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, January 25, 2012.  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

Promenade at Playa Vista Homeowners Association v. Western Pacific Housing, S198722—Review Granted and Held—January 26, 2012.

The question presented is whether, in a construction defect action brought by a homeowners association, a developer can compel binding arbitration pursuant to an arbitration provision in the CC&R’s.  The Supreme Court ordered further action deferred pending consideration and disposition of a related issue in Pinnacle Museum Tower Assn. v. Pinnacle Market Development, S186149.

The Court of Appeal, Second District, Division One, held in a published decision, Promenade at Playa Vista Homeowners Assn. v. Western Pacific Housing, Inc. (2011) 200 Cal.App.4th 849, that the developer could not compel binding arbitration.  The court reasoned that CC&R’s are equitable servitudes and can only be enforced by the homeowners association and/or an owner.  Developers are not among those permitted to enforce CC&R’s.

Review Denied (with dissenting justices)

None.

Depublished

None.

The Supreme Court set a special hearing for the writ petition challenging the new map of the State Senate districts.  Now it’s also having a special filing of its opinion in the case.  Instead of a normal filing on a Monday or Thursday, the court today announced the opinion will issue tomorrow at 10:00 a.m.

When the court last month agreed to hear the writ petition on the merits, it set a schedule that the court said would allow “the filing of an opinion in this matter as early as the end of January 2012.”  The justices are right on time.

As we’ve mentioned in the past, the Chief Justice has leveled harsh criticism at the backers of AB 1208, the Trial Court Rights Act.  If passed, the bill would substantially shift power and control over court funding from the Judicial Council and the Administrative Office of the Courts (AOC) to local trial courts.  Perhaps no one is as much of a lightning rod for such criticism as the bill’s sponsor, Assembly Majority Leader Charles Calderon.  And, as we noted here, Calderon has done little to curry favor with the Chief.     

In this recent post on Legal Pad, the Recorder’s legal blog, Cheryl Miller explains that tensions have not lessened as AB 1208 heads toward a January 31 deadline for a vote on the Assembly floor.  According to Miller, the Chief recently told the Los Angeles Times’s editorial board that Calderon has used AB 1208 as “a hammer over my head for the last year.”  She criticized the bill’s backers for springing the legislation on her after just 47 days in office, without discussion or consultation. 

Calderon, for his part, is quoted as saying the Chief has refused to meet his demands to “distance herself” from the AOC and the troubled Court Case Management System project, which we last discussed in depth here.  Perhaps most interestingly, Calderon claims he has the votes to pass the bill off of the Assembly floor.  But, as noted here, the Judicial Council officially opposes the measure and, according to Miller, so do 43 out of 58 presiding judges.

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, January 18, 2012.  The summary includes those civil cases in which (1) review has been granted (not including grant-and-transfers), (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.  This week, we note that the Court has decided to grant review in three cases concerning the regulation of medical marijuana dispensaries, as discussed here and here.   

Review Granted

Zelasko-Barrett v. Brayton-Purcell, S198438 – Review Granted and Held– January 18, 2012.   

This is an action by a former law clerk against his law firm employer, alleging a failure to pay overtime wages and other benefits.  The Court of Appeal, First District, Division Three, reversed an order awarding attorney fees to the prevailing defendant/employer.  The Supreme Court ordered briefing deferred pending the decision in Kirby v. Immoos Fire Protection, Inc., S185827, which presents the following issues for review: “(1) Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations, or may attorney’s fees be awarded under Labor Code section 218.5?  (2) Is our analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?”  As we discussed here, this is not the first case to have been granted and held pending the outcome in Kirby. 

City of Riverside v. Inland Empire Patient’s Health and Wellness Center, S198638 – Review Granted – January 18, 2012.

This is an action by a city against a medical marijuana dispensary operator for public nuisance, seeking injunctive relief.  The question presented is whether local ordinances regulating or banning the operation of such dispensaries are preempted under state law.  The Court of Appeal, Fourth District, Division Two, held a city ordinance banning such dispensaries is not preempted by the Compassionate Use Act (Health & Safety Code, § 11362.5) or the Medical Marijuana Program (Health & Safety Code, §§ 11362.7–11362.83).

Traudt v. City of Dana Point, S197700 – Review Granted – January 18, 2012.

This is an action by a medical marijuana patient against a city for a declaratory judgment that city zoning ordinances banning medical marijuana dispensaries are preempted by state law. The question presented concerns a plaintiff’s standing to challenge such an ordinance.  The Court of Appeal, Fourth District, Division Three, held that an individual medical marijuana patient does not have standing to challenge the alleged infringement of a right belonging to the group as a whole.

Pack v. Superior Court (City of Long Beach), S197169 – Review Granted – January 18, 2012.

This is an action by members of a medical marijuana collective against a city for declaratory and injunctive relief challenging an ordinance prohibiting “cultivation, possession, distribution, exchange or giving away” of medical marijuana except pursuant to a permit.  The question presented is whether the city’s ordinance, which permits and regulates medical marijuana collectives rather than merely decriminalizing specific acts, is preempted by the federal Controlled Substances Act, 21 U.S.C. section 812, 841(a)(1), 844 (CSA).  The Court of Appeal, Second District, Division Three, held the city ordinance in question is, in part, preempted by the CSA.  Check out this article for additional information about this case.    

Review Denied (with dissenting justices)

None.

Depublished

Yuin University v. Korean Broadcasting System, S197947 – Depublished Court of Appeal Opinion – January 18, 2012.

This was an action by a university against a Korean television network for libel, based on the broadcasting company’s characterization of the university as “vacant,” a “ghost school” and a “degree factory.”  The Court of Appeal, Second District, Division Eight, held in a published decision, Yuin University v. Korean Broadcasting System (2011) 199 Cal.App.4th 1098, that while the broadcast may have cast doubts on the university’s legitimacy, the statements were not actionable when considered in context.

Today the Supreme Court resolved an unsettled issue about recoverable costs in California appeals. In its decision in Rossa v. D. L. Falk Co. (No. S183523), the court addressed whether California Rules of Court, rule 8.278(d)(1)(F), which permits a successful appellant to recover “the cost to obtain a letter of credit as collateral,” allows the recovery of “the interest expense incurred by an appellant to borrow funds to secure a letter of credit that was obtained to secure an appeal bond posted to stay enforcement of a money judgment during the pendency of the appeal.” Answering that question in the negative, the court held that “rule 8.278(d)(1)(F) does not extend to interest expenses incurred to borrow funds to provide security for a letter of credit.” (Emphasis added.)

In a prior post, and in a Daily Journal article (“Interest for Thee but Not for Me?”), I went out on a limb and predicted the opposite outcome. The 7-0 decision, authored by Chief Justice Cantil-Sakauye, shows just how wrong such predictions can be. The outcome seemed motivated by a reluctance to expand the universe of recoverable costs, which could generate future “litigation concerning the myriad ways in which the burden of providing security on appeal constitutes a ‘cost’ to the appellant.” The court also saw the interest expense for a letter of credit as fundamentally different than the cost of an appeal bond or a letter of credit (which are directly referenced in rule 8.278(d)(1)(F) as recoverable costs). A loan requires an immediate transfer of funds, whereas bonds and letters of credit do not. Thus, the interest expenses for a loan are substantially greater than the charges for a bond or letter of credit, and the court reasoned that if the Judicial Council had wanted such greater expenses to be recoverable, it would have said so more clearly.

An earlier decision, Cooper v. Westbrook Torrey Hills (2000) 81 Cal.App.4th 1294, had allowed an appellant to recover as costs the interest expenses incurred on funds the appellant borrowed to make a cash deposit in lieu of a bond. I had predicted that if the Supreme Court disapproved the recovery of interest on a letter of credit to secure an appeal bond, appellants would use letters of credit to obtain funds to post cash deposits, and then recover the interest expense under Cooper. That would strain the resources of the superior courts, which are not equipped to handle large numbers of cash deposits. The Supreme Court neatly eliminated that problem in Rossa by simply disapproving Cooper.

There now appears to be no way to recover the interest cost of borrowing money to secure a judgment on appeal—a result that seems unfair when judgment creditors earn statutory (and far above market rate) ten percent annual interest on judgments that are pending on appeal. In Rossa, the Supreme Court left the door open to correct that problem, noting that the Judicial Council may consider amending the Rules of Court “to extend the right to recover costs to interest expenses and fees incurred to borrow funds to secure a letter of credit.”

The Ninth Circuit yesterday asked the California Supreme Court to answer a question that will help the federal appeals court decide which school district is responsible for a student’s special education costs.  In Los Angeles Unified School District v. Garcia, the Ninth Circuit asked:  “Does California Education Code § 56041 — which provides generally that for qualifying children ages eighteen to twenty-two, the school district where the child’s parent resides is responsible for providing special education services — apply to children who are incarcerated in county jails?”

In May of last year, the Ninth Circuit requested an answer to a different which-district-pays question.  The Supreme Court denied that request.

The Supreme Court issued its opinion yesterday in O’Neil v. Crane Co., S177401, a high-profile case that has been pending since 2009 and that has been on our list of cases to watch.  In a nutshell, the Court held product manufacturers cannot be liable for injuries caused by replacement parts.  Kate Moser takes a look at the opinion in this article for The Recorder.  For more information about the O’Neil decision, view our firm’s eBulletin about the case.  Disclosure: Horvitz & Levy LLP represented Crane Co. in the Supreme Court.

In its conference on Wednesday, January 11, 2012, the Court granted no petitions for review in civil cases, no petitions were denied with dissenting justices, and no opinions were ordered published or depublished.  However, the Court did order supplemental briefing in Sonic Calabasas A, Inc. v. Moreno, S174475, which concerns the enforceability of arbitration agreements in the employment context.  You may recall that the U.S. Supreme Court granted certiorari, vacated and remanded last year after the California Supreme Court’s decision, Sonic Calabasas A, Inc. v. Moreno (2011) 51 Cal. 4th  659.  The U.S. Supreme Court ordered further consideration in light of its decision in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. ___ [131 S.Ct. 1740].  According to the Court’s online docket, the parties’ supplemental briefs are due February 10, with reply briefs due February 24.

The Supreme Court heard argument this morning in Vandermost v. Bowen, S198387, which involves a challenge to the district lines that will be used for the California state Senate elections in 2012.  Southern California Public Radio has this informative article summarizing the issues.  Once the video is available, you can watch the argument on the California Channel.

Update:  This Los Angeles Times article gives an account of the oral argument, as does this article from KQED, the Bay Area NPR station.  Hat tip to Professor Rick Hasen and his Election Law blog.     

Erik Cummins blogs that, in a recent discussion he had with Chief Justice Cantil-Sakauye, she said that “she is a big fan of writing that gives her a road map at the outset.  ‘Tell me what you are going to write and why,’ Cantil-Sakauye said.  ‘I like clear statements of why I’m reading this and then you can go into detail.’”

In its conference on Wednesday, January 4, 2012, the Court granted no petitions for review in civil cases, no petitions were denied with dissenting justices, and no opinions were ordered published or depublished.

It’s been more than six months since the Ninth Circuit asked the Supreme Court to answer a question of California law under rule 8.548.  Until now, that is, when the court filed yesterday’s request from the federal Court of Appeals in Sierra Pacific Power Co. v. Hartford Steam Boiler Inspection and Insurance Co.

According to the Ninth Circuit, the Supreme Court has not ruled, and the California Courts of Appeal are in conflict, on these questions:  “1.  Whether, under California insurance law, a building ordinance or law exclusion, found in the Perils Exclusions section of a property insurance policy, effectively excludes coverage for increased costs caused by complying with ordinances and regulations if the underlying loss was caused by a covered peril.  2.  Whether, under California insurance law, the costs of obtaining building permits or conducting required environmental impact studies are considered costs excluded by a building ordinance or law exclusion, or whether these costs are better considered as part of the replacement cost under the policy.”

One interesting factor is whether the underlying case raises an issue of California law at all.  The action arises from the Nevada federal district court, which at least initially decided that the case was governed by Nevada law.  A footnote in the Ninth Circuit’s request recognizes this, but concludes, “We find that based upon Nevada’s choice of law provisions, California law applies to the dispute . . . .”  I guess the Ninth Circuit didn’t want to first certify the choice-of-law question to the Nevada Supreme Court.

The rules don’t provide a deadline for the Supreme Court to decide whether it will answer a Ninth Circuit request, but the court seems to usually use the petition-for-review timeline as a guide.  So, we should see an answer (about whether there will be an answer) by the beginning of March.

The recently announced Supreme Court oral argument calendar consists of six cases, all criminal and half of them death penalty appeals.

On February 7 in San Francisco, the court will hear the following cases (with the issues presented as stated on the court’s website):

People v. Manzo:  Could defendant be convicted of discharging a firearm at an occupied motor vehicle in violation of Penal Code section 246, if he was outside the vehicle at the time he discharged his firearm but the firearm itself was inside the vehicle?

People v. Hernandez:  Did the trial court’s gag order, which precluded defense counsel from discussing with defendant a sealed declaration of a testifying prosecution witness and a transcript of that witness’s plea-agreement proceedings, so completely deprive defendant of his right to counsel as to constitute structural error reversible without a showing of prejudice or did the gag order implicate defendant’s right to counsel in a manner requiring a showing of prejudice before reversal would be required?

People v. Myles:  [This is an automatic appeal from an April 2001 judgment of death.  The court's website does not list issues for such appeals.]

People v. Weaver:  [This is an automatic appeal from a May 1993 judgment of death.  The court's website does not list issues for such appeals.]

Maldonado v. Superior Court:   (1) Was the order compelling a mental examination of petitioner under Penal Code section 1054.3, subdivision (b), reviewable by pretrial writ? (2) Should the prosecution be permitted to attend the examination? (3) Should the results of the mental examination be disclosed to the prosecution before trial, or only after the defendant presents mental state evidence at trial? (4) Should the trial court review the results of the mental examination in camera and on the motion of the defense to determine if they contain privileged material?

People v. Jones:  [This is an automatic appeal from a February 1999 judgment of death.  The court's website does not list issues for such appeals.]

Last week, the Daily Journal [subscription required], carried an excellent retrospective by Laura Ernde on Chief Justice Tani Cantil-Sakauye’s turbulent first year in office.  The article covers most of the travails of the last twelve months, including the challenges to the Judicial Council’s authority typified by AB 1208, the legislative effort to transfer more power to local trial courts.  It also includes a discussion of the deep budget cuts the judicial branch has experienced in recent years, and criticisms of the overbudget and much-criticized Court Case Management System (CCMS). 

Several points come through in the article.  First, the Chief has learned a great deal in her first year.  She had initially characterized the task before her by saying, “It’s not a learning curve, it’s a vertical climb.”  But at the end of 12 months she told Ernde, “I feel more informed . . . Less like I’m walking into the unknown.”  It is also clear that, to address dissension within the judicial branch, the Chief has sought consensus and has made efforts to make sure all sides feel they have been heard.  Ernde quotes the Chief as saying, “I want people to feel they have a chance to give input . . .  The thing about advice is if you keep getting it from the same folks it doesn’t move you forward.” 

Finally, the article quotes Court-watcher and Santa Clara University law prof Gerald Uelmen as saying the Chief has authored too few opinions this year (she has written six) to know how her jurisprudence compares to that of her predecessor, former Chief Justice Ronald George.  Ernde points out that the Chief’s rate of agreement with what Ernde terms “the court’s conservative wing”—Justices Carol Corrigan, Marvin Baxter and Ming Chin—has been 100 percent.  But since Ernde’s article was published that is no longer quite accurate: the Chief authored a 27-page partial dissent from the Court’s otherwise unanimous opinion  in California Redevelopment Association v. Matosantos, S194861, the redevelopment case.

The Supreme Court has scheduled a special January 10 oral argument for the Redistricting writ petition.  It’s been only 19 days since the court agreed to decide the petition and set an “extremely expedited briefing schedule” that will allow “oral argument in this matter as early as the first two weeks in January 2012, and the filing of an opinion in this matter as early as the end of January 2012.”

Coincidentally (or likely not), January 10 is the deadline for the counties to complete a random sampling of the 709,013 signatures submitted to qualify a referendum on the State Senate district map that is the subject of the writ petition.  At that point the court may better know if the referendum is “likely to qualify,” which is the new constitutional standard for asking the Supreme Court to stay implementation of a redistricting map.

So, how is the random sampling going?  The most recent report, with results through December 21, shows a higher percentage of valid signatures than on the day the Supreme Court agreed to hear the writ petition, but it’s still a smaller percentage than needed to qualify the referendum without having to verify every signature.

For those of you playing at home (and assuming I’ve done the math correctly):  if the random sample shows 78.311 percent valid signatures, the referendum qualifies without further verification; if less than 67.632 percent of the sampled signatures are valid, the referendum fails without more; anything in between requires all 709,013 signatures to be verified.  More numbers:  71.191 percent of the total signatures must be valid to reach the minimum 504,760 signatures necessary to qualify the referendum; as of December 21, 74.21 percent of the sampled signatures are valid, up from just under 70 percent 19 days ago.  Los Angeles County — with by far the most signatures (209,163) of any county — has yet to report the results of its random sampling.

As one veteran political reporter wrote, “Justices would be wise to bring their calculators into the courtroom.”

The Supreme Court announced it will file its opinion tomorrow in California Redevelopment Association v. Matosantos, the case that will decide the fate of the state’s redevelopment agencies.  The court is early:  when the court agreed in August to hear the redevelopment writ petition, it said that the expedited briefing schedule it then set was “designed to facilitate oral argument as early as possible in 2011, and a decision before January 15, 2012.”  The case was argued seven weeks ago.

The Court is holding no conference this week.  Accordingly, no action will be taken on petitions for review and no opinions will be ordered published or depublished.

Kate Moser in The Recorder recaps the Supreme Court’s year and looks ahead to 2012.

In her end-of-the-year interview with the press on a number of topics, Chief Justice Tani Cantil-Sakauye said that “the death penalty is no longer effective in California and suggested she would welcome a public debate on its merits and costs.”  So reports the Los Angeles Times in “California chief justice urges reevaluating death penalty.”

Related post:  Proposed ballot measure would dramatically reduce the California Supreme Court’s criminal caseload by abolishing the death penalty.

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 21, 2011.  The summary includes those civil cases in which (1) review has been granted (not including grant-and-transfers), (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

United Parcel Service Wage and Hour Cases, S197722—Review Granted and Held—December 21, 2011

The court ordered briefing deferred pending the decision in Kirby v. Immoos Fire Protection, Inc., S185827, which presents the following issues for review: “(1) Does Labor Code section 1194 apply to a cause of action alleging meal and rest period violations, or may attorney’s fees be awarded under Labor Code section 218.5?  (2) Is our analysis affected by whether the claims for meal and rest periods are brought alone or are accompanied by claims for minimum wage and overtime?”

The Court of Appeal, Second District, Division Eight, held in an unpublished decision that the defendant was not entitled to recover attorney’s fees under Labor Code section 218.5 for successfully defending a claim for alleged failure to pay meal and rest break premiums under Labor Code section 226.7.  This is the same issue the Second District, Division Eight, decided in United Parcel Service Wage and Hour Cases (McGann), S191908, in which review has also been granted and held.     

Estate of Giraldin, S197694—Review Granted—December 21, 2011

The question presented is:  When, during his lifetime, the settlor of a revocable intervivos trust appoints someone other than himself to act as trustee, after the settlor dies and the trust becomes irrevocable, do the remainder beneficiaries have standing to sue the trustee for breaches of fiduciary duty allegedly committed during the period of the trust’s revocability?

The Court of Appeal, Fourth District, Division Three, held in a published opinion, In re Estate of Giraldin (2011) 199 Cal.App.4th 577, that, during the settlor’s life, the trustee owed a duty only to the settlor and not to the trust beneficiaries.  Thus, the beneficiaries lacked standing to complain of any alleged breach of duty that occurred before the settlor’s death. 

Hillside Memorial Park v. Golden State Water Company, S197767—Review Granted and Held—December 21, 2011

This is an action by water companies and a city to determine ground water rights and to enjoin alleged annual overdraft. The court ordered briefing deferred pending further order of the court. 

The Court of Appeal, Second District, Division Five, held in a published decision, Hillside Memorial Park and Mortuary v. Golden State Water Co. (2011) 199 Cal.App.4th 658, that:  (1) the trial court had jurisdiction to consider a motion to amend a 1961 judgment imposing a physical solution on the West Coast Groundwater Basin; (2) the trial court erred in denying the motion to amend the judgment to allow use of “dewatered” acreage without holding an evidentiary hearing; and (3) the trial court erred in requiring that the moving parties obtain environmental impact reports under the California Environmental Quality Act before litigating a physical solution to the issue of dewatered acreage.  The court reversed the order denying the motion to amend the judgment and remanded to the trial court for a full hearing on a physical solution to the water storage issue.

Review Denied (with dissenting justices)

None.

Depublished

None.