Litigation Update: September 2022

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

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Jonathan Grossman, Jennifer Hansen, Gary A. Watt, David Williams, Ryan Wu
Disbarred Attorney Who Declared Bankruptcy Need Not Repay State Bar’s Client Security Fund.

The California Supreme Court disbarred plaintiff in 2014 for violations of the State Bar Rules of Professional Conduct and the state Business and Professions Code. The California Supreme Court ordered plaintiff to pay restitution to 56 former clients, costs for his disciplinary proceedings, and any funds that would eventually be paid out by the State Bar’s Client Security Fund (CSF) to his victims. Plaintiff subsequently filed for Chapter 7 bankruptcy and received a discharge from the federal bankruptcy court. The State Bar argued that plaintiff’s disciplinary costs and reimbursements to the CSF were excepted from discharge pursuant to 11 U.S.C. § 523(a)(7) as “a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and . . . not compensation for actual pecuniary loss.” The bankruptcy court granted summary judgment for the State Bar, concluding that while restitution payments were discharged, disciplinary costs and reimbursements paid from the CSF were not. Reversing, the Ninth Circuit stated: “Indebtedness arising from a disbarred attorney’s obligation to reimburse the State Bar for payments made by the CSF to victims of that attorney’s misconduct are not excluded from discharge.” (Kassas v. State Bar of California (9th Cir., Aug. 1, 2022) 42 F.4th 1123.)

No Discrimination Against the Visually Impaired.

Plaintiff alleged that defendant intentionally maintained a retail website that was inaccessible to the visually impaired in violation of the Unruh Civil Rights Act (Civ. Code, § 51 et seq.). Defendant successfully demurred and the trial court entered a judgment of dismissal. Affirming, the Court of Appeal stated: “As to intentional discrimination, the California Supreme Court has held that the discriminatory effect of a facially neutral policy or action is not alone a basis for inferring intentional discrimination under the Unruh Act. (See Koebke v. Bernardo Heights Country Club (2005) 36 Cal.4th 824, 854. . . . [¶] As to the ADA violation theory, [plaintiff] has not alleged, as he must in order for Title III of the ADA to apply, that [defendant’s] website constitutes a ‘place of public accommodation.’ (42 U.S.C. § 12182(a).) Under current law, we cannot read this phrase as including retail websites without any connection to a physical space.” (Martinez v. Cot’n Wash, Inc. (Cal. App. 2nd Dist., Div. 1, Aug. 1, 2022) 81 Cal.App.5th 1026.)

Hospice Payments.

This case involves the complex interaction between two statutory limits on federal Medicare spending relating to hospice care. Hospices that treat Medicare beneficiaries receive periodic reimbursements throughout the year from the Centers for Medicare and Medicaid Services (CMS), but the Medicare statute (42 U.S.C. § 1395d(d)) caps hospices’ aggregate annual reimbursement. The Budget Control Act (Pub. L. No. 112-25, 125 Stat. 240; see 2 U.S.C. §§ 900–903) separately requires the federal government to implement across-the-board cuts—commonly known as “sequestration”—to direct spending programs (including Medicare) when certain statutory conditions are met, as they were here. The plaintiffs are hospice providers who alleged that CMS’s method of implementing sequestration for hospice reimbursements is contrary to the Medicare statute and the Budget Control Act. The district court granted the government’s motion for summary judgment. Affirming, the Ninth Circuit concluded “that the plaintiffs’ challenge [wa]s without merit. CMS adopted a method that harmonized the Budget Control Act and the Medicare statute, ensuring the necessary percentage reduction to Medicare spending without altering the statutorily mandated calculation of the annual hospice cap.” (Silverado Hospice, Inc. v. Becerra (9th Cir., Aug. 1, 2022) 42 F.4th 1112.)

Chapter Two of the Federal Arbitration Act.

This appeal arises from the denial of a petition to enforce a summons issued by an arbitrator conducting an international arbitration under Chapter Two of the Federal Arbitration Act (FAA). (See 9 U.S.C. §§ 201–208.) The district court denied plaintiff’s motion to compel defendant to comply with an arbitrator’s subpoena requiring two of defendant’s law partners to appear at a hearing conducted pursuant to Chapter Two of the FAA. Reversing, the Ninth Circuit stated: “Section 204 of the FAA provides that where the arbitration agreement designates a ‘place of arbitration’ in the United States, an action or proceeding may be brought in the district embracing the place of arbitration. However, where, as here, that federal district court lacks personal jurisdiction over the party against whom enforcement is sought, we hold that the action may be brought in any district court deemed appropriate under the general venue statute, 28 U.S.C. § 1391, because § 204 supplements, rather than supplants, other venue rules.” (Jones Day v. Orrick, Herrington & Sutcliffe, LLP (9th Cir., Aug. 1, 2022) 42 F.4th 1131.)

Dismissal of Civil Rights Action Reversed.

A woman was arrested after a traffic stop. While in the police car, she vomited. The police called for paramedics, but canceled the call after the woman told them she was pregnant. The woman moaned and screamed during the hour it took police to transport her to jail. She told the police she was sick and called out for help. She was breathing rapidly and an officer told her to stop hyperventilating. Upon arrival at the station, she became unconscious. She fell into a coma and died nine days later. Her minor son brought this civil rights action alleging violation of 42 U.S.C. § 1983.  The district court dismissed the action. Reversing, the Ninth Circuit held that the son “ha[d] adequately pleaded both a survival claim on [his mother’s] behalf under the Fourth Amendment and a claim on his own behalf under the Fourteenth Amendment.” (J. K. J. v. City of San Diego (9th Cir., Aug. 2, 2022) 42 F.4th 990.)

Dissolution of Corporation Not Avoided by Attempted Buyout.

Plaintiff, who owned one percent of a limited liability company (LLC), filed an action seeking its judicial dissolution. Defendants, who together held 50 percent of the LLC, filed a motion to avoid dissolution by purchasing plaintiff’s one percent interest. Then plaintiff, together with other members owning the remaining 49 percent, voted to dissolve the LLC. The issue on appeal was whether a vote to dissolve an LLC extinguished the right defendants otherwise would have had to purchase plaintiff’s one percent interest and avoid dissolution of the LLC. The Court of Appeal concluded, “in accordance with the plain language of [Corporations Code] section 17707.01, that the . . . vote of 50 percent of the LLC membership interests to dissolve the LLC must be given effect. Consequently, the trial court erred when it issued an order appointing appraisers to determine the price defendants must pay to purchase plaintiff’s 1 percent membership interest. The trial court must dismiss the buyout proceeding as moot and direct the parties to wind up the activities of the LLC.” (Friend of Camden, Inc. v. Brandt (Cal. App. 2nd Dist., Div. 8, Aug. 2, 2022) 81 Cal.App.5th 1054.)

Summary Judgment Affirmed in Wrongful Death Action.

A man fell to his death from the steep, sloped roof of the residential building where he lived. The building was owned by defendant. The man had been drinking and had eaten a marijuana brownie earlier, and had been acting erratically before the fall. The parties agreed there was an “open and obvious risk” from the roof sloped at a steep angle and covered with brittle, broken, slippery, and unstable tiles. They also agreed there was no need for the man to be on the roof. Affirming summary judgment for the defendant, the Court of Appeal stated: “Under these circumstances, defendant owed no duty of care to [the man], and his parents cannot prevail on their wrongful death claims based on premises liability and negligence.” (Montes v. Young Men’s Christian Association of Glendale, California (Cal. App. 2nd Dist., Div. 8, Aug. 3, 2022) 81 Cal.App.5th 1134.)

Arbitration Agreement Is Severable from Any Illegality in Law Firm Retainer Agreement.

The trial court affirmed an arbitration award where the obligation to arbitrate arose from a provision in a law firm retainer agreement, and one of the attorneys who rendered legal services did so in violation of California’s attorney licensing requirements. Affirming, the Court of Appeal stated: “[T]he unlicensed attorney’s illegal practice of law pursuant to the retainer agreement does not render the entire retainer agreement illegal. . . . [A]n arbitration provision is severable from an agreement that is not entirely illegal (unless the arbitration provision itself is illegal). There is no claim here of any illegality in the retainer agreement’s arbitration provision.” (Brawerman v. Loeb & Loeb LLP (Cal. App. 2nd Dist., Div. 8, Aug. 3, 2022) 81 Cal.App.5th 1106.)

Defendant Not Entitled to Fair Use Defense in Copyright Infringement Action.

Plaintiff is a photographer who captured a series of photographs of an otherworldly sight—an ephemeral lake that had formed on the desert floor in Death Valley after heavy rains in March 2019. Plaintiff licensed his photos to several websites, which ran articles about the lake. Defendant is a digital publisher that posted an article about the lake using twelve of plaintiff’s photos, but neither sought nor received a license to do so. The district court granted summary judgment for defendant on plaintiff’s copyright action based on fair use. Reversing, the Ninth Circuit concluded that all of the fair use factors—(1) purpose and character of the use; (2) nature of the copyrighted work; (3) amount & substantiality of the portion used in relation to the work as a whole; and, (4) effect of the use upon the market for the value of the work—favored plaintiff. (McGucken v. Pub Ocean Limited (9th Cir., Aug. 3, 2022) 42 F.4th 1149.)

Public Schools Are Not Business Establishments Under the Unruh Civil Rights Act.

Plaintiff is a young man with developmental disabilities; when he was a teenager, he was a special-education student at a public high school. Plaintiff alleged that during his time there, he was repeatedly sexually assaulted by other students and by a school-district staff member. In 2016, his guardian sued the school district on his behalf, asserting various claims arising out of plaintiff’s experiences at the public school; those claims included allegations the school district had violated the Unruh Civil Rights Act (Civ. Code, § 51). The question before the California Supreme Court was whether plaintiffs who assert such claims can hold public school districts liable under the Act and thus avail themselves of the enhanced remedies—particularly statutory penalties and attorney fees—it makes available. Noting that public school districts are not business establishments within the meaning of the Act, the Supreme Court affirmed the judgment of the Court of Appeal denying plaintiff’s petition for writ of mandate. (Brennon B. v. Superior Court (Cal., Aug. 4, 2022) 13 Cal.5th 662.)

Public Employer’s Conduct Policy and the First Amendment.

A police department policy prohibited employees from engaging in speech on social media that would be “detrimental to the mission and functions of the Department,” “undermine respect or public confidence in the Department,” or “impair working relationships” of the “Department”. Thus, the police department concluded that a police sergeant violated the policy by posting content in his personal Facebook profile that denigrated Muslims and Islam. When the department took steps to discipline the sergeant, he sued, alleging that the department was retaliating against him for exercising his First Amendment right to freedom of speech. The district court rejected plaintiffs’ First Amendment retaliation claim on the ground that his speech did not address matters of public concern and was therefore not entitled to constitutional protection. The lower court also rejected plaintiffs’ claim that certain provisions of the department’s social media policy were facially invalid. The Ninth Circuit affirmed the dismissal of plaintiff’s facial overbreadth challenge and its entry of summary judgment for defendants on plaintiff’s facial vagueness and municipal liability claims. However, it reversed the district court’s dismissal of plaintiff’s First Amendment retaliation claim and his related claim under the Arizona Constitution. The appeals court concluded that disputed posts constituted speech on matters of public concern and, at the motion to dismiss phase, the court could not determine whether the department had an adequate justification for punishing otherwise protected speech. (Hernandez v. City of Phoenix (9th Cir., Aug. 5, 2022) 43 F.4th 966.)

The Department of Fair Employment and Housing Cannot Be Compelled to Arbitrate Based on Employee’s Agreement to Arbitrate.

Defendant employer hired a man to work as an engineer. The man was required to sign an arbitration agreement as a condition of his employment. Several years after signing the agreement, the man filed a complaint with the California Department of Fair Employment and Housing, the administrative agency responsible for enforcing state employment discrimination laws under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). The man reported to FEHA that two supervisors denied him opportunities and disparaged him because, under the traditional caste system of India, he is from the lowest caste and they are from the highest. He also reported that the employer retaliated against him when he complained about being treated unfavorably because of his caste. Attempts at informal resolution were unsuccessful. The separtment then filed a lawsuit in superior court against the employer and the two supervisors. The man was not a party to the suit. The employer moved to compel the department to proceed only by arbitration based on the arbitration agreement the man signed. The trial court denied the motion. Affirming, the Court of Appeal stated: “We conclude the Department cannot be required to arbitrate in that situation because it did not agree to do so.” (Department of Fair Employment & Housing v. Cisco Systems, Inc. (Cal. App. 6th Dist., Aug. 5, 2022) 82 Cal.App.5th 93.)

Proceeding Under a Fictitious Name in a Civil Action.

In an employment discrimination suit by the Department of Fair Employment and Housing, the department asked that the real party in interest—the affected employee—be referred to as John Doe, in part because revealing his identity could jeopardize the safety of his family members in India. The trial court denied the request, deciding that the safety of a party’s family members outside California could not be considered when weighing the competing interests in privacy versus public access. Issuing a writ of mandate, the Court of Appeal stated: “When a party to a civil action asks to proceed under a fictitious name, the trial court must determine whether that party’s privacy concerns outweigh the First Amendment right of public access to court proceedings. . . . We conclude evidence of potential harm to family members anywhere is a legitimate consideration in determining whether a party should be granted anonymity in litigation.” (Department of Fair Employment & Housing v. Superior Court (Cal. App. 6th Dist., Aug. 5, 2022) 82 Cal.App.5th 105.)

A Stipulated Judgment Is Not a Penalty or Liquidated Damages.

Defendant appealed an order denying his motion to vacate a $251,200.13 judgment entered against him, after he failed to pay the $30,000 initially required pursuant to a stipulated entry of judgment. He contended the trial court erred because the judgment was an unenforceable penalty and was therefore void. Affirming, the Court of Appeal stated: “The stipulated judgment, which respondent agreed to accept is the exact amount of damages suffered by respondent. Although appellant characterizes the stipulated damages as a penalty and/or liquidated damage provision, it is not. A party to a contract, here a lease and then a stipulated settlement, cannot pick and choose favorable aspects of the agreements while jettisoning the unfavorable aspects. A person should not be rewarded for a breach of contract.” (Creditors Adjustment Bureau, Inc. v. Imani (Cal. App. 2nd Dist., Div. 6, Aug. 9, 2022) 82 Cal.App.5th 131.)

What College Professors Teach.

The Council on American-Islamic Relations of Arizona, Inc., and an individual plaintiff sued a community college district and a college professor for its teaching about Islamic terrorism. Plaintiffs’ civil rights claim contended a violation of 42 U.S.C. § 1983. The district court dismissed the action. Affirming, the Ninth Circuit stated: “This court has never held that actions like the ones challenged in this case constitute a violation of the Establishment Clause or Free Exercise Clause.” (Sabra v. Maricopa County Community College District (9th Cir., Aug. 10, 2022) 44 F.4th 867.)

Limited Purpose Public Figures.

Two reporters who work for defendant published stories alleging misuse of funds by two charitable organizations. The charitable organizations and two of their employees sued for defamation. The district court granted defendants’ anti-SLAPP motion. (Code Civ. Proc., § 425.16.) Affirming, the Ninth Circuit stated: “Planet Aid and Lisbeth Thomsen are public figures for the limited purpose of the public controversy surrounding their use of charitable funds. The district court correctly concluded that a reasonable fact finder could not find, by clear and convincing evidence, that the Reporters acted with actual malice in publishing the allegedly defamatory statements. We therefore affirm the district court’s grant of the Reporters motion to strike the complaint under California’s anti-SLAPP statute.” (Planet Aid, Inc. v. Reveal (9th Cir., Aug. 11, 2022) 44 F.4th 918.)

Finally, A Chink in the Feres Doctrine.

Plaintiff is a former Colonel in the United States Army. Defendant is a former General in the United States Air Force and the former Vice Chairman of the Joint Chiefs of Staff. Plaintiff filed a civil action alleging defendant sexually assaulted her. Defendant contended the action was barred under Feres v. United States (1950) 340 U.S. 135, which held the government is not liable under the Federal Tort Claims Act (28 U.S.C. § 2674) for injuries to service members where the injuries arise out of or are in the course of activity incident to service. The district court denied a motion to dismiss brought by both the United States government and the individual defendant. Affirming, the Ninth Circuit noted that the existence of a sexual assault allegation weighed heavily in its analysis and stated: “[C]onsidering the totality of the circumstances, we are confident in our determination that this act of alleged sexual assault was not incident to military service, and Spletstoser’s action is not barred by the Feres doctrine. . . . Such an egregious intentional tort creates circumstances that are far different from Feres cases that have dealt with: (1) military missions [citation] ; (2) military-sponsored recreational activities [citation]  (3) medical malpractice [citation] ; and (4) the management, supervision, or training of military personnel [citations].” (Spletstoser v. Hyten (9th Cir., Aug. 11, 2022) 44 F.4th 938.)

Criminal Defendant Ordered Not to Associate with Siblings upon Release.

While incarcerated in county jail, a high-ranking member of a prison gang, known as Soldier Boy, orchestrated and participated in multiple violent assaults. After he was convicted of racketeering conspiracy, the district court sentenced him to 360 months (30 years) in prison. At the time of sentencing, the court imposed a special condition of supervised release that prohibited Soldier Boy from associating with any member of two gangs upon release. On appeal, Soldier Boy argued the condition violated his fundamental right to familial association because it did not exclude his siblings who might be gang members. Upholding the challenged condition, the Ninth Circuit stated: “Given Magdaleno’s history of coordinating and executing violent gang attacks, a prohibition on gang association does not constitute an unreasonable deprivation of liberty.” (United States v. Magdaleno (9th Cir., Aug. 11, 2022) 43 F.4th 1215.)

Driver Refused to Show His Driver’s License to Police Officer.

After plaintiff pulled up to a sobriety checkpoint, a police officer asked him to produce his driver’s license. He refused and was arrested. All charges were later dropped. Plaintiff sued, contending the police violated his civil rights under 42 U.S.C. § 1983. The district court granted summary judgment for the police and the city. Affirming, the Ninth Circuit held the police officer had probable cause to believe plaintiff was committing an offense in violation of Vehicle Code § 12951(b), which requires a driver to produce his or her license for examination upon demand of a peace officer. (Demarest v. City of Vallejo (9th Cir., Aug. 16, 2022) 2022 WL 3365834.)

California Supreme Court Held Minor Should Have Been Granted Special Immigrant Juvenile Status.

Congress created the special immigrant juvenile (SIJ) classification in 1990 to protect certain immigrant children and allow them to remain in the United States when it would not be in their best interests to be returned to their home countries. (Immigration Act of 1990, Pub.L. No. 101-649, § 153 (Nov. 29, 1990) 104 Stat. 4978, § 153.) Saul H. left his native El Salvador at the age of 16, fleeing gang violence: Saul’s parents started sending him to work in the fields in the summers when he was 10 years old. When Saul was 15, his parents made him stop going to school after gang members twice approached him outside of class, attempted to recruit him, and threatened to kill him and his family if he refused. Saul then got a job to help provide food for his family, but a gang member approached him there too, threatening to “disappear” him unless he paid a gang “tax.” Saul eventually left El Salvador on his own, against his parents’ wishes. In the United States, a distant relative took Saul in and agreed to serve as his guardian. Saul petitioned the probate court under Code of Civil Procedure § 155 to issue the predicate findings he needed to support an application to the federal government for SIJ status, which allows qualifying immigrants under the age of 21 to seek lawful permanent residence under. 8 U.S.C. § 1101(a)(27)(J). The court determined that because his parents’ inability to provide for and protect him was due to their poverty, Saul could not establish reunification with his parents was “not . . . viable because of abuse, neglect, abandonment, or a similar basis pursuant to California law.” The court further declined to find that it would not be in Saul’s “best interest . . . to be returned to” El Salvador, speculating that Saul would not face the same hardships if forced to return because, now 18, he was “no longer a minor” and observed that some Salvadoran youth avoid gang violence and grow up to be professionals. Saul appealed, and the Court of Appeal affirmed. Reversing, the California Supreme Court concluded the probate court applied an incorrect legal framework in ruling on Saul’s petition. The court held that abandonment need not be intentional or the fault of the parents, and it can be because of conditions in the country of origin. The credibility of the child is not an issue in state court; it becomes an issue when the application is presented to federal immigration authorities. Once the child proves by a preponderance of evidence he or she qualifies, the trial court must grant the request. The Supreme Court held that it was not viable to reunify Saul with his parents because he would face a “substantial risk” of “serious physical harm” as a result of his parents’ failure or inability to adequately protect him. (In re Guardianship of Saul H. (Cal., Aug. 15, 2022) 13 Cal.5th 827.)

Court Erred in Issuing Workplace Violence Restraining Order.

The trial court issued a workplace violence restraining order (WVRO) against defendant under Code of Civil Procedure § 527.8 based on a declaration of a clerk at the credit union describing a single encounter: She declared defendant “became visibly angry and became aggressive towards” her while she was assisting him; made a video recording of her “without her consent;” “made several rude and inappropriate statements questioning [her] mental competency;” repeatedly refused her request to stop video recording her; and “assaulted [her] when he forced a pen and paper back towards [her] and demanded that [she] write down his number.” She declared that the encounter made her “extremely scared for [her] personal safety.” She believed that, due to Rafat’s “aggression” and “later efforts to cause [her] harm by posting videos of the incident on the internet,” Rafat “w[ould] come back and seek [her] out at the branch.” She stated that further encounters were “likely” because Rafat “frequently visits” the branch. Reversing the order, the Court of Appeal stated: “We agree that the evidence is insufficient to show that Rafat made a credible threat of violence, and we therefore reverse the WVRO.” (Technology Credit Union v. Rafat (Cal. App. 6th Dist., Aug. 17, 2022) 82 Cal.App.5th 314.)

Roofs and the Right to Repair Act.

The Court of Appeal held that under the Right to Repair Act (Civ. Code, § 895 et seq.): “(1) a roof is a manufactured product within the meaning of section 896, subdivision (g)(3)(A) . . . , only if the roof is completely manufactured offsite, and (2) to prove a roof defect claim under subdivision (a)(4) or (g)(11) of section 896, a plaintiff must prove that water intrusion has actually occurred or roofing material has actually fallen from the roof.” (Gerlach v. K. Hovnanian’s Four Seasons at Beaumont, LLC (Cal. App. 4th Dist., Div. 2, Aug. 17, 2022) 82 Cal.App.5th 303.)

Commercial Speech Is Subject to Greater Regulation; California Supreme Court Held Anti-SLAPP Motion Should Have Been Denied.

Plaintiff purchased Michael, an album of music billed as Michael Jackson’s first posthumous release. The album’s back promised “9 previously unreleased vocal tracks performed by” the pop superstar, but plaintiff concluded some of the tracks, the so-called Cascio tracks, featured a Jackson imitator. She asserted Michael’s marketers misled her and violated two California consumer protection laws, the unfair competition law and the Consumers Legal Remedies Act, by misrepresenting the vocalist on the Cascio tracks on the album’s packaging and in a promotional video. The question before the California Supreme Court was whether plaintiff’s claims, premised on Michael’s packaging and video, were subject to the album marketers’ motion to strike under California’s anti-SLAPP statute (Code. Civ. Proc., § 425.16, subd. (b)(1)), which calls for early dismissal of meritless lawsuits if they arise from a defendant’s acts in furtherance of free speech rights in connection with a public issue. Finding the anti-SLAPP motion should have been denied, the Supreme Court concluded: “We recognize artistic works such as albums, in some instances, enjoy robust First Amendment protections, but that does not turn all marketing of such works into noncommercial speech, and it does not do so in this case. . . .[¶] . . . [¶] . . . Perhaps in another context the First Amendment would limit the reach of our consumer protection laws, but Sony’s album-back promise and video are commercial advertising making claims about a product, and we will not place them beyond the reach of state regulation.”(Serova v. Sony Music Entertainment (Cal., Aug. 18, 2022) 13 Cal.5th 859.)

Motion to Compel Arbitration Denied When Agreement Was Signed by Person Designated in an Advance Directive.

The health care agent and attorney-in-fact for a patient in a skilled nursing facility signed an arbitration agreement on the patient’s behalf. The trial court denied the facility’s motion to compel arbitration. The Court of Appeal concluded that “the authority granted to [the health care agent] in the Advance Directive to make health care decisions of behalf of [the patient], including choosing a skilled nursing facility, does not extend to executing optional arbitration agreements.” (Logan v. Country Oaks Partners, LLC (Cal. App. 2nd Dist., Div. 4, Aug. 18, 2022) 2022 WL 3500353.)

Allegation Website Not Accessible to Blind Persons.

A legally-blind plaintiff alleged a single cause of action against defendant under the Americans with Disabilities Act (42 U.S.C. § 12101 et seq.; ADA), claiming defendant failed to ensure its website was adequately accessible to her. The parties executed and filed a joint stipulation in which defendant “agreed not to dispute liability as it pertains to its website . . . and as to Plaintiffs claims.” Defendant further stipulated that “it will not dispute that Plaintiff is entitled to attorneys’ fees and costs under the shifting provisions of Cal. Civil Code §§ 51 and 52, which apply in this case.” Defendant appealed the trial court’s order of attorney fees and costs for plaintiff, contending she was not entitled to them, and alternatively they were excessive and unreasonable. Commenting “[w]e are accordingly troubled by Chopard’s desire to have us reach the merits of an appeal arguing for specified relief in direct contravention of its promise in a court filing not to,” the Court of Appeal affirmed the trial court’s order granting costs and attorney fees to plaintiff. (Gutierrez v. Chopard USA Ltd. (Cal. App. 2nd Dist., Div. 5, Aug. 19, 2022) 2022 WL 3572458.)

Black Voters in Georgia Continue Their Pursuit for Access to the Ballot.

Black voters in Georgia applied for an emergency order vacating an order granting a stay issued on August 12, 2022 by the Eleventh Circuit Court of Appeals. Their application stated: “Less than ten days ago, the district court issued a sixty-four-page opinion— after more than two years of litigation and a full trial on the merits—holding that Georgia’s at-large method of electing Public Service Commissioners dilutes Black voting strength in violation of Section 2 of the Voting Rights Act of 1965, 52 U.S.C. § 10301. Based on repeated assurances from Georgia’s Secretary of State that it could do so with minimal disruption to the State at this point, the district court permanently enjoined the Secretary from administering future Commission elections using that unlawful method, and it gave the Georgia General Assembly an opportunity to devise a remedy at its next session, which begins in January 2023.” The U.S. Supreme Court issued an order vacating the stay. (Rose v. Raffensperger (U.S., Aug. 19, 2022) 2022 WL 3568483 (Mem.).)

Challenge to Excusing a Combined Race and Gender Class Under Batson v. Kentucky Rejected.

During jury selection in California state court, after the prosecutor used peremptory strikes against three Hispanic women, a criminal defendant raised an objection pursuant to Batson v. Kentucky (1986) 476 U.S. 79. The superior court denied the challenge and the defendant was convicted. The state appellate court affirmed the denial of the challenge. The defendant brought a habeas corpus petition in federal court and the district court denied the petition. Affirming, the Ninth Circuit stated: “We conclude that even if a combined race and gender class is a cognizable group for purposes of Batson, that new rule would not apply to Nguyen’s case. Because Nguyen did not make a prima facie showing that the prosecution engaged in a discriminatory use of a peremptory challenge, we affirm the district court’s denial of the writ.” (Nguyen v. Frauenheim (9th Cir., Aug. 22, 2022)  2022 WL 3582695.)

Previously we reported:
Labor Code § 432.6, Which Bans Mandatory Arbitration, Is Not Preempted by the Federal Arbitration Act.

California enacted Labor Code § 432.6 to ensure: (1) that individuals are not retaliated against for refusing to waive rights and procedures established in the Fair Employment and Housing Act or the Labor Code;  and (2) that any contract relating to those rights and procedures be entered into as a matter of voluntary consent and not coercion. The district court enjoined its enforcement, finding that § 432.6 was preempted by the Federal Arbitration Act (9 U.S.C. § 1; FAA) because it placed agreements to arbitrate on unequal footing with other contracts, and also stood as an obstacle to the purposes and objections of the FAA. Reversing in part, the Ninth Circuit held that § 432.6 “does not make invalid or unenforceable any agreement to arbitrate.” It therefore does not directly conflict with the FAA, and does not “stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The appeals court further stated: “Because the district court erred in concluding that § 432.6(a)–(c) were preempted by the FAA it ‘necessarily abuse[d] its discretion’ in granting Appellees a preliminary injunction.” (Chamber of Commerce of United States v. Bonta (9th Cir., Sept. 15, 2021) 13 F.4th 7662.) 

The latest:

A majority of the panel (two of the three) voted sua sponte to grant a rehearing. (Chamber of Commerce of the United States v. Bonta (9th Cir., Aug. 22, 2022) 2022 WL 3582697.)

Hospital Not Responsible for Surgeon’s Negligence.

A surgeon and a hospital entered into an agreement whereby the surgeon became a member of the hospital’s medical staff and could perform surgeries in the hospital. Their agreement stated inter alia: “In performing the rights and duties identified in this Agreement, the parties are acting as independent contractors.” A patient was injured as a result of surgery performed at the hospital. The surgeon and patient settled between themselves. The hospital moved for summary judgment, which the court granted. Finding that the patient did not produce evidence of actual or ostensible agency, the Court of Appeal affirmed. (Franklin v. Santa Barbara Cottage Hospital (Cal. App. 2nd Dist., Div. 6, Aug. 22, 2022) 2022 WL 3582738.)

Surviving Wife Must Be Given Leave to Intervene in Wrongful Death Action.

Decedent died in a helicopter crash. Movant and appellant is the surviving spouse of decedent. Plaintiff and respondent is decedent’s former spouse and mother of his minor child. Plaintiff/respondent, as decedent’s personal representative, filed an action against defendant alleging wrongful death. Movant/appellant filed a motion to intervene pursuant to Civil Code § 387. The trial court denied the motion to intervene on because there was no legal authority allowing an heir to intervene in a wrongful death action filed by the decedent estate’s personal representative, without considering whether the heir’s interests were adequately represented by the personal representative. Reversing, the Court of Appeal held that “an heir must be granted leave to intervene as a matter of right so long as the statutory requirements for intervention have been met.” (King v. Pacific Gas and Electric Company (Cal. App. 1st Dist., Div. 3, Aug. 22, 2022) 2022 WL 3584930.)

A City May Be Held as an Alter Ego.

Plaintiff is a commercial real estate developer. Plaintiff sued a city and a reclamation authority for breach of contract and in tort, alleging the two engaged in gross mismanagement and malfeasance that derailed a development. Plaintiff sought to hold the city liable in equity under alter ego principles. The trial court sustained the city’s demurrer. Reversing, the Court of Appeal stated: “We cannot say, as a matter of law, the City cannot be held the alter ego of the CRA if plaintiff is able to prove the facts alleged.” (CAM-Carson, LLC v. Carson Reclamation Authority (Cal. App. 2nd Dist., Div. 8, Aug. 23, 2022) 2022 WL 3593158.)

Imitation Is the Sincerest Form of Flattery . . . But the Imitator Can Nonetheless Be Sued Under the Lanham Act.

Plaintiff sued defendant for damages and injunctive relief for unfair competition under the Lanham Act (15 U.S.C. § 1125(a)) and California’s unfair competition section (Bus. and Prof. Code, § 17200 et seq.). Two competing companies created their own three-feet-wide versions of Connect 4, the classic game in which players drop colored plastic coins into an upright game board in hopes of lodging four coins in a row. This case, however, did not involve the original maker of Connect 4, but rather two companies that lifted the Connect 4 concept to create their own oversized versions. The district court granted summary judgment to defendant. When a product has acquired “secondary meaning,” the product’s design is distinctive enough to be widely recognized in the market. The Ninth Circuit reversed “because a genuine issue of material fact exist[ed] about whether P&P’s trade dress acquired secondary meaning.” (P and P Imports LLC v. Johnson Enterprises, LLC (9th Cir., Aug. 24, 2022) 2022 WL 3642116.)

Class Action Brought by Special Needs Students.

A group of students and parents alleged that every school district in California failed to adequately accommodate special needs students after California public schools transitioned to remote instruction in March 2020 in response to the COVID-19 pandemic. The district court dismissed the action for failure exhaust administrative remedies. The Ninth Circuit held that plaintiffs lacked standing to sue school districts in which they were not enrolled and the State Special Schools, which they did not attend, because they did not allege that those defendants injured them personally. The appeals court further held that return to in-person teaching mooted plaintiffs’ claims against the state defendants and affirmed the lower court’s dismissal of the claims against plaintiffs’ school districts for failure to exhaust administrative remedies. (Martinez v. Newsom (9th Cir., Aug. 24, 2022) 2022 WL 3642172.)

Trial Court Erred in Denying Attorney Fees After Cross-Complainant Dismissed Pleading While Anti-SLAPP Motion Was Pending.

The trial court denied cross-defendant’s request for attorney fees in connection with an anti-SLAPP motion. It ruled the anti-SLAPP motion was moot because cross-complainant voluntarily dismissed the cross-complaint while the motion was pending. Reversing and remanding, the Court of Appeal stated: “We reverse and remand to enable the trial court to make a fee determination while applying the correct legal standard as required by Ketchum v. Moses (2001) 24 Cal.4th 1122.” (Frym v. 601 Main St. LLC (Cal. App. 1st Dist., Div. 5, Aug. 24, 2022) 2022 WL 3653305.)

Lower Court Did Not Consider Whether Relator Was an Original Source in Qui Tam Action.

A relator filed a qui tam action pursuant to the False Claims Act (31 U.S.C. § 3729), contending defendants fraudulently obtained patents on two drugs to combat Alzheimer’s disease and, by virtue of these fraudulent patents, prevented generic drug competitors from entering the market. The district court denied defendants’ motion to dismiss the action. Reversing and remanding, the Ninth Circuit stated: “Even though the public disclosure bar is triggered, [the relator] may still bring his qui tam action if he is an ‘original source’ of the information in his complaint. [Citations.] The district court did not reach this issue,[citation], and we express no view on it. We remand to the district court for further proceedings in light of our holding here.” (United States v. Allergan, Inc. (9th Cir., Aug. 25, 2022) 2022 WL 3652967.)

Extremely Reckless Conduct by Decedent Did Not Mean Death Was Substantially Certain to Occur.

Plaintiff’s son died in a one-car collision. He was intoxicated and had been driving at a high speed in the wrong direction down a one-way road when he hit a speed bump and lost control of the car, which ultimately flipped over and landed upside down in a body of water adjoining the road. The accidental death and dismemberment insurance policy obtained from defendant life insurance company paid benefits for a “Covered Accident,” defined as “[a] sudden, unforeseeable, external event that results, directly and independently of all other causes.” The district court granted summary judgment for plaintiff. On appeal, defendant insurer contended that under the language of the insurance policy, an event is not an “accident” if it is “reasonably foreseeable.” Affirming, the Ninth Circuit stated: “The appropriate test for whether the death in this case was an ‘accident’ is therefore the one that the district court applied, which asks whether the resulting death was ‘substantially certain’ to occur from the insured’s conduct. Although the insured’s conduct here was extremely reckless, the district court correctly concluded that his death was not ‘substantially certain’ to occur.” (Wolf v. Life Insurance Company of North America (9th Cir., Aug. 25, 2022) 2022 WL 3652966.)

No Liability for Wrongful Death of Employee.

A Hollywood producer brought an executive assistant he employed through his company to a luxurious resort in Bora Bora. The trip, which included the producer’s entourage of family and friends, was part vacation, although the assistant met with the concierge to plan the entourage’s daily recreational activities. Tragically, the executive assistant drowned when she went for a midnight swim in the lagoon outside her overwater bungalow. The drowning was accidental, and related to her ingestion of alcohol and cocaine supplied by the chef, who was also an employee of the producer on a working vacation. The executive assistant’s parents sued the producer for wrongful death, on the theory that he was (1) directly liable, because he paid all resort-related expenses of the trip, including for alcohol; and (2) vicariously liable, because he also employed the chef, who had met up with the executive assistant for a late-night rendezvous when she drank half a bottle of wine and snorted a “significant” amount of cocaine just before going for a swim. Granting summary judgment, the trial court ruled that the producer was not liable under either theory as a matter of law. Affirming, the Court of Appeal stated: “[W]e hold that the chef’s late-night activities with the assistant were not within the scope of his employment.” (Musgrove v. Silver (Cal. App. 2nd Dist., Div. 2, Aug. 25, 2022) 2022 WL 3655373.)

A Federal Statute Need Not Specify Its Preemptive Force in Order for the Statute to Have Such Force.

Plaintiffs are users of iPhones manufactured by defendant-appellee Apple Inc. Plaintiffs brought suit against Apple in the district court, alleging that Apple breached state tort and consumer-fraud laws by misrepresenting and failing to disclose the amount of RF radiation emitted by iPhones. The district court entered summary judgment for Apple, holding that the plaintiffs’ state-law claims were preempted by federal law. The Ninth Circuit affirmed, noting that a federal statute need not specify its preemptive force in order for the statute to have such a force, and Congress did not need to expressly delegate preemptive authority to the FCC for its regulations to preempt state law. (Cohen v. Apple Inc. (9th Cir., Aug. 26, 2022) 2022 WL 3696583.)

Trial Court Erred in Ordering Plaintiff to Answer Questions About His Immigration Status.

In a wrongful termination action, plaintiff objected to written discovery requests by defendant, his former employer, about his immigration status. Defendant moved to compel further responses, which the trial court granted. The plaintiff then petitioned for a writ of mandate, contending that the trial court abused its discretion in ordering him to answer questions about his immigration status. Noting that a person’s immigration status is irrelevant for purposes of labor issues (Civ. Code, § 3339), and that no inquiry about immigration status shall be permitted unless the person seeking to make the inquiry has shown by clear and convincing evidence that the inquiry is necessary in order to comply with federal immigration law, the Court of Appeal issued a writ of mandate, stating defendant did not meet its burden. (Manuel v. Superior Court (Cal. App. 6th Dist., Aug. 26, 2022) 2022 WL 3699433.)

Plaintiff Was Injured on Defendants’ Property; Their Son Invited Plaintiff onto the Property.

Gunner, aged 18, invited plaintiff to go motorcycle riding. The next day, he drove plaintiff and her bike to his parents’ property, unloaded the motorcycle, and provided her with protective riding gear. He told her to ride on the driveway while he took a “warm-up” lap on the track. Instead, plaintiff entered the track and rode in the opposite direction from Gunner. Their bikes collided, and both were injured. Plaintiff sued Gunner’s parents as well as a business entity owned by Gunner’s father. Under Civil Code § 846, landowners generally owe no duty of care to keep their property safe for others who may enter or use it for recreational purposes. There is an exception to that statutory negation of duty, however, when a landowner expressly invites someone onto the property. The question on appeal was whether that exception applies when the invitation was extended, not by the landowners, but by their live-at-home child who acted without the owners’ knowledge or permission. The California Supreme Court held “that a plaintiff may rely on the exception and impose liability if there is a showing that a landowner, or an agent acting on his or her behalf, extended an express invitation to come onto the property.” (Hoffmann v. Young (Cal., Aug. 29, 2022) 2022 WL 3711715.)

Sidewalk Protest Involving Eviction of Residents from Their Home and the Anti-SLAPP Statute.

Sidewalk picketers purportedly protested a real estate company’s business practices after the company evicted two long-term residents from their home. The Court of Appeal held the activity to be beyond the scope of anti-SLAPP protection, concluding that the picket did not implicate a public issue and concerned only a private dispute between the company and the residents it had evicted. Reversing, the California Supreme Court held as follows: “We granted review to clarify the proper application of FilmOn[.com Inc v. DoubleVerify Inc.]’s  two-part test. [((2019) 7 Cal.5th 133, 143.)] Applying both steps of the FilmOn analysis, we hold that the sidewalk protest constitutes protected activity within the meaning of [Code of Civil Procedure] section 425.16(e)(4). We remand for further proceedings consistent with this opinion.” (Geiser v. Kuhns (Cal., Aug. 29, 2022) 2022 WL 3711582.)

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 (9th Cir., Aug. 29, 2022) 2022 WL 3712506.)

Trial Court Did Not Err in Failing to Award Prejudgment Interest in Involuntary Corporate Dissolution.

Plaintiff and defendant are brothers. Plaintiff filed a dissolution action to dissolve a family-owned corporation formed by their parents. Defendant brother and the corporation invoked the statutory appraisal process. Thereafter, the trial court confirmed the fair value of plaintiff’s shares. On appeal, plaintiff contended the trial court erred by failing to award him prejudgment interest. He did not receive payment for those shares until approximately three years after he initiated his involuntary dissolution action, and claimed the lengthy delay was due to various continuances and hold-ups in the litigation. Affirming, the Court of Appeal noted that “by its express terms, Civil Code section 3287 prescribes interest only for those who are entitled to recover ‘damages.’ . . . [S]ection 3281 of the Civil Code ‘defines “damages” as monetary compensation for one “who suffers detriment from the unlawful act or omission of another.”’” (Crane v. R.R. Crane Investment Corp., Inc., (Cal. App. 2nd. Dist., Div. 7, Aug. 29, 2022) 2022 WL 3714406.)

Oral Modification of Search Warrant Does Not Comply with the Fourth Amendment.

Police officers obtained a search warrant that listed a motel room suspected of being a hub for drug trafficking. After the search of the motel room turned up only small quantities of drugs, the officers asked the judge over the phone for permission to amend the warrant to  include the suspect’s home. The judge agreed, but the officers did not physically amend the warrant. The district  court found the officers violated the Fourth Amendment because the warrant was facially defective. Reversing, the Ninth Circuit explained: “While a judge had orally approved the search of the home, the text of the Fourth Amendment still requires the warrant to specify the place to be searched. But we hold that the district court erred in denying the officers qualified immunity because it was not clearly established at the time that the search would violate the Fourth Amendment. An officer could have believed—based on the lack of direct case law at the time—that he or she could search the home because the court had orally approved it, even if the officer failed to make that change on the warrant.”“ (Manriquez v. Christian (9th Cir., Aug. 30, 2022) 2022 WL 3724101.)

The Reasonable Explanation Prevails in Slip & Fall Case.

Wet tile at defendant’s buffet restaurant caused plaintiff to slip and hit the floor hard. The jury awarded $850,000 damages, but the trial court granted defendant’s two posttrial motions. One was for judgment notwithstanding the verdict. The other, in the alternative, was for a new trial. Defendant argued no evidence showed its employees spilled liquid on its floor, so blaming them was impermissibly speculative. Plaintiff contended the pattern of the spill, in context, supported a reasonable inference it must have come from an employee, for how else would a spattered 10-foot trail of liquid 10 inches wide end up in the hallway to the kitchen?  Reversing, the Court of Appeal stated: “We reverse both orders and reinstate the jury verdict. Perez offered a reasonable explanation for how the tile got wet, one consistent with the company’s admission about its use of the hallway: a Buffet employee taking dirty dishes to the kitchen spilled liquid on the way. By contrast, Buffet’s explanations made no sense. Spilling liquid on the floor is an everyday event. When the facts are this simple and the contest is between a reasonable explanation and no reasonable explanation, the reasonable explanation wins.” (Perez v. Hibachi Buffet (Cal. App. 2nd Dist., Div. 8, Aug. 30, 2022) 2022 WL 3724764.)

Insurance Bad Faith Action Tossed.

Two tenants sued the owners of an apartment complex alleging multiple habitability claims as well as other causes of action that were arguably not based on habitability. The  owners tendered the lawsuit to their insurance company, the defendant in the present action, and the insurance company declined to defend the  owners. After settling the underlying action, the owners filed the present action for bad faith. The trial court granted summary adjudication to the owners, after concluding the insurance company had a duty to defend. Reversing, the Court of Appeal stated: “The primary question in this case is whether the phrase ‘any claim or “suit”’ in the habitability exclusion relieved [the insurance company] of its obligation to provide a defense to the underlying action. [¶] . . . We conclude the plain terms of the contract exclude all of the claims in the underlying action, and we accordingly reverse.” (24th & Hoffman Investors, LLC v. Northfield Insurance Company (Cal. App. 1st Dist., Div. 3) Aug. 30, 2022) 2022 WL 3754741.)

Dismissal for Lack of Personal Jurisdiction Reversed.

A Japanese adult entertainment producer brought this copyright infringement action against the owners and operators of a video-hosting site based in Hong Kong, alleging that the site was displaying several of its copyrighted works without authorization. The district court dismissed the suit, finding that it lacked specific personal jurisdiction over defendants because plaintiff could not establish that they “expressly aimed” their content at the United States market, or that it was foreseeable that operating the site would cause jurisdictionally significant harm in the United States. Concluding defendants “purposefully directed” their operation at viewers in the United States, the Ninth Circuit reversed.  (Will Co., Ltd. v. Lee (9th. Cir., Aug. 31, 2022) 2022 WL 3906205.)

Court Denied Discharge of Receivership.

Plaintiffs obtained a judgment against defendants for violations of the Federal Copyright Act. After defendants failed to satisfy the judgment, plaintiffs moved for appointment of a receiver to aid in the execution of the judgment. The district court appointed a receiver and authorized the receiver to sell defendants’ property—three radio stations—to generate the funds needed to satisfy the judgment. Defendants eventually deposited certain sums with the district court. Then, contending that they had satisfied the judgment, defendants moved to discharge the receiver, terminate the receivership, and enjoin the sale of the radio stations. The district court denied the motion, holding that it was within its discretion to prolong the receivership in order to protect other creditors and ensure that the receiver would be paid for his services.  Affirming, the Ninth Circuit stated that “it is discretionary and not incumbent upon the court to dismiss the receiver when the debt is discharged.” (WB Music Corp. v. Royce International Broadcasting Corporation (9th Cir., Aug. 31, 2022) 2022 WL 3906208.)

Attorney and Her Client in Fear After Court Hearing.

In a family law case, the ex-husband yelled at his ex-wife,  her attorney, and the judge during the proceedings. The judge admonished him to control himself or face sanctions. After the court session, the ex-husband followed the ex-wife and her attorney, yelling aggressively at the attorney. He called the attorney a scumbag and a liar. The attorney dialed 9-1-1 and also flagged down a passing police officer. While shaking and crying, the attorney told the officer they didn’t feel safe. The ex-husband refused to show the officer his identification and was eventually arrested for disturbing the peace and obstructing an officer. The ex-husband was eventually released with a citation. The ex-husband sued the police for violation of his civil rights under 42 U.S.C. § 1983. The district court dismissed the action after finding the police had probable cause for both crimes. Affirming, the Ninth Circuit stated: “Because probable cause supports his arrest under California Penal Code § 415(2) and qualified immunity shields the officers from liability for his arrest under California Penal Code § 148(a)(1), we hold that Vanegas is not entitled to relief under § 1983.” (Vanegas v. City of Pasadena (9th Cir., Aug. 31, 2022) 2022 WL 3905761.)

Widow Removed as Administrator of Spouse’s Estate Because She Was Not a United States Resident.

A man died intestate in 2016 and was survived by his wife and daughter from a previous marriage. Four years into a protracted probate dispute between the wife and daughter, the court removed the wife as the court-appointed administrator. It deemed her ineligible to serve in that role because it found that she was not a resident of the United States  as required by Probate Code §8402 (a)(4). Affirming the order, the Court of Appeal stated: “[T]he court reasonably rejected her claim to U.S. residency despite those ties. Janine [the wife] sold her home in California and moved with Ramsey to Mexico in 2014 intending to retire there. She remained in Mexico ‘full time’ for two years until Ramsey’s death. Although she returned to California for visits thereafter, she did not relocate or plan to move back to the U.S. until the probate case was over. On these facts, the court reasonably found that she was not a U.S. resident within the meaning of section 8402 and did not abuse its discretion in removing Janine as administrator.” (Estate of Wardani (Cal. 4th Dist., Div. 1, Aug. 31, 2022) 2022 WL 3906588.)

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