September 7, 2010

Summary of September 1, 2010 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, September 1, 2010. 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, (3) the Court has ordered depublished an opinion of the Court of Appeal, or (4) the Court has denied a Court of Appeal’s publication request.

Review Granted

Yanez v. Soma Environmental Engineering, S184846—Review granted and held—September 1, 2010

Briefing in Yanez is deferred pending the Court’s decision in Howell v. Hamilton Meats & Provisions, Inc., S179115, which presents the following issues: (1) Is the “negotiated rate differential”—the difference between the full billed rate for medical care and the actual amount paid as negotiated between a medical provider and an insurer—a collateral source benefit under the collateral source rule, which allows plaintiff to collect that amount as economic damages, or is the plaintiff limited in economic damages to the amount the medical provider accepts as payment? (2) Did the trial court err in this case when it permitted plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury’s award of damages by the negotiated rate differential?

The Court of Appeal, First District, Division One, held in a published opinion, 185 Cal.App.4th 1313, that: (1) the reasonable value of medical services provided to the plaintiff was an issue for the jury; (2) rate discounts negotiated by the plaintiff’s insurer were recoverable as damages to the extent the reasonable value of medical services provided was greater than the amount actually accepted; (3) evidence of the amount actually accepted was inadmissible in determining the reasonable value of medical services; and (4) prejudgment interest and post-offer costs rulings were reviewable on appeal from the amended judgment.

Full disclosure: Horvitz & Levy LLP represents the defendants in Yanez.

Parks v. MBNA American Bank, S183703—Review granted—September 1, 2010

Civil Code section 1748.9 requires credit card issuers to make certain disclosures on checks issued to cardholders for cash advances from the cardholders’ credit card accounts. In a class action suit against a bank for alleged violations of section 1748.9, the trial court dismissed the case on the ground that section 1748.9 was preempted by federal banking laws. The issues presented for review are: (1) whether section 1748.9 is preempted by the National Bank Act (NBA) (12 U.S.C. §21 et seq.); and (2) whether 12 Code of Federal Regulations section 7.4008, which was promulgated under the NBA by the Office of the Comptroller of the Currency (OCC), and which provides that state laws that impair a nationally chartered bank’s non-real estate banking powers are not applicable to nationally chartered banks, is a valid regulation.

The Court of Appeal, Fourth District, Division Three, held in a published opinion, 184 Cal.App.4th 652, that: (1) section 1748.9 is not, on its face, preempted by the NBA because it does not forbid or significantly impair a national bank from exercising a power granted to it by Congress under the NBA; and (2) the OCC did not have the authority, under the NBA, to issue a regulation establishing a blanket preemption of all state disclosure statutes.

Review Denied (with dissenting justices)

Embassy LLC v. City of Santa Monica, S184765—Review denied [Werdegar, J. voting for review]—September 1, 2010

The Ellis Act, Government Code section 7060 et seq., gives landlords the right to remove their residential units from the rental market. The landlord here signed an Ellis Act waiver in a contract with the City of Santa Monica and its Rent Control Board. The landlord later filed suit, seeking to have the waiver declared unenforceable. The Court of Appeal, Second District, Division Five, held in a published decision, Embassy LLC v. City of Santa Monica (2010) 185 Cal.App.4th 771, that the Ellis Act prohibits public entities from enforcing contractual Ellis Act waivers in all circumstances except those specified in the statute.

Ridgewater Associates v. Dublin San Ramon Services District, S183198—Review denied [Kennard, J. voting for review]; ordered not to be officially published—September 1, 2010

The plaintiff, Ridgewater, brought this action contending water had seeped onto its property from a neighboring sewage treatment facility operated by the defendant District. The trial court granted summary adjudication to the District in part because Ridgewater lacked standing to pursue its inverse condemnation claim. The Court of Appeal, First District, Division Three, held in the published portion of its opinion, Ridgewater Associates LLC v. Dublin San Ramon Services Dist. (2010) 184 Cal.App.4th 629, that Ridgewater had standing but could not prove damages on its inverse condemnation claim “because it knowingly bought a property that was subject to periodic water intrusion, and the purchase price reflected the property’s condition.” The Supreme Court ordered the opinion not to be officially published.

Haight Ashbury Free Clinics v. Happening House Ventures, S184232—Review denied [Kennard and Corrigan, JJ. voting for review]—September 1, 2010

Nonprofit medical clinic brought breach of fiduciary duty action against nonprofit landlord and founder of both nonprofits, alleging the founder breached his fiduciary duties. The trial court denied the defendants’ motion to strike under the anti-SLAPP statute, Code of Civil Procedure section 425.16, finding that the alleged constitutionally protected activity in question represented a small number of the alleged wrongful acts and, thus, was “merely incidental” to the cause of action at issue.

The Court of Appeal, First District, Division Five, reversed in a published opinion, Haight Ashbury Free Clinics, Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539. It held the trial court erred in concluding that activities are “merely incidental” to a cause of action within the meaning of the anti-SLAPP statute simply because they represent a relatively small number of the many alleged wrongful acts. It therefore directed the trial court to enter a new order granting the anti-SLAPP motion. Justice Henry Needham, Jr., concurred in part and dissented in part, asserting that striking the subject causes of action in their entirety “grossly miscasts the purpose of the anti-SLAPP law and grants a windfall to appellants.”


Ridgewater Associates LLC v. Dublin San Ramon Services Dist. (2010) 184 Cal.App.4th 629. See above discussion regarding denial of review.

Court of Appeal Publication Request Denied


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