Friday, July 29, 2011

Phillips, Spallas & Angstadt LLC v. Fotouhi (Cal. Ct. App. - July 27, 2011)

Here's a classy set of attorneys.  The facts:

"In November 2000, [Shahab E.] Fotouhi entered into a partnership agreement with Phillips, Spallas & Fotouhi, LLP (the Phillips firm). In March 2004, Fotouhi announced he was leaving the firm, effective April 1, 2004, and taking two major insurance clients with him (insurance clients).

Fotouhi started a new law practice, with three of the Phillips firm‘s former associates, Darren Epps, Wendy Hillger, and Michael Gilroy. Fotouhi, Epps, Hillger & Gilroy, LLP registered as a limited liability partnership on March 25, 2004. As the general partner, managing partner, and president of the Partnership, Fotouhi held a dominant position in the firm,and controlled the firm's books and records. He generated between 75 and 90 percent of the work."

Okay so far, right?  You can leave your law partners if you want and take your clients with you.  That's generally permissible.  Tough on your former partners, but not usually legally improper.
"In May 2004, the Phillips firm's successor in interest, Phillips, Spallas, & Angstadt, LLP, and two of its named partners, Robert K. Phillips and Gregory L. Spallas (collectively, plaintiffs) asserted claims against Fotouhi for violating the partnership agreement and filed a petition in the superior court to compel arbitration. On May 17, 2005, an arbitration panel awarded plaintiffs liquidated damages of $2.4 million, finding Fotouhi had breached the partnership agreement by failing to give proper notice of his withdrawal, and continuing to perform work for and referring work from the insurance clients (arbitration award)."
Oops.  Now, you may be able to leave a firm, but you've got to do it as you promised in advance.  And if you promised to make payments or give notice, you've got to do that.  So Fotouhi's $2.4 million down.
But at least he has new firm, clients, and income to pay it.  Let's see how he responds:
"Fotouhi vowed plaintiffs would 'never get a dime out of him.' A week later, Fotouhi met with a bankruptcy attorney and, on August 29, 2005, filed a petition for chapter 7 bankruptcy. In December 2007, the bankruptcy court entered a judgment denying him discharge, finding he had made false oaths in his bankruptcy schedules and statement of financial affairs. The bankruptcy court found he 'was motivated by his expressed intention to deprive his former partners of any recovery on their massive judgment against him, and to mislead all parties as to the value of his interest in the Partnership as well as other assets' and that, by leaving virtually no paper trail, Fotouhi maximized 'his ability to obfuscate the extent and nature of his property and business dealings.'  The bankruptcy trustee filed a proceeding to recover referral fees Fotouhi did not report in his bankruptcy papers, and the bankruptcy court entered a $53,666.43 judgment against Fotouhi on November 18, 2008." 
That's far from classy by Fotouhi.  It's akin to fraud.  Hardly what we'd like to see from a member of the Bar.
But Fotouhi's not done.  Getting the $2.4 million judgment against him, the additional bankruptcy judgment, and getting his petition dismissed (and a finding that he committed perjury) apparently wasn't enough:
"Less than a month later, on December 12, 2008, 'Fotouhi, Epps, Hillger & Gilroy, Inc.' filed articles of incorporation. The Corporation issued 1000 shares of stock on December 17, 2008. The majority shareholders were Ryan Mau, who had not been a partner of the Partnership, and Hillger, with 350 shares each. Epps, Gilroy, and Fotouhi were issued 100 shares each. Mau and the partners of the Partnership became the directors and officers of the Corporation. Fotouhi was secretary of the Corporation, which registered with the California State Bar in January 2009.  The Partnership continued operating as a law practice.

The bankruptcy trustee pursued a claim for valuation of Fotouhi‘s interest in the Partnership as an asset of the bankruptcy estate. The bankruptcy court found Fotouhi had a 38.59 percent interest in the Partnership and valued this interest at more than $546,000 as of the filing of the bankruptcy petition. On May 10, 2009, the bankruptcy court entered judgment against the Partnership for $546,440.18.
Shortly after the May 2009 bankruptcy judgment was entered, the Partnership began doing business as 'Fotouhi, Epps, Hillger & Gilroy, P.C.' The Corporation took over the Partnership‘s office lease and continued to operate in the same location. The Corporation filed substitutions of counsel for the Partnership‘s clients in pending cases, and vendor accounts were changed to the Corporation‘s name. The Partnership‘s website became the Corporation‘s website, and firm‘s name was changed on the letterhead and signage to reflect that it was now a professional corporation (P.C.) rather than a limited liability partnership (LLP)."

I get it.  More of the same.  Evading the judgment, and with the active participation of your new law partners.  The trial court below understood this as well, and ordered the new firm to pay plaintiffs a portion of the proceeds from the new firm to satisfy the judgments against Fotouhi.  Which led to the latest appeal, the next installment of the attempt to evade the judgment.

Happily, however, the Court of Appeal affirms.  Not only does it do so, but equally happily, in my view, it publishes (albeit belatedly) the opinion.  Including a fairly telling indictment of both Fotouhi and his partners, saying:  "Fotouhi not only declared his intent not to pay the judgment, but that he filed for bankruptcy shortly after the arbitration award in an unsuccessful attempt to discharge the debt and maneuvered Partnership funds to conceal his assets, and that his partners assisted him in his efforts to avoid paying the judgment."

Not exactly a ringing endorsement of the law firm.  Which continues to practice, and has offices in several cities in California and elsewhere.  I'm presuming, however, that it will not exactly highlight the Court of Appeal's opinion on the "News and Events" portion of its web page.  Even though a client might well find this stuff pretty interesting.

You'd expect more from lawyers.  As well as from partners of lawyers.  Given the express findings by the various courts, I would think that the State Bar would get involved.  But as a practical matter, unless you're convicted of drunk driving or bounce a trust fund check or refuse to return your client's phone calls, there's not much stomach for discipline that involves real work and "messy" disputes.  Sadly.

Thursday, July 28, 2011

People v. Gonzalez & Soliz (Cal. Supreme Ct. - July 28, 2011)

You know that when you click on the link to an opinion from the California Supreme Court and it takes fifteen seconds to load, it's probably a death penalty case, and probably over 100 pages.  Which this one is.

You also know that since it's a death penalty case in the California Supreme Court, it's probably unanimous.  Which this one is.  Affirming everything.

Just because something's incredibly long doesn't mean there's much of a dispute about the result. v. EDriver, Inc. (9th Cir. - July 28, 2011)

This case is interesting enough on its own, and involves whether the district court was allowed to require a private, for-profit entity (, Inc.) that had registered to display an initial "splash screen" that informed consumers that it was unaffilliated with the actual DMV.  (The answer, by the way, is "Yes, in order to combat false advertising, but with conditions.)  [You can look at the splash screen the district court imposed either in the Appendix to the opinion or here.  I will say that the "Disclaimer" seems deliberately hidden, at the top of the page (where it's easily ignored given the placement of the click-through.  I might well not have even seen it if I wasn't actively looking for it.)]

The opinion also gives the reader a little bit of insight into Judge Kozinski.  Sure, the usual stuff is there:  the contractions, the breezy style, etc.  But there's also a tiny additional thing as well.  At the bottom of page 9744, at the end of a string cite, Judge Kozinski quotes from an essay written in the NYU Law Review in 1983.  The author of this essay?  Judge Kozinski.

But no big deal, right?  The essay's about the Lanham Act.  This case is about, in part, the Lanham Act.  Some would find it tacky to cite yourself, but academics do it all the time.  Plus, this isn't the only time courts have cited Judge Kozinski's 1983 essay.  It's the fifth.

Now, mind you, 60% of those citations are contained in opinions by . . . . Judge Kozinski.  But hey, that still leaves 40% of the time Kozinski's been cited by someone other than himself.

You also see the development of Judge Kozinski's citation form.  Back in 2002, when he first cites this article by himself, he just cites the article, not the author.  Leaves the author's name out.  Maybe for humility reasons.  Then, the second time, he cites himself and puts the author's (his) name in, but it's only in a footnote.  This third time, he makes the text.  Moving up in the world.

Following this progression, next time, rather than being located at the end of a string cite, Judge Kozinski should cite the article as a standalone.  And his clerks' goal by the time Judge Kozinski takes senior status should be to write an opinion in which quotes from this essay are both the opening and concluding sentences of the opinion.

Then he'd really have arrived.

Wednesday, July 27, 2011

Misik v. D'Arco (Cal. Ct. App. - July 27, 2011)

I like this rule.  You can add an individual as the alter ego of a corporate defendant that was found liable pursuant to Section 187 of the CCP even if you didn't allege alter ego liability at trial.  You don't need a whole new lawsuit either; you simply have to convince the court that it'd be substantively appropriate to amend the judgment to add the individual as a judgment debtor.  When the individual is, in fact, the alter ego of the defendant, that makes sense.

Of course, plaintiff could initially assert alter ego liability in the complaint.  For settlement pressure or other reasons.  But I agree that there's no obligation to do so.  Sometimes it'll be more efficient to decide the alter ego issue later, and if that's what plaintiff wants, I think that's fine.  Maybe we want to first see if there's liability, and maybe also see (if there is) if the corporate defendant will pay the judgment before spending additional resources on alter ego issues.  Plaintiffs are allowed to make a lot of tactical decisions in how they frame their complaint.  This additional option seems perfectly reasonable to me as well.  Especially since, if given the option, that's probably what I'd elect in the vast majority of cases I'd file.

So I think the Court of Appeal gets this one right.  It's reasoning is more doctrinal and less policy-centered than mine, but we reach the same result.

Two other things about this case.  First, the fraud.  Pretty straightforward, and all too common.  Martin Ballardo convinces Thomas Misik to loan $150,000 at 12% interest.  Misik thinks he's lending the money directly to Ballardo, but nonetheless signs a promissory note to "Sayrahan Group LLC" that's countersigned by Thomas D'Arco, neither of whom Ballardo has ever heard of.  Which, parenthetically, should be a huge warning sign.  But it's 12%, right?!

Wrong.  You're never getting that money.  Or even your principal back.  Immediately after getting the $150,000 from Misik, Sayrahan's liabilities exceed its assets.  And Sayrahan never even has more than $3500 in its bank account -- ever -- even though it's just gotten $150,000.  They ain't repaying.  And, not surprisingly, default.

That's a pretty decent case for alter ego liability in my book, even if Sayrahan or D'Arco was actually guilty of fraud.  To hold otherwise would allow these schemes -- which, I might add, are fairly common -- to work pretty well.  Why perform actual Madoff-like fraud, for which you might go to prison, when you can simply take money from someone, do whatever you feel like doing with it (and take a "management fee" for yourself), and then have the corporation go bankrupt when it inevitably doesn't work out.

Indeed, without alter ego liability, I'd imagine that these schemes would be even more common than they are.  Why not?  Again, no need to commit fraud.  Just find someone stupid or greedy enough to loan you a six-figure amount at a crazy interest rate -- trust me, there are lots of these people around -- and tell them "I can't tell you what it's for.  It's a secret.  But what do you care?  You're getting 15% a year!"  Then put the money on red in Vegas, or (equivalently) on commodity futures options in the market -- and see what happens.  If you hit, you double your money and pay the guy back, and pocket the proceeds.  (Plus, most likely, he reinvests, and you do it again!)  If you don't, who cares:  Not your money.  You start a new group -- Sayrahan II -- and do it again.  It's all good for you.

Seems to me a perfectly appropriate application of alter ego liability to stop this stuff.  It's one thing if it's an actual entity with assets and the like.  It's another if it's a thing like this, which (as D'Arco admits) has absolutely nothing other than D'Arco himself; no address other than his house, no web site, no assets, etc.  That's a decent case for alter ego liability, and no reason not to make its application more efficient through CCP 187.

None of which, by the way, says that you should actually invest in these things.  If it's too good to be true, I promise you it is.  That's the lesson of the past ten years.  As well as the lesson of every ten years since at least the 1500s.  That each generation has a hard time learning this doesn't make it any less true.

One last thing.  Thomas D'Arco?  He's a lawyer in Canoga Park.  Still practicing law.  Hopefully -- hopefully -- not still taking people's money.

Monday, July 25, 2011

Semler v. General Electric Capital (Cal. Ct. App. - June 29, 2011)

Some cases are pretty easy.

Plaintiff says he was discriminated against because GE Capital refused to invest in a company if plaintiff was made a manager, which led the company to not permit him to become a member.  Plaintiff says that GE Capital's conduct violates California's Unruh Act.

I can see that a totally unjustified refusal to invest in a company based on some totally arbitrary reason might indeed violate California law.  For example, if you said "I refuse to allow you to hire any blondes," maybe that might indeed state a claim.  Not totally sure, since arguably you have a right to invest your capital irrationally.  But in the context of private placements and the like, at least for the moment, I'll accept that proposition.

So let's see what the case is here.  Why did GE Capital not want to invest its money in a company in which Richard Semler was also a member?

It might have something to do with the three years Semler spent in federal prison in Lompoc.  For felony convictions for conspiracy to sell weapons to Syria (including military helicopters) as well as tax evasion.

Uh, yeah.  That's not exactly a protected class.  Demurrer granted.  Affirmed on the merits.

Friday, July 22, 2011

Conservation Force v. Salazar (9th Cir. - July 22, 2011)

Two hunters wanted to bring in leopard skins and skulls from their recent hunting trips in Africa, but didn't have the required permits, so the Fish and Wildlife Service seized 'em at the airport in San Francisco.  The two hunters filed administrative appeals, and then, when those were decided against them, sued in federal court.  The Ninth Circuit holds that having elected the administrative route, they were barred from suing.

Makes sense.  You'll notice, by the way, that one of the parties is "Conservation Force".  Which you might think was on the side of not killing leopards, but in fact is on the other.  Proving that you can name a group anything you want.

Plus, while we're on the caption, notice how the two individuals are labelled.  Not the usual "Conservation Force, a non-profit corporation; Miguel Blasquez and Colin Crook, individuals," but rather "Conservation Force,  a non-profit corporation; Miguel Blasquez and Colin Crook, hunters."  Which seems a somewhat strange attempt to imply that hunters aren't really people.  Something that you might be inclined to see from the other side of the debate, not from the plaintiffs themselves.

Anyway, the hunters don't get their trophies.  Sorry about that.  Though I'm sure the leopards are sorrier.  At least about the underlying events.

California Parking Services v. Soboba Band (Cal. Ct. App. - July 20, 2011)

This is why you get an attorney to review your contract.  Especially when your contract is with an Indian tribe.

Sovereign immunity.  It's a biatch.  They know it.  You don't.  Get an attorney who does to equalize things.  Or suffer at your peril.

Wednesday, July 20, 2011

People v. Rushing (Cal. Ct. App. - July 20, 2011)

Here's what happens in the movies when you're driving your car and come across a group of inner city youths who are playing in the street and blocking your path.  At least if the movie is Harold and Kumar Escape From Guantanamo Bay.

Here's what happens in the real world when you're driving your car and come across a group of inner city youths who are playing in the street and blocking your path.  At least if you have the misfortune of politely asking them to let you through not knowing that it's "'Hood Day" and the youths are all members of the Fudge Town Mafia Crips.  First- and second-degree murder convictions affirmed.

Life sometimes does not imitate art.

Tuesday, July 19, 2011

U.S. v. Bagdasarian (9th Cir. - July 19, 2011)

Here's a classic Judge Reinhardt opinion.  It's joined by Chief Judge Kozinski and reverses the conviction of Walter Bagdasarian for posting some indisputably nasty, and arguably threatening, comments about Obama posted online.  (Read the opinion for details; I won't post the comments here because they're racist in the extremis.)  But it does so with a plethora of extraneous -- and yet relevant -- details about both history (e.g., vitriol used in previous presidential elections) and contemporary matters (e.g., other slams and rumors about Obama and the status of race relations in America).

Ultimately, the Ninth Circuit holds that an objective observer wouldn't have taken the comments as an actual threat and that Bagdasarian didn't have the subjective intent to actually harm the guy either.  Just a big talker.

Judge Wardlaw dissents.  Her opinion, as well as the majority opinion, are definitely worth reading in their entirety.  I particularly thought it characteristic that Judge Reinhardt wasn't afraid to reveal his opinions about Bagdasarian, saying that he was "an especially unpleasant fellow" whose comments demonstrated his "own malignant nature," and yet reversed his conviction.

It's a tough call what you do about threats like this.  On the one hand, you have to take them seriously, as there are lots of nuts out there, and you never know when you're dealing with an actual shooter.  On the other hand, 99% of them are just pos(t)ers.  Harmless.  Whose speech is just masturbatory violence.

Good opinions all around.

In Re Corrinet (9th Cir. - July 19, 2011)

I'm trying to figure out if it's a word I've never heard of or a typo.

Judge Tashima writes an opinion and cites to a dissent by Judge Kozinski in an earlier case.  Which he labels:  "(Kozinski, C.J., dissental)."

When I read this, I assumed it was a typo.  That Judge Tashima meant "dissenting".  Or something like that.

Though then I noticed that Judge Kozinski was actually on the panel.  And there's a dissent (by Judge Ikuta) as well.  So this is presumably an opinion that received some degree of review.  Doesn't anyone actually read these things?  It's not like a brand new word wouldn't stand out.

Which then led me to think:  "Am I just uninformed?"  To which the answer, obviously, is:  "Yes.  Completely."  But not necessarily on this point.

So I do what anyone would do in the modern era.  I google the thing.  Nope.  No "dissental".  Or at least none by anyone who knows how to spell.

But then I check out Westlaw.  No one's used the word "dissental" in the previous history of the Ninth Circuit.  But lo and behold, I find a 1961 opinion by the Montana Supreme Court.  In which Justice Doyle begins his concurrence with the line:  "One of my bretheran has dissental and another concurred specially in the cause."

It seems to me, again, that Justice Doyle must have meant "dissented".  But this was back in the days when we typed things by hand and actually reviewed the stuff.  And it's the first line of the concurrence.  Surely people read that, no?  Does that mean that some fancy people, like Justice Doyle and the panel here, know something I don't know?  Maybe.

I still think "dissental" isn't a word.  But what do I know?

Upon consideration, I'm thinking it might be fun to try to work in nonexistent words into judicial opinions.  "Cromulent" and "embiggen" are possibilities, clearly, but too obvious.  Something that sounds right.  I was thinking something like "formulata" -- a word I just made up off the top of my head.  But turns out that's actually an Esperanto word.  Though now I'll just revise the game.  Put in as many Esperanto words into opinions as you can fit.

I'm figuring this Judge Kozinski's clerks, at a minimum, are up to the task.  Goodness knows law clerks don't have enough to do already.

So "dissental".  Myth or legend?  History will be the judge.

POSTSCRIPT - History still gets to be the judge, but here's the scoop, from a reader in the know:  "'Dissental' was coined by the Chief Judge at some point in the past several years. He uses it only to describe dissents from denial of rehearing en banc ("dissent" + "denial" = "dissental"). It's caught on with a lot of other judges as an easy way of referring to those dispositions without having to say 'dissent from denial of rehearing' every time."

Personally, I might have used "dissential", but to each his own.  Still, funny that the term's not in anywhere in the intertube.  (Until now, that is.)  And that it was allegedly presaged back in '61.

History, do your work.

POST-POSTSCRIPT:  Lots of insiders have sent me e-mails commenting on the alleged value (or lack thereof) of Judge Kozinski's new word -- alongside the related term "concurral".  Those who like it support its brevity and easy of reference.  Those who don't, well, here's a representative snippet:  "'Dissental' is simply not a word.  It has not caught on with those who care about the English language.  That of course does not include all jurists, even those on the Ninth Circuit."

The judgment about whether "dissental" will eventually make it into the OED clearly isn't merely limited to history, but instead involves an ongoing controversy.  We'll check back in a couple decades to see how it's worked out.

Monday, July 18, 2011

Zapara v. CIR (9th Cir. - July 18, 2011)

This makes sense.

Michael and Gina Zapara run a fraudulent check-cashing scheme and, among other things, owe the IRS $450,000 from it.  (Michael also gets sent to prison -- though that's not in the opinion -- since we're only talking about their tax debt here.)  Coincidentally, they've also deposited over $450,000 into a brokerage account, without using their own names (for obvious reasons), which the IRS finds out about and levies the account.  Yay.  Gonna solve all our balanced budget problems for sure.

But the Zaparas have taken a huge hit.  The account's only worth around $47,000 (!!) now.  Apprently the Zaparas are better at cashing fake checks than they are at picking stocks.  So the Zaparas say:  "Okay.  Just sell the stock and apply it to our debt."  Based on a rule that says precisely that: that the IRS has to sell any levied securities within 60 days of a request.

The IRS gets the requests . . . repeatedly . . . but doesn't sell the stock.  So, when (presumably) the stock goes down even more, the Zaparas say:  "Hey.  Credit us for the $47,000 the stock was worth on the 60th day after we told you to sell.  Because that's what you were required to do."  Which the Tax Court finds utterly reasonable, and does so.

That, again, makes sense to me.  Legally.  Equitably.  Every way that ends in an -ly.

But the IRS appeals!  Which is weird because (1) the Tax Court seems totally right to me, and (2) it's for $47,000, for goodness sakes.  Hardly worth an appeal, particularly when the taxpayer's right.

Plus, the Ninth Circuit affirms.  So time and money down the toilet.

But strange stuff doesn't end there.  Who's defending the $47,000 appeal on behalf of the Zapatas?  Munger.

Seriously?!  Hiring Munger for a $47,000 appeal?  Bet that cost you . . . oh, I don't know.  $48,000?

And yea, I'm sure Munger's part of the overall $450,000 thing, so this is just a piece.  But I still think this is a fair piece of litigation over a tiny thing that should never have reached the Ninth Circuit in the first place.

But it's there.  It's fair.  Get used to it.

Friday, July 15, 2011

AIDS Healthcare Foundation v. LA County of Public Health (Cal. Ct. App. - July 15, 2011)

If you want porn stars to wear condoms, you have to ask the Legislature and/or California OSHA.  The judiciary isn't the right entity to ask.

So holds the Court of Appeal.

Fairbanks v. Farmers New World Life Ins. Co. (Cal. Ct. App. - July 13, 2011)

Here's a pretty darn good discussion of the difference between term versus "universal" life insurance.  As well as pretty good hints as to why you shouldn't purchase the latter.  At least from Farmers, which allegedly markets its policies with incredibly favorable yearly interest rate assumptions -- 11.5% -- even though it knows that's not at all plausible.

My general experience with financial matters tends to support the following broad generalization:  The more complicated something is, the worse it is for you.  That goes for derivatives, negative amortization loans, life insurance, etc.  The more complex and multifaceted a product, the more opportunities the seller has to rip you off.

Food for thought.

P.S. - Farmers nonetheless gets out of this class action.  Since the plaintiffs only crystalized their good arguments in favor of class certification once the case was on appeal.  Too bad.

Thursday, July 14, 2011

In Re Mickel O. (Cal. Ct. App. - July 13, 2011)

It's easy to get jaded in dependency cases.  So many abused children.  So much abuse.  So few easy solutions.

But lest one think that the trial courts and Court of Appeal merely "process" these cases along, here's a good example of where the trial court and Court of Appeal demonstrably care about the outcome.  And, for that reason, spent a great amount of time and mental energy to try to get it right.

Which is not to say it's easy.  'Cause it's not.  This one's about warring sets of grandparents.  In a setting that is far from simple, and that's been horribly protracted to boot.

So it'd be easy, and perhaps understandable, to boot this one and rubber stamp the trial court's decision.  But the Court of Appeal doesn't do that.  Check out the lengthy opinion.  As well as the concurrences.  They demonstrate actual compassion and caring.  Not jaded at all; only realistic and with a keen sense of what goes on in these types of cases.

Good stuff.

Save the Plastic Bag Coalition v. City of Manhattan Beach (Cal. Supreme Ct. - July 14, 2011)

City of Manhattan Beach versus Plastic Bags.  Plastic Bags win procedurally.  Manhattan Beach wins on the merits.

A pretty city is made even prettier.

Wednesday, July 13, 2011

Kunde v. Seiler (Cal. Ct. App. - July 13, 2011)

Yesterday I was doing an oral argument before the Court of Appeal in a pro bono case and there were two cases before mine, so -- having nothing else to do -- I listened intently.  One of the two was an election case that concerned the legality (and constituionality) of California allowing political parties to insert mailers in the sample voter ballots at no marginal cost.  It was an interesting case, and the lawyers were good.

This morning, less than 24 hours later, the Court of Appeal published this 32-page opinion.  Which is pretty rapid.  As well as proof positive that oral argument often doesn't matter much, since the entire opinion was clearly written before the argument and it's likely that not a single word changed.

(I'm not necessarily blaming the Court of Appeal in this regard; if you're not going to change the opinion, there's no reason to delay its publication merely to make it less obvious that oral argument didn't matter.  Nor was the opinion a surprise; the justices asked extremely few questions at oral argument, so it was pretty clear how it was going to come out.  But for those who think that the structure of the California Court of Appeal makes oral argument a useless formality, this is a pretty good example of that position.)

For what it's worth, I think the Court of Appeal gets this one right.  And I say that even though I'm somewhat sympathetic with the losing party's position.

Elections Code 13305 allows political parties to ask their members for contributions by including a one-page letter in the sample ballot mailed to registered party members, and all they have to pay is the marginal cost of inserting that page.  Because that one page rarely adds appreciable weight to the package (and hence does not change the postage cost), most of the time, they basically get to send out the request for free.  That's a pretty big advantage to recognized parties.

But it's an even bigger advantage, when, as here, the party doesn't just ask for contributions (nor, indeed, is that even a big point of the insert), but rather tells people how to vote in the election at issue; e.g., which candidates in an allegedly "nonpartisan" election the voter should vote for and how they should vote on the various initiatives and referenda on the ballot.  There's no doubt whatsoever that this wasn't the intent of the statute, which is geared towards contributions.  But the Court of Appeal's also correct that the statute does not expressly disallow such communications, and since it expressly disallows others (e.g., attacks on other parties), the Court of Appeal's decision makes sense.  Nor do I think this is a First Amendment violation, as it's true that the state is "sponsoring" (in a way) the message, but as long as the party pays the marginal cost of this speech -- which it does -- that's reasonable.  Sure, it favors recognized parties over other entities.  But so do a variety of other election statutes, and that's permissible under the First Amendment.  So as a matter of statutory and constitutional law, I think the decision makes sense.

Which is not to say that I think it's right that political parties should be permitted to do this.  In fact, I think it fairly clear they shouldn't be.  Asking for contributions is one thing.  Articulating partisan positions in official ballot materials in a nonpartisan election is another.  There's no reason for the state to effectively subsidize the latter, and ample reason for them not to.  So I see where the petitioners are coming from.

But this is a matter for the Legislature.  Perhaps unfortunately, but it is.  You can see why a more aggressive theory of the First Amendment might be potentially appealing here.  There are ample reasons for the political process to fail on this issue, and any fairminded public choice model clearly reveals why the elected branches can't reasonably be relied upon to handle this issue properly.  Do the Democratic and Republican Parties benefit by this electoral statute?  Sure they do.  Do they have any incentive to diminish their own impact on the electoral process?  Nope.  So is there any reason for the members of the Legislature, pretty much all of whom are members of these parties, to modify Section 13305 so it does what it's intended to do?  No.

You could potentially rely on the judiciary to correct these public choice failures.  But our system doesn't do that, which instead operates within very limited constitutional constraints.  And within those constraints, which are based upon fundamental democratic assumptions, the Court of Appeal gets this one right.

And doesn't take much time to do so.

FIC v. Union Pacific R.R. (9th Cir. - July 13, 2011)

Judge Fisher begins this opinion with the sentence:

"This is another maritime case about a train wreck."

Ho ho ho.  I like a little nine-word humor to begin an opinion.  (This isn't an original line by Judge Fisher, since Justice O'Connor used it in Norfolk Southern v. Kirby -- hence the "another" -- but I still love it.)

I'll let you read Judge Fisher's opinion to see why it's a maritime case even though it's a train (not ship) wreck.  Let's just say that maritime law is a bit broader than you might initially think.

Tuesday, July 12, 2011

Brown v. Horell (9th Cir. - July 12, 2011)

See if you think this is going to end well:

"Victor Jones and his wife Cheryl, checked into room 207 at the Gold Rush Inn . . . . Prior to meeting Brown, Victor purchased and consumed a quantity of cocaine on G Parkway before returning to the Inn around 12:00 a.m. on April 9. Victor met Brown in the parking lot at about midnight on April 9 and bought cocaine from him. Later, in the early morning hours of April 10, Brown sold Victor more cocaine. Over the next several hours, Victor purchased approximately $100 worth of cocaine from Brown on credit. In exchange for the extension of credit, Victor allowed Brown to borrow his Kia van, which was on loan from the dealership. Brown left in the van with Dante and returned around 2:00 or 2:30 a.m. Victor purchased more cocaine on credit and Brown kept the car keys. When Victor went to Brown’s room between 4:00 and 5:00 a.m. to ask for more cocaine, Brown told him he had no more.

Around 8:00 a.m. on April 10, Brown and Jaynelle accompanied Victor to pick up and cash his paycheck. . . . . Victor paid Brown what he owed for the cocaine, and Brown asked if he could borrow the van to take Jaynelle to her prenatal appointment.  Victor agreed when Brown promised to sell him more cocaine. Brown took the van, and Victor and his wife stayed at the Inn to smoke the cocaine.  Brown checked in with Victor from time to time, sold him more cocaine, and left again with Dante in the van. . . . When Brown returned to the Inn with Dante about 20 minutes later, Victor bought more cocaine."

Look, when your dealer says he doesn't have any more cocaine because you've bought it all, it's probably time to stop.

Plus, the following words do not mix well together:  Kia.  Prenatal appointment.  Cocaine.

P.S. - No, it does not end well.  Victor gets shot four times.  His wife, Cheryl, gets shot and killed.

Monday, July 11, 2011

U.S. v. Quinzon (9th Cir. - July 11, 2011)

I agree that it's a hassle to have your computer activities monitored.  That's pretty intrusive.  It provides a pretty good glimpse into lots of aspects of your life.

But Quinzon should have thought of that before he downloaded child pornography.  Once you've done that, it's a pretty reasonable probation restriction.  We want to make sure you don't reoffend, and that's a pretty good way to do so.

I also liked what the panel did here.  The district court's order was imprecise and potentially very broad.  Understandably so, since computer technology will evolve, and the conditions at issue will start in 2016 and end in 2046.  Who knows what computers (or the internet) will look like then?  Not me, that's for sure.  Nor the district court, which wanted to have a flexible order that could accommodate such changes during the period it was in effect.

Some sorts of monitoring would be unnecessarily intrusive, such as programs that took a snapshot of what's on your computer every second or so.  So what the Ninth Circuit did was to interpret the restriction so it only applied to monitor Quinzon's connections to the internet.  Which makes sense, since that's the conduct for which Quinzon was convicted.  If he wants to write a diary on his personal computer, or use an electric calculator, that need not be monitored (though they can be searched randomly by the probation office if they want).  That makes sense.

A nice, reasonable adjudication.

Friday, July 08, 2011

U.S. v. Gonzalez-Melchor (9th Cir. - July 8, 2011)

We're pretty hard core about not allowing federal judges to engage in plea negotiations.  Or, on the civil side, settlement negotiations, for that matter.  We want our judges to be neutral decisionmakers, not participants.  Sometimes I find that's too bad, since occasionally there's a case that won't settle but that I know would if the judge were permitted to lean in and set the lawyers (and clients) straight.  But that's the way it is, and as a general rule, I understand why.

So when I saw this case, out of San Diego, I was thinking:  "You can't do that.  Who's the judge that did this?"  And saw that it was Judge Burns, who's a smart, and strong-willed, jurist.  But in this case, the latter got ahead of the former.  Since everyone -- both the diverse panel on the Ninth Circuit (Judges Nelson, Bybee and Milan Smith) and me -- agrees that he did something he shouldn't have done.

It's a routine border case the likes of which we have down here every day.  Several years ago, Gonzalez-Melchor gets caught crossing the border and admits that he's come over six or seven times before, so the immigration judge deports him -- denying him (and a ton of other people) voluntary departure because s/he's convinced he's just coming back anyway.  Later, he's caught crossing the border again, so now we criminally prosecute him for being a deported alien found in the U.S.  (That's why the IJ didn't allow voluntary departure; so that next time, he'd be put in prison rather than put back on a bus to Mexico.)

Gonzalez-Melchor is convicted at a bench trial, and now it's time to sentence him.  At which point Judge Burns says that he's inclined to give him two points for acceptance of responsibility, and that if Gonzalez-Melchor agrees to waive his right to appeal to the Ninth Circuit, as well as truly promise to never come back, Judge Burns will knock off a substantial amount of additional time as well, and only sentence him to five years or so.  At which point the lawyer quickly communicates with the client and the client accepts this deal.

The problem is that this violates Rule 11.  This is basically Judge Burns giving a plea deal to a defendant:  waive your right to appeal (and do some other things) and I'll knock some time off your sentence.  The government can make such an offer, and then the judge can decide whether or not to accept the resulting deal.  But the judge can't cut out the middleman and make an offer like that himself.

So Gonzalez-Melchor's waiver of his right to appeal is invalid.  Which makes sense, and I agree is required by Rule 11.

P.S. - Looks to me like there's confusion about dates in Judge Smith's opinion.  The opinion says Gonzalez-Melchor was before the IJ "on September 8, 1995," and two paragraphs later the opinion says:  "Four years later, on September 9, 2009," he was caught reentering the U.S.  Seems like "Four" should be "Fourteen"or, perhaps, "1995" should be "2005".

Thursday, July 07, 2011

The Duality of Death (Cal. Cts. - July 7, 2011)

The California Supreme Court is no Ninth Circuit.  And vice versa.  Particularly when it comes to death.

Today brings two different death penalty cases.  With results that will surprise few.

John Famalaro is sentenced to death in California.  The murder occurred two decades ago.  The California Supreme Court takes up the case on direct review of the sentence.  It unanimously affirms.

Richard Hurles is sentenced to death in Arizona.  This murder occurred almost two decades ago, in 1992.  The Arizona courts are happy with this result, and grant him no relief, both on direct review and on state habeas.  The case reaches the Ninth Circuit on federal habeas, and Hurles draws a panel consisting of Judges Pregerson, Nelson and Ikuta.  The Ninth Circuit reverses.  With a lineup that one would expect:  Judges Pregerson and Nelson in the majority, and Judge Ikuta dissenting.

The persistence of neither opinion is guaranteed.  The Ninth Circuit hardly shirks from reversing unanimous California Supreme Court death penalty opinions.  And the United States Supreme Court hardly shirks from reversing split Ninth Circuit death penalty opinions.

So there are surely more fights to come.

But the contrast is nonetheless fairly stark for now.

Wednesday, July 06, 2011

Nalwa v. Cedar Fair (Cal. Ct. App. - June 10, 2011)

Sometimes I agree with neither the majority nor the dissent.  This time I agree with both.

With respect to the former, I agree with Justice Rushing that the primary assumption of the risk doctrine doesn't apply to bumper cars in an amusement park.  That doctrine principally applies to sports activities.  It's not applicable to bumper cars.  It goes too far to try to extend it there.  The California Court of Appeal shouldn't do so.

With respect to the latter, however, I agree with Justice Duffy that it seems a bit crazy to let someone sue for injuring their hand on a bumper car because they were smashed.  That's the whole point.  There's smashing.  Sure, you could make it safer.  You could make the cars go one way.  You could put bigger bumpers on them.  You could include airbags.  You should stop them from bumping.  But when plaintiff got in the car, it was clear these were just regular old bumper cars.  I don't think they should be permitted to sue.

Whether one accomplishes this result through a negligence analysis or assumption of the risk or primary assumption of the risk, I concede, is unclear to me.  I don't think it should be the last of these.  But I also think I know the proper result.  And liability -- or even a trial -- isn't it.

Tuesday, July 05, 2011

People v. Carbajal (Cal. Ct. App. - July 5, 2011)

Today's Theme:  "Jury Confusion, and Why We Don't (or Can't) Do Anything About It."

Here's yet another case.  The jury convicts Carbajal of molesting one victim, but is hung with respect to the other.  There's a "sentencing enhancement" that says you're punished more if you molest two victims.  Despite the fact they're hung on the second victim, the jury says "True" on the enhancement.  Which the trial judge recognizes is inconsistent, and asks 'em about it, at which point the jury says "Oh, we were confused, we thought it was just multiple 'counts,' not multiple victims."  So the judge understandably sends 'em back in.

At which point they immediately return, this time with a "False" finding.  Which is also inconsistent with their being hung on the other victim.  So the trial court boots the thing and gives it to another jury, which convicts on both the substantive offenses against the second victim as well as the enhancement.

Seems fine, right?

Nope.  Violates the Double Jeopardy Clause, according to the Court of Appeal.

Jurors.  Sausage.  Weird stuff.

U.S. v. Evanston (9th Cir. - July 3, 2011)

Jury deliberations are a black box.  We mean to keep it that way.

Which means no asking a deadlocked jury what their problem is and then giving the parties additional argument.  Don't care what some states have started to do.  Ain't doing it in federal criminal cases.  At least when there's an objection.

Friday, July 01, 2011

People v. Vangelder (Cal. Ct. App. - July 1, 2011)

Does drinking impair your judgment?  Let's see.

Imagine that you've had quite a bit to drink.  You're hanging out with your son.  What do you think would be the best plan at this point:

(A)  Continue to hang out.  Maybe scale it back a bit.
(B)  Get in your vehicle and drive.

Okay.  Let's assume you're not very bright, and elect (B).  Which of the following seems the most reasonable course of action:

(C)  Drive carefully.  You're likely intoxicated.  Be cautious.
(D)  Crank it up.  To 125 miles per hour.  On the 163 in San Diego.

Terry Vangelder elected both (B) and (D).  He's lucky he didn't kill or seriously injure someone.  At which point I wouldn't be surprised at all if he got a decade in prison.

As it is, he got essentially no penalty.  No jail time.  A suspended sentence.  Even that got reversed on appeal (albeit for a new trial) because the trial court improperly excluded some expert testimony.

For me, this case stands for two propositions.  One, people often make incredibly bad decisions.  Two, our criminal laws make an incredibly powerful distinction between "potential" and "actual" harm, even when the underlying acts are exactly the same.  Terry Vangelder gets lucky and doesn't crash into anyone even though he's going 125 mph.  He gets off with a slap on the wrist.  Other drivers are unlucky and kill someone going 60 mph.  They get thrown into prison for five years.

I'm not at all confident that such a broad disparity is justified.

I know it's the Fourth of July weekend coming up.  So remember:  Make good decisions.  'Cause maybe you'll be lucky like Terry.  Or maybe not.

Better safe than sorry.