Cal Biz Lit

Witness Statements as Work Product: Cal Supremes To Decide

In March, CBL posted here about the three conflicting appellate cases related to whether or not witness statements were protected work product.  This discussion came about because of a Court of Appeal's decision in Coito v. Superior Court of Stanislaus County (March 4, 2010) ___ Cal.App.4th ___ (F057690).  There, the court held that witness statements were not protected by the work product doctrine and were discoverable.  As mentioned at the time, the dissent urged the California Supreme Court to review and settle this issue.  

And yesterday, the Supremes accepted the challenge, voting unanimously to grant the petition for review.  This means we should get resolution of the issue some time in the next year or two.  It also means that Coito is no longer citeable authority.  Instead, until the case is decided, litigants, and the trial courts, have their choice between Kadelbach v. Amaral (1973) 31 Cal.App.3d 814 (verbatim statements generally discoverable) and Nacht & Lewis Architects, Inc. v. Superior Court (1996) 47 Cal.App.4th 214 (statements not discoverable -- in fact, who litigant chose to statementize not even discoverable). 

We'll monitor this and let you know what happens.

Court of Appeal Issues New Tort Decision On Fault Allocation

    Today, Cal Biz Lit presents a guest post from Adams | Nye partner Barbara Adams.  Barbara discusses a new case allowing apportionment of fault to the U.S. Navy, even in situations where the Navy can't be sued.

    In California, since the passage of Proposition 51 (Civil Code §§ 1431 and following) in 1986, defendants in personal injury cases have been liable for non-economic damages only according to their share of “fault” as found by the jury at trial.  It is, of course, to the advantage of the defense to have as many entities as possible on the verdict form to whom the jury can attribute “fault” for the plaintiff’s injuries.  In 1992, the California Supreme court held that even if employers could not be used, they were entities to whom a share of “fault” could be attributed (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593.)  In 2003, a California Appellate Court held that, even if the plaintiff cannot recover damages from the Navy, the Navy is an entity to whom the jury can allocate “fault” (Taylor v. John Crane, Inc. (2003) 113 Cal.App.4th 1063.) 

    In 2008, in a trial in Alameda County Superior Court,  plaintiffs’ counsel managed to convince the trial judge that Taylor no longer applied, and after the defendant had offered lots of evidence of Navy fault, the Navy  could not be on the verdict form at all.

    The plaintiffs in the most recent case were the wife and daughter of Ulysses Collins, who died of mesothelioma in 2005.  He had worked as a welder at the Hunters Point Naval Shipyard from 1960 to 1973, and at Mare Island Naval Shipyard from 1976 to 1994 (from 1973 to 1976, he worked at an oil refinery.)  At the close of evidence, plaintiffs’ counsel moved for a directed verdict as to the Navy, arguing that, pursuant to Munoz v. City of Union City (2007) 148 Cal.App.4th 173, the Navy enjoyed sovereign immunity, without exception, and thus could not be listed on the verdict form.  The trial Judge agreed.  During deliberations, the jury asked why the Navy did not appear on the verdict form as an entity to whom they could allocate fault, and they were instructed that they could not apportion to the Navy as a matter of law.  The jury found Plant Insulation 20% at fault, in a verdict that included $1.8 million in non-economic damages (that’s $360,000 in liability, with no ability for set off), and $1,038,000 in economic damages (I would tell you what the set-off was, but the wording of the decision makes no sense whatsoever.)

    Appeal followed, resulting in last week's decision in Collins v. Plant Insulation Co. (June 3, 2010) ___Cal.App.4th___ Case  (California Court of Appeal No. A124268), overturning the trial court’s decision.   As the Collins Court explained, the difference between the holding in Munoz  and Taylor is that the former case held that there was an absence of duty, and thus a true absence of fault, where in the latter instance, there was only a decision that the Navy cannot be sued in civilian court, not an abrogation of fault. 

    The clearest case on this issue, cited by the Collins court, is Richards v. Owens Illinois (1997) 14 Cal.4th 985.  There, a defendant in an asbestos case attempted to have non-party tobacco companies on the verdict form for fault allocation.  The California Supreme Court held that fault could not be allocated to tobacco companies.  At that time, California barred suits against tobacco companies (a ban that has since been lifted).  The Supreme Court reasoned that the legislature had not just granted the tobacco companies immunity from suit;  it  had declared that the tobacco companies did not owe, and therefore could not breach, a duty to smokers.   Thus, there was no “fault” to allocate.

    The Court also distinguished Munoz.  In that police unreasonable use of force case,  the jury allocated fault both to the police officer for unreasonable use of force, and to the City of Union City for vicarious liability.  But the Court of Appeal held that, based provisions of the California Government Code designed to shield public entities from liability, the City owed no duty to the decedent, and therefore could not have any share of “fault.” 

    Plaintiff’s counsel in Collins attempted to construct a "sovereign immunity" parallel between Munoz and their case, arguing that since  sovereign immunity means, “the king can do no wrong”, then the Navy, like tobacco companies and the City of Union City, had no potential duty, and thus no “fault.”  But the Court held that the Navy can act "wrongfully" and still be immune.  And that .   British concepts of sovereign immunity don't, and never have, applied in the U.S..

    In conclusion, if you hope to add an unusual party to the verdict form in your trial, an entity that cannot otherwise be sued for this injury, be ready to examine the basis of that immunity.  Is it just immunity from suit, or complete lack of  duty, and thus fault?

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.

Witness Statements: Work Product or Not?

    California's attorney word product doctrine is codified in Code of Civil Procedure § 2018.030, and has both absolute and qualified components.  There is absolute protection against discovery for a "writing that reflects an attorney's impressions, conclusions, opinions, or legal research or theories," meaning that such writings are not discoverable under any circumstances.  Other work product (which is not defined) "is not discoverable unless the court determines that denial of discovery will unfairly prejudice the party seeking discovery in preparing that party's claim or defense or will result in an injustice." 

    For the court's assistance in applying this law, the legislature (which hasn't bothered to define "work product") offers the following philosophical statement in Code of Civil Procedure § 2018.020:

It is the policy of the state to do both of the following:
   (a) Preserve the rights of attorneys to prepare cases for trial with that degree of privacy necessary to encourage them to prepare their cases thoroughly and to investigate not only the favorable but the unfavorable aspects of those cases.
   (b) Prevent attorneys from taking undue advantage of their adversary's industry and efforts.

    Well ok, it's a "policy" statement not a philosophical statement.  Still, it might have been nice for the legislature to say what it was they were talking about.  Instead, they supplied the following rather zen guidance in Code of Civil Procedure 2018.040:

This chapter is intended to be a restatement of existing law relating to protection of work product.  It is not intended to expand or reduce the extent to which work product is discoverable under existing law in any action.

    Fine.  And as a result, for as long as I've been a lawyer, trial courts, appellate courts and lawyers have been struggling with, and coming up with different answers to, what seems like a straightforward questions that out to have a bright line answers:  Are witness statements work product?  Are they discoverable?  

    And yesterday, in Coito v. Superior Court of Stanislaus County (March 4, 2010) ___ Cal.App.4th ___ (F057690)  the Fifth Appellate District muddied the waters some more. 

    More confusion after the jump.

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.

Cal Supremes Hear Argument On Choice of Law In Toxic Tort Case

    The plaintiff is exposed to a toxic product way back in the 1950's in Oklahoma, where he is then living. Many toxic exposures cause disease (if at all) only many years later.  And so, fifty years after the exposure, and after he has moved to California, the plaintiff is diagnosed with a disease allegedly caused by the exposure.  Under Oklahoma's statute of repose, his case is time-barred.  Under California's delayed accrual statute of limitations for asbestos-related cases, he has lots of time.  Which law applies?

    In McCann v. Foster Wheeler, Superior Court of Los Angeles County; BC336869, the trial court ruled that Oklahoma law governed and the case was time barred.  The Court of Appeal reversed based on choice of law principles.  The decision, which you can read here, is now not citeable as authority because . . . . the Cal Supremes granted a hearing.  Which they held on Friday.  The Supremes summarized the issue as follows:

This case presents the following issue: Where plaintiff’s exposure to asbestos in Oklahoma in 1957 (when plaintiff was a resident of Oklahoma) assertedly led to plaintiff’s developing mesothelioma in 2005 (when plaintiff was a resident of California), is the timeliness of plaintiff’s action against defendant (a company that designed and manufactured the boiler upon which the asbestos was being installed in Oklahoma) properly governed by Oklahoma or California law?

    I've often thought Cal Supremes oral argument in this state was akin to a press conference for the outcome, but according to Legal Pad, this one was hard to call.  Justice Corrigan, one of the court's more conservative justices, was quoted by Legal Pad as raising "the specter of California becoming a 'litigation magnet' if people figure out they could move to the Golden State and sue for injuries that might have actually occurred decades ago." 

    On the other hand, Justices Werdegar and Kennard seemed to want to give the plaintiff some relief under Code of Civil Procedure section 361, California's "borrowing statute." While the Court of Appeal had ruled in plaintiff's favor, it had also held that section 361 was of no help.

    We should know the outcome in sixty days.

Suing The Unknown Defendant: How The Doe Device Works

    Here's what got this post started:  I'm a big fan of Beck and Hermann's Drug & Device Law Blog, and have had it on CBL's list of approved blogs for years.  Although they both practice in the world of big law, they write like -- dare I say it? -- real people.  I even enjoy it when they post about how wacky California is, although that's supposed to be my department.

    However.  In a post late last week, they were puzzled over an unpublished decision in a district court case in Los Angeles called Dorsett v. Sandoz, Inc.   Their puzzlement seemed to stem from confusion between principles of deferred accrual of the statute of limitations law and relation back of so-called "Doe allegations." Anybody left awake now?

    So let's see if we can either put the rest of you to sleep, or else straighten this out.  And CBL will use the opportunity to show how the statutes of limitations and California's fictitiously named defendant statute interact with each other.

    To non-lawyers, the concept of statute of limitations probably seems straightforward:  you have so many years to file a lawsuit, if you're on one side of the line you're in, on the other you're out.  Simple?  Ha!  First of all, we have tons of different statutes of limitations, ranging from ninety days for conversion of property left at a hotel to ten years for an action against a real estate developer for latent property defects.  The statute for personal injuries and wrongful death is most often two years, although there are some exceptions (the most commonly applied one being the one year statute for asbestos-related disease or death).      But that's the simple part.  More after the jump.

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.

SF Chron Reports On The Personal Injury Reduced Medical Specials Issue

    Cal Biz Lit has been following the trail of cases addressing what happens when a successful personal injury plaintiff had his or her medical bills paid by insurance, and the insurer has a deal with the providers to reduce fees to a pre-negotiated rate.  As CBL has posted here and here, the question is whether the plaintiff recovers the amounts the providers accept as full payment, or the amounts they initially billed before the write-offs. 

    This morning's San Francisco Chronicle has coverage of the issue, and the new decision in Howell v. Hamilton Meats & Provisions, Inc. (November 23, 2009) ___ Cal.App.4th ___ (Fourth Dist., D053620), here.

    As the Chron points out, Howell was the result of an aggressive campaign by the California plaintiff bar to find suitable cases and attack this issue in the Courts of Appeal.  There are three other cases on this issue pending in appellate courts.  And the Chron also quotes predictions, accurate in CBL's view, that this issue is headed to the Cal Supremes.

Can A Personal Injury Plaintiff Recover For $3 Aspirins? For $75 Booties? Issue Now Joined In California

    It's been more than  year since Cal Biz Lit posted about the whole Hanif / Nishihama / Olsen question.  That question, specifically, is this:   "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?"   Anybody who's working in the product liability or personal injury law world knows the drill.  So does anybody who's ever been in a hospital.  The plaintiff gets hurt.  The hospital fills up her bill with $5 Q-tips, and $10 bandages, and $3 aspirin tablets and  $75 disposable slippers, not to mention Ritz-Carlton-like room charges. 

    Then it's time for the public agency or insurance company to settle up.  And under a pre-existing deal between the insurer and the hospital, the hospital takes something like twenty cents on the dollar and writes off the rest.  So almost nobody ever pays all those $10 charges for razors and $30 for disposable IV bottles full of salt water.  Or whatever.

    So, now our plaintiff is discharged from the hospital, feeling fit as a fiddle (or so we hope) and ready to proceed with her lawsuit.  Assume liability is established, does she get what the hospital and the doctors billed?  Or does she get what they accepted from the insurance company? 

    For some years now, the answer has been pretty clear:  she can put on evidence of the large amount of her bills so the jury will think she must have had a pretty significant injury.  But after the jury awards all those medicals and goes home to their families, the judge will reduce them down to what the providers actually accepted.  That's the ruling by the Courts of Appeal in 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.

    Well, in July of last year, another Court of Appeal came out with a decision in Olsen v. Reid (2008) 164 Cal.App.4th 200.  That Court didn't have to decide whether or not Hanif and Nishihama were correct, because the defendant in that case didn't meet his burden of showing what the reduced medical bills were.  But in a gratuitous concurring opinion, Justice Moore of that Court let loose with a lengthy argument that Hanif and Nishihama had been wrongly decided, and the plaintiff should be entitled to recover for the entire amount billed, even if nobody was ever going to pay it.

    At the time, CBL commented as follows:

As a concurring opinion, this has no binding effect, and trial courts throughout the state are still bound to follow Hanif and Nishihama.  But this looks like an invitation for a plaintiff in another case to directly attack these decisions at the Fourth District Court of Appeal when the record is better for the defendant.  In fact, it looks like an out-and-out advisory opinion that this district will, in the right case, issue a decision holding that the plaintiff recovers the amount billed, not just the amount paid.

    Well, a stopped clock is right twice a day, and CBL gets it right once in awhile as well.  Because here is the Fourth District again, in Howell v. Hamilton Meats & Provisions, Inc. (November 23, 2009) ___ Cal.App.4th ___ (Fourth Dist., D053620) squarely holding that Hanif and Nishihama were wrongly decided and declining to follow them.  In short, this court rules that if a plaintiff has health insurance, and as part of the insurer's deal with the hospital and doctors, large amounts of the bills get written off so that neither the insurer nor the plaintiff has to pay the excess amounts, that is a "benefit" to the plaintiff.   The defendant didn't pay for the benefit.  So under the collateral source rule, the defendant can't take advantage of the benefit.  And the plaintiff can recover for the full amount of the  bill, even though nobody is ever going to pay most of it.

    So now, there are directly conflicting Court of Appeal decisions.  Which means that under Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal. 2d 450 , every trial court in California can follow either rule.  Until the Cal Supremes intervene.  Which, CBL feels confident, they will.