a California-centric collection of comments and resources about complex litigation and class action practice
if my updates to the Kindle information page broke your subscriptions. The beta control panel forces a re-publish to Kindle if anything is updated, and this may break your subscription settings. It's Amazon's fault, but I'll take the blame.
Amazon swears nothing will happen to existing subscriptions, even though you have to "republish" to edit any part of a blog description page. We'll see.
No conference was held for the week of October 5, 2009. Nothing to see here. Move along.
Octagon Publishing, Inc. is offering a new resource for information about interesting class action attorney fee awards. Class Action Attorney Fee Digest Blawg is an offshoot of the Class Action Attorney Fee Digest, which collects class action attorney fee award information that is reported in subscription-based publication. This new blawg will need some more material before it becomes a major resource for practitioners.
Via ClassActionBlawg.
As a child of Las Vegas, I have a soft spot for all things "Sin City." For that reason, among others, I was touched by the sensitivity with which the anonymous blogger that is Legally UnBound used words to sculpt a snapshot (dare I say, tableau) of Las Vegas and its unique culture. Blawg Review #231 is good reading, but it's not necessarily for the faint of heart (you'll know what I mean when you get to the section entitled "The Stripper & The Geisha"). Sweet, sweet childhood memories...
The California Supreme Court held its (usually) weekly conference today. The only notable event was:
As promised shortly after Morgan, et al. v. AT&T Wireless Services, Inc. (September 23, 2009) was published, here is a longer post on the first substantial application of In re Tobacco II Cases, 46 Cal. 4th 298 (2009) by a California Court of Appeal. Before commenting on the analysis in Morgan, a brief summary of the facts of the case are in order. The plaintiffs alleged that they were ripped off when they purchased the premium Sony Ericsson T68i cell phone for use on the AT&T network but weren't told that AT&T was abandoning the 1900 MHz GSM spectrum in favor of the 850 MHz spectrum, rendering the phones useless. Then AT&T sent the T68i owners an inferior replacement that they called an "upgrade." After three successive rounds of pleadings, the trial court held that plaintiffs could not state any actionable claims. In case you were wondering, I just summarized 20 pages of opinion for you.
First, the Court examined the UCL cause of action by recapitulating the elements of a valid UCL cause of action:
[D]espite the changes to the standing requirements, the Proposition 64 amendments to the UCL "'left entirely unchanged the substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted.'" (In re Tobacco II Cases (2009) 46 Cal.4th 298, 314 (Tobacco II).) Thus, pre-Proposition 64 caselaw that describes the kinds of conduct outlawed under the UCL is applicable to post-Proposition 64 cases such as the present case. The only difference is that, after Proposition 64, plaintiffs (but not absent class members in a class action) must establish that they meet the Proposition 64 standing requirements. (Tobacco II, supra, 46 Cal.4th at p. 320.)
Slip op., at 20. Then the Court cut through the extraneous allegations of the Third Amended Complaint to determine whether any prong of the UCL was sufficiently alleged:
The definitions of unlawful and fraudulent business practices are straightforward and well established. An unlawful business practice under the UCL is "'"'anything that can properly be called a business practice and that at the same time is forbidden by law.'"'" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (Cel-Tech).) A fraudulent business practice is one in which "'"'members of the public are likely to be "deceived."'"'" (Tobacco II, supra, 46 Cal.4th at p. 312.)
Slip op., at 21-22. The Court also noted the unsettled definition of "unfair" in cases not involving commercial competitors, but it did not need to resolve the dispute, concluding that the other two prongs were sufficient to resolve the appeal. Returning to the fraudulent prong of the UCL, after underscoring that "fraudulent" under the UCL is distinct from common law fraud, the Court provided more detail about the type of conduct that is "fraudulent" under the UCL:
As noted above, a fraudulent business practice is one that is likely to deceive members of the public. (Tobacco II, supra, 46 Cal.4th at p. 312.) A UCL claim based on the fraudulent prong can be based on representations that deceive because they are untrue, but "'"also those which may be accurate on some level, but will nonetheless tend to mislead or deceive. . . . A perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by failure to disclose other relevant information, is actionable under"' the UCL." (McKell, supra, 142 Cal.App.4th at p. 1471.) For example, in Pastoria v. Nationwide Ins., supra, 112 Cal.App.4th 1490, the plaintiffs alleged: (1) they purchased insurance policies based upon the defendant insurance company's description of the premiums, lack of deductibles, and other policy benefits; (2) less than two months later the insurer notified them of significant changes to their policies, including material increases in premiums and substantial deductibles; and (3) the insurer knew of the impending changes to the policies at the time plaintiffs purchased them, but did not communicate that to the plaintiffs. (Id. at p. 1493.) We held that those allegations were sufficient to state a claim for relief under the fraudulent business practices prong of the UCL. (Id. at p. 1499.)
Slip op., at 23-24. The Court then identified the allegation from Morgan that were comparable:
In the present case, plaintiffs alleged that (1) AT&T marketed and sold expensive T68i phones (which could be operated only on the AT&T GSM/GPRS network) in conjunction with multi-year service plans, and touted the improvements it was making to its GSM/GPRS network; (2) the improvements AT&T made to the network significantly degraded the portion of the network on which the T68i phones operated; and (3) AT&T knew at the time it sold the T68i phones that the improvements it was going make would soon render the T68i phones essentially useless.
Slip op., at 24. Having concluded that a UCL fraudulent prong violation was alleged, the Court then determined that the plaintiffs had standing to bring the claim, citing Tobacco II:
In Tobacco II, supra, 46 Cal.4th 298, the Supreme Court held that this standing requirement applies only to the named plaintiffs in a class action (id. at pp. 320-321), and that it imposes an actual reliance requirement on named plaintiffs seeking relief under the fraudulent prong of the UCL (id. at p. 326). The court went on to explain what a plaintiff must plead and prove: “while a plaintiff must allege that the defendant's misrepresentations were an immediate cause of the injury-causing conduct, the plaintiff is not required to allege that those misrepresentations were the sole or even the decisive cause of the injury-producing conduct. Furthermore, where, as here, a plaintiff alleges exposure to a long-term advertising campaign, the plaintiff is not required to plead with an unrealistic degree of specificity that the plaintiff relied on particular advertisements or statements.” (Id. at p. 328.)
Slip op., at 27. The Court found that the allegations of an extensive advertising campaign by AT&T, coupled with the plaintiffs' online research and similar representations made to them in AT&T stores sufficiently alleged the necessary reliance element.
The Court did not reach the same conclusion when it turned to the cause of action under the FAL (False Advertising Law), which was based on the claim that the T68i replacement phone was an "upgrade":
AT&T argues that plaintiffs do not have standing to bring this claim. AT&T is correct. Proposition 64 made identical changes to the standing requirements to bring an action under the FAL as it made to the requirements under the UCL. (Californians for Disability Rights v. Mervyn’s, LLC, supra, 39 Cal.4th at p. 229, fn. 2.) A person bringing an action under the FAL must establish that he or she “has suffered injury in fact and has lost money or property as a result of a violation of [the FAL].” (Bus. & Prof. Code, § 17535.) Even if it could be said that the return of a phone that plaintiffs alleged was “useless” constituted an injury in fact, plaintiffs alleged that each of them declined to return their T68i phone. Therefore, they cannot truthfully allege that they lost money or property as a result of AT&T's offer. Accordingly, the trial court did not err by sustaining the demurrer to the FAL cause of action.
Slip op., at 29.
Regarding the CLRA claim, the Court of Appeal clearly resolved a question with respect to CLRA notices for corrective action. The question is whether the notice must be sent before the initial complaint is filed to permit an amendment seeking damages, or, alternatively, whether it can issue after the initial complaint is filed so long as at least 30 days pass before an amendment seeking damages is filed. This question gained some traction when a federal district court ruled that the notice must be sent before the initial complaint is filed. The Court of Appeal disagreed:
The federal district court cases upon which AT&T relies for its assertion that failure to comply with the notice requirement requires dismissal with prejudice fail to properly take into account the purpose of the notice requirement. That requirement exists in order to allow a defendant to avoid liability for damages if the defendant corrects the alleged wrongs within 30 days after notice, or indicates within that 30-day period that it will correct those wrongs within a reasonable time. (See, e.g., Meyer v. Sprint Spectrum L.P., supra, 45 Cal.4th at p. 642; Kagan v. Gibraltar Sav. & Loan Assn., supra, 35 Cal.3d at p. 590.) A dismissal with prejudice of a damages claim filed without the requisite notice is not required to satisfy this purpose. Instead, the claim must simply be dismissed until 30 days or more after the plaintiff complies with the notice requirements. If, before that 30-day period expires the defendant corrects the alleged wrongs or indicates it will correct the wrongs, the defendant cannot be held liable for damages.
Slip op., at 31. I've been on the short end of this argument, and I'm glad that a California Court of Appeal put an end to what I viewed as an argument disconnected from the purpose of the statutory language.
Regarding the fraud cause of action, the Court of Appeal noted the general rule that fraud must be pled with particularity; however, it then described an important exception:
[T]he Supreme Court has noted, there are “certain exceptions which mitigate the rigor of the rule requiring specific pleading of fraud.” (Children’s Television, supra, 35 Cal.3d at p. 217.) For example, where a fraud claim is based upon numerous misrepresentations, such as an advertising campaign that is alleged to be misleading, plaintiffs need not allege the specific advertisements the individual plaintiffs relied upon; it is sufficient for the plaintiff to provide a representative selection of the advertisements or other statements to indicate the language upon which the implied misrepresentations are based. (Id. at p. 218.) But the court also noted that where a claim of fraud is based upon a long-term advertising campaign, which “may seek to persuade by cumulative impact, not by a particular representation on a particular date . . . [p]laintiffs should be able to base their cause of action upon an allegation that they acted in response to an advertising campaign even if they cannot recall the specific advertisements.” (Id. at p. 219.)
Slip op., at 33.
This opinion offers the first evidence that Tobacco II will prove to be yet another instance where the California Supreme Court has substantially redirected an anti-consumer trend in appellate and trial court rulings.
Complex litigation is primarily written advocacy. Since you are reading a blog about complex litigation topics, you might be interested in the top blogs for writers for 2009. You might find something that speaks to you if you poke around a bit. Keep in mind that these are not legal writing blogs, but legal writing could stand for a regular dose of non-legal writing advice every so often.
Twenty-three years ago, the Legislature enacted the Civil Discovery Act of 1986 (Code Civ. Proc., § 2016.010, et seq.)1 (the Act), a comprehensive revision of pretrial discovery statutes, the central precept of which is that civil discovery be essentially self-executing. More than 10 years ago, Townsend v. Superior Court (1998) 61 Cal.App.4th 1431 (Townsend) lamented the all too often interjection of "ego and emotions of counsel and clients" into discovery disputes, warning that "[l]ike Hotspur on the field of battle, counsel can become blinded by the combative nature of the proceeding and be rendered incapable of informally resolving a disagreement." (Id. at p. 1436.) Townsend counseled that the "informal resolution" of discovery disputes "entails something more than bickering with [opposing counsel]." (Id. at p. 1439.) Rather, the statute "requires that there be a serious effort at negotiation and informal resolution." (Id. at p. 1438.)
Clement v. Alegre (September 23, 2009), slip op., at 1-2.
So begins Clement v. Alegre (September 23, 2009), authored by the Court of Appeal (First Appellate District, Division Two). The case involves a dispute over a real property transaction, but that's not all that relevant. But it certainly isn't a class action matter, and it's not all that complex of a case. The issue, however, permeates civil litigation to its core. The discovery process is nearly, but not quite, broken. The higher the stakes (like in class actions), the more entrenched and obstructive the positions taken by counsel. Compromise is now a pleasant surprise. Bitterness is the norm. Clement reminds counsel and courts that it shouldn't be.
The discovery fight began with a set of 23 special interrogatories:
As described by the referee, plaintiffs‘ objections were of two types:
"Special Interrogatory No. 1 requested a description of 'all economic damages you claim to have sustained. . . .' Clement objected that the question was 'vague and ambiguous'. Clement's contention that the term 'economic damages' is vague is based on propounding party's failure to specifically refer to Civil Code section 1431.2, [subdivision] (b)(1) which defines economic damages. Thus, reasons Clement, 'Responding Party reasonably construes the failure to adopt this definition as expressing Propounding Party's intention to define economic damages in a manner different than as provided in California Civil Code Section [1431. 2, subdivision] (b)(1).' Clement goes on to supply a restricted definition of his own, to wit: the lost profit from the potential sale of the property to a third party buyer. Thus limited, he answers that he is aware of none."
"Special Interrogatory No. 2 asks: 'Please state the amount of such damages as identified in interrogatory number 1.' Clement's objections this time were (1) that this Special Interrogatory violates [section] 2030.060[, subdivision] (d) because it is not full and complete in itself, requiring, as it does, reference to the answer to an earlier interrogatory in the same set. He brands the reference to the answer to an earlier question as reference to 'other materials' in order to answer the question, citing Catanese v. Superior Court (1996) 46 Cal.App.4th 1159, 1164 [(Catanese)]." Plaintiff Clement also stated that he did not have to answer the interrogatory, because it would deny him 30 days to respond, as interrogatory No. 2 was a follow-up question that referred to the answer to interrogatory No. 1, and there could be no answer to interrogatory No. 1 in existence until the response to interrogatory No. 1 was rendered. The 30 days to answer interrogatory No. 2 would start after the answer to interrogatory 1. Finally, Clement stated that he would meet and confer in good faith with defendant to resolve any dispute, without the need for a motion. However, he also stated no response to a meet and confer communications could be given without "reasonable time and opportunity to consult with [his] attorney."
Slip op., at 3-4. A great deal of correspondence followed the initial objections. Eventually the defendant filed a motion to compel. An award of sanctions in excess of $5,000 followed soon thereafter, and an appeal of right was next. The Court of Appeal was not sympathetic:
Ample evidence supports the referee‘s determination that plaintiffs "deliberately misconstrued the question." Plaintiffs themselves quoted the statute defining the term in their initial response. Yet, they objected, and then deliberately provided an answer using a definition narrower than that provided by statute. Somewhat artfully, plaintiffs urge that Goldstein agreed in his January 23, 2008 letter to respond to any definition of economic damages that plaintiffs chose to provide. However, even after defendant's counsel advised that the term was being used as defined in the statute plaintiffs had cited, plaintiffs did not answer the question, but demanded that defendant supply the definition in writing and allow them an extra 30 days from the date of receipt in which to respond. Clearly this was "game-playing" and supports the referee's findings and the sanctions award.
Slip op., at 8. Then the Court noted that, though they believed the plaintiff fully intended to obstruct discovery, that intent was irrelevant:
Even assuming we agreed that neither plaintiffs nor Goldstein intended to be evasive — and we do not — their intent is not relevant here. "There is no requirement that misuse of the discovery process must be willful for a monetary sanction to be imposed." (Cal. Civil Discovery Practice (Cont.Ed.Bar 4th ed. May 2009 update) § 15.94, p. 1440, citing Code Civ. Proc. § 2023.030, subd. (a); 2 Hogan & Weber, Cal. Civil Discovery (2d ed. 2004) Sanctions, § 15.4, p. 15-8 ["Whenever one party's improper actions — even if not 'willful' — in seeking or resisting discovery necessitate the court's intervention in a dispute, the losing party presumptively should pay a sanction to the prevailing party." (Fn. omitted)]; Kohan v. Cohan (1991) 229 Cal.App.3d 967, 971.)
Slip op., at 8. Then the Court turned to the nonsense contention that an interrogatory that refers to a prior interrogatory answer is not "full and complete" by itself:
Plaintiffs do not contend that any of the interrogatories to which they objected on this basis were unclear, or that the interrogatories, considered either singly or collectively, in any way undermined or violated the presumptive numerical limit of 35 interrogatories of section 2030.030. Yet plaintiffs seized on what might have been at most an arguable technical violation of the rule, to object to interrogatories that were clear and concise where the interrogatories did not even arguably violate the presumptive numerical limitation set by statute. In so doing, plaintiffs themselves engaged in the type of gamesmanship and delay decried by the drafters of the Act.
Slip op., at 9. The Court goes on to explain that the prohibition on preface instructions, definitions, and references to other materials were enacted solely to prevent circumvention of the presumptive 35 interrogatory limit. More choice commentary:
Plaintiffs rely upon Catanese, supra, 46 Cal.App.4th at p. 1164, and upon Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2009) paragraph 8:979.5, which provides: "No incorporation of other questions: The requirement that each interrogatory be 'full and complete in and of itself' is violated where resort must necessarily be made to other materials in order to answer the question. [Citation.]" (Weil & Brown, supra, at p. 8F-21, citing Catanese at p. 1164, italics added.)
First, the paragraph heading — "No incorporation of other questions:" — is not mirrored by the substance of the paragraph, which identifies the violation as interrogatories requiring resort to "other materials" — not to a previous question — to answer the interrogatory. Second, the treatise clearly is relying upon Catanese, supra, 46 Cal.App.4th 1159, which involves a very different situation and which is demonstrably distinguishable. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 8:979.5, at p. 8F-21.)
In Catanese, supra, 46 Cal.App.4th 1159, after the plaintiff had been deposed for eight days, she propounded a series of five interrogatories inquiring whether the defendant contended that any of her answers to questions in the deposition were untruthful, and if so, what evidence supported that contention. (Id. at pp. 1161-1162.) The appellate court concluded that the interrogatories violated the "rule of 35" and the requirement of "self-containment" codified in the predecessor to the current statute. (Id. at pp. 1163-1164.) "This rule was violated here by interrogatories which necessarily incorporate, as part of each interrogatory, each separate question and answer in eight volumes of deposition. An interrogatory is not 'full and complete in and of itself' when resort must necessarily be made to other materials in order to complete the question. [Plaintiff] could have propounded interrogatories which inquire separately regarding each deposition question and answer, but if [she] had inquired separately in self-contained interrogatories, she would have violated the 'rule of 35.' " (Id. at p. 1164.) The court further explained that the "interrogatories as worded effectively posed upwards of 10,000 separate questions. It was a violation of the 'rule of 35' to propound these interrogatories without the supporting declaration required by [the statute]." (Id. at p. 1165.)
Slip op., at 11-12. The opinion should be read fully and carefully by all litigators, but more is worth repeating here:
"It is a central precept to the Civil Discovery Act of 1986 (§ 2016 et seq.) . . . that civil discovery be essentially self-executing. [Citation.]" (Townsend, supra, 61 Cal.App.4th at p. 1434.) A self-executing discovery system is "one that operates without judicial involvement." (2 Hogan & Weber, Cal. Civil Discovery, supra, § 15.4, pp. 15-7 to 15-8.) Conduct frustrates the goal of a self-executing discovery system when it requires the trial court to become involved in discovery because a dispute leads a party to move for an order compelling a response. (Ibid.) The Reporter‘s Notes to the predecessor to section 2023.030, subdivision (a) confirms that revision of the "substantial justification" provision was "intended to encourage judges to be more alert to abuses occurring in the discovery process. On many occasions, to be sure, the dispute over discovery between the parties is genuine, though ultimately resolved one way or the other by the court. In such cases, the losing party is substantially justified in carrying the matter to court. But the rules should deter the abuse implicit in carrying or forcing a discovery dispute to court when no genuine dispute exists. And the potential or actual imposition of expenses is virtually the sole formal sanction in the rules to deter a party from pressing to a court hearing frivolous requests for or objections to discovery. . . . The proposed change provides in effect that expenses should ordinarily be imposed unless a court finds that the losing party acted justifiably in carrying his point to court. At the same time, a necessary flexibility is maintained, since the court retains the power to find that other circumstances make an award of expenses unjust – as where the prevailing party acted unjustifiably. The amendment does not significantly narrow the discretion of the court, but rather presses the court to address itself to abusive practices. . . ." (2 Hogan & Weber, Cal. Civil Discovery, supra, Appendix D, Reporter‘s Notes at pp. AppD-19 to AppD-21, quoting Advisory Committee to Federal Rule of Civ. Proc. § 34(a)(4) as amended in 1970, italics added; see Cal. Law Revision Com. com., 21A West‘s Ann. Code Civ. Proc. (2007) foll. § 2023.030, p. 64.)
Slip op., at 14-15. The Court concludes its discussion with a thorough review of the meet and confer efforts. I won't quote from that discussion here, but it's cut from the same cloth. I end with the Court's final admonitions:
Perhaps after 11 years it is necessary to remind trial counsel and the bar once again that "[a]rgument is not the same as informal negotiation" (id at p. 1437); that attempting informal resolution means more than the mere attempt by the discovery proponent "to persuade the objector of the error of his ways" (id. at p. 1435); and that "a reasonable and good faith attempt at informal resolution entails something more than bickering with [opposing]counsel . . . . Rather, the law requires that counsel attempt to talk the matter over, compare their views, consult, and deliberate." (Id. at p. 1439.)
Slip op., at 17-18. I'd say these reminders were well overdue.
The California Supreme Court held its (usually) weekly conference today. Notable results include:
No other case developments jumped out at me as significant this week.
In other Supreme Court news, the briefs for the October oral argument calendar are now available here. Lots of "People v." cases in October, so it's not as exciting as it sounds (unless you are a District Attorney...or a criminal).
While a more thorough analysis will follow, reader may be interested in taking a look at Morgan, et al. v. AT& T Wireless Services, Inc. (September 23, 2009). In Morgan, the Court of Appeal (Second Appellate District, Division Four) is called upon to address the sufficiency of allegations in a consumer class action alleging causes of action under the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.), the False Advertising Law (FAL) (Bus. & Prof. Code, § 17500 et seq.), the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), and for fraud and declaratory relief. You can wade through the decision yourself, or wait for the Executive Summary in the next day or so.
The Complex Litigator reports on developments in related areas of class action and complex litigation. It is a resource for legal professionals to use as a tool for examining different viewpoints related to changing legal precedent. H. Scott Leviant is the editor-in-chief and primary author of The Complex Litigator.
