Business Law

Matthew Omlansky, a relator, brought a qui tam action against Save Mart Supermarkets alleging False Claims Act violations for seeking reimbursement for prescription and nonprescription medications sold to Medi-Cal patients at rates higher than the rates charged to customers paying cash. Specifically, Omlansky alleged this practice violated a 2009 state statute capping Medi-Cal billings at Save Mart’s “usual and customary price.” (See Welf. & Inst. Code, §§ 14105.45, subd. (b), 14105.255, subd. (b).) The trial court sustained Save Mart’s demurrer and Omlansky appealed. Read more

California Appellate Court Declines to Extend the Holding in Edwards v. Arthur Andersen LLP Invalidating Noncompete Provisions in the Employment Context to an Exclusive Dealing Business Arrangement On August 29, 2019, the California Court of Appeal, Fourth Appellate District, in the case of Quidel Corporation v. The Superior Court of San Diego County/Beckman Coulter, Inc., 2019 Cal. App. LEXIS 815, Cal. Ct. Appeal Case No. D075217 (Aug. 29, 2019), granted the petition of Quidel Corporation and issued a writ instructing… Read more

Please join the Nonprofit Organizations Committee for a program on the topic of “Update on Property Tax Exemption for Nonprofit Organizations.” Our presenter is Zenaida Espanola, Acting Chief Appraiser at the Los Angeles County Assessor. The meeting will held jointly with the Tax Exempt Organizations Committee of the Taxation Section. Read more

The Agribusiness Committee of the California Lawyers Association Business Law Section will continue its 2019 Agriculture Tour series with a Water Tour, to be held at the San Luis Joint-Use Complex near Santa Nella, CA, on Friday September 20, 2019. Read more

Background: Limited liability company (“LLC”) operating agreements commonly contain a clause on “Tax Matters Partner” (“TMP”). A TMP represents a partnership before the Internal Revenue Service (“IRS”) in all tax matters under the former Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”). The TEFRA audit rules apply to LLCs that are treated as partnerships for federal income tax purposes. LLCs with 10 or fewer members are exempt from these rules. Read more

Summary: In In Jones v. Machado-Powell, 2018 WL 4925214 (9th Cir. BAP 2018), the Bankruptcy Appellate Panel held, in an unpublished opinion, that Appellees had not violated the automatic stay when they removed and sold debtor’s personal property and then listed the real property for sale as debtor had neither an ownership interest, nor a possessory interest in said real property, when debtor filed for chapter 13 bankruptcy relief. Read more

Summary: The California Court of Appeal reversed the trial court’s judgment and held that the Uniform Voidable Transactions Act (Cal. Civ. Code. § 3439 et seq., formerly known as the Uniform Fraudulent Transfer Act, or UFTA) can apply to a premarital agreement in which the prospective spouses agree that upon marriage each spouse’s earnings, income, and other property acquired during marriage will be that spouse’s separate property. Robert Sturm v. Todd Andrew Moyer et al., No. B284553 (Cal. Ct. App. Feb. 15, 2019). The Court held that the application of the UFTA to a premarital agreement depends on whether there was actual or constructive fraud under Civil Code section 3439.04, and remanded to the trial court to make that determination. Read more

The California Lawyers Association has created a new advisory group to help ensure CLA members stay up-to-date with their ethical obligations. The new Ethics Committee will create educational content, comment on proposed rule changes, write advisory opinions on emerging ethical issues, and issue ethics alerts and reminders to CLA members. Read more

The Corporations Committee of the Business Law Section (BLS) is accepting Applications for Appointment. The next term starts upon adjournment of the California Lawyers Association annual meeting in October 2019 and will end upon adjournment of the annual meeting in 2023. Read more

Assembly Bill 5 (Worker Status: employees and independent contractors) (“AB 5”) is the proposed codification of the ABC Test for the California Labor Code and California Unemployment Insurance Code based on the California Supreme Court decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018). AB 5 replaces the current common law analysis under S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), for determining the status of a worker as either an employee or independent contractor. Read more