Moofly Prods., LLC v. Favila, No. B294825 (D2d1 Mar. 4, 2020)
Two issues here: 1. Can a superior court issue terminating sanctions based on conduct that occurred while a case, since remanded, had been removed to federal court? 2. When is there a right to jury trial on a claim for fraudulent conveyance?
The terminating sanctions issue arose from discovery misconduct—including violating court orders—that occurred after the case had been removed based on a putative copyright infringement claim but before it was remanded. The magistrate judge recommended terminating sanctions. The district court, however, dismissed the copyright claim and declined jurisdiction under 28 U.S.C. § 1367(c)(3) to send the remainder of the case back to state court. Although the district judge found the recommendation for terminating sanctions to be well-founded, it left the ultimate decision to the superior court on remand.
Defendant renewed the terminating sanctions motion on remand. The superior court dismissed the claims, and the Court of Appeal affirms. The conduct at issue rose to the level of terminating sanctions. Plaintiff wholesale refused to participate in discovery and ignored court orders to the contrary. Given the lack of authority otherwise, that Plaintiff’s misconduct occurred while the case was removed to federal court did not matter.
The dismissal of Plaintiffs claims left standing Defendants’ cross-claims for fraudulent transfer of some IP between two related entities controlled by Plaintiff and his wife. Those claims got tried to the court, which found for Defendants. Plaintiff now claims that deprived it of its right to jury trial.
Generally, claims for fraudulent conveyance or equitable trust are equitable and carry no right to jury trial. There is an exception, however, for claims to recover a determinate sum of money. Because that kind of claim most closely resembles remedies available at law in 18th Century England—replevin, trover, money had and received—the U.S. Supreme Court has determined that the right to jury trial would attach to such claims. See Granfinanciera, S.A. v.Nordberg, 492 U.S. 33 (1989).
The Seventh Amendment hasn’t been incorporated against the states. But California courts would generally reach the same result under state law—the key distinction being that California law looks to the law of England in 1850 instead of 1789. In any event, the res in this case isn’t a sum certain of money, it’s intangible IP. Recovery of that kind of property has always required and still requires a resort to equity. So there’s no right jury trial.
Affirmed.
Tuesday, March 31, 2020
Friday, March 27, 2020
MNT after SJ.
Brewer v. Remington, No. F76467 (D5 Mar. 4, 2020)
The trial court granted summary judgment for the Defendant in a medmal case based on the statute of limitations. Plaintiff moved for new trial, which the court granted, finding it had misapplied the delayed discovery rule. Defendant appealed. See Code Civ. Proc. § 904.1(a)(4) (grant of new trial is appealable order).
Generally, a new trial motion is subject to an abuse of discretion standard of review. That makes sense given that many of the grounds for new trial entail the trial court weighing evidence subject to facts and judgment calls. But whether to grant summary judgment is always a question of law. A new trial motion after a granted SJ just gives a trial court a shot to correct a legal mistake. So on appeal, that gets reviewed de novo, like any other legal question. Which isn’t inconsistent with the general standard because de novo review of legal error is baked into abuse of discretion.
Affirmed.
Whether or not to move for new trial after losing an SJ that results in a final judgment is an tricky strategic choice. On one hand, it superficially doesn’t really hurt. If you lose, the appeal is basically the same, just delayed a little.
On the other hand, a new trial motion is time consuming. And given the right to appeal a grant, the case is likely going to the Court of Appeal anyways, subject to the same standard of review regardless. Also, sometimes the moving party’s arguments get better. Plus, most trial judges are pretty set on their decisions.
But I guess there's some marginal value, just stats-wise, in being an appellee vs. an appellant. Especially for post judgment settlement. So if you think the trial judge is persuadable, or if there’s some argument that could have been better presented, maybe it’s worth a shot.
The trial court granted summary judgment for the Defendant in a medmal case based on the statute of limitations. Plaintiff moved for new trial, which the court granted, finding it had misapplied the delayed discovery rule. Defendant appealed. See Code Civ. Proc. § 904.1(a)(4) (grant of new trial is appealable order).
Generally, a new trial motion is subject to an abuse of discretion standard of review. That makes sense given that many of the grounds for new trial entail the trial court weighing evidence subject to facts and judgment calls. But whether to grant summary judgment is always a question of law. A new trial motion after a granted SJ just gives a trial court a shot to correct a legal mistake. So on appeal, that gets reviewed de novo, like any other legal question. Which isn’t inconsistent with the general standard because de novo review of legal error is baked into abuse of discretion.
Affirmed.
Whether or not to move for new trial after losing an SJ that results in a final judgment is an tricky strategic choice. On one hand, it superficially doesn’t really hurt. If you lose, the appeal is basically the same, just delayed a little.
On the other hand, a new trial motion is time consuming. And given the right to appeal a grant, the case is likely going to the Court of Appeal anyways, subject to the same standard of review regardless. Also, sometimes the moving party’s arguments get better. Plus, most trial judges are pretty set on their decisions.
But I guess there's some marginal value, just stats-wise, in being an appellee vs. an appellant. Especially for post judgment settlement. So if you think the trial judge is persuadable, or if there’s some argument that could have been better presented, maybe it’s worth a shot.
Wednesday, March 18, 2020
What's Your Issue, Textron?
Textron, Inc. v. Travelers Cas. & Sur. Co., No. B262933 (D2d4 Feb. 25, 2020)
Back in 1991, in connection with a large exposure for environmental contamination, Insured won a declaratory relief claim that a CGL policy with Insurer was governed by Rhode Island law. Thirty years later, Insured settled a mesothelioma case with an employee who was allegedly exposed to asbestos from 1950 to 1983. Insured now seeks coverage under the GCL policy.
The coverage question turns on the meaning of “occurrence” as applied to a continuous or progressively deteriorating personal injury. That question has different answers under California and Rhode Island law. Basically, under California law, coverage reaches back to any partial harm within the policy period, while Rhode Island law would cover only if the meso diagnosis was within the period. So the ultimate question on this appeal is whether the 1991 dec. relief ruling collaterally or judicially estops Insured from arguing that California law applies.
The trial court ruled that it didn’t, which resulted in denial of Insurer’s summary judgment motion. Insurer took a writ. A Palma notice issued. In response to which, a different trial court reversed course, finding that it does, which mooted the writ. That led to summary judgment for Insurer.
Insured now appeals. The Court of Appeal reverses.
Collateral estoppel requires a the same issue to be actually litigated and decided in a prior action in which the party to be estopped was a party. The question here is whether the “issue” was same in 1991. The nature of an “issue” is a squishy topic. It’s basically a question of application of law to fact. On one hand, there can be estoppel on an issue even though specific factual or legal theories that could have been presented in the first case were not. On the other hand, there is no estoppel on an issue that could have been raised but wasn’t. As the Court explains, “[p]utting it as simply as we can, the factual predicate of the legal issue decided in the prior case must be sufficient to frame the identical legal issue in the current case, even if the current case involves other facts or legal theories that were not specifically raised in the prior case.” Satisfied?
That being said, the Court holds that, even though they facially answer the same basic question—what law applies to “occurrence”?—the cases nonetheless do not present the same issue. That is because the factual framing behind the choice of law question is so different. The dispute in the 1991 case was over 258 different insurance policies issued by 49 different carriers arising from environmental contamination in 19 different states. On the other hand, the 2011 meso case entailed an ongoing injury to a single plaintiff who lived in California.
Looking at California’s “government interest analysis” for choice of law—which the court assumes is the same as Rhode Island’s test—the inputs that go into that analysis are totally different. That was borne out by an analysis of the 1991 decision. Nowhere did that decision address, for instance, whether there was an actual conflict of law between Rhode Island and California. Nor did it look to California’s interest in defining “occurrence” to a Californian injured by conduct that occurred in California. Thus, despite the superficial similarity, the cases do not entail litigation of the same issue, so collateral estoppel can’t apply.
Reversed.
Back in 1991, in connection with a large exposure for environmental contamination, Insured won a declaratory relief claim that a CGL policy with Insurer was governed by Rhode Island law. Thirty years later, Insured settled a mesothelioma case with an employee who was allegedly exposed to asbestos from 1950 to 1983. Insured now seeks coverage under the GCL policy.
The coverage question turns on the meaning of “occurrence” as applied to a continuous or progressively deteriorating personal injury. That question has different answers under California and Rhode Island law. Basically, under California law, coverage reaches back to any partial harm within the policy period, while Rhode Island law would cover only if the meso diagnosis was within the period. So the ultimate question on this appeal is whether the 1991 dec. relief ruling collaterally or judicially estops Insured from arguing that California law applies.
The trial court ruled that it didn’t, which resulted in denial of Insurer’s summary judgment motion. Insurer took a writ. A Palma notice issued. In response to which, a different trial court reversed course, finding that it does, which mooted the writ. That led to summary judgment for Insurer.
Insured now appeals. The Court of Appeal reverses.
Collateral estoppel requires a the same issue to be actually litigated and decided in a prior action in which the party to be estopped was a party. The question here is whether the “issue” was same in 1991. The nature of an “issue” is a squishy topic. It’s basically a question of application of law to fact. On one hand, there can be estoppel on an issue even though specific factual or legal theories that could have been presented in the first case were not. On the other hand, there is no estoppel on an issue that could have been raised but wasn’t. As the Court explains, “[p]utting it as simply as we can, the factual predicate of the legal issue decided in the prior case must be sufficient to frame the identical legal issue in the current case, even if the current case involves other facts or legal theories that were not specifically raised in the prior case.” Satisfied?
That being said, the Court holds that, even though they facially answer the same basic question—what law applies to “occurrence”?—the cases nonetheless do not present the same issue. That is because the factual framing behind the choice of law question is so different. The dispute in the 1991 case was over 258 different insurance policies issued by 49 different carriers arising from environmental contamination in 19 different states. On the other hand, the 2011 meso case entailed an ongoing injury to a single plaintiff who lived in California.
Looking at California’s “government interest analysis” for choice of law—which the court assumes is the same as Rhode Island’s test—the inputs that go into that analysis are totally different. That was borne out by an analysis of the 1991 decision. Nowhere did that decision address, for instance, whether there was an actual conflict of law between Rhode Island and California. Nor did it look to California’s interest in defining “occurrence” to a Californian injured by conduct that occurred in California. Thus, despite the superficial similarity, the cases do not entail litigation of the same issue, so collateral estoppel can’t apply.
Reversed.
Tuesday, March 10, 2020
If a Consumer Never Sees an Ad, Can It Deceive Her?
Downey v. Public Storage, Inc., No. B291662 (D2d2 Feb. 6, 2020)
False advertising class action based on deceptive advertisements of a $1 first month promotional rate for storage spaces. There are apparently taxes, insurance, locks, and fees that arguably make that rate higher. Defendant has been advertising the deal, in a wide variety of media, for the last 37 years. The class is defined as everyone who paid the promotional rate. The issue is whether, in order to certify that class, the plaintiff needs to show that both the exposure of the class to the advertisements and the deceptiveness of the ads are subject to common proof. The trial court ruled they were and denied certification. Plaintiff took an appeal under the death knell doctrine.
About a decade ago, the California Supreme Court held that a class action for violations of the UCL or FAL did not require individualized proof that members of the class relied on a false advertisement. In re Tobacco II Cases (2009) 46 Cal.4th 298. The logic is similar to the fraud on the market theory in a securities case. Because Proposition 64 requires a plaintiff to have lost money or property, a named plaintiff in a false advertising case must establish her own reliance and injury. But the reliance of the absent class members can be inferred if she can show: (1) the members of the class were exposed; (2) to an ad containing a misrepresentation; (3) that is material, and (4) they bought the product. Since since the UCL and FAL permit restitution of money that “may have been acquired” though false advertising, see Bus. & Prof. Code §§ 17203, 17535, that’s good enough to get relief for rest of the class.
The question then, is whether a plaintiff needs to show that elements (1) and (2) are nonetheless subject to common proof to merit certifying a class. Relying on a fair amount of prior precedent, the Court of Appeal here holds she does. It declines to read some stray language from Tobacco II so broadly as to permit absent class members to obtain restitution without some proof that they were actually exposed to false advertising. To do so would permit restitution of money that was “definitively not acquired” though a false ad.
The evidence before the trial court showed that Defendant gave the promotional rate to customers who never asked for it. It was also possible for a consumer to pay the promotional rate without having seen any advertising. Because the class was defined as anyone who paid—as opposed to anyone who saw—that means the defined class contained individuals who were definitely not entitled to restitution. So substantial evidence thus supported the trial court’s conclusion that exposure wasn’t subject to uniform proof.
Similarly for deceptiveness, Plaintiff challenged 37 years’ worth of advertising, in multiple media, in different locations. Some of these ads contained disclaimers about the other fees and taxes. And on other occasions, a customer was nonetheless warned of the additional costs before the transaction was complete. Depending on the nature of the ad and the context, such disclosures could render some of the ads not deceptive. Given the great variety of advertising, there was substantial evidence in support of the trial court’s finding that deceptiveness also was not subject to common proof.
Affirmed.
False advertising class action based on deceptive advertisements of a $1 first month promotional rate for storage spaces. There are apparently taxes, insurance, locks, and fees that arguably make that rate higher. Defendant has been advertising the deal, in a wide variety of media, for the last 37 years. The class is defined as everyone who paid the promotional rate. The issue is whether, in order to certify that class, the plaintiff needs to show that both the exposure of the class to the advertisements and the deceptiveness of the ads are subject to common proof. The trial court ruled they were and denied certification. Plaintiff took an appeal under the death knell doctrine.
About a decade ago, the California Supreme Court held that a class action for violations of the UCL or FAL did not require individualized proof that members of the class relied on a false advertisement. In re Tobacco II Cases (2009) 46 Cal.4th 298. The logic is similar to the fraud on the market theory in a securities case. Because Proposition 64 requires a plaintiff to have lost money or property, a named plaintiff in a false advertising case must establish her own reliance and injury. But the reliance of the absent class members can be inferred if she can show: (1) the members of the class were exposed; (2) to an ad containing a misrepresentation; (3) that is material, and (4) they bought the product. Since since the UCL and FAL permit restitution of money that “may have been acquired” though false advertising, see Bus. & Prof. Code §§ 17203, 17535, that’s good enough to get relief for rest of the class.
The question then, is whether a plaintiff needs to show that elements (1) and (2) are nonetheless subject to common proof to merit certifying a class. Relying on a fair amount of prior precedent, the Court of Appeal here holds she does. It declines to read some stray language from Tobacco II so broadly as to permit absent class members to obtain restitution without some proof that they were actually exposed to false advertising. To do so would permit restitution of money that was “definitively not acquired” though a false ad.
The evidence before the trial court showed that Defendant gave the promotional rate to customers who never asked for it. It was also possible for a consumer to pay the promotional rate without having seen any advertising. Because the class was defined as anyone who paid—as opposed to anyone who saw—that means the defined class contained individuals who were definitely not entitled to restitution. So substantial evidence thus supported the trial court’s conclusion that exposure wasn’t subject to uniform proof.
Similarly for deceptiveness, Plaintiff challenged 37 years’ worth of advertising, in multiple media, in different locations. Some of these ads contained disclaimers about the other fees and taxes. And on other occasions, a customer was nonetheless warned of the additional costs before the transaction was complete. Depending on the nature of the ad and the context, such disclosures could render some of the ads not deceptive. Given the great variety of advertising, there was substantial evidence in support of the trial court’s finding that deceptiveness also was not subject to common proof.
Affirmed.
Subscribe to:
Posts (Atom)