California Courts of Appeal
ATKINS v. CITY OF LOS ANGELES
“The opinion filed February 14, 2017 and certified for publication is modified as follows:
1. On page 63, in the first sentence of the first paragraph the word “ever” is deleted, and the words “until retirement” are inserted after Department before the end of the sentence.
As modified, the sentence reads:
Although Smith opined on the value of the plaintiffs’ future economic damages, she provided or cited to no testimony, other evidence, or opinion on the likelihood that the plaintiffs would receive future earnings from the Department until retirement.
2. On page 66, the entire first paragraph including footnote 18 is deleted and replaced with the following two paragraphs:
“An expert’s opinion is only as good as the facts on which it is built.” (Shiffer v. CBS Corp. (2015) 240 Cal.App.4th 246, 253.) Here, there were no facts on which to build Smith’s opinion that the plaintiffs were entitled to recover future economic damages to retirement. Even giving deference to the trial court’s ruling denying the City’s motion for a new trial and drawing all inferences in favor of it, the evidence is too speculative to lend support to the award of the plaintiffs’ future lost earnings until retirement. (See Toscano, supra, 124 Cal.App.4th at pp. 695-696.)
The City does not genuinely dispute that the plaintiffs are entitled to a reasonable, non-speculative award of future economic damages. The City’s argument is that (assuming liability) the plaintiffs are not entitled to recover future lost earnings until retirement, not that they are not entitled to recover any future lost earnings at all. Although there is evidence in the record from which the jury could have calculated a reasonable amount of future economic damages, it is not our role to say what that amount should be. “‘The measure of damages suffered is a factual question and as such is a subject particularly within the province of the trier of fact.’” (Behr v. Redmond (2011) 193 Cal.App.4th 517, 533; see also Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, 696 [remanding for a new trial limited to the amount of punitive damages because the Court of Appeal would not “substitute [its] own assessment of the appropriate amount of punitive damages for that of a jury (or a judge on a new trial motion)”]. We therefore reverse the trial court’s award of future economic damages and remand for a new trial on this limited issue. (See Code Civ. Proc., § 657, subd. (5); cf. Piscitelli, supra, 87 Cal.App.4th at p. 990 [reversing the judgment without granting a new trial on damages because the reviewing court could distinguish between the reasonable and unreasonable portions of the jury’s award for future economic damages].)
This order does not change the judgment. The City’s petition for rehearing is denied.”
Michael N. Feuer, City Attorney, James P. Clark, Chief Deputy City Attorney, Thomas Peters, Chief Assistant City Attorney, Amy Jo Field, Assistant City Attorney, Blithe S. Bock and Paul Winnemore, Deputy City Attorneys, for Defendant and Appellant.
McNicholas & McNicholas, Matthew S. McNicholas, Douglas D. Winter, Los Angeles; Fullerton & Hanna, Lawrence J. Hanna, Van Nuys; Esner, Chang & Boyer and Stuart B. Esner for Plaintiffs and Respondents.
Second District, Division 7, 2/14/17 decision by Segal, Perluss and Keeny concurring, as modified on denial of rehearing on 3/13/17; 8 Cal.App.5th 696, 214 Cal.Rptr.3d 113, 2017 A.D. Cases 44,304, 17 Cal. Daily Op. Serv. 1390, 2017 Daily Journal D.A.R. 1376.
BECK v. STRATTON
“The Labor Commissioner awarded respondent Anthony Stratton approximately $6,000 in unpaid wages and penalties against his former employer, appellant Thomas Beck. Beck unsuccessfully appealed the award to the superior court under Labor Code section 98.2, subdivision (a). Stratton then moved for attorney’s fees under Labor Code section 98.2, subdivision (c) 58 days later. Beck opposed the motion as untimely, because Stratton filed it after the 30-day deadline applicable to fee motions in limited civil cases. Stratton maintained the motion was timely because it was filed within the 60-day deadline applicable to fee motions in unlimited civil cases. The superior court agreed with Stratton and awarded him $31,365 in attorney’s fees.
On appeal, Beck contends that the motion for attorney’s fees was untimely because the case was a limited civil case. He further contends that, even if the motion was timely, the fee award was unreasonably high and unsupported by competent billing evidence. We disagree with both arguments and affirm the judgment of the superior court.”
The decision reasoned, “When Beck initiated the action in superior court, he did not file a civil case cover sheet designating the case as limited or unlimited as required by Rule 3.320. He likewise did not comply with section 422.30 or Rule 2.111(10) by explicitly stating in the case caption that he intended the case to be classified as a limited one. The case accordingly was, by default, an unlimited one. Just as a “persuasive argument [could] be made that when a litigant files an action in a particular court he intends to submit himself to the jurisdictional limits of that court” when the municipal and superior courts were divided (Babcock v. Antis (1979) 94 Cal.App.3d 823, 828, 156 Cal.Rptr. 673), after unification a persuasive argument may be made that a party filing the case without indicating that he or she wishes the case to be limited intends it to be unlimited. The clerk who filed this case complied with his or her ministerial duty to classify the case based on its caption when he or she assigned the case a prefix indicating that it was unlimited.”
Thomas E. Beck, Los Alamitos, in pro per.
David Maxim Balter, Napa, for Defendant and Respondent.
Second District, Division 4, 2/17/17 decision by Collins, ordered published 3/8/17; ___ Cal.Rptr.3d ___, 2017 WL 915535, 17 Cal. Daily Op. Serv. 2215.
BETANCOURT v. PRUDENTIAL OVERALL SUPPLY
“Plaintiff and respondent Roberto Betancourt (Betancourt) sued defendant and appellant Prudential Overall Supply (Prudential). Betancourt’s complaint sets forth one cause of action: enforcement of the Labor Code under the Private Attorneys General Act (PAGA). (Labor Code, § 2698.) Prudential filed a motion to compel arbitration. The trial court denied Prudential’s motion. Prudential contends the trial court erred. We affirm the judgment.”
The decision reasoned, “The trial court correctly denied Prudential’s motion to compel arbitration because a defendant cannot rely on a predispute waiver by a private employee to compel arbitration in a PAGA case, which is brought on behalf of the state. (County of Solano v. Lionsgate Corp. et al. (2005) 126 Cal.App.4th 741, 749, fn. 5, 24 Cal.Rptr.3d 362; see also Iskanian, supra, 59 Cal.4th at pp. 386-387, 173 Cal.Rptr.3d 289, 327 P.3d 129.) This is currently a PAGA case, and Prudential is relying on a 2006 predispute arbitration agreement by Betancourt to compel arbitration in this 2015 case brought on behalf of the state. The state is not bound by Betancourt’s predispute agreement to arbitrate.”
Further, “Prudential, citing federal cases, asserts California law permits arbitration of PAGA claims. One case Prudential relies upon is Sakkab v. Luxottica Retail North America, Inc. (9th Cir.2015) 803 F.3d 425. Sakkab provides, “The California Supreme Court’s decision in Iskanian expresses no preference regarding whether individual PAGA claims are litigated or arbitrated. It provides only that representative PAGA claims may not be waived outright.” (Sakkab, at p. 434.)
The issue in the instant case is not an all-or-nothing question of whether PAGA cases can be arbitrated. The issue is whether Prudential can rely upon a predispute arbitration agreement with Betancourt to compel arbitration in a PAGA case. In Iskanian, our Supreme Court explained, “Simply put, a PAGA claim lies outside the FAA’s coverage because it is not a dispute between an employer and an employee arising out of their contractual relationship. It is a dispute between an employer and the state, which alleges directly or through its agents—either the Labor and Workforce Development Agency or aggrieved employees—that the employer has violated the Labor Code.” (Iskanian, supra, 59 Cal.4th at pp. 386-387, 173 Cal.Rptr.3d 289, 327 P.3d 129.) Betancourt is not suing in his private capacity. Betancourt is suing on behalf of the state. “[T]he state is the real party in interest.” (Id. at p. 387, 173 Cal.Rptr.3d 289, 327 P.3d 129.) The state is not bound by Betancourt’s predispute agreement to arbitrate. (See Mikes v. Strauss (S.D.N.Y.1995) 889 F.Supp. 746, 755 [government was not a party to the predispute arbitration agreement signed by an employee who became a qui tam plaintiff].)
As explained ante, if the California Attorney General filed a lawsuit against Prudential for alleged Labor Code violations, Prudential could not rely on its predispute agreement with Betancourt to compel arbitration. In this PAGA action, Betancourt is suing on behalf of the state. Prudential cannot rely on the predispute agreement with Betancourt to compel arbitration. Therefore, while a PAGA action might be subject to arbitration, relying on a predispute agreement with a private party will not suffice to compel arbitration of a PAGA claim.”
Hill, Farrer & Burrill, Kyle D. Brown, James A. Bowles, Los Angeles, and Edward S. McLoughlin for Defendant and Appellant.
Lawyers for Justice, Edwin Aiwazian, Arby Aiwazian, Glendale, and Joanna Ghosh for Plaintiff and Respondent.
Fourth District, Division 2, 3/7/2017 decision by Miller, Ramirez and McKinster concurring; ___ Cal.Rptr.3d , 2017 WL 895834, 27 Wage & Hour Cas.2d (BNA) 306, 17 Cal. Daily Op. Serv. 2171.
CHARNEY v. STANDARD GENERAL, L.P.
Plaintiff and appellant Dov Charney appeals the trial court’s order granting an anti-SLAPP motion (Code Civ. Proc., § 425.16) filed by defendants and respondents Standard General, L.P., Standard General Master Fund L.P., and P. Standard General LTD. Charney was the president and chief executive officer (CEO) of American Apparel, Inc. (American Apparel). Charney’s employment was ultimately terminated following an investigation into allegations that he engaged in various types of misconduct. Standard General then issued a press release which read as follows:
“As we have stated previously, our objective is to help American Apparel grow and succeed. We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the Board of Directors’ decision to terminate him based on the results of that investigation.”
Charney filed a lawsuit alleging several causes of action rooted in his claim that the press release contained false and defamatory information about him. Standard General’s anti-SLAPP motion was successful, prompting this appeal by Charney. We hold Charney did not satisfy his burden of showing there was a minimal chance his claims would succeed at trial and, for that reason, affirm the trial court’s order granting the anti-SLAPP motion.”
The decision reasoned, “Charney concedes Standard General satisfied the threshold burden of proving the complaint filed amounted to a SLAPP. He maintains the trial court erred because he satisfied his burden of showing his case had merit. We accept Charney’s concession and concern ourselves only with the issue of whether Charney established sufficient merit to his lawsuit.
Charney’s causes of action shared the same foundation—in order to be successful, they all required the press release to constitute a defamatory statement. As we will explain, the evidence fell short of meeting the minimal merit necessary to establish this predicate and defeat Standard General’s anti-SLAPP motion.”
Keith A. Fink & Associates, Keith A. Fink and Olaf J. Muller for Plaintiff and Appellant.
Munger, Tolles & Olson, Mark B. Helm and John F. Muller for Defendants and Respondents.
Second District, Division 5, 3/28/2017 decision by Kumar, Turner and Kriegler concurring; ___ Cal.Rptr.3d ___, 2017 WL 1155698.
FARRAR v. DIRECT COMMERCE, INC.
“Plaintiff Wilson Farrar has sued her former employer, defendant Direct Commerce, Inc., alleging causes of action for breach of contract, conversion, wrongful termination, breach of the covenant of good faith and fair dealing, and failure to pay wages owed and waiting time penalties. Farrar, who was hired by the company as its vice president of business development, negotiated an employment agreement set forth in a six-page offer letter detailing, inter alia, her compensation, additional bonus structure, and stock options. The agreement also included an arbitration provision, set off by the same kind of underlined heading and spacing as the other enumerated paragraphs of the agreement. The trial court denied Direct Commerce’s petition to compel arbitration on the ground of the arbitration provision was procedurally and substantively unconscionable. While the arbitration provision is one-sided, as it excludes any claims arising from the confidentiality agreement Farrar also signed, we conclude that offending exception is readily severable and, on this record, should have been severed. We therefore reverse and remand for arbitration.”
Sheppard, Mullin, Richter & Hampton LLP, Littler Mendelson, Nancy E. Pritikin and Krista Stevenson Johnson for Defendant and Appellant.
McGuinn, Hillsman & Palefsky, Cliff Palefsky and Scott M. Stillman for Plaintiff and Respondent.
First District, Division 1, 3/23/2017 decision by Banke, Humes and Margulies concurring; ___ Cal.Rptr.3 ___, 2017 WL 1090483.
GATEWAY COMMUNITY CHARTERS v. SPIESS
“In this appeal, we are called upon to answer a novel question of statutory interpretation: whether Gateway Community Charters (Gateway), a nonprofit public benefit corporation that operates charter schools, is an “other municipal corporation” for purposes of Labor Code section 220, subdivision (b) (hereafter section 220(b)), thereby exempting it from assessment of waiting time penalties described in section 203. We conclude it is not; therefore, we affirm the judgment of the trial court.”
Young, Minney & Corr, Paul C. Minney, Sacramento, James E. Young, William J. Trinkle, Walnut Creek, and Rachel B. Tillman for Plaintiff and Appellant.
Outten & Golden, Jennifer S. Schwartz and Menaka N. Fernando, San Francisco, for Defendant and Respondent.
Third District, 3/8/17 decision by Butz, Raye and Duarte concurring; ___ Cal.Rptr.3d ___, 2017 WL 912073, 17 Cal. Daily Op. Serv. 2225.
GERARD v. ORANGE COAST MEMORIAL MEDICAL CENTER
“Three health care workers sued their hospital employer in this putative class and private attorney general enforcement action for alleged Labor Code violations and related claims. In this appeal, their primary complaint is the hospital illegally allowed its health care employees to waive their second meal periods on shifts longer than 12 hours.
A statute requires two meal periods for shifts longer than 12 hours. But an order of the Industrial Welfare Commission (IWC) authorizes employees in the health care industry to waive one of those two required meal periods on shifts longer than 8 hours. The principal issue before us concerns the validity of the IWC order.
This is our second opinion in this case. Our first opinion concluded the IWC order is partially invalid to the extent it authorizes second meal break waivers on shifts over 12 hours and we reversed. (Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, review granted May 20, 2015, S225205 (Gerard I))
After the California Supreme Court granted the hospital’s petition for review in Gerard I, that court transferred the case back to this court with directions to vacate our decision and to reconsider the cause in light of the enactment of Statutes 2015, chapter 506 (Sen. Bill No. 327 (2015-2016 Reg. Sess.); SB 327).
Upon reconsideration we conclude the IWC order is valid and affirm.”
Law Offices of Mark Yablonovich and Mark Yablonovich; Capstone Law, Glenn A. Danas and Robert K. Friedl for Plaintiffs and Appellants.
Sheppard, Mullin, Richter & Hampton, Richard J. Simmons, Derek R. Havel, Daniel J. McQueen, Robert J. Stumpf, Jr., and Karin Dougan Vogel for Defendant and Respondent.
Fourth District, Division 3, 3/1/17 decision by Thompson, Bedsworth and Ikola concurring; ___ Cal.Rptr.3 ___, 2017 WL 1079985.
WALENT v. COMMISSION ON PROFESSIONAL COMPETENCE OF THE LAUSD
“Appellant Los Angeles Unified School District appeals an award of attorney’s fees to Respondent Nancie Walent, after her successful challenge of her dismissal from employment. Although Appellant asserts the trial court erred in its determination of reasonable attorney’s fees, we find neither legal error nor an abuse of discretion in the trial court’s determination. Accordingly, we affirm.”
“ … The relevant statute is section 44944(f)(2), which provides: “If the Commission on Professional Competence determines that the employee should not be dismissed or suspended, the governing board of the school district shall pay the expenses of the hearing, including the cost of the administrative law judge, any costs incurred under paragraphs (2) and (3) of subdivision (e), the reasonable expenses, as determined by the administrative law judge, of the member selected by the governing board of the school district and the member selected by the employee, including, but not limited to, payments or obligations incurred for travel, meals, and lodging, the cost of the substitute or substitutes, if any, for the member selected by the governing board of the school district and the member selected by the employee, and reasonable attorney’s fees incurred by the employee.”
Cases interpreting this statute are consistent in holding that the language “reasonable attorney’s fees incurred by the employee” does not require that the employee actually pay, or become obligated to personally pay, the fees at issue. (See e.g., Russell v. Thermalito Union School Dist. (1981) 115 Cal.App.3d 880, 883-884, 176 Cal.Rptr. 1 [teacher’s fees paid under union defense plan were incurred because the teacher was liable for or subject to the fees; “[t]he ultimate source of the funds utilized to pay the attorney for a successful aggrieved employee is immaterial.”]; Board of Education v. Commission on Professional Competence (1980) 102 Cal.App.3d 555, 564-565, 162 Cal.Rptr. 590 (Sunnyvale)[same].)
LAUSD nonetheless maintains that the statute at issue here prohibits the trial court from awarding any amount other than the product of the agreed hourly rate and the reasonable hours expended.4 It argues that, unlike other statute based fees, the lodestar calculation, long accepted in California jurisprudence, is legally barred. We disagree.”
Bergman Dacey Goldsmith, Gregory M. Bergman, Michele M. Goldsmith, Los Angeles, and Jason J. Barbato for Real Party in Interest and Appellant.
Trygstad, Schwab & Trygstad, Shanon Dawn Trygstad, Los Angeles, and Daniel J. Kolodziej for Petitioner and Respondent.
Second District, Division 7, 2/21/2017 decision by Zelon, Perluss and Keeny concurring; ___ Cal.Rptr.3d ___, 2017 WL 970481, 17 Cal. Daily Op. Serv. 2375.
Ninth Circuit
BRUNOZZI v. CABLE COMMUNICATIONS, INC.
“Matteo Brunozzi and Casey McCormick worked as technicians for Cable Communications, Inc. (CCI) installing cable television and internet services. They filed separate lawsuits against CCI alleging that the company’s compensation plan violates the overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207, and Oregon’s statutory requirement that an employer pay all wages earned and unpaid after terminating an employee, ORS 652.140. Brunozzi additionally alleges that CCI violated Oregon’s laws prohibiting discrimination against a private employee who engages in whistleblowing (ORS 659A.199) and wage-claim discussions (ORS 652.355). The district court granted summary judgment in favor of CCI on those claims. The technicians appealed. We reverse.”
The evidence showed, “The employment contract states that during a normal, non-overtime workweek, a technician will receive the total value of the piece-work tasks that he completed—his Piece Rate Total—plus a Production Bonus in the amount of 1/6 his Piece Rate Total. Because the Production Bonus is “a portion of regular wages [that] the [technician] is entitled to receive under his regular wage contract[,]” it is not a true bonus as defined by the Department of Labor (DOL). 29 C.F.R. § 778.502(a). … CCI reduces the Production Bonus paid during a regular forty-hour workweek by the amount of overtime premium that it calculates is due to the technician on his Piece Rate Total. Because a “bonus” of 1/6 the technician’s Piece Rate Total forms part of the technician’s income in a normal, non-overtime week, diminishing or eliminating that “bonus” results in the technician being paid at a reduced hourly rate during weeks when he works overtime.”
The decision determined, “The diminishing “bonus” device in CCI’s pay plan causes it to miscalculate the technicians’ regular hourly rate during weeks when they work overtime and allows CCI to pay the technicians less during those weeks. We thus hold that CCI’s pay plan violates the FLSA’s overtime provisions, and we reverse the district court’s orders granting summary judgment in CCI’s favor on the technicians’ FLSA claims.”
As to the whistleblower claim, “The record reflects that Brunozzi verbally complained to his immediate supervisors on several occasions that he was not being properly compensated for overtime. Brunozzi’s last complaint came two days before he was terminated, when he told his supervisor that he would not work on Saturday, April 5, 2014, “Because I’m not being paid overtime, as far as I can tell.” Because the district court interpreted “reported” in ORS 659A.199 to mean reports only to authorities that are external to the employer, it found that Brunozzi’s complaints to his supervisors did not constitute protected activity under the statute and entered judgment against him on his retaliation claim. Brunozzi argues that the district court erred when it interpreted ORS 659A.199’s “reported” to include only reports made to external authorities. We agree.”
As to the retaliation claim, “Brunozzi’s refusal to work additional overtime unless he was paid an overtime rate for those hours was a demand for future payment and does not qualify as a wage claim under Oregon law. See Perri, 66 P.3d at 538–40 & n.8 (concluding “that a wage claim for purposes of ORS 652.320(9) [renumbered to subsection (7) when the statute was amended in 2001] and ORS 652.355 must be either a claim for payment for services previously rendered or a claim for wages, compensation, damages, or civil penalties in connection with a claim for unpaid wages—that is, a claim for wages for services previously rendered”). But his complaints that CCI had failed to properly compensate him for overtime were at least discussions or inquiries about a demand for past-due wages if not the actual making of such a demand. These complaints were precursors to Brunozzi’s filing of a formal demand in court for past-due overtime wages, and they qualify for protection under ORS 652.355. Accordingly, we reverse the district court’s order granting summary judgment in CCI’s favor on Brunozzi’s ORS 652.355 claim.”
Phil Goldsmith (argued), Law Office of Phil Goldsmith, Portland, Oregon; D. Michael Dale, Law Office of D. Michael Dale, Cornelius, Oregon; David A. Schuck, Schuck Law LLC, Vancouver, Washington; Corinna Spencer-Scheurich, Northwest Workers’ Justice Project, Portland, Oregon; for Plaintiffs-Appellants.
Mitchell C. Baker (argued) and Alexander A. Wheatley, Fisher & Phillips, LLP, Portland, Oregon, for Defendant-Appellee.
Ninth Cir., 3/21/17 decision by Dorsey, McKeown and Fletcher concurring; ___ F.3d ___, 2017 WL 1055588.
Other Significant Decisions
CITY OF SAN JOSE v. SUPERIOR COURT
“In June 2009, petitioner Ted Smith requested disclosure of 32 categories of public records from the City of San Jose, its redevelopment agency and the agency’s executive director, along with certain other elected officials and their staffs. The targeted documents concerned redevelopment efforts in downtown San Jose and included emails and text messages “sent or received on private electronic devices used by” the mayor, two city council members, and their staffs. The City disclosed communications made using City telephone numbers and email accounts but did not disclose communications made using the individuals’ personal accounts.
Smith sued for declaratory relief, arguing CPRA’s definition of “public records” encompasses all communications about official business, regardless of how they are created, communicated, or stored. The City responded that messages communicated through personal accounts are not public records because they are not within the public entity’s custody or control. The trial court granted summary judgment for Smith and ordered disclosure, but the Court of Appeal issued a writ of mandate. At present, no documents from employees’ personal accounts have been collected or disclosed.”
Overturning the contrary judgment of the Court of Appeal, the Court held, “[W]hen a city employee uses a personal account to communicate about the conduct of public business, the writings may be subject to disclosure under the California Public Records Act (CPRA or Act).”
Richard Doyle, City Attorney, Nora Frimann, Assistant City Attorney, and Margo Laskowska, Deputy City Attorney, for Petitioners.
No appearance for Respondent.
McManis Faulkner, James McManis, Matthew Schechter, Christine Peek, Tyler Atkinson and Jennifer Murakami, San Jose, for Real Party in Interest.
Cal., 3/2/2017 unanimous opinion by Corrigan; 2 Cal.5th 608, 389 P.3d 848, 214 Cal.Rptr.3d 274, 17 Cal. Daily Op. Serv. 1937, 2017 Daily Journal D.A.R. 1896.
CZYZEWSKI v. JEVIC HOLDING CORP.
“Bankruptcy Code Chapter 11 allows debtors and their creditors to negotiate a plan for dividing an estate’s value. See 11 U.S.C. §§ 1123, 1129, 1141. But sometimes the parties cannot agree on a plan. If so, the bankruptcy court may decide to dismiss the case. § 1112(b). The Code then ordinarily provides for what is, in effect, a restoration of the prepetition financial status quo. § 349(b).
In the case before us, a Bankruptcy Court dismissed a Chapter 11 bankruptcy. But the court did not simply restore the prepetition status quo. Instead, the court ordered a distribution of estate assets that gave money to high-priority secured creditors and to low-priority general unsecured creditors but which skipped certain dissenting mid-priority creditors. The skipped creditors would have been entitled to payment ahead of the general unsecured creditors in a Chapter 11 plan (or in a Chapter 7 liquidation). See §§ 507, 725, 726, 1129. The question before us is whether a bankruptcy court has the legal power to order this priority-skipping kind of distribution scheme in connection with a Chapter 11 dismissal.
In our view, a bankruptcy court does not have such a power. A distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the Code establishes for final distributions of estate value in business bankruptcies.”
Danielle Spinelli, Washington, DC, for Petitioners.
Christopher Landau, P.C., Washington, DC, for Respondents.
Jack A. Raisner, Rene S. Roupinian, Robert N. Fisher, Outten & Golden LLP, New York, NY, Christopher D. Loizides, Loizides P.A., Wilmington, DE, Danielle Spinelli, Craig Goldblatt, Joel Millar, Jonathan Seymour, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Petitioners.
Christopher Landau, P.C., James P. Gillespie, P.C., Jason M. Wilcox, Kirkland & Ellis LLP, Washington, DC, for Respondents Sun Capital Partners, Inc., Sun Capital Partners IV, LP & Sun Capital Partners Management IV, LLC.
Domenic E. Pacitti, Linda Richenderfer, Klehr Harrison Harvey, Branzburg LLP, Wilmington, DE, for Respondents Jevic Holding Corp., Jevic Transportation, Inc. & Creek Road Properties, LLC.
Peter S. Partee, Sr., Richard P. Norton, Hunton & Williams LLP, New York, NY, for Respondent CIT Group / Business Credit, Inc., as Agent for the Lender Group.
Robert J. Feinstein, James E. O’Neill, Pachulski Stang Ziehl &, Jones LLP, Wilmington, DE, for Respondent Official Committee of Unsecured Creditors.
USSC, 3/22/17 opinion by Breyer, joined by Roberts, Kennedy, Ginsburg, Sotomayor, and Kagan; Thomas dissenting and joined by Alito; ___ S.Ct. ___, 2017 WL 1066259.
ERHART v. BofI FEDERAL BANK
“This case involves cross actions between Charles Erhart, an internal auditor, and his former employer BofI Federal Bank (BofI). Erhart filed a whistleblower and retaliation action against BofI. BofI countered with its own lawsuit based on Erhart allegedly stealing confidential information from BofI and disseminating it.
Before this court is third-party Carol Gillam’s Motion to Quash the Subpoena served on her by BofI. Carol Gillam is the attorney representing Charles Erhart. Gillam argues that BofI’s alleged need to depose her is outweighed by the risk of disclosing privileged and protected work product information, and that there are other available sources for the information. BofI argues that Gillam’s deposition is necessary to determine what confidential information Gillam—as an agent for Erhart—disclosed to third parties. For the following reasons, the court GRANTS Gillam’s motion to quash.”
“ … A party moving to quash a subpoena normally has the burden of persuasion. Moon, 232 F.R.D. at 637. But under Shelton the burden shifts, as the party seeking opposing counsel’s deposition must show it needs the deposition by demonstrating these factors:
(1) no other means exist to obtain the information other than to depose opposing counsel [citation omitted]; (2) the information sought is relevant and nonprivileged; and (3) the information is crucial to the preparation of the case.
Shelton, 805 F.2d at 1327.
The court found that the information for which BofI sought Gillam’s deposition was discoverable through other sources. The court also rejected BofI’s contention that Gillam “had voluntarily interjected herself” into the litigation by responding to media inquiries about the case.
“In sum, Gillam provided a document production with the names and contact information for third parties. BofI does not show any reason why the other parties to the communications could not provide the same information that Gillam could provide. It is insufficient to show that Gillam’s deposition is the most convenient source of the information. Accordingly, BofI does not meet its burden in showing that the requested information is unavailable from other sources.”
Carol Gillam, The Gillam Law Firm, Los Angeles, CA, for Plaintiff.
Polly Towill, Andre J. Cronthall, Sheppard Mullin Richter and Hampton LLP, Los Angeles, CA, for Defendant.
USDC, SD, 03/02/2017 Order Granting Motion to Quash by Stormes; Slip Copy, 2017 WL 840648.
ERHART v. BofI HOLDING, INC.
“These consolidated actions revolve around whistleblower protections under federal and state law. BofI Federal Bank employed Charles Matthew Erhart as an internal auditor at its headquarters in San Diego, California. After Erhart discovered conduct he believed to be wrongful, he reported it to the United States Department of the Treasury’s Office of the Comptroller of the Currency—BofI’s principal regulator. He later filed an action against BofI under federal and state law whistleblower protection provisions alleging BofI retaliated against him for reporting unlawful conduct to the government.
The next day, The New York Times published an article titled Ex-Auditor Sues Bank of Internet. The share price of BofI’s publicly-traded holding company plummeted thirty percent. A few days later, BofI brought a countersuit against Erhart alleging he violated California state law and the Computer Fraud and Abuse Act by publishing BofI’s confidential information and deleting hundreds of files from his company-issued laptop. The Court consolidated BofI’s countersuit with Erhart’s whistleblower retaliation action.
BofI now moves in its countersuit for summary adjudication of thirteen of Erhart’s affirmative defenses, all of which relate to whistleblower protections. (ECF No. 45.)1 Erhart opposes. (ECF No. 67.) After hearing oral argument, the Court GRANTS IN PART and DENIES IN PART BofI’s motion for the following reasons.”
“ … Erhart argues his affirmative defenses should survive summary adjudication because the Confidentiality Agreement is unenforceable on public policy grounds. (Opp’n 4:1–5:28.) Accordingly, the Court considers the interest in enforcing the Confidentiality Agreement, the public policy against enforcement, and whether the public policy clearly outweighs the interest in favor of enforcement.” The court found that the public policy protecting whistleblower outweighed the public interest in enforcing confidentiality agreements.
The court concluded, “It is implicit in the various whistleblower protection provisions that if an employee is permitted to provide information regarding believed wrongdoing to the government, including documents, the employer cannot then seek to impose tort liability on the employee for the same conduct. The public policy considerations underpinning the Court’s contract analysis would similarly influence its analysis under tort law. Consequently, for the same reasons discussed above, the Court concludes summary adjudication of Erhart’s defenses in the context of BofI’s remaining claims is not warranted.”
Carol Gillam, The Gillam Law Firm, Los Angeles, CA, for Plaintiff.
Polly Towill, Andre J. Cronthall, Sheppard Mullin Richter and Hampton LLP, Los Angeles, CA, for Defendant.
USDC, SD, 02/14/2017 Order Granting in Part and Denying in Part Bofl Federal Bank’s Motion for Summary Adjudication of Charles Matthew Erhart’s Twelfth through Twenty-Fourth Affirmative Defenses by Stormes; Slip Copy, 2017 WL 588390.
PENA–RODRIGUEZ v. COLORADO
“A Colorado jury convicted petitioner Penã–Rodriguez of harassment and unlawful sexual contact. Following the discharge of the jury, two jurors told defense counsel that, during deliberations, Juror H.C. had expressed anti-Hispanic bias toward petitioner and petitioner’s alibi witness. Counsel, with the trial court’s supervision, obtained affidavits from the two jurors describing a number of biased statements by H.C. The court acknowledged H.C.’s apparent bias but denied petitioner’s motion for a new trial on the ground that Colorado Rule of Evidence 606(b) generally prohibits a juror from testifying as to statements made during deliberations in a proceeding inquiring into the validity of the verdict. The Colorado Court of Appeals affirmed, agreeing that H.C.’s alleged statements did not fall within an exception to Rule 606(b). The Colorado Supreme Court also affirmed, relying on Tanner v. United States, 483 U.S. 107, 107 S.Ct. 2739, 97 L.Ed.2d 90, and Warger v. Shauers, 574 U.S. ––––, 135 S.Ct. 521, 190 L.Ed.2d 422, both of which rejected constitutional challenges to the federal no-impeachment rule as applied to evidence of juror misconduct or bias.
Held : Where a juror makes a clear statement indicating that he or she relied on racial stereotypes or animus to convict a criminal defendant, the Sixth Amendment requires that the no-impeachment rule give way in order to permit the trial court to consider the evidence of the juror’s statement and any resulting denial of the jury trial guarantee. Pp. 863 – 871.”
Jeffrey L. Fisher, Stanford, CA, the Petitioner.
Frederick R. Yarger, Denver, CO, for Respondent.
Jonathan D. Rosen, Denver, CO, Jeffrey L. Fisher, Pamela S. Karlan, Brian Wolfman, Stanford Law School, Supreme Court, Stanford, CA, for Petitioner.
Cynthia H. Coffman, Colorado Attorney General, Frederick R. Yarger, Solicitor General, L. Andrew Cooper, Deputy Attorney General, Glenn P. Roper, Deputy Solicitor General, Katharine J. Gillespie, Stephanie Lindquist Scoville, Senior Assistant Attorneys General, Majid Yazdi, Molly E. McNab, Assistant Attorneys General, Office of the Colorado, Attorney General, Denver, CO, for Respondent.
USSC, 3/6/17 opinion by Kennedy, joined by Ginsburg, Breyer, Sotomayor, and Kagan; Thomas dissenting; Alito dissenting joined by Roberts and Thomas; 137 S.Ct. 855, 17 Cal. Daily Op. Serv. 2025.