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Yesterday, the Supreme Court denied the petition for rehearing in Mervyn's. My original post on the rehearing petition is here.
The Supreme Court also denied the request for partial publication of the Court of Appeal's opinion in Branick. That opinion will remain uncitable. My original post on the publication request is here.
Still no activity in any of the "grant and hold" Prop. 64 retroactivity cases, which are listed here.
An article in this morning's San Francisco Chronicle reports on a recent settlement in one of the antitrust/UCL cases I am handling. This unpublished Court of Appeal opinion from last September provides more background about the maneuverings in the case, and here is my firm's web page on the case.
In In re Phenylpropanolamine (PPA) Products Liability Litigation, ___ F.3d ___ (Aug. 29, 2006), the Ninth Circuit addressed multidistrict litigation ("MDL") proceedings under 28 U.S.C. section 1407. The decision provides useful insights into the MDL process, where many federal class actions end up. The following language is worthy of note:
(Slip op. at 10305.) "[W]e grant additional deference to a district court administering a MDL proceeding ...." (Id. at 10361.)[M]ultidistrict litigation is different because of the large number of cases that must be coordinated, its greater complexity, and the court’s statutory charge to promote the just and efficient conduct of the actions. 28 U.S.C. § 1407. As a result, the considerations that inform the exercise of discretion in multidistrict litigation may be somewhat different, and may tip the balance somewhat differently, from ordinary litigation on an ordinary docket.
The American Bar Association will present its 10th Annual National Institute on Class Actions on October 6, 2006 in San Diego. The program will repeat on October 27, 2006 in New York. According to the program flyer (pdf), you can also sign up separately to listen by teleconference to one segment of the program, "CAFA: Cure-All, Flop, or Too Soon to Tell?," on October 27 at 10:30 a.m. Pacific (1:30 p.m. Eastern).
A request for partial publication of the Court of Appeal's opinion has been filed with the Supreme Court in Branick. Under Rule of Court 976(d)(2), the Supreme Court has authority to order a Court of Appeal opinion published "at any time after granting review." The Court of Appeal's opinion, which was originally certified for publication, was effectively depublished in its entirety when the Supreme Court granted review. See Rule of Court 976(d)(1). An educated guess suggests that publication is being sought of the Court of Appeal's holding that the Home Owners' Loan Act (12 U.S.C. §§ 1461 et seq.) did not preempt the plaintiff's UCL claim. Branick v. Downey Sav. & Loan Assn., 126 Cal.App.4th 828, 835-39 (2005), aff'd, Branick v. Downey Sav. & Loan Assn., 39 Cal.4th 235 (2006).
On September 13, 2006 at 11:00 a.m., Mealey's will host a teleconference entitled "Proposition 64 and California Section 17200." The speakers are Duane Westrup of Westrup Klick & Associates, who represents the plaintiff in Pfizer, Elizabeth Van Horn of Hodel Briggs Winter, counsel for the defendant in Branick, and Jeffrey S. Gordon of Kaye Scholer. UPDATE: After I received the answer to the petition for review in Pfizer, I realized that Jeffrey S. Gordon represents the defendant in that case. This should be an interesting teleconference.
In California Consumer Health Care Council v. Kaiser Foundation Health Plan, Inc., ___ Cal.App.4th ___ (Jul. 25, 2006), which was ordered published last Friday, the Court of Appeal (First Appellate District, Division Two) rejected a UCL "unlawful" prong claim predicated on an alleged violation of the Confidentiality of Medical Information Act (Civ. Code §§ 56 et seq.). Slip op. at 4-11.
In the first appellate decision to cite Mervyn's, the court alternatively held that the plaintiff's UCL claim was barred by Proposition 64:
As noted in the introduction to this opinion, appellant claims to be a public interest organization, and in its FAC specifically asserted that it was suing on “behalf of the general public.” Nowhere in the FAC did appellant allege that it was, or was authorized to represent, any Kaiser patient who had been—or even was likely to be—injured by Kaiser’s policies with regard to the transmission of its medical information. Thus, it is indisputable that, if Proposition 64 applies to this case, appellant is not authorized to maintain this UCL action against Kaiser.
Slip op. at 12. In light of its substantive ruling that the alleged conduct was not "unlawful," the court declined to remand the case for the trial court to consider possible substitution of plaintiffs. Id. at 13.
In Hart v. FedEx Ground Package System, Inc., ___ F.3d ___ (7th Cir. Aug. 9, 2006), the Seventh Circuit addressed two of CAFA's mandatory exceptions to federal jurisdiction, the "local controversy" exception and the "home-state controversy" exception. The court held that, while the defendant bears the burden of proving that CAFA's initial requisites to jurisdiction have been met, the plaintiff bears the burden of proving that an exception applies. In so holding, the court followed recent decisions of the Fifth and Eleventh Circuits, Frazier v. Pioneer Americas LLC, No. 06-30434, 2006 WL 1843629 (5th Cir. July 6, 2006) and Evans v. Walter Industries, Inc., 449 F.3d 1159, 1165 (11th Cir. 2006). The court also held that "plaintiffs have the right, through appropriate discovery, to explore the facts relevant to the court’s jurisdiction as the case progresses." (Slip op. at 13.) [Hat tip: CAFA Law Blog]
3L Epiphany has posted a lengthy list of legal weblogs that have been cited in law review articles. I learned from that list that my own blog was cited in one of the symposium articles recently published by Nexus: A Journal of Opinion. In his article "The Information Age, Again," Timothy Sandefur writes:
Sandefur, "The Information Age, Again," 11 Nexus J. Op. 5, 8-9 (2006) (footnotes omitted; hyperlinks added).Not only does blogging harness the energies of widely dispersed expertise and energy, it also allows a more in-depth treatment of issues than the traditional media. This is due to the phenomenon of media fracturing .... There are specialized blogs on a remarkable variety of subjects: in my own business, I have frequent recourse to Legal Theory Blog, which covers developments in jurisprudence; How Appealing, which covers news from the nation’s appellate courts; The UCL Practitioner, which focuses on cases invoking California Business and Professions Code § 17200; and Eminent Domain Watch, which covers national eminent domain news. .... Audience specialization allows blog writers to expect a certain level of sophistication from the audience, and thus to expand on more sophisticated elements of a particular topic.
Thanks to the reader who advised me that on August 8, 2006, Californians for Disability Rights filed a petition for rehearing in the Mervyn's case. Two days later, the Supreme Court granted itself an extension of time, through October 20, 2006, to rule on the petition. On August 16, 2006, Mervyn's filed its answer to the petition. I do not yet have copies of either of these briefs and would be grateful to anyone who forwards a copy. Here is a link to the Mervyn's docket.
UPDATE: The editor of Mealey's California Section 17200 Report kindly forwarded a copy of the Mervyn's petition for rehearing. The petition asks the Supreme Court to clarify that the Branick holding (which allows plaintiffs to seek leave to amend to substitute an affected person) will apply to the Mervyn's case itself on remand. It also asks for permission to seek leave to amend in the Court of Appeal instead of the trial court, which is an excellent strategy. That would allow the Court of Appeal to proceed to address the merits of the appeal faster than if the case were first remanded to the trial court. Depending on the state of the appellate record, that might also be a good strategy for some of the other cases, like Mervyn's, that were already pending on appeal when Prop. 64 passed.
UPDATE: A reader just forwarded a copy of the answer to the petition for rehearing, which Mervyn's filed on Wednesday. Mervyn's argues (among other things) that leave to amend can never be granted post-judgment. That strikes me as a dubious argument because Branick itself was pending on appeal, post-judgment, when Prop. 64 passed. In Branick, the Court of Appeal decided to address the substantive issue, and resolved it in the plaintiff's favor, before it addressed Prop. 64 retroactivity. But for its retroactivity holding, the judgment of dismissal would have been reversed and the plaintiff's case reinstated at the trial court level. Instead, the Court of Appeal opinion ends by saying that the case is remanded for the trial court to determine whether to grant leave to amend.
In Mervyn's, the Court of Appeal elected to decide the defendant's motion to dismiss first, and issued a published opinion denying the motion. That opinion addressed Prop. 64 retroactivity only. Supreme Court review was sought and granted, and the Court of Appeal suspended further briefing pending the outcome of the Supreme Court petition.
Because of these procedural distinctions, the Supreme Court's opinion in Branick simply concludes by saying that the Court of Appeal's judgment is affirmed. The Mervyn's opinion, by contrast, states that the Court of Appeal's judgment is reversed and the case remanded for further proceedings. It seems to me that the next step in Mervyn's is for the Court of Appeal to decide whether the motion to dismiss the appeal must now be granted. It makes a great deal of sense to ask the Supreme Court to clarify whether that court may consider the request for leave to amend, because if an affected party may be substituted at the appellate level, there is no need to dismiss the appeal. What does not make sense would be to hold, contrary to Branick, that substitution is not permitted as a matter of law in Mervyn's, simply because of the procedural method the Court of Appeal chose to employ in deciding the Prop. 64 retroactivity question.
Many thanks to counsel for the plaintiff/petitioner in Pfizer for forwarding a copy of their petition for review. This brief, along with the rest of the Pfizer briefs, has been added to my list of Prop. 64 appellate briefs. I have also updated my lists of Prop. 64 appellate opinions and pending appeals. Finally, I added Mervyn's and Branick to my list of leading California Supreme Court UCL decisions.
In an unpublished portion of Small Property Owners of San Francisco v. City and County of San Francisco, ___ Cal.App.4th ___ (Aug. 9, 2006) (First Appellate District, Division Five), the Court of Appeal held that notice of the unfavorable outcome of a class action need not be provided to the class members in the same manner as the original notice:
(Slip op. at 24-25.) This is an interesting holding, which should have been published along with the rest of the opinion.In this case, appellants argue, notice of the adverse judgment by mail would cost appellants over $20,000, and would not result in any commensurate benefit to class members. Because appellants lost, there is no risk of collusion or benefit to the named plaintiffs at the expense of the class members, as might occur in the event of a collusive settlement, nor does the judgment impose on class members the obligation to take any action or elect how they will proceed. Therefore, appellants urge, giving notice by their website or the San Francisco Rent Board’s website is the most reasonable means of providing notice of the judgment to the class members.
....
The record does not disclose any logical justification for requiring appellants to spend over $20,000 in mailing costs just to tell class members of an adverse judgment. The portion of the judgment requiring notice by standard mail is therefore stricken, such that the sentence “The notice . . . shall be served in the same manner as provided in the Order for the earlier Notice — both by standard mail and by posting on the website of plaintiff Small Property Owners of San Francisco: www.smallprop.org” shall now read: “The notice . . . shall be served by posting on the website of plaintiff Small Property Owners of San Francisco: www.smallprop.org.” ....
Doe v. Texaco, Inc., 2006 WL 2053504 (N.D. Cal. Jul. 21, 2006) is interesting because it was decided ten days after Pfizer and three days before Mervyn's. There, the court (Judge Alsup) cited Pfizer in granting the defendants' motion to dismiss the UCL claim:
Actions alleging violations of the Unfair Competition Law may be brought "by any person who has suffered injury in fact and has lost money or property as a result of such unfair competition." Cal. Bus. & Prof.Code § 17204. In the instant action, plaintiffs do not allege that they lost money or property as a result of Chevron's false statements about the environmental and health harms in Ecuador. For plaintiffs to prevail, they would have to claim that their cancer or increased risk of cancer caused them to lose property or money and that the false statements caused the cancer or increased risk thereof. Such a contention would be patently absurd and appears nowhere in the complaint.
In addition, the "as a result of" language in the statute means that, for a plaintiff to state a claim, he or she must allege that they relied upon the defendant's acts of unfair competition and, as a result, suffered injury in fact. Pfizer v.Super. Ct. of L.A. County, No. B188106, --- Cal.Rptr.3d ----, 2006 WL 1892581 at *9 (Cal.Ct.App. July 11, 2006). Plaintiffs here do not allege that they suffered cancer or increased risk of cancer due to misleading statements made by Chevron. Their claim founders on this silence.
2006 WL 2053504 at *3. It is somewhat difficult to analyze this language, because the order does not really explain who the plaintiffs are or what they were claiming the defendants did wrong. It talks about environmental pollution, people who contracted cancer, and the defendant's alleged "false statements." If the plaintiffs contracted cancer due to the defendants' environmental pollution, and spent money on a physician's care, then they certainly would have "lost money or property as a result of" the defendant's conduct. However, that does not seem to be what the complaint alleged. Leave to amend was granted, so it will be interesting to see what develops in this case, especially now that Pfizer has been impliedly overruled.
Last Friday, a petition for review was filed challenging the Court of Appeal's opinion in Pfizer v. Superior Court, 141 Cal.App.4th 290 (Jul. 11, 2006). Here is a link to the docket. When I obtain a copy of the petition, I will put it up.
In Dunbar v. Albertson's, Inc., ___ Cal.App.4th ___ (Jul. 20, 2006), the Court of Appeal (First Appellate District, Division One) affirmed an order denying class certification. Yesterday, the opinion was ordered published, but I don't see anything particularly noteworthy in it. According to the docket, seven publication requests were filed, six by non-parties.
UPDATE: The blog Wage Law has some additional commentary on the Dunbar decision, which is an employee misclassification case. I agree with Wage Law's observation that Dunbar is yet more proof that after Sav-on, trial court orders either granting or denying class certification are unlikely to be reversed on appeal.
Those of you following court developments surrounding "no class action" arbitration clauses will be interested to read Muhammad v. County Bank, ___ A.2d ___ (N.J. Aug. 9, 2006), handed down yesterday. In Muhammad, the New Jersey Supreme Court invalidated such a clause, relying in part on Discover Bank v. Superior Court, 36 Cal.4th 148 (2005). [Hat tip: How Appealing]
Check out this article from Chicago Lawyer magazine. [Hat tip: Legal Blog Watch]
Fans of SCOTUSblog won't want to miss its founder, Tom Goldstein, who will be speaking about the U.S. Supreme Court on Monday, August 7 at an MCLE event sposored by the Bar Association of San Francisco.
I've added a search box to the blog. It will allow you to search the blog's content via Google. For example, you can find all references in the blog to Cel-Tech, or any other case. The search box is located in the sidebar to the right, just above the list of California law blogs, under the heading "Research."
The August 2006 issue of California Lawyer has this article on punitive damages claims against Wal-Mart for wage and hour violations. The article quotes my colleague, Jessica Grant, who led my firm's trial team to a $172 million victory against Wal-Mart last year. The print version of the magazine includes this photo.
Yesterday, in Harper v. Poway Unified School District, ___ F.3d ___ (9th Cir. July 31, 2006) (O'Scannlain, J., dissenting), a group of four Ninth Circuit judges cited the Volokh Conspiracy in their opinion dissenting from the denial of en banc rehearing. Professor Volokh criticized the original Ninth Circuit decision in his blog, and the dissenting opinion cites his blog post as support for its position on the merits. (Slip op. at 8549 (citing Eugene Volokh, Sorry, Your Viewpoint Is Excluded from First Amendment Protection, April 20, 2006, http://volokh.com/posts/1145577196.shtml).) [Hat Tip: California Appellate Report.]
This development is particularly timely, coming within a week after the publication of two articles addressing the ramifications of judicial reliance on law blogs. Lyle Denniston of SCOTUSblog observed that "[t]he hallmark of true influence – citation as authoritative in case law or legal briefs – is beginning to develop, but so far can hardly be called frequent, or common." Lyle Denniston, "Law Blogs: The Search for Legitmacy," 11 Nexus Law Journal 17, 21 (2006). Nonetheless, "operating on the assumption that the Court has become Internet-savvy, ... outside advocacy by blogs is likely to grow more common, a kind of digital amici advocacy." Id. at 20; see also Howard Bashman, "Viewing Law Blogs as a Vast Amicus Brief," Law.com (July 24, 2006) ("When the legal blogosphere offers assistance in the form of insightful commentary about pending cases from law professors and lawyers with particular expertise in the subject matter under consideration, a judge's consultation of those blog posts is, in my view, just another form of permissible legal research.").
One notable thing about the Harper case in particular is that the original Ninth Circuit opinion was handed down on April 20, 2006, just over three months ago. No law review article criticizing the opinion could be written, submitted, edited and published in a traditional law review within that time frame. Professor Volokh's blog post, by contrast, was published within hours after the opinion was announced. Only a blog can be so timely.
UPDATE: More blogosphere commentary on this development can be found at Bag and Baggage, LexBlog, Legal Blog Watch, and at the Volokh Conspiracy itself.
