Friday, July 29, 2016

If I Say Glitter Gave Me IIED, Will Mariah Win an Anti-SLAPP Motion?

Brodeur v. Atlas Entertainment, Inc., No. B263379 (D2d8 Jun 27, 2106)

There’s a scene in American Hustle where Jennifer Lawrence’s character blows up a microwave oven by cooking some food that is wrapped in foil. During the course of an argument about it between her and her husband—played by Christian Bale—Lawrence yells that she had “read that it takes all of the nutrition out of our food.” When Bale proclaims that’s “bullshit,” Lawrence says she read it in an article by “Paul Brodeur.”

American Hustle
was loosely based on the FBI’s late 1970s Abscam sting operation, which took down six Congressmen and various other politicians on corruption charges. Although the caper at the film
s core is mostly made up, the movie weaves various historical facts from the 1970s into the plot. As the opening title explains: “Some of this actually happened.” One of these historical facts is that Paul Brodeur is a real dude who—in 1977—wrote a series of articles about the hazards of microwave radiation in the The New Yorker and then book called The Zapping of America. Brodeur’s work did not, however, claim that microwave ovens render food un-nutritional.

Brodeur sued the studio and various others associated with the film, claiming that the movie’s attributing to him a false scientific claim he never made defamed him. The studio filed an anti-SLAPP motion, which the trial court denied because American Hustle did not entail “a public issue or an issue of public interest.” The studio appeals.

The Court of Appeal finds that the subject matter of American Hustle is sufficiently a matter of public interest to meet the first prong of the analysis. As the court explains it: “we can see no basis for concluding that a farcical scene about microwave ovens—clearly emanating from matters in which the public was interested during the relevant decade—is anything other than protected activity within the meaning of the anti-SLAPP statute.” I suppose. And because the offhand comment of a fictional character (and a character generally portrayed as wacky and a little unhinged at that) is not the kind of thing that anyone would perceive to be an assertion of objective fact, there’s just no actionable defamation and thus no chance of success. So the motion should have been granted.

I don’t find the court
’s arising from analysis very satisfying. Suffice it to say, the anti-SLAPP statute and the analysis it entails do not line up very coherently with lawsuits arising from fictional works of art. The conduct and speech at the heart of the statute’s protections are two Ps in SLAPP: “Public Participation.” So it covers litigation and other forms of government petitioning. It also protects statements in public fora and “other conduct in furtherance,” but for these two latter categories, the statements or conduct must be connected to a public issue. The type of stuff the legislature had in mind was “participation in matters of public significance,” see § 425.16(a), i.e., political stuff, albeit broadly construed: speechifying, rallies, protest, pamphleteering, non-fiction journalism, etc.

While art is clearly and deservedly entitled to the strong protections of the First Amendment, not all First Amendment protected activities are addressed by the anti-SLAPP statute. And, frankly, they don’t need to be. No doubt, we intuitively want art to be protected by the anti-SLAPP regime, because, after all, only jerks sue people for making art. We feel really strongly that way down here in the Second District—Hollywood’s home court. (For proof, check out Defendants’ list of amici.) So, when these silly claims arising from fictional works of art get filed, we try dutifully to pound their square pegs into the round hole of the anti-SLAPP protection.

Which leads invariably down this facile path of trying to decide if works of essentially fiction or abstract representation address matters “of public interest.” Was microwave safety an issue of public interest? The style of the 1970’s? ABSCAM? Paul Brodeur? Is a movie an issue of public interest simply because people are interested in the movies? What if it’s not a very popular movie? Or a movie about a not very popular topic? Or an abstract or surreal movie where it’s not too clear what the “issues” are? Does David Lynch get less protection than Oliver Stone? And what about art and music? Is The Reaper (Catalan Peasant in Revolt) anti-SLAPP protected but not Composition with Red, Yellow, and Blue? Does Whitey’s on the Moon get protection but not Space Is the Place?

I don’t claim to have all the answers here, but a few things seem pretty clear. First, § 425.16(e)(3) applies to “any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest.” A movie is not “written or oral statement.” Nor is it a public forum or a place open to the public. Nor are most performances or exhibitions of art. So, generally speaking, these kinds of things don’t fall within (e)(3). We can think up hypothetical examples where they might, but most of the time, they just don’t.

So then we’re left with (e)(4): “any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” As I have been saying for years now, somebody needs to come up with a coherent theory on (e)(4).* Because, read literally, it covers a claim for wiretapping to win a high-profile litigation. And a claim for sexual discrimination in hiring a newscaster or in assigning a lawyer to cases. And a claim for bribing a lawyer to get his client’s private documents for use in a political smear campaign. And a claim that a teacher was denied tenure on the basis of her race. And a PI claim for food poisoning contracted from the craft services table while working on a documentary about James Madison. (OK, I made up that last one. But the others are real.) Some have been held protected, some not, and I’ve never seen a good answer why.

In any event, it seems, at least to me, that (e)(4) shouldn’t be read so broadly to invoke the strong medicine of the anti-SLAPP remedy just because the operation of a law firm, a media or entertainment business, or an educational institution generally and broadly touches on First Amendment-implicating activity. It’s not like there aren’t any number of ambiguous words in (e)(4) to interpret it so that it covers stuff that is more or less consistent with the (e)(1)-(3). Has nobody heard of ejusdem generis?

None of which is meant to justify this totally stupid lawsuit. It deserved to be dismissed on a demurrer for precisely the reason the court points out in addressing the merits prong of the analysis.

Reversed.

*
Big project. Working on it. 

Tuesday, July 26, 2016

Alter Ego Doctrine Is Not a Recipe to End-Around MICRA

Gopal v. Kaiser Foundation Health Plan, No. B259808 (D2d1 Jun. 23, 2016)

The court here upholds a granted summary judgment motion where an insurance plan was dismissed from a med-mal case due to lack of evidence that it was the alter ego of the principal defendants. Plaintiffs claimed a “single-enterprise” theory. I.e., that the various defendants, even if not in a clean vertical relationship, seriously abused the corporate form to perpetrate a fraud or accomplish an inequitable result. Plaintiffs didn’t show that here. Instead, they were using the alter ego theory to end around MICRA’s limitation on med-mal damages against heath care providers. The court notes that MICRA’s limits are not an “injustice” that can or should be remedied by ignoring the corporate form. They are, instead, a public policy determination by the California legislature, which courts must honor.

Affirmed.

Friday, July 22, 2016

A Little Less Illusory

Harris v. Tap Worldwide, LLC, No. B262504 (D2d5 Jun. 22, 2016)
 

This decision reverses a trial court’s denial of a motion to compel arbitration based on an arbitration provision in an employee handbook. The employee signed an acknowledgement that he received both the handbook and the arbitration agreement, and that they would apply to him if he continued to work after their effective date. That was sufficient to create a contract. Moreover the contract was not illusory by virtue of the fact that the employer retained the right to modify the handbook. There was a specific term in the arbitration provision that limited modifications to written changes necessary to comply with developments in the law for which the employee would be given thirty days written notice and which would apply only prospectively. That limitation governed over the handbook’s general right to modify, and because it prevented any “unfettered or arbitrary right to modify or terminate the parties’ understandings concerning the duty to arbitrate,” it kept the arbitration agreement from being illusory. In the course of making this ruling, the court backs away from an earlier decision of the same division.

Reversed.

Wednesday, July 20, 2016

FAA Preempts State Limits on Med-Mal Arbitration

Scott v. Yoho, No. B265641 (D2d5 Jun. 22, 2016)

The court here holds that some arbitration clauses between a plastic surgeon and his (dead) patient bore on interstate commerce such that the FAA applied. The fact that LA Superior Court was elected as the venue in which any collateral litigation would occur was not an election that the California Arbitration Act would apply instead. And because the FAA applied, it preempted Code of Civil Procedure § 1295(c)’s 30-day right to rescind arbitration agreements in medical services contracts. Because the right applies only to arbitration contracts, it is not a “grounds . . . at law or in equity for the revocation of any contract” and is thus not saved from preemption by 9 U.S.C. § 2.

Reversed

Tuesday, July 19, 2016

Sharp Cut in SLAPP Fees Affirmed

569 E. Cnty. Blvd. LLC v. Backcountry Against the Dump, Inc., No. D068538 (D4d1 Jun. 16, 2016)

A prevailing movant on an anti-SLAPP motion can recover its attorneys’ fees. But the fees they need to be reasonable. Defendant here sought fees for almost 200 hours of partner work, at a $750 rate, plus some associate time at half that rate. The trial court knocked the rate down to $275 and cut the time more or less in half. Under the applicable abuse of discretion standard, the ruling holds up because there was substantial evidence before the trial court to establish the rates and hours it used in its calculation.

Affirmed. 


***Update: On rehearing (here) the court adds a bunch of footnotes shooting down other arguments made by the appellant.

Monday, July 18, 2016

A Mistake in Service Is Not Extrinsic Fraud

Yolo Cnty. Dept. of Child Support Servs. v. Myers, No. C075671 (D3 Jun. 10, 2016)

Courts have equitable power to vacate default judgments—even really old ones—on certain narrow grounds, especially when a plaintiff established personal jurisdiction by filing a false proof of service. But to do that, the POS itself needs to be fraudulent; a motion to vacate does not lie simply because of some defect in service in the underlying action. Defendant didn’t satisfy that standard here. Nor could he challenge partiality of the judge in either this or the original case. In the original case, Code of Civil Procedure § 170.4 specifically says that a disqualified judge can still deal with defaults. So even if the old judge deserved a DQ—which the court here expresses some doubt—he still had power to sign the default order. And as to the current case, the challenge was based on disagreement with the merits of rulings, which is a legit not grounds to DQ the judge. And in any event, DQ motions aren’t appealable—they can be reviewed only by writ. Which plaintiff didn’t seek here.

Affirmed.

Friday, July 15, 2016

Writ Frees Kid from Notice Trap

Alex R. v. Superior Court, No. B270686 (D2d7 Jun 13, 2016)

The trial court in this case refused to appoint a guardian ad litem for a minor who needed to bring a parentage action as part of a process to adjust his immigration status. Because the litigation entailed the severance of the parental relationship between the minor and his father, the trial court conditioned the appointment of the guardian on the minor’s giving notice to the father. But that isn’t right. The guardian ad litem statutes—Code of Civil Procedure § 372 and some provisions of the Family Code—don’t have a notice requirement. And requiring one puts the minor in a Catch-22—without the guardian, the minor can’t file and serve the parentage documents on the father. It is that notice—the service of process—and the subsequent opportunity be be heard that give the father the due process to which he is entitled, should he want it.

Writ granted.

Thursday, July 14, 2016

Brandt Fees Are Part of the 1 in State Farm's Punis Ratio

Nickerson v. Stonebridge Life Ins. Co., No. S213879 (Jun. 9, 2016).

I wrote about this case back in 2013 when it was decided by the Court of Appeal. The focus of my post was on an instructional issue. But the Supreme Court granted review on a different issue in the case—one that merited three sentences paragraph in the Court of Appeal’s opinion: When deciding whether punitive damages in a bad faith insurance case exceed the constitutionally proscribed ration of nine or ten time the actual damages, should the baseline include so called Brandt fees. These are fees that, notwithstanding the American rule, can be recovered by an insurance coverage plaintiff to compensate for legal costs of obtaining coverage over the carrier’s objection. The Court of Appeal said they could not, citing a 2010 case on the point. But the Supreme Court—with Justice Kruger writing for a unanimous court—disagrees. Brandt fees are an element of compensatory damages in a bad faith case. It is thus appropriate to consider them as part of the starting point in the State Farm/Gore analysis, which puts a nine- or ten-to-one ratio of punitives to compensatories at the outer limits of the state’s power to punish. That’s the case even when the parties follow the common practice—as happened here—of stipulating to have the court calculate Brandt fees post-trial in the event of a bad faith verdict in the plaintiff’s favor.


Reversed.

Wednesday, July 13, 2016

Everything that's Old Is New Again

San Diegans for Open Government v. City of San Diego, No. D068421 (D4d1 Jun. 7, 2016)

In 1994, the Legislature changed California’s general civil sanctions rules to make them look and work more like Rule 11 of the Federal Rules of Civil Procedure. The 1994 amendments added Code of Civil Procedure § 128.7, which permits a court to sanction attorneys or parties for filing meritless pleadings that are “signed” by a party or its attorney. Like Rule 11, § 128.7(c)(1) includes a “safe harbor” requiring the service of a sanctions motion twenty-one days before filing and an opportunity to correct the sanctionable pleading before the motion can be heard. It also adopts an “objectively unreasonable” standard for sanctions—proof of bad faith or ill intent are unnecessary.

Sunday, July 10, 2016

This Would Make Me Yelp!

Hassell v. Bird, No. A143233 (D1d4 Jun. 7, 2016)

Wow. Back-to-back Yelp defamation cases. It must be a cottage industry or something. And while I might have had a few quibbles with some of the intermediate steps in the analysis on the last one, this one really manages to go off the rails.

Tuesday, July 5, 2016

This Is Why You Need "Related to."

Rice v. Downs, No. B261860 (D2d1, as modified Jun. 23, 2016)

This case involves an investment dispute where an operating agreement contains an arbitration clause requiring that the parties arbitrate disputes “arising out of” the agreement. (As opposed to an ordinary “broad cause” covering disputes “arising or related to” it.) The parties asserted a bunch of different tort claims, most of which appear to “arise” not from the agreement, but from the fact that some of the investors were attorneys for others. The court declines to categorically rule that “arising from” clauses are limited to claims sounding in contract. But it does hold that the circumstances here merit the conclusion that the non-contract claims didn’t arise from the agreement because the attorney-client relationships they do arise from were extrinsic to the agreement itself. And a relatively narrow reading of the clause is bolstered by the fact that the prior section of the agreement—a consent to jurisdiction and venue—did include broader arising from or related to language. According to the court, the juxtaposition suggests that the choice of somewhat narrower arbitration language was deliberate.

Reversed.

Friday, July 1, 2016

With a Whimper . . .

Aghaji v. Bank of America, No. B261971 (D2d4 May 31, 2016)

This is a “mass joinder” case. That’s where hundreds of plaintiffs try to join their individual suits into a mega-litigation, without it being subject to any of the rules or restrictions of a class action. These kinds of cases keep popping up in the mortgage litigation context, where a whole swath of homeowners—often represented by a common attorney or firm—try to argue that some kind of defect in the process means that they can’t be foreclosed on, or that they don’t have to pay, or something similar to that.