Getting All Meta

Cohen v. Superior Court, No. B330202 (D2d4 Jun. 6, 2024).

This one is pretty interesting, in a kind of meta way. 

The underlying litigation is a fight between neighbors over landscaping. Plaintiffs say Defendants’ shrubbery violates the LA Municipal Code. The purport to get their cause of action from a Government Code provision that states:

Violation of a city ordinance is a misdemeanor unless by ordinance it is made an infraction. The violation of a city ordinance may be prosecuted by city authorities in the name of the people of the State of California, or redressed by civil action. action.

 Gov’t Code § 36900(a).

That seems to me, at least, to say that a city attorney can bring either a misdemeanor case or a civil action to redress the violation of a city ordinance. But Plaintiffs say that “redressed by civil action” means that anyone can bring a civil action alleging an ordinance violation. That reading isn’t totally nuts or anything, but it’s awkward.

Plaintiffs, however, have a 20-year old Court of Appeal case that agrees with them on their side. Riley v. Hilton Hotels Corp., 100 Cal. App. 4th 599 (2002). Because, in the absence of other authority, that bound the trial court, it overruled the Defendants demurrer. Defendants took a writ.

Plaintiffs moved to dismiss the writ, claiming, among other things, that the Court of Appeal doesn’t have jurisdiction to order the superior court to ignore Riley, based on the lack of horizontal stare decisis in the Court of Appeal. 

That’s pretty obviously wrong. Nothing about Auto Equity Sales, Inc. v. Superior Court, 57 Cal.2d 450, 456 (1962) or the other cases interpreting California’s somewhat unusual stare decisis rules says that the Court of Appeal can’t grant a writ that orders the trial court to comply with a rule that is sideways with some existing Court of Appeal precedent. That’s a pretty basic upshot from not having horizontal stare decisis.

But the Court of Appeal goes on to say that because Riley was a decision of the 2/4 (albeit with a completely different panel), it doesn’t just get to disagree with Riley. It can overrule it.

I didn’t know that was a thing. I had always thought that one of the features of the whole Auto Equity setup was that the division of the Court of Appeal into geographic districts, and subdivision of some districts into divisions, had no significance from the perspective of stare decisis. See Tourgeman v. Nelson & Kennard, 222 Cal. App. 4th 1447, 1456 n.7 (2014). So, for instance, the 2/4 isn’t even technically bound by prior opinions of the 2/4, even if it’s unlikely to disagree with itself. (Although it happens, sometimes seemingly by accident.) And if you can’t bind or be bound, it’s difficult to understand how you could overrule. 

The Court here does cite a couple of cases where panels on Court of Appeal purport to overrule prior decisions out of the same division. See Est. of Sapp, 36 Cal. App. 5th 86, 109 (2019); Saucedo v. Mercury Sav. & Loan Assn., 111 Cal. App. 3d 309, 315 (1980); People v. Yeats, 66 Cal. App. 3d 874, 879 (1977). But none of them explains why a panel of the Court of Appeal actually has the power to overrule a prior decision, as opposed to merely disagree with it. It also cites some Supreme Court cases that explain when stare decisis should not preclude departing from prior precedent. See Moradi-Shalal v. Fireman's Fund Ins. Companies, 46 Cal. 3d 287, 296 (1988); Cianci v. Superior Court, 40 Cal. 3d 903, 923 (1985). But the “no horizontal stare decisis” rubric does not apply to the Supreme Court. As the cited cases show, it typically views itself bound by its prior decisions under principles of stare decisis, but also able to overrule them.

I’m not saying this is bad, really. Just under-theorized. I have been of the view for long time, including in some of the earliest posts on this blog, that California should consider some way to create greater consistency in the Court of Appeal. This could take the form of some kind of formal en banc procedure or an expansion of the workload of the Supreme Court. Both of those, however, are bureaucratically difficult. It seems like the rules could also be amended to permit the Supreme Court to grant and transfer, and provide the transferee court to act as a quasi en banc, with the authority to disapprove of inconsistent prior decisions of Court of Appeal, which would then be subject to further discretionary review by the Supreme Court. I believe, given the power afforded to the Judicial Council under Article VI, § 12(c) of the state constitution, this could be accomplished by a minor amendment to the Rules of Court.

But given the way Auto Equity works at the superior court level, permitting divisions of the Court of Appeal to “overrule” prior decisions of the same divisions, and only the same divisions, is arbitrary and likely to be ineffective. The one place it might work is when, like here, there’s an isolated outlier that is the only thing that speaks on an issue, incorrectly. The other overruling cases cited in the opinion seem to be similarly situated.

In any event, the Court, having decided it has the power to overrule Riley, overrules Riley. For all sorts of reasons, even if the statute is ambiguous, it seems clear that Government Code § 36900(a) does not create a private right of action for anyone to enforce a city ordinance in a civil suit.

Writ granted.

20 Years After Zubulake III

Victor Valley Union Sch. Dist. v. Superior Court, No. E078673 (D4d2 Mar. 24, 2023)

The underlying case is a lawsuit alleging that a School District was negligent in failing to prevent an on-campus sexual assault of the Plaintiff, a teenager with developmental disabilities, while he was in a high school bathroom. It came out in discovery that after the events, but before the onset of the litigation, a video of the outside of the door to the bathroom had been erased. Plaintiff moved for terminating sanctions. The trial court, finding that the deletion was only negligent, declined to award terminating sanctions. It did find, however, that the District should have anticipated that the video would be relevant to anticipated litigation and thus that the District had a duty to preserve it. It accordingly issued evidentiary, issue, and monetary sanctions that effectively precluded it from contesting liability. 

District took a writ.

Technically, the petition concerns the Discovery Act’s safe harbor precluding sanctions for the routine, good faith deletion of electronically stored information. See Code Civ. Proc. § 2023.030(f)(1). But that subsection goes on to say that it does not alter any obligation to preserve discoverable information. § 2023.030(f)(2). The Court of Appeal considers the interplay between (f)(1)’s safe harbor and the (f)(2)’s stated intent not to change the law. It also looks at the legislative history of the 2009 amendments to the Discovery Act to make clearer rules regarding ESI and a 2012 bill that closed some loopholes in the 2009 amendments, including the addition of (f)(1) and (f)(2) to § 2023.030. The Court concludes that the safe harbor for routine deletion of ESI can apply only when the alleged spoliator is under no duty to preserve.

Which begs the question, of course: When is a party under a duty to preserve evidence? Despite the statute’s being on the books for a decade, and the prevalent role of ESI in modern litigation, there is actually no published state law authority on that question. So—as is the general practice of state courts on discovery issues—the Court of Appeal looks to federal law, which has been more-or-less settled since around the time I was in law school. 

The duty to preserve evidence arises at the point where litigation is reasonably foreseeable. It’s an objective, but fact-specific standard. As some of the cited federal cases explain, the “mere existence of a potential claim or the distant possibility of litigation” is not enough. But litigation doesn’t need to be on-file or “imminent” either. As the Court explains—reviewing the relevant federal decisions—litigation is reasonably foreseeable when it is “probable” or “likely” or arise from a dispute or incident.

Plaintiff also argued that the District’s statutory obligation under Government Code § 53160 to preserve video for 100 days gave rise to a presumption or provided an independent per se standard for a duty to preserve. But the Court of Appeal rejects. As the Court explains, (1) it’s unclear that the statute applies to the district; (2) the federal case law around regulatory violations and spoliation is (a) largely in the context of adverse inference instructions—not at issue here—(b) generally requires intentional deletion; and (c) permits an inference only when the party seeking the inference is within the class of persons the regulatory duty is intended to protect. None of those is present here.

The Court of Appeal goes on to hold that the trial court correctly applied the reasonable foreseeability test here. Litigation is not necessarily “probable” or “likely” to arise from every incident or dispute. But a school district’s “heightened duty” to care for the welfare of its students” “weighs heavily in favor of finding litigation is reasonably foreseeable following the report of an alleged sexual assault of a student by another student.” That is bolstered by the fact that public school employees are generally “mandated reporters”—potentially subject to criminal prosecution for failing to report an alleged child sexual assault to the authorities. These circumstances “make it obvious that evidence about whether a sexual assault occurred and who was responsible should be preserved for litigation, such that a reasonable administrator would not need to parse out the precise likelihood of a particular claim in determining whether to preserve the video.”

There was also, in addition, specific evidence of the District’s awareness of the likelihood of litigation. First, an administrator who reviewed and made a report on the video prior to its destruction observed that it depicted clear violations of the school’s restroom policy, which required the bathroom to stay locked and students admitted only one at a time. Second, the school’s risk manager stated in a declaration that the District’s attorneys had instructed him to “obtain confidential statements and reports immediately after an incident and forward them to my department.” Those materials were then to be provided to the District’s insurance carrier to evaluate potential liabilities and defenses. And third, the video was, after all, preserved long enough for the administrator to review and report on it. (The Court notes, however, in a long footnote, that the fact that in the litigation, the District claimed attorney-client privilege and attorney work product protection over the administrator’s report was not really evidence that the District anticipated litigation at the time the report was made.)

The record thus supported the trial court’s issuance of sanctions.
But the Court of Appeal finds the particular sanctions issued were likely too onerous. Discovery sanctions are supposed to be remedial, not punitive. And, as noted, although the trial court declined to put the District in default, it effectively did so by preventing the District from contesting the essential elements of liability. It was in effect if not name, a terminating sanction. And given that the trial court found that the District was only negligent, the trial court should have at least considered lesser sanctions that would have restored Plaintiff to the position he would have been in had the video not been deleted.

Writ granted.

This decision is detailed and lengthy. Perhaps a little too lengthy for my personal taste. Its analysis is rather obviously correct.

But it’s been 20 years since the decisions in the Zubulake case in the S.D.N.Y. explored the framework for when a duty to preserve evidence arises. And more than a decade since the Legislature amended the Discovery Act to address ESI issues. Why, in 2023, is this a case of first impression in California?
It seems, to me, that there are three possibilities.

First, given that discovery issues are most often addressed by the Court of Appeal by writ, it’s possible that superior court judges, in the large, have been getting it right. So maybe the appropriate case never came up.

Second, as the Court recognizes in footnote 12, some federal district court opinions are, at least, “unofficially reported,” in reporters like the Federal Supplement and the Federal Rules Decisions. That creates a body of persuasive case law that helps the development and stability of the law on novel issues that tend to evade appeal, such as discovery disputes. California doesn’t have that sort of thing. Trial court rulings are not even unofficially reported. Indeed, they are generally really hard to find. Indeed, there’s case law that says they are un-citable in any event, even if there’s no rule that actually says so. San Diego Cnty. Emps. Ret. Assn. v. Cnty. of San Diego, 151 Cal. App. 4th 1163, 1184 (2007) (“A trial court judgment cannot properly be cited in support of a legal argument, absent exceptions not applicable here.”); see also Aixtron, Inc. v. Veeco Instruments Inc., 52 Cal. App. 5th 360, 399 (2020); Bolanos v. Superior Court, 169 Cal. App. 4th 744, 761 (2008); Santa Ana Hosp. Med. Ctr. v. Belshe, 56 Cal. App. 4th 819, 831 (1997); cf. R. Ct. 8.1115(a) (non-citation rule applicable only to unpublished Court of Appeal and appellate division orders).

And third, it’s possible that writs were taken on this issue (or even that it was raised in an appeal of a judgment) but either the Court of Appeal summarily denied the petitions, or the decisions went unpublished. (A footnote explains that the District cited to some unpublished cases where the issue was addressed, but the Court declines to consider them under Rule of Court 8.1115.) But if this is a first impression issue, why were the prior decisions unpublished? Cf. Cal. R. Ct. 8.1115(c)(1), (2). 

With no insult the superior court judges of our great state, I don’t really buy that the first possibility explains things. Someone has to have gotten it wrong somewhere. And if so, this shouldn’t happen in a legal system as large as California’s, which, on a body count basis is significantly larger than the entire system of federal courts. Twenty, or even ten, years of legal uncertainty about a basic procedural issue that comes up in hundreds, perhaps even thousands of cases every year imposes an enormous cost on litigants and the superior courts.

You Gotta Fight for Your Right to S-J!

Cole v. Superior Court, No. D081299 (D4d1 Dec. 30, 2022)

Summary judgment takes a long time to brief. An MSJ needs to be heard at least 30 days before trial. Code Civ. Proc. § 437c(a)(3). And you need to give 75 days’ notice. § 437c(a)(2). Plus you need to add 5 days for mail service and two days for FedEx. Id. And as the Court here notes, although the summary judgment statute is silent on it, under the e-service statute, you also add two days for email or other electronic service. § 1010.6(a)(4)(B).

Defendant in this case filed an MSJ 107 days before trial, serving by email. But this case is in San Diego, where you need to reserve hearing dates pretty far out in advance. The earliest date the court would hear the motion was a week after the trial date. So defendant filed an ex parte asking to set an earlier date or to kick the trial so the MSJ could be heard. The court denied the application, commenting that Defendant waited too long to bring the motion. Defendant took a writ.

The Court here holds that, so long as a motion is timely under the above rules—that is, served by mail 110 days before trial, 107 days by FedEx or e-service, or 105 days by personal delivery—a trial court is obliged to hear it before trial. The Court cites a number of cases that stand for the proposition. So Defendant was entitled to either a specially set date or a trial continuance. The trial court abused its discretion by denying the ex parte.

Writ granted.

Location Still Matters

Rycz v. Superior Court, No. A163741 (D1d5 July 28, 2022)

This case arises out of the pretty awful death of a college student who, while incredibly drunk, staggered out onto the 5 freeway near USD, where she was hit by two cars. All the relevant events happened in San Diego County. Almost all of the witnesses are in San Diego County. But Plaintiff sued in San Fransisco because a significant defendant—Uber—is headquartered there. 

Nobody claims that San Francisco isn’t a proper venue. It is, under Code of Civil Procedure § 395. But several of the defendants moved for transfer under § 397(c), which permits a change of venue “[w]hen the convenience of the witnesses and the ends of justice would be promoted by the change.” The trial court denied the motion, reasoning that, given the new rules that liberally allow for remote testimony, § 367.75, Cal. R. Ct. 3.672, the location of the witnesses no longer mattered. A Defendant took a writ.

As the Court of Appeal explains, the new rules for remote appearances, which, without further legislative action, expire in 2023, don’t implicitly repeal the right to transfer a case to where it is convenient for most of the witnesses. Even under the new rules, remote testimony at a jury trial isn’t a given. It’s within the discretion of the trial court. And while § 367.75 reflects a legislative determination that remote testimony can sometimes be adequate, it does not suggest that it will be adequate all the time. So the motion should have been granted.

Writ granted.

Stay Play

Leenay v. Superior Court, No. E077292 (D4d2 Jul. 22, 2022)

A Store is facing a bunch of wage-and-hour litigation across the state. It successfully had a number of cases coordinated through the JCCP process. It then moved to stay the coordinate cases because it was also the Respondent in 50 or more wage and hour cases—cases brought by different plaintiffs—that had been compelled to arbitration. Store convinced the trial court that Code of Civil Procedure § 1281.4—which says a court shall stay a case pending arbitration “of a controversy which is an issue involved” in the action—required it to stay cases brought by different parties, so long as the “issues” overlapped. Plaintiff took a writ.

The problem with Store’s argument is § 1281.4’s use of the word “controversy.” Elsewhere in the CAA, that term is defined as “any question arising between parties to an agreement whether the question is one of law or of fact or both.” § 1280(d). So the “controversy” referenced in § 1281.4 needs to be between the same parties who are also parties to an arbitration agreement. “In other words, section 1281.4 requires that the pending action involve both the arbitrable question and the parties in the arbitration.” That doesn’t apply to Plaintiff’s case here.

Writ granted.

More Talk About Ford

LG Chem, Ltd. v. Superior Court, No. D079718 (D4d1 Jun. 27, 2022)

Plaintiff was injured when a lithium-ion battery called an “18650” that he bought from a San Diego vape shop blew up in his pocket. He sued a Korean Manufacturer that makes 18650 batteries. Manufacturer moved to dismiss for lack of personal jurisdiction. The trial court granted the motion, and the Manufacturer took a writ.

Jurisdictional discovery revealed that Manufacturer did sell a large number of 18650 batteries to three customers in California. These customers all approached Manufacturer—it did not market, advertise, or solicit their business. And these customers were all industrial. They would encase the batteries in an enclosure with protective circuitry for use in products like electric cars and power tools. Manufacturer did not sell to anyone in California that re-sold batteries for direct sale to consumers, including vape shops or vape shop supply businesses. Indeed, owing out of a vaping battery incident in 2016, Manufacturer made all of its customers certify that its batteries would used only for the aforementioned industrial uses and that they would not be sold or re-sold for individual consumer use.

On these facts, the court finds specific personal jurisdiction to be lacking. It finds that the sales were adequate to constitute purposeful availment. But the jurisdiction founders on the second—relatedness—element of the specific jurisdiction test.  There’s not much dispute that Plaintiff’s injury does not “arise” out of Manufacturer’s industrial sales in California. But the question is whether the claims “relate” to those contacts, a la, the Supreme Court's Ford decision, which we recently discussed in the Daimler Trucks case.*

The Court rejects the Ford analogy, however, based on both the quality and quantity of the contacts. First, unlike Ford, manufacturer did not extensively market and advertise sales of its product to anyone in California. And second, the California market that Manufacturer served was industrial, not consumer. So unlike Ford—where Ford sold trucks in Montana, just not plaintiffs truck—here Manufacturer did not systematically serve a market for consumers like Plaintiff to purchase or use its 18650 batteries.

Writ granted.

Interestingly, this falls on the other side of the “junior varsity general jurisdiction” line I discussed in my post on Daimler Trucks. As I said there, in Ford, the U.S. Supreme Court basically created a third jurisdictional category for certain tort cases—one with a more malleable relatedness prong—where there are (1) home-state plaintiffs; (2) defendants who would have satisfied the pre-Daimler “systematic and continuous” test; and (3) where the instrumentality that hurt the plaintiff is marketed and sold to others in the jurisdiction where the defendant lives. Unlike in Daimler, this case fails in both elements (2)—Manufacturer doesn’t satisfy the old systematic and continuous test from Helicopteros Nacionales v. Hall—and (3) Manufacturer didn’t market or sell 18650 batteries to consumers in California.

*Daimler Trucks was actually decided a few weeks after this case. I was in trial when this case came down and I am working through some backlog.

JV-GJ

Daimler Trucks North America LLC v. Superior Court, No. B316199 (D2d5 Jul. 7, 2022)

This is basically the state court equivalent of the U.S. Supreme Court’s recent personal jurisdiction decision in Ford Motor Company v. Montana Eighth Judicial District Court, 141 S.Ct. 1017, 1024–1025 (2021). Plaintiff, a Californian, is a truck driver. His truck is made by Daimler. He bought it used, in California. But it was originally sold in Georgia. Plaintiff got into a bad accident in Oklahoma while on a long-haul trip back to California. He sued Daimler, in California, alleging that the truck had a design defect. Daimler moved to quash for lack of personal jurisdiction. The trial court denied the motion, and Daimler took a writ.

Daimler makes two basic points: (1) it didn’t design, manufacture, assemble, or sell the truck in California; and (2) the accident was in Oklahoma.  

The first point is clearly foreclosed by Ford. There, plaintiffs, who bought used Ford vehicles in their home states sued Ford in home state courts after vehicular accidents in those states. Ford argued that those facts didn’t satisfy the second element of the traditional three-step specific personal jurisdiction analysis—that the claim arise out of or relate to the defendant’s in-state contacts—because the plaintiff’s injuries weren’t caused by anything Ford did in their home states. The Court rejected that analysis, finding that Plaintiff’s claims related to Ford’s extensive marketing and sales of its vehicles in the home states, even if those particular vehicles were sold elsewhere. 

But the second point is different. The Ford plaintiffs sued where the accidents happened, which also happened to be their home states. Here, however, the accident happened in Oklahoma, albeit to a Californian. While Ford suggested that an in-state injury could be relevant to the jurisdictional inquiry, it was not an irreducible minimum to find jurisdiction. The Court here finds that it because Plaintiff is Californian, the out-of-state nature of the accident isn’t dispositive. When a Californian is injured by a product that a defendant extensively markets and sells to Californians, that is enough to satisfy the relatedness test, even if the injury occurs elsewhere.

In coming to this conclusion, the court contrasts Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773 (2017), where the court found that a defendant’s extensive marketing and sales of drugs in California did not satisfy relatedness when the plaintiffs were out-of-state citizens who were allegedly injured by pharmaceuticals taken in their home states.

Writ denied.

It seems like we’re effectively seeing a third category of personal jurisdiction emerge. Eight years ago, in another case involving Daimler—Daimler AG v. Bauman, 134 S.Ct. 746 (2014)—the Supreme Court did away with the old “systematic and continuous” test for general jurisdiction, replacing it with a test finding general jurisdiction only where the defendant is “at home.” For a corporation, that’s its headquarters and place of incorporation. So just doing a lot of business in a state is not enough, without more, to make a company subject to jurisdiction there. And Bristol-Myers Squibb declined to blow a hole in that rule by finding, at least for out of state plaintiffs, that lots and lots of in-state business was enough to justify a “sliding-scale” rule where a flimsy standard for relatedness would suffice.

But limiting general jurisdiction causes some problems. Because, under a more stringent test for relatedness in specific-jurisdiction, it means that arbitrary factual distinctions (like the fact that an allegedly defective truck was bought used, in California, from someone who originally bought it in Georgia) could lead to plaintiffs being unable to sue in the courts of their home states, even when the defendant moves lots of the same product in the plaintiff’s home state.

So there is this class of cases where there are (1) home-state plaintiffs; (2) defendants who would have satisfied the pre-Daimler “systematic and continuous” test; and (3) where the instrumentality that hurt the plaintiff is marketed and sold to others in the jurisdiction where the defendant lives. In these cases, we are getting to a kind of junior-varsity general jurisdiction, where “relatedness” requires only that the three elements exist. 

And maybe that’s fine. Jurisdiction feels fair in Ford and here. If companies elect to extensively avail themselves of a state’s markets, state courts should get to vindicate their citizens’ injuries connected with those products, even if the relatedness line is only conceptual, not causal. On the other hand, the plaintiffs in Bristol-Myers—non-Californians suing for injuries allegedly due to taking Plavix outside of California—were pretty obviously engaged in forum shopping, so holding them to a higher relatedness standard makes sense. I'm just not sure this is a rule.

Exclusive Concurrent Jurisdiction Comes for PAGA #2

Shaw v. Superior Court, No. A163263 (D1d4 May 3, 2022)

PAGA case #1 is pending in LA. This case, filed in Contra Costa County is PAGA case #2 about the practice by the same employer. After JCCP coordination was denied, the court stayed this case under the doctrine of exclusive concurrent jurisdiction—essentially a rule that you can’t have the same lawsuit in two different courts at the same time. (In a PAGA clam, the plaintiff stands in the government’s shoes.) Although Plaintiff #2 makes some arguments that the doctrine doesn’t apply to PAGA cases, they aren’t very convincing. So her case was properly stayed.

Affirmed.

Apex Depositions in DA Fight

Ross v. Superior Court, No. D079278 (D4d1 Apr. 19, 2022)

This is a retaliation case brought by an assistant DA in Riverside who claims that the DA—who we’ll call DA #2, for reasons soon to be apparent—forced him to prosecute and innocent person, coerced him to withhold Brady evidence, and punished him when he resisted. During the deposition of the DA's predecessor (DA #1), DA #1 testified that he and the new DA (DA #3) were of the view that DA #2 was ethically challenged. DA #1 also testified that DA #3 told him that unnamed attorneys from the county had leaned on him to make sure DA #3 didn’t express that opinion in a deposition.

Plaintiff subpoenaed DA #3—who is currently in office. But to take the depo of a high government or corporate official—commonly called an “apex deposition”—the noticing party needs to show that: (1) the witness has percipient factual knowledge; and (2) it can’t get the information by some other means. The trial court quashed the subpoena because Plaintiff didn’t make that showing. Plaintiff took a writ. 

The Court of Appeal found that the trial court was mostly right. Most of Plaintiff’s theories of relevance were weak or the evidence otherwise available. But in a limited way, the standard was satisfied. Efforts to tamper with witnesses or suborn perjury are relevant and admissible because they show consciousness of guilt. And only DA #3 can provide that info. (Indeed, DA #1’s testimony about it is hearsay.) So to that limited extent, the motion to quash should have been denied.

Writ granted in part.

First Filing, Cross-Claims, and Labor Code § 925

LGCY Power v. Superior Court, No. F082353 (D5 Mar. 1, 2022)

California law is, in general, more friendly to the rights of employees than the laws of some other jurisdictions. This arises from statutory provisions, as well as case law interpreting them. A prime protection is Business & Professions Code § 16600, which has been interpreted to, among other things, to prohibit or render unenforceable post-employment non-compete and non-solicitation terms in employment agreements. For a while, employers seeking to avoid § 16600 would craft employment agreements to ensure that employment contracts would be interpreted by out-of-California courts under non-California law.

The Legislature’s answer to that was Labor Code § 925, enacted in 2016. Under § 925, the employer of a California employee cannot require, as a term of employment to agree to adjudicate claims outside of California or under non-California law. The statute further permits an employee to void any contractual provision that violates this prohibition and provides for an award of attorneys’ fees. It applies only to contracts entered or amended after January 1, 2017. And it contains an exception: It does not apply to a contract were an employee is “in fact individually represented by legal counsel” in negotiating the choice of law and forum.

There are a number of open interpretive questions about the statute, as there are relatively few published decisions of California appellate courts addressing it. The few that exist primarily address the effective date. Midwest Motor Supply Co. v. Superior Court, 56 Cal. App. 5th 702, 710 (2020) (holding that any modification of an employment contract after January 1, 2017 brings the agreement into the statute); Ryze Claim Sols. LLC v. Superior Court, 33 Cal. App. 5th 1066, 1072 (2019) (§ 935 did not apply to contract entered before 2017).

This case resolves a few of them. A group of salespersons left their employer to found a competing company. Some of employees lived in California, but both the old and the new companies are in Utah. All of the pertinent employment agreements provided for Utah law and venue in courts in Salt Lake City. They also contained non-compete clauses. The old Employer sued the employees in Salt Lake City alleging, among other things, breaches of of the non-competes and trade secrets misappropriation. After the California employees were unsuccessful in their efforts to get their cases dismissed—both on motions to dismiss and summary judgment—under § 925, one of them brought an action in Fresno County Superior Court. (Another filed a case in San Diego, which is not the subject of this writ.) The employer demurred based on the pendency of the Utah action, which the trial court denied. The employer then sought a writ of manage with the Court of Appeal.

First, the Employer argued that the statute on compulsory cross-complaints precluded the filing of the Fresno action. Under Code of Civil Procedure § 426.30(a), if a complaint has been filed against a party, that party is required to litigate any “related cause of action”—one arising from the same transaction or occurrence—by filing a cross-complaint in the first action. Although the parties didn’t brief the issue, the Court finds that the rule applies to claims that are first-filed in other jurisdictions.

We should pause there for a moment. It’s one thing to say that when a case proceeds to judgment in some other jurisdiction, the failure to bring a compulsory counter-claim in that action bars filing a new action in California state court. That’s how the equivalent Federal Rule of Civil Procedure—Rule 13(a) works. See 6 Wright & Miller, Federal Practice & Procedure § 1417. And there are California state cases that recognize the same thing applies to § 426.30. See Currie Med. Specialties, Inc. v. Bowen, 136 Cal. App. 3d 774, 776 (1982). But the way the court reads § 426.30 is that the mere filing of a litigation in another state bars bringing suit in California if the claim would be a compulsory cross-claim in the first-filed suit.

Federal law doesn’t have this problem. See 6 Wright & Miller, Federal Practice & Procedure § 1418 But Rule 13 is phrased as a requirement to plead compulsory cross-claims and has an exception for cases where the claim is pending elsewhere. Fed. R. Civ. P. 13(a)(1), (a)(2)(B). The application of its bar to future cases is implicit. On the other hand § 426.30 is literally triggered “when a complaint has been filed and served” and says the potential cross-claimant “may not thereafter in any other action assert” the claim. So thinking the rule applies as the Court here does isn’t textually crazy.

But it’s a potentially problematic result and I can’t find any case law or evidence that that’s what the legislature intended. It’s also in tension with the rule that a plea in abatement or special demurrer for “other action pending,” see Code Civ. Proc. § 430.10(c), only lies when the first filed action was also filed in California. Gregg v. Superior Court, 194 Cal. App. 3d 134, 136 (1987). Indeed, since § 426.30 does not itself provide any procedural vehicle to move for dismissal, perhaps the limit on the special demurrer is the effective answer.

Setting aside § 925 for the moment, California has certain policy imperatives, which its citizens are generally entitled to rely on its courts to vindicate. Take for instance the bar on contractual waivers of the right jury trial. See Grafton Partners v. Superior Court, 36 Cal. 4th 944, 950 (2005). Assume a Californian is party to a contract with a jury trial waiver and a New York law and venue selection. In that case, a California court cannot enforce the venue provision on public policy grounds. But if § 426.30 works like the Court reads it here, that only works if the Californian moves first and files here. Otherwise, notwithstanding the state’s policy otherwise, a second-filed action here would be barred under § 426.30(a).

There are some potential tactical ways to avoid that. Section 426.30(a) arguably only comes into effect when the defendant in the first case files its answer. So there’s an argument that a second filed case might not be barred here if filed pre-answer. (As noted, employee here litigated somewhat extensively in Utah before filing in Fresno.) The rule doesn’t apply when the first filed court lacks personal jurisdiction. § 426.30(b)(1). (Employee tried that in Utah but his motion was denied.) And it doesn’t apply to a claim solely to declaratory relief. § 426.60(c). (Employee’s claims here include wage and hour claims for money damages.) But still. If you want to be in California, you would be advised to act fast.

In any event, the Court here digs itself out of the hole it creates by finding that § 925 creates an exception to § 426.30, which does not apply when “otherwise provided by statute.” Although § 925 doesn’t say that it permits a cross-claim that would otherwise be barred by § 426.30, the court finds that the purpose and the structure of the statute in preserving a California forum for California employees are adequate to create an exception.

Employer next argues that § 925 does not void non-California choices of law or forum—it only makes them voidable. It suggests that Employee needed to seek to void the provisions with a court—and in particular with the court in Utah. But although one generally needs to act to void a voidable obligation, Employee basically did that when he filed his complaint and opposed Employer’s demurrer in the California case. Since § 925 doesn’t have any time limit, that’s good enough.

Next, Employer argues that § 925 is facially inapplicable, because Employee entered his contract in 2015 and it was not modified after January 1, 2017. But Employee was promoted and his job duties and pay changed after that. Notably, Employee’s original job description and pay structure were written into Employee’s employment agreement. So the changes to these terms, albeit oral, were sufficient to bring the situation into the ambit of § 925. There’s nothing in § 925 that requires a triggering amendment to be in writing.

Employer also argues that Employee is, in actuality, an independent contractor And since § 925 facially applies only to employees, terms and condition of employment, and employment agreements, it does not apply. This issue has come up a bunch in federal district court cases, especially in the context of motions to compel arbitration. See, e.g., Yeomans v. World Fin. Grp. Ins. Agency, Inc., 2019 WL 5789273, at *3 (N.D. Cal. Nov. 6, 2019). Unfortunately for Employer, instead of fully briefing the issue in its petition, it opted to try to incorporate by reference briefing from the Utah case. That doesn’t satisfy Rule of Court 8.204(a), which is incorporated into the rules on writs under Rule 8.485. So the Court deems the issue forfeited. The Court of Appeal thus declines to disturb the trial court’s implicit finding that Employee alleged sufficient facts to show he was an employee for the purposes of § 925.

Finally, Employer makes an argument that the Full Faith & Credit clause of the federal constitution required the court to apply Utah’s compulsory cross-complaint rule. But the Full Faith and Credit clause applies primarily to judgments. The Utah case hasn’t yet reached a judgment. When and if it did, the Full Faith and Credit clause would generally require to apply the preclusion rules of the forum that entered the judgment, including rules about compulsory cross-complaints, to see if a later filed case is barred under res judicata. But there’s just no rule that Full Faith and Credit requires a court in a second-filed action to apply the procedural rules of the state where a first action is filed.

Writ denied.

Burdens and Standards on Administrative Writs

Li. v. Superior Court, No. C092584 (D3 Sept. 30, 2021)

Last year, in Conservatorship of O.B., the California Supreme Court cleared up some confusion regarding the way an underlying burden of proof affects the standard of review on appeal. Essentially, the court held that the standard of review bakes in the burden. So, for instance, when the substantial evidence standard applies, it will take more or better evidence to affirm a finding for a fact subject to a clear and convincing burden than it would for a fact that can be found by a preponderance.

This case applies that logic to administrative mandamus proceedings under Code of Civil Procedure § 1094.5. Administrative mandamus is a procedure that’s used to appeal the quasi-judicial decisions of administrative agencies to the superior court. In any administrative proceeding where the claimant is entitled to a hearing, the appeal is taken by § 1094.5 writ. The standard of review that applies to that appeal depends on the nature of the right affected. If the proceedings substantially affect a fundamental vested right, the record is reviewed de novo, and the statute directs the court to find an abuse of discretion if in its independent judgment, the agency’s findings are not supported by the weight of the evidence. If no fundamental right is involved, the superior court performs more of a traditional appellate role and reviews the findings for substantial evidence. 

The question, then, how the O.B. rule affects a superior court when the underlying burden in the administrative case is higher than a preponderance. The logic of O.B. pretty clearly applies to non-fundamental review that applies a substantial evidence standard. But for independent review, some older cases read the phrase “by the weight of the evidence” in § 1094.5(c) to require a preponderance burden even if the agency needed to make findings by clear and convincing. Particularly when combined with O.B., however, that leads to the odd result that the superior court winds up applying a more deferential standard of review in the independent review than it does on review for substantial evidence. That doesn’t make a lot of sense.

So the Court of Appeal here revisits those old cases. It does not find that they were implicitly overruled by O.B.—a probate appeal that had nothing to do with administrative mandamus. But regardless, the Court finds that the old cases mistakenly equated “weight of the evidence” with a preponderance and relied upon somewhat shaky somewhat out of context authority in doing so. In particular, there was a lot of conceptual conflation between burdens of proof and standards of review. With that underbrush cleared, there is no logical obstacle to applying an O.B.-style burden incorporation into the independent review standard.

Ironically, none of that affects the outcome of this case—the Medical Board of California’s revocation of petitioner’s physician’s license where the burden is clear and convincing and review is independent. The court finds that the petitioner failed to show that application of the correct standard would have altered the result in the superior court.

Writ denied.

I Have Never Seen Your Client. And I'm Not a Florist.

Forest Law Memorial-Park Assoc. v. Superior Court, No. E076549 (D4d2 Oct. 7, 2021).

This one is kind of interesting. It’s a PI case where the main issue is respondeat superior. An Employee of the defendant, a Cemetery, hit someone while driving. The factual question is whether the Employee was merely coming from or going to work―which is generally not viewed as within the scope of employment―or whether he was driving as part of required duties―which is.

On summary judgment, the Employee put in a declaration that said he was basically the front desk receptionist―he never drove anywhere from work. Plaintiff, however, put in a declaration from a lady who said she was Florist, and who said she often saw Employee come by at her shop to pick up flowers for the Cemetery. The Court found that created enough of a fact dispute to deny SJ.

But then the Erstwhile Florist was deposed. She testified she had never seen Plaintiff and didn’t know who he was. She never say any of Cemetery's employees. Indeed, her only connection to the Cemetery is that she had a granddaughter who was buried there. Indeed, EF was not even a florist. She was the customer service manager at a grocery store that had a flower department, where she once picked up the phone when Plaintiff’s lawyer called, because the florist was on her break. EF said that she only signed the declaration because Plaintiff's attorney harassed her by calling twenty-some times, so she signed it to get him to leave her alone. She testified that she signed the document without understanding that it was going to be used in court or the significance of signing a document under penalty of perjury. 

The Cemetery renewed its SJ motion, this time using EF's depo transcript and objecting to the recanted declaration. The trial court again denied SJ. After specific supplemental briefing on this issue, it found that, because the four corners of the declaration failed to show any basis for exclusion, it was admissible. And because the court was not allowed to make credibility determinations on summary judgment, it had to credit EF’s since-disavowed declaration. And that gave rise to a disputed issue of material fact. Cemetery took a writ.

The Court of Appeal grants a writ. EF’s declaration was admissible evidence only if it was made within her personal knowledge, which may be shown by any otherwise admissible evidence, “including [her] own testimony.” Evid. Code § 702(a), (b). And under Evidence Code § 403(a)(2), the proponent of evidence bears the burden to come forward with facts sufficient to sustain a finding that the witness had personal knowledge concerning the subject of testimony. The converse of that rule is that, if the foundational evidence is such that no reasonable juror could or would find the witness has personal knowledge, the testimony is inadmissible under § 702.

Here, the trial court erred in limiting its inquiry to the face of the declaration. As noted, “any admissible evidence” can be considered. Here, that included the depo testimony recanting the declaration and describing shady the circumstances of its creation. And when that is taken into account, the Court finds that no jury could reasonably have found that EF had personal knowledge of the facts in her declaration. The Court notes that there were all kinds of circumstances that could merit a different result, like some corroboration, or the lack of an affirmative account of the circumstances of signing, or some basis to believe EF’s memory was better when she singed than when she was deposed. But since none of that was present here, Plaintiff failed to meet its burden under §§ 403 and 702, even if that is a pretty low bar to meet.

The court also address two ancillary issues. First, Plaintiff argues that the declaration was also admissible as a prior inconsistent statement under 
§ 1235, an exception to the hearsay rule that permits the introduction of such statements as substantive evidence. But § 1235 applies only at trial. Inconsistent statements of hearsay declarations are addressed under § 1202, which permits use for impeachment, but not matters of substance. And in any event, even if the declaration were not hearsay, that wouldn’t make it admissible because it still failed the personal knowledge requirement. (FWIW, the usual requirement of personal knowledge is dispensed with in the case of a party’s admission, Levy-Zentner Co. v. S. Pac. Transportation Co., 74 Cal. App. 3d 762, 787 (1977), but that doesn’t extend to prior insonsistent statements.) 

Finally, the court addresses and rejects Cemetery’s alternative argument that the declaration should have been excluded under the D’Amico rule, which holds that a declaration can’t contradict other sworn discovery responses to avoid summary judgment. The Court finds two reasons D’Amico doesn't apply. 

First, the Court says that D’Amico is premised on the value of party admissions and thus applies only to inconsistencies between parties' declarations and their discovery responses. Inconsistencies regarding third party witnesses like EF don’t fall within the rule. The Court notes in a footnote, however, that two published Court of Appeal cases apply D’Amico to third party witness statements. It disagrees with these cases. And it also explains that the uniform practice of federal courts applying the similar “sham affidavit” rule also applies to third party declarations. But, the Court notes, the federal rule requires the court to make factual findings about sham-ness, which are effectively credibility determinations, while in California, the non-moving party can avoid D’Amico by coming forward with an explanation of inconsistency that could be credited by a reasonable trier of fact.

The Court also finds that D’Amico applies only when the inconsistent deposition testimony happens before the declaration. When the deposition happens afterwards, the parties have a chance to cross examine the witness about the declaration. Sometimes, like here, they can show that the declaration was made without foundational facts being true. But there may be other times where, despite inconsistency, both the depo and the declaration could be admissible and the resolution of the conflict left up to the trier of fact.

Writ granted.

 

Quashing Service in Unlawful Detainer

Stancil v. Superior Court, No. S253783 (Cal. May 3, 2021)

Unlawful detainers—eviction proceedings—are among the most common civil litigations in California state courts. More than 150,000 of them get filed in any given year. 

UD procedure is, however, a wreck. It is super-expedited—a response to a complaint needs to be served within five days. Summary judgment motions can be heard on five days notice. Trial can be set in twenty days.

At the same time, it is also very complicated. The substance and procedure are governed by numerous vaguely worded statutes, strewn across multiple codes in seemingly random fashion. There are overlapping layers of law at the city, county, state, and sometimes even the federal level. Many of the defenses are extremely technical. And, despite the enormous volume of filings, there is very little case law on anything. 

And then on top of all that, many of the litigants are pro se, and even the represented ones often aren’t paying their lawyers for hours of work to figure it all out.

This case, however, made it to the Supreme Court. The question presented is whether and how the tenant can use a motion to quash to challenge a UD complaint. It’s an interesting one.

In ordinary civil procedure, a motion to quash is used to challenge a defect in service or the lack of personal jurisdiction. The relevant statute, Code of Civil Procedure § 418.10, also addresses forum nonconveniens. It permits a defendant to make a special appearance to challenge service. No responsive pleading is required unless and until the motion is denied. The time to respond is further tolled if the defendant takes writ petition—specifically authorized by § 418.10(c)—until ten days after it is denied.

This has an unusual significance in UD cases because it potentially creates a avenue the tenant to really slow things down. Instead of five days to respond, the tenant gets the time spent to brief and argue the motion, ten days to take a writ, whatever time it takes to get decided, and then, if denied, ten days after the denial to answer.   

That creates a lot of incentive for the tenant to move to quash. Even when personal jurisdiction, as such, is not really at issue. Which is what happened here. Plaintiff—who appears to be the renter of a boat slip at a Marina of the S.F. Bay—argued in his motion that the wrong public entity was the name plaintiff. The trial court denied his motion, and then the appellate division and the Court of Appeal denied his writs. But the Supreme Court granted review, due to a longstanding perceived split of authority between Delta Imports, Inc v. Municipal Court, 146 Cal. App. 3d 1033, 1036 (1983) and Borsuk v. Superior Court, 242 Cal. App. 4th 607, 610 (2015).

The Court, in a unanimous opinion by Justice Cuellar, takes an interesting tack. Plaintiff loses, but the rule the Court lays winds up being relatively favorable to tenants. As the Court explains, a motion to quash under § 418.10 can only raise issues with personal jurisdiction or service. Tenant’s effort here—which entails a challenge to the truth of some of the facts alleged in the complaint—is not that. So a motion to quash is not an appropriate vehicle in his case.

But while that was enough to end the case, it doesn’t end the analysis. As the Court explains, UD is a creature of statute, with a bunch of special procedures. One of them is the right to serve a summons that requires a response within five days. In order to serve that kind of summons, however, the case needs to be a legit UD case. Were you to serve a five-day summons in an ordinary tort case, that service would be defective, it would be inadequate for the court to take jurisdiction over the defendant, and thus it could be subject to a motion to quash.

So, reasons the Court, a condition of serving a five-day notice in a legit UD case is pleading a legit UD case. A complaint that doesn’t state facts, if assumed true, that make out all the elements of an actionable UD claim is thus amenable to attack by a motion to quash.*

The upshot of all this is that although the tenant can’t use a motion to quash in a UD case to accomplish what he could with a summary judgment motion, he can use the motion to serve the same essential function of a general demurrer. And because the landlord’s strict compliance with the statutory procedures are elements of a UD claim, that means many of the kind of technical defects that trip up landlords and their counsel are amenable to resolution on on a motion to quash, even if they don’t raise what one would ordinary consider to be defects in service or personal jurisdiction.

Writ denied.

*This case shows the value of a well placed amicus brief. The link between stating a claim and jurisdiction thorough a five-day notice that the Court drew is not all that apparent from the tenant’s brief—it comes directly out of an amicus brief filed by the Western Center on Law & Poverty.

How Many Contempts?

Moore v. Superior Court, No. G058609 (D4d3 Nov. 11, 2020)

A trustee’s Attorney in a probate case got hit with a civil contempt judgment for misconduct during a settlement conference. Allegedly, he was rude and abusive to the other parties and the settlement officer, he accused opposing counsel of lying without affording any explanation. He refused to discuss settlement. And when the officer threatened to go to the judge, Attorney objected on the grounds that the settlement proceedings were confidential. The trial court found him guilty on these four counts and fined him $900 per violation. It also ordered him to pay the opposing party’s fees for the contempt litigation under Code of Civil Procedure § 1218(a).

An interesting side point—a contempt judgment is both final and nonappealable. See Code Civ. Proc. §§ 904.1(a)(1); 1222. So the judgment gets reviewed though a writ of review, which is not much used in other contexts. 

Attorney raises a number of grounds, but only one gets traction—the unit of prosecution. Attorney says all four alleged contempts arise from a single course of conduct during a fifteen minute settlement conference. Relying on Penal Code § 654, Attorney argues that fining him four times punishes him multiple times for the same act. The Court of Appeal agrees. Although the unit of offense rules are pretty fuzzy, contempt cases seem to limit multiple charges of contempt to separate, discreet acts. When, like here, there’s only one core incident, there’s only one punishable offense. So the Court of Appeal knocks the four counts down to one.

It also strikes the attorneys’ fees. Section 1218(a) permits a fee award for contempts where the contempt consists of violating a court order. That’s not the issue here. Attorney might have earned the contempt by being rude and disrespectful, but he didn’t violate any court order. So a fee award under § 1218(a) was not authorized.

Reversed in part.

The Limits of a Pro Hac

Big Lots Stores, Inc. v. Superior Court, No. D077486 (D4d1 Nov. 20, 2020)

Defendants in this employment case are primarily represented by lawyers from an Ohio firm who are admitted pro hac vice. On several occasions the Ohio lawyers also claimed to represent ten deponents—eight former employees and two current store managers—in the case, for whom they had never been authorized to represent pro hac. When the trial court got word of this, it revoked the Ohio lawyers’ pro hacs. Defendants took a writ.

The Court of Appeal splits the difference. It is true, the Court holds, that a pro hac permits an out of state lawyer to represent only a particular party in a particular case. In a slightly different context, Rule of Professional Conduct 4.2(a) says that a lawyer who represents a company also represents officers, directors, managing agents, and Rule 4.2(b) says that lawyer also represents other current employees whose admissions could be held against the company. But that didn’t apply to former employees. Nor did it apply to current store managers, who could not have made binding admissions given the factual particulars of the case. Thus the Ohio lawyers were not authorized to represent the witnesses.

But that said, the revocation of the pro hacs—an effective disqualification—was too drastic a remedy that deprived Defendants of their choice of counsel. No doubt, the Ohio lawyers misinterpreted the pro hac orders and the relevant rules. But the mistakes were innocent. So a DQ was not warranted.

Writ granted.

Peremptory Strikes for Peremptory Strikes

Akopyan v. Superior Court, No. B304957 (D2d7 Aug. 24, 2020)

This case got reversed and remanded last fall with an order that the trial court conduct a full Batson inquiry over the Defendants having exercised peremptory strikes against a number of Hispanic jurors. When the case got back to the superior court, Plaintiff exercised the other kind of peremptory strike—against the trial judge under Code of Civil Procedure § 170.6. The court accepted the strike and Defendant took a writ, which the Court of Appeal grants.

The issue here is the application of § 170.6 on a remand. The statute does permit a new strike after a reversal and a remand for a new trial. But conducting the Batson inquiry ordered in the prior reversal is not a “new trial” in any sense of that term. And policy-wise, it’s also particularly important for the same judge to do the full Batson analysis since that judge oversaw the allegedly problematic voir dire in the first instance. Only if the trial judge finds a Batson violation will there be a new trial. So the Court of Appeal says the trial court should have put the § 170.6 on ice till the Batson inquiry is done and then granted it only if he ordered a new trial.

Writ granted.