Litigation Update: November 2020

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

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
  • Managing Editor, Reuben Ginsburg
  • Editors, Dean Bochner, Julia Shear Kushner, Jessica Riggin, and David Williams
No Counterfeiting Trademark.

Plaintiff sued defendant for counterfeiting based on defendant’s use of the trademarked term “EYE DEW” on its skincare products. Apart from that term, the beauty products made by plaintiff and defendant look nothing like each other, as their respective packaging features different shapes, design schemes, text, and colors. The district court granted summary judgment for defendant, ruling that a reasonable consumer would not confuse defendant’s skincare products with plaintiff’s. The key question presented on appeal was whether a trademark counterfeiting claim requires a likelihood of confusion. Affirming the summary judgment, the Ninth Circuit Court of Appeals concluded that “the plain language of the statute requires a likelihood of confusion for a counterfeit claim.” (Arcona, Inc. v. Farmacy Beauty, LLC (9th Cir., Oct. 1, 2020) 976 F.3d 1074.)

Objections to Evidence in Support of Summary Judgment Motion.

In a case alleging fraud, misappropriation of trade secrets, and other causes of action, the trial court granted summary judgment for defendant. Affirming, the Court of Appeal rejected plaintiff’s contention that the trial court erred by overruling its objections to the evidence defendant submitted in support of the summary judgment motion. The appeals court observed that in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535, the California Supreme Court declined to decide whether the appropriate standard of review is de novo or abuse of discretion. But even under a de novo standard of review, there was no error in this case because the documents in question were authenticated both by the attorney’s statement that they were produced in discovery and by their form, which indicated they were authentic. Hooked Media Group, Inc. v. Apple Inc. ((Cal. App. 6th Dist., Sept. 30, 2020) 55 Cal.App.5th 323.)

Judgment Inconsistent with Special Verdict.

The jury in a “lemon law” case found no breach of warranty but did not stop there because the special verdict form did not say to answer no further questions if there was no breach of warranty. So the jury answered further questions, including questions on damages.  The court entered a judgment awarding damages, but later granted on both alternative grounds defendant’s motion to vacate the judgment and enter a defense judgment and for judgment notwithstanding the verdict. Affirming the judgment, the Court of Appeal concluded that the motion to vacate was timely filed more than 15 days after the court clerk served a notice of entry of judgment because the notice of entry clerk was not served pursuant to Code of Civil Procedure § 664.5, the original judgment was inconsistent with the special verdict, and in any event JNOV was proper because there was no substantial evidence to support the original judgment for plaintiff. (Simgel Co., Inc. v. Jaguar Land Rover North America, LLC (Cal. App. 2nd Dist., Div. 8, Oct. 1, 2020) 55 Cal.App.4th 305.)

Business Owed No Duty to Pedestrian Injured on Public Property Abutting Business Property.

The owner or occupier of private property has a duty to exercise reasonable care to maintain its property in a reasonably safe condition, but that duty generally does not extend to publicly owned sidewalks and streets abutting the property unless the owner or occupier exercises control over that publicly owned property. In this case, a pedestrian tripped and fell in a pothole located on city-owned property where the lip of a driveway and the gutter meet. The pedestrian sued the commercial business that leased the property serviced by the driveway even though the business simply put the driveway and gutter to their ordinary and accustomed uses. The jury found in favor of the pedestrian, but the trial court granted judgment notwithstanding the verdict for the commercial business. Affirming, the Court of Appeal concluded that the business owed no duty to the pedestrian. (Lopez v. City of Los Angeles and Wally’s Wine & Spirits (Cal. App. 2nd Dist., Div. 2, Oct. 1, 2020) 55 Cal.App.5th 244.)

“Sgt. Isaac Woodard, a black soldier, was removed from a bus in Batesburg and arrested on Feb. 12, 1946. . . . Woodard was beaten and blinded by a town police officer,” Historical Marker in Batesburg, South Carolina.

On January 15, 2016, two Los Angeles County Sheriff’s Department deputies confronted plaintiff at his godmother’s house after a shooting nearby. According to the complaint, plaintiff ran in fear from the deputies—who had guns drawn and shouted commands at him—and hid in a nearby home. Plaintiff alleged that the deputies radioed in a false report that he had a gun and was fleeing. Plaintiff alleged he later attempted to surrender, but the deputies severely beat him and used racial slurs against him. After he was subdued, one of the deputies allegedly rammed a baton into his eye socket, causing permanent damage. Five days later, plaintiff was charged with attempted murder and was held in custody for eight months. The charge was ultimately dropped, and plaintiff was released from jail. On July 3, 2018, more than two years and five months after his arrest, plaintiff filed a federal civil rights action against the county and the two deputies. Defendants moved to dismiss the action on the ground it was barred by the applicable two-year statute of limitations. Plaintiff responded that the statute of limitations was tolled while his criminal charges were pending. The district court denied the motion to dismiss. Affirming, the Ninth Circuit concluded that plaintiff’s claim was tolled until the criminal charges were dismissed. (Lockett v. County of Los Angeles (9th Cir., Oct. 2, 2020) 977 F.3d 737.)

Attorney Fee Award Reversed.

Plaintiff alleged a restaurant was inaccessible to wheelchair users in violation of Health and Safety Code § 19955 and the Unruh Civil Rights Act (Civ. Code, § 51 et seq.; Unruh Act). In response to the lawsuit, the restaurant voluntarily remediated its barriers to access. The trial court entered judgment for plaintiff on the Health and Safety Code claim and against plaintiff on the Unruh Act claim, and awarded plaintiff $242,672 in attorney fees and costs. Reversing, the Court of Appeal concluded that there was no evidence to support judgment for plaintiff on the Health and Safety Code claim and no basis for an award of attorney fees. (Skaff v. Rio Nido Roadhouse (Cal. App. 1st Dist., Div. 1, Oct. 5, 2020) 55 Cal.App.5th 522.)

Contractor Controlling Traffic Owes Motorist a Duty of Care.

Defendants, who were performing construction work on a public road, implemented a “reversing lane closure” traffic control that reduced traffic to one lane. Traffic in one direction was stopped while traffic in the other direction was allowed to proceed, and then the procedure was reversed. Plaintiff was driving when he came to a stop behind two vehicles. Moments later, he was rear-ended. Plaintiff sued the contractor, alleging that the contractor negligently created conditions that caused the collision. The trial court granted summary judgment for the contractor on the ground that it owed plaintiff no duty of care. Reversing, the Court of Appeal concluded that the defendants owed a duty of care as a highway contractor performing work on a public highway and under the Rowland factors (Rowland v. Christian (1968) 69 Cal.2d 108). (Shipp v. Western Engineering, Inc. (Cal. App. 3rd Dist., Oct. 5, 2020) 55 Cal.App.5th 476.)

Client Hired a Lawyer Too Late.

Riverside County Superior Court local rule 3401 requires parties to exchange witness information and exhibits no later than 14 days before a jury trial. Plaintiff hired a lawyer a few days before trial, after the 14-day deadline had expired. The new lawyer requested a continuance; the trial court denied the request. Because plaintiff did not make any disclosures under local rule 3401, it was precluded from offering any evidence at trial. Consequently, the trial court entered a nonsuit. Finding no abuse of discretion, the Court of Appeal affirmed. (Reales Investment, LLC v. Johnson (Cal. App. 4th Dist., Div. 2, Oct. 5, 2020) 55 Cal.App.5th 463.)

Arizona Election Litigation.

The State of Arizona passed a law requiring early voters to sign their ballots by 7:00 p.m. on election day in order to have their votes counted. The Arizona Democratic Party challenged the law. The district court enjoined the law and ordered Arizona to institute a new procedure that would grant voters who failed to sign their ballots up to five days after voting has ended to correct the error. The state appealed and sought a stay of the trial court’s injunction pending adjudication of the appeal. The Ninth Circuit issued an emergency stay. (Arizona Democratic Party v. State of Arizona (9th Cir., Oct. 6, 2020) 976 F.3d 1081.)

Advocate-Witness Rule.

A man and a woman dissolved their 17-year marriage. The woman, an attorney, subsequently sued the man on behalf of her daughter, alleging that he sexually abused the daughter when she was still a minor. The man denied the allegations and moved to disqualify the woman from representing her daughter. The trial court granted the motion to disqualify. Affirming, the Court of Appeal held that the trial court reasonably concluded the woman would be a witness and properly disqualified her.(Doe v. Yim (Cal. App. 2nd Dist., Div. 4, Oct. 5, 2020) 55 Cal.App.5th 573.)

Posting Bond for Records Requested Under the Public Records Act.

Just before a city was scheduled to delete/destroy records because of the expense of keeping them, two parties filed lawsuits against the city pursuant to the Public Records Act (Gov. Code, § 6250 et seq.) seeking to enjoin the destruction. The trial court issued an injunction, but pursuant to Code of Civil Procedure § 529 ordered plaintiffs to post a bond in the amount the city contemplated it would cost to comply with the injunction, $2,349.50. On appeal, plaintiffs contended the bond requirement conflicted with the Public Records Act and amounted to a prior restraint in violation of the First Amendment. Finding neither argument persuasive, the Court of Appeal affirmed the order requiring posting a bond. (Stevenson v. City of Sacramento (Cal. App. 3d Dist., Oct. 6, 2020) 55 Cal.App.5th 545.)

Life Insurance Policy Would Not Take Effect Unless Employee Was in “Active Service.”

While employed by the County of Alameda and on a medical leave of absence, decedent enrolled online in supplemental life insurance coverage under a group insurance policy. She remained on leave on the policy’s effective date and died six months later, without having returned to work. When her beneficiary claimed benefits, defendant insurer denied coverage based on a policy provision stating the insurance would not become effective if the employee was not in “active service” on the effective date. The decedent’s beneficiary sued both the insurance company and the county for breach of contract, arguing that both waived or were estopped from asserting the active service precondition to coverage. The trial court sustained demurrers without leave to amend and entered judgment in favor of both defendants. Affirming the judgment in favor of the county and reversing the judgment in favor of the insurance company, the Court of Appeal stated: “The County is not an insurer,” and held that “[i]f [decedent’s] insurance policy went into effect, the entity liable for improper denial of benefits would be [the insurance company], not the County,” noting, “there are factual questions as to what [decedent] knew or should have known about the active service requirement and whether the conduct of [the insurance company] and the County supported a reasonable expectation that the supplemental insurance was in place and effective.” (Dones v. Life Ins. Co. of N. Am. (Cal. App. 1st Dist., Div. 2, Oct. 7, 2020) 55 Cal.App.5th 665.)

Illegal Recording of Phone Conversations Without Consent.

Plaintiff sued Yelp for recording his phone conversations with Yelp representatives without notice or his consent, citing the California Invasion of Privacy Act (Pen. Code, § 630 et seq.; CIPA). The trial court granted summary judgment for Yelp, finding that plaintiff’s voice was not captured on the recordings. Plaintiff appealed. The appeals court discussed both two-sided and one-way recordings. For two-sided recorded calls, a representative must activate the system manually with a recording feature on a computer; discovery yielded no evidence they were used with plaintiff. One-way recordings captured only the Yelp representative’s side of a conversation. The Court of Appeal stated that CIPA governs “one-sided recordings,” but “the fact that plaintiff’s voice was not recorded . . . does not necessarily defeat his CIPA claims.” Reversing, the appellate court stated: “Our interpretation of CIPA does not preclude a corporation such as Yelp from engaging in one-way recordings for the indicated purpose of sales training or quality control. Our holding does, however, make such recording illegal under CIPA if consent is not first obtained from all the participants of the call.” (Gruber v. Yelp Inc. (Cal. App. 1st Dist., Div. 3, Oct. 7, 2020) 55 Cal.App.5th 591.)

Whistleblower’s Lawsuit May Qualify as a “Corrective Disclosure” to Establish Causation in a Private Securities Fraud Action.

In a private securities fraud action, one way to prove loss causation is to show that the defendant’s fraud was revealed to the market through one or more “corrective disclosures” and that the company’s stock price declined as a result. Plaintiff alleged loss causation, relying on two corrective disclosures: a whistleblower lawsuit filed by a former company insider and a series of blog posts offering negative reports about the company’s operations.  The district court dismissed the case, concluding that neither the whistleblower lawsuit nor the blog posts qualified as corrective disclosures. The Ninth Circuit affirmed as to the blog posts but reversed with respect to the whistleblower lawsuit, stating: “If the market regarded his factual allegations as credible and acted upon them on the assumption that they were true, as the shareholders have plausibly alleged here, [the whistleblower’s] allegations established fire and not just smoke.” (In re BofI Holding, Inc. Securities Litigation (9th Cir., Oct. 8, 2020) 977 F.3d 781.)

Super-Priority Lien Challenged.

A man’s 47,800 square foot property came to the county’s attention when an inspection of one of its seven structures revealed hazardous and unpermitted electrical wiring, hazardous decking and stairs, unpermitted kitchens and plumbing, broken windows, and lack of power. It turned out that two other damaged buildings were being used as residences after being destroyed by fire. After several unsuccessful attempts to compel the owner to abate the hazardous situation, the county sought and obtained the appointment of a receiver pursuant to Health and Safety Code § 17980.7 and Code of Civil Procedure § 564 to oversee the abatement work. The superior court authorized a “super-priority” lien on the property to finance the rehabilitation efforts. The trial court also prioritized the county’s enforcement fees and costs. A bank’s trustee challenged the super-priority lien since the bank had a prior recorded lien. Affirming in part and reversing in part, the Court of Appeal stated: “We conclude that the trial court did not abuse its discretion in subordinating U.S. Bank’s lien and confirming the sale of the property free and clear of all liens so that the receiver could remediate the nuisance conditions on the property promptly and effectively. However, the court’s order prioritizing the County’s enforcement fees and costs on equal footing with the receiver finds no basis in the receivership statutes.” (Cty. of Sonoma v. U.S. Bank N.A. (Cal. App. 1st Dist., Div. 1, Oct. 8, 2020) 55 Cal.App.5th 696.)

Dismissal of False Advertising Case Against Seller of Supplements Reversed.

Plaintiff purchased one of CVS’s glucosamine-based supplements, believing it would provide the advertised joint health benefits. He sued CVS under California law, alleging that the supplement he purchased, and five additional CVS glucosamine-based supplements, did not provide the advertised benefits. He sought to certify a class of similarly situated consumers. The district court dismissed the case without leave to amend, holding that the Food, Drug, and Cosmetic Act (21 U.S.C. § 343(a); FDCA) preempted plaintiff’s California claims. Noting that the district court considered only the objective representations on the supplement label, the Ninth Circuit reversed, stating: “The district court erred in concluding that the FDCA preempts [plaintiff’s] state law causes of action simply because CVS’s glucosamine-based supplements present only structure/function claims, and erred in dismissing the complaint without granting [plaintiff] leave to amend to add allegations regarding an implied disease claim.” (Kroessler v. CVS Health Corp. (9th Cir., Oct. 9, 2020) 977 F.3d 803.)

Portland Protests.

After George Floyd was killed by a Minneapolis police officer, people in Portland, Oregon protested. Plaintiffs, who are journalists, alleged that although they did not participate in the protests, local authorities shot them with pepper balls, impact munitions, paint markers, tear gas canisters, and pepper spray. They alleged they were shoved and otherwise prevented from recording and reporting on the protests and on law enforcement’s response. Four days after the complaint was filed, the district court entered a temporary restraining order against the city, regulating the local authorities’ use of crowd-control tactics against journalists and legal observers. Several days later, the city and plaintiffs stipulated to a preliminary injunction that was largely identical to the TRO. Many of the protests centered around a federal courthouse. The Department of Homeland Security (DHS) and the U.S. Marshals Service (USMS) deployed federal law enforcement agents to the scene of the protests. At that point, the intensity of the protests escalated. Plaintiffs filed an amended complaint joining DHS and USMS. The amended complaint alleged that the federal defendants “intentionally targeted and used physical force and other forms of intimidation against journalists and authorized legal observers for the purpose of preventing or deterring them from observing and reporting on unreasonably aggressive treatment  of lawful protestors.” The district court entered a TRO against the federal defendants after plaintiffs demonstrated video of the federal government deploying tear gas and less-lethal munitions at journalists when no protestors were present and other evidence. Noting the public interest in the federal government protecting federal agents and property, the Ninth Circuit found that the federal government had not made a strong showing that it would succeed on the merits and concluded the federal government was not entitled to a stay. (Index Newspapers LLC v. United States Marshals Serv. (9th Cir., Oct. 9, 2020) 977 F.3d 817.)

Loss of Society and Comfort Damages for Child of Injured Seaman Are Not Available.

The child of a man who was injured while diving during the making of a movie sued for compensatory and punitive damages under general maritime law. The trial court granted judgment on the pleadings. Affirming, the Court of Appeal stated: “Appellant Prickett has not cited to us any admiralty authority that has allowed a child to recover loss of society damages for a nonfatal injury to a non-seaman on the high seas, and – without legislative impetus or compelling logic for such a result – we must decline to do so.” (Prickett v. Bonnier Corp. (Cal. App. 4th Dist., Div. 3, Oct. 13, 2020) 2020 WL 6041607.)

City’s Billboard Ordinance Is Not Content Neutral.

A city adopted an ordinance that prohibits parking or standing of mobile billboard advertising displays on any public street, alley or public land, and authorizes the impounding of vehicles in violation. Plaintiff challenged the constitutionality of the ordinance. The district court dismissed plaintiff’s claims on the pleadings, concluding the restrictions were content-neutral, reasonable time, place, and manner restrictions that did not infringe the First Amendment right of freedom of speech. It also dismissed plaintiff’s state law claims. On appeal, plaintiff conceded that standing alone, the ordinance was content neutral, but the city exempted emergency, construction, repair, and maintenance vehicles from the ordinance. The Ninth Circuit agreed with the lower court regarding dismissal of the state law claims, but otherwise reversed, stating: “The City’s mobile billboard regulations favor certain speakers because the City favors the likely speech of those speakers. Therefore, the district court erred in concluding the regulations are not content based.” (Boyer v. City of Simi Valley (9th Cir., Oct. 14, 2020) 2020 WL 6054620.)

Lack of Standing in Voting Case.

Arizona law requires that mail ballots must be received no later than 7:00 p.m. on election day. Six members of the Navajo Nation who reside on a reservation filed an action challenging that requirement. According to the complaint, Navajo Nation reservation residents face myriad challenges to voting by mail. Many on-reservation members do not have home mail service; to receive or send mail, they must travel to a post office. This trip is often long and requires traversing rough terrain and stretches of unpaved roads. Added to this challenge are the socioeconomic factors, educational disadvantages, and language barriers that make both the travel to the post office—which requires access to a car—and the completion of mail ballots difficult. Even after these obstacles are overcome and the ballots are mailed, ballots from the reservation take disproportionately longer to reach the county recorder’s office because of the slower mail service on the reservation. The district court denied plaintiffs’ motion for a preliminary injunction, finding plaintiffs did not demonstrate they were likely to prevail on the merits. The Ninth Circuit affirmed, but for a different reason. The appeals court found plaintiffs lacked standing to bring the action because they failed to show a particularized injury to any of the plaintiffs. (Yazzie v. Hobbs (9th Cir., Oct. 15, 2020) 977 F.3d 964.)

Trade Secret Misappropriation.

Plaintiff developed a comprehensive electronic system for managing stock brokerage firm accounting and other services. Defendant’s predecessor obtained a license for plaintiff’s system, and later the rights and duties of the license were assigned to defendant. Five years later, defendant terminated the license agreement with plaintiff. But just prior to termination of the license, defendant began building its own software for the same services. Plaintiff sued defendant for misappropriation of plaintiff’s system under the federal Defend Trade Secrets Act (18 U.S.C. § 1839(3)), misappropriation under the California Uniform Trade Secrets Act (Civ. Code, § 3426), and unfair competition. The district court granted defendant’s motion for summary judgment. Reversing, the Ninth Circuit held that there was a triable issue of fact “as to whether (a) [plaintiff] described its alleged trade secrets with sufficient particularity and (b) [plaintiff] has shown that parts of the [plaintiff’s] System are secret; and (2) the district court abused its discretion under 56(d) by issuing its summary judgment ruling before discovery occurred.” (InteliClear, LLC v. ETC Global Holdings, Inc. (9th Cir., Oct. 15, 2020) 2020 WL 6072880.)

Employer Beware.

After passing a background check, an employee was hired by defendant, but she was terminated four weeks later for providing false information regarding prior criminal convictions on her job application. When she filled out the application, she was exercising her rights under Labor Code § 432.7, which prohibits an employer from asking a job applicant to disclose any conviction that has been judicially dismissed. However, the Department of Motor Vehicles (DMV) mistakenly reported that the employee had an active criminal conviction. The DMV corrected its mistake after she was fired, but the employee was not rehired. She went to the Labor Commissioner, who determined she was unlawfully discharged and ordered her reinstatement with back pay. When defendant did not comply, the Labor Commissioner sued. The trial court found no evidence defendant was aware that plaintiff’s conviction had been judicially dismissed when it terminated her, and granted nonsuit to defendant. Reversing, the Court of Appeal noted that plaintiff had passed the background check and concluded: “The Commissioner presented evidence sufficient to prove that [the defendant] was aware or had reason to believe that [the employee’s] criminal conviction had been judicially dismissed.” (Garcia-Brower v. Premier Automotive Imports of CA, LLC (Cal. App. 1st Dist., Div. 1, Oct. 15, 2020) 55 Cal.App.5th 961.)

Medical Device Supplier’s Case Against Medicare Tossed.

Plaintiff is a medical device supplier who sought to have Medicare cover its product. After Medicare denied the request, plaintiff filed this action. The district court dismissed the suit, finding it lacked subject matter jurisdiction. Affirming, the Ninth Circuit stated: “We conclude that the lawsuit is subject to Medicare’s administrative channeling requirements, that Plaintiff . . . has not met those requirements, that there exists a way to satisfy those requirements, and that these conclusions do not completely preclude judicial review so as to trigger a key exception to the channeling requirements.” (Sensory Neurostimulation, Inc. v. Azar (9th Cir., Oct. 16, 2020) 977 F.3d 969.)

Chemical Placed on Health Hazard List.

Proposition 65 was enacted by the voters to protect the people of California and its water supply from harmful chemicals. It requires the Governor to publish, at least annually, a list of chemicals known to the state to cause cancer or reproductive toxicity. The Office of Environmental Health Hazard Assessment (OEHHA) listed bisphenol A as a chemical known to cause reproductive toxicity under Proposition 65. Plaintiff contended OEHHA abused its discretion in listing bisphenol A. Affirming, the Court of Appeal noted that, in the absence of evidence to the contrary, OEHHA’s position was properly “based on, among other things, the following presumption: chemicals that cause harm in experimental animals will also cause similar harm in humans . . . .” (American Chemistry Council v. Office of Environmental Health Hazard Assessment (Cal. App. 3rd Dist., Oct. 19, 2020) 55 Cal.App.5th 1113.)

Video Evidence.

A convicted criminal defendant contended that the trial court erred by permitting a detective to describe the events of a surveillance video that was subsequently watched by the jury. The Court of Appeal affirmed, stating: “The court did not abuse its discretion, however, as the detective’s narration was admissible lay testimony based on her extensive review of the video.” (People v. Son (Cal. App., 4th Dist., Div. 3, Oct. 19, 2020) 55 Cal.App.5th 1163.)

Trial Court Erred in Granting Equitable Relief to Defendants Who Went Off the Grid Until a Money Judgment Was Entered Against Them.

On equitable grounds, the trial court granted defendants’ motion to vacate a default judgment. Reversing, the Court of Appeal held that equitable relief from a default judgment is reserved for exceptional circumstances, and there were none in this case. Defendants “failed to pay any attention to this lawsuit and missed every notice from plaintiff because they had made themselves unreachable.” (Kramer v. Traditional Escrow, Inc. (Cal. App. 4th Dist., Div. 3, Oct. 20, 2020) 56 Cal.App.5th 13.)

Writ of Habeas Corpus Granted.

Petitioner, age 64, has been in the custody of the California Department of Corrections and Rehabilitation (CDCR) since 1989. He filed a petition for writ of habeas corpus alleging CDCR was not adequately prepared to respond to the outbreak of COVID-19 at San Quentin State Prison. Approximately 75 percent of the inmate population and dozens of prison staff became infected. The Court of Appeal granted the writ, finding that the warden and CDCR “have acted with deliberate indifference and relief is warranted.” The Court of Appeal also ordered the CDCR to transfer petitioner to a safe facility, and ordered CDCR “to expedite the removal from San Quentin State Prison—by means of release on parole or transfer to another correctional facility administered or monitored by CDCR—of the number of prisoners necessary to reduce the population of that prison to no more than 1,775 inmates. If necessary to achieve this reduction, respondents are ordered to revise their expedited release programs to include inmates over age 60, who have served at least 25 years of their sentences and are eligible for parole, such as life prisoners eligible for parole and second or third strike prisoners, even if such prisoners are serving a sentence for a violent offense.” (In re Von Staich (Cal. App., 1st Dist., Div. 1, Oct. 20, 2020) 56 Cal.App.5th 53.)

Court of Appeal Explains the Difference Between an Alternative Writ and an OSC

The People of the State of California filed a civil complaint against several corporations and an individual, alleging unfair competition and false advertising. The corporations filed an unverified answer containing a general denial. The People moved to strike the answer. The trial court granted the motion, concluding that Code of Civil Procedure § 446, subdivision (a) did not authorize the filing of an unverified answer, and that § 431.30, subdivision (d) required a specific denial of each allegation. The corporations filed a petition for extraordinary writ relief in the Court of Appeal. The Court of Appeal issued an order to show cause. The trial court notified the parties that the case had been assigned to another judge and the court was considering changing its prior ruling. After a hearing, the court vacated its prior order and denied the motion to strike. The Court of Appeal stated that the trial court retained jurisdiction to vacate its prior order, but should not have done so after issuance of an OSC. The appellate court explained the difference between an alternative writ, which requires the lower court to either change its ruling or show cause why it has not done so, and an OSC, which does not invite the lower court to change the challenged ruling. The Court of Appeal admonished, “Going forward, trial courts receiving an order from an appellate court should observe the distinction between an alternative writ and an OSC.” The appellate court also stated that a trial judge ordinarily cannot overturn the order of another trial judge unless the original judge is no longer available, and concluded that the second judge had no authority to vacate the prior ruling by another judge. The Court of Appeal held that the plain language of Code of Civil Procedure § 446, subdivision (a) authorized the filing of an unverified answer because a verification might subject the corporations to criminal prosecution, and the corporations were entitled to answer with a general denial. (Paul Blanco’s Good Car Company Auto Group v. Superior Court (Cal. App., 1st Dist., Div. 5, Oct. 20, 2020) 2020 WL 6153671.)

Changed Arbitration Terms.

When plaintiff first subscribed to an online service in 2014, she expressly agreed to the terms of use. Those 2014 terms included both an arbitration provision and a “change-of-terms” provision, specifying she would be bound to future versions of the contract by continuing to access defendant’s products. In 2018, plaintiff used the product on defendant’s website. At that time, the arbitration provision of the terms had changed. The district court ordered the matter to arbitration under the terms of the 2018 arbitration provision. Affirming, the Ninth Circuit described the issue before it as “whether a mere website visit after the end of a business relationship is enough to bind parties to changed terms in a contract pursuant to a change-of-terms provision in the original contract.” The Ninth Circuit found that the 2018 terms were inapplicable. Nevertheless, it compelled arbitration under the 2014 terms. (Stover v. Experian Holdings, Inc. (9th Cir., Oct. 21, 2020) 2020 WL 6156048.)

Filed Complaint the Same Day Permission to Present a Late Governmental Claim Was Requested . . . Case Dismissed.

Plaintiff missed the statutory deadline to present a claim to a public entity. Pursuant to the Government Claims Act, he asked the entity to allow him to present a late claim. However, he filed a complaint in superior court on the same day, not waiting for the public entity to respond to his late-claim application. The trial court dismissed the action. Affirming, the Court of Appeal held that plaintiff filed his court complaint too soon: “the Government Claims Act . . . is not satisfied by filing a complaint before rejection of a claim.” (Lowry v. Port San Luis Harbor District (Cal. App., Oct. 22, 2020) 2020 WL 6192949.)

Decedent Ignored Order of Police Officer.

A police officer responded to a violent domestic disturbance. In the presence of the officer, decedent, with a knife drawn, advanced toward an individual he had assaulted earlier that day. He ignored multiple commands from the officer to stop and a warning that the officer would shoot. When he advanced to within 10-15 feet of the victim, the officer fired and killed him. The district court granted summary judgment in favor of the officer. Finding the officer was entitled to qualified immunity, the Ninth Circuit affirmed. (Ventura v. Rutledge (9th Cir., Oct. 22, 2020) 2020 WL 6192981.)

Independent Contractors vs. Employees.

Prosecutors brought a civil enforcement action against defendants Uber and Lyft seeking interim injunctive relief, alleging they misclassified drivers using their ride platforms as independent contractors rather than employees. Prosecutors alleged this misclassification gave defendants an unfair advantage over competitors and reduced tax revenues. The trial court issued a preliminary injunction that restrained Uber and Lyft from classifying their drivers as independent contractors. Affirming, the Court of Appeal concluded the trial court acted within its discretion. (People v. Uber Technologies, Inc. (Cal. App. 1st Dist., Div. 4, Oct. 22, 2020) 2020 WL 6193994.)

The Attorney-Client Privilege Can Get Complicated.

In a labor dispute action involving a claimed whistleblower, the jury awarded money damages against a state agency. The trial court permitted plaintiff’s counsel to invite the jury to draw negative inferences from the agency’s invocation of the attorney-client privilege. The agency asked the court to instruct the jury with the mandatory curative instruction found in Evidence Code § 913: “If . . . a privilege is or was exercised not to testify with respect to any matter, or to refuse to disclose or to prevent another from disclosing any matter, neither the presiding officer nor counsel may comment thereon, no presumption shall arise because of the exercise of the privilege, and the trier of fact may not draw any inference therefrom as to the credibility of the witness or as to any matter at issue in the proceeding.”  Instead, the court instructed the jury with CACI No. 215: “A witness or party may have an absolute right not to disclose what they told their attorney in confidence because the law considers this information privileged. Do not consider, for any reason at all, the fact that a witness or party did not disclose what they told their attorney. Do not discuss that fact during your deliberations or let it influence your decision in any way.” On appeal, the agency argued that plaintiff’s counsel’s questioning forced the defendants to decide whether to suffer the negative inferences or disclose the content of a privileged memo. The Court of Appeal reversed, stating,“the jury was left with counsel’s questions and argument to infer that defendants sought legal advice to terminate plaintiff for being a whistleblower in June 2010, an inference that would damage the defendants’ position in the litigation.” (Carroll v. Commission on Teacher Credentialing (Cal. App. 3rd Dist., Oct. 23, 2020) 2020 WL 6253302.)

Lemon Law Damages.

In a Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.) case, the jury awarded damages for violation of express warranty as well as a civil penalty for willful failure to repurchase or replace the vehicle. On the fraud claim, the jury awarded economic damages of $33,839.91, noneconomic damages of $100,000, and punitive damages of $1 million. After an award of fees and costs, the total judgment amounted to $1,740,169.58. On appeal, the manufacturer contended most of the damages should be vacated because of lack of substantial evidence of fraudulent concealment. Finding there was no evidence the manufacturer was aware of the defect until after plaintiff purchased his vehicle, and thus no evidence that the manufacturer concealed it, the Court of Appeal vacated the damages award, holding: “Because the fraud judgment must fall, the separate award of economic damages, the noneconomic damages, and the punitive damages fall with it.” But the court affirmed the verdict for willful failure to repair or replace, stating: “By the time [the manufacturer’s] duty to repurchase arose, it was aware of the electrical defect in [plaintiff’s] vehicle, which it chose not to repair adequately.” (Santana v. FCA US, LLC (Cal. App. 4th  Dist., Div. 3, Oct. 23, 2020) 2020 WL 6261439.)

A Question of Duty.

A 19-year-old woman went to a Live Nation concert with friends, ingested an illegal drug, and collapsed. After medical personnel responded, an ambulance transported her to a hospital where she died shortly thereafter. Her parents sued Live Nation for negligence and other causes of action. Finding that Live Nation did not owe a duty of care to concert attendees, the trial court granted summary judgment for Live Nation. In order to put on its concert, Live Nation needed to obtain various government permits and approvals. Its safety overview in seeking those approvals stated: “ ‘Patrons make attempts to sneak illegal substances in . . . . Patrons who consume illegal substances are also prone to dehydration or possible overdose reactions. [¶] Some patrons will consume several different substances and suffer from negative effects. [¶] This is the major risk.’ Therefore, according to Live Nation, it ‘retained security and medical vendors and coordinated with local public agencies to use reasonable measures to implement security and medical plans for the safety of attendees . . . .’ ” During the event, the decedent’s eyes rolled back and she collapsed. According to her friends, the security guards “just sort of waited” and watched her on the ground, looking at each other. The friends said the security guards said there was nothing they could do until medical personnel involved. One friend said it took 15 or 20 minutes for the medical team to arrive. Another friend said, “ ‘[i]t could have been five minutes though.’ ” The team placed a manual air pump in her mouth, and about 15 minutes later, transported her by cart to an ambulance. Reversing, the Court of Appeal stated: “Because of its special relationship with festival attendees, an operator of electronic music festivals like Live Nation owes a duty of reasonable care to festival attendees. Whether Live Nation breached its duty and caused [the woman’s] death are for the jury to determine.” (Dix v. Live Nation Entertainment, Inc. (Cal. App. 2nd Dist., Div. 7, Oct. 26, 2020) 2020 WL 6268307.)

Private Landowner’s Property Was Not Dedicated for Public Use.

Defendant owns 110 acres of undeveloped land on the Tiburon peninsula near plaintiff’s communities. Plaintiff, a trust, proclaims its mission is to “ ‘save these trails, not only for the present, but to save them into the future and combine them with other trails to form a network for the public to enjoy.’ ” Plaintiff asked the trial court to find defendant’s land had been dedicated for public use. The trial court found for defendant, concluding plaintiffs failed to show that the public’s use of the trails was sufficient to make a conclusive and undisputable presumption of knowledge and acquiescence. Affirming, the Court of Appeal concluded the trial court’s findings were supported by substantial evidence. (Tiburon/Belvedere Residents United to Support the Trails v. Martha Company (Cal. App. 1st Dist., Div. 5, Oct. 26, 2020) 2020 WL 6266312.)

What Does a Release Release?

Plaintiff worked as a diesel mechanic for defendant. Plaintiff alleged he developed a sarcoma as a result of his exposure to diesel fumes and other carcinogenic substances. Plaintiff previously brought an unrelated action against defendant, which was settled. At that time, plaintiff executed a release “of all claims arising from his employment, including any claims concerning exposure to toxic chemicals or fumes.” In the present action, the trial court granted judgment on the pleadings for defendant. Reversing, the Court of Appeal stated: “The release at issue here purported to extend to future claims unrelated to the particular injury that Chacon previously settled. To that extent it is invalid. We therefore reverse and remand for further proceedings on Chacon’s complaint.” (Chacon v. Union Pacific Railroad (Cal. App. 2nd Dist., Div. 2, Oct. 26, 2020) 2020 WL 6268302.)

Meaning of Policy Language.

A vehicle accident caused a car to crash through a restaurant, injuring two patrons. The patrons sued the restaurant owner and his landlords, alleging that the property lacked safety measures that would have protected the patrons from this type of injury. The trial court granted summary judgment for the restaurant owner but not for the landlords, who knew a similar accident had occurred years earlier but failed to implement safety measures to prevent a recurrence. The landlords settled the action with the restaurant patrons. The landlords’ insurer then sued the restaurant’s insurer for equitable contribution because the “additional insured” provision in the restaurant’s policy covered the landlords’ liability “arising out of” the restaurant owner’s “use” of the premises. Following a bench trial, the court found that the landlords’ liability arose from the restaurant owner’s use of the premises and was therefore covered under the policy. The court entered judgment for the landlord’s insurer, requiring the restaurant’s insurer to pay 50 percent of the settlement amount and costs of defense. Affirming, the Court of Appeal stated that “[t]he phrase ‘arising from’ in a general liability insurance policy requires only a minimal causal connection, which existed here, and the respective liability of the parties is irrelevant to the additional insured provision.” (Truck Insurance Exchange v. AMCO Insurance Company (Cal. App. 2nd Dist., Div. 4, Oct. 26, 2020) 2020 WL 6268669.)

Question of Fact Whether Officer Used Excessive Force.

A 12-year-old girl called 911 and told the dispatcher she, her sister, and their mother were barricaded in a room at their home because her mother’s boyfriend had a chainsaw and was going to attack them. She also said the man had anger issues and was always drinking. The 911 operator could hear a sawing sound on the call. When police arrived, the man followed their instructions. At one point, one of the officers announced the man had a knife in his pocket. Two officers gave the man orders, one from the man’s left side and the other from his right side. As the man turned his head to the officer on the left, he lowered his arms. A third officer immediately shot the man with a beanbag round and then a second round. The man brought a civil rights action alleging excessive force. The district court granted summary judgment in favor of all defendants on the federal claims and declined to exercise jurisdiction over the state law claims. The Ninth Circuit reversed as to one officer who knelt on the man’s back, but affirmed as to the officer who shot the beanbags, finding his force was objectively reasonable.  The Ninth Circuit also reinstated plaintiff’s state law claims and remanded for further proceedings. (Cortesluna v. Leon (9th Cir., Oct. 27, 2020) 2020 WL 6279697.)

Officers’ Use of Deadly Force Was Objectively Reasonable.

After leading police officers on a high-speed chase, a man turned down a dead-end street. He stopped at the end of the road, and the police officers parked and exited their cruisers behind him. The man turned the van around, pointing it generally toward the officers. As the van accelerated in an arc toward and eventually between the officers, they commanded him to stop, and fired on him when the van moved in their direction and in the direction of their fellow officers. The man crashed into a police cruiser, pushing that cruiser into one of the officers, and the officers continued to fire. The man sustained multiple gunshot wounds and was pronounced dead at the scene. Granting summary judgment for all defendants, the district court found that the officers’ use of deadly force was reasonable. Affirming, the Ninth Circuit Court stated: “We hold that the officers’ use of deadly force was objectively reasonable in this dynamic and urgent situation, where officers were faced with the immediate threat of significant physical harm.” (Monzon v. City of Murrieta (9th Cir., Oct. 27, 2020) 2020 WL 6293163.)

The Mysterious Land of References.

The trial court ordered a general reference (Code Civ. Proc., § 638) pursuant to the parties’ prior agreement. The referee filed his decisions in the trial court, including a $5 million punitive damages award. Before entering judgment on those decisions, the court granted defendants’ motions to set aside the decisions and ordered a new trial to be had by the court, not by the referee. Plaintiffs petitioned the Court of Appeal for a writ of mandate to compel the trial court to enter judgment on the referee’s decisions or, alternatively, to direct the trial court to order a new trial to be heard by the referee. The Court of Appeal granted the petition, concluding that the trial court had no authority to review the referee’s decisions before entering judgment on the decisions, but, “the trial court was authorized to entertain the motions as postjudgment motions and, based on the parties’ reference agreement, properly ruled that the new trial would be heard by the court and not by the referee.” (Yu v. Superior Court (Cal. App. 2nd Dist., Div. 3, Oct. 27, 2020) 2020 WL 6281295.)

Discretionary Function Exception.

Plaintiff was asleep in the Lake Mendocino recreation area when a 60-foot tree crashed onto his tent and smashed his foot. He sued the government. Evidence revealed that during daily foot patrols, someone from the Army Corps of Engineers looked for trees with dead spots, foliage loss, cankers, fungi, or trees with dead branches that would signal a threat. If a tree looked dangerous, it was removed the same day or first thing the next morning. If the tree did not pose an immediate threat, it would be removed later. The tree that hit plaintiff’s tent had been inspected, but no sign of disease was found. After the tree fell, root rot was discovered. The district court dismissed the action. On appeal, the Ninth Circuit stated: “The United States has sovereign immunity and cannot be sued without its consent. One important immunity waiver that allows suits against the federal government is the FTCA [Federal Tort Claims Act]. But liability does not extend to [¶] Any claim based upon an act or omission of an employee of the Government, exercising due care. . .[¶] 28 U.S.C. § 2680(a). The purpose of this ‘discretionary function exception’ is to ‘prevent second-guessing’ of legislative and administrative decisions grounded in social, economic and political policy through the medium of an action in tort.’ ” The appeals court concluded the Corps’ policies were not mandatory and allowed for discretion, and thus affirmed dismissal of the action under the discretionary function exception.  (Lam v. United States (9th Cir., Oct. 28, 2020) 2020 WL 6304703.)

Terminating and Monetary Sanctions Upheld.

The trial court awarded $586,600 in sanctions for discovery abuses and dismissed plaintiffs’ complaint. Defendants appealed, contending the amount awarded was insufficient to cover the attorney fees and costs resulting from plaintiffs’ discovery abuses, and plaintiffs’ trial counsel should be jointly and severally liable for the sanctions. The Court of Appeal concluded that there was no abuse of discretion in the amount awarded, the evidence supported the finding that plaintiffs’ counsel did not advise the misconduct resulting in the discovery sanctions, and the court erred by not awarding fees in connection with certain requests for production of documents. (Cornerstone Realty Advisors, LLC v. Summit Healthcare Reit, Inc. (Cal. App. 4th Dist., Div. 3, Oct. 28, 2020) 2020 WL 6304989.)

Forum Selection Clause in Employment Agreement Is Void.

An employment agreement stated that any action brought by the employee “must be venued in Franklin County, Ohio.” Plaintiff began working for defendant in 2014. Defendant later revised plaintiff’s compensation package. Labor Code § 925 provides: “An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would . . . :[¶] (1) Require the employee to adjudicate outside of California a claim arising in California. . . ,” and applies “to a contract entered into, modified, or extended on or after January 1, 2017.” Defendant moved to dismiss or stay the action based on the forum selection clause. The trial court denied the motion, concluding that Labor Code § 925 rendered the forum selection clause in the original employment agreement unenforceable because defendant modified the agreement in 2017 and 2018. Defendant petitioned the Court of Appeal for extraordinary relief. The appellate court denied the petition, concluding that any modification to a contract on or after January 1, 2017, triggers Labor Code § 925. (Midwest Motor Supply Co. v. Superior Court (Cal. App. 1st Dist., Div. 4, Oct. 28, 2020) 2020 WL 6305492.)

Younger Abstention.

Plavix is a medication used to help prevent heart attacks and strokes by inhibiting the formation of blood clots. Researchers reported that some people, particularly those of Asian or Pacific Islander descent, have a genetic variation in an enzyme involved in metabolizing Plavix. The State of Hawaii filed suit in state court against the pharmaceutical companies that produce Plavix, alleging the companies knew that those with the genetic variation, a group that includes a significant portion of Hawaii’s population, experienced worse clinical outcomes and that the companies intentionally concealed that fact in violation of Hawaii’s statute prohibiting unfair or deceptive acts or practices in commerce. Six years later, the drug companies filed suit in federal court, seeking an injunction against the state court litigation. The district court dismissed the suit, concluding that Younger v. Harris (1971) 401 U.S. 37 required the district court to abstain from exercising jurisdiction. The Ninth Circuit concluded that the state court proceeding fell within the general class of quasi-criminal enforcement actions to which Younger abstention applies and affirmed. (Bristol-Myers Squibb Co. v. Connors (9th Cir., Oct. 29, 2020) 2020 WL 6334330.)

Lawyer’s Duty of Candor with the Court.

A lawyer filed a motion to enforce a settlement agreement. The lawyer later received the settlement checks. The lawyer proceeded with the motion and did not inform the court that he had already received the funds. The court held the other counsel in contempt. The other counsel moved to set aside the contempt order. The court granted the set aside motion and issued an order to show cause against the lawyer “based upon his lack of candor with the Court.” The court found the lawyer in contempt based on his lack of candor at the hearing on the motion to enforce the settlement agreement and ordered him to pay sanctions of $5,310. The lawyer appealed. The Court of Appeal held that the contempt finding was not appealable. As to the sanctions, the appeals court affirmed, stating: “An attorney is an officer of the court and owes the court a duty of candor.” (Levine v. Berschneider (Cal. App. 2nd Dist., Div. 7, Oct. 30, 2020) 2020 WL 6336162.)

Dormant Commerce Clause.

In 2018, plaintiff filed an action to enforce a 1997 judgment that had not been renewed. Plaintiff relied upon Code of Civil Procedure § 351, which tolls a statute of limitations when a defendant leaves the state. The trial court found the statute impermissibly burdened interstate commerce and therefore violated the dormant commerce clause. The court granted the debtor defendant’s motion for summary judgment on the ground the creditor’s action was time-barred. Affirming, the Court of Appeal stated that the fact that the judgment might have been subject to infinite renewals in an alternate timeline was irrelevant, and concluded that Code of Civil Procedure § 351 places burdens on interstate commerce that are excessive in relation to its putative local benefits. (Arrow Highway Steel, Inc. v. Dubin (Cal. App. 2nd Dist., Div. 2) Oct. 30, 2020) 2020 WL 6336163.)

Waiver of PAGA Claims in Employment Agreement Unenforceable.

Plaintiff is a driver for Lyft, Inc., whose terms of service include an agreement that he could not bring a Private Attorney General Act (Lab. Code, § 2698; PAGA) claim in court and that disputes with Lyft must be resolved by individual arbitration. Plaintiff sued Lyft alleging six PAGA claims. Lyft petitioned to compel to arbitration. The trial court denied the petition. Basing its decision on Correia v. NB Baker Electric, Inc. (2019) 32 Cal.App.5th 602, which held that a purported waiver of PAGA representative claims is unenforceable, the Court of Appeal affirmed. (Olson v. Lyft, Inc. (Cal. App. 1st Dist., Div. 2) Oct. 30, 2020) 2020 WL 6336102.)

Damages Recoverable Under the Lemon Law.

In a lemon law case under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.), the jury awarded plaintiff the full price of her defective vehicle, offset by mileage accrued, plus incidental and consequential damages and a civil penalty. Following the jury’s verdict, the trial court denied defendant’s motion to reduce plaintiff’s damages by the $19,000 credit plaintiff received towards the purchase price of a new vehicle when she traded in her defective vehicle to a GMC dealer. Reducing the damages award, the Court of Appeal noted: “Granting plaintiff a full refund from defendant in addition to the proceeds of the trade-in would put her in a better position than had she never purchased the vehicle, a result inconsistent with ‘restitution.’ ” The appeals court held the lemon law’s restitution remedy does not include amounts a plaintiff has already recovered by trading in the vehicle at issue. (Niedermeier v. FCA US LLC (Cal. App. 2nd Dist., Div. 1, Oct. 30, 2020) 2020 WL 6375408.)

Recreational Use Immunity.

Plaintiff, a minor, was severely injured in a collision with another motorcycle ridden by defendants’ 18-year-old son. An expert witness testified the collision was caused by the negligent design of the track on defendants’ property next to defendants’ residence. Civil Code § 846 provides recreational use immunity from liability for landowners, except if there was an express invitation. The trial court instructed the jury that the express invitation exception to the immunity defense applied only if one of the parents, i.e., an actual landowner, expressly invited plaintiff onto the property. The jury found no liability. Reversing, the Court of Appeal stated: “We hold that where, as here, a child of the landowner is living with the landowner on the landowner’s property and the landowner has consented to this living arrangement, the child’s express invitation of a person to come onto the property operates as an express invitation by the landowner within the meaning of section 846, subdivision (d)(3), unless the landowner has prohibited the child from extending the invitation.” (Hoffmann v. Young (Cal. App. 2nd Dist., Div. 6, Oct. 30, 2020) 2020 WL 6375391.)

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