Litigation Update: September 2024

The California Supreme Court was presented with a situation where multiple persons claimed to be an “aggrieved employee” within the meaning of the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA) and filed separate and independent lawsuits seeking recovery of civil penalties from the same employer for the same alleged Labor Code violations. Here, plaintiffs in one action scheduled a settlement approval hearing in superior court. Before that hearing, plaintiffs in another PAGA action filed separate motions to intervene in the settled action and submitted objections to the settlement. The trial court denied the motions, approved the settlement, and later denied motions to vacate the judgment. The plaintiffs in the action whose motions were denied appealed, challenging both the settlement and the denials of their various motions. The Court of Appeal affirmed, finding that the trial court had properly denied the intervention motions. The Supreme Court affirmed the judgment of the Court of Appeal, stating: “We agree with the Court of Appeal. PAGA provides that an aggrieved employee, after complying with specified procedural prerequisites, may ‘commence a civil action’ to recover civil penalties that the LWDA may assess and collect. (§ 2699.3, subd. (a)(2)(A).) Although a PAGA plaintiff may use the ordinary tools of civil litigation that are consistent with the statutory authorization to commence an action, such as taking discovery, filing motions, and attending trial, we conclude for reasons explained below that the authority Olson seeks in this case — to intervene in the ongoing PAGA action of another plaintiff asserting overlapping claims, to require a court to consider objections to a proposed settlement in that overlapping action, and to move to vacate the judgment in that action — would be inconsistent with the scheme the Legislature enacted. This conclusion best comports with the relevant provisions of PAGA as read in their statutory context, in light of PAGA’s legislative history, and in consideration of the consequences that would follow from adopting Olson’s contrary interpretation.” (Turrieta v. Lyft, Inc. (Cal., Aug. 1, 2024) 16 Cal.5th 664.)

https://www.courts.ca.gov/opinions/documents/S271721.PDF

Five corporate jet pilots sued under the Fair Labor Standards Act ( 29 U.S.C. § 207; FLSA) seeking overtime pay for the time they spent on call between flight assignments, claiming their employer misclassified them as exempt employees. The district court entered judgment for the employer. Affirming, the Ninth Circuit stated: “This appeal presents two questions: (1) whether corporate jet pilots are exempt from the FLSA as highly compensated, non-manual laborers, and (2) whether the time that corporate jet pilots spend waiting for a request to fly constitutes work. Because we answer the first question in the affirmative and the second in the negative, we affirm the judgment of the district court.” (Kennedy v. Las Vegas Sands Corporation (9th Cir., Aug. 1, 2024) 110 F.4th 1136.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/01/23-15311.pdf

Plaintiff purchased a vehicle that soon developed problems. When the problems could not be successfully addressed by the manufacturer, plaintiff filed a lemon law action under the Song-Beverly Consumer Warranty Act against the manufacturer and the dealer. A mandatory settlement conference before the court was held over Zoom, at the conclusion of which the parties advised the judge that the case was settled for $100,000, a settlement confirmed on the record. An issue arose as to whether the settlement amount was inclusive or exclusive of attorney fees, resulting in the parties filing competing motions, plaintiff to reset the case on the trial court calendar, defendants to enforce the settlement. The trial court ordered an evidentiary hearing on the settlement issue, which was held over four days. Following that hearing, the trial court filed an 11-page order approving the settlement—finding that the $100,000 was inclusive of attorney fees. Concluding the stipulated judgment met the requirements of Code of Civil Procedure § 664.6, the Court of Appeal affirmed. (Greisman v. FCA US, LLC (Cal. App. 1st Dist., Div. 2, Aug. 5, 2024) 103 Cal.App.5th 1310.)

https://www.courts.ca.gov/opinions/documents/A166919.PDF

The mother of two children of color filed an action in federal court alleging racial discrimination against the children. The district court dismissed the action without prejudice, stating that a “person can represent themselves, but you cannot represent others, including your own children.” Affirming, the Ninth Circuit stated, “a parent may not proceed pro se on her children’s behalf.” (Grizzell v. San Elijo Elementary School (9th Cir., Aug. 7, 2024) 110 F.4th 1177.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/07/21-55956.pdf

Plaintiffs, who are investors, brought a securities fraud action against defendant alleging defendant made misrepresentations about a company that affected the stock price. The district court held that plaintiffs had standing but granted defendant’s motion to dismiss on the grounds that plaintiffs had not sufficiently alleged materiality. The Ninth Circuit affirmed, but on the ground of standing, stating: “Plaintiffs would need to have purchased or sold Lucid stock to have standing to bring this action under Section 10(b). Here, Plaintiffs did not purchase or sell Lucid stock, as Lucid was a privately held company during the relevant period. Plaintiffs purchased CCIV stock, but their complaint does not allege that anyone made misrepresentations about CCIV stock. . . . [¶] That CCIV later acquired Lucid does not change our analysis. At the time of Defendants’ alleged misrepresentations, CCIV and Lucid were two entirely separate companies.” (Max Royal LLC v. Atieva, Inc. (9th Cir., Aug. 8, 2024) 110 F.4th 1181.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/08/23-16049.pdf

A restaurant purchased virus coverage, but after it suffered substantial financial losses during the pandemic, its insurance company denied coverage. The Limited Fungi, Bacteria or Virus Coverage endorsement generally excluded coverage for any virus-related loss or damage that the policy would otherwise provide, but it extended coverage for virus-related loss or damage if the virus was the result of certain specified causes of loss, including windstorms, water damage, vandalism, and explosion. The Court of Appeal found the policy’s promise of virus-related coverage was illusory because the restaurant had no realistic prospect of benefitting from the virus-related coverage as written. Reversing the judgment of the Court of Appeal, the California Supreme Court stated: “The terms of the Limited Fungi, Bacteria or Virus Coverage endorsement are clear and unambiguous. . . . [¶] . . . This court has never recognized an illusory coverage doctrine as such. The doctrine as articulated by John’s Grill does not appear in our precedents. But even assuming some version of the doctrine may exist under California law, we conclude that an insured must make a foundational showing that it had a reasonable expectation that the policy would cover the insured’s claimed loss or damage. Such a reasonable expectation of coverage is necessary under any assumed version of the doctrine. Here, however, John’s Grill has not shown it had a reasonable expectation of coverage under the policy for its pandemic-related losses.” (John’s Grill, Inc. v. Hartford Financial Services Group, Inc. (Cal., Aug. 8, 2024) 16 Cal.5th 1003.)

https://www.courts.ca.gov/opinions/documents/S278481.PDF

Three members of a class action involving allegations of racial discrimination against Tesla requested their personnel records. When the documents were not forthcoming, the three plaintiffs filed another action asserting violation of the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). Tesla answered and filed a special motion to strike pursuant to the anti-SLAPP statute, Code of Civil Procedure § 425.16. Affirming, the Court of Appeal stated: “Faced with many requests for information that had nothing to do with the allegations in [the class action], produced virtually nothing. This suggests it viewed the [the class action] as a convenient excuse to relieve itself of the burden of meeting statutory obligations that were independent of its [class action] defense. While the position Tesla took in response to these requests incidentally closed the door to plaintiffs’ ability to gather evidence supporting their allegations in [the class action], that did not transform the plaintiffs’ demands for personnel files under the Labor Code—or Tesla’s response to those demands—into petitioning activity ‘in [the class action].”’ (Taylor v. Tesla, Inc. (Cal. App. 1st Dist., Div. 4, Aug. 8, 2024) 104 Cal.App.5th 75.)

https://www.courts.ca.gov/opinions/documents/A168333.PDF

Plaintiff is a nonprofit advocacy organization dedicated to educating the public about what is sees as the dangers of vaccines. Since 2019, Facebook has been adding warning labels to alert users that the information plaintiff shared was not accurate. Plaintiff sued the owners of Facebook, alleging many claims, including violation of its rights under the First and Fifth Amendments. The district court dismissed the case. In its analysis, the Ninth Circuit noted defendant is a private corporation, but that private corporations may be treated as state actors if two requirements are present: (1) the “state policy” requirement and (2) the “state actor” requirement. The appeals court affirmed, noting plaintiff did not meet the first requirement because the source of plaintiff’s alleged harm was defendant’s own policy of censoring, not any provision of federal law. (Children’s Health Defense v. Meta Platforms, Inc. (9th Cir., Aug. 9, 2024) 2024 WL 3734422.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/09/21-16210.pdf

Plaintiff contended defendants violated the Commodity Exchange Act (7 U.S.C. §25(c)) by unlawfully manipulating the price of cryptocurrency called HEX. The Ninth Circuit considered whether the statue authorizes nationwide service of process without regard to the venue provision in the act. The district court dismissed the case because plaintiff did not show sufficient minimum contacts with the state of Arizona. Reversing as to the U.S. defendants and affirming as to the foreign defendants, the appeals court stated: “Because we conclude the Commodity Exchange Act authorizes nationwide service of process independent of its venue requirement, we reverse in part.” (Cox v. CoinMarketCap OPCO, LLC (9th Cir., Aug. 12, 2024) 2024 WL 3748982.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/12/23-15363.pdf

A couple was married in 2006. In 2014, the husband purchased clothing from plaintiff for $447,000. He paid $119,616, leaving a balance of $327,000. In 2017,  the wife found out that the husband had taken on additional wives in Equatorial Guinea, and that effectively ended their marriage. In 2018, plaintiff brought the instant lawsuit, serving the husband at the couple’s property in Chino. A month later, the wife filed for dissolution of the marriage. The trial court granted a motion for summary judgment for the wife in the instant action brought by plaintiff, the clothing retailer. On appeal, plaintiff contended the marital dissolution judgment was subject to the Uniform Voidable Transactions Act (Civ. Code, § 3439 et seq.; UVTA) and the judgment was fraudulent because it awarded the wife the couple’s only marital property located in the United States, while awarding the husband other foreign assets and properties and assigning the debt liability to plaintiff to the husband. According to plaintiff, the dissolution judgment “effectively makes enforcement of [plaintiff’s] Judgment impossible.” Affirming, the Court of Appeal agreed with the trial court’s ruling that plaintiff’s complaint was barred by Family Code § 916, subdivision (a)(2), which states that “the property received by the person in the [marital dissolution] is not liable for a debt incurred by the person’s spouse before or during marriage, and the person is not personally liable for the debt, unless the debt was assigned for payment by the person in the division of the property.” (Bijan Boutiques, LLC v. Isong (Cal. App. 4th Dist., Div. 3, Aug. 13, 2024) 104 Cal.App.5th 132.)

https://www.courts.ca.gov/opinions/documents/G063288.PDF

Plaintiff was driving home from a family celebration with her teenage daughter and a friend when a police officer saw her and mistakenly suspected that she was driving a stolen vehicle. The mix-up was partially due to an error by the Department of Motor Vehicles which issued the wrong license plates. Although plaintiff drove in compliance with all traffic laws, the police followed her for more than ten minutes. The officers decided to conduct a high-risk felony stop involving about a dozen officers and a helicopter unit. At gunpoint, plaintiff and the passengers were ordered out of the vehicle and commanded to lie prone on the street with their arms outstretched. All three were handcuffed and seated on the street while the officers investigated. Later, all three sued the Los Angeles Police Department, the city, and the individual officers under 42 U.S.C. § 1983. The district court granted summary judgment for the officer and a jury later found in favor of the police department and the city. The Ninth Circuit reversed the grant of summary judgment in for the individual officers, stating they were not entitled to qualified immunity because at the time of the incident, it was clearly established that officers can be held liable for conducting a high-risk stop based on nothing more than a reasonable suspicion that the vehicle was stolen. (Chinaryan v. City of Los Angeles (9th Cir., Aug. 14, 2024) 2024 WL 3803301.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/14/21-56237.pdf

On January 4, 2021, two days before the Vice President of the United States was set to preside over a joint session of the U.S. Congress to certify the results of the 2020 general election, Election Integrity Project California, Inc. (EIPCa) and 10 candidates who had lost their races for political office filed this lawsuit seeking to decertify the results of the 2020 election in California due to alleged irregularities and to declare unconstitutional California’s vote-by-mail election system. The district court entered an order dismissing the plaintiffs’ claims, concluding that even if all of the plaintiffs’ allegations were true, the plaintiffs failed to state plausible claims of constitutional violations in the administration of California’s elections. Affirming, the Ninth Circuit stated: “EIPCa might prefer that California adopt different election policies. But ‘[n]othing in the Constitution, the Supreme Court’s controlling precedent, or our case law suggests’ that we, as unelected federal judges, can or should ‘micromanage a state’s election process.’” (Election Integrity Project California, Inc. v. Weber (9th Cir., Aug. 15, 2024) 2024 WL 3819948.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/15/23-55726.pdf

This case concerned whether a hospital authority created by a county board of supervisors and authorized by the Legislature to manage the county’s public health facilities may be held liable for wage and hour violations and civil penalties under the Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA). The California Supreme Court held: “We conclude the Legislature intended to exempt public employers such as the hospital authority from Labor Code provisions governing meal and rest breaks (§§ 226.7, 512) and related statutes governing the full and timely payment of wages (see § 220, subd. (b)). We further conclude public entities are not subject to PAGA penalties for the violations alleged here. Because the Court of Appeal reached different conclusions, we reverse its judgment.” (Stone v. Alameda Health System (Cal., Aug. 15, 2024) 2024 WL 3819163.)

https://www.courts.ca.gov/opinions/documents/S279137.PDF

The California Legislature enacted the California Age-Appropriate Design Code Act (Civ. Code, § 1798.99.31; CAADCA) to protect minors. Plaintiff is an online trade association that challenged the statute on constitutional grounds. One of plaintiff’s main arguments involved the statute’s requirement that online businesses create a Data Protection Impact Assessment report identifying risks, for each offered online service or feature likely to be accessed by children. The district court found plaintiff was likely to succeed in its First Amendment challenge and entered a preliminary injunction preventing the entire law from going into effect. The Ninth Circuit affirmed in part, stating: “We agree with NetChoice that it is likely to succeed in showing that the CAADCA’s requirement that covered businesses opine on and mitigate the risk that children may be exposed to harmful or potentially harmful materials online, Cal. Civ. Code §§ 1798.99.31(a)(1)–(2), facially violates the First Amendment.” (NetChoice, LLC v. Bonta (9th Cir., Aug. 16, 2024) 2024 WL 3838423.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/16/23-2969.pdf

In a class action, plaintiffs alleged that the Maricopa County Sheriff’s Office (MCSO) racially profiled Latino drivers and passengers under the guise of immigration enforcement. The district court issued a permanent injunction against MCSO and, several months later, appointed an independent monitor to assess compliance with the injunction. Finding the lower court properly relied on its inherent equitable powers, the Ninth Circuit affirmed the grant of the injunction and appointment of the monitor. (Melendres v. Skinner (9th Cir., Aug. 19, 2024) 2024 WL 3853851.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/19/23-15036.pdf

A woman purchased firearms for her son who is a convicted felon. During the purchase, she signed a Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Form 4473, in which she certified that she was the actual purchaser of the firearms. An employee at the gun shop contacted ATF to report he suspected the woman was a straw purchaser, which is an individual who purchases a gun on another’s behalf while falsely claiming the purchase is for herself. A jury convicted the woman of making false statements on the form. Affirming, the Ninth Circuit noted that 18 U.S.C. § 922(a)(6) makes it a crime “for any person in connection with the acquisition or attempted acquisition of any firearm . . . knowingly to make any false or fictitious oral or written statement . . . with respect to any fact material to the lawfulness of the sale . . . of such firearm.” The appeals court concluded the woman’s Second Amendment rights were not violated. (United States v. Manney (9th Cir., Aug. 19, 2024) 2024 WL 3853846.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/19/23-716.pdf

In a class action against Google, plaintiffs are a group of Google Chrome uses who chose not to sync their Chrome browsers with their Google accounts while browsing the web. Plaintiffs believed, based on the terms of Google’s Chrome Privacy Notice, that their choice not to sync Chrome with their Google accounts meant that certain personal information would not be collected and used by Google. The district court held that Google successfully proved that plaintiffs consented to its data collection and granted summary judgment in Google’s favor. Reversing, the Ninth Circuit stated: “Here, Google had a general privacy disclosure yet promoted Chrome by suggesting that certain information would not be sent to Google unless a user turned on sync.” (Calhoun v. Google, LLC (9th Cir., Aug. 19, 2024) 2024 WL 3869446.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/20/22-16993.pdf

In 1978, Congress enacted the Indian Child Welfare Act ( 25 U.S.C. § 1901 et seq.; ICWA), a federal policy relating to the placement of Indian children outside the family home. Under California’s analogue of ICWA (Welf. & Inst. Code, § 224.2, subd. (a)), courts and child welfare agencies are charged with an affirmative and continuing duty to inquire whether a child is or may be an Indian child in dependency cases. The California Supreme Court was tasked with determining whether a child welfare agency’s failure to make the statutorily required initial inquiry under California’s heightened requirements constituted reversible error. California’s highest court held “that an inadequate Cal-ICWA inquiry requires conditional reversal of the juvenile court’s order terminating parental rights with directions to the agency to conduct an adequate inquiry, supported by record documentation.” (In re Dezi C. (Cal., Aug. 19, 2024) 2024 WL 3853597.)

https://www.courts.ca.gov/opinions/documents/S275578.PDF

The federal Indian Child Welfare Act of 1978 (25 U.S.C. § 1901 et seq.) and California’s implementing law require juvenile dependency courts and appropriate agencies to inquire into a child’s native heritage and to notify a relevant tribe if there exists “reason to know that an Indian child is involved . . . .” (25 U.S.C. § 1912(a); see Welf. & Inst. Code, §§ 224.2, 224.3, subd. (a).) The question before the California Supreme Court was, when the required initial inquiry was inadequate, may an appellate court consider postjudgment evidence to conclude the error was harmless? California’ highest court held that “absent exceptional circumstances, a reviewing court may not generally consider postjudgment evidence to conclude the error was harmless. The sufficiency of an ICWA inquiry must generally be determined by the juvenile court in the first instance.” (In re Kenneth D. (Cal., Aug. 19, 2024)

https://www.courts.ca.gov/opinions/documents/S276649.PDF

Plaintiff used Instacart to get groceries delivered from the grocery store. Plaintiff sued the grocery store, but not Instacart, for an Instacart purchase where he claimed the grocer cheated him on price. The grocer moved to compel arbitration on the strength of a contract between plaintiff and Instacart. The grocer did not sign this contract. The court denied the motion. Affirming, the Court of Appeal stated: “First, contrary to [plaintiff’s] claim, [plaintiff] did contract for arbitration—with Instacart—by signing up for its service. Second, the trial court, rather than the arbitrator, properly decided threshold questions of arbitrability, because the contract did not make unmistakably clear that [plaintiff] had agreed to arbitrate with anyone besides Instacart. Third, the grocery store was not a third-party beneficiary of the [plaintiff]-Instacart arbitration contract.” (Mahram v. Kroger Co. (Cal. App. 2nd Dist., Div. 8, Aug. 19, 2024) 2024 WL 3878309.)

https://www.courts.ca.gov/opinions/documents/B324405.PDF

Plaintiffs alleged the United States misled the City of San Francisco about the safety of a contaminated former Naval shipyard that the city leased to use as a facility for San Francisco Police Department employees. The district court dismissed the action based on lack of subject matter jurisdiction. Affirming, the Ninth Circuit stated that the Federal Tort Claims Act had certain exceptions to the broad waiver of immunity by the federal government, and that one of those exceptions is misrepresentation. (Abbey v. United States of America (9th Cir., Aug. 20, 2024) 2024 WL 3869453.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/20/23-15170.pdf

This case involved a noncompetition restraint following the sale of a portion of a business interest. The California Supreme Court recently clarified in Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1159, that one of two standards applies to determine whether noncompetition agreements are void under section Business & Professions Code § 16600. The Court of Appeal held: “Following a partial sale, the seller remains an owner of the company and may still exercise some degree of control over its operations. Given this context, a noncompetition provision arising from a partial sale cannot be deemed inherently anticompetitive and invalidated per se under section 16600.” (Samuelian v. Life Generations Healthcare, LLC (Cal. App. 4th Dist., Div. 3, Aug. 20, 2024) 2024 WL 3878448.)

https://www.courts.ca.gov/opinions/documents/G061911.PDF

Plaintiff was born after her mother had a brief relationship with the deceased in the 1960s. The deceased moved to California shortly after plaintiff was conceived. The deceased fathered five children before moving to California. He was aware of the existence of all but plaintiff. After moving to California, the deceased married, and fathered his two youngest children. The deceased executed a trust in 1999, naming only his two youngest children. After the deceased passed, plaintiff petitioned to receive a share of his estate. The trial court denied plaintiff’s claim. Affirming, the Court of Appeal stated: “[W]e conclude Carla failed to carry her burden of showing the sole reason she was omitted was because Benjamin was unaware of her birth. [Citation.] Benjamin’s omission of four known pretermitted children and his naming as beneficiaries only the two children resulting from his marriage shows his intent that only those two children should receive a share of his estate.” (Estate of Williams (Cal. App. 4th Dist., Div. 1, Aug. 21, 2024) 2024 WL 3883518.)

https://www.courts.ca.gov/opinions/documents/D083713.PDF

Plaintiffs are drivers whose licenses were suspended by the Department of Motor Vehicles (DMV) after they were arrested for driving under the influence. Each driver invoked the right to challenge the suspension in an “administrative per se” (APS) hearing conducted by the DMV. Before the APS hearings, the drivers requested continuances based on their counsel’s conflicting court appearances. The DMV denied the requests, went forward with the hearings, and issued administrative decisions reinstating the suspensions. The drivers challenged the DMV’s denials of the continuances by filing petitions for writs of mandate in superior court. The superior court denied their petitions. Reversing, the Court of Appeal stated: “[W]e conclude the denials of the requested continuances were a prejudicial abuse of discretion. We further conclude the proper remedy is to provide the drivers with new APS hearings that address the merits for their challenges to the suspension orders.” (Cisneros v. Department of Motor Vehicles (Cal. App. 5th Dist., Aug. 21, 2024) 2024 WL 3886653.)

https://www.courts.ca.gov/opinions/documents/F081373A.PDF

The question presented was whether, under 28 U.S.C. § 1446(b)(1), a defendant may remove a civil action after it has received a copy of the complaint but before it has been formally served. In other words, is a defendant required to wait for formal service before removing an action? The Ninth Circuit held: “We agree with the district court that under § 1446(b)(1), a defendant may remove a state-court action once it receives a copy of the complaint; it does not have to wait for formal service.” (Mayes v. American Hallmark Insurance Company of Texas  (9th Cir., Aug. 22, 2024) 2024 WL 3894306.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/22/22-35075.pdf

In an action brought by police officers who were accused by a member of the city council of murdering a man they tried to arrest, a federal judge granted defendant’s motion for recovery of expert witness deposition expenses, including fees for time spent in preparation for deposition. Affirming, the Ninth Circuit stated: “We conclude the district court did not err when it granted this motion because the plain text of Federal Rule of Civil Procedure 26 allows for the recovery of reasonable expenses for time an expert witness, whose opinions may be presented at trial, spends preparing for a deposition.” (Miller v. Sawant (9th Cir., Aug. 22, 2024) 2024 WL 3894243.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/22/23-35197.pdf

Uber Technologies retained an attorney in Argentina to serve as its legal representative in launching its ridesharing platform in Argentina. According to that attorney, the plaintiff here, Uber concealed its launch plans from plaintiff and launched before its Argentine subsidiary was fully formed and registered with the proper tax authority. As a result, plaintiff was subject to personal liability under Argentine law. Within days of the launch, law enforcement authorities raided plaintiff’s office and the homes of his business colleagues. In the operative complaint, plaintiff alleged claims of negligence, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, and aiding and abetting fraudulent concealment. Applying California law, the district court concluded that plaintiff’s negligence and breach of the implied covenant claims were time barred. The district court also held that the fraudulent concealment claims were foreclosed by the economic loss rule—a doctrine that prevents a party to a contract from recovering economic damages resulting from breach of contract under tort theories of liability. Accordingly, the district court dismissed the complaint. The Ninth Circuit certified this question to the California Supreme Court: “Under California law, are claims for fraudulent concealment exempted from the economic loss rule?” (Rattagan v. Uber Technologies, Inc. (9th Cir., Dec. 6, 2021) 19 F.4th 1188.)

The latest:

The California Supreme Court framed the question as: “Under California law, may a plaintiff assert a tort claim for fraudulent concealment arising from or related to the performance of a contract?” California’s highest court concluded: “The answer to the question is a qualified yes. A plaintiff may assert a fraudulent concealment cause of action based on conduct occurring in the course of a contractual relationship if the elements of the claim can be established independently of the parties’ contractual rights and obligations, and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract.” (Rattagan v. Uber Technologies (Cal., Aug. 22, 2024) 2024 WL 3894629.)

https://www.courts.ca.gov/opinions/documents/S272113.PDF

The City of Los Angeles filed a lawsuit against a private contractor. The contractor sought discovery to the claims and defenses. After years of stonewalling, the city eventually turned over information revealing serious misconduct in the initiation and prosecution of the lawsuit. The trial court found that the city had been engaging in an egregious pattern of discovery abuse as part of a campaign to cover up this misconduct. The court ordered the city to pay $2.5 million in discovery sanctions. The central question before the California Supreme Court was whether the trial court had the authority to issue the order discovery sanctions pursuant to Code of Civil Procedure §§ 2023.010 and 2023.030. The Court of Appeal had answered no. The appellate court read the Civil Discovery Act as conferring authority to sanction the misuse of certain discovery methods, such as depositions or interrogatories, but as conferring no general authority to sanction other kinds of discovery misconduct, including the pattern of discovery abuse at issue here. Affirming the judgment of the trial court and reversing the judgment of the Court of Appeal, the California Supreme court held: “Under the general sanctions provisions of the Civil Discovery Act, Code of Civil Procedure sections 2023.010 and 2023.030, the trial court had the authority to impose monetary sanctions for the City’s pattern of discovery abuse. The court was not limited to imposing sanctions for each individual violation of the rules governing depositions or other methods of discovery.” (City of Los Angeles v. PriceWaterhouseCoopers, LLP (Cal., Aug. 22, 2024) 2024 WL 3894042.)

https://www.courts.ca.gov/opinions/documents/S277211.PDF

Plaintiffs contended defendant violated the Consumers Legal Remedies Act (Civ. Code, §§ 1750–1784; CLRA) by marketing Cosequin as falsely promoting healthy joints in dogs. The district court certified a class action: “All persons residing in California who purchased during the limitations period the following canine Cosequin products for personal use: Cosequin DS Maximum Strength Chewable Tablets; Cosequin DS Maximum Strength Plus MSM Chewable Tablets; and Cosequin DS Maximum Strength Plus MSM Soft Chews.” Affirming, the Ninth Circuit stated about plaintiffs’ expert’s opinion: “[T]he near-universal reason class members purchased Cosequin was because it would ‘improve/help/maintain mobility, flexibility, joint health/support.’” (Lytle v. Nutramax Laboratories (9th Cir., Aug. 23, 2024) 2024 WL 3915361.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/23/22-55744.pdf

After a Lakers game, a crowd gathered outside the arena. Plaintiff is a Lakers fan. The Los Angeles Police Department initiated crowd control measures and declared there was an unlawful assembly. One officer discharged a .40-millimeter less-lethal launcher. Plaintiff felt something impact her head and fell to the ground. While spending a few seconds dazed on the ground, plaintiff saw a blue rubber bullet nearby. Someone picked her up and got her walking away. Plaintiff sued the police department and the officer. An expert witness testified plaintiff suffers from traumatic brain injury. A jury found for plaintiff, but the lower court granted a new trial on the issue of damages only. On appeal, the defendants contended they would be denied their right to a fair trial under the Seventh Amendment if the matter is returned only for the issue of damages. Affirming, the Ninth Circuit held the lower court did not abuse its discretion. (Marroquin v. City of Los Angeles (9th Cir., Aug. 27, 2024) 2024 WL 3945122.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/27/23-55423.pdf

This appeal presented three questions regarding the breadth of the Song-Beverly Act’s (Civ. Code, § 1790 et seq.) pro-consumer remedies. First, is a consumer entitled to recover as “restitution” amounts paid to a third party for a service contract on the vehicle? Second, is a consumer entitled to recover as “restitution” all insurance premiums paid on the vehicle should the consumer continue to drive it (as opposed to only those premiums attributable to coverage against property damage)? Third, is a manufacturer’s, distributor’s, or retailer’s violation of the act willful as a matter of law if the violation was negligent or if it adequately investigated but could not confirm the existence of a defect yet nevertheless offered to buy back the vehicle on terms that were reasonable at the time the offer was made? The Court of Appeal held the answer to all three questions is “no.” (Valdovinos v. Kia Motors America, Inc. (Cal. App. 2nd Dist., Div 2, Aug. 29, 2024) 2024 WL 3982399.)

https://www.courts.ca.gov/opinions/documents/B324418.PDF

The Hawai‘i Court Records Rules, which apply to all criminal and civil proceedings in Hawai‘i state courts, require that all “medical and health records” be filed under seal without further order of a judge. Plaintiff moved to unseal the court-ordered competency evaluations of a criminal defendant charged with assault after hitting a gas station employee with a hammer and then telling the arresting officer he heard voices and saw visions. The Ninth Circuit described the issue and its holding as follows: “We are asked to determine whether a state may mandate the categorical sealing of all ‘medical and health records’ filed in any state court proceeding in order to protect the individual privacy rights of the subjects of those records, without any case-by-case consideration of the privacy interest implicated by the records or whether less restrictive alternatives exist to sufficiently protect that interest. We conclude that it may not.” (Civil Beat Law Center for the Public Interest v. Maile (9th Cir., Aug. 28, 2024) 2024 WL 3958954.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/28/23-15108.pdf

Plaintiff Mendocino Railway has resisted efforts by the California Coastal Commission and the City of Fort Bragg to regulate the use and maintenance of Railway properties in the city. After the city sued the railway in state court, the railway responded by suing the city and the commission in federal court. The railway appealed the district court’s dismissal of its federal case under the Colorado River doctrine, which authorizes federal courts to refrain from exercising jurisdiction where there are parallel state court proceedings. (See Colorado River Water Conservation Dist. v. United States (1976)] 424 U.S. 800.) Affirming dismissal of the action, the Ninth Circuit stated: “The forum shopping and piecemeal litigation considerations strongly favor dismissal, and the order in which the forums obtained jurisdiction also supports that outcome.” (Mendocino Railway v. Ainsworth (9th Cir., Aug. 29, 2024) 2024 WL 3978586.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/29/23-15857.pdf

Title IX prohibits gender discrimination at federally funded educational institutions. It carves out an exception for religious institutions whose tenets mandate gender-based discrimination. (20 U.S.C. § 1681(a).) Plaintiffs are lesbian, gay, bisexual, transgender, and/or nonbinary (LGBTQ) students who applied to or attended religious institutions and alleged that they experienced discrimination on the basis of their sexuality or gender identity. They sued the Department of Education, claiming that Title IX’s religious exemption violates the equal protection guarantee of the Fifth Amendment and establishes a religion in violation of the First Amendment. They also challenged the department’s implementing regulations of Title IX as arbitrary and capricious under the Administrative Procedure Act. The district court dismissed the complaint and denied leave to amend on all claims. Affirming dismissal, the Ninth Circuit stated: “This case addresses, among other issues, the question of whether Congress’s attempt to balance the important interests of religious freedom and gender-based equality violated the Constitution. Because we hold that Congress did not exceed its constitutional boundaries, we affirm.” (Hunter v. U.S. Department of Education (9th Cir., Aug. 30, 2024) 2024 WL 3998788.)

https://cdn.ca9.uscourts.gov/datastore/opinions/2024/08/30/23-35174.pdf

Three jury trials took place in this constructive termination/disability discrimination action under the Fair Employment and Housing Act (Gov. Code § 12900 et seq.; FEHA). In the first trial, the jury awarded plaintiff $2,137,391 in economic damages and $5 million in noneconomic damages. In the second trial, the jury awarded plaintiff $15,400,000 in noneconomic damages, the only issue remaining. In the third trial—ordered because the trial court found misconduct on the part of plaintiff’s counsel—the only issue again was the amount of noneconomic damages. The jury awarded $1,250,000. The jury’s verdict was the exact amount of defendant’s offer made pursuant to Code of Civil Procedure § 998. On appeal, both the plaintiff and defendant contended the trial court erred in awarding plaintiff $3,264,906 in attorney fees. The trial court also granted defendant’s motion to tax costs in part, allowing plaintiff to recover the reduced amount of $210,882.55 in costs. Affirming, the Court of Appeal found no abuse of discretion by the trial court, stating: “In sum, there is no precedent for restricting the trial court’s discretion in cases where attorney misconduct is involved. And there is no precedent for eliminating attorney fees entirely for a discrete trial on identical issues by claiming it is ‘unrelated’ to eventual success in a new trial.” (Simers v. Los Angeles Times Communications LLC (Cal. App. 2nd Dist., Div. 8, Aug. 30, 2024) 2024 WL 4002528.)

https://www.courts.ca.gov/opinions/documents/B323715.PDF