Determine Whether a Law Firm Has Enough Employees to Come Under the Mandate of the Americans with Disabilities Act.
Plaintiff worked as a full-time associate attorney at the Nevada office of defendant’s law firm. Plaintiff sued the firm, alleging it did not accommodate her disabilities in violation of the Americans with Disabilities Act (42 U.S.C. § 1201 et seq.; ADA). Both of the firm’s partners are licensed to practice law in California and Nevada. The district court granted defendant’s motion for summary judgment, concluding that the ADA did not apply because the firm has fewer than 15 employees. The Ninth Circuit reversed and remanded with instructions to the district court to consider whether the firm’s Nevada and California offices are an integrated enterprise. (Buchanan v. Watkins & Letofsky, LLP (9th Cir., Apr. 7, 2022) 30 F.4th 874.)
Previously we reported:
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.)
What happened next:
The Ninth Circuit vacated the three-judge-panel opinion, and the matter will be heard en banc. (Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC (9th Cir., Aug. 3, 2021) 5 F.4th 950.)
Statistical Regression Model.The Ninth Circuit vacated the three-judge panel opinion, and the matter was heard en banc. Disagreeing with the panel in part, and affirming the district court in full, the Ninth Circuit found that “the district court did not abuse its discretion in rigorously analyzing such statistical evidence, determining that it was not flawed in a manner that would make it incapable of providing class-wide proof, see supra Section III.C, concluding that the evidence was sufficient to sustain a jury verdict on the question of antitrust impact for the entire class, and preserving the defendants’ ability to challenge the persuasiveness of such evidence at trial. We therefore affirm the district court’s decision to certify the Tuna Purchasers’ three subclasses under Rule 23(b)(3). Nevertheless, the Tuna Suppliers will have the opportunity to convince a jury that not all class members were overcharged due to their collusion.” (Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC (9th Cir., Apr. 8, 2022) 31 F.4th 651 (en banc).)
Provider of Services to Medicare Advantage Patients Was Required to Exhaust Administrative Remedies Under Medicare Before Suing Medicare Advantage Plan.
Plaintiff provided international air ambulance services to two patients who became seriously ill while in Mexico. Both patients were enrolled in Medicare Advantage plans offered by defendant Kaiser Foundation Health Plan, Inc. Plaintiff flew the patients from a hospital in Mexico to a hospital in San Diego and billed Kaiser for those services at its usual and customary rates. Kaiser paid only a fraction of the billed amount, however, because in its view plaintiff’s services were covered by Medicare and thus subject to payment at the much lower Medicare-approved rates. Plaintiff brought this action against Kaiser to recover the additional sums Kaiser allegedly owes. The district court dismissed the action on the ground that plaintiff failed to exhaust its administrative remedies under the Medicare Act. The Ninth Circuit affirmed, stating: “Because Jet Rescue failed to exhaust its administrative remedies and has not shown any basis for excusing that requirement, the district court properly dismissed Jet Rescue’s action for lack of subject matter jurisdiction.” (Global Rescue Jets, LLC v. Kaiser Foundation Health Plan, Inc. (9th Cir., Apr. 8, 2022) 30 F.4th 905.)
Approval by Board of Directors Saved Defendant from Having to Disgorge Short-Swing Profits.
The CEO of a publicly traded company was given an option/warrant award to purchase several million shares of the company at specified prices by the board of directors. Five months later, he exercised those options and then sold the stock at a profit. Several shareholders sued the CEO, alleging he violated Section 16(b) of the Securities Exchange Act of 1934, which statute requires corporate insiders to disgorge to the corporation all profits made from buying and selling company securities within any six-month period, a so-called short-swing transaction. However, the SEC has issued several exemptions from that section, including Rule 16b-3(d)(1), which exempts any transactions if the acquisition was “approved by the board of directors” of the issuer. The district court therefore dismissed the action. Affirming, the Ninth Circuit stated: while some of the board was absent, “a quorum of CytoDyn’s board met and approved that award by a majority vote, in compliance with both Delaware corporate law and CytoDyn’s bylaws. . . . . This is sufficient under Rule 16b-3(d)(1). Pourhassan thus was not required to disgorge to CytoDyn his profits when he sold stock less than six months after receiving the 2019 option and warrant award.”
(Alpha Venture Capital Partners LP v. Pourhassan (9th Cir., Apr. 8, 2022) 30 F.4th 920.)
Records Requested Under Public Records Act Relating to Police Activity Not Contemporaneous.
Plaintiff asked Kern County for the names of arrestees for DUI in a certain time frame under the California Public Records Act (Gov. Code, § 6250 et seq.). The county provided plaintiff with some information, but did not provide the arrestees’ names. Plaintiff then filed a verified petition for writ of mandate in superior court to compel the county to provide the arrestees’ names. The trial court sustained the county’s demurrer without leave to amend. Denying plaintiff’s petition for writ of mandate, the Court of Appeal discussed the holding in County of Los Angeles v. Superior Court (Kusar) (1993) 18 Cal.App.4th 588. That case held that disclosure mandates are limited only to information pertaining to “contemporaneous” police activity. The appeals court stated: “Furthermore, although the Legislature has not defined what ‘contemporaneous’ means in this context, we conclude the information sought here, which was 11 to 12 months old when Kinney filed her request to the County, should not be considered ‘contemporaneous’ information based on the reasons supporting the holding in Kusar. We deny Kinney’s petition solely on this ground and do not need to explore any other possible grounds.” (Kinney v. Superior Court (Cal. App. 5th Dist., Apr. 7, 2022) 77 Cal.App.5th 168.)
Case Against Lawyers to Proceed Because Plaintiff Alleges Attorneys Did Not Advise Him of Anti-SLAPP Law.
Plaintiff sued his former attorneys for professional negligence, breach of fiduciary duty, and breach of contract, alleging, among other things, that defendants failed to advise him of California’s anti-SLAPP statute before filing a complaint on his behalf against a newspaper publisher in California federal court. He alleged the lawsuit predictably drew a successful special motion to strike, which caused him to incur substantial attorney fees litigating and losing the motion and deprived him of discovery he intended to use in a disciplinary proceeding pending against him in the United Kingdom, ultimately resulting in the loss of his law license, substantial fines and fees, and bankruptcy. The trial court granted defendants’ motion for summary adjudication of the professional negligence claim, concluding plaintiff could not establish causation under the case-within-a-case method because he could not prove he would have prevailed in his lawsuit against the publisher but for defendants’ negligence. Affirming in part and reversing in part, the Court of Appeal stated: “We conclude the trial court erred. . . . [W]hile we agree with the court’s subsequent ruling that [plaintiff’s] damages claim based on the adverse outcome of the U.K. disciplinary proceeding was too speculative to create a question of fact for a jury, those damages were only part of his cause of action for professional negligence. Because an attorney owes a duty of care to advise a client of foreseeable risks of litigation before filing a lawsuit on the client’s behalf, we conclude [plaintiff] asserted a viable claim that, but for defendants’ negligent failure to advise him of the risks associated with a potential anti-SLAPP motion, he would not have filed his lawsuit in California and would not have incurred damages from litigating and losing an anti-SLAPP motion.” (Mireskandari v. Edwards Wildman Palmer LLP (Cal. App. 2nd Dist., Div. 3, 2022) 77 Cal.App.5th 247.)
Insurance Frauds Prevention Act Targets Deceptive Acts Directed at Insurers, Not by Insurers.
Plaintiff was injured at work and filed a workers’ compensation claim based on his injury. His claim was denied because he allegedly had not reported his injury to his supervisor. Months later, the human resources manager produced a timeline of plaintiff’s injury, clearly demonstrating he had reported it. The denial of his claim was reversed. Plaintiff filed a qui tam action on behalf of the People of the State of California against an insurance company, a claims administrator, and a claims examiner, alleging violation of the Insurance Frauds Prevention Act (Ins. Code, § 1871.7; IFPA). The trial court sustained defendants’ demurrer without leave to amend. Affirming, the Court of Appeal stated: “IFPA expressly targets only deceptive conduct directed at insurers, not improper conduct by insurers.” (People ex rel. Ellinger v. Magill (Cal. App 4th Dist., Div. 2, Apr. 11, 2022) 77 Cal.App.5th 287.)
Arbitration Agreement Adhesive, Procedurally Unconscionable, and Substantively Unconscionable.
Defendant hired plaintiff as a gardener and required him to sign an agreement containing a mandatory arbitration provision as a condition of employment. Later, plaintiff sued defendant and defendant petitioned the trial court to compel arbitration. The trial court denied the request. Affirming, the Court of Appeal stated: “Substantial evidence supports factual findings that the Agreement is adhesive because it was presented to Nunez as a nonnegotiable condition of his employment. It is procedurally unconscionable because it was given to Nunez in English, which he cannot read, without adequate explanation or a fee schedule. It is substantively unconscionable because it allows the arbitrator to shift attorney fees and costs onto Nunez and drastically limits his ability to conduct discovery.” (Nunez v. Cycad Management LLC (Cal. App. 2nd Dist., Div. 2, Apr. 11, 2022) 77 Cal.App.5th 276.)
Surgically-Implantable Transvaginal Pelvic Mesh Products.
In 2016, the Attorney General filed an enforcement action against medical device manufacturers on behalf of the People of the State of California. Defendants appeal an adverse judgment following a bench trial. The trial court levied nearly $344 million in civil penalties against defendants for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of defendants’ surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) and 121,844 violations of the False Advertising Law (Bus. & Prof. Code, § 17500 et seq.), and it imposed a $1,250 civil penalty for each violation. Affirming in part and reversing in part, the Court of Appeal stated that “substantial evidence did not support the trial court’s factual finding that Ethicon’s oral marketing communications were likely to deceive doctors, and we amend the judgment to strike the nearly $42 million in civil penalties that were imposed for these communications. We discern no other error and affirm the judgment as modified.” (People v. Johnson & Johnson (Cal. App. 4th Dist., Div. 1, Apr. 11, 2022) 77 Cal.App.5th 295.)
Sanctions in Both Trial and Appellate Court for Frivolous Anti-SLAPP Motion.
This is the first sentence of the appellate opinion: “This appeal illustrates an attorney’s misuse of the anti-SLAPP statute.” The case involved a defendant who would not pay for services rendered by plaintiff; it was nothing more than a breach of contract case. Defendant’s in-house counsel filed an anti-SLAPP motion to strike pursuant to Code of Civil Procedure § 425.16. The trial court denied the motion and awarded plaintiff its attorney fees incurred in opposition. Affirming, the Court of Appeal stated: “We grant respondent’s motion for sanctions for taking a frivolous appeal. We order appellant and his counsel to pay sanctions of $12,798.50 to [respondent] and $8,500 to the clerk of this court.” (Clarity Co. Consulting, LLC v. Gabriel (Cal. App. 2nd Dist., Div. 6, Apr. 12, 2022) 77 Cal.App.5th 454.)
South Korean Company’s Motion to Quash for Lack of Personal Jurisdiction Denied.
Writ proceedings arose out of an action brought by the People of the State of California against several oil and gas firms, alleging their participation in a multiyear conspiracy to manipulate the California gasoline market to the detriment of California consumers. Defendant, a South Korean corporation petitioned for a writ of mandate to compel the trial court to reverse its order denying its motion to quash service of the summons for lack of personal jurisdiction, arguing its limited contacts with California were insufficient to support specific personal jurisdiction. Denying the petition, the Court of Appeal stated: “While SK Trading may not have directly engaged in specific trades on the California spot market, the evidence shows that its officers were directly involved in the formulation of the policies that the complaint alleges constituted an anticompetitive scheme.” (SK Trading International v. Superior Court (Cal. App. 1st. Dist., Div. 4, Apr. 12, 2022) 77 Cal.App.5th 378.)
Poor Medical Care in Jail.
A man in a county jail complained of increasing chest pain and other symptoms. Nitroglycerin had no effect, and jail policy required that paramedics should have been called. They were not. After many hours, the man died due to an aortic rupture. The man’s family sued the doctor and nurses involved in the man’s poor medical care, alleging a violation of the Civil Rights Statute (42 U.S.C. § 1983). The district court denied qualified immunity to the medical providers. On appeal, the Ninth Circuit noted: “In a § 1983 case, we must determine whether the level of medical care was unconstitutional, not whether it was so substandard that it may have cost Russell his life.” The court decided: “Although Nurse Trout is shielded by qualified immunity because her actions did not violate then-existing clearly established law, there is at least a genuine dispute of material fact over whether Dr. Le’s and Nurses Teofilo’s and Lumitap’s conduct violated clearly established law as it then stood. Therefore, we reverse the district court’s denial of qualified immunity to Nurse Trout, and we affirm its denial of qualified immunity to Dr. Le and Nurses Teofilo and Lumitap.” (Russell v. Lumitap (9th Cir., Apr. 13, 2022) 31 F.4th 729.)
Evidence of a Gun Found on a Driver Suppressed.
A district attorney charged a man with possession of a firearm by a felon. The defendant filed a motion to suppress evidence of the gun under Penal Code § 1538.5, arguing the evidence was obtained as the result of an unreasonably prolonged detention and illegal search. At the hearing, the officer who pulled over defendant’s car testified that when he approached the driver’s side door, the window was rolled down and defendant asked if the officer wanted his license, registration, and proof of insurance. There was no smell of marijuana and no contraband in plain view and no signs that defendant was intoxicated. The officer ran a record check and learned defendant had a valid license and was not on probation or parole. The officer asked where defendant was coming from (he said he went to get a burrito), and when he got off probation (he answered, 2018). The officer asked if there was weed in the car, and defendant said he did not smoke weed. The officer asked defendant if he could take a look in the vehicle for contraband, and defendant declined. After defendant declined to consent to a search, the officer asked defendant to get out of his car and put his hands behind his head because the officer was going to issue him a citation for the vehicle lighting infractions. The prosecutor asked whether the officer if he believed “defendant was armed or dangerous at that moment.” The officer responded, “He was wearing baggy clothing. He had [a] hoodie on and jeans. The hoodie naturally has bulges in it, so based upon defendant’s history of weapons, I elected to remove him from the vehicle and pat him down so I can complete the citation.” Defendant did not make any furtive gestures and did not make any sudden movements during the traffic stop, but “he appeared to be getting nervous” when the officer told him he was going to pat him down. The officer acknowledged that he did not describe this justification in his report. As the officer patted defendant’s front waistband area, he felt what he recognized as a handle to a handgun. He lifted the front of defendant’s hoodie and saw a revolver. Defendant was arrested. The officer inspected the revolver, which was loaded with five rounds. The traffic stop occurred in a high-crime area. The trial court granted the motion to suppress. Affirming, the Court of Appeal decided the search could not be justified on Pantoja’s history for weapons simply because he had been arrested for possession of a weapon many years ago. Nor could mere presence in a high-crime area justify a search. The court stated: “In short, we conclude, viewing the evidence in the light most favorable to the trial court’s ruling, Officer Hill’s pat search of defendant was not supported by reasonable suspicion.” (People v. Pantoja (Cal. App. 1st Dist., Div. 2, Apr. 13, 2022) 77 Cal.App.5th 483.)
Plaintiff Alleges Hospital Added a Cover Charge to Her Emergency Room Bill.
Plaintiff sued defendant for a violation of the Consumer Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.) and declaratory relief, alleging the hospital engaged in a deceptive practice when it did not disclose its intent to charge her a substantial emergency room evaluation and management services fee (EMS Fee). In 2018, the five levels of the hospital’s EMS Fees ranged from $773 to $3,206; the fee was added on top of the charges for each individual item of treatment and service provided during the emergency room visit. Plaintiff describes the EMS Fee as a “cover charge,” surcharge for overhead, or visitation fee. The trial court granted the hospital’s motion for judgment on the pleadings. Affirming, the Court of Appeal stated: “Although [plaintiff’s] pleading adequately alleges Hospital failed to disclose facts that were known exclusively by Hospital and were not reasonably accessible to [plaintiff], we conclude [plaintiff’s] conclusory allegation that she relied on the failure to disclose the EMS Fee and thereafter received treatment at the Hospital does not plead the element of reliance with sufficient particularity.” (Torres v. Adventist Health System/West (Cal. App. 5th Dist., Apr. 14, 2022) 77 Cal.App.5th 500.)
Looks Like DMV Hearings and Practices Are About to Change.
The Department of Motor Vehicles (DMV) conducts administrative hearings to determine whether automatic suspension of a driver’s license is warranted after the driver has been arrested for driving under the influence. At these hearings, the DMV mandates that the hearing officers simultaneously act as advocates for the DMV and as triers of fact. The DMV also authorizes its managers to change hearing officers’ decisions, or order the hearing officers to change their decisions, without notice to the driver. Based on these practices, the California DUI Lawyers Association (CDLA) sued the DMV and its director for injunctive and declaratory relief, contending the DMV’s practices violate drivers’ rights to procedural due process under the California and United States Constitutions. The trial court entered judgment in favor of the DMV, but enjoined the DMV from maintaining or implementing a structure allowing managerial interference with hearing officers’ decision-making through “ex parte communications or command control.” The Court of Appeal reversed, ordering the trial court to grant CDLA’s motion for summary judgment on the civil rights claim (42 U.S.C. § 1983) for violating due process rights under the Fourteenth Amendment to the United States Constitution. (California DUI Lawyers Association v. California Department of Motor Vehicles (Cal. App. 2nd Dist., Div. 4, Apr. 15, 2022) 77 Cal.App.5th 517.)
Previously we reported:
“I have as much privacy as a goldfish in a bowl,” Princess Margaret.
Plaintiff is a data analytics company that collects and compiles information. One of the sources for its information is the public profiles on defendant’s professional networking website. Defendant has taken steps to prevent plaintiff from having access to this public information. Plaintiff contends defendant’s actions will put it out of business. A federal district court granted a preliminary injunction in favor of plaintiff, forbidding defendant from denying plaintiff access to publicly available member profiles. Affirming the grant of the preliminary injunction, the Ninth Circuit stated: “Internet companies and the public do have a substantial interest in thwarting denial-of-service attacks and blocking abusive users, identity thieves, and other ill-intentioned actors. . . . Although an injunction preventing a company from securing even the public parts of its website from malicious actors would raise serious concerns, such concerns are not present here.” (HiQ Labs, Inc. v. LinkedIn Corp. (9th Cir., Sept. 9, 2019) 938 F.3d 985.)
In LinkedIn Corp. v. hiQ Labs, Inc, (2021) 141 S. Ct. 2752, the U.S. Supreme Court vacated the judgment and remanded the case for further consideration. The Ninth Circuit once again affirmed the grant of a preliminary injunction enjoining LinkedIn from denying hiQ Labs access to publicly available member profiles, stating: “Internet companies and the public do have a substantial interest in thwarting denial-of-service attacks and blocking abusive users, identity thieves, and other ill-intentioned actors. But we do not view the district court’s injunction as opening the door to such malicious activity.” (hiQ Labs v. LinkedIn Corp. (9th Cir., Apr. 18, 2022) 2022 WL 1132814.)
Forced Labor Allegations.
Plaintiffs are six citizens of Mexico who were recruited to work on an Idaho dairy farm as animal scientists under the TN Visa program for professional employees. But when plaintiffs arrived at the dairy to perform such professional services, they were instead required to work substantially as general laborers. After leaving the dairy’s employ, plaintiffs brought this suit alleging a variety of claims under federal and Idaho law. In particular, plaintiffs alleged that defendants’ bait-and-switch tactics violated applicable federal statutory prohibitions on forced labor by, inter alia, abusing the TN Visa program in order to coerce plaintiffs to provide menial physical labor. The district court granted summary judgment to the dairy. Reversing, the Ninth Circuit stated: “Plaintiffs presented sufficient evidence to establish a forced labor claim under [18 U.S.C.] § 1589(a)(3).” (Martinez-Rodriguz v. Giles (9th Cir., Apr. 18, 2022) 2022 WL 1132809.)
Energy Companies Sued for Causing Injuries and Damages Due to Global Warming . . . and They Have to Defend in State Court.
The County of San Mateo, the County of Marin, and the City of Imperial Beach filed three materially similar complaints in California state court against more than 30 energy companies in July 2017. They alleged the energy companies’ “extraction, refining, and/or formulation of fossil fuel products; their introduction of fossil fuel products into the stream of commerce; their wrongful promotion of their fossil fuel products and concealment of known hazards associated with use of those products; and their failure to pursue less hazardous alternatives available to them; is a substantial factor in causing the increase in global mean temperature and consequent increase in global mean sea surface height.” The public entities further alleged they “have already incurred, and will foreseeably continue to incur, injuries and damages because of sea level rise caused by [the energy companies’] conduct.” After the energy companies removed the cases to federal court, a district court judge remanded the matters back to state court. Affirming the remand order, the Ninth Circuit stated: “We have long held that ‘removal statutes should be construed narrowly in favor of remand to protect the jurisdiction of state courts.’ ” (County of San Mateo v. Chevron Corporation (9th Cir., Apr. 19, 2022) 2022 WL 1151275.)
“Trouble Right Here in River City,” The Music Man by Meredith Wilson.
A former prosecutor sued the Riverside County District Attorney’s office for whistleblower retaliation and disability discrimination after the DA’s office allegedly demoted him and refused to accommodate his medical issues in response to the prosecutor’s raising concerns the DA’s office was prosecuting an innocent man for murder. To understand the issue here, we will call elected district attorneys by #1, #2 and #3–#2 was the DA when plaintiff’s allegations took place. During his deposition, #1 recounted a conversation with #3 in which they shared the view that #2 “was one of the most unethical attorneys they had encountered as prosecutors.” #1 also said that #3 revealed that an unidentified “County lawyer” asked #3 to alter his testimony regarding his views of #2’s ethical character. Plaintiff subpoenaed #3, the current district attorney, for a deposition. The trial court granted the county’s motion to quash the subpoena. Issuing a writ of mandate, the Court of Appeal stated: “We grant the petition as it relates to alleged requests by the unidentified County lawyers that [#3] alter his testimony regarding [#2]’s ethical character.” (Ross v. Superior Court of Riverside County (Cal. App. 4th Dist., Div. 1, Apr. 19, 2022) 2022 WL 1153146.)
Agreement to Arbitrate Unconscionable.
A 26-year-old psychiatric patient who was a recent UCLA engineering graduate was transferred from a hospital to defendant’s facility. His family’s complaint for wrongful death and other causes of action alleged that the patient’s medical chart stated he required 24-hour supervision “at this time;” that the patient told defendants he needed his medication; that the facility’s pharmacy was closed; that the facility did nothing to get the patient his medication; that the facility left the patient alone; and that the patient hung himself from the smoke detector with the string from his sweatpants. The trial court denied the facility’s petition to compel arbitration pursuant to an arbitration agreement signed by the patient upon his admission to the facility. Affirming the denial of arbitration, the Court of Appeal agreed with the trial court that it had the authority to determine preliminary issues of arbitrability and that the agreement was unconscionable. (Nelson v. Dual Diagnosis Treatment Center, Inc. (Cal. App. 4th Dist., Div. 3, Apr. 20, 2022) 2022 WL 1165853.)
City’s Sign Regulation Not Subject to Strict Scrutiny.
Petitioner city’s sign code prohibited the construction of any new off-premises signs, but allowed existing off-premises signs to remain as grandfathered “non-conforming signs.” An owner of a grandfathered off-premises sign was not permitted to digitize the sign, but on-premises signs could be digitalized and changed. Respondents are outdoor-advertising companies that own billboards in the city and sought permits to digitize some of their off-premises billboards. The city denied the applications, and respondents filed suit alleging that the code’s prohibition against digitizing off-premises signs, but not on-premises signs, violated the Free Speech Clause of the First Amendment. A district court judge entered judgment for the city. The Fifth Circuit reversed. Reversing the judgment of the appeals court, the U.S. Supreme Court stated: “The question presented is whether, under this Court’s precedents interpreting the Free Speech Clause of the First Amendment, the City’s regulation is subject to strict scrutiny. We hold that it is not.” (City of Austin, Texas v. Reagan National Advertising of Austin, LLC (U.S., Apr. 21, 2022) 2022 WL 1177494.)
Rue Saint-Honoré in the Afternoon, Effect of Rain, a Painting by Camille Pissarro.
The agent of painter Camille Pissarro sold the painting in 1900 to Paul Cassirer, a member of a prominent German Jewish family that owned an art gallery and publishing house. Some quarter-century later, Lilly Cassirer inherited the painting and displayed it in her Berlin home. But in 1933, the Nazis came to power. After years of intensifying persecution of German Jews, Lilly decided in 1939 that she had to do anything necessary to escape the country. To obtain an exit visa to England, where her grandson Claude Cassirer had already relocated, she surrendered the painting to the Nazis. Lilly and Claude ended up in the United States. After the war, they could not locate the painting, so in 1958, Lilly agreed to accept compensation from the German Federal Republic for an amount worth about $250,000 in today’s dollars. Over the years, the painting was bought and sold a few times; the last time to an entity controlled by the Kingdom of Spain for over $300 million. It is now part of a collection in a Madrid palace. The underlying question in this case is whether the Cassirer family can get the painting back, but the question before the U. S. Supreme Court involved choice of law. Under the Foreign Sovereign Immunities Act of 1976 (28 U. S. C. §1602 et seq.), a foreign state or instrumentality is amenable in specified circumstances to suit in an American court. Claude brought such a suit to recover the painting. The U.S. Supreme Court held: “The question presented is what choice-of-law rule the court should use to determine the applicable substantive law. The answer is: whatever choice-of-law rule the court would use if the defendant were not a foreign-state actor, but instead a private party. Here, that means applying the forum State’s choice-of-law rule, not a rule deriving from federal common law.” (Cassirer v. Thyssen-Bornemisza Collection Foundation (U.S., Apr. 21, 2022) 2022 WL 1177497.)
Puerto Ricans Not Entitled to Supplemental Security Income Benefits.
The question presented to the U.S. Supreme Court in this case was whether the equal-protection component of the Fifth Amendment’s Due Process Clause requires Congress to make Supplemental Security Income benefits available to residents of Puerto Rico to the same extent that Congress makes those benefits available to residents of the States. The high court held: “In light of the text of the Constitution, longstanding historical practice, and this Court’s precedents, the answer is no.” The court explained: “The United States includes five Territories: American Samoa, Guam, the Northern Mariana Islands, the U. S. Virgin Islands, and Puerto Rico. This case involves Puerto Rico, which became a U. S. Territory in 1898 in the wake of the Spanish-American War. For various historical and policy reasons, including local autonomy, Congress has not required residents of Puerto Rico to pay most federal income, gift, estate, and excise taxes. Congress has likewise not extended certain federal benefits programs to residents of Puerto Rico.”(United States v. Madero (U.S., Apr. 21, 2022) 2022 WL 1177499.)
The Madrid Protocol.
A key feature of the Madrid Protocol, as implemented by amendments contained in Title XII of the Lanham Act (15 U.S.C. § 1051 et seq.) , is that applicants with trademark protection in other countries may obtain an “extension of protection” in the U.S.—which is generally equivalent to a trademark registration—without first having used the mark in commerce in the United States. In 2011, Lodestar Anstalt obtained an extension of protection for its Liechtenstein-registered trademark in the use of the word “Untamed” in connection with whiskey, rum, and other distilled spirits. After Bacardi U.S.A., Inc. began an advertising campaign in November 2013 using the phrase “Bacardi Untameable” to promote its rum products, Lodestar brought this trademark infringement suit against Bacardi U.S.A., Inc. and two of its affiliates. A district court entered summary judgment against Lodestar. Affirming, the Ninth Circuit stated: “[T]he parties vigorously dispute whether Lodestar used its ‘Untamed’ mark in commerce in the U.S. before Bacardi’s campaign, but we find it unnecessary to decide that issue. Even assuming that Lodestar’s first use of its mark in U.S. commerce occurred after Bacardi’s campaign began, we conclude that, under the distinctive regime established for the Madrid Protocol, Lodestar’s subsequent bona fide use of its registered mark on certain rum products gave rise to a priority of right that it could seek to enforce in an action under the Lanham Act. But Lodestar is still required to satisfy the basic elements of an action for trademark infringement, including a showing that Bacardi’s campaign involved a likelihood of confusion with Lodestar’s bona fide use of its registered mark in commerce. Because Lodestar failed to make that showing, we affirm the district court’s grant of summary judgment.” (Lodestar Anstalt v. Bacardi & Company Limited (9th Cir., Apr. 21, 2022) 2022 WL 1180767.)
One of the Many Legal Issues Resulting from the Pandemic.
During the pandemic, after a health order allowing certain essential industries to reopen, plaintiff went back to work at a construction company. According to plaintiff, defendant employer knowingly transferred workers from an infected construction site to plaintiff’s jobsite without following the safety procedures required by the order. Plaintiff was forced to work in close contact with these employees and soon developed COVID-19, which he brought back home. Plaintiff’s wife was over 65 years old and was at high risk from COVID-19 due to her age and health. She tested positive and developed severe respiratory symptoms. She was hospitalized for more than a month and was kept alive on a respirator. Both husband and wife filed suit alleging the wife’s injuries were caused by defendant’s violation of the order. The Ninth Circuit stayed the action and, pursuant to Rule 8.548(b)(2) of the California Rules of Court, certified two questions to the California Supreme Court: 1. If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer? 2. Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19? (Kuciemba v. Victory Woodworks, Inc. (9th Cir., Apr. 21, 2022) 2022 WL 1180878.)
Another of the Many Legal Issues Resulting from the Pandemic.
An iconic Hollywood restaurant had a business interruption insurance policy issued by defendant insurance company. Due to COVID-19 and notices from the governor, the mayor of Los Angeles, and several public health agencies, the restaurant was ordered to close in March 2020, resulting in the loss of all its business. The restaurant filed a claim for its losses and the insurance company denied it. The insurance company’s demurrer was sustained without leave to amend. The question on appeal was whether the insuring clause’s requirement of “direct physical loss of or damage to [the insured] property” could reasonably be construed to cover the closure resulting from the pandemic. Affirming dismissal of the case, the Court of Appeal stated: “Under California law, a business interruption policy that covers physical loss and damages does not provide coverage for losses incurred by reason of the COVID-19 pandemic.” (Musso & Frank Grill Co., Inc. v. Mitsui Sumitomo Insurance USA Inc. (Cal. App. 2nd Dist., Div. 1, Apr. 21, 2022) 2022 WL 1182918.)
Still Another of the Many Legal Issues Resulting from the Pandemic.
Plaintiff is a large talent agency that represents actors, directors, producers, recording artists, writers, and other professionals in industries such as film, television, music, digital media, and publishing. It purchased property insurance policies from defendants insurance companies that covered plaintiff’s premises in several states, including California, New York, Tennessee, and Florida. The policies included “business income and extra expense” provisions and a “civil authority” provision. The business income and extra expense provisions addressed business income loss and extra expenses incurred due to “impairment of . . . operations,” if the impairment was “caused by or result[ed] from direct physical loss or damage by a covered peril to property.” The “direct physical loss or damage must . . . occur at, or within 1,000 feet of” a covered premises. The provisions covered losses “during the period of restoration,” defined as beginning “immediately after the time of direct physical loss or damage by a covered peril to property,” and continuing until “operations are restored,” including “the time required to . . . repair or replace the property.” Plaintiff sued defendants, asserting the policies covered its losses under two theories: first, loss of use of its properties due to civil closure orders and other limitations imposed to slow the spread of the virus, such as cancelled events and productions; and second, “damage” to its properties caused by the alleged presence of the virus in the air and on surfaces. The trial court sustained the insurers’ demurrer without leave to amend. Affirming, the Court of Appeal stated: “We find that UTA has failed to allege facts sufficient to demonstrate direct physical loss or damage under either theory, and therefore affirm.” (United Talent Agency v. Vigilant Insurance Company (Cal. App. 2nd Dist., Div. 4, Apr. 22, 2022) 2022 WL 1198011.)
Where Have All the Statesmen Gone?
After minority party state senators in Oregon walked out of the state senate to prevent a quorum, members of the majority party threatened to send the state police to arrest them and return them to the capitol. One minority party senator, the plaintiff here, made two statements, one on the floor of the senate, and the other to a reporter in the state capitol building, stating he would resist any such attempt to arrest him. In response, majority party members ordered him not to enter the state capitol without giving them a 12-hour advance notice. Plaintiff brought this action against three defendants who are also state senators, on the ground that the order impermissibly retaliated against him for engaging in speech protected by the First Amendment. The district court dismissed the action. Reversing, the Ninth Circuit stated: “We conclude that the district court erred in dismissing Boquist’s First Amendment retaliation claim for failure to state a claim because Boquist adequately alleged that he engaged in constitutionally protected speech and was subject to a retaliatory adverse action on account of that speech. The senate majority members, however, will have an opportunity to raise affirmative defenses, including that their actions were motivated by legitimate security concerns.” (Boquist v. Courtney (9th Cir., Apr. 21, 2022) 2022 WL 1180876.)
Current Social Security Regulations Do Not Require the ALJ to Provide Specific and Legitimate Reasons for Rejecting an Examining Doctor’s Opinion.
A woman’s Social Security claim for physical and mental impairments was denied by an administrative law judge (ALJ). The ALJ rejected the opinion of a psychologist who examined the claimant and assessed her ability to work. The doctor reported “marked and extreme limitations in a number of areas of understanding, remembering or applying information, interacting with others, concentrating, persisting and maintaining pace, and adaptation.” The ALJ concluded that the claimant had the residual functional capacity to perform “light work” with minor limitations. Based on this finding, the ALJ found that the claimant could perform her past relevant work as a cosmetologist and hairstylist. The district court affirmed the agency’s denial of benefits. Reviewing the denial of Social Security benefits de novo, the Ninth Circuit noted that recent regulation changes displaced longstanding case law requiring an ALJ to provide “specific and legitimate” reasons for rejecting an examining doctor’s opinion. The appeals court then affirmed the denial of benefits, stating: “Woods does not identify any particular evidence that the ALJ failed to consider or explain why the record does not support the ALJ’s findings regarding her mental functioning.” (Woods v. Kijakazi (9th Cir., Apr. 22, 2022) 2022 WL 1195334.)
Slip and Fall at Costco, and Duty of Food Sample Vendor.
Plaintiff was injured when she slipped and fell at Costco on what she thought was liquid soap. She sued Costco and Club Demonstration Services (CDS), an independent contractor that operated food sample tables within the store. The trial court granted a motion for summary judgment filed by CDS, concluding that the company owed plaintiff no duty of care because CDS’s contract with Costco limited its maintenance obligations to a 12-foot perimeter around each sample table, and that plaintiff’s fall occurred outside that boundary. Reversing, the Court of Appeal stated: “While the CDS-Costco agreement may allocate responsibility and liability as a matter of contract between those parties, it does not limit the scope of CDS’s common law duty to customers. Although CDS protests that this outcome would impose an unreasonable duty covering the entire Costco warehouse, its argument conflates the legal question of duty and the (generally) factual question of whether that duty was breached. Despite having a duty of ordinary care, CDS would have no liability so long as its conduct was reasonable under the circumstances, which include the distance between CDS personnel and the hazard.” (Hassaine v. Club Demonstration Services, Inc. (Cal. App. 4th Dist., Div. 1, Apr. 22, 2022) 2022 WL 1195331.)
Too Late to Request Punitive Damages in Med Mal Case.
While in mammoplasty surgery, a woman went into cardiopulmonary arrest. She remained intubated and unresponsive until her death six weeks later. Her husband and minor children filed a complaint for damages. In the intentional misrepresentation and promissory fraud counts of the complaint, plaintiffs alleged that defendants had acted with “malice, oppression, and/or fraud” and with intent to harm or conscious disregard of probable harm, but neither those counts nor the prayer for relief mentioned punitive damages. In the family’s response to defendants’ request for a statement of damages, punitive damages were not mentioned. Then, with the trial date approaching, plaintiffs moved to amend the complaint in several ways, including a request for punitive damages. The trial court granted leave to amend. In granting extraordinary relief in a writ of mandate, the Court of Appeal stated: “The evidence of the misconduct of the surgeon and the employees of his clinic that the survivors submitted with their motion for leave to amend, if believed by the trier of fact, might well support an award of punitive damages. Nevertheless, because the survivors did not move to amend within the time mandated by statute (Code of Civil Procedure § 425.13), we grant the requested relief.” (Divino Plastic Surgery, Inc. v. Superior Court (Cal. App. 4th Dist., Div. 1, Apr. 22, 2022) 2022 WL 1197962.)
It’s Not What Plaintiff Should Have Known; It’s What Plaintiff Knew.
Code of Civil Procedure § 474 allows a plaintiff who is ignorant of a defendant’s identity to commence suit—before the statute of limitations runs—by using a fictitious name for that defendant and then amending her complaint when the defendant’s true name is discovered. Plaintiffs sued a Doe and substituted defendant for the Doe more than a year after an alleged wrongful death. The trial court granted defendant’s motion for summary judgment because plaintiffs knew or should have known facts establishing a cause of action against defendant when they first filed the complaint. Reversing, the Court of Appeal stated: “Compliance with section 474 is determined by the facts that a plaintiff actually knew at the time she filed the complaint, not the facts she should have known.” (Hahn v. New York Brake LLC (Cal. App. 1st Dist., Div. 5, Apr. 25, 2022) 2022 WL 1210643.)
Antitrust Action Against Entrenched Realtors to Continue in Trial Court.
Some sellers of real estate prefer not to have their personal information widely available, so they avoid multiple listing services. Thus, plaintiff launched a company whereby real estate was sold as “pocket listings,” meaning information about the property for sale was not made widely available. Plaintiff alleged entrenched competitors in the real estate market conspired to take anticompetitive measures to prevent it from gaining a foothold in the market. The district court dismissed the complaint, finding it inadequately pled antitrust injury. Reversing, the Ninth Circuit stated: “We hold that PLS adequately alleged a violation of the Sherman Act and antitrust injury.” (PLS.com, LLC v. National Association of Realtors (9th Cir., Apr. 26, 2022) 2022 WL 1218792.)
Defendant Had Valid Good Faith Defense that Plaintiff Was Not an Employee.
Plaintiff modeled in several Walmart photo shoots and claimed that Walmart owed her penalties pursuant to California Labor Code § 203 because it failed to pay her immediately after each shoot. In the district court, Walmart contended that no penalties were owed because plaintiff was an independent contractor rather than a Walmart employee. Alternatively, Walmart argued that no penalties were owed because there was a good-faith dispute as to plaintiff’s employment status. The trial court concluded that disputes of material fact prevented it from deciding whether plaintiff had performed her work as an employee but granted summary judgment to Walmart based on its good faith defense. Affirming, the Ninth Circuit stated: “It is undisputed that Hill modeled for Walmart for a total of fifteen days over the course of a year, and that she performed her services as a freelancer in sporadic one-or two-day increments. Along with other indicators that Hill was an independent contractor, the limited and irregular nature of her work made it reasonable for Walmart to believe that Hill was not an employee, and, as a result, that she was not entitled to immediate payment at the conclusion of each photo shoot. That is enough for Walmart’s good-faith defense to succeed.” (Hill v. Walmart Inc. (9th Cir., Apr. 26, 2022) 2022 WL 1218776.)
Department of Transportation Must Produce Information About Prior Accidents in the Same Location Where a Man Was Killed.
A man was killed when a driver approaching from the opposite direction failed to keep in her lane while going around a curve. Plaintiffs, the wife and children of decedent, sought information about prior accidents in the same location and the trial court granted plaintiffs’ request. The trial court concluded that accident reports prepared by peace officers are not confidential under Vehicle Code § 20014, and, therefore, the confidentiality provisions of Vehicle Code § 20012 did not apply. The Department of Transportation sought extraordinary relief. Denying the state’s petition for writ of mandate, the Court of Appeal stated: “The State shall reveal the information the Plaintiffs/real parties in interest seek.” (State of California ex rel. Department of Transportation v. Superior Court of Ventura County (Cal. App. 2nd Dist., Div. 6, Apr. 26, 2022) 2022 WL 1222247.)
Prosecutor’s Duty of Neutrality when Hiring Private Law Firms.
A city sued Experian Data for unfair competition, alleging violation of Business and Professions Code § 17200 et seq. Pursuant to contingency fee agreements, the city hired three private law firms to represent it in the litigation. The trial court denied Experian’s motion to disqualify the private law firms. Affirming, the Court of Appeal held the city did not violate a prosecutor’s duty of neutrality and that the agreements to pay the private law firms from any penalties recovered from Experian do not violate § 17206’s requirement that all funds recovered in a UCL action are to be paid to the City Treasurer. (People ex rel. City of San Diego v. Experian Data Corp. (Cal. App. 4th Dist., Div. 3, Apr. 26, 2022) 2022 WL 1222870.)
Yahoo and Facebook Did Not Act as Government Agents in Criminal Child Sexual Exploitation Case.
A criminal defendant was arrested returning from the Philippines, where he engaged in sex tourism involving minors. He arranged these illegal activities through online messaging services provided by Yahoo and Facebook. His participation was initially discovered after Yahoo investigated numerous user accounts that it suspected were involved in child sexual exploitation. Following a jury trial, defendant was convicted on one count of attempted sexual exploitation of a child (18 U.S.C. § 2251(c)), and one count of possession of sexually explicit images of children (18 U.S.C. § 2252(a)(4)(B)). On appeal, defendant argued that the evidence seized from his electronic devices upon his arrest should have been suppressed because, among other reasons, Yahoo and Facebook (which also searched his accounts on its platform) were government actors when they investigated his accounts without a warrant and reported the evidence of child sexual exploitation to the National Center for Missing and Exploited Children, in violation of defendant’s Fourth Amendment rights. He further argued that the district court improperly instructed the jury on the required mental state for his sexual exploitation charge and miscalculated the sentence on his possession charge. Affirming the judgment, the Ninth Circuit rejected defendant’s argument that the electronic service providers acted as government agents and concluded the jury was properly instructed. (United States v. Rosenow (9th Cir., Apr. 27, 2022) 2022 WL 1233236.)
Forum Non Conveniens.
Plaintiff brought a shareholder action against defendant and the trial court stayed the action pursuant to the doctrine of forum non conveniens (Code Civ. Proc., § 410.30). On appeal, plaintiff contended the trial court erred by enforcing a forum selection clause in defendant’s corporate charter that required plaintiff to pursue his claims in Delaware. Affirming the stay order, the Court of Appeal stated: “Considering first the class and derivative claims Grove brings, we disagree that it was unreasonable to enforce this forum selection clause. Considering next Grove’s claim to inspect the company’s books and records, we conclude this dispute has already been adjudicated in the Delaware Court of Chancery, whose decision is entitled to full faith and credit here.” (Grove v. Juul Labs, Inc. (Cal. App. 1st Dist., Div. 1., Apr. 27, 2022) 2022 WL 1237219.)
Provision in Defendant’s Certificate of Incorporation Effectively Stripped State Court of Jurisdiction.
A stockholder sued defendant in California state court alleging that the company’s offering documents contained materially false and misleading statements in violation of the Securities Act of 1933 (15 U.S.C. § 77a et seq.). Although the act generally allows a plaintiff to choose whether to file suit in state or federal court, and bars the removal to federal court of a suit filed in state court, a “federal forum provision” (FFP) in defendant’s certificate of incorporation states claims under the act must be brought in federal court unless defendant consents to a different forum. So, defendant promptly moved to dismiss plaintiff’s complaint, arguing that because of the FFP, the case could be brought only in federal court as defendant had not consented to state court jurisdiction. The trial court declined jurisdiction on the basis of the FFP, and entered a judgment of dismissal without prejudice for defendant. Affirming, the Court of Appeal stated: “If, as the Supreme Court held in Rodriguez [de Quijas v. Shearson/American Express, Inc. (1989) 490 U.S. 477], ‘resort to the arbitration process does not inherently undermine any of the substantive rights afforded’ by the 1933 Act (Rodriguez, supra, 490 U.S. at p. 486, 109 S.Ct. 1917), which authorizes concurrent jurisdiction in state and federal courts, we cannot discern how resort to a federal court could undermine any of those rights.” (Wong v. Restoration Robotics, Inc. (Cal. App. 1st Dist., Div. 2, Apr. 28, 2022) 2022 WL 1261423.)
Emotional Distress Damages Are Not Recoverable Under Two Federal Antidiscrimination Statutes.
A deaf and legally blind woman who primarily communicates in American Sign Language (ASL) sought treatment at defendant’s physical therapy facility. She requested that defendant provide an ASL interpreter at her appointments. Defendant declined to do so, telling the woman she would have to communicate with the therapist by using written notes, lip reading, or gesturing. The woman sued the facility, alleging violation of the Rehabilitation Act of 1973 (29 U. S. C. §794(a)), and the Patient Affordable Care Act (42 U. S. C. §18116). The facility is subject to these statutes because it receives federal financial assistance and because it receives reimbursement through Medicare and Medicaid. The district court dismissed the complaint, concluding damages for emotional harm were not recoverable in private actions brought under those statutes. The Fifth Circuit affirmed. The U.S. Supreme Court granted certiorari. The high court noted that Congress has passed a number of statutes prohibiting recipients of federal financial assistance from discriminating based on certain protected characteristics and that in the past the Supreme Court has held that private plaintiffs may secure injunctive or monetary relief in suits brought under Spending Clause antidiscrimination statutes. The high court held that emotional distress damages in a private action are not recoverable under the Rehabilitation Act of 1973 or the Affordable Care Act. (Cummings v. Premier Rehab Keller, P.L.L.C. (U.S., Apr. 28, 2022) 2022 WL 1243658.)
Under Maritime Law, Statute of Limitations for Wrongful Death Begins to Accrue on the Date of Death.
Decedent worked as a marine machinist from 1974 until 1981. In 2015, he was diagnosed with mesothelioma and died a few months later. Plaintiff’s widow filed suit in 2018, more than three years after decedent’s diagnosis. The district court dismissed the case because under maritime law, the statute of limitations was three years (46 U.S.C. § 30106). Reversing, the Ninth Circuit stated: “We reverse and remand to the district court for its reconsideration of Sherri Deem’s claims in light of our holding that the statute of limitations for her claim began to accrue on the date of Thomas Deem’s alleged wrongful death, and not before that death.” (Deem v. William Powell Company (9th Cir., Apr. 29, 2022) 2022 WL 1279046.)