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Posts Tagged ‘California Supreme Court’

Prop 51: CA Supreme Court Creates Noteworthy Exception to Reduction or Apportionment of Non-Economic Damages

Posted on: November 10th, 2020

By: Zachary Price

Under Proposition 51, although all defendants in California are liable to a plaintiff for 100% of plaintiff’s economic damages (including such things as medical expenses and lost earnings), defendants are only liable for noneconomic damages (such as physical pain, mental suffering, and emotional distress) in proportion to their fault. In other words, while defendants are jointly liable for economic damages, they are severally liable for noneconomic damages. 

However, in B.B. v. County of Los Angeles (2020) 10 Cal.5th 1, the California Supreme Court has created a noteworthy exception, holding that intentional tort defendants are categorically exempt from the several liability protections of Proposition 51. As a result, regardless of a defendant’s proportion of fault, if that defendant is found liable for an intentional tort, they are responsible for 100% of plaintiff’s noneconomic damages.

In B.B. v. County of Los Angeles, a jury found that a Los Angeles County Sheriff’s Department deputy had committed battery by using unreasonable force to subdue a man when the deputy pressed his knees into the man’s back and neck. The man lost consciousness and died 10 days later. The decedent’s family was awarded $8 million in noneconomic damages. The jury found that the deputy was only 20% responsible for the decedent’s death, with 40% responsibility attributable to other deputies and the remainder to the decedent. However, because the deputy’s liability was based on an intentional tort, the trial court entered judgment against the deputy for 100% of the noneconomic damages.          

The appellate court disagreed with the trial court and reduced the judgment against the deputy in proportion to the jury’s allocation of responsibility.  The matter then proceeded to the California Supreme Court. Resolving a split of authority in the appellate courts, the California Supreme Court held that Proposition 51 does not apply to intentional tortfeasors, making the deputy in question liable for the entirety of the $8 million noneconomic damages award. Specifically, the California Supreme Court held that Civil Code section 1431.2(a), which codified Proposition 51, does not authorize a reduction in the liability of intentional tortfeasors for noneconomic damages based on the extent the negligence of others contributed to the injuries in question. “Others” include plaintiffs, codefendants, injured parties, and nonparties.

The California Supreme Court based its decision on the plain language of section 1431.2, which expressly incorporates “principles of comparative fault.” After a thorough discussion of the history of comparative fault in California, the Supreme Court noted that principles of comparative fault have never required or authorized the reduction of an intentional tortfeasor’s liability based on the acts of others. Because section 1431.2 incorporates those principles, the statute did not allow the deputy to reduce his liability for noneconomic damages based on the acts of the decedent or other deputies.     

The California Supreme Court’s decision in B.B. v. County of Los Angeles will have profound ramifications. Armed with this exception to Proposition 51, expect to see an uptick in cases advancing intentional tort theories by the plaintiffs’ bar, particularly in multi-defendant litigation or cases with defendants known to have deep pockets. To avoid potential application of this exception, defense counsel will need to aggressively challenge intentional torts prior to trial through discovery and motion practice.

If you have questions or would like more information, please contact Zachary Price at [email protected]

Securing the Bag: California Supreme Court Rules Exit Searches Compensable

Posted on: March 2nd, 2020

By: Gregory Blueford

Shunning the position of the United State Supreme Court’s decision in Busk v. Integrity Staffing Solutions, Inc., the California Supreme Court has ruled that time spent on the employer’s premises waiting for and undergoing company-mandated exit searches of bags and personal technology devices brought to work purely for personal convenience by employees is compensable as “hours worked” in California.

In Frlekin v. Apple, Inc., the employer, Apple, had a bag search policy that required search of employees’ bags, packages, purses, backpacks, briefcases, and personal Apple technology devices whenever the employee left the store. Apple said the time spent waiting for and undergoing these searches was not compensable as “hours worked” in California, in part because employees could opt not to take a bag and therefore would not be required to undergo the search; in other words, the decision to bring a bag to work was “voluntary.”

The California Supreme Court said that the California Wage Orders had to be reviewed “liberally” and with an eye towards “protecting and benefiting employees.” The Court ruled that Apple’s search policy “controlled” employees by (1) requiring employees to comply with the policy under the threat of discipline, including termination, (2) confined employees to the premises as they waited for and underwent a search, and (3) required employees to complete tasks while awaiting and during the search like finding a manager and waiting for that person to conduct the search, thus, making the time is compensable. The California Supreme Court reasoned that the wage and hour standards of the Fair Labor Standards Act and subsequent decision in Busk, which generally exempts non-required work activities, “differs substantially” from California law, and that a State may enact law that provides employees greater protection than the FLSA, which California has done.

Employers with bag or any similar exit searches must be weary of this decision and ensure that this time is considered compensable and employees stay on the clock until the conclusion of the search.

If you have questions or would like more information, please contact Greg Blueford at [email protected].

CAUTION! Disciplinary Action Ahead

Posted on: February 27th, 2020

By: Anastasia Osbrink

It has now been over a year since California Evidence Code, section 1129 went into effect, and as such, it is a good time to be reminded that compliance is mandatory and attorneys who fail to comply face possible disciplinary action. Evidence Code, section 1129 requires attorneys to provide the client with a written explanation of mediation confidentiality and obtain a signed acknowledgment from the client on the disclosure document prior to the client agreeing to participate in mediation. (Evid. Code, § 1129.) Mediation confidentiality is codified in Evidence Code, section 1119. If an attorney fails to obtain this signed disclosure, which the attorney must also sign, he or she could face disciplinary action. Moreover, Evidence Code section 1122 was amended as part of this requirement. That Evidence Code section now provides for the admission of evidence of a signed disclosure form, or lack thereof, as part of a disciplinary action against an attorney for failure to obtain it. (Evid. Code, § 1122.)

This change, of which many California attorneys are still unaware, occurred as a result of the holding in Cassel v. Superior Court, where the California Supreme Court ruled that mediation confidentiality prohibited plaintiffs from introducing communications that took place during mediation as evidence of malpractice against their former attorneys. (Cassel v. Superior Court (2011) 51 Cal.4th 113.) After that ruling, the California Law Revision Committee wanted to ensure that clients understood the extent of mediation confidentiality and how it could impact the current or future litigation.

Providing a written explanation of mediation confidentiality that is signed by the client is not only good practice, it is the law. Moreover, compliance with Evidence Code, section 1129 is especially simple because there is form language within this code section that an attorney can use to ensure compliance. There are a few additional points to remember. First, the document must be a separate, stand-alone document that is not attached to any other document. Also, it must be obtained prior to the client agreeing to mediation. That often means before the Case Management Conference, California lawyers. The simplest means of compliance is to provide this document to the client at the same time as an engagement agreement and any conflict waivers, but separately from those documents. Additionally, the document must be provided in the client’s preferred language, so make sure to find this out from the client ahead of time. Finally, attorneys must make sure that they sign the document as well and provide a fully executed copy to the client. These are steps an attorney must take to make sure they do not face later disciplinary action.

If you have questions or would like more information, please contact Anastasia Osbrink at [email protected].

AB5: California’s Controversial Gig-Work Law Took Effect January 1, 2020

Posted on: January 7th, 2020

By:  Margot Parker

As of January 1, 2020, California’s AB5 may require employers to reclassify hundreds of thousands of independent contractors as employees with broad labor law protections.  The new law codifies the “ABC test” adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles in 2018.  Under the ABC test, a worker may only be classified as an independent contractor if it can be shown that:

A. The worker is free from the control and direction of the hiring entity, both under the contract for the performance of work and in fact;

B. The worker performs work that is outside of the usual course of the hiring entity’s business, and

C. The worker is engaged in independently established trade, occupation, or business that is of the same nature as the work performed for the hiring entity.

This strict three-pronged test now applies to the requirements of the California Labor Code and the California Unemployment Insurance Code.  Beginning July 1, 2020, it will also apply to the California Workers Compensation Code.

While the law provides exemptions for certain occupations and industries (including accountants, architects, dentists, insurance brokers, lawyers, and engineers), the Legislature declined to exempt app-based ride services and food delivery companies, whose workers complain they often earn less than minimum wage.  Uber, Lyft, DoorDash, Postmates and Instacart are mounting a ballot initiative to exempt their workers, while trucking associations, photographers, and freelance journalists have brought other initiatives opposing the law.

Given such controversy, the law’s author intends to introduce additional legislation to clarify AB5 this year.  In the meantime, employers should consult with legal counsel and review independent contractor classifications to ensure proper classification of workers pursuant to the ABC test.

If you have any questions or would like more information, please contact Margot Parker at [email protected].

Dear California Legislature the Constitution Prohibits Ex Post Facto Laws

Posted on: June 10th, 2019

By: David Molinari

If you have practiced law in the State of California for an appreciable period of time you become numb to warnings from out-of-state clients and counsel bemoaning enactments by the state’s legislature that will doom business and cause exodus of industries from the state. We are a resilient people, capable of prospering despite the “well-intentioned” actions of the state’s governing bodies.  However, did the State Assembly really intend to draft a bill that violates California Constitution Article 1, Section 9 prohibiting ex post facto laws with California Assembly Bill 5, adding Labor Code 2750.3?

Assembly Bill 5 seeks to codify the recent California Supreme Court decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018.). In the Dynamex case, the State Supreme Court virtually eliminated the status of independent contractor. The California Supreme Court adopted an “ABC” test for determining whether workers are employees under California Wage Order laws. The test requires the hiring entity establish three elements to disprove employment status: (A) That the worker is free from control of the hiring entity in connection with work performance-both under the contract and in fact; (B) That the worker performs work outside the hiring entity’s usual business; and (C) That the worker is customarily engaged in an independent business of the same nature as the work performed.

Under Assembly Bill 5, the legislature seized on the ability to expand the categories of individuals eligible to receive benefits by creating a legislative instrument that would result in additional monies being deposited into the state via continuously appropriated funding from an expanded pool of employers. The Bill seeks to codify the Dynamex decision. But the legislature simply adopted the Supreme Court’s opinion which includes retroactive application. The legislative findings clearly show a financial purpose behind codifying Dynamex: The loss to the state of revenues from companies that use “misclassified” workers to avoid payment of payroll taxes, premiums for workers’ compensation, Social Security, unemployment and disability insurances. The Assembly clearly did not overlook or ignore retroactive application of Dynamex may subject this new pool of employers to criminal penalties they currently are not exposed to suffering. The Assembly in its findings concluded: Assembly Bill 5 “Would expand the definition of a crime.”

The Supreme Court held applying Dynamex retroactively was consistent with due process because the Court was “merely extending” principles previously stated in S.G. Borello & Sons, Inc v. Department of Industrial Relations, 48 Cal.3rd 341 (1989) and represented “no greater surprise than tort decisions that routinely apply retroactively.” The holding has been cited for authority for retroactive application by the 9th Circuit in Vasquez v. Jan-Pro Franchising as well as the State Courts of Appeal including the 4th District, Division 1 in Garcia v. Border Transportation Group, LLC, 28 Cal. App. 5th 558.

Codification of Dynamex threatens to create an ex post facto law that expands exposure to criminal penalties. Thus, it would seem to be in violation of California Constitution, Article 1, Section 9 that the legislature shall not pass ex post facto laws.  For example, the new pool of employers will be immediately subject to prosecution under California Labor Code Section 3700.5. Labor Code Section 3700.5 makes it a crime, punishable by imprisonment in the county jail for up to one year, or by a fine of not less than $10,000.00 or both, for any entity that fails to secure workers’ compensation insurance. A second or subsequent conviction is punishable by imprisonment for up to a year and a fine of not less than $50,000.00.

Article 1, Section 9 has been applied to past employment-related legislation; but only with respect to the Article’s prohibition against laws impairing the obligation of contract. The language of Article 1, Section 9 appears unambiguous and absolute. However, prior challenges have run into judicial interpretation that the Article may not be read literally and the prohibitions of Article 1, Section 9 may not be absolute; at least with respect to the impairment of contracts. The clause “is not to be read with literal exactness like a mathematical formula.” Torrance v. Workers’ Compensation Appeals Board, 32 Cal.3rd 371 (1982).

The guidelines for determining the constitutionality of a statute imposing an ex post facto criminal penalty applies a presumption against retrospective application unless the legislature expresses such specific intent. The legislature’s findings expressly stated Assembly Bill 5 “would expand the definition of a crime.” Is that enough of a legislative expression of intent even though the State Supreme Court only referenced civil “tort decisions” to justify retroactive application? Maybe we shouldn’t be numb to those warnings any longer.

For more information, please contact David Molinari at [email protected].