Litigation Update: September 2023

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

  • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District, Division Three
  • Managing Editor, Julia C. Shear Kushner
  • Editors, Dean Bochner, Colin P. Cronin, Jonathan Grossman, Jennifer Hansen, Gary A. Watt, Ryan Wu
Guam’s New Abortion Law Passes Muster.

After Dobbs v. Jackson Women’s Health Organization (2022) 142 S.Ct. 2228, made clear the Constitution does not guarantee the right to abortion, Guam enacted a statute that requires women seeking abortions to have an in-person meeting with a physician or qualified agent of the doctor, who must disclose certain information to the patient before an abortion may be performed. A group of women challenged the law. The Ninth Circuit concluded the new law “passe[d] muster under the low bar of rational basis review.” The appeals court stated: “Guam has legitimate interests in requiring an in-person consultation: the consultation can underscore the medical and moral gravity of an abortion and encourage a robust exchange of information. As we learned during the pandemic, a telephonic or video meeting may be a poor substitute for an in-person meeting, whether it be in the classroom, courtroom, or clinic.” (Raidoo v. Moylan (9th Cir., Aug. 1, 2023) 75 F.4th 1115.)

Petitions for Reconsideration to the Workers’ Compensation Appeals Board. 

A party to a workers’ compensation proceeding can petition the Workers’ Compensation Appeals Board for reconsideration if that party is unhappy with the ruling of either a workers’ compensation judge or the board itself. By statute, the board must act upon such petitions within 60 days. (Lab. Code, § 5909.) To satisfy this requirement, the board often grants petitions for purposes of further study without first deciding whether reconsideration is actually warranted. Later—sometimes many months after the petition for reconsideration was filed—the board issues a decision on the merits affirming, reversing, or modifying the ruling at issue. Five petitioners requested a writ of mandate, arguing the board’s grant-for-study procedure is an unauthorized way to extend the 60-day deadline. The Court of Appeal agreed and granted the writ, stating: “A statute requires the Board to make a reasoned decision when granting reconsideration. The Board may not simply grant reconsideration for the purpose of further study. We therefore issue a writ of mandate requiring the Board to cease its grant-for-study procedure and to comply with the statute when granting reconsideration. [¶] We also hold that the Board is not required to issue a final ruling on the merits within 60 days. Statutory language negates the Petitioners’ argument to the contrary.” (Earley v. Workers’ Compensation Appeals Board (Cal. App. 2nd Dist., Div. 8, Aug. 1, 2023) 94 Cal.App.5th 1.)

Benefit to Class Was Minimal, So Attorney Fee Award Reversed Because It Was Too High. 

Plaintiffs’ lawyers filed a class action lawsuit on behalf of copyright holders of musical compositions and ended up recovering a little over $50,000 for the class members. The lawyers then asked the court to award them $6 million in legal fees. And the trial court authorized $1.7 million in legal fees. Reversing and remanding, the Ninth Circuit stated: “The touchstone for determining the reasonableness of attorneys’ fees in a class action is the benefit to the class. It matters little that the plaintiffs’ counsel may have poured their blood, sweat, and tears into a case if they end up merely spinning wheels on behalf of the class. What matters most is the result for the class members. Here, the benefit from this litigation was minimal: the class received a measly $52,841.05 and obtained no meaningful injunctive or nonmonetary relief. On remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. In determining the value of this ‘claims-made’ class action settlement, the court should consider its actual or anticipated value to the class members, not the maximum amount that hypothetically could have been paid to the class. The court should also consider engaging in a ‘cross-check’ analysis to ensure that the fees are reasonably proportional to the benefit received by the class members.” (Lowery v. Rhapsody International, Inc. (9th Cir., Aug. 2, 2023) 75 F.4th 985.)

Premarital Agreement Presumed to Be Involuntarily Executed.

Before plaintiff and the real party were married, they entered into a premarital agreement which included a provision that real party waived any right to receive spousal support in the event the marriage ended in dissolution. Family Code § 1615, subdivision (c), creates a presumption “that a premarital agreement was not executed voluntarily” unless the trial court makes five designated findings. With the five findings, the presumption of involuntary execution is overcome as a matter of law. Here, the family law court ordered temporary spousal support. The Court of Appeal upheld the award, stating: “Although the premarital agreement in this case might appear to satisfy the requirements of section 1615(c)(1) and (2), the trial court made no findings on the subject, and it is the court’s findings that rebut the presumption of involuntary execution. Peter did not ask the trial court to conduct a facial review of the agreement and make such findings.” (Last v. Superior Court of Orange County (Cal. App. 4th Dist., Div. 3, Aug. 2, 2023) 94 Cal.App.5th 30.)

City Ordinance Is Preempted. 

In 2016, Protect Monterey County (PMC) sponsored, and Monterey County voters passed, Measure Z, a local ordinance that bans oil and gas wastewater injection and impoundment and the drilling of new oil and gas wells throughout the county’s unincorporated areas. Chevron U.S.A. Inc. and other oil producers and mineral rights holders, among others, filed a total of six actions against the county challenging Measure Z on various grounds, including state and federal preemption. PMC and its founder and spokesperson intervened in the action. The trial court entered judgment for plaintiffs on state and federal preemption grounds. PMC appealed, and the Court of Appeal affirmed. Concluding that Public Resources Code § 3106 preempts Measure Z and affirming the judgment of the Court of Appeal, the California Supreme Court stated that “section 3106 implicitly limits a local entity’s authority by expressly providing that the state supervisor shall approve all production methods that are, ‘in the opinion of the supervisor,’ ‘suitable for th[e] purpose’ ‘of increasing the ultimate recovery of underground hydrocarbons.’” (Chevron U.S.A. Inc. v. County of Monterey (Cal., Aug. 3, 2023) 15 Cal.5th 135.)

Former Director of Charitable Corporation Has Standing to Continue Action Against Corporation’s Directors. 

Here, the director of a charitable corporation brought a lawsuit under Corporations Code §§ 5142 and 5233 against the charity’s directors for self-dealing. Under § 5223, a trial court may remove from officer any director guilty of malfeasance. The California Supreme Court granted review in this case to decide whether a director of a charitable corporation who loses the position as director under §§ 5223, 5142 and 5233 also loses standing to maintain the lawsuit. California’s high court decided that “the statutes do not impose a continuous directorship requirement that would require dismissal of a lawsuit brought under these statutes if the director-plaintiff fails to retain a director position.” (Turner v. Victoria (Cal., Aug. 4, 2023) 15 Cal.5th 99.)

Coercive Interrogation Tactics Theory.

Plaintiff sued public entities and police officers under 42 U.S.C. § 1983 for violation of his Fifth Amendment right against compelled self-incrimination in his criminal case. The district court excluded expert testimony, concluding the expert would impermissibly vouch or buttress the defendant’s credibility. The expert planned to testify that a police officer used classic coercion tactics to elicit incriminating admissions from him. Reversing, the Ninth Circuit stated: “A jury could benefit from Dr. Blandón-Gitlin’s expert knowledge about the science of coercive interrogation tactics, which Deputy Vega employed here, and how they could elicit false confessions.” (Tekoh v. County of Los Angeles (9th Cir., Aug. 4, 2023) 75 F.4th 1264.)

Fire Chief Failed to Persuade He Was Fired for Discriminatory Reasons.

A city fired a fire chief after an investigation that culminated in a 250-page report. The former chief sued the city for discrimination, and both sides moved for summary judgment. The district court denied the former chief’s motion and granted the city’s motion. Affirming, the Ninth Circuit held that, “based on the record before us, the district court’s granting of summary judgment in Defendants’ favor was appropriate where Defendants’ legitimate, non-discriminatory reasons for firing [the former chief] were, in sum, sufficient to rebut [his] evidence of discrimination, and [the former chief] has failed to persuasively argue that these non-discriminatory reasons were pretextual. When discriminatory remarks are merely quoting third parties and the real issue is public perception or other forms of misconduct (such as engaging in an activity that does not benefit the employer), there is no genuine issue of material fact that the employer was discriminatory.” (Hittle v. City of Stockton, California (9th Cir., Aug. 4, 2023) 76 F.4th 877.)

Family of Prison Guard Who Died in COVID-19 Outbreak at Prison May Proceed with Civil Rights Action Against Prison Officials.

A few months into the COVID-19 pandemic, high-level officials in the California prison system transferred 122 inmates from the California Institution for Men, where there was a widespread COVID-19 outbreak, to San Quentin State Prison, where there were no known cases of COVID-19. The transfer sparked an outbreak of COVID-19 at San Quentin that ultimately killed one prison guard and over 25 inmates. The guard’s family members sued prison officials, claiming that the officials violated the guard’s due process rights. The officials moved to dismiss, arguing that they were entitled to qualified immunity. The district court denied the motion with respect to some of the officials. Affirming, the Ninth Circuit stated: “Plaintiffs sufficiently allege a violation of [the guard’s] due process right to be free from a state-created danger.” (Polanco v. Diaz (9th Cir., Aug. 7, 2023) 76 F.4th 918.)

Plaintiff’s Action Against Church for Fraud to Proceed in Trial Court.

Plaintiff brought suit in federal court against the Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, alleging fraud under California law. Plaintiff, a former member of the church, alleged that, from 1993 to 2015, he contributed substantial amounts of cash and corporate shares to the church as tithes. He claimed that during at least some of that time, he relied on false and misleading statements by the church about its use of tithing money. Plaintiff further alleged that the church represented that tithing money was not used to finance commercial projects, but that, in fact, the church used tithing money to finance a shopping mall development and to bail out a troubled for-profit life insurance company owned by the church. After limited discovery, the district court granted the church’s motion for summary judgment, holding that no reasonable juror could find that the church had fraudulently misrepresented how tithing funds were used. Affirming in part and reversing in part, the Ninth Circuit stated: “We disagree with respect to the shopping mall but agree with respect to the life insurance company. We hold that there is evidence in the record from which a reasonable juror could conclude that the Church knowingly misrepresented that no tithing funds were being or would be used to finance development of the shopping mall and that [plaintiff] reasonably relied on the Church’s misrepresentations.” (Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints (9th Cir., Aug. 7, 2023) 76 F.4th 962.)

Ban on Butterfly Knives Violates Second Amendment.

In Hawaii, it is a misdemeanor knowingly to manufacture, sell, transfer, transport, or possess a butterfly knife—no exceptions. (Haw. Rev. Stat., § 134-53(a).) Reversing a summary judgment for the state, the Ninth Circuit concluded that, “just as with firearms in Heller, bladed weapons facially constitute ‘arms’ within the meaning of the Second Amendment.” (Teter v. Lopez (9th Cir., Aug. 7, 2023) 76 F.4th 938.)

Plaintiff’s Allegations Interfere with Statutory Scheme Regulating Emergency Room Costs.

Plaintiff alleged defendants violated the Unfair Competition Law (Bus. & Prof. Code, § 17200; UCL) and the Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA) by failing to disclose, through signage or other methods, Evaluation and Management (EMS) fees charged in the emergency room. Defendants moved to strike the allegations regarding EMS fees, arguing their disclosure obligations were defined by statute. The trial court agreed and struck the allegations from the operative complaint. Affirming, the Court of Appeal concluded that “the trial court’s order striking the EMS fee allegations was proper. The duties Moran s[sought] to impose on defendants interfere[d] with the extensive and carefully drawn state and federal legislative and regulatory scheme governing the disclosure and transparency of hospital prices.” (Moran v. Prime Healthcare Management, Inc. (Cal. App. 4th Dist., Div. 3, Aug. 7, 2023) 94 Cal.App.5th 166.) 

Text Messages Do Not Violate the Telephone Consumer Protection Act

Plaintiff sued defendant for violating the Telephone Consumer Protection Act (47 U.S.C. § 227; TCPA) because she received three mass marketing text messages from defendant. The district court granted a motion for partial judgment and dismissed the action. Affirming, the Ninth Circuit stated: “We hold that these text messages did not use prerecorded voices under the TCPA, because they did not include audible components.” (Trim v. Reward Zone USA, LLC (9th Cir., Aug. 8, 2023) 76 F.4th 1157.)

Trial Court Erred in Reforming Insurance Policy by Increasing Policy Limits.

Plaintiffs are either heirs of someone who was killed or were themselves seriously injured in an accident involving a large truck. Plaintiffs alleged that the insurer of the truck violated the law by issuing a policy for only $50,000 when a policy of at least $750,000 was required. The Motor Carriers of Property Permit Act (Veh. Code, § 34600; MCPPA) states that certain motor carriers/commercial vehicles “shall provide and thereafter continue in effect adequate protection against liability imposed by law upon those carriers for the payment of damages in the amount of a combined single limit of not less than seven hundred fifty thousand dollars ($750,000) on account of bodily injuries to, or death of, one or more persons.” (Veh. Code, § 34631.5.) The trial court reformed the insurance policy to provide policy limits of $750,000. Issuing a writ of mandate, the Court of Appeal stated: “A motor carrier of property is subject to heightened insurance coverage requirements under the MCPPA. . . . Thus, even where an insurer provides coverage for the purpose of meeting a motor carrier of property’s MCPPA requirements, the insurer is allowed to issue a policy with limits below the statutory requirement of $750,000. It is up to the insured motor carrier of property to secure additional insurance or to comply with the permitting requirements in other authorized ways (e.g., a surety bond or certificate of self-insurance).” (Infinity Select Insurance Company v. Superior Court of Fresno County (Cal. App. 5th Dist., Aug. 8, 2023) 94 Cal.App.5th 190.)

Not So Fast, Raymond and Mortimer Sackler Families.

A federal court approved a settlement of Purdue Pharma’s estate in bankruptcy. The bankruptcy trustee, represented by the U.S. Department of Justice, opposed the settlement. In a petition to the U.S. Supreme Court, the trustee stated: “Until recently, Purdue was controlled by members of the Raymond and Mortimer Sackler families. Members of those families, who withdrew approximately $11 billion from Purdue in the eleven years before the company filed for bankruptcy . . . have now agreed to contribute up to $6 billion to fund Purdue’s reorganization plan . . . , but only on the condition that the Sacklers and a host of other individuals and entities—who have not themselves sought bankruptcy protection—receive a release from liability that is of exceptional and unprecedented breadth. The plan’s release ‘absolutely, unconditionally, irrevocably, fully, finally, forever[,] and permanently release[s]’ the Sacklers from every conceivable type of opioid-related civil claim—even claims based on fraud and other forms of willful misconduct that could not be discharged if the Sacklers filed for bankruptcy in their individual capacities. . . . The Sackler release extinguishes the claims of all opioid claimants except the United States, and therefore applies to an untold number of claimants who did not specifically consent to the release’s terms.” The Supreme Court granted certiorari, stating: “The parties are directed to brief and argue the following question: Whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties, without the claimants’ consent.” (Harrington v. Purdue Pharma, L.P. (U.S., Aug. 10, 2023) 2023 WL 5116031.)

Foreign Company Had Standing to Allege Domestic Injury.

Plaintiff, a Chinese company, sued defendant, a California company, under the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961–1968; RICO) for supplying allegedly defective products. The district court found plaintiff lacked standing because the harm it alleged was felt in China. The Ninth Circuit reversed, stating: “Under the Supreme Court’s decision in Yegiazaryan v. Smagin [(2023) 143 S. Ct. 1900], the district court applied the wrong legal standard in analyzing whether GMC had suffered a domestic injury under RICO. [¶] . . . [¶] . . . . We conclude that the circumstances of GMCs alleged injury indicate that it arose in the United States.”

(Global Master International Group, Inc. v. Esmond Natural, Inc. (9th Cir., Aug. 11, 2023) 76 F.4th 1266.)

Plaintiff Suffered No Economic Injury, So Unfair Competition Action Dismissed. 

Plaintiff filed a class action against defendants, pharmaceutical companies, alleging they violated California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.) by selling a drug in excessively large single-use vials. Plaintiff contended defendants should have offered smaller vial sizes to reduce waste of expensive medicine. Defendants demurred and argued plaintiff lacks standing under the statute because, even if the drug were available in small vials, plaintiff’s deductible would have been the same amount. Plaintiff insisted that he had standing because the collateral source rule allows him to recover as restitution the amount his insurer paid for wasted medicine. The trial court sustained defendants’ demurrer without leave to amend. Affirming, the Court of Appeal concluded that plaintiff suffered no economic injury, stating: “We agree with the trial court that the collateral source rule does not apply; the plaintiff lacks standing under section 17204.” (Williamson v. Genentech, Inc. (Cal. App. 1st Dist., Div. 5, Aug. 11, 2023) 94 Cal.App.5th 410.)

No Attorney Fee Award After Dispute Over Swimming Pool Construction.

Plaintiff sued her contractor for work done on the outside of her home, including construction of a swimming pool. The trial court ruled that plaintiff was unsuccessful on the “vast majority” of her swimming pool claims and that there was no prevailing party. Plaintiff appealed only on the trial court’s denial of attorney fees to her pursuant to Business and Professions Code § 7168, which provides for reasonable attorney fees arising out of pool construction. The Court of Appeal affirmed and stated: “What is apparent from this history is that the Legislature enacted the statutory fee provision at issue specifically to provide recompense to the party prevailing in a dispute over the construction of a swimming pool.” (Lee v. Cardiff (Cal. App. 1st Dist., Div. 1, Aug. 11, 2023) 94 Cal.App.5th 398.)

Alleged Mental Health Discrimination.

Plaintiff was a nursing student at defendant public institution college. He sought medical treatment for homicidal thoughts about three of his instructors. His doctor contacted mental health crisis responders, and plaintiff voluntarily admitted himself to inpatient psychiatric treatment the same afternoon and remained there for four nights. A social worker, perceiving an automatic duty to warn, reported plaintiff’s statements to the local police. When the report reached defendant, college officials terminated him from the nursing program, barred him from campus, and entered failing grades for his in-progress coursework. Plaintiff sued defendant and individual officials at the college, alleging violations of his First Amendment rights and other claims related to mental health discrimination. The district court dismissed the college from the case but permitted the case to continue against the individual officials. The Ninth Circuit affirmed and held there is an exception to Eleventh Amendment sovereign immunity, stating that “In Ex parte Young [(1908) 209 U.S. 123], the Court held that the Eleventh Amendment does not bar an action seeking prospective relief against a state official for a violation of federal law.” (R. W. v. Columbia Basin College (9th Cir., Aug. 14, 2023) 2023 WL 5192565.)

Civil Rights Action Alleging Brady Violation Dismissed.

Plaintiff was arrested for murder and held for almost four years before the charges against him were dismissed, months after another person confessed to the crime. Plaintiff sued the County of Riverside and various county officials years later under 42 U.S.C. § 1983, claiming that they had violated his due process rights under Brady v. Maryland (1963) 373 U.S. 83, by suppressing the separate confession. The district court denied a motion for judgment on the pleadings on the Brady claim. Reversing, the Ninth Circuit stated: “We reverse and remand, without prejudice to Parker asserting a different due process claim. A Brady violation requires that the withheld evidence have a reasonable probability of affecting a judicial proceeding, and no such proceeding was affected here.” (Parker v. County of Riverside (9th Cir., Aug. 15, 2023) 2023 WL 5211337.)

Insurance Fraud Claim Dismissal Reversed.

Insurance companies brought qui tam actions on behalf of the State of California alleging insurance fraud under the California Insurance Frauds Prevention Act (Ins. Code, § 1871 et seq.; IFPA) and the Unfair Competition Law (Bus. & Prof. Code, § 17000 et seq.; UCL) against medical companies, physicians, and one other individual. Plaintiffs alleged that while the medical corporations hold themselves out as providers of radiology services, they in fact act as radiology “brokers,” sending patients to radiology facilities and radiologists with which the purported medical corporations have contracted. The complaints further alleged that although the medical corporations appear to be owned and controlled by licensed physicians, as state law requires, they are in fact controlled by the individual defendant who is not a physician, and/or his medical management company. Finally, the complaints alleged that these facts were not disclosed on bills submitted to Allstate under contracts of insurance, and Allstate would not have paid the claims submitted by the medical corporations had it known the true facts. The trial court found the complaints failed to state causes of action under the IFPA and the UCL because they were not pled with requisite specificity, the business models alleged were lawful, and one of the actions was time barred. Reversing, the Court of Appeal stated: “We conclude that the operative complaints adequately plead causes of action under both statutes, and thus we will reverse the orders sustaining the demurrers and judgments of dismissal.” (People ex rel. Allstate Insurance Company v. Discovery Radiology Physicians, P.C. (Cal. App. 2nd Dist., Div. 3, Aug. 15, 2023) 94 Cal.App.5th 521.)

“Under the law, attempts to control, regulate, and monitor a spouse’s finances, economic resources, movements, and access to communications are abuse.” Fourth District Court of Appeal, Division 2.

A woman sought a domestic violence restraining order against her estranged husband. The trial court denied her petition while indicating that her allegations of a pattern of control and isolation by limiting her access to money, communication, and transportation did not fall within the statutory definition of domestic violence or abuse. Reversing, the Court of Appeal stated: “Under the law, attempts to control, regulate, and monitor a spouse’s finances, economic resources, movements, and access to communications are abuse.” (Hatley v. Southard (Cal. App. 4th Dist., Div. 2, Aug. 16, 2023) 94 Cal.App.5th 579.)

Idaho Ban of Transgender Women/Girls from Sports.

In March 2020, Idaho enacted the Fairness in Women’s Sports Act (Idaho Code, §§ 33-6201–06 (2020)), a ban on the participation of transgender women and girls in women’s student athletics. The act bars all transgender girls and women from participating in, or even trying out for, public school female sports teams at every age, from primary school through college, and at every level of competition, from intramural to elite teams. The act also provides a sex dispute verification process whereby any individual can “dispute” the sex of any female student athlete in the state of Idaho and require her to undergo intrusive medical procedures to verify her sex, including gynecological exams. Male student athletes in Idaho are not subject to a similar dispute process. The district court preliminarily enjoined the act, holding that it likely violated the Equal Protection Clause of the Fourteenth Amendment. Affirming, the Ninth Circuit stated: “Because the Act subjects only women and girls who wish to participate in public school athletic competitions to an intrusive sex verification process and categorically bans transgender girls and women at all levels from competing on ‘female[], women, or girls’ teams [], and because the State of Idaho failed to adduce any evidence demonstrating that the Act is substantially related to its asserted interests in sex equality and opportunity for women athletes, we affirm the district court’s grant of preliminary injunctive relief.” (Hecox v. Little (9th Cir., Aug. 17, 2023) 2023 WL 5283127.)

Prisoner Claims He Is Denied Access to the Courts.

A Nevada prisoner sued Nevada prison officials for denying him meaningful access to the courts under the First Amendment. The prisoner argued that the prison’s system to access the library deprived him of access to the courts by preventing him from discovering a Nevada Supreme Court decision that supported his claim for post-conviction relief. He did not learn about a published case until seven years after it was decided. At that point, he had already filed two unsuccessful habeas petitions in the Nevada courts. Upon discovering the case, the prisoner filed a fourth habeas petition in 2016. The Nevada trial court denied his petition as procedurally barred by laches and as untimely, successive, and an abuse of the writ, concluding the prisoner failed to show good cause and prejudice to overcome the procedural bar. The district court granted summary judgment for the prison officials on jurisdictional and merits grounds. Affirming, the Ninth Circuit stated: “Because Nasby cannot show actual injury—the hindrance of a non-frivolous underlying legal claim—he lacks standing.” (Nasby v. Nevada (9th Cir., Aug. 18, 2023) 2023 WL 5315112.)

The Coastal Commission’s Authority Supersedes the County.

Property owners sought a coastal development permit to move an easement for a public hiking trail from their parcel to a contiguous parcel. The terms of the easement grant prohibited removing the portion of existing trail from the property. A cease-and-desist order from the Coastal Commission prohibited property owners from interfering with the public’s use of the existing trail on their parcel. The local government, however, granted the property owners application for a coastal development permit. On appeal, the commission denied the permit. The trial court denied the property owners’ petition for writ of administrative mandate challenging the commission’s action. Affirming, the Court of Appeal stated: “The Commission enforces the Coastal Act. Its authority overrides the County.” (Cave Landing, LLC v. California Coastal Commission (Cal. App. 2nd Dist., Div. 6, Aug. 18, 2023) 94 Cal.App.5th 654.)

Transporting Conservatees for Medical Treatment.

Plaintiff is the conservator, appointed pursuant to Welfare and Institutions Code § 5350 of the Lanterman-Petris-Short Act (LPS), of her adult son David S. Plaintiff sued defendants Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals for a declaration of their obligations under LPS and the terms of David’s health plan, to transport and accept for “assessment and evaluation,” as each as defined in LPS, conservatees like David upon their conservators’ demand. The superior court sustained Kaiser’s demurrer. Affirming, the Court of Appeal stated: “Plaintiff alleges that David’s health plan provides coverage for ambulance services ‘if a “reasonable person would have believed that the medical condition was an Emergency Medical Condition which required ambulance services.”’ [¶] . . . [¶] . . . we reject plaintiff’s implication that an LPS conservatee is per se suffering from an ‘Emergency Medical Condition’ at all times following the judicial determination of grave disability.” (Rhonda S. v. Kaiser Foundation Health Plan (Cal. App. 2nd Dist., Div. 8, Aug. 18, 2023) 94 Cal.App.5th 643.)

Insurance Company Entitled to Either Its Bail Money Back or a Continuance to Give Prosecutor Time to Decide Whether to Extradite Fugitive. 

After tracking down a fugitive, North River Insurance Company and its bail agent asked for its bail money back. The court said no: the prosecution had not decided whether to extradite the fugitive from Mexico. North River sought a continuance, to give the prosecution enough time to decide. The court refused that as well. Because prosecutors would not decide, and because prosecutors would not agree to a delay to allow themselves to decide, North River had to forfeit its bail money, said the trial court. Reversing, the Court of Appeal stated: “We hold the trial court either had to ask the prosecution to announce its extradition decision or had to grant North River’s request to continue the appearance period to give the prosecution enough time to make its decision. This interpretation is the reasonable construction of a statute that has the explicit purpose of achieving justice.” (People v. North River Insurance Company (Cal. App. 2nd Dist., Div. 8, Aug. 18, 2023.)

Corporations that Facilitate Sexual Abuse of Children Are Not Excused from Affirmative Duty to Protect the Children.

In late 1986 or early 1987, when he was nine years old, plaintiff was hired to work on a Pepsi commercial that featured Michael Jackson. Several months later, Jackson wrote plaintiff a letter on one of defendants’ stationery. After that, plaintiff and his family were invited to dinner at Jackson’s home in Encino. The invitation was made by Jackson through Jolie Levine. Ms. Levine was then Jackson’s secretary and personal assistant “and an employee/managing agent” of one of the defendants. Thereafter, there were other visits and gifts from Jackson. There are allegations that Jackson sexually abused the child. The principal issue in these cases was whether corporations wholly owned by Jackson had a legal duty to protect children from sexual abuse. The corporations contended they had no duty to protect children because of their corporate structure; that is, they had no ability to control Jackson, their sole owner. The trial court sustained defendants’ demurrer without leave to amend. Reversing, the Court of Appeal stated: “[W]e conclude a corporation that facilitates the sexual abuse of children by one of its employees is not excused from an affirmative duty to protect those children merely because it is solely owned by the perpetrator of the abuse.” (Safechuck v. MJJ Productions, Inc. (Cal. App. 2nd Dist., Div. 8, Aug. 18, 2023) 94 Cal.App.5th 675.)

Clarification of the Meaning of “Employer” Under FEHA. 

In a class action under various statutes, including the Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA), plaintiffs claim that as part of its medical screenings, defendant required job applicants to complete a written health history questionnaire that included numerous health-related questions having no bearing on the applicant’s ability to perform job-related functions. According to plaintiffs, these questions covered details of the applicant’s health history including “whether the applicant has and/or has ever had: 1) venereal disease; 2) painful or irregular vaginal discharge or pain; 3) problems with menstrual periods; 4) irregular menstrual period; 5); penile discharge, prostate problems, genital pain or masses; 6) cancer; 7) mental illness; 8) HIV; 9) permanent disabilities; 10) painful/frequent urination; 11) hair loss; 12) hemorrhoids; 13) diarrhea; 14) black stool; 15) constipation; 16) tumors; 17) organ transplant; 18) stroke; or 19) a history of tobacco or alcohol use.” In addition, the questionnaire asked whether the job applicant was pregnant, sought information regarding medications taken, and required the job applicant to disclose prior job-related injuries and illnesses. The California Supreme Court stated this case required the court to clarify the meaning of the term “employer” as used in FEHA after the Ninth Circuit asked for clarification. California’s highest court concluded: “We conclude that an employer’s business entity agents can be held directly liable under the FEHA for employment discrimination in appropriate circumstances when the business entity agent has at least five employees and carries out FEHA regulated activities on behalf of an employer.” (Raines v. U.S. Healthworks Medical Group (Cal., Aug. 21, 2023) 2023 WL 5341067.)

Hazardous Recreational Activity. 

Plaintiff suffered serious injuries when he ran into a suspended cable fence while riding his off-road motorcycle on an unpaved area owned by defendant, a public entity, in an unoccupied area of the desert. The owner of the property placed the cable fence around its property to stop illegal dumping and off-road vehicles to protect the sensitive habitat. Plaintiff sued defendant, alleging that the cable fence created a dangerous condition on public property. The trial court granted summary judgment for defendant. Affirming, the Court of Appeal stated: “We conclude the Commission is entitled to hazardous recreational activity immunity under Government Code section 831.7.” (Altizer v. Coachella Valley Conservation Commission (Cal. App. 4th Dist., Div. 2, Aug. 21, 2023) 2023 WL 5343730.)

An Agent’s Deemed Admissions Do Not Bind the Principal Codefendant. 

Plaintiffs’ family member died after his pick-up truck collided with a tractor trailer driven by defendant truck driver and owned by defendant company. During pretrial discovery, the truck driver, despite being given numerous extensions of time to respond, did not respond to requests for admissions, regarding the cause of the accident and comparative fault, propounded by plaintiffs. At trial, the superior court precluded defendant truck owner from contesting liability and comparative fault, instead imputing the truck driver’s deemed admissions to establish liability. A jury returned a verdict for wrongful death in favor of plaintiffs for $7,619,000. The trial court denied defendant truck owner’s motion for new trial. Reversing and ordering a new trial, the Court of Appeal stated: “In sum, we conclude an agent’s deemed admissions do not bind the principal codefendant, even when the basis for the action against the principal codefendant is vicarious liability arising from the acts of the agent.” (Inzunza v. Naranjo (Cal. App. 2nd Dist., Div. 4, Aug. 21, 2023) 2023 WL 5344893.)

Trial Court Erred in Disqualifying a Party’s Attorney Who Was to Be both a Witness and Trial Counsel.

Plaintiffs moved to preclude defendant’s counsel of record from testifying at trial in support of defendant’s claim that plaintiffs fraudulently induced defendant to enter into a settlement agreement. Plaintiffs subsequently clarified that their motion should be considered, in the alternative, a motion to disqualify defendant’s counsel. Although defendant had provided its informed written consent to counsel acting as both its key witness and trial counsel, the court granted the motion and disqualified defendant’s counsel, finding the integrity of the judicial process would be impaired if counsel served in dual roles. On appeal, defendant contended the court should have denied the motion due to plaintiffs’ excessive delay in raising the issue, and because the order precluding its counsel from representing it at trial was not supported by any evidence of prejudice to plaintiffs or detriment to the judicial process. Reversing, the Court of Appeal stated: “Disqualification of counsel when consent has been given must be based on a convincing showing of prejudice to the opposing party or the potential for palpable injury to the judicial process. Here, the record is devoid of the evidence necessary to support disqualification of [defendant’s] chosen counsel. To the contrary, the timing of the motion and the fact [plaintiffs] initially sought to preclude [defendant’s counsel’s] testimony, not to disqualify him, strongly suggest the motion was filed for purely tactical reasons.” (Geringer v. Blue Rider Finance (Cal. App. 2nd Dist., Div. 7, Aug. 22, 2023) 2023 WL 5359826.)

Local Election Method Diluted Latino Voters’ Ability to Elect Preferred Candidates. 

The trial court determined that, because of racially polarized voting, the at-large method of electing city council members in defendant city diluted Latino voters’ ability to elect their preferred candidates and their ability to influence the outcome of council elections, as compared to several alternative electoral methods, including district elections. To remedy this violation, the trial court ordered the city to promptly conduct a special election using a seven-district map drafted by an expert who testified at trial. The Court of Appeal granted a stay of the judgment and then reversed. Reversing the judgment of the Court of Appeal, the California Supreme Court stated: “To prevail on a CVRA claim (California Voting Rights Act of 2001; Elec. Code, § 14025 et seq.), a plaintiff who has established the existence of racially polarized voting in an at-large system need not prove that the protected class would constitute a majority—or, as the [c]ity proposes, a near majority—of a hypothetical single-member district. [¶] . . . [¶] . . . [W]hat is required to establish ‘dilution’ of a protected class’s ‘ability . . . to elect candidates of its choice’. . . is proof that, under some lawful alternative electoral system, the protected class would have the potential, on its own or with the help of crossover voters, to elect its preferred candidate. [¶] A court presented with a dilution claim should undertake a searching evaluation of the totality of the facts and circumstances . . . . [¶] Because the Court of Appeal did not evaluate the dilution element of the CVRA under this standard, we reverse the judgment and remand the matter to the Court of Appeal for it to reconsider in the first instance the CVRA claim presented here.” (Pico Neighborhood Association v. City of Santa Monica (Cal., Aug. 24, 2023) 2023 WL 5440486.)

Statute of Limitations for Breach of a HELOC. 

Where a contract imposes on a party multiple duties that are divisible, a breach of each divisible duty gives rise to a separate breach-of-contract claim, each with its own limitations period that begins to run at the time of each breach. In the instant home equity line of credit (HELOC) agreement, the borrower was required to make monthly payments, but the agreement also sets a separate due date for the full debt and contains a discretionary acceleration clause that grants the lender the choice whether to demand immediate payment of the full amount if the borrower fails to make a monthly payment. The Court of Appeal held the borrower’s duty to make a monthly payment under such a HELOC agreement is divisible from the borrower’s duty to pay the full amount, explaining that “because the HELOC agreement in this case—by setting a fixed maturity date for the full amount and leaving it to the discretion of the lender whether to accelerate that date—necessarily contemplates that a breach as to a monthly payment does not constitute a breach as to the full amount.” (Piedmont Capital Management, L.L.C. v. McElfish (Cal. App. 2nd Dist., Div. 2, Aug. 24, 2023) 2023 WL 5443868.)

Previously We Reported: Access to Records of Public University

An assistant professor at a public university submitted four articles on topics in her field of study to various academic journals unaffiliated with her university. All four of the articles were later either retracted or corrected by the journals, at least in part, due to inaccurate references or text overlap from uncited sources. Soon after that, the professor left her position at the university. A third party investigating the article retractions sent the university a request under the California Public Records Act (Gov. Code, § 7920.000 et seq.; CPRA), seeking certain post-publication communications between the professor, the university, and the journals regarding the retracted articles. The university determined the requested documents were subject to disclosure. The professor disagreed, filed a petition for writ of mandate, and sought a preliminary injunction to prevent disclosure. The trial court denied the professor’s motion for preliminary injunction, concluding she had not met her burden of establishing a likelihood of prevailing on the merits. Affirming, the Court of Appeal stated, “Finding no abuse of discretion, we affirm. As explained below, the requested communications qualify as public records under the CPRA, and the professor did not establish the records are otherwise exempt from disclosure.”(Iloh v. Regents of the University of California (Cal. App. 4th Dist., Div. 3, Jan. 13, 2023) 87 Cal.App.5th 513.)

The latest:

This time around, the trial court denied the defendant’s anti-SLAPP motion brought under Code of Civil Procedure § 426.13. Reversing, the Court of Appeal stated: “In issuing the CPRA request, [the real party in interest] was engaging in newsgathering so it could report on matters of public interest, such as how a public university funded largely by taxpayer dollars resolves quality or integrity problems in its professors’ publications. The real party in interest was therefore engaged in protected activity when it issued the CPRA request.” (Iloh v. Regents of the University of California (Cal. App. 4th Dist., Div. 3, Aug. 24, 2023) 2023 WL 5444336.)

Plaintiff’s Case Against School District Dismissed After She Refused to Comply with Public Health Order During the Pandemic. 

Plaintiff was placed on unpaid administrative leave and then terminated from her employment with defendant school district after refusing to either provide verification of her COVID-19 vaccination status or undergo weekly testing as required by a then-operative order of the State Public Health Officer. Plaintiff sued under the Confidentiality of Medical Information Act (Civ. Code, § 56 et seq.). The trial court sustained defendants’ demurrer without leave to amend. Affirming, the Court of Appeal stated: “There is no room for factual debate about how else defendants could have complied with the Order’s requirements without directing plaintiff to stay home until she provided test results—and terminating her when it was clear she was never going to test.” (Rossi v. Sequoia Union Elementary School (Cal. App. 5th Dist., Aug. 25, 2023) 2023 WL 5498732.)

Class Action Alleges Securities Fraud After Defendants Concealed Extent of Cryptocurrency Sales. 

Lead plaintiff brought a putative shareholder class action alleging that defendant and three of its officers knowingly or recklessly made materially “misleading and false statements regarding the impact of cryptocurrency sales on defendants’ financial performance” to conceal the extent to which defendant’s revenue growth depended on demand for cryptocurrency. The complaint alleged violations of §§ 10(b) and 20(a) of the Securities and Exchange Act of 1934, (15 U.S.C. §§ 78j(b) and 78t(a)), and of Securities and Exchange Commission Rule 10b-5 (17 C.F.R. § 240.10b-5). The district court dismissed the complaint under Rule 12(b)(6) on the sole ground that the amended complaint failed to sufficiently plead that the defendants’ allegedly false or misleading statements were made knowingly or recklessly. Affirming in part and reversing and remanding in part, the Ninth Circuit stated: “We hold that Plaintiffs have stated a claim for relief under Section 10(b) and Rule 10b-5 against Defendants Huang and NVIDIA, but not against Defendants Kress and Fisher. The amended complaint sufficiently alleges that, during the Class Period, Huang made false or misleading statements and did so knowingly or recklessly.” (Ohman v. NVIDIA Corporation (9th Cir., Aug. 25, 2023) 2023 WL 5496507.)

Superior Court Erred in Not Reviewing Arbitration Award on Its Merits Despite Agreement’s Requirement that Review Should Be Conducted by Court of Appeal. 

The parties arbitrated their dispute pursuant to an arbitration agreement that provided for review of the merits of the arbitration award by the Court of Appeal. When the matter was before the superior court, that court declined to review the arbitration award due to the wording of the agreement. Reversing, the Court of Appeal stated: “When parties agree that judicial review of an arbitration award on the merits is to be undertaken in the first instance by the Court of Appeal, rather than by the superior court, is the superior court required—or permitted—to step aside? The superior court in this case answered in the affirmative. In so doing, it erred.” The Court of Appeal quoted from the concurring/dissenting opinion of Justice Moreno in Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334: “Although arbitration is created by contract, and the terms of the arbitration are dictated by contractual provisions, courts are not parties to arbitration agreements, and they are not bound by their terms. Parties can agree that a legal dispute arising from their arbitration will be settled by the California Supreme Court, but this court is not bound by that agreement.” (Housing Authority of the City of Calexico v. Multi-Housing Tax Credit Partners XXIX, L.P. (Cal. App. 4th Dist., Div. 1, Aug. 28, 2023), 2023 WL 5521226.)

Complaint/Grievance Form Submitted to School District Did Not Substantially Comply with Requirement of a Government Claim. 

After an elementary school teacher grabbed and twisted plaintiff’s arm, his mother filed a complaint form with the school district. They then filed a lawsuit for damages against the district, its superintendent, the assistant superintendent, the elementary school principal, and the teacher. The trial court sustained defendants’ demurrer without leave to amend, on the ground appellant failed to file a claim in compliance with Government Code § 910.2. On appeal, plaintiff contends his mother’s complaint form substantially complied with the requirements of § 910 and the district was estopped from raising defects in the form. Affirming, the Court of Appeal stated: “Appellant’s complaint form in no way suggested that he was seeking compensation for his injury. More important, there is nothing in appellant’s complaint form threatening litigation if appellant’s demands, monetary or otherwise, were not met. His complaint form does not satisfy the requirements of a ‘claim as presented.’” (A.S., a Minor v. Palmdale School District (Cal. App. 2nd Dist., Div. 8, Aug. 28, 2023) 2023 WL 5524107.)

Diving from Groin/Jetty into Ocean Is a Hazardous Recreational Activity.

A man dove from a groin/jetty into the ocean. A city ordinance prohibited diving from groins/jetties, but no warning was given by the city that diving was prohibited or that it was dangerous to dive. In a two to one decision, the Court of Appeal held the city is immune under Government Code § 831.7 because such diving is a hazardous recreational activity. (Carr v. City of Newport Beach (Cal. App. 4th, Div. 3, Aug. 29, 2023) 2023 WL 5596339.)

Police Officer Who Used Deadly Force Is Entitled to Qualified Immunity. 

Two police officers were dispatched to a gym after a man reportedly threatened gym patrons and assaulted a security guard. The man violently attacked the officers and refused to stop after they repeatedly deployed their tasers. One officer eventually resorted to lethal force to end the aggression. The district court denied qualified immunity to the officer. Reversing, the Ninth Circuit Court of Appeals stated: “We are asked to decide whether this officer is entitled to qualified immunity. We hold that he is. The officer’s use of deadly force did not violate clearly established law. For this sole reason, we reverse the district court’s decision.” (Smith v. Agdeppa (9th Cir., Aug. 30, 2023) 2023 WL 5600294.)

California State University Has Discretion to Set Its Own Equipment Reimbursement Policies. 

When the Covid pandemic struck, the California State University (CSU) directed that instruction be provided remotely. To provide such instruction, a biology professor at CSU-Los Angeles, incurred expenses which CSU refused to reimburse for a computer and other equipment. The professor sued CSU’s board of trustees on behalf of himself and similarly situated faculty, alleging Labor Code § 2802 obligated CSU to reimburse employees for necessary work-related expenses. CSU demurred, arguing that as a department of the state it enjoys broad exemption from Labor Code provisions that infringe on its sovereign powers. The trial court sustained CSU’s demurrer without leave to amend. Affirming, the Court of Appeal stated that CSU enjoys broad discretion under the Education Code to set its own equipment reimbursement policies. (Krug v. Board of Trustees of the California State University (Cal. App. 2nd Dist., Div. 1, Aug. 29, 2023) 2023 WL 5543521.)

Rosenthal Fair Debt Collection Practices Act. 

Plaintiff owns a home with a solar energy system. At the time he purchased the home, the prior homeowner was party to a contract with a company which owned the system. Among other terms, the solar agreement required the prior homeowner to purchase the energy produced by the system through monthly payments to the owner of the system. In the event of a sale of the house, the solar agreement afforded the prior homeowner three options. The prior homeowner and plaintiff agreed to an option which allowed prepayment of all remaining monthly payments and a transfer of all solar agreement rights and obligations to plaintiff, except for the monthly payment responsibility. In conjunction with the sale of the house, prepayment occurred, and the parties entered into the requisite transfer agreement. At some later point in time, defendant began sending plaintiff monthly bills on behalf of the company that owns the system, demanding payments pursuant to the solar agreement. After receiving a bill, plaintiff spoke to a representative of defendant who told him he should not have received the bill, and the issue would be resolved. Thereafter, however, plaintiff received additional bills and at least one late payment notice, which identified defendant as a debt collector. Plaintiff communicated with defendant’s representatives about the errors by phone and email, all to no avail. Plaintiff filed a class action lawsuit against defendant. The complaint alleged, on behalf of the class, violation of California’s Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), and on behalf of plaintiff individually, violation of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.). The trial court sustained defendant’s demurrer without leave to amend. Reversing, the Court of Appeal stated the Rosenthal Act encompasses debt collection activity engaged in on behalf of another and concluded: “Because the operative complaint stated a cause of action under the Rosenthal Act, defendant’s demurrer should have been overruled as to that cause of action.” (Hagey v. Solar Service Experts, LLC (Cal. App. 4th Dist., Div. 3, Aug. 30, 2023) 2023 WL 5602365.)

Filing Successive Actions After Dismissal Without Prejudice.

“This case present[ed] the following question: In California, the filing of successive lawsuits which are both dismissed without prejudice by the plaintiff does not constitute a final judgment on the merits that would preclude a subsequent lawsuit in a California state court. But when, as here, the plaintiff has previously filed two federal suits, alleging federal and state claims, and has voluntarily dismissed them without prejudice, is a third suit filed in California state court alleging only state-law claims subject to claim preclusion because Fed. Rules Civ. Proc., rule 41(a)(1)(B) provides that a second voluntary dismissal of a federal suit is “an adjudication on the merits?” The trial court sustained defendant’s demurrer without leave to amend. The Court of Appeal held: “Accordingly, under California law, a plaintiff may file and dismiss without prejudice more than one action successively and not be precluded from bringing another suit. The voluntary dismissal of the second federal suit did not bar the present action.” (Gray v. LaSalle Bank, N.A. (Cal. App. 6th Dist., Aug. 30, 2023) 2023 WL 5607036.)

PAGA Claims for Employees Other than Plaintiffs May Proceed in Trial Court; Claims for Plaintiffs’ Individual Civil Penalties Go to Arbitration.

Plaintiff employees sued a restaurant chain to recover civil penalties under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA) for various Labor Code violations. Defendants moved to compel arbitration. The trial court denied the motion and defendants appealed. Affirming in part and reversing in part, the Court of Appeal stated: “Based on Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __, [142 S.Ct. 1906] (Viking River) and the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), we conclude the parties’ agreements require arbitration of plaintiffs’ PAGA claims that seek to recover civil penalties for Labor Code violations committed against plaintiffs. On an issue of California law that the California Supreme Court has recently resolved, we conclude plaintiffs’ PAGA claims that seek to recover civil penalties for Labor Code violations committed against employees other than plaintiffs may be pursued by plaintiffs in the trial court. (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 (Adolph).).” (Barrera v. Apple American Group LLC (Cal. App. 1st Dist., Div.2, Aug. 31, 2023) 2023 WL 5620678.)

Racial Justice Act. 

Petitioner was charged with several firearm possession crimes after police discovered a handgun during a search of his car. Petitioner filed a motion under the California Racial Justice Act of 2020 (Pen. Code, § 745 (a)) claiming that police stopped and searched his car because he is Black. The trial court denied petitioner’s motion for failure to state a prima facie violation of the Racial Justice Act. Issuing a writ of mandate, the Court of Appeal stated: “Because the trial court’s review of Finley’s motion went beyond the confines of determining whether it stated a prima facie case, we will grant Finley’s petition for writ of mandate and direct the trial court to rehear the motion.” (Finley v. Superior Court (Cal. App. 1st Dist., Div. 4, August 30, 2023) 2023 WL 5620093.)

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