Friday, January 12, 2018

Can't Waive the PAGA Till You're a PAG

Julian v. Glenair, Inc., No. B277064 (D2d4 Dec. 13, 2017)

By now, it’s well-settled that an employee’s claims under the Labor Code Private Attorney General Act, or PAGA, aren’t arbitrable, even if the employee’s contract says they are. But the Supreme Court decision that set that rule—Iskanian—had some dicta suggesting that its rationale did not apply to post-dispute agreements to arbitrate. The theory is, basically, that a PAGA claim belongs to the state, so the employee can’t agree to arbitrate it in an employment agreement. But once the employee is litigating on the state’s behalf she’s free to make any tactical decisions related to the litigation she deems advantageous, which includes the right, post dispute, to agree to send a case to arbitration.

Thursday, January 11, 2018

Failure to Issue a Statement of Decision Is Not Structural Error

F.P. v. Monier, No. S216566 (Cal. Nov. 27, 2017)

After a bench trial, and despite a proper request, the court in this case failed to issue a statement of decision under Code of Civil Procedure § 632. Everyone agrees that’s error. The question presented to the Supreme Court in this case, however, is whether it’s a structural error requiring per se reversal, or whether it’s a procedural error that merits reversal only upon proof of prejudice to the appellant. See Code Civ. Proc. § 475; Cal. Const. Art. IV, § 13. The Court of Appeal said prejudice is required. And the Supreme Court agrees.

After reviewing the lengthy history of the amendments to the statute currently codified in § 632, the Court admits its jurisprudence on the topic has been somewhat inconsistent. But particularly given the removal of a mandatory retrial requirement from earlier versions of § 632, the Court holds that proof of prejudice is, in fact, required to merit a reversal for failure to follow § 632. And since the trial record contained evidence sufficient to sustain a ruling in plaintiff’s favor and the trial court did, in fact, rule in favor of the plaintiff, there’s no prejudice her that would permit a reversal for the trail court’s procedural error in failing to follow § 632.


Tuesday, January 9, 2018

This Is Madness!

Rhue v. Superior Court, No. B283248 (D2d7 Nov. 28, 2107)

In many of California’s counties, the courts no longer provide official reporters. Parties need to bring their own. But if the parties can’t afford that, the only way to create an appellate record is a rather arcane process called a settled statement. Which is a narrative description, approved by the trial judge, of what happened during a proceeding. Very 18th century.

Monday, January 8, 2018

Park Rolls On

Shahbazian v. City of Ranch Palos Verdes, No. B271562 (D2d7 Nov. 22, 2017)

Some grumpy Palos Verdeans in a fence dispute with their neighbors sued a City for issuing an “over-the-counter after-the-fact permit” that approved the new fence. The City filed an anti-SLAPP motion, which the trial court denied on the basis that issuing a permit is not protected activity under Code of Civil Procedure § 425.16(b)(1). The City appealed.

It’s pretty much all Park from here. There, the Supreme Court explained that while governments do and can speak and petition, normal official acts of government are not speech or petitioning, even though they are often arrived at by speaking beforehand and conveyed though some communicative act. Like issuing a permit. So there’s no protected activity.


Friday, January 5, 2018

Through the McCarran-Ferguson Looking Glass

Citizens of Humanity, Inc. v. Applied Underwriters, Inc., No, B276601 (D2d2 Nov. 22, 2017)

When we talk about preemption and arbitration, we’re usually talking about federal law preempting a state law rule that says something isn’t arbitrable. But when it comes to insurance, that gets stood on its head. 

The McCarran-Ferguson Act, 15 U.S.C. §§ 1011–1015, says that federal law doesn’t regulate state insurance law unless the federal law is specifically addressed to the topic of insurance. It’s kind of a reverse preemption where state insurance law displaces federal laws of general applicability when it comes to insurance. 

One area where state insurance law does so is the Federal Arbitration Act. Under McCarran-Ferguson, state insurance laws that say insurance claims aren’t arbitrable trump the FAA’s generally applicable rule that federal law will make you arbitrate whatever the parties agree to arbitrate, subject to defenses that apply to any contract. Here, the parties selected Nebraska law, which includes a statute that says that insurance policy disputes aren’t arbitrable. So the superior court rightfully denied the motion to compel in this case.

There’s also a threshold issue of whether the McCarran-Ferguson issue should have been decided by the court or the arbitrator. The clause in this instance specifically delegated arbitrability questions to the arbitrator. Under the FAA, that usually means the arbitrator decides arbitrability. But Nebraska law says none of this can go to the arbitrator, so the attack on the arbitration provision was also an attack on the delegation clause. Under those circumstances, the court needs to decide the gateway choice of law question.


Thursday, January 4, 2018

Procedural Perfection Is a Lot to Expect

Laboratory Specialists Int'l, Inc. v. Shimadzu Sci. Indus., No. G054056 (D4d3 Nov. 21, 2017)

The contract in this commercial dispute selected Maryland law and a county in Maryland for venue. Defendant first demurred on forum nonconveniens, and after the court noted that was improper, it filed a proper motion to dismiss or stay under Code of Civil Procedure § 410.30. The court granted the motion, and Plaintiff appeals.

Plaintiff mostly lays its appeal on a technical argument that Defendant forfeited its chance to raise forum non by raising the issue in a demurrer. It points to § 418.10(e)(3), which says you forfeit the right to raise FNC if you don’t make a motion “at the time of filing a demurrer.” But Defendant did, in fact, raise the convenience of the forum at the time it filed a demurrer, so there’s no forfeiture. The fact that it did so in the demurrer—instead of a separate motion filed at the same time
is sufficiently substantial compliance to avoid a forfeiture. That’s the case even though forum non is not an appropriate grounds to demur. It was well within the trial court’s discretion to treat the request in the demurrer as a separate request to stay or dismiss under § 410.30.

So far as the merits of the motion go, the court finds that the forum clause was mandatory and that it covered the claims filed by Plaintiff. Which means the only question is whether enforcing the clause is unfair or unreasonable. Which it wasn’t. Finally, Plaintiff claims that the trial court erred by dismissing the action instead of just staying it. But Plaintiff didn’t make that complaint to the trial court, so the Court of Appeal declines to reach it.


Monday, January 1, 2018

No CC § 47(b) Protection for Cosby Nastygram.

Dickinson v. Cosby, No. B271470 (D2d8, Nov. 21, 2017)

This is a high-profile defamation case brought by Janice Dickinson against Bill Cosby and his Attorney after Cosby—through his Attorney—accused Dickinson of lying about her claim that Cosby raped her. The accusations of falsehood were contained in a press release, as well as in a demand letter sent to various media outlets threatening them against publishing any of Dickinson’s allegations. As is routine in defamation cases nowadays, this is all playing out in the context of litigation over an anti-SLAPP motion.

The procedural posture is a little complicated, but necessary to understand what’s going on. Dickinson first sued Cosby for defamation, to which Cosby responded with an anti-SLAPP motion. But Cosby’s motion papers intimated that Attorney made some of the statements without asking Cosby if the underlying facts were true. So Dickinson amended her complaint to add claims against Attorney. Attorney and Cosby then filed a regular motion to strike against the AC, on the grounds that Dickinson wasn’t permitted amend because of the pending anti-SLAPP motion. The trial court ultimately struck the AC, granted Cosby’s anti-SLAPP on the demand letter, but denied it on the press release.

The Court of Appeal goes in reverse chron order. So it starts with the regular motion to strike. The Court of Appeal had previously granted a motion to dismiss Dickson’s appeal as to Cosby on the amendment issue because it wasn’t an appealable order. But since Attorney was only named in the AC, as to him the motion strike was an effective final judgment; it resolved the whole case in his favor. So the Court finds it could reach the merits as to the Attorney.

On the flip side, Attorney wasn’t a party to Cosby’s initial anti-SLAPP motion, so he is not a proper party to the appeal for those issues.

Then the Court finds that a pending anti-SLAPP motion by one defendant does not block plaintiff from amending her complaint as a matter of right under the Code of Civil Procedure to add a new party who has not filed an anti-SLAPP motion. As the court sees it, § 425.16 does not actually preclude amending a complaint. Instead, the court cogently reads the cases that hold a plaintiff cannot amend her complaint while an anti-SLAPP motion is pending to really mean that the moving defendant is simply entitled to have his motion decided on the original complaint. The corollary to that is that a plaintiff can’t avoid a motion by withdrawing problematic allegations in an amended pleading.

So, as the court sees it, an amended complaint isn’t prohibited; the motion just remains directed to the original complaint notwithstanding any amendment. And if granted, the case against that defendant is over, amendment or not. It follows that an anti-SLAPP motion by one defendant does not preclude an amended complaint from adding a new defendant who wasn’t party to the motion. So the motion to strike was erroneously granted.

Moving on to the merits of Cosby's anti-SLAPP motion, there’s no dispute that the case “arises from protected activity.” As to potential success on the merits, a key issue is whether Attorney
’s demand letter to the media is covered by Civil Code § 47(b) litigation privilege. The court here finds it is not.

It’s well established that statements in demand letters sent in good faith and serious consideration of litigation are privileged against any torts. “Hollow threats of litigation,” however, don’t cut it. Noting that the question is essentially factual, the court puts the demand letter into the hollow threat category. It finds convincing (1) that the demand letter was sent only to media outlets that had yet to publish Dickinson’s story; and (2) that Cosby never actually sued any of the media outlets who received the letter but published the story nonetheless. (Indeed, as has become common with over-the-top Hollywood attorney demand letters, one online outfit published the letter too, basically daring Cosby to sue.) As the court explains, “these facts suggest that the demand letter was a bluff intended to frighten the media outlets into silence (at a time when they could still be silenced), but with no intention to go through with the threat of litigation if they were uncowed.”

The court goes on to find that Dickinson otherwise made a prima facie showing of the elements of her claims of defamation, IIED, and false light invasion of privacy. 

Reversed in part.