Today President Obama unveiled his new Cybersecurity National Action Plan as part of his 2017 budget proposal to Congress. The Plan has a broad scope designed to address many of the cybersecurity issues that gained high visibility in 2015. In particular, the Plan focus on issues with Federal cybersecurity infrastructure: modernizing antiquated software and systems vulnerable to cyber attacks, developing uniform cybersecurity practices, and developing best practices for Federal agencies to follow in managing both data security and data privacy.
A strong piece of the Plan involves the Commission on Enhancing National Cybersecurity, which the President established today by executive order. The President will appoint up to twelve people to the Commission, with recommendations from Congressional leadership. The Commission will issue a report before the end of the year making recommendations in a number of cybersecurity areas including IT procurement and modernization practices, best practices for networking security, and cybersecurity risk management for Federal agencies, as well as for business and consumers. The Plan also explains implementation of Commission recommendations.
California courts are tired of hearing your demurrers, and now the state has done something about it. Code of Civil Procedure Section 430.41, which went into effect on January 1, 2016, now requires a meet-and-confer process before a demurrer is filed.
The purpose of these requirements is to encourage parties to cooperate with each other to resolve their demurrer objections out of court. In other words, gone are the days of complaint, demurrer, sustain with leave to amend, complaint, demurrer, sustain with leave to amend, and so on.
Under the new rule, “the demurring party must 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-demurring party then must respond with legal support of why its pleading is legally sufficient.
The meet-and-confer must take place at least five days before the responsive pleading is due. If a live-time conference doesn’t take place in time, the demurring party can file a declaration saying it made a good faith effort to meet and confer and why it didn’t happen, and it will receive an automatic 30-day extension to respond.
Regardless of its meet-and-confer efforts, the demurring party must file a declaration with its demurrer saying that it met and conferred and was unable to resolve all of its objections or that the non-demurring party failed to meet and confer with it.
The Code specifically states, however, that any finding that the meet-and-confer process was insufficient “shall not be grounds to overrule or sustain a demurrer.” But any party dissatisfied with the meet-and-confer process might still want to bring its deficiencies to the court’s attention.
A few other notes on this new rule:
If you can demur to a portion of the complaint now, do it or accept that you won’t be able to do so if it continues to appear in an amended complaint.
If the court sustains a demurrer with leave to amend, it can now order a conference of the parties before an amended complaint is filed.
Are you a prisoner representing yourself or litigating an unlawful detainer? Then these rules don’t apply to you.
Generally, a complaint or cross-complaint shall not be amended more than three times in response to a demurrer.
Under the amended section 472, a party may now amend its pleading instead of opposing a demurrer if the parties so stipulate.
The meaning of “appropriate equitable relief” under ERISA Section 502(a)(3) has been the subject of no less than four Supreme Court decisions in this millennium. The Supreme Court’s decision in Montanile v. Board of Trustees of the Nat’l Elevator Indus. Health Benefit Plan is the most recent decision to consider the issue and is an important cautionary tale for ERISA plans.
Click here to view a client alert, authored by Ray Lynch and Matt Peck, that discusses the evolving Supreme Court jurisprudence on the meaning of “appropriate equitable relief” and discusses the practical significance of the Montanile decision for ERISA plans.
In a 6-3 opinion authored by Justice Breyer, the Supreme Court reversed a California court of appeal decision that refused to enforce a class-wide arbitration waiver on the grounds the waiver—although unenforceable under California state law at the time of contracting—was preempted by the Court’s holding in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011). DirecTV, Inc. v. Imburgia, 2015 WL 8546242 (Dec. 14, 2015) (“Imbrugia“). In Concepcion, the Court applied Federal Arbitration Act (“FAA”) preemption to strike down a California law that prohibited consumer class-arbitration waivers on unconscionability grounds.
At issue in Imbrugia was a provision in a DirecTV agreement that required binding arbitration to resolve any disputes but then voided the arbitration requirement “if the law of your state would find this agreement to dispense with class arbitration procedures unenforceable.” While the case was pending in the trial court, the Court issued its opinion in Concepcion. DirecTV then sought to compel arbitration because it could now avoid class-wide arbitration given that California’s prohibition on class-wide waivers was invalidated by Concepcion. Notwithstanding, the court of appeal affirmed the trial court’s denial of DirecTV’s motion to enforce the arbitration agreement reasoning that “law of your state” meant California law as it existed prior toConcepcion. The Ninth Circuit came to a conclusion directly opposite of that in Murphy v. DirecTV, Inc., 724 F.3d 1218 (9th Cir. 2013) on precisely the same issue involving a substantively identical arbitration agreement.
In reversing the Ninth Circuit, the United States Supreme Court in the unanimous decision of OBB Personenverkehr AG v. Sachs, 136 S.Ct. 390 (12/1/15) clarified what is required to establish a claim against a foreign entity that would not be barred by sovereign immunity under the Foreign Sovereign Immunities Act ( 28 U.S.C. section 1605 (a)(2)) (“Act”). Under the Act, a foreign state is immune from the jurisdiction of the courts of the United States or individual States, unless the action is based upon commercial activity carried on in the United States by the foreign state.
In this case, plaintiff Sachs, a California resident, bought a Eurail pass for rail travel in Europe from a Massachusetts-based travel agency. Ms. Sachs was injured in a train station in Austria. The railway was treated as an agency of a foreign state. Plaintiff sued under theories of negligence and strict liability, but the gravamen of the suit was the conduct of the railway at the site of the injury.
The Northern District Court dismissed the action under the Act finding the commercial activity exception to the Act did not apply. The Ninth Circuit en banc reversed on the grounds that the ticket sale by a travel agency constituted commercial activity in the United States by a foreign state; and as the suit was based upon that activity, it was a necessary element of each of plaintiff’s causes of action.
Congress has been busy passing last minute appropriations bills before the year ends to fund the government through the end of the fiscal year and to plan long term infrastructure spending. Congress has added some provisions to those bills that affect federal privacy and cybersecurity laws.
Justice Werdegar, in a unanimous opinion released late Thursday, delivered news the Organic industry was hoping not to get: California consumers are not prohibited from challenging false organic food labels on the basis of federal preemption.
In Quesada v. Herb Thyme Farms Inc., S216305 (California Supreme Court Dec. 3, 2015), a consumer alleged that Herb Thyme Farms Inc. was selling herbs labeled organic, which were, in whole or in part, made up of conventionally grown herbs. The district court found the deceptive labeling action preempted by the Organic Foods Production Act of 1990, which regulates farming methods for organic-marketed produce and organic certification programs. The Court of Appeals affirmed that outcome, though by finding the claims preempted by implication.
The California Supreme Court disagreed. The silence of the Organic Foods Production Act on the issue of consumer protection lawsuits, and the fact that deceptive labeling claims are generally governed by state law, both weighed against the presumption of federal preemption. (Id. at *7.) The Court reasoned that the purpose of a clear national definition of organic production was so consumers could rely on organic labels and to curtail consumer fraud. (Id. at *2.) Because the state claims advance, rather than hinder, the Legislature’s purposes and objectives in the Organic Foods Production Act, the Court found that the state claims would not get in the way of the federal statutory scheme. (Id.)
Though consumers and Organic producers will have to wait and see what impact this decision will have on the way Organic food is marketed in California and the volume of Organic deceptive labeling claims filed in state courts, it is certain they will all be watching carefully.
[This post follows up on our November 25, 2015 entry regarding new rulemaking under Proposition 65 (“Prop. 65”).]
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The “dirty dozen” is no more. But companies subject to Prop. 65 may not like what has taken its place. The newly revised Prop. 65 “safe harbor” warning regulation proposal contains several important substantive changes that, if adopted, will significantly impact California businesses, and any business whose reach extends into the state’s borders. Most notably, the new proposal would require the identification of at least one of the specific chemicals for which the exposure warning is being provided, from the list of over 900 chemicals identified by the state of California under Prop. 65.
Those who have followed the Prop. 65 rulemaking process this year may be aware that in January the Office of Health Hazard Assessment (“OEHHA”) proposed several new regulations, including developing a list of 12 chemicals – aka, “the dirty dozen” – that businesses would have been required to specifically identify when warning about exposure risks. Last week, however, OEHHA withdrew its prior proposal and replaced it with a new, more expansive proposal.
OEHHA now proposes to require a Prop. 65 warning in most instances to specifically identify one or more of the over 900 Prop. 65-listed chemicals for which the warning must be provided. While there are exceptions for some specific product and environmental exposure categories, the new warning regulation would apply to most consumer products and environmental exposures.
There are, however, two revisions aimed at providing business owners with some certainty as to potential future Prop. 65 litigation risk. First, the new regulation would establish that a warning provided pursuant to, and in compliance with, a court-ordered settlement or judgment is per se “clear and reasonable” for purposes of Prop. 65. For companies that have resolved Prop. 65 lawsuits through court-approved settlements, this proposed regulation should provide comfort that they can rely on their existing warning program to the extent a court has reviewed and approved it, even after the new regulations take effect.
Second, the newly proposed regulations would not apply to consumer products manufactured prior to the regulations’ effective date. For such products, the previous version of the Prop. 65 regulations (September 2008) would continue to apply. While including such a “no retroactive application” provision in the new regulations is logical, its codification will provide some finality for business owners in term of assessing their liability. However, businesses should be mindful that products manufactured before the effective date, but sold to consumers after that date, may still trigger notices of violation from private plaintiffs. Thus, it will be critical for businesses to be able to identify the manufacture date of consumer products they sell in California.
On November 24, 2015, the California Office of Environmental Health Hazard Assessment (“OEHHA”) issued notice of a new proposal to modify its Proposition 65 (“Prop. 65”) regulations and announced that it is withdrawing its earlier proposal to modify the Prop. 65 regulatory language. OEHHA stated that its decision to withdraw its January 16, 2015 proposal to modify Title 27, Article 6 of the California Code of Regulations was made “after reviewing oral and written comments from the public,” which resulted in “a number of substantive and clarifying changes to the proposed regulatory language and Initial Statement of Reasons.”
Can Congress create a statutory right to standing for a Plaintiff who suffers no concrete harm?
On November 3, 2015, the Supreme Court heard oral arguments in the closely watched class action, Spokeo, Inc. v. Robins, a case dealing with a statutory cause of action created by the Fair Credit Reporting Act (FCRA). At issue: whether Congress can create a statutory right to standing for a plaintiff who suffers no concrete harm?
Spokeo is a website that allows users to search for an individual’s personal information. In Spokeo, Plaintiff Robins alleges that Spokeo willfully violated the FCRA by publishing a consumer report that falsely claimed he had a graduate degree and was married with children. According to Plaintiff, the false report injured his job prospects. Spokeo moved to dismiss the case, arguing that the alleged injury was not enough to meet Article III’s requirement that a party seeking relief must have suffered an injury-in-fact. The District Court had dismissed the case, finding that Robins lacked standing because he failed to allege an injury in fact. The Ninth Circuit Court of Appeals sided with Robins and reversed the District Court’s decision, holding that Robins had Article III standing because the mere violation of a statutory right was enough to satisfy Article III.
