Yesterday, the Supreme Court issued a "grant and transfer" order in Californians for Disability Rights v. Mervyn's LLC, no. S148962 (docket), granting review in that proceeding for the second time (I'll call it "Mervyn's II"). The Court of Appeal (First Appellate District, Division Four) will be reconsidering whether Californians for Disability Rights should be permitted to amend its complaint to substitute a new, affected plaintiff under Branick v. Downey Savings & Loan Assn., 39 Cal.4th 235 (2006).
As everyone knows, the first grant of review resulted in the Supreme Court's retroactivity opinion, Californians for Disability Rights v. Mervyn's LLC, 39 Cal.4th 223 (2006) (Mervyn's I). On August 8, 2006, Californians for Disability Rights filed a petition for rehearing, asking the Supreme Court to clarify whether, under Branick, it would be permitted leave to seek to amend its complaint to substitute an affected plaintiff (as explained in this post). On August 30, 2006, the Supreme Court denied the petition for rehearing (as explained here).
The case then went back to the Court of Appeal (First Appellate District, Division Four). On November 13, 2006, that Court issued this brief order:
Appellant's request to grant leave to move for substitution of plaintiff in this court, or in the alternative for an order vacating the judgment and remanding the case to the trial court with leave to permit amendment, is denied. The appeal is dismissed for lack of standing.
As I observed in this post, "[t]he Court of Appeal's original opinion in Mervyn's came after the defendant moved to dismiss the appeal, arguing that Prop. 64 had stripped away the plaintiff/appellant's standing. It seems that the motion to dismiss has now, at long last, been granted." Because the appeal was from a judgment in favor of Mervyn's, the trial court would have lost jurisdiction long ago, and no further relief could be had from that court. Because the Court of Appeal refused to grant relief, Californians for Disability Rights was nearly out of options, even though no appellate court had ever reached the merits of its appeal.
On December 21, 2006, Californians for Disability Rights filed another petition for review with the Supreme Court (Mervyn's II). I have not seen the petition or other briefs, but I gather that the petition challenged the Court of Appeal's holding that amendment could not be sought in any court, in apparent contravention of Branick. Yesterday's "grant and transfer" order reads:
Request for judicial notice granted. Petition for review GRANTED. The above-entitled matter is transferred to the Court of Appeal, First Appellate District, Division Four, with directions to vacate its decision and to reconsider the cause in light of United Investors Life Insurance Co. v. Waddell & Reed, Inc. (2005) 125 Cal.App.4th, 1300 and Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235. (Cal. Rules of Court, rule 8.528(d).)
It strikes me as somewhat unusual that the Supreme Court would direct a Court of Appeal to reconsider its ruling in light of another Court of Appeal opinion. Such opinions are not binding on sister appellate courts. Perhaps it did so because the Court of Appeal did not prepare a written opinion explaining why it denied amendment.
It is also very interesting that the Supreme Court would cite United Investors in particular. As I explained in this post from January 2005, in that case, the Court of Appeal (Second Appellate District, Division Five) held that Prop. 64 did not strip away a plaintiff's appellate-level standing, even if it stripped away its trial-level standing: "Even if plaintiff has no authority to maintain its suit in superior court, it is sufficiently aggrieved by the dismissal of its complaint that it has standing to appeal under Code of Civil Procedure section 902." United Investors, 124 Cal.App.4th at 1305. I even mentioned on the blog back in January 2005 that in Mervyn's, the First District could have simply followed the lead of United Investors and denied the motion to dismiss, then addressed Prop. 64 retroactivity when it decided the merits of the appeal. I also observed in February 2005 that it was very interesting that the First District's opinion in Mervyn's did not even mention, much less follow, United Investors. If the First District follows United Investors now, I do not see how it could avoid either (a) holding that Branick requires that Californians for Disability Rights be allowed to seek leave to amend, whether at the trial or the appellate level, or (b) reaching the merits of CDR's appeal. What's more, it hardly seems fair that CDR should be trapped in the appellate twilight zone simply because Proposition 64 passed after its appeal was already pending.
In any event, it will be very interesting to see how this plays out. Congratulations to counsel for Californians for Disability Rights for effectively nagivating the appellate rules to achieve this result.
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