Volume 33 • Number 2 • 2020 California LITIGATION
NAVIGATING THE NEW SETTLED STATEMENT Nuts and Bolts of PROCEDURES Videoconference Page 24 Dispute Resolution in the Time of COVID-19 Threats, Extortion Page 47 and Legitimate Advocacy Page 38
The Journal of the Litigation Section of the California Lawyers Association California Litigation Litigation Section Officers Litigation Section Advisors Editorial Board W. George Wailes, San Mateo, Chair Hon. Elizabeth Feffer, Los Angeles Terrance J. Evans, San Francisco, Vice Chair Hon. Ernest H. Goldsmith, San Francisco Benjamin G. Shatz, Los Angeles, Jessica Barclay-Strobel, Los Angeles, Treasurer Hon. Eileen C. Moore, Santa Ana Editor-in-Chief Mary McKelvey, Los Angeles, Secretary Marc D. Alexander, Santa Ana J. Thomas Greene,San Francisco, Nick Akers, San Francisco Brian P. Barrow, Long Beach Immediate Past Chair Marc D. Alexander, Santa Ana Kathryn M. Davis, Pasadena Robert M. Bodzin, Oakland Paul J. Dubow, San Francisco Lisa M. Cappelluti, San Francisco Thomas R. Freeman, Los Angeles Executive Committee Members Cynthia Elkins, Woodland Hills Yalileth Giacoman, Los Angeles Jeremy Avila, San Jose Reuben A. Ginsburg, Los Angeles Hon. Allan J. Goodman (Ret.), Los Angeles Lawrence E. Biegel, Monterey Susan Horst, San Francisco Justice Elizabeth A. Grimes, Los Angeles Adrieannette Lynn Ciccone, Hayword Michael F. Kelleher, Oakland Daniel A. Lawton, San Diego Jose A. Cordova, San Francisco Seth Kugler, San Francisco Hon. Michael Mattice (Ret.), Fairfield Karli Eisenberg, Sacramento Carol D. Kuluva, Los Angeles Thomas J. McDermott, Jr., Palm Desert Michelle Galloway, Palo Alto Jessica N. Leal, Redwood City Ana Sambold, San Diego Paul Killion, San Francisco Norman J. Rodich, Irvine Justice Therese M. Stewart,San Francisco Jonathan A. Patchen, San Francisco Megan A. Rowe, Sacramento Hon. Helen E. Williams, San Jose Ana Sambold, La Jolla Jerome Sapiro, Jr., San Francisco Erik M. Silber, Los Angeles Benjamin G. Shatz, Los Angeles Sublime Designs Media Chad A. Stegeman, San Francisco Leah Spero, San Francisco Production & Design Kenneth K. Wang, Los Angeles Jordanna Thigpen, Beverly Hills www.sublimedesignsmedia.com Michelle McCoy Wolfe, Riverside
Erik J. Olson 2006 – 2007 MARK YOUR 2020 Past Chairs of the Litigation Mark A. Mellor 2007 – 2008 Section Gregory A. Nylen 2008 – 2009 Michael D. Fabiano 2009 – 2010 CALENDAR NOW Alvin H. Goldstein, Jr. 1983 – 1985 Elizabeth England 2010 – 2011 Daniel M. Sklar 1985 – 1986 Michael A. Geibelson 2011 – 2012 SEPTEMBER 24-26, 2020 Robert Aitken 1986 – 1987 Lisa Cappelluti 2012 – 2013 James C. Hagedorn 1987 – 1988 Robert M. Bodzin 2013 – 2014 California Lawyers Association Hon. Lawrence W. Crispo 1988 – 1989 Carol D. Kuluva 2014 – 2015 Annual Meeting Mark A. Neubauer 1989 – 1990 Reuben Ginsburg 2015 – 2016 Cedric C. Chao 1990 – 1991 Kathleen Brewer 2016 – 2017 The Annual Meeting will expand its dates and be Michael D. Whelan 1991 – 1992 Megan A. Rowe 2017 – 2018 a virtual conference held over 3 half-days. Mark C. Mazzarella 1992 – 1993 Thomas Greene 2018 – 2019 Thomas J. McDermott, Jr. 1993 – 1994 Mark W. Hansen 1994 – 1995 OCTOBER 9, 13, 15, 20 & 22, 2020 Kimberly R. Clement 1995 – 1996 Past Editors-in-Chief Litigation Summit Teresa Tan 1996 – 1997 Mark Herrmann 1987 – 1989 George L. Mallory, Jr. 1997 – 1998 Mark W. Hansen 1989 – 1991 Your Litigation Summit is going virtual this year Dana J. Dunwoody 1998 – 1999 Christopher Engh 1991 – 1994 with two-session blocks over several days. Join us Robert S. Gerber 1999 – 2000 Robert Aitken 1994 – 1996 for Trial Lawyer Hall of Fame insights into voir Jerome Sapiro, Jr. 2000 – 2001 Russell Leibson 1996 – 1999 dire and argument; critical updates on state and Curtis D. Parvin 2001 – 2002 Hon. Elizabeth Humphreys 1999 – 2002 Laura Lee Blake 2002 – 2003 Joan Wolff 2002 – 2006 federal developments; an ethics program focused Charles V. Berwanger 2003 – 2004 Sharon J. Arkin 2007 – 2011 on e-discovery issues; and a judges’ panel to help William J. Caldarelli 2004 – 2005 John Derrick 2011 – 2013 you be a more effective advocate. Buy the full Richard L. Seabolt 2005 – 2006 package or purchase a la carte.
Copyright 2020, CLA. The opinions in this publication are solely those of the contributors. OCTOBER 9 & OCTOBER 16, 2020 California Litigation is pleased to review original articles submitted for publication. Articles should be Appellate Summit 1,000-2,000 words. Please submit proposed articles – and Letters to the Editor – to Benjamin G. Shatz, The Appellate Summit is going virtual with at [email protected]. TO SUBSCRIBE: California Litigation is mailed free to all members of the Litigation Section of the 4+ hours of specialized CLE over two Fridays, CLA. To join the Litigation Section, send your name, address and telephone number to California featuring jurists, appellate experts, and a Hall of Lawyers Association, 400 Capitol Mall, Suite 650, Sacramento, CA 95814. Section dues are $95 per year Fame ethics panel. and should be enclosed with the enrollment information.
2 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Table of Contents
5 16 From CLA’s CEO A Long and Winding Road to A Personal Plea for Addressing the Root Undo Bad Supreme Court Law Causes of Racism By Michael M. Berger By Ona Alston Dosunmu 20 7 That Family Is Wrong for You: From the Section Chair Religious Objections Before the News for a New World Supreme Court By W. George Wailes By Peter Renn
9 24 Editor’s Foreword Navigating the New Settled Sweet Successes —— On or About 31 Statement Procedures Flavors By Justice Elizabeth A. Grimes, By Benjamin G. Shatz, Editor-in-Chief John A. Taylor, Jr., and Garen N. Bostanian
11 31 The Puzzle of Precedent in Recent Legislative Changes the California Court of Appeal Affect Long-Standing Pre- By Justice Michael J. Raphael Trial Discovery Practice By Hon. Allan Goodman (Ret.)
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 3 Table of Contents continued
35 51 Showing Lack of Intellectual Property Probable Cause: Litigation and Other Updates Plaintiff’s Burden of Proof in Opposing in the Video Game Industry as an Anti-SLAPP Motion Attacking a Malicious Prosecution Claim of April 2020 By Mark T. Drooks and Sharon Ben-Shahar By Yen-Shyang Tseng Mayer 55 38 Affirmative Action MCLE ARTICLE Quandaries Threats, Extortion and The Affirmative Action Puzzle: Legitimate Advocacy A Living History from Reconstruction By Mark L. Tuft to Today By Melvin I. Urofsky 42 Reviewed by Richard Wirick Insurance Coverage Analysis 58 Avoids Malpractice Landmines Stringfellow Acid Pits: By Michael Dawe and Brian Cronin The Toxic and Legal Legacy 47 By Brian Craig Reviewed by Dan Lawton Nuts and Bolts of Videoconference Dispute Resolution in the Time of COVID-19 By Marc Alexander
4 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association FROM CLA’S CEO A Personal Plea for Addressing the Root Causes of Racism By Ona Alston Dosunmu
In addition to being the CEO and Exec- And even if racists do not feel personally utive Director of CLA, I am also an attorney. empowered to shoot Black persons for playing The death of George Floyd has affected me and their music too loud or because they thought turned my attention to the meaningful policy they were a suspect in a crime, racists can always interventions that lawyers can champion to use the police or the threat of calling the police help reduce the likelihood that others suffer to try to enforce their will on African Ameri- the same fate. But this month’s piece is less cans. How? By calling 911 (or threatening to) about those policy interventions than it is the for such offenses as picnicking in a public park, personal cry of a mother, a wife and a sister to asking that a dog be leashed or selling bottles of Black men. water without a permit.
Ahmaud Arbery. Trayvon Martin. Eric The terror, trauma and perpetual fear that Garner. Philando Castile. Botham Jean. state-sanctioned violence will be brought to Michael Brown. Freddie Gray. Walter Scott. bear against Black boys and men for nothing Tamir Rice. more than doing everyday things like jogging or going to the store impact entire families George Floyd is just one of many in a long and entire communities. And no amount of line of Black men and boys who have died at money, education, professionalism, mastery of the hands of police or at the hands of vigilantes standard English or careful diction protects our who are confident that when it comes to Black sons, husbands, fathers and brothers. men, they may act with impunity. The facts, circumstances, and law around these incidents When my son was 15, he went to play bas- are varied and complicated but the root cause is ketball with friends in a tony, upper-Northwest not. Many people are incapable of seeing Afri- neighborhood of Washington, D.C. He left his can Americans as fully human. Added to this is friend’s house to meet his sister. On his way, he the demonization of Black men as “criminals” was stopped at gunpoint, frisked, questioned, and “thugs.” thrown into the back of a police car and taken
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 5 for a so-called “field show-up” by a victim of a to police officers acting as judges, juries and recent mugging. He was never arrested, never executioners on the streets of America’s cities. read his rights, nor was a parent ever called. I support efforts at criminal justice reform. As he was sitting handcuffed on the curb, his I support the election or appointment of friends tried to intervene. They were told to prosecutors who come from the communities move away. Ultimately, he was released. It was being policed. I support stronger federal Justice a case of mistaken identity for which he didn’t Department supervision of problematic police receive so much as an apology. forces. I support changes in the law about when the use of deadly force is permissible by A parent of one of the friends who wit- police officers. All of these policy interventions nessed the incident contacted me to ask about are important and should happen. my son’s welfare. But for that message, I never would have known the incident occurred. I Most of all though, what I believe needs to never would have known that this wasn’t the happen is for America to learn to see African first time this had happened to him. My son Americans as fully human. could have been taken from our family in an
instant by a trigger-happy, racist cop or by Ona Alston Dosunmu is the Chief Executive Officer of the being misidentified as a criminal. While my California Lawyers Association (CLA). A recognized leader in the husband didn’t make excuses or try to convince legal profession, Ona joined CLA with deep expertise in nonprofit governance and operations. Her legal experience includes stints in me that I was wrong to be upset, he did gently both private law firms and in-house. Most recently, Ona held a remind me that such experiences are par for the number of positions at the Brookings Institution, where she was Vice President and General Counsel and served as Interim COO. As CEO course. The fact that neither my son nor my of CLA, she is focused on supporting the Sections, serving members husband was surprised by this treatment and and fulfilling CLA’s mission by building the organization’s financial, technical and human capacity. Ona is particularly passionate about the fact that this wasn’t my son’s first run-in creating an organizational culture of trust, transparency, positivity with the police for simply existing in his Black, and respect. male body was and continues to be both pain- Ona earned her law degree from Georgetown University Law Center after graduating with a bachelor’s degree in journalism and a master’s ful and infuriating. degree in sociology from Howard University. She has served on numerous legal and nonprofit boards, including the Children’s Law There is an unbroken line through U.S. Center and the Corporate Pro Bono Advisory Board as well as two terms on the global governing board of the Association of Corporate history of violence against African Ameri- Counsel (ACC). She also chaired ACC’s board-level Advocacy cans—from slavery to the post-Reconstruction Committee and was elected Chair of ACC’s national Nonprofit terrorism of lynching in the Jim Crow era Organizations Committee.
6 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association FROM THE SECTION CHAIR News for a New World
By W. George Wailes George Wailes is a business trial attorney in San Mateo assisting clients in resolving their disputes through dispute resolution or trial. [email protected]
By the time you read this, I trust most We canceled in-person programs starting courts and offices will be reopened. Terrance in March and our committees and volunteers Evans will have taken over as Chair of the sec- shifted to presenting online programs about tion in September. You are in for a good year our new virtual practice. The ADR Commit- with Terrance at the helm. I’m writing this while tee presented three free webinars on effective sheltering in place under the Bay Area’s more dispute resolution and complex proceedings restrictive rules while the rest of California is using remote technology, and also conducted moving through Phase 2 and will soon begin an interview of Dean Erwin Chemerinsky. Phase 3. While there are many unknowns, That interview is posted on our website. Our one thing is clear: Life and the practice of law Committee on Appellate Courts conducted will never be the same. We likely will not be interviews with every appellate court in greeting each other with a handshake anytime California, state and federal, including the soon. Until a vaccine is distributed widely, and California Supreme Court, about practice and likely beyond, virtual appearances, depositions, oral arguments before each court during the dispute resolution, and meetings will be a ma- pandemic. Those interviews as well as general jor part of our practice. tips for remote argument are posted on the committee’s part of our website. Our publications continued unabated during the pandemic and joined the digital Our Federal Courts Committee presented age. Last May, we distributed both California a free program in which judges from the South- Litigation and California Litigation Review ern and Northern Districts explained how they digitally for the first time (with hard copies are operating during the pandemic and their mailed as well). Look for that practice to con- strategy for reopening when health officials tinue. We combined the monthly Litigation allow. Our Core Skills Committee presented Update with the newsletter, so that you receive programs on mastering remote advocacy with only one email with both the Update and the judges (and a justice) from federal and state newsletter, and you receive more up-to-date courts and how to conduct remote depositions, information with the more frequent newsletter. and assisted in preparing a program on employ- ment law issues during the pandemic. All these
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 7 programs and interviews have had tremendous Our Litigation and Appellate Summit attendance, and we trust they were helpful to will be presented virtually beginning October your practice. 9. This provides you with an opportunity to attend all the programs in both summits for Prompted by the tragic killing of George one price, something that was not possible in Floyd in May, we formed our Racial Justice the past since the summits were conducted Committee. It will begin by issuing a statement simultaneously. of condolence to Mr. Floyd’s family and other victims and then work toward a California that We have done our best to help during treats all with equity. If you want to assist with the pandemic with the transition to a virtual the work of the committee, please contact us at practice. Our volunteers are doing our best to [email protected]. keep you informed and to continue to provide substantive and procedural guidance. Let us We have been posting regularly to social know if there are subjects or areas of practice media on current topics of interest to litigators you want us to focus on. Consider volun- and in April and May we ventured into live teering to write an article, joining one of our webcasts with programs on practice during the committees, or presenting a webinar. Contact pandemic. Stay tuned for more online presen- us at [email protected]. And stay safe! tations and media posts.
8 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association EDITOR’S FOREWORD Sweet Successes — On or About 31
Benjamin G. Shatz, Editor-in-Chief of this Flavors journal, is a certified Specialist in Appellate Law and Co-chairs the Appellate Practice Group of Manatt, Phelps & Phillips, LLP, By Benjamin G. Shatz in Los Angeles. [email protected]
My last EIC’s foreword was written with the share? Now’s a great time to submit an article to optimism of a dawning new age. What I had in California Litigation. mind was a futuristic Year 2020 — a vision of Buck Rogers. Instead, we got Daniel Dafoe, who Rather than discuss this issue or “the virus,” authored both A Journal of the Plague Year and I want to use this space to call special attention Robinson Crusoe. As I write right now, L.A. feels to George Wailes, our Litigation Section Chair. more like London 1665 — at least in my imagi- George was doing a tremendous job of leading nation. I don’t really know because I’m marooned and invigorating our section before our medieval at home, not quite as beleaguered and lonely as a catastrophic pandemic. His stewardship has only castaway, but feeling akin. The good news is that gotten better. modern tech really has allowed most lawyers to At the last Executive Committee’s long-term continue to work from home. And we’re getting planning session — which, in late 2019 B.C. this journal out, and on time, come hell or high (that’s Before COVID), feels like a prehistoric eon water. ago — he directed the group to consider what the We’ve got a dozen awesome articles for you. Litigation Section could do for members, regard- As always, they include deep legal analysis, practi- less of price or other practical concerns. The idea cal tips, some history and some forward thinking. was to get creative juices flowing. But George I won’t catalog them all for you this time. Explore has a secret: He loves ice cream. Thus, to kick them on your own, and be sure to send feedback things off, he explained that in a perfect world, to me. I will, however, draw one fun connection: it would be his desire to provide every Litigation Mike Berger, one of our authors in this issue, ac- Section member with a quality cone of creamy tually features prominently in the book reviewed goodness. The Excom then proceeded to more by Dan Lawton about the Stringfellow Acid Pits weighty business. But George’s idea did get me saga. May we all have such meaningful legal work (and others) thinking: What flavors of ice cream in our careers. Perhaps you already have some to would be appropriate for lawyers or litigators in particular? Here’s what we came up with:
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 9 Litigation Crunch, Associate Grind, First Hope that was amusing. Lest you deem ice Year Fudge, Toffee Bar Association, Jamoca cream beneath great legal minds, consider that as Almond Justice, Licorice Law & Motion, Prelim a student, Chief Justice John Roberts frequented Pineapple Injunction, Kahlúa Continuance, the Baskin-Robbins in Harvard Square, invariably Lemon in Limine, Vanilla Voir Dire, Juicy Jury, ordering a sundae of chocolate chip ice cream Sticky Cross-Exam, Frosty Hostile Witness, topped with marshmallow. (Joan Biskupic, The Whipped Witness Waffle, Raspberry Rebuttal, Chief: The Life and Turbulent Times of Chief Daiquiri Declaration, Icy Irrelevancy, Orange Justice John Roberts (2019); Benjamin Pomer- Objection, Red Velvet Verdict, Punitive Pineap- ance, Center of Order: Chief Justice John Roberts ple, Compensatory Kiwi, Appellate Swirl, Banana and the Coming Struggle for a Respected Supreme Briefing, Amaretto Amici, Fudgy Writ Ruling, Court (2019) 83 Albany L.Rev. 449, 461, citing Pineapple Preemption, Last Berry Standing, Michael Levenson, Supreme Court Justices Remi- Res Fruiticatta, Melon Mootness, Ripe Cherry nisce About Their Harvard Days, Boston Globe Ripeness, Sine-mon qua non, Pro Hac Peach, (Oct. 26, 2017).) De Minimis Trifle, Tutti Frutti Pro Se, Peanutty Pro Per, Strawberry Solo, Witkin’s Watermelon, I hope that you and yours are well, remain Coconut Complaint, Sweet Sanctions, Mistrial well, and that our state, nation, and world Mocha Mint, Melony Mediation, Decadent Dis- rebound from our current crisis as quickly and covery, Res Chipsa, Peachy Impeachment, Peachy successfully as possible. If you need a little sugary Perjury, Sundae Settlement, Salted Settlement, boost to help see you through these dark times, Calendaring Crumble, Malpractice Mango-tan- reach for the ice cream. But don’t forget to exer- go, Salted Cara-mal-practice, Cant’elope Di- cise too. No one wants to gain “the COVID-19” vorce, Emin-mint Domain, Grape Bodily Injury, (pounds). Felonious Fudge, and Brownie v. Board.
10 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association The Honorable Michael J. Raphael is a Justice on the Court The Puzzle of of Appeal, Fourth Appellate District, Division Two. Precedent in the California Court of Appeal By Justice Michael J. Raphael
The California Court of Appeal may be judge panels in the Ninth Circuit must follow the unique as an appellate court that is formally a sin- earlier case; there is no discretion to do otherwise. gle court establishing binding statewide precedent, (See, e.g., Lair v. Bullock (9th Cir. 2015) 798 F.3d but which nevertheless sits in regional divisions. 736, 745.) Second, as a matter of “vertical” stare That situation presents two puzzles that do not decisis, every trial court in the multi-state region exist elsewhere in the same way. covered by the Ninth Circuit also is bound by the ruling. A federal appellate court in another region Background can disagree with the Ninth Circuit, and the two The Court of Appeal currently has nineteen conflicting opinions can coexist, each applying divisions, with a total of 106 justices sitting in mandatorily to appellate panels and trial courts in six regional districts, three of which are further only its own region. The way in which circuit judg- divided into between three and eight divisions. es decide whether to reconsider their precedent is (This article considers each of the three undivided the relatively rare circumstance where their court regional districts as a single “division.”) hears a case “en banc” — that is, by the full court (or, in the Ninth Circuit, by an eleven-judge pan- Regional Courts of Appeal are not unusu- el) instead of by a three-judge panel. (Three-judge al — after all, that is the structure of our federal panels in all appellate courts also can reconsider appellate court system. But the treatment of prece- their precedent in the circumstance, different than dent in that system provides a useful contrast with this article’s topic, when an intervening case from a California’s intermediate court. higher court changes the law.)
Each federal appellate court establishes In contrast, though its divisions are regionally binding precedent for its region only. When a situated, California Court of Appeal precedent three-judge appellate panel decides a case in, say, is treated as emanating from a single Court of the United States Court of Appeals for the Ninth Appeal, as if it had no regional divisions. That is, Circuit, the holding of the case creates fully bind- any Court of Appeal published opinion establishes ing precedent — what can be called “mandatory precedent for trial courts throughout the entire stare decisis” — for its region in two ways. First, as state, not merely the region in which the division a matter of “horizontal” stare decisis, future three- is located. (Auto Equity Sales, Inc. v. Superior Court
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 11 (1962) 57 Cal.2d 450, 455; Cuccia v. Superior a California trial court, this situation is similar to Court (2007) 153 Cal.App.4th 347, 353-354.) the position of a federal trial court confronting conflicting decisions in the federal circuits, but This situation — regional appellate courts none in its own circuit. The differences, however, establishing statewide precedent — has allowed are that in the federal system each conflicting case for the treatment of stare decisis in California to remains binding in its own region, and, in Califor- diverge from that in the federal appellate courts. nia, one of the cases was binding precedent for the First, as to horizontal stare decisis, an opinion whole state before it was contradicted. of one Court of Appeal panel is not binding on To be sure, some opinions have stated that other panels of the court. Of course, in the Court a trial court, as a practical matter, “ordinarily will of Appeal, a prior holding is treated as precedent; it follow an appellate opinion emanating from its typically is followed by subsequent panels. (Witkin, own district even though it is not bound to do so.” Cal. Procedure (5th ed.) Appeal, § 499, p. 560.) (McCallum v. McCallum (1987) 190 Cal.App.3d But it is not the case that the Court of Appeal 308, 315, fn. 4.) But this conclusion does not inexorably must follow its precedents. There is come from empirical research, and it is not clear no “en banc” procedure in the Court of Appeal, to what extent it is true, or if trial court practice and any three-judge Court of Appeal panel has might differ by type of issue, county, or individual discretion to decide a matter of law differently trial judge. A trial judge who has an opinion on from the way another panel has decided it. (Id. at which precedent is correct is free to follow her § 498, pp. 558-559; see Cuccia, supra, 153 Cal. judgment, regardless of which regional division App.4th at pp. 353-354 [“[d]isagreements at the decided the precedents. Further, in the areas of the Court of Appeal level are common”].) Unlike in state served by the districts based in Los Angeles federal appellate courts, horizontal stare decisis in and San Francisco, the trial judge has no certainty the Court of Appeal is not mandatory. as to which of several divisions will hear the trial Importantly, this is the case even if a Court court’s appeal. of Appeal panel is considering a case from its own The Puzzles division. (E.g., Eisen v. Tavangarian (2019) 36 Cal.App.5th 626, 637 [“We, however, are free to The unique characteristic of the California reconsider one of our prior decisions and conclude Court of Appeal — a single appellate court sitting it was mistaken.”]; Tourgeman v. Nelson & Kennard in regional divisions, yet creating statewide prece- (2014) 222 Cal.App.4th 1447, 1456 [“even if Col- dent — presents a couple of puzzles that do not train had been decided by a panel of this division, exist in other jurisdictions. we would be free to disagree with it”].) Puzzle No. 1: Should a Panel View Its Second, as to vertical stare decisis, divergent Division’s Own Precedent as Carrying Court of Appeal opinions mean that neither one is a More Powerful Form of State Deci- binding on any trial court. Vertical stare decisis is sis? If so, Why, and to What Extent? absolute in California as to decisions of the Califor- nia Supreme Court and uncontradicted decisions of Non-binding precedent presents a puzzle the Court of Appeal. When the Court of Appeal for appellate courts everywhere, including, most divides on an issue, though, the trial court “must prominently, the United States Supreme Court. make a choice between the conflicting decisions.” The nature of horizontal stare decisis is that an (Auto Equity Sales, supra, 57 Cal.2d at p. 456.) For appellate court normally will follow its precedents,
12 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association even where doing so is not strictly mandatory. That The case law does not necessarily recognize a is, a court typically does not revisit its precedents formal heightened standard. (See, e.g., Tourgeman, afresh. There must be some good reason to disagree supra, 222 Cal.App.4th at p. 1456, fn. 7 [division with a prior case. (See Allen v. Cooper (2020) 140 is “free to disagree” with itself].) Nowhere is there S.Ct. 994, 1003 [to overrule a precedent, Supreme a formal requirement stated that a Court of Appeal Court demands “ ‘special justification’ ” beyond panel must give its own division’s precedent extra that the case was “ ‘wrongly decided’ ”].) weight.
But the circumstances under which a court Indeed, the formal theory underlying Court will find a precedent worthy of rejection are diffi- of Appeal precedent arguably provides no reason cult to encapsulate. In California, on the one hand, to treat a division’s own precedent specially. Be- an appellate panel might follow the precedent if it cause the Court of Appeal is a single, statewide is long accepted, or well-presented and considered. court that issues precedents binding statewide, (Witkin, supra, Appeal, §§ 515-518.) On the the precedent from a particular regional court has other hand, it might depart from a precedent that no special binding authority in its region. If an overlooks a statute; if the governing statute has opinion creates a split in the caselaw, trial courts changed; if the precedent is wrong in principle throughout the state are free to follow either opin- or in policy; if the precedent is contrary to other ion, regardless of where the opinions originated. If authority; or the precedent is poorly considered. an opinion takes a side in an existing caselaw split, (Id. at §§ 519-538.) One could say, very loosely, trial courts throughout the state already are free, that to reject a precedent, a court must find that and remain free, to follow either side of the split. precedent not just wrong, but really wrong. Thus, because the Court of Appeal is a single In general, this is how the Court of Appeal court without regional precedent, it is arguable treats its precedent, no matter which division is- that any reason strong enough to warrant disagree- sues it. A California appellate court routinely cites ing with an opinion of a sister court (or a reason its sister divisions elsewhere in the state and does for not disagreeing), is applicable regardless of what not lightly create a “split” in authority, though it panel created the precedent, even if it was a panel will do so when it thinks it is warranted. of the court’s division.
And this leads to the puzzle that is particular But yet . . . it is not unusual for a Court of to California. Is there a further heightened standard Appeal opinion to make note of the fact that for an appellate panel to disagree with a decision precedent comes from its own division, indicating from its own division? Put yet another loose way, the court cares about that fact. What explains this? to warrant rejection, does such a decision need be Perhaps the consideration that persuades some not just really wrong in the panel’s view, but really justices is not a formal one but a practical one: really wrong? uniform guidance for trial courts in its own region. If trial courts do wish to simply follow their own That is, one might ask whether there are cir- regional appellate court on a matter in which the cumstances where a Court of Appeal panel would Court of Appeal is split — though trial courts for- disagree with a precedent from another division mally need not do so — then it could make sense but would not disagree if the same case happened to avoid complicating things for those courts. to have been decided by its own division. In one case, a Court of Appeal panel divided over this consideration. The majority considered
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 13 “conflicting opinions and the mischief they may quent issues, it could make more sense for the visit upon trial courts within this division,” but majority to adopt the legal interpretation that it decided that it was nevertheless worth creating a believes correct, rather than deferring to division split within its division, because it disagreed with uniformity. a case from its division that was new and inconsis- tent with another division, and because the ma- At a minimum, the pieces of the puzzle of jority’s articulation of its disagreement might aid precedent do not clearly fit together in the Califor- in informing the state Supreme Court about the nia Court of Appeal, allowing room for individual issue. (People v. Michaels (1993) 20 Cal.Rptr.2d justices to have a range of views on whether and to 121, 124, vacated, 857 P.2d 1099.) The dissenting what extent the precedents of their own divisions Justice agreed with the majority in the case but are entitled to particular weight. found it preferable to provide uniform guidance Puzzle No. 2: Can a Division Over- to trial courts within the division by avoiding an rule Its Own Precedent? intra-division split. (Ibid. (dis. opn. of Froelich, J.)) A step beyond an appellate panel’s disagreeing If Court of Appeal panels rely on the “uni- with its own division precedent — and thereby form guidance” principle to give extra weight to leaving a split in authority — is a panel overruling their own divisional precedent, there are some its own precedent, rendering it no longer good law additional puzzle pieces to consider. First, as trial on which a trial court may rely. courts need not follow their region’s authority when presented with a split, an appellate panel Because a Court of Appeal panel has the presumably should believe that it actually is true power to declare law, it may seem that a panel that trial courts in its region will do so if it opts to inherently has the power to overrule its precedents. refrain from creating an intra-division split. There (See People v. Yeats (1977) 66 Cal.App.3d 874, 879 is a plausible reason to view this matter differently [suggesting that it has the power to “decline to in the seven divisions that hear every appeal from follow” an opinion of another division and power a particular county or counties than in the twelve to “disapprove” its own precedents].) And there are divisions that hear appeals from either Los Angeles at least a few opinions that purport to do so. County (seven divisions of the Second District) or For example, in The Urban Wildlands Group, the counties around San Francisco (five divisions Inc. v. City of Los Angeles (2017) 10 Cal.App.5th of the First District). A trial court’s ruling in the 993, 1003, Division Five of the Second District latter counties has only a modest chance (about “disapproved” two of its prior cases, from 1997 14% in LA; 20% in SF) of proceeding to any and 2000, holding that they were part of a line of particular division. Thus, unlike in the counties caselaw that is less convincing than a contrary line served by the seven divisions that hear all a coun- of cases. A concurring justice joined the opinion ty’s appeals, trial courts in LA and the SF counties but not the overruling of precedent, stating that have no assurance that the division that decided task is better left to the Supreme Court. (Ibid. the precedent will receive its appeal. (conc. opn. of Baker, J.)) Finally, the “uniform guidance” rationale may In Estate of Sapp (2019) 36 Cal.App.5th matter more on issues of procedure and evidence 86, 109, Division Two of the Fourth District that routinely arise in trial court, as opposed to stated that there must be a “compelling reason” issues applying only to particular areas of law that to overrule a case, and found that standard met are presented less frequently. On these less-fre- in overruling a 1983 case from that division. (Id.
14 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association at p. 109, fn. 9; see Opsal v. United Services Auto Interestingly, however, the panels that have Assn. (1991) 2 Cal.App.4th 1197, 1204 [“[m]ere exercised overruling authority have done so only disagreement” with another panel’s decision is not a as to precedents from the panel’s own division. compelling reason to overrule it].) The court found No panel has suggested that it could overrule an a compelling reason because the prior decision opinion — even if outdated and wrong — from wrongly interpreted a term, and the court noted a different division. (See, e.g., Garza v. Asbestos that the relevant erroneous analysis in the earlier Corp., Ltd. (2008) 161 Cal.App.4th 651, 659, fn. 5 case had never been cited by another California [stating it may not overrule cases from another di- appellate court. (Estate of Sapp, at p. 109, fn. 9; see vision].) Because Court of Appeal precedent is not also Saucedo v. Mercury Sav. & Loan Assn. (1980) regional, but rather emanates from a single Court 111 Cal.App.3d 309, 310, 315 [Fourth District, of Appeal, binding trial courts throughout the Division Two panel overruling an opinion written state, what gives judges that happen to sit in the by same author two years earlier, holding it was issuing division the unique authority to overrule a wrongly decided].) decision from that division? If an old and arguably outdated precedent has existed for decades, bind- But what is the source of this power of one ing all trial courts statewide, what gives the justices Court of Appeal panel to overrule a precedent from the division that happened to issue it — and established by another panel? Under the Cali- only those justices — the authority to overrule it? fornia Constitution, a judgment of the Court of Appeal occurs when at least two justices present While the source, nature, and extent of the at oral argument concur in it. (Cal. Const., art. overruling power is a puzzle, the “compelling VI, § 3.) The Court of Appeal has no “en banc” reason” formulation of Estate of Sapp cannot fully procedure through which a larger (and formally explain the reason for it. After all, it takes a com- more powerful) panel — either from a division, or pelling reason for the Court of Appeal to simply from the entire Court of Appeal — can reconsider disagree with a precedent and create a split, short an opinion and supersede it. Consistent with this, of overruling the precedent. our Supreme Court has stated that, when it denies review of a Court of Appeal opinion, the opinion But a practical clue to what may be occurring “stands . . . as a decision of a court of last resort when the Court of Appeal overrules its precedent in this state, until and unless disapproved by this is this observation: The court tends not to overrule [Supreme C]ourt or until change of the law by precedents decided by active justices on the court, legislative action.” (Cole v. Rush (1955) 45 Cal.2d at least not unless the author of the precedent is 345, 351.) That formulation does not allow for the doing the overruling. Court of Appeal to overrule its precedent. On a court that lacks an “en banc” procedure, As a formal matter, any Court of Appeal panel it may be that overruling occurs where a panel — has authority equivalent to any other. It is settled implicitly — forms a “en banc”-type judgment that this authority means any panel is not bound of its own: a judgment that very few, if any, of by horizontal stare decisis and thus may articulate its current judicial colleagues would support the a legal holding that diverges from an earlier panel, precedent being repudiated. creating a split. But no theory has been articulated But this is a guess that can be found nowhere as to the source of one Court of Appeal panel’s in the rules. It is simply an attempt to piece togeth- authority to overrule another. er the puzzle of precedent in the California Court of Appeal.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 15 Michael M. Berger is Senior Counsel at Manatt, Phelps & A Long and Phillips, LLP in Los Angeles, and Co-Chair of its Appellate Practice Group. He has practiced takings law for the past 50 years, Winding Road has experienced all the cases discussed in this article except the one from 1922, and has argued four takings cases in the United to Undo Bad States Supreme Court. Supreme Court Law By Michael M. Berger
What do you say when the Supreme Court it will be recognized as a taking.” (Pennsylvania establishes a critical new standard but it is Coal Co. v. Mahon (1922) 260 U.S. 393, 415.) simply wrong? How do you react as a lawyer? Simple. Straightforward. Common sense. Go What can be done to set things right, and how “too far” and you cross a constitutional thresh- long (if ever) will it take? This is such a story. old.
Every now and then even the ablest jurists Then the Court did almost nothing for half — including those at the highest level — muff a century except periodically to repeat the “too one. And when they do, it may take a while far” mantra. When the Court reentered the to fix. That happened to takings law 35 years field in 1978-1980, it floundered. The Court ago, and it is only now in the process of being couldn’t even settle on a rule that would tell corrected. It has to do with what aficionados lower courts and litigants when governmental call “regulatory takings,” i.e., takings of prop- action went too far. In a case that it continues erty caused by the impact of government reg- to refer to as its “polestar,” the Court said that ulations. And its focus is on whether the Fifth it “quite simply has been unable to develop Amendment’s prohibition of uncompensated any ‘set formula’” for determining when gov- taking of private property for public use applies ernment action violates the Fifth Amendment’s only to physical takings (e.g., taking a truckload takings clause. (Penn Central Transp. Co. v. New of your raisins, to cite a recent example) or to York City (1978) 438 U.S. 104, 124.) Some regulatory takings as well (e.g., a rule making it “polestar.” Meanwhile, the Court granted cert illegal to sell your own raisins). in a number of cases and then declined to reach the merits, concluding that none was For those unfamiliar with this field, Justice sufficiently “ripe” to decide. Holmes probably thought he laid down a clear rule in 1922, when he concluded in an 8-1 That brings us to 35 years ago, when the opinion that when a regulation “goes too far Court decided Williamson County Regional
16 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Planning Commission v. Hamilton Bank (1985) while “reserving” their federal issues for federal 473 U.S. 172. In an effort that some saw as court. (Some government agencies made a an attempt to rid the federal courthouses of game of the confusion by removing to federal local land use disputes, Williamson County held court cases that had been properly filed in state that claims of government regulatory violation court and then moving to dismiss the federal of the Fifth Amendment were not ripe for lit- suits as unripe.) It was a messy process. igation in federal court until (1) the regulatory agency had reached a “final” decision about Observers kept expecting the Supreme what the owners could do with their property Court to review one of these cases and issue and (2) the owners had sued for compensation an opinion that read essentially as follows: “We in state court under the state’s parallel takings granted certiorari to explain that, when we provision — and lost. At that point, said the decided Williamson County, we were conscious Court, a federal suit could be maintained. of the issues that appear to be causing turmoil in the lower courts. We thought it was both ob- Those of you who recall first year Civil Pro- vious and implicit that we intended to exercise cedure might remember concepts like res judi- our reviewing authority to create an exception cata and collateral estoppel (or claim and issue to those rules for this specific situation. Suffice preclusion, depending on how long ago you it to say that we did not create a system to send went to law school) and the full faith and credit litigants on a wild goose chase through the state doctrine. If you are able to see those concepts court system on the promise that it would be through the haze of time, you might ask your- their ticket of admission to U.S. District Court self what the nation’s highest court had in mind only to have their eventual federal suits uncer- when it told litigants to go forth and try a case emoniously dismissed. Apparently we were too in state court and, upon losing (because if they subtle, so we are issuing this opinion to make win they don’t need further litigation) they can clear our intent that federal constitutional sue again — on the same facts and the same issues may, of course, be litigated in federal constitutional theory — in federal court. And courts.” But that opinion never came. yet that is what the Court said. It took the Supreme Court 20 years to Lower courts and commentators were high- recognize expressly the procedural trap it had ly critical of Williamson County. Even Congress laid by mandating state court litigation as a tried to help. Exercising its constitutional pow- precursor to identical federal court litigation. er over the jurisdiction of the federal courts, the In one of those strange quirks, that recognition Gingrich-led House of Representatives twice came in a case in which the Court could not passed legislation granting federal courts the deal with the issue on the merits. The case authority to review regulatory takings cases in was San Remo Hotel v. City & County of San the first instance (bypassing the state courts), Francisco (2005) 125 S.Ct. 2491. The case had but each effort fell victim to a filibuster in the proceeded through all levels of the California Senate. Meanwhile, the lower courts made a court system before reaching the United States hash of Williamson County. Most recognized Supreme Court on certiorari. The key issue in the procedural trap built into the double-liti- that last round became whether the case could gation requirement and either applied it rigor- proceed in federal court, having been fully ously or sought ways to allow litigants to avoid litigated in state courts, i.e., the Williamson it — for example, by filing suit in state court County state court litigation issue. In one
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 17 stunning moment at oral argument, Justice like the National Association of Home Build- O’Connor asked plaintiff’s counsel whether ers actively supported litigation and legislative he had attacked Williamson County’s validity. efforts to repair the damage done by the state When he responded “no,” Justice O’Connor court litigation requirement. Notwithstanding replied “perhaps you should have.” The reason the Court’s evident invitation, there matters for her cryptic comment became clear when sat. The Supreme Court routinely denied cert the opinions came down. As Williamson Coun- in each of the many cases presented to it, lower ty had not been challenged, the Supreme Court courts struggled to apply what became known simply applied it as written. Chief Justice as the Williamson County “ripeness mess,” and Rehnquist filed a lengthy concurring opinion litigants held their collective breath. in which he expressed chagrin that he had lent Knick v. Township of Scott his name to the Williamson County vote total Then came and urged the full Court to find a case in the (2019) 139 S.Ct. 2162. The Supreme Court near future that would allow it to reconsider granted certiorari specifically “to reconsider the Williamson County that opinion. Three other Justices signed on to holding of that property that opinion. No one in the majority disagreed. owners must seek just compensation under state law in state court before bringing a federal In San Remo, the Court disclosed the hid- takings claim ....” and overruled Williamson den procedural trap at the heart of the litiga- County’s state court litigation requirement. tion ripeness requirement: once a plaintiff goes (Knick, at p. 2169.) The vote was 5–4, with to trial on the merits of a claim — no matter Chief Justice Roberts writing for the majority the court — the full faith and credit doctrine and Justice Kagan for the dissenters. The ma- will preclude relitigating the claim elsewhere. jority took dead aim at Williamson County, But relitigation is at the heart of Williamson concluding that it “was not just wrong. Its County’s doctrine, i.e., sue and lose in state reasoning was exceptionally ill founded” and court and then the case is “ripe” for federal it was “unworkable in practice.” (Knick, at p. court. However, as lower courts had realized, 2178.) As the majority described it, the case and the concurring Justices in San Remo finally simply garbled its theory by concluding that, acknowledged, a state court suit does not “rip- because the Fifth Amendment did not preclude en” federal litigation, it kills it. takings, but only takings without just compen- sation, such a claim could not be ripe for litiga- Lawyers took the San Remo concurring tion until the state courts had entertained such opinion — with its four signatories and no a suit under comparable state law and ruled disagreements — as an invitation to find the against the property owner. That was wrong, right case to present the issue to the Court. held the majority, because a taking is complete And they tried. The Pacific Legal Foundation at the time of the offending governmental ac- took several cracks at it. So did I. Others too. tion, not later, at the entry of judgment against And we filed amicus briefs supporting each the government. Because of that, for example, other. In our spare time, the lawyers filing interest runs on a takings award from the time those cert petitions also wrote extensively for of the initial invasion, not from the eventual both scholarly journals and bar publications, judgment. The court that decidedWilliamson seeking to attract attention to this federal County “was simply confused.” (Knick, at p. jurisdictional gaffe that banned regulated 2174.) How many times have mere mortals landowners from federal court. Organizations
18 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association wanted to dismiss an errant Supreme Court in order to level the government/property own- opinion that way? er playing field: The finality roadblock needs to be dealt with. That requirement continues to The opinion doesn’t use the word, but it cause problems, albeit of a different nature. exudes the feeling that the majority believed Just what it takes to render a local regulatory that the Williamson County court was simply decision “final” and fit for litigation in any naïve. The Court as then-constituted appeared court is multiply problematic. In a nutshell, all to have a clear idea of what it wanted to ac- those cases held to be unripe before Williamson complish, i.e., giving state courts the first County established myriad requirements, such — but not the only — opportunity to review as applying for a specific use permit, applying the actions of state court officials. But the for more than one such permit, applying for mechanism it chose had “totally unanticipated a variance from the terms of the regulation, consequences.” (Knick, supra, 139 S.Ct. at p. obtaining something that looks like a “final” 2174.) Remarkable. It is simply baffling to decision of what will be allowed, and actually contemplate that the entire complement of the suffering damage from the action. The dis- United States Supreme Court and its battery cussion could go on with respect to any or all of intensely bright and able research attorneys of these permutations, but that is a different didn’t realize that sending parties to try and lose story for a different day. Suffice it for now to a case would end the matter, rather than teeing say that the Supreme Court finally interred the it up for further litigation in a different court. state court litigation mandate and put property Yet, they apparently did. Once “ripened” in owners with Fifth Amendment takings claims that fashion, as the Knick majority put it, “the on a par with other citizens with constitutional federal claim dies aborning.” (Id. at p. 2167.) claims. A good day’s work. So, the state court litigation requirement of Williamson County is dead. Or at least it should be. There may still be some holdouts. Recently, for example, a federal district court in Riverside concluded that notwithstanding Knick, the court could still invoke the absten- tion doctrine, sending the case back to the same state court system that Knick said that property owners had the right to avoid by filing suit directly in federal court. The idea that a clear Supreme Court directive that regulatory takings cases be heard in federal court could be easily sidestepped by invocation of the ab- stention doctrine because (as the district court put it) land use is a “sensitive” state issue is, charitably, absurd. The case is being appealed, and rightly so.
But there is still work for the Supreme Court to do with respect to Williamson County
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 19 Peter Renn is Counsel in the Los Angeles office of Lambda Legal That Family Is Defense and Education Fund. [email protected] Wrong for You: Religious Objections Before the Supreme Court By Peter Renn
The U.S. Supreme Court has agreed to contract with CSS. CSS seeks an injunction to hear a taxpayer-funded foster care provider’s force the City to renew its contract — while religious objection to protections against also permitting CSS to engage in otherwise sexual orientation discrimination in Fulton prohibited discriminatory conduct. v. City of Philadelphia (2019) 922 F.3d 140. The decision could have significant implica- The central legal question in the litigation tions for the ability of government to enforce is whether the City’s decision not to renew nondiscrimination requirements. If decided its contract with CSS violates the free exer- broadly, Fulton also has the potential to re- cise clause of the First Amendment, barring shape much of law as we know it, ushering a the government from “prohibiting the free new era of expanded litigation over religious exercise” of religion. The answer could have objections to virtually any legal obligation. significant implications for legal protections against discrimination, whether based on Fulton asks whether it is constitutionally sexual orientation or otherwise. The Supreme permissible for the City of Philadelphia to Court has also agreed to answer whether its require that its foster care providers, who are 30-year-old test for evaluating all free exercise contracted to provide government services, claims should be revisited, which could have comply with the City’s nondiscrimination even greater ramifications. policy. The provider at issue, Catholic Social Services (CSS), refuses to work with married Backdrop of the Case same-sex couples seeking to serve as foster In 2018, a reporter informed the City parents because of its religious belief that that two of its contracted foster care provid- marriage should only be between a man and ers, one of which was CSS, refused to work a woman. That refusal violates the City’s with same-sex couples because of their reli- nondiscrimination protections, which bar dis- gious objections. The City followed up with crimination based on sexual orientation, race, the providers and confirmed they had such a and other characteristics. After learning of policy, which the City noted was in violation that refusal policy, the City did not renew its of its ordinance prohibiting sexual orientation
20 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association discrimination in public accommodations. rejecting that challenge, and departing from One of the providers subsequently agreed to the heightened scrutiny test that had previ- cease its discriminatory practice. The other, ously prevailed, Smith held that religiously CSS, did not. As a result, the City did not neutral laws of general applicability do not renew its contract with CSS. Notably, how- violate the free exercise clause. In other words, ever, the City continues to contract with CSS the mere fact that such a law may incidentally for a range of other child welfare services, burden one’s exercise of religion does not such as its operation of group homes, where make it unconstitutional. However, the gov- CSS’s policies have different implications ernment also may not selectively enforce laws under local law. That continued relationship because of religion, craft the scope of its laws is inconsistent with assertions that the City with the goal of targeting religious exercise, was motivated by religious hostility in the nor otherwise take action based on religious nonrenewal at issue. hostility. These latter inquiries are often fact- bound and case-specific. Represented by the Becket Fund, a religious advocacy group, CSS filed suit. It Applying these standards, the Third Cir- sought a preliminary injunction compelling cuit had no difficulty rejecting CSS’s free exer- the City to contract with CSS. Organizations cise claim. First, the City’s nondiscrimination serving foster youth and supporting families policy was generally applicable and religiously in the lesbian, gay, bisexual, transgender, or neutral: All of its foster care providers must queer/questioning (LGBTQ) community, comply with the policy, set forth in both the represented by the American Civil Liberties City’s contracts and its nondiscrimination Union, intervened on the City’s side. The ordinance, and the policy applies regardless Eastern District of Pennsylvania denied a pre- of whether the discrimination at issue is liminary injunction, which the Third Circuit religiously motivated or not. Indeed, in just affirmed in 2019. During that appeal, CSS 2018, the Supreme Court affirmed that reli- also filed an emergency application with the gious objections to same-sex relationships do Supreme Court for an injunction, which was not justify denying “equal access to goods and denied, although Justices Alito, Gorsuch, and services under a neutral and generally applica- Thomas indicated they would have granted ble public accommodations law.” (Masterpiece it. The Supreme Court granted certiorari in Cakeshop, Ltd. v. Colo. Civil Rights Commn. February 2020. (2018) 138 S.Ct. 1719, 1727.)
The Third Circuit’s Free Exercise Analysis Second, CSS failed to show that the City was enforcing its nondiscrimination policy The key legal issues in Fulton concern the out of religious hostility rather than a sincere First Amendment’s free exercise clause. While commitment to equality. While the Supreme freedom of religious belief is absolute, free- Court had previously found religious hostility dom of action based on such belief is not. The in statements by civil rights commissioners in modern test for analyzing free exercise claims Masterpiece Cakeshop, which involved a Col- comes from Justice Scalia’s majority opinion orado bakery that refused to serve a same-sex in Employment Division v. Smith (1990) 494 couple, the Third Circuit found no evidence U.S. 872. The case involved a challenge to a of such hostility from the City, which also state law that prohibited the use of peyote, continues to contract with CSS for a range of used in a Native American religious ritual. In
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 21 other child welfare services. CSS claimed that Smith should be “revisited.” Before Smith, it had been targeted by the City for its reli- free exercise claims were evaluated under gious beliefs — but those beliefs were plainly heightened scrutiny: If a claimant could show relevant to the extent they confirmed CSS’s a substantial burden on religious exercise, the refusal to comply with the nondiscrimination government was required to show a compel- policy. The Third Circuit cautioned that if “all ling interest and that its actions were narrowly comment on religiously motivated conduct by tailored to that interest. But Smith expressed those enforcing neutral, generally applicable that heightened scrutiny was “courting an- laws against discrimination is construed as archy,” because it could require “religious ill will against the religious belief itself, then exemptions from civic obligations of almost Smith is a dead letter, and the nation’s civil every conceivable kind.” (494 U.S. at pp. 888- rights laws might be as well.” (Fulton, supra, 889.) Perhaps unsurprisingly, those in favor of 922 F.3d at p. 159.) religious exemptions to nondiscrimination laws generally oppose Smith. Justices Alito, The Paths Before the Supreme Court Thomas, Gorsuch, and Kavanaugh have all The Supreme Court has a range of ques- characterized Smith as drastically cutting back tions — and a range of options — in Fulton, free exercise protections, telegraphing their some narrower and others broader. At one desire to revisit it. end of the spectrum, one of the narrower Smith has limited relevance to federal questions on which it has granted review laws. After it was decided, Congress passed concerns the proper articulation of the test the Religious Freedom Restoration Act for a free exercise violation. CSS claims that (RFRA), 42 U.S.C. sections 2000bb et seq., the Third Circuit’s articulation of the test which requires strict scrutiny of federal laws excluded consideration of evidence relevant claimed to burden religious exercise. But to a free exercise violation, such as the history RFRA does not apply to boost defenses to of the challenged policy and whether the state laws. Consequently, the implications of government has granted secular exemptions abandoning Smith would be felt most acutely while denying religious exemptions to the in places like California. While some states policy. While that characterization is dubious, already require, to various extents, height- because the Third Circuit analyzed precisely ened scrutiny for free exercise claims under those issues, if the Supreme Court chooses to their statutes or constitutions, others — like resolve the case on these grounds, it should California — do not. Accordingly, ratcheting not cause seismic changes to the free exercise up the federal constitutional floor of what is landscape. When the Supreme Court last required to justify government action may not dipped its toe into these waters in Masterpiece make much difference in a state like South Cakeshop, it also resolved the case on narrow, Carolina; but it would have a direct impact case-specific grounds. But Justice Kennedy, here in California. Faced with the prospect who also authored landmark opinions affirm- of heightened scrutiny, the government may ing the equal dignity of same-sex couples, has prefer to have its own employees carry out now been replaced with Justice Kavanaugh. certain functions rather than contractors who At the other end of the spectrum, perhaps may refuse to comply with legal requirements the most consequential question on which the based on religion. Supreme Court has granted review is whether
22 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Whatever one’s views about Smith, and Angeles County’s child welfare system are whatever free exercise test is adopted, the LGBTQ. Family rejection of a young person’s government must have sufficient latitude to LGBTQ identity is a significant reason for prevent harm to third parties — such as the that over-representation. Permitting CSS’s children and families in the foster care system. discrimination would send a terrible message Some religious objections do not directly to LGBTQ foster youth that families formed implicate that issue. Consider another case in by people like them are not good enough to which Supreme Court review has been sought: be foster families. And permitting agencies to A man objects to providing his social security impose religious litmus tests can reduce the number to the State of Idaho as a means of pool of foster families who would be support- identification because he believes it is a mark ive of LGBTQ youth. of the devil. Requiring a religious exemption may seem innocuous enough there; after all, Second, the government has a compelling who is harmed? But adopting heightened interest in preventing the harms of discrim- scrutiny across-the-board means that it would ination that are inflicted upon the families also apply in situations like Fulton where seeking to care for foster children. CSS has the government seeks to prevent third-party argued that no such harm exists because harm. The principle that should guide those these families could simply go elsewhere to situations is straightforward and longstand- other agencies. But that is hardly assured, ing: Your right to swing your arm must stop particularly if other agencies can also claim where someone else’s nose begins. And the religious exemptions, and this ignores the government must have adequate flexibility to pain and humiliation of being turned away, prevent those injuries. the risk of which can deter qualified families from opening up their homes. A segregated In the case of child welfare, the stakes system of government services would also are exceptionally high. First, the government offend basic principles of equality. Although has an affirmative obligation to put first the religious agencies sometimes are free to interests of the children in its custody, and adhere to doctrine when serving their own that includes placing them with families well congregations, they must not be similarly free qualified to care for them. It therefore has a when performing government functions with compelling interest in prohibiting its contrac- taxpayer funds. tors from rejecting prospective foster parents based on irrelevant characteristics. Otherwise, Ultimately, no matter what level of scru- some children will lose out on loving homes tiny is applied, the City should prevail. But headed by same-sex couples. a Supreme Court that is willing to overturn Smith may also render nondiscrimination Nationwide, there are more than 400,000 protections — along with all other legal ob- children in the foster care system, with ligations — more vulnerable to challenge, by upwards of 50,000 here in California. No- transforming religious freedom from a shield tably, LGBTQ youth are disproportionately into a sword. represented among them, as an amicus brief filed by Lambda Legal pointed out. For ex- ample, one federally funded study found that approximately 20 percent of youth in Los
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 23 The Honorable Elizabeth A. Grimes is an Associate Justice Navigating the of the Court of Appeal, Second Appellate District, Division New Settled Eight. Statement Procedures John A. Taylor, Jr. is certified By Justice Elizabeth A. Grimes, John A. Taylor, Jr., as an appellate specialist by the and Garen N. Bostanian State Bar of California Board of Legal Specialization and is a partner at Horvitz & Levy LLP. [email protected]
The record on appeal is one of the most important aspects of appellate practice, because what’s included in the record (or omitted from it) determines what issues can be raised and argued on appeal. One long-standing method of designating oral proceedings has been the settled statement, a Garen N. Bostanian is an summary of trial court proceedings prepared attorney at Horvitz & Levy LLP in its Appellate Fellowship by an attorney and certified by a judge. Program. gbostanian@ horvitzlevy.com But use of settled statements in Cali- fornia was relatively rare until budget cuts resulted in a severe cutback in the number of court-funded reporters provided during tri- als. The increasing use of settled statements has necessitated amendments to the Rules of Court, to make the settled statement process less burdensome. Nonetheless, an anecdotal survey among jurists indicates that the sim- This article outlines how to obtain a plified procedures have had mixed success settled statement under the amended rule, due to lack of knowledge about the amended identifies some of the rule’s shortcomings, rule. (The authors express particular appreci- and proposes additional solutions for im- ation to the Honorable Samantha P. Jessner, proving the settled statement process. Supervising Judge of the Civil Division of the Los Angeles Superior Court, for her con- Importance of the Record tributions during that survey.) “When practicing appellate law, there are at least three immutable rules: first, take
24 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association great care to prepare a complete record; sec- Settled Statements in Unlimited Civil Cases ond, if it is not in the record, it did not happen; (2017) p. 3 (hereafter JC Report).) Under and third, when in doubt, refer back to rules that regime, a settled statement could be one and two.” (Protect Our Water v. County obtained only through a trial court motion. of Merced (2003) 110 Cal.App.4th 362, 364, (Ibid.) italics added.) An inadequate record can be fatal to even the most promising appeal. But the number of court reporters has significantly declined in recent years. Be- Appellants face an uphill battle from cause of budget reductions, many superior the start — appealed orders are presumed courts have adopted policies limiting the correct, and appellants must affirmatively availability of official court reporters to a demonstrate prejudicial error based on an narrow category of civil cases, which does adequate record. With an incomplete record, not include ordinary contract, personal inju- this task becomes even more burdensome, if ry, or professional negligence cases. (Jameson not impossible, since appellate courts may v. Desta (2018) 5 Cal.5th 594, 610.) presume that any error was corrected in the missing parts of the record, or that the In addition, it requires up to two years omitted proceedings would have supplied to complete a court reporter degree, and whatever evidence is needed to support the to become a certified reporter requires judgment. passing a state licensing exam. Passing re- quires transcribing 200 words per minute To present a complete appellate record, with a 97.5 percent accuracy rate. (Court counsel has several tools. The traditional Reporter Jobs and Training Opportunities in approach is to provide the Court of Appeal California, CourtReporterEDU.org
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 25 ifornia Rules of Court — was amended on In other circumstances, a motion is January 1, 2018, to address the difficulties required. The motion must be filed in the inherent in the former settled statement superior court at the same time as the party’s procedures. (JC Report, at p. 3.) notice designating the record on appeal. (Rule 8.137(b)(2).) The motion must show Rule 8.137 was rewritten to make the one of the following: (1) that the statement process for attaining a settled statement less can be settled without significantly burden- burdensome for both appellants and the ing the court or opposing parties, and will courts. For courts, inadequately prepared result in a substantial cost savings; (2) that statements hamper judicial efficiency. Be- the designated oral proceedings cannot cause judges must review the statements for be transcribed; or (3) that the appellant is accuracy prior to certifying them, an attor- unable to pay for a reporter’s transcript and ney’s failure to follow the proper procedures funds from the Transcript Reimbursement causes delays in proceedings and can even Fund are not available. (Rule 8.137(b)(2)(A) result in defaults in procuring the record (i)-(iii).) on appeal. The amendments to rule 8.137 make settled statements more accessible by The first category should rarely apply adding the option to proceed by election — in light of the attorney time required to (rather than only by motion), by amending prepare the motion and proposed settled the existing form for designating the record statement and to resolve disputes regarding on appeal to incorporate these amendments, its content, simply paying for the reporter’s and by creating new forms to make it easier transcript will usually be more cost effective. for attorneys and self-represented litigants to Realistically, it is always burdensome for a navigate the settled statement process. court to certify a settled statement when a reporter’s transcript is available. Regarding How It Works the third category, the “Transcript Reim- Preparing a settled statement is a four- bursement Fund” has not been available for step process involving a back-and-forth be- some time so that factor is easily met, but tween the appellant (who proposes a settled courts will require a declaration or other statement), the respondent (who proposes evidence to support the appellant’s claim of amendments), and the trial judge (who “set- insufficient available funds. tles” any disputes between the parties re- If the motion is denied, the appellant garding the statement’s content). Before the must file a new notice designating the record process begins, appellants must determine if on appeal within 10 days after the clerk sends they are permitted to use the rule. or a party serves the order of denial. (Rule A settled statement may be obtained ei- 8.137(b)(2)(B).) ther by election or by motion. Proceeding by Whether proceeding by election or mo- election is permissible if (1) the oral proceed- tion, the appellant must specify the date of ings were not reported (the usual situation in each oral proceeding to be included, indicate which a settled statement will be necessary) whether it was reported, and if so, must pro- or (2) the appellant has already obtained vide the name of the reporter (if known), and a court order waiving costs and fees. (Cal. whether a certified transcript was prepared. Rules of Court, rule 8.137(b)(1)(A), (B).) (Rule 8.137(b)(3)(A), (B).)
26 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association If the oral proceedings were transcribed and answer format if the court permits), by a court reporter, a respondent has the op- and also jury instructions given only orally. tion of bypassing the entire settled statement (Rule 8.137(d)(1) & (2)(A), (B).) Failing process. Within 10 days of receiving notice to include all this information will (with that the other side intends to use a settled certain narrow exceptions) limit the scope statement, a respondent may simply file a of the appeal to points identified in the notice indicating his or her intent to provide statement, and the omitted information will a reporter’s transcript. (Rule 8.137(b)(4) be presumed to support the judgment being (A).) This shifts the cost of providing a re- appealed. (Rule 8.137(d)(1) & (2)(A).) The porter’s transcript from the appellant to the appellant must also attach to the statement a respondent — but a respondent may prefer copy of the judgment being appealed. (Rule that option over a settled statement to ensure 8.137(d)(3).) a more accurate record, and to avoid the delay and expense of litigating the content of Second, the respondent has 20 days to the settled statement. proceed in one of two ways: (1) file proposed amendments to the proposed statement Respondents who exercise this option (Rule 8.137(e)(1)) or (2) preempt the settled must either (1) deposit certified transcripts statement process by electing to provide a re- of all proceedings mentioned in the settled porter’s transcript instead and following the statement, or (2) file a notice requesting same steps outlined above for exercising that preparation of the reporter’s transcript and a option at the motion stage. (Rule 8.137(e) deposit or waiver of the costs needed to pre- (2)(A), (B).) pare it. (Rule 8.137(b)(4)(A)(i), (ii).) If the respondent timely deposits the certified tran- Third, the trial court reviews and settles scripts, the appellant’s motion for a settled the statement. Within 10 days of the respon- statement will be dismissed. (Rule 8.137(b) dent filing proposed amendments (or failing (4)(B).) The appellant’s motion will also to do so in a timely manner), either side may be dismissed if the respondent deposits the request a hearing to review and correct the funds (or waiver of funds), and the clerk will statement. (Rule 8.137(f)(1).) However, then send the reporter a notice to prepare the the court will hold a hearing only if there transcript. (Ibid.) is a dispute about a material aspect of the proceedings. (Ibid.) If the proceedings were If the respondent opts not to pay for a reported, and the court wants to avoid deal- reporter’s transcript, the appellant has 30 ing with the dispute, as permitted by local days from election (or the court granting the rules it can simply order (and pay for) a tran- motion) to serve and file a proposed state- script to be prepared in lieu of the statement, ment. (Rule 8.137(c)(1).) This is where the upon determining that doing so will save settled statement process really begins. time and resources. (Rule 8.137(f)(2).) In reality, budget restrictions may foreclose this First, the appellant proposes a statement. option. The Los Angeles Superior Court, for The statementmust include a condensed example, has no funds to pay for transcripts narrative of the material facts and the points in general civil cases absent a fee waiver. the appellant is raising on appeal, including a summary of the evidence, witness testi- Regardless of whether any hearing is mony (which can be presented in question held, the court must either make any correc-
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 27 tions necessary for accuracy or identify the statements are typically unnecessary because necessary changes and order the appellant court reporters are provided by the court. In to incorporate them. (Rule 8.137(f)(3)(B) other cases, there appears to be a consensus & (4)(A), (B).) And if no hearing is held, among judges that the process is not often and the proposed settled statement omits used because it is so time consuming for the information required by rule 8.137(d), the parties, and impractical for courts given the court may order the appellant to file a new sheer volume of cases on their docket. And statement by a specified date. (Rule 8.137(f) litigants may be reluctant to pay the attorney (3)(A).) fees generated by all the extra work in pre- paring the statements. If the appellant fails to file the corrected or new statement, he or she will be deemed When settled statements are used, the to be in default and rule 8.140 (the rule fast pace at which judges move through cases outlining default for failure to procure the makes timely preparation of the statements record on appeal) will apply. (Rule 8.137(f) essential. It is unrealistic to expect litigants (3)(A) & (g)(1).) Once a corrected state- and judges to accurately recall what was said ment is served on the parties, any party may and decided days or even months after the submit additional proposed modifications. relevant oral proceedings. To avoid the diffi- (Rule 8.137(g)(2).) And 10 days after the culties of recalling events, some judges require time to file amendments passes, the judge, counsel to remain in the courtroom each day after reviewing the corrected statement and until they agree on a settled statement for proposed modifications, either certifies the that day’s proceedings. In such courtrooms, statement, or orders additional changes — the settled statement process may take up to beginning the cycle all over again. (Rule three hours each day to complete, creating a 8.137(g)(3).) strong incentive for the parties to simply hire a reporter. The final step is the certification and filing of the settled statement. If the court In civil trials involving well-heeled lit- did not order a transcript to be prepared or igants who understand the necessity of an the process has reached the stage where no accurate record in anticipation of possible additional modifications are required, the appeal, the parties generally do pay for a statement must be promptly certified. (Rule court reporter. But even in reported trials, 8.137(h)(1).) Alternatively, the parties may there will be gaps in the record — for pre- file a stipulation that the original statement trial proceedings, in-chambers conferences, (or the statement with the incorporated unreported sidebars, jury instruction con- modifications) is correct, which has the same ferences, discussions with counsel after the effect as the court’s certifying the statement. jurors and reporter have been dismissed for (Rule 8.137(h)(2).) the day, and even for unreported audio-vi- sual presentations. Where an unreported Judicial Perspective event’s importance becomes apparent only An informal survey of superior court after trial has concluded, a settled statement judges in Los Angeles reveals that settled can be useful to fill in gaps. Many judges and statements are not regularly used. In some attorneys assume that use of a court reporter types of cases, such as probate matters, settled and a settled statement are mutually exclu-
28 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association sive, but nothing in the rules precludes using lants did not use a settled statement because settled statements for such gap-filling. they were unaware of its availability or, if they knew about the rule, failed to follow it. Of course, it is far better to summarize such events on the record soon after they Proposed Solutions occur and a reporter is available to record that summary — avoiding the dimming of The decline in available court reporters memory and inevitable squabbles over the and the judiciary’s shrinking budget triggered details of what actually occurred. But in a changes to the settled statement rule. But pinch, it appears that settled statements are our findings confirm that settled statements underutilized in situations where they could are not the long-term answer. The obvious profitably preserve issues for appeal that solution, adopted in other jurisdictions, is would otherwise be waived due to an inad- to broadly permit the electronic recording equate record. of trials. Even if the preparation of certified transcripts based on electronic recordings Analysis of Reported Decisions Involving continues to be precluded in most cases, Settled Statements electronic recording could be permitted for the limited purpose of assisting in preparing In practice, the amended rule’s simplified settled statements. Indeed, some judges have procedures do not yet appear to have yielded reported that they permit self-represented substantial benefits. In fact, a review of over litigants to record proceedings for that sole 140 decisions (published and nonpublished) purpose. issued after the amended rule took effect — each of which discusses the use of settled But in the absence of electronic record- statements — reveals four general categories ings to prepare settled statements, litigants of decisions. can improve their use of settled statements in several ways. In the first, only 17 percent involved a settled statement that was successfully filed First, it bears repeating that settled state- and used to support argument. In the second ments are best used for filling gaps in the and largest category (63 percent of the deci- reported record, such as portions of reported sions), it was noted that a settled statement proceedings where, for whatever reason, the should have been filed but was not, generally court reporter was not available or otherwise resulting in an adverse disposition due to did not report what occurred. While settled failure to procure an adequate record. In the statements can be used for short court trials, third category (10 percent), there was no for longer proceedings and jury trials, the settled statement due to procedural error or settled statement process will almost always denial, generally resulting in the same out- be more costly than hiring a court reporter. come. And in the fourth category (another The process also places a generally unwel- 10 percent), a settled statement was filed but come burden on judges, especially where failed to include facts adequate to support the resolution of disputes regarding content the claim on appeal. is required. And longer proceedings tend to have more potentially material facts that Thus, in the vast majority of cases — need to be included, making their prepara- more than four-fifths of decisions — appel-
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 29 tion even more difficult as time passes and Finally, cooperation with opposing memories fade. counsel in preparing a settled statement can expedite the process. In fact, stipulating to Second, accuracy is crucial when prepar- the proposed settled statement will have the ing the settled statement. Where a proposed same effect as its certification by the court, statement fails to align with recollections reducing expense to the parties and burden of other parties and especially the court, on the trial judge. (Rule 8.137(h)(2).) By the amended rule contemplates continuing working together parties can avoid potential rounds of revisions that will cause unneces- procedural pitfalls, prepare more objective sary delay and expense. Litigants should not statements, and help facilitate greater judi- only prepare objective statements, but should cial efficiency. Of course, all aspects of liti- plan ahead by notifying the court before the gation would go more smoothly if attorneys start of trial of an intent to use a settled were more cooperative and less adversarial statement. All parties involved will then be regarding procedural matters — but as Har- more attentive to contemporaneously noting riet Tubman once said, “Every great dream material points for inclusion, ensuring that begins with a dreamer.” the arguments that may be raised on appeal are preserved in the settled statement or oth- er portions of the record.
Third, attorneys should read rule 8.137 carefully and closely follow its procedures. Even though the recent amendments were intended to make the settled statement pro- cess simpler, there remain complexities and deadlines to trip up the unwary.
Fourth, litigants should use the new forms created and updated by the Judicial Council to prepare procedurally sound settled statements. For example, Judicial Council form APP-003 (Appellant’s Notice Designating the Record on Appeal (Unlim- ited Civil Case)) was amended so appellants could state their intent to use a settled state- ment. Form APP-014 (Appellant’s Proposed Settled Statement (Unlimited Civil Case)) was created to help litigants prepare settled statements by identifying what information is mandatory or optional in the statement. And form APP-014-INFO (Information Sheet for Proposed Settled Statement) pro- vides a comprehensive overview of both form APP-014 and the settled statement process.
30 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Hon. Allan Goodman, now an arbitrator, mediator, and Recent Legislative discovery referee with ADR Services, Inc., was a Los Angeles Superior Court Judge and periodically an Associate Justice Changes Affect Pro Tem on the Second District Court of Appeal from 1995 through 2019. JudgeGoodman@ Long-Standing ADRServices.com Pre-Trial Discovery Practice By Hon. Allan Goodman, Judge of the Superior Court (Ret.)
Two legislative changes made in 2019 the option to respond by producing responsive have immediate impact on pre-trial discovery documents as they are kept in the usual course practice in California state courts. The first af- of business. This new procedure applies in fects how lawyers respond to pre-trial requests pending as well as newly filed cases. As dis- for production of documents. The second, cussed further below, no change was made in initially a more modest change, may be the the subdivisions of section 2031.280 that ap- harbinger of far greater changes in discovery ply to electronically stored information (ESI). practices, changes which eventually may align discovery practices in state courts with those The changes that were made passed the long required in federal court civil actions. California Senate 38 to 0 and the Assembly 77 (See Fed. Rules Civ.Proc., rule 26, 28 U.S.C.) to 0. The Senate Judiciary Committee analysis of the new legislation adopted the reasoning of Responding to Requests for Production of two of the organizations sponsoring it: In their Documents Other than ESI joint letter in support of the bill proposing the changes, California Defense Counsel and The way to appropriately respond to your the Consumer Attorneys of California wrote litigation adversary’s requests for production of that the legislation then being proposed would documents was changed by legislation effective “streamline[] the process for the parties re- January 1, 2020. Newly revised subdivision (a) ceiving this information and make[] litigation of Code of Civil Procedure section 2031.280 more efficient. Often litigants will produce a requires that “[a]ny documents or category of mass quantity of documents without specify- documents produced in response to a demand ing the category to which said documents are for inspection, copying, testing or sampling responsive. This leads to difficulty in determin- shall be identified with the specific request ing whether responses were indeed submitted number to which the documents respond.” for each request.” (Sen. Com. on Judiciary, Eliminated from the former subdivision (a) is Analysis of Sen. Bill No. 370 (2019-2020 Reg.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 31 Sess.) April 30, 2019, pp. 2-3.) The advantage the manner of responding to requests for claimed for the new, limiting provision was production of documents may ultimately be that it “greatly benefits a requesting party, who determined by a court if, or when, the court will now be given clear guidance as to what is presented with a motion for a protective documents are relevant to each of its specific order by a responding party seeking to shift, demands.” (Id. at p. 4.) or have the requesting party share in, the costs of compliance with a request for production of As the initial Senate committee analysis documents. (See Code Civ. Proc., § 2031.060, recognizes, “it should be noted that this will subd. (b).) often place a heavier burden on the responding party, who must now more clearly articulate Going forward, and subject to the need the connections between each document, for court assistance with requests for produc- or category or documents, and the relevant tion that are considered to be “unreasonably demands.… [¶] Ultimately, these changes will burdensome,” how is the responding party to provide a more streamlined and responsive comply with the revised statute? Must doc- document production, if at the slight expense uments responsive to more than one of the of the producing parties.” (Sen. Com. on typically numerous requests for production be Judiciary, Analysis of Sen. Bill No. 370 (2019- identified and produced separately in response 2020 Reg. Sess.) April 30, 2019, p. 4.) to each of the several requests to which it may be responsive? Is there a less repetitive means Whether the burden on the responding to comply with the new statute’s mandate? party will be slight, as the committee report suggests, depends at least in part on the size While there is no clear guidance at pres- of the responsive document production. The ent given the recent effective date of the new committee report on the new provision ap- statute, the sole change made in the wording pears to assume that any increased burden on of SB 370 between the time of its introduction the responding party would not constitute an and its passage suggests the answer. For many “unwarranted annoyance, ... or oppression, or years, section 2031.280, subdivision (a) had undue burden or expense,” to quote one of the provided that “[a]ny documents produced in principal bases for a request for a protective response to a demand for inspection, copying, order in pre-trial discovery proceedings. (See testing, or sampling shall either be produced Code Civ. Proc., § 2023.010, subd. (c).) Yet, as they are kept in the usual course of business, in a wide variety of cases (e.g., many types or be organized and labeled to correspond of cases commonly litigated in independent with the categories in the demand.” SB 370, as calendar courts and in class actions) there are, introduced, in addition to deleting the option typically, large numbers of responsive docu- for production “as [the documents] are kept in ments, making compliance with the newly re- the usual course of business,” proposed that the vised statute a daunting task. (Indeed, an entire responsive documents “shall be organized and industry already exists to help lawyers manage labeled to correspond with the categories in the burden of searching for and identifying the demand.” (SB 370, as introduced Feb. 20, documents potentially and actually responsive 2019, italics added.) This language may have to pre-trial requests for production.) required assembling all of the documents re- sponsive to each request; thus, if documents Which party actually will bear the cost were responsive to more than one request, they of complying with the new restrictions on
32 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association would need to be produced multiple times, long existed with respect to discovery of ESI. once for each request to which they were re- (Stats. 2009, ch. 5.) In addition to adding sponsive. By the time the bill emerged from specific provisions for discovery of ESI (e.g., the Senate Judiciary Committee, this clause Code Civ. Proc., § 2031.280, subds. (c)–(e)), had been reworded to read, “shall be identified at the same time the Legislature added specific with the specific request number to which the provisions for issuance of protective orders in documents respond.” (SB 370, as amended connection with its production (Code Civ. April 11, 2019, italics added.) Proc., § 2031.060, subds. (a)–(f)).
This change in wording may be consid- Some have argued that the change elimi- ered to be significant: Instead of the repetitive nating the option of production as the respon- production indicated by the original language sive documents are maintained in the ordinary of SB 370, it appears that a document produc- course of business also applies to ESI. If so, tion may qualify if it contains the universe of that could substantially increase the burden in documents accompanied by a table or schedule responding to document production requests which correlates by document name(s) and for ESI, for example, based on how paper page number(s) the documents responsive to records were converted and stored as ESI. Sub- each of the requests for production to which division (d) of section 2031.280 authorizes it is responsive, thus eliminating the need for production of ESI “in the form or forms in multiple productions of the same document(s). which it is ordinarily maintained or in a form (For ease of use by all parties, the universe of that is reasonably usable” unless the parties documents produced would be sequentially agree otherwise or a court orders production numbered.) in a different manner. The circumstance that the Legislature made no changes in this or The party responding to a request for other subsections of section 2013.280 that production must keep in mind other statutory apply specifically to ESI at the time it changed requirements, including the obligation to re- the manner of compliance for traditional spond separately to each item or category in documents supports the argument that there the request for production; to state whether was a conscious decision to continue to allow the party will comply in whole or in part and ESI to be produced in the same manner as whether it lacks the ability to comply; or state before the change to subdivision (a) of section if it objects and, if so, state the objection and 2031.280. Had the Legislature wished to have its bases. (Code Civ. Proc., §§ 2031.210, the change to subdivision (a) apply to ESI in subd. (a) & 2031.220.) If the responding par- subdivision (d), the opportune time to do so ty claims an inability to comply, it must also would have been when it amended subdivi- explain the reason, e.g., that the documents sion (a) of the same statute. Its silence on this do not exist, were destroyed or lost, or are not point may “speak volumes.” Thus, it appears within its custody or control. (§ 2031.230.) that ESI may continue to be produced as has When the Legislature made the changes been prescribed since 2009. described above in SB 370, it did not change The protective order provisions applica- the requirements for production of ESI, which ble to requests for production of documents appear in other subdivisions of the same stat- were not changed in the 2019 Legislature. ute. Those provisions had been enacted in 2009 Thus, in the event a request for production when the Legislature addressed issues that had
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 33 of documents, including ESI, is made, and party would be “required” to make extensive objected to by the responding party, the Code initial disclosures of information of all types of Civil Procedure provides a means to resolve then reasonably available to it. But this provi- the conflict. Setting aside the likely inquiry sion applied only if the parties first agreed to from the judge supervising discovery as to the do so and the court entered an implementing depth of the parties’ predicate mandatory meet order. (SB 17, as chaptered at Stats. 2019, ch. and confer efforts, section 2031.060, subdivi- 836, §§ 1, 2 adding §§ 2016.090 & 2023.050 sion (b) sets out the court’s authority to “make to Code Civ. Proc.; see Sen. Com. on Judiciary, any order that justice requires to protect any Analysis of Sen. Bill No. 17 (2019-2020 Reg. party … from unwarranted … burden and ex- Sess.) Apr. 11, 2019, p. 1 & passim.) pense.” (See also Id., subds. (d)–(f) [added in 2009 to apply specifically to disputes involving As SB 17 emerged from the Legislature production of ESI].) and was sent to the Governor, the $1,000 sanction was reduced to $250, to be assessed A Modest Approach to Accelerating “in addition to any other sanction imposed” Pre-Trial Discovery in connection with requests for production of documents. (The statute can be read as making For decades, the Federal Rules of Civil the $250 amount mandatory in the event the Procedure, or many district courts’ local rules court imposes other “sanctions”; Code Civ. before that, have provided for early, extensive, Proc., § 2023.050, added by SB 17, as chap- and attorney-initiated mandatory disclosure of tered at Stats. 2019, ch. 836, § 2.) all types of discovery between litigants without the prior issuance of formal requests for dis- Also, the comparison with Federal Rule covery by any party. (See Fed. Rules Civ. Proc., 26 was generous: The requirement for mutual, rule 26, 28 U.S.C. & former U.S. Dist. Ct., early production of matter otherwise left to Local Civ. Rules, Central Dist. Cal., rule 3(e).) traditional California document discovery procedures, was — and in the statute enacted In 2019, a bill (SB 17) was introduced in is — only effective if the parties stipulate to the California Senate that “models the Federal use it and they also obtain an order from the Rules of Civil Procedure” in certain respects. court in which their action is pending. One of the Senate committee reports speaks broadly — and in critical terms — of the There are cogent reasons for parties to difficulties in obtaining pre-trial discovery, a adopt the new procedure, including the po- circumstance with which litigators are quite tential for lawyers to save their clients consid- familiar. In fact, however, the descriptions of erable time and expense in obtaining materials this process in these committee reports went that to this point have been extracted from far beyond the actual impact of the legislative opponents only after propounding — and proposal, both as introduced and as enacted. eventually enforcing — document discovery Originally, the legislative proposal only added requests. Lawyers should also understand that a provision making $1,000 sanctions orders the language of the Senate Committee reports mandatory in certain discovery disputes. The carries the implication that if the voluntary bill was then amended to also provide that, procedure is not embraced, there may be fur- within 45 days after service of the answer in ther movement to more closely align Califor- civil actions (other than in unlawful detainer nia pre-trial discovery practice with its federal actions) and without awaiting a request, each court counterpart.
34 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Mark T. Drooks is a partner at Showing Lack of Bird Marella in Los Angeles. Probable Cause: Plaintiff’s Burden of Proof in Opposing an
Sharon Ben-Shahar Mayer is a Anti-SLAPP Motion partner at Bird Marella in Los Attacking a Malicious Angeles. Prosecution Claim By Mark T. Drooks and Sharon Ben-Shahar Mayer
An anti-SLAPP motion is a critical phase Under the anti-SLAPP statute, once the in a malicious prosecution case. Courts have court determines that the special motion to long held that malicious prosecution claims strike is appropriately invoked, the burden fall within the purview of the anti-SLAPP shifts to plaintiffs to prove, by competent statute, which gives the defendants an ex- admissible evidence, that it is probable they traordinary tool to force plaintiffs to estab- will prevail on their claims. (Code Civ. Proc., lish the prima facie merits of their case before § 425.16, subd. (b).) To meet this burden, discovery even starts. An anti-SLAPP motion the plaintiffs must substantiate a legally suf- can be case dispositive and, if successful, ficient claim that is supported by a sufficient entitles the moving party to attorneys’ fees. prima facie showing of facts. (Jarrow Formu- An order granting or denying the motion is las v. LaMarche (2003) 31 Cal.4th 728, 741.) immediately appealable and appellate review Courts do not weigh the evidence or deter- is de novo. It is therefore not surprising that mine credibility on an anti-SLAPP motion. anti-SLAPP motions are frequently filed in (Squires v. City of Eureka (2014) 231 Cal. malicious prosecution cases, and there is App.4th 577, 590-591.) Instead, the courts substantial case law analyzing the elements accept as true all evidence favorable to the of malicious prosecution. But analyzing the plaintiffs and assess the defendants’ evidence plaintiff’s burden in establishing a lack of only to determine if it defeats the plaintiffs’ probable cause on an anti-SLAPP motion submission as a matter of law. (Ibid.) Put an- can get tricky. other way, the party opposing an anti-SLAPP motion must present admissible evidence
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 35 demonstrating “the existence of disputed on its head. Where the existence of conflict- material facts.” (Oviedo v. Windsor Twelve ing evidence ordinarily tends to work in Properties, LLC (2012) 212 Cal.App.4th 97, favor of a plaintiff opposing an anti-SLAPP 112.) This standard is “‘not high’” and the motion, that ought not to be the case where plaintiffs need to show only a “‘minimum the issue is probable cause. Because attorneys level of legal sufficiency and triability.’” and litigants are not required to predict how (Squires, supra, at p. 591.) the trier of fact will weigh the evidence, the existence of conflicting evidence favor- One of the elements that a malicious ing plaintiffs’ position should not negate a prosecution plaintiff must establish is that the finding of probable cause; because probable prior action was brought without probable cause exists when there is only some evidence cause. (Crowley v. Katleman (1994) 8 Cal.4th in support of the underlying claims, pointing 666, 676.) The burden of showing a lack to weaknesses in defendants’ evidence ought of probable cause is hard to carry; probable not to advance the plaintiffs’ showing of cause is present unless all reasonable attor- lack of probable cause. The low threshold of neys would agree that the action is totally and factual showing mandated by the prima facie completely devoid of merit. (Roberts v. Sentry standard becomes irrelevant because virtually Life Ins. (1999) 76 Cal.App.4th 375, 382.) any evidence supporting defendant’s position Thus, an action does not lack probable cause can defeat probable cause as a matter of law. simply because it lacks merit: “probable cause to bring an action does not depend upon it Nor can plaintiffs meet their burden being meritorious, as such, but upon it be- to make a prima facie showing of lack of ing arguably tenable, i.e., not so completely probable cause by pointing to disputed ma- lacking in apparent merit that no reasonable terial facts concerning the underlying claims. attorney would have thought the claim ten- The existence of such disputed facts merely able.” (Wilson v. Parker, Covert & Chidester suggests that the outcome of the underlying (2002) 28 Cal.4th 811, 824.) Plaintiffs and action was subject to doubt, but does not their attorneys therefore do not act without mean the claims were pursued without prob- probable cause “by bringing the claim, even able cause. Put another way, the presence of if [they are] also aware of evidence that will disputed facts as to the underlying claims weigh against the claim. [Litigants] and their does not mean there are disputed material attorneys are not required, on penalty of tort facts as to the existence of probable cause liability, to attempt to predict how a trier of so as to require the denial of an anti-SLAPP fact will weigh the competing evidence, or to motion. One implication of this is that the abandon their claim if they think it likely the plaintiffs’ prima facie burden in opposing evidence will ultimately weigh against them.” an anti-SLAPP motion is no different from (Id. at p. 822.) Instead, litigants and their their ultimate burden of proof on the issue attorneys have a right “‘to present issues that of probable cause. are arguably correct, even if it is extremely unlikely that they will win.’” (Id. at p. 817.) The application of the low prima facie showing standard to the demanding element In a sense, the element of lack of prob- of lack of probable cause has been the source able cause effectively turns the prima facie of considerable confusion. For example, showing standard on an anti-SLAPP motion some courts have mistakenly concluded that
36 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association the evidence presented by the malicious she instituted or prosecuted the prior action. prosecution defendants on the issue of prob- (See Sheldon, supra, 47 Cal.3d at p. 884.) able cause was irrelevant because it, at most, But disputed facts concerning the merits created a disputed material fact that should of the underlying claims are irrelevant and be resolved by the jury. (See, e.g., Roscoe BK therefore do not preclude resolution of the Restaurant Inc. v. Murphy (May 13, 2016, probable cause question as a matter of law. B260709) 2016 WL 2892746, at *6 [affirm- Therefore, unlike in the typical prima facie ing the denial of an anti-SLAPP motion and analysis, the starting point of the probable concluding that defendants’ evidence in sup- cause inquiry should be the defendants’ port of the underlying claim “does not defeat evidence favoring existence of probable as a matter of law” plaintiffs’ evidence against cause rather than plaintiffs’ evidence of lack the merit of that claim but “instead would of probable cause. And while courts do not require us to weigh the evidence, which we weigh the evidence or determine credibility, may not do”]; Groom v. Fritch (June 29, they must consider all evidence presented by 2004, G031960) 2004 WL 1445077, at *3 the defendants in support of the underlying [concluding that evidence favoring the merit claims before concluding that the plaintiffs of the underlying claims and undermining have met their burden of proof. Because the the plaintiff’s showing of lack of probable existence of probable cause is a question of cause merely created a factual dispute that law receiving de novo appellate review, we should be resolved by the jury].) One reason should expect to see further development. for this apparent confusion stems from a misunderstanding of dicta in Sheldon Appel, in which the court stated: “While, as we have just discussed, the probable cause determina- tion has always been considered a question of law for the court, the cases have also made clear that if the facts upon which the defen- dant acted in bringing the prior action ‘are controverted, they must be passed upon by the jury before the court can determine the issue of probable cause.... “What facts and circumstances amount to probable cause is a pure question of law. Whether they exist or not in any particular case is a pure question of fact. The former is exclusively for the court, the latter for the jury.”’” (Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 877.)
This dicta is consistent with the obser- vation discussed above. Disputed facts that are consequential to the question of probable cause should go to the jury. Such is the case, for example, where there is a dispute as to the facts known to the defendant when he or
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 37 Mark Tuft is a partner with MCLE ARTICLE Cooper, White & Cooper LLP in San Francisco specializing in legal malpractice law and is a co-author of the Rutter Group Practice Guide on Professional Threats, Extortion Responsibility. MTuft@cwclaw. com. and Legitimate Advocacy By Mark L. Tuft
Recent cases highlight the need for litigators the client zealously within the bounds of the law. to clearly understand the difference between (See ABA Model Code Prof. Responsibility, EC aggressive advocacy and conduct amounting to 7-1.) The current ABA Model Rules use decid- extortion and prohibited threats. Clients should edly softer language in describing the required be able to hire aggressive lawyers and expect duty of advocacy: “A lawyer must also act with them to pursue available means for achieving commitment and dedication to the interests of the clients’ objectives. Litigators wishing to the client and with zeal in advocacy upon the cli- preserve their right to practice law, on the other ent’s behalf. A lawyer is not bound, however, to hand, need to know the parameters of legitimate press for every advantage that might be realized advocacy and cannot abide uncertainty when it for a client.” (ABA Model Rules Prof. Conduct, comes to distinguishing aggressive tactics from rule 1.3 (Diligence), com. [1]; see also ABA impermissible threats and extortion. Model Rules Prof. Conduct, Preamble ¶[9].)
Legitimate Advocacy “Within the bounds of the law” sets a clear constraint on legitimate advocacy. Zealousness What is meant by legitimate advocacy? The does not require that lawyers function with a term is sometimes used in rules of professional certain emotion or style of litigating. (Rest.3d, conduct (see, e.g., ABA Model Rules Prof. Con- Law Governing Lawyers (ALI 2000) § 16, duct, rule 8.4(g) [forbidding bias and harass- com. d.) Instead, the proscriptive maxim con- ment in law practice]). However, the rules do siders zealous advocacy and fidelity to the law not contain a clear-cut definition, and legitimate to go hand in hand. “Lawyers who exercise their advocacy is commonly viewed in the context of skill and knowledge so as to deprive others of zealous advocacy. their rights or to obstruct the legal system sub- Zealous advocacy is best understood as it vert the justifications of their calling. Unlawful has evolved in the law governing lawyers. The acts include all those exposing a lawyer to civil ABA articulated the duty of zealous advocacy in or criminal liability, including procedural sanc- Canon 7 of the 1969 Model Code of Profession- tions, or discipline for violation of professional al Responsibility as the duty of a lawyer, both to rules.” (Rest.3d, supra, § 23, com. c.) his client and to the legal system, to represent
38 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Neither California’s current nor former rules threat is made that puts the intended victim in fear refer to zealous advocacy. However, California case of being accused of a crime. law and ethics opinions reflect the maxim that zealous advocacy is tempered by the law. (Hawk A threat to expose or impute to the victim v. Superior Court (1974) 42 Cal.App.3d 108, 126; any deformity, disgrace, or crime, or a threat to see, e.g., Cal. State Bar Formal Opn. 2019-198.) expose any secret affecting the victim or his or her The “bounds of the law” include disciplinary rules family, also constitutes criminal extortion. (Pen. and enforceable professional obligations. (Hawk, at Code, § 519.) Examples include a threat to expose p. 126, fn. 17.) Thus, it is professional misconduct a person’s adultery or a prior criminal record. It is for a lawyer to commit a criminal act that reflects immaterial whether the threatened disclosure is adversely on the lawyer’s honesty, trustworthiness, accurate or false. Penal Code section 523 punishes or fitness as a lawyer; to engage in conduct involving as extortion sending a letter or other writing to any dishonesty, fraud, deceit, or reckless or intentional person with the intent to obtain money or prop- misrepresentation; or to engage in conduct that is erty where the letter or writing contains a threat to prejudicial to the administration of justice. (Rules do an act that constitutes extortion under section Prof. Conduct, rule 8.4(b), (c), (d).) Business and 519. Professions Code section 6106 also prohibits at- The extortion statutes prohibit the making torneys from engaging in any act involving moral of threats proscribed by section 519 even if the turpitude or dishonesty. In addition, a lawyer may threat itself is not illegal. The threat becomes illegal be subject to discipline for criminal acts set forth when coupled with a demand for money or other in Business and Professions Code section 6101 or property right. The law focuses on the means used if the criminal act constitutes “other conduct war- to obtain another’s property, even if the purpose is ranting discipline” as defined by Supreme Court to collect a valid debt, or the person making the case law. (In re Kelley (1990) 52 Cal.3d 487, 497.) threat believes in good faith that the accusation Therefore, legitimate advocacy can be con- is warranted and the person is able to report the sidered as fulfilling the role of the advocate by matter to the authorities. proceeding in a manner reasonably calculated to In Libarian v. State Bar (1952) 38 Cal.2d 328, advance a client’s lawful objectives with reasonable 329-330, a lawyer, after losing at trial, sent a letter competence and diligence and fidelity to the cli- to opposing counsel accusing opposing counsel’s ent’s cause. client of perjury and threatening to use the perjury Extortion charge as a basis for a motion for new trial and a criminal complaint unless the opposing party paid Extortion is the obtaining of property (includ- his client’s demand. The Supreme Court held that ing property rights) from another, with that person’s the letter constituted an attempt to commit extor- consent, induced by a wrongful use of force or fear. tion and a crime involving moral turpitude that (Pen. Code, § 518.) Threats that would induce warranted discipline. In Barton v. State Bar (1935) fear for purposes of the statute include a threat to 2 Cal.2d 294, 297, an attorney’s threat to report accuse the person or a relative or family member adulteration of gasoline to authorities unless the of any crime. (§ 519.) It is immaterial whether the oil company paid his client’s demand constituted person or family member actually committed the criminal extortion and was grounds for disbar- crime or whether the accusation does not relate to ment. An attorney’s threats to press the Republic of any specific crime. Extortion is committed when a Ecuador to file criminal charges against Chevron’s attorneys to pressure Chevron into settlement
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 39 constituted extortion in violation of the Hobbs Mendoza that contained those express threats that Act, 18 U.S.C. § 1951(b)(2). (Chevron Corp. v. had no reasonable connection to the underlying Donziger (S.D.N.Y. 2014) 974 F.Supp.2d 362, dispute. 581-582.) Prohibited Threats under the Ethics Rules Recently, in United States v. Avenatti, (S.D.N.Y., Jan. 6, 2020, No. 19 Cr. 373 (PGG) Most states prohibit extortionate threats of 2020 WL 70952), a lawyer was convicted of crim- criminal prosecution or disciplinary action as a inal extortion in threatening to hold a press confer- means of gaining an advantage in a civil matter ence to report Nike’s alleged wrongful misconduct as a violation of Rule 8.4(b). (See ABA Formal that the lawyer claimed would cost Nike billions Opn. 94-383 (1994) [threatening a disciplinary of dollars in market share unless Nike agreed to complaint against opposing counsel to gain an retain the lawyer and his co-counsel to conduct an advantage in a civil case may violate Rule 8.4(b) if “internal investigation” and pay a fee of $15 to $20 the conduct is extortionate under criminal law].) million in addition to settling his client’s claim. Several jurisdictions, including California, have a separate rule in addition to Rule 8.4(b) that bars Demand letters and other litigation commu- certain threats aimed at gaining an advantage in a nications that constitute extortion as a matter of civil matter. law are not protected speech or petitioning activity under California’s anti-SLAPP statute. (Code Civ. California’s rule prohibits lawyers from Proc., § 425.16; Flatley v. Mauro (2006) 39 Cal.4th threatening to present criminal, administrative, 299, 321-322.) Flatley found that an attorney’s or disciplinary charges to obtain an advantage in prelitigation communications that threatened to a civil dispute. (Rules Prof. Conduct, rule 3.10(a); publicly accuse a well-known celebrity of rape and formerly Rule 5-100(A).) A “civil dispute” is other unspecified violations unless he settled con- broadly defined to include any actual or potential stituted criminal extortion. The letter warned that controversy over the rights and duties of two or unless the matter settled, an in-depth investigation more persons under civil law, regardless of whether would ensue with all immigration, social security, formal action has commenced. It also includes IRS and state tax information being exposed, and administrative proceedings of a quasi-criminal stated: “We are positive the media worldwide will nature pending before a federal, state, or local enjoy what they find.” (Id. at p. 309.) In Mendoza governmental entity. (Rule 3.10(c).) “Administra- v. Hamzeh (2013) 215 Cal.App.4th 799, 806-807, tive charges” means filing or lodging a complaint an attorney’s letter threatening to report alleged with a governmental entity that may order or tax fraud of a client’s former employee to the IRS recommend the loss or suspension of a license, and other enforcement agencies unless the former or may impose or recommend the imposition of employee paid damages constituted criminal a fine, pecuniary sanction, or other sanction of a extortion regardless of whether the threat could quasi-criminal nature. The term does not include be characterized as extreme or egregious. On the filing charges with an administrative agency as a other hand, a prelitigation letter was found not to condition precedent to maintaining a civil action. be “so extreme in its demands that it constituted (Rule 3.10(b).) criminal extortion” in Malin v. Singer (2013) 217 Rule 3.10 commonly applies to threats made Cal.App.4th 1283, 1298-1299. Malin found a by lawyers to coerce payment of delinquent critical distinction between a demand letter that fees and costs (e.g., Bluestein v. State Bar (1974) makes no overt threat to contact prosecuting 13 Cal.3d 162, 170; Lindenbaum v. State Bar agencies or the IRS, and the letters in Flatley and
40 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association (1945) 26 Cal.2d 565, 573), and threats made in whether the threat is made as a means of obtaining settlement demand letters (e.g., In the Matter of an advantage in a civil dispute and that a civil Rodriguez (Review Dept. 1993) 2 Cal. State Bar dispute is broadly defined to include potential as Ct. Rptr. 480, 488; Libarian, supra, 38 Cal.2d at well as actual controversies whether or not a formal pp. 329-330). action has been filed. It is equally important to bear in mind that extortionate threats under civil and The rule does not apply to the actual pre- criminal law may constitute a violation of Rule senting of criminal, administrative or disciplinary 8.4 and the State Bar Act regardless of whether the charges. (Rules Prof. Conduct, rule 3.10, com. threat is made to obtain an advantage in a civil dis- 2.) Nor does the rule apply to threats to initiate pute, and regardless of whether the threat involves contempt proceedings for failure to comply with criminal, administrative, or disciplinary charges. a court order or the offer of a civil compromise authorized by statute, such as Penal Code sections In the end, legitimate advocacy does not 1377 and 1378. (Rule 3.10, com. 3.) The rule does equate to “scorched earth” tactics, but rather to not prohibit a government lawyer from offering a effective advocacy that entails commitment and global settlement or release-dismissal agreement in dedication in achieving the client’s lawful objec- connection with related criminal, civil, or admin- tives with reasonable competence and diligence. istrative matters. (Rule 3.10, com. 4.) (See, e.g., In re Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1537.) Belligerent letters often Whether a lawyer’s statement violates Rule evoke belligerent responses. Legitimate advocacy 3.10 depends on the specific facts. A statement also means acting with civility, professional integ- that the lawyer will pursue “all available remedies,” rity, and candor under the State Bar’s Guidelines or words of similar import, would not by itself vio- of Civility and Professionalism (available at www. late the rule. (Rules Prof. Conduct, rule 3.10, com. calbar.ca.gov/Attorneys/Conduct-Discipline/Eth- 2.) It is not improper, for example, to threaten to ics/Attorney-Civility-and-Professionalism). (See, bring a civil action if the client’s demands are not e.g., In re Marriage of Davenport, at p. 1537.) If a met. (See Cal. State Bar Formal Opn. 1991-124; lawyer knows that a client expects aggressive tactics S.D. County Bar Assn. Formal Opn. 2005-1.) not permitted by the rules or other law, the lawyer Rule 3.10 is limited to threats made to obtain is required to advise the client about the relevant an advantage in a civil dispute. For example, if a limitations on the lawyer’s professional conduct. lawyer believes in good faith that the conduct (Rules Prof. Conduct, rule 1.4(a)(4).) Aggressive of opposing counsel for a party in a civil matter advocacy will not be lessened by litigators adhering violates criminal or other law, a statement by the to these rules and standards. lawyer that if the conduct continues, the lawyer will report it to the appropriate authorities would not be considered to violate the rule. (Rules Prof. Conduct, rule 3.10, com. 1.) Conclusion
Explicit lines exist in the law governing lawyers sufficient to avoid confusion and uncertainty in distinguishing legitimate advocacy from extortion and improper threats. Litigators need to be aware that threats proscribed under Rule 3.10 depend on
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 41 Michael G. Dawe is a principal of Prenovost, Normandin, Bergh Insurance & Dawe and of counsel to Borchard & Callahan in Orange Coverage Analysis County. Avoids Malpractice Landmines Brian D. Cronin is an associate By Michael Dawe and Brian Cronin at Prenovost, Normandin, Bergh & Dawe and focuses on civil defense litigation and insurance coverage issues. “Things are not always what they seem.” The Fables of Phaedrus, Book IV, Fable 2.
Whether representing plaintiffs or defen- dants, every litigation professional needs at least a basic understanding of liability insur- ance coverage to avoid inevitable malpractice landmines in the pathways of a professional career. The holding in Thee Sombrero, Inc. v. (“CUP”) from the city of Colton, California. Scottsdale Ins. Co. (2018) 28 Cal.App.5th 729 The CUP permitted a floor plan of the prop- provides a clarifying prism through which the erty that could not be modified without city importance of a front-end insurance coverage approval. In 2007, Sombrero leased the prop- analysis can be appreciated. erty to tenants who operated the nightclub as “El Sombrero.” The city approved a floor plan Important lessons to be learned from this which had a single entrance equipped with a case include: (1) the potential for liability metal detector through which all patrons had insurance coverage is very often not obvious; to pass. (2) the apparent lack of insurance coverage is often supported by seemingly logical and The operators of El Sombrero employed sound, albeit incorrect, denials of coverage; on-premises security services (“Security”). and (3) a competent front-end and ongoing Security carried liability insurance covering it insurance coverage analysis is a critical element for both the customary “bodily injury” and of discharging one’s professional responsibility “property damage” liability exposures. The li- in civil litigation. ability coverage provided, in customary terms, that Security would be both defended against The El Sombrero Nightclub Case potentially covered claims, and indemnified Thee Sombrero Inc. (“Sombrero”) owned against actually covered claims for “bodily commercial property which was operated as a injury” and “property damage” arising from nightclub pursuant to a conditional use permit an “occurrence.” (There was no direct issue in
42 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association this case of whether Scottsdale had a “duty to was no fault in the maker of the metal detector. defend” its insured because Sombrero’s claim You would learn further that, apparently with- focused solely on Scottsdale’s alleged “duty to out the knowledge or approval of Sombrero, indemnify.”) An “occurrence” was customarily Security had revised the floor plan to convert defined as an “accident.” In lay terms, Security’s a former storage area into a “VIP” entrance, insurance provided it with the right to a legal which was not equipped with any metal detec- defense and indemnity against claims that it tor. A representative of Security admitted that had accidentally caused “bodily injury” or the gun employed in the shooting was brought “property damage” to any third party. in through the VIP entrance.
On June 4, 2007, one patron shot and As prospective counsel for Sombrero, you killed another patron at the El Sombrero find yourself seeing some light at the end of nightclub. As a result of this homicide, the the tunnel with this information. Presumably city revoked Sombrero’s CUP. While Sombrero Security may have some liability exposure to was able to negotiate a modified CUP allow- Sombrero for having created an alternative ing it to operate as a banquet hall, it could entry into the nightclub, unpermitted by the no longer operate as a nightclub. According CUP, through which a patron was able to avoid to the president of Sombrero, the change in the metal detector at the front entrance. There legal status dramatically reduced the value of should be at least a shot (excuse the pun) at the property. Sombrero’s president opined liability against Sombrero in negligence. You in a declaration that the fair market value of are disappointed to learn, however, that Secu- Sombrero’s property as a nightclub was over rity, apparently not financially flush, cannot $2,700,000, while its value as a banquet hall be expected to respond meaningfully in com- was just over $1,800,000, a reduction in value pensation. By leaving no stone unturned, you of over $900,000. discover that Security at least carried general liability insurance with both “bodily injury” Assuming Sombrero’s president arrived and “property damage” coverage. in your office seeking advice as to whether or not insurance coverage might play a role in Surely, you think, there must be some way compensating Sombrero for its loss of over to translate these facts into a potential recovery $900,000 of fair market value, could you of real money. You mentally run through the envision any scenario under which “property customary coverages and quickly eliminate damage” coverage might be the source of such “bodily injury” as a viable avenue of recovery. recovery? Assuming you can, and you are not Indeed, while there was undeniably grievous already a seasoned insurance coverage attorney, “bodily injury” to the deceased, that is a claim you are showing admirable aptitude for that which belongs to the representatives of the calling. deceased, not to the property owner Sombrero.
Obviously, you would need more infor- What about “property damage” coverage? mation from Sombrero’s president. You would Not being readily familiar with the relatively naturally inquire as to how there was a gun on standardized definitions employed in insurance the premises if there was a metal detector at the policies, you review the definition of “property only entry point. You might surmise that the damage.” Security’s policy contains the follow- maker of the metal detector might have some ing relatively common two-prong definition of responsibility. You would learn, however, there property damage: “(a) physical injury to tangi-
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 43 ble property, including all resulting loss of use Scottsdale would provide apparently of that property,” or (b) “loss of use of tangible substantive bases for its position. It would property that is not physically injured.” submit that your analysis reflects an elemen- tary misapprehension as to the fundamental You quickly rule out the first alternative: meaning of “loss of use” of tangible property there has been no “physical injury to tangible which is not physically injured. It would point property.” You pause, however, at the second out that Sombrero did not actually “lose” the alternative: hasn’t there been at least some “loss use of its tangible property. Rather, Sombrero of use of tangible property that is not physically was simply obliged to use that property for a injured” within the scope of the definition? different purpose. “Use” of the property as a After all, before the homicide, Sombrero’s banquet hall, Scottsdale would urge, is no less a CUP allowed it to operate a property-value-en- “use” of tangible property than the “use” of the hancing nightclub, where after the homicide property as a nightclub. Sombrero was only allowed to operate a prop- erty-value-diminishing banquet hall. It would Scottsdale would instruct that while your seem at least plausible that Sombrero has suf- inventive thinking may be admirable in the fered some “loss of use of tangible property that abstract, it fails to apprehend a fundamental is not physically injured” for which Security is principle limiting “property damage” coverage: liable and for which the value of Sombrero’s “numerous courts hold that mere financial loss of use is measurable in dollars. injury does not constitute ‘property damage’ as required for coverage under a CGL policy.” Might there be a source of financial recov- ery from Security’s insurer if you can prevail This argument, in fact, was sufficiently against the impecunious Security and establish persuasive in Thee Sombrero to convince the tri- that its negligence caused the loss of the CUP, al court to summarily rule in Scottsdale’s favor. and consequently lowered the value of the property? This naturally causes you to struggle As is often the case when insurers explain a with the next question: can a reduction of the denial of coverage, even when that denial may fair market value of real property resulting later be determined by a court to have been from a legally mandated change of use con- incorrect, Scottsdale’s argument had the spe- stitute insured “property damage” under the cious patina of logic which, to many insureds definition “loss of use of tangible property that and their counsel inexperienced in coverage is not physically injured”? nuances, may suffice to cut short the effort to recover insurance benefits. Reasonable minds, it is said, may differ. If the question had been put to at least one Fortunately for Sombrero, its counsel presumptive expert on insurance coverage, was not daunted by the mere fact that both Security’s general liability insurer Scottsdale Scottsdale and the trial court had summarily Insurance Company, it would have generated rejected her alternative analysis of the second a ready, clear, and unequivocal answer: “not element of the “property damage” definition. a chance.” Hence, there would be no reason As is commonly the case when an appellate whatsoever for Sombrero to pursue a claim court reverses an underlying judgment, “first against Security based on the fantastical hope appearances deceive many,” to quote the ven- that Scottsdale would be obligated to indem- erable Phaedrus again. nify its insured.
44 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Just as summarily as the trial court had can differ in all areas of legal practice. Whenev- rejected Sombrero’s argument at the trial level, er an appellate court reverses the trial court, it the Court of Appeal rejected Scottsdale’s argu- is a necessary fact that the ultimately prevailing ment in reversing the judgment. Indeed, the party had to fight long and hard to achieve court observed unequivocally that Sombrero’s what was presumably a just result. That said, inability to use the property as a nightclub as there is a confluence of at least three common a result of the loss of its CUP constituted by factors inherent in insurance coverage disputes definition, a “loss of use” of “tangible property” that may combine to increase the likelihood of within the scope of the second element of the an insured’s need to fight the battle through the definition of “property damage” in the policy. appellate court to achieve the correct result. To emphasize its conclusion, the court noted: “It defies common sense to argue otherwise.” Two factors militate, at least to some ex- tent, in favor of the insurer prevailing at the The court’s holding in this regard reflects trial level. First, insurers write the policies. It is what may be — but really should not be — a thus no surprise that if there is an inclination somewhat arcane principle that is absolutely to deny coverage, there will likely be policy critical to an insured seeking coverage under language upon which the insurer “hang(s) its the liability insurance policy. While it is true sombrero” in mounting a persuasive argument that something which is “merely” an economic to support a coverage denial. Second, it is com- loss does not constitute coverage-triggering monly perceived that courts are overburdened. “property damage” under either of the two The dictates of judicial economy, though not common elements of the definition of property technically relevant, may play a role in the damage, it is no less true that insurance cov- ability of insurers to effectively employ the erage is not vitiated simply because “economic standardized policy language, structured over loss” constitutes the measure of damages of an decades, in convincing trial courts that the underlying “occurrence” involving “property insured’s claim is without merit. damage” or other covered risk. Counterbalancing the foregoing two fac- Logic and experience reflect that it is not tors, and critical to the successful pursuit of uncommon for insurers, perhaps somewhat insurance coverage on behalf of claimants, is overzealous in the desire to protect their the fact that many of the legal principles gov- shareholders, to conflate potentially covered erning insurance disputes are weighted heavily economic loss as a measure of damages for an in favor of the insureds as a matter of public otherwise covered risk, with the concept of policy. Insurance contracts are recognized by “mere economic loss,” which by itself may be the law as contracts of adhesion; it is no secret outside the scope of actual or potential cover- that the insurers are the metaphorical Goliath age. to the insureds’ David. Legal principles that have evolved to favor insureds are perhaps best Key Takeaways understood not as efforts by the law to favor The fact that the successful determination insureds over insurers, but simply as efforts to of insurance coverage was not reached until help to make the fight fair. counsel for the claimant had fought and lost Once a litigated matter has risen above the battle at trial is perhaps not unique to in- the fray of the trial level, to the arguably more surance coverage litigation. Reasonable minds reflective and controlled environment of the
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 45 appellate court, counsel for the insured may 4. Whenever a denial letter asserts that have a better chance of gaining traction with there is no coverage because “mere the nuanced explication that is often essential economic loss” does not constitute to a successful advocacy of entitlement to cov- the threshold coverage risk such as erage. “property damage,” never simply accept that conclusion as correct. Since dam- For the civil litigation practitioner, there ages in litigation are always measured are at least a few important takeaways from in dollars, the “mere economic loss” ar- Thee Sombrero: gument is often a “go to” argument for 1. If the claim or suit against your de- the insurer in the effort to convince that fendant client even implicitly reflects the insured is not entitled to coverage. a claim for “bodily injury,” “property Conclusion damage,” “personal injury,” or “adver- tising injury,” never fail to inquire of The litigation practice of insurance cover- your client as to each and every liability age is inherently technical and requires more policy under which the client may be than just passing familiarity with the basic covered. In this regard, do not overlook concepts to avoid what can be significant mal- the “general” liability coverage that is practice pitfalls. Insurance policies are complex often a component of homeowner’s, and difficult to understand. They are loaded renter’s, or business owner’s insurance. with exclusions and other provisions built in Each such policy should be reviewed to over decades of drafting. determine whether the minimal thresh- old of a “bare potential or possibility” As readily demonstrated by the facts of covered damages triggering the duty and litigation history in Thee Sombrero, both to defend may be met. insureds and third-party claimants seeking insurance benefits through the liability of in- 2. Unless you are absolutely certain that sureds may face daunting odds and obstacles in there is literally no potential for cover- obtaining just coverage results. There are many age, be sure to advise that your client points at which the ball may be dropped by tender its defense to its liability insurer the litigation practitioner. A failure to appre- or insurers. ciate coverage implications may lead to highly undesirable consequences. While the possi- 3. When representing an insured facing bilities are too numerous to catalog, the most an insurer’s denial of coverage, whether obvious starting point is the failure to counsel for the duty to defend, the duty to in- the tender of a client’s defense at the outset of demnify, or both, never simply assume litigation. It is important to remember that an that the denial is correct because, at insurer is immunized from any responsibility least on its surface, it sounds logical or for the insured’s defense costs unless and until appears to make sense. There are scores the insured has tendered its defense to the of appellate reversals of lower court insurer. Given that there is very little cost in judgments finding such superficially time or money to transmit a tender of defense, persuasive denials of coverage to be prudence dictates that the practitioner err on incorrect. the side of caution.
46 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Marc Alexander is a mediator and litigator at AlvaradoSmith Nuts and Bolts of APC. He authors the blog California Mediation and Arbitration (www.calmediation. org) and co-contributes to the Videoconference blog California Attorneys Fees (www.calattorneysfees.com). His email is malexander@ Dispute Resolution alvaradosmith.com. in the Time of COVID-19 By Marc Alexander
By necessity, I have started to conduct In March, responding to the COVID-19 mediations via videoconference. This was an crisis, the ABA and the California Lawyers unanticipated development in my practice. Association provided webinar offerings about Our local rules in California’s Central District online mediation. only contemplated that, at the discretion of the mediator, parties residing outside the Central The advantages to a videoconference are District could have a representative with final numerous. It can be done efficiently, without settlement authority available by phone during traveling by the attorneys, clients, or insurance the entire proceeding in lieu of a personal company representatives. Costs and time are less appearance. Evidently, the local rules did not than with in-person meetings. The technology contemplate a pandemic. All of that changed is flexible, allowing for joint sessions, separate with COVID-19 amid valid concerns about caucuses, screen sharing, chat, and document public health and safety. exchange. A videoconference, like a phone call, can be initiated early during a lawsuit, and it is Also, in the Central District, the largest easy to schedule follow-up sessions. It can be group of cases that must be mediated are Amer- lower-keyed than an in-person confrontation, icans with Disabilities Act cases. The ADA helping some parties to focus on interests, plaintiffs have disabilities affecting access, and a rather than emotions. Videoconferencing significant number are immunocompromised. seems familiar, because we are all familiar with Under current conditions, the alternatives are absorbing information from computer and to cancel mediations, continue mediations, television screens, and familiar with the human conduct mediations by phone, chat, or email, face. Videoconferencing provides visual and or conduct mediations by videoconference. In audio information, which is very important many of the ADA cases that must be mediated, to those who are visually oriented. And video- a videoconference could be the best alternative conferencing allows for social distancing, at a in the absence of personal appearances.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 47 time when we are required by state and local and CREK ODR (online dispute resolution). governments to “shelter in place.” Free versions tend to have limitations making them unsuitable for lengthy or multi-party There are disadvantages to videoconfer- mediations. CREK ODR, which I have not yet encing. We may lose the nuances of demeanor: used, offers the interesting solution of a Vir- Did the attorneys roll their eyes? Did the client tual Mediation Room, coming with domain, sigh? Did a note get passed between attorney private and joint caucus, document authoring and client? Some persons have disabilities that and management, custom intake, email com- are not suited to videoconferencing. In fact, munication, and video integration features. some ADA lawsuits are now brought because Whichever platform one chooses, one should websites allegedly fail to provide proper access consider the level of security provided: what to the visually impaired. Retired judges who encryption is provided, how audio and video mediate may believe the aura of authority that are stored, where they are stored, how long comes with having been clothed in judicial they are stored, and who controls the ability to robes will be dimmed, and mediators with record. forceful personalities may believe they lose an advantage in a videoconference. Also, the very What “best practices” are emerging? The ease with which a videoconference can be con- California Lawyers Association has posted ducted may make participants feel less invested a helpful checklist of best practices for using in the process. Confidentiality, a requirement Zoom, which are also good suggestions for oth- for all mediations, can be breached with greater er videoconference platforms. For participants, ease in a videoconference, and a smartphone the tips include: (1) performance is optimized screenshot could end up posted to a website. when the Zoom software/app is used, instead In costly bet-the-farm intellectual property of calling in; (2) log in ten minutes early to test litigation, there may be intense concerns about audio/video settings, and be prepared to down- confidentiality. Zoom, however, has addressed load a free app; (3) mute audio unless speaking; confidentiality concerns by requiring passwords (4) use headset or earbuds to improve audio; and creating virtual waiting rooms, allowing the (5) if you use more than one device, mute all host to admit or remove a participant. Perhaps but one to avoid feedback; (6) if you’re having the most serious problem is simply that some trouble with audio or video, disconnect and people are very comfortable with technology log in again; (7) check the platform website and others are not, based on their personality, to learn the status of technical problems; and ability, and economic opportunity. It could (8) instructions and guides can be found on the be unfair to conduct a videoconference if one platform website. side does not have the skills or the necessary hardware and software to handle it. In short, Here are additional tips: avoid backlight- videoconferencing is not for every dispute, but ing, make sure you have adequate bandwidth it can be effective in many disputes, as well as and a reliable internet connection, dress for resolving part of a dispute. comfortably but do not wear shiny clothing, remove background distractions, clean up There are several platforms for video- your desktop and browser bookmarks, turn off conferencing that can be used for mediation, audible notifications and your smart phone, if including Zoom, RingCentral Meetings (pow- you are not using it. Let persons know that you ered by Zoom), Legaler (designed for lawyers),
48 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association have a scheduled conference and do not wish to should further note: the mediator’s/host’s view be interrupted. Corral pets and small children. of the screen will not be identical to the other participants’ views, because the mediator will Mediators acting as conference hosts can have controls that other participants may not set ground rules in advance. And they may have. For example, the mediator may be able wish to consider adding important ground to control participation and create and manage rules to a retention letter. Address the options breakout rooms, and other participants may available for participation: dialing in by com- lack those controls and icons on their screens. puter, tablet, or phone, and whether the session will be video or audio. Find out if anyone One of the most frequent questions asked has an objection to being seen by video, or if of mediators is: when do you do joint sessions, anyone has accessibility issues. State whether and when do you separately caucus with the or not recording will be permitted, and if so, parties? In California, the trend is to separately reemphasize the importance of maintaining caucus, at least before the mediator has a sense confidentiality. Provide all parties with an op- of how the parties will react in a joint meeting, portunity to participate in a test run before the and whether a joint meeting can serve a useful actual mediation session. Establish who may purpose. While an initial joint session can be be present in the session. Explain that it will efficient for gathering information and laying be possible to hold private separate caucuses down ground rules, an in-person joint session online. Direct parties to an online user’s guide can be fraught with risk if the parties and coun- for the platform you will use. Address how sel are emotional or angry. In my experience, documents will be presented and signed. And the social distance in a videoconference makes have a backup plan in case of technical failure: joint sessions less emotional and more civil. get cell numbers, landline numbers, and fax numbers. In case of a technology breakdown, When online mediation ends, I like to what will you do first? Log in again? Call cell go to a joint session, because this offers the numbers? Send text messages? Invite questions parties an opportunity for valedictory words about procedure. and a courteous, albeit virtual, “handshake” analogous to the one that I like to see at the With Zoom and many other platforms, end of an in-person meeting. I prefer to do this mediators’ invitations to participate are deliv- whether or not the dispute settles. ered by email and can be scheduled for any date and time. Track who accepts invitations to If the parties reach agreement and want participate. Before beginning a session, study to sign a document during the mediation, this the platform settings with care, including op- can be done by fax or email, provided that the tions for “advanced” settings. When the session agreement explains that fax, email and coun- begins, take roll, as it is easy to lose track of terparts are adequate for signing. Some of the participants online. By taking roll, the medi- platforms allow for the immediate exchange of ator learns if someone who should be present documents without going to an outside service. has failed to show up. Ask if anyone is present Also, there are additional platforms that enable whom you cannot hear or see. Take a few parties to electronically sign documents, such minutes to describe the tool bar, and the views as HelloSign, VineSign, Adobe Sign, and Do- that are available, such as a view of the speaker, cuSign. or a gallery view of all participants. Mediators
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 49 I am learning by doing, and there is no must be accessible, accountable, competent, substitute for practice. However, there are confidential, equal, fair/impartial/neutral, resources I found to be particularly helpful: legal, secure and transparent. YouTube videos demonstrating the different platforms, online instructions and guides for After COVID-19 has faded, online the different platforms, and Simon Boehme’s mediation will only grow in strength and very helpful slides showing how to use Zoom, acceptance. Just as it took litigators time to available for free at www.odrzoom.com/. become accustomed to the use of CourtCall, they will become familiar with mediation vid- Online dispute resolution is a relatively eoconferences. Perhaps one day the courts will new field with emerging standards and prin- also accept that tool for mandatory settlement ciples. The National Center for Technology conferences. Mediation videoconferences will and Dispute Resolution lists some of those not be the best dispute resolution tool for all emerging standards and principles at the web types of litigation, but the efficiency, time site odr.info/standards/. ICODR, the Interna- saving, cost saving, and flexibility offered by tional Council for Online Dispute Resolution, videoconference platforms will make them an has stated that quality online dispute resolution appealing option for many mediations.
50 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Yen-Shyang Tseng is an appellate attorney at Horvitz & Levy Intellectual LLP in Burbank. Among other games, Yen currently enjoys playing VALORANT, Teamfight Tactics, Legends of Runeterra, Property Litigation and Final Fantasy XIV. and Other Updates in the Video Game Industry as of April 2020 By Yen-Shyang Tseng
In just the first four months of this year, But the pandemic also increased exposure to the video game and esports industries have video games and esports. Verizon reported that already gotten off to an exciting start. Activision video game Internet usage went up 75 percent, Blizzard launched the Call of Duty League and compared with video streaming’s 12 percent followed up with the release of Call of Duty: increase. And without traditional sports to broad- Warzone. Riot Games launched the closed beta of cast, ESPN instead aired esports invitationals such VALORANT and the live version of Legends of as the NBA 2K Players Tournament, eNASCAR Runeterra — and also announced the first global iRacing Pro Invitational Series, Madden NFL esports tournament for Teamfight Tactics. Other 20 Celebrity Tournament, ESPN Apex Legends popular game releases during this time include Pro-Am, and ESPN Esports VALORANT Invi- Nintendo’s Animal Crossing: New Horizons and tational. Square Enix’s Final Fantasy VII Remake. As for legal news, the video game industry These industries saw a mixed impact from scored three important intellectual property the COVID-19 pandemic. Sony Interactive victories — all within a week: Solid Oak Sketches, Entertainment delayed the release of The Last of LLC v. 2K Games, Inc. (S.D.N.Y., Mar. 26, 2020, Us Part II and Marvel’s Iron Man VR, Amazon No. 16-CV-724-LTS-SDA) 2020 WL 1467394 Gaming Studios delayed the release of New (Solid Oak Sketches), Pellegrino v. Epic Games, World, and Nintendo canceled the 2020 Play! Inc. (E.D.Pa., Mar. 31, 2020, No. 19-1806) Pokemon Championship Series. The economic 2020 WL 1531867 (Pellegrino), and AM General impact of COVID-19 has also caused some LLC v. Activision Blizzard, Inc. (S.D.N.Y., Mar. esports companies and teams to lay off staff and 31, 2020, No. 17 Civ. 8644 (GBD)) 2020 WL players. 1547838 (AM General). These cases are discussed below.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 51 Tattoos on Players in NBA 2K defense — the purpose and character of the use, the nature of the copyright work, the amount and Four years ago, Solid Oak Sketches, LLC substantiality of the portion used in relation to sued 2K Games, Inc. and Take-Two Interactive the copyrighted work as a whole, and the effect Software, Inc. (collectively, Take-Two) alleging of the use upon the potential market for or value copyright infringement over tattoos on NBA of the copyrighted work — all weighed in Take- players Eric Bledsoe, LeBron James, and Kenyon Two’s favor. Among other things, Take-Two’s use Martin that appear in the game NBA 2K. Solid of the tattoos was transformative, and the tattoos Oak had entered into license agreements with the in NBA 2K were much smaller and largely un- tattoo artists and received copyright registrations recognizable and unobservable. for the designs. Meanwhile, Take-Two had ob- Solid Oak Sketches could have far-reaching tained a license from the NBA and its players to consequences for the video game industry by use the players’ likenesses in NBA 2K and released reducing the risk faced by companies producing versions featuring players — including Bledsoe, games that depict real people’s likenesses and in- James, and Martin — as they appear in real life, creasing the risk for entities that obtain copyrights including their tattoos. solely to extract licenses. The court’s analysis In March, the Southern District of New York could also potentially extend beyond tattoos and granted Take-Two’s summary judgment motion into other copyrighted works appearing in games. on three grounds. Dance Move Emotes in Fortnite First, the court held Take-Two’s use of the As discussed in my article in the previous tattoos was de minimis. It found no reasonable issue of California Litigation, several plaintiffs trier of fact could find the tattoos as depicted in sued Epic Games in the last two years alleging NBA 2K to be substantially similar to the designs copyright infringement and other claims over licensed to Solid Oak. The tattoos appear on three dance moves depicted in emotes available for of 400 available players, the average gameplay players to purchase and use in Fortnite. In the does not likely include the tattooed players, and wake of Fourth Estate Public Benefit Corp. v. the tattoos displayed are small, indistinct, and ap- Wall-Street.com, LLC (2019) 139 S.Ct. 881, the pear as “rapidly moving visual features of rapidly plaintiffs withdrew their copyright claims, and moving figures in groups of player figures.” (Solid some voluntarily dismissed their cases altogether. Oak Sketches, supra, 2020 WL 1467394, at p. *6.) But others elected to proceed on trademark and Second, the court held Take-Two had an right of publicity claims. implied license to use the tattoos in NBA 2K as Leo Pellegrino, for example, still had eight part of the players’ likenesses. The tattoo artists claims against Epic: unauthorized use of his had granted the players implied and nonexclusive name or likeness, misappropriation of public- licenses to use the tattoos as part of their likeness- ity, invasion of privacy by misappropriation of es before licensing any rights to Solid Oak. The identity, unjust enrichment for using his likeness players then gave the NBA the right to license and trademark, unfair competition for using his their likenesses to third parties, and the NBA likeness and trademark, trademark infringement granted such a license to Take-Two. under the Lanham Act, trademark infringement Third, the court held Take-Two’s use of the under state law, and trademark dilution under the tattoos was fair use. All four factors of the fair use Lanham Act.
52 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association In March, the Eastern District of Pennsylva- The court quickly dispatched Pellegrino’s nia granted Epic’s motion to dismiss nearly all of remaining claims. Pellegrino’s unjust enrichment these remaining claims, leaving only a trademark claim failed because he conferred no benefit on infringement claim based on a false endorsement Epic, his unfair competition claim failed because theory. he and Epic did not supply similar goods or ser- vices, the Copyright Act preempted his state law The court dismissed Pellegrino’s right of trademark infringement claim, and his trademark publicity and privacy claims by applying the dilution claim failed because Epic did not use the “transformative use” test in Hart v. Electronic Arts, dance as its own trademark to identify Fortnite. Inc. (3d Cir. 2013) 717 F.3d 141 to balance Epic’s First Amendment protections against Pellegrino’s Pellegrino reflects a big win for Epic in the publicity and privacy rights and finding Fortnite fight over dance move emotes and could fore- avatars “do not share Pellegrino’s identity nor do shadow similar results in other pending cases. what Pellegrino does in real life.” (Pellegrino, supra, (See Brantley v. Epic Games, Inc. (D.Md., Feb. 2020 WL 1531867, at p. *4.) Fortnite avatars do 25, 2019, No. 8:19-CV-00594-PX) 2019 WL not share Pellegrino’s appearance or biographical 927195.) The court’s transformative use analysis information, and the avatars fight in a battle reflects an important victory for video game royale and use emotes “amidst ‘us[ing] weapons companies using people’s likenesses and for the and violence to eliminate the competition’” while industry’s widespread use of emotes in games. Pellegrino is “a musical performer who executes The court’s application of Dastar to the false des- his [dance] at musical performances.” (Ibid.) ignation of origin theory and its finding that the Copyright Act preempted the state law trademark The court identified two potential theories infringement claim prevents plaintiffs from doing for Pellegrino’s trademark infringement claims an end run around copyright law by instead under the Lanham Act: false designation of ori- raising trademark claims. Finally, the remaining gin and false endorsement. The court dismissed false endorsement claim might well fail at the the false designation of origin claim as barred summary judgment stage to a First Amendment by Dastar Corporation v. Twentieth Century Fox defense — as the next case shows. Film Corporation (2003) 539 U.S. 23 (Dastar) because Pellegrino failed to allege any confusion Humvee Trademarks in Call of Duty as to who produced the emote in Fortnite, and only alleged confusion over who might have In the 2000’s, trademark owners began originated the dance itself. (Pellegrino, supra, 2020 targeting video game companies with lawsuits WL 1531867, at p. *6 [“Under Dastar, a claim alleging trademark infringement over the use of that concerns the origin of an idea embodied in marks in games. For example, Activision Blizzard a tangible good is governed by copyright law, not has faced several lawsuits involving the Call of the Lanham Act”].) But the court disagreed that Duty franchise. The latest of these lawsuits began Dastar required dismissal of Pellegrino’s false en- three years ago when AM General, LLC alleged dorsement claim because it relates to “Epic’s use trademark infringement and related claims over of Pellegrino’s likeness and trademark to create Activision’s use of Humvee vehicles and trade- the impression that Pellegrino endorses Fortnite,” marks in Call of Duty games as well as sales and not to the “alleged confusion over the origin” of promotional materials. the dance. (Pellegrino, at pp. *6-*7.) In March, the Southern District of New York granted Activision’s summary judgment motion.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 53 The court applied the seminal Rogers v. General’s trademark infringement, trade dress Grimaldi (2d Cir. 1989) 875 F.2d 994 test, infringement, unfair competition, false designa- which balances a plaintiff’s trademark rights with tion of origin, false advertising, and trademark a defendant’s First Amendment rights when the dilution claims. defendant uses a trademark or an individual’s likeness in an expressive work. To meet this test, AM General is the latest in a series of cases Ac- AM General had to show either that Activision’s tivision has won over plaintiffs alleging trademark use of the marks has no artistic relevance to the infringement over use of marks in the Call of Duty work or, if the use has artistic relevance, it explic- franchise. (See Mil-Spec Monkey, Inc. v. Activision itly misleads as to the source or content of the Blizzard, Inc. (N.D.Cal. 2014) 74 F.Supp.3d 1134; work. Novalogic v. Activision Blizzard (C.D.Cal. 2013) 41 F.Supp.3d 885.) And more broadly, it adds to The court found Activision’s use has artistic the growing body of law protecting video game relevance because “[f]eaturing actual vehicles companies from trademark infringement claims used by military operations around the world over the use of marks in games. (See VIRAG S.R.L. in video games about simulated modern warfare v. Sony Computer Entertainment America LLC (9th surely evokes a sense of realism and lifelikeness Cir. 2017) 699 F.App’x 667; Brown v. Electronic to the player who ‘assumes control of a military Arts, Inc. (9th Cir. 2013) 724 F.3d 1235; E.S.S. soldier and fights against a computer-controlled Entertainment 2000, Inc. v. Rock Star Videos, Inc. or human-controlled opponent across a variety of (9th Cir. 2008) 547 F.3d 1095; Dillinger, LLC v. computer-generated battlefields.’” (AM General, Electronic Arts Inc. (S.D.Ind., June 16, 2011, No. supra, 2020 WL 1547838, at p. *6.) 1:09-cv-1236-JMS-DKL) 2011 WL 2457678.) The court also found Activision’s use not Other Updates explicitly misleading. The court applied the Po- laroid Corp. v. Polarad Electronics Corp. (2d Cir. In addition to these significant cases, two 1961) 287 F.2d 492 factors — the strength of brief updates follow my previous article. the plaintiff’s trademark, the degree of similarity First, Tfue’s contract dispute with his FaZe between the two marks, the proximity of the Clan rages on in the Southern District of New products and their competitiveness with one York after the California state court lawsuit was another, the likelihood the senior user will enter stayed due to a mandatory forum selection clause. the junior user’s market in the future, evidence of Both parties filed summary judgment motions, actual confusion, the defendant’s good faith in and the court held oral argument in April. adopting its own mark, the quality of defendant’s product, and the sophistication of consumers Second, on the loot box front, the Entertain- in the relevant market — and found the factors ment Software Ratings Board introduced the new weighed in favor of Activision. AM General had label “In-Game Purchases (Includes Random only shown “the strength of its mark and a less Items)” for games containing in-game offers to than 20 percent risk of confusion.” (AM General, purchase digital goods with real-world currency supra, 2020 WL 1547838, at p. *10.) when the player does not know before purchase the specific items they will receive. Having found that AM General did not sat- isfy either prong of the Rogers test and that there By the time this article is published, there will was no likelihood of confusion, the court granted undoubtedly have been more developments. Stay Activision’s summary judgment motion as to AM tuned for the next update.
54 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association Richard Wirick leads the insurance coverage group at Affirmative Action Kjar, McKenna & Stockalper in El Segundo. He has published four books of fiction, and this essay is forthcoming from his Quandaries book of essays, Hat of Candles (Macmillan 2021). The Affirmative Action Puzzle: A Living History from Reconstruction to Today (Pantheon: 322 Pages) By Melvin I. Urofsky Reviewed by Richard Wirick
When I started law school at Davis in of California v. Bakke (1978) 438 U.S. 265. The 1981, the affirmative action battle hung over plurality opinion was by Lewis Powell, a mod- the campus like Don DeLillo’s “airborne toxic erate. It struck down Davis’s medical school event,” a cloud so thick you could cut it with a admissions program, but at the same time up- knife. It was on that campus three years prior held the right of schools to use race-conscious that a medical school applicant, Allan Bakke, admissions criteria to an undefined degree. argued that his failure to be admitted was the This is where it all got murky. To go back to my result of a university policy setting aside cer- DeLillo metaphor, the cloud of unknowing, as tain places for minorities, even though certain it were, blows back and forth almost 40 years minority applicants had less stellar credentials later, but seems as impenetrable as ever. than him. Despite several attempts to relitigate it, it remains the law of the land. But it showed Let’s posit two basic types of “affirmative extreme judicial confusion with the entire issue action.” The first, flowing from liberal public of quotas, “reverse discrimination,” and the opinion lingering from the 1960s, seeks a extent to which an institution of higher learn- proactive approach, an effort to reach a certain ing may want to diversify its incoming student “critical mass” of underrepresented groups in body, or not. The Justices’ bewilderment only a business or school by giving applicants from begins with the fact that six opinions were ren- historically discriminated backgrounds pref- dered in the decision. See Regents of University erence over slightly more qualified applicants
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 55 of non-discriminated admission pools. This thinker, affirmative action really is a kind of approach was spearheaded by quotas, and its reparation. You cannot just seek out and admit critics speak often (as did the 1978 briefs to members of underprivileged groups. You must the Supreme Court) of the dreaded “Q-word.” cast your net wide enough to give some appli- Powell and the majority ruled that strict quotas cants “preferential treatment.” were unconstitutional. Accordingly, colleges began to steer away, both in written policy and This book goes back and starts at Recon- in the hushed secrecy of admissions committees’ struction and goes all the way to the Trump closed-door sessions, from any suggestion of administration. The Davis program was the Q-word. But the second type of post-Bakke obviously sloppily tailored, or not narrowly affirmative action, that of vaguely reaching di- tailored enough. University officials, in their versity goals (what Powell left legitimate) seems responsive briefs, argued that the university almost to require some kind of (at least rough) was satisfying a compelling state interest by quota — how else would you calculate whether believing minority M.D.s would gravitate to you have reached your “critical mass” without minority communities. But the university had counting up the number of aspirants? no data to back this up, and Powell opined that this assumption itself smelled of racism. Abstractly, we all pretty much believe Another argument from the Davis lawyers was admissions should be color-blind. We want the “aim of countering the effects of societal everyone to have the same opportunities, discrimination.” Powell rejected this standard which means everyone should have the same as too diffuse — though race-specific remedies admissions “rights.” But we also get the nuance could be legitimized by individual instances of that diversity goes nowhere unless racial or gen- discrimination, a general citation of past racism der identities are at least considered. But heavy would be “an amorphous concept of injury that lifting comes when we face the fact that most may be ageless in its reach into the past.” people would be most comfortable not having to calculate the means to achieve it. Some think Here is where Powell pulled out an inge- that we can ban all forms of preferential treat- nious trump card. Although admissions based ment by enforcing existing laws to achieve some on race violate the Fourteenth Amendment’s kind of equality of result. They are skeptical of equal-protection clause and Title VI of the anything like heavy emphasis on ethnicity both 1964 Civil Rights Act, and these were argu- because they — not being biased themselves — ments for Bakke (past discrimination doesn’t enjoy no real benefit from discrimination, and justify correction by statutory violation), also see preferential treatment as stigmatizing Powell invoked the First Amendment. In the underprivileged by imparting that those particular, he argued for “academic freedom,” applicants are actually underqualified for the not for individual students but for the insti- slots they end up inhabiting. Other affirmative tution. Such “freedom” is not constitutionally action skeptics agree with the first group but enshrined, but he cited a 1957 case, Sweezy v. absolutely can see no solution but to end dis- New Hampshire (1957) 354 U.S. 234, in which crimination by in some instances actually dis- Felix Frankfurter cited South African jurists for criminating. Urofsky seems to be of the second the principle that academic freedom allows an type, realizing diversity is not going to arrive on institution to decide what the racial and gender its own, that earlier educational deprivation is make-up of its faculty and students might be. systemic, racially and class-based. To this latter
56 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association So Powell concluded that Davis’s admis- to the First Circuit. But even as it was being sions committees were allowed to believe a decided, the Court was changing, Kavanaugh diverse class provides better learning opportu- was being confirmed, Kennedy and Stevens had nities and environments, and that considering departed, and the rightward tilt was beginning. an applicant’s race as one of several factors can fall within the “right” of that school’s exercise of Again, affirmative action — any way you academic freedom. The more recent Michigan cut it — is “reparations light,” reparations that case, Grutter v. Bollinger (2003) 539 U.S. 306, do not involve money, land, or whatever else essentially revisited, if not relitigated Bakke. It they could be. For generations American com- closely traced the Texas case of Fisher v. Univer- munities, public offices, police and fire forces, sity of Texas (2013) 570 U.S. 297, where a white and university bodies were direct descendants female was denied admission to UT’s flagship of Jim Crow and the slavery that preceded it. campus in Austin. Her attorneys made an Urofsky’s favorite quote is from George Shul- argument that strikes this writer as downright tz, Nixon’s Labor Secretary and certainly a bizarre. They posited that even if she was not right-leaning mind on almost every conceivable admitted because of her grades and not her race, issue. Shultz said, “[F]or hundreds of years, the she was somehow “Constitutionally injured” by United States had a racial quota. It was zero. being subjected to an admissions process that Affirmative action is an attempt to redress an considered race. (“Somehow Constitutionally injustice done to black people. The Fourteenth injured” strikes me as only slightly less ambigu- Amendment protects white people too, but that ous than an “airborne toxic event.”) Following is not why it needed to be written.” Bakke and Grutter, the Court rejected this argu- No one assumes that past injustices can ment. The votes, however, augured ominously. be remedied overnight. But piecemeal social Both the Michigan and Texas decisions were engineering like affirmative action has been a 4-3. well-conceived, thoroughly thought-through The latest and genuinely interesting battle device to spearhead past discrimination, and in Urofsky’s affirmative action history is the like any (especially) social movement, it has Harvard case, Students for Fair Admissions, Inc. warts and rough edges and plenty that needs to v. Professors & Fellows of Harvard College. An be smoothed out. The bottom line is that white individual named Blum was seemingly denying Americans carry advantages simply because of admission to as many brown and black students the color of their skin, and people of color carry as he could, and that was remedied by allowing the contrary disadvantage. Affirmative action’s more Asian students in the gate. But Asian baby steps, like any learning process, involves as students argued this was not enough. It still much stumbling as actual walking. But turning claimed an unexpressed bias in favor of them back the Bakke clock would be constitutionally needed to be more rigidly managed. Harvard deadly, especially in our present climate of judi- won in the trial court, following Bakke and cial and legislative encroachment by an imperial progeny. The federal trial court ruling by Judge Presidency. Allison Burroughs held that while Harvard’s ad- Allan Bakke was admitted, received his mission process was “not perfect,” it nonetheless M.D. from Davis’s medical school, and went on met the legal standard needed to ensure that it to intern at the Mayo Clinic. His first patient? was not motivated by racial prejudice or stereo- Lewis Powell, former Associate Justice of the typing. The plaintiff Asian students appealed Supreme Court.
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 57 Dan Lawton is a member of California Litigation’s editorial Stringfellow board. He is senior counsel with Klinedinst PC, where he practices litigation in the firm’s appellate and professional Acid Pits: liability groups. The Toxic and Legal Legacy By Brian Craig Reviewed by Dan Lawton
My three brothers and I grew up in Ful- 1940’s. Later, the site’s operator had covered lerton, in northern Orange County, during the pits with drilling mud and dirt. In the the 1970’s. Our parents felt no anxiety about 50’s, when he did it, the area was only sparsely letting us walk or ride bikes to school by populated. I suppose he hoped no one would ourselves. Our play in the streets and vacant notice later. lots was mostly unsupervised. During the summer, the main rule was to return home Someone did notice, of course. The place, by the time the streetlights came on. Around which became known as the McColl dump the fields where we played Little League base- site, made the Superfund’s National Priority ball, oil pumpjacks dotted the hills. The sign List in 1982. Years of litigation and remedia- posted on the fence aside the gravel parking tion followed. lot declared the park’s name: Union Oil Field. The McColl dump site was too far from To us, it, like the rest of California, seemed a where our family lived to have exposed us to kind of paradise. any harm. But to a naïve boy, the news left As a teenager, I read an article in the local an impression. The idea that a company could newspaper about Fullerton residents who dump tons of harmful chemicals into the had moved into a new housing development ground, cover it up, and leave it behind in our north of us, off of Rosecrans Avenue. The new little town was strange to me. It seemed like a homeowners smelled foul odors. Mysterious thoughtless and rotten thing to do, the kind liquids oozed from the ground. Some people of thing that would mortify your mother if had gotten sick. she heard you had done it.
Before then, no one had told the residents And so the McColl dump site came to that the city and home builder had sited their mind right away when I heard of Brian Craig’s dwellings on soil which rested a few feet above new book, Stringfellow Acid Pits: The Toxic and 100,000 cubic yards of petroleum refinery Legal Legacy (Univ. Michigan Press), about the waste which Texaco, Union Oil Co., and other notorious Superfund site in Riverside County. oil companies had dumped into unlined pits Craig is a lawyer and law professor. Here, he in the ground on the 22-acre site during the has undertaken a daunting task: to relate a
58 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association story of toxic contamination and marathon granite underlying the site was decomposed. litigation that spanned decades, and to keep it An alluvial channel ran through the fractured interesting. Mostly, he succeeds. Stringfellow bedrock. Acid Pits is a prodigious feat of legal scholar- ship. Oblivious, Jimmy Stringfellow agreed to allow the state to design and build a toxic During the 1950’s, Riverside County waste dump on his land. He formed a corpo- officials were keen to entice industry into the ration, the Stringfellow Company, to operate area. They envisioned something that was it. sorely needed by the manufacturers and aero- space companies who drove much of southern By 1956, trucks were rumbling up the California’s economy during the early years of canyon, hauling waste to Stringfellow’s prop- the Cold War. It was a toxic waste dump. But erty for dumping into the unlined pits hastily where to put it? dug by state contractors. The names of the companies whose toxic sludge the truckers Jimmy Stringfellow owned 17 acres dumped there would be familiar to anyone in Pyrite Canyon at the base of the Jurupa who grew up in southern California in the Mountains. He used it to operate a rock postwar years: McDonnell Douglas, Montrose quarry. Local officials thought the site was Chemical, General Electric, Hughes Aircraft, ideal for dumping toxic waste. In 1955, they Northrop, and Rockwell International. Most approached him and asked if he would allow a of it went into the pits. Other times, the geological survey of the land, to see if the bed- operators sprayed liquid wastes into the air. rock underneath was solid and impermeable. There was sulfuric acid, sodium hydroxide, Stringfellow agreed. polychlorinated biphenyl (PCB), various pesticides, lead, manganese, and chromium. The officials got what they paid for. A There were spent acids and caustics, solvents, junior geologist employed by the state of pesticide byproducts, vapor degreaser waste, California, Robert Fox, visited the site. There and paint booth sludge. Sometimes, when he spent 30 minutes, maybe 45. He looked organic material got mixed in, the foul brew around. In 1955, there were backhoes, power caught fire. augers, and rotary drills — tools that a geol- ogist could use to look at bedrock, take core What the truckers thought of what they samples, and look for buried streams. But Fox were doing is not recorded. But state officials had been told to keep his work on budget. thought it all grand. Dumping toxic waste at The budget for his survey was $300. There Stringfellow beat prior disposal techniques were trees, plants, and springs around the — dumping waste in the Pacific Ocean or by site, suggesting the presence of groundwater. the side of the road — by a long shot. When If this occurred to Fox, he paid it no mind. manufacturers asked state officials what to His survey consisted of looking around. He do with their hazardous waste, the common prepared a report declaring the property safe answer became, “Send it to Stringfellow.” for the dumping of toxic waste. Initially, formal protocols governed If you’re reading this review, you’re proba- dumping at the site. There were forms to bly a lawyer, so you know where this is going. be filled out, lists of what could and could Fox was tragically and wildly wrong. The not be dumped, and the need to obtain ad-
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 59 vance written approval for each load. These The responsible officials and other players protocols eroded as time passed. In 1969, did the predictable things. They blamed one the state eliminated the need to get written another. They waited for someone else to do approval for every shipment. Oral approvals something. They insisted studies were needed. replaced written correspondence. By 1971, They dithered. They refused to take action Stringfellow was allowing “unsupervised night that might cost money or threaten to expose dumping,” supposedly available by telephone anything embarrassing. They demanded appointment. Eventually, the need for a phone Stringfellow’s financial condition be investi- call went by the boards and the gate was left gated before giving him any money to abate unlocked so truckers could let themselves in conditions at the site. When the state’s chief at any hour of day or night. Drivers started geologist recommended repairs that would dumping their loads when no one from the have cost $410,000, the state water board Stringfellow Company was present. Who rejected them as too expensive. “The normal knows what they dumped there in the dead procedure is to follow the normal procedure,” of night when no one else was around. The wrote one bureaucrat. Several years passed. volume of waste dumped there from 1956 to The trucks kept rolling. 1972 is thought to exceed 34 million gallons — enough to fill 34 swimming pools as long While state and local government officials as a football field each, 50 feet wide, and 10 fiddled, local citizens did something. Penny feet deep, or to cover over 104 acres of land to Newman was a mother of two and a teacher a depth of one foot. in Glen Avon. She was active in the PTA and Cub Scouts. In 1978, a series of rainstorms The waste leached down through the caused the acid pots to overflow into her ground, through the fractures and fissures in home, among others’ homes, and school the bedrock underlying the pits, around the playgrounds. She sprang into action and or- ends of a negligently-constructed dam, and ganized a group of mothers who wanted to do into the aquifer below. Except for a few small something, the Parents of Jurupa. posted signs, no one told the people who lived in the surrounding area they lived near Glen Avon residents began suffering acute a toxic waste site. There was no fence to keep health problems, including birth defects, anybody out. Teenagers paddled canoes in the along with headaches, dizziness, asthma, and toxic stew, thinking the ponds were like res- nausea. Contaminants were found in surface ervoirs meant for recreation rather than toxic water miles downstream of the ponds. String- waste ponds brimming with hazardous chem- fellow’s toxic waste kept flowing into ditches icals. When heavy rains fell, the site flooded, and culverts, backing up sewers, and causing causing the ponds to overflow their banks. shoes and clothes to disintegrate. Contaminated water cascaded down Pyrite Stringfellow was hardly unique for its Canyon and into a stream, Pyrite Creek. In time. It was one of hundreds of such sites in the nearby town of Glen Avon, children were the U.S. A few others may ring a bell: Love seen splashing in puddles and making fake Canal in New York, the Valley of the Drums beards out of the toxic foam that lay on the in Kentucky, and the Chemical Control site streets. The state closed the site temporarily in New Jersey. In 1980, impelled to act by and tried to figure out what to do. community outrage over these and other notorious sites, Congress enacted CERCLA,
60 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association the Comprehensive Environmental Response, case, U.S. v. Stringfellow, as a co-plaintiff. The Compensation, and Liability Act, also known Department of Justice filed the case in federal as the Superfund law. It provided for abate- court in Los Angeles in 1983. The first-named ment and clean-up of hazardous waste by defendant in the caption was none other than holding the parties responsible strictly liable. Jimmy Stringfellow. The list of defendants It created a trust fund to finance clean-ups read like a Who’s-Who of titans of California’s when the government couldn’t locate the aerospace and manufacturing industries: responsible parties. Montrose Chemical Corp., Rohr Industries (of San Diego), Rockwell International, Mc- Stringfellow was a poster child for clean- Donnell Douglas, Alcan Aluminum, Weyer- up under CERCLA. But the law was only as hauser, and Northrop. As the lawyers did their good as the person charged with enforcing work in Los Angeles, Stringfellow, about 45 it. In 1982, that was Anne Gorsuch, Ronald miles east, was still leaking like a sieve. The Reagan’s director of the EPA. She might have EPA undertook remediation measures at the ordered some Superfund cash spent at String- site. But some of its work aggravated, not fellow. But it was an election year, Gorsuch reduced, the problem, illustrating the dreaded was a conservative Republican, and Jerry greeting, “I’m from the government and I’m Brown, a Democrat, was running for U.S. here to help.” Senate against Pete Wilson. Gorsuch didn’t want Brown taking credit for any clean-up The ensuing litigation exceeded three of the Stringfellow site. So she withheld the decades, employed and enriched a battalion cash. When an outraged Congress demanded of over 1,000 attorneys who billed countless she produce records concerning the matter, hours, consumed scores of millions of dollars Gorsuch refused to turn them over, earning in attorneys’ fees as it ground forward in the distinction of becoming the first agency several courts, including the U.S. Supreme director ever cited for contempt of Congress. Court, and occupied the national media. She resigned in ignominy in 1983, citing the pressure of the investigation. The national Midway through Craig’s book, I felt my media’s coverage of the story eroded public initial identifications of good guys and bad trust in the Superfund program. If hacks like guys melting away. Jimmy Stringfellow’s name Gorsuch could treat Superfund money like a was synonymous with environmental disaster. political football while toxic waste poisoned He had owned and operated a toxic waste Americans, what good was the law? dump which poisoned his community. But he was no geologist, and he had allowed the site After Gorsuch slunk out of Washington, to be built on his land only after state author- the EPA got busy on Stringfellow. The agency ities guaranteed its safety as a catchment for designated the site the most contaminated toxic waste. Montrose Chemical, McDonnell place on the west coast. Soon the EPA iden- Douglas, and many others had dumped huge tified 224 companies that had dumped toxic volumes of poison into Stringfellow. But waste at Stringfellow, and found 199 of them. before dumping, hadn’t they asked the state When no agreement with them was forthcom- where to dispose of their waste? And hadn’t ing, the federal government sued for cleanup the state replied, “Send it to Stringfellow”? and to hold “the parties responsible for the toxic waste.” The State of California joined the There is unexpected irony in the tale. Craig casts Jimmy Stringfellow, the owner
The Journal of the Litigation Section of the California Lawyers Association // California Litigation Vol. 33 • No. 2 • 2020 // 61 and operator of the most notorious toxic is a “preeminent law firm” and a “top law waste dump in California, as a dupe and a firm.” We are told several times that children victim who prevailed in the end. The State in Glen Avon made fake beards out of toxic of California, which joined the U.S. in suing foam they found on the ground. Elsewhere, Stringfellow in 1983, winds up liable for there are unexplained gaps in the chronology, the whole mess, the villain who insisted on and departures from a coherent chronology, opening the site, designed it badly, ignored making for a sometimes-muddled narrative. recommendations to improve its safety, and Craig tells us that Latham & Watkins’ David continued to approve the dumping of colossal Mulliken “passionately argued the interests volumes of toxic waste there for 16 years over of” his client, Montrose Chemical Corp., at the recommendations of its own geologist. the Supreme Court in 1987. But he doesn’t We Californians fondly think of our state as a tell us what Mulliken argued, or why he was forward-looking pioneer in enacting environ- passionate about it. An audio recording of the mental protection laws and safeguarding its hearing, or even an interview with Mulliken, environment. Reading Stringfellow Acid Pits would have helped us re-live the moment. will quickly disabuse you of that notion. But Craig does not bother with these things, leaving the reader wondering. Craig tells us Craig is a lawyer, and he writes like a that Jimmy Stringfellow twice resisted the lawyer, a little too much like one in places. state’s entreaties to open his property for use The nonlawyer reader will struggle to under- as a toxic dump site before finally relenting. stand legal terms like collateral order doctrine, What made him change his mind? Craig does venire, summary judgment, directed verdict, not say. and permissive intervention. Craig assumes the general reader must understand what the Craig ends with a feel-good review of word “deposition” means; he does not pause to lessons learned, praising the Stringfellow explain it to the uninitiated. Later, however, in litigation as exemplifying the best that the describing Jimmy Stringfellow as “hapless,” he American legal system can produce in a case dumbs it down: “the term ‘hapless’ is defined involving a mass catastrophe. “By all ac- as having no luck or unfortunate.” I wish counts,” he writes, “justice was indeed served Craig were less fascinated with the minutiae with the Stringfellow litigation.” of procedural rules and interlocutory orders and more interested in the human story that I wonder. An army of litigators gobbled underlies the legal tapestry he unravels in up millions of dollars in taxpayer money that Stringfellow Acid Pits. Does the reader really was intended to remediate a hazardous waste need to know the names of all of the lawyers dump. While lawyers, insurance carriers, who were on the brief filed by Latham & large corporations, and the federal and state Watkins in the U.S. Supreme Court? Craig governments slugged it out in the courts for lists them — then never refers to them again. over 30 years, the residents of Glen Avon died and got older. California taxpayers paid nearly Nevertheless, Craig succeeds in compress- $100 million to settle with the federal govern- ing a complicated story into a single volume. ment in 2001, 18 years after the lawsuit was But, alas, a good copy edit would have helped filed. And still the site remains contaminated. Stringfellow Acid Pits avoid some redundancy. Indeed, Stringfellow won’t be fully cleaned We are told, twice, that Latham & Watkins up for another 500 years. Jimmy Stringfellow
62 // California Litigation Vol. 33 • No. 2 • 2020 // The Journal of the Litigation Section of the California Lawyers Association died before he could settle his case with the ni did. If any of the government officials or State. If all of that is justice being served, it corporate polluters who made them pay that seems impossible to feel good about it. price ever said, “thank you for your sacrifice,” their words have gone unrecorded. A RAND study concluded that, of the millions of dollars insurance companies spent I wish this book were for a general au- on Superfund toxic waste sites, 90% of it dience. But it isn’t. There’s too much legal wound up going into legal battles, mostly esoterica, too much fascination with lawyers with the insurers’ own policy holders. In as- and procedure, and not enough human dra- sessing the Superfund program, Bill Clinton ma and character development. The audience said, “We all know it doesn’t work . . . . All for Stringfellow Acid Pits is lawyers, judges, the money goes to lawyers, and none of the law students, and anyone who cares about money goes to clean up the problems it was the history of environmental contamination designed to clean up.” If there is a message in the U.S. during the Cold War. Don’t be there about the role of lawyers in remedying scared off by the exorbitant hardcover price terrible problems, it is not a cheerful one. of Stringfellow Acid Pits ($90). If you have a Insurance companies have a poor reputation Kindle, Amazon will sell you an electronic for their classic strategy in fighting their own version for $14. insureds, captured in the motto, “Delay, deny, defend.” Perhaps no case illustrates the zealous I still love visiting Fullerton, where I go to practice of this motto better than the String- see my parents. After pulling off the freeway, fellow litigation. Can there be any doubt as I drive down Brea Boulevard, past Union Oil to who it is who did the delaying, denying, Field, on my way to their home. The old Little and defending, to their own profit and ad- League fields where my brothers and I used vantage? It was insurance carriers, corporate to play are still there. The pumpjacks are still defendants, and the State of California. But it there too. They bob slowly up and down, suck- was we lawyers, and nobody else, who enabled ing oil out of the ground alongside the bright them to do it as effectively as they did it. green ball fields and the brown scrub-covered hills. Here and there, a jackrabbit darts in the The ghost hovering above Craig’s tale is brush. The sight captures California as a kind the awful truth of the environmental cost of of Paradise Lost, an idyllic place despoiled by the Cold War. In the giddy days following the men too selfish and careless to avoid poisoning collapse of the Soviet Union, jubilant Amer- the land and groundwater that they left for ican political leaders and pundits celebrated their descendants and the taxpayers to clean on television and in print. Amid the orgy of up later, a space where natural beauty and self-congratulation, some names went unmen- peace prevail alongside the tools of extraction tioned. They included Hanford, Washington, and pollution, where vile things we would Rocky Flats, Colorado, and Bikini Atoll — rather not contemplate lie hidden just below sites so befouled by nuclear weapons produc- the surface. tion or testing that no one could safely live or work within miles of them. In the end, Glen Avon and its people paid a price for America’s victory in the Cold War just as surely as the residents of Hanford, Rocky Flats, and Biki-
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