Sunday, November 23, 2014

Be Careful what You Wish for

Kight v. Cashcall, Inc., No. D063363 (D4d1 Nov. 4, 2014)

This case is a class action alleging violations of California’s dual-consent telephone eavesdropping statute, Penal Code § 632. Three years ago, plaintiffs were successful in an appeal wherein the court adopted many if not all of their liability theories. Kight v. CashCall, Inc., 200 Cal. App. 4th 1377 (2011). As pertinent here, the prior appeal determined that § 632 applies whenever a caller has a reasonable expectation that a phone call will not be secretly monitored. The test is objective, but it accounts for the totality of the plaintiff’s circumstances.

On remand, Cashcall moved to decertify the class. It argued that the experiences of the plaintiffs in their calls with Cashcall were so varied in the extent of their expectations of monitoring that individual issues would necessarily predominate such that class treatment would be inappropriate.  The trial court agreed and decertified the class.

The court of appeal first notes that a decertification shouldn’t just be a redo of the original certification. Some circumstances relevant to management of the class must change before the court can consider decertifying. But the intervening appeal’s clarification of the relevant legal standard provided those circumstances here. And when that standard is considered, the trial court did not abuse its discretion in decertifying the class because individual issues did, in fact, predominate. The illustrative experiences of the individual plaintiffs showed such a wide variety of experiences and expectations that there would be no manageable way to afford class treatment.


Saturday, November 22, 2014

Cops Took My Car. Unconstitutional!

Thompson v. Petaluma Police Dept., No. A137981 (Nov. 4, 2014)

Plaintiff contends that a provision in the Vehicle Code addressing vehicle impoundments is unconstitutional and that the City of Petaluma is acting unconstitutionally by expending funds to enforce it. The City demurred, both on the merits of the claim and on standing. The court here holds that plaintiff has standing to sue as a taxpayer under Code of Civil Procedure § 526a, which permits a taxpayer to sue for illegal expenditures of government money or waste. Although plaintiff is not a resident of Petaluma, he owns a business and pays taxes there. That’s enough under established law. And although plaintiff’s unconstitutionality theory is a dead-ender, he appears to be able to claim that the way the city is enforcing the impoundment statute does not jibe with the statutory text and any pertinent judicial gloss. He thus should be permitted to amend on remand. 

Reversed and remanded.

When it Comes to the Record, Designate or Forfeit

Aspen Grove Condo. Ass’n v. CNL Income Northstar LLC, No. C073530 (D3 Nov. 3, 2014)

This is a lawsuit involving damage to neighboring land due to the failure of a retention basin.  Most of the opinion deals with substantive issues involving injunctive relief, but there is one interesting point of procedure. The appellant was found to have forfeited its appeal on evidentiary issues. It designated only a partial reporters transcript and then failed to include the evidentiary issue in its identification of issues to be raised on appeal in its notice of designation of record, as is required under Rule of Court 8.130(a)(2) when the whole reporters’ transcript isn’t designated. Particularly because parts of the transcript that weren’t prepared involved some of the evidentiary issues, the court finds that the appellant failed to preserve the evidentiary issues.


We Don't Need Private Attorneys General to Combat Unlicensed Dentistry

Bui v. Nguyen, No. H039310 (D6 Oct. 28, 2014)

Plaintiff won a $200k verdict against a dental assistant who was masquerading as a dentist for negligently performed dental work. He also obtained a permanent injunction requiring the defendant to identify herself as a dental assistant in her advertising and to refrain from wearing a white dental lab coat. Casting the injunction as a public service, plaintiff sought attorneys’ fees under the private attorney general provision, Code of Civil Procedure § 1021.5. The trial court awarded the fees, but at a significantly reduced rate. 

The court of appeal reverses. An award of fees under § 1021.5 is appropriate when (1) plaintiff enforced an important public right; (2) the litigation conveyed an important benefit on the public; (3) private enforcement is necessary; and (4) private enforcement is burdensome, such that it warrants subsidizing successful plaintiffs

Here, the court finds that the third element is not satisfied. Generally private enforcement is necessary when public enforcement is unavailable or inadequate. The paradigmatic cases tend to involve government defendants because the government is unlikely to enforce the laws it is breaking against itself. When a defendant is a private party, however, the plaintiff’s efforts to get the pertinent regulators involved is relevant to the adequacy of public enforcement. Here, plaintiff did not submit any evidence that there had been efforts to get public regulators like the California Dental Board or the state AG to bring enforcement actions regarding the practice of unlicensed dentistry or false advertising about dental businesses. Nor did he provide any evidence that these regulators routinely ignore citizens’ complaints over these issue. In the absence of evidence of insufficient public enforcement, the trial court abused its discretion in awarding fees under § 1021.5.


Thursday, November 13, 2014

Sanctions Stick for Failure to Withdraw Moot Motion to Quash

Evilsizor v. Sweeney, No. A140059 (D1d1 Oct. 28, 2014)

Interesting discovery issue that comes up a lot. In a divorce case, husband subpoenaed some bank docs from wife. The docs, however, also contained private information about wife’s dad, who filed a motion to quash, without bothering to meet and confer. As soon as he found out, husband amended the subpoena to exclude dad’s info, and made various efforts to resolve any dispute.

But dad did not withdraw the motion to quash, and the husband was required to file an opposition, which sought sanctions under Code of Civil Procedure § 1987.2 for pursuing a substantially unjustified discovery motion. Dad then withdrew the motion before the hearing, which the trial court nonetheless held to address potential sanctions. The trial court ruled that, although the initial motion was not unjustified, husband went to lengths to address dad’s concerns and to avoid litigating the issue, but dad declined to resolve the issue after the subpoena was amended. It awarded a sanction of $2,225 against the father.

The court first addresses an issue of appealability.  Generally, under Code of Civil Procedure § 904.1, orders imposing sanctions of less than $5,000 are appealable under only upon final judgment.  The statute is ambiguous in that it addresses “parties,” but it isn’t clear whether it is directed to the parties to the action or the parties to the discovery motion. The court declines to resolve the issue and exercises its discretion—expressly afforded by § 904.1(b)—to take up the matter on a writ.

On the merits, § 1987.2, the quashal statute, permits the imposition of sanctions when a “motion was made” without substantial justification.  The court decides that “made” means not only when the motion was filed, but includes the time during which it was pursued. So by failing to withdraw the motion after it was no longer substantially justified, dad came within in the ambit of the court’s power to issue sanctions. Further, the trial court was within its rights to order attorneys’ fees, even though husband’s counsel was pretty quick to threaten sanctions and could have avoided the hearing and opposition just by informing the court that he had amended the subpoena to address the objections. Judging that was all within the sound discretion of the trial court and would not be second guessed on appeal.


Building Permit Does Not Include a Dose of Collateral Estoppel

Bowman v. Cal. Coastal Commission, No. B243015 (D2d6 Oct, 23, 2014)

A county imposed a beach access condition on granting a building permit, which the property owner did not challenge through administrative mandamus.  The owner never actually performed the permitted construction. The property owner later applied for a second permit to replace a structure on the property. The application also requested removal of the access condition. The county approved the request.

But the Sierra Club and the Surfrider Foundation appealed the removal of the condition to the Coastal Commission, which decided that the issue had been settled by the non-appeal of the first permit’s imposition of the condition. The court here holds that although collateral estoppel can arise from a quasi-judicial administrative decision, it would be inequitable to apply the doctrine here. The access easement would not stand up to the Nolan/Dolan takings test. And particularly given that the owner didn’t actually do the work under the first permit, it would be unfair to apply collateral estoppel to the present circumstances.


The "Wrongness" Exception to Collateral Estoppel

Gottschall v. Crane Co., A136516 (D1d2 Oct. 22, 2014)

Asbestos plaintiffs often sue numerous defendants who might have been the supplier of the asbestos that caused their disease.  Here, plaintiff sued a bunch of defendants in San Francisco Superior Court and a few more in the Northern District of California.  The federal case got transferred to the big federal asbestos MDL in Philadelphia, and the MDL panel ultimately dismissed the case based on the sophisticated user defense.  One of the defendants in the state court case then moved for summary judgment on the grounds that the plaintiff was collaterally estopped by the federal decision to deny the defense. The trial court granted the motion.

The court here declines to apply collateral estoppel. The federal court made an incorrect decision on a pure question of California law. Prior court of appeal cases have held that collateral estoppel will not bind California courts to erroneous interpretations of California law by non-California courts. Further, applying collateral estoppel to bind the plaintiff to an erroneous application of California law by a foreign court would work an injustice.


**If this ruling sounded a little strange, maybe it is. The California Supreme Court granted review on January 21, 2015.

Shady, Shady Stuff

Lofton v. Wells Fargo, No. A136626 (D1d3, as modified Nov. 20, 2014)

There are two wage-and-hour cases against Wells Fargo. One is a class action. The other is a 600 plaintiff mass joinder case with no certified class. One is in LA, the other in San Francisco. Although they are not coordinated, both cases allegedly resolve at the same mediation. The deal was that the class will settle for $19 million, the 600 plaintiffs will opt out, and then the 600 will settle for $6 million.

But when it comes time to get approval, the individuals don’t opt out. Instead, they file claims in the class settlement, apparently because that
s what their lawyers tell them to do. And nobody tells the court during the approval process that the individual case attorneys—the appropriately named “Initiative Legal Group”—now contend that the whole $6 million was to address their attorneys’ fees.

When one of the individual plaintiffs gets word of ILG
s initiative to steal the settlement fund from their clients, he sues ILG for breach of fiduciary duty. He also intervenes in the (already approved) class action case and gets a TRO from that court preventing ILG from dissipating the $6 million. 

The court here affirms that injunction, finding: (1) that issuing the TRO was within the trial court’s ongoing jurisdiction over a class action settlement under Code of Civil Procedure § 664.6, which includes the authority to act in equity; (2) that the trial court did not abuse its discretion in issuing the TRO; (3) that ILG’s constitutional and privacy objections are bogus; and (4) that ILG’s Evidence Code § 1152 settlement privilege objections were harmless or unfounded.


Wednesday, November 12, 2014


Kenne v. Stennis, No. B242262 (D2d5 Oct. 21, 2014)

Unsurprisingly, a complaint based on making false police reports and filing meritless civil harassment petitions arises from protected activity, for anti-SLAPP purposes. Similarly unsurprising is that the plaintiff could not show a probability of success because her claims were barred by the litigation privilege in Civil Code § 47(b), as well as other policy-based privileges. 

Affirmed in part and reversed in part.

Tuesday, November 11, 2014

Notice Not Necessary to Defaulted Discharged Debtor when Actually Acting Against Insurer

Weakly-Hoyt v. Foster, No. F067626 (D5 Oct. 21, 2014)

When a plaintiff seeks to recover against an insurance policy held by a bankrupt defendant, in order to obtain a default judgment, the plaintiff is only required to serve the insurer, not the defendant, with a statement of damages under Code of Civil Procedure § 425.11. Because a defendant whose debts have been discharged in bankruptcy faces no potential liability, that defendant can’t object to the default on the grounds of insufficient notice. Affirmed.

There's No Implied Consent Under the Stored Communications Act, But Coerced Consent Is AOK

Negro v. Superior Court, No. H040146 (D6 as modified Nov. 18, 2014)

Generally, the Stored Communications Act, 18 U.S.C. §§ 2701–12, prohibits the provider of an electronic communications service from divulging the contents of communications stored on its service. This is why you ordinarily can’t subpoena Google for the contents of your opponent’s gmail account, which is just what the real party did in this writ case.

There is an exception, however, for when the subscriber gives its consent. But the consent cannot be implicit. It must be real consent-in-fact. Thus, to the extent the trial court here denied a motion to quash based on implicit consent by the subscriber, it erred.

That said, courts have nevertheless recognized that parties to litigation can be compelled by the court to give their consent, even though that doesn’t jibe with the concept of consent as commonly understood. Here, after the petitioner’s motion to quash was denied, he was ordered by a Florida court to consent to Google’s disclosing his gmail to the real party—his opponent in that litigation. He abided by the order, so there was effective consent to require Google to produce the documents. 

Finally, the court rejects Google's argument that the Act immunizes it from participating in third party discovery. Thus, the court here declines to issue a writ requiring the trial court to quash the subpoena.

As a side point, the subscriber’s consent was provided after he filed his writ petition in this case. In relying upon the evidence of consent as a basis to deny the writ, the court notes an exception to the general rule that the record is static on appeal. An appellate court proceeding in mandate can consider all relevant evidence, including facts not existing until after the petition was filed, particularly when the additional evidence may validate an action that would otherwise have to be set aside. Something to keep in mind when engaged in writ practice in a fast-moving and still developing case.

Writ granted, but only to require the trial court to correct its basis for denying the motion to quash.

One for the Right Side of "Arising From"

Old Republic Constr. Program Grp. v. Boccardo Law Firm, No. H037989 (D6 Oct. 21, 2014)

In a very thorough opinion, the court here gets the point that the Lunada court missed a few weeks ago. In determining whether the “arising from” prong of the anti-SLAPP analysis has been satisfied, the court should look to what acts the plaintiff contends constitute the allegedly wrongful or injurious conduct. (As opposed to other acts that, while having a causal significance to the story of the case, are not themselves the conduct that forms the basis of the claims.) If the defendant has engaged in protected conduct, but the plaintiff’s case does not actually arise from that conduct, the standard has not been met.

Thus, when the defendant enters a stipulation to put client funds into a trust account but plaintiff’s claim is that defendant wrongfully withdrew those funds, the case arises from the withdrawal, not the stipulation.  And because there is nothing communicative or public-interest-related about taking money out of a bank account, protected activity is not the basis of the claim. So the anti-SLAPP statute does not apply.


Monday, November 10, 2014

No Third Bites at the Apple

Nixon Peabody v. Superior Court, No B256873 (D2d4 Oct. 17, 2014)

Plaintiff voluntarily dismissed its case in LA Superior and a related case in the C.D. Cal, which lead to the involuntary dismissal with prejudice of a third, related, federal case under the “two dismissal” rule. See Fed. R. Civ. P. 41 (a)(1)(B) (second dismissal is counted as on the merits if plaintiff has previously dismissed a prior case
based on or including the same claim). Plaintiff then moved under Code of Civil Procedure § 473(d) to revive the LA Superior Court case, arguing that because its attorney had not informed it of the consequences of the dismissal, it should be relieved from default. The trial court said ok, but the court of appeal says no dice. Section 473(d) might permit relief when an attorney dismisses a client’s case without authorization, but it doesn’t apply when the attorney just fails to explain the consequences of a dismissal.

Writ granted.

Saturday, November 8, 2014

The Decider Decides

Network Capital Funding Corp. v. Papke, No. G049172 (D4d3 Oct. 9, 2014)

The court rules that an arbitration agreement between a company and one of its employees did not clearly leave it up to the arbitrator to decide whether class arbitration would be permissible. The issue was thus a question of substantive arbitrability for the court to decide. Moreover, the trial court did not err in deciding that the agreement did not, in fact, permit class arbitration. 


**Note: The Supreme Court granted review on January 14, 2015, likely to resolve the split of authority on who decides the issue of the permissibility of class-wide arbitration that was addressed in Sandquist, in which review had been granted two months prior.

Friday, November 7, 2014

Cop Union Is a Private AG Too

Indio Police Command Unit Assoc. v. City of Indio, No. G050051 (D4d3 Oct. 9, 2014)

The court here upholds an attorneys’ fee award under the private attorney general doctrine. See Cal. Code Civ. Proc. § 1021.5. Plaintiffs—a police officers’ union—sued to enforce a statutory collective bargaining right. The trial court did not abuse its discretion in finding that that right was an important right affecting the public interest, which is the factual predicate to awarding fees under the doctrine. Similarly, the court did not err in finding that the other two elements of the doctrine—that the litigation convey a significant benefit on the general public or a large class of persons, and that there are financial burdens that disincentivize private enforcement—were satisfied.


Runaway anti-SLAPP Decision Eats Declaratory Relief

Lunada Biomedical v. Nunez, No. B243205 (D2d5 Oct. 9, 2014)

This opinion says that when a claim seeking a declaration of non-liability under the CLRA is met with an anti-SLAPP motion, the declaratory relief cause of action “arises from” the defendants’ CLRA notice letter. Under the test it states, a declaratory relief claim satisfies the first prong of the anti-SLAPP analysis so long as a communication between the parties is needed to show a live controversy. Taken at face value, that would mean that any declaratory relief claim seeking a declaration of non-liability satisfies the first step of the anti-SLAPP analysis.  That can’t be the law.

Guilty, Guilty, Guilty!

CB Richard Ellis v. Tera Nova Consultants, No. G049803 (D4d3 Oct. 7, 2014)

During an effort put a defunct LLC’s members on the hook for its debts, the trial court let the jury see an arbitral ruling—complete with reasoning and factual findings—against the LLC that was the basis of those debts. That was error in that it potentially suggested that the defendants—nonparties in the arbitration—might be bound by the award. The ruling was also hearsay. The court, however, finds the mistake harmless. 

There’s also a jury misconduct issue. Two jurors submitted very brief declarations under Evidence Code § 1150 that another juror had said he knew the defendants and that they were “guilty, guilty, guilty.” That juror, however, submitted a detailed declaration saying he did nothing of the sort, and the court finds that it was not an abuse of discretion for the trial court to rely on the detailed declaration to deny a new trial motion. That seems right. But as I’ve said before, our courts really need to get out of this business altogether.


Saturday, November 1, 2014

The ESI Dream of the '90s Is Alive in State Court

Vasquez v. Cal. Sch. of Culinary Arts, No. B250600 (D2d2 Sept. 26, 2014)

In responding to a business records subpoena for student loan files, Sallie Mae jerked around some plaintiff lawyers and was cagey about the cost and burden of compliance. After Sallie Mae
s motion to quash was denied, the trial court awarded about $20k in sanctions because its resistance was not substantially justified.  In an opinion that addresses Code of Civil Procedure § 1985.8—rarely cited in any opinionthe court affirms.

The court first notes that the fact that a subpoena seeks ESI from a third party does not automatically make it unduly burdensome.  (Because it’s not, like, 1990!)  It also rejects Sallie Mae’s argument that “documents” didn’t exist because the information was contained in an electronic database and producing what plaintiffs wanted would entail the creation of “new” documents. That the court's reasoning is based on a 2006 federal district court case—there is no California authority on point—is itself telling on the discouraging state of the state of the art on ESI discovery law in California state court.

So the rule is that if you want database information from a third party, you can get it, so long as it is maintained in a way that, even with some work, it can be extracted from the database.  You do, however, have to pay the costs of extraction.  On the other hand, the third party is obliged to provide a reasonable estimate of the costs of compilation. And if the third refuses to do so and acts unreasonably, it will subject to sanctions for a lack of substantial justification.