On Tuesday, in Fairfax v. Lords, ___ Cal.App.4th ___ (Apr. 18, 2006), the Court of Appeal (Fourth Appellate District, Division Three) held that the trial court has no discretion under Code of Civil Procedure section 2034 (now sections 2034.210 et seq.) to permit defendants to wait to designate their experts until after the plaintiff has designated hers. I have faced this argument myself, but fortunately I haven't seen a trial judge accept it. In Fairfax, the Court of Appeal made clear that the argument fails under the statute's plain language, which requires "simultaneous" designations of experts:
According to [defendant's] reasoning, “[s]ince plaintiff had the burden of proof on all issues presented here . . . it is simply prudent litigation defense practice to minimize the cost of litigation by allowing plaintiff to declare the issues he intends to retain experts for, and for the defense to then offer appropriate rebuttal experts. Some plaintiffs designate economists, accountants, accident reconstructionists, vocational rehabilitationists, physical therapists, pain management specialists and various types of physicians practicing in different areas. . . .  It would serve no purpose for the defendant to designate the myriad types of experts in the first designation, thereby driving up the cost of litigation, only to later find out plaintiff took a more simple approach to the case and thus certain defense experts were prepared in vain. It would also be poor litigation strategy for the defendant to declare one type of healthcare provider for an issue, and thus be foreclosed from designating another expert on the same topic, prior to knowing what type of expert plaintiff has chosen.”
There are two significant problems with [defendant's] reasoning. First, he seems to be assuming there is no way for defendant to determine what claims are at issue in a particular case until plaintiff reveals his expert witness list. That is simply untrue.
The complaint itself is a rich source for determining what claims are at issue. In the instant case, for example, the complaint specifies a claim for medical malpractice. That should put defendant’s mind at rest concerning the potential need for an “accident reconstructionist.” As for the other potential issues listed by [defendant], ordinary discovery is available to determine whether, for example, plaintiff is claiming lost wages, and if so, whether the calculation of such wages is subject to dispute; whether plaintiff is truly disabled from performing his (or other suitable) work; whether plaintiff has undergone physical therapy (or should have); and whether plaintiff has undergone (or might have been helped by) pain management. Reasonably competent defense counsel is not at risk of expending large amounts on issues like these because he cannot ascertain the nature of plaintiff’s claims.
The second, and more fundamental problem with [defendant's] argument is that it is simply inconsistent with the clear statutory requirement of a “simultaneous” exchange. Even if we agreed that defendants’ interests would be better served by a system which allowed them to designate experts only after seeing plaintiffs’ list (and it would be difficult to dispute the point), that is simply not an appropriate basis for ignoring the requirements of the statute. By [defendant's] reasoning, we could also agree that defendants might be well served by a system which relieved them of any obligation to even respond to a complaint until plaintiff had proved his prima facie case at trial. After all, if plaintiff doesn’t have the goods, why require a defendant to spend even a dime? But that is not the law, and it is not our place to conclude it should be.
In an opinion ordered published on Monday, the Court of Appeal rejected a UCL "unlawful" prong claim, holding that the plaintiff had not alleged any violation of the underlying, "borrowed" statute. Violante v. Communities Southwest Devel. & Constr. Co., ___ Cal.App.4th ___ (Mar. 16, 2006) (slip op. at 6-10). The opinion does not address the UCL's "unfair" prong, suggesting that the plaintiff made no attempt to plead an "unfair" prong claim separate and apart from the "unlawful" prong claim. I always like to reiterate how important it is to plead each of the three prongs—"unlawful," "unfair," and "fraudulent"—separately.
In the meal-and-rest-break case that led to a recent $172 million award against Wal-Mart in Alameda County, for example, the court considered DLSE opinion letters submitted by lawyers on both sides.
But Jessica Grant, one of the plaintiff lawyers and a [principal] at The Furth Firm, says the judge relied on his own interpretation.
"Perhaps, in the past, the courts might have given a little more weight to the DLSE opinions," she says. "But because of the agency's flip-flops, I think the courts are far less likely to give any credence to the DLSE opinions."
Marjorie Fochtman, a partner at Nixon Peabody, agrees.
"I think that the future direction of wage-and-hour law will be dictated by the courts and not DLSE," she said.
At long last, the Court of Appeal (Sixth Appellate District) has scheduled the Apple/bloggers case, O'Grady v. Superior Court, no. H028579, for oral argument on April 20, 2006 at 9:30 a.m. in San Jose. I won't be able to attend, but if I receive a report I'll put it up. For more on the O'Grady case, see theseposts. One of the amici curiae briefs supporting the bloggers, in which I joined, is accessible here [pdf]. More pleadings are available at the Electronic Frontier Foundation's website.
Last week, on April 3, 2006, the bill (A.B. 759) that would have allowed a "city and county," such as San Francisco, to bring a UCL claim on behalf of the general public regardless of population size was amended. The bill was completely gutted and now relates to an entirely different subject matter. I don't know whether any other bill still contains the proposed amendment to section 17204. My original post on A.B. 759 is here.
In keeping with its trend of granting review only in Prop. 64 cases with published opinions, the Supreme Court yesterday denied review in Brazil v. Sara Lee Corp., no. S141348. The Court of Appeal's unpublished opinion is no longer available online, but my original post on the opinion is here. It's too bad that unpublished opinions aren't archived longer on the Court of Appeal's website. It would be too costly in storage space for me to save them all online, nor do I go back and update all of my old posts to remove the former links. However, Westlaw maintains all Court of Appeal decisions, published and unpublished, in its database.
After class certification was denied in Experian Information Solutions, Inc. v. Superior Court, ___ Cal.App.4th ___ (Mar. 30, 2006), the trial court granted the plaintiff's motion for permission to use class member contact information previously obtained through discovery to "mail a proposed letter to [them] notifying them that they might have claims subject to running statutes of limitations and requesting each recipient's consent to be contacted by [plaintiff's] counsel to determine whether he or she has evidence relating to the issue of [plaintiff's] damages." Slip op. at 5. The Court of Appeal (Fourth Appellate District, Division Three) affirmed this order in part.
First, the court observed that while "[t]here is ample precedent for precertification communication by the plaintiff with potential class members," "court approval of communications after a class-certification motion has been denied involves a different analysis ... ." Slip op. at 9. The court reversed the part of the trial court's order permitting the plaintiff to notify the former putative class members of their possible claims, holding that "there is no legal basis to permit such a communication." Id. at 9-10. And that was about the sum of the court's analysis; it cited no authority for its conclusion, other than the idea that it is "not the court's role" to facilitate such communications. Of course there's nothing wrong with such an analysis; that's what the court must do when deciding a question of first impression. The court concluded: "[A]fter class certification has been denied by a trial court, court-ordered notifications to former, potential class members that they might have legal claims against a defendant are impermissible." Id. at 10-11.
However, the court approved communication with former putative class members for purposes of discovery, with several caveats designed to protect privacy:
We approve of the use of a neutral third party in cases such as this to lessen the extent of any infringement on the recipients’ privacy rights. Our approval of this procedure is consistent with a panel of this court’s recent decision in Best Buy Stores, L.P. v. Superior Court, supra, __ Cal.App.4th at page __ [2006 Cal.App. Lexis 337, at pages *10-11], holding the use of a neutral third party to facilitate precertification communications aids in the effort to protect the recipients’ privacy rights.
The letter, however, must do more to protect the recipients’ privacy rights. .... A[n] ... acceptable means of establishing the recipients' consents to be contacted is through a written, signed authorization. (Accord, Best Buy Stores, L.P. v. Superior Court, supra, __ Cal.App.4th at page __ [2006 Cal.App. Lexis 337, at pages *10-11] [requring written authorization to be contacted by counsel signed by recipient of precertification communication].) The letter must also include a statement that the recipient's failure to submit a signed authorization means the recipient will not be contacted by [plaintiff's] counsel. These additional protections must be incorporated to the letter.
Slip op. at 14. Both this case and Best Buy were decided by the same District and Division, but a slightly different panel.
The interplay between communications with class members (before and after certification) and the class members' right to privacy is a hot topic right now. In addition to the recent Best Buy decision (my original post on which is here), the Supreme Court is now reviewingPioneer Electronics (USA), Inc. v. Superior Court, 128 Cal.App.4th 246 (2005), which involved precertification communications. (My original post on Pioneer Electronics is here.)
This article by Michael Mallow was in the Daily Journal last Wednesday. (Unfortunately, the Daily Journal's website does not have pass-through links to specific articles.) The article discusses the Court of Appeal's opinion in Bardin v. DaimlerChrysler Corp., ___ Cal.App.4th ___ (Feb. 23, 2006), which asked the Supreme Court and/or the legislature to provide guidance on the meaning of "unfair." According to the online case information site, no petition for review has been filed yet. My original post on Bardin is here.
In an unpublished opinion dated April 6, 2006, the Court of Appeal (First Appellate District, Division Five) reiterated the rule that a UCL claim may not be predicated on conduct that falls within the litigation privilege of Civil Code section 47(b). Othman v. Wells Fargo Bank, N.A., no. A109606 (slip op. at 15-16).
In Harris v. Investor's Business Daily, Inc., ___ Cal.App.4th ___ (Mar. 29, 2006), the UCL claim was predicated on an alleged violation of the federal Fair Labor Standards Act (29 U.S.C. §§200 et seq.). The Court of Appeal (Second Appellate District, Division Four) held that the FLSA's "opt-in" requirement did not preempt the "opt-out" requirement of Code of Civil Procedure section 382, which would govern a UCL class action. Harris is virtually identical to Bahramipour v. Citigroup Global Markets, Inc., 2006 WL 499132 (N.D. Cal. 2006), in which Judge Claudia Wilken reached the same conclusion. My original post on Bahramipour is here.
This week’s National Law Journalreports on a recently-enacted Utah law that would permit class action waivers in credit card agreements. “F. Paul Bland Jr., staff attorney for Trial Lawyers for Public Justice, a Washington-based public interest law firm, called the new legislation ‘an effort to gut California protection laws by Utah legislation.’” A copy of the Utah bill (S.B. 252 Substitute, if I understand the Utah naming convention correctly) is accessible here. It does not appear to address the obvious choice-of-law question that would arise in a case involving California consumers.
Federal Rule of Bankruptcy Procedure 7023 states that Rule 23 applies to adversary proceedings, allowing class actions to be filed in bankruptcy court. I used to work on bankruptcy-court class actions when I was at Severson. The proceedings are essentially the same, although I found that most bankruptcy judges were somewhat less familiar with class action procedures than district court judges, so more careful briefing on the basic elements was often helpful. In Gregory v. Finova Capital Corp., ___ F.3d ___ (4th Cir. Mar. 14, 2006), the unsecured creditors took advantage of Rule 7023 and filed a putative class action as an adversary proceeding against a third party who they alleged breached a duty to the debtor. That same third party had already been sued in district court for the same alleged misconduct, and the district court granted class certification without regard to the pending adversary proceeding. The Fourth Circuit reversed, holding that an adversary proceeding already pending in bankruptcy court was the "superior" way to resolve the dispute, because in that particular case, the bankruptcy court would need to adjudicate the same issues "in the normal course of [the debtor's] bankruptcy." Slip op. at 6.
And in another interesting decision, the Seventh Circuit held that unnamed class members need not exhaust their administrative remedies to be part of the class. In re Household Int'l Tax Reduction Plan, ___ F.3d ___ (7th Cir. Mar. 20, 2006). While the case was decided in the context of ERISA, it contains language more broadly applicable to other types of cases (absent a statute to the contrary): "If the complaint or subsequent filings adequately identify the class members' claims and demonstrate that they are indeed very similar to those of the named plaintiff, the defendant knows what he is facing and can make efforts to settle the full array of claims. In such a case, requiring exhaustion by the individual class members would merely produce an avalanche of duplicative proceedings and accidental forfeitures, so is not required." Slip op. at 3.
Yesterday, the Ninth Circuit issued a new CAFA decision, Abrego v. Dow Chemical Co., ___ F.3d ___ (9th Cir. Apr. 4, 2006). Its key holdings are (1) CAFA did not alter the burden of proving that federal removal jurisdiction is appropriate; the defendant retains that burden (slip op. at 16-23); (2) for a "mass action" to be subject to removal, at least one plaintiff's claims must individually meet the $75,000 jurisdictional requirement (slip op. at 23-32); and (3) the district court has discretion to deny jurisdictional discovery; CAFA does not require that such discovery be permitted (slip op. at 32-38). The decision addresses the "bewildering" (slip op. at 23) language of CAFA in some detail and is worth a read.
As I reported here, the Court of Appeal recently ruled that a defendant can waive the right to argue that Prop. 64 applies retroactively to a pending case by not raising the issue soon enough. Lyons v. Chinese Hosp. Assn., ___ Cal.App.4th ___ (Feb. 6, 2006) (slip op. at 2 n.2). Last week, a reader wrote in with the following question:
What does the recent appeals court’s ruling finding that the Prop 64 issue can be waived if not raised in a timely fashion say about or do to the argument that defendants have raised to the Supreme Court about standing being challengable at any time during the process, if anything? Are they safe because they challenged it early enough, or does this in some way strike a blow against that argument?
This was my response:
In answer to your question, off the top of my head, I think the rule that standing can be raised at any time derives from the related rule that challenges to the court's jurisdiction can be raised at any time. Indeed, the courts have a duty to raise jurisdictional problems sua sponte whenever they become aware of them. Normally, standing is jurisdictional, so if the plaintiff lacks standing, the court lacks jurisdiction. Thus, the rule developed that challenges to standing can be raised at any time. With Prop. 64, however, if the new standing rules do not apply retroactively, then there is no standing problem; instead, the old standing rules would apply, and the (unaffected) plaintiff would have standing. Thus, there is no jurisdictional problem that the court would be required to raise sua sponte, or that a party would be permitted to raise at any time. This may have been the reasoning underlying the court's decision that Prop. 64 retroactivity is not the kind of issue that can be raised at any time, and that it can, in fact, be waived.
It also seems to me that in all of the cases now pending before the Supreme Court, the defendants raised the Prop. 64 issue very quickly, within a couple of weeks or months, at most, after the initiative passed, so those defendants are safe from any waiver argument. Any other thoughts on this?
Last week, the Supreme Court denied petitions for review in two cases:
The Discover Bank remand case, in which the Court of Appeal avoided the question of whether the no-class-action arbitration provision was unconscionable under California law by holding that Delaware law applied. Discover Bank v. Superior Court (Boehr), 134 Cal.App.4th 886 (2005) (Supreme Court docket). The Court also denied the depublication request. My original post on this case is here.