Amicus Briefs Filed
Amicus curiae is a legal Latin phrase, literally translated as “friend of the court.” It is the name for a brief filed with the court by someone who is not a party to the case.
With Fred Hiestand at the helm of CJAC’s Appellate Program, CJAC regularly files such “friend of the court” briefs on issues of concern to its broad membership of businesses, professional associations, and local governments, in an effort to offer information and assist the court in deciding particular cases.
Recently Filed Amicus Briefs
Goldman v. Sunbridge Healthcare - Third Appellate District - 2/5/13: The issue in this case is whether nursing home arbitration agreements challenged on state unconscionability grounds are valid and enforceable because of the preemptive effect of the FAA as limned by the Supreme Court opinion in AT&T Mobility v. Concepcion and its progeny.
CJAC argues that the parties to the arbitration agreements at issue expressly agreed that the FAA shall govern the agreements interpretation and application. They also agreed to a broad delegation of authority to the arbitrator to decide all questions regarding the validity and enforceability of the arbitration contracts, including their scope and preemptive force and whether they are unconscionable. A number of recent Supreme Court and federal appellate opinions make clear that the disputes between the parties in this case should be resolved by arbitration. (Goldman v. Sunbridge Healthcare, C069970, brief filed on 2/5/13)
Sanchez v. Valencia Holding Company, LLC - California Supreme Court - 10/1/12: This issue in this case is whether the Federal Arbitration Act, as outlined by AT&T v. Concepcion, bars use of state unconscionability law to invalidate an arbitration agreement in a retail automobile sales contract because it (1) permits an internal arbitral appeal process to a three-person panel for extreme outlier results, (2) requires the losing party to advance costs for an internal arbitral appeal, and (3) excludes from arbitration self-help relief.
CJAC and Cal Chamber argue that the appellate court's decision here should be reversed because the FAA preempts use of state law on unconscionable contracts to stand as an obstacle to the execution of private, binding arbitration agreements. Merely requiring "procedures incompatible with arbitration" violates the FAA; and any procedure that interferes with a "streamlined" arbitration proceeding is prohibited. The arbitration agreement at issue clearly comports with federal law; and, to the extent its provisions conflict with state law defining unconscionable contracts, state law must yield to the broad preemptive sweep of the FAA. However, the specific provisions of this arbitration agreement are neither procedurally nor substantively unconscionable. They meet the Concepcion standard for providing a "streamlined procedure tailored to the type of dispute." (Sanchez v. Valencia Holding Company, LLC, S199119, Brief filed on 10/1/12)
Pfeifer v. John Crane, Inc. - Second Appellate District - 4/10/13: The issue in this asbestos case is whether it is reversible error for the trial court to refuse to give the sophisticated user/purchaser instruction requested by the defendant manufacturer of asbestos containing gaskets and packing it made for the U.S. Navy (according to the Navy’s specifications) in a product liability suit by a former Navy employee who, while working for the Navy, contracted mesothelioma.
CJAC argues that narrowly defining the "sophisticated user" doctrine to render it inapplicable in most situations, as the trial court did here, cannot help but foster more litigation over who is to pay for asbestos related injuries with all its accompanying detriment to the administration of justice. (Pfeifer v. John Crane, Inc., B232315, brief filed on 4/10/13)
Vanhooser v. S.C. (Hennessy Industries, Inc.) - Second Appellate District - 4/13/12: The issue in this case is determining whether a spousal loss of consortium action should be allowed for a latent injury from asbestos exposure to one of the partners that occurred before, but was only discovered after, his or her marriage. Petitioner and her husband married 10 years after his last exposure to asbestos when he worked in the Navy. Well into the marriage, the husband’s injury from asbestos manifested as mesothelioma and petitioner asserted her claim for loss of consortium along with his action for negligence and strict liability. The lower court ruled, in reliance on Zwicker v. Altamont Emergency Room, that petitioner did not have a viable claim because her husband’s last exposure to asbestos, which occasioned his mesothelioma, occurred before they were married. Petitioner argues that her loss of consortium action should be allowed because it "accrued" at the same time his did, but "accrual" does not comport with when the harm to the marital relationship took place.
CJAC argues that an element of the loss of consortium tort is the existence of a valid marriage when the predicate injury, or injury producing event, occurs. Discovery of a latent premarital injury after the marriage takes place will not wash. Petitioner’s plea that this court rewrite the loss of consortium tort to eliminate a core element defies sound precedent and common sense. It would, if accepted, usher in untoward financial consequences detrimental to the administration of justice and the public interest. (Vanhooser v. S.C. Hennessy Industries, Inc., B239677, brief filed on 4/13/12)
Woodard v. Crane Co. - Second Appellate District - 6/21/11: This is an asbestos case concerning the scope and application of the “component parts” defense in product liability law. Specifically, should component parts manufacturers be liable for failure to warn when the component is not inherently dangerous and the manufacturer had no role in its end design, even if it was foreseeable the component could, once outside the manufacturer’s control, be combined with other products that are defective and cause consumer injury?
The fact pattern in these types of case is becoming all too familiar: a plaintiff contracts mesothelioma from working many years ago in the Navy on ships whose boiler systems contained valves or pumps (i.e., “component parts”) manufactured by private companies pursuant to the Navy’s specifications. These valves and pumps required periodic packing and replacement of gaskets supplied by others that could conceivably, but not necessarily, contain asbestos. The people who contract mesothelioma from exposure to asbestos when repairing or replacing packing or gaskets connected to the valves can’t sue the Navy because of sovereign immunity, so they turn their sights to component parts manufacturers.
CJAC argues it is unfair and ineffecient to impose liability upon a component part maker for defects in the final product over which it has no control. (Woodard v. Crane Co., B219366, CJAC amicus brief filed on 6/21/11)
Decision Rendered - 8/25/11: The Second Appellate District, in a unanimous opinion, came to the same conclusion as CJAC in our amicus brief, ruling that Crane Co. owes no duty to plaintiff because Crane is a component parts manufacturer and did not contribute to the overall design of the product that allegedly caused the plaintiff’s mesothelioma.
Crull v. 3M Company - First Appellate District - 3/4/11: Denton Crull worked as a boiler technician in the Navy for 25 years. During that time, he was often exposed to asbestos without wearing any protective masks or respirators. That exposure alone was enough to have caused the mesothelioma (cancer) he got after retiring from the Navy. At other times during his Navy stint, he wore a Navy-supplied 3M mask that was not designed to protect wearers from inhalation of asbestos dust and said so on its packaging, though Crull admitted he never read these warnings; and sometimes he used a 3M respirator that lessened the inhalation of asbestos dust, but expressly warned it would not prevent inhalation of asbestos.
After he contracted cancer, Crull sued the Navy and 53 other defendants for strict products liability and negligence. When the case went to trial, only four defendants were left, the rest having been dismissed due to settlement or from pre-trial rulings that they were not responsible for his injuries. Crull presented his case to the jury and 3M moved for nonsuit, contending Crull failed to show any causation by 3M for his injuries. The court agreed with 3M and dismissed it from the case. Crull appealed, arguing that the trial court applied the wrong “causation” standard in granting nonsuit. The trial court applied the “substantial factor” causation standard, but the plaintiff contends the more lenient, loosey-goosey “Rutherford” (from the court case of that name) causation test for when all defendants are asbestos manufacturers or distributors should have been used.
In its friend of the court brief, CJAC and the California Chamber of Commerce argue that because 3M’s products contained no asbestos, the “substantial factor” test was the correct one and, because 3M’s products could not by themselves have caused or contributed to plaintiff’s injuries, his other theories of liability - “failure-to-warn” and “design defect” - are beside the point. (Crull v. 3M Company, A126822, CJAC and CA Chamber of Commerce amici brief filed 3/4/11)
Toyota v. Certain Economic Loss Plaintiffs - Ninth Circuit Court of Appeals - 3/1/12:
The issue in this case is whether a plaintiff-owner of the kind of automobile for which others have experienced problems of sudden unintended acceleration (SUA) has "standing" to prosecute a product defect claim against the auto manufacturer/distributors when his vehicle has never manifested SUA and he has never suffered an economic loss from an attempted or actual sale of it. There is no disagreement between the parties as to the standing of certain plaintiffs: those who have experienced SUA, or who have sold or tried to sell their automobiles and found them, because they are associated in the public mind with the SUA phenomenon, to be of diminished value when compared to similar vehicles not known for exhibiting SUA. These owners indisputably have suffered an "injury-in-fact."
Members of the purported class who, however, simply own automobiles of the same kind as those who have standing, but who have not themselves ever suffered an SUA or sold or tried to sell their vehicles, are the sole focus of this dispute. Plaintiffs contend these persons have standing because of the "statistically significant" probability that they will sometime suffer the adverse effects of those with standing. The defendants and CJAC believe this anticipated harm is too speculative and conjectural, too thin a basis to satisfy the Article III standing that is a prerequisite for all federal court lawsuits.
The district court found for plaintiffs on this issue and CJAC is supporting reversal by the Ninth Circuit.
Bomersheim v. Los Angeles Gay & Lesbian Center - California Supreme Court - 8/23/10: At issue is (1) whether class treatment is appropriate where plaintiffs seek damages for individualized pain and suffering unique to each class member; and (2) whether causation can be presumed by common proof on a class-wide basis or must be proven for each class member.
The trial court denied plaintiff’s motion to certify the action for class prosecution, but the appellate court reversed — ruling that the established ways of proving causation of damages could be dispensed with by a “presumption of causation” standard, shifting the burden to defendant to disprove causation. The appellate court also brushed aside the trial court’s determination that the measure of damages for each class member requires an individualized process.
CJAC has filed a letter brief urging the California Supreme Court to grant review, and a decision from the Court is expected soon. (Bomersheim v. Los Angeles Gay & Lesbian Center, S184174, CJAC letter brief filed on 8/23/10)
Diaz v. Carcamo - California Supreme Court - 10/20/2010: CJAC (joined by the California Chamber of Commerce) filed an amici brief in the California Supreme Court in Diaz v. Carcamo. This case presents two important issues:
(1) When an employer admits respondeat superior liability for negligent driving by one of its employees occasioning injury to another, may the plaintiff still assert the alternate direct liability theory of “negligent hiring” and, pursuant thereto, introduce evidence of the bad character and poor driving record of the employee; and
(2) If so, may plaintiff, pursuant to Proposition 51, recover damages against employer and employee under both vicarious and direct liability theories in an amount that represents the total of the respective comparative fault percentage each separately bears for the accident?
The appellate opinion, contrary to law and logic, answered “yes.” We argue that allowing a direct negligence claim to go forward with one for admitted respondeat superior liability adds nothing, other than prejudice to the trial by encouraging the admission of otherwise inadmissible evidence. Further, the conflation of direct negligence theories when vicarious liability is admitted provides a basis for oppressive discovery and makes the apportionment of damages under Propostion 51 confusing and confounding. Once an employer admits vicarious liability for the negligence of its employee, the two should be treated as a single entity and the liability of the employer should be coextensive with that of the employee. To hold otherwise invites a jury to unfairly assess the negligence of the employer twice. (Diaz v. Carcamo, S181627, CJAC amicus brief filed on 10/20/2010)
Decision Rendered - 6/23/11 - The California Supreme Court, in a unanimous decision, overturned the Court of Appeal, echoing the argument CJAC (joined by Cal Chamber) made in its amici brief filed in October. The court agreed with CJAC’s argument that when an employer admits vicarious liability for an employee’s actions that cause injury to a plaintiff, there is no need for an additional claim of negligent entrustment.
The opinion states:
“A person injured by someone driving a car in the course of employment may sue not only the driver but that driver‘s employer. The employer can be sued on two legal theories based on tort principles: respondeat superior and negligent entrustment. Respondeat superior, a form of vicarious liability, makes an employer liable, irrespective of fault, for negligent driving by its employee in the scope of employment. The theory of negligent entrustment makes an employer liable for its own negligence in choosing an employee to drive a vehicle.
If, as here, a plaintiff asserts both theories, and the employer admits vicarious liability for any negligent driving by its employee, can the plaintiff still pursue the negligent entrustment claim? The answer is no…”
Cortez v. Abich - California Supreme Court - 6/24/10: The issue in this case is whether homeowners who hire unlicensed contractors to undertake extensive remodeling of their personal residences are liable in tort under Cal-OSHA and Labor Code section 2750.5 to workers hired by the contractors for injuries they sustain while working on the remodel.
CJAC argued in its amicus brief that imposition of Cal-OSHA requirements upon homeowners to injured third-party workers hired by unlicensed contractors for remodeling the homeowners’ personal residence is contrary to legislative intent, the purpose of Cal-OSHA and applicable contract licensing laws. It also runs afoul of the “unclean hands” doctrine. CJAC urged the Court to overturn the appellate court decision and affirm the trial court’s ruling.
Decision Rendered - 1/24/11:The Supreme Court agreed with CJAC’s amicus brief and unanimously ruled that extensive home remodeling is not within the statutory exception of “household domestic service”, which would allow defendants to escape liability for an “employee’s” injury.
Employee Meal and Rest Breaks
Hohnbaum et al. v. Brinker Restaurant Corporation - California Supreme Court - 8/18/09: This case addresses the issue of whether employers are required to ensure that their employees take meal and rest period breaks or that they are only required to make these breaks available to employees and not force them to work through the break periods. Also at issue is whether a case brought by employees alleging meal and rest break violations by their employers should be certified as a class action.
CJAC argues in our amicus brief that employees are free to choose whether to take a meal or rest breaks “provided” them by their employer and to waive their rights to these breaks for their own reasons. If an employee decides to not take a break it does not mean their employer is in violation of Labor Code provisions requiring it make the breaks available.
Also, employer liability for off-the-clock work requires proof that the employer knew or should have known employees were doing this contrary to express company policy, so class certification is not appropriate in this case.
Decision Rendered - 4/12/12: The Supreme Court unanimously agreed with CJAC's argument that while employers are required to make breaks available, employees are at liberty to use the periods as they wish and the employer need not ensure that no work is done.
The Court found that the view that an employer must ensure no work is done -- i.e., prohibit work -- lacks any textual basis in the wage order or statute at issue. "Indeed, the obligation to ensure employees do no work may in some instances be inconsistent with the fundamental employer obligations associated with a meal break: to relieve the employee of all duty and relinquish any employer control over the employee and how he or she spends the time."
Joint and Several Liability
Leung v. Verdugo Hills Hospital - California Supreme Court - 11/22/11: CJAC joined with the U.S. Chamber, the California Chamber and Artemis S.A. in this case. The issue is: Should the common law rule that a release for consideration of one joint tortfeasor operates as a release of the joint and several liability of all joint tortfeasors be abandoned in light of statutory and case law modifications of the joint and several liability rule?
This case involves a carefully crafted joint-and-several-liability scheme, Code of Civil Procedure Sections 875 through 880, under which the Legislature specifically chose to retain the preexisting common law rule governing the release of joint tortfeasors in a select category of cases in order to advance the goals of encouraging early settlements and equitably apportioning costs among all parties. Petitioner, Aidan Leung, a medical-malpractice plaintiff, chose, after a jury verdict, to proceed with a settlement that the trial court had previously found not to be in good faith. He now seeks to upset the overall joint-and-several-liability framework considerably by asking this Court to throw out over 200 years of common law and to create a new rule that would gut the statutory scheme’s core goal of encouraging early, “good faith” settlements. Since 1957, this system has promoted and helped attain these dual goals, and the Legislature has not seen fit to overturn the common law release rule against the background of which it legislated. We argue that the Supreme Court should affirm the trial court's decision. (Leung v. Verdugo Hills Hospital, S192768, Amicus Brief filed on 11/22/11)
Decision Rendered - 8/23/12: In a unanimous opinion authored by Justice Kennard, the California Supreme Court disagreed with CJAC and repudiated the common law release rule saying that "in light of the unjust and inequitable results the common law release rule can bring about, as shown in this case, we hold that the rule is no longer to be followed in California."
Kristina Gavello, et al. v. Bernard Millman, MD - First Appellate District - 3/7/13: This case represents the latest round in a series of coordinated attacks in the appellate courts on the constitutionality of MICRA. CJAC's brief argues that controlling precedent, sound public policy, and well-settled and reasoned constitutional doctrine make clear -- the $250,000 ceiling on recoverable noneconomic damages in medical malpractice cases comports completely with federal and state constitutional safeguards. Plaintiffs' counsel know this, but continue to assert the opposite, a tactic apparently based on the notion that if one says something often enough, the courts may eventually come to believe it, despite all law and reason to the contrary. However, calling a law unconstitutional does not make it so, no matter how devoutly the caller wishes and repeats it. (Gavello, et al. v. Millman, A132291, brief filed on 3/7/13)
Hughes v. Pham - Fourth Appellate District - 9/18/2012: This case is the "next chapter" in the plaintiffs bar's attack on MICRA. They argue MICRA's cap on noneconomic damages has become more arbitrary and irrational over time, and that the "purported basis for its enactment has been eviscerated." They point to "changed conditions" since MICRA's enactment that render it in violation of the right to jury trial, separation of powers, due process and equal protection, and that MICRA fails strict scrutiny analysis and even rational basis review.
CJAC argues MICRA is a rational response to the 1975 medical malpractice insurance crisis, and is a model law that reined in med mal litigation costs and reduced premiums for med mal insurance. All of MICRA's sections intended to reduce med mal litigation costs have withstood repeated constitutional challenges. Arguments that the $250,000 cap is no longer viable because it did not achieve its purpose of dampening litigation costs (because Prop 103 did instead) and that the conditions prompting its enactment no longer exist are nothing new and have been repelled by every court to consider them. (Hughes v. Pham, E052469, Amicus Brief filed on 9/18/2012)
Stinnett v. Tam - Fifth Appellate District - 11/5/2010: CJAC filed an amicus brief in response to this latest attempt to challenge MICRA on constitutional grounds.
Plaintiff argues that the conditions prompting MICRA’s enactment in 1975 are now materially different, removing any present “rational basis” for MICRA’s treatment of medical malpractice plaintiffs distinct from other personal injury plaintiffs. In addition, plaintiff contends MICRA never achieved its purpose of restoring affordable medical liability insurance premiums, claiming that credits instead belongs to the passage of Prop 103.
CJAC argues that all of MICRA’s sections have withstood repeated constitutional challenges and the “heart” of MICRA — its $250,000 lid on recoverable noneconomic damages — satisfies equal protection because it is rationally related to MICRA’s purpose: to reduce the cost of medical malpractice litigation and help to make med mal insurance premiums affordable. In addition, MICRA, not Prop 103, is responsible for arresting the conditions that caused the medical malpractice crisis.
Decision Rendered - 9/1/11: In a 2-to-1 opinion, the court agreed with CJAC and upheld MICRA against all constitutional challenges. Justice Gene Gomes, joined by Justice Dennis Cornell, held that the MICRA passes equal protection muster.
Ruiz v. Podolsky - California Supreme Court - 2/4/10: At issue in this case is whether the nonsignatory adult heirs of a patient bound by a physician-patient arbitration agreement are to arbitrate their own wrongful death claims. (Ruiz v. Podolsky, S175204, CJAC amicus brief filed on 2/4/10)
Decision Rendered - 8/23/10: The Court, in a 6-1 decision authored by Moreno, agreed with CJAC’s arguments that MICRA’s arbitration provision (CCP section 1295) permits patients to bind their spouses and nonsignatory heirs to arbitrate their claims for wrongful death. The Court’s opinion echoed CJAC’s arguments that this holding carries out the intent of the Legislature and furthers MICRA’s goal of reducing costs in the resolution of malpractice claims and therefore malpractice insurance premiums.
Personal Injury Damages
Corenbaum v. Lampkin - Second Appellate District - 12/31/12: In this case, plaintiffs were seriously injured while riding in a taxi. The defendant, intoxicated and driving at excessive speeds, ran a red light and collided with the taxicab. At trial, the court did not permit the admission of any evidence relating to the collateral source payment of plaintiffs' medical bills. The California Supreme Court's ruling in Howell v. Hamilton Meats & Provisions, for the first time, permits the introduction of the amount accepted by a medical provider as payment in full, but generally precludes evidence of any collateral source of such payment. The court is now seeking assistance on the following two issues left open by the Howell decision:
1. Although evidence of the amount billed for medical expense is irrelevant, and thus inadmissible under Howell on the issue of past medical damages, to what extent, if at all, is such evidence relevant and admissible on (a) medical expenses and/or (b) noneconomic damages?
2. To the extent that evidence of medical billings is admissible on either of the two issues identified above, and such evidence is in fact presented to the jury, what specific limiting instruction, if any, should be given?
CJAC's answer to the above questions is that evidence of the amount billed for medical expenses may be relevant to assist the trier of fact in determining future medical expenses in certain situations, provided an appropriate limiting instruction is given that they are not in themselves sufficient to establish the “reasonable value” of future expenses but must be considered with and in the context of expert testimony on the issue. Evidence of amounts “billed” for medical expenses is, however, never relevant nor admissible for ascertaining noneconomic damages. (Corenbaum v. Lampkin, B236227, brief filed on 12/31/12)
Decision Rendered - 4/30/13: The court unanimously agreed with CJAC's arguments that evidence of the full amount billed for a plaintiff's medical care is not relevant to the determination of a plaintiff's damages for medical expenses, past or future, and therefore is inadmissible for that purpose if the plaintiff's medical providers, by prior agreement, had contracted to accept a lesser amount as full payment for the services provided.
Howell v. Hamilton Meats & Provisions, Inc. - California Supreme Court - 9/2/10: At issue is whether plaintiffs in personal injury actions are entitled to recover an amount for medical expenses greater than what their private health insurance paid on their behalf and what their healthcare providers who treated them for injuries accepted as full payment for services. The appellate opinion here concluded the amounts billed for plaintiff’s medical care, and not the amount actually paid by plaintiff’s medical insurance to fully satisfy all her financial obligations for that care, was the correct measure of medical damage because to hold otherwise violates the collateral source rule.
Should this opinion remain law, it not only will cause confusion (it conflicts with other appellate decisions), but will result in substantially greater sums being paid by health insurers to plaintiffs, which translates into an increase in the size of settlements, verdicts, the number of lawsuits, and the cost of health care and insurance. (Howell v. Hamilton Meats & Provisions, Inc., S179115, CJAC amicus brief filed on 9/2/2010)
Decision Rendered - 8/18/11: The California Supreme Court agreed with CJAC and held that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial.
The 6-1 decision, authored by Justice Werdegar with pro tem Justice Klein dissenting, overturned the appellate court, which had previously ruled that plaintiff was entitled to the full “sticker price” amount billed by her medical care providers.
Threshold Enterprises v. Superior Court - First Appellate District - 1/28/13: The issue in this case is whether res judicata bars a Prop 65 lawsuit by a public prosecutor against petitioner, who was also a party to a previous, final court-approved consent judgment on identical claims brought by a private enforcer on behalf of the public.
CJAC's amicus brief argues that writ review is warranted to decide several issues including (1) when is a private enforcer of Prop 65 in "privity" with a public enforcer of a previous claim against the same defendant; (2) whether the narrow "public interest" exception to res judicata applies to this Prop 65 prosecution; and (3) whether the order denying res judicata to the previous consent judgment and subjecting petitioner to repeat litigation on the same issue violates due process. (Threshold Enterprises v. Superior Court - First Appellate District, A137683, brief filed on 1/28/13)
Punitive Damage Claims
Bullock v. Philip Morris USA, Inc. - Second Appellate District - 3/17/11: In this case, the issue is whether a punitive damage verdict for the plaintiff of $13.8 million, in conjunction with a compensatory damage award for $850,000 ($100,000 of which is for “pain and suffering”), comports with the defendant’s constitutional right to due process of law.
CJAC argues that the punitive damage award violates the defendant’s rights to due process. It is 16 times greater than the compensatory award, and the compensatory award includes a significant, separate “pain and suffering” component that overlaps with the punitive damage award in terms of the defendant’s punishment. There is no deterrence objective left to be satisfied by the punitive award because the defendant has already paid billions of dollars from other lawsuits to numerous plaintiffs (including a master settlement agreement with the California Attorney General to cover Californians’ smoking-related health problems) for essentially the same conduct for which the plaintiff seeks punitive damages.
Given these circumstances, the punitive damage award should not exceed the single digit, maximum ratio of 9:1 punitive to compensatory damages suggested by U.S. and California Supreme Court precedents, and more properly and fairly should be in the lower ratio of that scale (3:1 or 1:1) since the compensatory damage award is substantial. (Bullock v. Philip Morris USA, Inc., B222596, CJAC amicus brief filed on 3/17/2011)
Decision Rendered - 8/17/11: In a 2-1 opinion, the court unfortunately sided with the plaintiff. The majority 42-page appellate opinion by Justice Walter Croskey (Justice Joan D. Klein joining), upheld the punitive award on the grounds that the egregious behavior of Philip Morris, combined with the not “substantial” compensatory award, justified punitive damages in excess of the single digit ratio referenced in opinions by the U.S. and California Supreme Courts.
Nelson v. Exxon Mobil - California Supreme Court - 9/21/10: At issue is whether plaintiffs can assign to a third party their remedy for punitive damages incident to and assigned with their causes of action for negligence and strict products liability.
The trial court (consistent with a long line of authority) ruled they could not, but the appellate opinion, in reliance on a handful of cases from other states and some purported distinctions between opinions of California courts, reversed. The appellate court ruled that if the underlying cause of action involves a property interest, rather than a personal interest, the punitive relief may be assigned.
CJAC argues this appellate holding up-ends generations of well-reasoned precedent and will likely result in stirring-up needless litigation by further fueling the nascent but growing industry of outside investors funding litigation in return for a stake in the outcome. (Nelson v. Exxon Mobil, S179122, CJAC brief filed 9/21/10)
Du v. Deerbrook Insurance Co. - Ninth Circuit Court of Appeals - 7/5/12: In this case, CJAC is supporting Deerbrook's Petition for Panel and En Banc Rehearing. The issue is whether a reasonable settlement demand or offer from the claimant to the insured defendants is, under California law, a prerequisite to a later assigned third-party bad faith claim against the insurer for its refusal to effectuate settlement.
The panel opinion answered "no" to this question, a decision CJAC is asking it to reconsider and reverse, or if necessary, the Court to review en banc and certify to the California Supreme Court for answer. CJAC argues that, contrary to the opinion, California law consistently holds that a settlement offer or demand by the plaintiff is an essential element in a bad faith action against an insurer for its settlement conduct. (Du v. Deerbrook Insurance Co., 10-56422, brief filed on 7/5/12)
Village Northridge Homeowners Association v. State Farm - California Supreme Court - 8/15/08: The issue in this case is whether a party to a settlement agreement can keep the proceeds therefrom while filing suit to avoid the release in that agreement and obtain additional damages for fraud. Until the appellate opinion, the settled law has been that a party seeking to avoid a settlement agreement on fraud grounds must rescind that agreement and return the consideration paid as required by Civil Code section 1691. The appellate opinion limited this rule by distinguishing between the settlement of personal injury actions — to which it conceded the well-settled rescission rule applies — and non-personal injury settlements, specifically one involving an underlying insurance obligation concerning the amount of the policy limits for earthquake damage. The CJAC brief argued that there is no principled distinction between the rescission rule for personal injury settlements and non-personal injury settlements involving underlying insurance obligations respecting the amount of the policy limits. (Village Northridge Homeowners Association v. State Farm, S161008, CJAC amicus brief filed on 08/15/2008)
Update: In April, the Court ordered supplemental briefing by the parties to address the following issue: “Should the court overrule Garcia v. California Truck Co. (1920) 183 Cal. 767, 773, and Taylor v. Hopper (1929) 207 Cal. 102, 105.” The issue in this case is whether a party to a settlement agreement can keep the proceeds therefrom while filing suit to avoid the release in that agreement and obtain additional damages for fraud. CJAC’s amicus brief was filed in August 2008, so this is the first “news” in this case in close to two years!
Decision Rendered - 8/30/10: The California Supreme Court today released its opinion in Village Northridge Homeowners Association v. State Farm. The Court’s unanimous 19-page opinion, authored by Justice Chin, is below. The common sense decision is refreshingly succint, as the opinion’s opening paragraph below offers a nice summary of the case.
We granted review to determine whether an insured who suffered property damage in the 1994 Northridge earthquake may settle a disputed insurance claim with its first party insurer, execute a full and complete release of the claim, keep the money the insurer paid in the claim settlement without rescinding the release, and then sue the same insurer for allegedly fraudulently inducing the insured to settle the claim for less than it was worth under the policy. Although the insured here signed a release and waiver of all future claims, it seeks to bypass the statutory and common law rules governing rescission of a release, and instead to take advantage of a more general contract rule that a party to a contract may elect to affirm the contract and sue for fraud damages. Consistent with long-settled case law and the relevant state statutory scheme that specifically governs rescission of contracts, including releases, under Civil Code sections 1691 through 1693, we conclude that a release of a disputed claim, like the one here, does not permit a party to elect the remedy of a suit for damages when the release itself bars that option. Instead, the insured party to the release must follow the rules governing rescission of that release before suing the insurer for damages.
Unfair Competition Law
Rose v. Bank of America - California Supreme Court - 9/20/12: The issue in this case is whether a private enforcement claim under the Unfair Competition Law (UCL) can be predicated on violation of the federal Truth in Savings Act despite express Congressional repeal of any private enforcement action under it.
CJAC argues that express Congressional repeal of a statutory cause of action allowing for private enforcement of its prohibitions prevents it from being "bootstrapped" to the UCL for private enforcement. A statute silent about private enforcement may, absent a valid defense, be borrowed by the UCL and enforced in a private action seeking equitable relief. But, a statute whose private enforcement remedy has been extinguished by legislative repeal or judicial overruling is a nullity; it cannot serve as a valid predicate to be bootstrapped to the UCL and enforced thereunder. (Rose v. Bank of America, S199074, CJAC amicus brief filed on 9/20/12)
People ex rel. Kamala Harris v. Pac Anchor Transportation - California Supreme Court - 4/25/12: The issue in this case is whether an action under the UCL against a trucking company for treating individuals who drive trucks for them as "individual contractors" instead of "employees" is preempted by the Federal Aviation Administration Authorization Act (FAAAA). CJAC contends that a trilogy of US Supreme Court cases provide ample authority and reason for concluding that this UCL action is preempted by the FAAAA. (People ex rel. Kamala Harris v. Pac Anchor Transportation, S194388, brief filed on 4/25/12)