Justia California Court of Appeals Opinion Summaries

The state sued several oil and gas firms alleging their participation in a multiyear conspiracy to manipulate the California gasoline market to the detriment of California consumers. The complaint alleged violations of the Cartwright Act, Business and Professions Code section 16720, and the Unfair Competition Law, section 17200.Defendant SK Trading, a South Korean corporation, sought a writ of mandate to compel the trial court to reverse its order denying its motion to quash service of the summons for lack of personal jurisdiction. SK argued that its limited contacts with California were insufficient to support the court’s exercise of specific personal jurisdiction. The court of appeal denied the petition. SK Trading’s contacts with California supported the court’s exercise of specific personal jurisdiction; it purposefully engaged in activities that should have led it to reasonably anticipate being required to defend those activities in California legal proceedings. SK Trading has not established that the assumption of jurisdiction over it is unfair or unreasonable. There was evidence that SK Trading controlled and facilitated key aspects of the alleged conspiracy. The operative facts of the controversy are related to that contact with this state. View "SK Trading International Co. Ltd. v. Superior Court" on Justia Law

Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon) appealed after a trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition Law (UCL), and 121,844 violations of the False Advertising Law (FAL). The court imposed a $1,250 civil penalty for each violation. The Court of Appeal concluded the trial court erred in just one respect: in addition to penalizing Ethicon for its medical device instructions and printed marketing communications, the court penalized Ethicon for its oral marketing communications, specifically, for deceptive statements Ethicon purportedly made during one-on-one conversations with doctors, at Ethicon-sponsored lunch events, and at health fair events. However, there was no evidence of what Ethicon’s employees and agents actually said in any of these oral marketing communications. Therefore, the Court of Appeal concluded substantial evidence did not support the trial court’s factual finding that Ethicon’s oral marketing communications were likely to deceive doctors. Judgment was amended to strike the nearly $42 million in civil penalties that were imposed for these communications. View "California v. Johnson & Johnson" on Justia Law

Relator Gilbert Ellinger brought a qui tam suit on behalf of the People of the State of California against Zurich American Insurance Company (Zurich), ESIS, Inc. (ESIS), and Stephanie Ann Magill, under Insurance Code section 1871.7, a provision of the Insurance Frauds Prevention Act (IFPA). In January 2016, Ellinger injured his back while working, and he immediately informed his supervisor. The following month, Ellinger reported to his employer’s human resources manager that he had sustained a work-related injury and had told his supervisor about it. The human resources manager created a “time line memorandum” summarizing the conversations she had with Ellinger about the injury. She placed the memorandum in Ellinger’s personnel file. Ellinger filed a workers’ compensation claim. Magill worked as a senior claims examiner for ESIS and was the adjuster assigned to investigate Ellinger’s claim. ESIS denied Ellinger’s claim on an unspecified date. Magill later testified that she denied the claim because of a written statement from Ellinger’s supervisor in which the supervisor claimed that Ellinger had not reported the injury to him. When the human resources manager was deposed in November 2016, she produced the time line memorandum, which Ellinger’s counsel in the workers’ compensation action did not know about until then. Nearly eight months after that disclosure, in July 2017, ESIS reversed its denial of the claim and stipulated that Ellinger was injured while working, as he had alleged. Contrary to Magill’s testimony, her email messages showed that the human resources manager had emailed Magill the time line memorandum in March and April 2016, and Magill thanked the manager for sending it. Ellinger alleged that Magill’s concealment of or failure to disclose the time line memorandum violated Penal Code section 550 (b)(1) to (3). On the basis of those alleged violations, Ellinger alleged that defendants were liable under section 1871.7. Against each defendant, Ellington sought a civil penalty and an assessment of no greater than three times the amount of his workers’ compensation claim. The trial court sustained defendants’ demurrers without leave to amend, concluding defendants could not be held liable under section 1871.7 for any failures of Magill in the claims handling or review process. Finding no reversible error in sustaining the demurrers, the Court of Appeal affirmed. View "California ex rel. Ellinger v. Magill" on Justia Law

M.G. (Mother) appealed the termination of her parental rights to her 11-year-old daughter, A.R., and her 10-year-old son, C.R., and placing them in a permanent plan of adoption by their paternal grandparents. M.G. did not challenge the merits of the order; instead, she argued it had to be reversed because the Orange County Social Services Agency (SSA) failed to conduct an inquiry into whether the children had Native American ancestry, as required by the federal Indian Child Welfare Act (ICWA). The Court of Appeal found an ICWA inquiry should be conducted in every case. "The tribes have a compelling, legally protected interest in the inquiry itself. It is only by ensuring that the issue of Native American ancestry is addressed in every case that we can ensure the collective interests of the Native American tribes will be protected. Thus, the failure to conduct the inquiry in each case constitutes a miscarriage of justice." In the interest of limiting any further delay, the Court conditionally reversed and remanded the case with instructions that SSA conduct the inquiry immediately, and that the trial court likewise resolve the issue as soon as possible. If the initial inquiry revealed no Native American heritage, then the judgment would be reinstated forthwith. View "In re A.R." on Justia Law

The Song-Beverly Consumer Warranty Act (also known as California’s “Lemon Law”) defined “new motor vehicle” as a new vehicle purchased primarily for personal (nonbusiness) purposes, but also specified that the term included “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty.” The remedy at issue here, known as the “refund-or-replace” provision, required a manufacturer to replace a defective “new motor vehicle” or make restitution if, after a reasonable number of attempts, the manufacturer (or its representative) was unable to repair the vehicle to conform to the applicable express warranty. Plaintiffs Everardo Rodriguez and Judith Arellano purchased a two-year-old Dodge truck from a used car dealership. The truck had over 55,000 miles on it and, though the manufacturer’s basic warranty had expired, the limited powertrain warranty had not. After experiencing electrical defects with the truck, plaintiffs sued the manufacturer, FCA US, LLC (Chrysler), for violation of the refund-or-replace provision. FCA moved for summary judgment, arguing the truck was not a “new motor vehicle,” and the trial judge agreed. The sole issue in this case was whether the phrase “other motor vehicle sold with a manufacturer’s new car warranty” covered sales of previously owned vehicles with some balance remaining on the manufacturer’s express warranty. The Court of Appeal concluded it did not, and that the phrase functioned instead as a catchall for sales of essentially new vehicles where the applicable warranty was issued with the sale. Judgment was therefore affirmed. View "Rodriguez v. FCA US, LLC" on Justia Law

This case arose from an ongoing investigation by the district attorneys’ offices of several California counties into the debt collection practices of Alorica Inc. (Alorica), specifically the Rosenthal Fair Debt Collection Practices Act, and the federal Telephone Consumer Protection Act. In November 2019, the district attorneys' offices (collectively referred to as the State) served Alorica with an investigative subpoena. The subpoena contained 11 separate document requests and covered the time period from February 2015 through the date the subpoena was served. The State directed Alorica to respond by December 13, 2019, and to specify whether any of the requested records were no longer in Alorica’s “possession, custody or control.” Alorica served its objections and responses to the subpoena. Alorica objected to most of the requests, and argued that the requests violated Alorica’s right to privacy and right against unreasonable searches and seizures. Alorica claimed that it did not have any debt collection clients, so it denied having any of the requested agreements with clients related to debt collection, policies and procedures relating to the collection of consumer debt, or call records of debt collection calls as to the defined top five clients. One year later, in November 2020, the People petitioned for an order compelling full compliance with the subpoena. Alorica opposed and argued that it was not a debt collector subject to the Rosenthal Act, so the subpoena was invalid as it was not reasonably relevant to an investigation concerning debt collection. Alorica ultimately lost its argument and was ordered to produce files in accordance with the administrative subpoena. View "California v. Alorica, Inc." on Justia Law

The plaintiff, SwiftAir, entered into an agreement with the defendant, Southwest Airlines (“Southwest”). Under the agreement, SwiftAir would develop software for Southwest. In turn, Southwest would test the software to determine whether to license it. When Southwest decided not to license the software, SwiftAir filed various breach of contract and fraud claims against Southwest.The trial court granted summary judgment in Southwest’s favor, finding that the Airline Deregulation Act (“ADA”) preempted all but one of SwiftAir’s claims. The remaining claim was presented to a jury, which found in Southwest’s favor.The Second Appellate District affirmed. For a claim to be preempted by the ADA, 1.) the claim must derive from state law, and (2) the claim must relate to airline rates, routes, or services, either by expressly referring to them or by having a significant economic effect upon them. Here, the subject of the contract was providing passengers with inflight entertainment and wireless internet access, which are considered “services” under the ADA. Thus, Southwest did not need to prove that SwiftAir’s claims would have a significant economic effect on Southwest’s services. View "SwiftAir v. Southwest Airlines" on Justia Law

At birth, Appellants’ son tested positive for methadone and marijuana. Appellant A.S., the child’s mother, admitted to using marijuana days before giving birth. The juvenile court detained J.C. and placed him with Appellant J.C.’s mother.Based on Appellants’ criminal histories and substance abuse issues, the Los Angeles County Department of Children and Family Services (“the Department”), the couple’s son was declared a dependent of the court. At a 12-month hearing, appellants had not made substantial progress towards alleviating or mitigating the causes that led to their son’s placement. The court terminated Appellants’ parental rights. In doing so, the court relied on appellants’ statements that they had no known Indian ancestry.On appeal, appellants argued that the Department failed to conduct an adequate investigation into whether either parent was of Indian ancestry and that the trial court failed to ensure that the Indian Child Welfare Act (“ICWA”) applied. The court held that the Department did not fulfill its duty under the ICWA because it did not speak to extended family members who were available. Additionally, the trial court failed to ensure that the Department fulfilled its duties by neglecting to ask the Department what efforts it made to ensure the ICWA did not apply.The court conditionally affirmed the trial court’s order, remanding the case to the trial court to ensure that the Department conducts the necessary inquiries, including speaking with extended family members. View "In re J.C." on Justia Law

Plaintiff Christopher Teacher filed a complaint seeking a writ of administrative mandate against California Western School of Law (CWSL) challenging the procedures CWSL followed in expelling him from the law school. The trial court denied Teacher’s request for a writ and entered a judgment in favor of CWSL. On appeal, Teacher claimed, among other things, that CWSL failed to provide him with a fair administrative process in expelling him. The Court of Appeal concurred, finding CWSL’s disciplinary procedures expressly provided, “The student or the student’s spokesperson shall have the right to cross[-]examine witnesses.” Notwithstanding this, CWSL did not afford Teacher the opportunity to cross-examine any of the witnesses on whose statements CWSL relied in reaching its decision to expel Teacher. In light of the fact that CWSL deprived Teacher of this important right guaranteed by its own procedures, the Court reversed judgment, emphasizing that it did not reach any conclusion as to Teacher’s commission of the misconduct that CWSL alleged. The case was remanded for further proceedings. View "Teacher v. Cal. Western School of Law" on Justia Law

Plaintiff’s, two patients at an acute psychiatric hospital, obtained judgments against the hospital and its parent company under the Elder Abuse and Dependent Adult Civil Protection Act (“the Elder Abuse Act”).On appeal, Defendants claimed that the Medical Injury Compensation Reform Act of 1975 (“MICRA”) applied to Plaintiffs’ claims. Defendants contend that under MICRA, Plaintiffs’ claims are time-barred.The Second Appellate District explained that MICRA is “designed to discourage medical malpractice lawsuits,” whereas the Elder Abuse Act permits “interested persons to engage attorneys to take up the cause of abused elderly persons and dependent adults. The legislative intent is clear that professional negligence and the Elder Abuse Act are separate and distinct. Thus, Plaintiffs’ claims under the Elder Abuse Act were not time-barred.The otherwise court affirmed the lower court’s rulings over Defendants’ objections. However, on Plaintiffs’ appeal, the court ordered a new trial on the issues of respondeat superior and ratification. View "Samantha B. v. Aurora Vista Del Mar" on Justia Law