December 19, 2014

Summary of December 17, 2014 conference report for civil cases

The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Wednesday, December 17, 2014. The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.

Review Granted

Raceway Ford Cases, S222211—Review Granted—December 17, 2014

This case presents the following issues: (1) Does the inclusion of inapplicable smog check and smog certification fees in an automobile purchase contract violate the Automobile Sales Finance Act (ASFA) (Civ. Code, § 2981 et seq.)? (2) Does backdating a second or subsequent finance agreement for the purchase of a vehicle to the date of the first finance agreement violate the ASFA?

Auto purchasers brought an action against an automobile dealership under the ASFA, the Unfair Competition Law (UCL), and the Consumers Legal Remedies Act (CLRA). After a bench trial, the trial court entered judgment in favor of one purchaser on a fraud claim but in favor of the defendant dealership on all other claims. The court later withdrew its decision and entered judgment for the purchasers on their backdated contract claims. The  Court of Appeal granted the defendant dealership’s petition for a writ of mandate. The trial court then vacated it its prior judgment, entered judgment for the dealership, and awarded it fees and costs. The plaintiff car buyers appealed and the defendant dealership cross-appealed.

In a published opinion, Raceway Ford Cases (2014) 229 Cal.App.4th 1119, the Court of Appeal, Fourth Appellate District, Division Two, reversed the trial court’s ruling with respect to the plaintiffs’ “backdating” claims and remanded for further proceedings. The key determination in the plaintiffs’ backdating cause of action is defining the appropriate start-date of the term used for calculating the annual percentage rate of the second contract’s credit transaction. The Court of Appeal held the trial court overlooked a key distinction in this determination and thus erred in categorically ruling in the defendant’s favor.

Under the Federal Reserve Board’s Regulation Z, which implements the federal Truth in Lending Act (TILA) (15 U.S.C.A. § 1601 et seq.; 12 C.F.R. § 226.1 et seq.), a transaction is consummated when the consumer becomes contractually obligated on a credit transaction—this event is distinct from when the consumer becomes obligated by the purchase of the vehicle. Accordingly, “the two obligations are analytically separate . . . no matter whether they coincide or not.” Here, the trial court conflated these two occurrences by assuming the appropriate start-date coincided with the date of sale. However, under Regulation Z’s definition of “consummation,” the appropriate start-date of a subsequent contract is triggered by the consumer’s act of signing that contract. Despite finding the trial court’s ruling on this cause of action in error, the Court of Appeal did not rule in favor of the plaintiffs. This is because it acknowledged that Regulation Z provides certain exceptions and also allows for a small margin of error with respect to a calculation of APR. Consequently, since one of the enumerated exceptions may apply to the plaintiffs’ transactions, and since the defendant’s asserted error might fall within the scope of Regulation Z’s acceptable margin of error, the Court of Appeal remanded for further inquiry.

Second, the Court of Appeal held that even if, on remand, the plaintiffs can successfully establish their backdating cause of action, it is unclear whether they will have a remedy under the ASFA. The plaintiffs argued the court should award damages under Nelson v. Pearson Ford Co. (2010) 186 Cal.App.4th 983, which held that backdating violations between a dealership and buyer contravene both section 2981.9 and subdivision (a) of section 2982 of the ASFA. Nelson held the appropriate remedy for backdating violations is to treat the contract as unenforceable and order the remedies of restitution and rescission. But the Court of Appeal here rejected Nelson on multiple grounds and held neither section 2981.9 nor section 2982 were implicated by such inaccurately disclosed APRs. Given this determination, the court affirmed the trial court’s decision and held the contract should not be rendered unenforceable. In addition, the court rejected the plaintiff’s attempt to recover under the CLRA and the UCL. The court held the plaintiffs (1) could not establish the defendants engaged in any activity proscribed by the CLRA and (2) did not have standing to sue under the UCL.

Finally, with respect to the plaintiffs’ asserted cause of action regarding the erroneous charging of smog fees, the Court of Appeal affirmed the trial court’s ruling in favor of the defendant. The court determined that section 2982, subdivision (a), of the ASFA had not been violated. That provision governs the formalities of contracts, not their substance. Accordingly, even though the defendants erroneously charged the plaintiffs for services not provided, section 2982 was not implicated because the erroneous charges were accurately described and set forth in the contract. Consequently, the plaintiffs’ asserted cause of action under the ASFA failed.

Review Denied (with dissenting justices)





December 18, 2014

Kruger gets top JNE rating

Cheryl Miller in The Recorder and Bob Egelko in the San Francisco Chronicle report that Supreme Court appointee Leondra Kruger has received the best rating — exceptionally well qualified — from the Commission on Judicial Nominees Evaluation (JNE), the State Bar body that is required to vet the governor’s nominees and appointees.  Egelko states the rating “virtually guarantees her confirmation” at Monday’s hearing of the Commission on Judicial Appointments.  Miller similarly writes that “JNE’s top rating and glowing endorsements portend an easy confirmation hearing.”

Governor Brown’s last two appointments to the court — Justice Goodwin Liu and Justice-elect Mariano-Florentino Cuéllar — also got the highest JNE rating before their unanimous confirmations.

December 18, 2014

Dangerous vacationing

We warned you:  if you are counsel in a Supreme Court case that might be argued during a vacation you’ve planned, tell the court about your plans as soon as possible, but definitely before the case is placed on the court’s oral argument calendar.  One thrill-seeking attorney recently disregarded the advice, and got away with it.awesomely-dangerous-vacation-activities813360084-jan-3-2014-1-600x400

Last week, the court scheduled Tract 19051 Homeowners Association v. Kemp for its January calendar.  Four days later, respondent’s counsel files a letter with the court asking for a continuance because of “a long planned family vacation” that will end the day before the scheduled argument.  Counsel says he “would like more than a single day [after his vacation] to prepare” for what he reports will be his first Supreme Court argument.  Within 48 hours, the court publishes an amended calendar showing that the case will be called and continued to the February calendar.

It helped that opposing counsel did not object to the change and that there will be probably two brand new justices sitting for the January calendar, but still . . . .

Last-minute continuance requests granted.  What’s next, relief for late petitions for review?  Oh, wait.

December 18, 2014

Chief Justice appoints Justice Ming Chin to the Judicial Council

As noted in this press release, the Chief Justice on Tuesday appointed Justice Ming W. Chin to the Judicial Council for a two-year term beginning January 5. He will occupy the seat presently filled by the retiring Justice Marvin Baxter. According to the press release, the Chief said: “ ‘Justice Chin has long been a leader on matters of statewide judicial administration, chairing both the visionary Commission for Impartial Courts and the statewide Technology Advisory Committee. . . . He has that invaluable combination of deep knowledge, vision, and collegiality that helps the judicial branch collaborate, self-assess, deliberate, and move forward. I look forward to his contributions on the council.’ ”

In a December 8 article in the Daily Journal [subscription required], “Tech savvy justice has big goals for seat on Judicial Council,” Paul Jones reports that Justice Chin said of his new role that “the opportunity to play a role in revitalizing the judicial branch after half a decade of crippling budget cuts seemed a worthy challenge” and that “one of his main interests will be promoting the use of new IT innovations to improve courts’ efficiency.” Jones quotes Justice Chin as saying “ ‘The advances in technology are breathtaking. Our courts are way behind and we need to catch up.’ ” Among the nascent technological efforts to win Justice Chin’s attention are: (1) a program in Fresno County that allows some court appearances via video—a means of easing the burden on litigants who have been forced by courthouse closures to travel greater distances to court; and (2) allowing court interpreters to help a larger number of people by interpreting via video.

The Daily Journal quotes Santa Barbara Superior Court Assistant Presiding Judge James E. Herman, who has overseen the Judicial Branch’s recent technology planning, as welcoming Justice Chin’s appointment to the Judicial Council. According to Judge Herman, Justice Chin is “ ‘incredibly tech savvy. He’s really just such a visionary in terms of what technology can do for access to justice.’ ”

December 17, 2014

California’s independent constitution

The Fall/Winter 2014 newsletter of the California Supreme Court Historical Society (I serve on the Society’s board) is available online.  It includes two articles about the California constitution from authoritative sources.

Chief Justice Tani Cantil-Sakauye writes about “The Truly Independent Nature of the California Constitution.”  And former Justice Joseph Grodin’s article is entitled, “The California State Constitution And Its Independent Declaration of Rights.”  Both pieces are adapted from the forthcoming second edition of The California State Constitution (Oxford University Press, 2014), which Grodin co-authors.

December 16, 2014

Governor Brown defends his appointment of Leondra Kruger to the California Supreme Court

In interviews with California legal newspapers published today, Governor Jerry Brown has defended Leondra R. Kruger, his most recent appointee to the state Supreme Court. The governor’s remarks come a week before Ms. Kruger’s scheduled December 22 confirmation hearing before the Commission on Judicial Appointments (catch it at 10:45 a.m. on the California Channel). Kruger is presently a U.S. Department of Justice attorney in Washington, D.C., where she formerly served as an assistant Solicitor General and acting principal deputy Solicitor General.

The governor’s selection of Kruger for the high court has drawn criticism from more than one quarter, which is likely what prompted his remarks to the media. As we previously noted, retired Court of Appeal Justice Rick Sims has criticized the selection in a Daily Journal [subscription required] op-ed piece on the ground that, while brilliant and accomplished, Kruger lacks judicial experience and is unfamiliar with California law. And former Assembly Speaker and former San Francisco mayor Willie Brown criticized the governor’s pick of Kruger, who is African-American, in a San Francisco Chronicle op-ed piece on the ground that surely a qualified African-American could have been found within the borders of the Golden State.

In an interview published in today’s Daily Journal [subscription required], Brown responded. Of Sims’ criticism he was dismissive, saying: “If that’s what you are going to cite as criticism, I would say this appointment is beyond reproach.” According to this Wall Street Journal LawBlog summary, the governor expressed his view that both Kruger and recently confirmed Justice Mariano-Florentino Cuellar “ ‘could make a very important contribution to the law of California.’ ” Of Willie Brown’s criticism, the governor observed laconically that it was “mild.”

According to the Sacramento Bee, the governor also gave an interview to The Recorder [subscription required]. Of Kruger’s lack of judicial experience, he said: “‘There can be judges who sit on the court for a long time. You can compare their body of work and you can compare hers. . . . And I think she stands very tall.’ ” The governor also rejected the suggestion that he has overlooked sitting California judges with his Supreme Court appointments, calling the assertion “ ‘logically deficient.’ ” He explained: “ ‘The fact that I find someone outstanding doesn’t mean there aren’t other outstanding people. . . . I just didn’t happen to pick them.’ ”

December 14, 2014

Willie Brown is “Puzzled over Jerry Brown’s East Coast nominee for Supreme Court”

Willie Brown, a California political legend as Assembly speaker and San Francisco mayor, in today’s San Francisco Chronicle asks about Governor Jerry Brown’s appointment of Washington, D.C., resident Leondra Kruger to the Supreme Court, “Were there no qualified African Americans in California?”

This “carpetbagger” argument has never resonated strongly with me.  Being a local is a factor, but it’s not near the top of my list.  There shouldn’t be geographical limits on the size of the talent pool.

December 13, 2014

Summary of December 10, 2014 conference report for civil cases

The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Wednesday, December 10, 2014. The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.

Review Granted

Lynch v. California Coastal Commission, S221980—Review Granted—December 10, 2014

This case presents the following issues: (1) Did plaintiffs, who objected in writing and orally to certain conditions contained within a coastal development permit approved by defendant California Coastal Commission, and who filed a petition for writ of mandate challenging those conditions, waive their right to challenge the conditions by subsequently executing and recording deed restrictions recognizing the existence of the conditions and constructing the project as approved? (2) Did the permit condition allowing plaintiffs to construct a seawall on their property, but requiring them to apply for a new permit in 20 years or to remove the seawall, violate Public Resources Code section 30235 or the federal Constitution? (3) Were plaintiffs required to obtain a permit to reconstruct the bottom portion of a bluff-to-beach staircase that had been destroyed by a series of winter storms, or was that portion of the project exempt from permitting requirements pursuant to Public Resources Code section 30610, subdivision (g)(1)?

In 2003, plaintiff homeowners applied to the City of Encinitas for approval to obtain a coastal development permit. Six years later, defendant Coastal Commission approved respondents’ application and granted a permit containing numerous special conditions and limited the permit’s duration to 20 years. The homeowners obtained the permit, recorded the required deed restrictions, and constructed their project according to the challenged conditions. In the meantime, they filed a petition for writ of mandate challenging the 20 year limit and the conditions, one of which precluded them from rebuilding a staircase. The Coastal Commission argued that the homeowners accepted the benefit of the permit by constructing their project, and thus waived the right to challenge the permit’s conditions. The court granted homeowners’ petition and directed the Coastal Commission to remove the challenged conditions.

The Court of Appeal, Fourth Appellate District, Division One, held in a published decision, Lynch v. California Coastal Commission (2014) 229 Cal.App.4th 658, that: (1) the homeowners waived their right to challenge the permit’s conditions and their compliance with the permit’s conditions under duress and protest did not fall under either exception to the general waiver rule; (2) the Coastal Commission’s decision to limit the permit’s duration was supported by substantial evidence; and (3) the reconstruction of the homeowners’ staircase was subject to the permitting requirements under the California Coastal Act of 1976, which generally requires a permit for reconstruction, repair, or maintenance projects.  Justice Nares dissented, disagreeing that sufficient evidence supported the majority’s conclusions regarding the 20 year limit and staircase conditions.

For more information about this case, see this Los Angeles Times article.

Friends of the Eel River v. North Coast Railroad Authority (Northwestern Pacific Railroad Company), S222472—Review Granted—December 10, 2014

This case presents the following issues: (1) Does the Interstate Commerce Commission Termination Act (ICCTA) preempt the application of the California Environmental Quality Act (CEQA) to a state agency’s proprietary acts with respect to a state-owned and funded rail line or is CEQA not preempted in such circumstances under the market participant doctrine? (2) Does the ICCTA preempt a state agency’s voluntary commitments to comply with CEQA as a condition of receiving state funds for a state-owned rail line and/or leasing state-owned property?

The North Coast Railroad Authority (NCRA) entered into a contract with the Northwestern Pacific Railroad Company (NWPRC), allowing NWPRC to conduct rail service on tracks controlled by NCRA. In addition, NCRA and Caltrans executed an agreement that required NCRA to submit an environmental impact report prior to requesting or receiving funds for the right-of-way purchase or construction of railway tracks. In 2007, NCRA submitted a draft of its EIR, and in addition, NCRA issued notices of exemption for rail line reconstruction concerning work it believed to be categorically exempt from environmental review under CEQA. The proposed action would be “limited to the repair, restoration, replacement-in-kind, or retrofitting, as well as the on-going maintenance of existing railroad facilities.” In 2011, NCRA adopted a resolution approving the EIR. Petitioners filed a petition for writ of mandate, challenging NCRA’s certification of an environmental impact report (EIR) under CEQA. The court dismissed petitioners’ writ of mandate petition.

The Court of Appeal, First Appellate District, Division Five, affirmed in a published opinion, Friends of Eel River v. North Coast Railroad Authority (2014) 230 Cal.App.4th 85. First, the court held that the ICCTA preempted CEQA’s requirement, and explained that when, as here, a party relies on a state law of general application to challenge a state proprietary action, that challenge operates as a regulation, rather than a part of the proprietary action being challenged. Accordingly, the market participation doctrine did not apply. Second, the court concluded that NCRA’s agreement with Caltrans did not unambiguously amount to a commitment to prepare an EIR regarding the resumption of railway operations.

Review Denied (with dissenting justices)




December 12, 2014

MICRA opinion filing Monday

On Monday morning, the Supreme Court will file its opinion in Rashidi v. Moser, which was argued on the October calendar.  In Rashidi, the court will answer this question:  If a jury awards the plaintiff in a medical malpractice action non-economic damages against a healthcare provider defendant, does Civil Code section 3333.2 entitle that defendant to a setoff based on the amount of a pretrial settlement entered into by another healthcare provider that is attributable to non-economic losses or does the statutory rule that liability for non-economic damages is several only (not joint and several) bar such a setoff?

Rashidi is perhaps more notable for what is not being decided than what is.  The statute the court will interpret is the part of the 1975 Medical Injury Compensation Reform Act (MICRA) that limits to $250,000 the recoverable amount of noneconomic damages in healthcare professional negligence cases.  The plaintiffs’ bar doesn’t want the statute interpreted; it wants the statute struck down as unconstitutional, and the plaintiff asked the court to do that in Rashidi.  But the court specifically limited the issue it would decide to the narrower statutory construction question.

The opinion can be viewed Monday starting at 10:00 a.m.

December 11, 2014

“New” Supreme Court to hear 6 cases on January calendar

When the Supreme Court convenes for its January calendar, announced today, it probably will have two new faces.  Leondra Kruger should be confirmed and then sworn in on December 22 and Mariano-Florentino Cuéllar should be sworn in on January 5.  It will be the first oral argument session without Justice Marvin Baxter in a quarter century.  It will also be the first one since April with no Court of Appeal justices sitting on the court by assignment.

The January calendar might have been trickier than usual to put together.  The court normally doesn’t schedule an oral argument in a case until a majority of the justices concur in a “calendar memorandum” written by one of the justices.  (See page 6 of the court’s internal operating practices and procedures.)  I’m just guessing here, but I’m thinking that Justice Baxter and future Justices Kruger and Cuéllar did not have any input on the calendar memoranda for the January cases and that those cases all have calendar memoranda that have been concurred in by 4 of the 5 current justices who will still be on the court when the cases are argued next month.  Requiring concurrences of 4 out of 5 justices instead of 4 out of 7 could have limited the cases available to be heard in January.

Two days after Cuéllar officially joins the court, the court will hear the following cases in San Francisco (with the issue presented as stated on the court’s website):

Tract 19051 Homeowners Association v. Kemp:  Is a prevailing homeowner entitled to attorney fees under Civil Code section 1354 in an action by a homeowners association to enforce its governing documents as those of a common interest development when the homeowner prevailed because it was later determined that the subdivision was not such a development and its governing documents had not been properly reenacted?

Coffey v. Shiomoto:  (1) Can circumstantial evidence other than the results of chemical tests be used to prove that a driver’s blood-alcohol content at the time of driving was the same as, or greater than, the results of a blood-alcohol test taken approximately an hour after driving?  (2) Is the decision of the Court of Appeal consistent with the requirements of Evidence Code section 604 for proof of an initially presumed fact after the presumption has been rebutted?

People v. Loper:  (1) Is a trial court’s order denying the recall of a sentence under section 1170, subdivision (e) appealable?  (2) Assuming such an order is appealable, what is the proper standard of review on appeal?  (3) Was the trial court’s order denying the recall of defendant’s sentence correct in this case?

People v. Diaz:  (1) Did the trial court err by failing to instruct the jury sua sponte that it must consider defendant’s extrajudicial, oral statements with caution when the statements constituted the criminal act?  (2) If so, did the Court of Appeal correctly conclude that the trial court’s failure to instruct was harmless error?

As noted, the Supreme Court has indicated it might use Diaz to overturn some of its past precedent.  A year ago, the court ordered supplemental briefing on these issues:  (1) Are there grounds for this court to reconsider precedent holding that a cautionary instruction concerning a defendant’s extra-judicial statements must be given sua sponte, even in the absence of a statute mandating that the instruction be given?  (See, e.g., People v. Beagle (1972) 6 Cal.3d 441, 455-456 and fn. 4; People v. Carpenter (1997) 15 Cal.4th 312, 392.)  (2) What rationale exists for requiring the cautionary instruction to be given sua sponte, in light of other available instructions, including the general instructions on witness credibility that are routinely given in every case?  (See, e.g., CALCRIM No. 226.)  (3) If a cautionary instruction is not required sua sponte in every case in which a defendant’s extrajudicial statements tending to prove guilt are admitted, under what circumstances, if any, should it be given upon request?  (4) If the rule requiring the court to give the cautionary instruction sua sponte is changed, should the new rule apply retroactively to defendant’s case?  (5) What effect, if any, does the Legislature’s adoption of Penal Code section 859.5, subdivision (e)(3), effective January 1, 2014, have on these issues?

People v. Cook:  Does Penal Code section 12022.7, subdivision (g), which provides that the great bodily injury enhancement of this section “shall not apply to murder or manslaughter . . . ,” allow an enhancement on a manslaughter conviction for the great bodily injury inflicted on another victim who was the subject of a separate manslaughter conviction?

Less than five months ago, the court requested supplemental briefing concerning whether any great bodily injury enhancement was proper

People v. Scott:  [This is an automatic appeal from a September 1997 judgment of death.  The court’s website does not list issues for such appeals.]


December 10, 2014

“All experience is welcome on the Supreme Court”

So said Chief Justice Tani Cantil-Sakauye during her annual meeting with the press, according to the Daily Journal [subscription].  The comment concerned Leondra Kruger’s appointment to the Supreme Court and the criticism from some that Kruger has insufficient experience in California law.  The Chief Justice is quoted as also saying, “We are a mix of boots on the ground folks and also people who have worked with the theories of the law . . . I think it’s a healthy mix.”  If things go as expected, the Chief Justice and Kruger will be colleagues in 12 days.

December 10, 2014

Prosecutor disqualification motion filing tomorrow

Tomorrow morning, the Supreme Court will file its opinion in Packer v. Superior CourtPacker, which was argued on the October calendar, raises the issue whether the trial court abused its discretion by denying a motion for recusal of a prosecutor without an evidentiary hearing on the grounds that defendant failed to make a prima facie showing that recusal was warranted.

The opinion can be viewed tomorrow starting at 10:00 a.m.

December 7, 2014

Dissenting pro tem streak broken

In the dozens of cases decided since Justice Kennard’s retirement, every time there was a dissent, the pro tem Court of Appeal justice assigned to the case was with the minority, or, in one case, was the minority.  But that streak was broken last week.

In Riverside County Sheriff’s Department v. Stiglitz, the court was divided.  The majority held that, “when hearing an administrative appeal from discipline imposed on a correctional officer, an arbitrator may rule upon a discovery motion for officer personnel records, commonly referred to as a Pitchess motion.”  Justices Werdegar and Baxter dissented, but the pro tem justice — Second District, Division Four, Justice Thomas Willhite, Jr. — signed the majority opinion written by Justice Corrigan.

December 5, 2014

Jury misconduct opinion filing Monday

On Monday morning, the Supreme Court will file its opinion in People v. Lavender, in which the court will decide whether the Court of Appeal erred by reversing defendants’ convictions for juror misconduct and remanding for a new trial rather than remanding for an evidentiary hearing into the misconduct.

Lavender was argued on the court’s October calendar.

The opinion can be viewed Monday starting at 10:00 a.m.

December 3, 2014

Kruger confirmation hearing scheduled for December 22

On December 22, the Commission on Judicial Appointments will hold a hearing on Governor Brown’s appointment of Leondra Kruger to the California Supreme Court.  The Commission members are Chief Justice Tani Cantil-Sakauye, Attorney General Kamala Harris, and soon-to-retire Second District Court of Appeal Presiding Justice Joan Dempsey Klein.

If, as is likely, the Commission confirms Kruger’s appointment, she will join the court in time for its January oral argument calendar and the parade of pro tems will end.

The hearing on Kruger’s appointment is likely to be televised on the California Channel; the hearings for Chief Justice Cantil-Sakauye, Justice Liu, and Justice-elect Cuéllar were.

December 3, 2014

No conference held the week of December 1, 2014

The Court is holding no conference this week because it is hearing oral argument in Los Angeles. Accordingly, this week no action will be taken on petitions for review and no opinions will be ordered published or depublished.


December 3, 2014

Prosecutor misconduct opinion filing tomorrow

Tomorrow morning, the Supreme Court will file its opinion in People v. Centeno, which was argued on the October calendar.  The court will answer this question:  did the prosecutor commit misconduct during closing argument by misstating the state’s burden of proof?  After scheduling the case for argument, the court asked the parties to be prepared to address whether defense counsel was constitutionally ineffective for failing to object to the prosecutor’s argument.

The opinion can be viewed tomorrow starting at 10:00 a.m.

December 1, 2014

Retired Court of Appeal justice criticizes Kruger appointment

Retired Third District Court of Appeal Justice Rick Sims writes in today’s Daily Journal [subscription] that he opposes Leondra Kruger’s appointment to the California Supreme Court.  His reasons:  she “cannot possibly have a sufficient working knowledge of California law sufficient to do the job” and she has no judicial experience.  Similar criticism could have been leveled at Justice Goodwin Liu and Justice-elect Mariano-Florentino Cuéllar when Governor Brown named them to the court.  Neither had been judges.  Also, although both might have had a bit more “working knowledge of California law” than Kruger does because of their teaching at law schools in California, the difference is probably not substantial.  I don’t recall Justice Sims opposing their appointments.  In fact, in his column, Sims says that Liu “has been a welcome addition to the court.”

On the other side (literally and figuratively) of the Daily Journal’s front page is Emily Green’s “Kruger known for thoughtful advocacy.”  In the article, former acting Solicitor General Walter Dellinger said Kruger’s lack of local legal experience could be a plus — “All that means is she is coming to the court without preconceptions about California law.”

November 28, 2014

MICRA constitutionality might be early test of the “new” Supreme Court

The Supreme Court on Tuesday granted review in Hughes v. Pham.  A group who supported review is touting the court’s action as a decision to “review the constitutionality of [what the group characterizes as] the state’s arbitrary 39-year-old damages cap of $250,000 in medical malpractice cases.”  That’s wrong . . . at least for now.

The constitutionality of Civil Code section 3333.2 — the limit on noneconomic damages in healthcare professional negligence cases enacted as part of the 1975 Medical Injury Compensation Reform Act (MICRA) — is not currently before the court in Hughes, but it could be before spring.  If that happens, it will be a harbinger of change at the Supreme Court due to the court’s three newest justices, all appointed by Governor Brown.

The Hughes petition for review raises the constitutional issue, but, in granting review in Hughes, the court clearly did not agree to decide that issue.  In fact, the court did not agree to decide any issue in Hughes at all.  Hughes is a grant-and-hold case; action on the matter is deferred pending disposition of Rashidi v. Moser, S214430, and the eventual “action” on a grant-and-hold case is usually not a written opinion.  Moreover, the court will not decide the constitutional issue in Rashidi, either.  Indeed, the court is expressly avoiding that issue there:  the Court of Appeal upheld the constitutionality of the cap in a published opinion and the Rashidi plaintiff’s petition for review raised the constitutional issue, but the court specifically limited the case to an issue about how the damage cap is applied, thereby presuming the statute’s constitutionality.

But, just because Hughes‘s status as a grant-and-hold case means the court normally would not issue an opinion in the matter does not mean that the status won’t change.  The court can, and occasionally does, un-hold a case and order briefing, hold oral argument, and issue an opinion.  If that happens in Hughes, the court could decide the constitutionality of the MICRA damage cap in that case.  And it might happen.  Some history tells why.

Actually, the Supreme Court already decided the constitutionality of the MICRA cap.  It upheld the law almost 30 years ago in Fein v. Permanente Medical Group (1985) 38 Cal.3d 137.  Within the last ten years, however, plaintiffs lawyers have renewed their attack on the cap in court with somewhat different constitutional arguments.  So far, they’ve been unsuccessful.  For example (and a disclosure), Horvitz & Levy filed an amici curiae brief supporting the cap five years ago in a case raising the same constitutional issues as in Hughes.  In that case, the Court of Appeal upheld the MICRA cap’s constitutionality in an unpublished opinion and the Supreme Court denied review.  (The plaintiffs’ bar has also failed to raise the amount of the cap legislatively, most recently winning only 33 percent of the vote for a ballot initiative.)

Three years ago, however, when the Court of Appeal again rejected constitutional attacks on the MICRA cap, in Stinnett v. Tam (2011) 198 Cal.App.4th 1412, the Supreme Court again denied review, but Justices Kathryn Werdegar and Goodwin Liu voted to hear the case.

In Stinnett, the court was two votes short of review.  Within the next two months, there will be two new justices on the court — Mariano-Florentino Cuéllar and Leondra Kruger — who could join with Justices Werdegar and Liu in voting to decide the constitutional issue.  And the first opportunity to do so would be un-holding Hughes.  That could happen after a decision in Rashidi,  which was argued in October, or even before then.

A change in court personnel can profoundly affect the outcome of cases.  The court’s MICRA jurisprudence itself is a prime example.  When the Supreme Court first reviewed the constitutionality of MICRA, examining a part of that statutory scheme other than the damages cap, the court initially struck down the law in a 4-3 decision.  (American Bank and Trust Co. v. Community Hospital (1983) 190 Cal.Rptr. 371.)  There were three pro tem justices on the case; two voted with the majority and one with the dissenters.  Soon after the decision, Governor Brown (in his first stint as governor) appointed Joseph Grodin to the court, replacing one of the pro tems who had been in the majority.  Justice Grodin voted with the three dissenters to rehear the case and he and those three formed a new majority to uphold MICRA.  (American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359.)

Legal observers have been discussing how Governor Brown (in his second two terms as governor) could reshape the Supreme Court.  An early indication of that impact will come when his three appointees this time around — Liu, Cuéllar, and Kruger — vote whether to treat Hughes as a typical grant-and-hold or to use that case as the vehicle to reevaluate the constitutionality of MICRA’s damage cap.

November 26, 2014

Summary of November 25, 2014, conference report for civil cases

The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Tuesday, November 25, 2014.  The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.

Review Granted

McLean v. State of California, S221554—Review Granted—November 25, 2014

This case presents the following issues:  (1) When bringing a putative class action to recover penalties against an “employer” under Labor Code sections 203, may a former state employee sue the “State of California” instead of the specific agency for which the employee previously worked?  (2) Do Labor Code sections 202 and 203, which provide a right of action for an employee who “quits” his or her employment, authorize a suit by an employee who retires?

A retired deputy attorney general filed a class action against defendants the State of California and the California State Controller’s Office, alleging defendants violated prompt payment requirements of Labor Code section 202.  The trial court sustained defendants demurrer, finding that the term “quits” in sections 202 and 203 does not apply to employees who retire.

The Court of Appeal, Third Appellate District, in an published opinion (McLean v. State of California (2014) 228 Cal.App.4th 1500), held that:  (1) an employee who quits to retire may sue under sections 202 and 203, (2) the action was proper against the State of California, and (3) the trial court properly dismissed the Controller’s office because an action against a state agency is, in effect, an action against the state.

Hughes v. Pham, S221650—Review Granted & Held—November 25, 2014

The court ordered briefing deferred pending decision in Rashidi v. Moser, S214430, which was argued in October and which presents the following issue:  If a jury awards the plaintiff in a medical malpractice action non-economic damages against a healthcare provider defendant, does Civil Code section 3333.2 entitle that defendant to a setoff based on the amount of a pretrial settlement entered into by another healthcare provider that is attributable to non-economic losses or does the statutory rule that liability for non-economic damages is several only (not joint and several) bar such a setoff?

After a plaintiffs’ jury verdict in a medical malpractice case, the trial court reduced the noneconomic damages to $250,000 under section 3333.2 (a part of MICRA), and applied an earlier settlement to offset the final judgment.  Plaintiffs argued that section 3333.2 is unconstitutional.  If that statute is valid, plaintiffs conceded that an offset was required under MICRA, but they contended the trial court was required to calculate the ratio of economic to noneconomic damages before it applied the MICRA cap.  Plaintiffs also challenged the application of MICRA’s periodic payments provision.  Defendant challenged the judgment against him on numerous grounds.

The Court of Appeal, Fourth Appellate District, Division Two, held in an unpublished opinion, among other things, that section 3333.2 is constitutional and that the trial court correctly determined the ratio of economic and noneconomic damages before it applied the MICRA cap to plaintiffs’ noneconomic damages.

Review Denied (with dissenting justices)



Cutler v. Franchise Tax Board, S221856—Depublished—November 25, 2014

This case presents the issue whether a plaintiff whose lawsuit results in a published opinion finding that a tax statute discriminated on its face on the basis of an interstate element in violation of the commerce clause, was entitled to attorney fees under Code of Civil Procedure section 1021.5, the private attorney general statute.

The trial court denied the plaintiff’s attorney fee motion, ruling that plaintiff’s lawsuit had not conferred a significant benefit on the public or on a large class of people and that the necessity and financial burden of private enforcement were not such as to make an attorney fee award appropriate.

The Court of Appeal, Second Appellate District, Division Eight, reversed in Cutler v. Franchise Tax Board (2014) 229 Cal.App.4th 419, concluding that both of the trial court’s rulings were erroneous.