Litigation
Litigation Update: October 2023
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, Jennifer Hansen, Gary A. Watt, Ryan Wu
Trial Court Erred in Denying a Military Veteran’s Petition for a Lower Sentence.
A military veteran, who pled guilty to committing five felonies in 2001 and was sentenced to 28 years in prison, requested the trial court to lower his sentence pursuant to Penal Code § 1170.91, a statute that specifically applies to veterans who suffer from health conditions resulting from military service. The trial court denied the petition, finding that a person serving a stipulated sentence is categorically ineligible for relief under that statute. Reversing, the Court of Appeal analyzed the recent amendments made to § 1170.91, concluding: “In sum, then the Legislature clearly intended to make persons serving a stipulated sentence eligible for relief under section 1170.91.” (People v. Harrell (Cal. App. 4th Dist., Div. 2, Sept. 1, 2023) 2023 WL 5663160.)
Bank Disbursed Money in a Blocked Account to Someone Other than the Law Firm to Whom the Court Ordered It Be Disbursed.
A probate court issued the final probate order closing administration of the estate. The order provided that the administrator was “authorized and directed to receive statutory compensation for services rendered, in the sum of $16,000.00.” It also ordered that the law firm was “authorized and directed to receive: [¶] Statutory compensation for services rendered, in the sum of $16,000.00” as well as “Extraordinary compensation for legal services rendered, in the sum of $44,151.25” plus costs. Instead of following the court order, the bank disbursed all the funds to the administrator. The law firm sued the bank for negligence. The trial court granted summary judgment for the bank. Reversing, the Court of Appeal stated: “In finding a duty, we consider the factors first articulated by the Supreme Court in Biakanja v. Irving (1958) 49 Cal.2d 647 (Biakanja). Although banks do not generally have a duty to police customer accounts for suspicious activity, Chase owed the Law Firm, as an intended beneficiary of the blocked account order and acknowledgment, a duty to act with reasonable care in limiting distributions from the blocked account to those authorized by court order.” (Law Firm of Fox and Fox v. Chase Bank, N.A. (Cal. App. 2nd Dist., Div. 7, Sept. 5, 2023) 2023 WL 5691039.)
Nonprofit Group Dedicated to Preserve California’s Coast Does Not Have Authority over Airbnb Rentals.
Plaintiff is a nonprofit corporation that states its mission is to protect and preserve the California coast. Defendant owns and operates an online marketplace for short-term rentals. The gravamen of plaintiff’s complaint was that short-term rentals in the coastal zone, including those offered for rent on defendant’s site, are developments under the Coastal Act (Pub. Resources Code, § 30106) that require a coastal development permit. Plaintiff alleged that short-term rentals increase the density and intensity of use of land in the coastal zone by increasing access to homes and residential investment properties by the guests who rent them and by increasing access to the coastline by such guests. The trial court sustained defendant’s demurrer without leave to amend. Affirming, the Court of Appeal stated: “We hold that [short-term rentals] are not per se developments under the Coastal Act, and accordingly affirm the judgment. (Coastal Protection Alliance Inc. v. Airbnb, Inc. (Cal. App. 2nd Dist., Div. 3, Sept. 5, 2023) 95 Cal.App.5th 207.)
State Workers’ Compensation Is Exclusive Remedy for Worker Who Sued Under Federal Admiralty Law.
Plaintiff fell while stepping from a dock to a boat. He sued his employer, a yacht club, under federal admiralty law. The trial court sustained defendant’s demurrer. Affirming, the Court of Appeal stated: “Congress in 1984 specified employees covered by state workers’ compensation law working at a ‘club’ are covered by state workers’ compensation law and not federal law if they are eligible for state workers’ compensation. (33 U.S.C. § 902, subds. 3, 3(B).) Ranger concedes the yacht club is a ‘club.’ Federal law thus makes California state workers’ compensation law paramount, which means Ranger’s exclusive remedy is workers’ compensation. (Labor Code, § 3602, subd. (a) [workers’ compensation is exclusive].)” (Ranger v. Alamitos Bay Yacht Club (Cal. App. 2nd Dist., Div. 8, Sept. 6, 2023) 95 Cal.App.5th 240.)
Trial Court Erred in Ordering Case Under Song-Beverly Act to Arbitration.
Petitioners alleged they leased a Mercedes-Benz automobile and at the end of the lease signed a retail installment sales contract. Both the lease and the sales contract had arbitration agreements. In their lawsuit under the Song-Beverly Consumer Warranty Act (Civ. Code, §§ 1790–1795.8), plaintiffs contended the automobile had undisclosed defects covered by warranties. The dealer could not fix the defects. The manufacturer moved to compel arbitration as a third-party beneficiary of both the lease, the installment sales contract, and the doctrine of equitable estoppel. The trial court ordered the parties to arbitration. Issuing a writ of mandate, the Court of Appeal stated: “Petitioners’ complaint does not reference either of the two agreements with the dealer and does not allege that [the manufacturer] breached obligations based on those agreements. [The manufacturer] is not mentioned in the agreements and does not have any obligations arising out of the agreements. Petitioners’ claims are thus not ‘intimately founded and intertwined’ with the agreements [], but instead arise from a statutory scheme separate and apart from the contracts.” (Yeh v. Superior Court of Contra Costa County (Cal. App. 1st Dist., Div. 4, Sept. 6, 2023) 95 Cal.App.5th 264.)
So Many Different Courts.
Plaintiffs filed suit under § 702 of the Administrative Procedure Act (5 U.S.C. § 702), seeking injunctive and declaratory relief against defendants United States Air Force and United States Air National Guard based on defendants’ alleged misuse of plaintiffs’ intellectual property. The district court dismissed the action. Affirming, the Ninth Circuit stated: “Aero Can Seek Declaratory Relief in the Court of Federal Claims.” (United Aeronautical Corporation v. United States Air Force (9th Cir., Sept. 7, 2023) 2023 WL 5763351.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/07/21-56377.pdf
Challenge to California’s Laws Prohibiting Openly Carrying Guns.
Plaintiffs wish to openly carry handguns in California for self-protection, but California’s current licensing regime effectively establishes a statewide ban on open carry by ordinary law-abiding Californians. With narrow exceptions, those Californians who reside in counties with more than 200,000 residents—roughly 95% of state residents—may not apply for an open carry license. (Pen. Code, §§ 25850, 26150(b)(2), 26155(b)(2), 26350; see also id. at §§ 26361–26392 (exceptions).) A subset of the remaining 5% of Californians not subject to other categorical bars may apply for an open-carry license from the local county sheriff or police chief, but California provided no evidence that any such license has ever been issued. Plaintiffs brought a Second Amendment suit in federal court against the Attorney General of California in his official capacity and sought a preliminary injunction enjoining the enforcement of the California Penal Code sections that impose criminal penalties for unlicensed open carry. The district court denied the injunction. Reversing and remanding, the Ninth Circuit stated: “Here, by declining to assess Appellants’ likelihood of success on the merits of their Second Amendment claim, the district court abused its discretion by failing to apply the proper preliminary injunction standard for a case raising a constitutional challenge. [Citation.] We therefore reverse and remand. Recognizing that the preliminary injunction proceedings in this case have been ongoing for more than four years, we instruct the district court to complete its reevaluation of the requested preliminary injunction and issue a decision expeditiously.” (Baird v. Bonta (9th Cir., Sept. 7, 2023) 2023 WL 5763345.)
Justice Alito Wrote Separately to Explain Why He Would Not Recuse Himself from a Case.
In a case involving the taxes on United States shareholders’ foreign investments, Justice Alito wrote the following: “In a letter to THE CHIEF JUSTICE dated August 3, 2023, Senator Richard Durbin, the Chair of the Senate Judiciary Committee, ‘urge[d]’ THE CHIEF JUSTICE ‘to take appropriate steps to ensure’ that I recuse in this case. Recusal is a personal decision for each Justice, and when there is no sound reason for a Justice to recuse, the Justice has a duty to sit. Because this case is scheduled to be heard soon, and because of the attention my planned participation in this case has already received, I respond to these concerns now. [¶] There is no valid reason for my recusal in this case. Senator Durbin’s letter expressed the view that recusal is necessary because I participated in two interviews that resulted in two articles about my work that appeared in the Wall Street Journal. The interviews were jointly conducted, and the resulting articles were jointly written, by James Taranto and David B. Rivkin, Jr. Mr. Taranto, a prominent journalist, presumably either wrote or approved everything that appeared in the articles under his byline, and Senator Durbin’s letter makes no objection relating to his participation in this project. Senator Durbin argues, however, that Mr. Rivkin’s participation requires me to recuse because Mr. Rivkin, who is both a much-published opinion-journalist and a practicing attorney, is one of the attorneys in this case. [¶] This argument is unsound. When Mr. Rivkin participated in the interviews and co-authored the articles, he did so as a journalist, not an advocate. The case in which he is involved was never mentioned; nor did we discuss any issue in that case either directly or indirectly. His involvement in the case was disclosed in the second article, and therefore readers could take that into account. [¶] There was nothing out of the ordinary about the interviews in question. Over the years, many Justices have participated in interviews with representatives of media entities that have frequently been parties in cases before the Court, including NPR, the New York Times, CBS, Fox News, National Review, and ABC. Similarly, many of my colleagues have been interviewed by attorneys who have also practiced in this Court, and some have co-authored books with such attorneys. Those interviews did not result in or require recusal. [¶] Senator Durbin’s request for my recusal is presumably based on the theory that my vote in Moore will be affected in some way by the content of the articles that resulted from the interviews, but that theory fundamentally misunderstands the circumstances under which Supreme Court Justices must work. We have no control over the attorneys whom parties select to represent them, and as a result, we are often presented with cases in which one of the attorneys has spoken favorably or unfavorably about our work or character. Similarly, we regularly receive briefs filed by or on behalf of Members of Congress who have either supported or opposed our confirmations, or who have made either favorable or unfavorable comments about us or our work. We participate in cases in which one or more of the attorneys is a former law clerk, a former colleague, or an individual with whom we have long been acquainted. If we recused in such cases, we would regularly have less than a full bench, and the Court’s work would be substantially disrupted and distorted. [¶] In all the instances mentioned above, we are required to put favorable or unfavorable comments and any personal connections with an attorney out of our minds and judge the cases based solely on the law and the facts. And that is what we do. [¶] For these reasons, there is no sound reason for my recusal in this case, and in accordance with the duty to sit, I decline to recuse.” (Moore v. United States (U.S., Sept. 8, 2023) 2023 WL 5807533.)
Potential Juror Would Scrutinize Credibility of Police Officers More than Lay Persons.
An inmate in a jail facility was observed taking something from her pants and passing it on to the criminal defendant here. Defendant was searched and found to be in possession of 59 grams of methamphetamine. She was charged with a crime. During voir dire, a potential juror said she would be more critical in judging the credibility of police officers and hold them to a higher standard in terms of credibility and scrutinize them more than she would a lay person. The prosecutor challenged for cause and defense counsel objected, asserting that distrust of law enforcement is an invalid reason to challenge a juror. The trial court overruled the objection, and the defendant was convicted. Affirming the conviction, the Court of Appeal stated: “In support of this argument, Aranda relies on recently enacted [CCP] section 231.7, which took effect in January 2021 and provides that a ‘peremptory challenge’ based on a prospective juror’s ‘[e]xpressing a distrust of or having a negative experience with law enforcement or the criminal legal system’ (id., subd. (e)(1)) is ‘presumed to be invalid unless the party exercising the peremptory challenge’ can make a certain evidentiary showing (id., subd. (e)). According to Aranda, the prosecution’s challenge for cause of Juror 134 was presumptively invalid under section 231.7. We disagree. On its face, section 231.7 applies only to peremptory challenges, not challenges for cause.” (People v. Aranda (Cal. App. 4th Dist., Div. 3, Sept. 8, 2023) 95 Cal.App.5th 311.)
“Fees and Costs Must Be RECEIVED by the Arbitrator Within 30 Days After the Due Date.”
Plaintiff sued defendant, her former employer, for sexual harassment and assault. The trial court ordered the case into arbitration. The date for defendant to pay arbitration fees and costs to the arbitrator was September 1, 2022. Under Code of Civil Procedure § 1281.98 (a)(1), these fees and costs had to be “paid within 30 days after the due date”—or by October 3—to avoid breaching the arbitration agreement. Instead, the arbitrator received the payment on October 5, two days after the statutory 30-day grace period expired. This delay occurred because the real parties opted to mail a check on Friday, September 30, for the full amount due on Monday, October 3, even though payment could be submitted by credit card, electronic check (also referred to as “ECheck”), or wire transfer. Plaintiff moved to vacate the order compelling arbitration on the basis that real parties failed to pay their arbitration fees and costs within 30 days of the due date as required by § 1281.98(a)(1). After the trial court denied the motion, thus precluding petitioner from withdrawing from the arbitration and pursuing her claims in court, she filed a petition for writ of mandate in this court. Issuing a peremptory writ of mandate, the Court of Appeal stated: “In this writ proceeding, we strictly enforce the 30-day grace period in section 1281.98(a)(1) and conclude fees and costs owed for a pending proceeding must be received by the arbitrator within 30 days after the due date. We do not find that the proverbial check in the mail constitutes payment and agree with petitioner that real parties’ payment, received more than 30 days after the due date established by the arbitrator, was untimely.” (Doe v. Superior Court of City and County of San Francisco (Cal. App. 1st Dist., Div. 3, Sept. 8, 2023) 95 Cal.App.5th 346.)
Executor of Estate Cannot Appear Pro Per in Action for Partition.
The issue before the appellate court was whether the executor and personal representative of an estate could proceed in propria persona on issues related to a complaint for partition. Dismissing the appeal, the Court of Appeal stated: “[W]e conclude that Leslie’s complaint for partition and other relief is a claim made against third parties for the benefit of the estate’s beneficiaries, such that it could not be prosecuted by Leslie in propria persona. By extension, Leslie cannot prosecute the appeal before us without us.” (Estate of Sanchez (Cal. App. 6th Dist., Sept. 8, 2023) 2023 WL 5868290.)
All Admissible Relevant Evidence Should Be Considered When Determining Whether a Parent Sexually Abused a Child.
When dissolving the parties’ marriage, the family court granted the mother full custody of the parties’ minor daughters, barring all visitation with the father. On appeal, the father contended the lower court erred in not ordering an evaluation into whether he sexually abused his daughters. Affirming, the Court of Appeal noted the court may order an expert to evaluate allegations of abuse of a child under Family Code § 3118, but that “such an evaluation is not the only evidence that can support a finding of sexual abuse; rather ‘all relevant, admissible evidence submitted by the parties’ should be considered when determining whether a parent sexually abused a child. (§ 3044, subd. (e).)” (Marriage of C.D. and G.D. (Cal. App. 2nd Dist., Div. 6, Sept. 11, 2023) 2023 WL 5924035.)
Jurisdiction over a “Digital Nomad.”
Plaintiff sued defendant over a trademark issue and the district court dismissed the case for lack of personal jurisdiction. Defendant has no employees or outside investors, has no manufacturing or production facilities, and does not itself own or rent any office space. The company is, for all practical purposes, an extension of one man, who claims to “handle[] business for Impossible LLC . . . remotely from wherever [he] happen[s] to be.” Reversing, the Ninth Circuit stated: “We hold that [] defendant is subject to specific personal jurisdiction in California because it previously operated out of California and built its brand and trademarks there. [Defendant’s] activities in the forum state are sufficiently affiliated with the underlying trademark dispute to satisfy the requirements of due process.” (Impossible Foods Inc. v. Impossible X LLC (9th Cir., Sept. 12, 2023) 2023 WL 5921361.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/12/21-16977.pdf
Guns, Kids, and the First Amendment.
California Business and Professions Code § 22949.80 prohibits the advertising of any “firearm related product in a manner that is designed, intended, or reasonably appears to be attractive to minors.” Junior Sports Magazines Inc. publishes Junior Shooters, a youth-oriented magazine focused on firearm-related activities and products. According to Junior Sports Magazines, its ability to publish Junior Shooters depends on advertising revenue. Fearing liability under § 22949.80, Junior Sports Magazines ceased distributing the magazine in California and placed warnings on its website deterring California minors from accessing its content. Meanwhile, the magazine sued California, contending § 22949.80 is unconstitutional. The magazine also requested a preliminary injunction to stop enforcement of the statute. The district court denied the injunction. Reversing, the Ninth Circuit noted that California allows minors to use firearms under adult supervision for hunting, shooting, and other lawful activities, and held: “California has many tools to address unlawful firearm use and violence among the state’s youth. But it cannot ban truthful ads about lawful firearm use among adults and minors unless it can show that such an intrusion into the First Amendment will significantly further the state’s interest in curtailing unlawful and violent use of firearms by minors.” (Junior Sports Magazines, Inc. v. Bonta (9th Cir., Sept. 13, 2023) 2023 WL 5945879.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/13/22-56090.pdf
Previously we reported:
School District Cannot Set Double Standards.
The Fellowship of Christian Athletes (“FCA”) requires students serving in leadership roles to abide by a Statement of Faith, which includes the belief that sexual relations should be limited within the context of a marriage between a man and a woman. The San Jose Unified School District revoked FCA’s status as an official student club at its high schools, claiming that FCA’s religious pledge requirement violates the School District’s non-discrimination policy. Reversing the district court’s denial of FCA’s motion for a preliminary injunction, the Ninth Circuit stated: “While this clash of values may pose a difficult policy choice, the legal outcome is much more straightforward based on the record before us. Under the First Amendment, our government must be scrupulously neutral when it comes to religion: It cannot treat religious groups worse than comparable secular ones. But the School District did just that. The School District engaged in selective enforcement of its own non-discrimination policy, penalizing FCA while looking the other way with other student groups. For example, the School District blessed student clubs whose constitutions limited membership based on gender identity or ethnicity, despite the school’s policies barring such restricted membership. The government cannot set double standards to the detriment of religious groups only. We thus reverse the district court’s denial of FCA’s motion for preliminary injunction and direct the district court to enter an order reinstating FCA as an official student club.” (Fellowship of Christian Athletes v. San Jose Unified School District Board of Education (9th Cir., Aug. 29, 2022) 46 F.4th 1075.)
Next:
The Ninth Circuit Court of Appeals ordered that this matter be reheard en banc. The three-judge panel opinion was vacated. (Fellowship of Christian Athletes v. San Jose Unified School District Board of Education (9th Cir., Jan. 23, 2023) 59 F.4th 997 (mem.).) Thereafter, a majority of active judges of the Ninth Circuit voted to issue an injunction pending resolution of this appeal. The court ordered San Jose Unified School District to recognize student chapters affiliated with the Fellowship of Christian Athletes, and the injunction was to remain in effect pending resolution of the appeal. (Fellowship of Christian Athletes v. San Jose Unified School District Board of Education (9th Cir., Apr. 3, 2023) 64 F.4th 1024.)
The latest:
The en banc court held: “Plaintiffs are likely to succeed on their Free Exercise claims because the District’s policies are not neutral and generally applicable and religious animus infects the District’s decision making. . . . Therefore, we REVERSE the district court’s denial of FCA’s motion for a preliminary injunction and direct the district court to enter an order reinstating FCA’s ASB recognition.” (Fellowship of Christian Athletes v. San Jose Unified School District (9th Cir., Sept. 13, 2023) 2023 WL 5946036.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/13/22-15827.pdf
Access to the Internet by Persons Who Are Blind.
Two blind plaintiffs filed an action under the Unruh Civil Rights Act (Civ. Code, § 51 et seq.) for disability discrimination, contending defendant’s websites discriminate against the blind by being incompatible with screen reading software. The trial court sustained defendant’s demurrer after finding that a website is not a place of public accommodation under the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.; ADA), which is incorporated into the Unruh Act. Affirming, the Court of Appeal stated: “[W]e conclude the ADA unambiguously applies only to physical places.” The dissent states: “Applying the ADA only to public accommodations with a physical location is effectively a determination Congress intended to freeze the legislation in time, applying it only to life as it existed when it was enacted. Such an interpretation is problematic.” (Martin v. Thi E-Commerce, LLC (Cal. App. 4th Dist., Div. 3, Sept. 13, 2023) 2023 WL 5949029.)
Rocking the Property Rights Boat.
In a housing area of Alaska, some homes back up to a small airstrip. The homeowner can walk out the back door, hop on a plane parked in the backyard, and taxi the plane directly onto an adjacent air strip. Defendant is that housing subdivision. The plaintiff is a state-owned corporation that owns and operates a railroad system, which possesses a right of way on which it operates a section of track adjacent to the air strip. That right of way includes 100 feet on either side of the track’s center line, some of which directly overlaps with the air strip. For decades, both parties acted in a spirit of mutual accommodation, neither sure of their own property rights. In 2019, the housing subdivision sent a letter to the railroad demanding the railroad relinquish any claim to exclusive use of the right of way. The railroad filed the instant action to quiet title to the right of way. The district court granted summary judgment for the railroad. Affirming, the Ninth Circuit stated: “We hold that the 1914 [Alaska Railroad] Act reserved an exclusive-use easement for the Alaska Railroad and that the federal government transferred that exclusive-use easement to the state under ARTA [Alaska Railroad Transfer Act of 1982; 45 U.S.C. §§ 1201-14].” (Alaska Railroad Corporation v. Flying Crown Subdivision Addition No. 1 and Addition No. 2 Property Owners Association (9th Cir., Sept. 18, 2023) 2023 WL 6053812.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/18/22-35573.pdf
County Allegedly Refuses to Release Animals Scheduled for Euthanasia to Shelters.
Under the Hayden Act, a county has a duty to release dogs and other animals scheduled for euthanasia to a requesting animal adoption or rescue organization. (Food & Agr. Code, § 31108.) Los Angeles County allegedly routinely failed to perform this duty by enforcing a policy of not releasing an animal scheduled for euthanasia to a shelter unless the county determined the animal has no behavioral problems. Plaintiff is an animal rescue center that filed a petition for writ of mandate in the trial court, alleging the county was not following the law. The trial court dismissed the action after sustaining the county’s demurrer without leave to amend. Reversing, the Court of Appeal noted: “The Hayden Act contains only one other express exception to release: section 31108.5, subdivision (b), permits the immediate euthanasia of a dog relinquished by its owner ‘if it has a history of vicious or dangerous behavior documented by the agency charged with enforcing state and local animal laws.’” Otherwise, the Court of Appeal held that once a county determines the release of an animal was requested by a non-profit charitable organization, the county has no discretion to refuse to release and then to euthanize the animal. (Santa Paula Animal Rescue Center, Inc. v. County of Los Angeles (Cal. App. 2nd Dist., Div. 5, Sept. 18, 2023) 2023 WL 6053506.)
School Bus Never Came, so 16-Year-Old Student Texted Friend to Drive Her; There Was a Car Crash and Student Was Killed.
After waiting 40 minutes for a school bus that never came, a 16-year-old got picked up from the bus stop by a friend whom she had texted. During their ride to school, the friend’s car was hit head on by another driver, causing the girl to suffer fatal injuries. Her parents sued the school district for wrongful death. The district demurred, asserting immunity under Education Code § 44808. The trial court sustained the demurrer to the parents’ first amended complaint without leave to amend and entered a judgment of dismissal. Reversing, the Court of Appeal stated: “We conclude the parents pleaded sufficient facts to fall outside section 44808 immunity for purposes of demurrer and reverse. [¶] . . . [¶] In sum, the plain language of section 44808 establishes that a school district undertakes to provide transportation both when the school bus arrives and transports students and also when the district accepts the responsibility of providing that transportation.” (Brinsmead v. Elk Grove Unified School District (Cal. App. 3rd Dist., Sept. 18, 2023) 2023 WL 6058526.)
The Hospital Lien Act Does Not Permit Insurance Company to Satisfy Lien by Placing Both Hospital and Patient’s Attorney on Check.
Under the Hospital Lien Act (Civ. Code, §§ 3045.1–3045.6; HLA), “when a hospital provides care for a patient, the hospital has a statutory lien against any . . . settlement received by the patient from a third person responsible for his or her injuries, or the third person’s insurer, if the hospital has notified the third person or insurer of the lien.” The HLA prohibits an insurer from paying a patient without paying the hospital the amount of its lien, or as much as can be satisfied from 50 percent of the patient’s recovery from the tortfeasor or insurer. Here, the insurer had notice of the hospital’s lien, settled the case with the patient and gave the check for the lien amount payable to both the patient and the hospital. The hospital sued the insurer for noncompliance with the HLA. The trial court granted summary judgment for the insurance company. Reversing, the Court of Appeal stated: “Merely delivering to the patient (or, in this case, his attorney) a check for the lien amount, made payable to both the patient and the hospital, is not payment in satisfaction of the hospital’s lien under the HLA. . . . [¶] . . . [¶] . . . The obvious point of including [the patient’s attorney] as copayee was to empower him to negotiate keeping some portion of the amount of the Medical Center’s lien for himself. The HLA does not condition the hospital’s right to payment on the timing or resolution of a negotiation between the patient and the hospital.” (Long Beach Memorial Medical Center v. Allstate Insurance Company (Cal. App. 2nd Dist., Div. 7, Sept. 19, 2023) 2023 WL 6115891.)
Pandemic Policies by School District Challenged.
Plaintiffs alleged that during the pandemic, defendants school district and teachers’ union discriminated against poor students and students of color with its distance learning framework. Since the suit was filed, the school district returned to in-person instruction, but plaintiffs continued to seek injunctive relief to remedy what they contended are ongoing harms. The trial court sustained defendants’ demurrers with leave to amend. Rather than amend, plaintiffs suffered dismissal and appealed. Reversing, the Court of Appeal stated: “The court erred by striking the class allegations based on individualized questions of remedy.” (Shaw v. Los Angeles Unified School District (Cal. App. 2nd Dist., Div. 4, Sept. 19, 2023) 2023 WL 6118536.)
Statute Prohibits Sale of Principal Place of Residence to Satisfy a Consumer Debt.
Plaintiff prevailed in a breach of contract cause of action against defendant, but the trial court denied plaintiff’s application for an order to sell defendant’s home to satisfy the judgment. Code of Civil Procedure § 699.730 is a recently added statute that prohibits the forced sale of a judgment debtor’s principal place of residence to satisfy a consumer debt except under certain circumstances. Under the statute, consumer debt is defined as debt incurred by an individual primarily for a personal, family, or household purpose. Affirming, the Court of Appeal held: “[W]e hold that the definition of ‘consumer debt’ in section 669.730 is not latently ambiguous and that section 669.730 neither violates the contract nor the equal protection clauses of the federal and state Constitutions. (Davis Boat Manufacturing-Nordic, Inc. v. Smith (Cal. App. 5th Dist., Sept. 19, 2023) 2023 WL 6118737.)
Employee’s Work-Related Injury and Later Death Within the Scope of Workers’ Compensation.
The decedent was hit by a pickup truck in a crosswalk at a major intersection. After the accident, the decedent walked back to the market where he worked. There, store employees gave him an ice pack, a form to fill out relating to his injury, and a ride home. He died several hours later. His family filed an action for wrongful death against several defendants, including the market. The market demurred on the ground that an administrative law judge had ruled the injury was work related, and therefore within the scope of workers’ compensation, which is generally the exclusive remedy for such injuries. The trial court sustained the market’s demurrer without leave to amend. Affirming, the Court of Appeal rejected plaintiffs’ contention that in applying first aid to decedent, the market acted in the dual capacity as both employer and supplier of first aid services. The appeals court also rejected plaintiffs’ contention the market fraudulently concealed from decedent that his injury was work related. (Jimenez v. Mrs. Gooch’s Natural Food Markets, Inc. (Cal. App. 2nd Dist., Div. 3, Sept. 19, 2023) 2023 WL 6119240.)
Public Interest Exemption to Anti-SLAPP Statute.
Defendant provides an online directory of professionals and their employment information. Clicking on a link in a search engine produces a redacted “teaser profile,” offering the individual’s name, employer, and job title. On the same page are links inviting the viewer to sign up for a trial subscription or subscribe to view the full profile. Plaintiff objected to defendant providing such a “teaser profile” of her information along with subscription links. Her complaint asserted defendant did not obtain her permission or compensate her, and defendant’s directory was using her name and likeness to promote its product in violation of California’s Right of Publicity statute (Civ. Code, § 3344). The district court denied defendant’s motion to strike the complaint under the anti-SLAPP statute (Code Civ. Proc., § 425.16). Affirming, the Ninth Circuit concluded that the “complaint f[e]ll[] within the public-interest exemption to the anti-SLAPP law. . . . [The] complaint is exempted from California’s anti-SLAPP law as a suit ‘brought solely in the public interest’ under § 425.17(b).” (Martinez v. ZoomInfo Technologies, Inc. (9th Cir., Sept. 21, 2023) 2023 WL 6153577.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/21/22-35305.pdf
Side Effects of a Guilty Plea by a Public Employee.
Throughout plaintiff’s employment as a city accountant, she was eligible for retirement benefits. The district attorney filed a felony complaint against her for misappropriation of public funds and embezzlement by a public officer. Plaintiff and the district attorney reached a plea agreement wherein plaintiff entered a no-contest plea to a felony count for a different crime, unauthorized access to a computer system or network. Under the plea agreement, the crime would be later reduced to a misdemeanor and then dismissed. Government Code § 7522.72 provides that if a public employee is convicted of a felony for conduct arising out of or in the performance of her official duties, the employee forfeits certain accrued retirement benefits, which “shall remain forfeited notwithstanding any reduction in sentence or expungement of the conviction.” After the California Public Employees’ Retirement System determined that plaintiff forfeited a portion of her retirement benefits as a result of her felony conviction, she filed a petition for writ of administrative mandate, which the trial court denied. Affirming, the Court of Appeal concluded that “the trial court did not err in denying the petition because, consistent with the language and purpose of section 7522.72, [plaintiff’s] retirement benefits were subject to forfeiture upon her no contest plea to a job-related felony, notwithstanding the subsequent reduction to a misdemeanor and dismissal of the charge.” (Estrada v. Public Employees’ Retirement System (Cal. App. 2nd Dist., Div. 8, Sept. 21, 2023) 2023 WL 6153712.)
Continuing Vestiges of the Pandemic.
Plaintiff is an entertainment conglomerate that operates sports and other entertainment ventures at venues around the globe. It sued its insurance company to recover economic losses it suffered when the COVID-19 pandemic shut down many of those venues. Plaintiff did not establish there was direct physical loss or damage to property. (The question whether a policy holder can recover economic losses it suffered during the pandemic without first establishing there was a “direct physical loss or damage to property” is currently pending before the California Supreme Court in John’s Grill, Inc. v. The Hartford Financial Services Group, Inc. (2022) 86 Cal.App.5th 1195, review granted Mar. 29, 2023, S278481.) The trial court sustained the insurer’s demurrer and dismissed the complaint. Affirming, the Court of Appeal stated: “[W]e side with the vast majority of cases holding that direct physical loss or damage to property, rather than mere loss of the property’s use, is a prerequisite for coverage. We further hold that two of the clauses in the policy here—namely, extension clauses dealing with orders by civil authorities and with impediments to access—do not, by their addition of the word ‘event,’ eliminate the requirement of direct physical loss or damage to property. [¶] Second, has ‘direct physical loss or damage to property’ been sufficiently pled where, as here, the policy holder alleges that the virus that causes COVID-19 has either been deposited onto or ‘adsorbed’ to the surface of the policy holder’s property? . . . [W]e side with those cases holding that the ephemeral existence of COVID-19 or its predecessor virus on property does not constitute ‘direct physical loss or damage to property’ as a matter of law. As a result, we affirm the trial court’s judgment dismissing the policy holder’s complaint on demurrer.” (Endeavor Operating Company, LLC v. HDI Global Insurance Company (Cal. App. 2nd Dist., Div. 2, Sept. 21, 2023) 2023 WL 6155983.)
Discrimination Claims Come to Social Media.
Class action plaintiffs alleged Facebook requires all advertisers to choose the age and gender of its users who will receive ads, and companies offering insurance products routinely tell Facebook to not send their ads to women and older people. They contended women and older people are excluded from receiving insurance ads in violation of Civil Code §§ 51, 51.5, and 52. The trial court sustained Facebook’s demurrer. Reversing, the Court of Appeal stated: “Liberally construing the complaint and drawing all reasonable inferences in favor of [plaintiffs’] claims, we conclude the complaint alleges facts sufficient to state a cause of action and reverse.” (Liapes v. Facebook, Inc. (Cal. App. 1st Dist., Div. 3, Sept. 21, 2023) 2022 WL 20680402.)
If Forum Selection Clauses in Corporate Documents Were Enforced, Plaintiffs Would Be Required to Waive Trial by Jury.
The trial court denied defendants’ motion to dismiss a shareholder lawsuit on forum non conveniens grounds. The certificate of incorporation and bylaws designated the Delaware Court of Chancery as the exclusive forum to resolve shareholder disputes like the present case. The trial court declined to enforce the forum selection clauses in the corporate documents after finding that litigants do not have a right to a civil jury trial in the Delaware Court of Chancery and, therefore, enforcement of the clauses would deprive plaintiff of its inviolate right to a jury trial in violation of California public policy. Affirming, the Court of Appeal “agree[d] with the trial court that enforcement of the forum selection clauses in [the] corporate documents would operate as an implied waiver of [the shareholder’s] right to a jury trial—a constitutionally-protected right that cannot be waived by contract prior to the commencement of a dispute.” (EPICENTRx, Inc. v. Superior Court of San Diego County (Cal. App. 4th Dist., Div. 1, Sept. 21, 2023) 2023 WL 6157420.)
Failure to Promptly Pay Employees Laid Off Due to Pandemic.
Plaintiffs are members of a certified class of former California employees of Hyatt Corporation who were laid off after the COVID-19 pandemic struck in March 2020 and then terminated in June 2020. Plaintiffs contended that Hyatt violated California law by failing to pay them immediately for their accrued vacation time and by failing to compensate them for the value of free hotel rooms employees received each year. The district court granted summary judgment for Hyatt and dismissed the case with prejudice. Reversing in part and affirming in part, the Ninth Circuit stated: “We conclude that the prompt payment provisions of the California Labor Code required Hyatt to pay Plaintiffs their accrued vacation pay in March 2020. We therefore reverse the district court’s grant of summary judgment to Hyatt as to the vacation pay claim and remand for the district court to consider whether Hyatt acted willfully in failing to comply with the prompt payment provisions. However, the complimentary hotel rooms Hyatt provided to employees were excludable from the calculation of employees’ regular rate of pay under the Fair Labor Standards Act (FLSA). We therefore affirm the grant of summary judgment as to the complimentary hotel room claim.” (Harstein v. Hyatt Corporation (9th Cir., Sept. 22, 2023) 2023 WL 6167607.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/22/22-55276.pdf
Jury Verdict Reversed Because Court Permitted Attorney to Elicit Opinions in Police Report as to Cause of an Accident.
In a personal injury and wrongful death action involving a collision between a car and a bus in Arizona within the boundaries of the Navajo Nation reservation, a jury returned a verdict in favor of defendants. The Ninth Circuit reversed and remanded for a new trial, finding the lower court abused its discretion under the federal rules of evidence in permitting the defense attorney to elicit the opinions expressed in a police report as to the cause of the accident. The appeals court stated: “An opinion rendered by a person of unknown qualifications and contained in a report that, without any other explanation, relies uncritically on the hearsay statements of only selected witnesses and that does not expressly take account of, or address, any other relevant considerations, does not bear sufficient indicia of reliability and trustworthiness to be admitted as a competing expert ‘opinion’ that a testifying expert may be required to address on cross-examination.” (Jensen v. EXC, Inc. (9th Cir., Sept. 22, 2023) 2023 WL 6168820.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/22/20-15908.pdf
A University Kept a Scholarship Football Player Who Violently Beat Two Female Students. The Next Year He Did It Again. This Time, the Court Held that Title IX Was Implicated.
The University of Arizona knew that a player on a football scholarship had repeatedly and violently assaulted two female students during his freshman year but did not take steps to ensure he would not be a danger to other students. During his sophomore year, the player repeatedly and violently assaulted another female student in off-campus housing, who then sued the university. The university contended it was not responsible for what occurs off-campus. Undisputed evidence in the record showed that if the player’s coaches had been told of his prior, he would have been kicked off the football team, would have lost his scholarship, and likely would have been expelled from the university by the end of his freshman year, months before his assault on plaintiff. Plaintiff sued the university under Title IX of the Education Amendments of 1972 (20 U.S.C. §§ 1681–1688), contending the university’s acts and omissions in response to the player’s violent assaults on the other two students deprived plaintiff of the full benefits of her education. After the initial panel affirmed the district court’s grant of summary judgment for the university, the Ninth Circuit granted rehearing. Sitting en banc, the Ninth Circuit reversed, stating: “We hold that [plaintiff] presented sufficient evidence to allow a reasonable factfinder to conclude that a responsible university official exercised sufficient control over the ‘context’ in which [the football player] attacked [plaintiff] to support liability under Title IX.” (Brown v. Arizona (9th Cir., Sept. 25, 2023) 2023 WL 6207762.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/25/20-15568.pdf
The Law Has Changed Regarding Public Access to Certain Records of Police Misconduct.
Journalists in Oakland filed requests for information under the California Public Records Act (Gov. Code, § 6250 et seq.) about Oakland police officers who had sex with an underage girl. It took an order from the superior court to get the city to respond, but the documents produced were highly redacted. The lower court declined to order the city to produce less redacted versions of the documents despite a 2018 statute requiring public access to certain records of police misconduct (Pen. Code, § 832.7). The Court of Appeal granted a petition for writ of mandate, stating: “We agree that some of the challenged redactions were not permitted under the statute, and thus grant the petition.” (Bondgraham v. Superior Court (Cal. App. 1st Dist., Div. 2, Sept. 25, 2023) 2023 WL 6210599.)
In Overlapping PAGA Action, Superior Court Erred in Denying Motion to Intervene.
Appellants are lead plaintiffs in Private Attorneys General Act (Lab. Code, § 2698 et seq.; PAGA) representative actions in Orange and Los Angeles Counties against In-N-Out Burgers. Upon learning of settlement negotiations in a subsequent, overlapping PAGA action brought by plaintiff against In-N-Out in Sonoma County, appellants filed a proposed complaint in intervention in the Sonoma County action, and moved to intervene under Code of Civil Procedure § 387 and for a stay. The superior court in Sonoma County denied both motions. Reversing and remanding, the Court of Appeal stated: “First, applying de novo review, we agree with the trial court’s decision to deny mandatory intervention . . . . [¶] Second, the denial of permissive intervention was an abuse of discretion.” (Accurso v. In-N-Out Burgers (Cal. App. 1st Dist., Div. 4, Sept. 25, 2023) 94 Cal.App.5th 1128.)
Alabama’s Petition for a Stay Pending Its Writ of Certiorari in Voting Rights Case in U.S. Supreme Court Denied.
Alabama’s Secretary of State applied for a stay pending a petition for writ of certiorari. After the Supreme Court’s decision in Allen v. Milligan (2023) 143 S. Ct. 1487, Alabama enacted a new congressional redistricting plan. Respondents, the plaintiffs in the underlying case who claimed gerrymandering, argued no stay should be granted because Alabama was “even more brazen” in its “last-ditch attempt to evade the Voting Rights Act.” They contended Alabama’s 2023 Remedial Plan is “a remedial plan in name only.” The order of the Supreme Court stated: “The application for stay presented to Justice Thomas and by him referred to the Court is denied.” (Allen v. Caster (U.S., Sept. 26, 2023) 2023 WL 6218265.)
https://www.supremecourt.gov/orders/courtorders/092623zr1_kjfm.pdf
Tracing Community and Separate Property.
During a period of separation, the husband commingled community and separate property. The family court found the husband failed to meet his burden to trace his separate property interest. On appeal, the husband contended the lower court erred by requiring that tracing be done using a “transaction-by-transaction” analysis instead of aggregating total community assets and total community expenses post separation and comparing the two. The Court of Appeal rejected that argument, stating: “[T]he detailed tracing analyses required of commingled funds should also be applied to the expenditure of comingled [sic] funds postseparation.” (Marriage of Simonis (Cal. App. 3rd Dist., Sept. 26, 2023) 2023 WL 6222679.)
Force Majeure Argument Rejected in Unlawful Detainer Action.
Defendant was operating an indoor gym and fitness center in Chatsworth in 2016 when it entered into an amended lease with plaintiff that required defendant to renovate the premises. Construction began in November 2019 and was expected to be completed in August 2020. In March 2020, however, the COVID-19 pandemic prompted government orders that closed indoor gyms but that allowed commercial construction to continue. Defendant nonetheless stopped construction, remained in possession of the premises, and stopped paying rent. Plaintiff filed an unlawful detainer action, the trial court granted plaintiff’s motion for summary judgment, and entered judgment in its favor. The trial court rejected defendant’s arguments and ruled the closure orders did not prevent defendant from continuing construction work. Affirming, the Court of Appeal stated: “We agree with the trial court’s interpretation of the COVID-19 closure orders and reject the arguments by [defendant] that rely on the lease’s force majeure provision and the doctrines of frustration of purpose and temporary impossibility and impracticability.” (Fitness International LLC v. KB Salt Lake III, LLC (Cal. App. 2nd Dist., Div. 7, Sept. 26, 2023) 2023 WL 6230746.)
Receiver and Arbitration Agreements.
The district court ruled that a receiver was not bound by arbitration agreements. Reversing, the Ninth Circuit stated: “We conclude that a receiver acts on behalf of the receivership entity and thus can be bound by an agreement signed by that entity.” (Winkler v. McCloskey (9th Cir., Sept. 28, 2023) 2023 WL 6301667.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/28/22-55856.pdf
Legal Malpractice Claim When There Was Limited Representation of a Client.
A limited liability partnership and one of its partners retained a lawyer but limited the scope of representation to having the lawyer represent the partnership in a specific, ongoing case. After the partnership lost the case, the partner sued the lawyer for malpractice. In an amended complaint, the partnership was added as a plaintiff. The partner’s complaint was filed before the statute of limitations ran; the amendment was filed after. This case thus presents two questions: (1) Do the partnership’s malpractice claims “relate back” to the timely filing of the partner’s malpractice claims (such that the partnership may continue as a plaintiff); and (2) May the partner continue to press his timely claims for malpractice against the lawyer, when the lawyer’s sole task was to represent the partnership in the ongoing case? The Court of Appeal answered “no” to both questions. (Engel v. Pech (Cal. App. 2nd Dist., Div. 2, Sept. 28, 2023) 2023 WL 6304729.)
Neither the People Nor the Labor Commissioner Signed Arbitration Agreements with Uber or Lyft.
The People of the State of California alleged Uber and Lyft violated the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.; UCL) by misclassifying their California rideshare and delivery drivers as independent contractors rather than employees, thus depriving them of wages and benefits associated with employee status. The People sought injunctive relief to the extent Proposition 22 is unconstitutional or otherwise invalid. The California Labor Commissioner filed separate actions against Uber and Lyft, pursuant to Labor Code §§ 61, 90.5, 95, and 98.3 (b), seeking injunctive relief, civil penalties payable to the state, and unpaid wages and other amounts alleged to be due to Uber’s and Lyft’s drivers, such as unreimbursed business expenses. Both defendants moved to compel arbitration based on their arbitration agreements with drivers. The trial court denied their motions. Affirming, the Court of Appeal stated: “We conclude the court correctly denied the motions because the People and the Labor Commissioner are not parties to the arbitration agreements invoked by Uber and Lyft.” (In re Uber Technologies Wage and Hour Cases (Cal. App. 1st Dist., Div. 4, Sept. 29, 2023) 2023 WL 6332898.)
Exaction by a County in Exchange for Building a Home.
The U.S. Supreme Court granted certiorari in Sheetz v. County of El Dorado (2022) 84 Cal.App.5th 394. The petition stated: “George Sheetz applied to the County of El Dorado, California, for a permit to build a modest manufactured house on his property. Pursuant to legislation enacted by the County, and as the condition of obtaining the permit, Mr. Sheetz was required to pay a monetary exaction of $23,420 to help finance unrelated road improvements. The County demanded payment despite that it made no individualized determination that the exaction—a substantial sum for Mr. Sheetz—bore an ‘essential nexus’ and ‘rough proportionality’ to the purported impacts associated with his modest project . . . The question presented is whether a permit exaction is exempt from the unconstitutional conditions doctrine as applied in Nollan [v. Cal. Coastal Comm’n, 483 U.S. 825, 837 (1987)] and Dolan [v. City of Tigard, 512 U.S. 374, 391 (1994)] simply because it is authorized by legislation.” (Sheetz v. County of El Dorado (U.S., Sept. 29, 2023) 2023 WL 6319652.)
https://www.supremecourt.gov/orders/courtorders/092923zr_q8l1.pdf
No Error in Permitting Criminal Defendant’s Statement He Entered the U.S. to Find Work.
A criminal defendant was found guilty of attempted illegal entry into the United States in violation of 8 U.S.C. § 1325. On appeal, he contended the lower court erred in denying his motion to suppress a statement he made to a border patrol agent about coming to the United States to find work. He argued that the statement, which he made while between border fences, should have been suppressed because he was “in custody” and was not given a Miranda warning prior to his admission. The Ninth Circuit affirmed, holding that the agent’s question about Cabrera’s purpose for being in the United States did not exceed the scope of allowable inquiry during such a stop. (United States v. Cabrera (9th Cir., Sept. 29, 2023) 2023 WL 6331058.)
https://cdn.ca9.uscourts.gov/datastore/opinions/2023/09/29/21-50259.pdf
No Duty of Bar Owner When a Victim Was Attacked a Block Away from the Bar.
Plaintiffs’ son was stabbed to death by assailants after a fight broke out in and outside defendant’s bar. After the fight, the victim walked down the street, turned left, and went to the rear of another bar. He and a friend looped around and were about a block away from defendant’s bar and on the other side of the street from the bar, when the assailants attacked them again, killing the victim. His parents sued defendant for wrongful death. The trial court granted summary judgment for defendant. Affirming, the Court of Appeal analyzed the factors set forth in Rowland v. Christian (1968) 69 Cal.2d 108, and held: “We conclude the balance of these factors weighs against imposing a duty under these circumstances.” (Glynn v. Orange Circle Lounge Inc. (Cal. App. 4th Dist., Div. 3, Sept. 29, 2023) 2023 WL 6438060.)
Peremptory Challenge of Judge Denied.
A criminal defendant filed a motion for resentencing, which the trial court denied. The Court of Appeal reversed and remanded for another hearing. Once back in the trial court, before the same judge who denied the request for resentencing the first time, the defendant filed a peremptory challenge pursuant to Code of Civil Procedure § 170.6 to disqualify the judge from hearing the case. The judge denied the peremptory challenge. Defendant filed a petition for writ of mandate. The Court of Appeal denied the petition because the new hearing was not a new trial within the meaning of § 170.6(a)(2). (Sandoval v. Superior Court (Cal. App. 6th Dist., Sept. 29, 2023) 2023 WL 6366580.)