Cal Biz Lit

More Change At Cal Supremes

The Recorder and San Jose Merc have both confirmed that Associate Justice Carlos Moreno is retiring effective February 28.  This means that incoming Governor Jerry Brown will get his first Supreme Court appointment within two months of taking office.  But it will hardly be his first such appointment ever.  During his first two terms, Brown appointed Chief Justice Rose Bird (who brought no judicial experience to the bench) and Associate Justices Cruz Reynoso and Joseph Grodin. 

The Bird court forged a lot of new territory in the world of tort law, creating some tort-reform "poster child" cases such as Bigbee v. Pacific Telephone and Telegraph (1983) 34 Cal.3d 49 (jury to decide if telephone company is liable for negligent siting of telephone booth -- remember those? -- when drunk driver runs into it and injures occupant) and Isaacs v. Huntington Memorial Hospital (1985) 38 Cal.3d 112 (allowing case to proceed against property owner for actions of third-party criminal with no evidence of prior similar incidents).  It also reversed something like 61 death penalty sentencings. 

In 1986, in a campaign co-led by social conservatives and business interests, all three of these appointees were denied reconfirmation, a first in the history of the California Supreme Court. Then-Governor Deukmajian filled the positions with conservatives, and the Court has been pretty moderate ever since.

CBL lives in Oakland, where Jerry Brown was mayor from 1999 to 2006.  Jerry faces one of the hardest tasks imaginable in governing a state with a projected $28 billion budget deficit over the next eighteen months.  His views and appointments have generally become more moderate and respectful of institutions in the  years since his first two terms as governor.  CBL will be flabbergasted if Governor Brown is willing to expend any political capital at all on controversial bench appointments.  But time will tell.

 

Cal Supremes -- The Most Followed Court

The new -- and excellent -- "At The Lectern," Horvitz & Levy's new blog on Supreme Court practice, provides a reminder on why the California Supreme Court is so important.  From 1940 to 2005:

1,260 of the California Supreme Court’s decisions have been followed at least once by another state’s supreme court.  The Washington Supreme Court was next, with 942 followed decisions.  The median for all fifty state high courts was 453.

Furthermore,

60 of the Court’s decisions were followed three or more times by other states’ high courts.  Washington was again second, but with just 72 decisions cited three or more times.

One of Cal Biz Lit's themes has always been that the law in California isn't necessarily worse, isn't necessarily better, but sure as shootin' is different, and out-of-staters ignore those differences at their peril.  The study Horvitz & Levy cites makes another point:  if you non-Californians think we're a little goofy here, just wait:  your time is coming.

Horvitz and Levy's other blog, the appropriately named "California Punitive Damages, An Exemplary Blog" has long been the best comprehensive on-line source on its subject.  CBL is now pleased to add the firm's most recent effort to our (somewhat smugly named) "Cal Biz Lit's Approved Blogs."

My only quibble with the two sites:  Folks, how about some pictures?  I'll get you started with a lectern.

 

 

Chief Justice Cantil-Sakauye: What Can We Expect?

As CBL discussed last week, Governor Schwarznegger has named Court of Appeal Justice Justice Tani Cantil Sakauy to succeed Chief Justice Ronald George.  Justice Cantil Sakauy is considered to be a moderate Republican (no surprise -- so is Governor Schwarznegger).  A good deal of the Chief Justice's responsibility is administrative -- overseeing a lot of the state-wide judicial infrastructure and bureaucracy -- and CBL has no idea of Justice Cantil Sakauy's qualifications in that regard. 

But we thought we'd take a look at her appellate track record in the areas where we often toil:  Product Liability and other tort matters, Proposition 65 and consumer and class litigation.  Here's an unscientific sampling of opinions she's authored:

Proposition 65:  Justice Cantil Sakauy does not appear to have authored any opinions in this field.

Consumer and Class Litigation:  Although we found a couple of class action matters where she wrote the opinion, none involved issues of class certification.

In WFS Financial, Inc. v. Superior Court (2006) --caution, not citeable -- 44 Cal.Rptr.3d 561 , a purported class action dispute between a lender and a consumer involving repossession of a vehicle, she wrote for the court in holding that California's Reese-Levering Automobile Sales Finance Act (Civ. Code § 2981 et seq.) was preempted as to federal savings associations by the Home Owners Loan Act (12 U.S.C. §1461 et seq.).  The Supreme Court granted review, and the case was dismissed after settlement.

In Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, a consumer automobile case under the Song-Beverly Consumer Warranty Act (or "lemon law", Cal Civ. Code § 1790 et seq.), she wrote a decision holding that a Song-Beverly plaintiff who prevailed, but failed to beat the defendant's offer of judgment under California's Code of Civil Procedure §998 could not recover attorneys' fees incurred after the date of the offer.

Business Litigation:This is not a comprehensive list, but a couple we found interesting:

Vanacore v. Huckaby (2008) 2008 WL 287824 (Cal.App. 3 Dist.):  In this unpublished, none-citeable business property dispute decision, she and her panel reversed a jury's finding of fraud for lack of substantial evidence.

Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937:  She wrote an opinion in a case of first impression, holding that a right to implied contractual indemnity can be established without showing negligence by the indemnitor.

Tort Cases:

We found no product liability decisions she had authored.  We did find quite a number of garden-variety tort cases.  Some of the more interesting ones:

Nelson v. Exxon Mobil Corporation (2009) -- caution, not citeable -- 102 Cal.Rptr. 3d 311:  she wrote the decision in which her panel held that punitive damages are assignable if the cause of action they are attached to is assignable.

Patterson v. Sacramento City Unified School District (2007) 155 Cal.App.4th 821, reversing summary judgment with an interesting discussion of the primary assumption of risk doctrine.

Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, upholding summary judgment in a fraud case when the element of justifiable reliance was conclusively negated by contractual language.

Hartline v. Kaiser Foundation Hospitals (2005) 132 Cal.App.4th 458, upholding summary judgment against a tortfeasor's employer based on the "going and coming rule," and, more interestingly, holding that a Code of Civil Procedure section 998 offer of judgment for dismissal  with a waiver of costs (not accepted by the plaintiff) was reasonable under the circumstances, and hence the defendant was entitled to enhanced costs after winning the case.

Initial impression:  fairly conservative on consumer cases, pretty much down the middle on tort cases, opinions are meticulous, well reasoned and well-written.

Governator to Appoint New Cal Supremes Chief Justice

Chief Justice Ronald George announced a week ago that he would not be seeking re-election this November (California Supreme Court justices stand for a yes or no re-election vote every twelve years).  In no time flat, Governor Schwarznegger announced a successor:  Justice Tani Cantil Sakauye from the Third District Court of Appeal in Sacramento.  The Third District has generally been a business-friendly Court.  It gets a lot of Proposition 65 litigation and other litigation where the State of California is a party.  CBL is going to be taking a look at some of her opinions in business, Proposition 65 and tort matters, and hopes to have a post up on that subject soon.  Meanwhile, here are some excerpts from her bio on the Court's web site:

Associate Justice Tani Cantil Sakauye served 14 years as a judge on the Sacramento court. In 1990, Governor George Deukmejian appointed her to the Municipal Court, in 1997 Governor Pete Wilson elevated her to the Superior Court, and in 2005 Governor Arnold Schwarzenegger nominated her to the Court of Appeal, Third Appellate District where she was unanimously confirmed by the Commission on Judicial Appointments.

On the Sacramento court Justice Cantil Sakauye presided over both criminal and civil assignments. In 1997, she started and presided over the first court in Sacramento dedicated solely to domestic violence issues. Her responsibilities on the Sacramento court included: Chair of the court's criminal law committee, a member of the presiding judge's task force on domestic violence, and a member of the Home Court committee.

Currently, Justice Cantil Sakauye is a member of the Judicial Council. On the Council, she is vice chair of the Rules and Projects Committee, chair of the Advisory Committee on Financial Accountability and Efficiency for the Judicial Branch, co-chair of the Judicial Recruitment and Retention Working Group, and a member of the California Commission on Impartial Courts. She has previously served as a member of the Judicial Council's Task Force on Domestic Violence Practice and Procedure and chaired the Best Practices Domestic Violence subcommittee. She serves as President of the Anthony M. Kennedy American Inn of Court, an organization dedicated to promoting civility, ethics, and professionalism in the practice of law. Since 2007, she has served as a Special Master, selected by the Supreme Court to hear disciplinary proceedings before the Commission on Judicial Performance.

Justice Cantil Sakauye needs to be confirmed by a panel consisting of the current Chief Justice, Attorney General Jerry Brown and senior Court of Appeals Justice Joan Dempsey-Klein.  She will then begin serving, but will stand for voter approval in the November election.  If she is approved (and it's pretty much a sure thing), the California Supreme Court will have a female majority for the first time.

Cal Supremes To Decide Personal Injury Reduced Medical Specials Issue

CalBizLit has posted on numerous occasions on the cases addressing this question:  "Just what does a personal injury plaintiff get when her medical bills are $200,000 but the hospitals and doctors have deals with the insurance companies, Medicaid (or MediCal as we Californians call it) or Medicare to take a whole bunch less as payment in full?"  Previous posts are here,  here and here.   The defense has Hanif v. Housing Authority (1988) 200 Cal.App.3d 635 and Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4th 298  both holding that the plaintiff only gets the medicals that were actually paid.  After a concerted effort, the plaintiff side had Howell v. Hamilton Meats &  Provisions holding to the contrary:  that the plaintiff could recover the entire amount billed, regardless of what the providers too as payment in full.

But no more.  Last week, the Cal Supremes granted a hearing in Howell, describing the issues to be decided as follows:

(1) Is the "negotiated rate differential" (the difference between the full billed rate for medical care and the actual amount paid as negotiated between a medical provider and an insurer) a collateral source benefit under the collateral source rule, which allows plaintiff to collect that amount as economic damages, or is the plaintiff limited in economic damages to the amount the medical provider accepts as payment? (2) Did the trial court err in this case when it permitted plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury's award of damages by the negotiated rate differential?

So Howell is no longer citeable authority, and until the Supremes decide (many months from now), the only published decisions on these questions are the Hanif and Nishihama, both favoring the defense.

Cal Supremes Resolve Important Conflict of Laws Issue

    Cal Biz Lit blogged here on McCann v. Foster Wheeler (2008), ___Cal.Rptr.___, Superior Court of Los Angeles County; BC336869.  The case dealt with a conflict between Oklahoma’s pro-business statute of repose, which would bar the plaintiff’s claim, and Code of Civil Procedure section 340.2, California’s pro-plaintiff statute of limitations for asbestos claims, which would have allowed it.  Plaintiff was exposed to asbestos related to the defendant’s product for two weeks in the late 1950’s in Oklahoma.  The defendant was a resident of New York.  And the plaintiff moved to California in 1975, living here until his mesothelioma diagnosis more than thirty years later.

    California uses a three-part “governmental interest” method for resolving conflicts. Reich v. Purcell (1967) 67 Cal.2d 551.  First, it looks at whether there is actually a conflict.  Second, it looks at whether both states have an interest in applying their own laws.  Finally, if there is a conflict and if both states have interests, it looks at which interest will be more significantly impaired  by application of the other’s law.

    The Court of Appeal had ruled that Oklahoma had no interest in protecting a New York defendant, so that California’s pro-plaintiff statute of limitations applied. 

    Yesterday, the Supremes reversed in McCann v. Foster Wheeler LLC (February 18, 2010) ___ Cal.___ (S162435).   The court held 7-0 that Oklahoma had an interest in business-friendly legislation both as applied to local businesses and to out-of-state businesses.  Furthermore, the interest in creating a more business-friendly environment in Oklahoma would be more severely impaired by applying California law than would California’s pro-plaintiff interest be impaired by applying the Oklahoma bar.

    It is not unusual for non-California plaintiffs to sue non-California defendants in toxic tort cases where the primary nexus between the case and California is that the plaintiff’s attorneys are located here.  CBL can imagine a number of situations where this sort of conflict of laws arises, and the McCann decision could well apply to any number of situations involving toxic exposures in plaintiff-unfriendly jurisdictions.

Juror Anger In Hard Economic Times

I've practiced law in California through several recessions now.  But like all of us, I've never lived through, or practiced in, a recession like this one.  Yesterday's Los Angeles Times had a good article on how jurors respond when times are tough:

• Even more than usual, they want absolutely no part of jury service;
• People "on the margins of society" are more sympathetic to plaintiffs, and they are seeking a lot of hardship excuses;  and
• Quoting one prospective juror:  "Money is such an issue and to give money to someone for results of a case, it's really important that they're getting it for a real reason, an important reason."

Hat Tip to Ashby Jones at Wall Street Journal's Law Blog.

Cal Supremes on Attorney-Client Privilege: Absolute Privilege Means Absolute Privilege

    Here's a new, pro-business decision from the Cal Supremes reinforcing protection of the attorney-client privilege.   In Costco Wholesale Corporation v. Superior Court (Randall) (November 20, 2009) ___Cal.4th___ (S163335), the defendant's in-house counsel had retained an outside firm to interview some employees and provide an opinion on whether certain positions were exempt or non-exempt for wage and hour / overtime purposes.  Making sure Defendant knew it was getting its money's worth, the outside counsel wrote a twenty-two page letter summarizing the investigation and giving opinions. 

    Flash forward several years.  Costco is now involved in a wage and hour case involving -- guess what? -- the question of whether certain positions are exempt or non-exempt.  Plaintiffs seek the letter in discovery.  Costco objects on attorney client privilege grounds.  The trial court appoints a discovery referee to review the document in camera, and teh referee recommends production of a redacted version of the letter.  The redactions leave the fact-based information from the interviewed employees, but black out just about everything else. 

    Trial court adopts referee's recommendations, ordering production of the redacted letter.  Costco appeals.  Court of appeal affirms.  Costco petitions Cal Supremes, who grant review and reverse.

    Say the Supremes:  What part of "absolutely privileged" don't you understand?  Confidential communications from attorney to client are absolutely privileged.  The law makes no distinction between the parts that are "fact based," the parts that are "legal advice" or anything else.  So redaction didn't help -- the entire communication was privileged, regardless of its exact content.

    Furthermore, the entire procedure was improper.  Evidence Code section 915 prohibits a court from ordering in camera disclosure  of an assertedly privileged document for the purpose of ruling on the claimed privilege.  So the trial court had no business ordering the letter produced for review in the first place.

Tort Plaintiffs Be Warned: Contra Costa and Santa Clara Counties Are Not Friendly Places

    To help you get your weekend off to a rousing start, here's a bunch of statistics.  Just what you were hoping for, right?

    About a year ago, Cal Biz Lit reported here on the U.S. Department of Justice's 2005 survey of state court civil jury and bench trials.  The link to that report is no longer  alive.  The report was revised in April, 2009, and is now available here.

    In the earlier post, CBL expressed surprise at the small number of cases tried to completion in some California courts.  Santa Clara County, with 89 judges or commissioners, tried a grand total of 54 cases to verdict or judgment (that's .606 trials per judicial officer). Contra Costa, Northern California's largest suburban county with over a million residents and 59 judges, had 29 civil trials go to verdict or judgment, about half a trial per judicial officer.

    Well, now the DOB has massaged the same data some more in a new report
available here, and it looks like some plaintiffs will wish fewer tort cases went to verdict.  'Cuz the outcomes weren't so hot for them. Nationwide in 2005, plaintiffs won their tort trials about half the time.  The median tort damage award when they won was $31,000.  But in Contra Costa County, with twelve tort cases tried to conclusion in 2005, plaintiffs won twice -- that's 12%.  And while the win / loss record in Santa Clara County was near the national norm, the median damage award in the fourteen cases the plaintiffs won was a piddling $19,000.  That's right, folks, Santa Clara County jurors in 2005 awarded a thumping total of about $266,000 in tort damages to all plaintiffs against all defendants!

    Here are the plaintiff win rates in some of the other major California counties:  Los Angeles, 42.8%;  Alameda, 56.2%;  San Francisco, 53.2%;  Orange, 41.9%.  This is not particularly surprising.

    Nor are the average plaintiff verdict amounts much of a surprise:  Alameda is right near the national average, $30,000.  San Francisco is higher at $43,000.  And Los Angeles County, the largest in the state, had an average plaintiff tort verdict in 58 cases of $106,000.  CBL suspects this may be heavily skewed by a number of eight figure asbestos verdicts.

    And speaking of asbestos, the DOJ reports that out of 16,359 nation-wide state court tort trials in 2005, 2.2% were product liability trials, and about one in four of those were asbestos cases.  On the other hand, 58% were automobile accident cases -- obviously the largest number by far.  A distant second was medical malpractice, at about 15%.

   

Attorney's Lien vs. Medical Lien: Attorneys' Lien Wins

    Most plaintiff personal injury attorneys' have provisions in their fee agreements giving them a lien against client recovery.  In a wide variety of circumstances, the medical providers may have a lien against the recovery as well.

    So what happens when the case tanks and there isn't enough money to pay off both the liens?  In a California case of first impression, California's Court of Appeal for the Third District holds that as a matter of public policy, the attorneys' lien for fees and costs comes first.  The case is Gilman v. Dalby (August 10, 2009) ___Cal.App.4th___ (C050294). 

    But don't worry, there wasn't some poor doctor left out in the cold.  The medical lien was owned by Lien Medical, a personal injury medical lien factor ("Turn your liens into greens" -- the colors appear at this company's web site).  And Lien Medical, which has already satisfied the provider, is the one to get stuck.  But the decision is much broader than that, and pretty clearly applies to all medical liens.

    BTB, this is the sort of garden variety call that appellate courts have to make every day.  There's no applicable statute of any kind, and it's really a matter of advancing the common law.  And it demonstrates that when people -- usually politicians with agendas -- talk about judges "interpreting the law" vs. "making the law," they either don't know what they are talking about or they are deliberately avoiding an honest discussion of how the law works.