Wednesday, May 28, 2014

Court Stands up for Brinker in Decertification Appeal

Hall v. Rite Aid Corp., D062909 (D4d1 May 16, 2016)

This is a class action against Rite Aid for not giving seats to cashiers. The trial court originally certified a class on the issue of whether the nature work performed by the cashiers while stationed at their registers reasonably permits the use of seats—the standard under the relevant Wage Order 7-2001.  But Rite Aid successfully moved to decertify the class right before trial, based on an argument that the Wage Order required an analysis of the nature the duties of the job as a whole. It successfully argued that individual issues predominated because there was a significant variety as to how much time its employees spent ringing up sales versus other duties that are clearly inconsistent with sitting down.

On appeal, like so many cases decided over the past year, the court reverses based on the California Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), which held that the class certification inquiry needs to focus on the plaintiff’s theory of liability without resolving the theory’s legal or factual merits.  Plaintiff’s theory here was that the employees’ duties while at their registers were consistent with their use of seats.  Under that theory, individual issues did not, in fact, predominate over classwide ones.  The trial court thus abused its discretion in decertifying the class. Under Brinker, whether or not the plaintiff’s theory was based on a correct reading of the Wage Order was not an issue that could be resolved on a class cert motion. Instead, Rite Aid could test the theory based on a motion for judgment on the pleadings or summary judgment.


The Order of Operations

W&W El Camino Real, LLC v. Fowler, No. D062977 (D4d1 May 16, 2014)

This appeal mostly deals with the interpretation of Civil Code § 2482.5, the Right to Farm Act, which affords a defense against nuisance liability for certain commercial agricultural activity. The jury in the case had rendered an inconsistent special verdict finding both that the defense applied, but also that the defendant was liable. After reversing based on the scope of the Act, the court adds that on remand, the special verdict should walk the jury through the elements of the defense first, in order to avoid any inconsistency

Dawn, I Want You Back . . .

In re Marriage of Valli, No. S193990 (Cal. May 15, 2014)

Frankie Valli and his ex-wife are in a very long-running dispute about whether a life insurance policy that Frankie bought during the marriage is community or separate property. In ruling for the ex-Mrs. Mr. Valli,* the Cal. Supremes hold that the Family Code’s rules about the characterization of community property trump Evidence Code § 662’s presumption that a title holder is the actual owner of property. Justice Chin’s concurrence elaborates on the issue, explaining key differences between California’s Spanish-based family law and that in common law jurisdictions.

When the Refs Pick the Refs....

Tiri v. Lucky Chances, Inc., No. A136675 (D1d4 May 15, 2014)

The court of appeal holds that an arbitration agreement effectively delegated the issue of arbitrability to the arbitrator and that because the plaintiff could not establish that the delegation itself was unconscionable, the delegation should be enforced.

Monday, May 19, 2014

Fun Times with the Interstate & International Depositions & Discovery Act

Digital Music News LLC v. Superior Court, No. B242700 (D2d1 May 14, 2014)

 The court here grants a writ. It orders the trial court to vacate an order compelling the production of documents subpoenaed by a party in an out-of-state litigation.

This Lawsuit Is Not Triangular ...

Orion Commc’ns v. Superior Court, No. D064979 (D4d1 May 14, 2014)

A judgment creditor moved to amend a judgment to add a new defendant as an alter ego or successor of the original judgment debtor. The new defendant filed a declaration to strike the judge under Code of Civil Procedure §170.6. The trial court accepted the strike, notwithstanding the fact that earlier in the case, the judgment debtor had previously filed a strike of its own.

The court here grants a writ and orders the trial court to strike the strike. Under § 170.6, each “side” of a case only gets one strike. That’s the case even when a party joins the case after its side has used its strike. There can, on occasion, be more than two “sides” in a case, as when parties on the same side of the v. are nonetheless substantially adverse. But the general rule is just two sides. In order to substantiate otherwise, the moving party is required to provide evidence establishing its adversity against the prior striker. Here, the new defendant argued that it might potentially be adverse to the debtor. But it didn’t provide any evidence in support. And in any event, the arguments it made were speculative and did not demonstrate the requisite adversity.

Writ granted.

Thursday, May 15, 2014

No Arbitration for Car Wash Class

Carmona v. Lincoln Millennium Car Wash, Inc., No. B248143 (D2d8 May 9, 2014)

The case is a wage-and-hour class action against several L.A. area car washes. The class plaintiffs’ employment contracts with defendants include, amongst myriad inscrutable provisions and typos, a really poorly drafted arbitration clause and a strong confidentiality agreement. (Because car wash laborers are obviously privy to all kinds of sensitive commercial information. Did you know they clean the cars with water?!? And soap!?!) The trial court refused to compel arbitration, which the court of appeal affirms on unconscionability grounds. 

The arbitration agreement was procedurally unconscionable because it was adhesive, because key provisions were not translated into Spanish (although plaintiffs were Spanish speakers) and because the AAA arbitration rules that were incorporated into the contract were not provided to the employees. 

It was also substantively unconscionable. In particular, the agreement one-sidedly required employees to arbitrate while giving the car washes the option of seeking relief in court for breaches of the confidentiality agreement. It also unilaterally gave the employer the right to recover its fees, which the court finds unconscionable notwithstanding Civil Code § 1717’s automatic rendering of the obligation as mutual. (You apparently can’t get out of substantive unconscionablity by arguing that the parts of the agreement are so one-sided that they can’t be enforced. Good to know.) Finally, the agreement unilaterally required the employees to consult with the car washes before seeking any kind of judicial relief. This kind of “free peek” provision gives a substantial advantage to the employer that the employee does not have. Under the circumstances, the agreement was unconscionable, so plaintiffs could not be compelled to arbitrate.


Tuesday, May 13, 2014

Down the Ol’ Memory Hole

So published court of appeal opinions are permanently available because they are, well, published. And unpublished opinions have a Westlaw database where they can be looked up, even if they cant be cited. But how do you find the unpublished parts of partially published opinions? I can’t seem to find them on Westlaw, and after the slip opinions disappear from the first page of the listing on the courts website—which, e.g., for the Second District goes back about two years—they appear lost from the public record unless someone wants to send a runner to pull them from the file. 

Am I missing something?

Net Monetary Recovery

Desaulles v. Cmty. Hosp. of the Monterrey Peninsula, No. H038184 (D6 May 2, 2014)

In a settlement in an employment case, the employer case agreed to pay the employee $23,500 in exchange for dismissal of two of her claims, and the entry of a judgment awarding nothing, which would supposedly permit plaintiff to appeal some unfavorable in limine rulings that effectively gutted the rest of her case. The question is: For the purpose of awarding costs, who was the prevailing party? Is the plaintiff who got a settlement or the defendant who got a judgment that says plaintiff takes nothing? Because the parties’ agreement was silent as to costs, the issue comes down to Code of Civil Procedure § 1032(a)(4) which defines a prevailing party for cost purposes as, among other definitions, “the party with a net monetary recovery.”  Unsurprisingly—at least to me, given that the case ended with plaintiff in possession of a pile of defendant’s money—the court concludes that a plaintiff who received money in exchange for a dismissal and a stipulated judgment for no relief did, in fact, receive a net monetary recovery and was thus entitled to its costs as the prevailing party. But only after wading through a confusing body of precedent on the issue.


**Note: Review granted July 23, 2014.

A Lesser Known Motion

Biron v. City of Redding, No. C071094 (D3 Apr. 30, 2014)

I once represented a plaintiff in a case with alter ego issues. At the close of our evidence, defendants filed a motion for nonsuit on alter ego, which the court denied. Had there been a seasoned state court procedure geek amongst the fine lawyers representing defendants, they would instead have done what the defendants did here: File a motion for judgment under Code of Civil Procedure § 631.8(b). 

Why? Because alter ego is an equitable issue where the judge is the trier of fact, even if the underlying claim is a legal one that goes to the jury. A motion for judgment is filed at the same time as a nonsuit motion—the close of plaintiff’s case—but it can be employed only in a bench trial. Unlike a nonsuit motion, which just asks if the plaintiff came forward enough evidence to get to the jury, on a motion for judgment the court can weigh plaintiff’s evidence after he rests and find it insufficient to meet the overall burden of proof. That weighing is permitted because, at the end of the day, the court will be the trier of fact. Why waste time for a defense case if plaintiff’s case is unconvincing? (The Federal rules contain a similar procedure in Rule 52(c). See Ritchie v. United States, 451 F.3d 1019, 1022 (9th Cir. 2006).)

Would it have made a difference? Probably not. But our case in chief was mostly focused on the underlying merits and the worst of the alter ego evidence came out during the cross of witnesses that defendants called in their own case. (Among other things, seems there was some confusion about who was the actual CFO of the principal defendant, with two separate defense witnesses claiming the role.) Based in large part on that evidence, we won a bench verdict on alter ego, which was affirmed on appeal.

Wednesday, May 7, 2014

Another Fine Use of Appellate Resources

Schwarzburd v. Kensington Police Protection & Cmty. Svcs. Dist. Bd., No. A139630 (D1d1 Apr. 30, 2014)

The underlying case is a writ proceeding against a NorCal Community Services District and three of its board members brought by two other board members who dissented from the board’s 3-2 vote to extend a meeting past 10 o’clock at night. They also challenged a subsequent 3-2 vote to approve a salary increase to the District’s police chief.  All of the defendants filed a SLAPP motion, which the trial court denied.

The court first holds—errrr, decides? I'm not going to be able to keep that up—that the public interest exception to the anti-SLAPP statute in Code of Civil Procedure § 425.17 does not apply because challenging an extension of a public meeting “does not operate to enforce an important right affecting the public interest.” Indeed, given that the result is cutting off debate, it is anathema to it. Further, at least as to the individual board member defendants, private enforcement is not necessary because the petitioners have recourse against the board itself.

Turning to the anti-SLAPP analysis, the court holds that voting by legislative officers in public meetings is, in fact, protected activity under § 425.16(e)(2) and (4). Thus, the trial court erred in its determination that the case against the three board members did not arise from protected activity. As to the board itself, however, the trial court was correct. The anti-SLAPP statute does not apply to the official acts of public entities themselves. But as to the merits of the individuals claims, there were none, so the motion should have been granted.

Reversed in part.

Some Dicta on the Nature of Holdings

In re Marriage of Boswell, No. B249141 (D2d6 Apr. 28, 2014)

As the court explains, “this is another frivolous family law appeal.” Somewhat inexplicably, the middle of the opinion contains “A Digression on the Use of the Word ‘Holding’” which explains that the term “holding” should be used only to describe the ratio decidendi of an appellate opinion. Thus, the opinion advises, a trial court never renders holdings, and even in an appellate case “holding” does not mean the conclusion, but the statement of the controlling rule. So, if the court is right, I apparently have used the term incorrectly on many occasions. Although that doesn’t matter so much, because, as the court explains—reminiscent of a classic Ninth Circuit dissent by the late Judge Pamela Rymer—its opining on the nature of holdings is dicta.  Cf. Barapind v. Emnoto, 400 F.3d 744 (9th Cir. 2005) (en banc) (Rymer, J., dissenting) (arguing that that the majority opinion’s “discussion about dicta is dicta”).

Taking Primary Rights (Too) Seriously

DKN Holdings v. Faerber, No. E055732 (D4d2 Apr. 25, 2014).  

The court holds that a judgment that plaintiff won against one of three jointly and severally liable defendants is res judicata as to the other two because the claims against all three defendants assert the same primary right. Thus, as to these defendants—who were sued in the original case but dismissed without prejudice because they weren’t served—plaintiff cannot get any recovery in a later filed action. I’m not so sure.