Thursday, August 28, 2014

Demurrer, Amendment, Demurrer, Answer

Carlton v. Dr. Pepper Snapple Corp., No. E056566 (D5 Aug. 14, 2014)

The issue here concerns the timeliness of a demurrer after a prior demurrer is granted with leave to amend. As is typical in California, a Rule of Court and the Code of Civil Procedure are not too clear and seem to conflict. Rule of Court 3.1320(j) says that the defendant needs to respond to the “remaining causes of action” in a pleading within ten days if: (1) a demurrer is overruled, (2) it is sustained with leave to amend and no amendment follows; or (3) the demurrer is sustained without leave as to other causes of action. But Code of Civil Procedure § 471.5 affords thirty days to respond to an amended complaint.  The court here sensibly harmonizes the two rules: Rule of Court 3.1320(j) applies when a plaintiff does not file an amended complaint, while § 471.5 applies when he does.

Weeping and Gnashing of Teeth...

Chubb & Son v. Superior Court, No. A140860 (D1d5 Aug. 12, 2014)

Plaintiff is an insurance defense lawyer. Although she was employed by a firm, essentially all of her legal work consisted of defending the insureds of Chubb, petitioner on this writ. She claims that after she took medical leave in connection with a pregnancy, her performance evaluations—which included commentary by Chubb and its insureds—inexplicably declined, ultimately leading to her termination. She sued both her firm and Chubb for employment discrimination.

Plaintiff requested her performance reviews and related documents in discovery. Chubb took the position that since plaintiff was privy to client communications within the documents, plaintiff herself could review them, but that she could not show them to her attorneys. Similarly, Chubb took the position that the privilege barred it from providing unredacted documents to its own litigation attorneys for their review. The trial court, relying on Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294 (2001), held that the attorney-client privilege did not preclude revealing the documents to the parties’ litigation attorneys. Chubb took a writ.

The first district denies the writ. It finds that Fox Searchlight controls. In that case, an in-house attorney sued Fox for pregnancy discrimination. (Sound familiar?) In the course of resolving an anti-SLAPP motion, the court held that it was permissible for the attorney to disclose her former client’s—the defendant’s—privileged communications to her own attorney for the purposes of evaluating an employment litigation. The facts at hand here are not meaningfully distinguishable. In reaching this result, the court rejects a number of hyperbolic arguments advanced by Chubb, including a claim that permitting attorneys embroiled in employment litigation to disclose privileged client information to their litigation counsel would “spell[ ] doom for the attorney-client relationship[.]”

Not so much.

Writ denied.

Monday, August 18, 2014

Within the Jurisdiction . . .

Rebolledo v. Tilly’s, Inc., No. G048625 (D4d3 Aug. 6, 2014)

The court here holds that an arbitration clause’s exclusion of “any matter within the jurisdiction of the California Labor Commissioner” applies to wage claims brought in superior court when they could have been brought before the Labor Commissioner. Those matters are thus within the Commissioner’s concurrent jurisdiction, even if the plaintiff did not elect to bring them in that forum. So the employee can’t be compelled to arbitrate those claims.


Herr Mercedes Ist Nicht Hier zu Hause

Young v Daimler AG, No. A135995 (D1d4 Aug 5, 2014)

Plaintiffs appeal an order granting a motion to quash service on Daimer AG, because the court lacked general personal jurisdiction over that defendant. Just this past January, the U.S. Supreme Court held that the very same German company was not subject to general personal jurisdiction in California. See Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746 (2014). So the only thing surprising about the result of this appeal is that the panel granted a request to publish it.


Wednesday, August 13, 2014

Sliding Scale or Slippery Slope?

Bristol-Myers Squibb v. Superior Court, No. A140035 (D1d2 July 30, 2014)

The case is a coordinated mass tort proceeding concerning alleged defects in Plavix. Most of the plaintiffs are Californians, but a significant minority are not. Defendant BMS moved to quash service from the out of state plaintiffs, arguing that the court lacked personal jurisdiction to the extent that the claims arose from out-of-state injuries. The trial court denied the motion, finding that BMS was subject to general jurisdiction in California. The court here denies a writ, agreeing that there’s personal jurisdiction, but for different reasons.

With a Title Like Bloxham v. Saldinger, this Must Be a Real Property Case

Bloxham v. Saldinger, No. H038040 (D6, as modified, Aug. 27, 2014).

In this case about a property line dispute, most of the opinion deals with land surveying issues dating back to the early settlement of California. The prevailing plaintiffs, however, cross appeal because the trial court declined to award them fees under Code of Civil Procedure § 2033.420 for the cost of proving a fact that had been denied in a request for admission. In affirming, the court explains several key aspects of the law concerning sanctions for denying RFAs that ultimately prove true at trial.

First, a party can’t necessarily deny based on lack of knowledge or that the RFA calls for expert opinion. The party must make a reasonable investigation. If it fails to do so, a denial for lack of knowledge merits cost shifting. Second, sanctions are only available when the RFA concerns a material issue. That sinks the plaintiff’s argument here because the RFA asked about the accuracy of the description in the plaintiff’s deed. The contested issue in the case, however, wasn’t the accuracy of the deed. It was the location of the boundary line based on the deed’s descriptions, which referenced landmarks that were no longer readily ascertainable. The RFA thus did not address an issue of “substantial importance,” so sanctions were not merited under § 2033.420(b)(2).  Finally, although plaintiffs’ demanded their full fees incurred at trial due to the denial of the RFA, § 2033.420(a) entitles them only to the expenses incurred in proving that the denial was not correct. Because the accuracy of the deed’s description was never disputed at trial, plaintiffs failed to show how they incurred any expense in proving that the description was, in fact, correct.


Clarifying the Burdens

Collin v. Calportland Co., No. C0635875 (D3 July 30, 2014)

This is an asbestos case, where the trial court granted summary judgment on product ID. The particulars don’t really matter much. But there are two useful statements on the SJ standard. First, the case clearly states that a moving defendant’s burden is to come forward with evidence that raises an reasonable inference that plaintiff can’t prove an element of her claim. That’s always been the standard, but the clear articulation is helpful. Second, the court makes the point that a moving party is not obligated to “to set forth all material evidence” that might undermine its initial burden on the motion, so long as the omission is not “an attempt to mislead the trial court about the state of the discovery record[.]” Given that a recent case suggests that evidence produced by the moving party after a motion for summary judgment is filed can sometimes be considered in assessing the moving party’s initial burden, this is also a helpful clarification for parties moving for summary judgment.

Affirmed in relevant part and reversed on other issues.

Goods and Services in the Digital Age

Demetriades v. Yelp, No. B247151 (July 24, 2014)

A restaurant proprietor sued Yelp for false advertising, claiming that Yelp’s statements about the quality and accuracy of its review filtering software were false and misleading. Yelp responded with an anti-SLAPP motion, arguing that the statements were protected activity under Code of Civil Procedure § 425.16(e). But according to the court, that doesn’t matter, because the statements at issue fall within the commercial speech exception in § 425.17(c). The exception applies when (i) defendant is in the business of selling goods or services, (ii) the statements at issue are statements of fact about those goods or services, (iii) the statements were made for the purpose of procuring a transaction in those goods and services, and (iv) the statements are directed to likely consumers of defendant’s goods or services. Those requirements were satisfied here. Although user reviews posted on Yelp are generally outside the exception, Yelp's statements about the quality of its own filtering software are not. The latter are clearly aimed at encouraging businesses to buy ads on the Yelp platform.


Tuesday, August 12, 2014

Voluminous Hearsay . . .

Golden State Coring & Pipe Jacking Inc. v. E. Muni. Water Dist., No E054618 (D4d2 July 23, 2104)

This is an appeal of an order granting summary judgment in a construction dispute. It turns on whether there were stoppages of work. In support of its motion, defendants provided a declaration from their attorney, who purported to summarize voluminous records produced in discovery, to the effect that such stoppages did, in fact, occur. The court here finds that sufficient because Evidence Code § 1523(d) permits oral testimony of the contents of writings if “the writing consists of numerous accounts for other writings that cannot be examined in court without great loss of time, and the evidence sought from them is only the general result of the whole.” Further, because the plaintiff did not actually contest that the stoppages happened, even if it was error to admit this evidence, there was no prejudice meriting reversal.

Justice King dissents. He makes the point—well borne out in the case law—that while § 1523(d) might provide a vehicle for secondary proof of the contents of voluminous records, it does not permit an end run around the hearsay rule. If records being summarized are inadmissible hearsay, they are not rendered admissible by summarizing them. So if a party wants to prove the truth of contents of documents that are being summarized, it must also lay foundation that the records themselves are not hearsay or subject to an exception. The most common exception is business records. Because the declaration in this case did not lay that foundation, and because the defendant didn’t otherwise provide foundational evidence that the exception applied—such as a custodian of records declaration under § 1561—the summaries weren’t admissible even if they satisfied the secondary evidence rule. 


The Man Wins, the Attorney Doesn't Lose, the Client Loses ...

Settle v. State of California, No. B249236 (D2d6 July 23, 2014)

Code of Civil Procedure § 1038 requires an award of costs (including attorneys’ fees) to a government entity defendant in that wins summary judgment if the court finds that plaintiff lacked a reasonable basis to bring suit. In this case, after granting the state’s summary judgment motion, the trial court assessed about $11,500 in costs and fees against both plaintiff and her attorney, jointly and severally. Section 1038, however, is silent about whether costs can be assessed against an attorney. Given the statute’s complete absence of any reference to attorneys, and in light of the other statutory remedies available to punish attorney participation in frivolous litigation—such as sanctions under § 128.7—the court here (employing some funny metaphors) finds that § 1038 does not authorize awards against attorneys.


Typical Post-Trial Madness

Ochoa v. Dorado, No. B240595 (D2d3 July 22, 2014)

This rear-ender auto accident case is a glorious procedural mess. 

Wednesday, August 6, 2014

This Settlement Is Really Just a Sale . . .

Luckey v. Superior Court, No. B253892 (July 22, 2014)

Plaintiff brings a class action against a retailer for violating FACTA, which prohibits the printing of certain credit card information on a customer receipt. After an early mediation before a retired judge, a class action settles. The class had not yet been certified. 

The terms of the settlement lookahem—a little shady. The plaintiff attorneys get $300,000 and the members of the class get $5 off any $25 purchase from the defendant during a particular week. Apparently, every other customer of the defendant who shops during that week also gets the same deal. In exchange, the class releases its FACTA claims, which carry statutory damages of $100-1,000 per count. 

The parties stipulate that a temporary judge can hear the motion to approve the settlement. Coincidentally, the temporary judge they agree to is the same judge that conducted the mediation. Because, surely the retired judge who brokered the settlement is in a perfectly objective position to opine upon whether he got the parties to a fair deal! The trial court, however, refuses to approve the stip, reasoning that the class representative has no authority to consent to a temporary judge on behalf of the absent members of an as-yet-uncertified class. Both parties seek writ relief.

Interestingly, because both sides agree that the trial court should be reversed, there is effectively no real party in opposition to the writ. The court of appeal, however, requested a response from the superior court itself. Although the superior court is generally only a nominal party on a writ, in certain limited circumstances—those addressing the court’s procedures or uses of its resources—it can provide a response. This was one of those circumstances.

The court goes on to agree with the superior court. The state constitution, the rules of court, and concerns of public policy require all “parties litigant” to consent to the appointment of a temporary judge.  If a class has not been certified, the putative class rep does not have the authority to bind absent members of the class to such an agreement.

Writ denied.

Death Knell on Class Claims

Sandquist v. Lebo Automotive, No. B244412 (D2d7 July 22, 2014)

In this putative employment class action, the trial court in this case granted defendant’s motion to compel arbitration. In the process of doing so, it also struck plaintiff’s class allegations without prejudice because a class action waiver provision in the employment agreement ostensibly precluded litigation on a classwide basis.  In a later order, the court dismissed the class claims with prejudice. 

The court first holds that, although an order compelling arbitration is generally not appealable, the second order here is. Under the “death knell doctrine,” an order that is tantamount to a dismissal of the claims of the absent class members can be appealed. The trial court’s order striking plaintiffs’ class allegations did not meet that test—claims dismissed without prejudice are not effectively terminated. But the later order did. And even though plaintiff’s notice of appeal cited only the first order, the court construes the notice liberally to find that plaintiff was effectively appealing both orders.

As to the merits, the trial court should not have struck the class allegations. That issue, which required the court to interpret the agreement, should have been reserved for the arbitrator to decide. Although the precedent is split on the issue, the majority rule is that whether class-wide arbitration is barred is a procedural issue that falls within the arbitrator’s purview, as opposed to a more fundamental question of whether the parties actually agreed to arbitrate, which is reserved for the court to decide. The court here follows that rule.


**Note: The Supreme Court granted review on November 12, 2014. Given the similar grant in Network Capital Funding, it would seem that the court will resolve the split referenced above.

Friday, August 1, 2014

Timing Issues Can Make Sumary Judgment Burdens Tricky

Ganoe v. Metalclad Insulation Corp., No. B248941 (D2d3 July 21, 2014)

What happens when a moving defendant relies on factually devoid interrogatory responses in meeting its initial burden on a motion for summary judgment, but plaintiff then amends those responses to account for documents produced after defendant filed its motion?

Yet Another Arbitration Decision

Galen v. Redfin Corp., No. A138642 (D1d1 July 21, 2014)

An arbitration clause in plaintiff’s employment contract says that all disputes “arising out of or related to this Agreement . . . shall be resolved by binding arbitration within the State of Washington.” Unsurprisingly, the court holds that a broad clause like that encompasses a statutory claim alleging misclassification as an independent contractor. As the California Supreme Court recently addressed in the class action context , the employee/independent contractor distinction turns principally whether the employment contract gives the company the right to control the worker’s performance. So a dispute over classification certainly relates to the agreement. Nor does the court find the arbitration agreement to be unconscionable. Its obligations are mutual and the fact that it provides for prevailing party attorney’s fees and choice of venue in defendant’s home state did not make it fundamentally unfair.


**Note: Review granted, November 12, 2014.