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Anthony E. Sonnett
Managing Shareholder
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Trevor J. Ingold
Shareholder
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Jocelyn A. Julian
Of Counsel
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Sharon E. Sonnett
Of Counsel
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Vanna Der Ohanessian
Associate
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Matt F. Cohen
Associate
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New Developments in
California Law
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CLASS ACTION |
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Trial court improperly sustains objections to disclosure on privacy grounds where subpoenaed information was essential to resolution of writers’ age discrimination claims. |
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Alch v. Superior Court (Time Warner Entertainment Co.) (C.A. 2nd Dist. 2008) 165 Cal.App.4th 1412. |
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Television writers filed 23 class action lawsuits against studios, networks, production companies, and talent agencies, alleging and industry-wide practice of age discrimination. The writers served subpoenas on third parties, including the Writers Guild of America (“WGA”), seeking data from which they could prepare a statistical analysis to support their claims. A privacy notice was sent to 47,000 WGA members; 7,700 of them objected to disclosure of personal information on privacy grounds. The trial court sustained the objections in their entirety. The writers sought a writ directing the court to allow access to the requested information, arguing the data was critical to proving their age discrimination claims.
The court of appeal granted the petition. In determining whether granting access to the requested data constitutes a serious invasion of privacy, the trial court must balance the objectors’ privacy interests against the public interest in pursuing the litigation. Here, the court denied the writers access to all data about the objectors while giving “short shrift” to the litigants’ need for discovery. It assumed the writers would “still be able to put together a meaningful statistical study based upon information from the non-objectors” when the statistical evidence was essential to proving a pattern and practice of discrimination. The writers demonstrated a compelling need for the requested information, which was “directly relevant” to their disparate impact claims and “essential to the fair resolution” of their suit. The trial court thus erred in balancing the objectors’ privacy rights and the writers’ interests by failing to analyze the type of data requested and the state’s interest in preventing discrimination. As such, it must enter a new order granting the writers access to the requested information.
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DISCOVERY |
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Trial court prejudicially abuses its discretion in granting motion to compel documents after discovery cutoff date absent motion to reopen discovery. |
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Pelton-Shepherd Industries Inc. v. Delta Packaging Products Inc. (C.A. 3rd Dist. 2008) 165 Cal.App.4th 1568. |
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In 2003, Pelton-Shepherd Industries Inc. (“Pelton-Shepherd”) filed a complaint against Delta Packaging Products Inc. (“Delta”). Discovery was to be completed by October 17, 2005 with the last day available for any discovery motion set for October 31,. Pelton-Shepherd served Delta by mail with a set of demand for inspection and production of documents on September 15, 2005 due on October 20. On February 15, 2006, the trial court granted Pelton-Shepherd’s motions to compel Delta to respond within 30 days. On May 22, Pelton-Shepherd moved for terminating sanctions for Delta’s failure to obey the order. The trial court imposed terminating sanctions and dismissed Delta’s cross-complaint after imposing $2,500 in sanctions. Following a default judgment favoring Pelton-Shepherd, Delta appealed, arguing that Pelton-Shepherd’s motion to compel was heard after the discovery deadline and a motion to reopen was not made.
The court of appeal reversed, finding that if a party notices a discovery motion for a hearing date after the deadline, there is no right to have that motion heard. The court may hear the motion in its discretion however, and must consider factors such as the necessity of discovery and diligence of the propounding party. Pelton-Shepherd filed its motion to compel on December 6, 2005, more than a month after the deadline. Further, the trial court did not consider the relevant factors, thus abusing its discretion. This abuse is prejudicial if it is probable that Delta’s result would be more favorable without the error. Had there been a decision on whether to reopen the discovery, the result would have favored Delta. Thus, the court’s abuse was prejudicial.
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CIVIL PROCEDURE |
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Leave to amend complaint is granted where it may reasonably be amended to allege valid cause of action. |
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Kempton v. City of Los Angeles, (C.A. 2nd Distr. 2008) 165 Cal.App.4th 1344. |
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Plaintiffs’ garage bordered Cedar Lodge Terrace. Plaintiffs alleged the fences erected by their neighbors created hazards by diminishing sightliness and preventing pedestrian access to CLT. Plaintiffs administratively requested that the City of Los Angeles remove the fences, but City refused. Plaintiffs filed suit, arguing they had suffered emotional distress due to fear while driving in and out of their home. City argued that plaintiffs did not state facts sufficient for a cause of action as there was no actual injury. The trial court entered judgment in favor of City on the pleadings.
The court of appeal reversed, finding that where a complaint can reasonably be amended to allege a valid cause of action, leave to amend is liberally granted. A specific request to amend is not required as a prerequisite to appellate review of the trial court’s decision. In the present case, a review of the pleadings revealed that there was a possible cause of action in public nuisance, which requires that an individual suffers harm specially injurious to that individual. The fences’ blockage of ingress/egress sightliness and plaintiffs’ fears of hitting a pedestrian, vehicle collision, and/or bodily injury could constitute an actionable special injury within the theory of public and private nuisance. The pleadings therefore presented sufficient factual assertions to support public nuisance per se and specific injury.
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CIVIL PROCEDURE |
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Sale of automobile of eBay does not provide sufficient minimum contacts to support personal jurisdiction over non-resident defendant in buyer’s forum state. |
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Boschetto v. Hansing (9th Cir. 2008) 2006 F.3d 1980383. |
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Frank-Boucher Chrysler Dodge-Jeep and its related corporations (“Boucher)” sold cars and had their principal place of business in Wisconsin. Jeffrey Hansing, a Boucher employee, also lived in Wisconsin. Hansing auctioned a 1964 Ford Galaxie on eBay and sold it for $34,106 to the winning bidder, Paul Boschetto. Boschetto arranged for the car to be shipped from Wisconsin to where he lived in California. Upon arrival, the car failed to meet Boschetto’s expectations or the advertised description. Hansing and eBay refused to rescind the purchase. Boschetto sued Hansing and Boucher (“defendants”) in federal court. It dismissed his complaint for lack of personal jurisdiction.
The court of appeal affirmed, finding that an individual’s contract with an out-of-state party alone does not establish sufficient minimum contacts to create jurisdiction in the other party’s home forum. Boschetto failed at the first step of the test for personal jurisdiction because the sale of one automobile over eBay did not establish that defendants purposely availed themselves of the privilege of doing business in California. The lone transaction between Hansing and Boschetto was insufficient to create a substantial connection with the forum state. Consummation of the transaction via eBay also did not affect jurisdiction because the sale of the Galaxie closed the advertised listing and extinguished the Internet contact within the forum state. The one-time contract for the sale of a good involved the forum state only because that is where Boschetto happened to reside. The non-resident defendants otherwise lacked any connection to California. Thus, Boschetto’s complaint was properly dismissed for lack of personal jurisdiction.
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TORTS |
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Instruction on negligence per se is not required where reinstalled tires are not covered by statute designed to prevent use of unsafe tires. |
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Alcala v. Vazmar Corp. (C.A. 2nd Dist. 2008) 167 Cal.App.4th 747. |
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In June, 2002, Richard Alcala (Richard) brought a P.T. Cruiser owned by his son, Andrew Alcala (“Andrew”), to Earthbound Tire Center (Earthbound) to buy four new wheels. Richard stated that he believed a front-end alignment had been performed. Earthbound owner Vic Minassian said he installed four tires and Alcala chose not to have the alignment. In November, Alcala took the car to Earhbound again and Minassian rotated the tires. On November 30, Andrew died after losing control of the car while driving in the rain. Richard brought a wrongful death action against Earthbound. The jury found Earthbound was not negligent. Richard moved for a new trial, which was denied. Richard appealed, arguing that the trial court erred when it failed to instruct the jury on negligence per se.
The court of appeal, while reversing and remanding the case on other grounds, found that negligence is presumed if the plaintiff shows that a defendant violated a statute which caused a person’s death and that death resulted from an incident that the statute was designed to prevent. Vehicle Code section 27465 prevents tire dealers form installing unsafe tires. Here, Richard argued that the statute was designed to prevent unsafe tire rotations, in that tire rotations constituted “installations.” Earthbound argued the statute did not prevent reinstalling a tire that was once on a car. In construing a statute, courts examine the Legislature’s intent. The court of appeal found tires that were removed and remounted were not covered by the statute to protect emergency roadside service operators. Thus, negligence per se did not apply. The trial court properly declined to so instruct the jury.
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CORPORATIONS |
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Shareholder must make adequate demand on board of directors before filing derivative action. |
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Potter v. Hughes (9th Circuit 2008) 546 F.3d 1051. |
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Charles Krieger (“Krieger”) sent a demand letter to the Board of Directors (“Board”) of Public Storage Inc. (“PS”) complaining of three transactions. The letter stated “two individuals” would file an action in California, but did not mention shareholder Katherine Potter (“Potter:) by name. When the Board did not take action that Krieger and Potter requested, they sued, alleging the directors wrongfully managed PS. The district court found Krieger did not satisfy the contemporaneous ownership requirement and Potter failed to make an adequate demand on the Board before filing suit. It dismissed the shareholder’s derivative action. The court of appeals affirmed. The court of appeals held that Federal Rule of Civil Procedure 23.1 requires a putative derivative plaintiff to make an adequate demand on the Board before initiating a derivate action. The complaint here did not show Potter took any efforts to demand action by the Board. She remained anonymous in Krieger’s letter, which purported to represent additional unnamed plaintiffs. Even if Potter were one of those plaintiffs she could not rely on the demand made by Krieger, whose lack of contemporaneous ownership in PS disqualified him from making a demand. Despite the attendance of Potter’s attorney at meetings with PS’s special committee, the Board was not required to “piece together” disparate events that, taken together, “might have” been sufficient to require corporate action. The Board was entitled to receive a valid demand and know the identity of the shareholder who made it. Because Potter also failed to provide detailed allegations showing that demand would be futile, the district court properly dismissed her suit.
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CORPORATIONS |
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A corporation cannot demur to a derivative complaint filed on its behalf. |
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Patrick v. Alacer Corp. (C.A. 4th Dist. 2008) 167 Cal.App.4th 995. |
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Ymelda Patrick (“Ymelda”) and her late husband founded Alacer Corp. (“Alacer”) to manufacture vitamin supplements. They created the vitamin supplement formulas, served as corporate officers, and financially supported the corporation throughout their marriage. Ymelda later alleged the directors of the corporation began looting the corporation. She filed a complaint alleging six causes of action. Alacer demurred to her third amended complaint without leave to amend, and the trial court sustained the demurrer. A judgment of dismissal was entered. Ymelda appealed, and the court of appeal reversed and remanded the trial court’s sustaining of Alacer’s demurrer. The court of appeal held that shareholders may bring a derivative suit to enforce ethe corporation’s rights and redress its injuries when the board of directors fails or refuses to do so. In a derivative suit, the corporation is the ultimate beneficiary. Because the complaint in a derivative action is filed on the corporation’s behalf, not against it, the corporation is only a “niminal defendant.” Further, a demurrer may only be filed by the party against whom a complaint has been filed. As such, a nominal defendant corporation may not defend a derivative action filed on its behalf. Here, Ymelda asserted shareholder derivative and direct causes of action against Alacer and individuals who sit on its board of directors. Further, Alacer is the real party in interest and only a nominal defendant. Alacer therefore cannot demur to a derivative complaint filed on its behalf. The court of appeal held that the trial court improperly sustained Alacer’s demurrer to the derivative cause of action. |
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CONSTITUTIONAL LAW |
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Summary Judgment is improper where there are factual disputes as to whether a First Amendment plaintiff spoke as a public employee or private citizen. |
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Posey v. Lane Pend Oreille School District No. 84 (9th Circuit 2008) 546 F.3d 1121. |
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Robert Posey (“Posey”) worked for Lake Pend Oreille School District No. 84 as a “security specialist” for a high school. He met with the school principal to express his concerns about student discipline and safety issues, including drug and weapons violations. Posey’s growing concerns about security resulted in a letter to the School District Chief Administrative Officer, wherein he complained of inadequate safety and security policies at the high school. Posey’s position was later eliminated, and he filed suit under 42 U.S.C. Section 1983, claiming violation of the First and 14th Amendments. The district court granted the school district’s motion for summary judgment. The court of appeal reverse and remanded. With respect to the First Amendment retaliation test, Garcetti v. Ceballos requires a determination as to whether the plaintiff spoke as a public employee or a private citizen. The U.S. Supreme Court has held that when a public employee speaks pursuant to his official duties, the speech is not protected. The question of whether the plaintiff spoke as a public employee or a private citizen is a mixed question of fact and law. In the present case, there are factual disputes regarding whether Posey wrote and delivered his letter as a part of his official employment duties. Posey’s expression of concern about the inadequacy of school security was relevant to the public’s evaluation of school administration performance. Posey addressed matters of public concern, and the school district failed to justify the disparity in treatment of Posey from other citizens. Because there are genuine issues of material fact regarding Posey’s job responsibilities, summary judgment was improperly granted. |
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EMPLOYMENT LAW |
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Adult education teachers are deemed exempt employees ineligible for overtime. |
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Kettenring v. Los Angeles Unified School District (C.A. 2nd Dist. 2008) 167 Cal.App.4th 507. |
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Ernest Kettenring (“Kettenring”) and Veta Patrick (“Patrick”) were adult eduation teachers employed by the Los Angeles Unified School District (“LAUSD”). Adult education teachers employed by LAUSD were compensated based on an hourly rate for each classroom hour, which was deemed a “salary” in the collective bargaining agreement (“CBA”). Under the CBA between LAUSD and the teachers’ union, United Teachers of Los Angeles (“UTLA”), all teachers were required to perform work outside of classroom hours such as course preparation, grading and supervision. Kettenring and Patrick argued that these hours outside the classroom required compensation as overtime. The trial court disagreed and ruled in favor of LAUSD. The court of appeal affirmed. The court of appeal found that employees who receive less than the minimum wage or who have not been paid for overtime may sue the employer under the Labor Code. Exemptions to this requirement include professionals paid on a salary basis, such as teachers. An employee will be considered paid on a salary basis if he regularly receives a predetermined amount each pay period, not subject to reduction for variations in the quality or quantity of work performed and without regard to the number of days or hours worked. The language of the CBA required that adult education teachers receive a “predetermined amount constituting all or part of [their] compensation . . . not subject to reduction.” As such, Kettenring and Patrick were exempt employees ineligible for overtime pay despite the requirements that they work outside the classroom to prepare their courses.
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