Wednesday, December 30, 2020

Money Too.

Kwan Software Engg, Inc. v. Hennings, No. H042715 (D6 Dec. 2, 2020)

After a years-long record of fraud on the court, false testimony, and spoliation of evidence, the trial court dismissed Plaintiffs complaint in this case as a terminating sanction. It declined, however, to award Defendants’ monetary sanctions under the discovery act. As we recently discussed, the Discovery Act requires an award of monetary sanctions as compensation in the form of reasonable costs unless the non-prevailing party was substantially justified or an award would be unjust. See Code Civ. Proc. § 2023.030(a). 

In the course of issuing terminating sanctions, the trial court made findings from which it is clear that a substantial justification was not present. Nor would it be unjust—that other sanctions were awarded did not render it unjust to also require plaintiffs to compensate Defendants for the increase expense incurred as a result of Plaintiffs’ discovery misconduct. So the trial court abused its discretion by not awarding monetary sanctions.

Sanctions were not merited, however, against Plaintiffs’ former attorneys. The record established that that the attorneys had not “advised” their clients to engage in discovery abuse, which precludes any award under § 2033.030(a).

Reversed in part.

Monday, December 28, 2020

Font Failure Dooms Arb Clause, for Now

Domestic Linen Supply Co. v. L.J.T. Flowers, Inc., No. B292863 (D2d6 Dec. 4, 2020)

The arbitration clause in the parties’ contract in this case was set out in paragraph 15 of the text of the contract. It appeared in ordinary type on the back of the document, while the parties’ signatures were on the front. Under the California Supreme Court’s opinion in Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899, 914 (2015), that might be evidence of some procedural unconscionability, but it’s not per se fatal. Indeed, a per se rule like that would probably be preempted by the FAA. See Doctors Assocs., Inc. v. Casarotto, 517 U.S. 681, 684, 687–688 (1996) (FAA preempted state statute requiring arbitration clause to be in underlined capital letters on the first page of a contract).  

The Court of Appeal here, however, doesn’t do an unconscionability analysis. In a brief analysis short on citations to authority, it finds, instead, that the appearance of the clause in boilerplate on the backside of the contact supports the trial court’s finding that the defendant, who signed the contract, never actually agreed to arbitrate. There’s no discussion of substantive unconscionability at all. And in getting there, the court further suggests that the constitutional right to jury trial means that any doubts should be resolved against waiver, i.e., against arbitration. That, of course, is contrary to the settled rule that ambiguities in an arbitration agreement are to be construed in favor of arbitration.

The Court further affirms a contractual attorney’s fee award in favor of defendant. Although there are cases that say a party that defeats a motion to compel isn’t entitled to a separate prevailing party fee award divorced from the underlying merits, the Court says this case is different because the trial court was dealing with a freestanding petition to compel. Arbitration, in such cases, is the whole show. Since the case was done once the petition was denied, there was no underlying merits case to prevail in. In those circumstances, the party who prevails on the petition is the winner, entitled to fees under a prevailing party fee contract.

Affirmed.

I’m not exactly enthusiastic about the current trends towards forcing everyone into arbitration based on pre-dispute agreements. Were arbitration truly mutually advantageous, parties would agree to it even after a dispute arises. But the first part of this opinion is pretty far over the line. I would not be surprised to see a petition granted. Or perhaps more likely, a grant and transfer.

Wednesday, December 23, 2020

American Pipe Tolling Does Not Require Precognition

Hildebrandt v. Staples the Office Store LLC, No. B294642 (D2d3 Dec. 4, 2020)

The trial court granted summary judgment on the statute of limitations in this wage and hour case. Plaintiff argued that two prior class actions in which class cert was ultimately denied tolled the statute under the American Pipe doctrine. The trial court disagreed, finding that because class cert was denied on commonality grounds, Plaintiff had no reasonable basis to wait to file sue in reliance on the prior cases.

That’s not really the test, though. So long as Plaintiff can ascertain that she falls within the prior class definition, and so long as she’s bringing more or less the same claims, American Pipe applies. The Court of Appeal addresses Jolly v. Eli Lilly & Co., 44 Cal. 3d 1103 (1988), in which the California Supreme Court generally adopted the American Pipe analysis, while deciding that it didn’t apply to the facts of that case, which was a mass tort. In particular, Jolly held that tolling didn’t apply in because: (a) the class definition was somewhat fail-safe, such that a Plaintiff could not know she was a class member without first having key liability issues decided in her favor; and (b) the class plaintiff did not bring damages claims, which were the crux of Plaintiff’s case. In those circumstances, a plaintiff can’t reasonably rely on the prior class action in deferring her decision to sue. 

But those weren’t the case here. Plaintiff fell within the general class definition and had basically the same claims. Defendant says the exceptions in Jolly nonetheless apply because Plaintiff could not have predicted that her claims were sufficiently common with the named class plaintiffs to know she was in a certifiable class in the prior case. But requiring a predictive exercise like that is contrary to the whole point of American Pipe and Jolly, which is to preserve the utility of the class action device by not requiring any and all potential class members to rush to the courthouse to avoid the limitations period. 

In reaching its result, the court disagreed with Batze v. Safeway, Inc., 10 Cal. App. 5th 440 (2017), which suggested a presumption against tolling when class cert in the prior case is denied on lack commonality. 

Reversed.

Friday, December 18, 2020

Tenants Are Neccessary Parties in Landlords’ Rent Control Lawsuit

Pinto Lake MHP LLC v. Cnty of Santa Cruz, No. H045747 (D6 Oct. 30, 2020)

The Owner of a mobile home park sought administrative permission to raise rents under Santa Cruz County’s mobile home rent control ordinance. As contemplated by the ordinance, the Tenants participated in that proceeding as an adverse party. When that was denied, the Owner sought review by administrative mandamus against the County. But it didn’t join the Tenants in the Superior Court proceedings. The County demurred for failure to join the tenants under Code of Civil Procedure § 389, and the trial court sustained the demurrer.

The Court of Appeal affirms. Tenants’ rights under the Ordinance were to be adjudicated in the mandamus proceeding. The Ordinance made them parties to the administrative case, and they elected to participate in that capacity. Under the circumstances, Tenants had claimed an interest relating to the subject of the administrative mandamus proceeding and failure to join them would impair their ability to protect their rights under the Ordinance. That made them “necessary” parties whose joinder was required if feasible under § 389(a)(2)(i). In particular, the Court notes that the County’s participation in was an inadequate proxy for the Tenants. 

The superior court, however, never conducted the second part of the test under § 389 because it ordered Owner to join Tenants, and when Owner refused, the superior court granted the demurrer. But a dismissal is proper only after an analysis under § 389(b)—a determination that “equity and good conscience” do not permit the case to go forward even in the absence of the necessary parties. So the Court of Appeal remands for that purpose.

Affirmed in part and remanded.

The NRLA Doesn't Make PAGA Claims Arbitrable

Olson v. Lyft, No. A156322 (D1d2 Oct. 29, 2020)

In Iskanian v. CLS Transp. L.A., LLC, 59 Cal.4th 348 (2014), the California Supreme Court held that PAGA claims are not arbitrable. Employer here acknowledges that rule, but argues that Iskanian was implicitly overruled by the U.S. Supreme Court in Epic Sys. Corp.v. Lewis, 138 S. Ct. 1612 (2018). Epic held that § 7 of the National Labor Relations Act—which guarantees certain employee rights to collective action—was not in conflict with the FAA and thus that employment claims are generally arbitrable. But that doesn’t undermine Iskanian. Iskanian is not premised on labor law, but on the fact that the State, which never agreed to arbitrate, is technically the plaintiff in a PAGA case. The Court of Appeal already made that point in Correia v. NB Baker Elec., Inc., 32 Cal. App. 5th 602 (2019), and the Court here sees no good reason to decide otherwise.


Affirmed.


Thursday, December 17, 2020

Tolling Statute Violates Dormant Commerce

Arrow Highway Steel, Inc. v. Dubin, No. B303289 (D2d2 Oct. 29, 2020)

Plaintiffs here have a super-old judgment that they never bothered to renew under Code of Civil Procedure § 683.110, 683.120. But they argue that the ten-year limit on time to bring a collections action in § 337.5, should be tolled under § 351, which tolls limitations while the defendant is not present in California. Defendants, however, argue that § 351 is unconstitutional under the dormant commerce clause. The trial court agreed, and so does the Court of Appeal.

Generally, there are three tests that determine whether a state law violates the commerce clause: (1) laws that purposefully discriminate against out of state persons; (2) laws that do so in “practical effect”; and (3) laws that, while not necessarily discriminatory, burden interstate commerce to an extent that can’t be justified by their utility. Nobody here is arguing that § 351 is a (1) or a (2). That is, § 351 applies equally to toll the statute when a Californian leaves as it does when a Nevadan comes here to commit a tort and then leaves the state. So the issue is the balancing test.

Which is not the clearest of tests in the con law casebook. Applying both U.S. Supreme Court and California state precedent, the Court of Appeal holds that § 351 subjects defendants to an unreasonable burden of having to choose between remaining present in California to permit the statute to run and being out of state to conduct their affairs, including interstate commerce. That is particular so given the minimal need for tolling in an era where out of state defendants are readily subject to long arm jurisdiction and out of state service of process.

Affirmed.

If You Move and Don't Tell the Court, It's Your Fault if You Don't Get Mail

Kramer v. Traditional Escrow, Inc., No. G058522 (D4d3 Oct. 20, 2020)

After Defendants’ lawyer in this wage and hour case quit, they stopped participating in the case. They missed depos, ignored correspondence, and got sanctioned for it a couple of times. Eventually they wound up in default. They sought relief. Their excuse was that their principal had moved, but failed to tell the court. Also the principal’s divorce attorney had some confusing back and forth with Plaintiff’s attorney about the status of the case. 

Although that was good enough for the trial court, it’s not good enough for the Court of Appeal. As the Court puts it, “Defendants cannot deliberately neglect this lawsuit and go off-grid, so to speak, and then complain that they lacked notice of the proceedings.” 

Reversed.

Tuesday, December 15, 2020

Kurt Weldon Gets 419'ed

Luxury Asset Lending, LLC v. Phila. Tel. Network, Inc., No. G057766 (D4d3 Oct. 29, 2020)

This one is a doozy. Two connected Boomers from Philly—one of whom is my parents’ former congressman—get roped into an investment scam involving a purported former Libyan oil minister, a $350 million wealth fund, some Ghanian royalty and/or government officials, boxes of $100 million in $100 bills, and whole lot of other sketchy stuff that would raise red flags to most individuals of ordinary curiosity. When their adventure started to go south, an apparent White Knight stepped in to offer the Boomers high interest loans to throw good money after bad. It would later come to pass that White Knight’s principal was closer to the underlying scam than he let on. 

Boomer #2—not the congressman—was the apparent CEO and largest shareholder PTNI, a company that ran low-power TV station. He secured his loans from White Knight, not only with his own shares in PTNI, but also by pledging PTNI’s assets as collateral. (He was not actually allowed to do either—his stock was restricted and he didn’t own PTNI’s assets.) 

White Knight eventually got a $3.8 million default judgment in OC Superior against the Boomers and PTNI. (The service on PTNI was only on Boomer #2 in his capacity as CEO, which is not proper service.) Boomer #2 subsequently went BK, while Boomer #1 got sidetracked into an arbitration. White Knight then assigned the judgment to an affiliate, which then started to go after PNTI’s assets. It obtained an order under Code of Civil Procedure § 708.510 assigning both Boomer #2’s shares, as well as all ownership and control over PTNI and all of its assets. 

At this point, PTNI figured out what was going on and tried to fight back. It objected to the transfer of its broadcast license with the FCC. There were some receivership proceedings in the Court of Common Pleas in Philadelphia and some other inconclusive litigation in the OC. Eventually, PTNI moved to vacate the $3.8 million default judgment under § 473.5 and on non-statutory equitable grounds. The trial court denied relief, but the Court of Appealin a very funny and well-crafted opinion by Justice Bedsworthreverses.

Section 473.5 permits a court to vacate a default or default judgment when the defendant never received actual notice of the claims in time to defend against them. The motion needs to be brought within 180 days of proper service or 2 years of entry and the lack of notice can’t be due to the defendant’s efforts to avoid service or inexcusable neglect. 

Here, there never was any proper service on PTNI, so we’re in the two year window. Nor did PTNI have actual notice. Although there was some evidence that other PTNI execs knew of Boomer #2’s issues with White Knight, there’s no basis to believe that anyone knew PTNI itself or its assets were on the line.

Nor was there any unreasonable delay. The fact that it took some time for PTNI to move to vacate the judgment is unsurprising. It was a small company facing a three front war. It would be unfair to expect it to act maximally and immediately in every forum as it tried to sort out its avenue for relief.

Finally, White Knight’s Assignee argues that because PTNI only moved to vacate the default judgment and not the underlying default, it’s not entitled to any meaningful relief. But that’s kind a trifle under the circumstances here. It is true that if a party moves for pre-judgment relief from a default, and doesn’t get it, relief from the default judgment is not of any substance, since the only thing that could happen is reentry for another judgment. But here, there is no real issue that PTNI wasn’t also entitled to relief from the entry of default, it just did not say so in its notice of motion. The Court of Appeal is not going to let that stand in the way of relief here.

So far as equitable relief goes, California permits non-statutory relief from a default judgment in exceptional circumstances. These are generally when some fraud or mistake extrinsic to the proceedings themselves prevents the defendant from putting on a defense. Fraud generally requires the plaintiff to do something deceptive, while mistake generally arises from an excusable neglect that results in an unjust judgment. Generally, to get relief on either grounds, the defendant moving to vacate needs to show: (1) that it had a meritorious case; (2) that is has a satisfactory excuse for failing to present a defense; and (3) that it diligently sought relief once the mistake or fraud was discovered. All three elements were satisfied here.

Reversed.

FWIW, this classic article from The Atlantic on scamming the scammers is well worth a read, even 13 years later.

 

A Theory of Discovery Sanctions

Cornerstone Realty Advisors, LLC v. Summit Healthcare REIT, Inc., No. G057176 (D4d3 Oct. 28, 2020) 

Plaintiffs in this case refused to turn over some key financial records. Even after the trial court ordered them to. For that, they ultimately got hit with terminating sanctions. But that’s not the subject of this appeal. 

Monday, December 14, 2020

Post-Judgment Procedure for Referees

Yu v. Superior Court, No. B304011 (D2d3 Oct. 27, 2020)

The parties here agreed to resolve their dispute before a referee under a general judicial reference authorized by Code of Civil Procedure § 638(a). The referee issued an award of about $7 million to Plaintiff and submitted his findings and conclusions to the trial court. The trial court, however, found that the referee’s was tainted by legal error. Before judgment was entered, the court ruled that a new trial would be permitted and that the new trial would be before the court, not the referee. Plaintiff took a writ.

Friday, December 11, 2020

Anti-Slapp Coverage Is Close, But Not the Same, as Civil Code § 47

RGC Gaslamp v. Ehmcke Sheet Metal Co., No. D095615 (D4d1 Oct. 23, 2020)

As a step generally predicate to litigation, the recording of a mechanic’s lien constitutes “protected activity” under the anti-SLAPP statute. See Code Civ. Proc. § 425.16(e)(1), (2). As the Court of Appeal here explains, that’s the case even if the recording was somehow defective under the mechanic’s lien statutes. Nor, in meeting its initial burden, does the party seeking anti-SLAPP relief need to show that the lien, in actuality, relates to litigation that is contemplated in good faith and under serious consideration. That, no doubt, is a requirement for the protection of pre-litigiation communications under the litigation privilege in Civil Code § 47(b). But that’s an anti-SLAPP step 2 issue about the merits, not an issue over whether a claim “arises from protected activity” under step 1.

The Court of Appeal also finds that it was an abuse of discretion to strike evidence that the moving defendant submitted on reply. This wasn’t some brand new evidence that could have been included with the motion. It was, instead, supplemental to that offered in the opening papers, offered in order to rebut a specific argument raised in the opposition. Despite the common exhortations against reply evidence, that’s ok.

Affirmed.

Thursday, December 10, 2020

No Adverse Inferences

Carroll v. Comm’n on Teacher Credentialing, No. C083250 (D3 Oct. 23, 2020)

An employee of a state agency claims she was fired in retaliation for reporting misconduct to statue auditors. As required by statutes governing public employees, she first presented her claims to the State Personnel Board, which rejected her complaint. She then filed a civil action, which included both state claims and a claim under 42 U.S.C. § 1983. Agency removed the case to federal court, which dismissed the § 1983 claim for failure to state a claim and then remanded to state court. A state court jury subsequently found in her favor and awarded significant damages.

The Agency raises two preclusion issues, but neither carries the day. First, the Agency says the federal court’s dismissal of the § 1983 claim is claim preclusive (res judiciata) to the state law claims because they invoke the same primary right. But primary rights are a state court thing and the preclusive effect of a federal court ruling is decided by federal, not state, law. Federal courts say that the grant of a 12(b)(6) motion is not sufficiently on the merits to give rise to res judicata. So no preclusion.

The Agency also says that the Personnel Board’s denial created issue preclusion (collateral estoppel) issues. The statutory scheme that governs state employees does requires a Personnel Board complaint as a predicate to suit. But an employee has no right to appeal an adverse decision from the Board, and state law does not treat any subsequent civil suit as a review of the Board’s decision. Given that scheme, the California Supreme Court has held that Personnel Board decisions are insufficiently final to satisfy the finality element of issue preclusion. See State Bd. of Chiropractic Examiners v. Superior Court, 45 Cal. 4th 963, 975–76 (2009).

But Plaintiff isn’t out of the woods. During the trial, Plaintiff’s lawyer asked several of the Agency’s witnesses about their intentions for seeking legal advice related to Plaintiff from the Department of Personnel Administration—basically the state’s employment/HR counsel. When the witnesses would not answer the question on privilege grounds, the attorney sarcastically questioned them about what advice they were not seeking. The trial court let the questioning occur. It then refused to instruct under Evidence Code § 913, which says that a jury should be instructed not to draw any inference from the valid exercise of a privilege. In both questioning and argument, Plaintiff’s counsel implied an inference that the failure to disclose the purpose of the advice suggested something sinister was afoot.

That was error. Indeed, prejudicial error. You can’t make a witness decide between revealing privileged communications and letting an opponent draw negative inferences from a refusal to waive the privilege. Although the court gave a general closing instruction (CACI 215) about not drawing inferences regarding the invocation of the attorney-client privilege, the sheer amount of questioning on the issue, combined with the trial court’s refusal to specifically instruct under § 913 rebutted the general presumption that juries will follow their instructions. And because this testimony went to the heart of the case—the Agency’s motivation for firing Plaintiff—the error was clearly prejudicial, thus meriting reversal.

Reversed.

Wednesday, December 9, 2020

Too Close for Combat

Doe v. Yim, No. B299856 (D2d4 Oct. 5, 2020) 

Eight months after her divorce became final, Mother, an attorney, represents her adult Daughter in an action alleging that her Ex-Husband sexually abused Daughter during the marriage while Daughter was a minor. Ex moves to DQ Mother, both under the attorney-witness rule and because Mother was privy to various marital confidences during her 17-year marriage to Ex. The trial court granted the motion.

The advocate-witness rule, currently codified as Rule of Professional Conduct 3.7, says an attorney cannot be an advocate in a trial where she is likely to be a witness unless the issue is minor or related to her fees. There’s an informed consent of the client exception, but the commentary explains that client consent isn’t enough of the representation will potentially mislead the jury or prejudice the opposing party. This can occur when, for instance, there can be confusion over when the attorney is testifying as to personal knowledge versus making arguments as an advocate. Further, although the rule is facially limited to trial representations, it has also been expanded to cover pre-trial testimony, as well as situations where it would reveal to the jury that a trial witness was, at one point, an advocate for one of the parties, such as taking and defending depositions. 

Here, there was no doubt that Mother would be a key trial witness on any number of highly contested topics. Given that, it was reasonable for the trial court to find that permitting her to participate as an advocate would be confusing to the jury or prejudicial, notwithstanding that Daughter might have given informed written consent. It was thus appropriate to DQ Mother from representing Daughter at trial, as well as in any pre-trial evidentiary hearings or depositions in the case.

Further, disqualification can also be ordered to protect against a lawyer’s running afoul of non-lawyer confidential or fiduciary relationships. Here, there is little doubt that much of what Mother knows and could testify to was obtained through communications over which Ex could invoke the martial communications privilege. See Evidence Code § 980. As an advocate, she further could use that knowledge to a strategic advantage in the litigation. Under the circumstances, disqualifying Mother as an attorney for Daughter was an appropriate prophylactic measure to prevent the potential misuse of confidential marital information.

Affirmed.

Bond OK for PRA PI

Stevenson v. City of Sacramento, No. C08065 (D3 Oct. 6, 2020)

The City of Sacramento changed its record retention policy such that it would save email for only two years. Shortly before the policy went into place, Plaintiffs sought all documents subject to deletion under the Public Records Act. Plaintiffs brought suit and obtained preliminary injunctions preventing deletions. But the trial court ordered them to post an $80k undertaking, based on the City’s estimate of the cost of retaining the documents for a year. The amount was later reduced to $2,350 after a better cost estimate was provided. Plaintiffs appealed.

So the question is, does Code of Civil Procedure § 529, which requires the posting of an undertaking to offset the cost of an improvidently granted PI, apply to PRA cases? Various statutes permitting injunctive relief have express exceptions to the bond requirement, but the PRA isn’t one of them. Plaintiffs nonethless raise a bevy of arguments why § 529 shouldn’t apply. The Court of Appeal, however, doesn’t buy them. 

Among other things, there’s no actual conflict between the statutes. Cases interpreting similar silence have found that § 529 applies to other types of statutorily authorized injunctive relief. Section 529 doesn’t impinge on the rights of the indigent to access public records, because the bond and undertaking law already has an exception for indigency. Nor does the state Constitutional mandate to read limits on the right of public access narrowly license reading § 529’s unambiguous bond requirement out of the statute. Finally, although some amici contend otherwise, a bond requirement is not actually a prior restraint prohibited by the First Amendment—it doesn’t stop anyone from saying anything.

Affirmed.



Sandbaggers Lose in the End

Reales Investment, LLC v. Johnson, No. E072523 (D4d2 Oct. 5, 2020)

A local rule in Riverside County Superior Court requires a bunch of pretrial disclosures of witnesses and evidence, at the expense of the exclusion of anything that is not disclosed. Plaintiff’s original attorney was relieved before making any of the required disclosures. And its new attorney—who appeared for the first time on the first day of trial—didn’t make them either. After the court denied the new attorney’s oral motion for continuance, it ultimately found that Plaintiff’s evidence would be excluded under the local rule, and on that basis granted a nonsuit for Defendant.

First, there was no error in denying the continuance. Plaintiff’s first attorney was relieved more than three months before trial. It had adequate time to find new counsel, and if more time was required to get them up to speed, such counsel could have filed a proper written motion for a trial continuance. By waiting till the first day of trial to make the substitution and only then seeking an oral continuance, Plaintiff failed to establish good cause. 

So far as failure to comply with the local rule goes, the noncompliance was basically undisputed. Nor did Plaintiff’s late hiring of counsel excuse the failure to make the required disclosures. Moreover, the record also revealed substantial discovery misconduct on Plaintiff’s part, such as giving nonsensical responses and failure to produce any documents or to make any percipient, PMK, or expert witnesses available for depositions. Thus, along with the local rule violation, evidentiary preclusion sanctions would have also been in order.

Affirmed.

For what it’s worth, the discussion of discovery sanctions here is interesting. Relying on the text of certain provisions in the Discovery Act, a bunch of cases say that non-monetary sanctions like issue or evidence preclusion are authorized only if the guilty party violates a court order. See, e.g., New Albertsons, Inc. v. Superior Court, 168 Cal. App. 4th 1403, 1427 (2008). Of course, if an opposing party rolls into trial and starts putting into evidence undisclosed documents or testimony, the prejudiced party might never have gleaned that it needed to file a motion to compel, so there will be no order to violate. Under the federal rules—which include a self-executing duty to supplement responses absent from the Discovery Act—a failure to disclose evidence can lead to automatic preclusion under FRCP 37(e)(1). Which makes a lot of sense, since there’s no surefire way to catch this kind of sandbagging before trial. To the extent this case suggests a similar rule, at least in the pre-trial non-disclosure context, it’s a useful citation to keep in the quiver.


Monday, December 7, 2020

Magic Words Sometimes Make a Difference

Simgel Co. v. Jaguar Land Rover N. Am., No. B292458 (D2d8 Oct. 1, 2020)

This is a pretty ridiculous lemon law case about some very minor electrical problems regarding the power windows in a Jaguar. (Tom Magliozzi, for one, would be rolling in his grave to hear about electrical issues in a British import…) In answering the verdict form, the jury checked the box on the verdict form indicating that the car had no material defect. But, because the parties failed to indicate that a “no” answer meant the jury should stop, the jury went on to find that the Plaintiff had timely revoked acceptance and that there were $26k in rescission damages.

Friday, December 4, 2020

Good Enough for Real Docs

Hooked Media Grp. v. Apple Inc., No. H044395 (D6 Sept. 30, 2020) 

The Court of Appeal here affirms a trial court’s summary judgment in a case alleging that a certain computer company poached some engineers from a company it had previously considered acquiring. For anyone who practices in this space, it’s a useful opinion delimiting the typical causes of action. (There’s also a weird concurrence that, so far as I can tell, basically agrees with the Court’s opinion in every essential respect.)

A few things of procedural note, however. First, the Court makes a point on authentication that, in the early days of this blog, I once complained was unaddressed in a published case. (Although I later discussed a case that resolved the issue.) Namely that an attorney declaration attesting that documents were received from the opposing party in discovery is adequate to authenticate those documents when they bear facial indica that they actually came from the producing party. 

Second, the Court affirms the trial court’s refusal to tax almost $100k in e-discovery costs. Although the appellant raised some cogent points as to why the costs were unnecessary, they weren’t enough to overcome the deference given to the trial court on cost issues.

Affirmed.

Thursday, December 3, 2020

Relatedness Is Not Liability

Bader v. Avon Prods., Inc., No. A157401 (D1d4 Sept. 29, 2020)

Plaintiff in this case is a lifelong Californian who claims she got mesothelioma from a lifetime of using Avon products containing talc that was allegedly contaminated by asbestos. Avon objected to personal jurisdiction, claiming that Plaintiff had not satisfied the “relatedness” prong of the specific jurisdiction inquiry, which asks whether the plaintiffs claims are substantially connected to the defendant’s in-state contacts. The trial court found that relatedness had not been established and dismissed for lack of personal jurisdiction.

Avon’s relatedness argument here is, charitably, a stretch. Plaintiff says Avon sold her talc products in California and that the talc gave her cancer. That seems like it should be enough relatedness for specific jurisdiction. (Generally, in products liability cases, relatedness arguments come up when plaintiffs engage in forum shopping by suing where they have only tenuous connection, such that their injuries have little to do with the defendant’s in-forum sales. Like when someone from Iowa sues in California based on a product that was purchased in Iowa.) 

Avon, however, says that the Supreme Court’s rejection of California’s “sliding scale” relatedness test in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1776 (2017) also requires Plaintiff to show that the talc that Avon sold her in California actually contained asbestos in order to establish personal jurisdiction. The Court of Appeal rejects the argument, more kindly than I would. Because it’s basically nonsense. 

Sliding scale relatedness was a short lived effort to concoct a junior varsity version of general jurisdiction after the Supreme Court limited general jurisdiction to states where the defendant is “essentially at home.” See Daimler AG v. Bauman, 134 S. Ct. 746 (2014); Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011). Skirting that rule, a 4-3 majority of the California Supreme Court held that when a defendant has lots and lots of connections in the forum state—sort of akin to the “systematic and continuous” test that applied for general jurisdiction pre-Goodyear and Daimler, see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)—the nexus between the defendant’s contacts and the plaintiff’s claims could be pretty tenuous. But the U.S. Supreme Court granted cert from that decision, ultimately finding that the sliding scale test was inconsistent with due process. Bristol-Myers, 137 S. Ct. at 1781–82. Specific jurisdiction thus requires some substantial relationship between the contacts and the claim irrespective of what other non-claim related contacts the defendant might have in the forum, regardless of how significant those contacts are.

So far, all good. 

But what neither Bristol Meyers nor any other court has ever said is that, to show relatedness, the plaintiff has to affirmatively prove, as jurisdictional matter, that the defendant’s in-forum sales actually caused her injury. That would make the test for personal jurisdiction—a question usually resolved at the outset of the caseimpossibly high and unduly complicated. So high and complicated that a plaintiff couldn’t hale a defendant into a court in her home state for selling her an allegedly defective product in her home state unless she arrives at the courthouse on day one loaded for bear with expert testimony on causation. That doesn’t make any sense.

Reversed.

The Jurisprudence of Signification

Wood v. Superior Court , No. A168463 (D1d2 Mar. 14, 2024). Yes. You can change your legal name to Candi Bimbo Doll if you want to. See Cod...