Iskanian Survives Epic

Correia v. NB Baker Elec., Inc., No. D073798 (D4d1 Feb. 25, 2019)

The Court of Appeal here affirms a decision severing out a PAGA representative claim as not amenable to arbitration while compelling arbitration of the rest of the case. In getting to that result, the Court makes three basic decisions:

First, The fact that Plaintiff mistakenly filed an opposition to the petition to compel nine court days before the hearing (which is the rule for regular motions under Code of Civil Procedure § 1005(b) instead of ten days after service of the petition (the rule for arbitration oppositions under § 1290.6) did not prevent the court from reaching the merits. The deadline in § 1290.6 is not jurisdictional, so the court could give relief for good cause.

Second, the California Supreme Court’s decision in Iskanian v. CLS Transportation—which held that waivers of PAGA representative claims are unenforceable—remains good law following the U.S. Supreme Court’s decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018)—which held that the National Labor Relations Act did not preclude class action waivers in employment agreements. Epic said that FAA preemption is broad, but it is not crosswise with Iskanian’s central point—that PAGA claims are essentially qui tam claims that belong to the government and thus can’t be waived by an agreement between private parties.

Third, although some federal courts suggest otherwise, PAGA claims—whether representative or individual—can’t be compelled to arbitration at all. Iskanian didn’t reach that issue, but it’s logic compels it. Because PAGA claims belong to the state, the statutory right to bring them in court can’t be waived in pre-dispute arbitration because the state has not consented. agreement without the state’s consent. A PAGA plaintiff does becomes semi-agent of the state when he brings his or her claims. In that capacity, the plaintiff could arguably consent to arbitration post-lawsuit on the state’s behalf. But at the time an employee signs a pre-dispute arbitration agreement, no such agency exists.

Affirmed.

An Easy SLAPP Call

Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, Inc., No. A153305 (D1d2 Feb. 21, 2019).

We talk a lot about the kinds of activity that fall around the edges of protection under the anti-SLAPP law. Here’s something that clearly isn’t: When the operators of the three incumbent marijuana dispensaries in a city conspire to engage in fraud, intimidation, and other skullduggery to prevent any commercial landlord in their city from renting any space to a potential fourth competitor. That might violate the Cartwright Act, the Sherman Act, the UCL, and maybe even RICO. But it’s not protected activity.

Affirmed.

The § 170.6 Clock Can Start Before a Formal Transfer

Sunrise Financial, LLC v. Superior Court, No. D073772 (D4d1 Feb. 7, 2019).

Code of Civil Procedure § 170.6(a)(2) requires a peremptory challenge to a judge assigned to a case for all purposes to be filed within fifteen days of a party’s appearance in the action. The question here is: does filing a brief in opposition to a § 403 motion to transfer and consolidate non-complex cases pending in different count as an appearance to start the running of the fifteen day clock. The Court here finds it does.

State Civil Procedure in the Shadow of the Oar of Admiralty

Korman v. Princess Cruise Lines, No. B290681 (D2d4 Feb. 14, 2019)

This is kind of interesting. Admiralty law is basically a body of federal common law. So it makes sense that, under 28 U.S.C. § 1333, federal courts have subject matter jurisdiction in admiralty cases. But that statute also has language—something called the “saving to suitors” clause—that has been read to preserve concurrent state court jurisdiction for in personam (but not in rem) admiralty cases. And while there’s some debate, many courts—including the Ninth Circuit—say the savings to suitors clause creates a procedural, but not a jurisdictional, bar to removal of admiralty cases to federal court if there’s not an independent basis for federal subject matter jurisdiction. See Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1069 (9th Cir. 2001).

No Mandatory § 473(b) Relief from Voluntary Dismissal

Jackson v. Kaiser Foundation Hosps., Inc., No. A150833 (D1d3 Feb. 8, 2019)

Plaintiff here followed the erroneous advice of an attorney regarding the statute of limitations and dismissed her case without prejudice. When the error was uncovered, she moved to vacate that dismissal under Code of Civil Procedure § 473(b), which affords mandatory relief from a “default or dismissal” due to an attorneys neglect, even if the neglect is inexcusable. The trial court denied the motion and Plaintiff appealed.

There’s a question as to whether the order is appealable. Generally, a § 473(b) seeks relief from a judgment of default or dismissal, which makes it appealable under § 904.1(a)(2) as an order entered after a final judgment. A voluntary dismissal, however, doesn’t result in the entry of judgment, so that logic doesn’t facially apply. But the Court nonetheless looks to some dicta in two cases and decides that a denial of a motion for relief is sufficiently final and the evidentiary record sufficiently clear to make the order appealable, even if the dismissal is not a judgment. 

I think I’m a little skeptical on this. Appellate jurisdiction is supposed to be a pure creature of statute. So we shouldn’t be opening up avenues to appeal that share some formal similarity with appealable orders, but aren’t actually the orders that the Legislature permitted to be appealed. After all, there is already a equitable safety-valve to appellate jurisdiction in the form of the writ of mandamus. So if the court really felt a need to get to the merits, it could have construed the notice of appeal here as a writ petition instead of creating a non-statutory appealable order.

And as to the merits, the mandatory relief provisions of § 473(b) apply only to defaults and dismissals. But they don’t apply to just any old dismissals, or so says the case law. They apply to default-like dismissals. That is, dismissals that result from whiffing on an obligation to respond. Like forgetting to file an opposition and stuff like that. An erroneous voluntary dismissal that results from an attorney’s inexcusable neglect won’t cut it.

Affirmed.

$1m+ Appellate Bond Cost Award Affirmed.

Rostack Inv., Inc. v. Sabella, No. B286069 (D2d8 Feb. 5, 2019)

To say enforcement of a money judgment pending appeal, the defendant needs to post an undertaking. Code Civ. Pro. § 917.1(b). (Or if he or she is flush, a cash deposit will do. § 995.710.) To account for postjudgment interest, the undertaking needs to be 150 percent of the judgment, if posted by a licensed surety insurer. Otherwise it’s double. The one mitigator is that the cost of a bond, interest on it, and the costs of financing it are recoverable as an appellate cost if the case gets reversed. Cal. R. Ct. 8.278(d)(1)(F).

Here, Plaintiff won a pretty big judgment—$52 million—in some kind of collections matter. Staying enforcement required Defendant to post a $77 million bond, assuming it was from a licensed surety. The judgment got reversed. So now Defendant is seeking the bond costs—$1.4 million—as costs on appeal. Plaintiff says that’s unreasonable, particularly since Defendant, who is apparently of some means, could have just posted cash, or financed the bond differently. The trial court disagreed and denied a motion to tax. It entered the cost award as a judgment. Plaintiff appealed.

There’s a threshold appealability issue. The underlying case is still ongoing. Plaintiff says the cost award needs to wait to be wrapped into a final judgment. But that’s not right. Unlike trial court costs, which are part of a merits judgment, costs awarded by the Court of Appeal (the amount of which are decided by the Superior Court on remand) are a collateral issue that get entered as an independent judgment. The case law seems pretty clear on that.

On the merits, the question comes down to whether the bond costs were reasonable and necessary. Cal. R. Ct. 8.278(d)(1). The record here contained substantial evidence that Defendant had explored a variety of alternatives. The Court explains that it wasn’t unreasonable for Defendant to account for the opportunity costs of locking up so much cash in deciding to opt for a more financed options. So drawing inferences in favor of the trial court’s ruling, she chose a reasonable path. The fact that there may have been other, cheaper, options—options with potentially problematic consequences for Plaintiff—didn’t make the cost unreasonable.

Affirmed. (With more costs on appeal ….)

No Rams, No Chargers, But Maybe Intentional Interference

Rand Res., LLC v. City of Carson, No. S235735 (Cal. Feb. 4, 2019)

I gave this anti-SLAPP case short shrift when it was decided by the Court of Appeal, thinking that it was a pretty straightforward application of the rule that would soon be enunciated by the Supreme Court in Park, decided shortly thereafter. The Supreme Court granted review. In a unanimous opinion by Justice Cuellar, the Court parses the case a little more closely than I or the Court of Appeal did.

Eddie Money + Employment Litigation = SLAPP?

Symmonds v. Mahoney, No. B283529 (D2d1 Feb. 1, 2019)

Eddie Money fired his Drummer, who has cancer and a bad back. Drummer sued under FEHA, alleging disability and age discrimination. Eddie filed an anti-SLAPP motion, alleging that the claims arose from his First Amendment Protected write to make his music without being hassled by the man. Which the trial court, quite sensibly, denied.

But the Court of Appeal reverses.