Thursday, September 29, 2016

We Don't Need No Stinkin' Lodestar...

Laffitte v. Robert Half Intl, No. S222996 (Cal. Aug. 11, 2016)

A long time ago, in Serrano v. Priest, 20 Cal. 3d 25 (1977)—Serrano III, the first two Serranos being about equal educational opportunity in public schools—the California Supreme Court ruled that the lodestar method (hours times reasonable rate) is the proper means of calculating an attorney fee award under the private attorney general doctrine. What happens when the award is not based on the private attorney general statute, but instead under the “common fund” doctrine—where one party obtains a pool of recovery to the collective benefit of a group of potential plaintiffs? Is the plaintiffs’ attorney stuck with a lodestar, or can he argue instead that he is entitled to a percentage of the overall recovery, even if that significantly exceeds the lodestar. 


Wednesday, September 28, 2016

Service on DeadCo's Authorized Agent Is Service Nonetheless

Pulte Homes Corp. v. Williams Mechanical, Inc., No. E064710 (D4d2 Aug. 9, 2016)
 

A defunct plumbing company whose charter had been suspended got sued for negligent performance of a contract. Plaintiff served its designated agent, who did nothing because the company was basically a dead letter. Plaintiff took a default.

The company, however, did have some insurance. After finding out about the default, the carrier retained counsel for the defunct company and moved for relief from default under Code of Civil Procedure § 473(b), which was granted by the trial court. But the Court of Appeal reverses.

Section 473(b) requires the motion to be filed within six months of the order to be vacated. The motion here was filed more than six months after the entry of default, although less than six months after a default judgment was entered. The court holds that the earlier date was the key one. Vacating a default judgment isn’t worth much unless you can also vacate the underlying default.

The court also rejects a challenge under § 473.5, which permits the setting aside of a default when the defendant never received actual notice. Here, there’s no question that the registered agent of the company was properly served. While service on an entity’s attorney might not be enough to give actual notice, when an attorney is also a designated agent, that service is sufficient to give the corporation actual notice as a matter of law. Even if the attorney neglects to inform the company’s principals because the company had gone out of business.

Finally, the court declines to award equitable relief from default on grounds of extrinsic mistake. That relief is available only under “rare circumstances” where the moving party is inequitably denied a hearing. To obtain the relief, the moving/defaulted party needs to show: (1) that its defense has merit; (2) a satisfactory excuse for not presenting the defense in the original action; and (3) that it acted diligently to set aside the default once discovered. There’s a threshold issue here that Defendant didn’t really raise extrinsic mistake until its reply brief, although two elements (excuse and timeliness) were discussed on the opening brief in connection with the 473.5 issue. The court finds that Defendant forfeited the argument on the meritorious-ness element. And in any event, Defendant didn’t meet the burden of showing either a satisfactory excuse or diligence.

Reversed.

Tuesday, September 20, 2016

But How Can a Brown Act Claim Be a SLAPP?

Cruz v. City of Culver City, No. B265690 (D2d8 Aug. 8, 2016)
 

We’ve had a pretty good run of decent anti-SLAPP decisions lately, so I guess I shouldn’t be too disappointed with this one. But it’s a real stinker.

Plaintiffs sued a city for violating the Brown Act by taking official actions that weren
t on its meeting agendas. The City filed an anti-SLAPP motion. According to the Court Appeal, the public interest litigation exception in Code of Civil Procedure § 425.17(b) does not apply to any party “seeking any personal relief.” Because the substantive city issue under consideration that Plaintiffs contend resulted in the Brown Act violations—something about parking regulations—was an issue in which Plaintiffs had some financial interest, the court finds that the exception does not apply.

Plaintiffs’ then apparently conceded that the case actually arises from protected activity. They disastrously failed to anticipate City of Montebello—decided by the Supreme Court on the same day this opinion was ordered published—which made abundantly clear that actions challenging the official legislative actions of governments (as opposed to individual capacity suits against government officials) don’t “arise from protected activity” under the anti-SLAPP statute.

The court goes on to find that plaintiffs failed to establish a probability of prevailing to prevail in their Brown Act challenge.

Affirmed.

This is a terrible precedent. There
s still a motion to modify pending. We'll see.

Monday, September 19, 2016

Putting the System on Trial!

Weiss v. City of LA, No. B259858 (D2d4 Aug. 8, 2016)
 

The Vehicle Code provides for three separate levels of review of parking tickets: First an initial paper review, conducted by “the issuing agency,” then a hearing before an ALJ, then an appeal de novo in Superior Court. But the City of LA delegates the “initial review” to the private vendor it pays to process tickets. Plaintiff here got a $55 ticket, for which his initial review was denied by the vendor. Instead of seeking administrative review, he just paid the fine and sought mandamus directing the city to conduct its own initial reviews.

He won. The trial court found that the city had a non-delegable duty to conduct its own review. The trial court then awarded him $721,994.81 in attorneys’ fees under the private attorney general statute, Code of Civil Procedure § 1021.5. The city appeals both the merits and the fee award.

There’s a standing issue lurking here—plaintiff voluntarily paid the fine, so seems that he’s not harmed enough to take a writ. The Court of Appeal thus finds that he “lacks general standing to pursue mandamus relief.”


But this is an area—like taxpayer standing under Code of Civil Procedure § 529awhere California’s standing doctrines are far more liberal than what would be required to show standing under Article III in federal court.
So the court goes on to find that plaintiff has something called “public interest standing,” which relaxes the requirement of actual harm when “the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty.” Given the enormous burden of challenging the whole review system that would be put on someone contesting an ordinary parking tick, the court finds that standard met. To do otherwise would effectively insulate the city’s practice from judicial review.

After affirming on the merits, the court also affirms the fee award. Generally, the private attorney general doctrine permits an award of fees when: (1) the case enforces an important right affecting the public interest; (2) the case confers a significant benefit on a large class of persons; and (3) the burden of private enforcement makes the award appropriate. Plaintiff was successful in enjoining an unlawful practice that had persisted for more than a decade, and which affected millions of parking citations, so the court finds the standard satisfied.

Affirmed.

Tuesday, September 13, 2016

This Release Does Not Compute

Ignacio v. Caracciolo, No. B266930 (D2d8 Aug. 3, 2016)
 

This is another case where an insurance company gets over its skis by making a Code of Civil Procedure § 998 offer of judgment that tries to do more than just enter judgment in the case along the terms of the offer. This time, the offer includes an agreement to a broad general release, including a waiver of unknown claims under Civil Code § 1542. Plaintiff didn’t take the deal. At trial, Insurer won a verdict below the offer’s cash consideration, so it sought cost shifting. On appeal, the Court of Appeal finds the offer invalid. Problem is, when a release is broader than the claims in the case, the value of the offer vs. what was won at trail can’t really be rationally compared. Suppose, for instance, that plaintiff had some multi-million dollar claim against the insurer on some other issue that wasn’t in the case. Since the release offered was far broader than the case with respect to the releasing parties, the released parties, and the claims being released, it couldn’t be fairly valued under the § 998 calculus.

Affirmed.

Friday, September 9, 2016

Who Killed the Samurai?

Hayward v. Superior Court, No. A144823 (D1d2 Aug. 3, 2016)

This case—a contentious divorce—is pretty ugly. The parties stipulated to have the case resolved by a private judge, appointed by the family court as a Pro Tem. But things go downhill from there.

Thursday, September 8, 2016

The Ground Rules on John Doe SLAPPs

John Doe 2 v. Superior Court, No. B269087 (D2d3 Aug. 2, 2016)
The anti-SLAPP statute provides for an automatic stay of discovery. See Code Civ. Proc. § 425.16(g). The court has discretion to permit limited discovery on showing of good cause, but orders doing so are few and far between. In particular, when a defamation case is met with an anti-SLAPP motion, prior cases have established that, before it can get relief from the discovery stay, plaintiff needs to make a prima facie showing that the statement was provably false, defamatory in meaning, and unprivileged.

Defendant Doe here used an anonymous Gmail account to send emails to a party with whom Plaintiff was enmeshed in a business dispute. Plaintiff sued anonymously, alleging that the Doe’s emails were defamatory. Plaintiff subpoenaed Doe’s account-holder information from Google. When Doe got notice of that, he appeared and filed an anti-SLAPP motion, which put the kybosh on any discovery. But Plaintiff moved to lift the stay under § 425.16(g) and the trial court agreed. But Doe took a writ, which the court here grants.

As noted, to get discovery over Doe’s identity, Plaintiff needed to affirmatively show that the statements were false, capable of defamatory meaning, and unprivileged. It didn’t meet that burden here. Nor did the court buy Plaintiff’s back-up argument—that it needed to discover who Defendant was to know if he might have been a party to an arbitration agreement. Whatever interest Plaintiff had in some theoretical right to compel arbitration didn’t overcome the protections that § 425.16(g) gives to the right to free and anonymous expression.

Writ granted.

Wednesday, September 7, 2016

A Course Correction on the Anti-SLAPP Journey

Baral v. Schnitt, No. S225090 (Cal. Aug. 1, 2016)

In first of several pending cases addressing the anti-SLAPP statute, the Supreme Court resolves a longstanding split about how to handle so-called “mixed” causes of action. That is, causes of action that implicate both protected and unprotected activity. I’ve discussed this split previously here and here, as well as in my original post on the Court of Appeal’s decision in this case. 
In a cogent analysis focusing on both the text and the practicalities of the issue, the Court ultimately adopts the current minority rule.

Tuesday, September 6, 2016

I Feel a Little Less Alone in the Anti-SLAPP Universe

Nam v. Regents of the Univ. of Cal., No. C074796 (D3 Jul. 29, 2016)

A breath of fresh air in the anti-SLAPP arena. This is another case where an employer with a First Amendment-ish mission—here, a public university hospital that uses peer review—tries to pawn off alleged employment discrimination as “arising from protected activity” under the anti-SLAPP statute. It has happened before
. And on more than one occasion it has worked. But this time the court isn’t buying it. Even better, the court here does a commendable job of tracing the line of cases back to the 2011 Tuszynska v. Cunningham decision’s misreading of a 2002 Supreme Court case that had begun to lose track of its roots and propagate through the case law like a virus. 


Friday, September 2, 2016

Time to Fix that Arb Agreement . . .

Sandquist v. Lego Automotive, Inc., No. S220812 (Jul. 28, 2916)

Who decides if an arbitration can proceed on a class basis? It’s an unresolved question under both state and federal law. Because Court of Appeal decisions on the issue were somewhat inconsistent, the Supreme Court granted review on it. The answer, according to divided 4-3 court: It depends.