Cal Biz Lit

Warning -- Off-Topic Musical Post

There's lots to post about today.

But it's 80 degrees in San Francisco and summer (which usually arrives in the bay area in late September) is here .  So to heck with it.  Showing my age, here's the late Mike Bloomfield and the great Al Kooper for your Friday afternoon.

Attorneys' Fees and Code of Civil Procedure section 998

Marc Alexander and Mike Hensley have a good post in yesterday's California Attorney's Fees on our Code of Civil Procedure section 998, the California equivalent of FRCP 68.  The statute, and the cases interpreting it, make for a fairly complex set of rules, but as they point out, attorneys who master this statute can have a big and favorable impact on their clients' exposure to attorneys' fees.

There is a significant potential for fee-shifting under section 998 when there is otherwise be a right to fees under contract, statute, etc. Essentially, the scenario is this: at the onset of the litigation (or early on, in any event) where the successful plaintiff will have a right to fees, defendant offers the amount in controversy to the plaintiff, plus fees and costs to be determined by the court.  Since it's early on in the litigation, the fees and costs presumably don't amount to much at that point. Plaintiff rejects the offer. In the trial of the non-fees part of the case, the plaintiff gets a judgment in his favor, but only for the amount the defendant offered him way back when. To get to that point, the plaintiff ran up $400K or $500K in fees, perhaps more than the underlying damages.  The rule in this scenario is, no post-offer fees to the plaintiff. And if it's a scenario (tort, statute, contract, whatever) where the prevailing defendant can recover fees, then the defendant gets post-offer fees. That's the decision in Scott Co. of California v. Blount, Inc. (1999) 20 Cal. 4th 1103, and more recently, Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718.

Wha' Happened?

Week before last, the Recorder (San Francisco's ALM affiliate) had a small article buried in the back about a Seattle firm suing the owner of Applebee's for misstating the nutritional content of the food on its Weight Watcher's menu.  So I went over to ALM's Law.com, and found this story:

Nationwide restaurant chains Applebee's, Chili's Grill & Bar, On the Border Mexican Grill & Cantina, and Romano's Macaroni Grill face two new class action lawsuits over allegedly printing false nutrition information on their menus.

The named plaintiff for both suits, a Washington resident who sued the restaurants and their parent companies, claimed in the cases that she dined at Applebee's because it offered a Weight Watchers menu with low-calorie and low-fat food items and the other three restaurants because their menus contained "low-fat, health conscious" items.

The post went on to explain that the plaintiff, one Ann Paskett, had filed suit in Federal Court for the Central District of California (that's the distric t in Los Angeles) with theories based on our old friends the Consumer Legal Remedies Act and the Unfair Competition Law.  Intrigued, I went over to the web site for the plaintiff law firm, Breskin, Johnson, Townsend, PLLC where I found another link to the ALM story. And on the site and elsewhere in the blogosphere, I found this press release, clearly the basis for the story, including the following choice quotes from Ms. Paskett, the the clearly victimized plaintiff and her lawyer:

When asked about the lawsuit, Paskett responded "It's not fair for Applebee's to sell consumers dishes with inaccurate and unreliable nutritional information. Applebee's is capitalizing on consumers' desire to eat healthy, but not taking the steps necessary to provide consumers with reliably healthy food."

and

Paskett's attorney, David Breskin, stated "Consumers want and deserve truthful information in making choices about the food they eat. We hope to bring redress to those customers who were deceived in seeking healthier dining options, and to ensure that restaurants offer truthful information about the food that they serve." 

At this point, I was even more intrigued, so off I went to PACER to see what was happening in the case.  There, I found this Complaint, filed June 3, 2008.  And I found this dismissal of the case, filed three days later.  Curiously, I didn't find anything on the Breskin web site indicating the suit had been dismissed.  Then I went and took the weekend off.

This morning, back to the Breskin web site.  The press release is gone.  The Paskett Complaint in the Central District is gone from the site (although her Complaint in Federal Court in Texas against Brinker International, which owns  Chili's, Romano's Macaroni  and On the Border is still there -- apparently Ms. Paskett likes to sample the Weight Watcher's menus all around the country).

But wait!  Here's a new Complaint, this one filed by one Maria Jones in Alameda Superior state court, also against DineEquity, the owner of Applebee's, and otherwise identical to Ms. Paskett's complaint.  What in the world is going on here?  Might someone be forum shopping?  Might we not have liked our Federal Court judge assignment?  Anybody have any ideas?

Attorneys' Fees for Wrongful Denial of Requests for Admissions

I don't usually post about unpublished Court of Appeal decisions;  in fact, I don't usually read them.  Under California Rules of Court, Rule 8.1115(a), they aren't citeable and aren't authority for anything.

But Wednesday's unpublished decision in Manhattan Banker Corporation v. Retamco Operating, Inc., B189546, is enough of an object lesson or cautionary tale that it's worth mentioning.  Long story short:  defendant sends seven requests for admissions to plaintiff, which, if admitted, would establish plaintiff has no case.  Plaintiff denies them all.  Case goes to trial, and -- guess what? -- they were all true, and plaintiff has no case.

Defendant moves for all of its attorneys' fees under Code of Civil Procedure, section 2033.420, subdivision (a), all $138,000 or thereabouts, and the trial court awards them all.  Why?  because if the plaintiff had given proper responses to the requests for admissions, there would have been no trial, and no fees.  The Code makes it mandatory to award costs of proof of that which should have been admitted in response to requests for admissions.  And the fees were the costs of proof.

The Court of Appeal affirmed.  Moral of the story hardly needs stating.

Hat tip to the new, and very good, California Attorney's Fees.

Sanctions for Failure to Attend Court-Ordered Mediation

The original mission of this blawg was to provide guidance to out-of-state businesses and others whose involvement in California litigation was infrequent, but potentially painful.  So a decision last Friday from the Court of Appeal in Sacramento is useful for understanding the appellate courts' view on the obligations of parties at court-ordered settlement conferences and mediations.  And given the Court of Appeals' prospective announcement about how it is going to approach this issue in the future, this is probably valuable for just about anybody.

The case is Campagnone v. Enjoyable Pools & Spas Service & Repairs (May 30, 2008) ___ Cal.App.4th___ (Third District, No. C055050).  More after the jump.