Severed Truckers

Betancourt v. Transp. Brokerage Specialists, Inc., No. A159528 (D1d3 Mar. 28, 2021)

As we’ve previously discussed, the Federal Arbitration Act does not apply to truck drivers who are “engaged in foreign or interstate commerce.” And as we’ve also previously discussed, under what’s called the “last mile” rule, courts have applied the exception intrastate truckers who are driving the final leg of an interstate distribution. Which is what the plaintiff here is.

That being the case, California, not federal, arbitration law applied to Plaintiff’s arbitration agreement. The contract contained a class action waiver—unenforceable under California law, which is generally preempted by FAA § 2. But since preemption does not apply here, the waiver is invalid under prior California cases like Gentry, which are no longer good law outside of the trucker context. The Court of Appeal also finds a second provision—prohibiting a not-prevailing party in an arbitration from moving a court to vacate—to be unconscionable. The Court, however, finds these provisions to be severable, at least so far as they apply to claims Plaintiff did not bring as a class action. 

So the Court of Appeal reverses and remands to the trial court to determine whether the non-class claims claims should be severed and separately sent to arbitration.

Paying $50k Is Not a Favorable Termination

Citizens of Humanity v. Ramirez, No. B299469 (D2d5 Apr. 19, 2021)

Employer settled a wage and hour case with employee, on an individual basis, for $50k. Then it sued her and her lawyer for malicious prosecution. But you can’t do that. An element of malicious prosecution is a termination of the prior action in a manner favorable to the current plaintiff. Obviously, a $50k settlement is not a favorable termination, even if it ends the litigation with a dismissal. And since a malicious prosecution claim is a lawsuit based on a prior lawsuit, the anti-SLAPP statute is implicated. Here, such a motion should have been granted. 

Reversed.

Too Late to Vacate

Bacall v. Shumway, No. B32787 (D2d8 Mar. 16, 2021)

An arbitrator partially cancelled a contract after finding that some of the services provided under it included the unlicensed practice of law because Attorney let his license lapse during the period of performance. In moving to vacate the award, Attorney and his company argue that the arbitrator violated public policy in making that finding—this exceeding his authority—and committed misconduct by failing to consider arguments related to costs and fees. The trial court rejected those arguments, and now the Court of Appeal does too.

On the authority point, Attorney points to a line of cases where courts have vacated arbitral awards premised on the enforcement of contracts that would be illegal under California law. (Much like this recent case, where the Court of Appeal vacated an award declining to void a non-compete.) But the facts here are the other way—the arbitrator declined to enforce the contract because it was partially illegal. So the same policy isn’t implicated.  

On the misconduct, Attorney seems to have blew the Arbitrator’s deadline to respond to Client’s fee request. After the award issued, Attorney requested to file an opposition. The Arbitrator considered the late opposition to be a request to modify the award and—under the applicable AAA Commercial Rules—ruled that he lacked the authority to re-determine an issue that had already been decided. Although Attorney tries to frame the issue as a refusal to consider evidence, it’s really not. Attorney had a chance to oppose the fee request. The fact that he blew the deadline did not mean that the arbitrator committed misconduct meriting vacation of the award under Code of Civil Procedure 1281.2 in rejecting the late arguments.

Affirmed.

Going to California

Yue v. Yang, No. A159145 (D1d5 Mar. 25, 2021)

A Canadian made a bunch of highly inflammatory posts against a California resident on Chinese language Internet bulletin boards that were themselves located in California. Plaintiff Californian sued for defamation. The trial court quashed service for lack of personal jurisdiction.

Generally speaking, making postings on the Internet does not subject you to personal jurisdiction anywhere they might be read by somebody upset by them. But when your stay stuff like “I am going to come to California and bully you in your back yard,” and threaten to “go to California” and “destroy you the shyster in U.S. federal court,” the posts cross the line from generalized speech on the Internet to the kind of stuff that satisfies the Calder effects test. That is, when you deliberately aim harmful speech at someone, that is specifically directed to the jurisdiction they live in, you have purposefully availed yourself of the legal regime of that state and thus of its courts. 

Reversed.

City SLAPPs Cop for Suing Against Disclosure

Collondrez v. City of Rio Vista, No. A159246 (D1d3 Mar. 16. 2021)

Cop sued a City to challenge the release of a report related to a disciplinary action under the Public Records Act. Cop claims the City didn’t gave him appropriate notice to contest the release. City filed an anti-SLAPP motion, which the court partially granted and partially denied, finding on the latter issue that Cop showed a probability of prevailing.

The Court of Appeal reverses, in part, finding that the whole motion should have been granted. The Court finds that the claims arose from protected activity because they entailed a release of information to the media on an issue of public interest—police misconduct. Cop tries to draw an analogy to cases finding no “arising from” when public officials are just carrying out mandatory duties. For example, serving an arrest warrant isn’t protected activity even though submission of an affidavit in support of it is a statement in a judicial proceeding. But the Court doesn’t agree with that analogy. The PRA requires agencies to make discretionary calls when releasing records and invoking exceptions. The Court finds that discretion to have sufficiently expressive value to implicate City’s free speech rights.

So far as the chance of success, recent amendments to the Penal Code specifically subject police discipline records to disclosure when they relate to a sustained finding of dishonesty against a police officer. Here, a City employee made such a finding against Cop after a Skelly hearing, but that finding wasn’t ultimately appealed because City and Cop settled the personnel action. As the Court of Appeal reads the new provision, however, that is enough to count as a sustained finding requiring disclosure. 

Reversed in part.

Not Final

Contreras-Velazquez v. Family Health Cntrs. of San Diego, No.D075577 (D4d1 Mar. 18, 2021)

In rendering a verdict that Defendant isn’t liable, Jury in trial #1 makes a bunch of findings. But the trial court found that there was inadequate evidence to support that result. It granted a new trial on liability, which was affirmed on appeal. At retrial, Defendant argued that certain of the findings in trial #1 were issue preclusive on trial #2. 

But that doesn’t make sense. Issue preclusion or collateral estoppel requires the issue to have been decided in the first proceeding in a decision that was final and on the merits. A jury’s factual finding, upset by a new trial order that is then affirmed on appeal is definitely not final. The effect of a new trial grant is to vacate the judgment and the findings that support it. It thus cannot be the case that factual findings that undergird a verdict that is vacated on a new trial grant have any finality to them. Indeed, if the new trial grant is affirmed, there is no way that the findings could have been reviewed and affirmed on the merits in the first appeal. 

Affirmed.