Bring on the Shadow Docket

Daly v. San Bernardino Cnty. Bd. of Supers., No. S260209 (Cal. Aug. 9, 2021)

If you been following the debate over the SCOTUS shadow docket over the past couple years, you might know that, in federal court, judgments on appeal are not automatically stayed. Whether a stay will issue is a matter of discretion left up to the deciding court in the first instance, and then the court reviewing on appeal, with the party seeking the say bearing the burden of persuasion. See Fed. R. Civ. P. 62(c); Fed. R. App. P. 8(a); see generally Nken v. Holder, 556 U.S. 418, 426 (2009) (four-factor test, similar to Winter test applicable to injunction); Hilton v. Braunskill, 481 U.S. 770, 776 (1987).

But in California, it’s the other way around. Filing a notice of appeal presumptively stays enforcement of a judgment. Code. Civ. Proc. § 916. That rule is then subject to statutory exceptions—“as provided in Sections 917.1 to 917.9, inclusive, and in Section 116.810.” Id. The most commonly invoked of those is when the appellant of a money judgment fails to post an appellate bond. See § 917.1. Appellate courts also have discretion to grant writs of supersedeas to stay cases that are not otherwise within the ambit of § 916. But there’s no statutory authority to afford relief from a stay if a case falls within one of the statutory exceptions.

And then there is the rule for injunctions. Except for very specific kinds of injunctions, see Slip Op. 9 n.4, the statutes on stays don’t really address those at all. Which puts us into the realm of the preeminent canon of construction that applies to California procedural law—procedunt omnia statuta nisi non.* Everything in procedure is statutory, except when it isn’t. Back in 1857—notwithstanding an 1851 statute substantively equivalent to § 916—the Supreme Court held that only a mandatory injunction is stayed on appeal. An ordinary prohibitory injunction is not. That has remained the basic rule throughout the history of the state. The rub, however, is telling the difference between the two. Which gets us to this case.

A member of the San Bernardino Board of Supervisors quit to join the state assembly. The county charter says, in the event that occurs, the remaining supes get to appoint a replacement. But if that doesn’t happen within thirty days, appointment goes to the governor. Here, the members of the board culled a large list of potential appointees through an email nominations process before having an open meeting to debate the nominees and vote on the appointment. The meeting occurred and a new supervisor was seated. Plaintiff’s mandamus petition contended that the email culling was a form of non-public seriatim voting that violated the open meeting rules in the Brown Act. The trial court agreed. It held that the appointment was invalid, so the new supervisor needed to be unseated. And since thirty days had passed, it was the governor’s choice to pick the replacement. The County appealed.

So the question then, is whether that order is a mandatory injunction (stay applies) or a prohibitory one (with no stay)? After an extensive review of the pertinent case law (beginning with that aforementioned 1857 case) the Court, in a unanimous opinion by Justice Kruger, says the injunction was mandatory and thus should have been stayed. 

The difference between mandatory and prohibitory injunctions is based on the concern with preserving the status quo pending appeal. A change to it is mandatory, while a sustenance of it is a prohibition. But it’s not really that simple. As the court notes, “[l]ike many distinctions in the law, the distinction between a mandatory and a prohibitory injunction sometimes proves easier to state than to apply.” 

So, in one old case, San Francisco was ordered to stop storing so much water in a reservoir. Even though it reads like a prohibition, because the status quo was that it could store the water, the injunction was deemed mandatory and thus stayed pending appeal. See Byington v. Superior Court, 14 Cal. 2d 68, 70 (1939). Or an order unseating a director of a corporation in favor of someone else was viewed as mandatory, even though phrased in terms of enjoining the service of the ousted director, because the status quo permitted him to serve. Foster v. Superior Court, 115 Cal. 279, 282 (1896). Same thing for a contested officer of a hotel. Clute v. Superior Court, 155  Cal. 15, 18 (1908). Or an order requiring a company to discontinue the employment of an individual who was expelled from its labor union. Feinberg v. One Doe Co., 14 Cal.2d 24, 27 (1939).

But then there’s a case where San Francisco was ordered to stop operating a Muni line. United Railroads v. Superior Court, 172 Cal. 80, 82 (1916). The status quo was that it was operating the line, so under the above rule, that would seem to make the injunction mandatory. But the court held that it wasn’t because San Francisco wasn’t improperly operating the line at “the last actual peaceable, uncontested status which preceded the pending controversy.”

This is a hard distinction to draw. Wasn’t the “the last actual peaceable, uncontested status which preceded the pending controversy” in Byington San Francisco not storing extra water? Or in Foster, Clute, and Feinberg, the defendants’ not having an objectionable director, officer, or employee? 

But Justice Kruger—quite cleverly—sees a different through-line here. It turns on whether the order “aims not to prevent injury from future conduct but instead offers a remedy for a past violation[.]” Something that enjoins acts that could cause harm in the future—stopping the misuse of the tracks in United Railroads—is a prohibition. On the other hand, something that requires an affirmative act to remedy a past violation—like draining the reservoir in Byington or ending relationships with directors, officers, or employees in Foster, Clute, and Feinberg—counts as mandatory. I haven’t sat down and seen if that rule would do Judge Hercules' job of more coherently explaining the distinctions over the 170-ish years of case law. But it certainly feels less arbitrary and it has some logical appeal.

So applied here, the order—that the county terminate a supervisor appointed by the other supes and let the governor make the pick—was clearly mandatory. It was a compelled act to remedy the prior Brown Act violation.  

The opinion goes on to explain that, while settled law says the injunction was mandatory and thus should have been stayed, the distinction is kind of artificial and “also appears imperfectly aligned with the equitable considerations relevant to the question of staying an order pending appeal.” The rule does not necessarily produce the most just result in all cases. The Court further notes that both the federal courts and the courts of many states apply a more discretionary approach that leaves room for a more individualized consideration of whether a stay is justified. So while this matter beyond the scope of the appeal, the Court notes that the Legislature could always choose to revisit the issue and “decide whether the law would be better served by an approach that permits courts to take account of a wider array of equitable considerations than does present law.”

Court of Appeal reversed.

* Ok, I just made that up with Google translate. It’s probably not even grammatical Latin. But it’s no less true of a canon than anything on Karl Llewellyn’s list.
 

Not Dead Yet...

So, we've been on a bit of a hiatus. It has, of course, been a pretty weird year. After six eight years of continuous publication, time seems to have gotten away from us over the last three months. 

But we’re not dead, yet.

Kibbitz Costs Kaiser Arb Award

Grabowski v. Kaiser Found. Health Plan, Inc., No. D076968 (May 10, 2021)

Plaintiff lost a medmal arbitration, in which she was pro se. During a break, while she wasn’t present, the arbitrator and defendant’s counsel had an ex parte conversation about the difficulties with the fact that plaintiff didn’t have a lawyer and her inefficacy as an advocate for herself. The lawyer and the arbitrator had a laugh about it. Unbeknownst to them, the conversation was recorded. Plaintiff’s mother, who had been recording the proceedings with her phone to make a record, had left it on during the break. 

Arbitrators, of course, are not supposed to have ex parte discussions with one party’s lawyers about the other party. Because such communications are a potential grounds for disqualification as facts that might reasonably give rise to a doubt over the arbitrator’s impartiality if known by an objective observer, an arbitrator is required to disclose them. See Code Civ. Proc.§ 1281.9(a). A failure to do so is, effectively, structural error meriting the vacation of an arbitration award even without any showing of prejudice. See § 1286.2(a)(6)(A).) Which is what happens here.

Reversed.

Can’t Sandbag on an Arb DQ.

Alper v. Rotella, No. G058088 (D4d3 May 5, 2021)

Under Code of Civil Procedure § 1281.91, an arbitrator is required to disqualify him or herself, “upon the demand of any party,” if a ground for DQing a sitting judge under § 170.1 is present. One of those grounds is an “impairment” that renders the judge (or arbitrator) “unable to properly perceive the evidence or . . . to properly conduct the proceeding.” § 170.1(a)(7). The arbitrator in this case had been in some kind of accident and was taking some pretty heavy pain meds. Arguably, that could be a ground for a DQ. But all the parties were made aware of the fact. And none of them objected during the proceedings.

But the losing party tried to vacate the award on that ground after the fact. No way. If a party wants a DQ, it has a statutory obligation to make a timely demand § 1281.91(d). Having known of the basis of a potential DQ and failed to timely raise it before the arbitrator, the losing party forfeited the ability to bring it up for the first time on a motion to vacate the award.

Affirmed.

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.

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.