Litigation

LITIGATION UPDATE: MAY 2024

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A monthly publication of the Litigation Section of the California Lawyers Association.

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Colin P. Cronin, Jenn French, Jennifer Hansen, Ryan Wu
Superior Court Lacked Jurisdiction to Dismiss Matter Sent to Arbitration.

In a dispute over money, with allegations of fraud, defendants successfully compelled the matter into arbitration in July 2021. After the plaintiffs failed to initiate arbitration proceedings, in February 2023 the court set a hearing on an order to show cause re: dismissal for failure to prosecute. The court subsequently dismissed plaintiffs’ claims against defendants without prejudice. Reversing, the Court of Appeal stated: “Once the court granted the Petrosian defendants’ motion to compel arbitration and stayed the action, it retained only vestigial jurisdiction over the case as provided in the California Arbitration Act (Code Civ. Proc., § 1281 et seq.), and the court did not have the power to dismiss the claims for failure to prosecute. If a party fails to diligently prosecute an arbitration, the appropriate remedy is for the opposing party to seek relief in the arbitration proceeding (and, if necessary, the opposing party may need to initiate the arbitration for this purpose).” (Lew-Williams v. Petrosian (Cal. App. 2nd Dist., Div. 7, Apr. 2, 2024) 101 Cal.App.5th 97.)

https://www.courts.ca.gov/opinions/documents/B330387.PDF

No Arbitration in Wage and Hour Action.

Plaintiff and defendant employer entered into an arbitration agreement when plaintiff’s employment began. A few years later, plaintiff quit. Four months after that, the parties negotiated a new employment contract and plaintiff returned to work for defendant. But this time, arbitration was not part of the parties’ negotiations. After that second stint of employment ended, plaintiff filed a class action complaint alleging defendant failed to provide adequate wage statements in violation of the Labor Code. Defendant’s motion to compel arbitration was denied by the trial judge since all her claims arose from the second stint of employment. Affirming, the Court of Appeal stated: “An employer and employee can agree to arbitrate claims related to their employment relationship. But termination of that relationship can revoke the arbitration agreement. And when there is no evidence that the parties agreed to arbitrate claims arising from a subsequent employment relationship, any claims arising solely from that subsequent relationship are not subject to arbitration.” (Vazquez v. Sanisure, Inc. (Cal. App. 2nd Dist., Div. 6, Apr. 3, 2024) 101 Cal.App.5th 139.)

https://www.courts.ca.gov/opinions/documents/B329219.PDF

Plaintiff Failed to Show Hotel Had Notice of Broken Shower Head.

While plaintiff was taking a shower in a hotel, the handheld shower head fell apart. She was injured when she cut herself and fell. She sued the hotel for negligence and premises liability. The trial court granted summary judgment for defendant. Affirming, the Court of Appeal stated: “We affirm because Howard failed to mount a triable issue of material fact on the key issue of notice and failed to establish the applicability of a venerable but inapt doctrine—res ipsa loquitur.” (Howard v. Accor Management US, Inc. (Cal. App. 2nd Dist., Div. 8, Apr. 3, 2024) 101 Cal.App.5th 130.)

https://www.courts.ca.gov/opinions/documents/B320603.PDF

Driver’s Due Process Was Violated When DMV Hearing Officer Was Not Impartial. 

A hearing officer for Department of Motor Vehicles (DMV) concluded that plaintiff had driven his car with a blood-alcohol content (BAC) of 0.08 percent or greater. Plaintiff challenged the hearing officer’s decision through a writ of mandate in the superior court. The trial court denied the writ of mandate and sustained the suspension. On appeal, plaintiff argued in part that his state and federal due process rights were violated because the hearing officer who conducted the hearing was not constitutionally impartial. Reversing and remanding for a new hearing, the Court of Appeal stated: “[W]e conclude that to resolve such a challenge, it is first necessary to determine whether a particular driver’s due process right to an impartial adjudicator was violated. Consistent with [California DUI Lawyers Association v. DMV (2022) 77 Cal.App.5th 517, 532-533], that determination is made by assessing the administrative record and the revocation decision to see if the public hearing officer actually acted as both an adjudicator and an advocate, or merely acted as an adjudicator and a collector and developer of evidence. If the relevant documents demonstrate that the public hearing officer did not act as an advocate, then the driver’s due process right to an impartial adjudicator was not violated, and the constitutional issue is resolved. If the relevant documents demonstrate that a public hearing officer actually acted as an advocate, then the driver’s due process right to an impartial adjudicator is violated. In the latter circumstance, because we conclude that a violation of the due process right to an impartial adjudicator is a structural error, then the driver is entitled to a new APS hearing before a constitutionally impartial adjudicator. [¶] Here, we conclude that the public hearing officer acted as both an adjudicator and an advocate, which entitles Knudsen to a new APS hearing.” (Knudsen v. Department of Motor Vehicles (Cal. App. 5th Dist., Apr. 4, 2024) 101 Cal.App.5th 186.) 

https://www.courts.ca.gov/opinions/documents/F085992.PDF

Admission of Electronic Recording Made Without the Consent or Knowledge of the Person Recorded. 

The trial court issued a domestic violence restraining order against a husband/father. During the hearing, the trial court admitted three audio recordings, which the restrained party did not realize were being made. In the recordings, he was screaming, yelling, and berating the mother of his three-year old twins in the twins’ presence. On appeal, the restrained party contended that Penal Code § 632 prohibits the intentional electronic recording of a confidential communication without the consent or knowledge of all parties to a conversation, and that Family Code § 2022 states that evidence collected in violation of the Penal Code is inadmissible. Affirming, the Court of Appeal discussed Penal Code § 633.5, which permits nonconsensual recordings evidencing abuse when an individual is charged with domestic violence. (Br. C. v. Be. C. (Cal. App. 3rd Dist., Apr. 5, 2024) 101 Cal.App.5th 259.) 

https://www.courts.ca.gov/opinions/documents/C097015.PDF

Attorney Fee Award in Case Involving Gender Affirming Medical Care for a Prisoner.

Plaintiff filed this action while incarcerated at an Idaho prison in 2017, alleging violations of the Eighth Amendment, the Fourteenth Amendment’s Equal Protection Clause, the Affordable Care Act (ACA), the Americans with Disabilities Act (ADA), and negligence under Idaho law. Plaintiff sought an injunctive order requiring defendants to provide gender-affirming medical care, including gender-confirmation surgery, hormone treatment, and gender-appropriate clothing and personal items. The motion also sought to prohibit the prison and its officials from implementing the prison’s gender dysphoria policy and from retaliating against plaintiff because of her gender identity. The district court granted the injunction and ordered defendants to “provide Edmo with adequate medical care, including gender-confirmation surgery.” The lower court awarded plaintiff $2,586,048.80 for attorney fees. The actual attorney fee was multiplied by 1.7 to 2.0 respectively for local and out-of-state counsel. Defendants appealed the award of attorney fees. The Ninth Circuit held that plaintiff was entitled under 42 U.S.C. § 1988 to fees incurred litigating her successful Eighth Amendment claim and agreed with the lower court that plaintiff’s counsel achieved excellent results in what may properly be viewed as a landmark case, but remanded for recalculation of the fees. (Edmo v. Corizon, Inc. (9th Cir., Apr. 5, 2024) 97 F.4th 1165.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/05/22-35876.pdf

Damages Awarded Included Those Incurred After Date of Breach of Contract. 

When plaintiff was first hired by defendant in 2015, he accepted less cash compensation in exchange for stock options. Defendant terminated him in 2018. When defendant had an initial public offering in 2020, plaintiff was not able to realize his expected profit because he lost his stock options when he lost his job. He sued for breach of contract. A jury found that defendant breached its contracts with plaintiff and awarded plaintiff over $11.5 million in damages for the lost options. The trial court, however, conditioned the denial of defendant’s new trial motion on plaintiff’s acceptance of a remittitur in the amount of $4,358,358. After plaintiff accepted the remittitur, the court entered judgment for Shah in that amount. Both parties appealed. The Court of Appeal reversed the amended judgment with directions to enter a new judgment in the amount of $6,694,000, and stating: “In the portions of our opinion certified for publication, we hold that: (1) under both California and Delaware law, Shah’s damages were properly measured after the date of breach, following the IPO; (2) the operative pleading gave Skillz adequate notice that Shah sought damages for the loss of the performance stock options he was granted in late 2016; and (3) stock options are not wages under the Labor Code.” (Shah v. Skillz Inc. (Cal. App. 1st Dist., Div. 5, Apr. 8, 2024) 101 Cal.App.5th 285.)

https://www.courts.ca.gov/opinions/documents/A165372.PDF

Transportation Worker Exemption to Federal Arbitration Act Found Not to Apply to Business Entities or Commercial Contracts.

After a dispute arose between Amazon and the delivery service partners (DSPs) with whom it contracts to provide local delivery services, three DSPs sued Amazon on behalf of all current and former DSPs, seeking damages and injunctive relief. Amazon moved to compel arbitration and the district court ordered the matter into arbitration. Affirming, the Ninth Circuit stated: “Section 1 of the [Federal Arbitration Act (9 U.S.C. § 1)]—the transportation worker exemption—does not extend to business entities or to commercial contracts.” (Fli-Lo Falcon, LLC v. Amazon.com, Inc. (9th Cir., Apr. 10, 2024) 97 F.4th 1190.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/10/22-35818.pdf

Removal to Federal Court Ineffective.

The forum defendant rule, contained in 28 U.S.C. § 1441(b)(2), prohibits removal based on diversity jurisdiction “if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Violation of the forum defendant rule is considered a non-jurisdictional defect, which is waived if a plaintiff does not seek remand on that basis within 30 days of removal. The lone defendant in three actions consolidated on appeal is undisputedly a citizen of California. It removed these cases to federal court based on diversity jurisdiction. (28 U.S.C. § 1332(a), (c)(1).) Both the district court and the Ninth Circuit concluded that defendant’s removals were ineffectual. The appeals court stated: “These were attempts to remove cases that did not yet exist as civil actions pending in state court, and thus Dexcom’s initial notices of removal were legal nullities that did not start the 30-day remand clock under § 1447(c). . . . Because the district court had the power under § 1447(c) to order remand based on the forum defendant rule, 28 U.S.C. § 1447(d) requires that we dismiss these appeals for lack of jurisdiction.” (Casola v. Dexcom, Inc. (9th Cir., Apr. 10, 2024) 98 F.4th 947.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/10/23-55403.pdf

Plaintiff May Proceed with Class Action Under ERISA.

Plaintiff brought a putative class action under the Employee Retirement Income Security Act of 1974 (29 U.S.C. § 18; ERISA) against UnitedHealth Group, Inc., and its subsidiaries, alleging defendants apply a more stringent review process to benefits claims for outpatient, out-of-network mental health and substance use disorder (MH/SUD) treatment than to otherwise comparable medical/surgical treatment. Plaintiff contended defendants’ procedures violate the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (29 U.S.C. § 1185a; Parity Act), in the process also breaching its fiduciary duty and violating the terms of his plan. The district court dismissed the action, concluding the claims were insufficient as a matter of law. Reversing, the Ninth Circuit stated: “We conclude that Ryan S. adequately stated a claim for a violation of the Parity Act. . . . [He] alleges . . . that UnitedHealthcare applied a more restrictive review process to his outpatient, out-of-network MH/SUD claims.” (Ryan S. v. UnitedHealth Grp., Inc. (9th Cir., Apr. 11, 2024) 98 F.4th 965.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/11/22-55761.pdf

No Requirement that Worker Must Work for a Company in the Transportation Industry to Be Exempt Under § 1 of the FAA. 

Plaintiffs worked as distributors and commercial truck drivers of baked goods, such as Wonder Bread, and sued defendant in federal court in Connecticut for violating state and federal wage laws. Defendant moved to compel arbitration. When the case reached the U.S. Supreme Court, the question presented was whether the exemption from coverage under the Federal Arbitration Act (9 U. S. C. §1; FAA) for any “class of workers engaged in foreign or interstate commerce” is limited to workers whose employers are in the transportation industry. The nation’s highest court held: “The only question before us is whether a transportation worker must work for a company in the transportation industry to be exempt under § 1 of the FAA. We conclude that there is no such requirement.” (Bissonnette v. LePage Bakeries Park St., LLC (U.S., Apr. 12, 2024) 601 U.S. 246.)

https://www.supremecourt.gov/opinions/23pdf/601us2r12_7648.pdf

Failure to Disclose Information Required by Item 303 Cannot Support a Private Action Under SEC Rule 10b-5(b). 

The crux of plaintiff’s allegations in its action against defendant for violation of Securities and Exchange Commission (SEC) Rules, rule 10b-5(b) was that defendant’s public statements were false and misleading because it concealed from investors that its subsidiary’s single largest product faced a ban on the bulk of its worldwide use due to a 2016 regulation adopted by the United Nations’ International Maritime Organization (IMO). The question presented to the U.S. Supreme Court was whether the failure to disclose that information in its periodic filings with the SEC, as required by item 303 of SEC Regulations, regulation S-K, can support a private action under rule 10b–5(b), even if the failure does not render any “statements made” misleading. The nation’s highest court held that failure to disclose information required by Item 303 cannot support a private action under rule 10b-5(b). (Macquarie Infrastructure Corp. v. MOAB Partners, L.P. (U.S., Apr. 12, 2024) 601 U.S. 257.)

https://www.supremecourt.gov/opinions/23pdf/601us2r13_8mjp.pdf

County’s “Exaction” of Money in Exchange for a Building Permit Held Unconstitutional.

To address traffic congestion, El Dorado County’s General Plan requires developers to pay a traffic impact fee as a condition of receiving a building permit. Plaintiff wanted to build a small, prefabricated home on his residential parcel of land. To obtain a permit, he had to pay a substantial fee to mitigate local traffic congestion. Plaintiff challenged the fee as an unlawful “exaction” of money under the takings clause. The California Court of Appeal rejected that argument because the traffic impact fee was imposed by legislation, and, according to the court, Nollan v. California Coastal Commission (1987) 483 U. S. 825, and Dolan v. City of Tigard (1994) 512 U. S. 374, apply only to permit conditions imposed on an ad hoc basis by administrators. Holding for plaintiff, the U.S. Supreme Court stated: “That is incorrect. The Takings Clause does not distinguish between legislative and administrative permit conditions.” (Sheetz v. County of El Dorado, California (U.S., Apr. 12, 2024) 144 S.Ct. 893.)

https://www.supremecourt.gov/opinions/23pdf/22-1074_bqmd.pdf

Prosecution Used 13 of Its 15 Peremptory Challenges to Excuse Women from Criminal Jury.

A criminal defendant was found guilty of capital murder of a prison guard. The U.S. Supreme Court denied certiorari. Justice Sotomayor, joined by Justice Jackson, dissented from that denial, stating: “In this capital case, prosecutors used 13 of their 15 peremptory strikes on women. They offered only one justification in each case: the woman’s views on the death penalty. In reviewing the challenged jurors, the Texas Court of Criminal Appeals (TCCA) failed to conduct a side-by-side comparison. Instead, it tested the prosecution’s justification in the aggregate, looking to the women’s views on capital punishment as a group instead of individually. That legal error hid the best indication of discriminatory purpose. Under a side-by-side comparison, it is clear that at least one woman struck by the State had more favorable views on the death penalty than at least one man the State did not strike. I would summarily vacate the decision below and remand for the TCCA to apply the proper comparative analysis.” (Compton v. Texas (U.S., Apr. 15, 2024) 144 S.Ct. 916.)

https://www.supremecourt.gov/orders/courtorders/041524zor_6kg7.pdf

Police and Paramedic Entitled to Qualified Immunity in Death. 

At the direction of a paramedic, law enforcement officers used their body weight to hold down and restrain a man to strap him to a backboard so he could be transported to a hospital for mental health treatment. The man asphyxiated and died. His family brought a civil rights action under 42 U.S.C. § 1983, and the district court granted summary judgment for the police and paramedic. Agreeing with the lower court that the defendants were entitled to qualified immunity, the Ninth Circuit stated: “At the time of Perez’s death, the law did not clearly establish, nor was it otherwise obvious, that the officers’ actions, directed by medical personnel, would violate Perez’s constitutional rights. Likewise, the paramedic involved was acting in a medical capacity during the incident, and the law did not clearly establish that medical personnel are liable for constitutional torts for actions taken to provide medical care or medical transport.” (Perez v. City of Fresno (9th Cir., Apr. 15, 2024) 98 F.4th 919.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/15/22-15546.pdf

High Court Did Not Need to Decide Whether a Plaintiff Could Proceed Under the Self-Executing Takings Clause. 

Texas installed a flood control barrier that resulted in flooding of the land of more than 120 landowners during heavy rains. Plaintiff sued Texas, contending Texas was using his land to store stormwater and that amounted to a taking of his land by the government in violation of the takings clause. The U.S. Supreme Court granted certiorari to decide whether a person whose property is taken without compensation may seek redress under the self-executing takings clause even if the legislature has not affirmatively provided them with a cause of action. The high court noted the issue framed that way assumes there is no separate cause of action under which to bring a claim based on the takings clause, but that Texas provides a cause of action that allows property owners to vindicate their rights under the takings clause. Accordingly, since the Fifth Circuit would not permit plaintiff to pursue his claim under the Texas statute, the U.S. Supreme Court vacated the judgment of the Fifth Circuit and remanded the matter so the plaintiff could pursue his action under the Texas statute. (Devillier v. Texas (U.S., Apr. 16, 2024) 601 U.S. 285.)

https://www.supremecourt.gov/opinions/23pdf/601us2r15_apl1.pdf

Juvenile’s Record Remains Unsealed. 

Penal Code § 782 permits a juvenile court to dismiss a petition if the court finds dismissal serves “the interests of justice and the welfare of the person who is the subject of the petition.” Here, a boy was declared a ward of the juvenile court when he was 14 years old. Later, he moved to seal his juvenile court records, but the juvenile court denied the motion because his prior adjudications were for committing forcible lewd conduct on children under the age of 14. Affirming denial of the petition to seal the records, the court of appeal stated that a subset of sex offenses is categorically and unequivocally not eligible for sealing under Penal Code § 781. (In re Taylor C. (Cal. App. 4th Dist., Div. 3, Apr. 16, 2024) 101 Cal.App.5th 492.)

https://www.courts.ca.gov/opinions/documents/A168282.PDF

Veteran Entitled to Both Montgomery Bill and Post-9/11 GI Bill Benefits.

Plaintiff served eight years on active duty in the U.S. Army during three periods of military service, having reenlisted twice, serving a total of eight years on active duty. As a result of his first period of military service, plaintiff was entitled to 36 months of educational benefits under the Montgomery GI Bill, to be paid by the Department of Veterans Affairs (VA). His subsequent periods of service separately entitled him to 36 months of educational benefits under the Post-9/11 GI Bill. Both of plaintiff’s entitlements were subject to a 48-month aggregate-benefits cap. Plaintiff used 25 months and 14 days of his Montgomery benefits to help fund his undergraduate degree. Then, after serving his third tour of duty, plaintiff sought to use his Post-9/11 benefits to attend divinity school. The VA informed plaintiff that his Post-9/11 benefits were limited to the duration of his unused Montgomery benefits, pursuant to a provision of the Post-9/11 GI Bill, 38 U.S.C. § 3327(d)(2). The question before the U.S. Supreme Court was whether plaintiff could access his Post-9/11 benefits entitlement without being subject to § 3327(d)(2)’s durational limit. Holding that plaintiff could access his Post-9/11 benefits without being subjected to the limitation, the Supreme Court stated: “Because he simply seeks to use one of his two separate entitlements, §3327(d)(2) does not apply. [¶] . . . [¶] . . . [I]t is clear that (1) Rudisill is separately entitled to each of two educational benefits; and (2) absent specified limits, the VA is statutorily obligated to pay him 48 months of benefits, . . . .” (Rudisill v. McDonough (U.S., Apr. 16, 2024) 601 U.S. 294.)

https://www.supremecourt.gov/opinions/23pdf/601us2r16_2dp3.pdf

Woman Not Required to Show Employment Transfer Based on Sex Effected a Significant Change in Working Conditions to Pursue Title VII Action. 

From 2008 through 2017, plaintiff worked as a plainclothes officer in the St. Louis Police Department’s specialized Intelligence Division. By virtue of her division position, plaintiff was also deputized as a task force officer with the Federal Bureau of Investigation (FBI)—a status granting her, among other things, FBI credentials, an unmarked take-home vehicle, and the authority to pursue investigations outside St. Louis. Her supervisor said she was a workhorse, but a new commander, who referred to plaintiff as “Mrs.,” instead of “Sergeant,” came to the department and transferred plaintiff out of the unit in order to replace her with a male officer. The commander considered the male officer a better fit for the unit’s dangerous work. Plaintiff was reassigned to a uniformed job, but her rank and pay remained the same. She lost her FBI status and the car that came with it. Plaintiff brought a Title VII action under 42 U. S. C. § 2000e–2(a)(1), alleging the city discriminated against her on the basis of sex. The courts below rejected the claim on the ground that the transfer did not cause plaintiff a “significant” employment disadvantage, and the case was dismissed after summary judgment was entered for the city because plaintiff did not show the transfer effected a significant change in working conditions producing material employment disadvantage. Vacating the judgment of dismissal, the U.S. Supreme Court stated: “What the transferee does not have to show, according to the relevant text, is that the harm incurred was ‘significant.’ [Citation.] Or serious, or substantial, or any similar adjective suggesting that the disadvantage to the employee must exceed a heightened bar.” (Muldrow v. City of St. Louis, Missouri (U.S., Apr. 17, 2024) 144 S.Ct. 967.)

https://www.supremecourt.gov/opinions/23pdf/22-193_q86b.pdf

Government Claim Form Alleged Different Wrongs than Those Stated in Lawsuit. 

Plaintiff’s employment at a veterans’ hospital was terminated. Plaintiff filed a claim with the Equal Employment Opportunity Commission (EEOC), checking the boxes for discrimination based on sex and retaliation. He did not check the boxes for race, color, religion, national origin, age, disability, genetic information, or other. An EEOC officer investigated and concluded there was no evidence plaintiff had not been discriminated against because of his male gender, nor that he had been retaliated against. Once the EEOC right to sue letter was issued, plaintiff sued the department in state court, alleging four causes of action: (1) He suffered sexual harassment. (2) He suffered harassment based on his race or on his immigrant status. (3) His employer failed to prevent this sexual and racial harassment. (4) The harassers retaliated against him after he lodged internal complaints against them. The trial court granted summary judgment for the department because plaintiff did not exhaust his administrative remedy. Affirming, the Court of Appeal stated: “Filing this administrative complaint is a mandatory prerequisite to suing in court. [¶] . . . [¶] . . . Even in cases appropriate for judicial resolution, the exhaustion requirement can lead to settlement, can eliminate unlawful practices, and can mitigate damages. [¶] The crucial exhaustion test is this: employees satisfy the administrative exhaustion requirement if their court claims are like, and reasonably related to, the claims they stated in their administrative filing. [¶] . . . [¶] Kuigoua loses because his judicial claims are not like, and are not reasonably related to, those in his administrative complaint.” (Kuigoua v. California Department of Veterans Affairs (Cal. App. 2nd Dist., Div. 8, Apr. 17, 2024) 101 Cal.App.5th 499.)

https://www.courts.ca.gov/opinions/documents/B323735.PDF

Bedrock Principle Underlying the First Amendment. 

On two separate occasions—an abortion rally and an LGBTQ pride event—plaintiff sought to read Bible passages to attendees gathered in the City of Seattle. When those attendees began to abuse and physically assault him, police officers asked him to move and ultimately arrested him when he refused, rather than deal with the wrongdoers directly. Plaintiff sued the city and certain officers, seeking, inter alia, preliminary injunctive relief. The district court denied the motion, surmising that the officers’ actions were content neutral. Reversing, the Ninth Circuit stated: “‘If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.’ [Citation.] . . . ‘[I]f speech provokes wrongful acts on the part of hecklers, the government must deal with those wrongful acts directly; it may not avoid doing so by suppressing the speech.’ [Citation.]” (Meinecke v. City of Seattle (9th Cir., Apr. 18, 2024) 99 F.4th 514.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/18/23-35481.pdf

Anti-SLAPP and Malicious Prosecution.
  • Party 1 reported Party 2 to the police. 
  • The police independently investigated and concluded there was criminal activity on the part of Party 2.
  • Party 2 defeated the criminal charges by showing a witness had lied, and the prosecutor dismissed the case.
  • Party 2 sued Party 1 for malicious prosecution.
  • The trial court performed an analysis during Party 1’s Anti-SLAPP motion, concluding that as to step one, Party 1’s help in bringing about a criminal prosecution is protected activity. As to step two, the trial court denied the Anti-SLAPP motion, concluding Party 2 had shown legally sufficient claims.
  • The Court of Appeal reversed, finding the independent investigation by the police completely shielded Party 1 from liability, so the Anti-SLAPP motion should have been granted.

(Lugo v. Pixior, LLC (Cal. App. 2nd Dist., Div. 8, Apr. 18, 2024) 101 Cal.App.5th 511.)

https://www.courts.ca.gov/opinions/documents/B324368.PDF

No Individual Claim by Plaintiff Required to Sue Under PAGA. 

The trial court dismissed plaintiff’s complaint on behalf of herself and 500 other current and former employees for civil penalties for violations of the California Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA) after finding plaintiff lacked standing to bring a representative action because she did not allege an individual claim in the action. Reversing, the Court of Appeal stated: “Balderas, an alleged aggrieved employee who was subject to alleged Labor Code violations by Fresh Start, may bring a ‘non-individual’ or representative PAGA action on behalf of herself and other Fresh Start employees, even though she did not file an individual cause of action seeking individual relief for herself in this action. [¶] . . . [¶] Balderas met the standing requirements. She alleged that she 1) was an ‘aggrieved’ employee of Fresh Start, and 2) was subject to one or more Fresh Start violations. She alleged, ‘[W]hen Employees including Ms. Balderas started work for Fresh Start at around 6:00 a.m. or 7:00 a.m., they regularly were not provided a meal period until after 5 hours of work for shifts longer than 5 hours.” This delay in providing timely meal periods for her and other employees violated their right to have “a meal period within the first five (5) hours of work.’” (Balderas v. Fresh Start Harvesting, Inc. (Cal. App. 2nd Dist., Div. 6, Apr. 18, 2024) 101 Cal.App.5th 533.)

https://www.courts.ca.gov/opinions/documents/B326759.PDF

Police Officer Entitled to Qualified Immunity for Shooting. 

Officers Gomez and Velez responded to a call involving a man attempting suicide with a knife in his backyard. When they arrived, they found the man’s wife covered in blood and frantically pleading for help. The officers went to the backyard, where they found Hart holding a knife. They told him to drop the knife, but instead of doing so he began moving towards them while raising the knife. As Hart neared the officers, Officer Velez deployed her taser, but it was ineffective. With Hart approaching closely and wielding a knife, Officer Gomez took action to protect himself and his partner, shooting Hart. Hart died in the emergency room. Hart’s family sued, alleging that Gomez, Velez, and the City of Redwood City violated their and Hart’s constitutional and state law rights. The parties filed cross-motions for summary judgment, and as relevant here, the district court found that Officer Gomez was not entitled to qualified immunity. Reversing, the Ninth Circuit stated: “. . . Officer Gomez is entitled to qualified immunity because Plaintiffs have failed to show either that his conduct was objectively unreasonable, and therefore a violation of Hart’s Fourth Amendment rights, or that such rights were clearly established by precedent existing at the time of the conduct.” (Hart v. City of Redwood City (9th Cir., Apr. 19, 2024) 99 F.4th 543.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/19/22-17008.pdf

Summary Judgment Reversed on Whether Property Purchaser Was a Bona Fide Purchaser for Value.

Plaintiff and defendant formed a limited liability company and bought a parking lot. Defendant sold the lot and received millions in profits without telling plaintiff about the sale. Plaintiff sued both defendant and the buyer of the parking lot. The trial court entered summary judgment for defendants. Reversing the summary judgment ruling that the parking lot buyer was a bona fide purchaser for value, the Court of Appeal stated: “For a buyer to establish it was a bona fide purchaser for value, it must demonstrate it conducted research with due diligence to see if the title it was planning to buy would be good. [¶] . . . [¶] Two factors in this case highlighted the importance of investigating whether [defendant] actually had the sale authority she claimed. [¶] First, the preliminary report notes required proof the manager had duly executed authority to act on behalf of the limited liability company. [¶] Second, title officer Rivera testified . . . [¶] . . . that a preliminary report is not a representation of the condition of title, but is done to evaluate risk solely for the benefit of the title insurer.” (Sam v. Kwan (Cal. App. 2nd Dist., Div. 8, Apr. 19, 2024) 101 Cal.App.5th 556.)

https://www.courts.ca.gov/opinions/documents/B314426.PDF

Name-Calling Cannot Be Elevated to a Public Issue for Anti-SLAPP Purposes.

Plaintiffs sued defendants for defamation, infliction of emotional distress, interference with economic advantage, and civil harassment due to the content of a number of emails defendants sent to the members of a small homeowners association. Defendants brought an anti-SLAPP motion to dismiss pursuant to Code of Civil Procedure § 425.16, contending their name-calling [regarding plaintiffs’’ religion and race] was in service of the governance of the homeowners association, and, thus, per se a public issue. The trial court denied the motion. Affirming, the Court of Appeal stated: “Itkoff and Diamond attempt to elevate their name-calling by saying it was in service of the governance of a homeowners association. They imply anything touching upon a homeowners association is per se a public issue. This is incorrect.” (Dubac v. Itkoff (Cal. App. 2nd Dist., Div. 8, Apr. 19, 2024) 101 Cal.App.5th 540.)

https://www.courts.ca.gov/opinions/documents/B317061.PDF

Marijuana Transporter Faced the Supremacy Clause. 

The petitioner here transported marijuana—which is legal under Alaska law but a controlled substance under federal law—by aircraft within Alaska. After an investigation, the Federal Aviation Administration (FAA) revoked his pilot certificate under 49 U.S.C. § 44710(b)(2). Petitioner sought review of the National Transportation Safety Board’s order affirming the FAA’s revocation. Denying his petition for review, the Ninth Circuit stated: “Although many states have legalized recreational marijuana, it continues to be a controlled substance federally. [Citation.] The government has, at times, declined to prosecute certain marijuana crimes as a matter of policy. . . . But state law legalizing marijuana distribution does not negate federal law criminalizing the same action.”(Fejes v. Federal Aviation Administration (9th Cir., Apr. 22, 2024) 98 F.4th 1156.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/22/22-70129.pdf

Alleged Disability Discrimination and Hostile Work Environment. 

Plaintiff is a scientist with the National Aeronautics and Space Administration (NASA). He has physical disabilities related to his hips and spine that he alleges require him to purchase premium-class airlines tickets for flights over an hour long. He sued NASA and its Administrator under the Rehabilitation Act of 1973 (29 U.S.C. § 791 et seq.), alleging, among other things, that he suffered a hostile work environment after informing his supervisors of his disabilities and requesting upgraded airline tickets for work travel as a reasonable accommodation. He also alleged that he was discriminated against due to his disability by being passed over for a promotion. The district court dismissed plaintiff’s hostile-work-environment claim for failure to state a claim and granted summary judgment for NASA on his disability discrimination claim based on the denied promotion. Affirming in part and reversing and remanding in part, the Ninth Circuit held that the lower court erred in concluding plaintiff failed to allege a plausible causal nexus between the claimed harassment and his disabilities, and that plaintiff alleged sufficiently severe or pervasive harassment to survive NASA’s motion to dismiss, and plausibly alleged a hostile-work environment claim based on his disability. The appeals court held the lower court correctly ruled on plaintiff’s disability discrimination claim because NASA proffered a legitimate nondiscriminatory reason for not selecting plaintiff for an available senior position. (Mattioda v. Nelson (9th Cir., Apr. 22, 2024) 98 F.4th 1164.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/22/22-15889.pdf

Previously we reported: Slave Labor? 

Plaintiffs alleged that a for-profit food service company hired by a county to provide food to county jail inmates employs detainees in the Santa Rita Jail without compensating them. Alameda County has not enacted a local ordinance providing for compensation to county detainees for services performed. The Ninth Circuit certified the following question to the California Supreme Court: “Do non-convicted incarcerated individuals performing services in county jails for a for-profit company to supply meals within the county jails and related custody facilities have a claim for minimum wages and overtime under Section 1194 of the California Labor Code in the absence of any local ordinance prescribing or prohibiting the payment of wages for these individuals?” (Ruelas v. County of Alameda (9th Cir., Nov. 1, 2022) 51 F.4th 1187.)

The latest

The California Supreme Court held: “The United States Court of Appeals for the Ninth Circuit has asked us to decide whether nonconvicted incarcerated individuals working in a county jail for a private company have a claim for minimum wage and overtime under California law. We conclude the answer is no.” (Ruelas v. County of Alameda (Cal., Apr. 22, 2024) 15 Cal.5th 968.)

https://www.courts.ca.gov/opinions/documents/S277120A.PDF

Making a Television Series Constitutes Protected Activity. 

Plaintiff alleged in her complaint that her idea for a television series was stolen by defendants. She contended her idea for a series—which she intended to star in, write for, and produce—was turned into a sitcom by defendants without her permission or involvement. Defendants contended the sitcom, a spinoff of an existing television series, was not based on plaintiff’s ideas. Defendants filed special motions to strike under Code of Civil Procedure § 425.16, the anti-SLAPP statute. Upon de novo review, the Court of Appeal held that all of plaintiff’s claims arose from protected activity. (Norman v. Ross (Cal. App. 2nd Dist., Div. 4, Apr. 23, 2024) 2024 WL 1731781.)

https://www.courts.ca.gov/opinions/documents/B316971.PDF

Motion to Compel Arbitration of Employee Dispute and PAGA Claim Denied. 

Plaintiff signed an arbitration agreement when he began working for defendant. After his employment ended, plaintiff filed a complaint asserting several causes of action under the Private Attorney General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). Defendant filed a motion to compel arbitration, which the trial court denied. Affirming, the Court of Appeal stated: “We conclude that, by signing an arbitration agreement that (1) merely referred to the rules of the American Arbitration Association; (2) included a carve-out that arguably covered the dispute; and (3) included a severability clause stating a court may not enforce certain provisions, Mondragon, an unsophisticated party, did not delegate arbitrability decisions to the arbitrator. We also conclude the language of the arbitration agreement did not require Mondragon to arbitrate his individual PAGA claims.” (Mondragon v. Sunrun Inc. (Cal. App. 2nd Dist., Div. 7, Apr. 23, 2024) 2024 WL 1731764.)

https://www.courts.ca.gov/opinions/documents/B328425.PDF

Whether Court of Appeal Modified or Reversed Determined When Interest on Attorney Fee Award Started. 

This appeal, the second in this litigation, was about interest on an award of statutory attorneys’ fees. In particular, it was about whether interest on the award runs from the first, later-reversed attorneys’ fees order or the second, post-remand attorneys’ fees order. The Court of Appeal held: “The answer depends on whether our opinion in the prior appeal was a modification (so that interest runs from the first order, which is what the prevailing plaintiff wants) or a reversal (so that interest runs from the second, which is what the defendant wants). [¶] The line between modification and reversal, however, like that (for example) between a mandatory and prohibitory injunction, can be a little blurry. Here, however, we can safely draw that line. Our directions in the prior appeal required the trial court to do more than perform a pure mathematical computation or add or delete a category of fees; the trial court had to exercise its discretion to determine an appropriate award of attorneys’ fees. Therefore, our prior opinion was a reversal, not a modification, which means interest runs from the second attorneys’ fees award.” (Vines v. O’Reilly Auto Enterprises, LLC (Cal. App. 2nd Dist., Div. 7, Apr. 24, 2024) 2024 WL 1751760.)

https://www.courts.ca.gov/opinions/documents/B327821.PDF

Disclosure Requirements Imposed by Health & Safety Code § 1363.1.

Plaintiff sued defendant for claims associated with her son’s healthcare. Defendant petitioned to compel arbitration of her claims, but the trial court denied the petition on the ground that defendant’s arbitration agreement was not enforceable because it did not comply with the disclosure requirements imposed by Health & Safety Code § 1363.1. §1363.1 provides that “‘[a]ny health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets’ four enumerated conditions.” One of those conditions is: “(d) In any contract or enrollment agreement for a health care service plan, the disclosure required by this section shall be displayed immediately before the signature line provided for the representative of the group contracting with a health care service plan and immediately before the signature line provided for the individual enrolling in the health care service plan.” Reversing, the Court of Appeal stated: “Dougherty identified subdivision (d) of section 1363.1 as the only provision of the statute that USB allegedly violated. That provision relates only to where the ‘disclosure required by’ section 1363.1, subdivisions (a) through (c) must be displayed ‘immediately before the signature line provided for the individual enrolling in the health care service plan.’ There is no dispute the enrollment form complied with this directive.” (Dougherty v. U.S. Behavioral Health Plan (Cal. App. 4th Dist., Div. 2, Apr. 24, 2024) 2024 WL 1752872.)

https://www.courts.ca.gov/opinions/documents/E079741.PDF

Disciplined Physician Not Entitled to Hearing When Defendant Stopped Processing His Application for Employment Upon Learning of Discipline.

Plaintiff, a physician, was the subject of a disciplinary proceeding by the Medical Board of California, which resulted in a public reprimand. He applied for privileges in the emergency department of two hospitals owned by defendant. The hospitals stopped processing his application a few days after the effective date of the reprimand. Plaintiff sued defendant for injunctive relief and damages. The trial court granted summary judgment for defendant. Affirming, the Court of Appeal stated: “Because Kime did not meet those [the quasi-legislative] requirements, he had no common law right to a hearing when Mercy stopped processing his application for privileges. [¶] Nor did Kime have any right to a hearing under [Business & Professions Code] section 809.1.” (Kime v. Dignity Health, Inc. (Cal. App. 1st Dist., Div. 2, Apr. 25, 2024) 2024 WL 1794223.)

https://www.courts.ca.gov/opinions/documents/A166748.PDF

Plaintiffs Unable to Plead Unfair Practices Against Apple.

Plaintiffs brought a class action contending Apple’s restrictive contractual terms and coercive conduct toward portable software developers who seek to do business on Apple’s App Store constituted unlawful and unfair business practices. The trial court sustained Apple’s demurrer without leave to amend. In U.S. v. Colgate & Co. (1919) 250 U.S. 300, the U.S. Supreme Court established the Colgate doctrine: A seller has the right to choose its business partners, including the right to refuse to sell to a dealer. The doctrine also states that a trader or manufacturer has the right to exercise their own independent discretion as to parties with whom they deal. In Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Company (1999) 20 Cal.4th 163, the California Supreme Court held that plaintiffs did not prove a violation of the Unfair Practices Act (Bus. & Prof. Code, § 17000 et seq.; UPA), because the evidence did not show that the defendant acted with the necessary mental state. In Chavez v. Whirlpool Corporation (2001) 93 Cal.App.4th 363, a case decided after Cel-Tech, the Court of Appeal applied the Colgate doctrine to preclude an Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.; UCL) cause of action. On appeal in the instant case, plaintiffs challenged only one aspect of the trial court’s ruling. They argued the court erred by relying on Chavez to sustain the demurrer to their UCL cause of action alleging unfair practices by Apple toward one developer, Epic Games, Inc., and its gaming application. Plaintiffs claim that Chavez is inconsistent with the California Supreme Court’s decision in Cel-Tech. Affirming, the Court of Appeal stated: “[W]e disagree that Chavez reflects a misapplication of Cel-Tech.” (Beverage v. Apple, Inc. (Cal. App. 6th Dist., Apr. 25, 2024) 2024 WL 1794410.)

https://www.courts.ca.gov/opinions/documents/H050526.PDF

Petition to Compel Arbitration that Was Denied by Lower Court Is Reversed by Appellate Court. 

Plaintiffs are a group of individuals, including a minor, who filed a putative class action against defendant Warner Bros. Entertainment, Inc. for its alleged misrepresentations related to the mobile application, Game of Thrones: Conquest (GOTC). Warner Bros. moved to compel arbitration pursuant to the GOTC Terms of Service, which users agree to by tapping a “Play” button located on the app’s sign-in screen. The lower court found the notice of the terms of service was insufficiently conspicuous to bind users to them, and accordingly denied Warner Bros.’ motion to compel arbitration. Reversing, the Ninth Circuit stated: “Warner Bros. now appeals, asserting that the district court’s determination was erroneous. We agree and reverse and remand. [¶] . . . [¶] . . . We also reject the Plaintiffs’ argument that the arbitration agreement is rendered unconscionable by its ban on public injunctive relief.” (Keebaugh v. Warner Bros. Entertainment Inc. (9th Cir., Apr. 26, 2024) 2024 WL 1819651.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/26/22-55982.pdf

City’s Constitutional Debt Limitation Not Violated. 

Article XVI, section 18, subdivision (a) of the California Constitution sets forth the constitutional debt limitation applicable to cities. It states in relevant part: “No . . . city . . . shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters of the public entity voting at an election to be held for that purpose.” A taxpayers’ association and individuals argued a city violated its constitutional debt limitation when its city council adopted a resolution authorizing the issuance and sale of bonds, on the condition they result in a savings to the city, to address a shortfall in the city’s pension plans. The trial court held validation proceedings and entered judgment for the city. Affirming, the Court of Appeal stated: “With the challenged resolution, the city does not seek to increase pension benefits but instead to issue bonds to provide an income stream for a liability it has already incurred.” (City of San José v. Howard Jarvis Taxpayers Association (6th Dist., Apr. 29, 2024) 2024 WL 1855412.)

https://www.courts.ca.gov/opinions/documents/H050889.PDF

Law Student Out of Luck in Federal Court. 

A law student petitioned the State Bar of California for a hearing to excuse his delay in taking the First Year Law Students Exam (FYLSX), a prerequisite to bar admission for students attending an unaccredited law school, and to waive the resulting forfeiture of credit for law school courses he had completed. When the State Bar denied the petition, the student brought this action against its director of admissions, alleging that the denial violated the student’s Fourteenth Amendment rights. The district court dismissed the action. Affirming, the Ninth Circuit stated: “Because the California Supreme Court has exclusive original jurisdiction over matters of admission, the State Bar’s actions did not result in a cognizable deprivation of rights. Therefore, the federal law claims must be dismissed for failure to state a claim.” (Pell v. Nuñez (9th Cir., Apr. 30, 2024) 2024 WL 1868947.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/04/30/23-55188.pdf


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