When Cal Biz Lit posts on California law, new cases,
statutes, etc., I try to include relevant links so readers can easily
see them for themselves. The links to California cases come
predominantly from three free sites, the links to California statutes
usually come from the State Legislature's site, and Federal
authorities, where available, are usually from AltLaw. Some of these
free sites require registration, but once a particular browser
remembers the log-in information, the links are really easy to
follow. I have added a Microsoft Word document here (on the side bar)
with more detailed information on where the links are found. The sites
range from very good to excellent, and are all recommended.
I'm going to keep this post at the top of Cal Biz Lit for a few days so all readers get a heads up.
As discussed here and lots of other places in lots of blawgs, Mattel's Barbie has been duking it out with MGA Entertainment's Bratz in Federal Court in Riverside since last May. The jury previously found copyright infringement and has been deliberating on damages since last week.
Ever since California's courts adopted their "fast track" programs some twenty years ago, state court cases here have generally moved along at a pretty good clip. Even somewhat complex cases can be set for trial, and go to trial, within a year of filing. (I recall one defense lawyer complaining near the beginning of "fast track" that he was being "denied my God-given right to conduct a leisurely defense.)
A big exception for some time has been the Superior Court in the inland empire's burgeoning Riverside County . That Southern California court has experienced extreme population growth, a shortage of judges and a district attorney who reportedly never met a potential criminal filing he didn't think meritted a jury trial. These factors have combined to cause a multi-year backlog of cases, and frequent suspension of civil trials altogether. As reported in Legal Pad, the problem has most recently been attacked with a group of visiting judges from other counties, but they apparently have their doubts whether they have provided any long term relief.
But Riverside also has a Federal Court outpost, and that's where they've
been trying the Mattel v. MGA Entertainment plastic doll smack-down, with Mattel claiming the defendant stole its intellectual property to develop and sell the Bratz doll. The case has been a boon to the Riverside hotel and lodging industries, as swarms of lawyers have descended for the lengthy trial. As previously reported here, and just about everywhere else, the jury found liability in the first phase of this bifurcated trial, and the presentation of evidence on damages has just concluded. The LA Times reports that Mattel's lawyer John Quinn asked the jury for $1.8 billion. "I'm well aware that the numbers we're talking about here are very substantial," Quinn told jurors.
Ya' think?
Off Topic Double-Barreled Musical Interlude
It's been awhile since we had a music post. Some of you may be familiar with What About Clients, Dan Hull and Holden Oliver's excellent and unique law blog dealing with client service issues. Happily, it also includes periodic musical posts, and recently included this one, featuring the late and great Paul Butterfield, Son House and my boyhood blues guitar hero, Mike Bloomfield. He really did sound as good as I remembered (Language warning -- may not be entirely safe for work):
I commented on WAC that I thought they and I had the only lawblogs that featured jazz, blues and r & b interludes, but boy was I wrong. Hull turned me on to Raymond Ward's Minor Wisdom. He's a lawyer from New Orleans, and, as is only proper, his blog has tons of outstanding musical posts.
For example, there is this one with Dr. John and Johnny Winter:
I should have mentioned that the Court of Appeal was extraordinary open in blasting the long-time small, rural county judge by name(well, I guess San Joaquin county isn't as small as it used to be) for having "botched" the ruling. We see this kind of personal criticism in published appellate rulings almost never -- the trial judge, while always identified in the introduction of an appellate decision, is thereafter usually cloaked in the anonymity of "the trial court."
As today's Legal Pad points out, this may be part of an ongoing dispute between the Court of Appeal and Judge Peter Saiers. As I had mentioned yesterday, published decisions on discovery matters are few and far between, and one has to wonder if this one was published because of who the judge was.
Despite this level of statutory detail, and despite some fairly strict rules that, for example, close discovery thirty days before the first trial date and require discovery motions to be heard no later than fifteen days before the first trial date (CCP section 2024.020), there is a tendency among some judges, particularly in the smaller and more rural counties, to figure that they can't go wrong if they err on the side of allowing discovery. And since our Courts of Appeal hear very few discovery cases and publish decisions in even fewer, there is often very little the parties can do about it.
The last day to have a discovery motion heard is fifteen days before trial (CCP section 2024.020(a));
The trial court cannot extend the time for such a motion to be heard (presumably in the absence of a stipulation of the parties) unless one side makes a motion (CCP section 2024.050(a));
Once the motion is made, the court must exercise its discretion considering various factors, including but not limited to "[t]he necessity and the reasons for the discovery" and [t]he diligence or lack of diligence of the party seeking the hearing of a discovery motion and the reasons that . . . the discovery motion was not heard earlier" (CCP sections 2024.050(a) and (b)(1), (2)); and
If the trial court allows a discovery motion after the cut-off without a motion specifically seeking the tardy discovery motion, or without considering the appropriate factors, it is an abuse of discretion and reversible on a showing of prejudice.
This powerful and unambiguous limit on the trial court's power should apply not only to the motions cut-off, but to the thirty day discovery cut-off itself and to the similar cut-offs for expert depositions (15 days before trial, per CCP section 2024.030) and for hearing expert motions (ten days before trial per CCP section 2024.030).
In a post day before yesterday, I noted that the Court of Appeal in Clayworth v. Pfizer, Inc. (July 25, 2008) ___ Cal.App.4th ___ (A116798) had held that the "pass-on defense" barred the plaintiffs' Cartwright Act suit because, while the alleged violation resulted in increased prices to the plaintiffs, they passed these increased prices along to their own customers. I observed, and asked, "The pass-on defense might prevent the plaintiffs from recovering as damages the price increases. But why couldn't they recover other damages, such as lost profits? What am I missing here?"
As Kimberly Kralowec points out in her comment, what I was "missing here" was the fourth sentence of the opinion, where the Court noted that "plaintiffs . . . admitted that they sought no other damages, such as lost or delayed sales, aside from the claimed overcharges" (Slip Op., p. 1). In other words, they couldn't recover other damages, such as lost profits, because they waived them.
So as the header above says, my bad. Perhaps a little more care in reading the opinion might be in order. At least the first page . . . . .
California has long had its own anti-trust law, the Cartwright Act (Bus. &
Prof. Code §§16700 and following), and the California anti-trust jurisprudence is similar, but by no means identical to, that deriving from the Federal Sherman Anti-Trust Act (15 U.S.C. § 1, and following). Last month, the Court of Appeal for the First District decided a case of first impression, creating another clear difference between the two. In Clayworth v. Pfizer, Inc. (July 25, 2008) ___ Cal.App.4th )___ (A116798), the Court held that the “pass-on defense” is available to defendants accused of price-fixing. The issue, previously discussed by the U.S. Supremes in Hanover Shoe v. United Shoe Mach. Corp. (1968) 392 U.S. 481, is this: Plaintiffs (in our case, a large number of retail pharmacists) buy products (here, prescription drugs) from Defendants (in our case, a large number of pharmaceutical companies). Defendants unlawfully conspire to keep the prices artificially high. Plaintiffs pass along every last nickel of the supra-market price to its customers. Do Plaintiffs have a claim under the anti-trust laws? In Hanover Shoe, the U.S. Supremes said “yes,” or “maybe,” depending on how you interpret the decision. Nine years later, in Illinois Brick v. Illinois (1977) 431 U.S. 720, the Court said that only the Plaintiffs had such a claim – not the customers to whom the unlawful increases were “passed on.” This is what is known as the “indirect purchaser” doctrine, and it was eliminated by statutory amendment in a number of states, including California. (Stats. 1978, ch. 536,§ 2, p. 1696). Surprisingly, the “pass-on defense” was never directly considered by a California Court of Appeal until last month. And the Court held that it applied and barred Plaintiffs’ Cartwright Act claims. The theory was this: since the unlawful increases were all passed on to somebody else, there were no damages, and you can’t have a Cartwright Act claim without damages. OK, I understand the decision, but here is what I don’t understand: is it so clear that the plaintiffs didn’t have any damages? If I recall my economics classes at Cal oh so many years ago, there is such a thing as “price elasticity of demand.” If product has negative price elasticity (as I assume pharmaceuticals, like most consumer products, do), then an increase in price results in a decrease in demand. If demand decreases, unit sales decrease, and if a retailer’s unit sales decrease as a result of a price increase which does not affect per-unit profits (as would be the case when price increases are “passed on”), isn’t the retailer damaged by a reduction in profits? The pass-on defense might prevent the plaintiffs from recovering as damages the price increases. But why couldn't they recover other damages, such as lost profits? What am I missing here?
