Declarations and Exclusions

Let's Get Small

Mainstream legal reporting has its moments of accuracy, but also tends to be liberally larded through with misstatement, omission and dollops of authentic nonsense, especially when the report claims to have uncovered a burgeoning "trend." The Los Angeles Times succumbs to the hazards of the course today—on Page One, no less—as it ventures into the mysterious realms of the Small Claims Court and consumer class action law in a garbled story that seems to be about the former but that is really more concerned with the latter.

The Times pegs its report to a dispute between "angry consumer" Heather Peters and Honda Motor Company:

The Los Angeles resident is miffed that her 2006 Honda Civic hybrid doesn't get its claimed fuel economy. And she isn't satisfied with a proposed class-action lawsuit settlement that would give trial lawyers $8.5 million while Civic owners would get as little as $100 and rebate coupons for the purchase of a new vehicle.

But Peters believes that she found a venue where she can win justice and where Honda can't spend a single dollar on legal help.

On Jan. 3 she'll take her case to Small Claims Court in Torrance, where California law prohibits Honda from bringing an attorney. She's asking for the maximum of $10,000 to compensate her for spending much more on gasoline than expected. Honda said the Civic would get about 50 miles per gallon, but because of technical problems the car gets closer to 30 mpg.

By way of background: in California, the Small Claims Court exists as a division within the larger Superior Court. (Other jurisdictions, of course, have equivalent institutions, but California is the focus of the Times story, and of this blog.) The purpose of Small Claims Court is to take disputes involving relatively small amounts of money out of the more formal judicial system, in the hope that the claims can be resolved more quickly and at less expense than in a full-scale court case. A Small Claims case can often be concluded within weeks of filing, rather than the months or years entailed in a "real" lawsuit. Hearings are somewhat informal, and rules of evidence such as the hearsay rule are more loosely applied.  Typically, Small Claims cases are not heard by an actual judge. The hearing officer will most likely be a local volunteer attorney sitting as a temporary judge on the Court’s behalf.  The hearing officer is expected to apply the law as any other court would, but the relative informality of the Small Claims process inevitably leaves open the potential for some to go Solomonic and to do "what seems fair" regardless of legal niceties.

So then, to return to the Times report:

One point that the story alludes to but never states plainly—"burying the lede" as the journobloggers like to say—is that the jurisdictional limit on California Small Claims cases will be increasing as of January 1, 2012. Ms. Peters will be permitted to claim as much as $10,000 only because her hearing is scheduled for the first court day of the new year. If the case were heard today, the maximum award would be only $7,500.

• The increased jurisdictional limit has some oddities of its own. First, the $10,000 maximum only applies to claims asserted by actual human plaintiffs. Corporate plaintiffs are now, and will remain, able to seek relief in Small Claims Court only up to $5,000. For reasons that are not at all plain, the existing $7,500 limitation will remain in place even after January 1 for claims of "bodily injuries resulting from an automobile accident," in cases in which the allegedly negligent defendant "is covered by an automobile insurance policy that includes a duty to defend."

The claim by the Times that "Honda can't spend a single dollar on legal help" is bunk. The only thing Honda cannot do is send a lawyer to appear at the Small Claims hearing itself. Up to the courthouse door, Honda can (and presumably will) spend whatever it wants to obtain advice and assistance from its attorneys in preparing to put on a defense. Honda can be represented at the hearing by any employee it designates, so long as that employee is a non-lawyer whose primary job is something other than appearing for the company in Small Claims court. Whoever that employee may be, it is near to inconceivable that he or she will not have been fully briefed and prepared, armed with all necessary evidence, and likely supplied with a written legal brief, drafted behind the scenes by counsel, for the "guidance and assistance" of the hearing officer. To the extent that insurance coverage applies, Honda's liability insurer may well be paying for the necessary legal consultation.

Also not mentioned by the Times: if Ms. Peters claim results in a judgment against Honda, Honda has the option of appealing that judgment. In California practice Small Claims defendants have a right of appeal, but Small Claims plaintiffs do not. A small claims appeal goes before an actual Superior Court judge and is heard de novo: that is, it is an entirely new hearing, as if the original Small Claims proceeding had not happened.  More pertinent to the unreliable theme of the Times story: in Small Claims appeals, the parties are entitled to be represented by an attorney at the hearing, as Honda surely would be. 

Having glossed over the extent to which attorneys can and will involve themselves in Small Claims litigation, the Times sets its controls for the heart of hyperbole and and runs straight on into trend-spotting cliché:

If she's successful in getting others to follow her example, Peters could inspire a whole new litigation strategy in the auto industry and other businesses. Working together but filing lawsuits independently, consumers could force companies to go mano a mano with individual plaintiffs in far-flung courtrooms nationwide.

Call it a small-claims flash mob.

"This could create a lot of problems in the industry," said Aaron Jacoby, the Los Angeles defense attorney who heads the automotive industry group at the Arent Fox law firm.

Dewy-eyed invocations of "social networking and the Internet" follow, leading to the inevitable "to be sure" caveat and the equally inevitable exception to the caveat. Small Claimants have to "prepare arguments" and take time from work to show up in court, don't you know? It can be "daunting," adds attorney Jacoby, who almost certainly had more potent things to say than the 16 words the Times elected to quote. But...

there also could be some benefits, beginning with 'cutting the attorneys out of the equation in these cases,' said Richard Cupp Jr., who teaches product liability law at Pepperdine University.

Why might "cutting the attorneys out" be an unalloyed Good? In a further exercise in lede-burying the Times pivots its attention from defense counsel to plaintiffs' attorneys and strikes up what appears to have been the intended true theme of the story: the well known, often painful disconnect between the remedies that are obtained for individual class action plaintiffs—in the Honda cases, $100 to $200 cash and a potential discount of between $500 and $1000 on future Honda purchases—and the rather larger remedies obtained by the much smaller class of lawyers representing them—here, reportedly a share of $8.5 million in fees. One such lawyer is quoted expressing his pride in what he and his compatriots have wrought in crafting the settlement; his personal stake in the payout goes unquantified.

In the concluding segment of the story, we return to Peters and learn that this angry consumer may not be nearly so angry with Honda and its lawyers as she is with class counsel:

If successful, Peters, a state employee, could win damages many times the payment she would derive from the settlement. It helps that she's a former attorney herself (she let her license expire a decade ago), and thus has an easier time navigating the legal system than a typical consumer.

Although Peters hopes that others might also pursue their claims in Small Claims Court, she said if she wins a significant award, the figure could be used to scuttle the proposed class-action settlement in favor of one that would exact more money from the automaker.

'I am just trying to give people a tool kit that shows they have options besides capitulating for $100 or going out and hiring an expensive attorney,' Peters said.

Savvy State-employed recovering lawyer that she is, Heather Peters' decision to proceed in Small Claims Court suggests a calculated assessment on her part that whatever actual damages she or other individual Honda buyers may have sustained amount to something more than a few hundred dollars, but something less than $10,000 apiece. If that is the case, then she is likely right to think that proceeding by a class action offers no real advantage to her in terms of time and resources invested or the size her ultimate recovery. Going that route will not, however, eliminate Honda's attorneys entirely from the mix, much as the Times might wish it.

~~~

Update [1300 PST]: Portland, Oregon-based class action attorney David Sugerman adds a few insights on his blog, including links to Heather Peters' website opposing the class settlement and to her Twitter feed. Interestingly, at this writing, Ms. Peters herself has not linked to the Los Angeles Times story.

Here's a question I am at least somewhat curious about: Who is responsible for this story coming to the Times' attention in the first place, and for building this into a front page story in a fading-but-still-relatively-major metropolitan newspaper? Is Ms. Peters handling her own PR?

~~~

Photo: Tiny World Courthouse, Chambersburg, PA, via Ed South's Wonderful World of Blog. Post title lifted from Steve Martin, ca. 1977.

The Evidence of Things Not Seen

In August, Scott Greenfield (Simple Justice) posted an item ("Where's the Proof?") looking askance at the increasing number of law schools that are apparently treating the law of Evidence as an elective, rather than a mandatory subject. (Antonin Pribetic promptly followed up with a Canadian perspective on the subject on The Trial Warrior Blog.) Scott's post took aim at the notion that future attorneys who won't be spending their time in a criminal or civil courtroom have no real "need" to learn Evidence as a discipline, that it is somehow not relevant to their expected practice. He begged to differ:

The teaching of evidence in law school is not in anticipation of someone being a litigator. Granted, it is absolutely required for a litigator, and especially for a trial lawyer, but that's not where it ends. Knowledge and understanding of evidence is a core competency for every niche (read that clearly, every niche) in the practice of law. Yes, M&A. Even real estate closings and wills. Multinational contracts. You name it, you still need to know evidence. Why? Because every aspect of law entails a potential of dispute leading to litigation. Any lawyer who doesn't comprehend evidence cannot competently perform his function.

If nothing else, the concepts of relevance and materiality are basic to thinking like a lawyer.  If you don't get them, you can't think. You can't reason. You can't understand things the way a lawyer must.

Evidence is that important, to the way that lawyers think and to what they think about. It should if anything be even more important to the way that courts and other judicial bodies go about making decisions that affect or bind or burden those who come before them. In light of that, I was taken aback this week by the case of Kaiser Foundation Hospitals v. Wilson [PDF], in which the California Court of Appeal was prepared with surprising ease to find that the Legislature intended to toss aside one of the nre venerable precepts of the law of evidence: the general prohibition on Hearsay.

Hearsay, you will recall, is evidence in the form of an out of court statement submitted for the truth of its content. For instance, if Tom takes the stand and testifies that "I heard Dick say that Harry ran that red light," that testimony is hearsay if you are offering it to prove that Harry did in fact run that red light. Subject to a bundle of exceptions, hearsay evidence is generally inadmissible—that is, it is not to be heard or considered by the trier of fact—and for fairly obvious reasons: it is at least two steps removed from direct observation of the facts (not "I saw x" but "I heard someone say that they saw x") and, like a message passed from ear to ear in a game of "Telephone," becomes unreliable and subject to easy manipulation pretty quickly.

In the Kaiser v. Wilson case, the Court of Appeal took a look at Code of Civil Procedure section 527.8, which authorizes employers to obtain restraining orders and injunctions against those who are shown to p0se a threat of violence toward their employees. Kaiser Foundation Hospitals believed Jeff Wilson to be such a person: according to Kaiser, Wilson threatened violence against at least two specific Kaiser employees after his wife's employment with Kaiser was terminated. Kaiser applied to the Superior Court for injunctions prohibiting Wilson from violence or threats of violence against those employees, and the court granted the petition. Wilson appealed, arguing that nearly all of the evidence considered by the Superior Court was hearsay that should not have been admitted or considered in support of the injunction. 

The Court of Appeal concurs with Wilson's first premise, that the evidence offered by Kaiser was almost entirely hearsay. However, the court looks at the language of the controlling statute and concludes that in these particular cases the Legislature intended to toss aside the usual prohibitions on hearsay evidence.

Code of Civil Procedure section 527.8(f) requires a hearing before an injunction can issue, and requires "clear and convincing evidence that the defendant engaged in unlawful violence or made a credible threat of violence" as a prerequisite to the judge's decision to grant the injunction request. That same subsection also provides:

At the hearing, the judge shall receive any testimony that is relevant and may make an independent inquiry.

(Emphasis added.)

The appellate court's analysis of the statutory language proceeds from the somewhat unexpected premise that there is "no relevant legal authority regarding the extent to which the rules of evidence do or do not apply" to hearings under this statute. The court is curiously mum as to why it would not presume that the rules of evidence do apply to these cases as they would in most any other Superior Court hearing, especially one in which the standard of proof is defined as "clear and convincing evidence." In the absence of that presumption, the Court of Appeal opines that the reference to "any testimony that is relevant" should be taken to "suggest[] that the Legislature intended to permit a trial court to consider all relevant evidence, including hearsay evidence, when deciding whether to issue an injunction to prevent workplace violence...." (Court's emphasis.) The court takes note that hearsay is inadmissible "[e]xcept as provided by law," but deems the injunction statute's silence on the subject to create such an exception. 

The decision displays a touching confidence in the abilities of trial court judges, who "are particularly aware of the potential unreliability of hearsay evidence, and are likely to keep this in mind when weighing all of the evidence presented." In fact, the court notes that the trial judge in this particular case remarked that the weight he would give the hearsay testimony—the overwhelming majority of the evidence presented—was "not going to be a lot." All of which begs the question, if the hearsay evidence is not going to be given much weight to begin with, how can it be viewed as the sort of "clear and convincing" evidence that is required to support the injunction? Is it unreasonable, before as court imposes significant limitations on a defendant's activities or speech, to require the employer to produce direct evidence of a threat against a particular employee—for instance, the employee's own testimony concerning how the threat was conveyed or perceived—rather than secondhand testimony that someone else "heard" or "was told" of a threat?

I hold no brief in favor of violence, in or out of the work place, but my sense is that the courts in this case have allowed one laudable policy goal, protection from threats and violence, to trump a policy that is at least as laudable and necessary: the policy that evidence should not be considered when, as in the case of hearsay, it is by definition frequently unreliable and always disconnected from direct perception and personal knowledge of the facts it purports to establish.

The rules of evidence have developed over time to provide a degree of confidence in courts' factual findings and for the protection even of bad actors such as Wilson is claimed to be. It troubles me that an appellate court, particularly in the absence of an unequivocal statement of legislative intent, should be so willing to sweep them aside in the name of good intentions.

~~~

A gratuitous and irrelevant postscript:

This reminds me of an exchange heard in a Los Angeles courtroom many years ago.

ATTORNEY A:    Objection. Hearsay.
ATTORNEY B:    Yes, your Honor, but it's really good hearsay.... 

~~~

Illustration: Gossips in the Altstadt, Sindelfingen, Germany, via Wikimedia Commons.

Dodgy Draftsmanship -- Court Refuses to Enforce Arbitration Clause Despite Legislature's Ambiguous Phrasing

Saving the Legislature from its own sloppy phrasing, the Second District Court of Appeal concludes that Business & Professions Code §7191 absolutely prohibits a residential contractor from enforcing an arbitration clause when that clause is not presented in precisely the form required by that statute.  In passing, the Court also affirms that attorneys are entitled to the same protections as other consumers, despite their presumed superior knowledge and negotiating skills.

Business and Professions Code §7191 was enacted in 1994 to ensure that consumers who accepted arbitration clauses in contracts for residential construction would do so knowingly, fully informed that they are giving up their rights to jury trial and other potential benefits of litigation in court.  The statute imposes formal requirements on such clauses, including requirements that the provision be specifically entitled "ARBITRATION OF DISPUTES," that the effect of the clause be stated in prescribed language, ALL CAPITALIZED, and that the clause be initialed by the parties.  Subdivision (c) of the statute sets forth the effect if the contractor (referred to as the "licensee") utilizes an arbitration clause that does not comply with the statute's requirements:

(c)  A provision for arbitration of a dispute between a principal in a contract for work on a residential property with four or fewer units that does not comply with this section may not be enforceable against any person other than the licensee.

(Italics added.)

Paul Woolls entered into a contract for work on his home with a licensed contractor, Thomas Turner and T&T Construction.  The contract contained an arbitration clause, but the clause was not individually initialed and did not include the title, use the typefaces, or incorporate the prominent disclosures mandated by §7191.  Disputes arose concerning the work and Woolls filed suit.  Turner and T&T commenced an arbitration proceeding.  Despite written objections by Woolls and despite the pendency of a motion to stay the arbitration, the arbitrator held a hearing and issued a decision in favor of the contractor.  Woolls sought an order from the trial court vacating the arbitration award, but that court declined.  Woolls then petitioned the Court of Appeal to vacate the award and the Court did so, relying on §7191.

In the Court of Appeal, Turner and T&T argued that the Legislature had used the phrase "may not" in a "permissive" sense, not in a prohibitory one.  That is, they argued that the trial court had discretion to enforce the clause against Woolls, or not, and that the court had not abused its discretion in choosing to affirm the arbitrator's award.  After all, they argued, despite his objections Woolls had participated in the arbitration and had had the opportunity to present his side of case to the arbitrator.  The Court of Appeal disagreed with the contractor's position, concluding that the Legislature had intended to enact an absolute prohibition on the enforcement of non-compliant clauses against anyone other than the contractor.

Here, the disclosure requirements contained in section 7191, subdivisions (a) and (b), are mandatory.  Section 7191 repeatedly provides those provisions “shall” appear in the contract. [Citation.]  Therefore, to construe section 7191 as optional would render it ineffective, a construction we must avoid. [Citation.]

Consequently, we construe the language in section 7191 that a noncompliant arbitration provision 'may not be enforceable', to mean that a failure to comply with section 7191 renders an arbitration provision per se unenforceable 'against any person other than the licensee.'

The Legislature could, of course, have saved a good deal of trouble if instead of saying that a non-compliant clause "may not be enforceable" it had chosen either "shall not be enforceable" or "may not be enforced".

Also of note is Turner's argument, rejected by the Court, that because Woolls is an attorney -- he is a well-established and respected insurance coverage attorney in the Los Angeles area -- he should be deemed to have known and understood that he was agreeing to arbitrate future disputes, the absence of the required language notwithstanding.  Sometimes an attorney is just another consumer:

As explained, section 7191 prescribes the consequence for noncompliance therewith.  A noncompliant arbitration provision is not “enforceable against any person other than the licensee.”  [Citation.]   We decline to rewrite the statute to provide that a noncompliant arbitration provision is also enforceable against a consumer who, due to education, training or experience, is aware that by agreeing to arbitration he or she is waiving the right to a court or jury trial.  This court’s role is simply to interpret the statute as it was enacted, not to add to, detract from, or fine-tune it.

(Italics added; original emphasis omitted.)

The decision in Woolls v. Superior Court (Feb. 28, 2005), Case No. B177992, can be accessed at these links in PDF and Word formats.  [Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

Elsewhere: The ABC Evening News and Peter Jennings have just finished spending most of a week warning consumers of the dangers of arbitration clauses "hidden in the fine print."

Punitive Damages in Contract Cases? Say It Isn't So! [It Isn't.]

Walter Olson is concerned:

J. Craig Williams sounds the alarm about a new California Supreme Court opinion (authored, whether curiously or not, by libertarian-admired Justice Janice Rogers Brown) which would seem to open a door for lawyers to start claiming punitive damages in contract disputes.

Hold on to your towels and don't panic, gentlemen: there appears to be a good deal of overstatement going around about the Court's year-end decision in Robinson Helicopter Company v. Dana Corporation.  While that decision may well mean that punitive damages will become an issue in some cases that also involve breach of contract claims, it does not stand for the proposition that one can recover punitive damages for breach of contract.  Decs&Excs' summary and analysis of the decision continues in the extended body of this post, below.

For those who want to read it for themselves, the decision in Robinson Helicopter Company, Inc. v. Dana Corporation (December 23, 2004), Case No. S114054 can be accessed at these links in PDF and Word formats.
[Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

Update [01/11/05]:  Timothy Sandefur of the Pacific Legal Foundation, guest-posting at Crime & Federalism, is also interested in the possible consequences of this case, in which he participated by filing an amicus brief.

An Arcane Point, Well Expressed

"'But all the fun's in how you say a thing.'"
-- Robert Frost, "The Mountain" [North of Boston (1914)]

Once in a while, if you are an appellate judge with more than a little learnin’, you just have to let yourself go. You simply must write an opinion in which you carefully and thoroughly explain why the appellant’s case must be dismissed, because his attorneys have fallen victim to a “particularly well-camouflaged trap for the unwary” secreted within a critical procedural rule. And while you are about it, you must pepper the opinion with witticisms, citations to Shakespeare and the Bible, and passing remarks on words that are needed but oddly unavailable in standard English. Yesterday, Presiding Justice Sills of Division Three of the Court of Appeal for the Fourth District let himself go in just that way.

Every appellate practitioner knows that the most critical deadline of them all is the deadline to file the Notice of Appeal. In most jurisdictions, including California, that time limit is jurisdictional: the appellate court has no power even to consider the matter if the notice is not filed on time, and missing it by even one day is fatal no matter how meritorious the arguments on appeal might otherwise be. At the outset of his opinion, Justice Sills summarizes the substance of the problem that leads to dismissal of this appeal:

Here’s the trap: Most of the time, unsigned minute orders granting a dismissal motion (as happens, for example, when the trial court grants a motion for summary judgment) are not appealable. So adversely affected counsel do not have to worry about the time running on their right to appeal. They can confidently sit back until a formal signed order or judgment of dismissal is filed.

Subdivision (a)(3) of section 904.1, however, creates a counterintuitive exception, because it makes even unsigned minute orders granting motions to dismiss for inconvenient forum directly appealable. Further, such an order -- unlike some other appealable orders under section 904.1 -- constitutes a “final judgment” as the term is defined in section 577. But, and here’s the real trap -- as a final judgment it cannot be attacked by a motion for reconsideration. In fact, the trial court does not even possess the authority to undo or amend it, on its own motion or prompted by a litigant.

These principles will force us, reluctantly, to dismiss this appeal in this most convoluted of cases.

An extended procedural summary follows, but the reader will soon perceive that the temptation to wax scholarly and poetical is not to be resisted:

We say “reluctantly” dismiss, because, as anyone who reads this opinion through to the end is about to learn, California’s law of appellate jurisdiction is full of fiendishly fine distinctions worthy of the most legalistic of medieval clergy. We have turned this case around like a prism hoping to find the light that might save this appeal. Alas, we have not found it despite any number of quick flashes. On analysis they all turned out to be evanescent.

Fascinating displays of erudition begin to manifest themselves, as for example in the court’s footnote 3, invoking the Bard of Avon:

In Shakespeare’s Henry V, there is an early scene where the Archbishop of Canterbury delivers a long, tedious and virtually incomprehensible speech to the new king (incomprehensible unless you have the text in front of you and you’ve taken a graduate seminar on the law of royal succession in medieval France) on a topic that even many lawyers would find arcane, choice of law. (The archbishop of Canterbury basically rebuts the idea that the “Salique” law of Germany (sometimes also spelt “Salic” or “Sallic”), which bars any female succession at all, applies to preclude English Henry’s claim to the French throne). But upon that fine, pedantic legal distinction would “awake” the “sleeping sword of war,” and, as a consequence, later in the play, 10,000 French knights and soldiers would get slaughtered in the mud at Agincourt. In the case before us, by contrast, the worst thing that can happen as a result of the fine pedantic distinctions on which this case turns is that a case which should be otherwise considered by a court in one state will be considered in another, which is not quite the same thing as dying in battle from a gale of Welsh arrows.

And on and on through 37 pages. Later references include the Biblical books of Luke and Daniel (the latter taking up the laws of the Medes and Persians), more Shakespeare (the come-uppance of Cardinal Wolsey in Henry VIII), Stephen Sondheim and, with seeming inevitability, the linguistic analysis of Lewis Carroll’s Humpty Dumpty. Innumerable decisions from appellate courts within and without the State of California are taken up for consideration. Moreover, the good justice establishes his familiarity with lingua hip-hoppa:

For the appellate court, then, to deliberately scramble these distinctions is to engage in a kind of unseemly antinomianism that is, at root, so at odds with the Legislature’s and the Judicial Council’s handiwork that the net effect, in current parlance, is to “diss” that handiwork.²⁴

²⁴ For the sake of future readers just in case the word goes out of style soon, it is a short verb meaning "to show disrespect to." The problem is that modern English does not have a short verb that conveys the idea of deprecation so directly -- one practically has to go back to the era of King James to find something close. Contemn? Calumniate?

Enough. As is often written in non-legal weblogs, “Read the Whole Thing.”

The decision in Quest International Inc. v. Icode Corp. (Sept. 22, 2004), Case No. G032276, can be accessed at these links in PDF and Word formats. Because those links are not permanent -- and in honor of Justice Sills’ footnote 26:

²⁶Unlike doctors, appellate courts don’t bury their mistakes; we leave them embalmed for analysis by future pathologists for the rest of eternity.

-- Decs&Excs has also uploaded the decision to maintain its availability here.

Punitive Damages: Not a Double Jeopardy Category

The Court of Appeal has concluded that the fact that a defendant in a wrongful death case is already being punished criminally by imprisonment is no bar to that defendant also sustaining civil penalties through imposition of punitive damages.

With her driving ability significantly impaired by the influence of alcohol, defendant Deborah Gurnett swerved off the highway and struck and killed a cyclist. She later entered a "no contest" plea to charges of gross vehicular manslaughter while intoxicated and received the maximum sentence of ten years' imprisonment. The heirs of the deceased cyclist brought a civil action against Gurnett to recover damages for wrongful death. At trial, the jury awarded compensatory damages of $7.5 million and punitive damages of $35,000.

On appeal, Gurnett argued that the punitive damage award violated her constitutional rights, because she is already being punished through her criminal sentence. She urged that punitive damages violated the Fifth Amendment's prohibition of "double jeopardy," the prohibition on double punishment under the "excessive fines" clause of the Eighth Amendment, and the requirements of due process under the Fourteenth Amendment. The appellate court rejects all of these arguments: the Fifth and Eighth amendment prohibitions only control multiple punishments inflicted by the government in a criminal context and have no bearing on the rights of civil litigants to recover damages for behavior that is also a crime. The court further declined to adopt a "single suit" rule that would effectively limit the pursuit of a wrongdoer to whichever case, criminal or civil, first came to trial:

The mere absence of case authority supporting Gurnett’s substantive due process argument would be a minor impediment if we thought the argument tenable, but we do not. Sound policy dictates rejection of a constitutional rule barring the filing of both a criminal complaint and a civil complaint for punitive damages for a single course of conduct that injures an individual and violates the criminal law. There is no doubt that the goal in each of these cases would be to impose a penalty on the wrongdoer. But, a constitutional prohibition against imposing both penalties would apply regardless of the order in which the cases occurred. Here, the criminal case was filed first and resolved first. There is nothing that mandates this primacy, however. To accept appellant’s argument would lead ineluctably to the conclusion that a defendant who had been subjected to civil punitive damages would be immune from a subsequent criminal prosecution. [Citation.] We decline Gurnett’s invitation to create such a rule.

The decision in Shore v. Gurnett (Sept. 10, 2004), Case No. A101916 can be accessed at these links in PDF and Word formats. [Note: The links will expire in approximately 120 days; the opinion should still be accessible thereafter by substituting "archive" for "documents" in the URL.]

Recipes for Failure: A Losing Position, Sloppily Presented

California’s trial courts have the power to direct parties to civil cases to participate in arbitration. Often referred to as “judicial arbitration,” the procedure is non-binding in the sense that any party may, within 30 days after the arbitrator’s ruling, reject that ruling and have the case put back on track for trial. Although either side can reject the arbitrator’s award, it is expected that all parties and their counsel will participate in good faith, to the end that the case may actually be resolved without further proceedings in the court. (A substantial percentage of cases referred to arbitration are in fact resolved as a result, relieving the courts’ overstuffed civil dockets.)

Emphasizing the obligation to participate in arbitration proceedings in earnest, the Court of Appeal, in a case out of Sacramento, has affirmed an order imposing sanctions in excess of $2,000 on an attorney who rejected an unfavorable arbitration award after he had “arrived late to the arbitration, failed to provide the pleadings and brief requested by the arbitrator, failed to have [his clients, plaintiffs] the Rietvelds appear or be available by telephone, and failed to produce evidence, including testimony that was necessary to support the Rietvelds’ case.”

The sanctioned attorney had an uphill fight to begin with, but he appears to have compounded his problems by presenting his case weakly, at best, on appeal. In a section of the opinion that will not be included when the case appears in the Official Reports, appellate practitioners will find the following catalog of how not to persuade an appellate court. (Emphasis added throughout.)

The Rietvelds’ opening brief is deficient. Their attorney quotes major parts of several opinions, both Supreme Court and Court of Appeal, but fails to enclose these paragraphs in quotation marks. He also leaves out footnotes, internal citations, and appropriate ellipses, but gives no indication that anything is left out. Although he cites the cases from which he appropriated the quotes, the pinpoint cites are under inclusive. This unacceptable writing style, even if it was not meant to be deceptive, would have received a failing grade if done in law school.

Counsel for the Rietvelds also fails to substantiate the factual statements made in the brief. In the statement of facts, for example, he recounts the critical facts concerning Jon Rietveld’s agreement with Rosebud. The citation to the record to support these factual statements, however, is to the memorandum of points and authorities in opposition to the summary judgment, not to any evidence. . . .

Lest the attorneys for the defendant (Rosebud) become too pleased with themselves, the Court offers a few pointed criticisms on that side as well:

Not to be outdone, Rosebud’s attorney subtly attempts to influence this court with half-truths and innuendo. . . .

* * *

Further trying our patience, Rosebud baldly asserts the appeal is untimely. This assertion is not accompanied by authority. Rosebud neglects even to reveal why it believes the appeal is untimely.

Counsel owes a duty to this court to be more forthright [citation] and to provide authority for legal arguments [citation], rather than throwing them out off-handedly.

Despite all the problems in the parties’ briefs, we elect to disregard the deficiencies and decide the case on the merits.

The complete opinion in Rietveld v. Rosebud Storage Partners L.P. (July 30, 2004), Case No. C044766, can be read at these links in PDF and Word formats. Only the discussion of the merits of the sanctions award will be included when the decision is published officially.

For Want of a Phrase, The Case is Lost . . .

In Herman Melville's immortal Billy Budd [take that as your literary recommendation for the day], the conflicted Captain Vere avers that "Form is everything." The California Supreme Court provides a case in point:

California Code of Civil Procedure §2015.5 permits declarations -- unsworn statements executed under penalty of perjury -- to be used as the evidentiary equivalent of a sworn/notarized affidavit. However, the statute incorporates certain explicit formal requirements: It "defines a 'declaration' as a writing that is signed, dated, and certified as true under penalty of perjury. In addition, [the statute] specifies that a declaration must either reveal a 'place of execution' within California, or recite that it is made 'under the laws of the State of California.'"

Dheeraj Kulshrestha sued his former employer, claiming that he had been induced to move from Ohio to California by promises of a management position, and that he was subsequently terminated for unlawful and discriminatory reasons. The employer filed a motion for summary judgment. Kulshrestha's opposition papers included his own declaration, which stated that it had been signed by him in Ohio "under penalty of perjury." The declaration did not state that the penalties of perjury were those "under the laws of the State of California." The trial court concluded that the declaration was inadmissible; in a 22-page unanimous opinion, the California Supreme Court agrees:

In this suit against a firm for which he briefly worked, the plaintiff sought to prevent summary judgment by filing a declaration under penalty of perjury that showed a 'place of execution' in another state. Moreover, the document did not reference California’s “laws.” The evidence was excluded, summary judgment was granted, and dismissal was affirmed on appeal.

We now decide if declarations signed under penalty of perjury outside this state satisfy section 2015.5, and are admissible in summary judgment and other authorized proceedings, even though the contents are not certified as true “under the laws of the State of California.” The answer to this narrow question is no.

Section 2015.5 seeks to enhance the reliability of all declarations used as hearsay evidence by disclosing the sanction for dishonesty. Thus, the statute requires some acknowledgement on the face of the declaration that perjured statements might trigger prosecution under California law. The Legislature has determined that such knowledge can be inferred from the 'place of execution' where the document shows it was signed here. All other declarations, including those signed in other states, must invoke 'the laws of the State of California.' Indeed, when lawmakers added this phrase to section 2015.5 in 1980, it was deemed necessary to alert out-of-state declarants that California’s perjury laws — which were made extraterritorial at the same time — might apply. The lower courts correctly found the present declaration flawed in this regard. We will affirm the judgment.

(Italics in original; citations omitted.)

The decision in Kulshrestha v. First Commercial (July 19, 2004), Case No. S11564, is available at these links in PDF and Word formats.

UPDATE: U.S. Supreme Court Declines to Interfere in California Lawsuit Against Milwaukee Archdiocese

Last October, Decs and Excs reported on a decision in which the state Court of Appeal held that the Catholic Archdiocese of Milwaukee, Wisconsin, can be sued in California for damages arising from alleged sexual molestation by a priest that it had transferred from Milwaukee to Orange County. The Archdiocese has since requested review of that decision by California Supreme Court, which declined to hear the case in January of this year. The Archdiocese then filed a petition for certiorari to the U.S. Supreme Court which this week, without comment, also declined to hear the case. The Court of Appeal's decision is now final and the case will proceed forward in the trial court.

An AP/CNN report on the U.S. Supreme Court's action can be found here.

The Court of Appeal's decision is archived here. (The link in the original post is no longer accurate.)

Request for Sanctions Against Party Compelled to Provide Discovery May Be Presented in Separate Motion

When a party is obliged to bring a motion to compel his opponent to respond to a request for production of documents, the court is authorized to impose a monetary sanction on the uncooperative opponent. Typically, the request for imposition of the sanction will be included in the moving papers, but is that procedure mandatory? The Third District Court of Appeal, in a case out of Calaveras County, concludes that the sanction request can be presented in a separate motion, filed after the original motion has been heard and granted.

Morrie London was terminated after nine years working a manager in the copper shop of Dri-Honing Corporation. He sued, seeking damages for wrongful discharge. Dri-Honing urged that it was justified in terminating London because of incidents of insubordination. It also contended that the termination was warranted because the shop had been unprofitable under London's management. When London requested production of records that would disclose the shop's profitability or lack of profits, Dri-Honing refused to provide the information, contending it was "irrelevant." London filed a motion to compel production of the records.

At the motion hearing, Dri-Honing was given a choice: it could rely on its unprofitability rationale and produce the documents, or it could keep the documents confidential and be limited to relying solely on its insubordination rationale. Dri-Honing elected to keep the documents confidential.

At the hearing, the trial judge asked London's attorneys to state the amount they had incurred in fees for the motion, so that Dri-Honing could be required to pay that amount as a sanction for contesting its discovery obligations. Dri-Honing objected, correctly, that no sanctions could be imposed because they had not been mentioned or claimed in the moving papers. The court then permitted London to file a separate motion for the sanctions, which it granted in the amount of $6,000. Dri-Honing appealed, and the Court of Appeal affirmed the order for sanctions.

The bulk of the opinion consists of an analysis of the structure of the sanctions provisions in the Discovery Act. The Court of Appeal concludes that the favored approach is to make any request for sanctions in the original moving papers, but that there is nothing in the statutory structure that precludes a separate, later application, so long as it is made with reasonable promptness.

The Court expresses skepticism for most of Dri-Honing's arguments, including particularly the suggestion that the sanctions demand should be made in the original papers to permit the responding party to assess whether it makes more sense to fight the discovery or to surrender voluntarily. That calculus, the Court notes, runs counter to the policy requiring the voluntary production of relevant information:

As a final gasp, Dri-Honing states that the 'sanctions request must be included in the motion to compel in order to enable the nonmoving party and his attorney to consider whether and in what manner they will oppose the motion.' We note that a party is obligated to comply with the discovery statutes cooperatively and in good faith, regardless of what sanctions it may or may not be subject to. The suggestion that a party’s cooperation during discovery depends on how heavy the hammer is that hangs above its head is troublesome.

[Emphasis added.]

The decision in London v. Dri-Honing Corporation (April 19, 2004), Case No. C043096, can be found at these links in PDF
and Word formats.