Cohn v. Corinthian Colleges, Inc., et al. suggests developing statutory construction trend in Fourth Appellate District, Division Three

Greatsealcal100Statistically speaking, it is difficult to ascribe trends to any particular Court of Appeal on the basis of just a few opinions on a given topic. That said, one Appellate District in particular appears, at minimum, to be skeptical of the validity of class actions predicted upon statutory violations. In Cohn v. Corinthian Colleges, Inc. (pub. order December 19, 2008), the Court of Appeal (Fourth Appellate District, Division Three) affirmed a summary judgment granted in favor of various defendants, including Angels Baseball LP, in a case in which a Mother's Day tote bag giveaway to mothers was alleged to have violated the Unruh Civil Rights Act (Civ. Code, §§ 51, 52.).

In describing the nature of the appeal, the Court left little doubt about the nature of the opinion to follow:

As we will explain, the Unruh Act protects against intentional discrimination that is unreasonable, arbitrary, or invidious. This important piece of legislation provides a safeguard against the many real harms that so often accompany discrimination. For this reason, it is imperative we not denigrate its power and efficacy by applying it to manufactured injuries such as those alleged by the plaintiff in this case.

(Slip op., at p. 2.)  The Court later suggest that the outcome was appropriate in light of the plaintiff's prior litigation activities:

Cohn’s complaint gathers further suspicion because Cohn, his friends, and his counsel have been involved in numerous of what have been characterized as “‘shake down’” lawsuits. (E.g., Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 178.) They proclaim themselves equal rights activists, yet repeatedly attempted to glean money from the Angels through the threat of suit. The Unruh Act is a valuable tool for protecting our citizens and remedying true injuries. We are not convinced the Angels’ tote bag giveaway was in anyway unreasonable, arbitrary, or invidious discrimination.

(Slip op., at p. 6.)  However, if the Court was satisfied that the claim was so lacking in merit that summary judgment was the appropriate means of disposition, the need for the discussion about Cohn's motiviation seems unclear.  In fact, it weakens the Court's analysis by suggesting that the hinted inequity is a necessary supporting factor in the decision.  Presumably, the outcome would have been the same for a first-time litigant with no known associations with activists.

This decision could be viewed in isolation, as a fact-driven outcome.  However, there are some legitimate indications that this Division's construction of statutory rights favors a strict construction that tends to limit claims.  For example, in Starbucks v. Superior Court (Lords) (December 10, 2008) the District reversed an Order certifying a class action and denying summary judgment, holding that plaintiff job applicants lacked standing to sue and obtain penalties under a statutory scheme precluding inquiry into certain drug convictions.  (Full disclosure - I assisted with some of the appellate briefing in that matter)   There was no language in the statutory scheme suggesting that the legislature sought to limit standing only to convicted job applicants, as opposed to all job applicants.  Nevertheless, the Court limited the parties entitled to enforce a statutory mandate by the legislature.

And in McCoy v. Superior Court (Kimco) (2007) 157 Cal.App.4th 225 (review denied), the Third Division disregarded a discussion in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094 when it held that Labor Code § 203 waiting time penalties are governed by a one-year statute of limitation.

At least circumstantially, it appears that the Third Division is not inclined to view statutory protection schemes as strict liability standards entitled to uniform enforcement.

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The Complex Litigator passes 20,000 visit mark

While there are plenty of legal blogs that can boast orders of magnitude higher traffic levels per day (like Overlawyered, that just took out one of my kneecaps), The Complex Litigator is proud and thankful for the readers that pushed this blog passed the (arbitrary) 20,000 visits benchmark during this blog's first year of operation.  Here's hoping for many more benchmarks to come.


Warmest regards,

H. Scott Leviant
Founder and Editor
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Management changes coming to Complex Litigation Court in Los Angeles County

The batons will pass at Central Civil West (CCW), the courthouse designated to for Los Angeles County's complex litigation panel.  Judge Peter Lichtman will assume Presiding/Supervising status from Juddge Carolyn Kuhl.  Judge Carl West will assume Assistant Presiding/Supervising status from Judge Victoria Chaney.

As a result of this change, Judge West will review all new class actions filed in Los Angeles County to determine whether each such action will be designated as "complex" and assigned to a judicial officer at CCW.  Judge Lichtman will handle a similar function with respect to non-class cases provisionally designated as "complex."  In addition, Judge Lichtman will review Petitions for Coordination.

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BREAKING NEWS: In 5-4 ruling, Supreme Court rejects federal preemption argument in “light cigarette” litigation, suggesting that preemption may not fly in pending Wyeth matter

Seal-USSC100 In a 5-4 decision, the United States Supreme Court held that neither the Federal Cigarette Labeling and Advertising Act's pre-emption provision nor the Federal Trade Commission's actions in this field pre-empt plaintiffs’ state-law fraud claim related to “light cigarette” advertisements. The plurality, comparing and contrasting with Cipollone v. Liggett Group, Inc., 505 U. S. 504 (1992), determined that the alleged duty not to deceive was unrelated to the Labeling Act’s regulation of “smoking and health” information. (Slip op., at pp. 5-20.)

The mass media has extensive coverage of this decision. For general media coverage of this ruling, see, for example, The New York Times, FoxNews and Forbes.

One interesting theme, missed by much of the general media coverage, is whether this opinion offers any guidance as to how the Supreme Court will determine the preemption issue in Wyeth. If nothing else, this decision suggests that the current Supreme Court does not have a specific preemption agenda that has yet revealed itself. The law and fact-specific analysis of the Labeling Act makes any comparison with Wyeth somewhat challenging.

Stevens, J., delivered the opinion of the Court, in which Kennedy, Souter, Ginsburg, and Breyer, JJ., joined. Thomas, J., filed a dissenting opinion, in which Roberts, C. J., and Scalia and Alito, JJ., joined.

You can review the opinion here:

For those using browsers without flash, the direct link to the file is here.

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Changes [deleted] coming to The Complex Litigator

First, I wish to assure regular visitors that the type of content that brought you here and kept you returning will still be a part of this blog.  That said, I am pleased that a goal of mine when I created this blog appears that it will be realized sooner than I expected.  It was my hope to expand the output of this blog with additional contributing authors, and that looks like it is going to happen.

I have associated with Initiative Legal Group LLP, a civil litigation firm emphasizing class action litigation as one of its practice areas.  Initiative Legal Group LLP has agreed to help support, co-sponsor and co-produce this blog.  I will continue as a Supervising Editor and a principal contributing author, but this blog will soon benefit from the addition of more content authors and from the substantial expertise possessed by all of Initiative Legal Group LLP's attorneys in the area of class action jurisprudence.

At the outset, I had hoped to one day create a destination site, a community of sorts, providing information about class actions and other complex litigation issues.  The movie studio sales pitch for this concept would be "the Politico of class action and complex litigation." These improvements won't happen overnight, but they are coming.  Post frequency may actually decline for a few weeks as a result of several factors, including my need to get situated at Initiative Legal Group LLP and the general slow-down during the holidays.  However, we hope to build some momentum in 2009.  Until then, I will attempt to keep up with any new developments so I can keep you up to date.

On a related note, with my move to Initiative Legal Group LLP comes an improved ability to support practitioners interested in co-counseling arrangements or class action case referrals.  If  you need assistance, particularly in the Southern California area, don't hesitate to contact me.

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Poor Apple, sued yet again over iPhone 3G speeds

This blog reported in September, and again in November, that Apple and AT&T were facing a flurry of proposed class action lawsuits regarding the performance of the iPhone 3G on AT&T's higher speed network.  On November 26, 2008, plaintiff James Pittman sued Apple for varrious product defects.  (Jim Dalrymple, Apple Faces Another 3G Speed Lawsuit (December 4, 2008) www.pcworld.com.)

My iPhone seems to do as well as any other cell phone at holding calls, which is to say that it is passable at that task.  The 3G speed is substantially better than Edge, and I get 3G in a significant portion of the Los Angeles area.  Just my experience.

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For the moment, California law is clear: no punitive damages for violations of labor code provisions regulating breaks

Greatsealcal100Whether punitive damages are available for violations of various labor code provisions has been something of an open question in California. You may recall, for instance, that a jury found against Wal-Mart in the matter of Savaglio v. Wal-Mart, awarding $172 million to the class members, including $115 million in punitive damages.  In that particular case, after Wal-Mart argued that punitive damages amounted to a penalty on a penalty, Judge Ronald Sabraw rejected the argument that meal and rest break premiums were penalties.  That particular finding was later confirmed as the correct interpretation in Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094.  In any case, without clear guidance on the question, it has seemed prudent to at least request punitive damages for such violations and let a Court say that they weren't recoverable.

Yesterday, however, a Court of Appeal approached this issue from a different perspective.  In Brewer v. Premier Golf Properties (December 3, 2008) the Court of Appeal (Fourth Appellate Distirct, Division One) reviewed, among other things, whether a punitive damage award for violation of various Labor Code sections was valid.  The Brewer Court concluded that punitive damages are not available for several violations of the Labor Code: 

We are convinced, both by application of the "new right-exclusive remedy" doctrine and under more general principles that bar punitive damages awards absent breach of an obligation not arising from contract, punitive damages are not recoverable when liability is premised solely on the employer's violation of the Labor Code statutes that regulate meal and rest breaks, pay stubs, and minimum wage laws.

(Slip op., at pp. 10-11.)  The Brewer case was an individual action, but it is covered here because of the significant impact on many wage & hour class actions.  If you are curious about the "new right-exclusive remedy" doctrine, take a look at Rojo v. Kliger (1990) 52 Cal.3d 65.

It is worth noting that Savaglio remains on appeal and may ultimately affect this area of law.  However, Savaglio has been stayed pending the outcome in Brinker, so it will be several years before that case moves forward.

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A special thank you to those who provided support and assistance during a surprisingly short job search

I'd like to extend a special thank you to those members of the blawgosphere that provided support and assistance in my brief hiatus from gainful employment.  It is greatly appreciated.

The Complex Litigator will have an exciting announcement when the ink is dry on an employment arrangement, but I can say without getting ahead of myself that it looks like I will realize one of several long-term goals for this blog -- the expansion of the team of regularly contributing authors.  Fear not (assuming you like things how they are), as I will continue in my role as the primary editor and author.

Best regards,

H. Scott Leviant

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If a Protective Order governing trade secrets is issued in your case, don't do this (or get out your checkbook)

Greatsealcal100This blog is intended to cover topics related to complex litigation.  But, based solely on the appellate decisions covered here, one might think that this site is restricted to class action topics.  While it is true that the bulk of appellate decisions mentioned on this blog relate to class actions, that has more to do with the fact that class actions are an easily "ascertained" subset of complex litigation than any decision to limit coverage of other "complex litigation" decisions.  Today, in Wallis v. PHL Associates (November 25, 2008), the Court of Appeal (Third Appellate District) considered some of the thorny issues related to trade secrets and protective orders in the context of reviewing a sanction award in the eyebrow-raising amount of $43,678.42.

The Court explained the conduct resulting in that unusually high sanction: 

In the course of this long-running litigation, the parties agreed to a protective order, which the court issued, allowing the parties to file under seal certain confidential documents containing alleged trade secrets. Cross-complainant PHL Associates, Inc. (PHL) filed the declaration of its attorney Tory E. Griffin, with attachments containing what PHL alleged were trade secrets. Although the declaration designated that it was filed under seal pursuant to the protective order and was sent to the trial court in a sealed envelope and labeled appropriately, the document later appeared in the court file available to the public.

Upon learning of the public availability of the declaration, attorney Mendoza notified her clients of the public availability. In an attempt to defeat PHL’s claim that the information attached to the declaration contained trade secrets, the Wallises and Mendoza had third-parties view and copy the declaration.

PHL, along with fellow cross-complainants Jeffrey T. Wichmann and Mary B. Holmes, filed a motion for sanctions pursuant to Code of Civil Procedure section 128.5 (section 128.5) against the Wallises and Mendoza for their conduct relating to the declaration. The trial court granted the motion, finding that the actions of the Wallises and Mendoza were frivolous and taken in bad faith.

(Slip op., at pp. 2-3.)  The Court of Appeal wasn't any more impressed with the conduct or the arguments than the trial court:  "The position of the Wallises and Mendoza, that the appearance of the declaration in the court’s public file allowed them to disclose the information attached to the Griffin declaration, was frivolous. And they acted in bad faith when they disclosed the information."  (Slip op., at pp. 3-4.)

File this under too cute by half.  Protective Orders are fairly common in class actions and other types of complex litigation.  But, in my experience, Protective Orders are not taken as seriously as they should be.  This decision is a painful reminder that a court may not look favorably on cynical attempts to end-run a protective order.  And this (disregarding protective orders) may be more common that you might think.  I was commended by a trial court recently for not using information subject to a "use" protective order, despite an urgent need to do so.  Following the trial court's order shouldn't have been so unusual as to receive praise, but it was.  Just remember that they call them protective Orders for a reason.

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Are you in Los Angeles? And are you hiring?

Having accomplished what I set out to do in my last endeavor somewhat faster than anticipated, I now find myself looking for my next challenge.  Anyone interested in working with a somewhat opinionated attorney (who is willing to dial down those opinions during work hours) with quite a bit of class action experience is welcome to contact me by e-mail: 

thecomplexlitigator [at] leviant.net.

It only hurts a little to ask, right?

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