Antitrust and Unfair Competition Law

Competition: Spring 2019, Vol 29, No. 1


By J. Thomas Greene1


Parties May Not "Contract Around" Service Requirements of the Hague Convention

Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd.2

This appeal had its origin in a failed investment by an American investment fund in a Chinese company that was to produce fonts for various languages. Once the deal went south, Rockefeller Technology, the investor, pursued contractual arbitration in Los Angeles against Changzhou SinoType, the font maker. The Chinese company asserted that the writing that Rockefeller relied on was not an agreement but a ‘bei wang lu,’ or a summary of negotiations up to the date the writing was signed but not a binding contract.3 Ultimately Changzhou refused to participate in the arbitration and a $414 million default judgment was entered against it.

Fifteen months later, Changzhou challenged the arbitrator’s decision, arguing that service by mail (which was referenced in the writing that Rockefeller asserted was a memorandum of understanding) was contrary to the Hague Service Convention. Changzhou further argued that since "no personal jurisdiction [was] obtained . . . the resulting judgment [is] void as violating fundamental due process." (Id. at 120; citation omitted).

The court conducted a careful textual analysis of the Hague Service Convention, which provides that service can be effectuated "by a particular method requested by the applicant unless such method is incompatible with the law of the State addressed." Hague Service Convention, 20 U.S.T. 361, 362-363, reprinted in 28 U.S.C.A Fed. R. Civ. P. 4, note at 130 (West Supp. 1989). Since China had objected to service by mail, the agreement—assuming there was an agreement—did not and could not sidestep the plain text of the Convention. The court concluded that parties may not "contract around" the Convention’s service requirements. (Id. at 131-133.)

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This case could be a sleeper. Although couched in careful analysis, the court’s conclusion will be surprising to many lawyers handling international trade disputes. The California Supreme Court has granted review, so further insights on these issues can be expected in 2019. Review was restricted to one question: "Can private parties contractually agree to legal service of process by methods not expressly authorized by the Hague Convention?"


Forum Selection Agreement Does Not Foreclose Dismissal under Forum Non Conveniens Doctrine

Quanta Computer Inc. v. Japan Communications Inc.4

Plaintiff, a Taiwanese company, entered into a contract to manufacture and sell cellular telephones to defendant, a Japanese company. The parties’ contract included a forum selection clause providing that any dispute be resolved in a California court under California law. "Nothing in the creation, performance, or alleged breach of the contract [had] any connection to California." (Id. at 441.)

The Second District Court of Appeal concluded that the forum selection clause conferred jurisdiction on California state courts (Id. at 448) but given the lack of contacts with California it could not require California courts to hear disputes under the contract. The appellate court agreed with the trial court that the parties had alternate, adequate forums in Japan, Taiwan and Singapore, and that U.S. Supreme Court authority holds that "the jurisdiction with the greater interest should bear the burden of entertaining the litigation." (Id. at 448) (citing Piper Aircraft Co. v. Reyno, 445 U.S. 235, 260-261 (1981)). In this case, the availability of alternative forums and the lack of contacts with California supported dismissing the case without prejudice based on the doctrine of forum non-conveniens. (Id.)

Of particular interest to those dealing with international arbitrations, the court discusses at length a prior provision in the Code of Civil Procedure (Code Civ. Proc. § 410.30(b)), which waived forum non-conveniens challenges in order to "attract to our legal community international transaction[s]-particularly international arbitrations." (Id. at 449; citation omitted). However, this provision was subject to a sunset clause and was not re-enacted, so it was no longer applicable. (Id.)


U.S. Courts Not Required to Treat a Submission from a Foreign Government Concerning its Law as Conclusive Under Fed. R. Civ. P. 44.1

Animal Sci. Prods. V. Hebei Welcome Pharm. Co.5

This case arose in the context of private litigation concerning vitamin C price fixing. Two Chinese defendants asserted that their collective decision to increase prices and reduce output was compelled by the Chinese Ministry of Commerce. Based on this predicate, the defendants asserted that they were shielded from U.S. antitrust law by: (1) the act of state doctrine; (2) the foreign sovereign compulsion doctrine; and (3) principles of international comity

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The basis for these defenses was an amicus brief filed on behalf of the Chinese Ministry of Commerce that asserted that "the conspiracy in restraint of trade alleged by U.S. purchasers was in fact ‘a regulatory pricing regime mandated by the government of China.’" Animal Sci. Prods., 201 L. Ed. 2d at 229.

The legal issue before the Supreme Court was whether U.S. courts are required under Fed. R. Civ. P. 44.1 to conclusively accept a foreign government’s construction of its own law. The answer was a unanimous "no."

Although federal courts should "carefully consider a foreign state’s views about the meaning of its own laws [] a federal court is neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials." (Id. at 233-234; citations omitted).

Under Rule 44.1, the scope and meaning of foreign law is a question of law (id. at 232) and review on appeal is de novo. (Id.) "Relevant considerations," for reviewing courts, "include the statement’s clarity, thoroughness, and support; its context and purpose; the transparency of the foreign legal system; the role and authority of the entity or official offering the statement; and the statement’s consistency with the foreign government’s past positions. (Id. at 234.)

Using these factors, the Court determined that the amicus brief did not properly state the law of China. The Court gave particular weight to the statement of Chinese authorities that with China’s entry into the World Trade Organization (WTO), it had "’g[i]ve[n] up export administration of vitamin C.’" (Id.)

This decision clarifies the weight and factors to be used in assessing the statements of foreign jurisdictions about their own law. As such, this decision provides much needed clarity to potentially case-determinative legal issues.


Planned Parenthood Fed. of America, Inc. v. Ctr. For Med. Progress6

This case arises from undercover operations mounted by an anti-abortion advocacy group. Planned Parenthood, the plaintiff, asserted that operatives for the Center for Medical Progress "Had used fraudulent means to enter into their conferences and gain meetings with their staff for the purpose of creating false and misleading videos that were disseminated on the internet." (Id. at 831.) In addition, Planned Parenthood alleged that the Center had unlawfully recorded the conversations of its physicians while at meals.7Defendant Center for Medical Progress asserted that its actions were protected by the First Amendment or otherwise lawful.

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The Center challenged the suit in federal court under California’s anti-SLAPP statute8, filing a special motion to strike under Cal. Civ. Proc. Code § 425.16. This statute is designed to protect "a person’s right of petition or free speech," the Center’s core defense. Under this California law, a successful SLAPP motion can lead to immediate dismissal or an immediate appeal, during which time further proceedings, including discovery, are stayed. (Id. at 832-833.)

In parsing the potential conflicts between the anti-SLAPP law and the federal rules, the court concluded that:

[W]e hold that, on the one hand, when an anti-SLAPP motion to strike challenges only the legal sufficiency of a claim, a district court should apply the Federal Rule of Civil Procedure 12(b)(6) standard and consider whether a claim is properly stated. And on the other hand, when an anti-SLAPP motion to strike challenges the factual sufficiency of a claim, then the Federal Rule of Civil Procedure 56 standard will apply. But in such a case, discovery must be allowed, with opportunities to supplement evidence based on the factual challenges, before any decision is made by the court. A contrary reading of these anti-SLAPP provisions would lead to the stark collision of the state rules of procedure with the governing Federal Rules of Civil Procedure while in a federal district court. In this context, if there is a contest between a state procedural rule and the federal rules, the federal rules of procedure prevail. (Id. at 834.)

This is a thoughtful decision that provides useful guidance on the use of anti-SLAPP procedures in federal court.


SCOTUS Limits Tolling of Statutes of Limitation for "Stacked" Class Actions

China Agritech, Inc. v. Resh9

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This case is about equitable tolling in the class action context. Under American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), the timely filing of a class action tolls the statute of limitations for all persons included in the class complaint. If the class is not certified such persons can intervene as individual plaintiffs in the still-pending action. The question presented in Resh is "whether American Pipe tolling applies not only to individual claims, but to successive class actions as well." (Id. at 1801.)

Writing for a unanimous Court, Justice Ginsberg concludes that "Our answer is no." (Id. at 1804.) She writes: "American Pipe tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails. But American Pipe does not permit the maintenance of a follow-on class action past the expiration of the statute of limitations." (Id.)

The Court rejects a plaintiff-friendly analysis from the Ninth Circuit on the grounds of precedent and policy in Rule 23 favoring early resolution of class certification. She concludes: "The watchwords of American Pipe are efficiency and economy of litigation, a principal purpose of Rule 23. Extending American Pipe tolling to successive class action claims does not serve this purpose." (Id. at 1811.)

What does serve that purpose is the filing of "multiple" class actions, "[a]nd sooner rather than later filings are just what Rule 23 contemplates." Such filings, she argues, "may aid a district court in determining, early on, whether class treatment is warranted and, if so, which of the contenders would be the best representative." (Id.)

This case strongly militates in favor of filing competing or partially competing class actions early in the life of a case, even though such "[m]ultiple timely filings might not line up neatly" and could be "filed in different districts, at different times—perhaps when briefing on class certification has already begun." (Id.)

CAFA Exception for Local Controversies Requires Evidence that Two-Thirds or More of the Proposed Class are Citizens of the Forum State

King v. Great Am. Chicken Corp.10

The Class Action Fairness Act generally provides that class actions filed in state courts may be removed to federal court when (i) the aggregate amount in controversy is over $5 million; (ii) there are more than 100 putative class members; and (iii) any member of the class of plaintiffs is a citizen of a state different from any defendant. (28 U.S.C. § 1332(d) (2)(A), (d)(4)(B).)

However, a district court must decline jurisdiction under the local controversy exception in 28 U.S.C. § 1332(d)(4)(A) and the home-state controversy exception in 28 U.S.C. § 1332(d)(4)(B). To invoke either exception, one must prove that "two-thirds or more of the members of all proposed plaintiff classes in the aggregate are citizens of the state in which the action was originally filed." (28 U.S.C. § 1332(d)(4)(A(i)(I).)11

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Here, defendant rebuffed discovery related to the citizenship of the class but stipulated that "at least two-thirds (at least 67%) of the putative class are shown with addresses in California." (Id. at 877). The trial court refused to order discovery but did remand the case to state court based on the stipulation. (Id.)

"The burden of establishing that a CAFA exception applies . . . is on the party seeking to remand." (Id. at 878.) But, the Ninth Circuit opined that the "burden of proof placed upon a plaintiff should not be exceptionally difficult to bear." (Id. ; citation omitted). Notwithstanding this low hurdle, here, the court did not think that the plaintiff had carried its burden because the stipulation could be read as only agreeing that the plaintiff barely met the 2/3’s standard numerically and (i) even a small number of non-citizens would mean that the standard was not met and (ii) even a few class members emigrating to other states would likewise mean that plaintiff could not meet its burden.

While there was an "impression" that the plaintiff had met her burden, it was "guesswork." (Id. at 880.) The court denied the remand back to state court but directed the district court to give plaintiff reasonable discovery on the citizenship of class members. In the alternative, if defendant claims that the burden of such discovery is "onerous," "it is free to propose a stipulation that would better address [plaintiff’s] burden. (Id. at 881.)

This decision nicely lays out a discovery roadmap to support remanding state class action back to state court based on the local controversies doctrine.

Rule 23 Amended in Latest Revisions of the Federal Rules of Civil Procedure

Amendments to Fed. R. Civ. P. 23 became effective on December 1, 2018.

Rule 23(c)(2)(B) is amended to provide that notices to the class or putative class should "the best notice practicable under the circumstances." Recognizing modern methods of communications, the rule recognizes that notice may be given by U.S. mail, electronic means, or other appropriate means. The Advisory Note suggests that court should consider the "means or combination of means most likely to be effective in the case before the court." The rule requires that notices must be clear and concise, in plain, easily understood language." The Advisory Note comments that what is appropriate will depend on the likely audience, noting that a notice in a securities fraud action may be different from a general consumer case.

Rule 23(e) is amended with respect to notices and approval of settlements. Parties are obligated to provide sufficient information to the court to enable it to determine if notice is appropriate, and notice is only appropriate if the court can approve the settlement and certify the settlement class or classes. (Rule 23(e)(1).) Parties must identify any agreement made in connection with the proposed settlement. (Rule 23(e)(3).) A settlement notice must also give class members or putative class members a new opportunity to be excluded. (Rule 23(e)(4).)

Rule 23(e)(1) frontloads the settlement approval process by requiring parties to provide the court with "information sufficient to enable the court to determine whether to give notice if the [settlement] proposal to the class."

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Rule 23(e)(2) provides a summary of procedural and substantive factors that the court should use in assessing a settlement. According to the Advisory Note, this was written to "focus the court and the lawyers on the core concerns of procedure and substance that should guide the decision whether to approve the proposal." These factors are identified as "core" considerations but this list does not preclude or displace any additional factors that have been mandated by various circuits.

Objectors must "state with specificity the grounds for their objections." (Rule 23(e) (5).) The Advisory Note states that "objections must provide sufficient specifics to enable the parties to respond to them and the court to evaluate them." Payments for forgoing or withdrawing an objection to the settlement are prohibited. (Rule 23(e)(5).)

An amendment to Rule 23(f) makes clear that the decision to direct notice to the class or putative class "does not grant or deny class certification," therefor, "an appeal under this rule is not permitted."

These are smart, clarifying amendments to this critical rule.

Sargon Standard of Admissibility for Expert Opinion Applies to All California Proceedings, including Class Certification

Apple v. Superior Court12

This was a putative class action on behalf of purchasers of iPhone 4’s and 5’s. Plaintiffs claimed that a defective power button, also known as the sleep/wake button, reduced the value of these phones. At issue in this appeal was expert testimony supporting class certification.

The trial court decided that it did not need to analyze the expert opinion supporting certification under Sargon Enterprises, Inc. v. Univ. of S. Cal., 55 Cal.4th 747 (2012). Sargon updated analysis of the admissibility of expert opinion under California Evidence Code § 802, strengthening the role of state trial judges as gatekeepers for unreliable expert opinion.13 Despite challenges by Apple to plaintiffs’ experts on the grounds of expertise, use of improper inputs and an unreliable methodology, the trial court determined that Sargon only applied at trial, and so a Sargon analysis was unwarranted

The court of appeal rejected this analysis, concluding that ‘there is only one standard for admissibility of expert opinion evidence in California. Sargon describes that standard." (Apple, 19 Cal. App.5th at 1106.) The court noted that at class certification, a "court may find that it need not rule on the admissibility of certain expert opinion evidence offered in connection with class certification because it is irrelevant or unnecessary for its decision [] But where, for example, expert opinion evidence provides that basis for a plaintiff’s arguments regarding numerosity, ascertainability, commonality, or superiority (or a defendant’s response thereto), a trial court must assess that evidence under Sargon." (Id. at 1120.)

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Although the appellate court stated that there was "at least a reasonable chance" that one of plaintiff’s experts could be excluded under Sargon (Id. at 1123), the case was remanded for reconsideration in light of this opinion. (Id. at 1126.)

State Legislature Adjusts Cy Pres Rules

SB 847 (Committee on Budget and Fiscal Review), Ch. 48, Statutes of 2018

SB 847 is a budget bill that was signed into law by Governor Brown on June 27, 2018. Although budget bills are not typically substantive, this legislation amends California Code of Civil Procedure section 354 with respect to cy pres remedies in class actions. This replaces language inserted in this same section in a 2017 budget bill. (AB 103 (Committee on Budget).) The major difference is that in the 2017 amendments, 25% of unspent funds went to the Equal Access Fund of the Judicial Branch. This year’s version emphasizes the need to fund nonprofit organizations whose work "will benefit the class or similarly situated persons." Indigent legal services are listed but not given a preferential set-aside.


A. European Union’s General Data Privacy Regulation Now Effective; Implications for U.S. Discovery

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 201614

European Data Protection Board, Guidelines 2/2018 on derogations of Article 49 under Regulation 2016/6779, Adopted 25 May 201815

The European Union’s sweeping General Data Privacy Regulation (GDPR) became effective on May 25, 2018. (GDPR art. 99(2).) The GDPR was intended to replace prior EU and member state privacy laws.16 (GDPR recitals 9-13.) The GDPR could have a significant impact on criminal and civil discovery in the United States and sets the stage for constitutional litigation on its potential extraterritorial impact on U.S. courts. Despite its sweep and importance, however, the GDPR is not a beacon of clarity.17

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The protection of personal data is a fundamental right in the European Union. (GDPR recital 1, citing Charter of Fundamental Rights of the European Union, Art. 8(1) and Treaty on the Functioning of the European Union, Art. 16(1).) The GDPR "lays down rules relating to the protection of natural persons" with respect to their "personal data." (GDPR art. 1; emphasis added.)18

"Personal data" is broadly defined to include: "any information relating to an identified or identifiable natural person (‘data subject"); an identifiable natural person who can be identified directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more specific factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person." (GDPR art. 4(1).). Additional protections are extended to "special categories of information," that include racial data, political opinions genetic data, data concerning health or a natural person’s sex life or sexual orientation. (GDPR art. 9.) The law also provides special protection to the information of children. (GDPR recital 38, GDPR art. 8; conditions applicable to a child’s consent to processing.).

European data regulators have a broad range of enforcement tools. These range from warnings to reprimands to issuance of corrective orders. (GDPR art. 58.) They can also impose fines. For the most egregious violations of the regulation, penalties can be up to 20 million euros or 4% of worldwide sales, whichever is higher. (GDPR art. 83(5).) A private right of action for "compensation" is provided for infringement of the regulation. (GDPR art. 82(1).)

The GDPR guarantees privacy rights that are far more extensive than those available under U.S. law. These include:

  • Right to information about whom to contact about one’s data. (GDPR art. 14.)
  • Right to information about what data is being collected and what it will be used for. (Id.)
  • Right to access the information collected. (GDPR art. 15.)
  • Right to rectification, that is, the right to review and correct inaccurate information (GDPR art. 16.)
  • Right to erasure, also known as the right to be forgotten. (GDPR art. 17.)

Limits on processing of personal data apply broadly to:

  • Processing of data by or for a controller or processor in the EU, "regardless of whether the processing takes place in the Union or not." (GDPR art. 3(1).)
  • Processing of personal data of "data subjects who are in the Union" by a controller or processor not established in the Union if (a) the processing is related to the offering of goods and services" in the EU, even if no payment is made by the data subject or (b) the monitored behavior "takes place within the Union." (GDPR art. 3(2).)
  • The data subject has given knowing consent or processing is in accordance with legal requirements. (GDPR art. 6.)

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Only knowing consent is adequate and notices must be "clear and in plain language." (Id.) This means that "[n]atural persons should be made aware of risks, rules, safeguards and rights in relation to the processing of personal data and how to exercise their rights in relation to such processing." (GDPR recital 39.) And it "shall be as easy to withdraw as to give consent." (GDPR art. 7.)

Discovery-Related Provisions

Within the parlance of the GDPR, U.S.-based discovery is a demand for a "transfer" of protected data to a "third country," here the U.S. (GDPR art. 44.) Such transfers, including subsequent "onward" transfers to another third country, may take place "only if, subject to the other provisions of this Regulation [and], the conditions laid down in this chapter are complied with." (Id.)

Alternative approaches include:

  • Transfers based on an adequacy decision, that is, a determination by EU data authorities that the third country meets minimum privacy rules, including enforcement structures that are analogous to the GDPR. (GDPR art. 45.) The U.S. is not such a jurisdiction.
  • Transfers subject to appropriate safeguards. (GDPR art. 46.) The EU-U.S. Privacy Shield agreement provides a framework within which companies willing to bind themselves to, among other things, liability for violations of privacy rules can receive EU personal information.19 Large and small companies have already been certified under this agreement.20
  • Binding corporate rules. Specific model corporate rules can also be used as a basis for transferring EU personal data to a third country. (GDPR art. 47.)
  • Transfers based on an international agreement. (GDPR art. 48.) The example used is a mutual legal assistance treaty [MLAT] in force between the requesting third country and the EU or a Member EU State. This provision is not exclusive and is specifically "without prejudice to other grounds for transfer." (Id.)
  • Derogations for specific situations. (GDPR art. 49.) These are the most important for litigators. A "derogation" in this context is a qualified exception to the GDPR. These derogations have been usefully analyzed by the European Data Protection Board ("GDPB)") in a guidance document issued on the effective date of the GDPR.21 Article 49 provides a series of alternative ways to transfer personal data subject to the GDPR to a third country, including:
    • When the data subject has "explicitly consented" to the transfer after being informed of the possible risks of the transfer. (GDPR art. 49(1)(a).) However, the EDPB says it is "essential" that in seeking consent data subjects be informed of the "specific risks resulting from the fact that their data will be transferred to a country that does not provide adequate protection and no adequate safeguards aimed at providing protection for the data are being implemented." (EDPB Guidelines at 7.)
    • When the "transfer is necessary for important reasons of public interest." (Id. at (d).) The EDPB recognizes that this provision may be used by both public and private entities. "The essential requirement" of this provision is the "finding of an important public interest and not the nature of the organization (public, private or international organization) that transfers and/or receives the data." (EDPB Guidelines at 11.)
    • When "the transfer is necessary for the establishment, exercise or defence22 of legal claims. (GDPR art. 49(1) (e).) "This covers a range of activities for example, in the context of a criminal or administrative investigation in a third country (e.g. anti-trust law, corruption, insider trading or similar situations)." (EDPB Guidelines at 11.) What is "necessary" "This ‘necessity test’ requires a close and substantial connection between the data in question and the specific establishment, exercise or defense of the legal position." (Id. at 12; see also GDPR recital 111) (transfer must be "necessary in relation to a contract or a legal claim").

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The GDPR does not limit the article 49 derogation to occasional use. (GDPR art. 49(1)(e).) However, the EDPB suggests that such a limit exists based on a recital in the GDPR. (EDPB Guidelines at 11.)

The Art. 49(1)(e) "derogation can apply to activities carried out by public authorities in the exercise of their public powers (Article 49(3)." (EDPB Guidelines at 11.)

  • Finally, a savings provision provides that a transfer can be made if "not repetitive, concerns only a limited number of data subject, is necessary for the purposes of compelling legitimate interests pursued by the controller which are not overridden by the interests or rights and freedoms of the data subject" and the controller provides "suitable safeguards" and informs supervising government agencies and the data subject of the transfer. (GDPR art. 49(1), second subparagraph.) This appears to be a savings provision that makes possible transfers not contemplated by other articles of the GDPR, but only under highly restrictive circumstances. (EDPB Guidelines at 14-17.)
  • An example of a compelling interest "might be the case if a data controller is compelled to transfer the personal data in order to protect its organization or systems from immediate harm or from a severe penalty which would seriously affect its business." (EDPB Guidelines at 15.)
  • "Safeguards might include . . . measures aimed at ensuring deletion of the data as soon as possible after the transfer, or limiting the purposes for which the data may be processed following the transfer." (EDPB Guidelines at 16.)

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Extraterritorial Application of the GDPR?

Push comes to shove with the GDPR when a responding party refuses to either protect information by way of a litigation hold in Europe or refuses to turn over EU information in a U.S. legal action. This is not unplowed ground.

The key U.S. Supreme Court case is Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist., 482 U.S. 522, 544, n. 29 (1987). At issue in Aerospatiale was a French blocking statute that imposed titular criminal penalties on French companies that responded to U.S. discovery. The court conducted a comity analysis and rejected the French statute as a limit on U.S. discovery.23

More recent cases use this same analysis. Two cases involving the German privacy law that predated the GDPR are particularly salient. In Pershing Pac. West, LLC v. MarineMax, Inc., 2013 U.S. Dist. LEXIS 33473 (S.D. Cal Mar. 11, 2013), the court conducted a searching comity analysis and rejected the German law as determinative. Two points are important. First, the demanding party could demonstrate that alternate sources of relevant information were inadequate, so the requests were necessary. (Id. at *21.) Second, in balancing the respective national interests, the court found that the disputed discovery sought documents related to the subject of the dispute, diesel engines. "Any personal information of German citizens," the court wrote, "contained in any documents can be redacted, subject to a subsequent in camera review if necessary. Alternatively, a protective order can be requested." (Id. at *26.)

In St. Jude Med. S.C. v. Janssen-Counotte, 104 F. Supp. 3d 1150, 1165 (D. Or. 2015), the court likewise determined the necessity of the discovery requested, noting that "Germany’s interest in prohibiting disclosure of documents that incidentally contain personal data is, by the very terms of the Directive, tempered by countervailing interests in the efficient conduct of discovery under judicial supervision and the just resolution of litigation. Indeed, these interests are shared by the United States." As in MarineMax, the court focused on the need for the requested documents (id. at 1166), and concluded that analysis of the comity factors favored discovery.

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Approaching Discovery in a GDPR World

The GDPR does not spell the doom of discovery of EU-based documents and records. If responding parties have not or cannot assuage EU privacy concerns by (i) getting consent from data subjects, (ii) joining the Privacy Shield or (iii) using binding standard contracts, the Article 49 derogations provide a useful alternative. The most useful provisions are in Article 49(1)(d) for "public interest’ transfers and Article 49(1)(e) for transfers necessary for the "establishment, exercise or defence of legal claims."

Both provisions require a showing of necessity that dovetails nicely with the requirements of U.S. comity analysis. This suggests that litigants need to have good arguments about why the requested discovery is necessary. At least in MarineMax and St. Jude, this meant demonstrating that alternate sources of the needed discovery were unavailing.

Demanding parties may also be well served by having potential U.S. solutions for protecting private information. Protective orders such as those suggested by the magistrate judge in MarineMax may be good models. It will also make a demanding party’s comity burden in a U.S. court easier if it can offer other orders that would protect private information in ways that are consistent with the standards of the GDPR.

In general, until the full contours of practice under the GDPR becomes clear, providing at least some of the protections available under the GDPR will ease the burden on responding parties in the European Union while sharpening and strengthening the arguments of demanding parties facing a comity analysis in U.S courts.

B. California Consumer Privacy Act Signed into Law

AB 375 (Chau), Ch. 55, Statutes of 2018

A new California law is substantially similar to the EU’s General Data Protection Regulation. The California Consumer Privacy Act of 2018 enacts a framework for protecting personal information. This legislation displaces the earlier California Customer Records Act (codified at Civ. Code § 1798.81.5) that protected a person’s name in conjunction with other data such as a Social Security number or credit card number. The new law will become effective on January 1, 2020. (Civ. Code § 1798.198.)

The new legislation ensures the following:

  • The right to know what personal information is being collected
  • The right to know if one’s personal information is sold or disclosed and to whom
  • The right to veto sales or disclosures of personal information to third parties
  • The right to access their personal information
  • The right to equal service and price if one exercises one’s privacy rights.

"Personal information" is broadly defined to include any "information that identifies, relates to, describes, is capable of being associated with, or could be reasonably linked, directly or indirectly, with a particular consumer or household. (Civ. Code § 1798.140(o).) The legislation provides for civil enforcement by the Attorney General. (Civ. Code § 1798.155.) It also provides a private cause of action for injured consumers. (Civ. Code § 1798.150.)

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Nothing in the Act, however, restricts a firm’s ability to comply with federal, state or local laws, or to comply with civil, criminal or regulatory inquiry, investigation, subpoena, or summons." (Civ. Code § 1798.145.) This should make this Act far less problematic to litigators than the GDPR.

One potential implication of the California Consumer Privacy Act is that it might be certifiable as an adequate privacy protection regime under GDPR Article 45. Even if formal certification were not obtained, the mere existence of this Act could be part of a comity analysis concerning the extraterritorial scope of the GDPR.


Verbatim Record Required in State Civil Actions for Those Who Qualify for Waiver of Initial Court Filing Fees

Jameson v. Desta24

In the aftermath of the financial crisis, the California Legislature dramatically cut court funding. One response in many courts was to force litigants to pay for their own court reporters. Previously, court reporters in state courts were covered by filing fees.

In this case, Chief Justice Cantil-Sakauye concluded that under California’s in forma pauperis doctrine and Gov. Code § 68086(b), litigants who qualified for waiver of filing fees should also receive transcripts of their proceedings without charge. Although partly grounded on the Government Code, her analysis is sufficiently broad to potentially include low-income litigants who do not qualify for fee waivers under § 68086.

For trial courts across California, this is likely the most important case of the year because it forces them to find additional money in still constrained court budgets. That said, the Chief’s arguments are compelling, particularly her discussion of litigants whose appeals were dismissed because they had no record of what happened in lower courts.


Arbitration Agreement Held Unconscionable

Baxter v. Genworth North America Corp. (see discussion, supra, in "Substantive Law")25

Legislature Clears Roadblock to International Commercial Arbitrations SB 766 (Monning), Ch. 184, Statutes of 2018

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Many international companies prefer to resolve commercial disputes with other international companies by arbitration. Unfortunately, California essentially forwent this work when the California Supreme Court was misunderstood to have concluded that non-U.S. lawyers participating in international arbitrations in California might be engaging in the unauthorized practice of law. (Birbrower, Montalbano, Condon & Frank v. Superior Court, 17 Cal. 4th 119 (1998).) Although this was not a necessary reading of Birbrower, penalties under Cal. Bus. & Prof. Code § 6126 for the unauthorized practice of law in California are stiff: a fine of up to $1000; up to one year in county jail; or both. As a result, international arbitrations in California plummeted.

ChiefJustice Cantil-Sakauye subsequently empaneled a special panel to investigate international commercial arbitrations in California and how standard practices in international arbitrations could be squared with California rules regulating lawyer competency. A major report by this panel led to what became SB 766.26

The new law provides that lawyers are qualified to represent clients in an international commercial arbitration if (i) they are admitted to a bar in a U.S. state or territory or (ii) admitted to practice in a foreign jurisdiction. Cal. Code Civ. Proc. § 1297.185. They may represent clients in an international commercial arbitration if, among other things, the work flows from representations of a company in the lawyer’s home jurisdiction. Cal. Code Civ. Proc. § 1297.186. Non-California lawyers taking advantage of this new statute must agree to be subject to the California rules of professional responsibility where applicable to their work. Cal. Code Civ. Proc. § 1297.188. This legislation became effective on January 1, 2019.

For lawyers, this legislation creates new opportunities for work on international commercial arbitrations in California. This could be substantial. For example, in 2011, New York firms were expected to garner $400 million in fees for work on international commercial arbitrations.27

Although potentially lucrative, this is a technical area of law. For those new to international commercial arbitrations, the Supreme Court Task Force Report, noted above, is a good introduction to what is involved. For clients—ranging from high-tech giants to farmers and ranchers selling abroad—this creates the potential for their disputes to be resolved locally, as opposed to London, New York or Singapore. This means that they may need new arbitration provisions in their international contracts. Whether you are a California arbitrator or someone who counsels clients doing business internationally, this legislation is a big deal.


Service on Foreign Defendant that Provides Actual Notice Sufficient under Fed. R. Crim. P. 4

[Page 35]

In re Pangang Group Co. Ltd.28

This case arose from a prosecution of a Chinese company on charges of conspiracy to commit economic espionage, 18 U.S.C. § 1831(a), and attempted economic espionage. (18 U.S.C. § 1831(a)(3) and (4).) The issue before the court was the scope of Fed. R. Crim. P. 4(c)(3)(D)(ii) language that "a summons is served on an organization not within a judicial district of the United States . . . (ii) by any other means that gives notice . . ."

In this case, the Chinese government refused to effectuate service on its wholly owned company, defendant Panang. After a searching analysis of the text of the rule and the Advisory Committee Report, Circuit Court Judge Ikuta determined that service is effective if it gives notice notwithstanding its potential effect "on the practice of special appearances by criminal defendants." (Id. at 1058-1059.)

SCOTUS Appeal Mooted by Enactment of CLOUD Act

United States v. Microsoft29

This appeal arose from a law enforcement demand under the Stored Communications Act for e-mails related to a potential drug trafficking prosecution. Microsoft countered that since the e-mails were stored in its servers in Dublin, this was unlawful. The District Court ordered production of the disputed materials. (In re Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corp., 15 F. Supp. 3d 466 (S.D. N.Y. 2014).) The Second Circuit reversed, concluding that requiring Microsoft to disclose the electronic communications in question would be an unauthorized extraterritorial application of the Stored Communications Act. (In re Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corp, 829 F. 3d 197, 222 (2nd Cir. 2016).)

Last year the Supreme Court granted certiorari on the issue of whether, pursuant to the Stored Communications Act, 18 U.S.C. § 2703, a U.S. provider of e-mail services must disclose to the Government electronic communications under its control even if it stores the communications abroad. (United States v. Microsoft Corp., 583 U.S. ___, 138 S. Ct. 356 (2017).)

Earlier this year, the Court concluded that this appeal was moot because of an intervening amendment to the Stored Communications Act had resolved this question. (Microsoft, 138 S. Ct. at 1188.) This amendment provides that:

A [service provider] shall comply with the obligations of this chapter to preserve, backup, or disclose the contents of a wire or electronic communications and any record or other information pertaining to a customer or subscriber within such provider’s possession, custody, or control, regardless of whether such communication, record or other information is located within or outside of the United States. (Pub. L. 115-141, CLOUD Act § 103(a)(1); amending the Stored Communications Act, codified at 18 U.S.C. § 2701 et seq.)

[Page 36]

This was a win for law enforcement but a disappointment to privacy advocates.30

California Supreme Court Finds That Stored Communications Act Allows Production of Information Configured as "Public"

Facebook, Inc. v. Superior Court (Hunter)31

This case arises from subpoenas from two criminal defendants seeking Facebook posts from their victim and a prosecution witness. After an extended analysis of the privacy protections guaranteed by Shared Communications Act, 18 U.S.C. § 2703, the California Supreme Court determined that (1) posts which were limited to specific "friends" could not be produced by Facebook, but that (2) "a provider may properly be subject to the burden of compliance with a subpoena when a user implicitly consents to disclose by configuring a social media communication as public." (Id. at 1290; emphasis original).

Warrant Required to Obtain Cell-Site Location Information

Carpenter v. United States32

Cellular customers’ devices interact with cell towers several times per minute. Each interaction is recorded and retained by cell service providers for their own business purposes. These time-stamped records connect a user to a specific tower at a precise time.

Under the Stored Communications Act, 18 U.S.C. § 2703(d), government officials can obtain this information when they can offer "’specific and articulable facts showing that there are reasonable grounds to believe’ that the records are sought ‘are relevant and material to an ongoing criminal investigation.’" (Carpenter, 138 S. Ct. at 2212.) No warrant was assumed to be required.

Defendant was charged with multiple counts of robbery and additional counts of carrying a firearm during the commission of a federal crime of violence. Cooperating witnesses testified that Carpenter was the leader of an operation that resulted in at least six robberies. Prosecutors used cell tower information to place defendant near four of these robberies. Defendant sought to suppress the cell tower information, arguing this information could only be obtained via warrant.

In an opinion authored by ChiefJustice Roberts, the Court opined that the privacy issue at the heart of Carpenter’s appeal "lie at the intersection of two lines of cases," one dealing with a person’s expectation of privacy in his physical location and movements while the other line of cases holds that a person can have no reasonable expectation of privacy in information he voluntarily turns over to third parties. (Id. at 2215-2216.)

After an extended examination of these two lines of authority, the Court concludes that "[g]iven the unique nature of cell phone location information," the Government’s acquisition of the cell-site records "was a search within the meaning of the Fourth Amendment." (Id. at 2220.)

[Page 37]

The majority spends the rest of its opinion arguing that this decision is "a narrow one," commenting that it does not preclude access to so-called "tower dumps" (a download of information on all cellular devices connected to a particular cell tower during a particular period) or security cameras or business records and does not address surveillance involving foreign affairs or national security. (Id.)

In a dissent written by Justice Kennedy and joined by Justices Thomas and Alito, Kennedy argued that the majority’s analysis could upend ordinary law enforcement access to financial information shared with banks and other financial information. (Id. at 2222 et seq.) Three other dissents—Justice Thomas, Justices Alito and Thomas, and Justice Gorsuch—forcefully critique that underpinnings and implications of the majority opinion. This spate of dissents forecasts further litigation arising from this decision.

Exclusion of Two Gay Veniremen Violates Batson/Wheeler Doctrine

People v. Douglas33

In this case, defendant Brady Dee Douglas was told by his former boyfriend, a male prostitute, that Jeffery B., the victim, had shorted him money following a prearranged sexual encounter. Defendant Douglas, with a co-defendant, then tracked down the victim and demanded payment. This was followed by a high-speed chase during which the defendant shot at the victim’s car several times. A jury found Douglas guilty on various counts, including attempted second-degree robbery and assault with a semiautomatic firearm.

Two veniremen at trial were gay; both were dropped from the jury by prosecution peremptory challenges. When the prosecutor was challenged on these exclusions, he argued that there were reasons for dropping both jurors for reasons independent of their sexuality. But the prosecutor went on to say that since the victim was a closeted man, they might treat his testimony in a biased way. The trial court accepted these rationales; the court of appeal reversed.

In doing so, the Third District Court of Appeal rejected use of a more prosecution-friendly approach to "mixed" situations in which challenges are used for legitimate and illegitimate reasons. Instead, the court applied a per se rule under which a showing of any group bias violates People v. Wheeler, 22 Cal. 3d 258 (1978), the California equivalent of Batson v. Kentucky, 476 U.S. 79 (1986). (Douglas, 22 Cal.App.5th at 1175-1176.) On this basis, the appellate court ordered a new trial. (Id. at 1176.)34

[Page 38]


Failure to Disclose Representation of a Client Suing Another Client Violates Rules of Professional Responsibility

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co. Inc. 35

This appeal arose from the defense of a qui tam action brought against J-M Manufacturing by various public entities. The core allegation was that J-M had misrepresented the strength of plastic pipe it had sold to over 200 public entities for use in their water and sewer systems. Unbeknownst to J-M, one of those entities—South Tahoe Public Utility District—was represented by the same firm in an unrelated action. Both J-M and the public entity had signed arbitration agreements that included waivers of any conflicts; however, neither client was advised of the other representation.

Attorneys for South Tahoe discovered the dual representation of J-M and filed a disqualification motion in the federal qui tam action, which was granted. By this time the law firm had done 10,000 hours of work for J-M. At the time it was disqualified, the firm was owed $1 million in unpaid fees. The firm sued for payment and sought arbitration. The arbitrator awarded fees to the firm, which decision was sustained in superior court. The court of appeal reversed concluding that the firm had violated the requirements of rule 3-310, and review was granted by the California Supreme Court.

The first question for the Supreme Court was whether it had the power to overturn an arbitrator’s decision. The court concluded "an agreement to arbitrate is invalid and unenforceable if it is made as part of a contract that is invalid and unenforceable because it violates public policy." (Id. at 78-79; citations omitted).

The next question was whether the general waiver of conflicts signed by J-M was enough to clear the firm of its conflict. The court concluded that "[R]ule 3-310(C) (3) embodies a core aspect of the duty of loyalty [and that] the client’s consent to dual representation must be based on disclosure of all material facts the attorney knows and can reveal. " (Id. at 84; emphasis added.) "Assessed by this standard, the conflicts waiver here was inadequate." (Id.)

Before releasing the case back to the lower court, the Supreme Court opined on the court of appeal’s conclusion that violation of rule 3-310 "categorically" barred any recovery of remaining fees by the firm. Given that there is a potential equitable remedy for the firm, the Supreme Court commented that "[t]he degree to which forfeiture is warranted as an equitable remedy will necessarily vary with the equities of the case." (Id. at 90.) But "[w]hen a law firm seeks fees in quantum meruit that it is unable to recover under the contract because it has breached an ethical duty to its client, the burden of proof . . . lies with the firm." And "the firm must show that the violation was neither willful nor egregious, and it must show that its conduct was not so potentially damaging to the client to as to warrant complete denial of compensation." Moreover, the lower courts "must be satisfied that the award does not undermine incentives for compliance with the Rules of Professional Conduct." (Id. at 95.)

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This sends a powerful signal to firms to disclose conflicts when they are known to the firm. This may necessitate new internal systems of review and control to make sure that firms and agencies comply with their ethical duties.36

California Supreme Court Approves Major Rewrite of the Rules of Professional Responsibility

California Rules of Professional Conduct (Effective Nov. 1, 2018)37

This is the most substantial revision of California ethics rules in decades. You will need to read these rules yourself and take an additional class or classes to become completely conversant with these new requirements.38

The old rules had numbers like 3-120 (relating to sexual relations with a client). The new rules use a format used for California statutes, e.g. Rule 1.8.10 (the analogous, although more demanding, version of former Rule 3-120).

There are also more rules. This reflects the splitting of old rules into different sections to improve clarity. It also reflects the desire to have the rules explain what the requirements are in the text of the rules themselves, rather than requiring California lawyers to review both a rule and its various interpretations to sort out what is required.

These rules endeavor to maintain former rules that stood the test of time, while changing the organization and adding some content to bring our rules more into line with the model ABA rules used widely by other jurisdictions.

Highlights include:

  • Rule 1.1.5 now requires that payment of advance fees must be deposited into a client trust account; prior Rule 4-100 did not include this requirement although it was considered a good practice.
  • Rule 1.5 provides more guidance on what may make a fee unconscionable. The rule also authorizes and regulates fixed fee arrangements and true retainers.
  • Rule 1.51 continues to permit pure referral fees but requires agreements to divide fees to be consented to by the client in writing. This disclosure is required at the time a fee-splitting agreement is entered into among the lawyers or "as soon thereafter as reasonably practicable."
  • Rule 1.7 regulates conflicts of interest among current clients. This shifts away from the check list approach in former Rule 3-310 to a rule that focuses on risk and whether another representation would be "materially limited" by another client relationship. However, the rule requires a written disclosure of even non-material conflicts.
  • Rule 1.8.3 prohibits a lawyer from preparing an instrument of will for a client that gives the lawyer or someone related to the lawyer, a substantial gift unless the recipient is related to the client or the client has sought the advice of an independent lawyer.
  • Rule 1.8.10 substantially shifts toward a bright-line test with respect to prohibited sexual relations with a client. It replaces the former Rule 3-110 that prohibited sexual relations if, for example, they were not consensual. The new rule broadly prohibits sex between lawyer and client unless the physical relationship existed before the lawyer-client relationship.
  • Rules 5.1, 5.2 and 5.3: Rule 5.1 clarifies the extent to which an attorney-manager is responsible for subordinate attorneys. Rule 5.2 makes plain that subordinate lawyers have independent ethical duties but can rely on a "supervisory lawyer’s reasonable resolution of an arguable question of professional responsibility." ("Reasonable" is defined in Rule 1.0.1 to mean "the conduct of a reasonably prudent and competent lawyer.") Rule 5.3 clarifies the responsibilities of lawyers for the conduct of their non-lawyer assistants.
  • Rule 8.4.1 carries forward former rule 2-400’s prohibition on discrimination, harassment and retaliation. However, the prior rule required prior adjudication by a tribunal of competent jurisdiction, but not the State Bar Court. Under the revised rule, discrimination and other complaints can be brought directly to the State Bar. Taken together with the augmented responsibilities of attorney-managers, this rule change merits special attention by all firms, but particularly large firms.
  • Rule 9.9.5 requires active California attorneys and attorneys permitted to practice in California under Rules 9.44, 9.45 and 9.46 to be fingerprinted. The California Bar has set April 1, 2019 as the date by which in-state attorneys must get this done.39

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California Supreme Court Approves a New Code of Judicial Ethics

California Code of Judicial Ethics40

A new California Code of Judicial Ethics became effective on October 10, 2018. If you are a state judicial officer, this is a must-read document. This new code indicates that the California Supreme Court is working hard to update ethics standards across the justice system in California. Highlights include:

[Page 41]

  • Amended Canon 2A, relating to judicial impropriety or appearance of impropriety, requires that a judge "Not make statements, whether public or private, that . . . are inconsistent with the impartial performance of the adjudicative duties of judicial office." The Advisory Committee Commentary advises that judges "must exercise caution when engaging in any type of electronic communication including communication by text or email, or when participating in online social networking sites."
  • Canon 2B prohibits judges from lending their prestige to advance the pecuniary interests of the judge or others.
  • Canon 3E(2) requires judges to disclose on the record information relevant to disqualification, including campaign contributions above a small amount
  • Canon 5A strictly limits judicial participation in the political process while Canon 5B limits what those seeking judicial office may do during judicial campaigns or the appointment process. This canon allows judges to seek endorsements and contributions for their elections but prohibits solicitations from those under their supervision.


A. Federal Developments

New federal procedural rules became effective on December 1, 2018. The most accessible way to review these rules and their underlying analyses is to read the explanatory materials sent to Congress by the ChiefJustice.41

Highlights include:

1. Rules of Appellate Procedure

  • Appellate Rules 8, 11, and 39 are adjusted to reflect a change in Civil Rule 62(b) eliminating the antiquated term "supersedeas bond." Instead, the phrase "bond or other security" is substituted.
  • Appellate Rules 25 and 26 requires a person represented by counsel to file electronically, although exceptions are allowed by order of the court. For electronic filings, no separate proof of service is required on the theory that the electronic system retains a record of any filing.
  • Appellate Rules 28.1 and 31 deal with the time to file briefs after elimination of the "3-day rule" which added three days to time limits due to delays in mailing. The drafters, however, decided that the old time frames were better, and concluded that the time to file a reply brief should be 21 days.
  • Appellate Rule 29 makes national what was a local rule in some appellate courts that forbade the filing of an amicus brief that would cause the recusal of one or more judges.

2. Rules of Civil Procedure

  • Civil Rule 5 makes useful adjustments to the service and filing requirements in light of the almost universal use of electronic filing. If represented by counsel, all filings must be made electronically. This rule can be adjusted by local courts or individual courts to take into account the sophistication of litigants, particularly pro se litigants. The amended rule provides for a uniform, national protocol for the signature of documents. Like the analogous appellate rules, this rule also waives the necessity of a separate proof of service.
  • Civil Rule 23 changes have generated the most comments of any changes this year. These changes are discussed in the section on class actions.
  • Civil Rules 62 and 62.5 deal with bonds and sureties. Rule 62 extends the period of the automatic stay to 30 days. It eliminates a reference to the antique "supersedeas bond" and substitutes "bond or other security." This change in language is designed to make clear the non-bond forms of security are allowed.

3. Rules of Criminal Procedure

  • Criminal Rule 12.4 augments disclosure requirements. Any nongovernmental corporate party must disclose any parent corporation or and publicly held corporation that owns 10% or more of its stock. If there is an organizational victim, unless the government shows good cause, it must file a statement identifying any such organizational victim, including any information that would have been required to be disclosed by any nongovernmental corporate party.
  • Criminal Rules 45 and 49 do not take the same approach of the appellate and civil rules in making electronic filing the default option, subject to local changes. Instead, Rule 49 provides detailed rules for electronic and paper service of documents and how such service should be effectuated. Rule 45 is amended to add 3 days to deadlines for filings made via nonelectronic means.

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B. State Developments

1. Legislation

Two bills stand out and both are effective January 1, 2019. SB 954 (Ch. 350, Stat. of 2018) amends California Evidence Code sections 1122 and 1129. The effect of these amendments is to require specific disclosures to clients on the confidentiality of mediations in California.

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AB 2230 (Ch. 317, Stat. of 2018) amends Code of Civil Procedure sections 660, 663a, 2030.300, 2031.310 and 2033.290 to give additional time to ask for a new trial or a mistrial. The old rule was 60 days; the new rule provides 75 days.

2. Rules of Court

No new state rules appear to be particularly important for section members. However, all new and amended state rules can be found at:

[Page 44]



1. Thomas Greene is a trial attorney for the Antitrust Division of the U.S. Department of Justice. The views expressed here are those of the author and do not necessarily reflect those of the Antitrust Division or the U.S. Department of Justice. These are a selection of developments prepared for presentation at the Golden State Institute on November 8, 2018, reflecting developments as of that date.

2. 24 Cal. App. 5th 115 (2018), rev. granted, 2018 Cal. LEXIS 7239, 238 Cal. Rptr. 3d 118 (Sep. 26, 2018).

3. The court explained that a "’bei wang lu’ is a memorandum of understanding between the parties that records the current state of negotiations but does not create a binding contract. The court noted three other potential writings used in commercial negotiations in China. A ‘yi xiang shu’ is a letter of intent to enter into a contract. A ‘xie yi’ is an agreement which is usually, but not always, binding. And a ‘he tong’ which is a formal contract that is legally binding. (Id. at 124.)

4. 21 Cal. App. 5th 438 (2018).

5. ___ U.S. ___, 138 S. Ct. 1865, 201 L.Ed.2d 225 (2018).

6. 890 F.3d 828 (9th Cir. May 16, 2018), modified, 897 F.3d 1224 (9th Cir. Aug. 1, 2018).

7. For example, Center operatives recorded the conversation of two Planned Parenthood physicians without their consent while they were eating lunch. Planned Parenthood argued that this violated California’s all-parties consent requirement for recordings. Cal. Pen. Code §§ 632,634. The Center responded that the recording was proper because either (1) the conversation was in a public place or (2) the conversation was in aid of violations of law so the Center, arguably, came within the law enforcement exception to the all-parties rule in the statute. (Id. at 832.)

8. SLAPP stands for Strategic Litigation Against Public Participation. The statute was designed to protect public advocacy though a discovery freeze and immediate appeals of denials of SLAPP motions to state appellate courts.

9. ___ U.S. ___, 138 S. Ct. 1800 (2018).

10. 903 F. 3d 875 (9th Cir. 2018).

11. Subdivision 1332(d)(4)(B) reads "two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed."

12. 19 Cal. App. 5th 1101 (2018).

13. The court summarized Sargon as requiring that a trial court act "as a gatekeeper to exclude expert opinion testimony that is (1) based on matter of a type on which an expert may not reasonably rely, (2) based on reasons unsupported by the material on which the expert relies, or (3) speculative." (Id. at 117.) (citing Sargon, 55 Cal. 4th at 771-772.)



16. German authorities took advantage of what appear to be minor opportunities for member states to implement the GDPR to add back privacy requirements and remedies that were not brought forward from prior EU privacy statutes. Federal Date Protection Act (June 20, 2017), Whether the German statute is consistent with the GDPR is likely to be tested by the consistency mechanism contained in the GDPR itself. GDPR art. 63 et seq.; see also Sontje J. Hillberg & Marie Leutloff, The New German Privacy Act, Deloitte,

17. Alison Cool, Op-Ed, Europe’s Data Protection Law is a Big, Confusing Mess, N.Y. Times (May 15, 2018),

18. The regulation "does not cover the processing of personal data which concerns legal persons and in particular undertakings [i.e. businesses] established as legal persons." (GDPR recitals 14.)

19. See Privacy Shield Framework,

20. See Privacy Shield List,

21. European Data Protection Board, Guidelines 2/2018 on derogations of Article 49 under Regulation 206/679 (May 25, 2018), . (hereafter "EDPB Guidelines").

22. The English text of the GDPR consistently uses U.K. spelling conventions.

23. The EU’s Advocate General argued to the European Court of Justice, the equivalent of the U.S. Supreme Court, that the right to be forgotten should not apply globally, specifically rejecting extraterritorial application of a precursor of the GDPR. See Press Release, Court of Justice of the European Union, Advocate General Szpunar proposes that the Court should limit the scope of the dereferencing that search engine operators are required to carry out to the EU, Release No. 2/19 (Jan. 10, 2019),; see also Owen Bowcott, ‘Right to be forgotten’ by Google should apply only in EU, says court opinion, The Guardian (Jan. 10, 2019),

24. 5 Cal. 5th 594 (2018).

25. 16 Cal. App. 5th 713 (1st DCA, 2017).

26. International Commercial Arbitration Working Group, Report and Recommendations (April 10, 2017),

27. Emily Sacher, Losing the fight in dispute resolution, Crain’s (Oct 30, 2011),

28. 901 F. 3d 1046 (9th Cir. 2018).

29. 584 U.S. ___, 138 S. Ct. 1186 (2018).

30. See Matt Ford, Congress may have just nixed a Supreme Court case on digital privacy, New Republic (Mar. 25, 2018),

31. 4 Cal. 5th 1245 (2018).

32. ___ U.S. ___, 138 S. Ct. 2206 (2018).

33. 22 Cal.App.5th 1162 (2018).

34. Note that peremptory strikes against protected classes may also be unlawful in civil proceedings. See, e.g. Edmonson v. Leesville Concrete Co., Inc., 500 U.S. 614 (1991) (peremptory strikes by defense of black potential jurors in civil action brought by black plaintiff impermissible).

35. 6 Cal.5th 59 (2018).

36. Rule 3-310-the centerpiece of this decision- has been superseded by Rule 1.7. The language of the new rule is consistent with the language of former Rule 3-310, so this case remains a timely warning about effective management of dual representations.

37.; see also Rules Cross-Reference Table,

38. A reasonably priced, 3-part webinar series on these rules is offered by the California Lawyers Association at: Other CLE providers also offer programming on these rules.




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