INVESTIGATIVE SERVICES

THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION Guide2016 to

JULY/AUGUST 2016 / $5

EARN MCLE CREDIT PLUS BRAND PATIENT PROTECTION DUMPING page 26 page 20

INVOLUNTARY BANKRUPTCY page 32 On Direct: Ralph M. Terrazas page 8

Surrogacy for Same-Sex Couples Renewing page 12 our Mission

Los Angeles lawyer Margaret P. Stevens is the 2016-17 president of the Los Angeles County Bar Association page 7

FEATURES 20 A Shameful Practice BY WILL JAY PIRKEY The L.A. City Attorney's Office asserts claims under Unfair Competition Laws to enforce patient dumping ordinances

26 Fashion Sense BY LARRY C. RUSS AND NATHAN D. MEYER Although the law of brand protection has been stable in recent years, a case before the U.S. Supreme Court may alter the doctrine of secondary meaning Plus: Earn MCLE credit. MCLE Test No. 259 appears on page 29.

32 Forcing the Issue BY ASA S. HAMI Creditors considering an involuntary bankruptcy petition should first consider the risks and benefits

38 Special Section 2016 Semiannual Guide to Investigative Services

Los Angeles Lawyer DEPARTME NTS the magazine of the Los Angeles County 7 President’s Page 16 Practice Tips Bar Association Renewing LACBA’s mission to the Evaluating the effectiveness of the inter July/August 2016 community partes review process BY MARGARET P. STEVENS BY NATE DILGER AND JOHN LORD Volume 39, No. 5 8 On Direct 51 Index to Advertisers COVER PHOTO: TOM KELLER Ralph M. Terrazas INTERVIEW BY DEBORAH KELLY 52 Closing Argument Reflections on current choices for legal 10 Barristers Tips career paths The advantages of being a member of BY MARK SONNENKLAR the Barristers Section of LACBA BY DAMON A. THAYER LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly, except for a combined issue in July/August, by the Los Angeles County Bar Association, 1055 West 7th Street, 12 Practice Tips Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Period - icals postage paid at Los Angeles, CA and additional mailing Reviewing the legal issues that affect offices. Annual subscription price of $14 included in the Association membership dues. Nonmember subscriptions: surrogacy for same-sex couples $38 annually; single copy price: $5 plus handling. Address BY EVIE JEANG changes must be submitted six weeks in advance of next issue date. POSTMASTER: Address Service Requested. Send address changes to Los Angeles Lawyer, P. O. Box 55020, 07/08Los Angeles CA 90055. .16 VISIT US ON THE INTERNET AT WWW.LACBA.ORG/LALAWYER E-MAIL CAN BE SENT TO [email protected]

EDITORIAL BOARD Chair TED M. HANDEL Articles Coordinator JOHN C. KEITH Assistant Articles Coordinator SANDRA MENDELL Secretary TYNA ORREN Immediate Past Chair DONNA FORD

JERROLD ABELES (PAST CHAIR) ETHEL W. BENNETT SCOTT BOYER CHAD C. COOMBS (PAST CHAIR) HON. MICHELLE WILLIAMS COURT GORDON K. ENG STUART R. FRAENKEL MICHAEL A. GEIBELSON (PAST CHAIR) CHRISTINE D. GILLE SHARON GLANCZ STEVEN HECHT (PAST CHAIR) DENNIS HERNANDEZ MARY E. KELLY (PAST CHAIR) ERIC KINGSLEY KATHERINE KINSEY DANIELLE LACKEY JENNIFER W. LELAND PAUL S. MARKS (PAST CHAIR) COMM’R ELIZABETH MUNISOGLU PAUL OBICO CARMELA PAGAY DENNIS L. PEREZ (PAST CHAIR) GREGG A. RAPOPORT GARY RASKIN (PAST CHAIR) JACQUELINE M. REAL-SALAS (PAST CHAIR) THOMAS H. VIDAL

STAFF Editor ERIC HOWARD Art Director LES SECHLER Director of Design and Production PATRICE HUGHES Advertising Director LINDA BEKAS Administrative Coordinator MATTY JALLOW BABY

Copyright © 2016 by the Los Angeles County Bar Association. All rights reserved. Reproduction in whole or in part without permission is pro - hibited. Printed by R. R. Donnelley, Liberty, MO. Member Business Publications Audit of Circulation (BPA). The opinions and positions stated in signed material are those of the authors and not by the fact of publication necessarily those of the Association or its members. All manuscripts are carefully considered by the Editorial Board. Letters to the editor are subject to editing.

4 Los Angeles Lawyer July/August 2016 LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATION OF THE LOS ANGELES COUNTY BAR ASSOCIATION 1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2553 Telephone 213.627.2727 / www.lacba.org

LACBA EXECUTIVE COMMITTEE President MARGARET P. STEVENS President-Elect MICHAEL E. MEYER Senior Vice President PHILIP H. LAM Vice President TAMILA C. JENSEN Treasurer DUNCAN W. CRABTREE-IRELAND Assistant Vice President SARAH E. LUPPEN FOWLER Assistant Vice President ANNALUISA PADILLA Assistant Vice President ROXANNE M. WILSON Immediate Past President PAUL R. KIESEL Barristers President DAMON A. THAYER Barristers President-Elect MARIANA ARODITIS Chief Executive Officer/Secretary SALLY SUCHIL Chief Financial & Administrative Officer BRUCE BERRA General Counsel & Chief Administrative Officer W. CLARK BROWN

BOARD OF TRUSTEES RONALD F. BROT HARRY W.R. CHAMBERLAIN NATASHA R. CHESLER REBECCA A. DELFINO KENNETH C. FELDMAN JO-ANN W. GRACE JOHN F. HARTIGAN MARY E. KELLY LAVONNE D. LAWSON RICHARD LEWIS F. FAYE NIA BRADLEY S. PAULEY ANGELA REDDOCK DIANA K. RODGERS MARC L. SALLUS EDWIN C. SUMMERS III DAVID W. SWIFT WILLIAM L. WINSLOW

AFFILIATED BAR ASSOCIATIONS BEVERLY HILLS BAR ASSOCIATION CENTURY CITY BAR ASSOCIATION CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES CULVER MARINA BAR ASSOCIATION GLENDALE BAR ASSOCIATION IRANIAN AMERICAN LAWYERS ASSOCIATION ITALIAN AMERICAN LAWYERS ASSOCIATION JAPANESE AMERICAN BAR ASSOCIATION JOHN M. LANGSTON BAR ASSOCIATION LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES MEXICAN AMERICAN BAR ASSOCIATION PASADENA BAR ASSOCIATION SAN FERNANDO VALLEY BAR ASSOCIATION SANTA MONICA BAR ASSOCIATION SOUTH BAY BAR ASSOCIATION SOUTHEAST DISTRICT BAR ASSOCIATION SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION WOMEN LAWYERS ASSOCIATION OF LOS ANGELES

Los Angeles Lawyer July/August 2016 5 ikhrono livrakha, or simply z”l, (“May his memory be for a blessing”) is an honorific in Hebrew that ZJews traditionally use to convey respect for a deceased family member or noteworthy person. The phrase appears to originate from Proverbs, in which it is said that “the memory

of the righteous shall be for a blessing, but the name of the wicked shall not.” The hope is that recollections of the deceased will guide those who knew the person to live better lives in the future. In the three years since Sam Lipsman passed away, his memory remains a blessing to me. During the time I served on the editorial board and Sam was LACBA’s director of publications, he contributed immeasurably to honing the writing skills that I had first developed at USC’s journalism school. Sam’s knowledge of the substantive law was deep and covered a broad spectrum. He also could foresee legal trends. Armed with this knowledge and a sharp wit, together with a talented publishing staff and a committed editorial board, Sam transformed the magazine into an essential reference tool for attorneys and judges. Sam’s death left a void at Los Angeles Lawyer that needed to be filled. Eric Howard, with the support of the editorial board and the resources provided by LACBA, stepped in during this difficult transition. Eric has admirably preserved the magazine’s editorial standards and sustained its well-regarded value to LACBA members. Over the upcoming year, the challenge that all of us who are associated with the magazine will face is not just maintaining these principles. Rather, it will be keeping Los Angeles Lawyer a relevant and reliable source of legal information at a time when there are so many online resources and physical treatises and texts competing for the attention of attorneys. In my view, as the incoming chair of the editorial board, meeting this challenge will involve, among other things, rekindling a sense of energy and involvement among the board members. During Sam’s tenure, board meetings were often characterized by a serious but equally freewheeling and sometimes irreverent discussion. In this give-and-take, Sam and the members would critique the substantive and editorial content of articles that had been published or were about to be published and identify ways in which content could be improved. The magazine also benefitted from the significant time that the board set aside at each meeting to discuss new court rulings and statutes. This practice will be resumed this year. The board and editorial staff can certainly make great strides in meeting this chal- lenge, but the support of LACBA members is crucial to the success of this endeavor as well. This support can be as simple as sending an e-mail to Eric Howard at [email protected] with a legal issue that you believe should be covered by the magazine, and perhaps a suggested author. It can also follow the time-honored tradition of members’ submitting unsolicited articles, which also can be sent to Eric. And if you have other suggestions for enhancing the content and relevance of the publication, please send those along. To borrow from the standard pitch of pilots and flight attendants at the end of every flight, we know that you have many resources available to support your legal practices. We are committed to preserving the editorial legacy of Sam Lipsman and retaining Los Angeles Lawyer’s place as the resource that comes to mind first when searching for a legal argument or identifying issues to be addressed with a client matter. n

Ted M. Handel is a real estate and corporate transactional attorney with Valensi Rose, PLC, and is the 2016-17 chair of the Los Angeles Lawyer Editorial Board. His practice covers the acquisition, financing, leasing, and construction of commercial developments and affordable housing projects, and formation of nonprofit and for-profit entities.

6 Los Angeles Lawyer July/August 2016 president’s page BY MARGARET P. STEVENS

Renewing LACBA’s Mission to the Community

AFTER ALMOST 140 YEARS, now what? Is LACBA's mission still rel- So, LACBA has survived, and survived well. But how will we evant? Or do our members need something different from our organiz - not only survive, but also thrive? By working together. ation? The last two decades have seen unprecedented changes. When We will have differing views on how to thrive. This difference of I first started practicing law, I was the only attorney at my firm to opinion has generated the first contested election for trustee and officer have a computer—my own. I had learned to use one because I couldn’t positions since 1992. However the election turns out, we will still have survived without one, working full-time while attending Loyola need to work together to answer the question, how will we thrive? Law School’s evening program. The secretaries felt threatened because We will need to bring to the table not only our divergent points of I did my own edits. The partners were unnerved and weren’t quite view but also a willingness to listen to one another. As Madeline sure what I was doing in my office. The other associates just stared. Albright recently noted to a 2016 graduating class: “The great divide I was not allowed to use e-mail to communicate with opposing in the world today…is between people who have the courage to listen counsel. There was no computer network— documents moved around on floppy disks. The legal community was smaller, or at least LACBA has survived, and survived well. But how will we not only it felt smaller—larger than a decade or two before, but still small enough that you probably knew your opposing counsel, or could make survive but also thrive? By working together. one or two calls for some background. Today, we don’t call; we send an e-mail to our colleagues or ask Google. We also don’t talk to each other as much—even if we have the time, we often rely on impersonal e-mail. and those who are convinced that they already know it all.” Another thing has changed. When I first started practicing law, we Some issues, for example LACBA’s continued support for court had a billing code for bar activities, because participating in the funding and inviting newer lawyers to connect with our sections, organized bar was valued and indeed often taken for granted. While will likely garner unanimous support. Other issues may take some there are firms that continue to value bar participation, our profession work: how to allocate and plan for the rising costs of presenting CLE has transformed into a business in which benchmarks generally do programs and events, whether we can provide more online support not allow for it. and resources for our members, and whether we should expand our Also, there was a concept of professional courtesy and civility, pro bono projects to meet the desperate needs of our greater community. the idea that you could become friends with your opposing counsel This is where we will, as we have done before time and time again, while zealously advocating for your client and undermining the define ourselves and LACBA as leaders in our community. opposition at every step. However, this culture of professionalism We can start by focusing on one sentence—LACBA’s mission state- and public participation had actually been eroding for a while, and ment. It’s simple, but powerful: “The mission of the Los Angeles business as usual ended for good with the great recession of 2008. County Bar Association is to meet the professional needs of Los Predictions about our personal and professional lives have become Angeles lawyers and advance the administration of justice.” Only by difficult to make as we see the disappearance or merger of prominent focusing on our mission can we begin to take the steps together businesses and law firms. Our ability to communicate has also towards a future that will serve our members and our community. In eroded, compromised by the ever-increasing coarseness of public taking my first steps as president, I am establishing two task forces on discourse in every arena. our board of trustees: one to address the sections’ concerns about In this changed world, one might wonder whether bar organi- cost allocation and event coordination that have been a part of the zations like ours are a dying breed. That’s certainly the conventional dialogue for this past year, and a second to listen to our newer lawyers wisdom. But it isn’t so, at least not for LACBA. If it were, why on how they can access the extraordinary resources that LACBA, and does LACBA still present 300 in-person events each year? Why do particularly its sections, can offer to succeed in today’s profession. we have 26 sections and 19 committees that regularly meet in person I welcome the thoughtful input many of you have given me that to accomplish their goals? Why do 500 new lawyers show up at is born of years of experience as well as the enthusiastic, visionary the New Admittee Reception? Why do our five pro bono projects ideas of our newest members. Please continue this dialogue with me attract hundreds of volunteers that have assisted more than 18,000 during this exciting time in LACBA’s history and future. n people, provided more than $3.7 million in pro bono services, and— primarily through Counsel for Justice’s efforts—raised more than a The 2016-2017 president of LACBA, Margaret P. Stevens, is managing partner half million dollars in donations last year? I suggest that it shows at Daehnke Stevens LLP. Her practice focuses on employment and consumer that a sense of community and contribution is what lawyers need fraud class actions, product liability, employment/discrimination, business now more than ever. and corporate litigation, and personal injury.

Los Angeles Lawyer July/August 2016 7 on direct INTERVIEW BY DEBORAH KELLY

Ralph M. Terrazas Fire Chief of Los Angeles Fire Department

six minutes. We have internally developed fatalities within the city of Los Angeles, with a better model to dispatch our resources. a population of over four million. It was our Our call load has gone up 14 percent, and I all-time low. am proud that we have maintained our re- sponse time. What percentage do you think are arson? It’s not common, but there are significant ex- Drought conditions mean a higher fire risk. What ceptions—for example, the 2014 Da Vinci is the best thing a homeowner can do? Within fire. That was a $100 million loss. the city, we have very stringent brush con- trol ordinances. You have to have all your LAFD describes a fire fighting job as “most phys- vegetation trimmed 200 feet away from ically demanding.” How do fire fighters maintain your house. their health? Most work out off and on duty. With a fire, you don’t get the time to take a You have 3200 fire fighters, and the starting break. salary is $60,552. Who is a typical applicant? A college graduate who is an EMT or para- Firefighters wear a 50-pound self-contained medic, a graduate from a fire academy, and breathing apparatus. Any other heavy equip- who is physically fit. ment? Yes, assorted tools when you’re run- RALPH M. TERRAZAS | A 31-year veteran of ning from the fire engine. What does the written test consist of? Four LAFD, Chief Terrazas was formerly assistant LAFD has been accused of bias in their hiring fire chief over the South Division, which covers hours at a testing center by a private vendor. practices. What safeguards are now in place? I half the city, and established LAFD’s Pro- Previous tests had an adverse impact on am very proud of our diversity. The one fessional Standards Division. women, African Americans, and Latinos. I wanted a test with an even playing field. area we need to do better is in female re- cruitment. The biggest barrier has been the The physical ability test (CPAT) is a timed pass or physical test. That is why we are targeting fail test with eight separate events. Which is the women in the military and collegiate female hardest part? Dragging a 150-pound dummy. athletic teams. What is the perfect day? A day when we get things done. What percentage of applicants pass the CPAT? LAFD had paid out millions in discrimination law- 91 percent. suits. Any improvement? Our Professional You have been Chief of Los Angeles Fire Depart- Standards Unit was created in 2008. At our ment for approximately two years. What are your What are you looking for in the oral test? To get all-time high, the city paid out over $18 mil- major job duties? Our mission is to protect a feeling for the person and whether he or lion. Subsequent to 2008, we have had zero life and property. There is a lot to make that she has good common sense. litigation because of EEO issues. happen. There are labor relations, the bud- LAFD has 106 neighborhood fire stations that get, and political issues that arise. You have been with LAFD since 1983. Why did cover 470 square miles. What kind of fire is the you choose this profession? In the third grade, Does LAFD have a philosophy? Hit it hard and hardest to contain? We had a wharf fire that I vividly remember the firefighters coming to hit it fast. took a day and a half. It was heavy timber school and showing their equipment. They that had been covered with asphalt. Previ- let me shoot some water and I was hooked. LAFD budget is $626 million. How does that com- ously, those kinds of fires burned until there pare to past budgets? This is a record setting, was no more fuel. We had to take drastic What did it feel like walking into your first burn- all-time high for our department. Back in measures; the smoke was toxic. ing room? Adrenaline rush. 2011, we were in the low fives and had to close 17 companies. We did not hire for five Which is the busiest fire station? Skid Row has You graduated with a B.A. in Public Administra- years. the busiest station west of the Mississippi. tion. Did that prepare you for being chief? It did. Last calendar year, they ran over 17,000 The baseline is that you have to have fitness Are you hiring now? We had 13,000 appli- calls. as well as academic preparation. cants for 350 jobs. Are most fires avoidable? Yes. The best re- You hold a U.S. patent for a brush fire rate-of- What is your response time? Our average re- source for a homeowner or renter is a spread tool. What is that? It’s a way of calcu- sponse time is excellent—approximately smoke alarm. Last year, we had eleven fire lating how fast the brush fire will move. I

8 Los Angeles Lawyer July/August 2016 was tasked with a project on how to figure this out; I went back 30 years. The patent is city property.

What was your best job? This job. I get great satisfaction from the things that we are ac- complishing. I ran a relay race with a man that our paramedics brought back from death last year.

What was your worst job? I worked in a lum- ber yard where my uncle was a foreman. He offered me a permanent job for $400 a week. There’s nothing wrong with building lumber loads, but I did not want to do that for the rest of my life.

What characteristic do you most admire in your mother? She’s adventurous.

If you were handed $10 million tomorrow, what would you do with it? I would set up my kids with the ability to buy a house. I would do- nate a portion to charity, and go on a trip with the family. Everything I want, I already have.

Who is on your music play list? The Eagles, ever since Glenn Frey passed.

What book is on your nightstand? It’s Your Ship by Abrashoff—a great leadership book.

What do you do on a three-day weekend? I jog, play golf, work around the house, and enjoy family activities.

What are your retirement plans? None.

If your house were on fire, what would you take on your way out? Whoever is in, is coming out with me.

How do you get your news? I have downloaded all the links for the Los Angeles Times and multiple magazines onto my iPad. I think that’s the most efficient way.

LAFD is active on Twitter. For what purpose? Public safety messages, recruitment, our sto- ries. We also use Instagram and Facebook. Now, we are looking at Snapchat.

What are the three changes you would like to see in the world? I’ll tailor it to LA: less violence, stronger regulations to protect the environ- ment, and people being positive role models for children.

Who are your two favorite presidents? President Obama for the Affordable Care Act—that alone has caused me to have great admira- tion for him. FDR—that was a challenging time for the world.

What is the one word you would like on your tombstone? Game changer.

Los Angeles Lawyer July/August 2016 9 barristers tips BY DAMON A. THAYER

The Advantages of Being a Member of the Barristers Section of LACBA

AS THE INCOMING PRESIDENT OF THE Los Angeles County Bar and the law, and, yes, dinner and drinks are included. Association Barristers, I have the distinct privilege to write about who For attorneys seeking pro bono opportunities and other ways to we are and what we do, and to invite new and young attorneys to give back to the community, Barristers also has that covered. We join our dynamic group. Although Barristers has been active in the provide pro bono training and volunteer opportunities involving a Los Angeles legal scene for over 85 years, I still get asked the question diverse array of client groups, including immigrants, domestic violence “Who or what are the Barristers?” In all honesty, I asked the same victims, and veterans. For those looking for ways to get involved question years ago when I was finishing an out-of-state clerkship and outside the legal community, Barristers has previously organized looking to move into private practice in Los Angeles. While I knew I teams for the annual Los Angeles AIDS Walk, spoken to local high wanted to get involved in the local legal community and start building school students about constitutional matters, and organized various my professional network, I wasn’t sure where to begin since the other community service-oriented events. Southland is home to hundreds of bar associ- ations and other professional groups. For me, joining Barristers ended up being a no-brainer. Barristers is the only group in Los Angeles It doesn’t take a crystal ball to see that the leaders of Barristers focused exclusively on the needs of new and young attorneys that has the backing and name recognition of one of the largest bar associations today will be future leaders of the Los Angeles legal community. in the United States with nearly 24,000 mem- bers. At almost 5,000 members, Barristers is unique as it includes at torneys practicing in every area of the law as As Barristers, we were all law students not so long ago and have well as holders of JDs working in the business, entertainment, and not forgotten the value and perspective that speaking with newly political worlds. Our membership includes attorneys at big, midsize, minted lawyers can provide. To help the next generation of lawyers, small, and boutique firms as well as solo practitioners, those in gov- Barristers works with local law schools through a mock interview ernment service and who serve the public interest, teach, work as program. We also provide networking and mentorship opportunities. in-house corporate counsel, and various others. One of the final objectives of Barristers is to provide top-notch A core mission of Barristers is to create meaningful opportunities CLE programming covering hot topics and programs designed to for new lawyers to make connections that they might not otherwise help new attorneys refine their professional skills. Our CLE programs have a chance to make. Barristers hosts several networking functions from this past year featured well-known names in the legal community every year allowing our members to meet each other, as well as potential addressing fundamental subjects such as “how to litigate your first clients, referral sources, other young professionals, and other members high-profile case” and “what to expect at your first trial.” of the Los Angeles legal community. We recognize that knowing the Want to get involved? Of course you do! Any attorney is eligible right person can put a resume on the top of the pile and open the for Barristers membership who is either 36 years old or younger or door for an interview or provide inroads to landing a client or generating who has been admitted to practice for five years or less. Getting business. We also know that sometimes new attorneys just need a involved in Barristers can take many forms, including joining a com- chance to blow off steam and commiserate with peers about the 11:59 mittee, helping organize (or simply attending) our programs and events, P.M. summary-judgment filing that almost did not happen or the or submitting an article relevant to new attorneys for publication. For partner who inexplicably insists on following the outdated twelfth those wanting to take on a larger role in Barristers, we invite you to edition of The Bluebook. By the way, did I mention that cocktails at apply to be a member of our executive committee or to serve as liaison Barristers’ networking functions are often free? to the executive committee of one of LACBA’s other sections. Another focus of Barristers is hosting events in which new lawyers It doesn’t take a crystal ball to see that the leaders of Barristers can meet judges, elected officials, and other heads of government. today will be future leaders of the Los Angeles legal community. Our flagship bench-and-bar mixer gives members the rare opportunity Looking back at our not-too-distant past, former leaders of Barristers to mingle with esteemed members of the judiciary in an informal went on to become federal and state judges, prominent partners at setting. Barristers also hosts other types of events that have featured Los Angeles’s best law firms, in-house counsel at some of Southern numerous federal and state court judges, Los Angeles Mayor Eric California’s most highly regarded companies, high-ranking government Garcetti, U.S. Attorney Andre Birotte, Senator Ben Allen, California officials, and much more. We invite you to become a part of this State Treasurer John Chiang, Chief Deputy City Attorney Jim Clark, proud tradition. n and Los Angeles County Sheriff Jim McDonnell. Our very popular Dinner with a Leader series provides new attorneys an intimate Damon A. Thayer, the 2016-17 President of the Barristers, is an attorney at forum to engage prominent leaders over matters of public policy Shoreline, A Law Corporation, where he focuses on general business liti gation.

10 Los Angeles Lawyer July/August 2016

Los Angeles Lawyer July/August 2016 11 practice tips BY EVIE JEANG

Reviewing the Legal Issues That Affect Surrgogacy for Same-Sex Couples

THE U.S. SUPREME COURT’S recent landmark decision, Obergefell v. Hodges,1 legalized same-sex marriage across the United States. Regardless of sexual orientation, all couples now have the right to marry. However, for many, the right to marry is not complete without the right to have children. As such, many same-sex couples turn to surrogacy or adoption as a means to begin their families. Surrogacy is the carrying of a pregnancy for intended parents. In a traditional surrogacy, the host is genetically related to the child, while in a gestational surrogacy the host is not genetically related to the child. Surrogacy is particularly ideal for couples for whom preg- nancy would be risky or medically impossible. Also, it can assure couples that their genes will be handed down to their child. In adop- tion, the adoptive parents are genetically unrelated to the adoptee, unless the adoptee is a blood relative of one of the adoptive parents. Another distinct advantage of surrogacy is that the intended parents can make the decision to bring a child into the world and are thus more involved in the procreation process. Essentially, surrogacy is a form of assisted reproduction; accord- ingly, a surrogacy contract is an assisted reproduction agreement. California Family Code Section 7606 defines assisted reproduction as “conception by any means other than sexual intercourse.” Section 7962 of the Family Code requires that both the intended parents and surrogate seek separate independent counsel before entering into a gestational surrogacy agreement. Surrogacy policies and laws vary from state to state. Same-sex when Baby M was born, Ms. Whitehead changed her mind.8 couples considering surrogacy may also look outside of the United In 1988, the Supreme Court of New Jersey ruled that surrogacy States for a surrogacy arrangement. In the United States, a surrogacy contracts are contrary to existing statutes and public policy.9 New arrangement can cost up to $100,000.2 This price drives many Jersey has a strong public policy against the sale of a child or sale of couples to look abroad for more affordable options. India and a mother’s right to her child.10 Therefore, the Supreme Court of Russia, where a typical surrogacy arrangement costs approximately New Jersey ruled that parties cannot contract to change a biological $40,000, are popular choices.3 However, same-sex marriage still is mother’s legal status with respect to the surrogate child. Rather, in not universally recognized. For instance, India and Russia prohibit determining the custody of Baby M, the court used the “best interest same-sex marriage. In fact, in both countries same-sex marriages of the child” analysis and awarded the Sterns custody while also are punishable by incarceration.4 Therefore, many same-sex couples giving Ms. Whitehead visitation rights.11 may have only the United States as an option for surrogacy. Although Although some states followed the New Jersey ruling, other states there is limited data and reporting on the number of surrogacies in went a different route. In Johnson v. Calvert, a California court the United States, the Council for Responsible Genetics previously used the Uniform Parentage Act (UPA) of 1973 to resolve a surrogacy reported that the number of gestational surrogacies increased 89 dispute.12 However, the UPA of 1973 was repealed in 1994. In 2002, percent in just four years, from 2004 to 2008.5 further changes to the UPA were promulgated, and the revision mod- While gestational surrogacy in the United States has become rel- ernized uniform legal guidelines for determining parentage. Under atively commonplace, case law offers examples of the pitfalls that the act, a mother-child relationship can be established either by may result. The possibility of third-party reproduction garnered giving birth or various other means, including by genetic relationship. wide attention when Baby M was born. In 1984, in New Jersey, However, when the genetic and birth relationships reside in different William and Elizabeth Stern entered into a traditional surrogacy mothers, whichever person has the intent to bring the child into agreement with Mary Beth Whitehead.6 At the time, gestational sur- being and to raise it as her own is the mother.13 In Johnson, because rogacy was not widely available. Mr. and Mrs. Stern reportedly the surrogate mother was not genetically related to the surrogate based their selection of Ms. Whitehead as the surrogate by looking child, intent was determinative. at her picture. Pursuant to the agreement, Ms. Whitehead was insem- inated with Mr. Stern’s sperm, brought the pregnancy to term, and Evie Jeang practices surrogacy, family law, and workers’ compensation and was to terminate her parental rights in favor of Mrs. Stern.7 However, has offices in Los Angeles, San Francisco, and New York. RICHARD EWING

12 Los Angeles Lawyer July/August 2016 However, it is not the case that in every that of a sperm donor, who is treat - porting those for whose existence he is directly instance in which the gestational carrier is not ed as a legal stranger to a child if he responsible.’”29 genetically related to the child, intent must be do nates sperm through a licensed A similar point was made in Marriage of determinative. In the case of In re C.K.G., physician and surgeon under Family Buzzanca, a parentage by estoppel case in C.A.G., & C.L.G., the Supreme Court of Code section 7613…. The Court finds which a husband and wife made an agreement Tennessee’s holding that a gestational carrier no reason to treat ovum donors as with another woman and her husband that was indeed the legal mother of the children having greater claims to parentage the woman would carry a baby for them.30 to whom she gave birth, was based on the than sperm donors….18 The husband and wife then separated before following factors: 1) prior to the children’s The court of appeal affirmed the judg- the baby was born, and the husband tried birth, both the woman as gestator and the ment, also observing that K.M.’s status was to get out of paying support but was found man as the genetic father voluntarily demon- consistent with the status of a sperm donor to be a parent by estoppel. strated the bona fide intent that the woman under the UPA. Until more uniform statutes are passed, would be the children’s legal mother and The California Supreme Court, however, same-sex couples should thoroughly research agreed that she would accept the legal respon- reversed the decision, finding that both parties and plan their futures before entering into a sibility as well as the rights of parenthood, were mothers of the twin children.19 The surrogacy agreement since the determination 2) the woman became pregnant, carried to court found that Family Code Section 7613(b) of how surrogacy is regulated depends on term, and gave birth to the children as her did not apply, because the ova were donated both the state and type of surrogacy chosen. own, and 3) this case does not involve a con- to produce children who would be raised in While all states must now recognize same- troversy between a gestator and a female a joint home. The court did not apply an sex marriages, the legality of surrogacy is a genetic progenitor in which the genetic and intent test, finding that K.M.’s waiver did separate issue, and not all states recognize gestative roles have been separated and dis- not affect the determination of parentage. surrogacy arrangements. The states that do tributed among two women, nor does it in - not recognize surrogacy view it as a form of Gestational Surrogacy and Same-Sex volve a controversy between a traditional or human trafficking and are guided by a moral Couples gestational surrogate and a genetically unre- imperative to stop the sale and purchase of lated intended mother.14 In California, there is a strong public policy babies. On the other hand, states recognizing A different result may occur under Cal - favoring a child having two parents rather surrogacy view it as equal to adoption. ifornia’s Family Code Section 3040(d), which than one.20 The UPA “extends equally to However, even in cases of adoption, same- provides: every child and to every parent, regardless sex couples continue to encounter difficulties. In cases where a child has more than of the marital status of the parents,”21 includ- In a recent case, V.L. v. E.L., the Supreme two parents, the court shall allocate ing to same-sex couples.22 Court reversed an Alabama court’s refusal custody and visitation among the par- In Elisa B. v. Superior Court, in 1993, to recognize a same-sex adoption.31 V.L. and ents based on the best interest of the Elisa B. and Emily entered into a lesbian rela- E.L. were a lesbian couple, and V.L. was child, including, but not limited to, tionship.23 They both decided they would granted joint custody in Georgia of three addressing the child’s need for conti- like to give birth;24 however, Elisa would be children to whom E.L. gave birth. The couple, nuity and stability by preserving estab- the provider of the family and Emily would who never married and have since separated, lished patterns of care and emotional be the stay-at-home mother.25 In 1997, Elisa had established temporary residency in bonds. The court may order that not gave birth to Chance and, in 1998, Emily Georgia in order to secure adoption rights all parents share legal or physical cus- gave birth to Ry and Kaia. Elisa supported for V.L. Later, after the couple separated, an tody of the child if the court finds that the household financially and treated all three Alabama court refused to recognize the adop- it would not be in the best interest of children as her own. In 1999, they sepa- tion, ruling that Georgia had mistakenly the child as provided in Sections 3011 rated.26 Subsequently, the county filed an granted joint custody to V.L. Citing the U.S. and 3020. action to establish that Elisa was obligated Constitution, the Supreme Court has now The case is different when the surrogate to pay child support to Emily, who was receiv- reversed Alabama’s unprecedented decision, mother is genetically related to the surrogate ing public assistance. ruling that Alabama must give “full faith child. Generally, the law still views the sur- The California Supreme Court ruled that and credit” to Georgia’s decision.32 Although rogate mother as the legal mother. In this in parentage determination if a man or woman progress is being made, there still remain kind of case, the intended parents must adopt 1) receives the child into his or her home and issues for same-sex couples when it comes the surrogate child in order to become legal 2) openly holds out the child as his or her to adoption and surrogacy. parents. However, In re Marriage of Moschetta, natural child, then that man or woman is the The Center for American Progress (CAP) the court ruled a surrogacy agreement is not natural parent.27 By providing for the house- provides detailed information on each state’s equivalent to an adoption agreement.15 Under hold financially, Elisa received Chance, Ry, policies regarding surrogacy.33 For instance, the adoption statute, Family Code Section and Kaia into her home, and by naming the CAP explains that New York forbids surro- 8814, “‘birth parents’ must specifically con- children, breast-feeding them, and claiming gacy and will fine those entering into a sur- sent to an adoption in the presence of a social all of them as dependents, Elisa held out the rogacy contract up to $10,000.34 Michigan worker.”16 children as her own.28 As Family Code Section also forbids surrogacy, with fines up to In K.M. v. E.G., the egg donor, K.M., was 7611(d) states, “the presumed parent receives $50,000 and up to five years in prison.35 the former partner of the gestational mother, the child into his or her home and openly Texas does permit surrogacy but requires E.G. After the relationship ended, K.M. sued holds out the child as his or her natural judicial approval of surrogacy contracts.36 to establish parental relationship with E.G.’s child.” Furthermore, the California Supreme Washington permits only uncompensated twin children, conceived through in vitro fer- Court stated: “‘One who consents to the pro- surrogacy contracts.37 tilization.17 The trial court ruled: duction of a child cannot create a temporary Accordingly, because the issue of same- By voluntarily signing the ovum dona- relation to be assumed and disclaimed at sex couples’ rights to have children through tion form, [K.M.] was donating genetic will, but the arrangement must be of such a surrogacy has not been clearly resolved, they material, her position analogous to character as to impose an obligation of sup- may want to consider choosing states favor-

Los Angeles Lawyer July/August 2016 13 able to both same-sex marriage and surrogacy. be represented by independent counsel of their terms depending on the particular circum- In addition, couples need to consider whether choosing.39 A surrogacy agreement executed stances. they want a traditional surrogacy or gesta- in accordance with Section 7962 is presump- Breach tional surrogacy and whether they want judi- tively valid and may not be rescinded or re - cial involvement in the agreement process. voked without a court order.40 On the other A breach occurs when a contract obligation hand, failure to comply with Section 7962 is not fulfilled or an express representation Legal Representation and Surrogacy shall rebut the presumption of validity.41 or warranty is untrue. Some examples of Agreement Beyond complying with Section 7962, breach include: 1) termination of pregnancy Because California same-sex couples may have couples interested in gestational surrogacy without cause or consent, 2) refusal to submit limited surrogacy options in other states or should also include choice of law, choice of to medical testing, 3) the genetic relationship abroad, their best option may be to make a forum, and alternative dispute resolution of the surrogate child is not that of the in- surrogacy arrangement in California. This ar - provisions. Having such provisions will help tended parent(s), 4) failure of intended parents rangement would be governed by California resolve any disputes as quickly as possible, to pay, and 5) failure to comply with other surrogacy law Assembly Bill 1217, which thereby mitigating potential risks to the sur- material terms. This brings attention to an Governor Jerry Brown signed into law in 2013. rogate child. important question—what will a court do if In addition, Section 7962 was added to the It is also important to arrange that the the surrogate refuses to give custody of the California Family Code. The surrogacy agree- su r rogate will agree to: requested physical child to the intended parents or the intended ment must be statutorily compliant. and psychological exams; the minimum and parents refuse to take custody? To determine For instance, Section 7962 states a sur- maximum number of required attempts to the outcome, a court will look at the state’s rogacy agreement must have: 1) the date on achieve a pregnancy; not engage in intercourse surrogacy laws and the terms of the contract. which the assisted reproduction agreement during the attempts to achieve pregnancy; In New Jersey, the Baby M case is still for gestational carriers was executed, 2) the not terminate the pregnancy unless her own precedent in this particular situation. Custody persons from which the gametes originated, life is at risk; not smoke, drink, or use illicit of the surrogate child will depend on whether unless anonymously donated, 3) the identity drugs during the pregnancy; not claim phys- the surrogacy was traditional or gestational. of the intended parent or parents, and 4) dis- ical or legal custody of the surrogate child If the surrogacy was traditional, the court closure of how intended parents will cover by the surrogate and her husband, if any; will invalidate the surrogacy agreement and medical expenses of the gestational carrier the term that it is in the surrogate child’s use the “best interest of the child” test to and of the newborn or newborns.38 best interest to be raised by the intended par- determine custody. If the surrogacy was ges- Among other things, Section 7962 also ents; financial terms (including surrogate tational, the court usually will issue prebirth requires that the agreement be notarized and compensation, donor compensation, reim- orders in favor of the intended parents. In that both the surrogate and intended parents bursement, expenses, etc.); and other relevant Johnson v. Calvert, superior court Judge Richard Parslow found that the intended parents, the Calverts, were the genetic, bio- logical and natural parents of the child. Judge Parslow also ruled that the surrogate, John - son, did not acquire parental rights over the child she carried.42 In California, the intent of the parties is controlling. A statutorily compliant surrogacy agreement is presumptively valid and enforce- able and may not be invalidated absent a court order. In the event of a breach, having a well-drafted surrogate agreement is critical to protection of one’s family. With the advent of legal same-sex mar- riage, it is likely that same-sex couples increas- ingly will look towards surrogacy to build their families. However, the process is emo- tional, complicated, and expensive. In order to ensure a smooth process, couples should thoroughly consider the potential costs, including but not limited to medical and legal fees. Using a U.S.-based surrogacy agency may be more expensive but it allows the cou- ple to deal with more certainty than having a surrogacy in foreign jurisdictions, particu- larly in light of the controversy that still sur- rounds same-sex marriage in some of those places. Finally, selecting and contracting with the right surrogate candidate is essential to ensure the surrogate child’s health and to ensure that custody is properly delivered. Despite the attendant stress and complex- ities, many couples will still seek surrogacy

14 Los Angeles Lawyer July/August 2016 because it offers a more personal experience of bringing a child into this world. Couples should seek counsel for advice and guidance throughout the surrogacy process. Though the journey may be difficult, the destination is worth it. n

1 Obergefell v. Hodges, 135 S. Ct. 2584 (2015). 2 See, e.g., Agency Fees & Surrogate Mother Costs, Fertility Source Companies, https://www .fertilitysourcecompanies.com (last visited May 12, 2016); Janna Herron, The Costs of adoption vs. sur- rogacy, BANKRATE, http://wwww.bankrate.com (last visited May 12, 2016). 3 See, e.g., Cheaper Overseas: Surrogate Mothers, ABC NEWS, Sept. 28, 2007, available at http://abcnews .com; Egg Donation and Surrogacy, New Hope Surrogacy in Ukraine, http://surrogacyukraine.com (last visited May 12, 2016); Darlena Cunha, The Hidden Costs of International Surrogacy, THE ATLANTIC (Dec. 22, 2014), available at http://www.theatlantic .com. 4 See, e.g., Edward Echwalu, From Uganda to Russia, Homophobia Spreading Worldwide, NEWSWEEK (Feb. 27, 2014), available at http://www.newsweek.com; Supreme Court makes homosexuality a crime again, THE TIMESOF INDIA (Dec. 12, 2013), available at http://timesofindia.indiatimes.com. 5 MAGADALINA GUGUCHEVA, SURROGACY IN AMERICA, COUNCIL FOR RESPONSIBLE GENETICS 3 (2010), available at http://www.councilforresponsiblegenetics.org /pageDocuments/KAEVEJ0A1M.pdf. 6 Matter of Baby M, 109 N.J. 396, 411 (1988). 7 Id. 8 Id. at 416. 9 Id. at 421. 10 Id. at 437. 11 Id. at 453. 12 See Johnson v. Calvert, 19 Cal. Rptr. 2d 494 (1993). 13 Id. at 782. 14 In re C.K.G., C.A.G., & C.L.G., 173 S.W. 3d 714, 714 (Tenn. 2005). 15 In re Marriage of Moschetta, 30 Cal. Rptr. 2d 893, 900 (1994). 16 Id., citing FAM. CODE §8814(a). 17 K.M. v. E.G., 37 Cal. 4th 130 (2005). 18 Id. at 137, citing K.M. v. E.G., 33 Cal. Rptr. 3d 61, 66 (2005). 19 K.M., 37 Cal. 4th 130. 20 Kristin H. v. Lisa R., 37 Cal. 4th 156, 166 (2005). 21 Elisa B. v. Superior Ct., 37 Cal. 4th 108, 116 (2005). 22 Id. 23 Id. 24 Id. 25 Id. at 114. 26 Id. 27 Id. at 119. 28 Id. 29 Id. at 124 (citing People v. Sorensen, 68 Cal. 2d 280, 285 (1968)). 30 Marriage of Buzzanca, 61 Cal. App.4th 1410 (1998). 31 V. L. v. E.L., 577 U. S. ____ (2016). 32 Id. (citing U. S. CONST. art. IV, §1). 33 GUIDETO STATE SURROGACY LAWS, CENTERFOR AMERICAN PROGRESS, available at https://www .americanprogress.org (last visited May 11, 2016). 34 Id. See also N.Y. DOM. REL. LAW §§121-24. 35 MICH. COMP. LAWS §§722.855, .857, .859. 36 TEX. FAM. CODE ANN. §§160.751–.763. 37 WASH. REV. CODE §26.26.230. 38 FAM. CODE §7962(a). 39 Id. at §7962(b). 40 Id. 41 Id. 42 Johnson v. Calvert, 19 Cal. Rptr. 2d 494 (1993).

Los Angeles Lawyer July/August 2016 15 practice tips BY NATE DILGER AND JOHN LORD

Evaluating the Effectiveness of the Inter Partes Review Process

WHEN INTER PARTES REVIEW (IPR) PROCEEDINGS were first intro- property rights.” This characterization did not go unnoticed by the duced with the 2012 America Invents Act (AIA),1 they were welcomed PTAB, when Chief Judge James Donald Smith, attempting to defuse as an important addition to the patent system. Prior to IPR, potential the situation, responded: “I personally do not believe if by death infringers could only challenge a patent’s validity through federal squad you mean there’s an intention to find claims unpatentable…. court litigation or reexamination. Litigation required substantial Absolutely not. The board approaches its decisions in a very neutral time and costs, and reexamination proceedings often lasted over manner.”9 The PTAB has not outwardly given any sign that the two years with no ability to conclude even if the parties settled. views of Judge Rader, which seem to echo that of many practitioners, Given these significant shortcomings, Congress created IPR as a have played a role in the increased success seen by patent owners.10 more efficient and cost-effective way for potential infringers to chal- But the numbers certainly suggest the PTAB may be taking a more lenge a patent’s validity. Now, it is possible to challenge a patent’s balanced approach to IPR petitions. validity before the Patent Trial & Appeal Board (PTAB) far more A more tangible reason patent owners are having greater success quickly and cheaply than through litigation. IPR proceedings, however, defeating institution decisions is their increased willingness to bring are subject to several important limitations. For instance, they are the fight earlier in the process. Patent owners are filing preliminary limited to grounds that may be raised under Section 102 or 103,2 responses at a rate that has slowly crept up as the IPR process has and only based on prior art consisting of patents or printed publica- matured. In 2014, approximately 80 percent of patent owners filed tions, i.e., the PTAB will not consider prior use or prior sales of the a preliminary response to the IPR petition.11 That number increased invention, among others, as a basis for invalidating the patent. to 85.6 percent in 2015 and 83.8 percent in the first part of 2016.12 After receiving a petition for IPR from the petitioner—or a pre- While the incidence of preliminary responses has certainly increased, liminary response from the patent owner—the PTAB will determine that number alone does not adequately explain the PTAB’s declining whether the petitioner has shown a “reasonable likelihood” of pre- initiation rate. For example, while the patent challenger’s success vailing with respect to at least one claim challenged.3 If so, the PTAB rate between 2014 and 2015 dropped 14 percent, the numbers show will initiate a trial and, if the proceeding is not dismissed (for example, only a modest seven percent increase in patent owners who chose to if the parties settle), the PTAB will issue a final determination file a preliminary response challenging the initial petition.13 regarding the patentability of the challenged claims within one year. The decrease in granted petitions may also be tied to the type of Since the introduction of IPR proceedings, large companies—for patents now being challenged, in particular, the overall strength of example, Google, Samsung, Apple, Microsoft, and LG Electronics— those patents. The early IPR petitions appeared to focus on the weak- have embraced IPR proceedings.4 Nonpracticing Entities (NPEs), a est patents, a point that Judge Smith noted during a 2014 meeting of euphemism for “patent trolls,” have been a frequent target of these the U.S. Patent and Trademark Office’s Patent Public Advisory Com - proceedings, with familiar names like Intellectual Ventures, Innovative mittee. Indeed the stated goal of the AIA was to give the Patent Office Display Technologies, and Acacia showing up in the top-10 list for a “toolbox” of new proceedings to “weed out low quality patents… 2015.5 includ[ing] post-grant review, IPR, supplemental examination, and The first wave of IPR proceedings saw most action occurring derivation proceedings, as well as a transitional post-grant review once the PTAB had granted the petition and initiated trial. Many program for certain business methods patents.”14 Although the success patent owners did not even file a preliminary response to the chal- rate of patent challengers has remained high—at least at trial—chal- lenger’s petition, likely because they were unfamiliar with the process, lengers have been emboldened to utilize the process, resulting in an did not want to tip their hand too early in the process, and/or were increased number of IPR petitions and, according to many practitioners, attempting to minimize fees and expenses.6 Even when patent owners a higher caliber of patents being challenged.15 For instance, patent prepared a preliminary response, these responses rarely convinced office statistics show that the number of filed IPR petitions more the PTAB to deny the challenger’s petition. Indeed, in 2013 patent than doubled between 2013 and 2014 and has remained relatively owners achieved a dismal success rate, with the PTAB granting 86 steady since then, evidencing that patent challengers have embraced percent of IPR petitions.7 Recently, though, Patent Office statistics the PTAB’s IPR procedures as a desired alternative to district court have shown a steady decline in the PTAB’s rate of granting IPR peti- litigation. The PTAB has become the largest venue for patent disputes, tions. By 2014, the rate had dropped 12 percent to approximately with 461 petitions filed in the first quarter of 2016, compared with 74 percent and then dropped again in 2015 to approximately 65 288 filings in the same period for its nearest competitor, the Eastern percent.8 Understanding the reasons for this decline, however, has been far from a simple task. Nate Dilger and John Lord are registered patent attorneys and partners at Some practitioners have suggested that political forces may be in One LLP. Mr. Dilger’s practice focuses on litigating patent disputes, including play. At the October 2013 annual meeting of the American Intellectual representation of patent challengers and owners in PTAB inter partes review Property Law Association, then Federal Circuit Chief Judge Randall proceedings. Mr. Lord’s practice focuses on intellectual property litigation, Rader famously referred to the PTAB as “death squads killing including representation of companies in postgrant PTAB proceedings.

16 Los Angeles Lawyer July/August 2016 District of Texas.16 all the real parties-in-interest.”25 Note that art was publicly available “shortly after” to There is evidence, however, that patent the petitioner’s identification of real parties- demonstrate public accessibility prior to owners are becoming more successful in com- in-interest at the time of filing the petition March 2002.33 The printed publication re - bating IPR petitions. Specifically, patent own- reflects a rebuttable presumption inuring to quirement poses a problem for petitioners ers increasingly are able to chip away at the the petitioner’s benefit; it does not, however, who often cannot gather the necessary dis- challenger’s stated basis for initiating the IPR. shift the burden of persuasion.26 covery at the institution phase to meet the A review of PTAB orders denying institution Should the petition not comply with the “publicly accessible” case law doctrine. Patent suggests that patents owners—now armed statutory requirement to identify each real owners should use this valuable lesson to with three years’ worth of PTAB decisions— party-in-interest, the petition will be deemed challenge petitions at the institution stage. have learned much about what it takes to incomplete and dismissed.27 Thus, even if Patent owners have also been successful win at the PTAB, particularly when it comes cor rected, if the earliest filing date does not in attacking allegations of obviousness that to poking holes in the initial petition. These fall within the one-year period specified by do not properly articulate reasons underlying decisions provide significant guidance to the Section 315(b), the petition will be denied as that conclusion. PTAB decisions have faulted patent owner on how to effectively fight IPR untimely. Given the practical realities of a petitioners for failing to provide a persuasive challenges. short one-year window, it often happens that rationale for combining the teachings of mul- First, the patent owner should consider the corrected petition may be time-barred, tiple prior art references in an obviousness whether the petitioner has properly identified meaning that the petition is denied outright analysis. For example, the PTAB denied insti- all real parties-in-interest. A petition for IPR and no trial can be instituted.28 Thus, if the tution in Askeladden LLC v. iSourceLoans “may be considered only if…the petition patent owner can show that the peti tioner LLC, when the petitioner provided mere con- identifies all real parties in interest.”17 This did not identify all real parties-in-interest, clusory statements that it would have been identification must be made as part of a peti- the PTAB will deny institution, often pro- obvious to a person of ordinary skill in the tioner’s mandatory notices, required to be hibiting the filing of a corrected petition due art to combine multiple references. In Aske - filed as part of the petition.18 This requirement to the one-year time bar. ladden, the petitioner contended that the is particularly important because a petition Another issue the patent owner may en - challenged claims were unpatentable under that fails to name all real parties-in-interest counter is whether there is sufficient evidence Section 103.34 The petitioner also provided must be corrected and refiled within the one- of publication. The patent owner should con- expert testimony.35 The petitioner argued that year time limit imposed by Section 315(b) sider whether the petitioner has properly pro- the prior art references all “relate to real estate of the U.S. Code or be dismissed.19 vided sufficient evidence that its prior art is transactions and financing” and then explained In the context of an IPR, a real party-in- indeed prior art. Section 311(b) provides that what each reference disclosed.36 The PTAB interest is generally one who “desires review” a petitioner’s ground can be based on “prior held this to be an insufficient rationale for of the patent at issue and “may be the peti- art consisting of patents or printed publica- why one skilled in the art would have com- tioner itself, and/or it may be the party or tions.” Public accessibility has been called bined the specific teachings.37 The PTAB reit- parties at whose behest the petition has been the “touchstone” in determining whether a erated that although the U.S. Supreme Court filed.”20 This issue often arises when the rela- reference constitutes a printed publication emphasized “an expansive and flexible ap- tionship between the parent and subsidiary bar under Section 102(b).29 proach” to the obviousness question under companies blurs corporate lines.21 For exam- Issues regarding public accessibility often KSR International Company v. Teleflex Inc., ple, in Zhejian Yankon Group Ltd. v. Cor - arise in litigation, especially now as they relate the Court reaffirmed the importance of deter- delia Lighting Group, the petition only iden- to electronic documents. In an IPR context, mining an articulated reasoning to combine tified Yankon-China as the petitioner, not its the issue is no different than in litigation. If the known elements as claimed in the patent.38 U.S.-based subsidiary Yankon-US. The PTAB the patent owner can show that the petitioner The PTAB has also denied institution when found that “in view of the totality of the fac- did not provide sufficient evidence of publi- the petitioner purported to rely on an expert tual evidence of record” Yankon-US “could cation, the PTAB will deny institution on declaration to support its obviousness showing. have exercised control” over the proceeding grounds pertaining to that prior art. For exam- For example, the PTAB denied institution and should have been included.22 The PTAB ple, the PTAB has denied institution when because the petitioner did not provide articu- has found that when a petitioner and non- the petitioner failed to offer corroborating lated reasoning with rational underpinning to party in a parent-subsidiary relationship blur evidence that slides were publicly presented combine the prior art references, and its expert the lines of corporate separation such that at a conference, or made available on a web- declaration did “not provide any facts, data, one could control the conduct of the IPR, site, prior to the critical date.30 The petitioner or analysis to support the opinion stated.”39 the nonparty should be considered a real also failed to provide sufficient evidence of In short, the patent owner can challenge the party-in-interest to the proceeding.23 The key publication for the other pieces of prior art petition when the petitioner does not ade- inquiry concerns whether the nonparty had on which the petitioner attempted to rely.31 quately explain why a person of skill in the the opportunity to control the IPR proceed- Because the petitioner had not shown that art would have combined the elements from ings, not whether the nonparty could exercise each piece of prior art was a printed publica- the specific references in the manner claimed. control over the named party.24 tion and because each of the petitioner’s al- Another strategy for patent holders to Additionally, the burden is on the peti- leged grounds relied on those pieces of prior challenge the petition is to reduce some of tioner to ensure compliance with the statute art, the PTAB ordered denial of the petition.32 the petitioner’s grounds. Even when the PTAB to identify all real parties-in-interest and not The PTAB has found a petitioner’s evi- has sided with the petitioner and instituted on the patent owner to prove noncompliance. dence of publication insufficient even when trial, patent owners can win small victories “Where a patent owner presents evidence supported by declaratory evidence. When that later prove significant. For example, the that reasonably brings into question the accu- declaratory evidence stated that “it was com- PTAB has a policy called redundancy, under racy of a petitioner’s identification of the real mon business practice for documents to bear which, at its discretion, it may “deny some parties-in-interest, the petitioner alone bears a printing date such as ‘1201’ indicative of or all [of a petitioner’s proposed] grounds the burden of establishing that it has complied a printing date of December 2001,” the PTAB for unpatentability or some or all of the chal- with the statutory requirement to identify deemed insufficient an opinion that the prior lenged claims.”40 The PTAB has based this

Los Angeles Lawyer July/August 2016 17 policy on its regulatory and statutory man- Patent owners can also score an important filing a preliminary response. This proves dates for “just, speedy, and inexpensive” res- victory when a redundancy filing results in even truer given the revisions to Part 42 of olution of its proceedings, explaining that the elimination of one or more prior art ref- the AIA rules, which apply to “all AIA peti- “multiple grounds, which are presented in a erences. For example, in Volkswagen Group tions filed on or after the effective date [May redundant manner by a petitioner who makes of America v. Farlight LLC the PTAB insti- 2, 2016] and to any ongoing AIA preliminary no meaningful distinction between them, tuted review for all seven challenged patent proceeding or trial before the Of fice.”44 Per - are…not all entitled to consideration.”41 claims but narrowed the number of prior art haps the most important revision is that the The end result of the redundancy policy references on which the petitioner could rely patent owner may now include with its pre- is that the PTAB tends to focus on the at trial: “[Petitioner] VGA proposes additional liminary response testimonial evidence at - strongest grounds set forth by the challengers grounds of unpatentability for claims 1-3 of tempting to rebut petitioner’s required show- and to exclude weaker grounds from trial. the [challenged] ‘959 patent based on Muller ing. Allowing the patent owner to provide Patent owners can capitalize on this by ag - and Naka.… The grounds based on Muller such evidence at the outset provides a valuable gressively attacking these weaker grounds and Naka are redundant to those based on tool when drafting the patent owner’s pre- to exclude them from trial. As an example, Brown. We do not authorize IPR on these liminary response. a patent challenger may argue, in the alter- redundant grounds.”43 Preparing a well-crafted and well-sup- native, that a certain piece or prior art both IPR proceedings have achieved their stat- ported preliminary response involves time anticipates the claimed invention under ed goal of providing an effective and effici - and expense on the patent owner’s behalf, Section 102, or at least obviates the claim - ent way to challenge a patent’s validity. Few but it gives the PTAB the opportunity to ed invention under Section 103. If a patent would argue that these proceedings have make a decision based on arguments from owner succeeds in having the PTAB discard largely favored patent challengers, particularly both parties early in the process. Patent own- the Section 102 arguments as redundant, the once an IPR has been instituted. For those ers have powerful arguments at the instit - challenger must rely solely on Section 103 patents that reach final decision, patent chal- ution phase, thus they should explore all at trial. This means that the challenger must lengers continue to enjoy a success rate that these possible arguments and invest heavily clear additional hurdles, such as proving the has remained at a very high level. at the front end. When patent owners have art is “analogous art,” establishing a sec- Patent owners thus must fight early and done so, the investment appears to be pay - ondary prior art reference to provide any hard to prevent IPR institution, if possible, ing div idends, either in securing denial of missing claim limitations, pointing to an or at least to narrow the issues for which the petition entirely or at least narrowing “articulated reason” for making the claimed trial is instituted. The data collected to date the issues for trial. n combination, and overcoming any evidence and the lessons learned from past decisions of objective indicia of nonobviousness sub- make clear that it should be an exceedingly 1 See generally The Leahy-Smith America Invents Act, mitted by the patent owner.42 rare case when a patent owner opts against 35 U.S.C. §§100 et seq.; Summary of the AIA, available

18 Los Angeles Lawyer July/August 2016 at http://www.aipla.org. 2 See 35 U.S.C. §§102, 103. REAL ESTATE DISPUTE CONSULTING 3 35 U.S.C. §314. 4 Michael Loney, Data: Top Petitioners, Patent Owners, Law Firms, and Attorneys at the PTAB in 2015, WARONZOF ASSOCIATES MANAGING INTELL. PROP. (Feb. 29, 2016), available Timothy R. Lowe, MAI, CRE, FRICS at http://www.managingip.com. 5 Id. 6 See AIA TRIAL STATISTICS, USPTO, available at http:// •economic damages •lease disputes www.uspto.gov (last visited April 15, 2016) [hereinafter AIA]. •fair compensation •land use disputes 7 Id. •property valuation •partnership interest value 8 Erin Coe, PTAB Grants Lower Rate of IPRs as •lost profits •reorganization plan feasibility Patent Owners Fight Back, LAW 360 (Jan. 26, 2016), http://www.law360.com [hereinafter Coe]; see also Waronzof Associates, Incorporated 310.322.7744 T 424.285.5380 F AIA, supra note 5. 400 Continental Boulevard, Sixth Floor [email protected] 9 Erica Teichert, PTAB Says It’s Not A “Death Squad” El Segundo, CA 90245 www.waronzof.com For Patents, LAW 360 (Apr. 15, 2014), http://www .law360.com. 10 Peter J. Pitts, “Patent Death Squads” vs. Innovation, WALL ST. J. (June 10, 2015), available at http://www .wsj.com. 11 Coe, supra note 7. 12 Id. 13 Id. 14 Sarah Tran, Policy Tailors and the Patent Office, 46 U.C. DAVIS L. REV. 487, 498-99 (2012). 15 Erin Coe, PTAB’s Skyrocketing Petition Rate Starts To Stabilizes, LAW 360 (Feb. 11, 2016), http://www .law360.com. 16 Q1 2016 PATENT DISPUTE REPORT, UNIFIED PATENTS, http://unifiedpatents.com/q1-2016-patent-dispute- report/ (Last visited, Apr. 15, 2016). 17 35 U.S.C. §312(a)(2). 18 37 C.F.R. §42.8(a)(1). 19 35 U.S.C. §315(b). 20 Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). 21 See, e.g., Zhejiang Yankon Group, Ltd., v. Cordelia Lighting Group, IPR2015-01420, Paper 9 (P.T.A.B. Nov. 25, 2015). 22 Id. at 18. EMPLOYMENT LAW REFERRALS 23 Reflectix, Inc. v. Promethean Insulation Tech. LLC, 2015 WL 1927414 at *5 (P.T.A.B. Apr. 24, 2015). Paying Highest Referral Fees (Per State Bar Rules) 24 Zhejiang Yankon, IPR2015-01420, Paper 9 at 13. 25 Id. at 8. 26 See Zhejiang Yankon, IPR2015-01420, Paper 9 at 8. 27 See 37 C.F.R. §42.106(b). Honored to receive regular employment referrals from over 100 of Californiaʼs fi nest attorneys 28 See Zhejiang Yankon, IPR2015-01420, Paper 9 at 19. 29 In re Hall, 781 F. 2d 897, 898-99 (Fed. Cir. 1986). Stephen Danz 877.789.9707 See 35 U.S.C. §102(b). & Associates 30 Air Liquide Large Inds. U.S., L.P. v. Praxair Tech., Main offi ce located in Los Angeles and nearby offi ces in Pasadena, Inc., IPR2015-01074, Paper 11 (P.T.A.B. Oct. 26, Orange County, Inland Empire & San Diego 2015). Stephen Danz, Senior Partner 11661 San Vicente Boulevard, Suite 500, Los Angeles, CA 90049 31 Id. 32 Id. 33 Kinetic Techs., Inc. v. Skyworks Solutions, Inc., IPR2014-00529, Paper 8 at 19 (P.T.A.B. Sept. 23, 2014). 34 Askeladden LLC v. iSourceLoans LLC, IPR2015- 00129, Paper 8 (P.T.A.B. Apr. 15, 2015) 35 Id. at 3. 36 Id. at 9. 37 Id. 38 Id., citing KSR Intl Co. v. Teleflex Inc., 550 U.S. 398, 415 (2007). 39 Kinetic Tech., IPR2014-00529, Paper 8 at 14-15. 40 37 C.F.R. §42.108(b). 41 Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM-2012-00003, No. 7 Notice at 2 (P.T.A.B. Oct. 25, 2012). 42 See, e.g., In re Kahn, 441 F. 3d 977 (Fed. Cir. 2006). 43 Volkswagen Group of America v. Farlight LLC, IPR2013-00238, Paper 15 (Sept. 26, 2013). 44 37 C.F.R. Pt. 42.

Los Angeles Lawyer July/August 2016 19 by WILL JAY PIRKEY

A SHAMEFUL PRACTICE Despite enactment of the Emergency Medical Treatment & Active Labor Act in 1986, violations of patient dumping continue to represent a serious hazard in the city of Los Angeles

facility’s1 ing a corresponding increase in mentally ill, mandates that every hospital that receives wrongful chronically homeless patients wearing hos - Medicare/Med icaid reimbursement to make A HEALTH discharge, pital gowns and ID bracelets—barefoot or a nondiscriminatory medical as sessment of or dumping,2 of Los Angeles’s most vulnerable wheel chair-bound—wandering local streets.7 any person who enters its ED. If the assess- citizens—the homeless, disabled, mentally Once confined to Skid Row, these patients ment results in a finding of a medical emer- ill, seniors, and dependent adults—onto the may now be seen throughout the city.8 gency—including an urgent mental condi- streets traumatizes the victims and their fam- Patient dumping is not a new phenom - tion—treatment is required,13 or the patient ilies and imposes significant financial and enon. In the late 1870s, The New York Times must be stabilized and transferred to an ap - other burdens on communities.3 By engaging first coined the term in articles that de scribed propriate health fa cil ity for further care.14 in such practices, a health facility exposes the practice of New York City private hos - However, EMTALA does not cover in-pat - itself to administrative fines and restrictions pi tals transporting their poor and sick ly ient or nonemergency ED discharge.15 on or loss of state licensure or Medicare and pa tients by horse-drawn ambulance to Despite EMTALA, patient dumping took Medicaid certification, or both. Further, it Belle vue Hospital.9 The jarring ride and lack a more ominous turn in the early 2000’s when also opens the door to civil actions by local of stabilized care typically resulted in the private hospitals stopped transferring the poor prosecutors for violating the Unfair Com - death of these patients and caused public to public treatment facilities and instead dis- petition Laws (UCL)4 as well as personal in - outrage.10 More than a century later, private charged them directly to the street.16 In 2005, jury, professional negligence, and dependent hospitals continued to refuse to treat the the Los Angeles Police Depart ment (LAPD) adult or elder abuse lawsuits. Thus, the poor and un insured in their emergency de - manner in which a health facility handles or partments (ED) and transferred them to pub- Will Jay Pirkey is a deputy city attorney with the mishandles the discharge process is critical lic hospitals with similar results.11 Res ponding Office of the Los Angeles City Attorney assigned to patients, especially those who lack the to this situ a tion, Congress enacted the Emer - to the Criminal Department as a Special Prosecutor cap acity to care for themselves.5 gency Medi cal Treatment & Active Labor Act for Consumer Protection handling civil law enforce- Since 2013, homelessness has steadily (EMTALA), commonly referred to as the pa - ment matters with an emphasis on Unfair Com - grown in the City of Los Angeles,6 includ - tient anti-dumping laws, in 1986.12 EMTALA petition Law actions. HADI FARAHANI

20 Los Angeles Lawyer July/August 2016 began a yearlong invest igation into patient ferent types of hospitals, nursing homes, and people reach goals of stable housing, recovery, dumping.17 Using a video camera mounted licensed health care facilities. The term “trans- and a better quality of life. Thus, effective on the Union Rescue Mis sion building, the portation” is not defined but is intended to discharge planning can contribute significantly “Skid Row camera” captured a year later a include use of any form of transportation to preventing homelessness.37 cab dropping off a woman at the building including a hospital vehicle, taxi voucher, or In contrast, when patients are discharged wearing only a hospital gown and cap and Metro ticket. prematurely or placed in an environment socks. The woman, Carol Reyes, wandered For purposes of the ordinance, a “home- that is incapable of meeting their medical or the streets until the Mission took her in.18 less patient” is defined as: psychological needs, recovery may be jeop- The ensuing LAPD investigation found that “an individual who lacks a fixed and ardized and projected cost-savings lost if the she was a mentally ill, indigent, homeless regular nighttime residence, or who discharge ultimately results in ongoing and patient who had been dumped by Kaiser has a primary nighttime residence that more intense use of healthcare resources, Permanente’s Bellflower hospital while she is a supervised publicly or privately in cluding ED or nursing facility visits.38 In still needed acute medical care. The hospital operated shelter designed to provide addition, if the early discharge is consider ed left her with no discharge instructions or any temporary living accommodations, or “un safe”39 or causes an “immediate jeop- of her personal belongings. Ms. Reyes was who is residing in a public or private ardy…to the health and safety of the pat - subsequently admitted to another hospital place that was not designed . . . to be ient,”40 the facility may be subject to both for pneumonia and found to be “gravely dis- used as a sleeping accommodation for federal and state quality of care noncompli- abled” necessitating the appointment of a human beings.”25 ance in vestigations41 as well as civil lawsuits. conservator.19 The term “location” or “patient’s resi- As a condition of participating (CoP) Based on this investigation, the Los An ge - dence” means the patient’s home or for home- under Medicare/Medicaid reimbursement,42 les City Attorney filed the first criminal and less patients, the place given by those patients as well as meeting state Health and Safety civil law enforcement action by a city in Cal - as their principal place of dwelling.26 Code licensure requirements,43 hospitals must ifornia against a hospital for wrongfully dis- Finally, “written consent” means “know - have a written discharge planning process charging a homeless patient.20 In the ab sence ing ly, intelligently and voluntarily given that identifies those patients “who are likely of any specific statute or ordinance outlaw - writ ten consent signed by the patient or the to suffer adverse health consequences on dis- ing this discharge practice, the city attorney pat ient’s legal representative.”27 “Informed charge if there is no adequate discharge plan- used related California statutes, in cluding con sent” is a key element and means consent ning.”44 Federal and state law also requires Penal Code Sections 236 and 368, Wel fare given by a patient or his or her legal repre- that once there is a decision to provide a dis- and Institutions Code Sections 15610.17 and sentative with sufficient mental capacity28 charge plan, appropriate arrangements must 15610.57, and the Health and Safety Code to knowingly, intelligently, and voluntarily be made for posthospital care.45 However, Section 1262.5 as the primary legal predi cates make this decision.29 Further, by its very federal requirements differ in several signif- to support a UCL claim against the hosp ital.21 language, verbal consent is impermissible. icant respects from those imposed under The city attorney eventually ob tain ed a judg- The conduct proscribed by the ordinance California law. First, the hospital must prepare ment against all of Los Angeles County’s Kaiser must be analyzed in the context of a hospital’s a timely discharge plan when the need for a Foundation Hospitals for $550,000. The judg- duties to its patients. A hospital, like other plan is deemed necessary.46 Second, once a ment also required the hospitals adopt a home- health facilities,30 is “under a duty to observe discharge plan is considered necessary, then less discharge protocol, prohibited homeless and know the condition of its patient. Its the hospital must take into account “the patient discharge inconsistent with that pro- business is caring for ill persons, and its con- likeli hood of the patient’s capacity for self- tocol, and mandated training and monitoring duct must be in accordance with that of a care.”47 Finally, it must provide specific ref- compliance with the judgment.22 This format person of ordinary prudence under the cir- erences to posthospital care options in clud - of seeking monetary penalties and adoption cumstances, a vital part of those circum- ing care at home, a skilled nursing facility, of homeless discharge protocol became the stances being the illness of the patient and or intermediate care facility and, if necessary, framework for all future city attorney UCL incidents thereof.”31 This duty is met by counseling.48 actions for patient dumping.23 “insuring the competency of its medical staff California hospitals certified by the Cen- Following this and other city attorney and the quality of medical care provided” ters for Medicare & Medicaid Services (CMS) prosecutions of patient dumping cases, the through the establishment of high standards do not always recognize that their CoP oblig- Los Angeles City Council enacted Municipal of professionalism and the maintenance of ations extend to satisfying all applicable fed- Code Section 41.60 in 2008. Under the ordi- those standards through careful selection eral laws, not just EMTALA.49 This includes nance, “A health facility may not transport and review of staff.32 complying with the more specific discharge or cause a patient to be transported to a loca- Although the patient’s attending physician requirements of timeliness, determining “capac- tion other than the patient’s residence without is responsible for deciding whether a patient ity for self-care” and specific posthospital care written consent, except where the patient is may be discharged,33 a hospital through its options.50 Mere compliance with state law is transferred to another health facility following medical staff bylaws34 dictates the approved insufficient. bona fide procedures in accordance with discharge protocols, medical recordation A significant gap in federal and state law another provision of law.”24 This ordinance requirements, and enforcement mechanisms has been the absence of any requirement as has become the foundation of the city attor- to ensure that the physicians, support staff to specific protocol language, directives, or ney’s UCL actions against hospitals who and employees act appropriately.35 policy considerations.51 Rather, these laws engage in patient dumping and remains the For homeless patients with mental illness rely solely on the health care providers’ sub- only law of its kind in the state. or substance abuse issues, discharge planning jective judgment to determine if a patient The ordinance contains five key terms, involves identifying and arranging services needs a discharge plan. Acknowledging this including health facility, transportation, these individuals may need when they leave gap, the CMS has long suggested, in non- patient, location, and written consent. The a health facility or custodial setting and return binding comments, that a discharge plan be term “health facility” as defined by Health to the community.36 As part of a larger con- prepared for each patient to avoid “a screening and Safety Code Section 1250 includes dif- tinuum of care, this planning can help these process that fails to predict adequately which

22 Los Angeles Lawyer July/August 2016 patients need a discharge plan to avoid adverse stantial administrative and compensatory Armed with these various predicates, pub- consequences.”52 With rising costs, as well fines.62 lic prosecutors have statutory standing and as adverse consequences and readmissions, In 2014, Jane Roe, a 38-year-old homeless are not required to establish an injury in fact. the CMS has now proposed discharge rule schizo phrenic, asthmatic, and diabetic woman Because of the equitable nature of a UCL changes that, if adopted, will substantially with a history of depression, anxiety, and action, there are fewer remedies available limit the subjectivity as to when a discharge auditory hallucinations, was dumped in Skid than those afforded by other consumer pro- assessement and plan is to be made.53 Row by a hospital van bearing the name “Tri- tection laws. However, the UCL is broad in Nonetheless, discharge planning contin- City Regional Medical Center” (Tri-City) on scope, allowing the public prosecutor to stop ues to lack any standardization and is fre- its side and rear doors. Jane Roe was clad or correct emerging unfair as well as ongoing quently marked by poor quality of post - only in hospital paper tops and bottoms, and unlawful behavior. Consequently, injunctions discharge care and readmission.54 Worse, had no money, identification, medication, or are the primary remedy sought in a patient pro fessionals are reluctant to improve or telephone and began to wander aimlessly dumping case. coordinate system processes so that pre- through Skid Row.”63 By requiring hospitals to adopt homeless dictable, safe, and timely discharge occurs.55 Earlier this year, Pacifica of the Valley discharge protocols, provide training, and Consequently, adverse consequences have Hospital sent a mentally ill and often home- under go compliance monitoring over a period resulted for patients and health facilities less woman by taxi to a nursing facility in of years, there is a greater likelihood of ending By requiring hospitals to adopt homeless discharge protocols, provide training, and under go compliance monitoring over a period of years, there is a greater likelihood of ending patient dumping by health facilities and reducing homelessness.

based on the failure of the latter to timely the City; however, she went missing for three patient dumping by health facilities and reduc- and adequately screen patients and provide days because she never made it into the facil- ing homelessness. The city attorney has devel- an appropriate discharge plan.56 The adverse ity.64 Eventually, she was located and reunited oped homeless discharge protocols that have consequences are illustrated in a few exam- with her family.65 been incorporated into settlements with hos- ples. In 2013, a patient was ad mitted to a As in the case of the first example, these pitals. These protocols address critical com- psychiatric hospital under a 72-hour hold latter two cases resulted in administrative and ponents for the discharge process of the home- for observation due to symptoms of psy- public prosecutorial noncompliance investi- less, including patient rights, prompt discharge chosis, auditory hallucinations, and suicid- gations. One case remains in litigation66 while planning, capacity assessment, family involve- al ideations.57 The psychosocial assessment the other has resulted in a stipulation to enter ment and appropriate postdischarge social documented the patient was homeless, un- judgment requiring a plan of correction, in - and community services. Many of the hos- able to care for himself, had below average cluding upgraded transportation and dis- pitals subject to the city attorney’s UCL pa - learning ability and was a high risk for psy- charge protocols, further training, monitor - tient dumping suits have adopted a majority chosocial problems related to his inability ing, and payment of $1,000,000 in penalties.67 if not all of these components. Unfortunately, to perform normal everyday tasks.58 Not - These two situations highlight how the Los broader use of the proposed protocols has withstand ing the patient’s request for and Angeles City Attorney’s Office asserts claims stalled.72 the initial treatment plan’s reference to under the city’s antipatient dumping ordi- UCL actions are an effective means of assisted or a group living home as being nance and the UCL to obtain injunctive relief, addressing societal concerns,73 for example beneficial, the treating psychiatrist dis- recover significant judgments, and require patient dumping, because modifying the be - charged the patient before the hold expired. hospitals to adopt specific homeless discharge havior of health facilities and their personnel The patient was given a one-way bus ticket protocols. is essential to providing proper care to those out of town, a taxi ride to the station, and The city attorney has applied this legal who need it most.74 It has been left to public a three-day supply of psychiatric medi ca- strategy by filing claims against hospitals prosecutors’ civil law enforcement actions to tion.59 Three days later, the patient was located both within and outside the city who re-focus the attention of these facilities on the found wandering the streets of a city in transport patients to its streets.68 Also, the need for appropriate discharge protocol and which he had never been before, knew no office has used UCL predicates in patient planning for these special needs patients. n one, and did not know what to do.60 For - dumping cases, including California civil69 70 tunately, strangers assisted in having him and criminal elder and dependent adult 1 See HEALTH & SAFETY CODE §1250. placed in an assisted living facility. abuse laws. Although both address aban- 2 See Emergency Medical Treatment & Active Labor Federal and state noncompliance invest - donment, abduction or physical and financial Act of 1986, 42 U.S.C. §§1395dd et seq.; HEALTH & SAFETY CODE §1262.4; PENAL CODE §368(c); L.A. igations substantiated the complaints and abuse by a care giver, the latter statutes are MUN. CODE §41.60. found both an unsafe discharge and a failure effective in patient dumping cases because 3 M. A. SANTANA, REPORT FROM THE OFFICE OF THE CITY 61 to provide statutory mandated care. The they prohibit placing an elder or dependent ADMINISTRATIVE OFFICER, CAO File No. 0220-05151-0000, facility was required to provide a compliance adult “in a situation in which his or her per- HOMELESSNESSANDTHE CITYOF LOS ANGELES (Apr. 15, 2015), plan, undergo monitoring, training, amend son or health may be endangered”71 such as available at https://www.documentcloud.org/documents its interstate discharge protocol, and pay sub- being dumped on Skid Row. /1906452losangeleshomelessnessreport.html. 4 BUS. & PROF. CODE §17200.

Los Angeles Lawyer July/August 2016 23 5 See, e.g.,ERIC ALPER ET AL., HOSPITAL DISCHARGE 19 Complaint at 6-10, People v. Kaiser Found. Hosps., 3d 477, 489 (1988); See 42 C.F.R. §§482.12(a) (5), AND READMISSION, UPTODATE, http://www.uptodate No. BC 362039 (L.A. Super. Ct. 2006). 482.22(b), 482.21(e). .com (last visited June 13, 2016) [hereinafter ALPER]; 20 Id.; People v. Kaiser Found. Hosps., No. 6CA022627 33 Wickline v. Cal., 192 Cal. App. 3d 163 (1986); Yong-Fang Kuo & James S. Goodwin, Association of (L.A. Super. Ct. 2007). Khajavi v. Feather River Anesthesia Med. Group, 84 Hospitalist Care with Medical Utilization After 21 Kaiser Found. Hospitals, No. BC 362039; People Cal. App. 4th 32 (2000); See 42 C.F.R. §§482.12(c)(3), Discharge: Evidence of Cost Shift From A Cohort v. CHA, Hollywood Med. Ctr., No. BC 373298 (L.A. 482.12(c)(4), 482.23(b). Study, 155 ANNALS OF INTERNAL MED. 152 (2011) Super. Ct. 2007); People v. Methodist Hosp. of S. Cal., 34 See 42 C.F.R. §482.22 for CoP requirements. For [hereinafter Kuo]; John Banja et al., Discharge Di - No. BC 373297 (L.A. Super. Ct. 2007). discussion of acting in accordance with principles of lemmas as System Failures, 7 AM. J. BIOETHICS 29 22 Kaiser Found. Hosps., No. BC 362039 (final judg- sound corporate governance see Weinberg v. Cedars- (2007) [hereinafter Banja]. ment filed and entered June 27, 2007). Sinai Med. Ctr. 119 Cal. App. 4th 1098, 1109 (2004), 6 Greater Los Angeles Homeless Count, L.A. Homeless 23 See, e.g., id. (stipulated judgment with homeless and for compliance with CMS deficiency notifications Servs. Auth. (LAHSA), available at http://documents discharge protocol attached as Exhibit A); CHA, see El-Attar v. Hollywood Presbyterian, 56 Cal. 4th .lahsa.org/Planning/homelesscount/2016/datasets/La Hollywood Med. Ctr., No. BC 373298 (stipulated 976, 983-984 (2013). _City.pdf (last visited June 13, 2016); 2015 Greater judgment with homeless discharge protocol attached 35 Elam v. College Park Hosp., 132 Cal. App. 3d 332 Los Angeles Homeless Count Results, LAHSA, available as Exhibit A, filed July 23, 2008); Methodist Hosp. (1982); Calvin Goeschel et al., Respons ibility for at http://documents.lahsa.org/Planning/homelesscount of S. Cal., No. BC 373297 (stipulated judgment with quality improvement and patient safety: hospital /2015/factsheet/La_City.pdf; homeless discharge protocol attached as Exhibit A, board and medical staff leadership challenges, 138 7 See, e.g., People v. Beverly Hosp. of Montebello, filed July 23, 2008); People vs. Pacific Health Corp., CHEST 171, 172-78 (July 2010); Comment, The Hos - No. BC 530206 (L.A. Super. Ct. 2013); People v. Los Angeles Doctor’s Hosp., Tustin Hosp. and Med. pital’s Responsibility for its Medical Staff: Prospects Pacifica Hosp. of the Valley (case not filed, settled Ctr., No. BC 395757 (L.A. Super Ct. 2008) (last stip- for Corporate Negligence in California, 8 PAC. L.J. (documents on file with with the Office of the Los ulated judgment required compliance with discharge 141 (1977). Angeles City Attorney) 2014); People v. Glendale laws (Medicare/Medicaid Fraud), etc., filed May 24, 36 MARY BARON ET AL., HOSPITAL DISCHARGE PLANNING, Adventist Med. Ctr., No. BC 555301 (L.A. Super. Ct. 2013); People v. CHCM Inc., Coll. Hosp. Costa Mesa, BEST PRACTICES MANUALFOR DISCHARGE PLAN- 2014); People v. Gardens Reg’l Hospital & Med. Ctr., No. BC 411499 (L.A. Super. Ct. 2009) (stipulated NING: MENTAL HEALTH & SUBSTANCE ABUSE FACILITIES, Tri-City Reg’l Med. Ctr., No. BC 576996 (L.A. Super. judgment with no homeless discharge protocol attached HOSPITALS, FOSTER CARE, PRISONS AND JAILS, 21-36, Ct. 2015); People v. Good Samaritan Hosp., No. BC but required to develop best practices re discharge, 64-67 (Aug. 2008). 617010 (L.A. Super. Ct. 2016); People v. Pacifica filed Apr. 16, 2009); People v. CFHS Holdings & 37 Thomas E. Backer et al., The Role of Effective Dis - Hosp. of the Valley (filing pending 2016). Centinela Freeman Holdings, Inc., No. BC 455836 charge Planning in Preventing Homelessness, 28 J. 8 See, e.g., Good Samaritan Hosp., No. BC 617010; (L.A. Super. Ct. 2011) (stipulated judgment with PRIMARY PREVENTION 229 (2007) [hereinafter Backer]. Pacifica Hosp. of the Valley, supra note 7. “The number Marina Del Rey Hospital homeless discharge protocol 38 ALPER, supra note 5; Kuo, supra note 5. of homeless encampments, city and countywide, has attached as Exhibit B, filed Apr. 8, 2011); People v. 39 42 C.F.R. §§482.43; REV. TO STATE OPERATIONS jumped 85% from 2013-2015.” (Item No. 7, Motion, Beverly Hosp. of Montebello, No. BC 530206 (L.A. MANUAL (SOM), HOSPITAL APP. A, INTERPRETIVE GUIDE - p. 24, Ad Hoc Comm. on Homelessness, L.A. City Super. Ct. 2013) (stipulated judgment with homeless LINESFOR 42 C.F.R. 482.43, DISCHARGE PLANNING Coun cil (June 18, 2015), available at https://cityclerk discharge protocol attached as Exhibit A, filed Jan. (2013), available at https://www.cms.gov. [hereinafter .lacity.org/CouncilAgenda/DisplayAgendaPDF.ashx); 29, 2014); settlement agreement with homeless dis- SOM APP. A]. Gail Holland, More homeless camps are appearing charge protocol attached as People v. Pacifica Hosp. 40 42 C.F.R. §489.3; SOM, APP. Q, GUIDELINES FOR beyond L.A.’s skid row, L.A. TIMES (Jan. 24, 2015), of the Valley, (L.A. Super. Ct. 2016) Exhibit A signed DETERMINING IMMEDIATE JEOPARDY (2014); “An im - available at http://www.latimes.com. Donna Littlejohn Apr. 4, 2014; People v. Glendale Adventist Med. Ctr., mediate jeopardy is a situation in which the hospital's & Sarah Favot, Homelessness jumps 39 percent in No. BC 555301 (L.A. Super. Ct. 2014) (stipulated noncompliance with one or more requirements of South Bay, 12 percent in L.A. County in past two judgment with homeless discharge protocol attached licensure has caused, or is likely to cause, serious injury years, THE DAILY BREEZE (May 12, 2015), available at as Exhibit A, filed Sept. 9, 2014); People v. Gardens or death to the patient.” HEALTH & SAFETY CODE http://www.dailybreeze.com. Reg’l Hosp. & Med. Ctr., Tri-City Reg’l Med. Ctr., §1280.1(c). 9 Emily Abel, Patient dumping in New York City, No. BC 579669 (L.A. Super. Ct. 2015) (with an alleged 41 UPDATE OF SOM, CH. 5, COMPLAINT INVESTIGATION, 1877-1917, 101 AM. J. PUB. HEALTH 789, 790-91 inadequate homeless discharge policy with which the CMS (2013) [hereinafter SOM, CH. 5]; SOM, APP. A, (May 2011) [hereinafter Abel]. For a short history of hospital is alleged to have failed to comply); People v. supra note 39; HEALTH & SAFETY CODE §§1280.1 et the first ambulance service see Morton Galdston, Good Samaritan Hosp., No. BC 617010 (L.A. Super. seq. Ambulance Notes Of A Bellevue Hospital Intern, May Ct. 2016) (stipulated judgment with the Los Angeles 42 See Mission Hosp. Reg’l Med. Ctr. v. Shewry, 168 1938, 76 J. URBAN HEALTH 509, 510-512 (1999). City Attorney's Office, homeless discharge protocol Cal. App. 4th 460 (2008). 10 Abel, supra note 9. attached as Exhibit A, filed Apr. 21, 2016); Pacifica 43 HEALTH & SAFETY CODE §1280.1. 11 Robert L. Schiff et al., Transfers to a Public Hospital, Hosp. of the Valley, (filing pending, settlement agree- 44 Social Security Act §1861(ee)(1)-(2), 42 U.S.C. 314 NEW ENG. J. MED. 552, 553-57 (1986); Beverly ment with an updated homeless discharge protocol §1395x (ee); 42 C.F.R. §482.43(a);–SOM, supra Hoffman, Emergency Rooms: The Reluctant Safety and related protocol attached as Exhibit A, filed June note 41. Net, in HISTORY AND HEALTH POLICY IN THE UNITED of 2016). 45 42 C.F.R. §482.43(b)(2)(5); HEALTH & SAFETY CODE STATES: PUTTING THE PAST BACK IN 250, 260-66, 268 24 L.A., Cal. City Ordinance 179913; L.A. MUN. CODE §1262.5(b). (Rosemary A. Stevens et al. eds., 2006). 41.60(b) 46 42 C.F.R. §482.43(b)(5). California only requires 12 42 U.S.C. §1395dd et seq. See also Joseph Zibulewsky, 25 L.A. MUN. CODE 41.60(a)(3). a discharge plan prior to discharge. HEALTH & SAFETY The Emergency Medical Treatment and Active Labor 26 L.A. MUN. CODE 41.60(a)(2). CODE §1262.5(b). Act (EMTALA): what it is and what it means for physi- 27 L.A. MUN. CODe 41.60(a)(4). 47 42 C.F.R. §482.43(b)(4). California refers to the cians, 14 Proc. Baylor Univ. Med. Ctr. 339 (Oct. 2001). 28 “Capacity” means a person’s ability to understand patient or guardian’s choice of a designated family 13 42 U.S.C. §1395dd(a). the nature and consequences of a decision and to make caregiver but otherwise makes no mention of deter- 14 42 U.S.C. §1395dd(b) –(c). and communicate a decision, and includes in the case mining the capacity of the patient to make any health 15 Hernan D. Vera, testimony, Patient Dumping Briefing of proposed health care, the ability to understand its decisions. HEALTH & SAFETY CODE §1262.5(c). Before the U.S. Commission on Civil Rights, Washing - significant benefits, risks and alternatives. PROB. CODE 48 42 C.F.R. §482.43(c)(6), (7), (8). See Discharge ton, D.C., Mar. 14, 2014, transcript of record at 82- §4609. Plan ning: Rights and Procedures for Medicare Bene - 83, available at http://www.eusccr.com, cited in PATIENT 29 A patient should “receive sufficient information to ficiaries in Various Care Settings, Center for Medical DUMPING, U.S. COMMISSION ON CIVIL RIGHTS, (Sept. make a meaningful decision” regarding their own Advocacy, http://www.medicareadvocacy.org/medicare 2014). healthcare. Cobbs v. Grant, 8 Cal. 3d 229, 242 (1972). -info/discharge-planning (last visited June 15, 2016); 16 Sarah Gerry, Jones v. City of Los Angeles: A Moral See also Ashcroft v. King, (1991) 228 Cal. App. 3d California, though mentioning various post-dis charge Response to One City’s Attempt to Criminalize, Rather 604. options such as nursing homes, does not require iden- than Confront, Its Homelessness Crisis, 42 HARV. 30 HEALTH & SAFETY CODE §1416 et seq. See also tifying, offering or notation of the choices available for C.R.-C.L. L. REV. 239, 241 (2007). Nevarrez v. San Marino Skilled Nursing & Wellness post-hospital care. HEALTH & SAFETY CODE §1262.5(b). 17 Richard Winton & Cara Mia Dimassa, Police Allege Ctr., LLC 221 Cal. App. 4th 102 (2013); Sababin v. 49 42 §§C.F.R. 482.1, 482.11. 5 Patients Were Dumped On Skid Row By Hospital, Superior Ct., 144 Cal. App. 4th 81 (2006). 50 Id. L.A. TIMES (Oct. 24, 2006), available at http://articles 31 Rice v. California Lutheran Hosp., 27 Cal. 2d 296, 51 CMS does provide various check lists to assist in .latimes.com. 302 (1945). discharge planning. Your Discharge Planning Checklist: 18 Id. 32 Rhee v. El Camino Hosp. District, 201 Cal. App. For patients and their caregivers preparing to leave a

24 Los Angeles Lawyer July/August 2016 hospital, nursing home, or other care setting, available at https://www.medicare.gov/Pubs/pdf/11376.pdf. 52 SOM, supra note 41. ROSS MEDIATION SERVICES 53 Improving Medicare Post-Acute Care Trans form - ation Act of 2014. H.R. 4994, 113th Cong. (2nd Sess. Integrity Commitment Success 2014); 42 C.F.R. Pts. 482, 484, 485 [CMS-3317-P] RIN 0938-AS59, Medicare and Medicaid Programs; SPECIALTY AREAS Re visions to Requirements for Discharge Planning for • Real Estate • Business/Commercial Hospitals, Critical Access Hospitals, and Home Health Mortgage & Lending Escrow/Title/Agency Agencies, available at https://s3.amazonaws.com • • Trusts & Estates Workplace /public-inspection.federalregister.gov/2015-27840.pdf. • • 54 Hospital Discharge Planning: A Guide for Families • Construction • Multi-Party and Caregivers, Family Caregiver Alliance, https: • Personal Injury • Professional Liability //caregiver.org (last visited June 15, 2016); Banja, supra note 5; L. Halasyamani et al., Transition of care BARRY ROSS,ESQ., MBA for hospitalized elderly patients—development of a (818) 840-0950 discharge checklist for hospitalists, 1 J. Hosp. Med. www.ROSSmediation.com 354 (Nov. 2006). 55 Banja, supra note 5. See also 2014 MEMBER VALUE REPORT, REGIONAL ADVOCACY, LOS ANGELES COUNTY, HOSPITAL ASS’N OF S. CAL. 4 avail able at http://www.hasc .org/sites/main/files/file-attachments/final_for_print _hasc_mvr_with_cover2.pdf (last visited June 15, 2016) (“Resisted the city attorney’s request to adopt his homeless protocol as a standard policy for all hospitals. Hospitals are now encouraged to adopt their own policy and protocols.”) [hereinafter 2014 MEMBER VALUE REPORT]. A. Thomp son, Letter in Opposition, CMS proposed changes to discharge requirements, The Am. Hosp. Ass’n (January 4, 2016), available at http://www.aha.org/advocacy-issues/letter /2016/160104 -cl-cms3317p.pdf [hereinafterThompson]. 56 Thompson, supra note 55. 57 CMS Statement of Deficiencies and Plan of Cor- rections—Southern Nevada Adult Mental Health Services, Patient #1, March 20, 2013 (on file at the Office of the L.A. City Attorney). 58 Id. 59 Id. 60 Id. 61 Id. 62 Id. City and County of San Francisco v. State of Nevada, No. CGC-13-534108 (S.F., Cal. Super. Ct. Sept. 10, 2013). 63 Complaint at 1-2, People v. Gardens Reg’l Hosp. & Med. Ctr., Tri-City Reg’l Med. Ctr., No. BC 576996 (L.A. Super. Ct. 2015). 64Woman Blames Hospital In Sun Valley After Sister With Mental Illness Disappears, CBS LA NEWS, Mar. 31, 2016, available at http://losangeles.cbslocal.com. 65 Mentally Ill Woman Last Seen Exiting Taxi In Mid- City Area Found Safe, CBS LA NEWS, Apr. 3, 2016, available at http://losangeles.cbslocal.com. 66 Gardens Reg’l Hosp., No. BC 579669. 67 People v. Pacifica Hosp. of the Valley, (filing pending 2016). 68 See People v. Beverly Hosp. of Montebello, No. BC 530206 (L.A. Super. Ct. 2013); People v. Glendale Adventist Med. Ctr., No. BC 555301 (L.A. Super. Ct. 2014); Gardens Reg’l Hosp., No. BC 579669. 69 WELF. & INST. CODE §§15610-15610. See also Elder and Dependent Adult Abuse, California Courts, http://www.courts.ca.gov. 70 PENAL CODE §368. 71 PENAL CODE §368 (c); WELF. & INST. CODE §15656 (a). 72 See 2014 MEMBER VALUE REPORT, supra note 55. 73 See Kathleen S. Morris, San Francisco and the Rising Culture of Engagement in Local Public Law Offices, in WHY THE LOCAL MATTERS: FEDERALISM, LOCALISM, AND PUBLIC INTEREST ADVOCACY 51, 52-53 Kathleen Calussen et al. eds 2010) and Kathleen S. Morris, Expanding Local Enforcement of State and Federal Consumer Protection Laws, 40 FORDHAM URBAN L.J., 1903, 1915- 40 (2013). 74 Backer, supra note 37.

Los Angeles Lawyer July/August 2016 25 FASHIONby Larry C. Russ and Nathan D. Meyer SENSE

Preserving a clothing brand requires a carefully analyzed application of the four main instruments of protection MCLE ARTICLE AND SELF-ASSESSMENT TEST By reading this article and answering the accompanying test questions, you can earn one MCLE credit. To apply for credit, please follow the instructions on the test answer sheet on page 29.

property law is often a dif - The resulting case is Ugg Holdings, Inc. v. Severn.2 Ugg Hold - INTELLECTUAL ficult concept for young ings merged with and was acquired by Deckers between the filing companies in the fashion industry to focus on, with business and of the case and the opinion, and so the plaintiff can be described as marketing issues effectively becoming all-consuming. Nevertheless, Deckers. The court found the mark not to be generic, based its as a fashion company matures, protection of the brand becomes findings on key pieces of evidence, all of which offer guidance to essential to continued success. Often, by the time a brand gains trac- mark holders. Not ably, the Oxford English Dictionary (Am eri can tion, foreign entities have registered the trademarks abroad or intro- edition) had described “Ugg” as a generic type of sheepskin boot; duced knockoffs, causing avoidable headaches to the senior rights this evidence was bad for Deckers, but Deckers had written to the holder. Fundamental intellectual property protections are thus a publisher of that dictionary and successfully demanded the defini - necessity for the owner of a young brand. The key protections are tion be changed. Moreover, survey evidence showed that consumers trademark, trade dress, copyright, and design patent. generally viewed “Ugg” as a brand, not a “common name.”3 Adver - Turning first to trademarks, a trademark primarily protects against tise ments referencing “Uggs” were almost exclusively from Deckers consumer confusion by protecting a word, phrase, symbol, or design or its predecessor in interest. The fact that “Uggs” was generic in that identifies and distinguishes the source of goods of one party Australia did not matter.4 from another. Trademarks can be words, symbols—and at least in Ugg Holdings offers a few important lessons on brand protection. theory, sounds or smells. Some of the more basic trademarks are First, brand owners must monitor and protect the mark. Although obvious—Nike, Bloomingdale’s, Forever 21, and other source- it was not vigilant as it should have been, Deckers had policed its denoting names all function as trademarks. mark by writing to the Oxford English Dictionary. In addition, Trademarks are often symbols, such as the Nike swoosh or brand owners should strive to be exclusive. Deckers was the only Burberry plaid. When it comes to denim, it is common for the manufacturer truly advertising “Uggs” during the relevant period. stitching on the back pocket to function as a trademark. Companies Establishing exclusivity, however, goes hand-in-hand with monitoring. such as Levi’s, Seven for All Mankind, and Citizens of Humanity If a company does not police its mark, others may use it. Finally, it use distinctive stitching to mark a set of jeans as their own. Use of is essential to make consumers aware of a mark as a mark. A major some form of distinctive pocket stitching is near-universal in the point in Deckers’s favor was that a consumer survey indicated that industry. Other types of unique stitching on denim products have consumers viewed its mark as a brand and not just a type of product. also been the subject of trademark protection, for example as with If there is a risk of a brand going generic, efforts to inform consumers True Religion. can be essential. For example, Xerox has run advertisements stating, Because trademarks are about consumer protection (and not pro- “You cannot ‘xerox’ a document, but you can copy it on a Xerox tection of intellectual property per se), a trademark is only enforceable Brand copying machine.”5 Even if the campaign is not a commercial if it actually serves as identifying the maker or service provider of success, the effort may carry some weight with the U.S. Patent and the product or service. If consumers no longer associate the name Trademark Office (USPTO). with a specific company’s product, then the mark may become Although it is possible to sue for trademark infringement based generic and undergo what some refer to as genericide. For example, on common law, the preferred approach is to register a mark with Thermos was the trademark for a vacuum flask made by a specific the USPTO. This can be done on an intent-to-use basis before a company. However, over time, so many consumers came to associate mark is even used or at any time after use, even decades later. the term “thermos” with vacuum flasks in general that Thermos Preuse or intent-to-use registration is most common in the context lost its trademark protection.1 Genericide is rare, but it is worth of a company’s effort to expand a mark. For example, Nike mentioning, as evident in the case of Ugg sheepskin boots. registered its mark in connection with sport balls before expanding While creation of enforceable trademarks is relatively straight- into that line. forward in the fashion industry, a company occasionally may wait A registered trademark can usually be obtained relatively cheaply too long to police its own trademark. In the early 1970s, Ugg boots, for a few thousand dollars and can last forever as long as the mark a generic term for a style of sheepskin boots, became popular in does not infringe on another’s mark and is properly maintained. In Australia and New Zealand and were sold by a range of companies. addition, a federal trademark registration comes with favorable pre- Surprisingly, the mark remains generic to this day in Australia. In sumptions and with the possibility of recovering attorney’s fees. It 1979, a single manufacturer, which was subsequently bought by also allows owners to use the symbol “®” on their products, which Deckers Outdoors, began manufacturing and selling Ugg-style boots usually has a deterrent effect in terms of infringement. in the United States. It obtained a registration in the mark “Ugg” in Trademark actions are generally filed in federal court, although 1996, although marks including designs were registered earlier. a state action is technically permissible. Trademark-related claims Although another company, Severn, began selling Ugg-style boots have also been brought before the International Trade Commission under the name “Ug” in 1989, Deckers did not begin writing cease- (ITC), a separate judicial body that deals with importation. For and-desist letters until 1998 and did not sue for infringement until instance, the Converse shoe company recently and successfully sought 2004. Based on this delay, Severn’s primary defense was genericide. relief before the ITC to enjoin the importation of Chuck Taylor

Larry C. Russ is a founding partner and cohead of the litigation department at the Los Angeles law firm of Russ August & Kabat. He represents apparel companies in copyright, trademark infringement, and business litigation matters. In addition, he is a co-owner of American Rag Cie, an LA-based chain of retail stores. Nathan D. Meyer is a partner at Russ August & Kabat, where he focuses his practice on general litigation and intellectual property matters, with an emphasis on the apparel industry.

Los Angeles Lawyer July/August 2016 27 lookalikes that infringed Converse trade dress.6 at a minimum, to file applications to register core marks in countries The standard of liability in a trademark or trade dress case is where the company is most likely to distribute its products. “likelihood of confusion.” In other words, whether a consumer is Trade Dress likely to be confused into believing that the allegedly infringing product is in some way associated by or sponsored by the senior Turning next to trade dress, the more general goal of a fashion brand mark.7 There are factors in determining the likelihood of confusion, is to protect—for lack of a better word—the “look” of the brand. which vary slightly from circuit to circuit, but the tests all involve This is an achievable goal in the United States, but with a very high some mix of the strength of the marks, the similarity of the marks, degree of difficulty. Under the doctrine of product design trade dress, presence of actual confusion, intent, similarity of product lines and the design of an article of apparel (or any product) can be protected, channels of trade, and the sophistication of customers. As with all but only if that design has acquired distinctiveness, commonly known multifactor tests, it is often difficult to predict how a jury will assess as secondary meaning. “Secondary meaning” can best be described the evidence. as a distinctive feature or element of a product that identifies the In terms of economic damages, trademark plaintiffs may collect source of the goods without the consumer’s having to see the name their own lost profits, the disgorgement of the defendant’s profits or of the manufacturer. The classic shape of a Coke bottle is one a reasonable royalty, and request attorney’s fees in “extraordinary” example, as are the three black stripes on Adidas white tennis shoes. cases. If the damage to the mark is bad enough, the defendant may A fairly recent U.S. Supreme Court case that highlights the challenges also be forced to pay for corrective advertising. In such cases, the of proving secondary meaning in apparel cases is Wal-Mart Stores infringer must pay for advertising to address misconceptions stemming v. Samara Brothers.10 from the infringing actions of the defendant. In that case, Wal-Mart copied Samara’s line of children’s clothing. Samara sued for trademark infringement, claiming that, like the First to File Nike swoosh, its designs were inherently distinctive. The Court held In the area of brand expansion, there are major advantages to being otherwise, stating that “a product’s design is distinctive, and therefore the first to file. Trademark rights in the United States are based on protectable, only upon a showing of secondary meaning.”11 Samara use, which comes in two forms under trademark law. The first is was not able to and did not even try to prove that consumers could use in the literal sense in that the mark is actually being used. The identify Samara as the source of its clothing without looking at its second is created by filing an intent-to-use mark with the trademark label. In order for a product or clothing design to have trademark office with a bona fide intent to use.8 Once an application of intent protection, consumers must independently recognize the design and to use a mark has been filed and registered, the mark is deemed to the source of the design. Samarra’s loss notwithstanding, there have have been used as of the date of filing. Thereafter, the trademark been some recent successes. owner is allowed up to three years after its application is approved Christian Louboutin sued to show actual use of the mark.9 Yves St. Laurent (YSL) in an Fashion companies usually start small in size and breadth of effort to protect Louboutin’s offerings. A company may start out offering only shoes, bags, jeans, high-gloss red shoe soles or T-shirts, with the goal of expanding into a full line if the business and sought a preliminary is successful. If the business files only an actual use mark, someone injunction based on YSL’s else may start using it—particularly if the name is at least somewhat monochrome shoes, which descriptive or based on a semicommon given name. In addition, had red soles as well as red others may file their own intent-to-use mark in adjacent areas of uppers. The district court commerce, making expansion difficult. ruled for YSL, stating that For example, imagine that two completely unrelated and non- as a matter of law, color competing companies with somewhat similar names enter the mar- could never have secondary ketplace. One sells shoes and the other sells belts. Both do well in meaning.12 The Second Cir - their respective markets and are considering expansion into purses cuit reversed, holding that and clothing. Assuming confusion is likely, who gets to use the name the glossy red sole was a on the new goods? The answer is whoever uses first, either by actually valid trademark, based on an extensive showing that consumers creating and selling goods or by filing an intent-to-use application to (including Jennifer Lopez) recognized the shoes largely from register the mark with the USPTO. Louboutin’s media coverage, advertising expenditures, and successful The central lesson here is to think and plan ahead. If a fashion sales of lacquered red-soled shoes. However, the court limited company intends to expand its brand, filing a few intent-to-use Louboutin’s trademark rights to contrasting red lacquered soles— applications to register the mark is a quick, easy and relatively cost- e.g., black shoes with red soles. In light of the narrowing of the effective means of protecting its mark. Initiating a dispute with a trade dress, the Second Circuit found that YSL’s shoes did not infringe company that has beaten you to the trademark office is much, much the trade dress.13 harder than filing applications and can be extremely costly. For Louboutin, this was in many ways a win from a design per- spective, since it affirmed the distinctiveness of the red soles, as long International Trademark Rights as they were contrasting. The court’s finding is consistent with the It is not enough to focus only on trademark rights in the United way the shoes were actually advertised.14 For companies, the lesson States. One of the most frustrating experiences of successful small from this case is that if consumers truly recognize a mark, courts apparel companies is the challenge of registering trademarks in will offer protection. For attorneys, however, another lesson is there foreign countries. There are professional squatters in China, Hong are risks to taking an overly aggressive legal position. Louboutin Kong, Taiwan, Korea, the Philippines, and many other countries may have gone too far in arguing that YSL’s monochrome shoes who monitor trademark filings in the United States. These squatters would cause confusion, and YSL did likewise in arguing that con- will register the same marks in their own countries with the hope of sumers would not recognize contrasting red soles as originating with extorting money from a U.S. company when the company seeks to Louboutin. Louboutin successfully reversed a ruling that its shoes register marks abroad. The only sure way to avoid this problem is, had no secondary meaning, but that ruling would not have existed

28 Los Angeles Lawyer July/August 2016 MCLE Test No. 259 MCLE Answer Sheet #259 FASHION SENSE The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. You may take tests from back Name issues online at http://www.lacba.org/mcleselftests. Law Firm/Organization

1. What is the term of a design patent filed today? 12. Adam begins selling jeans under the mark “Shazam” Address A. 14 years from the date of grant. on February 1, and registers on March 1. Brenda registers B. 15 years from the date of grant. an intent to use a mark for “Shazam” in connection City C. 20 years from the filing date. with jeans on January 1, but does not commence actual State/Zip D. 17 years from the date of grant or 20 years use until April 1. Who has priority? E-mail from the filing date, whichever is longer. A. Adam. Phone B. Brenda. 2. Trademarks must be capable of being expressed State Bar # in words. 13. All else being equal, which of the following has True. the highest fees and costs? INSTRUCTIONS FOR OBTAINING MCLE CREDITS False. A. Copyright. 1. Study the MCLE article in this issue. B. Trademark. 2. Answer the test questions opposite by marking 3. A brand new clothing design can have trademark C. Design Patent. the appropriate boxes below. Each question protection in the United States. has only one answer. Photocopies of this True. 14. A company can warehouse trademarks for a “rainy answer sheet may be submitted; however, this False. day” up to three years. form should not be enlarged or reduced. True. 3. Mail the answer sheet and the $20 testing fee 4. A brand new fabric print can have copyright pro- False. ($25 for non-LACBA members) to: tection in the United States. Los Angeles Lawyer True. 15. Even if consumers view a mark as generic and do MCLE Test False. not associate it with the mark holder, there are actions P.O. Box 55020 the holder can take that per se will render the mark Los Angeles, CA 90055 5. Can a clothing design (e.g. a cheerleader uniform) valid. Make checks payable to Los Angeles Lawyer. have copyright protection? True. 4. Within six weeks, Los Angeles Lawyer will A. Yes. False. return your test with the correct answers, a B. No. rationale for the correct answers, and a C. It depends. 16. If the ornamental design underlying a design patent certificate verifying the MCLE credit you earned through this self-assessment activity. acquires secondary meaning, it can become a trademark 6. The International Trade Commission can prevent or trade dress. 5. For future reference, please retain the MCLE test materials returned to you. sale of infringing goods. True. True. False. ANSWERS False. Mark your answers to the test by checking the 17. Which of the following is not a potential form of appropriate boxes below. Each question has only 7. It is possible to “use” a trademark without actual relief in a copyright infringement action? one answer. use. A. Actual damages to the plaintiff. True. B. Punitive damages. 1. n A n B n C n D False. C. Infringer’s profits. 2. n True n False D. Statutory damages. 3. True False 8. Product design rights vary significantly between n n the United States and the European Union. 18. Which of the following is not a potential form of 4. n True n False True. relief in a trademark infringement action? 5. n A n B n C False. A. Disgorgement of infringer’s profits. 6. n True n False B. Corrective advertising. 7. n True n False 9. It is possible to obtain statutory damages even if C. Attorney’s fees (in some cases). infringement begins prior to registration. D. Statutory damages. 8. n True n False True. 9. n True n False 19. False. Which of the following is not a potential form of 10. n A n B n C relief in a design patent infringement action? 11. n A n B n C n D 10. Which of the following can form the basis of an A. Disgorgement of infringer’s profits. infringement action without registration? B. Reasonable royalty. 12. n A n B A. Copyright. C. Attorney’s fees (in some cases). 13. n A n B n C B. Trademark. D. Statutory damages. 14. n True n False C. Patent. 15. n True n False 20. Which of the following cannot be copyrighted due 11. What is the standard of liability for trademark in - to its status as a useful article? 16. n True n False fringement? A. An article of clothing. 17. n A n B n C n D A. Likelihood of confusion. B. The hull of a boat. 18. n A n B n C n D B. Actual confusion. C. An architectural work. 19. n A n B n C n D C. Intent to trade on goodwill. D. Substantial similarity. 20. n A n B n C

Los Angeles Lawyer July/August 2016 29 if the lawsuit hadn’t been filed in the first place. not protectable in the United States without a very strong showing Another recent and significant trademark infringement decision of secondary meaning, the rules are different in the European Union. stems from Converse’s efforts to protect the design of its iconic Under the law of community design, a design that has distinctiveness Chuck Taylor sneaker. Converse has been making Chuck Taylor similar to that required for a trademark in the United States can be shoes since before 1920, and there have been knockoffs for much of protected up to 25 years with registration and even be protected up that period. However, in recent years, Converse has attempted to to three years without a registration. For example, in 2014, a company crack down on knockoffs. Converse sought and obtained a trade called Karen Millen was able to successfully sue in Ireland for dress registration for its design in 2013, but rather than filing an infringement of unregistered community designs.20 In the United action in court, Converse filed before the International Trade States, these same designs would almost certainly have been held Commission under the Tariff Act, which bars importation of goods unprotectable under the holding in Wal-Mart. The In novative Design that infringe a valid trademark. In a 149-page decision,15 Chief Protection and Piracy Act marked one attempt to pass laws analogous Administrative Law Judge Charles E. Bullock of the ITC found the to community design in the United States.21 Chuck Taylor trademark enforceable. The opinion engages in a Copyright detailed analysis as to which shoe designs infringed and which did One major type of fashion brand protection is copyright. Copyright not. The judge consider - covers creative original works, and with limited statutory exceptions ed Converse’s massive (e.g., boat hulls and architectural works), copyright is not available sales and adver- for “useful articles,” such as clothing, except to the extent that the tisement design elements are separate and independent of the useful article.22 For this reason the Copyright Office will reject most attempts to register copyrights in clothing designs. However, copyright protection in the fashion world has traditionally applied to 1) prints, 2) denim pocket designs, 3) lace embroidery, and 4) most dec- orative embellishments. The boundary between a useful article and copyrightable material, however, is currently in flux.23 This May, the U.S. Supreme Court granted certiorari over the years, the defendants’ in Star Athletica v. Varsity Brands24 on the issue of how to deliberate copying of the design, and evidence of similar historic tease out design elements from a useful article. In that case, the third-party use over the years. The history of similar third-party use design at issue was a cheerleading uniform. The plaintiff in that case was discounted on the grounds that consumers were not aware of was able to convince the Copyright office and the Sixth Circuit that this use. The ITC judge found that Converse’s registration was valid, the design was separately copy rightable. The Supreme Court has albeit as a close call.16 granted certiorari on the precise test for separating a design from a The judge then engaged in a shoe-by-shoe infringement analysis, useful article. Currently, there are a number of separate tests that finding some shoes to be infringing and others not. Then, based upon vary ac cording to the circuit. A decision expected in 2017. a showing that Converse manufactured in the United States, the judge Regardless of the outcome in Star Ath letica, competitors are barred importation of the infringing shoes. The ruling may be reviewed barred from creating works that are “substantially similar” to the by the full ITC, and if it is upheld, the decision can be appealed to the copyrighted work.25 In the fashion industry, copyright infringement Federal Circuit.17 If upheld on appeal, the ruling could lead to a broad involves reasonably blatant copying, with a nearly identical print order barring imports of the look-alike sneakers. appearing on a nearly identical garment.26 Although the underlying Although the ITC decision offers a thorough test for secondary garment is almost never copyrightable, the fact that the garment is meaning, other courts provide a more general test, with some variation identical is often strong evidence of copying and access. among the circuit courts. In the Ninth Circuit, courts follow a seven- The filing fee for copyright registration is inexpensive—only $55 part test, focusing on consumer protection (surveys), extent and if filed electronically, which is easily done, often without an attorney. exclusivity of use, actual confusion, copying, and advertisement.18 When a design is copied, however, a lawsuit cannot be filed until The test is roughly analogous to those in other circuits and before the owner has applied for a copyright registration in the design— the ITC. except in the Ninth Circuit, which requires the copyright application In short, once a brand becomes famous, its look may be protectable. be fully processed by the Copyright Office before a suit can be filed. But establishing a brand takes time, as one of the key elements of When a deposit is submitted to the Copyright Office in connection trade dress is a period of exclusive use. Design patent can be a means with registration, the Library of Congress has the option to place of achieving this exclusivity, however. If a company is using product the deposit in its collection. Early registration is strongly encouraged, design as a means of distinguishing itself in the marketplace, it is and a registrant’s preinfringement contribution to the Library of important to consistently and aggressively link the product design Congress is rewarded in the form of increased potential damages to the brand, as Louboutin accomplished with his lacquered red against infringers.27 If registration predates infringement, or if the soles. Trade dress can be registered in the same manner as a trademark, copyright application for the design is filed within 90 days of publi- but the trademark office will insist on evidence of secondary meaning. cation, a copyright plaintiff that prevails can elect statutory damages28 Trade dress rights are enforced in the same manner as trademarks and may be able to obtain attorney’s fees.29 Copyright lawsuits must and with the same damage models.19 be filed in federal court.30 Community Design Rights in Europe Design Patents Another protection is community design rights, which are much Last on the list of significant protection in the fashion industry is easier to get in Europe. While the “look” of a piece of clothing is the design patent, which protects ornamental characteristics on a

30 Los Angeles Lawyer July/August 2016 1 July-August 2016 Master.qxp_Layout 1 7/1/16 1:02 PM Page 31

useful article. This type of protection is par- ion companies is to be well versed in the AG, 787 F. 3d 1368 (Fed. Cir. 2015) (Swiss watch ticularly common in shoes and accessories. pros and cons of the core protections and to company registered iWatch without a real intent to use, and the mark was canceled). For example, Tieks shoes with their bright keep track of the formalities that must be 9 37 C.F.R. §2.89. The trademark owner has six blue soles, are design patented, as are Crocs. followed in order to grow or protect a brand. months from the issuance of a notice of allowance, In terms of brand protection, one inter- but the period can be extended five times, for a total esting aspect of design patents is that it is of three years. possible to use a design patent in order to 10 Wal-Mart Stores v. Samara Bros., 529 U.S. 205 build up the protection needed for trade (2000). 11 Id. at 216. 31 dress. During the 15-year term of a design 12 Christian Louboutin S.A. v. Yves Saint Laurent patent from the time of issuance, no one can Am., Inc., 778 F. Supp. 2d 445, 457 (S.D. N.Y. 2011), copy the design, and the patent holder has rev’d in part, 696 F. 3d 206 (2d Cir. 2012). (“[T]he exclusive use. This period of exclusivity allows Court cannot conceive that the Lanham Act could a company to develop an ornamental design, serve as the source of the broad spectrum of absurdities that would follow recognition of a trademark for the secure patent protection, patent it, and use use of a single color for fashion items.”). the 15-year grace period granted by the patent 13 Christian Louboutin, 696 F. 3d at 228. process to attempt to develop secondary 14 Although Louboutin has marketed a monochrome meaning. For instance, Moen, a faucet maker, red shoe, the court held that Louboutin’s secondary was able to do this with one of its faucets,32 meaning was associated with contrast, citing press on this point. Id. but the most well-known example was Bayer 15 Certain Footwear Prods, Inv. No. 337-TA-936 Aktiengesellschaft, which used the period of (I.T.C. Nov. 17, 2015). exclusivity in the aspirin patent to build its 16 Id. at 56. Bayer brand in the United States.33 17 19 C.F.R. §210.42(h) (discretionary review); 28 Patent registration is expensive, more akin U.S.C. §1295(a)(6) (Federal Circuit jurisdiction). (Editor’s Note: The full ITC ruled on this matter sub- to the complex process of a utility patent sequent to publication of the present article.) filing than a copyright or trademark regis- 18 Avery Dennison Corp. v. Sumpton, 189 F. 3d 868, tration. The protection offered by a patent 876 n.6 (9th Cir. 1999). is also relatively short. The patent application 19 15 U.S.C. §1052(f), TMEP R. 1212, available at also must be filed quickly, within a year of http://www.uspto.gov. 20 sale to the public.34 One key aspect of a Karen Millen Fashions Ltd. v. Dunnes Stores, Ltd., Case C-345/13 (Ct. of J. of E.U. June 19, 2014). patent, as opposed to copyright or trademark, 21 See, e.g., H.R. 2511 (112th Cong., 2011), S. 3728 is that protection is contingent on marking (111th Cong., 2010), available at Thomas.loc.gov. the product with a patent notice. If a patent 22 See 17 U.S.C. §101. owner fails to mark its products with the 23 See, e.g., Lyle Denniston, Useful or creative: a look patent number, it will not be able to recover at design protection, Scotusblog, May 2, 2016, available at http://www.scotusblog.com. monetary damages, although there is an 24 Star Athletica, L.L.C. v. Varsity Brands, Inc., et al., exception if it is proven the infringer was on No. 15-866 (Jan. 7, 2016). actual notice of the infringement and con- 25 Nichols v. Universal Pictures Co., 45 F. 2d 119, tinued to infringe thereafter.35 In patent 121-22 (2d Cir. 1930) (Hand, J.). 26 enforcement lawsuits, the damages available There are dozens (potentially hundreds) of these cases filed every year in Los Angeles federal court; are roughly equivalent to those available in nearly all of them settle, and very few generate published the trademark context. opinions. For an example of this type of case, see L.A. Printex Indus., Inc. v. Aeropostale, Inc., 2012 U.S. Future Developments App. Lexis 12033 (9th Cir. June 13, 2012). Unlike utility patent law, the legal environ- 27 This is how the Library of Congress has built up ment surrounding brand building has been most of its collection, and it maintains copyright 1 King Seeley Thermos Co. v. Aladdin Indus., Inc., deposits dating back to the War of 1812. stable over the past 10 years, particularly 321 F. 2d 577 (2d Cir. 1963). 28 Up to $30,000 per infringement if not willful, up compared to the 1990s and early 2000s. That 2 Ugg Holdings, Inc. v. Severn, No. CV 04–1137– to $150,000 if willful. 15 U.S.C. §504(c). said, there may be change on the horizon. JFW, 2005 WL 5887187 (C.D. Cal. Feb. 23, 2005). 29 17 U.S.C. §§412, 504, 505. First, the Supreme Court will presumably 3 “Coke” is not generic, despite its use to refer to car- 30 28 U.S.C. §1338(a). 31 soon resolve the boundary between a useful bonated soft drinks generally, and “Google” is not a For design patents filed before May of 2015, it was 14 years. 35 U.S.C. §173. article and a design in the Star Athletica case generic verb; most people still know each word as a brand name. A term is not generic as long as consumers 32 Kohler Co. v. Moen Inc., 12 F. 3d 632 (7th Cir. in the coming term. Although the decision also understand it designates a source. Kleenex and 1993). is unlikely to radically change the law, it Xerox are generally considered borderline. 33 Bayer lost the mark and all of its other U.S. assets will provide much-needed uniformity on this 4 Ugg Holdings, 2005 WL 5887187. when the American government seized them and auc- issue across all circuits and may shift the 5 See Megan Garber, ‘Kleenex Is a Registered Trade - tioned them off during World War I. Bayer AG bought the US mark back in the 1990s. See, e.g., http://www needle somewhat on the scope of copyrighta- mark’ (and Other Desperate Appeals), THE ATLANTIC (Sept. 25, 2014), available at http://www.theatlantic .bayer.com/en/logo-history.aspx. bility. .com. 34 This is the “on sale bar” doctrine. See generally 2 Proponents of the European-style com- 6 Certain Footwear Prods, Inv. No. 337-TA-936 (I.T.C. DONALD S. CHISUM, CHISUM ON PATENTS, §6.02 (2015). munity design protection have not given up, Nov. 17, 2015). 35 Nike, Inc. v. Wal-Mart Stores, 138 F. 3d 1437 (Fed. and there may be future legislative efforts. 7 15 U.S.C. §§1114(1), 1125(a). Cir. 1998) (“In order to satisfy the constructive notice 8 provision of the marking statute, Nike must have Converse’s somewhat successful use of the 15 U.S.C. §1051(b)(1). Bona fide means having, based on an objective view of the circumstances, a shown that substantially all of the Air Mada Mid ITC to ban importation of infringing goods good faith intention to eventually use the mark in shoes being distributed were marked, and that once may also presage further use of the ITC. commerce. In other words, marks cannot be ware- marking was begun, the marking was substantially Overall, the key for counsel who advise fash- housed for a rainy day. M.Z. Berger & Co. v. Swatch consistent and continuous.”).

Los Angeles Lawyer July/August 2016 31 BY ASA S. HAMI FORCINGISSUE THE

Section 303 of the Bankruptcy Code determines who may be subject to an involuntary bankruptcy

bankruptcy is always an option petition, the amount of the petitioners’ claims against the FILING for a financially distressed com- entity, and the chapter under which they are filing the pany. A wide array of reasons for seeking bankruptcy case—chapter 7 or 11 are the only two available for an protection exists, including to stop an aggressive creditor involuntary case. The period between the date the petition from grabbing valuable assets, stay contentious litigation is filed and the date the bankruptcy court enters an order draining a company’s finances, avoid an impending for relief—an adjudication that the involuntary bankruptcy adverse judgment, or simply restructure crippling debt. filing was appropriate—is known as the gap period. Whatever the impetus for filing bankruptcy, it is a decision Threshold Considerations the distressed company usually makes voluntarily. How- ever, the Bankruptcy Code also grants creditors the ability Parties contemplating an involuntary petition should to commence a bankruptcy against a company through consider two threshold issues before taking the step to the filing of an involuntary bankruptcy petition under file the petition: 1) whether the alleged debtor is eligible certain circumstances.1 It is a powerful tool creditors to be an involuntary debtor and 2) whether the petitioners may wield, albeit one that should be used sparingly. Commencing an involuntary bankruptcy case is simple. Asa S. Hami is a bankruptcy attorney with SulmeyerKupetz, A Creditors file with the bankruptcy court a form that iden- Professional Corporation, in Los Angeles. He represents debtors, tifies the name of the entity against which the involuntary creditors, creditors’ committees, trustees, and other parties in

petition is being filed, the names of the parties filing the bankruptcy and insolvency-related matters. KEN CORRAL

32 Los Angeles Lawyer July/August 2016 Los Angeles Lawyer July/August 2016 33 are eligible to file the petition. These issues If the involuntary petition is not timely ability to move for such relief is potent. Ap - will play a role in the bankruptcy court’s deter - controverted, the bankruptcy court must pointment of a trustee would transfer control mination whether to enter an order for relief enter an order for relief.15 However, if the over the alleged debtor’s assets and operations or dismiss the case.2 petition is opposed the court conducts an to the trustee who essentially displaces current Section 303(a) of the Bankruptcy Code evidentiary hearing to determine whether management. This relief is available whether governs the first threshold issue.3 The universe an order for relief should be entered.16 The the involuntary case is filed under chapter 7 of parties against whom an involuntary peti- court evaluates a number of issues in con- or chapter 11, although the standards for tion may be filed is narrower than those that sidering the petition. First, the court deter- ap pointment differ slightly between the two may file a voluntary petition, but the class mines whether the “petitioning creditor” chapters. of potential involuntary debtors is still broad. requirements are satisfied, to wit: whether Section 303(g) provides that, in a chapter With limited exception, an involuntary peti- the petitioners hold the amount and type of 7 case, the court may appoint an interim tion may be filed “against a person.”4 The claims required under Section 303(b). Second, trustee “if necessary to preserve the property code defines “person” expansively to include the court determines whether the alleged of the estate or to prevent loss to the estate.”23 an “individual, partnership, and corporation.”5 debtor should be in bankruptcy and partic- This includes, for example, scenarios in which Aside from farmers, the only “person” placed ularly whether 1) “the debtor is generally “assets are missing or are in danger of being beyond the reach of an involuntary petition not paying such debtor’s debts as such debts dissipated,” “the debtor’s assets are perish- is “a corporation that is not a moneyed, busi- become due unless such debts are the subject able,” interpreted “broadly to include ‘not ness, or commercial corporation.”6 Courts of a bona fide dispute as to liability or only that which may deteriorate physically construe this phrase to include eleemosynary amount,” or 2) “within 120 days before the but that which is liable to deteriorate in price or other nonprofit organizations.7 Other ex - date of the filing of the petition, a custodian, and value,’” or “the debtor or insiders have ceptions not explicit in the code include: 1) other than a trustee, receiver, or agent ap - resisted examination into the debtor’s af- a dissolved corporation (unless it still exists pointed or authorized to take charge of less fairs.”24 In the final analysis, “the appointment under state law for purposes of winding up than substantially all of the property of the of an interim trustee lies within the sound its affairs)8 and 2) individuals barred from debtor for purposes of enforcing a lien against discretion of the bankruptcy court, guided in filing bankruptcy based on the dismissal of such property, was appointed or took pos- large part by the best interests of the credi- a prior bankruptcy case.9 session.”17 If the court finds in favor of the tors.”25 Separate from any bond the court Section 303(b) governs the second thresh - petitioners, the order for relief is entered, may order on motion by the alleged debtor, old issue.10 Who may be a petitioner varies and the case progresses as would any volun- the petitioners’ posting of a bond sufficient from debtor to debtor. If the petition is filed tary bankruptcy case; if not, the bankruptcy to indemnify the debtor for costs, attorney’s against a corporation or individual, it could case is dismissed. fees, expenses, and damages “allowable under be filed by creditors holding noncontin gent Petitioners who prosecute an involuntary § 303(i)” is an express condition to the ap- unse cured claims in the aggregate of $15,77511 petition that results in the entry of an order pointment of an interim trustee.26 that are not subject to “bona fide” dispute.12 for relief may seek a priority claim for attor- The Bankruptcy Code does not expressly If the entity has 12 or more creditors, the ney’s fees and costs incurred commencing permit the appointment of an interim trustee petition must be signed by at least three such and prosecuting the involuntary petition.18 in an involuntary bankruptcy case filed under creditors; if fewer than 12 creditors, the peti- The petitioners will need to establish that chapter 11. In fact, the code’s explicit allow - tion must be signed by at least one such cred- their efforts made a substantial contribution ance of the appointment of an interim trustee itor.13 If the petition is filed against a part- to the bankruptcy estate.19 However, the peti- in a chapter 7 case could be construed as an nership, it could be commenced by fewer tioners’ claim that qualified them to file the implicit prohibition against such an appoint- than all of the general partners, or if all of involuntary petition in the first place remains ment in a chapter 11 case. Never theless, rely- the general partners are in bankruptcy, by a a general unsecured claim—with a lower ing on the language in Section 1104 generally general partner, the trustee of the general payment priority—despite successful prose- addressing the appointment of a trustee in partner, or a holder of a claim against the cution of the petition. On the flipside, peti- all chapter 11 cases, courts permit appoint- partnership.14 tioners could be held liable for the alleged ment of an interim trustee in an involuntary debtor’s fees and costs, or other damages, if chapter 11 case.27 Courts, therefore, apply Prosecuting The Petition the petition is dismissed. the standard for appointment of a trustee in Once the petition is filed, the case runs much Various types of pretrial remedies could a voluntary chapter 11 case, which generally like a conventional lawsuit during the gap be pursued during the gap period before the requires a showing of some form of gross period in the petitioners’ pursuit of an order court adjudicates the petition. The alleged mismanagement or serious misconduct on for relief. A summons is issued to, and served debtor could seek to compel the petitioners the part of the person controlling the debtor.28 on, the alleged debtor together with the invol- to post a bond pending entry of an order for Risks untary petition, and the debtor must file a relief.20 The bond would serve to indemnify response within 21 days after the summons the alleged debtor for the potential damages Filing an involuntary petition carries risks is served (plus three additional days if the the court may later award to it against the and benefits, and the pros and cons should summons was served by mail). Its response petitioners under Section 303(i) if the case be vetted thoroughly before taking the plunge. could come in one of the following forms: ultimately is dismissed.21 The most notable risk is the exposure to lia- 1) an answer to the petition that denies or The petitioners, in turn, could seek the bility based on an unsuccessful petition. In admits the allegations in the petition and appointment of an interim trustee during the particular, if the case is dismissed (other than asserts affirmative defenses, 2) a motion gap period.22 If the need is grave, such as through the consent of the petitioners and un der Rule 12(b) of the Federal Rules of when serious mismanagement of the debtor the debtor), Section 303(i) authorizes the Civil Procedure, or 3) the filing of a voluntary is ongoing or an imminent threat of harm bankruptcy court to award costs, reasonable bankruptcy or motion to convert the case to to valuable assets is present, a motion to attorney’s fees, any damages proximately a voluntary case (essentially consenting to appoint an interim trustee could be filed con- caused by the filing of the involuntary petition, the involuntary petition). currently with the involuntary petition. The or punitive damages against the petitioners.29

34 Los Angeles Lawyer July/August 2016 With respect to an award of attorney’s fees and costs, the Ninth Circuit Court of Appeals views Section 303(i)(1) as a “fee- shifting” statute, not one imposing sanc- tions.30 As a result, courts faced with a request for attorney’s fees and costs under this section must consider the litigation as a whole, not whether the specific filing was well founded. This requires consideration of the “totality of the circumstances,” including “1) ‘the merits of the involuntary petition,’ 2) ‘the role of any improper conduct on the part of the alleged debtor,’ 3) ‘the reasonableness of the actions taken by the petitioning creditors,’ and 4) ‘the motivation and objectives behind filing the petition.’”31 There are only two prerequisites to award- ing fees and costs: 1) the court must have dismissed the petition on some ground other than consent of all parties and 2) the debtor must not have waived its right to recovery under this section.32 Bad faith is not a pre- requisite.33 Although the bankruptcy court is infused with wide discretion in determining whether or not to make the award,34 the petitioners’ risk of being hit with the judgment is high. Indeed, the Ninth Circuit has gone so far as to conclude that the Bankruptcy Code “creates a presumption in favor of an award of attorney’s fees”35 and “any peti- tioning creditor in an involuntary case… should expect to pay the debtor’s attorney’s fees and costs if the petition is dismissed.”36 Therefore, it behooves any creditor consid- into bankruptcy, the petitioners have limited higher priority claim. In other words, in addi- ering an involuntary petition to assess the any recovery on their claim to receipt of only tion to receiving no payment on the claim propriety of the petition before filing.37 a pro rata share of the generally limited funds that prompted commencement of the petition With respect to an award of damages available to pay all creditors pursuant to the in the first place, the petitioner now has under Section 303(i)(2), bad faith is a pre- Bankruptcy Code’s priority scheme. This incurred additional fees and expenses it may requisite.38 However, the mere finding of could result in no payment at all to a peti- be unable to recoup. bad faith does not guarantee an award of tioner on account of its claim. Indeed, more Finally, by filing the involuntary petition, punitive damages; discretion still lies with often than not, insufficient funds are present the petitioners open the door to being hit the court. Bad faith is measured by an objec- to pay all creditors in full. This is especially with “preference” liability to the extent they tive test that probes what a reasonable person true regarding payment of claims of general received any payments from the debtor within would have believed.39 Some courts permit unsecured creditors—in which class the peti- 90 days before the petition was filed. The an award of damages against a petitioner’s tioners’ claims necessarily fall—given that code empowers a trustee to avoid and recover counsel.40 such claims rank low on the hierarchy of as a preferential transfer any payments made Aside from liability stemming directly claims.44 And, absent a judgment from the to a creditor within 90 days of the filing of from an unsuccessful petition, even successful bankruptcy court adjudicating a claim nondis- the petition under certain circumstances.45 petitioners who obtain an order for relief are chargeable, the creditor will be unable to As a result, in addition to risking nonpayment exposed to the general risks, dangers, or hin- pursue collection of its claim after the bank- on its claim, a petitioner may now be com- drances that accompany every bankruptcy ruptcy case concludes. pelled to disgorge payment it previously case. Four are of note. First, the mere filing Third, and compounding the risk of not received on its claim. Creditors contemplating of the involuntary petition triggers the auto- receiving payment on the prebankruptcy an involuntary petition, however, have some matic stay under Section 362(a).41 Therefore, claim that served as the impetus for filing ability to mitigate this risk by delaying any the petitioners will no longer be permitted the petition in the first instance, petitioners filing to a date outside the 90-day preference to engage in any collection activities to pursue will incur attorney’s fees and costs preparing period if possible. their debt outside the bankruptcy case. A and prosecuting the involuntary petition Benefits violation of the automatic stay is subject to above and beyond their outstanding pre- the court’s contempt power and exposes the bankruptcy claim. Although they may seek Among others, some benefits to filing an violator to damages.42 to recoup those fees through a higher priority involuntary case under the right circumstances Second, petitioners must understand that claim, the bankruptcy court may deny this to countervail the risks include: a bankruptcy is a collective proceeding, not request—or allow it at a significantly reduced Preserving Assets. An involuntary petition an individual debt-collection device.43 This amount or, even if allowed in full, insufficient could be used to avoid the loss of, and pre- means that by successfully placing a company funds may prevent payment of even this serve, a valuable asset that could be monetized

Los Angeles Lawyer July/August 2016 35 to pay creditors. For example, filing an invol- caution and only after careful deliberation 10 11 U.S.C. §303(b). 11 untary petition would stop an impending and balancing of the risks and benefits. n As adjusted effective April 1, 2016, and subject to See foreclosure on real property or a landlord’s readjustment on April 1, 2019. 11 U.S.C. §§104 (a), 303(b). See also Revisions of Certain Dollar 1 anticipated termination of a valuable com- See 11 U.S.C. §303. Amounts in the Bankruptcy Code, Fed. Reg. Notice, 2 mercial lease following a tenant’s default. A third threshold requirement determines whether dated February 22, 2016, available at https://www Commencing the petition before the foreclo- the alleged debtor is eligible to be a debtor under the .federalregister.gov. particular chapter selected. See 11 U.S.C. §109. This sure or lease termination is absolutely nec- 12 See 11 U.S.C. §303(b)(1), (2). requirement applies in voluntary cases and is not 13 essary to preserve the asset. See id. limited to involuntary cases. This is different from the 14 See 11 U.S.C. §303(b)(3). Maximizing Value of Assets. An invol- first threshold identified above, which more broadly 15 See 11 U.S.C. §303(h). untary bankruptcy also could force the sale considers whether the entity subject to the involuntary 16 See id. of property at maximum value for the benefit petition may be an involuntary debtor under any chap- 17 11 U.S.C. §303(h)(1), (2). ter of the Bankruptcy Code. 18 See 11 U.S.C. §503(b)(3)(A), (b)(4). See also North of creditors. A debtor may own an asset with 3 See 11 U.S.C. §303(a). Sports, Inc. v. Knupper (In re Wind N’ Wave), 509 F. significant equity that it refuses to sell to pay 4 Id. 3d 938, 941-42 (9th Cir. 2007); In re Hovdebray claims. Filing a petition will permit the ap - 5 11 U.S.C. §101(41). Enters., 499 B.R. 333, 336-37 (Bankr. D. Minn. 2013) 6 pointment of a trustee with the power to 11 U.S.C. §303(a). ); In re Key Auto Liquidation Ctr., Inc., 384 B.R. 599, 7 market and auction the property to generate See In re Center For Mgmt. & Tech., Inc., 2007 605-06 (Bankr. N.D. Fla. 2008). funds to pay claims.46 Bankr. LEXIS 3734 (Bankr. D. Md. Oct. 26, 2007); In 19 11 U.S.C. §§503(b)(3)(A), (b)(4). re MAEDC Mesa Ridge, LLC, 334 B.R. 197, 200 Replacing Existing Management. At times, 20 See 11 U.S.C. §303(e). (Bankr. N.D. Tex. 2005); In re Caucus Distribs., Inc., 21 See id. See also 11 U.S.C. §303(i). a company’s management is incompetent, dis- 83 B.R. 921, 930 (Bankr. E.D. Va. 1988). Some courts 22 See 11 U.S.C. §303(g). The appointment is interim honest, or otherwise mismanaging the com- sweep all nonprofit organizations into this exception, because it stretches only through the gap period. pany to the detriment of creditors. Under such whereas others apply a two-pronged test: 1) whether 23 11 U.S.C. §303(g); Fed. R. Bankr. P. 2001(a). the debtor is considered an eleemosynary organization circumstances, an involuntary petition could 24 9-2001 COLLIER ON BANKR. ¶2001.02[2] (16th ed. under state law and 2) whether the debtor actually con- be filed to displace existing management with 2015) [hereinafter COLLIER] (citing Hill v. Douglass, ducts itself as an eleemosynary organization. See Center an independent trustee to stabilize operations 78 F. 2d 851, 854 (9th Cir. 1935)). See also In re For Mgmt., 2007 Bankr. LEXIS at *10-11; MAEDC, James Plaza Joint Venture, 62 B.R. 959, 961 (Bankr. or proceed with an orderly liquidation. 334 B.R. at 200; Caucus Distribs., 83 B.R. at 930. An S.D. Tex. 1986); In re Tradex Swiss AG, 2007 Bankr. The ability to put a company into bank- alleged debtor must plead that it is not a “moneyed, LEXIS 4246 (Bankr. D. Mass. Dec. 12, 2007). business, or commercial corporation” as an affirmative ruptcy could serve as an effective tool in a 25 COLLIER, supra note 24. defense in response to an involuntary petition. See creditor’s attempt to recover on an outstand- 26 Fed. R. Bankr. P. 2001(b). See also, 11 U.S.C. §303(i). Center For Mgmt., 2007 Bankr. LEXIS 3734. 27 See 2 COLLIER, supra note 24, at ¶303.29; In re ing debt. Given the potential liability stem- 8 See In re Anderson, 94 B.R. 153, 157 (Bankr. W.D. Prof’l Accountants Referral Servs., Inc., 142 B.R. 424, ming from a failed involuntary petition, how- Mo. 1988). 429 (Bankr. D. Colo. 1992). 9 ever, creditors should proceed with extreme See 11 U.S.C. §109(g). 28 See 11 U.S.C. §1104(a)(1). 29 See 11 U.S.C. §303(i)(1), (2). See also Orange Blossom Ltd. P’Ship v. S. Cal. Sunbelt Developers, Inc. (In re S. Cal. Sunbelt Developers, Inc.), 608 F. 3d 456, 461-62 (9th Cir. 2010). 30 Orange Blossom, 608 F. 3d at 462. 31 Higgins v. Vortex Fishing Systems, Inc. (In re Vortex Fishing Sys.), 379 F. 3d 701, 707 (9th Cir. 2004) (quoting In re Scrap Metal Buyers of Tampa, Inc., 233 B.R. 162, 166 (Bankr. M.D. Fla.1999)). 32 See 11 U.S.C. §303(i); Higgins, 379 F. 3d at 705-06. 33 See Higgins, 379 F. 3d at 707. 34 See Sofris v. Maple-Whitworth, Inc. (In re Maple- Whit worth, Inc.), 556 F. 3d 742, 745-46 (9th Cir. 2009). 35 Orange Blossom, 608 F. 3d at 462. 36 Higgins, 379 F. 3d at 707. 37 In one recent case, the bankruptcy court dismissed an involuntary petition after scolding the petitioner for filing the case solely to settle a “two-party dispute” between the petitioner and the debtor, explaining that “the bankruptcy court is not a collection agency” and “bankruptcy is not a judgment enforcement device.” In re Murray, 543 B.R. 484, 486, 494 (Bankr. S.D. N.Y. Jan. 13, 2016). 38 See 11 U.S.C. §303(i)(2); Higgins, 379 F. 3d at 706. 39 See In re Reynolds, 2014 Bankr. LEXIS 4421, *10 (Bankr. C.D. Cal. Oct. 20, 2014) (citing Wechsler v. Macke Int’l Trade, Inc. (In re Macke Int’l Trade, Inc.), 370 B.R. 236, 256 (B.A.P. 9th Cir. 2007)) and Jaffe v. Wavelength, Inc. (In re Wavelength, Inc.), 61 B.R. 614, 621 (B.A.P. 9th Cir. 1986)). 40 See, e.g., In re Walden, 781 F. 2d 1121 (5th Cir. 1986); Strange v. Columbia Nat’l Bank, 1998 U.S. Dist. LEXIS 16628 (N.D. Ill. Oct. 13, 1998). 41 See 11 U.S.C. §362(a). 42 See 11 U.S.C. §362(k). 43 See In re Murray, 543 B.R. at 496. 44 See 11 U.S.C. §§507(a), 726. 45 See 11 U.S.C. §§547(b), 550(a). 46 See 11 U.S.C. §363.

36 Los Angeles Lawyer July/August 2016 investigative services guide

ACCIDENT ANALYSIS/RECONSTRUCTION ACCOUNTING INVESTIGATIONS WHITE, ZUCKERMAN, WARSAVSKY, LUNA & HUNT INSTITUTE OF RISK & SAFETY ANALYSES FULCRUM INQUIRY 15490 Ventura Boulevard, Suite 300, 5324 Canoga Avenue, Woodland Hills, CA 91364, 888 South Figueroa Street, Suite 2000, Los Ange- Sherman -Oaks, CA 91403, (818) 981-4226, fax (818) 348-1133, fax (818) 348-4484, e-mail: expert les, CA 90017, (213) 787-4100, fax (213) 891- (818) 981-4278, 4 Park Plaza, 2nd Floor, Irvine, CA @irsa.us. Website: www.irsa.us. Contact Ken- 1300, e-mail: [email protected]. Website: www 92614, (949) 219-9816, fax (949) 219-9095, neth A. Solomon, Ph.D., Chief Scientist. .fulcrum.com. Contact David Nolte. Our profes- e-mail: [email protected]. Website: www Bio-mechan ics, accident reconstruction, human sionals are experienced CPAs, MBAs, ASAs, .wzwlh.com. Contact Barbara Luna. Expert wit- factors, and computer simulations. Experienced CFAs, affiliated professors, and industry special- ness testimony for complex litigation involving staff with exten sive research and courtroom ex - ists. Our analysis and research combined with damage analyses of lost profits, unjust enrichment, perience. Applic a tions to transportation, industrial, unique presentation techniques have resulted in reasonable royalties, lost earnings, lost value of premises, and recreational accidents as well as an unequaled record of successful court cases business, forensic accounting, fraud investigation, some criminal matters. and client recoveries. Our expertise encompasses investigative analysis of liability, and marital disso- damages analysis, loss/profit studies, business lution, and tax planning and preparation. Excellent MEA FORENSIC ENGINEERS & SCIENTISTS and intangible asset valuations, fraud investiga- communicators with extensive testimony experi- 23281 Vista Grande Drive, Laguna Hills, CA tions, statistics, forensic economic analysis, royalty ence. Prior Big Four accountants. Specialties in- 92653, (949) 855-4632, e-mail: Vickie.norton audits, strategic and market assessments, com- clude accounting, breach of contract, breach of @meaforensic.com. Website: www.meaforensic petitive surveys, analysis of computerized data, in- fiduciary duty, business interruption, business dis- .com. Contact Vickie Norton, MS, ATP, Project jury and employment damages, and a wide range solution, construction defects, delays, and cost Engineer, Airline Transport Pilot. Ms. Norton of other financial advisory services. Degrees/li- overruns, fraud, insurance bad faith, intellectual has over 20 years of multi-disciplined aviation censes: CPAs, CFAs, ASAs, PhDs, and MBAs in property (including trademark, patent, and copy- experience ranging from engineering design and accounting, finance, economics, and related sub- right infringement, and trade secrets), malpractice, airframe certification to Captain with a major US jects. See display ad on back cover. marital dissolution, personal injury, product liabil- airline with 14,000+ hours flight time, holding type ity, real estate, securities, tax planning and prepa- ratings on the 737, 757, 767 and A-320 aircraft. KRYCLER, ERVIN, TAUBMAN, AND KAMINSKY ration, IRS audit defense, tracing, unfair advertis- She has held the prestigious FAA Designated ing, unfair competition, valuation of businesses, Engineering Representative Certification as well 15303 Ventura Boulevard, Suite 1040, Sherman and wrongful termination. See display ad on as Certified Flight Instructor/Ground Instructor Oaks, CA 91403, (818) 995-1040, fax (818) 995- page 41. licenses and currently holds her Private Rotorcraft- 4124. Website: www.ketkcpa.com. Contact Helicopter license. She is responsible for technical Michael J. Krycler. Litigation support, including ZIVETZ, SCHWARTZ & SALTSMAN, CPAS investigations involving aircraft accident/incident forensic accounting, business appraisals, family 11900 West Olympic Boulevard, Suite 650, Los reconstruction, system/power plant malfunctions law accounting, business and professional valua- Angeles, CA 90064-1046, (310) 826-1040, fax and failure analysis, operational, maintenance, tions, damages, fraud investigations, and lost (310) 826-1065. Website: www.zsscpa.com. regulatory and human factors effects. Case analy- earnings. Krycler, Ervin, Taubman, and Kaminsky Contact Lester J. Schwartz, CPA/CFF, sis includes NTSB report review; aircraft design/ is a full-service accounting firm serving the legal DABFE, DABFA, Michael D. Saltsman, CPA, operating envelope, component design, assembly community for more than 20 years. See display MBA, JB Rizzo, CPA, ABV, CFF, CVA, Lynda R. and installation; compliance with and adequacy of ad on page 47. Schauer, CPA, CVA, CGMA, David L. Bass, CPA, David Dichner, CPA, ABV, Sandy Green, maintenance manuals and required inspection, re- MARCUM LLP pair and overhaul schedules, service bulletins and CPA, Silva Hakobyan, CPA, Oz Folb, MBA. Ac- airworthiness directives; pilot-in-command train- 2049 Century Park East, Suite 300, Los Angeles, counting experts in forensic accounting, tax is- ing, licenses, rating, proficiency and recency of CA 90067, (310) 432-7408, fax (310) 432-7502, sues, business valuations, and appraisals, marital experience; preflight planning and prevailing e-mail: [email protected]. Website: www dissolutions, eminent domain, insurance losses, Contact Keith Block, Market- weather conditions, and the potential effects of .marcumllp.com. business interruption, goodwill, economic analysis, ing Manager. “third party” (non-pilot) error, e.g. air traffic control, The experts at Marcum draw from investigative auditing, loss of earning, commercial flight dispatch, aircraft fueling/loading, and airfield their employment and life experiences to help iden- damages, and lost profits. Expert witness testi- lighting/signage defects. tify the appropriate responses. Our team of profes- mony preparation, settlement negotiations, and sionals includes Certified Public Accountants, Certi- consultations. See display ad on page 43. MEA FORENSIC ENGINEERS & SCIENTISTS fied Fraud Examiners, Accredited Senior Apprais- 23281 Vista Grande Drive, Laguna Hills, CA ers, Certified Protection Professionals, licensed pri- ASSET SEARCH INVESTIGATIONS 92653, (949) 855-4632, e-mail: steven.anderson vate investigators, former prosecutors, and law en- @meaforensic.com. Website: www.meaforensic.com. forcement personnel. It’s time to ask Marcum. BENCHMARK INVESTIGATIONS Contact Steven Anderson, PE, Senior Engi- MAYER HOFFMAN MCCANN P.C. 32158 Camino Capistrano, # A-415, San Juan neer. Steven Anderson is responsible for techni- Capistrano, CA 92675, (800) 248-7721, fax (949) cal investigations, primarily those involving motor 10474 Santa Monica Boulevard, Suite 200, Los Angeles, CA 90025, (310) 268-2000, fax (310) 248-0208, e-mail: [email protected]. Website: vehicle accident investigation and reconstruction. www.BenchmarkInvestigations.com. Contact Jim Specialized expertise in motorcycle design, rider 268-2001, e-mail: [email protected] or sfranklin Con- Zimmer, CPI. National agency. Professional in- behavior and operation. Has been qualified in @cbiz.com. Website: www.MHM-PC.com. tact Coral Hansen or Steve Franklin. Experi- vestigations with emphasis on accuracy, detail, civil and criminal courts as an expert witness with and expedience. Asset/financial searches; back- expertise in collision reconstruction. He is an avid enced professionals providing forensic accounting services in fraud investigations, marital dissolu- ground investigations; DMV searches; domestic/ rider and has led OEM design teams designing marital cases; due diligence investigations; merg- new motorcycles. That, coupled with his recon- tions, corporate/partnership/LLC dissolutions, eco- nomic damages, loss of earnings, malpractice de- ers/acquisitions specialist; personal injury defense struction experience, brings a unique skill-set cases; process service; surveillance/photograph; that sets him apart in the motorcycle/ATV recon- fense, expert witness testimony, and business valuations. Experts include CPA, CFF, CFP, CFE, witness location/interviews; workplace investiga- struction world. He will be assisting our clients tions—theft, harassment,discrimination, drugs; with vehicle, motorcycle and ATV reconstructions. ABV, CGMA.

38 Los Angeles Lawyer July/August 2016 worker’s comp cases—AOE/COE and sub rosa. Bilingual agents. Fully insured. Correspondents nationwide. CA Private Investigator license #PI 12651. CCI FINANCIAL INVESTIGATIONS Two locations: San Jose and Hollister, CA (831) 634-9400 or (408) 357-4114. Contact Sandra Copas, PI, CFE at [email protected] or Bryan Copas, CPA, PI, CAMS at bcopas @copas-inc.com. CA Private Investigator #25429. Exclusively dedicated to financial and fraud investigations, CCI is a private investigation firm with CPAs and other certified forensic ac- counting and fraud specialists for your civil or criminal matter. CCI serves attorneys, businesses, individuals, and professional fiduciaries through- out California. We locate, interpret, and simplify complex financial information, making it easy to understand and easy to present in a court of law. Services available: forensic accounting, financial investigations, expert witness testimony, settle- ment negotiations, consultations\nationwide searches for hidden assets including bank, bro- kerage, IRA accounts, 401(k) plans, life insurance policies, credit reports, safe deposit boxes, real property, and vehicles. Contact us today at CARPE DATUMTM……SEIZE THE DATA www.copas-inc.com for information on asset searches and other services that can help win your case. See display ad on page 46. COMPUTER FORENSICS E-DISCOVERY • Recover Critical Data • De-Duplication PARRENT SMITH INVESTIGATIONS & • E-Mail Recovery • Redaction RESEARCH • Dates on All Files • Bates Stamped Data 10158 Hollow Glen Circle, Los Angeles, CA 90077, • Websites Visited • Electronic (ESI) Productio n (310) 275-8619, (800) 516-2448 or 805-439-2824, fax (310) 274-0503, e-mail: joanne@psinvestigates .com or [email protected]. Website: 951.780.7892 | DataChasers.com www.psinvestigates.com. Contact Joanne Parrent or Nic Smith. PSI is a full-service inves- tigative firm. Nic Smith has 40 years in the field conducting investigations for attorneys in thou- sands of civil and criminal cases. We specialize in all types of litigation support including asset searches; witness interviews; complex litigation in- vestigations; corporate, family, and environmental cases. Nic Smith is a court-qualified expert in se- curity and investigative standards. Joanne Parrent, formerly an author and journalist, brings her inves- tigative research background to all matters. Of- fices in Los Angeles and San Francisco. Services throughout California. SAPIENT INVESTIGATIONS, INC. 1810 14th Street, Suite 212, Santa Monica, CA 90404, (310) 399-8200, fax (310) 496-2637. Web- site: www.sapientpi.com. Contact David Cogan, CFE, Managing Director. Sapient Investigations, Inc., the Westside’s premier intelligence firm, has a long history of tracking and recovering assets for its clients in the U.S. and abroad. These challeng- ing cases require a deep knowledge of how as- sets are hidden and an uncanny ability to follow the money trail. We have pierced corporate veils for Fortune 500 companies and traced money off- shore. For a consultation, please contact David Cogan, CFE, at (310) 399-8200 or visit www .sapientpi.com.

ATTORNEY LITIGATION SUPPORT, CIVIL AND CRIMINAL

THE SPECIAL AGENT GROUP LLC 2901 West Coast Highway, Suite 200, Newport Beach, CA 92663, (213) 216-3613, fax (714) 998- 2699, e-mail: rwarren@TheSpecialAgentGroup .com. Website: www.TheSpecialAgentGroup.com. Contact Robert Warren, certified fraud exam-

Los Angeles Lawyer July/August 2016 39 iner, Managing Director. The Special Agent professionals are experienced CPAs, MBAs, tion defects, delays, and cost overruns, fraud, in- Group is a full-service licensed and insured Pri- ASAs, CFAs, affiliated professors, and industry surance bad faith, intellectual property (including vate Investigation firm, CAPI License #26078. specialists. Our analysis and research combined trademark, patent, and copyright infringement, Agents served in the IRS, FBI, and LAPD for over with unique presentation techniques have resulted and trade secrets), malpractice, marital dissolu- 25 years. We are experienced in litigation, fraud, in an unequaled record of successful court cases tion, personal injury, product liability, real estate, employee misconduct, forensic accounting, em- and client recoveries. Our expertise encompasses securities, tax planning and preparation, IRS audit bezzlements, backgrounds, and criminal defense. damages analysis, loss/profit studies, business defense, tracing, unfair advertising, unfair compe- Agents can find witnesses and assets anywhere in and intangible asset valuations, fraud investiga- tition, valuation of businesses, and wrongful termi- the U.S. within 48 hours. We have expert wit- tions, statistics, forensic economic analysis, royalty nation. See display ad on page 41. audits, strategic and market assessments, com- nesses in IRS controversies, money laundering, ZIVETZ, SCHWARTZ & SALTSMAN, CPAS fraud, and law enforcement matters. petitive surveys, analysis of computerized data, in- jury and employment damages, and a wide range 11900 West Olympic Boulevard, Suite 650, Los BANKRUPTCY/TAX of other financial advisory services. Degrees/li- Angeles, CA 90064-1046, (310) 826-1040, fax censes: CPAs, CFAs, ASAs, PhDs, and MBAs in (310) 826-1065. Website: www.zsscpa.com. FULCRUM INQUIRY accounting, finance, economics, and related sub- Contact Lester J. Schwartz, CPA/CFF, DABFE, DABFA, Michael D. Saltsman, CPA, 888 South Figueroa Street, Suite 2000, Los Ange- jects. See display ad on back cover. MBA, JB Rizzo, CPA, ABV, CFF, CVA, Lynda R. les, CA 90017, (213) 787-4100, fax (213) 891- HIGGINS, MARCUS & LOVETT, INC. Schauer, CPA, CVA, CGMA, David L. Bass, 1300, e-mail: [email protected]. Website: www 800 South Figueroa Street, Suite 710, Los Ange- CPA, David Dichner, CPA, ABV, Sandy Green, .fulcrum.com. Contact David Nolte. Our profes- les, CA 90017, (213) 617-7775, fax (213) 617- CPA, Silva Hakobyan, CPA, Oz Folb, MBA. sionals are experienced CPAs, MBAs, ASAs, 8372, e-mail: [email protected]. Website: Accounting experts in forensic accounting, tax is- CFAs, affiliated professors, and industry special- www.hmlinc.com. Contact Mark C. Higgins, sues, business valuations, and appraisals, marital ists. Our analysis and research combined with ASA, President. The firm has over 30 years of liti- dissolutions, eminent domain, insurance losses, unique presentation techniques have resulted in gation support and expert testimony experience in business interruption, goodwill, economic analysis, an unequaled record of successful court cases matters involving business valuation, economic investigative auditing, loss of earning, commercial and client recoveries. Our expertise encompasses damages, intellectual property, loss of business damages, and lost profits. Expert witness testi- damages analysis, loss/profit studies, business goodwill, and lost profits. Areas of practice in- mony preparation, settlement negotiations, and and intangible asset valuations, fraud investiga- clude business disputes, eminent domain, bank- consultations. See display ad on page 43. tions, statistics, forensic economic analysis, royalty ruptcy, and corporate and marital dissolution. See audits, strategic and market assessments, com- display ad on page 43. CELL PHONE FORENSICS petitive surveys, analysis of computerized data, in- jury and employment damages, and a wide range KRYCLER, ERVIN, TAUBMAN, AND DIGITAL FORENSIC INVESTIGATIONS, INC. of other financial advisory services. Degrees/li- KAMINSKY P.O. Box 1288, Costa Mesa, CA 92628, (714) 867- censes: CPAs, CFAs, ASAs, PhDs, and MBAs in 15303 Ventura Boulevard, Suite 1040, Sherman 7286, e-mail: [email protected]. Web- accounting, finance, economics, and related sub- Oaks, CA 91403, (818) 995-1040, fax (818) 995- site: www.dfinvestigations.com. Contact Mark J. jects. See display ad on back cover. 4124. Website: www.ketkcpa.com. Contact Eskridge, CFCE, DFCP, EnCE, CBE, CCME. Michael J. Krycler. Litigation support, including BUSINESS Digital Forensic Investigations, Inc. can offer your forensic accounting, business appraisals, family firm documented expertise in computer and cell law accounting, business and professional valua- FORENSISGROUP phone forensics, as well as high-technology inves- tions, damages, fraud investigations, and lost EXPERT WITNESS SERVICES SINCE 1991 tigations. As the owner and primary forensic inves- earnings. Krycler, Ervin, Taubman, and Kaminsky 301 North Lake Avenue, Suite 420, Pasadena, CA tigator, Mark J. Eskridge will utilize his 12 years of is a full-service accounting firm serving the legal experience as a criminal investigator and com- 91101, (800) 555-5422, (626) 795-5000, fax: (626) See display community for more than 20 years. puter forensic examiner with the Orange County 795-1950, email: [email protected]. ad on page 47. Website: www.forensisgroup.com. Contact District Attorney’s office to provide you with the Mercy Steenwyk. 10,000 cases ForensisGroup MAYER HOFFMAN MCCANN P.C. personalized attention and responsiveness that has provided experts. 8,000 clients have retained 10474 Santa Monica Boulevard, Suite 200, Los your case deserves. Digital Forensic Investiga- experts from us. We respond in one hour or less. Angeles, CA 90025, (310) 268-2000, fax (310) tions, Inc. services include computer forensics, ForensisGroup is an expert witness services and 268-2001, e-mail: [email protected] or sfranklin cell phone forensics, and electronic discovery in consulting company providing experts, expert wit- @cbiz.com. Website: www.MHM-PC.com. Con- the criminal defense, corporate and civil arenas. nesses, and consultants to law firms, insurance tact Coral Hansen or Steve Franklin. Experi- companies, and other public and private firms in enced professionals providing forensic accounting CIVIL INVESTIGATIONS thousands of disciplines: construction, engineer- services in fraud investigations, marital dissolu- HERNANDEZ INVESTIGATIONS & ing, business, accounting, intellectual property, tions, corporate/partnership/LLC dissolutions, eco- RESEARCH computers, IT, medical, real estate, insurance, nomic damages, loss of earnings, malpractice de- P.O. Box 1567, Claremont, CA 91711, (626) product liability, premises liability, safety, and oth- fense, expert witness testimony, and business val- 338-9992, fax (626) 701-3338, e-mail: John ers, including experts in complex and hard-to-find uations. Experts include CPA, CFF, CFP, CFE, @HernandezPI.com. Website: www.HernandezPI disciplines. Let us give you the technical advan- ABV, CGMA. .com. Contact John Hernandez. Investigative tage and competitive edge in your cases. Refer- WHITE, ZUCKERMAN, WARSAVSKY, LUNA research for all matters of discovery and litigation rals, customized searches, and initial phone con- & HUNT support. Experienced in complex litigation, eva- sultations are free. See display ad on page 39. 15490 Ventura Boulevard, Suite 300, Sherman sive service of process, counterfeit/gray goods BUSINESS APPRAISAL/VALUATIONS Oaks, CA 91403, (818) 981-4226, fax (818) 981- merchandise, assets, backgrounds, and support 4278, 4 Park Plaza, 2nd Floor, Irvine, CA 92614, services—especially those of a unique and chal- BRIAN LEWIS & COMPANY (949) 219-9816, fax (949) 219-9095, e-mail: expert lenging variety. With 30 years of experience, HI&R Contact is relied on by PI industry leaders, law firms and 10900 Wilshire Boulevard, Suite 610, Los Angeles, @wzwlh.com. Website: www.wzwlh.com. Barbara Luna. businesses throughout Southern California. Opera- CA 90024, (310) 475-5676, fax (310) 475-5268, Expert witness testimony for com- tion area is all of Southern California, with national e-mail: [email protected]. Contact Brian plex litigation involving damage analyses of lost and international capability on a variety of informa- Lewis, CPA, CVA. Forensic accounting, business profits, unjust enrichment, reasonable royalties, tional services per client need. valuations, cash spendable reports, estate, trust, lost earnings, lost value of business, forensic ac- and income tax services. counting, fraud investigation, investigative analysis of liability, and marital dissolution, and tax plan- COMPUTER FORENSICS FULCRUM INQUIRY ning and preparation. Excellent communicators DATACHASERS, INC. 888 South Figueroa Street, Suite 2000, Los Ange- with extensive testimony experience. Prior Big les, CA 90017, (213) 787-4100, fax (213) 891- Four accountants. Specialties include accounting, P.O. Box 2861, Riverside, CA 92516-2861, (877) 1300, e-mail: [email protected]. Website: breach of contract, breach of fiduciary duty, busi- DataExam, (877) 328-2392, (951) 780-7892, www.fulcrum.com. Contact David Nolte. Our ness interruption, business dissolution, construc- e-mail: [email protected]. Website: www

40 Los Angeles Lawyer July/August 2016

.DataChasers.com. E-Discovery: Full e-discovery sultations are free. See display ad on page 39. mates, American Board of Forensic Examiners. services; you give us the mountain, we give you See display ad on page 49. the molehill: Tiff production, de-duplication, redac- CORPORATE INVESTIGATIONS tion, Bates-stamped data, and electronically DENTIST stored information (ESI) production. Computer FULCRUM INQUIRY RICHARD BENVENISTE, DDS, MSD forensic: full forensic computer lab. Recovering 888 South Figueroa Street, Suite 2000, Los Ange- deleted text files (documents), graphics (pictures), les, CA 90017, (213) 787-4100, fax (213) 891- 19231 Victory Boulevard, Suite 256, Reseda, CA date codes on all files, e-mail, and tracing Internet 1300, e-mail: [email protected]. Website: 91335, (818) 881-7337, fax (818) 881-6183, activity. Intellectual property cases, family law, em- www.fulcrum.com. Contact David Nolte. Our e-mail: [email protected]. 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Box 1288, Costa Mesa, CA 92628, (714) 867- and intangible asset valuations, fraud investiga- California State Department of Consumer Affairs. 7286, e-mail: [email protected]. Web- tions, statistics, forensic economic analysis, royalty Provider of continuing education courses on oral site: www.dfinvestigations.com. Contact Mark J. audits, strategic and market assessments, com- diagnosis, oral medicine, treatment modalities, Eskridge, CFCE, DFCP, EnCE, CBE, CCME. petitive surveys, analysis of computerized data, in- TMJ diagnosis and therapy. Multiple long-term Digital Forensic Investigations, Inc. can offer your jury and employment damages, and a wide range professional organization memberships. Degrees firm documented expertise in computer and cell of other financial advisory services. Degrees/li- /licenses: Doctor of Dental Surgery, (DDS); Master phone forensics, as well as high-technology inves- censes: CPAs, CFAs, ASAs, PhDs, and MBAs in of Science in Dentistry (MSD). tigations. As the owner and primary forensic inves- accounting, finance, economics, and related sub- tigator, Mark J. Eskridge will utilize his 12 years of jects. See display ad on back cover. ECONOMIC DAMAGES experience as a criminal investigator and com- puter forensic examiner with the Orange County MAYER HOFFMAN MCCANN P.C. CMM, LLP District Attorney’s office to provide you with the 10474 Santa Monica Boulevard, Suite 200, Los 5700 Canoga Avenue, Suite 300, Woodland Hills, personalized attention and responsiveness that Angeles, CA 90025, (310) 268-2000, fax (310) CA 91367, (818) 986-5070, fax (818) 986-5034, your case deserves. Digital Forensic Investiga- 268-2001, e-mail: [email protected] or sfranklin e-mail: [email protected]. Website: tions, Inc. services include computer forensics, @cbiz.com. Website: www.MHM-PC.com. Con- www.cmmcpas.com. Contact Scott Mowrey. cell phone forensics, and electronic discovery in tact Coral Hansen or Steve Franklin. Experi- Specialties: consultants who provide extensive the criminal defense, corporate and civil arenas. enced professionals providing forensic accounting experience, litigation support, and expert testi- SETEC INVESTIGATIONS services in fraud investigations, marital dissolu- mony regarding forensic accountants, fraud tions, corporate/partnership/LLC dissolutions, eco- investigations, economic damages, business 8391 Beverly Boulevard, Suite 167, Los Angeles, nomic damages, loss of earnings, malpractice de- valuations, family law, bankruptcy, and reorganiza- CA 90048, (800) 748-5440, fax (323) 939-5481, fense, expert witness testimony, and business val- tion. Degrees/license: CPAs, CFEs, MBAs. See e-mail: [email protected]. Website: uations. Experts include CPA, CFF, CFP, CFE, display ad on page 39. www.setecinvestigations.com. Contact Todd ABV, CGMA. Stefan. Setec Investigations offers unparalleled ECON ONE RESEARCH, INC. expertise in computer forensics and enterprise in- SAPIENT INVESTIGATIONS, INC. 550 South Hope Street, Suite 800, Los Angeles, vestigations providing personalized, case-specific 1810 14th Street, Suite 212, Santa Monica, CA CA 90071, (213) 624-9600, e-mail: lskylar forensic analysis and litigation support services for 90404, (310) 399-8200, fax (310) 496-2637. Web- @econone.com. Website: www.econone.com. law firms and corporations. Setec Investigations site: www.sapientpi.com. Contact David Cogan, Contact Lisa Skylar. Econ One provides eco- possesses the necessary combination of technical CFE, Managing Director. Sapient Investigations, nomic research, consulting, and expert testimony expertise, understanding of the legal system, and Inc., the Westside’s premier intelligence firm, in many areas, including: antitrust, intellectual specialized tools and processes enabling the dis- works with attorneys nationwide to conduct a wide property and patent infringement, contract dis- covery, collection, investigation, and production of variety of corporate investigations, from proxy con- putes, damages analysis/calculations, employ- electronic information for investigating and han- tests to trade secrets thefts to internal fraud inves- ment issues, and unfair competition. We offer in- dling computer-related crimes or misuse. Our ex- tigations. With more than a decade of high-level house expertise in applied economic theory, pertise includes computer forensics, electronic experience, Sapient Investigations, Inc.’s team un- econometrics, statistics, and years of experience discovery, litigation support, and expert witness derstands the importance of conducting these in- successfully dealing with the specific demands of testimony. vestigations quickly and with precision in order to the litigation process. Econ One experts have tes- produce actionable intelligence. For a consulta- tified in state and federal courts; administrative, CONSTRUCTION tion, please contact David Cogan, CFE, at (310) legislative; and regulatory agencies, and in arbitra- 399-8200 or visit www.sapientpi.com. tions and mediations. We understand the need for FORENSISGROUP EXPERT WITNESS SERVICES SINCE 1991 clear, accurate, persuasive answers to complex CORROSION problems. See display ad on page 47. 301 North Lake Avenue, Suite 420, Pasadena, CA 91101, (800) 555-5422, (626) 795-5000, fax: (626) KARS ADVANCED MATERIALS, INC. FULCRUM INQUIRY 795-1950, email: [email protected]. Testing and Research Labs, 2528 West Woodland 888 South Figueroa Street, Suite 2000, Los Ange- Contact Website: www.forensisgroup.com. Drive, Anaheim, CA 92801-2636, (714) 527-7100, les, CA 90017, (213) 787-4100, fax (213) 891- Mercy Steenwyk. 10,000 cases ForensisGroup fax (714) 527-7169, e-mail: [email protected]. 1300, e-mail: [email protected]. Website: has provided experts. 8,000 clients have retained Website: www.karslab.com. Contact Drs. www.fulcrum.com. Contact David Nolte. Our experts from us. We respond in one hour or less. Ramesh J. Kar or Naresh J. Kar. Southern Cali- professionals are experienced CPAs, MBAs, ForensisGroup is an expert witness services and fornia’s premier materials/mechanical/metallurgi- ASAs, CFAs, affiliated professors, and industry consulting company providing experts, expert wit- cal/structural/forensics laboratory. Registered pro- specialists. Our analysis and research combined nesses, and consultants to law firms, insurance fessional engineers with 30-plus years in metallur- with unique presentation techniques have resulted companies, and other public and private firms in gical/forensic/structural failure analysis. Experi- in an unequaled record of successful court cases thousands of disciplines: construction, engineer- enced with automotive, bicycles, tires, fire, paint, and client recoveries. Our expertise encompasses ing, business, accounting, intellectual property, plumbing, corrosion, and structural failures. We damages analysis, loss/profit studies, business computers, IT, medical, real estate, insurance, work on both plaintiff and defendant cases. Com- and intangible asset valuations, fraud investiga- product liability, premises liability, safety, and oth- plete in-house capabilities for tests. Extensive de- tions, statistics, forensic economic analysis, royalty ers, including experts in complex and hard-to-find position and courtroom experience (civil and crimi- audits, strategic and market assessments, com- disciplines. Let us give you the technical advan- nal investigations). Principals are Fellows of Ameri- petitive surveys, analysis of computerized data, in- tage and competitive edge in your cases. Refer- can Society for Metals and board-certified diplo- jury and employment damages, and a wide range rals, customized searches, and initial phone con- of other financial advisory services. Degrees/li-

42 Los Angeles Lawyer July/August 2016 censes: CPAs, CFAs, ASAs, PhDs, and MBAs in accounting, finance, economics, and related sub- jects. See display ad on back cover. MAYER HOFFMAN MCCANN P.C. 10474 Santa Monica Boulevard, Suite 200, Los Angeles, CA 90025, (310) 268-2000, fax (310) 268- 2001, e-mail: [email protected] or sfranklin@cbiz .com. Website: www.MHM-PC.com. Contact Coral Hansen or Steve Franklin. Experienced professionals providing forensic accounting ser- vices in fraud investigations, marital dissolutions, corporate/partnership/ LLC dissolutions, economic damages, loss of earnings, malpractice defense, expert witness testimony, and business valuations. Experts include CPA, CFF, CFP, CFE, ABV, CGMA. WARONZOF ASSOCIATES, INC. 400 Continental Boulevard, Sixth Floor, El Segundo, CA 90245, (310) 322-7744, fax (424) 285-5380. Website: www.waronzof.com. Contact Timothy R. Lowe, MAI, CRE. Confidence At The Courthouse. Waronzof provides real estate and land use litigation support services Business litigation is increasingly complex. That is why we believe valuation including economic damages, lost profits, financial feasibility, lease dispute, property value, enter- issues must be addressed with the same meticulous care prise value, partnership interest and closely held as legal issues. Analysis must be clear. Opinions must be share value, fair compensation, lender liability, and defensible. Expert testimony must be thorough and reorganization plan feasibility. Professional staff of articulate. HML has extensive trial experience and can five with advanced degrees and training in real es- provide legal counsel with a powerful resource for expert tate, finance, urban planning, and accounting. testimony and litigation support. See display ad on page 19. WHITE, ZUCKERMAN, WARSAVSKY, LUNA For More Information Call 213-617-7775 & HUNT Or visit us on the web at www.hmlinc.com 15490 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403, (818) 981-4226, fax (818) 981- BUSINESS VALUATION • LOSS OF GOODWILL • ECONOMIC DAMAGES • LOST PROFITS 4278, 4 Park Plaza, 2nd Floor, Irvine, CA 92614, (949) 219-9816, fax (949) 219-9095, e-mail: [email protected]. Website: www.wzwlh.com. Contact Barbara Luna. Expert witness testimony for complex litigation involving damage analyses of lost profits, unjust enrichment, reasonable royal- ties, lost earnings, lost value of business, forensic accounting, fraud investigation, investigative analysis of liability, and marital dissolution, and tax planning and preparation. Excellent communica- tors with extensive testimony experience. Prior Big Four accountants. Specialties include accounting, breach of contract, breach of fiduciary duty, busi- ness interruption, business dissolution, construc- tion defects, delays, and cost overruns, fraud, in- surance bad faith, intellectual property (including trademark, patent, and copyright infringement, and trade secrets), malpractice, marital dissolu- tion, personal injury, product liability, real estate, securities, tax planning and preparation, IRS audit defense, tracing, unfair advertising, unfair compe- tition, valuation of businesses, and wrongful termi- nation. See display ad on page 41. ZIVETZ, SCHWARTZ & SALTSMAN, CPAS 11900 West Olympic Boulevard, Suite 650, Los Angeles, CA 90064-1046, (310) 826-1040, fax (310) 826-1065. Website: www.zsscpa.com. Con- tact Lester J. Schwartz, CPA/CFF, DABFE, DABFA, Michael D. Saltsman, CPA, MBA, JB Rizzo, CPA, ABV, CFF, CVA, Lynda R. Schauer, CPA, CVA, CGMA, David L. Bass, CPA, David Dichner, CPA, ABV, Sandy Green, CPA, Silva Hakobyan, CPA, Oz Folb, MBA. Ac- counting experts in forensic accounting, tax is- sues, business valuations, and appraisals, marital dissolutions, eminent domain, insurance losses, business interruption, goodwill, economic analysis, investigative auditing, loss of earning, commercial damages, and lost profits. Expert witness testi- mony preparation, settlement negotiations, and

Los Angeles Lawyer July/August 2016 43 consultations. See display ad on page 43. CA 90071, (213) 624-9600, e-mail: skylar Drive, Anaheim, CA 92801-2636, (714) 527-7100, @econone.com. Website: www.econone.com. fax (714) 527-7169, e-mail: [email protected]. ECONOMICS Contact Lisa Skylar. Econ One provides eco- Website: www.karslab.com. Contact Drs. nomic research, consulting, and expert testimony Ramesh J. Kar or Naresh J. Kar. Southern Cali- FULCRUM INQUIRY in many areas, including: antitrust, intellectual fornia’s premier materials/mechanical/metallurgi- 888 South Figueroa Street, Suite 2000, Los Ange- property and patent infringement, contract dis- cal/structural/forensics laboratory. Registered pro- les, CA 90017, (213) 787-4100, fax (213) 891- putes, damages analysis/calculations, employ- fessional engineers with 30-plus years in metallur- 1300, e-mail: [email protected]. Website: www ment issues, and unfair competition. We offer in- gical/forensic/structural failure analysis. Experi- .fulcrum.com. Contact David Nolte. Our profes- house expertise in applied economic theory, enced with automotive, bicycles, tires, fire, paint, sionals are experienced CPAs, MBAs, ASAs, econometrics, statistics, and years of experience plumbing, corrosion, and structural failures. We CFAs, affiliated professors, and industry special- successfully dealing with the specific demands of work on both plaintiff and defendant cases. Com- ists. Our analysis and research combined with the litigation process. Econ One experts have tes- plete in-house capabilities for tests. Extensive de- unique presentation techniques have resulted in tified in state and federal courts; administrative, position and courtroom experience (civil and crimi- an unequaled record of successful court cases legislative; and regulatory agencies, and in arbitra- nal investigations). Principals are Fellows of Ameri- and client recoveries. Our expertise encompasses tions and mediations. We understand the need for can Society for Metals and board-certified diplo- damages analysis, loss/profit studies, business clear, accurate, persuasive answers to complex mates, American Board of Forensic Examiners. and intangible asset valuations, fraud investiga- problems. See display ad on page 47. See display ad on page 49. tions, statistics, forensic economic analysis, royalty audits, strategic and market assessments, com- ENGINEERING FAMILY LAW petitive surveys, analysis of computerized data, in- EXPONENT BRIAN LEWIS & COMPANY jury and employment damages, and a wide range of other financial advisory services. Degrees/li- 5401 McConnell Avenue, Los Angeles, CA 90066, 10900 Wilshire Boulevard, Suite 610, Los Angeles, censes: CPAs, CFAs, ASAs, PhDs, and MBAs in (310) 754-2700, fax (310) 754-2799, e-mail:reza CA 90024, (310) 475-5676, fax (310) 475-5268, accounting, finance, economics, and related sub- @exponent.com. Website: www.exponent.com. e-mail: [email protected]. Contact Brian jects. See display ad on back cover. Contact Ali Reza. Fires and explosions, metal- Lewis, CPA, CVA. Forensic accounting, business lurgy and mechanical engineering, structural and valuations, cash spendable reports, estate, trust, ELECTRONIC EVIDENCE/DATA RECOVERY geotechnical, accident reconstruction and analy- and income tax services. sis, human factors, risk and reliability assessment, CCI FINANCIAL INVESTIGATIONS SETEC INVESTIGATIONS toxicology and human health, biomechanics, elec- Two locations: San Jose and Hollister, CA (831) 8391 Beverly Boulevard, Suite 167, Los Angeles, trical and semiconductors, aviation, materials sci- 634-9400 or (408) 357-4114. Contact Sandra CA 90048, (800) 748-5440, fax (323) 939-5481, ence, HVAC, energy consulting, construction de- Copas, PI, CFE at [email protected] or e-mail: [email protected]. Website: fect, environmental fate and transport, and ground Bryan Copas, CPA, PI, CAMS at bcopas www.setecinvestigations.com. Contact Todd water quality. @copas-inc.com. CA Private Investigator #25429. Stefan. Setec Investigations offers unparalleled Exclusively dedicated to financial and fraud inves- expertise in computer forensics and enterprise in- ENGINEERING/GEOTECHNICAL tigations, CCI is a private investigation firm with vestigations providing personalized, case-specific COTTON, SHIRES AND ASSOCIATES, INC. CPAs and other certified forensic accounting and forensic analysis and litigation support services for fraud specialists for your civil or criminal matter. law firms and corporations. Setec Investigations 330 Village Lane, Los Gatos, CA 95030-7218, CCI serves attorneys, businesses, individuals, and possesses the necessary combination of technical (408) 354-5542, fax (408) 354-1852, 2804 professional fiduciaries throughout California. We expertise, understanding of the legal system, and Camino Dos Rios, Suite 201, Thousand Oaks, locate, interpret, and simplify complex financial in- specialized tools and processes enabling the dis- CA 91320, (805) 375-1050, fax (805) 375-1059, formation, making it easy to understand and easy covery, collection, investigation, and production of e-mail: [email protected]. Website: www to present in a court of law. Services available: electronic information for investigating and han- .cottonshires.com. Contact Patrick O. Shires. forensic accounting, financial investigations, ex- dling computer-related crimes or misuse. Our ex- Full-service geotechnical engineering consulting pert witness testimony, settlement negotiations, pertise includes computer forensics, electronic firm specializing in investigation, design, arbitra- consultations, nationwide searches for hidden as- discovery, litigation support, and expert witness tion, and expert witness testimony with offices in sets including bank, brokerage, IRA accounts, testimony. Los Gatos, San Andreas, and Thousand Oaks, California. Earth movement (settlement, soil creep, 401(k) plans, life insurance policies, credit reports, EMPLOYMENT landslides, tunneling, and expansive soil), founda- safe deposit boxes, real property, and vehicles. tion distress (movement and cracking of struc- Contact us today at www.copas-inc.com for infor- FULCRUM INQUIRY tures) drainage and grading (seeping slabs and mation on asset searches and other services that ponding water in crawlspace), pavement and can help win your case. See display ad on 888 South Figueroa Street, Suite 2000, Los Ange- page 46. les, CA 90017, (213) 787-4100, fax (213) 891- slabs (cracking and separating), retaining walls 1300, e-mail: [email protected]. Website: (movement, cracking, and failures), pipelines, KRYCLER, ERVIN, TAUBMAN, AND www.fulcrum.com. Contact David Nolte. Our flooding and hydrology, design and construction KAMINSKY professionals are experienced CPAs, MBAs, deficiencies, expert testimony at over 87 trials 15303 Ventura Boulevard, Suite 1040, Sherman ASAs, CFAs, affiliated professors, and industry (municipal, superior, and federal); 200+ deposi- Oaks, CA 91403, (818) 995-1040, fax (818) 995- specialists. Our analysis and research combined tions; 300+ settlement conferences in southern 4124. Website: www.ketkcpa.com. Contact with unique presentation techniques have resulted and northern California, Nevada, Hawaii and Michael J. Krycler. Litigation support, including in an unequaled record of successful court cases Michigan. forensic accounting, business appraisals, family and client recoveries. Our expertise encompasses law accounting, business and professional valua- damages analysis, loss/profit studies, business ENVIRONMENTAL ENGINEER tions, damages, fraud investigations, and lost and intangible asset valuations, fraud investiga- WZI INC. (ENVIRONMENTAL ENGINEERS) earnings. Krycler, Ervin, Taubman, and Kaminsky tions, statistics, forensic economic analysis, royalty is a full-service accounting firm serving the legal audits, strategic and market assessments, com- 1717 28th Street, Bakersfield, CA 93301, (661) community for more than 20 years. See display petitive surveys, analysis of computerized data, in- 326-1112, fax (661) 326-6480, e-mail: mjwilson ad on page 47. jury and employment damages, and a wide range @wziinc.com. Website: www.wziinc.com. Contact of other financial advisory services. Degrees/li- Mary Jane Wilson. BS, Petroleum Engineer ing MAYER HOFFMAN MCCANN P.C. censes: CPAs, CFAs, ASAs, PhDs, and MBAs in Environmental Assessor REPA 450065. Spe- 10474 Santa Monica Boulevard, Suite 200, Los accounting, finance, economics, and related sub- cialties include regulatory compliance, petroleum, Angeles, CA 90025, (310) 268-2000, fax (310) jects. See display ad on back cover. and power generation. 268-2001, e-mail: [email protected] or sfranklin @cbiz.com. Website: www.MHM-PC.com. Con- EMPLOYMENT/WAGE & HOUR DISPUTE FAILURE ANALYSIS tact Coral Hansen or Steve Franklin. Experi- enced professionals providing forensic accounting ECON ONE RESEARCH, INC. KARS ADVANCED MATERIALS, INC. services in fraud investigations, marital dissolu- 550 South Hope Street, Suite 800, Los Angeles, Testing and Research Labs, 2528 West Woodland tions, corporate/partnership/LLC dissolutions, eco-

44 Los Angeles Lawyer July/August 2016 nomic damages, loss of earnings, malpractice de- DABFA, Michael D. Saltsman, CPA, MBA, JB valuations, cash spendable reports, estate, trust, fense, expert witness testimony, and business val- Rizzo, CPA, ABV, CFF, CVA, Lynda R. and income tax services. uations. Experts include CPA, CFF, CFP, CFE, Schauer, CPA, CVA, CGMA, David L. Bass, FULCRUM INQUIRY ABV, CGMA. CPA, David Dichner, CPA, ABV, Sandy Green, 888 South Figueroa Street, Suite 2000, Los Ange- CPA, Silva Hakobyan, CPA, Oz Folb, MBA. Ac- WHITE, ZUCKERMAN, WARSAVSKY, LUNA les, CA 90017, (213) 787-4100, fax (213) 891- counting experts in forensic accounting, tax is- & HUNT 1300, e-mail: [email protected]. Website: www sues, business valuations, and appraisals, marital 15490 Ventura Boulevard, Suite 300, Sherman .fulcrum.com. Contact David Nolte. Our profes- dissolutions, eminent domain, insurance losses, Oaks, CA 91403, (818) 981-4226, fax (818) 981- sionals are experienced CPAs, MBAs, ASAs, business interruption, goodwill, economic analysis, 4278, 4 Park Plaza, 2nd Floor, Irvine, CA 92614, CFAs, affiliated professors, and industry special- investigative auditing, loss of earning, commercial (949) 219-9816, fax (949) 219-9095, e-mail: ists. Our analysis and research combined with damages, and lost profits. Expert witness testi- [email protected]. Website: www.wzwlh.com. unique presentation techniques have resulted in mony preparation, settlement negotiations, and Contact Barbara Luna. Expert witness testimony an unequaled record of successful court cases consultations. See display ad on page 43. for complex litigation involving damage analyses and client recoveries. Our expertise encompasses of lost profits, unjust enrichment, reasonable royal- FINANCIAL STATEMENTS damages analysis, loss/profit studies, business ties, lost earnings, lost value of business, forensic and intangible asset valuations, fraud investiga- accounting, fraud investigation, investigative MAYER HOFFMAN MCCANN P.C. tions, statistics, forensic economic analysis, royalty analysis of liability, and marital dissolution, and tax audits, strategic and market assessments, com- 10474 Santa Monica Boulevard, Suite 200, Los planning and preparation. Excellent communica- petitive surveys, analysis of computerized data, in- Angeles, CA 90025, (310) 268-2000, fax (310) tors with extensive testimony experience. Prior Big jury and employment damages, and a wide range 268-2001, e-mail: [email protected] or sfranklin Four accountants. Specialties include accounting, of other financial advisory services. Degrees/li- @cbiz.com. Website: www.MHM-PC.com. Con- breach of contract, breach of fiduciary duty, busi- censes: CPAs, CFAs, ASAs, PhDs, and MBAs in tact Coral Hansen or Steve Franklin. Experi- ness interruption, business dissolution, construc- accounting, finance, economics, and related sub- enced professionals providing forensic accounting tion defects, delays, and cost overruns, fraud, in- jects. See display ad on back cover. services in fraud investigations, marital dissolu- surance bad faith, intellectual property (including tions, corporate/partnership/LLC dissolutions, eco- MARCUM LLP trademark, patent, and copyright infringement, nomic damages, loss of earnings, malpractice de- and trade secrets), malpractice, marital dissolu- 2049 Century Park East, Suite 300, Los Angeles, fense, expert witness testimony, and business val- tion, personal injury, product liability, real estate, CA 90067, (310) 432-7408, fax (310) 432-7502, uations. Experts include CPA, CFF, CFP, CFE, securities, tax planning and preparation, IRS audit e-mail: [email protected]. Website: ABV, CGMA. defense, tracing, unfair advertising, unfair compe- www.marcumllp.com. Contact Keith Block, tition, valuation of businesses, and wrongful termi- Marketing Manager. The experts at Marcum nation. See display ad on page 41. FORENSIC ACCOUNTING draw from their employment and life experiences to help identify the appropriate responses. Our BRIAN LEWIS & COMPANY ZIVETZ, SCHWARTZ & SALTSMAN, CPAS team of professionals includes Certified Public Ac- 11900 West Olympic Boulevard, Suite 650, Los 10900 Wilshire Boulevard, Suite 610, Los Angeles, countants, Certified Fraud Examiners, Accredited Angeles, CA 90064-1046, (310) 826-1040, fax CA 90024, (310) 475-5676, fax (310) 475-5268, Senior Appraisers, Certified Protection Profession- (310) 826-1065. Website: www.zsscpa.com. Con- e-mail: [email protected]. Contact Brian als, licensed private investigators, former prosecu- tact Lester J. Schwartz, CPA/CFF, DABFE, Lewis, CPA, CVA. Forensic accounting, business tors, and law enforcement personnel. It’s time to ask Marcum. MAYER HOFFMAN MCCANN P.C. 10474 Santa Monica Boulevard, Suite 200, Los An- geles, CA 90025, (310) 268-2000, fax (310) 268- 2001, e-mail: [email protected] or sfranklin @cbiz.com. Website: www.MHM-PC.com. Con- tact Coral Hansen or Steve Franklin. Experi- enced professionals providing forensic accounting services in fraud investigations, marital dissolu- tions, corporate/partnership/LLC dissolutions, eco- nomic damages, loss of earnings, malpractice de- fense, expert witnesstestimony, and business valu- ations. Experts include CPA, CFF, CFP, CFE, ABV, CGMA. WHITE, ZUCKERMAN, WARSAVSKY, LUNA & HUNT 15490 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403, (818) 981-4226, fax (818) 981- 4278, 4 Park Plaza, 2nd Floor, Irvine, CA 92614, (949) 219-9816, fax (949) 219-9095, e-mail: [email protected]. Website: www.wzwlh.com. Contact Barbara Luna. Expert witness testimony for complex litigation involving damage analyses of lost profits, unjust enrichment, reasonable royal- ties, lost earnings, lost value of business, forensic accounting, fraud investigation, investigative analysis of liability, and marital dissolution, and tax planning and preparation. Excellent communica- tors with extensive testimony experience. Prior Big Four accountants. Specialties include accounting, breach of contract, breach of fiduciary duty, busi- ness interruption, business dissolution, construc- tion defects, delays, and cost overruns, fraud, in- surance bad faith, intellectual property (including trademark, patent, and copyright infringement, and trade secrets), malpractice, marital dissolu- tion, personal injury, product liability, real estate, securities, tax planning and preparation, IRS audit

46 Los Angeles Lawyer July/August 2016 defense, tracing, unfair advertising, unfair compe- tition, valuation of businesses, and wrongful termi- nation. See display ad on page 41.

FRAUD INVESTIGATIONS

FULCRUM INQUIRY 888 South Figueroa Street, Suite 2000, Los Ange- les, CA 90017, (213) 787-4100, fax (213) 891- 1300, e-mail: [email protected]. Website: www .fulcrum.com. Contact David Nolte. Our profes- sionals are experienced CPAs, MBAs, ASAs, CFAs, affiliated professors, and industry special- ists. Our analysis and research combined with unique presentation techniques have resulted in an unequaled record of successful court cases and client recoveries. Our expertise encompasses damages analysis, loss/profit studies, business and intangible asset valuations, fraud investiga- tions, statistics, forensic economic analysis, royalty audits, strategic and market assessments, com- petitive surveys, analysis of computerized data, in- jury and employment damages, and a wide range of other financial advisory services. Degrees/li- censes: CPAs, CFAs, ASAs, PhDs, and MBAs in accounting, finance, economics, and related sub- jects. See display ad on back cover. MAYER HOFFMAN MCCANN P.C. 10474 Santa Monica Boulevard, Suite 200, Los Angeles, CA 90025, (310) 268-2000, fax (310) 268-2001, e-mail: [email protected] or sfranklin @cbiz.com. Website: www.MHM-PC.com. Con- tact Coral Hansen or Steve Franklin. Experi- enced professionals providing forensic accounting services in fraud investigations, marital dissolu- tions, corporate/partnership/LLC dissolutions, eco- nomic damages, loss of earnings, malpractice de- fense, expert witness testimony, and business val- uations. Experts include CPA, CFF, CFP, CFE, ABV, CGMA. SAPIENT INVESTIGATIONS, INC. 1810 14th Street, Suite 212, Santa Monica, CA 90404, (310) 399-8200, fax (310) 496-2637. Web- site: www.sapientpi.com. Contact David Cogan, CFE, Managing Director. Sapient Investigations, Inc., the Westside’s premier intelligence firm, spe- cializes in investigating fraud in companies and non-profit organizations, whether internal or exter- nal. We assist our clients in un covering evidence of wrongdoing, unravel the perpetrator’s financial network and compile cases that can be taken di- rectly to law enforcement. Our principals are regis- tered with the national Association of Certified Fraud Examiners. For a consultation, please con- tact David Cogan, CFE, at (310) 399-8200 or visit www.sapientpi.com. WHITE, ZUCKERMAN, WARSAVSKY, LUNA & HUNT 15490 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403, (818) 981-4226, fax (818) 981- 4278, 4 Park Plaza, 2nd Floor, Irvine, CA 92614, (949) 219-9816, fax (949) 219-9095, e-mail: expert @wzwlh.com. Website: www.wzwlh.com. Contact Barbara Luna. Expert witness testimony for com- plex litigation involving damage analyses of lost profits, unjust enrichment, reasonable royalties, lost earnings, lost value of business, forensic ac- counting, fraud investigation, investigative analysis of liability, and marital dissolution, and tax plan- ning and preparation. Excellent communicators with extensive testimony experience. Prior Big Four accountants. Specialties include accounting, breach of contract, breach of fiduciary duty, busi- ness interruption, business dissolution, construc-

Los Angeles Lawyer July/August 2016 47 tion defects, delays, and cost overruns, fraud, in- securities, tax planning and preparation, IRS audit and most suitable specialists to serve as expert surance bad faith, intellectual property (including defense, tracing, unfair advertising, unfair compe- witnesses and advisors. Based in California, AMFS trademark, patent, and copyright infringement, tition, valuation of businesses, and wrongful termi- has a 25-year history as the trusted medical expert and trade secrets), malpractice, marital dissolu- nation. See display ad on page 41. partner to thousands of law firms across the coun- tion, personal injury, product liability, real estate, try and over 15,000 physicians, surgeons, nurses, securities, tax planning and preparation, IRS audit INTELLECTUAL PROPERTY/PATENT and related experts located in every U.S. jurisdic- defense, tracing, unfair advertising, unfair compe- DAMAGES tion. Please call Dan Sandman, Esq., at (800) 275- tition, valuation of businesses, and wrongful termi- 8903 to discuss your matter alongside one of our nation. See display ad on page 41. ECON ONE RESEARCH, INC. medical directors for a candid assessment and 550 South Hope Street, Suite 800, Los Angeles, lightning-fast expert placement. AMFS: world class INSURANCE/MALPRACTICE DEFENSE CA 90071, (213) 624-9600, e-mail: lskylar medical specialists in over 5,000 areas of exper- @econone.com. Website: www.econone.com. tise. See display ad on page 47. KEYSTONE INVESTIGATIVE SERVICES, INC. Contact Lisa Skylar. Econ One provides eco- 530 South Lake Avenue, Suite 706, Pasadena, nomic research, consulting, and expert testimony LITIGATION INVESTIGATIONS CA 91101, (626) 676-5170, e-mail: info@keystoneis in many areas, including: antitrust, intellectual .com. Website: www.keystoneis.com. Contact property and patent infringement, contract dis- ECON ONE RESEARCH, INC. Kelly Cory, President/CEO. Specialties: profes- putes, damages analysis/calculations, employ- 550 South Hope Street, Suite 800, Los Angeles, sional legal investigations for civil litigation, corpo- ment issues, and unfair competition. We offer in- CA 90071, (213) 624-9600, e-mail: lskylar rate/HR matters & insurance defense. Keystone in- house expertise in applied economic theory, @econone.com. Website: www.econone.com. vestigators are experts in legal support—back- econometrics, statistics, and years of experience Contact Lisa Skylar. Econ One provides eco- ground & asset searches, locates, surveillance, successfully dealing with the specific demands of nomic research, consulting, and expert testimony fraud, workplace and corp. investigations, jury sur- the litigation process. Econ One experts have tes- in many areas, including: antitrust, intellectual veys, cyber and complex investigations. Your tified in state and federal courts; administrative, property and patent infringement, contract dis- comprehensive research and field investigation re- legislative; and regulatory agencies, and in arbitra- putes, damages analysis/calculations, employ- source. “More of What You’re Looking For.” Provid- tions and mediations. We understand the need for ment issues, and unfair competition. We offer in- ing the competitive edge on all of your case mat- clear, accurate, persuasive answers to complex house expertise in applied economic theory, ters. Contact our office for a consultation or com- problems. See display ad on page 47. econometrics, statistics, and years of experience plimentary strategy session. successfully dealing with the specific demands of INVESTIGATIONS the litigation process. 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Areas of ex- 800 South Figueroa Street, Suite 710, Los Angeles, professionals are experienced CPAs, MBAs, pertise include internal corporate investigations, CA 90017, (213) 617-7775, fax (213) 617-8372, ASAs, CFAs, affiliated professors, and industry intellectual property matters, investigative due dili- e-mail: [email protected]. Website: www.hm- Contact Mark C. Higgins, ASA, Presi- specialists. Our analysis and research combined gence (including Patriot Act). FCPA matters, litiga- linc.com. dent. with unique presentation techniques have resulted tion support and intelligence, forensic accounting, The firm has over 30 years of litigation sup- in an unequaled record of successful court cases compliance, surveillance, security consulting, and port and expert testimony experience in matters and client recoveries. Our expertise encompasses computer forensics. Our professional staff in- involving business valuation, economic damages, damages analysis, loss/profit studies, business cludes top experts from the fields of law, law en- intellectual property, loss of business goodwill, and intangible asset valuations, fraud investiga- forcement, intelligence services, accounting, in- and lost profits. Areas of practice include business tions, statistics, forensic economic analysis, royalty vestigative journalism, computer forensics, and re- disputes, eminent domain, bankruptcy, and corpo- See display ad on audits, strategic and market assessments, com- search analysis. Assignments are performed pur- rate and marital dissolution. page 43. petitive surveys, analysis of computerized data, in- suant to a prearranged budget. jury and employment damages, and a wide range SAPIENT INVESTIGATIONS, INC. of other financial advisory services. Degrees/li- LEGAL INVESTIGATION/LITIGATION SUPPORT 1810 14th Street, Suite 212, Santa Monica, CA censes: CPAs, CFAs, ASAs, PhDs, and MBAs in 90404, (310) 399-8200, fax (310) 496-2637. Web- accounting, finance, economics, and related sub- KEYSTONE INVESTIGATIVE SERVICES, INC. site: www.sapientpi.com. Contact David Cogan, jects. See display ad on back cover. 530 South Lake Avenue, Suite 706, Pasadena, CA CFE, Managing Director. Sapient Investigations, 91101, (626) 676-5170, e-mail: info@keystoneis WHITE, ZUCKERMAN, WARSAVSKY, LUNA Inc., the Westside’s premier intelligence firm, .com. Website: www.keystoneis.com. Contact & HUNT works with attorneys and corporate counsel on a Kelly Cory, President/CEO. Specialties: profes- wide variety of business dispute and complex liti- 15490 Ventura Boulevard, Suite 300, Sherman sional legal investigations for civil litigation, corpo- gation matters. 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For a consulta- for complex litigation involving damage analyses comprehensive research and field investigation re- tion, please contact David Cogan, CFE, at (310) of lost profits, unjust enrichment, reasonable royal- source. “More of What You’re Looking For.” Provid- 399-8200 or visit www.sapientpi.com. ties, lost earnings, lost value of business, forensic ing the competitive edge on all of your case mat- accounting, fraud investigation, investigative ters. Contact our office for a consultation or com- LOST PROFITS AND EARNINGS analysis of liability, and marital dissolution, and tax plimentary strategy session. planning and preparation. Excellent communica- WHITE, ZUCKERMAN, WARSAVSKY, LUNA tors with extensive testimony experience. Prior Big LIFE CARE PLANNERS & HUNT Four accountants. 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CA Private Investigator license #PI 12651. and courtroom experience (civil and criminal in- ning and preparation. Excellent communicators vestigations). Principals are Fellows of American with extensive testimony experience. Prior Big METALLURGY Society for Metals and board-certified diplomates, Four accountants. Specialties include accounting, American Board of Forensic Examiners. See dis- breach of contract, breach of fiduciary duty, busi- KARS ADVANCED MATERIALS, INC. play ad on page 49. ness interruption, business dissolution, construc- Testing and Research Labs, 2528 West Woodland tion defects, delays, and cost overruns, fraud, in- Drive, Anaheim, CA 92801-2636, (714) 527-7100, PERSONAL INJURY surance bad faith, intellectual property (including fax (714) 527-7169, e-mail: [email protected]. trademark, patent, and copyright infringement, Website: www.karslab.com. Contact Drs. KEYSTONE INVESTIGATIVE SERVICES, INC. and trade secrets), malpractice, marital dissolu- Ramesh J. Kar or Naresh J. Kar. Southern Cali- 530 South Lake Avenue, Suite 706, Pasadena, tion, personal injury, product liability, real estate, fornia’s premier aterials/mechanical/metallurgical/ CA 91101, (626) 676-5170, e-mail: info@keystoneis securities, tax planning and preparation, IRS audit structural/forensics laboratory. Registered profes- .com. Website: www.keystoneis.com. Contact defense, tracing, unfair advertising, unfair compe- sional engineers with 30-plus years in metallurgi- Kelly Cory, President/CEO. Specialties: profes- tition, valuation of businesses, and wrongful termi- cal/forensic/structural failure analysis. Experienced sional legal investigations for civil litigation, corpo- nation. See display ad on page 41. with automotive, bicycles, tires, fire, paint, plumb- rate/HR matters & insurance defense. Keystone in-

MEDICAL EXPERT WITNESSES (ALL SPECIALTIES)

AMFS MEDICAL EXPERTS NATIONWIDE 6425 Christie Avenue, Suite 260, Emeryville, CA 94608, (800) 275-8903. Website: www.AMFS .com. Welcome to AMFS where our in-house staff of attorneys and physicians are on call to discuss your most important medical legal matters, advise you as to their merit, and locate/engage the best and most suitable specialists to serve as expert witnesses and advisors. Based in California, AMFS has a 25-year history as the trusted medical expert partner to thousands of law firms across the coun- try and over 15,000 physicians, surgeons, nurses, and related experts located in every U.S. jurisdic- tion. Please call Dan Sandman, Esq., at (800) 275- 8903 to discuss your matter alongside one of our medical directors for a candid assessment and lightning-fast expert placement. AMFS: world class medical specialists in over 5,000 areas of exper- tise. See display ad on page 47.

MEDICAL LEGAL

ROUGHAN & ASSOCIATES AT LINC, INC. 114 West Colorado Boulevard, Monrovia, CA 91016, (626) 303-6333, fax (626) 303-8080, e-mail: [email protected]. Contact Jan Roughan at ext. 216. Specialties: Roughan and Associates at LINC is a case management and medical/legal consulting firm. Services/products offered include: 1) Expert Testimony, 2) Life Care Plan (LCP) Con- struction/LCP Critique, 3) Medical Record Organi- zation/Summarization/Analysis, 4) Medical Bill Au- diting, 5) Expert Witness Identification, 6) IME At- tendance, 7) Video Services (e.g., Day In Life, Set- tlement Brief, IME Evaluation, NDT/PT Evaluation, etc.), 8) Questions for: Deposition/Cross Examina- tion , 9) Medical/Psychiatric Case Management. See display ad on page 49.

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Los Angeles Lawyer July/August 2016 49 vestigators are experts in legal support—back- PLASTIC AND COSMETIC RECONSTRUCTIVE 439-2824, fax (310) 274-0503, e-mail: joanne ground & asset searches, locates, surveillance, SURGERY @psinvestigates.com or nicsmith@psinvestigates fraud, workplace and corp. investigations, jury sur- .com. Website: www.psinvestigates.com. Contact veys, cyber and complex investigations. Your STANLEY P. FRILECK, MD, F.A.C.S. Joanne Parrent or Nic Smith. PSI is a full-ser- comprehensive research and field investigation re- 9033 Wilshire Boulevard, Suite 408, Beverly Hills, vice investigative firm. Nic Smith has 40 years in source. “More of What You’re Looking For.” Provid- CA 90211, (310) 820-1491, fax (310) 826-1977, the field conducting investigations for attorneys in ing the competitive edge on all of your case mat- e-mail: [email protected]. Website: www thousands of civil and criminal cases. We special- ters. 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Asset/financial searches; back- PETRU CORPORATION CPA, David Dichner, CPA, ABV, Sandy Green, ground investigations; DMV searches; domestic 250 Hallock Drive, Suite 100, Santa Paula, CA CPA, Silva Hakobyan, CPA, Oz Folb, MBA. /marital cases; due diligence investigations; merg- 93060, (805) 933-1389, fax (805) 933-1380, ers/acquisitions specialist; personal injury defense Accounting experts in forensic accounting, tax is- e-mail: [email protected]. Website: cases; process service; surveillance/photograph; sues, business valuations, and appraisals, marital www.PetruCorporation.com. Contact Tim witness location/interviews; workplace investiga- dissolutions, eminent domain, insurance losses, Truwe. 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50 Los Angeles Lawyer July/August 2016 AHERN Insurance Brokerage, p. 2 ForensisGroup Inc., p. 39 LawPay/Affinipay, Inside Back Cover Tel. 858-571-9030 or 800-282-9786 www.AHERNinsurance.com Tel. 626-795-5000 www.forensisgroup.com Tel. 866-376-0950 www.lawpay.com

AMFS, Inc. (American Medical Forensic Specialists, Inc.), p. 47 Fragomen, p. 5 Lawyers’ Mutual Insurance Co., p. 11 Tel. 800-275-8903 www.amfs.com Tel. 310-820-3322 www.fragomen.com Tel. 800-252-2045 www.lawyersmutual.com

The California Academy of Distinguished Neutrals, p. 4 FULCRUM Financial Inquiry LLP, Back Cover Michael Marcus, p. 19 Tel. 310-341-3879 www.californianeutrals.org Tel. 213-787-4100 www.fulcruminquiry.com Tel. 310-201-0010 www.marcusmediation.com,

CCI Financial Investigations, p. 46 Higgins, Marcus & Lovett, Inc., p. 43 Noriega Clinics, p. 18 Tel. 831-634-9400 or 408-357-4114 www.copas-inc.com Tel. 213-617-7775 www.hmlinc.com Tel. 213-716-3744

Chapman University School of Law, Inside Front Cover The Holmes Law Firm, p. 6 Ross Mediation Services, p. 25 Tel. 877-CHAPLAW (877-242-7529) www.chaplaw.edu/law Tel. 626-432-7222 www.theholmeslawfirm.com Tel. 818-840-0950 www.rossmediation.com

CMM, LLP, p. 39 Jack Cohen Expert Witness, p. 5 Roughan & Associates at LINC, p. 49 Tel. 818-986-5070 e-mail: [email protected] Tel. (747) 222-1550 [email protected] Tel. 626-303-6333 x16 e-mail: [email protected]

Commerce Escrow—A Division of Opus Bank, p. 25 Jack Trimarco & Associates Polygraph, Inc., p. 45 Stephen Danz & Associates, p. 19 Tel. 213-484-0855 www.comescrow.com Tel. 310-247-2637 www.jacktrimarco.com Tel. 877-789-9707 www.employmentattorneyca.com

Corporate Realty Advisors, p. 15 Kantor & Kantor, LLP, p. 36 Vicenti, Lloyd & Stutzman LLP, p. 14 Tel. 800-507-6673 www.Attorneysleasespecialist.com Tel. 877-783-8686 www.kantorlaw.net Tel. 626-857-7300 www.vlsllp.com

CPT Special Needs Trusts, p. 4 KARS Advanced Materials, Inc., p. 49 Walzer & Melcher, p. 1 Tel. 877-695-6444 Ext: 2 www.snthelp.com Tel. 714-892-8987 www.karslab.com Tel. 818-591-3700 e-mail: [email protected]

Lawrence W. Crispo, p. 5 Krycler, Ervin, Taubman & Kaminsky, p. 47 Waronzof Associates, p. 19 Tel. 213-926-6665 e-mail: [email protected] Tel. 818-995-1040 www.ketkcpa.com Tel. 310-954-8060 www.waronzof.com

DataChasers.com, p. 39 Law Office of David Bloom, p. 9 White, Zuckerman, Warsavsky, Luna & Hunt LLP, p. 41 Tel. 951-780-7892 www.datachasers.com Tel. 213-384-4088 ext. 4101, [email protected] Tel. 818-981-4226 www.wzwlh.com

Econ One Research, Inc., p. 47 LawBiz Management, p. 4 Zivetz, Schwartz & Saltsman, p. 43 Tel. 213-624-9600 e-mail: [email protected] Tel. 800-837-5880 www.lawbiz.com Tel. 310-826-1040 www.zsscpa.com

Member Lounge Research Refresh Recharge

An eBranch of the LA Law Library The next time you visit LACBA, be sure to stop A space to work by the new Member Lounge, located adjacent to the visitor reception area on the 27th floor. Convenient WiFi connection for your laptop and smartphone A place to enjoy a snack or beverage and recharge LACBA's Member Lounge is open Monday A small conference room (seats 4) where members through Friday during regular business hours can work or meet privately with clients from 8:45 a.m. until 5:00 p.m.

Los Angeles Lawyer July/August 2016 51 closing argument BY MARK SONNENKLAR

Reflections on Current Choices for Legal Career Paths

PRACTICING LAW IS NOT WITHOUT ITS CHALLENGES. Whether you developing yourself as a lawyer and business developer. practice at a big firm or small firm, as a solo practitioner or in- The in-house counsel route seems alluring: fewer working hours, house counsel, you may feel that the grass is greener on the other a bird’s eye view into how a business is run, and working with a side. I have been on all sides of that beautiful green pasture since I team of people that are driving towards a common goal (maximization began my career in 1996 as a real estate lawyer at a medium-sized of profits). In-house counsel positions, though, don’t pay as well as regional law firm in Chicago. In 1998, I moved to Los Angeles and private practice, the opportunities for advancement are generally took a position in the Corporate Finance Department of Morrison limited, and lawyers are often not part of the core management & Foerster LLP. Five years later, I decided to start my own firm. I team. was a solo practitioner for about six months until a real estate lawyer In short, the poor quality of life at big law firms, the isolation friend from law school joined me as a partner and we simultaneously of a solo practitioner, and the limited opportunities for an in-house added an associate from Gibson, Dunn & Crutcher LLP. My biggest client at the time, an Idealab company, had engaged me as their I had come full circle and had to determine what was next for outsourced General Counsel, and I was going to their offices in Pasadena three to four days a week. this corporate lawyer in his mid-40s. Our firm did not have a centralized of - fice—each lawyer found his or her own office space—and used independent contractors rather than salaried employees. The savings created by this vast attorney are the primary reasons why I initially left Morrison & reduction in overhead compared with traditional law firms were Foerster LLP and founded my own firm thirteen years ago. I was passed along to the clients in the form of lower hourly rates. At the also very inspired by the prospect of innovating a new legal business same time, our firm’s partners consistently pocketed about 90 percent model, being the creator of my own career, and having the support of their books of business. of partners who would share the ride. By 2010, the firm had grown to nine attorneys. However, that As I reflect on the past 13 years, I realize how empowered and growth came to a halt over the next two years. Not seeing a path to satisfied I have been. I have had the good fortune to choose my further expansion, my real estate partner decided to move his practice clients, what I wear, when I go into the office, when I come home, to a bigger firm, and we were forced to shed several of our associates how much billable work I want, what type of work I want to do, in the process. Finally, my remaining corporate finance partner left and who I want as partners. I haven’t had to manage a lot of overhead the firm on December 31, 2015, leaving me and the same associate and staff, which has minimized my time spent on tedious firm admin- who joined us thirteen years ago. I had come full circle and had to istration. I have had partners who helped me develop myself as a determine what was next for this corporate lawyer in his mid-40s. lawyer, marketer, and business strategist. I definitely understand the allure of a big firm: sophisticated Although the recent shrinkage of my firm indicates that small- work and big bucks, if one is willing to bill 2,500 hours per year firm practice is not without its risks, if you are confident in the and go to work at a corporate office every day, and one has the ability to develop a book of business that supports your lifestyle, ability to develop a book of business. At the same time, it is necessary the opportunities for a small-firm lawyer abound. I could have to have at least a $1M book to become an equity partner, and job chosen to build my firm back up by recruiting new partners with a security is dependent on others managing the firm well. The recent similar vision to mine, or I could have joined one of the many suc- partner layoffs at Reed Smith LLP and the dissolutions of Dickstein cessful, boutique transactional firms looking for synergies with new Shapiro, Dewey & LeBoeuf LLP, Bingham McCutchen, Heenan partners. Several of the firms with which I met earlier in 2016 offered Blaikie LLP, Heller Ehrman LLP, Thelen LLP, and Howrey LLP have me a position as a partner. In the end, I decided to join a boutique blindsided many big firm lawyers and staff, causing them to question corporate law firm called Baer & Troff, LLP, because it is aligned what happened to the security of a big law firm job. Also, I don’t with my values and offers me the best opportunity to take my practice know a lot of happy big firm lawyers. The demands of the job take to the next level. As I reflect on where I have been and where I want a toll and undermine the quality of life, including time with family. to go, I am genuinely excited to explore with other attorneys and Solo practice certainly has its advantages: you are the master of clients how to build a better mousetrap that maximizes value for your destiny and there are no office politics. However, it is a lonely clients and fulfills me and my partners. n existence, and you don’t have partners to kick around new ideas, backstop your thinking on interesting legal questions, cover your Mark Sonnenklar is a business transactions and outsourced general counsel clients if you get sick or go on vacation, or push you to continue attorney with Baer & Troff, LLP in West Los Angeles.

52 Los Angeles Lawyer July/August 2016