in brief: Majority of California Supreme Court sets 1-1 punitive damage to compensatory ratio on facts in Roby v. McKesson Corporation

In Roby v. McKesson Corporation, the second opinion issued today by the California Supreme Court, the Court held, among other things, that on the facts and circumstances presented, a 1-1 punitive damage to compensatory damage ratio was the constitutional ceiling.  Justice Werdegar authored a dissenting opinion (to which Justice Moreno concurred) on the Court's punitive damage holding, concluding that the facts and circumstances of the case supported a 2-1 punitive damage to compensatory damage ratio.  The case concerns allegations of wrongful discharge, discrimination and harassment.

Costco Wholesale Corp. v. Superior Court puts the privilege in attorney-client privilege

This morning the California Supreme Court issued its opinion in Costco Wholesale Corp. v. Superior Court.  If you don't remember this case, the Trial Court granted a Motion to Compel the production of documents that included a partially redacted letter from outside counsel to Costco, commenting upon the appropriateness of classifying certain managerial employees as exempt from California’s overtime pay laws and regulations.  Then a Petition for a Writ was filed, an OSC issued, the OSC was dismissed without an opinion, the Supreme Court directed the Court of Appeal to issue an OSC, the matter was heard, and, finally, the Petition was denied.  The Supreme Court subsequently granted a Petition for Review.

Without getting into the nuts and bolts of the ruling at this time, the Supreme Court's determination was clearly stated in the opening paragraph:

In this case we consider whether the trial court erred by directing a referee to conduct an in camera review of an opinion letter sent by outside counsel to a corporate client, allowing the referee to redact the letter to conceal that portion the referee believed to be privileged, and ordering the client to disclose the remainder to the opposing party. We conclude the court‟s directions and order violated the attorney-client privilege, and violated as well the statutory prohibition against requiring disclosure of information claimed to be subject to the attorney-client privilege in order to rule on a claim of privilege. (Evid. Code, § 915, subd. (a).)

Slip op., at 1.  The opinion is unanimous, but Chief Justice George offers interesting remarks about the nature of what constitutes an attorney-client communication in a concurring opinion.

Adobe rolls out significant upgrades to Acrobat.com, improving both the user experience and the "under the hood" machinery

On November 21, 2009, Adobe® released a substantial update to Acrobat.com.  I spent some time poking around my Acrobat.com accounts to see the updates in person, and some new features will be of interest to legal professionals.

Before commenting on the updates, I want to take a moment to recap the basic of what is offered at Acrobat.com.  Acrobat.com contains aspects of what the digerati would call "cloud computing."  The files you create and/or store on Acrobat.com are "in the cloud," not on your computer.  If hearing "cloud computing" makes you ill, then just refer to Acrobat.com as a collection of services hosted online.  Users can create basic word processing documents (Adobe Buzzword®), presentations (Acrobat.com Presentations), basic spreadsheets (Acrobat.com Tables), upload a variety of file formats and quickly convert them to PDF, store files, easily share files with others or launch an Adobe ConnectNow online meeting and collaborate on documents in real time.  The experience presented in your browser is based on the Adobe Flash® Platform.

Before the most recent Acrobat.com update, I was already using the file sharing tools right on this site to embed a flash-based PDF viewer that shows visitors documents stored on Acrobat.com.  I have also used the storage and sharing functions to deliver large documents to others.  These services almost always worked for me exactly as promised (in the early days of Acrobat.com, there were times when files would get stuck in some sort of an anti-virus scan queue for hours or never show up; that issue was resolved quite a while ago).

Now I want to mention some of the key improvements to the Acrobat.com suite of hosted tools that might interest lawyers.  First, Acrobat.com now offers a unified interface as the starting point for most Acrobat.com applications.  Previously, the interface was somewhat disjointed.  Now, users see file organizer with a much-improved interface:

From this launch point, a user can share files, upload files, create "collections" to organize files, and so on.  One very imporant feature set that has been added here is the ability to export to a variety of file types, depending upon whether you are working with a word processing document, a presentation, or a spreadsheet.  Presentations now includes support for importing PPT/PPTX files.  In other words, you can build a presentation on Acrobat.com and then convert it to PowerPoint if you want to use that tool in a setting where online connectivity is an issue.  Similarly, users can export their tables to PDF, XLS or CSV for sharing data in whatever format is best suited for the situation.  Buzzword supports export in DOC, DOCX, RTF, TXT, ODT, ZIP, PDF, and now EPUB, the electronic book publishing format for eBook readers such as Stanza on the iPhone, Sony Reader, and others.

A side comment:  The addition of EPUB support is smart on Adobe's part.  With Flash and Acrobat.com, Adobe is right in the thick of a brewing battle for control over the format in which various types of content will be delivered to you in the future.  It's probably not to extreme to say that Apple despises Flash.  It won't support it on the iPhone, and Apple is hoping that the html 5 specification will marginalize Flash.  Google is probably no huge fan of Flash either and would likely prefer html 5 to do in Flash as well.  But Flash is everywhere.  It is ubiquitous on the web.  By supporting EBUB, Adobe is offering support for an open ebook format (and sticking Apple and Amazon's Kindle in the eye at the same time).  By demonstrating that data stored on Acrobat.com will not remain hostage to a single proprietary document format, Adobe may woo more users.

Presenations receive some added features as well.  You can browse through color sets created by designers in Adobe Kuler.  Instead of using the same color schemes, these sets let you appear to be a bit more color coordinated when you design a Presentation.  You can also now search Google and Flickr for images in include in Presentations:

These improvements make Presentation a credible tool for assembling a basic presentation.  With the ability to incorporate FLV video, Presentation is now an interesting option.  The ability to export to Powerpoint formats adds the peace of mind that you won't have to wing it when the wifi hotspot you were counting on isn't working.

Acrobat.com is also planning on the ability to integrate with a mobile applications.  The Acrobat.com mobile application by scanR® will allow users to upload document images from a supported mobile phone and have them automatically stored as searchable PDF files in Acrobat.com. In addition, users can read their files stored in Acrobat.com, share files with others and fax documents from their Acrobat.com organizer or directly from their smartphone. Users of the free service will be able to send two outbound faxes and upload up to five documents from a mobile phone. An upgrade is available for users that need to fax or upload more documents.  I'd love to say that I've used the Acrobat.com mobile application on the iPhone and tell you about my experiences, but the Apple application review process is so broken that they still don't have Adobe's application available.  I was told by Adobe that they submitted it quite some time ago, but since some developers have been waiting for months just to get a bug fix pushed out, who knows when Apple will get around to approving an application for its good buddies at Adobe.

One benefit of using the Acrobat.com tools is the ability for multiple authors to work on documents at the same time.  Multiple authors can contribute to slides in a Presenations, enter data in a Table or draft content and comments in a Buzzword document.  This enables true collaborative document creation.  Lawyers in different locations could work on an agreement together, rather than playing document tennis with e-mail.

My comments about Acrobat.com do not cover the full set of features enabled for each of the applications on Acrobat.com.  I'm just hitting some of the interesting highlights.  I am interested to see whether users will embrace Acrobat.com or one of the other 800 pound gorillas in the room that are moving into the "cloud computing" space (i.e., Microsoft, which is moving Office tools online, and Google, with its hodgepodge of online services).  I don't believe Google's "do no evil" schtick.  I am not comfortable with Google ending up as the company that knows about everything I search for and everthing I store.  I want multiple competitors in this space so I have options when one goliath or another is naughty with my bits.  Adobe still suffers from a bit of closed format-itis, but Adobe may be adjusting to the times with the EPUB move.

You can follow Acrobat.com on twitter: www.twitter.com/acrobatdotcom

As a final note, I don't receive any premium access to Acrobat.com.  I just get the services I am willing to pay for right now, which is the free service.

Costco Wholesale Corp. v. Superior Court and Roby v. McKesson Corporation opinions will be available November 30, 2009

Because of the Thanksgiving holiday, the Supreme Court announced opinion filings that will be published on Monday, November 30, 2009.  The Court's Notice is available here.

Costco Wholesale Corp. v. Superior Court, previously mentioned on this blog here, will address the following issues:

(1) Does the attorney-client privilege (Evid. Code, § 954) protect factual statements that outside counsel conveys to corporate counsel in a legal opinion letter? (2) Does Evidence Code section 915 prohibit a trial court from conducting an in camera review of a legal opinion letter to determine whether the attorney-client privilege protects facts stated in the letter?

And Roby v. McKesson Corporation will address the following issues:

(1) In an action for employment discrimination and harassment by hostile work environment, does Reno v. Baird (1998) 18 Cal.4th 640, require that the claim for harassment be established entirely by reference to a supervisor’s acts that have no connection with matters of business and personnel management, or may such management-related acts be considered as part of the totality of the circumstances allegedly creating a hostile work environment? (2) May an appellate court determine the maximum constitutionally permissible award of punitive damages when it has reduced the accompanying award of compensatory damages, or should the court remand for a new determination of punitive damages in light of the reduced award of compensatory damages?

California Supreme Court activity for the week of November 16, 2009

The California Supreme Court held its (usually) weekly conference on November 18, 2009.  The only notable event was:

• A Petition for Review was granted in Yabsley v. Cingular Wireless.  The matter was held pending the outcome of Loeffler v. Target Corp., S173972.  I briefly discussed Yabsley here.

Breaking News: Plaintiff class wins second trial against alter ego defendants associated with Global Vision Products (Avacor hair regrowth formula)

In January 2008, class plaintiffs who purchased the hair regrowth formula Avacor prevailed at trial against Global Vision Products, Inc.  The plaintiff alleged that Avacor was not an all natural or herbal formulation, but contained the drug Minoxidil (Rogaine).  The initial verdict for the plaintiff class was approximately $37 million.  However, Global Vision Products filed for bankruptcy protection.

Today, after a second phase of trial, a jury returned a verdict against individual defendants Robert DeBenedictis and Henry Edelson on an alter ego theory.

I will provide some additional information about this verdict after reviewing materials from the trial.  Until then, Courtroom View Network, which recorded video of the entire trial, has provided access to a free clip from the trial.

Barboza v. West Coast Digital GSM, Inc. holds that the obligations of class counsel to a certified class include enforcement of a judgment

After a short quiet spell, class actions return with a splash.  In Barboza v. West Coast Digital GSM, Inc., the Court of Appeal (Second Appellate District, Division Four) had the opportunity to discuss the extent of class counsel's obligations to a certified class.  The conundrum arose when class counsel learned that the defendant had ceased operations, sold its assets to a third party, and intended to file for bankruptcy:

What are the obligations of class counsel when he learns that the defendant in the class action he is prosecuting has ceased operations, sold its assets to a third party, and intends to file for bankruptcy? In the case before us, counsel obtained a stipulated default and a default judgment that included more than $4 million in aggregate damages for the class, plus more than $1 million in prejudgment interest. So far, so good. But counsel then asserted that his job would be completed once his motion for attorney fees was heard, i.e., that he had no obligation to enforce the judgment on behalf of the class. The trial court disagreed. It ruled that “by assuming the responsibility of pursuing claims on behalf of the class, class counsel assumed the obligation to pursue it until the end (i.e., enforcement of the judgment) and not just until judgment.” Based upon the principles guiding class actions, we agree that class counsel's obligations to the class do not end with the entry of judgment, and hold that class counsel's obligations continue until all class issues are resolved, which may include enforcement of the judgment.

Slip op., at 2.  In its analysis, the Court of Appeal examined the sources of the obligations owed by class counsel (and the named plaintiff) to the certified class:

First, the representative plaintiffs must establish that they will adequately represent the class before a class may be certified. (Sav-On, supra, 34 Cal.4th at p. 326.) Part of that showing involves establishing that the counsel they have chosen can and will adequately represent the interests of the class as a whole. (Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 12; McGhee v. Bank of America (1976) 60 Cal.App.3d 442, 450.) Second, both the representative plaintiffs and the counsel they have chosen owe absent class members a fiduciary duty to protect the absentees‟ interests throughout the litigation. (Janik v. Rudy, Exelrod & Zieff, supra, 119 Cal.App.4th at p. 938.) Finally, the trial court, “as the guardian of the rights of the absentees, is vested broad administrative, as well as adjudicative, power.” (Greenfield v. Villager Industries, Inc., supra, 483 F.2d at p. 832.) Thus, unlike situations in which the litigant has retained an attorney to conduct litigation, where the litigant and the attorney agree upon the scope of the engagement, and their rights and duties are governed by their agreement, in class actions, where there is no agreement with absentee class members to define the scope of the engagement, class counsel must represent all of the absent class members' interests throughout the litigation to the extent there are class issues, and it is the duty of the trial court to ensure at every stage of the proceeding that counsel is adequately representing those interests.

Slip op., at 7-8.  Ultimately, the Court of Appeal described a reasonable way out of the quandry faced by class counsel that must collect a judgment from an insolvent debtor:

It may be that, given the specialized knowledge needed to enforce judgments, class counsel is not competent to provide enforcement services without assistance. But nothing prevents class counsel from associating in counsel with that expertise, and the cost of that association can be paid by the class from any recovery achieved. And if, after diligent inquiry, class counsel determines there are no recoverable assets, counsel may present such findings to the trial court, and the trial court, as guardian of the rights of the absent class members, may determine whether counsel should be relieved of any further obligations to the class.

Slip op., at 8-9.

This opinion is a necessary reminder of the extent of the duty assumed by class counsel when that fateful line is crossed and the proposed class is certified.

Google gets in on the legal research game

To Westlaw and Lexis:

You have a big head start, but the world's largest search monster just left the land of nightmares and placed itself squarely in your rearview mirrors.  Google has surfaced search functionality that will return full-text opinions from state and federal courts.  Google Scholar, still in "beta," allows searches by case name, topic, or key words.  Advanced filters allow for creative search construction.  The November 17, 2009 announcement on Google's blog is here.

I did some test searches, and the results are good, but not quite as current as Westlaw or Lexis would provide.  Each case, when viewed, includes a "how cited" tab that, rather than explaining the correct citation syntax, provides a list of other cases citing to that case and an interesting list of case quotes showing how the case is cited in context.  Testing with Tobacco II, I was able to find that Cohen v. DirecTV cites Tobacco II, but Cohen isn't yet returned as a result when searching for it by name.  Either Google is waiting for finality before providing access to opinions, or its data source is slow to update.  As another plus, the cases include pagination information.

Setting all else aside, it's free and it's simple.  At this point, Westlaw and Lexis should stock up on clean underwear.

Multi-Blog Post and Message to Plaintiffs' attorneys: Join CAOC!

George Washington once said:

Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all.

Letter of Instructions to the Captains of the Virginia Regiments [July 29, 1759]. The advocates of consumer rights, viewing the resources of defense firms and corporate defendants, can relate to the trepidation felt by the out-numbered and out-gunned Continental Army. Because of that disparity in resources, Consumer Attorneys of California ("CAOC") consolidates the voices of consumer attorneys throughout the state to (1) preserve and protect the constitutional right to trial by jury for all consumers, (2) champion the cause of those who deserve redress for injury to person or property, (3) encourage and promote changes to California law by legislative, initiative or court action, (4) oppose injustice in existing or contemplated legislation, (5) correct harsh, unjust and oppressive legislation or judicial decisions, (6) advance the common law and promote the public good through the civil justice system and concerted efforts to secure safe products, a safe workplace, a clean environment, and quality health care, (7) uphold the honor, integrity and dignity of the legal profession by encouraging mutual support and cooperation among members, (8) promote the highest standards of professional conduct, and (9) inspire excellence in advocacy. This post is a multi-blog effort to inform consumer attorneys about CAOC's value and encourage participation in CAOC through membership.

CAOC works tirelessly to protect or advance those causes of import to consumers and their attorneys in California. Often those efforts, though valuable, receive little fanfare. For example, CAOC recently sponsored SB 510, which affects the re-sale of what are known as "structured settlements," in which victims receive financial compensation over a period of time for medical expenses and basic living needs, as determined by a jury. Before SB 510 was signed by the Governor, Courts expressed frustration at their inability to prevent the sale of structured settlements on terms that might ultimately lead to long-term financial hardship for the victim. Now, SB 510 gives judges the information they need to make a reasoned decision about the propriety of a structured settlement sale.

Measures like CAOC-sponsored SB 510 help protect the most vulnerable members of our society and ask for nothing in return. They exemplify the spirit of CAOC. However, CAOC is only as effective in its mission as its membership allows it to be. When consumer attorneys join the ranks of CAOC, its voice gains in power and clarity. But if consumer advocates sit on the sidelines, hoping to benefit from the work of others, CAOC is stretched thin, and we are all at risk as a result.

Now, consumer advocate bloggers from across the state are combining their voices to call upon each and every lawyer and firm that regularly represents plaintiffs to join CAOC, thereby strengthening the consumer's first line of defense. The blogs participating in this unified call to action are:

• The Complex Litigator (H. Scott Leviant)
• The UCL Practitioner (Kimberly Kralowec)
• Bailey Class Action Daily (Matt Bailey)
• California Employee Rights Blog (James J. Peters)
• An Appeal to Reason (Donna Bader)
• California Personal Injury and Insurance Blog (Jonathan G. Stein)
• California Debt Blog (Jonathan G. Stein)
• TrialLawyerTips.com (Mitch Jackson and Lisa Wilson)
• California Injury Blog (John Bisnar)
• San Diego Injury Lawyer Blog (Ross A. Jurewitz)
• San Diego Car Accident Lawyer Blog (Ross Jurewitz
• San Diego Injury Accident Lawyer Blog (Ross A. Jurewitz)
• California Nursing Home Abuse Lawyer Blog (Walton Law Firm LLP)
• San Diego Injury Law Blog (Walton Law Firm LLP)
• California Personal Injury Law Blog (Norman Gregory Fernandez)
• Biker Lawyer Blog (Norman Gregory Fernandez)
• California Credit Law (Mark F. Anderson, Carol Brewer & Andy Ogilvie)
• Lemon Law Blog (Mark F. Anderson, Carol Brewer & Andy Ogilvie)

Show your support of consumers' rights by joining and supporting CAOC. Together we can make an impact that we cannot make alone.

Cohen panel tackles Tobacco II again in Princess Cruise Lines, Ltd. v. Superior Court

The Court of Appeal (Second Appellate District, Division Eight) generated a good bit of commentary with their construction of In re Tobacco II Cases, 46 Cal.4th 298 (2009).  Cohen v. DIRECTV, Inc. (October 28, 2009) was discussed in detail on this blog, and The UCL Practitioner had an extensive post as well.  In Princess Cruise Lines, Ltd. v. Superior Court (November 10, 2009), the Second Appellate District, Division Eight tackles reliance and Tobacco II for the second time.  But, in an interesting twist, Cohen receives no mention in this Opinion.

Princess Cruise Lines is, ostensibly, a summary judgment opinion.  Although it is not discussed in any detail, it appears that the summary judgment motion was brought pre-certification.  The Court described the causes of action asserted and the basics of the trial court's ruling:

The plaintiffs, real parties in interest in the proceedings before us, H. Roger Wang and Vivine Wang (from time to time collectively referred to as the Wangs), sued petitioner Princess Cruise Lines, Ltd., over charges added to the price of shore excursions taken during a cruise conducted by petitioner.  The Wangs asserted five causes of action.  The first three were based on Business and Professions Code sections 17200 (first cause of action) and 17500 (second) and on Civil Code section 1750 et seq. (third).  Respectively, these statutes are California’s Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumers Legal Remedies Act (CLRA).  The fourth and fifth causes of action were based respectively on common law fraud and negligent misrepresentation.

Petitioner moved for summary judgment and summary adjudication.  The trial court granted summary adjudication on the fourth and fifth causes of action because the Wangs could not show they relied on petitioner’s alleged misrepresentations.  The trial court, however, denied the motion for summary judgment because it concluded that on the UCL, FAL and CLRA causes of action the Wangs did not have to show that they relied on petitioner’s alleged misrepresentations.

Slip op., at 2.  After summarizing the discovery in the action and the trial court's rulings, the Court of Appeal discussed the issue of reliance in UCL and CLRA actions:

The court in Tobacco II first concluded that only the class representatives must meet the standing requirement under California’s UCL.  The court then proceeded to the next topic, which was “the causation requirement for purposes of establishing standing under the UCL, and in particular what is the meaning of the phrase ‘as a result of’ in [Business and Professions Code] section 17204?  We conclude that a class representative proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.”  (Tobacco II, supra, 46 Cal.4th 298, 306.)

There are two aspects to this holding.  First, it is very clear that reliance is required in a UCL action.  Second, it is also clear that this is true of UCL actions involving some form of fraud, but not all UCL actions.  As the court put it:  “We emphasize that our discussion of causation in this case is limited to such cases where, as here, a UCL action is based on a fraud theory involving false advertising and misrepresentations to consumers.  The UCL defines ‘unfair competition’ as ‘includ[ing] any unlawful, unfair or fraudulent business act or practice . . . .’  ([Bus. & Prof. Code,] § 17200.)  There are doubtless many types of unfair business practices in which the concept of reliance, as discussed here, has no application.”  (Tobacco II, supra, 46 Cal.4th 298, 325, fn. 17.)

Slip op., at 6-7.  Unlike Cohen, this Opinion presents as an effort to identify specific circumstances where it is valid to consider reliance in a UCL claim, using Tobacco II.  In fact, its almost as if the Court was sensitive to potential fallout from describing Tobacco II as irrelevant.  

In any event, the Court then, as one would expect in a summary judgment analysis, focused on the evidence presented by the plaintiffs:

The problem, from a pragmatic perspective, with the Wangs’ contentions about reliance is that it made no difference to them how much the excursions cost.  As Vivine Wang put it in her deposition, she told her travel agent that she wanted to go on the same excursions that her traveling group had booked and that “I want to go on the shore excursion . . . whatever it cost [sic].  It’s fine.”  At the threshold, therefore, it must be said that there was no reliance, i.e., the Wangs would have gone on the excursions whatever the price was and without reference to anything petitioner said or did in connection with the excursions.  It therefore follows that it is immaterial how the Wangs heard about the excursions and what, if anything, petitioner said or wrote about the excursions.

It must also be said that we are not inclined to ignore the Wangs’ repeated admissions that they had no contact with petitioner and received nothing from the petitioner.

Slip op., at 8.  The Court does its best to circumvent the reliance questions it raised in Cohen by citing Tobacco II for the contention that there is a limited area under the UCL where reliance can be an element of the claim, followed by a finding that the record contains admissions of absolutely no reliance.

Next, the Court issued an interesting holding that the Tobacco II discussion about reliance in certain limited situations in UCL cases applies to CLRA actions as well:

Civil Code section 1780, subdivision (a) provides:  “Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain any of the following:  [listing generic types of recoveries].”  (Italics added.)

It appears that the analysis of the phrase “as a result” found in Tobacco II, supra, 46 Cal.4th 298, 324-326, applies to this phrase in Civil Code section 1780, subdivision (a), which means that reliance is required for CLRA actions, with the limitations noted in Tobacco II.

Slip op., at 11-12.

So, if Cohen is enough of a lightning rod to elicit review, this one may escape that same fate.