Litigation Update

Litigation Section News: July 2016

 • Senior Editor, Eileen C. Moore, Associate Justice, California Court of Appeal, Fourth District
 • Managing Editor, Reuben Ginsburg
 • Editor, Jessica Riggin


Table of Contents of This Issue

Keep Quiet and We'll Pay You; Speak Up and You Get Zip.

Until the student association for Arizona’s three public universities advocated for a state initiative to increase funding for public education, a state board collected $2 from every public university student annually and remitted the funds to the student association. However, within weeks of the election, the board decided to both withhold funds it had already collected for the student association and to cease collecting them in the future. The student association filed suit pursuant to 42 USC § 1983, alleging the board had modified its policies to retaliate against the student association’s exercise of its First Amendment free speech rights. Under the doctrine of sovereign immunity, the federal trial court dismissed the lawsuit. The Ninth Circuit reversed, concluding the complaint alleges a plausible claim for First Amendment retaliation. (Arizona Students' Ass'n v. Arizona Bd. of Regents (9th Cir. June 1, 2016) 2016 WL 3082698.)

Admission of Cell Phone Records.

In this criminal case, the location of the defendant’s cell phone at the time of the crime was considered important. A detective who is an expert in the area of cell phone records testified, explaining that call detail records are maintained by cell phone companies and include the time and duration of each call, the cell tower the phone connected to at the termination of each call, and the “azimuth,” or compass orientation, of the particular antenna face of the cell tower the phone connected to at certain points in time. At trial, the defendant’s lawyer did not object to the detective’s expert testimony, waiving the defendant’s right to challenge the admission of the testimony on appeal. The appellate court was asked to determine whether the lack of an objection at trial amounted to ineffective assistance of counsel. The Court of Appeal concluded trial counsel’s failure to object did not amount to deficient representation because an objection would have been futile. The appellate court’s analysis includes the following statements: “Under that test [People v. Kelly (1976) 17 Cal.3d 24; People v. Leahy (1994) 8 Cal.4th 587], the proponent of such evidence must establish: (1) the new methodology is reliable by showing it has gained general acceptance in the relevant scientific community; (2) the witness furnishing the testimony is qualified as an expert to give an opinion on the subject; and (3) correct scientific procedures were used in the particular case.” The appellate court went on:  “Here, while cell phone records are relatively new devices, the methodology is not new. Cell phones operate like ‘sophisticated radios’ by sending and receiving a radio signal to and from a cell tower and base station in their general vicinity.” (People v. Garlinger (Cal. App. 3rd Dist., June 1, 2016) 247 Cal.App.4th 1185.)

De Minimis Copying Does Not Constitute Infringement. 

Madonna, a defendant here, released the song Vogue to great commercial success. Plaintiff alleged the producer of Vogue copied a .23-second segment of another recording. The federal trial court applied the longstanding legal rule that de minimis copying does not constitute infringement, and that even if plaintiff proved the segment was copied, the claim failed because the copying was trivial. Summary judgment in favor of defendants was granted and defendants were awarded attorney fees. The Ninth Circuit agreed with the trial court that a general audience would not recognize the brief snippet. The Ninth Circuit panel stated: “We recognize that the Sixth Circuit held to the contrary in Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005), but—like the leading copyright treatise and several district courts—we find Bridgeport’s reasoning unpersuasive.” However, the appeals court concluded the trial court here abused its discretion in awarding attorney fees, stating: “A claim premised on a legal theory adopted by the only circuit court to have addressed the issue is, as a matter of law, objectively reasonable.” (VMG Salsoul, LLC v. Ciccone (9th Cir., June 2, 2016) 2016 WL 3090780.)

Emergency Relief Granted to Proponents of Crime Initiative.

The California District Attorneys Association sought extraordinary relief after amendments were made to a proposed initiative involving changes to criminal procedures and punishment. During the public comment period, no online comments were made by any members of the public; however, within the comment period proponents of the measure met with the Governor’s staff and other interested persons and received numerous oral comments. After the close of the comment period but within the ensuing five-day window for accepting amendments, amendments to the proposition were made. Pursuant to Elections Code § 9002, subdivision (b), amendments to a measure that has been submitted for public comment must be “reasonably germane to the theme, purpose, or subject of the initiative measure as originally proposed.” The Attorney General concluded the amendments were reasonably germane and began preparing an official circulating title and summary of the initiative. That same day, the District Attorneys Association sought a writ of mandate asking the court to require the Attorney General to reject the amendments, and the trial court granted the writ. The proponents of the initiative, joined by the Governor, sought emergency relief in the California Supreme Court. In granting the relief sought by the initiative’s proponents and the Governor, the California Supreme Court stated: “There is no question that the changes the proponents made to this initiative measure were, in certain respects, quite extensive. However, that is their right, so long as the changes are reasonably germane to the original theme, purpose, or subject. The amended measure, like the original, addresses the process for transferring minors to adult court for criminal prosecution, and expands parole suitability review for state prisoners. It meets the accommodating standard established in section 9002(b). Accordingly, the trial court erred in directing the Attorney General to reject the amended measure.” The sole dissenting justice, Justice Chin, observed the Legislature added the “reasonably germane” language to ensure the public comment period would be meaningful, and not meaningless. (Brown v. Superior Court (June 6, 2016) 63 Cal.4th 335.)

“If you haven’t got anything nice to say about anybody, come sit next to me,” Alice Roosevelt Longworth.

Yelp, Inc., initially a nonparty to this action, claimed it was aggrieved by the judgment in this case. The judgment was obtained by plaintiffs and holds a defendant liable for defamation. The judgment requires the defendant to remove defamatory reviews she posted about plaintiffs on, a website owned by Yelp, Inc. The judgment also contains an order requiring Yelp to remove the defamatory reviews from its website. The trial court denied Yelp’s motion to vacate. The Court of Appeal concluded the motion to vacate was not cognizable under Code of Civil Procedure § 663, which permits an aggrieved nonparty to a judgment to become a party of record by moving to vacate a judgment, but that Yelp has standing to challenge the validity of the removal order because it also brought a nonstatutory motion to vacate. Yelp’s primary objection was based on the Communications Decency Act of 1996 (47 U.S.C. § 230), the purpose of which is to further First Amendment and e-commerce interests on the Internet. The Court of Appeal held that “the removal order does not violate Yelp’s First Amendment rights to the extent it requires Yelp to remove [defendant’s] defamatory reviews.” However, the appellate court also opined the judgment may be overbroad, to the extent it orders Yelp to do more than remove the defamatory remarks, and remanded the matter to the trial court for it to narrow the terms of the Yelp order. (Hassell v. Bird (Cal. App. 1st Dist., Div. 4, June 7, 2016) 247 Cal.App.4th 1336.)

Twenty-First Century Version of CCP § 128.5 Sanctions.

A self-described watchdog over government and public agencies sued a city and a city attorney. The underlying facts are only important with regard to the court’s consideration of sanctions against plaintiff pursuant to Code of Civil Procedure § 128.5, the sanctions statute that was dormant for almost 20 years until the Legislature breathed life back into it as of January 1, 2015.  One of plaintiff’s arguments in the present case was that plaintiff filed the action in 2014 and applying § 128.5 would amount to an improper retroactive application of the statute to past conduct. Ultimately, the trial court denied the city’s request for sanctions under § 128.5, and the city appealed. The Court of Appeal held: (1) The current version of § 128.5 applies to any case pending as of its effective date, January 1, 2015; (2) A party filing a sanctions motion under § 128.5 does not need to comply with § 128.7’s safe harbor waiting period; and (3) The legal standard in evaluating a request pursuant to § 128.5 is whether the challenged conduct was objectively unreasonable. (San Diegans for Open Government v. City of San Diego (Cal. App. 4th Dist., Div. 1, June 7, 2016) 247 Cal.App.4th 1306.)

Summary Judgment in Favor of Machine Manufacturer Reversed.  

Defendant manufactured and supplied brake arcing machines used to grind asbestos brakes. The grinders themselves did not contain asbestos, but released asbestos from the brake shoe into the air. Plaintiff’s husband, deceased, used defendant’s machines while working as a mechanic from 1965 to 1988. Plaintiff brought an action against defendant, alleging negligence and product liability. Defendant sought summary judgment, arguing there was no dispute that it never manufactured, distributed or designed an asbestos-containing product. Defendant further argued its product was designed to be used on non-asbestos brakes as well as brakes that contained asbestos. In opposition, plaintiff argued the intended function and inevitable use of defendant’s grinders was to grind asbestos-containing brakes, submitting a declaration from an industrial hygienist who opined that prior to 1980 “virtually all” drum brake materials contained asbestos, as non-asbestos brakes were in limited use. The trial court granted the MSJ. The Court of Appeal reversed, finding the applicable test was whether the inevitable use of defendant’s machines would expose a worker like plaintiff’s husband to asbestos dust absent safety precaution or adequate warning. The appellate court stated plaintiff produced sufficient evidence to raise a triable issue of fact as to whether the inevitable use standard was met. (Rondon v. Hennessy Indus., Inc. (Cal. App. 1st Dist., Div. 4, June 7, 2016) 247 Cal.App.4th 1367.)

Clash of Environmental Interests.

An executive order from the President mandates that federal agencies “act expediently. . . to increase the production and transmission of energy in a safe and environmentally sound manner.” A federal statute (Energy Policy Act of 2005) established a goal to approve at least 10,000 megawatts of energy power by 2015. A secretarial order from the Secretary of the Department of the Interior establishes the development of renewable energy as a priority. With those marching orders, the Bureau of Land Management (BLM) granted a right-of-way on federal land to construct and operate a wind energy project. In this action, brought by environmental groups, plaintiffs claim the project will harm birds, including bald eagles and bats, and that the BLM should have considered something less harmful such as rooftop solar panels. A federal trial court granted summary judgment to BLM, rejecting plaintiffs’ claims. In affirming, the Ninth Circuit noted the BLM acted within its discretion in dismissing alternative proposals. (Protect Our Communities Foundation v. Jewell (9th Cir., June 7, 2016) 2016 WL 3165630.)

Prenuptial Agreement Meets Immigration Affidavit of Support.

When a Turkish woman came to the USA, a man signed an I-864 Affidavit of Support in which he agreed to provide the woman with “any support necessary to maintain her at an income that is at least 125 percent of the Federal Poverty Guidelines for her household size.” The two married after they signed an agreement stating that neither party would be entitled to alimony or support from the other. A few years later, they separated. The man paid no support to the woman, and she brought an action to enforce his obligations under the Affidavit of Support. A federal trial court found the man owed her nothing since the woman was living with her son, and his income kept her within 125 percent of the federal poverty level. The Ninth Circuit Court of Appeals reversed, stating: “At the time a sponsor signs an affidavit of support for a single intending immigrant, he or she would reasonably expect that, if the immigrant separates from the sponsor’s household, the obligation of support would be based on a household size of one. . . . the sponsor’s duty of support must be based on a household size that is equivalent to the number of sponsored immigrants living in the household, not on the total number of people living in the household.”  (Erler v. Erler (9th Cir., June 8, 2016) 2016 WL 3192651.)

U.S. Supreme Court Says Due Process Required a State Supreme Court Justice's Recusal.

A criminal defendant was convicted of a 1984 murder and sentenced to death. During the trial, the then-district attorney of Philadelphia approved the trial prosecutor’s request to seek the death penalty against defendant. Over the next 26 years, the defendant’s conviction and sentence were upheld on direct ap­peal, state post-conviction review, and federal habeas review. In 2012, defendant filed a successive petition pursuant to Pennsylvania’s Post Conviction Relief Act (PCRA), arguing that the prosecutor had obtained false testimony from his codefendant and suppressed mate­rial, exculpatory evidence in violation of Brady v. Maryland (1963) 373 U. S. 83. Finding that the trial prosecutor had committed Brady vio­lations, the PCRA court stayed defendant’s execution and ordered a new sentencing hearing. The Commonwealth asked the Pennsylva­nia Supreme Court, whose Chief Justice was the former District Attorney who approved the trial prosecutor’s request to seek the death penalty, to vacate the stay. Defendant filed a response, along with a motion asking the Chief Justice to recuse himself or, if he de­clined to do so, to refer the motion to the full court for decision. Without explanation, the Chief Justice denied defendant’s motion for recusal and the request for its referral. He then joined the State Su­preme Court opinion vacating the PCRA court’s grant of penalty-phase relief and reinstating defendant’s death sentence. Two weeks later, the Chief Justice retired from the bench. The United States Supreme Court stated an objective standard requires recusal when there is a likelihood of bias on the part of a judge, and that, “applying this standard, the Court concludes that due process compelled the justice’s recusal.” (Williams v. Pennsylvania (June 9, 2016) 136 S.Ct. 1899.)

Amount of Attorney Fees May Be Considered When Deciding if an Award of Punitive Damages is Constitutionally Excessive.

A plaintiff, who is a veteran and who was previously paralyzed from his chest down, suffered further injury when he fell from the wheelchair lift on his van. In that fall, he suffered a comminuted displaced fracture of this right tibia and fibula, with many complications resulting therefrom. After he was discharged from the hospital, he sought benefits under an insurance policy that promised to pay him $350 for each day he was confined in a hospital for the necessary care and treatment of a covered injury. Some months later, and without consulting plaintiff’s doctors, the insurance company determined most days of his hospitalization were not medically necessary. Thus, the company paid plaintiff for 18 of the 109 days he spent in the hospital. Plaintiff sued the insurance company for breach of contract and breach of the implied covenant of good faith and fair dealing. At the close of evidence, the trial court granted plaintiff’s directed verdict for breach of contract and awarded him $31,500 in unpaid policy benefits. A jury awarded plaintiff $35,000 for his emotional distress and $19 million in punitive damages. The parties stipulated the amount of attorney fees was $12,500 and the court awarded that amount. The trial court conditioned denial of the insurance company’s motion for new trial on plaintiff’s consenting to a reduction of the punitive damages award to $350,000. In calculating the permissible amount of punitive damages, the court considered only the $35,000 the jury had awarded in compensatory damages for emotional distress for the insurer’s tortious breach of the implied covenant of good faith and fair dealing; it did not include the $12,500 in attorney fees. The Court of Appeal held that the trial court properly reduced the jury’s award to a 10-to-1 ratio of punitive to compensatory damages. The California Supreme Court reversed and remanded, stating: “We conclude that the Court of Appeal erred. In determining whether a punitive damages award is unconstitutionally excessive, Brandt [v. Superior Court (1985) 37 Cal.3d 813] fees may be included in the calculation of the ratio of punitive to compensatory damages, regardless of whether the fees are awarded by the trier of fact as part of its verdict or are determined by the trial court after the verdict has been rendered. We therefore reverse the judgment of the Court of Appeal.” (Nickerson v. Stonebridge Life Ins. Co.) (June 9, 2016) 371 P.3d 242.)

Excused Jury Brought Back For Further Deliberations.

After a federal trial judge realized a jury had returned a legally impermissible verdict, the judge had the jury recalled to further deliberate. While the jury had been excused, all members were still in the courthouse. The United States Supreme Court held that federal district courts have a limited inherent power to rescind a discharge order and recall a jury in a civil case, warning, however, that this power should be exercised cautiously. (Dietz v. Bouldin (June 9, 2016) 136 S.Ct. 1885.)

No Constitutional Right to Carry Concealed Weapon.

A member of the public who wants to carry a concealed weapon in public in California must satisfy good cause as defined in local policies. The sheriffs of San Diego and Yolo Counties published policies defining good cause as requiring a particularized reason why an applicant needs a concealed weapon for self-defense. People from those counties allege they wish to carry concealed firearms in public for self-defense, but that they do not satisfy the good cause requirements in their counties. They contend the counties’ definitions of good cause violate their Second Amendment right to keep and bear arms. The Ninth Circuit Court of Appeals stated: “We hold that the Second Amendment does not preserve or protect a right of a member of the general public to carry concealed firearms in public.” (Peruta v. Cty. of San Diego (9th Cir., June 9, 2016) 2016 WL 3194315.)

Enhanced Damages in Patent Infringement Cases.

Section 284 of the Patent Act provides that in a case of infringement courts may increase the damages to three times the amount found or assessed. In 2007, the U.S. Court of Appeals adopted a two-part test for determining when a district court may increase damages pursuant to § 284 in In re Seagate Technology, LLC (Fed.Cir. 2007) 497 F. 3d 1360. The U.S. Supreme Court held the Seagate test “unduly confines the ability of district courts to exercise the discretion conferred on them,” and remanded the two patent infringement matters before it. (Halo Electronics, Inc. v. Pulse Electronics, Inc. (June 13, 2016) 136 S.Ct. 1923.)

Penalty in Mortgage Fraud Scheme Found Unconstitutionally Excessive.

Following her conviction for participating in an extensive mortgage-fraud conspiracy involving more than 400 straw-buyer transactions and 227 properties purchased for more than $100 million, a defendant was ordered to pay more than $2 million in restitution and to forfeit more than $100 million. The Ninth Circuit decided the restitution order was appropriate but the forfeiture order “which so vastly outpaces the otherwise available penalties . . . runs afoul of the Excessive Fines Clause” of the Eighth Amendment.  (United States v. Beecroft (9th Cir. June 13, 2016) 2016 WL 3240304.)

Attempts to Set Aside Old Default and Disqualify a Commissioner.

Retroactive child support was sought against a man whose parentage was established in a 1989 default judgment. The man attempted to set aside the default and to disqualify the court commissioner who declined to set it aside. The process server effectuated substitute service of process on the man’s father pursuant to Code of Civil Procedure § 415.20, and the man now claims that he had not lived at that address for a number of years prior to the service. In affirming the denial of the man’s request to set aside the default, the appellate court stated that “merely demonstrating he did not live at the Carmichael address would not form the basis for equitable relief from a default judgment.” With regard to the order denying the man’s attempt to disqualify the commissioner, the appellate court held the denial of the man’s statutory motion to disqualify was not appealable. (Yolo County Department of Child Support Services v. Myers (Cal. App. 3rd Dist., May 13, 2016) 2016 WL 3398403.)

Free Exercise of Religion…With Herbs.

Two ministers run a ministry with a vision that “cannabis could be celebrated as a sacrament.” Cannabis is distributed to all members, whether or not they are medical marijuana users. Distribution takes place during communion on Sundays and in exchange for a donation when a member visits the sanctuary. Often lines stretch from the sanctuary door out to the street. Their ministry has 62,000 converts worldwide, along with a promise that those who join the flock will be delivered from the reach of federal drug laws. The two ministers were federally prosecuted, convicted, and sentenced to prison. On appeal, they claim their convictions violate their right to free exercise of religion as guaranteed by the Religious Freedom Restoration Act of 1993 (RFRA). The Ninth Circuit Court of Appeals noted that generally “RFRA provides sincere religious objectors must be given a pass to defy obligations that apply to the rest of us.” In affirming the convictions, the appeals court stated: “RFRA sets a demanding test: it obligates the government to satisfy the compelling-interest and least-restrictive-means tests with respect to the person whose religious exercise is substantially burdened in a specific case. . . . but . . . it means that we may not blind ourselves to who the person seeking a religious exemption actually is in a given case.” (United States v. Christie (9th Cir., June 14, 2016) 2016 WL 3255072.)

Plaintiff Couldn’t Afford Arbitration Costs.

The Federal Arbitration Act (FAA) requires federal courts to stay lawsuits between parties who have entered into a valid arbitration agreement. In this legal malpractice case, one party ran out of funds to pay her share of the arbitration costs, after unsuccessfully objecting to the protracted proceedings involving the arbitrator requiring the rehearing of witnesses and evidence presented in the underlying wrongful death action. The plaintiff borrowed money and her lawyer agreed to front most of the costs, but she was ultimately unable to provide the arbitrator’s required deposit of $18,562.50. The arbitrator terminated the arbitration without entering an award or resolving the case. Thereafter, the federal trial court dismissed plaintiff’s action after concluding it was deprived of the authority to proceed to trial since the FAA’s rules require the parties to bear arbitration costs equally. The Ninth Circuit reversed, stating: “[T]he FAA does not require dismissal of [plaintiff’s] case; instead [plaintiff’s] case should go forward in federal court.” (Tillman v. Tillman (9th Cir., June 15, 2016) 2016 WL 3343785.)

Prevailing Defendant Attorney Fee Award in Anti-SLAPP Motion Reduced by 80% Not An Abuse of Discretion.

An anti-SLAPP motion was granted and the prevailing party requested attorney fees of $156,529.15 pursuant to Code of Civil Procedure § 425.16, subdivision (c)(1). There were declarations assigning different hourly rates for different lawyers in the firm. One lawyer said his hourly rate was $750, and another’s was $350. The plaintiff who lost the anti-SLAPP motion argued the rates were excessive and that the hours charged were spent on matters other than litigating the motion. The trial court determined the correct hourly rate was $275 and that many of the charges were for working on other matters in the litigation, such as coordinating with other counsel and demurrers. The trial court awarded fees of $30,752.86. On appeal, the defendant argued the trial court abused its discretion in reducing the fees. The Court of Appeal noted that a prevailing defendant in an anti-SLAPP motion is entitled to fees incurred in litigating the special motion to strike (the merit fees) plus the fees incurred in connection with litigating the fee award itself (the fees on fees). The appellate court concluded the trial court did not abuse its discretion. (569 East County Boulevard LLC v. Backcountry Against the Dump, Inc. (Cal. App. 4th Dist., Div. 1, May 18, 2016) 2016 WL 3410432.)

Church Had Duty Vis-à-vis Location of Its Parking Lot.

Plaintiff was hit by a car and injured while walking from a church’s overflow parking lot across a busy five-lane road to the church. He sued the Church, alleging it acted negligently in locating its overflow parking lot in a place that required invitees like him to cross a busy street where they might be hit by a car and by failing to protect them from that risk. The trial court granted the church’s summary judgment motion on the ground the church owed no duty to plaintiff because it did not own, possess, or control the public street where plaintiff was injured. In reversing, the Court of Appeal concluded “the location of the overflow lot, which required [the church’s] invitees who parked there to cross a busy thoroughfare in an area that lacked a marked crosswalk or traffic signal in order to reach the church, exposed invitees to an unreasonable risk of injury offsite, thus giving rise to a duty on the part of [the church].” (Vasilenko v. Grace Family Church (Cal. App. 3rd Dist., June 17, 2016) 2016 WL 3474583.)

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