The Appellate Strategist : Appellate Lawyers & Attorneys for Updates on Trial Consultations, Amicus Briefs & Punitive Damage Awards

At long last, the Ninth Circuit Court of Appeals issued its opinion in the Uhm v. Humana, Inc. (.pdf), matter, finding the Medicare Act’s exhaustion requirements and preemption provision barred all of the plaintiffs’ common law claims. (-- F.3d --  (9th Cir. 2010).) Originally, the court issued an opinion two years ago, but vacated the decision last summer and took the case under submission after soliciting amicus assistance from the Centers for Medicare and Medicaid Services. The new Uhm decision is strong support for Medicare Act preemption, reflecting CMS’ underlying thesis that state law claims interfering with Medicare standards and regulations must be preempted.

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This case arises out of an insured’s claim against its insurer for property damages caused by an earthquake that struck the Los Angeles area in 1984.  After a protracted dispute (during which the insurer made substantial payments) over the value of the claimed damages, and the extent to which they were earthquake-related, the parties entered into a settlement agreement.  The insurer agreed to pay an additional $1.5 million, and the insured executed a standard release by which it waived its right to recover any undiscovered damages and agreed to forbear bringing suit on any and all claims, known or unknown.

Several years later, the insured brought a lawsuit seeking to recover additional damages under the policy.  It argued that it was fraudulently induced into entering into the settlement agreement and that under general contract principles it could elect to affirm the agreement (and thus keep the money it had already received) and sue for damages caused by the alleged fraud.  The trial court, relying on decades of precedent from the Supreme Court and the Court of Appeal, as well as the statutory scheme governing settlements and releases, granted dispositive motions in favor of the insurer.  The authorities, the court said, made clear that a party seeking to undo a settlement agreement must seek rescission and return any monies obtained as consideration for the release.  The Court of Appeal reversed.  Distinguishing the prior authorities on the basis that they involved third-party personal injury claims, rather than first-party breach of contract claims, the court found that public policy supports the rule (followed in several jurisdictions) that a policyholder may affirm, keep the money, and sue, despite having executed a full release.

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In Gates v. Gadsden County School Board (.pdf), Florida’s First District Court of Appeals has allowed a former teacher’s retaliation claim to proceed where she was prohibited from continuing as a volunteer mentor, which she had done since her resignation.

Teacher Martha Gates filed a Title VII discrimination suit against the Gadsden County School Board in 2004 and resigned from her teaching position.  Even though she resigned, she continued to participate in the school district’s volunteer mentoring program.  Six months after her resignation, the School Board prohibited her from continuing to volunteer, and she filed a Title VII retaliation claim.  The trial court entered summary judgment against Gates, concluding that a volunteer could not maintain a Title VII retaliation claim and, further, that she could demonstrate no materially adverse employment action.

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The California Commission on Judicial Appointments has unanimously confirmed the nomination of Associate Justice Tani Gorre Cantil-Sakauye, of the Third Appellate District of the Court of Appeal (Sacramento), as the new Chief Justice of California.

In the same session, the Commission also confirmed by unanimous vote: 

• The appointment of Judge Louis R. Mauro, of the Superior Court of Sacramento County, as an Associate Justice of the Court of Appeal, Third Appellate District

• The nomination of Judge Carol D. Codrington, of the Superior Court of Riverside County, as an Associate Justice of the Court of Appeal, Fourth Appellate District, Division Two (Riverside).

• The nomination of Associate Justice Brad R. Hill, of the Court of Appeal, Fifth Appellate District (Fresno), as Presiding Justice of the Court of Appeal, Fifth Appellate District.

Justices Cantil-Sakauye, Codrington and Hill will stand for election in their new positions in the November 2010 election.
 

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The Illinois Supreme Court has announced its oral argument calendar [pdf] for the upcoming September term, and it contains just one civil case. On September 22, 2010, the Court will hear argument in Hossfeld v. Illinois State Board of Elections, No. 109725.  Hossfeld involves the question of whether the appellant was a qualified primary voter for the Republican Party, such that his “Statement of Candidacy” in the February 2010 Republican primary for State Senator was valid, and he was therefore entitled to be on the ballot.  For more information on Hossfeld, click “Election Law” in the Illinois Supreme Court Updates.

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In a case brought to enforce a settlement reached at mediation, a dispute arose about the final terms of the settlement reached. One of the parties offered the declaration of the mediator to confirm the accuracy of the attached agreement. In Radford v. Shehorn, the Second District Court of Appeal held this was inadmissible under Evidence Code § 703.5, which declares that a mediator is incompetent "to testify, in any subsequent civil proceeding, as to any statement, conduct, decision, or ruling, occurring at or in conjunction with the prior proceeding...." The court ruled that this extended to a statement regard the terms of any agreement reached. While the parties can waive this restriction, in Radford the dispute extended to whether the signed waiver was actually part of the agreement. With that in dispute, the mediator remained barred from testifying. Ultimately, this error was found harmless, as a declaration of counsel confirming receipt of the agreement from opposing counsel was found sufficient to identify the final agreement. Note: Radford is consistent with an earlier case, Eisendrath v. Superior Court (2003) 109 Cal.App.4th 351, which barred a party from deposing the mediator in an action to correct the written agreement signed at the mediation.

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• Murray v. Alaska Airlines, Inc. holds that collateral estoppel applies to the administrative findings of a federal agency when those findings were subject to objection and judicial review that was never pursued, resulting in a final nonappealable order based on those findings. The Court found that in a subsequent civil lawsuit, those administrative findings have an issue-preclusive effect against the claimant who failed to challenge those findings and allowed them to become a final order and also failed to take any steps to withdraw his administrative complaint. For more details about Murray, see the Civil Procedure/Evidence/Discovery update page.

• Ruiz v. Podolsky holds that an arbitration agreement between a patient and treating physician extends to compel the heirs of that patient to arbitrate a wrongful death lawsuit when the agreement so extends by its own terms. The Court found that this result was compelled by C.C.P. § 1295, which by its terms intended to extend the arbitration of medical malpractice allegations to wrongful death claims. For more details about Ruiz, see the ADR update page.
   

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Labor Code § 351 bars an employer from collecting any gratuity that is left for an employee. Previous cases have addressed whether various tip pooling systems (i.e. systems which pool gratuities for division among a set of employees) operated by the employer are permitted under Labor Code § 351. Facing a split in the Court of Appeal on the existence of a private cause of action by the employee, the Supreme Court did not address the issue of whether the tip pooling system imposed in Lu v. Hawaiian Garden Casino was permitted. Instead, the Court unanimously ruled that Labor Code § 351 does not authorize a private right of action to sue an employer for allegedly taking gratuities. Finding no statutory language or legislative intent to provide such a remedy, the Court declined to create one. For more details about Lu, see the Employment-Compensation & Benefits update page.

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This week the Supreme Court granted review in three civil cases, covering a variety of issues:

• Greb v. Diamond International, in which the Court of Appeal, formerly at 184 Cal.App.4th 15, held that Delaware Gen. Corp. Law § 278 and not California Corp. Code § 2010 controlled whether a California plaintiff alleging personal injuries from asbestos could pursue a claim against a dissolved Delaware corporation when the complaint was filed more than three years after the dissolution of the corporation, thus barring the claim. For more details, see the Civil Procedure/Evidence/Discovery update page.

• Serrano v. Stefan Merli Plastering, in which the Court of Appeal, formerly at 184 Cal.App.4th 178 affirmed the denial of attorney’s fees under C.C.P. § 1021.5, finding that the trial court was within its discretion following Adoption of Joshua S. (2008) 42 Cal.4th 945, on the grounds that plaintiffs were protecting their own interests and only inadvertently triggered a published opinion which may have benefited others. For more details, see the Attorney-Related update page.

• Retired Employees Assoc. v. County of Orange, in which the Court certified review of the following issue: Whether, as a matter of California law, a California county and its employees can form an implied contract that confers vested rights to health benefits on retired county employees. For more details, see the Employment – Compensation & Benefits update page.

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In Clark v. Superior Court, the Supreme Court considered the claims of elderly plaintiffs under California’s unfair competition law, Business & Professions Code, § 17200 et seq., which sought treble damages under Civil Code § 3345. Under Civil Code § 3345, which is part of the Consumers Legal Remedies Act, the trier of fact is authorized to impose a penalty (i.e. a remedy intended to punish or deter) three times greater than otherwise provided for by the authorizing statute, when considering specified types of conduct regarding claims brought by or on behalf of elderly or disabled persons. If the statute does not provide a specific amount, then the trier of fact is authorized to increase the penalty it would otherwise have imposed, up to triple the original amount. The Court first ruled that § 3345 is not limited to claims brought under the Consumers Legal Remedies Act, but applies as a penalty enhancement for any claim which satisfies the terms of § 3345. However, following this statutory language, only “penalties” are potentially tripled, not compensatory damages. As such, the Court also ruled that § 3345 does not apply to claims brought under Business & Professions Code §17200, et seq., since the only monetary award provided for there is for restitution, which is not a “penalty” by definition. For more details about the Clark case, see the B & P 17200/Class Actions/Commercial update page.

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The California Supreme Court has accepted review in Rossa v. D.L. Falk Construction, to review the issue of whether California Rules of Court, rule 8.278(d)(1)(F), which permits a successful appellant to recover "the cost to obtain a letter of credit as collateral," allows the recovery of interest paid on sums borrowed to fund a letter of credit used to secure a surety bond. The Court of Appeal denied the claim, finding no statutory basis for awarding such costs. In doing so, Rossa first distinguished Cooper v. Westbrook Torrey Hills (2000) 81 Cal.App.4th 1294, which allowed the recovery of interest incurred in making a cash deposit pending appeal. However, Rossa then went on to “question its holding,” referring to the “obvious faultline” in Cooper’s analysis, arguing that Cooper is “further undermined” by a lack of statutory support and that it “stands as a conspicuous exception to the principles that costs are awarded only if statutorily authorized, and that such statutes are strictly construed.” Presumably, the Supreme Court accepted review in Rossa with the intention of resolving this conflict between the First and Fourth Districts. For more procedural details about the review in Rossa, see the Appeals & Writs update page.

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In Reid v. Google, the California Supreme Court addressed and resolved a well-known procedural trap for California attorneys: if you file your objections to your opponent’s evidence on a summary judgment motion, but the trial court never specifically rules on them, are the objections preserved on appeal? The Supreme Court’s answer: “yes.”

In opposing a summary judgment motion, Google made numerous written objections to its opponent’s evidence (175, in fact). The trial court failed to specifically rule on the objections, merely stating that it was “relying only on competent and admissible evidence” pursuant to Biljac. After reviewing the legislative history of C.C.P. § 437c  , the Court found that once an objection is properly made, it is not waived on appeal. If the trial court fails to rule on the objection it is considered overruled and the trial court is presumed to have considered the evidence, but the objection is preserved for appeal.

In doing so, the Supreme Court disapproved: 1) bothAnn M. and Sharon P. to the extent they each hold that the failure of the trial court to rule on objections to summary judgment evidence waives those objections on appeal; 2) Biljac to the extent it permits the trial court to avoid ruling on specific evidentiary objections; and 3) numerous court of appeal decisions which were contrary to this ruling (see footnote 7 of the opinion). For more procedural history of Reid v. Google, see the Summary Judgment update page.
 

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It’s almost become traditional wisdom over the past ten years: for the day-to-day work of the courts and the practicing bar, law reviews matter less than ever before. Chief Justice Roberts recently characterized legal scholarship as not “particularly helpful” in deciding cases. Judge Harry Edwards of the D.C. Circuit has been a critic of the state of legal scholarship as well, as have several other judges. An ABA study commented that practicing lawyers increasingly viewed legal scholarship as “irrelevant to their day-to-day concerns.” Even several law school professors have joined the chorus, endorsing the view that legal scholarship is increasingly removed from the work of the courts, and trying to quantify the “decline.”

But it turns out that reports of the death of the law review as a force in America’s courts may have been greatly exaggerated. According to a massive new study by Professors David Schwartz  of Chicago-Kent College of Law and Lee Petherbridge of Loyola Law School Los Angeles – “The Use of Legal Scholarship by the Federal Courts of Appeals: An Empirical Study" -- the courts’ use of legal scholarship is steadily increasing.

Professors Schwartz and Petherbridge studied a database of 296,098 reported decisions of the Federal Circuits spanning the years between 1950 and 2008. After screening out false positives and false negatives, the researchers plotted the positives – the opinions citing at least one law review or law journal – against the fifty-nine year study period. They concluded that citations to legal scholarship have steadily increased among the Federal appellate courts throughout the period. To determine whether the increase was a function merely of the courts’ increasing workload, the Professors plotted the citing opinions as a percentage of all opinions in a given year, and the result was still a steady upward trend.

The researchers analyzed possible explanations for the use of legal scholarship. Not surprisingly, they confirmed that the busier a particular Circuit is, and the more opinions written per appeal filed, the less likely an opinion is to cite to law reviews and journals. They suggested that the increasing use of scholarship might be explained, in part, by the fact that many areas of law arising in published cases have become increasingly complex, and there is simply far more scholarship easily available online than ever before. The professors also found a correlation between the dominant ideology of a Circuit and the court’s use of legal scholarship: more conservative courts use scholarship less, more liberal courts use it more.

Of course, the study suggests many follow-up questions, several of which the Professors discuss. The authors note that by taking a detailed look at the content of the articles and court opinions, important light might be shed on the issue of what kinds of legal scholarship judges use, and how do they use it. The researchers point out that the study concluded that over the entire period, only a little less than five percent of all opinions cited legal scholarship. Is that figure unexpectedly low? What role should the law reviews and journals be playing with respect to the bench and bar?  And why -- other than workload -- do some courts and specific judges seldom discuss legal scholarship, while others use academic work far more?

Although online databases of Federal appellate briefs are nowhere near as complete as the collection of opinions – Westlaw’s coverage begins in 1972 for the Fifth Circuit, but not until 2000 for the Tenth – it would be equally fascinating to apply the professors’ methods to practitioners’ briefs. Are practitioners providing more scholarly analysis to the courts? Is there any distinction in the use of scholarship between appellants and appellees? Are briefs in certain types of cases more likely to rely on scholarship?

Professors Schwartz and Petherbridge have provided important new evidence on a question that will interest a great many attorneys and judges. Their study is well worth a read.

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