A monthly publication of the Litigation Section of the California Lawyers Association.
- Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
- Managing Editor, Julia C. Shear Kushner
- Editors, Dean Bochner, Reuben Ginsburg, Jessica Riggin, David Williams, Ryan H. Wu, and Greg Wolff
Digital Economy Collides with Laws Designed for the Analog Age.
Uber’s drivers in Massachusetts are classified as independent contractors. They are required to pay the costs of maintaining, fueling, and insuring their vehicles and must also pay for their own phones. They have no guaranteed minimum wage or overtime premiums and do not accrue sick leave. When they signed up to become Uber drivers, they agreed to arbitration governed by the Federal Arbitration Act (9 U.S.C. § 1; FAA). Plaintiffs filed a class action contending that Uber drivers in Massachusetts should be considered employees under Massachusetts law. Plaintiffs moved for a preliminary injunction prohibiting Uber from classifying its drivers in Massachusetts as independent contractors. Uber moved to compel arbitration, stay proceedings pending arbitration, and transfer the case to the U.S. District Court for the Northern District of California pursuant to a forum selection clause in Uber’s driver agreements. The Massachusetts district court denied the injunction request and granted Uber’s transfer request. The California district court denied plaintiffs’ renewed request for an emergency injunction and granted Uber’s request to compel arbitration. Affirming, the Ninth Circuit concluded that “the district court properly granted Uber’s motion to compel arbitration. In doing so, it properly addressed Uber’s motion to compel arbitration prior to addressing Plaintiffs’ emergency motion for a preliminary injunction, and properly concluded that Uber drivers do not fall within the interstate commerce exemption to the FAA, and that Plaintiffs’ requested injunctive relief—reclassification as employees—does not constitute ‘public injunctive relief.’ ” (Capriole v. Uber Technologies (9th Cir., Aug. 2, 2021) 7 F.4th 854.)
Lack of Personal Jurisdiction
Defendant purchased shares of a privately held California corporation. Plaintiff sued defendant for fraud, breach of fiduciary duty, and violations of the Corporations Code. The trial court granted defendant’s motion to quash summons for lack of personal jurisdiction. Affirming, the Court of Appeal concluded that plaintiffs did not demonstrate the required relatedness between defendant and California because defendant’s activities did not arise out of, or sufficiently relate to, California. (Rivelli v. Hemm (Cal. App. 6th Dist., Aug. 2, 2021) 67 Cal.App.5th 380.)
Previously we reported: Statistical Evidence to Show Predominance in Class Actions.
Defendants, packaged tuna producers, appealed from an order certifying three classes in a multidistrict antitrust case alleging a price-fixing conspiracy. Defendants challenged the district court’s determination that Rule 23(b)(3)’s “predominance” requirement was satisfied by expert statistical evidence finding class-wide impact based on averaging assumptions and pooled transaction data. Affirming in part and reversing in part, the Ninth Circuit stated: “We ultimately conclude that this form of statistical or ‘representative’ evidence can be used to establish predominance, but the district court abused its discretion by not resolving the factual disputes necessary to decide the requirement before certifying these classes. We thus vacate the district court’s order certifying the classes and remand for the court to determine the number of uninjured parties in the proposed class based on the dueling statistical evidence. Only then should the district court rule on whether predominance has been established.” (Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC (9th Cir., Apr. 6, 2021) 993 F.3d 774.)
The Ninth Circuit vacated the three-judge-panel opinion, and the matter will be heard en banc. (Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC (9th Cir., Aug. 3, 2021) 5 F.4th 950.)
The Deadly Choke Hold and Loss of Life Damages
A man, later determined to be under the influence of amphetamines, was placing laundry into a washing machine at a laundromat when two police officers entered. The officers, who were responding to a 911 call about a suspicious person near the laundromat, heard something that sounded like glass breaking and observed a methamphetamine pipe and screwdriver in the man’s laundry. Police told the man to place his hands behind his back. The man did not immediately comply, was placed in a choke hold and turned purple. The man managed to pull away and the police tasered him. After the police put him in a choke hold and tasered him a few more times, he ran away calling out, “please don’t kill me.” At some point, he tripped and was apprehended and placed in another choke hold, whereupon he began to turn purple again. A police supervisor arrived and instructed the officer conducting the choke hold on how to do it efficiently. The man fell into a coma and died eight days later. The county medical examiner ruled the death as a homicide caused by “complications of asphyxia during the struggle with the law enforcement officer” while the man was “under the influence of methamphetamine.” The man’s family filed a civil rights action against the city and police officers under 42 U.S.C. § 1983, alleging excessive force and wrongful death. A jury awarded $13.2 million, which included $3.6 million in loss of life damages. The city moved to set aside the award on the ground that California law does not recognize loss of life damages. The district court denied the motion. Affirming, the Ninth Circuit stated: “[J]uries are regularly asked to assess damages without direct sensory experience of the issue before them—including, in this case, for pre-death pain and suffering. And it is still better for juries to decide whether a plaintiff has received sufficient compensation than for our court to draw arbitrary lines denying compensation entirely.” (Valenzuela v. City of Anaheim (9th Cir., Aug. 3, 2021) 6 F.4th 1098.)
Plaintiff’s Expert Declaration in Opposition to Motion for Summary Judgment.
In an asbestos case, defendant moved for summary judgment on the ground that plaintiffs were unable to establish the decedent was exposed to asbestos by an act or omission of defendant. Plaintiffs’ expert, a certified industrial hygienist, testified at deposition: “If [decedent] wasn’t present when the work was done, then I don’t think there’d be any issue regarding any exposure.” But in his declaration, the expert said “[decedent] did not need to be present at the exact time that the insulation block was being removed, swept up, and/or installed by [defendant’s] workers to be exposed” because asbestos fibers can remain suspended for up to 80 hours before settling out of the air. The trial court granted summary judgment for defendant. Reversing, the Court of Appeal concluded that “the contradiction between [the expert’s] declaration and his deposition testimony does not eliminate the declaration’s evidentiary value. . . . [T]he trial court erred in declining to give any weight to [the expert’s] declaration.” (Harris v. Thomas Dee Engineering Co., Inc. (Cal. App. 1st Dist., Div. 5, Aug. 4, 2021) 67 Cal.App.5th 475.)
PAGA Action Is Not Preempted by the FAA.
A trial court denied defendant’s petition to compel arbitration of a matter filed by its former employees who sought only penalties under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). Defendant appealed, arguing the trial court erred because arbitration was compelled by the Federal Arbitration Act (9 U.S.C. § 1 et seq.; FAA). Affirming, the Court of Appeal stated: “In Iskanian [v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348], our Supreme Court addressed the scope of the FAA and concluded that ‘a PAGA claim lies outside the FAA’s coverage because it is not a dispute between an employer and an employee arising out of their contractual relationship.’ ” (Herrera v. Doctors Medical Center of Modesto, Inc. (Cal. App. 5th Dist., Aug. 5, 2021) 67 Cal.App.5th 538.)
When plaintiff married her late husband they each signed a premarital agreement (PMA). Defendant lawyer represented plaintiff in connection with the PMA, while a non-attorney/longtime accountant/business manager negotiated the terms of the PMA on her husband’s behalf. The PMA stated that both parties had been represented by and consulted with independent legal counsel, even though no attorney signed the PMA on husband’s behalf. Ultimately, plaintiff lost millions of dollars due to a property disposition when her late husband’s family prevailed in litigation demonstrating the PMA was ineffective. Family Code § 1615, subdivision (c)(1) states: “it shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record [that] [t]he party against whom enforcement is sought was represented by independent legal counsel at the time of signing the agreement or, after being advised to seek independent legal counsel, expressly waived, in a separate writing, representation by independent legal counsel . . . .” Plaintiff sued her lawyer for malpractice. The trial court granted summary judgment for defendant. Reversing, the Court of Appeal concluded “there is a triable issue of material fact as to the threshold issue of whether [the husband] satisfied the requirements of section 1615 when he executed the PMA.” (Knapp v. Ginsberg (Cal. App. 2nd Dist., Div. 4, Aug. 5, 2021) 67 Cal.App.5th 504.)
Plaintiff was lawfully crossing the street when defendants’ car drove through a red light and hit another car which ran into plaintiff. Plaintiff sued the car’s owners—an individual and a company who employed the driver. Plaintiff sued the owners for negligent entrustment. Defendants moved for summary judgment, contending there was no evidence they had actual or constructive knowledge that the driver was an incompetent, reckless, or inexperienced driver. The trial court granted the motion and dismissed the action against the vehicle owners. Reversing, the Court of Appeal decided two issues. First, the court noted that Vehicle Code § 14604 requires an owner of a motor vehicle “to make a reasonable effort or inquiry to determine whether [a] prospective driver possesses a valid driver’s license before allowing him or her to operate the owner’s vehicle.” The appeals court concluded that a jury may find that an owner who breached its § 14604 duty and permitted an unlicensed driver to drive its vehicle had constructive knowledge of the driver’s incompetence to drive. Second, Vehicle Code § 14606, subdivision (a) states that “[a] person shall not . . . hire . . . any person to drive a motor vehicle owned by him or her or under his or her control upon the highways unless that person is licensed for the appropriate class of vehicle to be driven.” The appeals court held that a jury could find that the hirer had constructive knowledge of the hiree’s incompetence to drive. (McKenna v. Beesley (Cal. App. 4th Dist., Div. 1, Aug. 6, 2021) 67 Cal.App.5th 552.)
Claims Against Herbicide Manufacturer Are Not Preempted.
Plaintiffs husband and wife alleged they each developed non-Hodgkin’s lymphoma from spraying defendant’s herbicide on their property. Plaintiffs sued for failure to warn. After a six-week trial, the jury found for plaintiffs, awarding more than $55 million in compensatory damages and $2 billion in punitive damages. The trial court conditionally denied defendant’s motion for new trial, contingent on plaintiffs’ acceptance of reduced awards. Plaintiffs accepted the reductions. On appeal, defendant argued, among other things, that plaintiffs’ claims were preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.; FIFRA), which governs the use, sale, and labeling of pesticides and herbicides. Affirming, the Court of Appeal noted that FIFRA states a pesticide is misbranded if its labeling does not contain directions for use that, if complied with, are adequate to protect health. (Pilliod v. Monsanto Company (Cal. App. 1st Dist., Div. 2, Aug. 9, 2021) 67 Cal.App.5th 591.)
Jurisdiction Over Nationwide Class.
Plaintiff, a resident of California, filed a nationwide class action against defendant, incorporated in Delaware, for making unwanted sales calls in violation of the Telephone Consumer Protection Act of 1991 (47 U.S.C. § 227(b)(1)(A)-(B)). The district court denied defendant’s motion to dismiss, and ruled that its motion to strike class allegations were premature. But defendant did not move to dismiss the claims of non-resident class members for lack of personal jurisdiction. The district court concluded that defendant waived its personal jurisdiction defense by not raising it at the motion to dismiss stage, and certified the classes. The Ninth Circuit concluded the lower court erred because, at the motion to dismiss stage, lack of personal jurisdiction over unnamed, non-resident putative class members was not an “available” Rule 12(b) defense. The appeals court therefore vacated the class certification order, leaving it to the district court on remand to address the merits of defendant’s objection to class certification. (Moser v. Benefytt, Inc., (9th Cir., Aug. 10, 2021) 8 F.4th 872.)
Plaintiff sued defendant for alleged violation of the Telephone Consumer Protection Act of 1991 (47 U.S.C. § 227(b)(1)(A)-(B); TCPA) after he received a pre-recorded voice mail message on his cell phone. Plaintiff characterized the message as a job recruitment call. The district court dismissed the case for failure to state a claim, finding the TCPA does not prohibit job recruitment robocalls. The Ninth Circuit reversed, stating that the TCPA “does not prohibit making robocalls to cell phones only if the calls involve advertising or telemarketing. The applicable statutory provision prohibits in plain terms ‘any call,’ regardless of content, that is made to a cell phone using an automatic telephone dialing system or an artificial or pre-recorded voice, unless the call is made either for emergency purposes or with the prior express consent of the person being called.” (Loyhayem v. Fraser Financial & Insurance Services, Inc. (9th Cir., Aug. 10, 2021) 7 F.4th 1232.)
Had Plaintiff Not Waived Notice, His Dismissed Appeal Might Have Been Filed in Time for the Appeals Court to Treat It as a Writ.
After defendant refused plaintiff’s request for information pursuant to the California Public Records Act (Gov. Code, § 6250 et seq.), plaintiff petitioned for a writ of mandate compelling defendant’s release of records. The trial court denied relief. Notice of entry of judgment to that effect was mailed on July 14, 2020. On August 4, 2020, plaintiff filed a notice of appeal. The Court of Appeal dismissed the appeal stating: “The trial court’s July 14, 2020 order is not appealable, but may be reviewed only by ‘petition . . . for the issuance of an extraordinary writ’ filed ‘within 20 days after service upon the party of written notice of entry of the order.’ (Gov. Code, § 6259, subd. (c).) Because plaintiff waived notice at the July 14, 2020 hearing, the last day to petition this court was August 3, 2020.” (Austin v. City of Burbank (Cal. App. 2nd Dist., Div. 8, Aug. 10, 2021) 67 Cal. App. 5th 654.)
Mentally Ill Attorney Convicted of Murdering Her Husband to Be Retried.
Petitioner, a former attorney with serious, long-term mental illness, was convicted of murdering her husband in 2006 and was sentenced to prison for a term of 50 years to life. She petitioned for a writ of habeas corpus in the California Supreme Court in 2011, on the ground her conviction was invalid because she was incompetent to stand trial. Upon remand, the Court of Appeal expressed concern that petitioner’s trial counsel unsuccessfully tried to initiate competency proceedings, stating: “The real question is whether petitioner’s right to due process was violated by the trial court’s refusal to initiate proceedings to determine her present competence where, as we have said, even to a casual observer, the manner in which defendant conducted her defense was not rational.” The appeals court granted the petition, reversed the judgment of conviction and ordered that defendant may be retried on the charges for which she was convicted “if she is presently competent to stand trial.” (In re Sims (Cal. App. 4th Dist., Div. 2, Aug. 11, 2021) 67 Cal.App.5th 762.)
Trial Court Admitted Evidence of Plaintiff’s Full Unpaid Medical Bills as Well as the Medical Bills Paid by His Insurance Plan.
After an automobile collision, plaintiff received some medical treatment from providers who did not accept his insurance plan (“lien providers” per the court’s opinion). The medical bills from the lien providers remained unpaid at the time of trial. On appeal, defendants contended the trial court erred by: (1) admitting the full unpaid medical bills and the medical bills paid by plaintiff’s insurance plan into evidence to prove his past and future medical damages; (2) by excluding testimony that plaintiff’s lawyer referred him to the lien providers; and (3) by precluding testimony that plaintiff failed to mitigate his damages when he chose providers who did not accept his insurance. Affirming, the Court of Appeal stated: “We conclude the trial court abused its discretion to admit evidence of the full unpaid medical bills without first requiring [plaintiff] to demonstrate the evidence was admissible because he actually incurred those amounts. However, we conclude the error was harmless. [¶] No [p]rejudice [r]esulted [f]rom the [a]dmission of the [b]ills [p]aid by the [i]nsurance [p]lan[.] [¶] No [p]rejudice [r]esulted [f]rom the [e]xclusion of the [a]ttorney [r]eferral [e]vidence[.] . . The [t]rial [c]ourt [d]id [n]ot [e]rr [w]hen [i]t [p]recluded [e]vidence of [m]itigation[.]” (Qaadir v. Figueroa (Cal. App. 2nd Dist., Div. 8, Aug. 11, 2021) 67 Cal.App.5th 790.)
Insurance Company’s Hardball Tactics Hit Back.
Plaintiff suffered severe injury in a traffic collision when defendant insurance company’s insured ran a red light. The insured’s policy limit was $25,000. The insured promptly informed defendant he had no other insurance or assets. He had previously relinquished to defendant his right to negotiate settlement of potential claims falling within the policy. Despite repeated requests from plaintiff’s lawyer, defendant refused to tell the lawyer the amount of the policy limit or provide the policy. Plaintiff thereafter obtained a $26 million judgment against the insured driver, along with an assignment of the insured’s claim against defendant for breach of the implied covenant of good faith and fair dealing. Plaintiff sued defendant for that tort, and the trial court granted summary judgment in defendant’s favor. Reversing, the Court of Appeal stated: “Although it did not say so explicitly, the trial court’s written summary judgment ruling indicates it concluded no reasonable trier of fact could find a breach of the covenant of good faith and fair dealing in the foregoing facts if plaintiff established them at trial. In other words, the court believed the evidence presented by [plaintiff] on this issue was insufficient as a matter of law. On appeal, we must view the record in the light most favorable to the party opposing summary judgment. After our de novo review, we disagree with the trial court’s evaluation of the evidence. We therefore reverse its summary judgment ruling and the judgment based on that ruling.” (Hedayati v. Interinsurance Exchange of Automobile Club (Cal. App. 4th Dist., Div. 3, Aug. 11, 2021) 67 Cal.App.5th 833.)
Ninth Circuit Held Arbitration Provision in Labor Case Unconscionable.
Plaintiff, who worked as a delivery driver for defendant, contended defendant violated California labor laws by misclassifying its drivers as independent contractors because they were managed and treated as employees. Plaintiff had signed an agreement with an arbitration clause providing for all proceedings to be conducted in Dallas, Texas. The contract also contained a delegation clause that requires the arbitrator to determine the gateway issue of arbitrability. The district court held that the delegation clause was unenforceable as to plaintiff because it was procedurally and substantively unconscionable. Affirming, the Ninth Circuit stated: “Because the district court correctly held that the delegation clause was unenforceable as procedurally and substantively unconscionable, the district court properly proceeded to determine the gateway issue of arbitrability. In doing so, the district court correctly concluded that the same bases for concluding that the delegation clause was procedurally and substantively unconscionable—the take-it-or-leave-it circumstances and the cost-splitting, fee-shifting, and Texas venue provisions—also rendered the arbitration provision unconscionable. And for the same reasons it did not err by declining to sever the unconscionable terms with respect to the delegation clause, the district court did not err by not severing those same terms and declining to enforce the arbitration provision.” (Lim v. TForce Logistics, LLC (9th Cir., Aug. 12, 2021) 2021 WL 3557294.)
Convention on Recognition and Enforcement of Foreign Arbitral Awards Not Preempted by Washington Statute That Prohibits Predispute Arbitration Clauses in Insurance Contracts.
In an insurance dispute, one party moved to compel arbitration. The other party argued a Washington statute prohibits mandatory predispute arbitration clauses in insurance contracts. Affirming, the Ninth Circuit stated: “Article II, Section 3 of the Convention on Recognition and Enforcement of Foreign Arbitral Awards is self-executing, and it requires enforcement of the parties’ arbitration agreement. Because the Convention is not an ‘Act of Congress’ subject to reverse-preemption by the McCarran-Ferguson Act, the district court correctly granted defendants’ motion to compel arbitration.” (CLMS Management Services Limited Partnership v. Amwins Brokerage of Georgia, LLC (9th Cir., Aug. 12, 2021) 2021 WL 3557591.)
Hearing Officer in Peer Reviews May Be Financially Biased by an Incentive to Favor the Hospital to Increase Chances of Future Appointments.
Under California’s peer review statute (Bus. & Prof. Code, § 809 et seq.), a hearing officer makes evidentiary and procedural rulings but may not vote on the merits. The statute also provides that neither the panel members nor the hearing officer may gain a “direct financial benefit from the outcome.” The California Supreme Court was called upon to decide whether a hearing officer may be disqualified for financial bias on grounds that the officer has an incentive to favor the hospital in order to increase the chances of receiving future appointments. The Court of Appeal answered no. But the California high court’s ruling was not so cut and dry: “While a hearing officer’s interest in future employment is not automatically disqualifying, neither is it categorically beyond the reach of the statute. In some cases, depending on the circumstances, the hearing officer’s financial interest in currying favor with the hiring entity may create an intolerable risk of bias requiring disqualification under the statute. But because the record does not establish this is such a case, we affirm the judgment of the Court of Appeal.” (Natarajan v. Dignity Health (Cal., Aug. 12, 2021) 492 P.3d 294.)
Trial Court Erred in Excluding Expert Testimony.
In a PAGA case, the trial court excluded both (1) the testimony of plaintiff’s expert regarding alleged Labor Code violations, and (2) the spreadsheets prepared to show the basis of the expert’s opinion. The Court of Appeal held that the trial court did not abuse its discretion in excluding the spreadsheets. But the appeals court also held the trial court did abuse its discretion in excluding the expert’s testimony. “Evidence Code section 801  does not limit an expert to the use of admissible evidence in forming an opinion. . . . In sum, the court’s ruling excluding [the expert’s] testimony because it was based on [inadmissible] iBridge spreadsheets exceeded the bounds of the court’s discretion.” (Zuniga v. Alexandria Care Center, LLC (Cal. App. 2nd Dist., Div. 7, Aug. 12, 2021) 67 Cal.App.5th 871.)
“This case illustrates the law’s inability to remedy certain wrongs.” The Ninth Circuit Court of Appeals in Quintero Perez v. United States.
Plaintiffs’ family member illegally crossed the border from Mexico to the U.S. through a fence hole. When discovered by U.S. border agents, he retreated back through the hole to Mexico. He then reappeared at the border fence above U.S. agents. An agent ordered him multiple times to cease his activities. One agent drew his weapon and the man retreated. He again reappeared and threw rocks and a wooden board with nails down onto border agents, hitting one in the head with the board. An agent shot and killed the man. His family sued the agent who shot him and the U.S. government for damages pursuant to Bivens v. Six Unknown Fed. Narcotics Agents (1971) 403 U.S. 388, which held there is an implied right of action for damages against federal officers alleged to have violated a citizen’s constitutional rights. Meanwhile, in February 2020, in Hernandez v. United States (2020) 140 S. Ct. 735, the U.S. Supreme Court declined to extend Bivens to a situation very similar to the instant case, stating: “Unlike any previously recognized Bivens claim, a cross-border shooting claim has foreign relations and national security implications. In addition, Congress has been notably hesitant to create claims based on allegedly tortious conduct abroad. Because of the distinctive characteristics of cross-border shooting claims, we refuse to extend Bivens into this new field.” Finding that Hernandez “guides our analysis,” the Ninth Circuit concluded that plaintiffs were precluded from Bivens relief. (Quintero Perez v. United States (9th Cir., Aug. 16, 2021) 2021 WL 3612108.)
California’s Prevailing Wage Law Does Not Apply to Rolling Stock.
California’s prevailing wage law (Lab. Code, § 1720 et seq.) is a minimum wage provision that generally applies to those employed on “public works.” The California Supreme Court held that publicly funded work on rolling stocks, such as train cars, do not fall under the statutory definition of “public works.” It also decided that, even when work on rolling stock is integral to other activity that itself qualifies as public work, it still does not qualify as “public works.” (Busker v. Wabtec Corp. (Cal., Aug. 16, 2021) 11 Cal.5th 1147.)
Labor Code § 1772 Does Not Expand the Categories of Work Covered by the Prevailing Wage Law.
California’s Labor Code requires that certain kinds of jobs performed on a public works project be compensated at a per diem rate no less than the prevailing wage paid in the area where the work is done. (Lab. Code, § 1771.) Plaintiffs urged the California Supreme Court to interpret § 1772 in a way that would enlarge the scope of the prevailing wage law to encompass activities that the Legislature has not otherwise defined as public work. Ruling against plaintiffs, California’s high court stated: “This expansive interpretation is unsupported by either the statutory language or legislative history. Section 1772 was not intended to define or expand the categories of work covered by the prevailing wage law. As a result, plaintiffs’ reliance on that statute is misplaced.” (Mendoza v. Fonseca McElroy Grinding Co., Inc. (Cal., Aug. 16, 2021) 11 Cal.5th 1118.)
The Daily Beast published an article entitled “Trump’s New Favorite Channel Employs Kremlin Paid Journalist.” The article read: “If the stories broadcast by the Trump-endorsed One America News Network [(OAN)] sometimes look like outtakes from a Kremlin trolling operation, there may be a reason. One of the on-air reporters at the 24-hour network is a Russian national on the payroll of the Kremlin’s official propaganda outlet, Sputnik.” Rachel Maddow, host of The Rachel Maddow Show on MSNBC, ran a segment about the article later that day and stated: “[P]erhaps the single most perfectly formed story of the day, the single most like sparkly story of the entire day is this scoop from reporter Kevin Poulsen at ‘The Daily Beast’ who has sussed out that Trump’s favorite more Trumpier than Fox TV network, the one that the president has been promoting and telling everyone they should watch and is better than Fox, turns out that network has a full time on air reporter who covers U.S. politics who is simultaneously on the payroll of the Kremlin. What? [¶] I mean, what? I mean, it’s an easy thing to throw out, you know, like an epitaph in the Trump era, right? Hey, that looks like Russian propaganda. In this case, the most obsequiously pro-Trump right wing news outlet in America really literally is paid Russian propaganda. They’re [sic] on air U.S. politics reporter is paid by the Russian government to produce propaganda for that government.” The owner of OAN sued Maddow and MSNBC for defamation, not for repeating what was in the article, but for Maddow’s comment that OAN “ ‘really literally is paid Russian propaganda.’ ” The district court dismissed the case after granting defendants’ anti-SLAPP motion. Affirming, the Ninth Circuit stated: “Maddow’s statement is well within the bounds of what qualifies as protected speech under the First Amendment. No reasonable viewer could conclude that Maddow implied an assertion of objective fact.” (Herring Networks, Inc. v. Maddow (9th Cir., Aug. 17, 2021) 2021 WL 3627126.)
Employees Allegedly Coerced to Pay Employer for On-the-Job Business Mistakes.
Defendant clothing manufacturer allegedly coerced its employees to sign indemnification agreements, forcing employees to pay for business losses incurred for common on-the-job mistakes. Plaintiff filed a class action, alleging misuse of California’s shoplifting statute and violation of the requirement that employers indemnify employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” (Lab. Code, § 2802, subd. (a).) The trial court granted in part and denied in part defendant’s anti-SLAPP motion to strike. Reversing in part, the Court of Appeal stated: “In sum, [plaintiff’s] pleadings, declaration, and accompanying evidence support her claim that she personally incurred a necessary loss in direct consequence of the discharge of her duties or obedience to the directions of her employer. [Plaintiff] has stated a legally sufficient claim and made a prima facie factual showing sufficient to survive [defendant’s] special motion to strike.” (Gallano v. Burlington Coat Factory of California, LLC (Cal. App. 1st Dist., Div. 1, Aug. 16, 2021) 67 Cal.App.5th 953.)
In a Marital Dissolution Proceeding, Both Spouses Bear the Burden to Ensure the Court Has Necessary Information About Each Party’s Interest in Community Property.
A wife filed a marital dissolution action. She did not submit sufficient evidence to allow the court to determine the community property interest in the family home. The husband realized the absence of critical evidence, but did not submit it himself, believing it was the wife’s burden to do so. On appeal, the husband claimed the trial court erred in its evaluation of the community property. Reversing, the Court of Appeal stated: “We hold that where it is undisputed that there is a community property interest in real property, it is the obligation of both spouses to ensure that the family court has the information necessary to determine that interest, no matter which spouse brought the dissolution action. If the spouses fail to do so, the family court must direct them to furnish the missing information, reopening the case if necessary.” (In re Marriage of Ramsey & Holmes (Cal. App. 2nd Dist., Div. 4, Aug. 17, 2021) 67 Cal.App.5th 1043.)
Settlement Approval in Class Action Reversed.
Before class certification, the district court approved a class settlement against a dating app that offered reduced prices for those under 29 years old. The Ninth Circuit reversed, holding that settlements occurring before class certification are subject to a high procedural standard, because the district court acts as a fiduciary and must carefully scrutinize the settlement’s fairness to protect absent class members. Here, the Ninth Circuit found that the district court overestimated the amount defendants would actually pay by assuming that all class members would file a claim. (Kim v. Allison (9th Cir., Aug. 17, 2021) 2021 WL 3627260.)
Individuals with Disabilities Education Act.
The Individuals with Disabilities Education Act (20 U.S.C. § 1400 et seq.; IDEA) ensures that public schools educate children with disabilities. Plaintiffs claim the San Francisco Unified School District is failing its responsibilities to students under the IDEA by not timely identifying and evaluating students with disabilities, and, after identifying them, by providing them with insufficiently individualized accommodations and services. The district court dismissed the complaint because none of the plaintiffs had exhausted administrative remedies. Plaintiffs argued on appeal that exhaustion was not required because they were challenging district-wide policies that only a court can remedy, and because their claim comes under a recognized futility exception. Affirming, the Ninth Circuit noted that plaintiffs were unable to identify any policies that only a court could remedy, and held: “Plaintiffs’ claims did not fall within any recognized exception to the IDEA’s requirement that plaintiffs exhaust administrative remedies.” (Student A v. San Francisco Unified School District (9th Cir., Aug. 18, 2021) 2021 WL 3642151.)
No Anti-SLAPP Motion for Affirmative Defense.
Cross-complainant moved to strike cross-defendant’s affirmative defense for setoff pursuant to the anti-SLAPP statute (Code Civ. Proc., § 425.16). The trial court denied the motion. Affirming, the Court of Appeal held: (1) An anti-SLAPP motion may not be directed to an affirmative defense because the statute is confined to causes of action (§ 425.126, subd. (b)(1)); and (2) an affirmative defense for setoff cannot constitute a cause of action or claim for relief subject to an anti-SLAPP motion because a cause of action seeks relief, and an affirmative defense cannot seek relief. (Morris Cerullo World Evangelism v. Newport Harbor Offices & Marina, LLC (Cal. App. 4th Dist., Div. 3, Aug. 18, 2021) 67 Cal.App.5th 1149.)
Previously we reported: Window Washer Gets to Go to Trial Against Homeowner.
Plaintiff, who advertised his window washing company as being experienced in cleaning hard to reach windows, climbed onto the roof using a ladder affixed to a hard to reach skylight in a residence, then lost his footing and fell off the roof. He sued the homeowner for compensation for his injuries. The homeowner argued the window washer was an independent contractor and moved for summary judgment. The trial court dismissed the case after granting the motion. On appeal, the plaintiff did not dispute he is an independent contractor but contended there are triable issues of fact whether the homeowner can be held liable under the “retained control” exception set forth in Hooker v. Department of Transportation (2002) 27 Cal.4th 198, and the “hazardous condition” exception set forth in Kinsman v. Unocol Corp. (2005) 37 Cal.4th 659. While the appellate court did not find there were any triable issues of fact under the retained control exception, it did find there are triable issues of fact under the hazardous condition exception and reversed. (Gonzalez v. Mathis (Cal. App. 2nd Dist., Div. 7, Feb. 6, 2018) 20 Cal.App.5th 257.)
When the case reached the California Supreme Court, the court noted there is a strong presumption under California law that a hirer of an independent contractor delegates to the contractor all responsibility for workplace safety pursuant to Privette v. Superior Court (1993) 5 Cal.4th 689. The high court further noted it had identified two limited circumstances in which the presumption is overcome. First, as held in Hooker v. Department of Transportation (2002) 27 Cal.4th 198, a hirer may be liable when it retains control over any part of the independent contractor’s work and negligently exercises that retained control in a manner that affirmatively contributes to the worker’s injury. Second, as held in Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, a landowner who hires an independent contractor may be liable if the landowner knew, or should have known, of a concealed hazard on the property that the contractor did not know of and could not have reasonably discovered, and the landowner failed to warn the contractor of the hazard. The high court granted review to decide whether a landowner may also be liable for injuries to an independent contractor or its workers that result from a known hazard on the premises where there were no reasonable safety precautions the landowner could have adopted to avoid or minimize the hazard. Reversing the Court of Appeal and declining to create a third Privette exception, the California Supreme Court held: “Thus, unless a landowner retains control over any part of the contractor’s work and negligently exercises that retained control in a manner that affirmatively contributes to the injury , will not be liable to an independent contractor or its workers for an injury resulting from a known hazard on the premises.” (Gonzalez v. Mathis (Cal., Aug. 19, 2021) 12 Cal.5th 29.)
Defendant hired plaintiff to provide travel nursing services to hospitals and other facilities. Their contract had a non-solicitation provision. At some point, plaintiff began soliciting defendant’s travel nurse recruiters. Plaintiff filed suit against defendant, alleging four claims pursuant to §§ 1 and 2 of the Sherman Antitrust Act (15 U.S.C. §§ 1, 2), and three California law claims. The district court granted summary judgment to defendant on some of the claims and declined to exercise jurisdiction over others. Affirming, the Ninth Circuit held: “The non-solicitation agreement is an ancillary restraint and therefore is subject to the rule-of-reason—not the per se rule. The agreement does not violate the rule-of-reason because [plaintiff] failed to carry its burden of proving the agreement has a substantial anticompetitive effect that harms consumers in the relevant market. [Plaintiff’s ]claim for retaliatory damages also fails because it did not present any evidence of a cartel or a concerted action in the termination of its agreement with [defendant].” (AYA Healthcare Services, Inc. v. AMN Healthcare, Inc. (9th Cir., Aug. 19, 2021) 2021 WL 3671384.)
Exemption to Federal Arbitration Act Cannot Be Waived by Private Contract.
After plaintiff and others were laid off as interstate truckers without advance notice, he filed a class action against defendant transportation company. However, since plaintiff had waived his right to pursue class actions in an arbitration agreement with defendant, defendant moved to compel his individual claim to arbitration. The district court found that the Federal Arbitration Act’s exemption for transportation workers engaged in interstate commerce applied and could not be waived by private contract. (9 U.S.C. § 1 et seq.; FAA.) Affirming, the Ninth Circuit stated: “We affirm the district court’s ruling that the [FAA] § 1 exemption of employment contracts for transportation workers applies and cannot be waived by private contract.” (Romero v. Watkins and Shepard Trucking, Inc. (9th Cir., Aug. 19, 2021) 2021 WL 3671380.)
Employer’s Paramour Preference Is Not Unlawful Sex Discrimination.
Getting down to the nub, it looks as if the boss was having an affair with one of the workers and giving her preferential treatment. The question for the Ninth Circuit was whether that amounted to discrimination against other employees under the Title VII of the 1964 Civil Rights Act (42 U.S.C. §§ 2000e-2(a)(1), 2000e-3(a)), which prohibits discriminating against any individual because of that individual’s sex and retaliating against those who oppose unlawful employment practices. The district court granted summary judgment for the employer. Affirming, the Ninth Circuit stated: “We hold that discrimination motivated by an employer’s ‘paramour preference’ is not unlawful sex discrimination against the complaining employee within the ordinary public meaning of Title VII’s terms.” (Maner v. Dignity Health (9th Cir., Aug. 20, 2021) 2021 WL 3699780.)
Sometimes a Second Anti-SLAPP Motion Is Permissible.
A second anti-SLAPP motion to strike pursuant to Code of Civil Procedure § 425.16 is a proper procedural vehicle to challenge an amended pleading renewing allegations previously stricken via an anti-SLAPP motion. (Finato v. Keith A. Fink & Associates (Cal. App. 2nd Dist., Div. 1, Aug. 23, 2021) 2021 WL 3721411.)
Copyright: Exclusive Ownership and the Right to Public Performance for Music.
When an AM/FM radio station plays a song over the air, it does not pay public performance royalties to the owner of the original sound recording. In contrast, digital and satellite radio providers like Sirius XM must pay public performance royalties whenever they broadcast post-1972 music. The district court interpreted Civil Code § 980, subdivision (a), which grants a copyright owner “exclusive ownership” to its pre-1972 music, to include the right to public performance whenever copyrighted recordings are publicly recorded. At issue for the Ninth Circuit was whether digital and satellite radio providers like Sirius XM must pay public performance royalties whenever they broadcast post-1972 music. Reversing the district court’s grant of partial summary judgment for plaintiffs, the Ninth Circuit stated: “To answer this 21st century question about the obligations of satellite radio stations, we must rewind back almost 150 years and look to the common law in the 19th century when California first used the phrase ‘exclusive ownership’ in its copyright statute. At that time, no state had recognized a right of public performance for music, and California protected only unpublished works. Nothing suggests that California upended this deeply rooted common law understanding of copyright protection when it used the word ‘exclusive ownership’ in its copyright statute in 1872. So we do not construe ‘exclusive ownership’ to include the right of public performance.” (Flo & Eddie, Inc. v. Sirius XM Radio, Inc. (9th Cir., Aug. 24, 2021) 2021 WL 3716788.)
Lack of Accommodations for Blind Students.
When two blind students enrolled in a community college, they registered for disability accommodations, including tape-recorded lectures, preferential seating, receiving materials in electronic text, test-taking accommodations, and weekly tutoring. Their accommodations were granted on paper, but they and other blind students had problems accessing those accommodations, such as not being provided with handouts and PowerPoint presentations. After bench and jury trials, the district court entered a permanent injunction against the community college district, finding it was violating the Rehabilitation Act of 1973 (29 U.S.C. § 794 et seq.). The community college district appealed. Reversing and remanding, the Ninth Circuit found the district court erroneously limited plaintiffs’ claims to the disparate impact framework only, and ordered: “On remand, the district court is instructed to reconsider Plaintiffs’ individual claims under either the disparate impact framework or the individual failure to accommodate framework, depending on the nature of the specific claim, and to permit Plaintiffs to introduce evidence to support these claims under either framework.” (Payan v. Los Angeles Community College District (9th Cir., Aug. 24, 2021) 2021 WL 3730692.)
“My opponent wants Sanctuary Cities. But where was sanctuary for Kate Steinle?” Donald Trump’s Speech at 2016 Republican Convention.
Defendant is a ranger with the Bureau of Land Management (BLM). Traveling with his family, he parked their packed car along the Embarcadero in San Francisco before going into a restaurant. When he returned to the car, there had been a break-in, and one of the items stolen was a government-issued Sig Sauer gun. Four days later, a man who was undocumented found the gun. When he picked it up, he fired it onto the ground. It ricocheted, striking and killing a young woman who was walking with her father on Pier 14. It was unknown who stole the pistol, who removed it from its holster, and what happened to it during the four days between the theft and the fatal shooting. The decedent’s parents sued the government under the Federal Torts Claims Act (28 U.S.C. § 1346 et seq.) for negligence by the BLM. The district court granted summary judgment for the government. Affirming, the Ninth Circuit stated: “[We affirm on the ground that [the ranger’s] conduct was not the proximate cause of Ms. Steinle’s death.” (Steinle v. United States of America (9th Cir., Aug. 24, 2021) 2021 WL 3730700.)
Surviving Second Spouse and Children From the First Marriage
A husband and wife acquired property during the marriage. Everything was in his name. The legal title said it was his sole and separate property. He died. The children from his first marriage wanted their inheritance. The surviving spouse said it was community property and that husband and wife paid for the house and its upkeep.
· Family Code § 760 provides that property acquired during a marriage is community property.
· Family Code § 721, subdivision (b) provides there is a rebuttable presumption of undue influence when one spouse obtains an advantage over another in a community property transaction.
· Evidence Code § 662 provides that absent clear and convincing proof to the contrary, ownership is as set forth in the legal title.
· “[C]ourts resolving disputes over how to characterize property acquired during the marriage in an action between the spouses should apply the community property statutes found in the Family Code and not section 662[GW1] .” (In re Marriage of Valli (2014) 58 Cal.4th 1396, 1414 (conc. opn. of Chin, J.).)
The trial court found for the widow. Affirming, the Court of Appeal stated: “We . . . conclude the probate court erred in determining Family Code section 760 prevailed over Evidence Code section 662 in this probate action. And because we so hold, we need not address the children’s argument that, even if Family Code section 760 prevailed and the community property presumption did apply, the probate court erred in its determination of whether the presumption was rebutted. . . . We . . . conclude the probate court properly concluded the Family Code section 721 undue influence presumption applied. . . . While the children presented some contrary evidence, the wife’s evidence constitutes substantial evidence of constructive fraud to support the probate court’s finding of undue influence under Family Code section 721.” (Estate of Wall (Cal. App. 3rd Dist., Aug. 24, 2021) 2021 WL 3732360.)
[GW1]NOTE: This quote is from the concurring opinion.
Ignore Discovery Pursuant to Execution of Judgment and Go to Jail.
Plaintiffs obtained a judgment against defendants, and thereafter tried to discover defendant’s assets to collect on the judgment. Defendants ignored plaintiffs’ requests, so plaintiffs obtained a court order to compel. Still, defendants ignored plaintiffs’ requests. Plaintiffs pursued sanctions. The district court held the principal defendant in contempt. The court’s order included the following: “Therefore, an arrest warrant shall be issued for Hans Jecklin, and if he is in the United States, he shall be detained until he purges himself of his civil contempt.” Affirming the lower court’s contempt order and issuance of an arrest warrant, the Ninth Circuit stated: “Under the federal recalcitrant witness statute, when a witness refuses to testify or provide other information, including documentary evidence, the court ‘may summarily order his confinement . . . until such time as the witness is willing to give such testimony or provide such information.’ 28 U.S.C. § 1826(a). We address whether § 1826(a) applies to an individual who refuses to comply with a court order compelling responses to post-judgment written discovery requests. We hold that it does.” (Invesco High Yield Fund v. Jenklin (9th Cir., Aug. 25, 2021) 2021 WL 3778595.)
Preliminary Injunction Denied to Landlords for Eviction Moratorium.
Following the outbreak of COVID-19 in early 2020, the City of Los Angeles imposed an eviction moratorium with the stated purposes of ensuring housing security and promoting public health during the pandemic. The moratorium operates during a “Local Emergency Period” to bar certain evictions. Related provisions delay applicable tenants’ rent payment obligations and prohibit landlords from charging late fees and interest. Plaintiff, a trade association of Los Angeles landlords, sued the city, arguing that the moratorium and its related provisions violate the Constitution’s contracts clause. (U.S. Const. art. I, § 10, cl. 1.) The district court denied plaintiff’s request for preliminary injunctive relief, concluding that plaintiff had not shown the required likelihood of success on the merits. Affirming, the Ninth Circuit held the lower court did not abuse its discretion, and stated: “We hold that under modern Contracts Clause doctrine, the district court did not err in determining that the moratorium’s provisions were likely ‘reasonable’ and ‘appropriate’ given the circumstances of the COVID-19 pandemic.” (Apartment Association of Los Angeles County, Inc. v. City of Los Angeles (9th Cir., Aug. 25, 2021) 2021 WL 3745777.)
CBS Evades Accountability for Its Blunder.
The claims alleged in this case are based upon the filming of a scene depicting an armed robbery of a jewelry store for the CBS television show NCIS: New Orleans. One plaintiff owns a jewelry store, and two others are actors. Unbeknownst to plaintiffs, no one from CBS or the show had obtained filming permits to shoot the scene, nor had anyone informed the local authorities or the neighboring businesses that they would be filming an armed robbery scene for a television show. A neighbor called 911 to report that an armed robbery in progress. A SWAT team responded and broke down the jewelry store door with weapons drawn, warning the actors they would shoot if they did not drop their guns. The actors were pushed to the ground, handcuffed and arrested. Afterward, CBS instructed the actors not to tell anyone about the incident. The actors did not follow that instruction and have since been unable to secure employment on any television production and believe CBS has blackballed them. Both actors were diagnosed with PTSD. The jewelry store suffered a significant drop in business after word spread it was the site of an armed robbery. Plaintiffs sued CBS. The trial court dismissed the action after sustaining defendant’s demurrer. Affirming, the Court of Appeal held that since plaintiffs’ claims arose in Louisiana and the Louisiana statute of limitations had expired, plaintiffs were barred in California by Code of Civil Procedure § 361, which states that “[w]hen a cause of action has arisen in another State, . . . and by the laws thereof an action thereon cannot there be maintained against a person by reason of the lapse of time, an action thereon shall not be maintained against him in this State.” (LeBrun v. CBS Studios Inc. (Cal. App. 2nd Dist., Div. 4, Aug. 25, 2021) 2021 WL 3747125.)
The Discovery Rule and the Statute of Limitations.
In 2004, when plaintiff was 12 years old, his father began a pattern of physically and emotionally abusing his mother in plaintiff’s presence. This included striking her with fists, shouting at her, using insults and vulgar and abusive language, and other forms of physical and emotional abuse. In 2006, when plaintiff was 14 years old, his parents began practicing a pattern of physical abuse against him, including striking him with fists, attempting to kick him, other physical abuse, and threatening him with violence and retaliation. Plaintiff’s parents subjected him to such abuse continuously for approximately four years until about April 2008. In 2006, the county substantiated a report of child abuse made by one of plaintiff’s teachers, a mandatory reporter. The county did not cross-report to the district attorney or the sheriff as required. Plaintiff began to investigate his history within the county after his former teacher told him about that report in 2019. In October 2019, the county informed plaintiff of the unaddressed substantiated report of abuse. Plaintiff filed a complaint against the county on February 26, 2020. Finding plaintiff’s claims were barred by Code of Civil Procedure § 338, subdivision (a)’s statute of limitations, the trial court dismissed the action. Analyzing the arguments, the Court of Appeal noted evidence that plaintiff had trauma-induced amnesia until a triggering event in December 2017 that caused his childhood memories of abuse to return. Reversing, the appeals court stated: “Because plaintiff filed his action within three years from when he had reason to know of his causes of action, his suit is timely.” (Holman v. County of Butte (Cal. App. 3rd Dist., Aug. 25, 2021) 2021 WL 3763053.)
CDC’s Moratorium on Evictions Ended by U.S. Supreme Court.
Due to the pandemic, the director of the Centers for Disease Control and Prevention imposed a nationwide moratorium on evictions of any tenants who live in a county that is experiencing substantial or high levels of COVID-19 transmission and who make certain declarations of financial need. (86 Fed. Reg. 43244 (2021).) Plaintiff realtor associations obtained a judgment from the district court for the District of Columbia vacating the moratorium on the ground it is unlawful. But the district court stayed its judgment while the government pursued an appeal. The U.S. Supreme Court vacated the stay, stating: “The applicants not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing. . . . If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.” (Alabama Association of Realtors v. Department of Health and Human Services (U.S., Aug. 26, 2021) 2021 WL 3783142.)
No Specific Jurisdiction Over Virginia Law Firm.
A person with a federal tort claim arising out of injuries suffered in California retained a Virginia-based law firm with Virginia-licensed lawyers to represent her in negotiating a settlement with the pertinent federal agency’s lawyers in Arizona. Plaintiff is a veteran of the U. S. armed forces. While receiving services from the U.S. Department of Veterans Affairs (VA) in California, the social worker initiated and pursued a sexual relationship with plaintiff while plaintiff was her patient. VA officials later concluded that the social worker’s actions constituted “profound patient abuse.” Plaintiff pursued an administrative claim against the VA, and that case was assigned to the general counsel in Phoenix, Arizona. Plaintiff searched online and found and retained defendant, a Virginia law firm. A few months later, the firm secured a $200,000 settlement offer from the Phoenix-based VA lawyer. A few months after settlement, plaintiff sued defendant for giving her bad settlement advice. The trial court granted defendant’s motion to quash for lack of personal jurisdiction. Affirming, the Court of Appeal stated: “Can California exert specific jurisdiction over the firm and its lawyers if the person sues them for malpractice? We conclude that the answer is no, and do so because (1) the law firm and its lawyers did nothing to purposefully avail themselves of the benefits of doing business in California, and (2) the allegedly bad advice underlying the malpractice lawsuit was not sufficiently related to the firm’s and its lawyers’ contacts with California.” (Jacqueline B. v. Rawls Law Group, P.C. (Cal. App. 2nd Dist., Div. 2, Aug. 26, 2021) 2021 WL 3782768.)
Determining Value of Condemned Property.
In order to connect segments of a roadway, a city acquired land by condemnation. Thereafter, the city contended the land should be valued at its undeveloped state (about $50,000) pursuant to the holding in City of Porterville v. Young (1987) 195 Cal.App.3d 1260. The former landowners argued the land should be valued under a “project effect rule” (about $960,176), citing City of Perris v. Stamper (2016) 1 Cal.5th 576. The trial court held for the city. Affirming, the Court of Appeal stated the city had shown it would have conditioned development of the land on its owners dedicating the strip of land to the city. (City of Escondido v. Pacific Harmony Grove Development, LLC (Cal. App. 4th Dist., Div. 1, Aug. 26, 2021) 2021 WL 3783247.)
Personal Jurisdiction in Trademark Infringement Action
Ayla is plaintiff. Alya Skin is defendant. Both manufacture skin care products. Plaintiff is a Delaware corporation based in San Francisco. Defendant is an Australian company. Both plaintiff and defendant sell their products online. Plaintiff is the registered owner of three trademarks for use of the “AYLA” work mark in connection with beauty services. Plaintiff filed the action California federal court. The district court granted defendant’s motion to dismiss for lack of personal jurisdiction. Reversing, the Ninth Circuit stated: “Though the burden on Alya Skin of litigating this case under a foreign dispute resolution system may be relatively high, it does not outweigh Ayla’s interest in adjudicating its trademark dispute in the United States. The exercise of jurisdiction over Alya Skin is reasonable and thus satisfies the demands of due process. . . . We hold that Alya Skin is subject to specific personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2) and reverse.” (Ayla, LLC v. Alya Skin Pty. Ltd. (9th Cir., Aug. 27, 2021) 2021 WL 3823624.)
Payment of Costs in a Class Action.
In their class action trial plan, plaintiffs proposed, and defendant agreed, that the parties would depose 30 class members as part of a pilot study to determine how many additional depositions are needed for a valid random sample of the class generally. Over defendant’s objection, the trial court ordered that the parties share the deposition costs equally. Defendant didn’t get very far in its appeal of the trial court’s order to split the costs. The Court of Appeal stated: “We must answer a threshold question—whether the order is appealable under the collateral order doctrine. We conclude that it is not, and we dismiss the appeal.” (Reddish v. Westamerica Bank (Cal. App. 1st Dist., Div. 5, Aug. 27, 2021) 2021 WL 3827308.)
Interpretation of a Non-Disclosure Agreement.
The parties are competitors who entered negotiations for the sale of plaintiff to defendant. At the start of the process, they entered into a non-disclosure agreement (NDA), and agreed that English law governed the NDA. Eventually, the acquisition fell through. After that, the two competed for a project to be done for Facebook. This lawsuit is about plaintiff’s claim that defendant used its technology in pitching its design for the Facebook project. The district court interpreted the NDA in favor of plaintiff. Finding the lower court did not apply English law in interpreting the NDA, the Ninth Circuit reversed and remanded for a new trial. (BladeRoom Group Ltd. v. Emerson Electric Co. (9th Cir., Aug. 30, 2021) 2021 WL 3852630.)
Missed Premiums for Life Insurance Policies.
In 2012, the Legislature enacted Insurance Code §§ 10113.71 and 10113.72. These provisions were enacted after the defendant insurance company in this case issued a life insurance policy to plaintiff, but before it cancelled plaintiff’s policy. The laws changed the grace period and notice requirements for life insurance policies in California. With regard to whether the statutes apply to all policies in effect when the new laws became effective or only to policies issued after that date, the California Supreme Court held: “We conclude that sections 10113.71 and 10113.72 apply to all life insurance policies in force when these two sections went into effect, regardless of when the policies were originally issued.” (McHugh v. Protective Life Ins. Co. (Cal., Aug. 30, 2021) 2021 WL 3853061.)
City Immune for Natural Condition of Unimproved Public Property.
Plaintiff was injured by a falling tree branch while jogging in a municipal park owned by the city. She and her husband sued the city for personal injuries. The trial court denied the city’s motion for summary judgment. The city sought a preemptory writ of mandate directing the trial court to vacate its denial of the motion for summary judgment and grant the motion, arguing the city is immune from liability for injuries caused by a natural condition of unimproved public property, under Government Code § 831.2. Issuing the writ, Court of Appeal stated: “We conclude immunity under section 831.2 applies as a matter of law and issue the requested writ.” (City of Chico v. Superior Court (Cal. App. 3rd Dist., Aug. 30, 2021) 2021 WL 3855292.)
Contingency Fee Provision Violates Rules of Professional Conduct.
After an automobile accident, the plaintiff’s lawyer accepted a settlement and dismissed the action. Plaintiff’s attorney entered into the settlement pursuant to a provision in the attorney’s contingent fee agreement, which purported to grant the attorney the right to accept settlement offers on the client’s behalf in the attorney’s “sole discretion,” so long as the attorney believed in good faith that the settlement offer was reasonable and was in the client’s best interest. Plaintiff appealed from the judgment of dismissal. Reversing, the Court of Appeal stated: “We conclude such a provision violates the Rules of Professional Conduct and is void to the extent it purports to grant an attorney the right to accept a settlement over the client’s objection. Accordingly, we hold the settlement to be void and reverse the resulting judgment. We also refer plaintiff’s former attorneys to the State Bar for potential discipline, as required by law and by Canon 3D(2) of the Code of Judicial Ethics.” (Amjadi v. Brown (Cal. App. 4th Dist., Div. 3, Aug. 30, 2021) 2021 WL 3855831.)
Trial Court’s Denial of Postjudgment Motion to Tax Costs Affirmed.
Plaintiff appealed from a postjudgment order on a motion to tax costs, contending the trial court erred by refusing to tax costs for items she claimed were neither expressly authorized by statute nor allowable under Code of Civil Procedure § 1033.5’s discretionary provisions. Among other claims, plaintiff disputed costs incurred for exhibit photocopies submitted in support of a vexatious litigant motion. Affirming the order, the Court of Appeal stated: “We decide that these costs are recoverable outside the context of trial under section 1033.5, subdivision (a)(13), which states that recovery of costs of ‘photocopies of exhibits . . . may be allowed if they were reasonably helpful to aid the trier of fact.’ ” (Rozanova v. Uribe (Cal. App. 6th Dist., Aug. 30, 2021) 2021 WL 3856460.)
Suicide Was Not a Superseding Cause of Harm in Wrongful Death Action.
Plaintiff filed a wrongful death action after her son jumped from the roof of a drug rehabilitation treatment facility. The jury found the facility was 65 percent liable and decedent was 35 percent liable for his death. The jury awarded $1.7 million for past damages and $2.2 million for future damages. On appeal, the facility argued the trial court erred by refusing to instruct the jury on premises liability and that the son’s suicide was a superseding cause of harm. Rejecting that contention, the Court of Appeal stated: “Here, as in Haft[v. Lone Palm Hotel (1970) 3 Cal.3d 756], [the son’s] suicide could not have ‘broken the chain of causation’ since it was the very foreseeable risk that rendered Lighthouse’s conduct negligent.” The facility also contended the court erred in admitting rebuttal testimony constituting expert opinions of a non-designated expert witness. The appeals court also rejected that contention, finding the facility did not show how the trial court abused its discretion. (Green v. Healthcare Services, Inc. (Cal. App. 4th Dist., Div. 3, Aug. 31, 2021) 2021 WL 3871958.)
Code of Civil Procedure § 998 Offer Held Not to Apply in Disputed Wage Action.
Defendant argued the trial court erred when it found the cost-shifting provision of Code of Civil Procedure § 998 did not apply to their pretrial offer under that section. Affirming, the Court of Appeal stated: “Here we hold that Labor Code sections 206 and 206.5 preclude a section 998 offer that resolves disputed wage claims if there are undisputed wages due at the time of the offer.” (Wasito v. Kazali (Cal. App. 2nd Dist., Div. 6, Aug. 31, 2021) 2021 WL 3878319.)
No Evidence of Unconscious Bias or Intentional Discrimination.
A Chinese international student enrolled in Idaho State University’s doctoral program in clinical psychology in 2008. He completed the requisite four years of instruction and wrote and successfully defended his dissertation. However, he failed to complete the last requirement of the program, satisfactory completion of a professional internship consisting of 2,000 clinical hours over the course of 11 months. After he was dismissed from the internship, the university dismissed him from the program altogether. The former student sued the university, alleging the university violated Title VI because it intentionally discriminated against him based on his race or national origin. After a bench trial, the district court found plaintiff failed to prove intentional discrimination. Affirming, the Ninth Circuit stated: “[W]e take this opportunity to clarify that evidence of unconscious bias against a protected class in an appropriate case may be probative of whether an entity has intentionally discriminated in a Title VI case. But this question is factual, and here the evidence in the record shows that the district court permissibly found that ISU did not intentionally discriminate against [plaintiff].” (Yu v. Idaho State University (9th Cir., Aug. 31, 2021) 2021 WL 3876971.)