Federal Class Action Appeals – What’s the Deadline to Petition to Appeal When a Motion for Reconsideration Is Filed?

Josephine Mason
December 28, 2018

If you’re litigating a putative class action in federal court and get a class certification order that is adverse to your client (whether plaintiff or defense), you may petition to take an immediate appeal of that order.  Fed. R. Civ. P. 23(f). The petition to appeal must be filed quickly—within 14 days.  Id.  The short turnaround time “is designed to reduce the risk that attempted appeals will disrupt continuing proceedings.” Fed. R. Civ. P. 23(f), Adv. Comm. Note (1998).

But what happens if you also file a motion for reconsideration of the certification order? See Fed. R. Civ. P. 54(b). Rule 54(b) does not impose a deadline to file a motion for reconsideration; unless otherwise provided by local rule, a motion for reconsideration may be filed “at any time before the entry of a judgment.” Id.see, e.g., N.D. Cal. Civ. L.R. 7–9; Monterey Bay Military Hous., LLC v. Pinnacle Monterey LLC, No. 14-CV-03953-BLF, 2015 WL 1548833, at *5 n.9 (N.D. Cal. Apr. 7, 2015) (Civil Local Rule 7–9 “imposes no time limits on filing”).

That presents a question: Does the motion for reconsideration toll the time to file your petition to appeal under Rule 23(f)?

The dreaded answer:  It depends.

All of the circuits have answered this question in the affirmative—but only if the motion for reconsideration is filed within the 14-day period imposed by Rule 23(f). Lambert v. Nutraceutical Corp., 870 F.3d 1170, 1177 & n.3 (9th Cir. 2017), cert. granted, 138 S. Ct. 2675 (2018) (collecting cases). This limitation is consistent with the general rule that “a motion for reconsideration tolls the time for appeal, provided that the motion is made within the time for appeal.” Id. at 177-78 (citation omitted). Thus, the time to file a Rule 23(f) petition will be extended to 14 days from when the district court issues its order on your timely motion for reconsideration.

Watch out, though. The Supreme Court granted review in Lambert and just heard argument on November 27, 2018. The Question Presented is conceptually distinct: Whether equitable tolling applies to Rule 23(f)’s 14-day deadline. However, the opinion below addressed both equitable tolling and, as noted, whether a motion for reconsideration tolls the time to file a Rule 23(f) petition. Lambert, 870 F.3d at 1177 & n.3. And some of the Justices’ questions during argument appeared directed at the latter issue. See Transcript of Oral Argument at 4:2-6 (“JUSTICE GINSBURG: Counsel, I thought that both sides agreed that if the motion for reconsideration is filed within 14 days, within that period, then there is tolling until the motion is decided. Is that so?”). However the Court rules on the equitable tolling issue, it very well may also comment on whether a motion for reconsideration tolls the time to file a Rule 23(f) petition.

For now, it is still probably a safe bet that a timely motion for reconsideration—i.e., one filed within Rule 23(f)’s 14-day limit—will still toll the time to file a Rule 23(f) petition. A definitive answer may be forthcoming from the Supreme Court in Lambert. But whatever you do, don’t wait more than 14 days!

California Provides Defendants Additional Exemptions from Slack Fill Liability

Geoff Pittman
November 27, 2018

In response to an ever-increasing number of class action lawsuits claiming consumer deception based on the amount of empty space in product packaging, California recently amended its slack fill statutes to provide manufacturers with additional exemptions to avoid liability. For those who are unfamiliar, slack fill is defined as non-functional empty space in opaque product packaging. Federal regulations (21 C.F.R. § 100.100) and California law (California Business and Professions Code Sections 12606 and 12606.2) generally prohibit “non-functional slack fill,” subject to certain exemptions for companies to avoid liability for functional slack fill in their products. The argument frequently raised by plaintiffs is that the non-functional space in food and beverage products misleads consumers, causing them to think that they are buying more product than they actually receive. These lawsuits have had limited success on the merits, but still present risk for food and beverage companies given litigation costs and precedent allowing some cases to proceed beyond the motion to dismiss phase of litigation.

Before the recent California amendment, the exemptions for functional slack fill included protecting the contents in the package, machine requirements to close packaging, and to allow for settling during shipping, among others. California Assembly Bill 2632, which was recently signed into law by Governor Brown, provides defendants with several new exemptions from liability, in an attempt to reduce the spate of largely unsuccessful class action lawsuits. Specifically, Assembly Bill 2632 amends California Business and Professions Code Sections 12606 and 12606.2 to provide the following new exemptions:

(1) exempts packaging that does not allow the consumer to view or handle the physical container or product (i.e., products sold online);

(2) exempts product packaging that clearly and conspicuously depicts the product “fill line” on the exterior packaging or the immediate product container if visible at the point of sale; and

(3) exempts food containers where the actual size of the product is clearly and conspicuously displayed on exterior packaging (excluding the bottom), accompanied by a clear and conspicuous disclosure that the depiction is the “actual size” of the product.

These exemptions will provide defendants with additional defenses to slack fill claims in California and are a welcomed development given the large number of costly slack fill claims being raised year in and year out. Food and beverage companies in particular should review their product packaging and take steps to ensure that any slack fill in their product packaging falls under one of the exemptions provided for under California law. Hopefully, the additional clarity and exemptions provided by AB 2632 will curtail the continued explosion of consumer class action lawsuits alleging slack fill violations.

Revisiting Alvarado: “Work Week v. Pay Period” Question Remains

Diane Marie O'Malley and Dorothy Liu
June 6, 2018

“The California Supreme Court Modifies Its Opinion in Alvarado v. Dart  Container Corporation, 4 Cal.5th 542 (2018) only to leave open the ‘workweek v. pay period’ regular rate calculation question.”

Things couldn’t get much worse for employers in the area of calculating the regular rate of pay – a complicated operation even on a good day. The California Supreme Court just made the calculation murkier when it modified its March 5, 2018 Alvarado v. Dart  Container Corporation opinion.

We recently reported that, on March 5, 2018, the California Supreme Court issued its long awaited overtime calculation decision in Alvarado v. Dart  Container Corporation.  The specific question before the Court was “how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.”

To recap briefly, in Alvarado, a group of employees who received a flat sum bonus for working on a weekend filed a class action arguing that the employer must allocate the bonus only to non-overtime, regular hours worked during the pay period when determining the regular rate of pay for any overtime calculations. Plaintiff Alvarado relied upon a Division of Labor Standards Enforcement (DLSE) Manual policy, which directly addressed the issue. Following federal law, Dart Container had allocated the bonus to all hours worked, thus including overtime hours.

The California Supreme Court agreed with Plaintiff Alvarado finding that, when allocating a flat sum bonus, an employer must allocate that bonus only to non-overtime, regular hours worked in a pay period.

Questions cropped up immediately as the Court specifically discussed calculating the per-hour value within a  pay period.  As employers know, overtime is calculated on a workweek basis, not a pay period basis.  However, a bonus earned over a time period longer than a workweek is apportioned over that time period. DLSE Manual Section On March 22, 2018, the California Employment Law Council filed an Amicus Letter Requesting Clarification and/or Modification of the Court’s Order. In its Amicus Letter, the Council sought clarification regarding what seemed to be the Court’s suggestion that “employers should calculate the regular rate of pay for overtime compensation for each pay period, rather than each individual work week within the pay period.” (Amicus Letter, p. 1) The Council sought modification of the Court’s decision by changing the term “pay period” to “workweek or other period over which the bonus is earned.” (Amicus Letter, p. 3)

On April 25, 2018, the Court issued a modified opinion, which denied the Council’s Request and stated:

On page 551 of the published opinion, a footnote is inserted at the end of the sentence that reads: “Plaintiff’s formula turns out to be marginally more favorable to employees; the key distinction between the two formulas is whether the bonus is allocated to all hours worked, or only to the nonovertime hours worked.” The new footnote, which is numbered as footnote 2, reads: “Defendant’s formula and plaintiff’s formula have one thing in common: both use  the pay period as the basis for calculating an employee’s regular rate of pay. In  other words, neither party suggests that regular rate of pay should be calculated on  a workweek basis, which might result in an employee having two or more regular  rates of pay in a single pay period. This opinion follows the lead of the parties in  using the pay period as the basis for calculating regular rate of pay, but we did no grant review to decide whether, under California law, regular rate of pay is properly calculated on a pay-period basis or a workweek basis, and nothing in this opinion should be interpreted as deciding that question.” (emphasis added) Alvarado v. Dart  Container Corporation, Case No. S232607 (Cal. Sup. Ct, April 25, 2018)

Unfortunately, the Court  leaves the “workweek v. pay period” question  for another day.  Thus, employers are well advised to seek their labor counsel’s advice regarding that question when employers are re-working their payroll systems to comply with Alvarado’s mandate that they use only non-overtime hours as the divisor for purposes of calculating the per-hour value of the bonus.

Recent Decisions on Statutory Immunities Under the California Tort Claims Act

Kaylen Kadotani
May 14, 2018

The California Tort Claims Act (“Act”), California Government Code §§ 810, et seq., sets forth the basic principles of public entity tort liability.  Common tort claims against public entities relate to alleged injuries that occur on public property, such as a trip-and-fall on a public sidewalk alleged to be in a dangerous condition. Under the Act, statutory immunities are available to immunize public entities from so-called “dangerous condition liability.”

The California Court of Appeal recently issued two decisions upholding the application of two such immunities – trail and design immunity – in the context of a dangerous condition action:  Arvizu v. City of Pasadena (2018) 21 Cal.App.5th 760 and Rodriguez v. Dept. of Transportation (2018) 21 Cal.App.5th 947.

Continue reading Recent Decisions on Statutory Immunities Under the California Tort Claims Act

Ninth Circuit Underscores The Importance Of Carefully Crafting Class Action Settlements

Matthew Peck
March 6, 2018

In Brown v. Cinemark USA, Inc., 876 F.3d 1199 (9th Cir. 2017), the Ninth Circuit considered an issue of first impression: whether it had jurisdiction to consider an appeal of an order denying class certification where the individual plaintiffs seeking to represent the class settled their individual claims.

In Brown, Plaintiffs Silken Brown and Mario De La Rosa filed a class action complaint against Defendants Cinemark USA, Inc. and Century Theater, Inc. alleging various wage and hour claims.  The Defendants removed the case to federal court, where it was then consolidated with similar pending actions.

The district court dismissed the Plaintiffs’ direct wage statement claim and denied certification of Plaintiffs’ meal and rest break, reporting pay, off the clock work, derivative wage statement, and direct wage statement claims. Defendants then moved for summary judgment on the remaining individual claims, and the district court issued a tentative ruling granting in part and denying in part the motion.  Thereafter, the parties stipulated to the tentative ruling and settled the Plaintiffs’ remaining individual claims.  Importantly, the settlement agreement reserved the Plaintiffs’ rights to challenge the district court’s ruling denying certification of the Plaintiffs’ direct wage claim and dismissing Brown’s direct wage statement claim.

Plaintiffs appealed the issues reserved by the parties’ settlement agreement to the Ninth Circuit. On appeal, Defendants argued that the Ninth Circuit lacked jurisdiction under 28 U.S.C. § 1291 to consider an appeal of the district court’s interlocutory judgment in light of the Supreme Court’s decision in Microsoft Corp. v. Baker, 582 U.S. ____, 137 S.Ct. 1702, 198 L.Ed.2d 132 (2017).¹ The Ninth Circuit distinguished Baker, first noting that appeal pursuant to terms of the parties’ settlement agreement did not raise the same concerns as the voluntary dismissal in Baker because, unlike the Baker plaintiffs, the Brown Plaintiffs continued litigating their remaining individual claims following denial of certification.  Moreover, in stark contrast to Baker, no facts before the Circuit suggested that the Brown Plaintiffs engaged in “sham tactics” to achieve an appealable final judgment because the appeal resulted—not from a unilateral dismissal of claims—but pursuant to the terms of a bargained-for settlement  between the parties, which expressly preserved certain claims for appeal.  That is, Plaintiffs did not “openly intend[] to sidestep Rule 23(f) when they voluntarily dismissed their  claims.”

As a result, the Ninth Circuit concluded that it had jurisdiction under 28 U.S.C. § 1291 to consider the class certification ruling in Brown on the merits.  By contrast, in Bobbit v. Milberg, ____ Fed.Appx. ____, 2018 WL 654157, at *1 (9th Cir., Feb. 1, 2018), the Circuit ruled, on remand from the Supreme Court, that Baker compelled it to dismiss for want of jurisdiction an appeal of a ruling denying class certification where the individual plaintiffs had stipulated to voluntary dismissal of their personal claims and allowed another party to intervene for the purpose of pursuing the appeal. In contrast to Brown, the plaintiffs did not agree to preserve any claims for appeal.

The clear lesson is that settlements of individual claims in the class action context must be carefully drafted to avoid the creation of avenues to appellate relief that might otherwise be unavailable.


¹ In Baker, the district court denied class certification, and the appellate court declined discretionary interlocutory review of that denial.  The plaintiffs then voluntarily dismissed their own claims to create an appealable final judgment.  The Supreme Court ruled that the voluntary dismissal did not qualify as a “final decision” and noted that approval of such tactics would undermine 28 U.S.C. § 1291’s firm finality principal which is “designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class-action orders.”

Court Grants Reprieve from Warning Obligations Related to Glyphosate for California Proposition 65 on Basis of Inadequate Scientific Evidence

Merton Howard and Shannon Nessier
March 2, 2018

In a significant decision out of the Eastern District of California, Judge William Shubb issued a preliminary injunction staying warning obligations related to the addition of glyphosate to a list of chemicals in California under its so-called “right to know” statute, Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, Cal. Health & Safety Code §§ 25249.5-25249.14 (“Proposition 65”). In issuing the injunction, the Court found that there is not sufficient evidence to support the determination that glyphosate is known to the State of California to cause cancer, and therefore the warning requirements set to take effect this July as a result of its listing are constitutionally invalid compelled speech.

The stay of the warning obligations is an important victory for a number of key food and agribusiness companies, but likely not the end of this battle.


California’s Proposition 65 prohibits any person in the course of doing business from knowingly and intentionally exposing anyone to certain listed chemicals without providing a “clear and reasonable” warning. Failure to comply can result in penalties up to $2,500 per day for each failure, and subject the manufacturer/seller to costly enforcement actions by designated government/agency attorneys, as well as private citizens who may recover attorney’s fees. Cal. Health & Safety Code § 25249.7(b).

A chemical may be added to the Proposition 65 list after any one of certain entities, including the Environmental Protection Agency (“EPA”), the Food and Drug Administration (“FDA”), and the International Agency for Research on Cancer (“IARC”), provide confirmation of its status as a carcinogen or reproductive toxicant. In 2015, IARC classified glyphosate as “probably carcinogenic” to humans based on evidence that it caused cancer in experimental animals and limited evidence that it could cause cancer in humans, despite the fact that several other organizations, including the EPA and agencies within the World Health Organization, concluded that there is no evidence that glyphosate causes cancer.

As a result of IARC’s classification of glyphosate as probably carcinogenic, OEHHA listed glyphosate as a chemical known to the state of California to cause cancer on July 7, 2017, and thus the attendant warning requirement would take effect on July 7, 2018.

Current Action

In response to the listing and impending warning obligations, a collaboration of agribusiness companies and retailers, spearheaded by Monsanto, as well as chambers of commerce from a number of states, filed this motion for an injunction staying the listing of glyphosate and/or the enforcement of the attendant warning obligations. They claimed the listing and the warning obligation, when based on insufficient evidence, were violations of their First Amendment right against compelled speech. On Monday, the District Court issued its order agreeing that the compelled warning is a violation of the First Amendment given the lack of evidence of glyphosate’s link to cancer in humans.

In issuing the injunction staying enforcement of the warning obligations, the Court found the matter ripe, that the moving parties were likely to prevail on the merits (at least as to the warning obligation), and that if not stayed, the warning obligation would cause them irreparable harm.

The Court rejected defendants’ claims that the challenge was unripe because plaintiffs may not have to provide any warning if their products’ glyphosate levels are below the anticipated “safe harbor” level. Instead, it found that regardless of the State’s possible enactment of a safe harbor level, there is undeniable evidence from prior listings that plaintiffs face the significant risk of injury from still being subject to enforcement actions notwithstanding a defense of compliance with the safe harbor level. The court further noted that even forcing plaintiffs to pay to test their products, given the insufficient evidence on glyphosate’s carcinogenic impacts, is a cognizable harm.

The Court rejected the argument by plaintiffs that the mere listing of glyphosate is a violation of the First Amendment, instead focusing on the warning obligations set to take effect in July.

The Court explained that in cases of compelled speech, the State has the burden of demonstrating that a disclosure requirement is purely factual and uncontroversial, not unduly burdensome, and reasonably related to a substantial government interest. Here, the Court found that the required warning would be misleading to the ordinary consumer.

Despite hollow attempts by defendants to suggest that plaintiffs could use a less misleading warning to reflect the uncertain nature of the link between glyphosate and cancer, the Court got to the heart of the matter in speaking to the incredible burden of the Proposition 65 warning provisions: “Under the applicable regulations, in order for a warning to be per se clear and reasonable, the warning must state that the chemical is known to cause cancer. California regulations also discourage, if not outright prohibit, language that calls into doubt California’s knowledge that a chemical causes cancer.” Given these guidelines, the Court rightly understood no lesser warning would avoid the risk to plaintiffs of unmerited lawsuits and thus irreparable harm.

In speaking to these issues with the evidence related to the status of glyphosate as a carcinogen, the Court went on to say that “the required warning for glyphosate does not appear to be factually accurate and uncontroversial because it conveys the message that glyphosate’s carcinogenicity is an undisputed fact, when almost all other regulators have concluded that there is insufficient evidence that glyphosate causes cancer.”

Finally, the Court also addressed the public interest in enforcing the warning requirement, again finding for the plaintiffs. Judge Shubb found that misleading or false labels undermine California’s interest in accurately informing its citizens of health risks at the expense of plaintiffs’ First Amendment rights.

Because only the warning enforcement was stayed and not the listing itself, this fight is far from over. We can expect significant efforts from both sides as this issue moves forward, and the fate of glyphosate under California’s Proposition 65 remains unclear.

Class Certification Bid ‘Deflated’ by Court of Appeal for Lack of Ascertainability

Kaylen Kadotani
March 1, 2018

In a recent decision, the California Court of Appeal reinforced the ascertainability requirement for class certification under state law. In Noel v. Thrifty Payless, Inc. (2017) 17 Cal.App.5th 1315, the First District of the California Court of Appeal affirmed an order by the Marin County Superior Court which denied Plaintiff’s Motion for Class Certification on grounds that Plaintiff failed to demonstrate that the proposed class was ascertainable.  Just this week, the California Supreme Court granted review of this decision.

In this consumer class action, Plaintiff alleged that Defendant Thrifty Payless, Inc. dba “Rite Aid” (“Rite Aid”) violated the Unfair Competition Law (“UCL”), the False Advertising Law (“FAL”) and the Consumer Legal Remedies Act (“CLRA”)1 by selling an inflatable swimming pool that turned out to be smaller than the pool pictured on the product’s box. Plaintiff’s proposed class included: “All persons who purchased the Ready Set Pool at a Rite Aid store located in California within the four years preceding the date of the filing of this action [i.e., November 18, 2013].” (Id. at 1326.) Before filing his Motion for Class Certification, Plaintiff learned, through written discovery, that Rite Aid had sold more than 20,000 inflatable swimming pools, for a potential class of 20,000 individuals. Notably, however, Plaintiff did not seek any discovery as to the location and nature of any records maintained by Rite Aid relating to the identity of the purchasers, or how their identities might otherwise be ascertained. This critical omission proved fatal to Plaintiff’s attempt to certify a class.

As is well-established under California Code of Civil Procedure section 382, a motion for class certification may be granted where there is “an ascertainable class and a well-defined community of interest among class members.” (Id. at 1324) (citing Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.)   The ascertainability requirement depends on: (1) class definition, (2) class size, and (3) means of identifying class members. (Id.) (citing Sotelo v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 648.) The party seeking class certification carries the burden to establish the existence of ascertainability. (Id. at 1325) (citing Sav-On, 34 Cal.4th at 326.) The trial court found that Plaintiff failed to carry this burden since he “presented ‘no evidence’ to establish ‘what method or methods will be utilized to identify the class members, what records are available (either from Defendant, the manufacturer, or other entities such as banks or credit institutions), how those records would be obtained, what those records will show, and how burdensome their production would be. . . .'” (Id. at 1323.)

On appeal, Plaintiff argued that the trial court used the wrong legal standard for ascertainability, and that it should have followed the rule announced in Estrada v. FedEx Ground Package Systems, Inc. (2007) 154 Cal.App.4th 1, 14, which provides that a class is ascertainable “if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself as having a right to recover based on the description.” (Id. at 1326) (Italics removed.) Thus, Plaintiff argued, based on his proposed class definition, he had identified an ascertainable class. The Court of Appeal disagreed, noting that “[t]he theoretical ability to self-identify as a member of the class is useless if one never receives notice of the action.” (Id. at 1327) (citing Sotelo, 207 Cal.App.4th at 649.) “The ascertainability requirement is a due process safeguard, ensuring that notice can be provided ‘to putative class members as to whom the judgment in the action will be res judicata.’ . . . ‘Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.'” (Id.) (citing Sotelo, 207 Cal.App.4th at 647-648.)

The Court of Appeal agreed with the trial judge, and reasoned that other than pointing to the number of inflatable pools sold, the number of returns, and the gross revenue earned by Rite Aid, Plaintiff failed to submit any evidence which offered “insight into who purchased the pool or how one might find that out. . . . Unless [Plaintiff] could propose some realistic way of associating names and contact information with the 20,000-plus transactions identified by interrogatory response, there remained a serious due process question in certifying a class action.” (Id. at 1328.)

In its decision, the Court acknowledged an apparent conflict with another recent case, Aguirre v. Amscan Holdings, Inc. (2015) 234 Cal.App.4th 1290, in which the appellate court held that the means of identification requirement under Sotelo did not require a plaintiff to prove there is a way to give absent class members personal notice, and that the court need only consider the available means to identify class members “at the remedial stage.” (Id. at 1330) (citing Aguirre, 234 Cal.App.4th at 1300.) Disagreeing with the Aguirre approach, the Noel court pointed out that longstanding principles of due process and public policy support the requirement that a plaintiff make some showing of a means of identifying the class and a description of how notice may be given. (Id. at 1332.) The Court further noted that class action litigants should be able to address this inquiry quite easily in the early stages of the action, i.e., through the discovery that Plaintiff here neglected to pursue. (Id. at 1333.)

In summary, the Noel case, at least for now, reinforces the requirement that class action plaintiffs present an ascertainable class at the class certification stage by establishing a means of identifying the class members and providing notice.  As noted above, the California Supreme Court has just recently granted review of this decision, though we are not yet aware of the issues to be addressed on appeal. We will be following this decision closely, so make sure to check back for updates.


1 The Court’s discussion and ruling as to Plaintiff’s CLRA claim is not included in this blog entry. For reference, the Court also denied class certification as to CLRA, but for different reasons than the claims under the UCL and FAL.

Meet-and-Confer Rules Expand to Motions to Strike and for Judgment on the Pleadings

Candice Shih
February 9, 2018

Two years ago, a new rule was put into place requiring any party planning to demur to a pleading to meet and confer with the party that filed the pleading.  (Code Civ. Proc. Section 430.41.)

Hopefully, you have received some practice at this because now it is mandatory to meet and confer before moving to strike a pleading or moving for judgment on pleadings.

As of January 1, 2018, a party moving to strike a pleading under Code Civ. Proc. Section 435 is required to meet and confer with the party that filed the pleading under Section 435.5.  Also as of January 1, 2018, a party moving for judgment on the pleadings under Code Civ. Proc. Section 438 is required to meet and confer with the party that filed the pleading under Section 439.

If you are familiar with the meet-and-confer rules for demurrers, then you will know the rules for motions to strike and for judgment on the pleadings.  Aside from changing the name and nature of the procedure and stylistic changes, the three sets of rules on meet and confer are mostly the same.

As with the rules for demurrers, both new meet-and-confer rules require that the moving party meet and confer in person or by telephone with the party who filed the pleading and identify with legal support the basis of the perceived deficiencies. The non-moving party then must respond with legal support as to why its pleading is legally sufficient.  If a live-time conference does not take place by the deadline, the moving party can file a declaration saying it made a good faith effort to meet and confer and why it did not happen, and it will receive an automatic 30-day extension to file its motion.

A couple differences between (1) the rules for demurrers and (2) the rules for motions to strike and for judgment on the pleadings are:

  • Both the meet-and-confer rules on moving to strike and moving for judgment on the pleading do not apply to a special motion brought pursuant to Section 425.16 (anti-SLAPP) or to a motion brought less than 30 days before trial.  (Sections 435.5(d), 439(d).)
  • The deadline to meet and confer for moving for judgment on the pleading is five days before the motion is filed, rather than five days before it is due.  (Section 439(a)(2).)  Notably, this section does not state that the deadline to meet and confer is related to when the motion is due or when it must be filed, likely because there is no statutory deadline to move for judgment on the pleadings.

Note that if you are planning to demur and move to strike simultaneously that you will be subject to both sets of meet-and-confer rules.  You may want to determine if that is your strategy first before picking up the telephone to meet and confer so that you can address both subjects and comply with both sets of rules.

Disqualification: A Painful Reminder of the Pitfalls of Using Inadvertently Disclosed Attorney-Client Privileged Information

Neil Bardack
August 21, 2017

In California, State Compensation Insurance Fund v. WPS, Inc. 70 Cal.App.4th 644 (1999), has served as the rule book for attorneys who obtain inadvertently disclosed and obvious attorney-client information on how to avoid certain disqualification from representation.  Under State Fund, regardless of how the attorney came into possession of the information, once it is concluded that the document appears to be attorney-client privileged, the attorney must notify the holder of the privilege and refrain from using it until the parties or court has sorted out the disclosure or finds a waiver of the privilege.  The receiving attorney’s reasonable belief that there has been a waiver is not a defense to disqualification that may result if the attorney uses the document in advance of resolving the waiver issue.

A recent example of how courts apply the rule in State Fund is found in McDermott Will & Emery v. Superior Court, 10 Cal.App.4th 1083 (2017).  The document involved was clearly attorney-client privileged on its face as it contained an opinion of counsel, but the manner in which came into possession of counsel raised a strong argument of waiver.

There, McDermott had been sued for malpractice by a former client who alleged the firm had represented him and other family members, creating a conflict of interest.  McDermott was represented by Gibson Dunn.  The document in question had been drafted by the client’s attorney and clearly contained legal advice pertinent to the malpractice claim.  However, the client had sent the document to other non-lawyer family members and it ended up with McDermott pre-suit because the firm had been counsel to family members and a family-owned company.  This relationship had given rise to the conflict of interest claim being made.

Over objections, the client’s attorney Gibson Dunn had used the document in the litigation arguing that not only had it come from its client’s files and not by inadvertent disclosure in discovery, but it also had passed through the hands of several non-lawyers and any privilege had been waived.  Gibson Dunn made the wrong call, and that caused its disqualification from representing McDermott by the trial court.

On appeal, a divided Court of Appeal upheld the disqualification by finding there was no evidence of any intention to waive the privilege by the holder even in the face of several intermediate disclosures that had been made before McDermott had obtained the document from a family member who did not hold the privilege. Disqualification was proper because Gibson Dunn did not follow the guidelines set in State Fund but instead used the document, knowing it was presumptively privileged and that the document should have been either returned or that Gibson Dunn should have sought a court order obtained permitting its use.  Disqualification was necessary to prevent future harm and to protect the integrity of the judicial system.

The circumstances causing disqualification in McDermott show how important it is that an attorney refrain from using a document that at least could be argued as attorney-client privileged, no matter how strong the arguments may be that the privilege was waived. Only the holder of the privilege or a court can make that determination. It is a no-win situation and no matter how tempting the document may be, its use outside of State Fund’s ethical pathway will almost certainly result in an expensive and embarrassing disqualification of a client’s choice of counsel.

Commercial Defamation Update: California Imposes New Hurdle on Ability to Ascertain Identity of Anonymous Internet Posters

Michael Donner
August 4, 2017

California defamation law continues to evolve as the courts synthesize well-settled legal principles with ever-changing technological realities. On July 21, 2017, California’s First District Court of Appeal issued a published opinion in ZL Technologies v. Does 1-7 (July 21, 2017) 2017 DJ DAR 6999. In its opinion, the Court amplified existing defamation law as it relates to Internet postings and imposed new hurdles on the ability of parties to ascertain the identities of people who post defamatory statements on the Internet.

It is unlawful for an individual to damage a company by saying or writing something about it that is materially false. However, the courts typically bend over backwards to protect First Amendment rights. Accordingly, they created an exception to defamation for what they call “nonactionable opinion,” that is, statements for which no defamation claim may lie because the statements constitute mere expressions of opinion rather than assertions of fact.

It often can be frustratingly difficult, even for lawyers, to distinguish actionable defamation from nonactionable opinion. In part, this is because people tend to pepper their opinions with facts to support or emphasize them. The advent of the Internet has made this analysis even more complex, because now everyone with a cell phone has the ability to immediately share their views, and entire companies and Internet communities have been formed for the singular purpose of facilitating such discourse. In recent years, the California courts have tried to create some ground rules for distinguishing actionable defamation from nonactionable opinion on the Internet. Under those rules, judges are required to assess not only the specific language the internet poster used (the “what”), but also the online forum in which the poster used that language (the “where”). If the poster’s language is exaggerated or appears on websites that lend themselves to “rants and raves,” rather than considered thought, the California courts tend to view the postings as nonactionable opinion, notwithstanding the fact that it might contain some false facts.

Frequently, even if a company believes it can establish a claim for defamation, its battle to obtain relief has only just begun. One common characteristic of Internet posting is its anonymity. Posters sometimes use online monikers and the websites on which they publish their statements actively shield the posters’ identities. Hence, while a company might want to sue, it cannot readily do so because the identity of the person to be sued remains unknown. To address this issue, some businesses file lawsuits against “Doe” defendants and then take discovery to ascertain the posters’ identities. Discovery like that can be expensive and is not always successful.

In ZL Technologies, several anonymous individuals posted allegedly false statements about a company on Glassdoor.com, an employee review website. The company subpoenaed Glassdoor to obtain the posters’ e-mail addresses and other identifying information so the company could sue the posters for defamation. Although Glassdoor was insulated from defamation liability under federal law (as a mere forum for postings), it fought the subpoena on behalf of the posters.

The Court of Appeal allowed the company to proceed both with the case and its efforts to ascertain the identities of the anonymous posters. However, it tried to strike a balance between the company’s interest in obtaining relief and the posters’ interest in remaining anonymous. It held that litigants seeking to subpoena websites to determine the identities of anonymous posters must first (1) give notice of the subpoena to the posters (through the website) so the posters can fight the subpoena; and (2) establish a prima facie case of defamation on par with that necessary to defeat an anti-SLAPP motion. California never applied these two tests before in connection with this type of discovery.

In the aftermath of ZL Technologies, companies may still subpoena websites to ascertain the identities of anonymous posters who write defamatory things about them. However, before doing so, they must now give the posters a chance to challenge the legal propriety of their subpoenas. They also must marshal their evidence and prepare a nearly dispositive motion on their defamation claim, establishing that the posted statements were factual, actionable, material, false, and damaging. These hurdles will require considerably more time and resources to satisfy.

A California Litigation Blog