The California Supreme Court affirmed a powerful tool for civil lawyers last year in Siry Investment, L.P. v. Farkhondehpour when it held that, yes, theft by false pretenses under Penal Code section 496(c) is available in civil actions. But don’t get too cocky: as Wang v. EOS Petro, Inc. (D2d7 Jan. 13, 2023 No. B317659) 2023 WL 178372 (nonpub. opn.) observed when reversing a default judgment based on section 496(c), a plaintiff has to prove “criminal intent,” and that means more than mere nonpayment.

Though unpublished, the Wang case presents facts that appear often. The borrower-defendants took a number of loans from the lender-plaintiffs. The borrowers never made a single payment. The lenders sued, but the borrowers never answered. So the lenders got a default judgment, including attorney fees under Penal Code section 496(c).

The borrowers moved to vacate the default judgment, but the section 496(c) ruling remained.

But the Court of Appeal reversed the section 496(c) claim. The lenders had supported their section 496(c) claim for civil theft by establishing the borrowers obtained the lenders’ money and not repaying it. That is not enough. To establish civil theft under section 496(c), the plaintiff needs to show the defendants obtained plaintiffs’ money by theft: “To prove theft, a plaintiff must establish criminal intent on the part of the defendant beyond ‘mere proof of nonperformance or actual falsity.’ [Citation.]”

Quoting Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333 the court noted that this requirement prevents “ ‘[o]rdinary commercial defaults’ ” from being transformed into a theft.” (Siry Investment, L.P. v. Farkhondehpour, supra, 13 Cal.5th at pp. 361-362.)

So what does qualify as civil theft under section 496(c)? Here are a couple of examples:

But if all you have is an unpaid debt, that is not enough: "a mere unfulfilled promise or misrepresentation of fact is insufficient to establish an intent to steal.” (Siry, supra, 13 Cal.5th at p. 368 (conc. opn. of Groban, J.).)

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

Judgments sometimes say the prevailing party is entitled to costs. They sometimes even have a blank for the clerk to write in the amount of costs later.

But don’t wait for that to happen before appealing. That’s what the appellant did in Worsnop v. Dept. of General Services (D3 Jan. 24, 2023 No. C091167) 2023 WL 369440 (nonpub. opn.). By the time the costs were awarded, the deadline to appeal had run. So the appellant’s appeal was dismissed.

The plaintiff-employee in this case sued his employer. The employer won summary judgment. The judgment was entered on March 11, 2019, and the employer served a notice of entry on March 15. That started the 60-day clock to appeal.

But it looks like the plaintiff got distracted by the employer’s claim for costs. That did not get sorted until October. At that time, the clerk handwrote onto the judgment the amount of costs, noting the date of the award, October 28.

The plaintiff appealed in December, within 60 days of the addition of costs to the judgment.

But December was well more than 60 days after the notice of entry, and even more than 180 after the judgment, both dating back to March. (Plaintiff’s counsel claimed she never received the notice of entry.)

An amendment of a judgment to add costs does not substantively change the judgment so as to restart the time to appeal.

The plaintiff argued that the time to appeal did not begin to run until the trial court added costs to the judgment in October. But as the court noted, “Established authority is to the contrary.”

Here is the authority to bookmark for this:

It is well settled that “ ‘[t]he effect of an amended judgment on the appeal time period depends on whether the amendment substantially changes the judgment ....’ ” (Torres v. City of San Diego (2007) 154 Cal.App.4th 214, 222.) “ ‘Where the judgment is modified merely to add costs ..., the original judgment is not substantially changed and the time to appeal it is therefore not affected.’ ” (Ibid.; see also, Amwest Sur. Ins. Co. Patriot Homes, Inc. (2005) 135 Cal.App.4th 82, 84, fn. 1.)

The plaintiff cried foul that the lengthy posttrial proceedings caused him to file his appeal late. But the court was not moved: “Worsnop, had he been so inclined, could have appealed from both the final judgment and any postjudgment cost order. (Torres v. City of San Diego, supra, 154 Cal.App.4th at p. 222 [“ ‘When a party wishes to challenge both a final judgment and a postjudgment costs/attorney fee order, the normal procedure is to file two separate appeals: one from the final judgment, and a second from the postjudgment order’ ”].) Thus, any delay in resolving the cost proceedings did not affect his ability to timely appeal the judgment.”

The court concluded: “While Worsnop's circumstances may be unfortunate, he is not excused from timely filing a notice of appeal before pursuing his claims on appeal. Because he failed to do so, we must dismiss his appeal. (Rule 8.104(b).)”

Comment: In similar circumstances, the 2nd District recently held that adding costs to a judgment did restart the time to appeal.

In May 2022, I covered the Second District case of Pelter v. 1-800-Get-Thin, Inc. (D2d1 May 11, 2022 no. B307771) 2022 WL 1485533 (nonpub. opn.), involving a similar situation. The court considered an appeal filed a full 10 months after the judgment. That was certainly well past the outer deadline of 180 days. To avoid getting the appeal dismissed as untimely, the appellant argued that the appeal was filed within 60 days after the judgment had been amended to add costs.

The respondent moved to dismiss the appeal, presumably based on the same principles cited in Worsnop—an amendment that merely adds costs does not resurrect the time to appeal.

But the Second District not only denied the motion to dismiss, but shot back at the respondent: “No principle or authority supports the argument—Pelter's notice of appeal specifically references only the later, amended judgment.” That was the entirety of the analysis on the issue.

The Pelter decision was wrong. The Worsnop opinion is right.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

With his background as a brewery owner, business litigator Greg Nylen defends attorneys from “the triumvirate” of unfair-competition claims: the Unfair Competition Law, the False Advertising Law, and the Consumer Legal Remedies Act. Greg shares some trends, tips, and traps emerging in this space, including:

💡 Courts are getting a bit more stringent on the “reasonable consumer test”—the determination whether a large portion of the target market is likely to be misled. Does “krab meat” come from crab? Are rumors that outlet stores carry nowhere-to-be-found merchandise actionable? Increasingly, the courts’ answer to these questions is: Come on.

💡 But the “reasonable consumer” depends on what the product is. King’s Hawaiian bread is actually made in Torrance, CA. Does that matter? Probably not, because bread is bread. But what if the product was beer—where consumers may have more discriminating tastes, and the quality of the water matters to the product? The answer might change.

💡 The “reasonable consumer” is often determined as a matter of law. So plaintiffs’ strategy is to rely on consumer surveys, to make the determination factual in nature. Does it work? As Greg explains, you may be able to attack the survey as a matter of law.

💡 Litigation consumer claims in federal court? Beware of Article III standing. And bookmark the Sonner v. Premier Nutrition case—plaintiffs might not be able to get both legal and equitable relief in federal court.

Other items discussed in the episode:

Transcript:

Announcer  0:03 
Welcome to the California appellate podcast, a discussion of timely trial tips and the latest cases and news coming from the California Court of Appeal, and the California Supreme Court. And now your hosts, Tim Kowal and Jeff Lewis.

Jeff Lewis  0:17 
Welcome, everyone. I am Jeff Lewis.

Tim Kowal  0:19

And I'm Tim Kowal. Although Jeff and I are certified appellate specialists and uncertified podcast co hosts, we try to bring our audience of trial and appellate attorney some news and insights they can use in their practice. If you find this podcast useful, please recommend it to a colleague. If you don't find it useful. There's always opposing counsel. And thank

Jeff Lewis  0:35 
you to our sponsor. Our podcast is sponsored by casetext.casetext is a legal research tool that harnesses AI and a lightning fast interface to help lawyers find case authority fast. I've been a subscriber since 2019, and I highly endorse the service and listeners of our podcast will receive a 25% lifetime discount available to them if they sign up casetext.com/calp. That's casetext.com/CALP.

Tim Kowal  0:58 

And today we welcome Greg Nylund. To the show, Greg Nylund, has more than 29 years experience in litigating complex commercial cases involving intellectual property entertainment, litigation, and anti counterfeiting enforcement for luxury brands, food and beverage law, class action, defense and general business litigation. Greg is the co host of the California unfair competition defense podcast, which provides in depth analysis of new developments in case law and defense strategies relating to California's unfair Competition and Consumer Protection statutes, including business and professions code 17 217 500 at SEC and the Consumer Legal Remedies Act. Greg, welcome to the podcast. Thanks for being here.

Gregory Nylen  1:38

Thank you appreciate it.

Tim Kowal  1:39 

Was there anything in that short bio, that I read a view that that I left out for the good of the record for the good of our audience?

Gregory Nylen  1:45 
I think I do a lot of intellectual property litigation. And I think you've covered that. But there's some overlap in the sense that trademark for litigation, for example, turns on the question likely to confusion, which in turn looks at what reasonable consumers believe. So there's a lot of overlap between the fraudulent prong of the UCL and trademark litigation in that sense. Yeah, so that's, that's a lot of my wheelhouse, too. And also, I've been practicing now I realized I have to update my bio, because I've been practicing for 32 years now going on 33. So that needs a little adjustment on my end.

Tim Kowal  2:16 

Well, and at the end of your list of any practice areas, you include the umbrella term that business litigation, like, you know, like the 2 million or so others of us who do business litigation in the Los Angeles metro area, tell us how you develop your niche in unfair competition law, which is the subject that we'd like to talk about today, given that you recently published an article about recent trends and updates in that space, unfair competition law.

Gregory Nylen  2:38

Well, I've had two phases here at Greenberg, short one phase was I was a shareholder up in LA for 12 years and associate for a couple years before then, it was there when they opened the LA office from day one January 1 2000. And I lived in LA for 36 years where I went to film school before law school. And while I was in LA, I started defending a number of consumer class actions involving 70 275 Hunt. You know, the triumvirate, if you will, is what I call them in CLRS. They seem to go to gather like peas and carrots. Although and we'll get to this. I think Sonnar may be helping with that to some degree, but in terms of them all being lumped together.

Tim Kowal  3:15

So you're talking about sonar versus premier nutrition core the night Yes. Yeah, we'll talk. We'll talk about that a little bit later on.

Gregory Nylen  3:21
Yeah. So I did quite a bit of litigation in that regard. When I was in LA during my first stint at the firm, and then decided of all things to follow a passion and open a brewery in Orange County, which I co founded and along with my wife and ran for about five and a half years, we were the first in Costa Mesa of our type. We did that and we got out of the business just before COVID hit. I kept practicing law during that time. You know, I had trials during that time arbitrations, you name it, but it was at a small firm that a friend of mine I knew from law school had and after that, I came back to GT but in Orange County, so now my commute seven minutes instead of an hour and a half each way.

Tim Kowal  3:58
Yeah. So it's amazing. So you had a film school background before law school and then as a practicing attorney, you started a brewery so you you're all over the place as an entrepreneur a fan of the arts do you are you able to you find you're able to bring it all together in your legal practice? You kind of touch on all of your your passions there?

Gregory Nylen  4:15
Yeah. I mean, first 10 years of my career, I did entertainment litigation, primarily up in Santa Monica before coming to GT and so that that involved a lot of, you know, really interesting cases and clients and issues, right of publicity, defamation, false light invasion of privacy, public disclosure of private facts, a lot of Civil Code section 3344 stuff as well as you know, IP litigation, trademark and copyright and that kind of thing. The 1700s 200 stuff came in more when I when I joined GT, and then during my first stint, I would write on the subject. I did a yearly update on the law for the litigation review that litigation section of the State Bar produces. It used to be called the litigation section. They've changed how that's organized, but I was the chair of that section for a year and I'm Officer before then and a member of the executive committee before that. So I got very involved in, you know, writing about the statute and did some kind of the old school panels, you know, before the age of zoom and wrote some articles about it.

Tim Kowal  5:12 
Yeah, well, and at some point, you decided to start co hosting the California unfair competition defense podcast, what spurred you to to start that podcast and what kind of lawyer should be tuning in to the California unfair competition defense podcast,

Gregory Nylen  5:26
what my co host, Lisa Sonett. And I, who is also GTA, she's a shareholder in LA, we both recognize that there's a need for some sort of information source for people defending against these claims. And there really wasn't any consistent blog that we could find in that regard. There are plenty of side blogs. But we saw a need for for this kind of information on the defense side. And you know, in this day and age, we thought a podcast would be something that would be probably consumed more frequently by people than in the blog. It's just printed, you know, people can listen to I mean, I do a lot of cycling now. And I listened to stuff when I'm cycling, I don't listen to music, I listen to people talking for the most part. And if my own experience is any guide, and I was certainly told by our marketing people, that that's the way it is now, the podcast is a better way to go.

Tim Kowal  6:09

Yeah, that's interesting. I hadn't thought about what you just mentioned that there are more resources for the plaintiff side in these cases than for the defense side. So you said that you found that there were several unfair competition blogs that were geared toward prosecuting those kinds of claims, but not so much for the defense side. But what explains that other than, you know, I guess, kind of the jackpot mentality if you're gonna go and work on these cases, you want to be on the side that stands to win the big money, big money?

Gregory Nylen  6:31
I don't know. I mean, I think there are certainly plenty of articles about particular issues, like when a case like Sonnar that we talked about comes down, you'll see a bunch of law firms will write about it in from the defense perspective. And then that's pretty much it, as opposed to just talking about these issues on a consistent basis.

Tim Kowal  6:48 
Are there any types if there's one thing that you wanted attorneys to remember from your podcast to take away from listening to the California unfair competition defense podcast? What is it what types of doctrines or cases that defense attorneys really need to be aware of that? Maybe they're not if they're just kind of coming out of the box? And they don't I think sources before listening to your podcast?

Gregory Nylen  7:07 

Yeah, I mean, I think, you know, the, to be aware of the most recent developments in terms of how courts are viewing both sides of the battle, really, but it's just really important to stay on top of things because it changes so rapidly in this area. And when you have a case come down on one particular issue, you know, like I just look today, sonar has 309 federal court decisions following and already are applying it, you know, in various contexts. And that case is what two years old. So it's really important to fight to hear what the splits are, where the undecided issues are, but to get some hear about, you know, some ideas and consensus and how to address new angles and new attacks that the plaintiffs bar is trying, you know, in these what I call no injury cases, this in particular, you know, the the alleged false advertising and that kind of thing.

Tim Kowal  7:58 
Yeah, yeah. You describe it as a no injury cases. These are like these statutes are they're developed for the purpose of public policy to foster truth and fairness and advertising, not necessarily to prevent injury. So that's it makes it a little bit of a novel area of law, I guess. Sure. And as you said, it's important to know about where the trends are, where the splits and an unanswered questions are. And that's that's a good segue into talking about your recent article published in the ocba, Lawyer magazine, entitled recent developments in California unfair competition law. And in that article, you note that the courts are always busy interpreting the statutes under the unfair competition law located under the Business and Professions Code. And among those many decisions, you spotted three trends in unfair competition law, can you tell us what those trends are?

Gregory Nylen  8:43 

Sure. I mean, I think one of them is kind of sub parts, which is sub parts under the main topic that courts are willing to find statements that form the basis of these kinds of putative class actions to be not deceptive as a matter of law. And, you know, they're willing to do that for a number of reasons, but one of them is that there's no actual representation. That's kind of one sub subcategory. There's no statement on the packaging issue in an alert and relating to alleged false advertising on which a claim could be based on the other package simply doesn't say what they say it said, that's one type. The other type is just what I call the smell test. It doesn't pass the smell test for a reasonable consumer and courts have been increasingly willing to make that determination at the pleading stage as a matter of law without even getting into, you know, the stage where you're filing a motion for summary judgment or something like that. We

Tim Kowal  9:34 
back up just for a second when you mentioned these cases involving no representation that the advertiser or manufacturer is not making the representation or statement that the plaintiff says they are. Can you give us an example of a case like this? Is it simply a an instance where the plaintiff is misrepresenting what the advertising is? Or are we talking about advertising by way of images that don't make an actual literal representation?

Gregory Nylen  9:57 

Yeah, I mean, one of the context for this came up In the factory outlet context, and the case that I cited in the article is the Rubinstein versus the gap, which is a case where the plaintiff alleged that she was misled by gap selling clothing in the factory stores that had not been sold in traditional retail stores that you'd see in a mall, for example, and by factory store, I mean, a factory outlet, right? So when you go buy an outlet mall, you know, her contention was she thought that those clothes would be the same thing that you would get in a brick and mortar retail store in a traditional setting, you know, when

Tim Kowal  10:28 
that's an assumption she picked up how just just kind of custom or something floating in the air that's not written on the outside of the building, I take it

Gregory Nylen  10:34 
right. And it's, you know, I think a lot of people make that kind of assumption about certain things. But that doesn't mean you have a claim against somebody. And you know, you go to a factory outlet, they're not saying that this is precisely the same goods in every circumstance that you would get if you were to go to a place in, you know, the Santa Monica, or Thursday promenade or something.

Tim Kowal  10:53

So it's the essence of the claim is that there's this rumor that I'm supposed to be able to get these novel and nowhere else to be found merchandise and GAAP had a duty to dispel that rumor if it was in fact, but knew it was not true. And that that rumor was out there is that kind of the essence of the plaintiffs claim and that kind of a case. Yeah, the

Gregory Nylen  11:10 

plaintiff allege that reasonable This is a quote, reasonable consumers believe outlet stores sell products that were previously available for purchase at retail stores. So they plaintiff actually allege that but the Court explained and this again, this is at the pleading stage, there were no facts showing that to be true. And that a consumer for whom that you know, retail history of factory store items is material can ask gap employees about this. And a reasonable consumer would inspect the quality of factory store clothing items before buying them and can return them if they were unsatisfactory. That's what the court determined. So if you for some reason, thought this notion you had in your mind that you develop through popular belief, or whatever it is, what was actually the fact and you go to the store, you could number one, ask somebody at the store if this was true. And presumably they tell you, you know, we have, you know, we have goods here that are made in a different or same factory, but they're different, because that certainly happens a lot. You know, Factory Stores can very often carry goods that are not the same line that you'd find in those much more expensive locations. Yeah. And they're not always, you know, stuff that couldn't sell or out of season items, or last year's items. You know, sometimes they are sometimes they're not, but you know, people have the ability to ask questions, and make informed choices based on that. And if you don't have an It'd be one thing if a retailer were saying, you know, saying this is the same thing you'll find in our store in you know, X fancy mall, we're just selling it as last year's model, or last year as colors or whatever at a discounted price. It'd be another if they said, it's just simply the same, you're just, you know, you kind of you came here to this outlet mall, and so you can get it and get a deal. But that's not the case. Neither neither was the case in this instance. And but also, the Court made the point that you can look at something and determine if you liked the quality, you have it in your hands, just take the item and look at it, make it put it on what you like you would in any store, go to the changing room and try it on checkout the quality. Is it the same sort of quality that you came to expect? Is it you know, if not, don't buy it?

Tim Kowal  13:01 
Yeah, yeah. Well, that that leads to one of the one of the my takeaways from after reading your article, and maybe you can tell me if my takeaway is too broad, but I was left with this general impression that courts are going to be they're becoming less likely to find that consumers are likely to be deceived, the courts seem to assume a little bit more sophistication on the part of the consumers. Is that Is that too broad to take away? Or is that you think that's kind of trend that you're seeing?

Gregory Nylen  13:27
I don't know that it's necessarily assuming more sophistication, I think they're just imposing or not even really imposing. They're applying a reasonable standard, reasonable consumer standard, which has been around for a while, but they're making it rational, in my opinion, obviously, I come at this from the defense standpoint, but I believe in what I do very strongly, and I know why these laws were enacted, and they, you know, certainly have their place for the correct circumstance. But in a situation where something is not something a reasonable consumer is going to think is deceptive. Courts are just willing to look at that and go, I'm not going to force this defendant to spend months or years litigating this to the Class Search stage or beyond, you know, the cost of potentially hundreds of many hundreds of 1000s of dollars when look, I mean, come on, it's obviously not deceptive to just a rational, reasonable person. Just look at the statement. I mean, who's going to think that the term crab mix with the K is made with real crab? What kind of nuts and that you can't spell it all? And that's the king versus PF Changs case in the article, you know, and I think that that's that is something that judges should be entitled to do. That's why they are appointed in the case of federal court or elected in the case of state court to do it they do we trust them to be rational and make these kinds of initial determinations and frankly, prevent the courts from getting clogged by what I you know, these no harm cases that are based on allegations that don't pass the smell test. Yeah, that makes sense.

Tim Kowal  14:51 
Yeah, that was the holding of the King versus PF Chang's China bistro case that crab meat KR A B crab meat would not lead a reason Well consumer to believe that it was real crab see our A B crab meat. So let's go back to you mentioned, we're talking about the reasonable consumer test here, right. And as I understand that test, it means that it has to be more than just likely or possible that someone out there would be misled as to be a finding that a substantial portion of the target market would be misled. Is that did I have that? Right? Yeah.

Gregory Nylen  15:26 
I mean, it depends on the nature of the case, in a lot of cases, the target market is, you know, any reason or it could be huge. You know, it depends on what the product is, yeah, whoever is gonna buy that particular type of product are likely to. And that's the same thing for trademark infringement cases when you're talking about likelihood of confusion under this case called Sleep craft, which is the ninth circuit test for likely to confusion and one of the things that you need to show is, particularly with the survey in those kinds of cases is that your sample for the survey, it draws upon likely consumers of that product. So it's a similar concept. But I'll give you another example, which is the Disha Hodges case versus King's Hawaiian bakery West also discussed in the article. Some of the other things that come into play here is the actual packaging as well. So not just whether a particular phrase is so obviously not deceptive as a matter of law, that it's not going to pass that test. But also you know, it look in that case, you had kings when it was called kings, Hawaiian, original Hawaiian sweet rolls. And I think a lot of people are aware of this bread, which states in the package is established. 1950 Hilo, Hawaii, Hawaii, I'm sorry, inside a three point crown, which you know, is evocative of the pineapples crown. And but on the back, it says it's now made in Torrance, California says it right on the package. And that's an interesting case to me, because it's the court said, unlike the brewing process, and I found this interesting, having been a brewery owner, the place of origin is not as important to consumers in the courts mind, it's not relevant, whereas in brewing, it can be relevant because of the quality or type of water and which makes up over 90% of the end product. I found that interesting, because I remember I you know, as a home brewer before I owned a brewery. And you know, there are situations where if you're a beer aficionado, and you go you want to get a Kolsch in Germany and cone you know, it's got a very specific water profile, you want to get an alt in Dortmunder. It's got a very specific water profile that really affects the taste of the beer. So surprised to see the court pick up on that particular notion.

Tim Kowal  17:22 
But it's interesting. So does that mean that so King's Hawaiian bread package it says on the back somewhere made in Torrance, California, that's not unfair advertising. But what if you know kings away and made a line of beer King's Hawaiian Pilsner? And on the back of the Macan, it said Baden Torrance, would that be a different result? Because it's a different product, different target market?

Gregory Nylen  17:43 

I don't know. That's an interesting issue. But I think you know, what, it's gonna depend in part on the product and upon whether, you know, geographic origin is relevant to the quality of the product or some unique aspect of it, if there isn't, you know, a description of where it actually comes from, in that instance, on the packaging.

Jeff Lewis  17:58 
It was. It was, yeah, I was just gonna ask the distinction between Torrance and Hawaii, a bread and beer is that often made at the pleading stage or summary judgment as expert witness required expert testimony required on some of these issues? Well,

Gregory Nylen  18:12 
in that case, it was done pleading stage. And, you know, I think if the product doesn't make a representation, that's the geographic origin. You know, it seems to me to be fair, and the nature of the claim is I read, I looked at this packaging, and I thought it did, then I think it should be ripe for consideration by the court as a matter of law doesn't, you know, or if it's got a disclaimer as to geographic origin, I thought this is from Hawaii. I didn't bother to look at the part of the package that says it's from Torrance. And the Court said in those in that instance, your being selectively blind was the phrase the court used, and I think that's spot on. So you know, I mean, it's certainly important to have packaging, that's not deceptive, that doesn't matter. You know, mentioned things that aren't true doesn't make representations that aren't true. But if you don't, then I think it's great that courts are willing to take this up as a matter of law and make this kind of decision up front.

Tim Kowal  19:00 
Yeah. Where is that line between where big words a factual issue and where it's an issue of law? If if the plaintiff is arguing in opposition to your demurrer on behalf of the business owner, right, you're arguing that no, this this should be an issue of law, the court can find as a matter of law, that there's no, there's no deception here. And the plaintiff is arguing, Your Honor, this would be stealing away from the province of the jury, this should go this should go to a trial, you'd be denying my client his or her day in court. What's the argument there? How do you push the the judge over into your camp to decide that? Yeah, this is an issue that we can decide as a matter of law,

Gregory Nylen  19:33 

it's in the judges discretion and in their minds, really, they're substituting their judgment for reasonable consumers in a way that I think makes sense because they have a duty not to allow their docket to be clogged with nonsense. I mean, you know, I make no bones about where I come out on this stuff, but I think I do for a reason. And I think that's what this is all about. I mean, ever you're gonna get that argument on the other side in every instance that this is why you're doing this now. You know, we should be able to take this to a jury, we should be able to do a survey. And we'll talk about that in a minute. Or sometimes they'll include ally increasingly include allegations in their complaint about a survey, which ties in again to trademark litigation. That's, you know, a lot of the survey experts who get involved in these kinds of cases are the same ones you would use in a trademark infringement case.

Tim Kowal  20:20 
Yeah, yeah. Well, let's talk about surveys. I assume that this is a strategy that got cooked up by plaintiffs attorneys after you and your colleagues were successful in getting a lot of these issues adjudicated on demurrer stage as issues as a matter of law. And so plaintiffs probably decided we got to make this clear that this is a question of fact. And so let's get a survey put together. And so do the plaintiffs allege that there exists a survey and put the survey results in the pleadings themselves in order to buttress themselves at the demurrer stage?

Gregory Nylen  20:46 
Yeah, absolutely. And, you know, again, increasingly, in my experience, courts are willing to overlook those allegations in the face of statements that the courts determine are not deceptive to reasonable consumers as a matter of law. So that, you know, in some instances, they they point to obvious flaws with the survey with survey methodology. But in other cases, they just basically reached the conclusion that, you know, a self serving survey is not going to change the fact that I just simply don't find I, the court do not find this to be deceptive as a matter of law. But I'll give you an example as the Clark versus Westbury natural case cite in my article, you know, they're they plaintiff alleged that a survey showed that reasonable consumers would conclude that vanilla soy milk that had the vanilla flavor came from the vanilla beans specifically, although that wasn't represented on the on the packaging, and they claimed to have a 49.66% response rate, you know, can basically confusion rate showing that but, you know, the Court pointed out sort of flaws with the survey among the fact that they didn't have a when they were asked about whether the label conveyed anything about the origin of the flavor, nothing was not even an option. So there's Sherry diamonds survey evidence chapter from the Federal manual on on scientific evidence is kind of the gold standard on this issue. And it's really it boils down to a number of of issues that you can point to, but this was one of them. If you don't have nothing as an option in your survey instrument. It's a fatal flaw right there. And, you know, a lot of times the questions

Tim Kowal  22:14 
emerge stage, but that was that decided at the diverse stage or judgment

Gregory Nylen  22:18
tumor stage. That's interest? I believe. So I believe that's a good question. I believe that was also at the dimmer stage. But I've seen this happen at the dimmer stage. And a lot of times in at least in the surveys that I've seen, I have yet to see a survey that's described and in some cases attached, you know, that follows the basic requirements that you would follow in conducting a likelihood of confusion study in a trademark infringement case.

Tim Kowal  22:40 

I did just check your article, it does say that it was that the defendants motion for motion to dismiss was was granted on survey methodological errors. So that that is that is interesting. That's something very important, I would think for defense attorneys to keep in their back pocket to know that they don't have to wait for summary judgment or trial to adjudicate methodological problems with plaintiffs surveys,

Gregory Nylen  23:02 
right. And then I've cites a couple other cases in the article two on this issue, the elbows versus vitals International Group case there, it was kind of a vague reference to having surveys in hand, but they didn't allege any details that was at the dismissal stage as well, this govia versus grim a corporation case, which is a tortilla case, where the court felt that it was simply not plausible that reasonable consumers would be misled into believing that tortillas were made in Mexico when they had a statement on the packaging, saying that they had contained a piece of Mexico and the court found to be a meaningless phrase, they did get the plaintiff however, in that case, an opportunity to try to allege survey results. So sometimes they are willing to be more, you know, amenable to that. So I think it depends on what you know, you're going to have I like I said, I've yet to see a survey in this kind of case on the plaintiff side that supports the allegations that are made in a way that I think would pass muster under Sherry diamonds principles, which are the ones that every survey expert follows. And I've done, you know, panels and written about the survey issue. It's something that is of unique interest to me defended and taken a number of expert depositions on survey issues in particular, it's kind of an interesting area and so near and dear to my heart. And I'm glad to see that there are judges who take a look at some of these instruments and say, No, this isn't going to work. I mean, leading questions, for example, not having an open, you know, a question that no, or I'm not the seat is an option, not having a proper survey universe. Um, there's a whole host of things. There's just kind of a checklist that you go through, it's in if your expert is someone who's good, they're going to follow those rules whenever they conduct a survey. So

Jeff Lewis  24:34 
imagine when there's a case ending order at the demurrer stage, plaintiffs often appeal those rulings. And when there's a lack of a case ending order at the diverse stage and the demurrer is overruled, sometimes defense attorneys attorneys will take this up on our writ. So whether it's on a writ or on an appeal, are there any common issues you see up when the cases are up on a review? Are there traps that attorneys need to be aware of in terms of pleadings, battles over these types of claims

Gregory Nylen  24:58 

at the appellate stage? Ah, well, I think it's kind of like, you know, I wait, if you manage if saying if you're on the defense side and you manage to have your demersal stained with all leave to matter, yeah. Or motion dismiss granted with prejudice, what do you what do you look for on appeal?

Jeff Lewis  25:12 
Yeah, yeah. Like, for example, on the question of surveys, I wonder if it's if trial judges can sometimes overstep the line between fact questions and legal questions in terms of these statements, and whether or not it's an affirmative representation, or an omission and that kind of thing, right? Have you seen any issues that come up commonly in dealing with either appeals or risks on these issues?

Gregory Nylen  25:31 
Not really, because I think, excuse me, in most instances, the battles are about the same issues as a matter of law. So I think just dotting your I's and crossing your T's in terms of your arguments below, and making sure that you're on top of the law, because it changes so often, and try to make sure that you gather as many of the decisions on these points in your favor as you can because, you know, there are splits on a lot of these sub issues. And so, you know, I wouldn't say that there have been final pronouncements on you know, a lot of them. So,

Tim Kowal  25:59 
you ever have situations where you you're partially successful on a dimmer and you're able to kind of kill the core claim and the plaintiffs complaint, but the case is not completely finished. You know, sometimes in those kinds of instances where the case still hobbles along, the plaintiff might be motivated to just dismiss the rest of the claims in order to accelerate the appellate review. Do you ever see those kinds of issues? Do you ever have plaintiffs asking you to stipulate to a dismissal and reservation of appellate jurisdiction? Those kinds of things?

Gregory Nylen  26:25 
No, I haven't. Personally, I think it'd be interesting to see how though it depending on what they do, and what they dismiss, that could trigger some issues on dishonor, as well. And I'd be interested to see how that might play out

Jeff Lewis  26:35 

as a defense lawyer on these unfair competition claims. Where would you rather be state court or federal court in terms of which form is more hospitable to UCL claims?

Gregory Nylen  26:45 
You know, I know there are people who will say that they always want to, they'd rather be in federal court. And there is some truth to that, from the defense side for a variety of reasons. But I found that a lot, I really like a lot of complex judges. And if you get a very fair read for many of them in state court, and I really liked a lot of them. But I would say overall, I would rather be in federal court, not because of you know, the judges, but because I think there there are good ones in both state and federal court, of course, but rather, because you can take advantage of the federal courts view on Article Three standing, for example, and issues like Sonnar, which is a, you know, Ninth Circuit decision that can be really helpful in federal court as opposed to state I also just think, because of the institutional way that federal courts work, you and how dockets have become so backlogged after COVID, a lot of times you can get a quicker read, or a quicker decision, um, depending on which judge are in front of you know, that it can go both ways, I've had judges in federal court take over a year to rule on a motion to dismiss or I'm sorry, a motion to compel arbitration to the point where a client just decided to resolve the case, because we couldn't wait any longer. But I've also found in some state courts, it's taking six to eight months to get a hearing on, you know, a dispositive motion. So I just think overall, it's it's and because I do a lot of intellectual property litigation. I'm very comfortable in federal court. I'm comfortable in both. But yeah, you know, I think a lot of times, counsel, plaintiff's counsel, in these kinds of cases is not comfortable in federal court. So I'd like to be where there's an imbalance of comfort, if you will, that certainly helps. But you know, for those reasons, it's substantively, I think it's a better place to be for defense counsel, hey, you know,

Jeff Lewis  28:22 
I've never really litigated either side of these claims. And so far, Pardon my ignorance, Does insurance typically cover these claims? When a business is sued for a US UCL claim?

Gregory Nylen  28:33 
It depends, you know, false advertising, it depends on what kind of what kind of insurance you have really, yeah, it can run the gamut.

Jeff Lewis  28:40 

Let me ask you this, you know, many lawyers practice toaster law, they practice whatever pops up, right. They're generalists. When does somebody need to call Greg in to handle a UCLA UCL

Gregory Nylen  28:51 
plan? I mean, I think at the pleading stage, if you've gotten hit with one of these, there are so many traps for the unwary in the sense that you can leave a lot of arguments on the table without realizing that you just gave up gave something up. And, you know, just just the the nuances that are coming out, for example, under Sonnar, it's interesting to see how the district courts are applying that decision. And there's all of these micro splits, if you will. So it's really important to be able to marshal as many of the favorable district court orders as you can. And I've also noticed something interesting, which is, you know, used to be that you couldn't cite district court decisions from Westlaw, like anywhere, and now it's just all bets are off, it seems to me, I mean, I've had no problem whatsoever doing that in either state or federal court, frankly. And that's really helpful because a lot of times that's the only place where you're going to find a particular nuance or particular discussion of a case like Sondra, that's coming down and how are we going to actually apply this now on the ground? Now that this case has come down? How are we going to look at it in light of this particular nuance of, you know, this set of allegations on this in this country? right on this motion to dismiss.

Tim Kowal  30:01 
So you've mentioned sonor, several times now. So let's finally get to the Ninth Circuit decision in Sonnar versus premier nutrition Corp. So this is this is a doctrine now that comes up in federal court that can limit plaintiffs availability for or entitlement to equitable relief if there is an adequate remedy at law. So that's that's the holding under sonor versus premier nutrition. So Greg, how does this come about under sonor? If a plaintiff is seeking both equitable and legal relief, dishonor just mean that sorry, you can't get the equitable relief, you're only you can only look at the legal relief,

Gregory Nylen  30:34 

if you allege an adequate remedy, you know, if you allege a claim for which there's an adequate remedy at law, yes. And in some of the cases, like the GeoBlue case discussed in my article there, the plaintiff sought both restitution and injunctive relief, and the court found that was a distinction without a difference. You have to I have to plead the inadequacy of legal remedies. So that's an important unavailable. I'm sorry, go ahead.

Tim Kowal  30:58 
Yeah, that's an important pleading note on the checklist. And to make sure that if you're asking for both, you have to make sure to establish that legal relief by itself would not be adequate, you need the equitable relief as well.

Gregory Nylen  31:10 

Right. And so one area where this can come up as if you allege a claim under the CLA for which damages are available at the same time, you allege a claim under the UCL or FL or both, and see restitutionary discouragement or injunctive relief, and restitutionary discouragement is under Business and Professions Code section 17. Two of three is not what you might think it is, if you don't practice in this area, it's you know, the California Supreme Court has held in a number of cases that that doesn't include lost profits, for example, that the other side may have realized or earned as a result of alleged unfair business practices. It has to be money or property that you either had in your possession and turned over or paid to the defendant or that you have a statutory right to obtain like overtime wages, for example, once you earn overtime wages, they that's a right, that attaches to you individually as a person under California law under the labor code that's a present right to receive those wages. Right. But, you know, in a case called Korea supply, for example, you had a defense contractor who lost out on a bid to another one and tried to seek the profits that the company that won the bid as by virtue of what they claimed were unfair business practices tried to recover those as restitutionary. discouragement, California Supreme Court said no, that's not what that's all about. That's in essence damages in disguise, and you cannot get damages under the UCL. So because of that you would very often see up until Sonnar. Anyway, the triumvirate you'd see UCL FL and CRA because the CLI just straight up lets you get damages. And so now one of the issues that's come out of saunter, and you'll see a lot of back and forth in the district courts on this issue is sonor was further along than the pleading stage. Does that mean that you have to be further along for this doctrine to apply? In other words, can you allege in the alternative, can you allege these claims in the alternative and get by a motion to dismiss? I think the correctly decided district court cases say that doesn't make a difference, because it's obvious from this claim that they're seeking damages. So there are plenty of district court decisions where they will still dismiss the claims at that stage, but there are others. So that's one issue. The other issue is if you're seeking future injunctive relief, as opposed to relief for past conduct. And that's what came up in this. One of the issues that came up in the GeoBlue. Case cited my article, the Court rejected that argument that the plans for seeking relief for future violations based on automatic renewals relating to these television subscription services. And interestingly, the court in that case rejected plaintiffs argument also that they were only seeking relief under the ECL because the court found that the nature of their relief was legal. So that's a really this is a really hot area. I mean, as I said, 300 and something district court decisions, applying sonor. And this is why it's important when you get this kind of case to make sure you find somebody who understands this area of the law and is going to marshal as much as possible, you know, in in your favorite your defendant who's who's been hit with one of these claims.

Tim Kowal  34:04 
Okay. And then the solder case is fairly recent. That was 2020. Right. Was that the first case in this space in the Ninth Circuit? Well,

Gregory Nylen  34:12 

they were resolving, you know, as I recall from that decision, and I know this issue came up before in the district court level, so they were resolving an issue that had not yet been resolved at the appellate level.

Tim Kowal  34:23 

Yeah, well, like you said, this is a space to watch the interplay or to what extent a plaintiff can plead and recover both legal and injunctive relief, that may be a landmine and you know, I know that the you represent the defendants side, but I would say that if you're a plaintiff's attorney listening to this, it seems like it would. It could be malpractice to bring a claim in federal court if your client really wants both legal and equitable relief.

Gregory Nylen  34:45 
Yeah. One other interesting nuance I should point out on that is and this is not there are different district decisions on this as well, just a court decisions, but what happens if you allege this claim for under the CRA you'd like these types of claims, and one of them's under the CLR and you seek damages, and then just before trial, you dump the CRA claim because you, you know, you want to avoid this issue and just get a bench trial because it's all equitable at that point. And there are cases that say no, sorry, you know, nice try. Yeah, you make the district decision to do that you do so at your peril, because you could have the whole case thrown out, you know, except for potentially injunctive relief, but it depends on on the case.

Tim Kowal  35:23 
Okay. So those are the trends we've covered that looks like the judges tend to be imposing a little bit more of a rigorous standard on the reasonable consumer consumer tests, watch out for Article Three standing issues in federal court. And then also make sure that you're you're looking at the Sonnar versus premier nutrition Corp. If you see a case in federal court that alleges both legal and equitable remedies. Anything else audience should be aware of as kind of a parting shot here. Greg,

Gregory Nylen  35:47 
I think one of the things that if you're at the summary judgment phase of a case, I think one thing that's really important to remember is to really dot your i's and cross your t's and trial court on evidence to support your motion, because I have seen this time and time again, come up where you need to have, you know, authenticating declarations for exhibits, for example, this is not a jurisdiction where documents are self authenticating. So you need to make sure that you have proper, you know, declaration supporting your evidence, follow all the rules, make sure your separate statement, and I mean, it's in the rules of court, but I'm just shocked how many times to separate statement doesn't look like what the rules of court says just you know, do this here are the columns follow this format, and then you just get some wacky thing. So the picture right in the rules of court, yeah, exactly. So you know, you want everything has to be done. Right. If you want to survive the appeal. Yeah. No matter what side you're on. So that was kind of my parting shot on that issue.

Tim Kowal  36:42 
All right. All right. Well, Greg Nylund, thank you very much. If any of our listeners are representing a defendant facing unfair competition case, you should give Greg Nylund a call to make sure you're not missing any splits or unresolved issues or any defenses that you need to raise, or else they ever be deemed forever waived and forfeited if you ever have to get all right. Well, once again, Greg Island, thank you very much for being on the podcast and Jeff, that's gonna wrap up this episode. We'd like to thank our sponsor once again, case text for sponsoring the podcast each week when we include links to the cases we discussed, we use case text and listeners to the podcast can find a 25% discount available to them if they sign up to casetext at casetext.com/calp. That's casetext.com/C A L P.

Jeff Lewis  37:27 

And if you have suggestions for future episodes, or if you have a strong opinion about whether Hawaii or Torrance makes better water for bread, please email us at info at Cal podcast.com. And in our upcoming episodes, look for tips on how to lay the groundwork for an appeal when preparing for trial. All

Tim Kowal  37:41 
right, thanks. See you next time.

Announcer  37:42 
You have just listened to the California appellate podcast, a discussion of timely trial tips and the latest cases a news coming from the California Court of Appeal and the California Supreme Court. For more information about the cases discussed in today's episode, our hosts and other episodes, visit the California appellate law podcast website at ca l podcast.com. That's c a l podcast.com. Thanks to Jonathan Cara for our intro music. Thank you for listening and please join us again

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

Even judicial clerks face harassment and discrimination by their judge-employers. Aliza Shatzman knows this first hand, and it’s why she started the Legal Accountability Project. But how can we achieve accountability in such a strange place as a court?

Judicial jobs are not like normal jobs. Former Supreme Court clerks command signing bonuses in the stratosphere of $400,000 or more. Similarly, over 80 former staffers in Senate Maj. Leader Chuck Schumer’s office are now working in Big Tech. The Hill is not exactly where you go looking for top coders.

The value of working for a judge—like the value in working with Harvey Weinstein—is the value of the connections. So some people take the attitude that these jobs are a privilege, and those who get them should suck it up and not complain.

Do normal rules apply to these privileged workplaces—like Hollywood, or courts?

Watch the clip here.

This is a clip from episode 39 of the California Appellate Law Podcast. Listen to the full episode here.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Aliza Shatzman’s dream of a judicial clerkship turned into a nightmare. Just to get the experience, and the career credit, of a judicial clerkship, Shatzman would have put up with her judge calling her “bossy” like his wife, and telling her he preferred the company of her male co-clerk. But then her judge terminated her clerkship early—and gave her a negative reference—because, he said, she made him uncomfortable and she “lacked respect” for him.

Her HR complaint? Shatzman was reminded judges are special people and HR doesn’t have any control over them. What about the misbehaving judges’ colleagues? “Judges are notoriously unwilling to discipline their own.”

As for judicial complaints, they are routinely mishandled, and this mishandling sends the message: suffer in silence—don’t bother sending up further complaints.

In this clip from episode 39 of the California Appellate Law Podcast, Aliza Shatzman shares the origin story of the Legal Accountability Project, and why misbehaving employers need to be held accountable—even when the misbehaving employer is a judge.

Watch the clip here.

This is a clip from episode 39 of the California Appellate Law Podcast. Listen to the full episode here.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

What happens when an unmovable object—here, a jurisdictional limit—meets an unstoppable force—here, the liberality doctrine? We find out in Magyar v. Kaiser Permanente Medical Center (D2d2 Jan. 23, 2023 No. B315353) 2023 WL 355173 (nonpub. opn.): the unmovable object gives way. And so the plaintiff, who lost on summary judgment and forgot to appeal the judgment, got it reversed anyway.

After slipping and falling on the stairs in the parking structure on her way to a doctor appointment, the plaintiff sued both Kaiser and the operator of its parking structure, Modern Parking. The trial court granted summary judgment for both defendants.

But as sometimes happens, each defendant submitted a separate proposed judgment. And the trial court entered two separate judgments: one for Kaiser on September 15, and one for Modern Parking on September 21.

The plaintiff appealed from the Kaiser judgment on September 16. At that time, the Modern Parking judgment had not been entered. The Modern Parking judgment was entered five days later on September 21. The clerk mailed it to the plaintiff the same day. And two weeks later, Modern Parking served the plaintiff with a notice of entry of its separate September 21 judgment.

Yet the plaintiff never appealed from the September 21 Modern Parking judgment.

So Modern Parking argued “this court has no jurisdiction to consider an appeal from the September 21, 2021 judgment….” The court agreed.

(The “saving doctrine” would not apply here. That doctrine allows a reviewing court to deem a premature notice of appeal (such as an appeal from a nonappealable order granting summary judgment) to be taken from the subsequent appealable order (such as the summary judgment itself). But here, the plaintiff’s notice of appeal did not identify the order granting summary judgment: it identified the summary judgment for Kaiser on September 15. So the savings doctrine would not apply here.)

So one would expect this to end the analysis as to Modern Parking. But the court was not done. The court also must “liberally construe” the September 15 notice of appeal, because if the notice of appeal is “reasonably clear what [the] appellant was trying to appeal from,” and if the respondent “could not possibly have been misled or prejudiced,” then the court may consider the appeal. (In re Joshua S. (2007) 41 Cal.4th 261, 272.) For example, where two orders are issued simultaneously, and the appellant identifies one order in the notice of appeal but not the other, the Court of Appeal will conclude the appellant intended to challenge both orders. (See, e.g., Barriga v. 99 Cents Only Stores LLC (2020) 51 Cal.App.5th 299, 321; In re Daniel Z. (1992) 10 Cal.App.4th 1009, 1017.)

Here, of course, the orders were not entered the same day, but six days apart. And there is authority that the liberality doctrine would not permit construing a notice of appeal to include an order entered 44 days earlier. (In re J.F. (2019) 39 Cal.App.5th 70, 76–79.)

Ultimately, the court decided to “exercise its discretion” to extend its jurisdiction. The court noted that, based on the “unique circumstances” of the summary judgments being merely five days apart and being based on the Kaiser motion that Modern Parking had joined, there was “nothing that would logically and conclusively demonstrate plaintiffs intended to appeal solely from one of the judgments.”

The court also noted that Modern Parking was not prejudiced in any way, as it was served with all papers, and it filed a respondent's brief addressing the merits.

Comment

This language in the court’s analysis jumped out at me: there was “nothing that would logically and conclusively demonstrate plaintiffs intended to appeal solely from one of the judgments.” This suggests that the court started from the assumption that the notice of appeal encompasses all judgments—specified and unspecified—unless the record “logically and conclusively demonstrated” otherwise. This is contrary to authority that holds that each appealable judgment or order must be expressly specified—in either a single notice of appeal or multiple notices of appeal. (Filbin v. Fitzgerald (2012) 211 Cal.App.4th 154, 172-173.)

The court found it important that the plaintiff’s notice of appeal—using the Judicial Council form—checked the box indicating the appeal was taken from a “judgment after an order granting a summary judgment motion.” The court did not explain the significance, but presumably the court felt that, because cases ordinarily terminate with a single judgment, appellants should not be made to cower in fear of piecemeal judgments, taking appeals from each one.

Still, this represents one of the broadest applications of the liberality doctrine I’ve seen.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

A trial court relied on a hearsay declaration when it granted summary judgment to Avon in this talcum-powder case alleging asbestos-exposure. There is a growing consensus that trial court rulings on evidence are reviewed under the more lenient abuse-of-discretion standard, even on summary judgment. And Ramirez v. Avon Products, Inc. (D2d8 Jan. 23. 2023 no. B313982) --- Cal.Rptr.3d --- (2023 WL 354915) supports that consensus.

But the court still reversed. There are limits to what qualifies as evidence that can shift the burden of proof in the summary judgment context to the nonmoving party.

The important thing to take away from the published Ramirez opinion is that corporate litigants cannot get around hearsay and foundation problems by designating their witnesses “corporate representatives” or “persons most qualified.” These are deposition tools, not end-runs around the rules of evidence.

Ramirez alleged asbestos exposure back in the 1970s. Avon offered the declaration of a vice president, Lisa Gallo. But Gallo had only worked at Avon since the 1990s. Ramirez objected that Gallo lacked foundation and her declaration was hearsay. But the trial court overruled the objections, concluding that Avon had designed Gallo as its corporate representative and person most qualified on the topics. And besides, the events happened 50 years ago—it’s not like Avon is likely to still have people who were working there in the ‘70s.

There is no such thing as a “person most qualified” or “corporate representative” witness outside the deposition context:

The Court of Appeal did not buy the trial court’s rationale that Avon could get around the foundation and hearsay objections by dubbing its witness a “corporate representative” or “person most qualified.” “The Evidence Code,” the Court of Appeal observed, “recognizes only two types of witnesses: lay witnesses and expert witnesses.” And Avon did not offer Gallo as an expert.

The court went on: “There is no special category of “corporate representative” witness, as the trial court suggested. There is no exemption from the Evidence Code for a witness who has conducted an “independent review,” whatever the trial court meant by that phrase.”

What about a “person most qualified”? Attorneys are familiar with this concept when seeking information from an entity defendant via deposition. If Ramirez had deposed Avon for the same information, Avon presumably would have offered Gallo to testify to the same matters as in her declaration. So why can’t Avon do the same thing without the deposition?

The answer, the court explained, is that the tools available in deposition are for discovery—not to give the deposed party an end-run around the Evidence Code. “[T]he tools of discovery are intended to benefit the party utilizing those tools. The purpose of a deposition is not to aid the party whose witness is being deposed; it is to aid the opposing party taking the deposition. More specifically, the primary purpose of section 2025.230 is not to aid corporate entities. Rather, it is intended to simplify discovery for the party seeking information from a corporation.”

Hold on a minute. Something about this, Avon says, seems unfair. So the plaintiff can depose Gallo and get all this information, and then the plaintiff can use the bits of Gallo’s testimony it likes as party admissions against Avon? But then when Avon wants to use Gallo’s testimony, it’s barred on hearsay and foundation grounds? That, protests Avon, can’t be how it works.

But it is how it works. The court explained that, contrary to Avon’s suggestion, this is not unusual in the context of entity litigants. Natural persons are subject to the same rules: the answers a party-witness gives in discovery may be used against the party as party admissions—but the same party-witness can’t get self-serving testimony into evidence on her own behalf just by blurting them out at deposition. She has to follow the rules of evidence. The same applies to corporations.

As the appellate court concluded here: “What Avon is in effect suggesting is that if a party deposes a corporate entity, the corporate entity is no longer bound by the rules of evidence at any subsequent trial or hearing. This is simply nonsense.”

Ok, but what about the fact that the plaintiff’s allegations are 50 years old? By preventing Avon from offering testimony about matters from the 1970s, the court has prevented Avon from defending itself.

The court acknowledged that the age of the alleged acts poses problems. But Avon is forgetting that it is the defendant who bears the burden of that proof: “If anything, the problem is more acute for the Ramirezes, who bear the burden of proving the contents of those products.”

Finally, the court analyzed the documents attached to Gallo’s declaration, and noted they all predated Gallo, they all contained hearsay and even hearsay-upon-hearsay, and that none of them satisfied the business-records exception. And even if the were admissible, they did not establish that Avon’s products never contained asbestos.

Admitting the Gallo declaration and the attached exhibits was an abuse of discretion.

Avon forfeited its argument based on the plaintiff’s factually-devoid discovery responses by not sufficiently raising this in the trial court.

Ok, so Avon had trouble disproving plaintiff’s allegations. But can the plaintiff prove them? The plaintiff has the burden of proof, after all. And this can be a basis for summary judgment for the defendant.

Avon argued that the plaintiff’s discovery responses were factually devoid, implying the plaintiffs have no evidence to prove their asbestos claims.

But Avon made only a conclusory argument about this in its MSJ papers. And the record indicated that there was an ongoing discovery dispute at the time of the motion for summary judgment. “In light of this dispute,” the court held, “it would be unreasonable to infer a lack of evidence from any missing, devoid or incomplete responses.”

Besides, Avon’s arguments were not fully developed on appeal. “We may and do ‘disregard conclusory arguments that are not supported by pertinent legal authority or fail to disclose the reasoning by which the appellant reached the conclusions he wants us to adopt.’” (United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 153.)

Comment

The court went out of its way to note that there is a split of authority on the standard of review of evidentiary objections made in connection with a motion for summary judgment, with one side holding that the standard is de novo. The Ramirez panel did not go this direction, however, and sided with the majority of courts reviewing evidentiary rulings in the summary judgment context for abuse of discretion.

But the opinion is not clear how the trial court abused its discretion, as opposed to merely commit legal error, **in overruling the hearsay and foundation objections to Avon’s evidence—other than that the evidence was, in fact, hearsay and devoid of foundation. The court lingered on one of the exhibits to the declaration, a report putatively authored by a Dr. Pennisi, but which “resembles a press release.” Presumably, the court felt that this exhibit especially helped Avon, and was especially objectionable. The court concluded that “[t[he trial court abused its discretion in admitting all these hearsay documents, but the abuse of discretion was particularly egregious in the case of the Pennisi statement.”

The upshot is that the distinction between de novo and abuse of discretion when it comes to evidentiary rulings may come down to more of a mood or nuance than a legally measurable difference.

Tim Kowal  is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

The autism pandemic now affects between 1-in-44 and 1-in-35 children by the age of 8, according to a December 2021 Rutgers report—a rate that has climbed some 241% since 2000.

And one of the big ways this affects the millions of families raising children with autism is obtaining and fulfilling IEPs—Individualized Education Programs.

Special-education law attorney Tim Adams represents families to get their children the educational support they need. And because districts often have more legal support than financial support, these issues often wind up in court.

And while petitioners may be entitled to recover their attorney fees, surprisingly they are not entitled to their expert costs. This rule (an oversight?) tips the scales sharply against families and could be easily fixed by Congress.

Tim Adams’ biography, and LinkedIn profile.

Appellate Specialist Jeff Lewis' biography, LinkedIn profile, and Twitter feed.

Appellate Specialist Tim Kowal's biography, LinkedIn profile, Twitter feed, and YouTube page.

Sign up for Tim Kowal’s Weekly Legal Update, or view his blog of recent cases.

Use this link to get a 25% lifetime discount on Casetext.

Transcript:

Announcer  0:03 
Welcome to the California appellate podcast, a discussion of timely trial tips and the latest cases and news coming from the California Court of Appeal and the California Supreme Court. And now your hosts, Tim Kowal and Jeff Lewis.

Jeff Lewis  0:17 
Welcome, everyone. I am Jeff Lewis.

Tim Kowal  0:19 
And I'm Tim Kowal. The California appellate law podcast is a resource for trial and appellate attorneys. Both Jeff and I are appellate specialists, but we split our practices about even between trial and appellate courts. My wife tells me that makes us attack librarians so we try to bring that perspective and some legal news that our listeners will find useful in their legal practice.

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Tim Kowal  1:01 
All right. You know, Jeff, one of the topics that we discuss often on this podcast is the impact that the COVID pandemic has had on legal culture, but I was noted recently a stat about the autism pandemic and how it now affects between one and 44 and 135 children by the age of eight years old. According to a December 2021 records report, the autism rate and callate in America has climbed some 241% Since 2001 of the big ways that this affects the millions of families raising children with autism is an obtaining and fulfilling ie peas. That's an individual Individualized Education Program. And so I thought it'd be it'd be great to have a special education lawyer to come on the show and talk to our audience about these kinds of special education issues in the law. So today we welcome Tim Adams to the show. Tim Adams is an attorney focusing on education, law, and especially special education, law and advocacy. He has served as an adjunct Professor and Associate Director of the special education advocacy clinic at Pepperdine University School of Law. He is actively involved in educating parents and professionals in presentations and seminars. He's also trained Orange County Superior Court judges regarding special education law. He's been interviewed and quoted in publications including daily journal, Orange County Register and the nationally published magazine parenting. Tim is an ambassador for the autism community in action, an organization that provides support for families living with autism, and he served as an auxiliary board member for the University of California Irvine Child Development School, and was a founding board member of its successor, the children's school, and in 2017, Tim co founded walls that unite a nonprofit organization that provides educational experiences in low in low income communities in the United States and Mexico. Tim Adams, welcome to the podcast. And thank

Tim Adams  2:45 
you, Tim, and Jeff, for having me today. It's a pleasure to be here.

Tim Kowal  2:49 
Well, thank you, again, for being here. And being willing to share your experiences wonder if you can tell us a little bit more about your practice that I covered in that brief introduction, what is the day in the life of a special education attorney look like?

Tim Adams  3:00 
Well, we spend quite a bit of time counseling families through the educational planning process, as attorneys were helping to, you know, help them to navigate how to improve their educational programs or their child's educational programs. Those plans are created, as you mentioned at the beginning, via an individualized education program or an IEP, and that's set up through federal and state laws. And it's an obligation of the public school system, either the school district or a public charter school to prepare that IEP. So often, when I spend my day speaking with parents about concerns that they have with those IEPs, and how to resolve those concerns, whether it be a change in services, or a change in goals, most often it happens to be maybe a dispute over what's appropriate. And that's that becomes really the most important question in this field is what is it appropriate education for students?

Tim Kowal  3:52 
Maybe you can walk us through when is the first time that a parent will likely hear the term IEP and learn about what this process looks like? And when do they first start to think gosh, maybe I need Tim Adams or a special education attorney to help me enforce my rights under this IEP. How do they know if they're getting shortchanged or they're not getting all that the law requires that they get out of their IEPs?

Tim Adams  4:12 
Well, they may 1 hear that term, depending on what their child's diagnosis is, in California, the regional center system. So if we look in California has an obligation to address the needs of students that are even before they reach school age. So from zero to three years old, there are educational programs that are set up under Part C of the Individuals with Disabilities Education Act, that's the federal law that governs special education and that provides individual family services plan or an IFSP for students before they reach school age. And then that in California, the obligation to provide that program is through the regional center system. So they discuss that with the regional center if there's if their child is a student with an eligible developmental disability. If they're not, they may not hear that term until they reach school age and start kindergarten and realize My child's you know, delayed in some way or having trouble learning letters or reading, it could come as late as in some cases, if it's maybe a mental health concern junior high or high school or could come as early as before they reach school age at three years old.

Tim Kowal  5:15 
So some of these families have some inkling that their child has some problems in there, they're getting their child assessed, maybe even before they get into school, or at least before the scribe tells them about

Tim Adams  5:25 
it. That is correct. And so there's an obligation, it's a little complicated sometimes for parents to navigate, but they may be headed off from a regional center system to the to the school district, and there's a exchange that happens prior to age three, where the school system takes over and has to assess and determine whether the child meets eligibility criteria under 13 categories, one of 13 categories, or more than, you know, one or more, and then makes that special education or IEP offer. And that's where the process starts. And that could start at any age in California with federal law sets, you know, sets the obligations of school districts between three and 20. And 21. In California is extended that to 22.

Tim Kowal  6:04 
Okay, Jeff, you

Jeff Lewis  6:05 
want to ask question? Yeah. Hey, Tim, thanks, again, for being on the show. Sometimes I hear about the term advocate that an advocate will attend meetings involving IEPs and special ed lawyers, what is an advocate? What's an advocate do so

Tim Adams  6:19 
advocate could be just about anyone with specialized knowledge about the child, it could be a child's therapist, maybe a child is receiving some services through a marriage and family therapist, it could be you know, a relative, maybe an aunt uncle, it could be a doctor, it could be a child's teacher, you know, anyone who has specialized knowledge that is willing to advocate for the child's interests could be an advocate. And typically, it's going to refer to as a somebody who's not a lawyer, not a licensed attorney who's attending a meeting and advocating on behalf of that child.

Tim Kowal  6:51 
Yeah, I thought maybe let's pause this deep dive into special education, law and backup for a moment. And Tim, tell us a little bit how you got into special education law. This is you're obviously deep in the weeds here. You know, every you know a lot about special education law, that's your specialty. And most of us attorneys don't know a lick about it. Maybe they don't even know. That's why I had to I didn't stop with just the acronym IEP, I had to define what it is because I suspect a lot of our listeners maybe have never heard that term or don't know what it means. Tell us how you got onto this, how you got into this specialty in the first place? Is this something that you started off with? Or did you take a detour on a more typical? That's,

Tim Adams  7:26 
that's a great question. And I really became exposed to the IEP process as a young child have a younger brother with special needs and relatives who were supporting him, including my mother and attending IEP meetings. And I spent my afternoons waiting often and doing my homework waiting for my brother to finish therapies or, you know, tutoring and things like that. So I became exposed to the whole process as a child, although I didn't understand how the law would play into that. I just knew that mom was helping my brother out, and I was doing my best to get in the hand as well

Tim Kowal  7:59 

as the system. Like at that time, what was your mom able to find support?

Tim Adams  8:02 
She was surprisingly at the time, you know, my parents really had, you know, thought the answer was pride. You know, attending private schools and having him continue to to go to one private school after the next and for so this private schools weren't equipped. They weren't specialized, special education equipped private schools. They were your run of the mill private school, that maybe a parochial school that met well, but really didn't know how to address his needs. So he had mostly learning disabilities and had some trouble with academic concepts and did okay in law as long as he was in a small group or one on one setting. So unfortunately, you know, after moving through two or three private schools, they did find that the IEP process through the public school system was was likely going to be the best match. And so thankfully, they actually had a good outcome through the IEP process and continue to have a pretty positive outcome. But my initial exposure, of course, to that whole process was as a child and then moving into law school, I was looking for some elective courses to take and disability law was an option. And I was at Pepperdine law school. And it was an evening course. And it looked very interesting to me. So I signed up for the course and met a professor there, Dr. Meredith ghats, who became a mentor to me, and she ran the special education legal clinic that at the time was under contract with the Lanterman Regional Center and provided advocacy, free advocacy to families who had children who were consumers of that regional center. So my exposure was through a clinical program and that class at Pepperdine law school way back in the late 90s. And ended up getting into this field as a result of that. Now, I'll pause for a second if you have any follow up questions. But you know, a really quick follow up on Did you have any questions about that? Or, you know,

Tim Kowal  9:47 

you had mentioned that in your experience in your childhood with with your brother having to go deal with IEPs and your mom navigating that process. You said that fortunately, it went fairly well, he seemed to get the services that he needed. So obviously you didn't Need the future you special education lawyer to come in and advocate for his rights? So did you have an inkling at the time you enrolled in Pepperdine law school, or at the time taking this disability rights class that I'm gonna go special education law become an advocate for, you know, kids with special education needs,

Tim Adams  10:15 
I actually didn't in fact, I didn't even know it existed until I went to law school. And I'd say most of my student colleagues, quote, you know, they were weren't aware that this existed. And and so you're, in course, your average attorney doesn't know this exists. So you know, I did learn a lot about it, and then became very fascinated and very interested now, even though my brother didn't have any struggles, where it's at least that I knew of with my, you know, through the IEP process, you know, there were struggles in life. And there were advocacy moments that were, you know, that presented themselves even after he finished school. So we're able to have that provide that support and assistance because students that finish the IEP process and graduate but still need to navigate their life and their jobs and their higher education. And there are a lot of opportunities to continue that advocacy. So I would say for him in particular that came after high school once he received his diploma, but you know, it was a revelation for me having taken that class that this is really was really something that I was passionate about was interested in. And after interacting with families, and having the privilege of representing as an advocate, under the supervision of two attorneys that were adjunct professors have several families that were consumers had children, consumers to the regional center, I really fell in love with this practice area. Yeah. And as a result of that, I and a friend of mine, a law student was also in the clinic drafted a business plan. And he proposed it to a mid sized law firm right here in Orange County. And they agreed to take us on as you know, new graduates developing a special education practice group. And that's how we got started.

Tim Kowal  11:57 
Now, you had mentioned that even after your brother finished school successful using the IEP process that they you spotted, even afterward there were I think you'd call them advocacy moments where maybe I wonder if you could unpack that a little bit and that segue into a you know, are there counterpoints to you and your practice in the education realm in the employment realm where employment law attorneys need to be able to spot the kind of employees who may have these advocacy moments where, where they need someone to advocate for them in the workplace?

Tim Adams  12:25 
Yeah. And that's a great question. So these moments included interactions he may have with with supervisors, or other staff members as he had a diagnosis at the time of ADHD. And so it's sometimes it's challenging for him to to deal with stressful situations. And so there was a lot of counseling that took place. And in some cases, behind the scenes, you know, instruction, this is what you need to say to your boss or supervisor, this is what you shouldn't say, No, you shouldn't tell your boss to eff off and walk out. That's not a good idea. Let's let's come up with some more productive ways to address the impulsivity and some of the anger issues that go along with the diagnosis. So I was advocating not directly on his behalf in sort of a adversarial sense, you know, against an employer, it was more, you know, with a lot of counseling, I would say,

Tim Kowal  13:15 
Yeah, well, so when you when you graduated and pass the bar, did you go right into special education, litigation and advocacy,

Tim Adams  13:23 
I did actually started and through my mentor, Dr. Getz, we were able to I started with several cases through their Lanterman regional center, they contracted with my very small office at the time, my office is one myself and we were able to represent, I was able to represent several families initially and then ended up I had a partner right after that. So I worked for a small firm after I became a licensed attorney and worked for myself. And then I partnered up and then developed a quite a robust practice that partnership dissolved in roundabout 2009. And I've been on my own with associates since about that time.

Tim Kowal  13:59 

Okay, well, and let's, let's try to put some more meat on the bones of what I think maybe for our listeners, and for me, it might still be too abstract, you're dealing with IEPs and advocacy. Now, does that translate into a lot of litigation? Or is it is it a lot of paperwork phone calls? What is what is the day in the life?

Tim Adams  14:15
Okay, so it's mostly it does translate to a lot of litigation. And this process starts always with an assessment, the first thing you have to do is assess a child and determine if they're eligible under several categories. I mentioned the 13 categories. As an example, a student with ADHD, that and having that diagnosis doesn't in and of itself automatically qualify them for an IEP if the ADHD doesn't adversely impact his access to education, then he could be fine without it. He may need something like what's called an accommodation plan under Section 504. I have some clients that just need accommodation plans under 504 But most of my clients have IEP, so you start with that assessment. Is the student eligible? Whether they have a diagnosis or not, you know, you have a lot of fans At least they don't have the resources to go out and hire doctors to get various diagnoses. So you may have quite a few undiagnosed conditions that manifest in the form of a disability that we haven't identified. Or maybe it's a really complex situation where you may never quite identify that disability, but you know, that it's manifesting in native ways that impact adversely impact access to education, they can't get up and go to school, because they're really depressed, they, you know, they're having trouble focusing, they maybe have limited vitality in some way, they can't stay at school for more than a couple of hours, we may not have identified that exact diagnosis, but it doesn't matter under the ADEA. As long as we can identify a category that would make them eligible for special education, we can call it for example, and other health impairment or an O H AI, if it's clearly a diagnosis that impacts you know, that that's more academic in nature impacts their ability to access their academic work, it could be a specific learning disability, and SLV, these there lie acronyms in this field. So I'll try my best not to use too many. But you know, there's, you know, others, you know, the child has a diagnosis of autism, again, just just, you know, in and of itself doesn't mean that they're eligible for an IEP, maybe that autism diagnosis is relatively, is not very impactful in the sense that they, you know, it doesn't necessarily prevent them from accessing education or other services at school. And maybe it doesn't qualify for them, I'd say, in many cases, it does. But just because they have that diagnosis doesn't equal IEP eligibility. But there is a category under the law called Autism. So there are many students that do qualify. So those are just three of the many. But once you reach that eligibility, then the next step is to determine what the present levels of performance and functioning are. So we can develop goals. And those goals would be put into place in the areas of need that we've identified. So all we're going to list all the areas in need, and then we're going to develop goals. And then those goals are going to drive where that student is ultimately placed what school environment looking at the least restrictive environment as the option so we're looking at the neighborhood school with typically developing peers in a regular classroom with with some supports, maybe some accommodations, maybe he sits in the front of the class, so he can maybe he has an FM system, the bass, treble, paying attention, things like that.

Tim Kowal  17:17 
No, I have a question of mine. I wonder if you're leading up to it is sure, what is the source of the disputes? By the time they get to you? Obviously, the parent has probably, you know, had the conversation about developing the IEP? And is the school telling them nuts to you, I'm not doing the IEP, or is it just you don't qualify? Or no, I'm gonna give you ABC but not XYZ. And that's where the dispute is, what why are they coming to you as a special education attorney,

Tim Adams  17:42 
all the above. So what you just mentioned all those reasons or reasons why parents may come to my office saying, I strongly believe that my child qualifies for an IEP, he's struggling, he's failing classes, but the district says he can do it. He's He's capable, he's choosing not to, therefore we're not going to qualify, and we're not going to provide the supports. There are circumstances where they're already eligible. And we have a dispute over the amount of service, the intensity, the methodology, all sorts of disputes. When we have a child with dyslexia, for example, where the district feels strongly that they have the appropriate structured and environment to provide support and ensure that child's success and the parents is no boss is too big. The rocks were used, they're using the wrong methodology. The teachers aren't appropriately trained, and therefore he continues to fall behind. He's you know, he's he's in fifth grade, but he's at a second grade level, I get those clients frequently. And then we're looking at private placements that specialized in providing instruction to students with dyslexia. So and we also have, you know, a number of other types of disputes. I have a number of students unfortunately, post COVID, that are, their mental health conditions have worsened pretty significantly. And so unfortunately, we're placing a record number of kids with through public school districts and negotiations with them in residential treatment facilities or therapeutic boarding schools, 24 hour care facilities,

Tim Kowal  19:04 
you say, a record number, what is the uptick look like in terms of percentage

Tim Adams  19:08
increase, I'd see a 30% at least increase in the number of students that that or at least that I'm serving, that are being placed. And these are new clients and existing clients that are being supported, you know, in a day program in their neighborhood school, and they're even in their specialized private school. And as a result of that, we're, you know, we're having to look at alternative options that are there more intense therapeutically, and often out of state programs.

Tim Kowal  19:36 
So this uptick that you mentioned some 30%, since since before the pandemic started, these are going to you said residential treatment, but what is the nature of the of the treatment that they require?

Tim Adams  19:47 
So it's really they're receiving their education, typically in a normal school day, but they're there it's it's essentially a boarding school and they're also receiving a lot of therapy throughout the day through them. We're professionals. In some cases, medication management is also on site. Depending on the severity of the disability and the need, you may have less restrictive therapeutic boarding schools and we're restricted therapeutic boarding schools in California has rules are a bit different than some out of state programs. But California school districts contract with dozens of out of state residential facilities to care for students with mental health challenges of various sorts. So I'd say the vast majority of my clients that receive residential care, you know, on an IEP are out of state, meaning they're receiving services out of state, but they're residents in California.

Jeff Lewis  20:37 
Interesting. Hey, on the subject of an IEP, let's say the parents agree on the goals and agree on the services and everybody is in agreement, but the school is just not meeting those goals, those services not following the IEP. What remedies does a parent have to enforce an IEP short of litigation? Is there anything a parent can do to force a school to follow the IEP?

Tim Adams  20:58 
Yeah, absolutely. That's actually a pretty fairly streamlined approach. And I had a client, email me about that just this morning, if you believe that the school district is not in compliance with the IEP, and it's very clear that the IEP requires certain items implementing a service or a goal or an accommodation, it's not being done, you have the option to not litigate, but file a compliance complaint with the California Department of Education, there's a very, very easy form to fill out on the California Department of Education website and their special education division. And there's a 60 day timeline once you complete that form, and submit it usually with some exhibits and evidence of what's supposed to be happening, and it's not, and they will complete their litigate their investigation within 60 days and make a decision as to whether the district is in or not in compliance.

Jeff Lewis  21:47 

Does a parent need a lawyer to to initiate that kind of process?

Tim Adams  21:51 
They do not. They do not need a lawyer. In fact, even though lawyers can initiate the process for them, and there's the availability of attorneys fees, if you are the prevailing party, if the lawyer does it, the parent, and that's what's helpful for this, in general, if you litigator you file a compliance complaint, if you're the prevailing party, you can pursue collection of attorneys fees, the parent doesn't have to use a lawyer, they can fill out that form themselves, they can mail it off, fax it or email it off, and the investigation will be completed. And and decision rendered within that 60 day timeframe.

Jeff Lewis  22:22 

And in your experience as a state rubber stamp what districts are doing or does this result in actual enforcement, but IEPs?

Tim Adams  22:28 
It actually does, actually. So what's interesting is the administrative court and we haven't gotten to that Jeff and Tim, but you know, if you don't, if you have a dispute, you're you have to exhaust administrative remedies by filing a special education due process complaint. And in California, the agency with the current contract is called the office of administrative hearings, their special education division is handles those complaints, you've got to go through that process first. So with respect to that, you know, the parent would initially if it wasn't a very clear cut compliance issue, they would usually have to go through that litigation process. And then you know, they if they'd have to go through an administrative trial or due process hearing, get a decision back, but with the compliance complaint to submit it, and wait for a decision. And I would say, in our experience, most of the time, you know, if it's clear cut, meaning the district was supposed to provide five hours a week of speech therapy, and they provided three and the district can't prove they provided five, then the parent wins. It's really not if it's a little murky, or there's any subjectivity to it, it probably shouldn't be filed as part of a compliance complaint, it needs to be really clear cut. And so an answer your question, the short answer is they do a pretty good job if it's a really clear cut issue.

Tim Kowal  23:42 
Interesting. All right. Well, Tim, you said that in advocating for IEPs, you've had to file a lot of due process complaints. And that'll quite a bit of your work is litigation. Why is why does litigation become necessary in so many complaints? Isn't this supposed to be non adversarial? Aren't these families who are dealing with special education issues under enough strain as it is without having to go through litigation,

Tim Adams  24:03 

it is supposed to be but unfortunately, cost considerations are pretty significant for school districts parents are often having as a result of their child's needs to ask for more money than the district receives from the state and that the state receives from the federal government to fund special education programs. So you may have a district that receives you know, $15,000 to pay for all the services for you know, for a child, their program costs, you know, $100,000 So that's really the motivator for the litigation is they're trying to save cost and more in our experience. Now, the law doesn't really heavily consider that cost factor in decision making, so it can't come up, or it should really shouldn't come up in the IEP discussion. They can't say, oh, it's too expensive, therefore, we're not going to provide it but in reality, it's always a consideration. The district's weighing and how much is it going to cost to pay for this program versus litigate? You know, can we win, you know, they're looking at their exposure and trying to make some decisions. And, you know, unfortunately, you know, for parents, it can be a lengthy and time consuming and sometimes expensive process that they have to litigate, but it's necessary if they really want to get that program that's appropriate for their child and place.

Tim Kowal  25:13 
That's interesting. You mentioned that cost is what not a legal consideration. It's not recognized as one of the considerations even though it's the elephant in the room that no one can talk about it under a case

Tim Adams  25:22
called Rachael Hall, and it's very low on the totem pole. But it's it can't really it doesn't really come up and it shouldn't come up in an IEP discussion if it's what the child needs to get an appropriate education.

Tim Kowal  25:33 
Yeah, yeah. So it's not the school's ultimate responsibility. And in the eyes of the law to make the numbers foot they just, they have to be so deserving of the of the program, they're the school is obligated to give it to him.

Tim Adams  25:45 

So the why, you know, and I'll paraphrase requires a program that's reasonably calculated to confer an educational benefit to students based on that student's unique circumstances. And that program has to be appropriately ambitious. Okay, so these are the that's how we interpret what the law the Individuals with Disabilities Education Act calls a free appropriate public education or fate. So that's how we define it. But as you can, as I'm sure you've heard from that description, that's kind of subjective, like how do we, you know, what does that mean? So what we have to do Jeff and Tim and his processes, we have to get independent evaluators, experts to help us define and design the program for the students. So we typically will have the district start with their assessment. And if we don't agree with the outcome that will ask for an independent evaluation of public expense and independent educational evaluation I II, for sure. And the district can, you know, we ask the district to pay for it, they have two options, they can either fund the assessment by the qualified person that my clients would choose, the parent chooses, or they can file a due process complaint to defend their testing, but that independent evaluation is really going to drive what happens next, that expert is going to tell us what's wrong with the district's program? Can it be fixed? And if it can't be fixed? What should the student receive in terms of an appropriate program? Is it a smaller class size? Is it a different methodology? Is it a new accommodation? Or is it a completely different school, you know, it could be a completely different school, and usually that school is not going to be in the district is going to be it's going to be a private what's called a non public school. In some cases. In other cases, it may be private, non certified school in California, we have this unique requirement that schools that contract with school districts for special education have to be certified as an NPS or an NPA, non public school or non public agency

Tim Kowal  27:33 
about how many of these lawsuits do the parents win? And how many do the the schools successfully defend?

Tim Adams  27:39
Unfortunately, parents don't get a lot. And the parents are not often represented by counsel, they're representing themselves. Sometimes they don't, you know, parents are, you know, scared to show up to the hearing. They may not show up. And so parents when fewer cases, especially the ones that are unrepresented? I don't have the exact statistic as of right this second, but it's less than 50%, for sure.

Tim Kowal  28:00 

But you did mention that prevailing plaintiffs in these cases may be entitled to attorneys fees if they win, that is

Tim Adams  28:06 

correct. So we call them petitioners, at least at the administrative level. So you have to start with the due process complaint filed with the California office administrative hearings, that's the current agency that is under contract to hear these decides claims. And then you know, once you get a decision in favor, if you're the prevailing party on an issue of significance, that materially changes the position of the district as to the parent, then you're the theme that prevailing party under the law, and you can ask for reasonable attorneys fees now, well, we consider reasonable what the school district considers reasonable, that's, there's a completely different opinion every time so we may send a bill and they go out, we only want to pay a third of that, you know, and you know, because you want one out of three issues, but a lot isn't really proportional lies it it doesn't say you've got to win, you know, assign a percentage based on the number of issues you win, it's just an issue of significance. So you could win one out of 10. And that one issue could be worth a huge amount of money to or a great program to the family. And that could be an issue a significant enough in order to collect attorneys fees, but that does drive the parents ability to obtain competent counsel to represent them through the process, because attorneys they either can represent on a fee deferred basis, or they can significantly discount their fees in order to take cases to hearing. And how

Tim Kowal  29:23 
far up do these cases wind up getting appealed often do they get appealed to the district court or then to the Court of Appeals? Are they are they would typically be the state court? I assume?

Tim Adams  29:32 
No, actually we spend most of our time in federal courts. I'm rarely in state courts. I think that you know, it's a federal law. And and it's very clear that they have jurisdiction to hear these claims. And so we typically would file an action or the other side the district would file an action for appeal in a in a federal court if we what's interesting about the attorneys fees provision, so Administrative Law Judge really doesn't have jurisdiction to make attorneys fees, decisions. There are some you know, I've heard colleagues discuss you know, if they're was a stipulation, maybe the judge would make the decision on fees. But I wouldn't necessarily be comfortable with allowing the administrative lodges to do that. So I typically get a decision. And if it's in our favor, and we're the prevailing party, I'll send in demand for fees and give the district a period of time to respond. If they don't respond, then I'll file a separate action in federal court to collect fees. Now on the appeal side, again, most of them, almost all of them in our office are going to the US district courts, whether depending on where we started the case, either a southern central, eastern, or Northern vast majority of our cases are going to be in central and then a couple in southern we've had a couple of Eastern in the past as well, but and then beyond that are up to the Ninth Circuit Court of Appeals. And I've had several of those over the years. And then a couple that we petitioned for cert to the US Supreme Court, so they go all the way on.

Tim Kowal  30:47 
Yeah, yeah. back up a moment to to the process for how the administration of services works. One of the reports that I've been hearing a lot over the last couple of years, a lot of kids a lot of families pulling out of their of their local neighborhood public schools and enrolling in either homeschooling or putting in private schools, and they might be outside of a charter. For families who do that who are not either under a public school or under a public charter, do they disqualify themselves for for IEPs, and provisions of public funds for their support? Or do they still qualify,

Tim Adams  31:17 
so they still qualify for support, but it's the family does have to reach out to the public charter school or the school district that they're enrolled in. Typically, it's a school district, if you are attending a private school, and you feel like your child may be eligible for special education or needs services. And the first thing you do is to send a letter to the district or your neighborhood school saying my child, I'd like my child to be assessed special education assessment, you know, to determine if they need an IEP, the district would then have an obligation to come to provide an assessment plan or a consent form within 15 days, the parent signs that returns that the district that has 60 days to complete the assessment process and hold an IEP. So if your question is, you know, if they've already got that, and they leave, you know, are they entitled to services they are and our our position is that they are as long as they maintain active contact with the school district and make it clear that they have a dispute over the IEP. They follow a due process complaint to adjudicate that and that they continue to hold IEP meetings based on a recent Ninth Circuit decision called SW BW or Capistrano vs. SW BW, they have to put into that panel. And I don't necessarily agree, but the parent has to continue to ask the school district for IEPs. And normally speaking, if the parent resides in the district, that school districts has an obligation to continue to hold IEPs. And I think it's clear based on that panel's decision that that family in particular, and I know that case pretty well was my case, unfortunately, the panel saw that they had sent an email at one point saying they were going to go private for two years. And that panel thought that that was noticed enough that they were off the grid, so to speak for two years. So I Our position is that if as long as you tell the district that you're interested in having IEPs, I have an ongoing obligation to continue to hold those IPs.

Tim Kowal  33:03 
Okay. So that's an important decision to be aware of, we should cite that in the show notes, we'll get that citation from well, let's, let's talk a little bit bigger picture about the problem generally, and maybe how the legal system and lawyers can come to the rescue. Are there is there something more that attorneys should know about the process so that they can help? You know, they're probably a resource to their, you know, to their loved ones, people in their family probably going to say, you know, I'm going to talk to my attorney in my family about what we should do about about getting little Johnny the services he needs. What does that what does the the family attorney need to know to to steer their loved ones in the right direction.

Tim Adams  33:34 
So they would certainly they certainly wanted to start by reaching out to their public school district and asking for the public school district to complete an assessment. If there's any suspicion whatsoever that there's a special education need, whether it's a diagnosis or not, if we suspect that a student is has a delay with speech, or you know, is having some struggles in school or school age, if they're not school age, you would reach out to the regional center. But you know, the best first step is to contact your neighborhood public school and say, I've got a child who's struggling in this area, how can you help and they have an obligation to provide you with a list of supports and services, what's called, you know, procedural safeguards, certainly a parent can get on Google and do Google search for special education attorneys. We consult with lots and lots of families who don't come our clients and give them direction depending on their circumstance. But I would say start with, you know, the internet's a really good resource in and going through the California Department of Education going through the county department of education and looking for special education resources. But if there's again, if there's any suspicion that a child is struggling, start with that assessment.

Tim Kowal  34:42 
Yeah. But when you mentioned a lot of a lot of these civil rights lawsuits are improper. A lot of the families do not get legal counsel, is that a mistake? Should they be contacting you or another special education attorney? Well,

Tim Adams  34:52 
when I when I say prepare, it's at the administrative level that typically a parent cannot represent their child in a court says them right at the US District Court of Appeals Court, they would be required by the court to retain counsel. If they're representing themselves. That's okay. But they're representing the child's interests, they would have to have counsel. But yeah, with the office administrative hearings, the administrative level, they don't often have counsel. And so even if they didn't have an attorney, I would strongly recommend parents, that parents, you know, talk to an attorney about the process and see if there's a way to come to find, you know, to find some resources, there are some resources available, sometimes through the regional center system through some nonprofits. Unfortunately, there's not a lot of them, but they are available. In fact, the office of administrative hearings, the agency that hears these claims maintains a list of free and reduced priced attorneys. And we do take a fair number of cases that are fee deferred and discounted, you know, all our cases are discounted, but fee to for depending on, you know, the number of cases we're handling at the time.

Jeff Lewis  35:52 
Yeah, that's the hearing officer who hears these cases, set hearing officer only hear these types of cases, are they hearing all sorts of different administrative law issues.

Tim Adams  36:03 
And typically, if they're full time employed by the special education division of the office administrative hearings, they will only hear Special Education cases, there are times where they'll pull somebody from their general jurisdiction, who is hearing, you know, last week heard a licensing case, and this week is going to do special ed, if they're short staffed. But in my experience, it's usually just full timers that do that. Here's Special Ed claims all the time.

Tim Kowal  36:26
We don't tell our audience a little bit about the Lanterman Act. I understand that's the law that requires I think it's the regional centers, maybe it's the regional centers that we talked about for disabilities and advocacy for people with disabilities, does that Lanham Act to help has to do enough, right. So what are the gaps that need to be filled? And what's interesting

Tim Adams  36:42 
is Lanterman Act in California, the regional center system wears two hats. Okay, so they mentioned that part C of the IDA is the early intervention program component. So students that are kids that are zero to three, so Birth to Three, they still may have needs that the school district isn't responsible to address. So in California, we've assigned the responsibility to be the educator to the regional center system. And then and so the regional center system also has a responsibility to take care of people that have qualifying disabilities under the Lanterman Act. So they went to half that got the Early Intervention unit that is the educational provider, that's the regional center under the land. And then the you've got the Regional Center, also carrying the responsibility of addressing the needs of people with developmental disabilities that once you become eligible for the regional center as a person with a developmental disability, then you receive certain benefits and services for life. Now, the Lanterman Act is unfortunately, you know, the requirements that the regional centers are supposed to to have as watered down over the years since I first got into this practice in the early 2000s. Lanterman Act used to require quite a bit more from the regional center system, they are the payer of last resort, in most cases in almost every case. And so if the school district or another state agency does not have to provide a service or a program, the Lanterman Act says the regional center has to pick up the tab if it's necessary for their consumer. Now, it's all that's only people that are still eligible once they've turned three, because remember, you've got this group of zero to three, some of those people may not be eligible once they reach school age under Lanterman Act conditions, but the regional center is still responsible under Part C of the IDA. So you have the shift, where some people will remain eligible and receive school age services as a consumer for life and other folks will transition to the school district and the school district is then responsible, but they are no they're no longer receiving services from the regional center because they do not qualify under the Lanham Act. So depending on the severity of their developmental disability and the permanency of that developmental disability, the Lammert Lanterman Act would require that the regional center continue to maintain programming services, but only as the payer of last resort after age three. I hope that wasn't too confusing. There's a lot of moving parts there.

Tim Kowal  38:57 
Well, yeah, there's a lot of moving parts in this whole space. Yeah. So let me ask you, this is one of my last questions about as a special education attorney, what spaces are you watching in the judiciary, when cases come up on on these issues? What questions are left unanswered? What spaces are you watching in the area of special ed, special education law? Well, I'm

Tim Adams  39:14 
curious to know, on the funding issue, and this is one that's going to come up and, you know, when Congress gets around to reauthorizing the IDA, can I start with that, I like to know if at some point parents are gonna get we're gonna write into the idea that expert witness fees are also recoverable, because that's the app becomes a significant expense. And so

Tim Kowal  39:34 
it's often used in these administrative hearings. Absolutely.

Tim Adams  39:37 
An expert fees can be very expensive. So even though attorneys fees are recoverable, expert witness fees are not recoverable. It's not clear and courts will not allow that, you know, the idea isn't specifically stated recoverable. So ultimately,

Tim Kowal  39:50 
so it's not it's not known to some court award those expert costs and they're not clearly not

Tim Adams  39:55 
recoverable. So not recovered. So they're not recoverable. Yes. So that Because of that, we'd love to see a shift in terms of, you know, I would love to see some of the other circuits, you know, decide make some clear decisions on parent districts ongoing obligations on students that are privately placed, and parents rights when those students are privately placed, as the student and the parent have an have an affirmative obligation to reach out to the school district and start that process and continue that process and continue to engage the school district in discussion, or is it the, you know, the school district, the government agency, that obviously has more resources and more knowledge that should continue to be responsible to help and guide that the parent through that process? Because the concern I have, and I'll go back to the Capistrano versus SW BW decision is that, you know, puts a lot of burden on parents to continue to have to even know that they would continue to have to reach out to the school district and ask for help. Little do they know if they don't according to that panel, they may be, you know, losing all sorts of potential reimbursement, and the district may not have ongoing responsibilities unless they continue to engage. So I'd love to see more circuits make some query decisions, and I'd like to see a case of, you know, fortunately our case on s on the SWD Debbie case, the petition for cert was denied. So I'd love to see the Supreme Court take that type of case and make it really clear that it's always the school district's obligation to affirmatively reach out to parents and continue to hold IEPs every year unless the parent clearly waives their right to have that IEP.

Tim Kowal  41:32 

Yeah, I wonder if do you advise clients to send out Capistrano notices, you know, every semester to the district? Well, I'll put it this places.

Tim Adams  41:39 
Yeah, exactly. I put it this way until parents that talk to me. In fact, most of our letters will always say parents continue to have an ongoing desire to work with the district to hold IEPs we make it very clear in almost every piece of correspondence that we're not waiving our right to request an IEP, yes, we may be actively disputing an IEP, we may be privately placed, but we're not waiving our right and we continue to request that IEP meeting. Again, that panel, I think, got it wrong. And um, you know, Supreme Court didn't want to hear at this time, but maybe at some point in the future, we can convince them to hear it on a different case.

Tim Kowal  42:12 
Yeah. Well, and you mentioned the expert witness fees really need to be compensable. To the to the prevailing,

Tim Adams  42:17 
that's a congressional thing. We got it. That's the Congress is going to have to fix that. But Congress seems to be too busy to worry about special ed. Unfortunately, it's important issue, and they haven't gotten around to it since since 2004. That was the last time the IDEA was reauthorized and went into effect in June 2005.

Jeff Lewis  42:33 
Interesting, hey, in terms of the future, and clients that are coming in to see you, have you encountered parents that are seeking accommodations or IEPs, for their children who are suffering from long COVID? Or do you expect that to be a part of your practice going forward?

Tim Adams  42:48 

I have it, but at least it's not clear, I do have some unique medical conditions that that I've seen recently, but that as far as we know, they're not they're not COVID related. Most of my clients, you know, children, we've seen, I think, in general have been pretty resilient to COVID. But I think it's the adults that have had more trouble, right. So they are the ones with pre cut pre existing conditions, especially in the older adults. So I really haven't, the part about COVID, that was really unfortunately, very negatively impactful for my clients was the way that California, you know, treated really, you know, that dealt with the circumstance of closing schools for such a lengthy period of time and, and leaving it up to the school districts to decide in some cases, when to reopen, we, we had situations where school districts didn't reopen for over a year. So they closed effective, say the first, you know, mid part of March, and they didn't reopen in some cases until April or May of the following year. And that's too long for kids to be out of school. So if you're talking about the COVID impact, it's not that it's not the illness itself, that it was the reaction to the illness that really caused the most significant harm to students, in my opinion. And as a result of that lengthy school closure, we've got kids that were already really far behind that are much much further behind. You know, most parents didn't realize, but school was optional. In the spring of 2020. Through the end of the school year, parents didn't have to send their kids to school kids didn't have to go and teachers didn't have to show up to work.

Jeff Lewis  44:19
Hey, does that mean that districts were off the hook in terms of their IEP obligations to families during that same time period?

Tim Adams  44:26 

And that's that's a great question. The answer is no. And Congress actually asked the US Department of Education Secretary Betsy DeVos to weigh in on that when they passed the Cures Act and gave the US Department of Education a about a month to respond and Secretary very clearly stated that the obligations continued there was no and there should be no waiver. At least that was her advice to Congress. Congress didn't take any action to change anything. So but yes, districts were lobbying they shouldn't have to continue to implement IEPs during the COVID closures and the Secretary said Nope, you need to continue to implement these IEPs the timelines remain in effect. In fact, if anything, the kids that were intervention that were this, you know that before the school age zero to three kids should probably get some more funding because they missed out. Unfortunately, they didn't get that transition from from the early intervention program to the school district. So if they got caught, if they turned three in March, or April 2020, there was no school to pick up, you know, the program for them. And they could have really been struggling. So you've got a lot of really young kids that were kind of left out in the cold and school districts throwing up their hands going, well, we're closed, and we're not going to take any action until we get back to school in person. But that's where a lot of our cases are stemming from, you know, and now we'll continue to see litigation and more litigation through the appeals process probably for the next decade as a result of COVID closures. Interesting.

Tim Kowal  45:54 
All right. Well, as we wrap up here, Tim Adams, what are your predictions and prescriptions for the future in this space, you see things continuing to get worse, and we're gonna see more problems. You mentioned that 30% uptick in kids needing these residential services, additional services, are we going to see funding? And we're gonna see new programs for these things? Are we just in for a lot of unknowns? Yeah, I

Tim Adams  46:13 
don't know, it depends on who the next administration is. And with respect to funding funding has been an ongoing discussion, again, the federal government has never fully funded the IDA. So states are often left to decide how to close, you know, to bridge the gap between what they want to get and what they need in order to pay for students education. In terms of the results of going back to my you know, what we saw as a result of the COVID closure, I mean, my prediction is that we'll continue to see a lot of significant struggles, it's going to take us several more years to recover from those closures. And as a result of that, we're gonna see a lot more kids on IEP s, we're gonna have a significant increase in kids with mental health conditions that need that require treatment, a lot more anxiety related issues that we're going to see that I haven't seen in my career, I've never seen so many anxious that you know, kids with that are needed of counseling, support therapy, medication and placement and mental health treatment facilities. So my prediction is that, you know, we'll just see an increase in the number of IPs that are needed to address mental health concerns. Yeah.

Tim Kowal  47:15 
All right. Tim Adams, we want to thank you again, for coming on the podcast and keeping our audience abreast of these issues. It's a very important area that affects a lot of people and a growing number of people. Please keep us updated on on more cases and developments that come up in this space and look forward to having you on to keep us updated in the future.

Tim Adams  47:30 
Excellent, Tim and Jeff, and I appreciate you having me on. But it's a pleasure to speak with you both today.

Tim Kowal  47:34 
Thank you. All right. Well, that wraps up this episode. Again, we want to thank casetext once more for sponsoring the podcast each week, when we include links to the cases we discuss, we use casetext for the case database and listeners of the podcast can find a 25% discount available to them if they sign up that casetext.com/calp. That's casetext.com/calp.

Jeff Lewis  47:55 

And if you have suggestions for future episodes, or if you're a member of Congress that wants to weigh in on the recoverability of expert fees, and these types of special ed cases, please email us at info at Cal podcast.com. And in our upcoming episodes, look for tips on how to lay the groundwork for an appeal when preparing for trial.

Tim Kowal  48:09 
All right, thanks. See you next time.

Announcer  48:11 
You have just listened to the California appellate podcast, a discussion of timely trial tips and the latest cases the news coming from the California Court of Appeal and the California Supreme Court. For more information about the cases discussed in today's episode, our hosts and other episodes, visit the California appellate law podcast website at Cao podcast.com. That's c a l podcast.com. Thanks to Jonathan Cara for our intro music. Thank you for listening and please join us again

Tim Kowal  is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

After reviewing the science-based trial tips in John P. Blumberg’s Persuasion Science for Trial Lawyers, who would appellate specialist Stefan Love prefer as a trial consultant: a social scientist? Or a TV writer?

A social scientist can tell you, with citations to studies, why this or that strategy is likely to work. But gifted storytellers have captured imaginations, even if they can’t say quite how or why their stories work.

Watch the clip here.

This is a clip from episode 43 of the California Appellate Law Podcast. Listen to the full episode here.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Sometimes, lawsuits involve allegations of embarrassing or even illegal conduct. And a prelitigation letter that references that conduct might be considered extortion. The trial court thought an attorney letter was extortion in *********************Flickinger v. Finwall (D2d8 Nov. 30, 2022) 85 Cal.App.5th 822. But the Court of Appeal disagreed, and published its opinion saying so.

The unsavory allegations were between a homeowner and his contractor. The owner, in a drunken conversation with the contractor, confessed he’d taken money illegally as kickbacks during his overseas trips for his employer, Apple. The contractor eventually quit his job, allegedly based on trepidation of taking ill-gotten money.

When the homeowner demanded payment, the contractor’s attorney responded with a matter-of-fact statement that litigation “[could] result in Apple opening an investigation into [plaintiff's] relationships with vendors.”

The owner sued for extortion, and the contractor’s attorney filed an anti-SLAPP motion, arguing his letter was protected conduct. But the trial court held that the letter was extortion.

The Court of Appeal disagreed. The circumstances here did not fit into the egregious facts of Flatley v. Mauro (2006) 39 Cal.4th 299. Instead, the statement was a permissible threat under Malin v. Singer (2013) 217 Cal.App.4th 1283, which recognized that certain threats to disclose information in litigation do not amount to extortion as a matter of law. (Id. at pp. 1298–1299.)

Of significance, the letter was sent to the owner’s attorney—not to the attorney directly. And the letter was responding to the owner’s demand letter—it was not a threat out of the blue. And the letter defended the contractor on the merits—rather than merely stand on the force of the threat. And the statement that litigation may bring the kickbacks issue to light was not a threat to report to prosecution, but merely a matter-of-fact observation.

The court went on to find that the plaintiff failed on the second prong of the anti-SLAPP analysis to show a likelihood of prevailing on the merits.

So the order denying the defendant’s anti-SLAPP motion was reversed with directions to grant the motion. And the defendant will recover his attorney fees for both his motion and the appeal.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

Question: What’s the difference between an arbitration ruling based on an interpretation of contract that is merely wrong, and one that is irrational?

The answer in Hayday Farms, Inc. v. FeedX Holdings, Inc., No. 21-55650 (9th Cir. Dec. 19, 2022), an appeal from an arbitration award, is about $7 million.

This is yet another cautionary tale that arbitration severely constrains the litigants’ appellate rights. The 9th Circuit panel agreed that the appellant’s interpretation of the contract was the right one, but that was not enough: the arbitration award was not “irrational” or “some form of vigilante justice,” so it stands.

The arbitration panel awarded the plaintiffs $21 million on the contract dispute, but when the plaintiffs moved the district court to confirm the award, the defendants argued that $21 million was excessive. The large award was more than the plaintiffs stood to receive had the contract been performed, and so under California Civil Code section 3358, the award was excessive.

The district court agreed the arbitration award was excessive, and reduced it by $7 million.

On appeal, the Ninth Circuit addressed a question of first impression in its own circuit: whether the standards for vacatur in the Federal Arbitration Act applied for awards governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, when the Convention did not specifically say so. Agreeing with other circuits, the Ninth Circuit held that the FAA standards did apply. And the standard, expressed in different ways, is exceedingly tough.

Here is how Marc Alexander, proprietor of the California Attorney Fee Blog and the California Mediation Blog, described the court’s analysis:

“A plausible interpretation of the contract cannot be overturned. An award that is manifestly irrational and completely disregards the law can be overturned under FAA standards. The "irrationality standard 'is extremely narrow and is satisfied only where the arbitration decision fails to draw its essence from the agreement.'" Does the decision fail to draw its essence from the agreement? Have we entered the realm of the metaphysical?”

The Ninth Circuit held that the original $21 million arbitral award was not irrational. And so it had to be affirmed. That meant that the district court’s order reducing the award by $7 million had to be reversed.

The importance here is that the 9th Circuit reversed the district court and reinstated the aribtral award, even though the panel agreed with the district court that the award was excessive. As Judge Milan wrote, the defendant "probably offers the best interpretation of the parties’ agreements,” and the panel expressed "concern about a seemingly unfair damages award that likely violates § 3358.”

But as long as the arbitral award "was not some form of vigilante justice,” it has to be affirmed.

Comment:

The “irrationality standard” strikes me as itself irrational. An interpretation is either right or wrong. There is almost always a “rational” way of arguing any position. The HayDay court’s standard for challenging an unlawful arbitration award is, in effect, “do not bother arguing any infirmity in the arbitrator’s decision, for the only ground for reversal is infirmity of the arbitrator’s mind.” The upshot of this standard is that only a vote of no-confidence in the arbitrator’s cognitive or ethical constitution can warrant a reversal.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.

Gearing up for trial with experts? You’re ready with your Sargon and Sanchez objections. But don’t forget Kelly: if the expert’s opinion is outside the consensus, that’s not a Sargon objection—you have to be ready with a People v. Kelly objection.

Filing an MSJ? If the court sets your hearing after your trial date, you’re entitled to get it advanced—or to have your trial continued. (Might be a backdoor strategy to continuing trial dates.)

And a trial court abused its discretion in hearing a SLAPP motion before a restraining-order motion. The SLAPP ruling meant the case was stayed and the restraining-order issue couldn’t be heard. That’s not right. Trial courts need to make sure those issues are heard with or before SLAPP motions.

Also:

Appellate Specialist Jeff Lewis' biographyLinkedIn profile, and Twitter feed.

Appellate Specialist Tim Kowal's biographyLinkedIn profileTwitter feed, and YouTube page.

Sign up for Not To Be Published, Tim Kowal’s weekly legal update, or view his blog of recent cases.

Use this link to get a 25% lifetime discount on Casetext.

Other items discussed in the episode:

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes summaries of cases and appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

Get “Not To Be Published,” a weekly digest of these articles, delivered to your inbox by subscribing here: https://tvalaw.com/california-appellate-newsletter.