Cal Biz Lit

California -- Not a Judicial Hell Hole?

In April, the Chamber of Commerce published its list of judicial hellholes, giving California sixth place for the worst in the country, as I reported here.

At year end, here comes the judicial hellhole listing from the American Tort Reform Association.  I don't know what's happening here, but California didn't even make the hellhole list.  The best the golden state could do was number six on the "watch" list, based on ADA accessibility litigation.

Mandatory Arbitration in Employment Contracts

Today's guest blawger is Michael Sachs, who practices employment law with our firm.

Today's Wall Street Journal discusses the increasing use of arbitration provisions in employment agreements.   The WSJ estimates as many as 20% of all businesses require employees to agree to submit employment disputes to binding arbitration and agree in advance to waive jury trial rights as a condition of employment. 

The article also discusses a Missouri case where the court applied an arbitration provision even where the employee failed to sign the agreement.  The court reasoned that by continuing to work, the employee had agreed to be governed by the arbitration provision.

Interestingly, a recent California Court of Appeals indicates the law here is exactly the opposite.  In Mitri v. Arnel Management Co. (2007) ___ C.A. 4th ___ , the employer brought a motion to compel arbitration based on an arbitration provision contained in its employee handbook.  The handbook stated that any dispute would be settled by arbitration and that as a condition of employment the employees were required to sign an arbitration provision.  The employer argued that such language, in conjunction with an acknowledgment of receipt and review of the handbook, created an arbitration provision.  The employees argued that there was no signed arbitration provision because this passage only alerted them that an arbitration agreement would be forthcoming and they would be required to sign that agreement, but that no such agreement was ever provided to or signed by them.  The California Court of Appeals held that the employees never agreed to arbitrate their claims and thus, the motion to compel arbitration was denied.

More discussion of the WSJ artice and a number of perspectives on arbitration appear here at Legal Blog Watch. 

                                                                                                                               --Michael Sachs

Pro-Defense Lockheed Gatekeeper Decision -- Gone for Good

I blogged a couple of times (here and here) and in a white paper about the Court of Appeals' decision in Lockheed Litigation Cases, where, despite the fact that Daubert has never been adopted in this state, the Court suggested that the courts might have a meaningful gate-keeper role when it came to the admissibility of expert testimony.   The Cal Supremes granted review (which takes the decision off the books, making it unciteable) then dismissed the review because there were too many justices disqualifying themselves from the case.

The defendants, Exxonmobile and Union Oil (now part of Chevron), asked the Supreme Court to at least reinstate the published opinion.  "Nope" said the Court yesterday.  So for the defendants, it's still a win.  For all other defendants facing junk scientists, the case has no precedential value.  More at Legal Pad here.

Off-Topic Post

It seems like almost all my off-topic posts are about music, and sometimes I think I should change the "About" section of the blog to indicate the subjects are California litigation, jazz and blues. 

Anyway, Ike Turner passed this week.  By most accounts -- particularly his ex-wife Tina's -- a genuinely bad guy for much of his life, he still played an awfully important role in the birth of Rock 'n Roll.  I saw the Ike & Tina Review once, in 1970, and there was nothing like it for raw energy, sex and soul music.  Ike may have been the Svengali, but as a reminder of who the talent was, here's a TNT clip from the mid-1960's:

Coupon Settlement in Ford Explorer Class Action

For months, I wanted to write a post on the Ford Explorer UCL litigation pending in Sacramento Superior Court, (Ford Explorer Cases, JCCP Nos. 4266 and 4270), but I never got around to it.  The cases -- discussed at some length at UCLPractioner.com -- were pretty ingenious.  The pitch was this:  Ford had failed to disclose the fact that Explorers had a high center of gravity, making them prone to roll over and therefore unsuitable as family vehicles.  Every single owner was allegedly damaged by the difference between the value of the vehicle if it was as advertised, and its true value (an amount estimated at $1,000 per vehicle).  The plaintiffs got a multi-state class certified, and trial was underway earlier this year.

Then, not long after the plaintiffs rested, the parties announced a settlement without announcing the details.  Now we have the details, and guess what?  It's a coupon settlement -- the bane of class litigation.  Each member of the class gets a coupon worth up to $500 toward a new Explorer or other Ford -- transferable only between family members and expiring after a year -- in this purported "$25 million settlement."  Oh, and the attorneys' fees?  "Up to" another $25 million.

Legal interests aside, and just examining the social interests involved, coupon settlements are problematic in general, but even more so in cases involving consumer vehicles.  In general, the coupons don't get used.  I've seen all kinds of figures on how many coupons get redeemed in coupon settlements, and all the figures have been very, very low.  So any coupon settlement is worth, at most, the amounts actually redeemed.

But for automobiles and other big ticket items, the situation for the consumer is even worse.  There is not a vehicle manufacturer  in the United States who wouldn't pay $500 just to get a willing buyer into a showroom.  So the $500 should really be viewed as a marketing expense for Ford, not a damages payment.

CalBizLit  has no views on the merits of the Ford Explorer Cases, nor do I have any idea how the judge was leaning at trial;  obviously, if the case was tanking, it behooved their counsel to get whatever deal they could.  But this looks like a settlement where the winners will be the lawyers.  For once in my life, I find myself agreeing with the Nader crowd.  According the the Sacramento Bee, Clarence Ditlow of the Center for Auto Safety weighed in as follows:  "They should pay the lawyers in coupons."