Friday, January 29, 2010

People v. Lessie (Cal. Supreme Ct. - Jan. 28, 2010)

Imagine that the first sentence of a contemporary opinion by the California Supreme Court opinion begins with the sentence: "We granted review to decide whether to overrule a 1971 pro-Miranda decision of this Court." Which is essentially what the first sentence of this opinion says.

In light of that sentence, do you have any doubt whatsoever what the answer's going to be?

I thought not.

2010 ain't 1971. Particularly where Miranda's concerned.

Thursday, January 28, 2010

U.S. v. Treadwell (9th Cir. - Jan. 28, 2010)

It may well be that 2009 was the "Year of the Ponzi Scheme," and Judge Gould makes a reference to exactly that in the second footnote of his opinion. But if so, 2010 may well be the "Year of Huge Sentences." As, this morning, the Ninth Circuit affirms not only the convictions of Randall Treadway, Ricky Sluder and Larry Saturday for running a $40 million Ponzi scheme, but also Judge Whelan's 300-, 188-, and 63-month sentences (respectively) for the trio.

For us non-guidelines people, that's 25 years for Treadwell, 15+ for Sluder, an a cool 5 for Saturday.

Which reminds us that just as participating in a Ponzi scheme is all fun until it collapses, running one is similarly fun only until you get caught.

Robles v. Chalilpoyil (Cal. Ct. App. - Jan. 27, 2010)

It's a SLAPP appeal, and those are always slightly interesting. Especially when they involve California attorneys as defendants.

The appellant here is actually an expert witness who the plaintiff's lawyer allegedly had to boot off a case (and get a continuance of the trial date) because he had falsely testified at a deposition. Apellant wants the case dismissed on an anti-SLAPP motion, the trial court says no, and the Court of Appeal affirms.

But what was even more interesting to me than the underlying (alleged) false testimony was the allegation -- and, upon first glace, the claim seems plausible -- that the expert and the attorney tried to market a product to the defendants they were suing; a product that they came up with in the course of representing the client. The lawsuit was about a person -- John Robles -- who (allegedly) burned to death when his (presumably motorized) wheelchair ignited. So the family members then sued Golden State Medical Supply Co., Pride Mobility Products Corp., and others alleging a product defect. Plaintiffs hire Salinas attorney Thomas Wills to represent 'em, and the lawsuit progesses. My sense is that the theory of the underlying case is that the battery on the scooter/wheelchair must have ignited and killed Robles. In an ugly death.

So a regular old -- and pretty darn good -- lawsuit. Which only gets more interesting not only when Wills allegedly has to move to continue the trial because he just learned that his expert had falsely testified at his deposition, but also because Wills allegedly goes to his clients before trial and tells 'em that he and the expert want to market a product that they developed designed to avoid similar injuries in the future, and would they please sign a waiver of all rights to the thing. Shortly thereafter, the case (allegedly) settles for a million bucks, but plaintiffs don't want the settlement, Wills withdraws (and files a lien), defendants file (and win) a motion to enforce the settlement, and the lawsuit against Wills and the expert is thereafter filed.

My reaction to which included the thought: "Did Wills really ask the plaintiffs to waive any claims to a product he and the expert developed based on the litigation?" Because if he did, my initial reaction to such conduct would not be a positive. I admittedly don't know all the contours of intellectual property law in this regard. But an attorney who develops a product with an expert that both originates and derived from the underlying litigation seems like it might be partly the property of the client. And definitely creates a problemmatic conflict of interest, especially if the attorney might be (or might well want to) market the product to the exact same people -- the defendants -- with whom he's currently trying to negotiate a settlement.

Which in turn got me thinking: What kind of lawyer is this Thomas Wills guy?

So I looked it up. He's a California lawyer, with a J.D. from Monterey College of Law. But he's not just Thomas Wills anymore. He's Judge Wills. Appointed to the Superior Court 18 months ago.

Interesting stuff all around.

Wednesday, January 27, 2010

Save The Plastic Bag Coalition v. City of Manhattan Beach (Cal. Ct. App. - Jan. 27, 2010)

Sometimes your legal strategies can turn around and bite you in the arse.

For decades, environmental advocates have litigated for a strong and vigorous interpretation of statutes like the California Environmental Quality Act. Anti-environmental groups have decried the resulting doctrines, particularly the requirement that compels the creation of lengthy, time-consuming and often expensive environmental impact reports (EIRs) whenever a developer or municipality wants to do something that might arguably have an impact on the environment. But environmental groups have largely prevailed, at least here in California, and as a result, our EIR precedent is pretty darn strong.

But check out what happens here. The City of Manhattan Beach bans plastic bags at grocery stores and other retail establishments -- an unabashedly pro-environmental law designed to stop the proliferation of non-biodegradeable plastic bags in the ocean, on the roadside, and in the innards of various sea animals. But, not surprisingly, the plastic bag manufacturers ain't taking this lying down. They create an "unincorporated assocation" and call it the "Save the Plastic Bag Coalition" -- a much better name than "Self-Interested Plastic Mag Manufacturers" -- that then sues the City of Manhattan Beach.

Their claim? That the City didn't prepare a proper EIR. Since banning plastic bags, or making them more expensive, will likely increase the use of paper bags, thereby resulting in an increase in deforestation, paper mills, water pollution, etc.

And they win.

Justice Mosk, not surprisingly, dissents. With the following opening line: "Requiring the small city of Manhattan Beach (City), containing a little over 33,000 people, to expend public resources to prepare an environmental impact report (EIR) for enacting what the City believes is an environmentally friendly ordinance phasing out the retail distribution (not use) of plastic carryout bags within the City and promoting the use of reusable bags (not paper bags)stretches the California Environmental Quality Act (Pub. Resources Code, § 21000, et seq.) (CEQA) and the requirements for an EIR to an absurdity."

But he loses. In large part precisely because of the expansive interpretations of CEQA that have been established by precedent in cases the majority of which Justice Mosk would agree with.

I have no doubt that anti-environmentalists, including but not limited to developers frustrated with past environmental litigation, are laughing heartily at this afternoon's decision.

This is perhaps the legal doctrinal equivalent to the non-legal line: "Karma's a bi[a]tch."

Kawashima v. Holder (9th Cir. - Jan. 27, 2010)

Judge O'Scannlain writes this morning:

"We are called upon to decide whether petitioners’ convictions for subscribing to a false statement on a tax return and for aiding and assisting in the preparation of a false tax return qualify as 'aggravated felonies' that subject them to removal under the relevant immigration laws.

This is our third published opinion in this case. In our first opinion [2007 cite] we conducted a limited examination of the record of petitioners’ convictions to answer such question. One day after our panel opinion was filed, our en banc court decided Navarro-Lopez v. Gonzales [cite], which caused us to reconsider. We published a second opinion [2008 cite] in which we answered the question by applying Navarro-Lopez to Kawashima’s conviction in light of our circuit’s existing caselaw construing the statute defining 'aggravated felony.'

After we published our second opinion, the government filed a petition for rehearing en banc. While the government’s petition was pending before us, the Supreme Court granted certiorari in Nijhawan v. Attorney General [2008 cite]. Like the case before us, Nijhawan concerned whether a particular conviction for a financial offense constitutes an 'aggravated felony' under relevant immigration laws. After the Court issued its opinion, [2009 cite], we ordered the parties to file supplemental briefs on Nijhawan’s impact on the case before us. In light of this recent guidance
from the Court, we issue this hopefully final opinion in this litigation."

In short: "Third time's a charm?"

Tuesday, January 26, 2010

McDermott v. Ampersand Publishing (9th Cir. - Jan. 26, 2010)

I'll have more of substance to say about this case shortly. Which involves a facially narrow labor law issue but which nonetheless is a fairly interesting one (and one which I think will get some play).

But let me ignore the doctrine for a second and simiply give you the pracical bottom line for now:

Don't worry about reading this opinion, which came out this morning. Because it's going to get taken en banc. And reversed.

That's my prediction. If you'd like, read it and see if you agree.

Manuel C. v. Superior Court (Cal. Ct. App. - Jan. 26, 2010)

Justice Epstein seems right that in dependency proceedings, once a case involving one child is over, a party gets a new peremptory challenge to the judge when another case is brought shortly thereafter involving a different child (albeit in the same family). It's a different case, so a new challenge. So I have no problem with the holding here as a doctrinal matter.

But, were it me, I might have added a little note to the Legislature suggesting that they take a look at this. Especially since the way we allow parties to paper judges here in California is a bit troubling in any case, but particularly so when -- as here -- there are definite efficiency (as well as potential equity and uniformity) concerns.

When the trial court here denied the peremptory, it said: "It is the practice of the Los Angeles County to file petitions on any subsequent child born to the mother and/or the same parties that are involved in the case virtually at the same time. When the cases have been terminated and a new petition is filed on the same children, as it is in this case, it is assigned to the same judge as previously assigned. The purpose of this is to allow the children and the families to have stability. It is to allow one judge to become so familiar with the family as to be able to oversee the special needs of the children and to follow the progress of the family. It allows the court to hold parents accountable for their actions. It is in the best interest of these already abused and neglected children."

To me, there's some value in that statement. And at least something worth considering. So I'd have expressly suggested as such to anyone who might be willing to listen and potentially amend the rule to provide for special procedures in multiple-child family law cases.

Ho v. Hsieh (Cal. Ct. App. - Jan. 26, 2010)

It's a short little opinion from this morning. At least as Court of Appeal decisions go. Twelve double-spaced pages.

But it could have been even shorter. The actual analysis only takes up three and a half.

Plus, I can summarize it in a single sentence. Something that's not nearly possible with most cases. A sentence that's also largely self-evident. Which is this:

A court can't order stock shares transferred to a judgment creditor without any offset in the judgment.

For good reason. If the shares have absolutely no value, you can't transfer 'em to satisfy a judgment. If they have value, you've got to have an offset. It's got to be one or the other.

Call it $10,000. Call it $1. But you can't call it $0.

Monday, January 25, 2010

Lexin v. Superior Court (Cal. Supreme Ct. - Jan. 25, 2010)

For most people, Mondays aren't typically cause for massive celebration. But today's an exception for the former members of San Diego's Pension Board who were charged with a criminal conflict of interest as a result of their votes in favor of creating what turned out to be San Diego's monster pension crisis. This morning, Justice Werdegar writes a unanimous opinion that reverses the Court of Appeal and orders the charges against them dismissed.

But, as with many exceptions, there's an exception to the exception. Five of the six defendants get off. But a sixth -- Ronald Saathoff -- doesn't. The San Diego District Attorney's Office convinces the California Supreme Court that there's a unique set of facts that applies to him, so he's still up on criminal charges.

So the day could have definitely been better for Saathoff (and his attorney, Jerry Coughlan). But short of having charges against you dismissed, which was assuredly Saathoff's hope, it's still not a bad day to wake up to a pro-defendant interpretation of the criminal statute you're charged with violating and to see the charges against all of your high-profile co-defendants dismissed. It's now a much less high-profile case. Plus the prosecution has a bitter taste in its mouth from the loss in the California Surpemes. Which makes for a greater chance of a deal and/or dismissal.

This is not the end of the litigation -- civil or criminal -- regarding the San Diego penion mess. By any means. But it is a part of it that's winding down.

P.S. - Full Disclosure: Jerry Coughlan is the father of a current student of mine. Though such (minimal) links to the case extend in other directions too; one of the trial judges, for example, is the father of a former student. Not to mention other tangential links to some of the attorneys on the case. San Diego, while the ninth largest city in the nation, is not an especially large town when it comes to high-profile legal work.

Friday, January 22, 2010

U.S. v. Green (9th Cir. - Jan. 22, 2010)

I think that Judge Tashima's introductory paragraph in this one is pretty darn apt:

"Depending on whose version of this case you hear, defendant Judy Green is either a dedicated public schoolteacher who spent the years before her conviction working to help impoverished schools across the country, or the mastermind of a massive fraudulent scheme that bilked the federal government out of almost $60 million. The government takes the latter view, and charged Green with defrauding E-Rate, a Federal Communications Commission (“FCC”) program that funds technology projects at schools and libraries. Green insists the former is true, maintaining that she is guilty of nothing more than helping schools maximize their federal funding by exploiting loopholes in the E-Rate rules and regulations."

The jury thought she was a fraudster. The Ninth Circuit affirmed. And that seems right to me too.

It's actually a pretty good scam. The Feds reimburse schools up to 90% for various computer stuff, so Green would pitch low-income school districts and essentially make the following offer: "You buy equipment, the U.S. will pay 90%, and I'll get bids from contractors who (A) won't make you pay the remaining 10%, and (B) will throw in for free lots of extra 'goodies' that aren't eligible for reimbursement under the program." To which lots of the school districts said, not surprisingly, "Sure."

Of course, all this has a price. The contractors are willing to do this only if they inflate the bids. Which they do, charging up to three or four times what they normally charge. But the districts choose those bids since the Feds are paying, not them, and the districts get the goodies and don't have to pay a dime. Only the U.S. takes the hit.

So, again, a nice little trick. Green calls it "exploiting a loophole". But the jury saw it (as I do) as fraud. Getting bids that you know have got to be inflated, and then covering the thing up in the various ways Green did, is a pretty good sign that it's not merely a "loophole".

That said, if anyone else reading this has come up with a way to score $60 million with a system that's similarly arguably legal, please let me know. Maybe it's worth rolling the dice.

(To be clear: I'm kidding. But lots of other people wouldn't be.)

Thursday, January 21, 2010

Truong v. Glasser (Cal. Ct. App. - Jan. 21, 2010)

Let's hear it for statutes of limitations running fairly quickly against lawyers.

San Diego attorney Bruce Glasser enjoys the fruits of this holding. And, given its publication today, so do we all.

People v. Kelly (Cal. Supreme Ct. - Jan. 21, 2010)

I'm somewhat of two minds about this morning's decision from the California Supreme Court. Notwithstanding the fact that it's utterly uncontroversial.

On the one hand, I'm glad that Chief Justice George's opinion helps make clear the somewhat messy interplay between the Compassionate Use Act ("CUA") -- the initiative that legalized medical marijuana -- and the Medical Marijuana Program ("MMP"), which was added by the Legislature and was an attempt to establish some practical guidelines in applying the CUA.

Particularly helpful for me was the Court's straightforward discussion of the fact that the CUA provides a defense to prosecution but not arrest, while the identification card provisions might well affect the latter. I've always understood this to be the case, but it's helpful to make this clear. You can still be arrested if you carry weed, since we need not simply trust you that your possession qualifies under the CUA. But we won't arrest you if you have a valid identification card and you're carrying under the numerical limits established by the MMP; namely, eight ounces of pot and/or six mature (or twelve immature) plants. It's helpful to spell that out, in addition to being an entirely correct interpretation of the interplay. So I like that part.

On the other hand, however -- and I recognize that this is perhaps me being overly grumpy -- given that both the Attorney General and the defendant essentially agreed to everything at issue in this appeal, was it really necessary for the Chief to write a 54 page opinion, an opinion that discusses at length the broad history of California's initiative process, the different and varying provisions of other states, blah blah blah? Yeah, at some level, that's interesting, to some people at least. But hardly necessary (or even close to necessary) to the result, a result that even the competing parties have already agreed upon.

Given both the unanimous nature of the opinion, the clearly correct result, the admissions of the parties, and the fact that I've rarely seen an appeal that was more easily decided, I think that I might have done this one in, say, 20 pages. Maybe even less. A little more than a one-sentence opinion that says "Everyone agrees, so here's the rule." But less than 56 tree-killing pages.

Wednesday, January 20, 2010

In Re Criscione (Cal. Ct. App. - Jan. 13, 2010)

Arthur Criscione was born in 1938, making him 71 or 72 years old. He's had 14 prior parole hearings. Would you let him out?

Here are the relevant facts:

"Criscione was convicted in 1979 of the second degree murder of his girlfriend, Dorothy Quinitar. He was sentenced to 15 years to life. . . . [O]n February 27, 1979, at approximately 1:20 a.m., defendant walked into the San Jose Police Department and reported a homicide . . . . [D]efendant's son Rick Criscione . . . indicated his father had come over to his apartment and told him, 'I just killed Dorothy and put her in the bathtub.' . . . [T]he victim was found fully clothed and lying in approximately eight and a half inches of water in the bathtub. . . . Further interview with the defendant's son revealed that when his father came to his apartment and told him of the homicide, he noted his father's hair was wet, and one pant leg was also wet. . . . Ricky stated his father told him he and the victim had gone out last night, and when they came home, she'd pulled a knife on him. Ricky stated that this was not unusual, in that she had done this type of thing in the past. The defendant related to his son that he had choked the victim and stated, 'I know she is dead.' . . . Ricky Criscione indicated he felt his father stated he hit the victim first, then choked her. . . . An attempt was made to interview the defendant, but he chose to remain silent. He did state words to the effect 'I don't want to say anything more right now. I did it. She's in my apartment. And I don't want to go back there.' The defendant provided the officer with his key ring and then began to tell him the victim was 'a crystal freak.' And that she had been on glue, drugs, and crystal for approximately five years. . . .

Criscione completed the tenth grade at San Jose High School, then went to work in his father's bakery. He had also worked as a produce clerk and part-time as a bouncer at a bar. Criscione had no juvenile record and no convictions as an adult other than the offense for which he was incarcerated. He had a history of mental problems, having been treated with electroshock therapy on several occasions up until the age of 38 or 39. He did not smoke or drink. He had been married to Doris Cabrera; they had three children together. The marriage had been marked by violence. Criscione had beaten and choked Cabrera, sometimes leaving bruises on her neck. Cabrera was known to have pretended to pass out to make the choking stop. The marriage ended in divorce in 1977.

Criscione had a nearly spotless prison record with no major disciplinary infractions and only two minor infractions, the most recent from 1983. Criscione also had numerous laudatory notations in his file. He had participated in a long list of self-help programs, most with the Golden Hills Adult School Literacy Program. Because the commissioners at the 2007 parole hearing suggested book reports, Criscione had completed several of those as well.

If released on parole, Criscione planned to live with his brother in Corona Del Mar, with his son in Turlock, or with his sister in San Clemente. He was eligible for Social Security and a pension from the Retail Clerks union.

The Board referred to a psychological report by Garry L. Hitchcock, Ph.D., dated March 17, 2008, noting that the report was “favorable.” The Board then read a portion of the report into the record, as follows: “The inmate currently exhibits no psychiatric symptoms, and he appears to be functioning well within the prison setting. Risk assessment estimates suggest that the inmate poses a low likelihood to become involved in a violent offense if released to the free community. This overall risk assessment estimate takes into account the inmate's cultural background, personal, social, and criminal history, institutional programming, community social support, release plans, and current clinical presentation. In addition, there is the caveat that such an assessment is at least partially based on the likelihood of abstinence from any substance abuse. . . . The inmate does not currently see himself as a criminal, but rather as someone who wants to be a productive, responsible citizen in the free community. When he is asked to identify his personal strengths, Mr. Criscione replied, 'I‟m a very organized person. I keep my word. As far as work, I'm a very reliable and dependent [sic] person. I'm loyal to my family.

When he was asked how he has changed over the years of incarceration, Mr. Criscione replied, 'My values have changed. A lot of things you take for granted in the free world, values I held before prison seem silly and ridiculous. And the things I took for granted, I found they are the most precious.'"

There's the basic scoop. Would you keep him in, or let him out?

The answer in the real world? Keep him in.

Thursday, January 14, 2010

Crowe v. Wrisley (9th Cir. - Jan. 14, 2010)

It was one of the highest-profile murders in San Diego in recent memory: The Stephanie Crowe murder on January 20, 1998, when 12-year-old Stephanie Crowe was stabbed to death in her bedroom. It became even more shocking when, after extensive investigation and interrogations, Stephanie's brother and two of his friends were charged with the murder. And it became even more shocking when, a year later, DNA testing revealed Stephanie’s blood on the shirt of a transient, Richard Tuite, who had been seen in the Crowes’ neighborhood on the night of the murder and reported by several neighbors for strange and harassing behavior -- a test that eventually resulted in the dismissal of charges against the boys and a conviction of Tuite for Stephanie's murder.

Needless to say, the boys and their families sued. Raising a plethora of very much non-frivolous claims.

The district court nonetheless dismissed a large portion of the plaintiffs' claims. It took the Ninth Circuit over 18 months after the oral argument to write its opinion, notwithstanding the fact that it's unanimous. But it came out this morning. With Judge Thomas as the author.

This is a sufficiently high-profile opinion that I need not say much about it, and the whole thing's worth reading anyway. But let me give you one quote that suggests the tenor of the opinion, and a second quote that simply reveals the net result.

Quote One:

"One need only read the transcripts of the boys’ interrogations, or watch the videotapes, to understand how thoroughly the defendants’ conduct in this case 'shocks the conscience.' Michael and Aaron—14 and 15 years old, respectively—were isolated and subjected to hours and hours of
interrogation during which they were cajoled, threatened, lied to, and relentlessly pressured by teams of police officers. 'Psychological torture' is not an inapt description. In Cooper, we held that police violated an adult suspect’s substantive due process rights when they 'ignored Cooper’s repeated requests to speak with an attorney, deliberately infringed on his Constitutional right to remain silent, and relentlessly interrogated him in an attempt to extract a confession.' 963 F.2d at 1223. The interrogations of Michael and Aaron are no less shocking. Indeed, they are more so given that the boys’ interrogations were significantly longer than Coopers’s, the boys were minors, and Michael was in shock over his sister’s brutal murder. The interrogations violated Michael’s and Aaron’s Fourteenth Amendment rights to substantive due process."

Pretty darn clear how the panel feels, eh?

Quote Two. Here's the tally:

"We reverse the district court’s grant of summary judgment as to: (1) Michael and Aaron’s Fifth Amendment claims; (2) Michael and Aaron’s Fourteenth Amendment substantive due
process claims; (3) Michael’s Fourth Amendment claim that police lacked probable cause to arrest him; (4) Aaron’s Fourth Amendment claim that the warrant authorizing the search of his home was not supported by sufficient probable cause; (5) all otherwise surviving Fourth Amendment claims against McDonough; (6) all otherwise surviving claims against Blum; (7) the Crowes’ deprivation of familial companionship claim based on Michael’s arrest; and (8) all otherwise surviving claims against the Cities of Escondido and Oceanside. We affirm the district court’s grant of summary judgment as to: (1) Aaron’s Fourth Amendment claim that police lacked probable cause to arrest him; (2) Michael’s claim that police violated his Fourth Amendment rights by strip searching him; (3) the Houser’s deprivation of familial companionship claim; (4) Michael and Aaron’s defamation claims against Stephan; (5) and Aaron’s defamation claim against Blum. Additionally, we affirm the district court’s denial of summary judgment as to: (1) Cheryl, Stephen, and Shannon Crowes’ claims that police violated his Fourth Amendment rights by strip searching them; (2) Cheryl and Stephen’s Fourth Amendment claims that the warrant authorizing police to draw blood samples were not supported by probable cause; (3) Cheryl and Stephen’s Fourth Amendment claims of wrongful detention; and (4) the Crowe’s deprivation of familial companionship claims based on the placement of Michael and Shannon in protective custody. We remand to the district court for further proceedings consistent with this opinion."

Wednesday, January 13, 2010

Full Throttle Films, Inc. v. National Mobile Television (Cal. Ct. App. - Jan. 12, 2010)

The name of the plaintiff in this case is "Full Throttle Films," which led me to think: "Hmmm. This one might be interesting."

Don't judge a book by its cover.

P.S. - On a related note, "Full Throttle Films" does not produce what you might think. Unless you thought they produced NASCAR commercials. In which case you're right.

People v. Alford (Cal. Ct. App. - Jan. 13, 2009)

"In April 2008, defendant Anthony Mark Alford, Jr., entered a Wal-Mart, loaded a shopping cart with meat, put most of the meat in a 150-quart ice chest, placed some other items in the cart, and tried to leave the store without paying. The total value of the items in the cart was $515.20. Defendant told a peace officer he was going camping and did not have money to pay for the meat."

Not the most sophisticated crime in the universe, huh? "Excuse me, sir. I couldn't help but notice that the plastic ice chest you're buying weighs around 150 pounds. Need any help with that?"

By the way, for that crime, Alford gets six years in prison. Because we call it "burglary."

I guess having the state buy you meat -- or, more likely, meat-like items -- for six years is another way to go "camping" too.

U.S. v. Yip (9th Cir. - Jan. 13, 2010)

As your 1099s begin to arrive in this new Tax Year, let me be the first to remind you that there are serious downsides to running an "off the books" business that entirely fails to pay any taxes. Especially if, when you're audited, you start fabricating loans and the like in an effort to derail the civil audit.

How much of a downside? About four-plus years in prison.

P.S. - Having bank accounts in Hong Kong during this whole thing probably doesn't help either.

Tuesday, January 12, 2010

People v. Gonzalez (Cal. Ct. App. - Jan. 12, 2010)

Armando Gonzalez and Jose Ortiz are driving in Pomona with a couple of fellow gang-bangers. They see Hector sitting on the sidewalk watching fireworks and tell the driver to stop. They then get out of the car and, for totally inexplicable reasons, Ortiz walks up to Hector (with a gun at his side) and ask him "Where he's from." To which Hector replies, seemingly truthfully, "Nowhere. I don't gang bang." At which point Ortiz and Gonzalez say they're from Cherryville (their gang), turn around, and walk back to their car.

Mistaken identity, I guess.

But then, for some totally unknown reason, when they're nearly back to the car, Ortiz wheels around and fires the gun at Hector, hitting him twice (but not killing him). No one spoke either on the way back to the car or after the shooting. Why Ortiz chose to shoot Hector is totally unclear.

Ortiz gets convicted of premeditated attempted murder, and appeals, claiming that whatever he did, it wasn't premeditated. I understand the point, and I might well have agreed with him had I been on the jury -- depending, of course, on the state of the evidence.

But the Court of Appeal holds that even though, to me, Ortiz's decision to shoot seemed pretty spontaneous (indeed, totally inexplicable), it's still sufficient evidence to convict. Yeah, maybe he just decided to shoot on a whim. But maybe he held that intent when he approached Hector in the first place. A reasonable jury might have so concluded, so there you have it.

Gonzalez's argument on appeal seems even stronger. Gonzalez was convicted of aiding and abetting, and says: "Dude, I totally had no idea he was going to shoot the guy." Nor was the shooting during the commission of a felony as is usually the case. So Gonzalez says that he was simply in the wrong place with a wrong guy at the wrong time, and surely shouldn't be guilty of attempted murder as a result.

Even if one might view the evidence, at the extreme, as showing some degree of Ortiz's intent, I think it's a lot -- lot -- weaker as to Gonzalez's attempt. You basically have no evidence at all of any desire by Gonzalez to shoot or to help shoot. I'm sure Gonzalez was willing to help confront Hector and see if he was with a rival gang, and maybe -- maybe -- go along with an assault if he was. But was there any intent to help shoot the guy if he was (as he appears to be) a completely innocent bystander? I strongly, strongly doubt it. That seems all on Ortiz.

Nonetheless, the Court of Appeal affirms Gonzalez's conviction as well. This seems troubling to me. A very stiff sentence for potentially just being with a guy who does something very wrong.

(The Court of Appeal dropped a one-sentence footnote that says that maybe Gonzalez was the shooter, but this seems an implausible reading of the facts, and in any event centrally holds that he was properly convicted of aiding and abetting even without being the shooter, and this is the part I have the most problems with.)

I'm not saying this one's clear cut. But we're talking about a very long sentence, for aiding and abetting an attempted murder, with virtually no evidence whatsoever. At a minimum, it's a very extreme example of accomplice liability, and may well end up being legally over the line as well.

Monday, January 11, 2010

People v. Fierro (Cal. Ct. App. - Jan. 11, 2010)

I'll have to agree with the Court of Appeal on this one. All that Michael Ibarra wanted to do was to pump some gas. Here's a case of a simple civility dispute that slowly but inexorably escalated, on both sides:

"The Ibarras and appellant never knew each other until August 8, 2007, when they met at an ARCO gas station. Both arrived, in their respective cars, at about the same time. Ibarra believed that appellant was blocking access to the pumps. . . . Ibarra asked appellant to move his car. In a sarcastic tone of voice, appellant told Ibarra to make that request in Spanish. Even though Ibarra speaks Spanish, he repeated his request in English. Again appellant told him to ask, politely, in Spanish. Appellant then went into the store to pay for his gas.

Perturbed, Ibarra followed appellant into the store and asked him again to move his car. And once more appellant said – in Spanish – to make the request politely in Spanish. When it became clear appellant was not going to cooperate, Ibarra said, “Well, fuck you, then,” and returned to his car, where he waited by the driver's side for appellant to finish fueling.

Once he finished, appellant got back in his car, opened a beer bottle, and gestured as if offering some to Ibarra. Ibarra “gave him the bird as he did that,” and appellant smiled at Ibarra. Appellant drove forward, slowly, until he was even with Ibarra. Again he picked up the bottle and gestured as if offering Ibarra a drink. And again, Ibarra gave appellant “the middle finger.” Finally, appellant drove away.

Ibarra repositioned his car so he could fill his gas tank. As he started to use his debit card at the paypoint kiosk next to the pump, he noticed that appellant had not left after all. Instead, he had circled and was driving back toward Ibarra. Ibarra canceled his purchase and attempted to leave in order to avoid a second confrontation. Since another car was in front of his, Ibarra backed up, turned, and started forward. That is when appellant got out of his car and walked toward Ibarra.
Appellant called a nearby patron to interpret and, in an aggressive tone of voice, told this person several times to ask Ibarra, “Do you want to fuck with me now?” The interpreter said in Spanish to appellant, “I think he understands you,” and the interpreter left.

But appellant did not leave. He stood about seven feet from Ibarra on the passenger side of Ibarra's car, and he lifted his shirt to display what Ibarra and [Ibarra's son] believed was a weapon tucked into a waistband. Although father and son described it differently, they both said the weapon was in a holster and believed it was either a handgun or pistol. This got [Ibarra's son's] “heart pumping. I got a little scared. . . . Like he might pull the gun out of the holster and shoot us or something.” Ibarra wanted to drive away but still could not; other vehicles were blocking his car. He said that during the minute or so that appellant displayed his weapon, “. . . the game changed. I was in fear for my life. I was in fear for my son's life. . . . The only thing that kept me there was I was completely backed in. . . . I was afraid for my son and my life. I was afraid . . . . I was have [sic] afraid of losing my life that day.”

While Ibarra looked for an escape route, appellant harangued him. In Spanish, appellant uttered profanities, asked appellant if he was “a faggot,” said words to the effect that he should have more respect for people from Jalisco (a state in Mexico).

Then -- still in Spanish -- appellant said, “I should kill you. I will kill you.” Appellant also said, “I ought to kill you and” --pointing to [Ibarra's son] -- “the stupid mother fucker too.” Worse yet, appellant said he ought to kill them “ahorita,” which means “right now.” Finally, appellant said, “Now get the fuck out of here.” Ibarra obeyed him. . . .

Ibarra tried to get a grip on his emotions as he drove away. He had been “scared to death during the whole ordeal.” Within about 15 minutes -- once he was on the freeway and “out of harm‟s way” -- he called 9-1-1 and told the operator that he was “scared shitless.”

One can learn a plethora of lessons here. About the decline of civility in general. Or about how it's generally not a great idea to give someone you don't know the bird. Because even if you're bigger than them, a gun -- or the threat of a gun -- is a great equalizer.

Both sides should be happy this didn't turn out worse than it did. Though even how it turned out was bad enough.

U.S. v. Pineda-Moreno (9th Cir. - Jan. 11, 2010)

The Ninth Circuit holds today that it's okay for the DEA, and presumably any other law enforcement official, to come into your driveway, without probable cause, climb under your vehicle, and place a tracking device thereupon.

The theory is that you've got no "reasonable expectation of privacy" in: (1) your driveway, since a neighbor could go there on the way to your house, (2) the undercarriage of your car, since a child might potentially look for a lost ball there, or (3) where you come and go in your vehicle, since another driver could follow you.

It's hard to violently argue with any of these three predicates, though reasonable minds might well disagree either with some of them or with the impact of combining all three.

I'll just leave you with the following question. Presumably what's good for the United States is good for everyone else too. If you've got no "reasonable expectation of privacy" in all of these areas, then a private person should be totally able to do the same thing, right?

How would you feel if someone -- maybe your spouse, maybe your snoopy neighbor -- did precisely that? Would you feel like your "privacy" was invaded? Or would you simply be "unreasonable" in that "expectation"?

I particularly wonder if the members of the panel would feel the same way if someone did that to their cars. Admittedly, with federal judges, there are legitimate security concerns. But even if I was positive that the guy who was tracking me was totally nonviolent, and simply obsessed with knowing everything about me, I would still not be at all psyched. Sufficiently unpsyched that the words "legitimate expectation of privacy" might well come to my mind notwithstanding the fact that each of the three underlying predicates might be invaded by a neighbor, child, and driver, respectively.

Equatorial Marine Fuel Mgm't Svcs v. MISC Berhad (9th Cir. - Jan. 11, 2010)

I've been getting a tiny bit behind on my daily reading due to both the holidays and the fact that I'm in D.C. furiously preparing for an oral argument before the Supreme Court on Wednesday morning. An argument that concerns the fascinating world of ERISA when intersected with the thrilling concepts of standards of review.

So I was trying to think of a case that might be even more boring for the average reader.

And thought: What about maritime law? When it involves admiralty, and the special rules of attachment therein?

There you go. Excitement personified.

The only thing that could make such a hypothetical case more thrilling would be if it was about who was holding the bag for $22 million of fuel that a seller delivered to a buyer's middleman after the middleman went under.

Friday, January 08, 2010

Singh v. Holder (9th Cir. - Jan. 8, 2010)

Academics (including me) usually applaud the historical game theoretic aspects of Marbury v. Madison. So much so that it's now a pretty standard judicial play. Doctrinally, hold that courts have jurisdiction to review the issue, but then decide against the particular claimant. That way you expand your power but minimize backlash; ergo, for example, entrenched judicial review.

But this morning's Ninth Circuit case highlighted for me, at least, the two downsides of this move. As applied to Marbury, those downsides would have been: (1) What about higher courts?, and (2) What about Marbury?

Neither of these problems were really central in Marbury itself. As for (1), there were, of course, no courts higher than the Supremes. And as for (2), from a systemic perspective, we also didn't much care about whether William Marbury was a Justice of the Peace as opposed to someone else. Especially as contrasted to the value of judicial review. So the Marbury move receives approval.

Here, Judge Berzon makes a classic Marbury move, and decides (1) that notwithstanding the typical judicial-review-stripping provisions increasingly prevalent in immigration cases, courts indeed retain the ability to review particular (relatively rare) determinations of "hardship" in some removal cases, but (2) the BIA was, in this particular case, right on the merits, since there was no hardship. (I'm not saying she manipulated the result to achieve this end, just that this is the same type of result as in Marbury.)

But here's the rub. Unlike Marbury, where you were worried about the reaction of the other branches of government, here, you've got your own branch to worry about as well. Which can decide to take the case on the doctrinal issue alone, wholly apart from the result. And often do so. So hosing the petitioner doesn't much insulte the mattter from review. (Not that there is, I think, much chance of this going up; rather, I'm talking more generally. Plus, I concede that the chances of review may diminish slightly if the lower court doesn't grant relief. Nonetheless, it's a big difference between the dynamic in Marbury.)

The other difference is that the consequences of the two cases are very different. Instituting judicial review (Marbury) is a pretty important goal. Saving judicial review in a very small subset of unusual removal cases, not so much. Similarly, Marbury's occupation, not really vital, probably even to Marbury. Whether Balbir Singh gets deported to India? Definitely critical to Singh, and of more lasting social concern generally as well.

In short, here's a case that's a lot like Marbury. Except that it's different. In ways that might shed some light on when and where that principle works.

Thursday, January 07, 2010, Inc. v. City of Anaheim (Cal. Ct. App. - Jan. 5, 2010)

Here's an extremely well-written opinion by Justice Ikola. Which holds that Anaheim can use contingency fee lawyers to go after Priceline for not collecting and paying transient occupancy taxes.

I'll not say much other than it's an opinion worth reading. Extremely balanced. Erudite. With a definite -- and unfavorable -- take on the principal case (Clancy) that says cities generally can't hire contingency fee lawyers, and yet distinguishing that case on the merits.

This is something you're more used to seeing a federal appellate court do than the Court of Appeal. Take a Supreme Court (here, a California Supreme Court) case and parse it out very carefully, rather than simply doing the very easy thing and going the same way as that opinion.

It's a good opinion. Not if you're an inveterate believer in Clancy, mind you -- if you're a "neutrality at all costs" person, you'd likely have a different view. But I think Justice Ikola strongly supports his view on this one. One that I found persuasive.

Well done.

Wednesday, January 06, 2010

Junkin v. Golden West Foreclosure Service (Cal. Ct. App. - Jan. 5, 2010)

Gary Bennett is a "hard money" lender in San Carlos, and Donald Junkin -- a real estate investor -- borrows from him a lot; i.e., 40 to 60 times. After a particular deal in San Carlos goes south, Junkin sues Bennett claiming that the interest rate is usurious. Bennett defends the suit on the ground that the usury rules don't apply because the two were in a joint venture.

Justice Jones writes a concise (nine-page) opinion that goes through the various factors and explains why the two were indeed a joint venture. And I agree.

But let me give you my particular take here. The property was bought for $1.975 million. Bennett loaned Jenkins $856,000, and in return got an interest rate of 12 percent (which is generally over the maximum usury rate of ten percent). Bennett also gets a 10% stake in the property. But in my mind, that doesn't make 'em joint venturers. That only makes the loan more usurious -- two percent over ten percent plus additional equity -- not less.

But what swings it for me is that Bennett also co-signed for the $1.185 million first from an institutional lender. That's putting up real exposure, and makes the thing much more like a legitimate joint venture. Take that co-signed loan away, however, and I'd have held that this wasn't a joint venture, but merely a usurious loan.

Admittedly, if I were Jenkins' lawyer, I'd say that this is not significant at all, since the chance that the $1.975 million property tanks to under $1.185 million and hence that Bennett's liable under the loan is darn low. Still, even with this argument, I'd probably come out the same way.

But if you're looking to make a usurious loan, let me tell you how to do it. Charge an excessive interest rate, demand an equity stake as well, and then co-sign a first trust deed that you're darn sure the property will cover (and/or hedge that exposure). That'll probably work.

People v. Maikho (Cal. Ct. App. - Jan. 5, 2010)

Here's an opinion that hits close to home.

It's a case about illegal lobster fishing on the Ocean Beach Pier. Which is less than a mile from my house, and which I visit regularly.

A Department of Fish and Game ("DFG") officer is staking out the place two summers ago when he sees a dude (Bounh Maikho) hand-lining. Which, for those of you unfamiliar with the practice, is basically when you use your hands (rather than the reel) to pull the fishing line. You do so to get a better feel for the line. You can use it for fishing, but what you really want to use it for is to catch lobster. The only problem being that (1) it's illegal (but productive) to take lobster that way, and (2) spiny lobster's out of season in the summer anyway.

But the DFG officer sees Maikho hand-lining through a spotter and then sees him pull something in and put it in a black bag. Maybe a lobster, maybe a fish. The officer doesn't immediately pull Maikho aside, and instead waits for him to drive his car away, at which point he pulls him over and asks (essentially) "You got any fish or lobsters in that bag?" Maikho says no, the officer searches, finds a lobster, and cites Maikho for a couple of misdemeanors. Maikho moves to suppress, claiming that the DFG regulations allow officers only to search bags and stuff like that, and don't allow automobile stops, and that there wasn't probable cause. The trial court grants the motion to suppress, and the case eventually finds its way up to the Court of Appeal.

Justice McDonald writes a really, really good opinion in this one. It's thoughtful, comprehensive and cogent. Justice Benke writes a (shorter) dissent, but I think that McDonald has the better of the argument, both stylistically as well as on the merits. Justice Benke's approach is fine if you already agree with her about the result, and have a strong preexisting view about the need for expansive seizure rules, but I think that Justice McDonald does a better job of writing an opinion that attempts to persuade.

Which is not to say that Justice Benke doesn't have a point -- she does, arguing that even though the statute doesn't expressly allow traffic stops, hunters and fishermen reasonably expect to be stopped all the time, since random inspections are sort of par for the course, so what's the big deal if the search is in a car rather than on foot. But, at least for me, Justice McDonald does a powerful job of explaining why this is different -- not only in terms of the statute, since one is allowed and the other isn't, but why this difference actually matters both practically as well as doctrinally. So I think he's got the better view. Or at least I was persuaded.

Personally, I thought that Part II of Justice McDonald's opinion was less persuasive than Part I. But I readily concede that might just be me. Part I says that the search was unauthorized, and I agree with that. Part II says that there was no probable cause, and that's a lot closer call. In the end, I'm persuaded that on this evidence, there wasn't probable cause, since everyone admits that hand lining can be used for either fishing or lobster, and the officer even admitted that he stopped the car not because he necessarily thought there was an actual crime, but rather merely to ask some questions. So given that evidence, I agree that there was no evidence that proved that there was a "substantial probability" that a crime had been committed.

But I did want to say that, in my mind, there was "in fact" unquestionably probable cause. Sure, you can hand-line to fish. But no one freaking does. If you're hand-lining on the OB Pier, you're getting lobster. Particularly at 11:00 p.m. Pull 100 people hand-lining on the Pier and I promise you that 99+ of 'em are going for lobster, not fish. Otherwise you use the reel. (And typically fish when the fish can see, I might add.)

But, again, the officer didn't say so. But if he had, I've have entirely bought that testimony and found probable cause.

One other random point. Justice Benke's focus in the dissent is all about why DFG officers should be able to inspect, search, etc. But no one disputes that. They can. The question is whether they can deliberately wait to search until after the dude gets in his car and drives away. So we're not really talking about manifest necessity here. Just pull the guy aside when you see him dump the unknown object into his bag. Not too tough. (And yeah, I hear the officer say "I didn't want to blow my 'undercover'." But come on. You were using a spotter. Grab the guy on the Pier, or in the parking lot. If other people see that you're enforcing the rules, so much the better.)

One final (I promise) -- and totally random -- point. I'm a big fan of enforcing the fishing rules, so I'm completely in favor of enforcement here. But I thought it was completely funny that they were doing so on the O.B. Pier. Not because people don't illegally fish there. Because they do. But rather because it is the place to score weed in San Diego, so I'm sure the DFG officer saw 500 or so misdemeanor drug infractions in his spotter for every one illegal lobster catcher. So I can just hear Maikho saying: "Dude, you're busting me for catching a lobster but totally not caring about those 500 guys who scored dope right in front of you?! Come on!"

Maybe Maikho should have said he needed to eat lobster for his migraines. If only there was a "medical lobster" law.

Tuesday, January 05, 2010

Fink v. Shemtov (Cal. Ct. App. - Jan. 5, 2010)

Let me give you some help:

Suggestion One: When you've been declared a vexatious litigant, don't represent yourself when you challenge that finding on appeal. That's what got you into trouble in the first place.

(2) When and if you disregard Suggestion One, when you file the appeal, leave out the vitriol and personal attacks on the trial judge. That's, again, likely what got you into trouble in the first place. And even if it didn't, it definitely won't help. As we might say in an analogous context, being a nutjob doesn't help when you're arguing that you're not a nutjob. And you can tell you've gone to far when Justice Fybel not only affirms the order declaring you a vexatious litigant, but ends this opinion with: "Finally, we must once more admonish Fink about several unacceptable statements, contained in his opening brief and in the record, personally attacking the trial judge in this case. His personal attacks are inexcusable."

All of this would have been helpful to David Fink. Who won't be filing nearly as many actions in Orange County anytime soon.

(And yes, I know, I know. Saying all of this is just setting myself up for the inevitable stream of crank e-mails I receive from the parties at hand. Oh well. That's why the Good Lord created the Junk Mail folder.)

Sanchez v. Aerovias De Mexico (9th Cir. - Jan. 5, 2010)

When I was clerking on the Ninth Circuit and had drafted an opinion (or, especially, a dissent), I often took it to the judge and found -- draft after draft -- that he had added long arguments with absolutely no citations whatsoever. I distinctly recall thinking: "Don't you want some citations for these arguments? Don't you actually want to support what you're saying?"

Needless to say, I kept these thoughts to myself. But I still thought them. The stuff that I drafted was very authority- and case-centered, likely influenced by my background. And I thought that made for a better opinion.

Which I'm sure it sometimes does. But in my old age, I now understand that there's another way to write. The way my judge did. And that it's often much more powerful than the way I was used to. Or, in short, that longtime judges sometimes know quite a bit more about how to write an opinion than people who graduated from law school the previous year.

I flashed back to all of this when I read this morning this dissent by Judge Kleinfeld. It's to an Airline Deregulation Act ("ADA") case, so this is hardly something that gets your blood boiling. Nor is Judge Rymer's majority opinion -- which holds that the plaintiff's claims are preempted by the ADA -- outrageous or anything like that. So the power of the dissent is not that it tugs on your political heartstrings.

Rather, the thing about the dissent is that, at least to me, it's incredibly well-written. It tells a story. Not a narrative, but a vision. And does so on a common sense basis, and largely without interruptions from citations (which are relegated to the occasional footnote).

Is the dissent a bit overly simplistic in a couple of places? Yeah, I think so. Nonetheless, I really thought this was exceptionally good, and stunningly well-written. The whole thing is six single-spaced pages long, and worth reading in full, but here's a (long) snippet:

"I respectfully dissent. In my view, Sanchez’s claim is not preempted, so we should reverse. The error in the majority’s result derives from its error in concluding that “the ticketed price included the tourism tax.” It did not. As the majority apparently concedes, Sanchez’s contract included the website language, “the user shall remain fully liable for all . . . taxes . . . .” That means taxes attributable to her flight.

The airline collected a $22 tax from every passenger bound for Mexico, but it is undisputed that Mexico imposes this tax only on non-Mexicans, not Mexicans. Sanchez is a Mexican citizen, so Mexico does not impose the $22 tax on her trips to Mexico. The entire class she wishes to represent is exempt from the tax, so significant money is at stake. The airline collected the $22 as part of the $428.43 it charged to her credit card. It did not refund it to her and has no system for doing so. The record does not reveal whether the airline gave the $22 to the Mexican government, which was not entitled to it, or kept it for itself despite taking it under the premise of a tax collected on behalf of the Mexican government. The implication of the airline’s argument appears to be that it gave the $22 to the Mexican government. Sanchez sued for breach of contract and restitution.

The statute preempts state law claims “related to a price, route, or service.” The Supreme Court held in American Airlines v. Wolens that this preemption clause barred a state law claim under a state consumer fraud statute challenging retroactive changes in a frequent flyer program, but that a state law claim for breach of contract would not be preempted. . . . Applying the Wolens language, our task is to distinguish between a state-imposed obligation and one that the airline imposed on itself by making an offer that a customer accepted. Sanchez’s case is the latter sort. The airline offered to fly her to Mexico and back for a stated fare plus taxes. She agreed. Yet the airline charged her more than that. Though it called the $22 a charge for taxes, it was not. She did not owe the tax, and the airline did not owe the tax. This was no more a legitimate charge for taxes than it would be for a store in Fairbanks, Alaska (where there is no sales tax) to charge a
tourist the price of her souvenir plus 8.5% sales tax.

The airline’s answer to this is not that Sanchez owed the tax, or that it owed the tax for flying Sanchez. Instead, it argues that it did not inquire so did not know which of its passengers
were Mexican citizens, so it charged everybody tax whether they owed it or not. That argument does not address whether it breached its contract. If the deal is “the price is $9.95,” and the shop does not give the customers a nickel change from a ten dollar bill, the breach of contract does not somehow disappear because the shopkeeper contends that it would cost him more than a nickel to maintain a cash register, staff, and supply of nickels, to pay customers their change. . . .

About all there is to decide is whether Sanchez’s deal was to pay the Mexican tax whether any tax was imposed by Mexico on her trip or not, or to pay whatever tax was owed. To ask the question is to answer it. Her deal was to pay the fare and to “remain liable for all . . . taxes.” Were we recklessly indulgent, we might say this is ambiguous, maybe she means to contract to pay whatever taxes there may be on anyone, not just her. And maybe the tourist in Fairbanks wishes to pay the sales taxes that would be due were she buying her souvenir in San Francisco instead of Fairbanks. But probably not. We need not even reach application of the doctrine of construing the contract contra proferentem to resolve ambiguity in Sanchez’s favor, because the only sensible construction is that Sanchez agreed to remain liable only for taxes attributable to
her. The tourist who hands the $9.95 objet d’art to the cashier doubtless assumes, if she is from San Francisco, that it will cost her around $10.80, and may well hand the cashier a $20 bill instead of a $10. But her acceptance of an obligation to pay all taxes in addition to the marked price does not mean that she agrees to pay taxes that the city and state do not charge and that she does not owe, so long as the shopkeeper calls the extra money “tax.” She explicitly agrees to pay $9.95 plus whatever tax is due, and since none is due, she (and Sanchez) is entitled to all her change.

Sanchez was not liable for the Mexican tax, never was, and could not “remain liable” for a tax she never owed. This was a tax on non-Mexicans, she is Mexican, and whether the airline kept her money or made gift of it to the Mexican government (a gift, since the Mexican government did not impose the $22 tax on Sanchez or on the airline for transporting Sanchez), Sanchez’s contract was not to pay this tax on people other than herself. Nor does it matter whether the airline provides a procedure for customers to seek refunds of improperly collected taxes. An airline is not like a government agency enjoying a narrowly construed waiver of sovereign immunity. An airline is like the Fairbanks shopkeeper, bound by contract law to charge the customer the marked price plus any tax, and not a higher price in the guise of a tax not due. Sanchez is entitled to sue for breach of contract and restitution of her money under Morales, Wolens, and Charas."

I couldn't have written a better dissent. I'm quite sure about that.

Monday, January 04, 2010

In Re Cellphone Termination Cases (Cal. Ct. App. - Jan. 4, 2010)

Here's something I hadn't seen before.

It's a class action settlement, but the parties can't agree on the amount of the fees. So they agree to arbitrate, with a floor of $500,000 and a cap of $2,950,000. Objectors object, claiming (among other things) that they won't be allowed to participate the arbitration. The trial court agrees, and sets the fees itself.

The Court of Appeal holds that the arbitration procedure was okay, and should have been approved, at least here. Which I agree with, at least if there's a strong emphasis on that last caveat. Here, the trial court expressly found that there was no collusion and the entire range of the possible fee awards were reasonable. Given that finding, I agree there's no reason why the parties can't arbitrate the precise amount. Sure, the objectors can't participate in an arbitration (as opposed to a judicial fee-setting process). But it doesn't matter at that point -- the fees ain't going to or coming from the class, and we've already agreed that even an award at the top level would be reasonable. So that seems right to me.

I did want have one deeper-level thought, however. The case definitely highlights for me the wierd nature of fee awards in class actions. Let's say, for example, that the parties had agreed upon a fee award of between $0 and $400 million -- assume the second number reflects that counsel for plaintiff just has bizarre dreams, which the defendant is willing to entertain since it thinks there's no chance for an actual award of this amount -- and have agreed to arbitrate this dispute. Assume again a finding of no collusion, and a reasonable settlement on the merits.

Is this too a proper way to resolve the dispute, even though the entire range isn't within the realm of the reasonable? After all, again, the money's not going to or from the class either way. Why should they care, or be allowed to participate/object? Plus, if the court did indeed express a proper view as to the reasonableness of such a settlement, is the appropriate way to do so to allow it only if the entire range would be proper, or merely to find that the risk-adjusted number is reasonable; e.g., even if $400 million would be silly, since the award was almost certainy to be around a reasonable $1 million, approve the thing?

Which in turn makes me wonder what role the court legitimately has in reviewing an agreed-upon fee award in the first place. Don't get me wrong: I'm all for making sure the settlement isn't a sweetheart deal. Indeed, I think that this is vital, and not done nearly enough currently. (True probably even here, where the attorneys get millions and the class gets pretty much nothing but virtually meaningless warnings. And definitely true generally.)

But once a court's decided that the settlement on the merits is fair, why should objectors get to object to -- or a court approve -- the agreed-upon (or arbitrated) fee? At least when, as here, it is not coming from or to the class? That's "bonus money" at that point.

Sure, an excessive fee award might indicate a sweetheart deal, and hence establish collusion. So I see why the court should have to approve it on that basis. But assume that the settlement on the merits was reasonable -- e.g., pretend that, here, everyone who got a cellphone got $1000, a figure that's totally cool with everyone. Why do we care at all if the attorneys get $0 or $100 million? That's up to the parties, no? (I've got a separate thought about the fact that any "range" fee case is probably a one-way rachet, since an award of $0 is alway fine and not a basis for objecting to the settlement since it only harms the attorney, but that's for another day.)

One final comment. In the middle of the opinion, Justice Simon says: "Importantly, the trial court could have, and perhaps should have, delayed final approval of the settlement, including determination of the reasonableness of the fee award, until after the arbitration," which was an option that the defendant had expressly suggested in the trial court. I thought the "perhaps should have" part was a classic example of something you occasionally see when the Court of Appeal says to itself "I think maybe this should be the rule, but am not totally sure, and don't want to have to actually think about it enough to make a for-sure holding, so am going to fudge." Definitely helpful, but not as helpful as actually thinking the whole thing totally through.

So those are my class action thoughts for this first working day of 2010.