Cal Biz Lit

Ford's Petition for Review in Buell-Wilson Punitive Damages Case

I blogged in March, here, on the Court of Appeals' decision in Buell-Wilson v. Ford (2008) ___ Cal.App.4th ___ (Fourth Dist., D045154).  There, after the Cal Supremes remanded so the court could take another look at the $55 million punitive damage award, the court of appeals did.  And affirmed it again.  I looked in my crystal ball at the time, and wrote that this might be the end of the road for Ford, because "[t]he Court of Appeal seems to have set up enough procedural obstacles that the Supremes won’t get involved unless they really, really, really are determined to slap down excessive punitive damages awards."

Well, we'll find out.  Not unexpectedly, Ford has petitioned the California Supreme Court yet again.  The California Supremes do not accept cases to correct error:  instead, under California Rules of Court, rule 8.500(b)(1), that court generally grants review in civil cases "When necessary to secure uniformity of decision or to settle an important question of law."

Ford is contending that both reasons are present here.  Interestingly, its third basis for requesting review has to do with proffered evidence of government and industry standards and custom and practice in this product liability suit.  While Ford's immediate quarrel is that the trial court excluded this evidence as irrelevant to the punitive damage claim, Ford seems to go farther, suggesting that if it conformed to such standards, customs and practices, punitive damages would be barred as a matter of law.  The chances of ever establishing that proposition seem pretty slim, but if Ford ever carried this off, it would be about the biggest event in the California history of punitive damages / product liability jurisprudence.

Anyway, the Supreme Court has sixty days from April 28 in which to grant review, or ninety days if it grants itself an extension, so we'll know by this summer what the Court has in mind.
 

Contractual Attorney Fee Awards When There's No Jurisdiction over the Defendant

I'm still trying to finish my three-part series on attorneys' fees.  Soon, I promise.  But I keep seeing new cases.  Since part of the audience for this blawg is non-California companies who find themselves ensnared in litigation here, this story with a happy ending for an out-of-state litigant might be of interest.

I previously blogged here about contractual attorneys' fees.  The fundamental principal is in Civil Code section 1717:  if the contract says Party "A" gets fees if he wins, and Party "B" wins instead, the law makes the contractual provision mutual:  Party "B" gets fees, even if the contract only addresses party "A's" rights.

Which brought us, yesterday, to Profit Concepts v. Griffith  (2008) ___ Cal.App.4th ___ (4th District, G039077).  Profit Concepts was a California corporation with an ex-employee, Griffith,  residing in Oklahoma.  It sued him for breach of contract, trade secrets violations and for an injunction (perhaps not a wise idea in general, but that discussion is for another day).   Griffith moved to quash service on the ground that the California courts had no jurisdiction over him.  Profit Concepts filed a "statement of non-opposition," and now I really don't know what the company, or its lawyers, were thinking.  So the motion to quash was granted.

Now comes the attorneys' fees part.  There was an employment contract, which provided that if Griffith breached the contract, Profit Concepts could get an injunction, damages and attorneys' fees.  In other words, the contractual right to fees was unilateral in Profit Concepts' favor. 

The parties agreed that the unilateral language had to be enforced mutually under section 1717.  (What was this employer doing here, anyway?)  But Profit Concepts contended that Griffith wasn't a "prevailing party" just because he got the case dismissed for lack of jurisdiction.

Wrong.  Fees awarded to Griffith, the non-California resident.  The case was going no further, he was dismissed, so he was the prevailing party.  Oh, and the amount of the fees and costs?  $3,400.78.  That's what was at stake in this appeal.  What was this employer thinking?

Happy 109th Birthday Duke Ellington

Way, Way, Way Off Topic Musical Post.  Sometimes people just have to indulge me.

Here's he is on piano for 6 hands, with Willie the Lion Smith and Billy Taylor from the David Frost Show in 1969:

When Can Attorneys' Fees Be Awarded in a FEHA Case?

I am two thirds of the way through a three part post on attorneys’ fees, and have gotten a little bogged down (the pesky details of my law practice have gotten in the way of long posts).  At any rate, the first post, on the contractual right to fees, is here.  The second, dealing with fees in civil rights, employment and public interest litigation, is here.  The final installment will cover fees in consumer litigation, and (I hope) it will be up in the next ten days or so.

But a recent decision, Villanueva v. City of Colton (2008) ___Cal.App.4th___ (4th Dist., E042188) reminds me that I should have mentioned the rare circumstance under which a successful defendant can be awarded attorneys’ fees against an unsuccessful plaintiff under California’s Fair Employment and Housing Act.  Fundamentally, the situation is this:

Government Code section 12965(b) authorizes an award of reasonable attorneys’ fees and costs “to the prevailing party” in a FEHA action.  But, tracking the comparable provisions in Federal Title VII actions and the U.S. Supreme Court’s decision in Christiansburg Garment Co. v. EEOC (1978) 434 U.S. 412,421, California courts have held that a prevailing defendant can be awarded attorneys’ fees only if the suit is objectively “frivolous, unreasonable or without foundation.”  Rosenmann v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro (2001) 91 Cal.App.4th 859;  Cummings v. Benco Building Services (1992) 11 Cal.App.4th 1383.

In order to ensure that plaintiffs are not unduly punished for asserting their civil rights, Rosenman requires that, before awarding fees to a defendant, the trial court must make findings that the plaintiff is capable of paying.  The same holding appears in Jersey v. John Muir Medical Center (2002) 97 Cal.App.4th 814, where the court of appeal also reversed a trial court of fees against the plaintiff based on a finding of “no merit” – not the proper standard.

In the recent Villanueva decision, the plaintiff failed to offer evidence of his inability to pay attorneys’ fees other than showing that he earned $25 per hour.  The court of appeal held that without such evidence, the trial court’s award of fees could not be an abuse of discretion, effectively placing the burden of proof  on this issue, or at least the burden of going forward, on the plaintiff.

San Diego Jury Awards Punitive Damages to Marine Captain Against Military Insurer

The Los Angeles Times reports that last week a San Diego jury awarded $3.6 million to a Marine captain serving in Iraq against his homeowners' insurer, USAA.  The jury found that the company, which specializes in insuring military personnel, cheated him and defrauded him in connection with water damage to his Oceanside home.  The plaintiff testified early in the trial, then was deployed  to Iraq before the jury awarded  $84,000 to fix his  water damage, $50,000 for emotional distress and $3.5 million in punitive damages. The trial judge would not allow the jury to be told he was deploying to Iraq, and he testified in civilian clothes.

In these rarified times and in this State, it's not that unusual a verdict.  But here's the unusual part:  The San Antonio Express's blog, MySA.com (in Texas, not California) received some 90 posts on the verdict, ranging from scathingly anti-plaintiff (suggesting he should have stayed home from Iraq and paid attention to his water damage) to similarly anti-USAA.  USAA posted a carefully measured response at the same blog.  As is customary after disappointing verdicts, it defends the company's position, expresses its disappointment, and bravely assures readers that the Court of Appeal will straighten out this misunderstanding.  But USAA then writes:

First and foremost, USAA respects and honors Capt. Colombero's military service. We stand on our record of excellent service to the U.S. Military and their families for more than 85 years, as evidenced by our member satisfaction, claims satisfaction and customer retention rates — the highest in the insurance industry. We disagree with any statements that criticize our military members or suggest that they should not answer their call to duty.

California Blog of Appeal

I recently, and belatedly, discovered Greg May's California Blog of Appeal.  May is an instructive and very prolific blogger, who posts on "issues at the intersection of trial and appellate practice."  And yesterday, he hosted Blawg Review #155.  I'm adding to the list of CalBizLit's Approved Blogs.

Faster Than A Plodding Lawsuit; More Powerful Than Summary Judgment

The Weintraub Firm's engaging, if often over my head,  IP Law blog reports here on the U.S. District Court, Central District's latest ruling in litigation between the heirs of the creators of Superman and DC Comics.  Royalty rights from the Man of Steel have been in litigation for -- wait for it -- more than sixty years.  IP Blog gives a good outline of the history of the litigation stemming from the original contract rights of Jerome Siegel and Joseph Shuster, who invented  the big guy as Cleveland teenagers in 1933, granted rights to DC in 1938, and filed their first suit against the company in 1947 (they also litigated in 1969-70, and the current suit was filed in 2004).  Most recently, the district court has denied summary judgment to DC, thus, as IP Law Blog observes, "ensuring another ten years of litigation."

California Supreme Court Adopts Sophisticated User Defense

This is the biggest decision we've seen in a product liability case in quite some time.  Today, in Johnson v. American Standard (April 3, 2008) ___Cal.4th___ (S139184), the Cal Supremes squarely adopted the sophisticated user doctrine as a complete defense in strict liability failure to warn and negligent failure to warn cases.  The court adopted the doctrine right out of Restatement, Second of Torts, Section 388, subd.(b) comment (k).  And under the newly declared California rule, it doesn't matter whether or not the particular plaintiff is a sophisticated user: 

"A manufacturer is not liable to a sophisticated user of its product for failure to warn of a risk, harm or danger, if the sophisticated user knew or should have known of that risk, harm or danger.  It would be nearly impossible for a manufacturer to determine whether a given user or member of the sophisticated group actual has knowledge of the dangers because of the infinite number of user idiosyncrasies. . . .individuals who represent that they are trained or are members of a sophisticated group of users are saying to the world that they possess the level of knowledge and skill associated with that class.  If they do not actually possess that knowledge and skill, that fact should not give rise to liability on the part of the manufacturer.

The court leaves open one important question:  what if the manufacturer sells to the employer, and it is the employer who is alleged to be the sophisticated user?  While that was not the scenario here, it was in In re Related Asbestos Cases (D.C. Cal. 1982) 543 F.Supp. 1142, where Federal District Court Judge Peckham held that the Navy's status as a sophisticated user was an affirmative defense in product liability matters brought by its former employees.  In today's Johnson decision, the Supreme Court cited Judge Peckham's decision repeatedly.

Why Non-Californians Should Always Read This Blog

The main purpose of this blog (other than posting random music videos from YouTube) is to provide help to non-California companies and others who only occasionally have to deal with litigation in the Golden State.  But here's why what's happening in California is important to companies in every state:  The New York Times reports on a UC Davis Law Review study showing that the California Supreme Court is the most influential state supreme court in the United States. 

Shepard's Citation Service shows that from 1940 to 2005, decisions of the California Supremes were followed by other state courts 1260 times.   In second and third place were Washington (942) and Colorado (848).   Kentucky came in last, with 177.

So here's a shout-out to you non-Californians:  Read about California on CalBizLit.com.  Those wacky California Supreme Court decisions may be coming your way.

Hat tip to The Appellate Practitioner.

Oh For The Bad Old (Pre-Prop 64) Days

For those of you who are late arrivals to the party, back in the old days we used to have large amounts of litigation under California's UCL (Business and Professions Code sections 17200 and following).  Plaintiffs' lawyers would find an industry they could challenge based on hyper-technical, meaningless violations of obscure laws and regulations, and have one client sue everyone in the industry "acting in the public interest."  It mattered not whether the plaintiff had ever done business with, had any connection with, or even heard of any of the defendant businesses.

Then those killjoys the California voters came along and enacted Proposition 64, prohibiting private enforcement actions unless the plaintiff had "suffered injury in fact and lost money or property as a result" of the defendant's acts.  And that amendment to the law -- with its revolutionary premise that people who are wronged are the ones who get a remedy -- seems to have shut down most of the UCL litigation.

But some people just never give up.  Take, for example, O'Brien v. Camiscasca Automotive Engineering (2008) ___ Cal.App.4th ___ (B195641).  Mr. O'Brien filed his purported class action under the UCL, the Consumer Legal Remedies Act (Civil Code section 1750 and following) and the False Advertising Act (Business and Professions Code section 17500 and following) contending that the  defendants  had made false representations concerning the origin of their products.  But he admitted in his deposition that he had never seen the representations  before he bought the product, so the Court of Appeal affirmed summary  judgment against him;  if  he didn't see the allegedly false representation, it certainly didn't cause him harm. 

And the Court of Appeal further found there was nothing wrong with the trial court entering judgment five weeks later, before the plaintiff had a chance to confer with the court about amending his complaint to add a new plaintiff that actually had seen the representation.  Thus, Mr. O'Brien was deprived of the right to lead the charge protecting consumers against fraudulent misrepresentations by these defendants.

And what was the false representation?  Mr. O'Brien bought an Audi license plate frame.  Stamped on the back of the package were the words "Made in USA."  O'Brien alleged that it was not, in fact, made in the USA.  He admitted he had no complaints about the quality of the license plate frame, which "looked good," "was nice," "appeared to be new" and fit the expectations he had when he placed the order.

Quelle horror!  I just can't understand why the California voters would want to put a stop to this kind of nonsense.

Friday off-topic post:

RIP Israel "Cachao" Lopez, bassist and the inventor of Mambo, passed away last Saturday at age 89 in Florida.

Cachoa continued to delight as recently as last year, as evidenced by the following:

And if that's not enough, here he is with the legendary Cuban pianist, Bebo Valdez.  Have a great weekend.