Cal Biz Lit

Adams Nye MMSEA White Paper Coming Soon

    The whole world of settling personal injury cases involving Medicare beneficiary plaintiffs  is on the verge of getting turned on its head by the “Medicare, Medicaid and SCHIP Extension Act of 2007,” known by the less-than mellifluous acronym “MMSEA.”

    Stand by:  CalBizLit will be posting a new White Paper on this subject, probably Tuesday or Wednesday of this week.

Sierra Club v. Schwarzenegger / California Chamber of Commerce v. Schwarzenegger: Trial Court Orders ACGIH Reproductive Toxins Added to Proposition 65 List

   

CalBizLit blogged here on May 15 about the consolidated cases involving the Sierra Club and quite a number of other public interest organizations and unions, the California Chamber of Commerce and the State of California.  The public interest organizations and unions are seeking to expand the Proposition 65 list and to make the process for adding chemicals more dynamic.  The Chamber is trying to achieve the opposite.

    Last month, Judge Freedman in Alameda County Superior Court ruled that the State was required to list all the chemicals identified by reference in Labor Code sections 6382(b)(1) and 6382(d).  As of yesterday, it's Sierra Club et al. 2, Chamber 0.  Judge Freedman ordered that the state must also list all reproductive toxicants on the American Conference of Governmental Industrial Hygienists' ("ACGIH") list of Threshold Limit Values for Chemical Substances and Physical Agents in the Work Environment ("TLVs").

    In CBL's experience,  there are a lot chemicals that are listed but are encountered so rarely that the impact of their listing is largely theoretical.  What I hope to do soon is talk to some industrial hygienists and find out the extent to which this really makes a difference.  And when I do, I'll report back.

    Update:  The order is here.

Modesto Perchloroethylene Verdict: Sometimes You Win, Sometimes You Lose, Sometimes You Win And You Lose

    And I guess sometimes it's all a matter of perspective.  There's been a five month mega-trial in SF Superior  in a groundwater pollution case filed by the City of Modesto (in California's central valley) against Dow Chemical, PPG Industries and others.  The jury apparently deliberated for a month.  And with yesterday's verdict, either the City of Modesto won or Dow and PPG won:

    Per the Modesto Bee:  San Francisco jury awards Modesto $18.3 million in lawsuit.

    On the other hand, there's Law.com:  Chemical Companies Cleared in Calif. Groundwater Pollution Case.

    Apparently, the $18.3 million is less than the settlements Modesto has already collected, and Dow and Modesto dispute whether those settlements will offset the verdict.  Per Law.com, Dow was celebrating:  "Dow spokesman Jarod Davis wrote in an e-mail that the company was "pleased" by the verdict and that Modesto had failed to prove most of its claims."  So was Modesto's attorney:  "There's no question, overall, that the plaintiffs have been successful in this case."

    Meanwhile,  the same Dow that was partying over at Law.com was preparing its appeal over at the Bee:  "Michigan-based Dow Chemical said it intends to appeal the award, which it must split with PPG Industries of Pittsburgh."  And back at Law.com, Modesto's lawyer said they were going to the Court of Appeal as well.

The UCL After In Re Tobacco II Cases -- Are We Right Back Where We Started?

    Let's review briefly for those who haven't had the privilege of dancing in the UCL mosh pit:

     Long ago, there was California's Unfair Competition Law, or "UCL," which allowed any person to bring suit seeking an injunction or other equitable relief against any business engaged in a business practice that was unlawful, unfair or fraudulent.  It mattered not whether the plaintiff had ever himself been victimized by the business practice.  Indeed, it mattered not whether the plaintiff had ever set foot in the defendant business's premises.  The UCL deputized every citizen of California as a bounty hunter private attorney general.

    In the 1990s, UCL suits mushroomed (or at least, so it seemed), and the law was often used to enforce compliance with technical requirements of consumer protection laws that various industries hadn't paid much attention to.  Plaintiff attorneys would target industry practices and cut a swath through those industries, creating some angry, and fairly well-financed, industry groups. 

    Then, a law partnership known as the Trevor Law Group overreached, and started using the UCL to shake down small mom and pop, recent immigrant-owned dry cleaners and other businesses, and became the poster child for UCL abuse.  And when California business organizations floated a ballot initiative, Proposition 64, to scale back the use of the UCL, it caught fire, winning handily in 2004.

    Proposition 64 eliminated citizen suits under the UCL except by plaintiffs who had suffered "injury in fact " and "lost money or property as a result" of the unfair business practice in question.  The idea, clearly, was to eliminate the use of nominal plaintiffs who had no business relationship with, had never done business with, and had never been harmed by, the defendant businesses.

    Before and after Proposition 64, a UCL action could be the basis for a class suit.  As amended by Proposition 64, the UCL provides that:

"[a]ny person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 [i.e., has suffered injury in fact, lost money or property, etc.] and complies with section 382 of the Code of Civil Procedure [California's class action statute.]"

    So, just who is it that has to have standing?  The class representative or all the class members?  According to today's 4-3 opinion by the Cal Supremes ( In Re Tobacco II Cases (May 17, 2009) ___Cal.4th___ (S147345)), only the class representative has to have standing.  Class members who otherwise qualify for membership don't have to have suffered injury in fact, and don't have to have lost money or property as a result of the predicate act.

    In a concurring (slightly) but dissenting (mostly) opinion, Justice Baxter has, in my view, the better argument:

Even if the majority's holding has some sympathetic appeal on the particular facts alleged here, the rule the majority announces will apply equally to less egregious cases, where it invites the very kinds of mischief Proposition 64 was intended to curtail. . . .[T]he majority's erroneous determination . . .turns class action law upside down and contravenes the initiative measure's plain intent.

    How much of a difference will this ruling make?  Conceiveably a big difference.  To the extent a UCL action seeks injunctive relief, it seems to matter little whether there is one plaintiff or a class of plaintiffs. 

    On the other hand, the UCL also allows restitution -- the restoration of funds or property wrongfully taken by another.  And the restitution sought here, apparently, will be the money class members paid for their cigarettes.  The opinion makes it clear there will be a much relaxed standards for class members seeking resitution in class action UCL cases.  Justice Baxter seems to believe that the majority's ruling will allow

restitutionary relief on behalf of all California smokers who simply saw or heard such ads during the period at issue, regardless of whether false claims contained in those ads had anything to do with any class member's decision to buy and smoke cigarettes.

    Consider this:  As it allows both injunctive relief and other equitable relief as appropriate, the UCL likely allows rescission in an appropriate case.  So imagine a scenario where an automobile manufacturer carries on an extensive fraudulent advertising campaign.  Can rescission be obtained by a class of persons who bought the car and saw or heard an ad, even if there is no evidence that the ad had anything to do with the purchase?

    Looks a lot like the same kind of mischief we saw before.  Only time will tell.

Cal Supremes Decide In Re Tobacco II Cases -- Major UCL Case

    The decision in In Re Tobacco II Cases (May 17, 2009) ___Cal.4th___ (S147345) just hit the internets about ten minutes ago.  CalBizLit won't have time for analysis for a few hours, but at first blush, the decision looks like a big win for class action and UCL plaintiffs:

On review, we address two questions: First, who in a UCL class action must comply with Proposition 64' s standing requirements, the class representatives or all unnamed class members, in order for the class action to proceed? We conclude that standing requirements are applicable only to the class representatives, and not all absent class members. Second, what is the causation requirement for purposes of establishing standing under the UCL, and in particular what is the meaning of the phrase "as a result of' in section 17204? We conclude that a class representative proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions. Those same principles, however, do not require the class representative to plead or prove an unrealistic degree of specificity that the plaintiff relied on particular advertisements or statements when the unfair practice is a fraudulent advertising campaign.

    Much more analysis (both here, and, in all likelihood, all over the California blawgosphere) later today or tonight.

You Like The Proposition 65 List Now? Wait 'Til You See It With Still More Chemicals

    Early this month, CalBizLit received a number of press releases concerning a Proposition 65 case in Alameda County Superior Court, generally stating as follows (from the NRDC's press release):

The Alameda Superior Court has ruled that California’s landmark “right-to-know” and safe drinking water protection law, Proposition 65, must be extended to toxic chemicals known to cause cancer and reproductive harm identified under worker protection standards. The ruling finds in favor of labor and environmental groups, including the Natural Resources Defense Council, United Steelworkers and Sierra Club that fought the case against the California Chamber of Commerce.

    I held off on posting until I had time to dig a little further than the press releases.  And what I found is pretty interesting.  This is kind of Proposition 65 inside baseball, but it's potentially important.

More after the jump.

Nine Votes. That's Nine Votes. On Every Question.

    Unlike the federal courts, where verdicts must be unanimous, California courts require that in Civil cases, 3/4 of all jurors agree.  That's Code of Civil Procedure section 618.  In most cases of any consequence, we use "special verdicts" -- a series of questions for the jury to answer, usually ending with questions to be answered -- if necessary -- about damages.  After the verdict is announced in open court, either side can request that the jurors be individually polled, and if nine of them don't each agree with the verdict's answer to each of the questions, back to the room they go.  (It doesn't have to be the same nine for every question.)

    In complex cases with multiple causes of action, the special verdict can have many questions and go on for pages.  Drafting special verdict forms (and arguing them to the jury) is therefore very much an art form. 

    In order to avoid confusion, many trial judges give each juror a colored copy of the verdict form to fill out with his or her final vote, so that each will have a "cheat sheet" when polled.  Some of the more creative judges hand out "yes/no" paddles for the jurors to raise indicating their vote on each question.

    In the case of Keener v. Jeld-Wen (May 7, 2009) ___Cal.4th___ (S16430), decided last week by the Cal Supremes, the trial court messed up the polling, neglecting to poll one of the jurors on the verdict question apportioning liability between the parties.  Since the verdict was over $4 million, and the verdict apportioned 80% of the fault to the defendant, this was of more than academic interest to both sides.  And the defendant thought it worthwhile to discuss the significance with the Court of Appeal and then the Supremes.

    Too bad for the defendant, who should have discussed it with the trial judge.  And before the jury was sent home.  Per the Cal Supremes:  the verdict is presumed correct.  And if the irregularity isn't raised in time to correct it, the irregularity is waived.

This Just In: California Law Doesn't Allow Product Liability Claims By Plaintiffs With No Damages

   

    Company manufactures product.  Consumer buys, and uses, and gets intended  result.  Then, company recalls product from retailers (but not consumers) for failure to comply with standards (in this case, industry and FDA GMPs, or good manufacturing practices).  Consumer sues for herself and -- wait for it -- all others similarly situated.  She contends that

the pharmaceutical products . . . should not have been offered for sale in California because the products were adulterated, were not manufactured according to GMP requirements, and were not otherwise fit for the purposes intended. She seeks economic damages and restitution. Expressly disclaiming any personal injury claims, she "does not seek damages for personal injury or other physical harm, either for herself or any class members." 

    Says Northern District of California Judge Alsup:  thanks for playing, but  that's a no go:

As a concession to the shortness of life, California law does not allow a civil lawsuit to recover the purchase price for medicine consumed by the purchaser which performed as intended with no harm or fear of future harm merely because the consumer would not have purchased it had he or she known that the medicine came from a plant whose quality-control had been compromised. That the CDP was adulterated due to a lack of compliance with GMP requirements is not enough, without more, to state a claim. A plaintiff must allege an actual manifestation of a defect that results in some injury or rational fear of 'future injury in order to state cognizable claims. See Khan v. Shiley, 217 Cal. App. 3d 848, 855 (1990); see also Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291, 1298-99 (1995).

    That would be last month's decision in Myers-Armstrong v. Actavis Totowa LLC, 2009 WL 1082026 (N.D. Cal. April 22, 2009).  In the understated words of Beck and Hermann (to whose Drug and Device Law goes a hat tip for this case), "What a worthless lawsuit."

Brief off-topic note:  At the beginning of the year, I quit posting the off-topic posts here, and mvoed them, the you-tubeology, etc. over to CalBizLitAfterHours.com, while keeping a list of links to them on the column to the right of CalBizLit.  I'm going to keep doing it this way, but just want to mention that AfterHours is featuring Booker T  right now. 

Dole Banana Workers' Contempt Hearing Set For This Friday

     Like practically every other California law blogger, I've put up a number of posts on the bizarre goings on in the Los Angeles Superior Court DBCP cases brought by supposed Nicaraguan banana plantation workers against Dole, many of which were dismissed by Judge Chaney last month for fraud.  You can see past posts here, here, here and here.  Judge Chaney's from-the-bench ruling dismissing cases for fraud is like nothing I've ever heard or read before, and thanks to The American Lawyer, the transcript is available here.

    Judge Chaney has apparently set a contempt hearing for Friday, May 8 at 3:00 p.m. p.d.t.  (I say apparently because the on-line docket is a little ambiguous).  Courtroom View Network will have live recorded on-line coverage available here.  Courtesy of CVN, I hope to have a link to a portion of the hearing available here over the weekend or Monday morning.

  Update:  CVN advises that due to technical problems, it won't have live coverage this afternoon.  It does expect to have recorded coverage at its site on Monday.

When Can A Disqualified Class Representative Conduct Discovery To Find a Better Plaintiff? Muddy Waters Get Murkier

    A recurring scenario in post-Proposition 64 Unfair Competition Law cases has been this:  the plaintiff files a UCL case on behalf of all persons allegedly injured by the business practice in question; and it becomes clear that he or she has sustained no actual injury, and therefore can't serve as a plaintiff.  So the plaintiff seeks leave to conduct discovery to find a better representative plaintiff (the scenario can also come up in a more traditional class action setting, and it has).

More after the jump.