Los Angeles Lawyer February 2011

Transcription

2011 Guide to Trial Support Services
February 2011 /$4
Part 1 of 2
EARN MCLE CREDIT
Economic
Loss Doctrine
page 25
Attorney’s
Fees
in Probate
Matters
page 12
PLUS
Kids’
Court
page 44
Disparate
Treatment
Discrimination
Suits
page 32
Class
Distinctions
Los Angeles lawyers
Julian W. Poon (right)
and Blaine H. Evanson
examine recent circuit
court decisions on
class certifications
page 18
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F E AT U R E S
18 Class Distinctions
BY JULIAN W. POON AND BLAINE H. EVANSON
The most fundamental question in certifying class actions is what level of proof
is required of plaintiffs
25 Loss Horizon
BY CLAY WILKINSON AND ERIC BROWN
Intentionality and foreseeability can affect the seemingly clear application of
the economic loss doctrine
Plus: Earn MCLE credit. MCLE Test No. 200 appears on page 27.
32 Test Results
BY JOHN B. LOUGH JR.
With its decision in Lewis v. Chicago, the Supreme Court has expanded the statute
of limitations for disparate treatment employment discrimination lawsuits
37 Special Section
2011 Guide to Trial Support Services
Los Angeles Lawyer
D E PA RT M E N T S
the magazine of
the Los Angeles County
Bar Association
February 2011
Volume 33, No 11
COVER PHOTO: TOM KELLER
10 Barristers Tips
Develop a mentor relationship to enhance
your lawyering abilities
42 Classifieds
42 Index to Advertisers
BY DAREN M. SCHLECTER
43 CLE Preview
12 Practice Tips
Recovering attorney’s fees in probate
actions
BY RICHARD G. REINIS
44 Closing Argument
Kids’ court
BY LAUREN WOLKE
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Los Angeles Lawyer February 2011 3
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JUDGE
LAWRENCE W. CRISPO
(RETIRED)
I
receive innumerable e-mails each day offering pharmaceuticals to enhance my life. Ironically, many appear
to be coming from my own e-mail address. And
with increasing frequency, I have received e-mails written in
Russian. Fortunately, many of these e-mails get filtered by my
Mediator
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firm’s e-mail quarantine system.
Before e-mail spam became a late night talk show staple, there was snail mail. The
ridicule of snail mail arguably reached its pinnacle in the late 1980s and early 1990s.
See http://en.wikipedia.org/wiki/Cliff_Clavin. That ridicule turned to empathy for the
Postal Service’s potential demise. Compare http://www.time.com/time/magazine
/article/0,9171,913226,00.html (July 7, 1975) and http://www.washingtonpost.com
/wp-dyn/content/article/2010/09/29/AR2010092906645.html (September 29, 2010).
The flood of useless e-mail perhaps explains why its treatment in the Code of Civil
Procedure and state and federal court rules is schizophrenic. With the availability
of electronic filing, federal judges have become intolerant of counsel unwilling to use
e-mail addresses. State courts, however, are saddled with an electronic filing system
that is only available in some parts of some counties. Thus state courts are mostly
relegated to the agreement of the parties to accept service by e-mail.
Rule 2.251 of the California Rules of Court provides procedures for electronic
service. Among them is Rule 2.251(f)(2), which states, “If a document is served electronically, any period of notice, or any right or duty to act or respond within a specified period or on a date certain after service of the document, is extended by two
court days.” Accord, Los Angeles Superior Court Local Rule 18.0(g).
Electronic service that creates a Thursday, Friday, or Saturday response deadline
effectively extends the response period by four calendar days—or three calendar days
if the response deadline is on a Sunday. Thus, more than half the time, service by
e-mail in state court proceedings extends the period for notice or response by at least
as long as the extension for service by snail mail in federal courts. See Rule 6(d) of
the Federal Rules of Civil Procedure (referring to Rule 5(b)(2)(C)). The state courts’
extension by two court days is the same that applies to Express Mail, any other
overnight delivery, and facsimile transmission under Code of Civil Procedure Section
1013(c) and (e). The savings of one or two days over snail mail leaves little strategic incentive to agree to electronic service in state court proceedings. As one practitioner said, “I didn’t go to law school to become my opponent’s printing company.”
Under current law, electronic filing and service in state courts also provides little or no advantage on the day of filing or service. Unlike federal courts, which
acknowledge that a day ends at midnight, Code of Civil Procedure Section 1010.6(a)(3)
requires a document to be electronically filed by 5 P.M. “or the time at which the court
would not accept filing at the court’s filing counter, whichever is earlier.” Otherwise
the document is deemed to be filed the following court day. Unlike service by mail,
which only requires deposit in the mail on a particular date, electronic service must
also be completed by the “close of business” or it “is deemed to have occurred on
the next court day.” Rule 2.251(f)(4) of the California Rules of Court. This provides
no advantage to practitioners who prefer a final edit to a satisfying dinner.
Perhaps as budgets ease, technology improves, and electronic filing and service
become the norm, the Code of Civil Procedure and California Rules of Court can
be modernized to reflect the immediacy of electronic communication.
■
www.kantorlaw.net
Michael A. Geibelson is a business trial lawyer with Robins, Kaplan, Miller & Ciresi L.L.P., where
he handles unfair competition, trade secret, and class actions. He is the 2010-11 chair of the
Los Angeles Lawyer Editorial Board.
JACK TRIMARCO
& ASSOCIATES
www.jacktrimarco.com
A proud member of the Los Angeles County Bar Association
barristers tips
BY DAREN M. SCHLECTER
Develop a Mentor Relationship to Enhance Your Lawyering Abilities
A WISE PERSON ONCE SAID that a mentor is someone whose hindsight can become your foresight. In the practice of law, a young
attorney can and should develop a relationship with a more senior
attorney, usually in the same area of law, to learn skills often not taught
in law school, including how to deal with difficult people and situations, communicate effectively, and solve problems. Those who
have made their way through law school and into the perils of practice know that having another lawyer to bounce ideas off of can be
invaluable to becoming a more skilled practitioner.
Often, mentors are direct supervisors or more skilled attorneys to
whom newer attorneys turn for advice. Developing relationships
with other attorneys of varying backgrounds, experience, and expertise can be beneficial to mentees and mentors. Veteran attorneys can
also benefit from the role of mentor by being re-energized from the
passion and perspective of younger attorneys. Arguably, having many
different mentors with various legal backgrounds can mean the difference between being a mediocre attorney and an excellent one.
Mentors offer invaluable insight into how to be competent, zealous, and ethical. A junior attorney can be overwhelmed with the daily
tasks that litigators face: the hurdles of litigation; analysis of the
strengths and weaknesses of a client’s case; avoidance of conflicts of
interest; and interaction with opposing counsel, court staff, judge, and
client. For newer litigators compelled to go solo, mentors can assist
with such pivotal tasks as how to open and properly maintain a client
trust account, obtain malpractice insurance, master the tips and
tricks of business development, and delegate tasks. The same is true
of new transactional attorneys, who must also decide whom they represent, make pivotal decisions about how to avoid conflicts of interest, and adequately protect a client’s goals and interests in a written
document.
Then too, mentors can be attorney friends with similar experience
but who are not directly or emotionally tied to a case or situation.
For example, keeping in touch with those in one’s graduating class
can be an invaluable resource. Other attorneys may have mentors.
These attorneys may have insight, training, or other advice that can
help the newer practitioner with deciding whether to take a case, handling an ethical situation, or dealing with the innumerable hurdles that
practitioners deal with on a daily basis. Thus, having the benefit of
a network of attorneys of similar experience can make the practice
of law more fulfilling.
Discussing how-to issues with a mentor can help a mentee with
what would otherwise take years of hard-learned lessons to achieve.
Mentors can also often serve to give their less experienced comrades
the bigger picture of a case that newer attorneys fail to grasp, teaching a newer attorney how to be sympathetic to a needy client without getting too emotionally involved. Finally, experienced mentors can
remind a newer attorney how to keep the client’s goals and interests
inviolate. Regularly, mentors advise that being an ethical attorney
involves not just rote memorization of the professional standards and
canons of ethics as taught in law school but keeping one’s perspec10 Los Angeles Lawyer February 2011
tive clear from the influence of third parties and one’s emotional entanglement to a minimum.
Many attorneys have lauded the importance of mentorship to fulfillment in the profession. Nicole Livolsi acknowledges that she had
to seek a mentor upon joining a large firm. As the partners assigned
to mentor her were not a good fit, she sought others, and in time, she
discovered mentors with whom the relationship was mutually beneficial. Not surprisingly, she says that having a quality mentor was
the tipping point in her decision to continue the practice of law.
Invariably for her, mentorship kept her passionate about the practice
of law.
Mentorship can be especially fulfilling for more veteran attorneys
who have benefited from both sides of the mentoring equation.
Suzanne Henry credits the mentoring relationships she developed with
more senior attorneys she liked and trusted as having a huge impact
on her development as a litigator. As she has progressed through her
legal career, she found mentorship on litigation was becoming less
important and business development more so. Now in her 11th year
of practice, Henry gives back to other attorneys on the litigation front
while continuing to benefit from business development mentoring. She
says that attorneys have to stay relevant and that in order to develop
a solid bond with a mentor, it is necessary to give and not simply take.
Like many, Henry knows that having succeeded in law school and passing the bar is simply not enough to guarantee success and fulfillment
in the practice of law. To her, “The closest thing to an apprenticeship
in the United States legal system is developing a relationship with a
trusted, knowledgeable, and likeable mentor.”
While some attorneys have stressed that they cannot get proper
mentorship at a large firm, others believe that they have benefited from
a special team within a big firm that focuses on a particular practice
area. For example, Ryan Van Steenis of the Huron law group, now
in his third year of practicing law, says that he benefited from a special team at a large law firm. Van Steenis would rather take a less valuable job with a good mentor than work at a better paying job at which
mentorship is not stressed. Van Steenis has had two mentors with two
different styles who helped him with the critical issues of how to be
a great attorney and how to develop business. As a result, he has a
well-rounded approach to the practice of law. He says having a law
degree is no substitute for having the practical experience and knowledge from those who have gone before.
In the end, mentors are the building blocks of creating competent,
fulfilled, and motivated attorneys. There is no better gift than to receive
what a true mentor can give. Those who have benefited from years
of mentorship should help ensure that mentorship remains a pillar of
the profession. Undoubtedly, mentorship provides a great service to
ensure the quality of the profession as a whole and is a rewarding and
gratifying experience for all involved.
■
Daren M. Schlecter is the founder of the Law Office of Daren M. Schlecter, whose
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practice tips
BY RICHARD G. REINIS
RICHARD EWING
Recovering Attorney’s Fees in Probate Actions
TWO CALIFORNIA COURT OF APPEAL OPINIONS from 2010 leave any
lawyer attempting to recover attorney’s fees in a probate matter with
greater uncertainty than ever before. At the same time, practitioners
studying the decisions will be empowered by rules of interpretation
that have the potential to stand any statute—not just those in the
Probate Code—on its head. Together the two opinions issued by separate divisions of the Fourth District—along with a probate case
decided by the Fifth District in 2009—provide ample support for litigators arguing in any situation for a broad interpretation of statutory language.
In one of the cases, Leader v. Cords,1 the court provided salient
rules for victorious practitioners seeking attorney’s fees. They should
rely on the principle that a statute is ambiguous if susceptible to two
differing, reasonable interpretations. In accord with that principle, they
should invite their opponents to state their arguments and then
respond with a reasonable position. In this way the targeted goal of
statutory ambiguity will be reached. After that, all practitioners need
to do for an award of attorney’s fees is demonstrate that the statute
in question is remedial and wide enough in scope to cover the misconduct of their opponents. While these rules seem to clear a smooth
path for successful probate litigants seeking attorney’s fees, the court
in Soria v. Soria2 had other ideas. Still, Soria supports a broad reach
for the statute authorizing fees.
Ultimately, Leader and Soria obscure the application of Probate
Code Section 17211 and the meaning of similar Probate Code
Sections 2622.5 and 11003—the former dealing with conservatorships
and guardianships and the latter with estate administration. These three
cover the ambit of probate disputes and attempt to remove incentives
for litigation filed without reasonable cause and in bad faith. That is
the key part of the code sections, and Leader is right on that point.
Soria, by contrast, seems to have gone off the rails to reach the correct result.
Leader3 arose in the context of Probate Code Section 17211,
which authorizes a probate court to issue an award of attorney’s fees
if a party to a contest of a trustee’s account has acted without reasonable cause and in bad faith. Division One of the Fourth District
of the California Court of Appeal interpreted the statute broadly in
a manner not supported by published precedent. Three months later,
Division Three of the Fourth District decided in Soria4 that the liberal interpretation of Section 17211 had gone far enough. Section
17211 is virtually identical to Probate Code Sections 2622.5 and
11003, so Leader and Soria not only apply to a trustee’s account contest but also to bad faith litigation over conservatorships, guardianships, and estate administration.
In Leader, the trustee had refused to make a distribution to beneficiaries. Instead, he used his trustee’s powers to leverage a benefit
for himself. While obligated to regularly render accounts to the beneficiaries, the trustee had failed to do so, and the beneficiaries
demanded an accounting. Ultimately, the beneficiaries filed a petition
seeking a finding that the trustee had committed breaches of trust by
failing to file regular accountings. The beneficiaries also sought attorney’s fees under Section 17211.
The trial court found that the trustee had violated the Probate Code
but nevertheless denied the beneficiaries’ request for attorney’s fees.
According to the trial court, the action against the trustee for failure
to file an account did not amount to a “contest of the trustee’s
account,” stating that Section 17211 was unambiguous on this point.
The appellate court disagreed.
Citing Mayo v. DMV, the court of appeal declared that a statute
is ambiguous if it is “‘reasonably susceptible of two disputed meanings.’”5 The beneficiaries argued that a petition based on a theory of
breach of trust for failure to file an accounting amounted to a contest
of the trustee’s account. The trustee and the trial court took the opposite view. The petition filed by the beneficiaries did not contest an
account but instead sought only a determination that the trustee’s conRichard G. Reinis is a senior partner at Steptoe & Johnson LLP, where he is a
member of the Business Solutions and Litigation Departments. Reinis represented the trustee of the Rudnick Estates Trust at trial and on appeal in
Rudnick v. Rudnick and secured a denial of a petition of review before the
California Supreme Court.
duct constituted a breach of trust. In resolving this dispute, the appellate court stated,
“Thus, if we accept [the trustee’s] interpretation of the phrase as reasonable, the phrase
[‘contests the trustee’s account’] is reasonably
susceptible to more than one meaning.”6
In Leader, the beneficiaries sought to have
the statute interpreted broadly in order to collect attorney’s fees. They easily surmounted
the hurdle of “without reasonable cause and
in bad faith,” but the unfortunate phrase
“contests the trustee’s account” stood in the
way. Nevertheless, the court relied on another
handy rule of interpretation. Referring to the
statute as remedial, the court declared that the
statute’s language was entitled to broader
interpretation and determined that the phrase
“contests the trustee’s account” should include
contests “related to an account.”
Thus, a statute that provides a means for
the enforcement of a right or the redress of a
wrong is a remedial statute.7 Litigators may
wonder how many statutes do not fall into this
category. Moreover, according to the Leader
court, a remedial statute “must be liberally
construed ‘to effectuate its object and purpose,
and to suppress the mischief at which it is
directed.’”8 The opinion concludes:
We do not envision that the Legislature
intended to leave beneficiaries in [the
petitioners/beneficiaries’] position without potential recourse under section
17211, subdivision (b), for the unreasonable and bad faith opposition to
[their] petition for distribution, merely
because they do not challenge the accuracy of the account’s enumerated
receipts and distributions, or assets
and liabilities. Such a narrow reading
of 17211, subdivision (b) would defeat
its remedial purpose.9
Soria versus Leader
After Leader, one might have predicted that
the odds of securing an award of attorney’s
fees in probate litigation related to a trustee’s
account (or an objection to an account of a
conservator or guardian filed under Section
2622.5, or an account filed in connection
with estate administration under Section
11003) had gone up considerably, provided
one party could prove the other’s unreasonableness and bad faith. Not so. Three months
after the publication of Leader, the Soria
court issued its opinion dealing with the exact
same statute.
The Soria plaintiffs were the grandchildren
of the defendants. In a written agreement, the
grandparents had accepted title to the plaintiffs’ family home with the understanding
that the house would be reconveyed to the
grandchildren. When that did not happen, the
plaintiffs filed a complaint containing multiple causes of action, including a request for
similar relief to that secured by the Leader
beneficiaries—a determination of a breach
of trust by the trustees and an injunction
compelling the grandparents/trustees to
account. The action was not brought under
the Probate Code. A jury rendered a verdict
for the grandchildren/beneficiaries who subsequently, and successfully, moved against
the grandparents for attorney’s fees under
Section 17211(b).
The Soria court reversed on several
grounds. First, the grandchildren/beneficiaries did not contest a trustee’s account:
Instead, [the plaintiffs] pursued a
civil action against [the defendants],
alleging they breached their duties as
trustees, and sought an injunction
to compel [the defendants] to produce
an account. The very existence of a
trust was in dispute. At trial, there was
no contest of a trustee’s account within the meaning of section 17211(b).10
This is an odd statement, since the grandparents called an accountant as a witness, and
he presented an accounting at trial.
Next, the Soria court argued that Leader
was distinguishable because Soria was a civil
action, and the fees were sought as a personal
judgment against the trustees, not surcharged
against future compensation from or an interest in the trust. The court stated, “Section
17211(b) does not permit attorney fees to be
awarded in such a manner.”11
Neither of these grounds can withstand
reasonable scrutiny. The grandchildren’s challenge in Soria was certainly related to a
trustee’s account, just like the Leader beneficiaries’ petition for a determination of a breach
of trust for failure to account. That the grandchildren did not file a petition under Section
17200, as had the beneficiaries in Leader,
differentiates the two cases, but in form only,
not at all in substance. The plaintiffs and the
defendants in Soria, in effect, acquiesced to the
jurisdiction of the court at law, not equity, and
a jury trial followed. Indeed, one can question
whether this was the parties’ prime motivation
in choosing to forego a probate proceeding.
But did that forum selection deprive the parties of the special rules of a court in equity and
the application of the Probate Code to the proceedings?
The Soria court noted12:
[The probate court] had exclusive jurisdiction over Grandchildren’s claims.…
By hearing a matter within the probate
court’s exclusive jurisdiction, a trial
court acts merely in excess of jurisdiction, not without jurisdiction.…In
this case, no party has objected to the
trial court’s exercise of jurisdiction
over a matter exclusively within the
probate court’s jurisdiction, and therefore the trial court merely acted in
excess of jurisdiction….As a result,
the judgment is not void.…13
Thus, the Probate Code applied, and the
trial court was acting within its power when
it applied Section 17211(b). That left the
question of whether Section 17211(b) was
properly applied, but the Soria court’s attempt
to distinguish Leader by noting the issue of
forum selection appears to lack substance.
The Soria court determined that Section
17211(b) does not apply on the ground
that the remedy available under the Probate
Code is a surcharge against the trustee’s compensation or other interest of the trustee in
the trust. The opinion states that this type
of remedy cannot be accomplished in a civil
action that results in a money judgment against
the trustee. However, Section 17211(b) states
that the trustee shall be personally liable for
any amount that remains unsatisfied from
the trustee’s compensation or interest in the
trust. The line drawn by the Soria court is a
distinction without a meaningful difference.
Leader posed a truly substantive problem
that required disposition. The beneficiaries
in Leader did not contest the trustee’s account
but brought an action alleging a breach of fiduciary duty for failure to account. The Soria
beneficiaries similarly brought an action to
compel an accounting, so Leader and Soria
both invoke an account. Therefore, following
the logic of Leader, the court of appeal in
Soria should have upheld the trial court.
The Soria court did not dodge this reasoning and agreed that Section 17211(b) is
remedial and must be liberally construed.
Nevertheless, the court applied a “prevailing
party” standard. The trustees’ trial presentation of an account had served as the basis
for the ultimate award, which required both
parties to make certain payments: “Thus, if
Grandchildren did anything at trial that could
be construed as a contest to the account, the
contest was unsuccessful.”14 In other words,
the action may have been related to or a contest of an account, but the plaintiffs were
not the prevailing party—a factor implicit
in a statute that conditions relief on a finding
that an action was without reasonable cause
and in bad faith. Had the Soria court concluded its opinion on this point, the two
cases might have been reconciled. Simply
put, in Soria the grandparents/trustees acted
with reasonable cause and not in bad faith.
That constitutes a true point of distinction.
Unfortunately, the Soria court went further. Its opinion attempts to distinguish
Leader with an analysis of the statutory
scheme in Part 5 of the Probate Code, Judicial
Proceedings Concerning Trusts, including
Sections 17000 to 17450 and, in particular,
Section 17211. The court’s efforts in this
regard are unconvincing. The court draws a
distinction between a contest to an existing
account and a proceeding to compel the
trustee to account, thus veering away from liberally construing Section 17211(b) to include
anything “relating to an account.”
Concluding that an action to compel an
accounting would not be covered by Section
17211(b), the Soria court delivered a coup
de grace to liberal construction: “If the
Legislature intended to include within section
17211 a proceeding to compel the trustee to
account, it would have expressly done so.”15
The opinion proceeds to drive the point home:
“Section 17211 is a remedial statute, but
liberal construction can only go so far.”16 To
apply Section 17211(b) in this case “would in
effect turn section 17211(b) into a statutory
basis for recovery of attorney fees in virtually
any case in which the existence of a trust is
in dispute or any action of a trustee is challenged. We do not discern any intent by the
Legislature to reach that result by enacting
section 17211(b).” 17 The court directly
addressed the Leader ruling:
Our conclusion is not inconsistent with
Leader because it differs from this case
[in that]…the beneficiaries in Leader
pursued a petition in the probate court
[and]…[h]ere, in contrast, Grandchildren did not follow the Probate
Code procedures for proceedings concerning the internal affairs of a trust
but pursued a civil action….In Leader,
the petition to compel the trustee to
make a final distribution arose from
and was directly related to the trustee’s
accounting. Here, Grandchildren’s lawsuit did not arise out of an accounting.
Grandchildren and Grandparents disputed whether a trust even existed.18
The rule of law is not advanced by this
part of the opinion.
Once the court had made its determination
of the section’s inapplicability, it ruled out
other sources of potential recovery of attorney’s fees for the grandchildren/beneficiaries.
Starting its analysis with a description of the
American Rule—each party to a dispute is
responsible for its own attorney’s fees unless
otherwise specified by agreement or statute—
as codified in Code of Civil Procedure Section
1021, the Soria court simply states, “There are
a few exceptions to this rule, but none is
applicable here.”19 From the Soria court’s
view that the grandchildren’s choice of forum
rendered the dispute at issue a “civil proceeding,” not a “probate proceeding,” the
only means of recovery of attorney’s fees for
the victorious party was by statute or contract,
neither of which existed to support an award
of attorney’s fees.
Broad Equitable Powers
However, the Soria court’s dismissal of exceptions to the American Rule was a major over14 Los Angeles Lawyer February 2011
sight. One very significant exception to the
American Rule is available in courts of equity,
including probate courts—and probate courts
maintain broad equitable powers over trusts
within their jurisdiction. Once the jury rendered its verdict that the agreement was a
trust, the trial court in Soria became, in effect,
a probate court. Indeed, according to Rudnick
v. Rudnick—a decision issued by the Fifth
District of the court of appeal in 2009—
those broad equitable powers include the
power to award attorney’s fees, especially
when the court has determined that the proceeding is unfounded and was brought in
bad faith.20
At trial in Rudnick, three (of more than 10)
beneficiaries (“objectors”) challenged a
trustee’s petition under Section 17200 regarding instructions to consummate a sale of a
large tract of land near Tehachapi. A majority of the beneficiaries had voted favorably, and
the trustee sought approval from the probate
court. The trustee called the trust accountant
to the stand, who presented an accounting and
the proposed distribution of sale proceeds.
The trial court ruled in favor of the trustee,
finding the objectors’ testimony lacked credibility. Moreover, in response to a subsequent
motion by the trustee for attorney’s fees and
costs, the court ruled that the objectors had
acted in bad faith by challenging the petition
pretextually, with the real intent to delay and
derail the sale approved by the majority. In
granting the motion, the trial court assessed
the fees against future distributions to the
objectors.
The trustee had advanced two arguments:
The
• probate court has the general equitable
authority to make an award of attorney’s
fees to apportion the costs of a trial among
those whose bad faith conduct was responsible for those costs.
• Under Section 17211(a), the mirror image
of subsection (b), the trial court may make an
award of attorney’s fees against beneficiaries
who contest the trustee’s account without
reasonable cause and in bad faith.
The objectors’ argument was identical to
those made by the trustee in Leader and the
Soria court: The objectors’ contest was to
the sale (or distribution), not to an account
rendered by the trustee.
However, the trial court in Rudnick never
reached the trustee’s second argument. Its
decision was predicated on the general exception to the American Rule for probate courts
under Estate of Ivey,21 cited as the case law
upon which the passage of Section 17211
was based. This seminal case stands for the
proposition that “a probate court, pursuant
to its equitable powers and authority over
administration of a testamentary trust, may
provide that reasonable and necessary legal
fees incurred by other beneficiaries in oppos-
ing a first beneficiary’s frivolous bad faith
attacks on the trustee’s account had to be
paid out of the first beneficiary’s share of the
trust.”22
Section 17211 and Ivey are founded on the
notion that it is unfair for nonlitigant beneficiaries of a trust to bear the costs of defending against bad faith litigation instigated by
other beneficiaries. The trial court in Rudnick
never ruled on the statutory argument but
ordered that attorney’s fees be charged to
the future distributions of the objectors,
because it was unfair for the nonlitigants to
have to pay the costs of defending against the
bad faith actions of the objectors. The Fifth
District Court of Appeal agreed that this was
an equitable apportionment of costs incurred
by the trustee.
The Rudnick court relied on Conley v.
Waite 23 : “[W]hen an unfounded suit is
brought against [the trustee] by the cestui
que trust, attorney’s fees may be allowed him
in defending the action and may be made a
charge against the interest in the estate of
the party causing the litigation.”24 The Ivey
court also relied on Conley, among others:
Courts having jurisdiction over trust
administration have the power to
allocate the burden of certain trust
expenses to the income or principal
account and not infrequently do so
in connection with accountings or
suits relating to the administration of
the trust. Sometimes this authority is
stated in statutory form, but it exists
as part of the inherent jurisdiction of
equity to enforce trusts, secure impartial treatment among the beneficiaries, and to carry out the express or
implied intent of the settlor.…Where
the expense of litigation is caused by
the unsuccessful attempt of one of the
beneficiaries to obtain a greater share
of the trust property, the expense may
properly be chargeable to that beneficiary’s share.…25
In Leader, the beneficiaries paid their own
attorney’s fees and one-half of the trustee’s
attorney’s fees to defend their own action.
This was inequitable because the trustee’s
opposition to the beneficiaries’ contest was in
bad faith. Thus, the beneficiaries were
awarded their attorney’s fees against the
trustee’s interest in the trust or in compensation from the trust. If there had been a finding that the action was not a contest of a
trustee’s account, the Leader court, relying on
Ivey and Rudnick,26 might still have made its
attorney’s fees award to equitably apportion
legal fees incurred by the bad faith conduct
of the trustee in trying to use his power to distribute as leverage to secure a benefit from the
beneficiaries to which he was not entitled
under the trust.
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There was no finding of bad faith in Soria
and no clear winner, although the grandparents were ordered to reconvey the home. The
trustee apparently mounted a legitimate contest that required a jury to characterize a layman’s document as a trust and then interpret
the trust. Equitable apportionment arguably
was not warranted, so the alternative to
applying Section 17211(b) was still not available. However, the reliance in Soria on the
American Rule is misplaced. Probate courts,
sitting in equity, have the power to protect
innocent beneficiaries and a trust corpus from
the costs of defending against bad faith litigation.27 This general rule is modified by
Section 17211 to be applicable when the conduct relates to or contests a trustee’s
account.28 The standard under that statute
requires a finding that the conduct is without
reasonable cause and in bad faith.
Need for Legislative Action
Beneficiaries in both Leader and Soria initiated actions to accomplish something more
fundamental than contesting an account, and
any focus on the word “contesting” may run
counter to the statutory purpose. Both sought
a distribution of trust assets from reluctant
trustees. In Leader, the alleged failure to
account supports the court’s finding that the
action was related to an account. In Soria, the
plaintiffs sought an injunction to compel the
reconveyance of the residence, the trust corpus, and the rendering of an account.
Notwithstanding the Soria court’s characterization that what was presented did not
constitute an account under the Probate Code,
the defendants did indeed present one at trial.
These cases are not distinguishable on the
ground set forth by Soria that the plaintiff
grandchildren’s action was not related to or
a contest of a trustee’s account.
The distinction, if there is one, is that the
trustee in Leader acted without reasonable
cause and in bad faith—a characterization
that the court did not make regarding the
trustee’s actions in Soria. A finding of a breach
of the trust agreement is not ipso facto acting without reasonable cause and in bad
faith. The Soria court simply might have
determined that Section 17211(b) was inapplicable because the failure to account by
the grandparents/trustees was not without
cause and in bad faith. The appellate court did
not go that far but rather looked for another
reason to determine the section inapplicable. By repeatedly referring to the plaintiffs’
failure to follow procedures under the Probate
Code, the Soria court seems to be hedging its
bet—rendering Section 17211(b) inapplicable
by choice of forum, if not by statutory interpretation.
Focusing on the trustee’s conduct in the
two cases may lead to a more harmonized con16 Los Angeles Lawyer February 2011
clusion. In Leader, the trustee refused to make
a distribution unless the beneficiary agreed to
something unrelated to the trust. In Soria,
the trustees refused to convey (distribute) the
house, claiming there was no trust and that the
preconditions to reconveyance had not been
satisfied. The former was not a justification for
the trustee’s contest of the beneficiaries’ action.
The latter was.
This analysis is not evident in the most
recent decision. The Soria court’s conclusion
that the action was not a contest of a trustee’s
account is contrary to the Leader holding
and can only lead to confusion. Section 17211
has now been interpreted in such a manner
as to raise issues that are truly incidental to
its statutory intent, such as the meaning of
“contests a trustee’s account,” “account,”
and now “related to a trustee’s account.”
The statute should apply to actions taken by
either a trustee (as in Leader) or beneficiaries
(as in Rudnick) when such actions are without reasonable cause and in bad faith and
impose unreasonable costs on other beneficiaries or the trust estate. The application of
this remedial statute ought to be available to
litigants regarding any matter raised under
Section 17200. This raises the question of
whether Section 17211 is a sanction or a
means by which costs may be fairly allocated, or both.
A starting point is a review of Section
17211(a), which allows a trustee to charge his
or her attorney’s fees against the trust interests when objecting beneficiaries challenge
the trustee’s account in bad faith. Why should
this power be limited to an “account” as
narrowly defined in certain sections of the
Probate Code? If the trustee reports on internal matters of the trust, such as the approval
of an asset sale by the majority beneficiaries,
as in Rudnick, and seeks instructions from the
court to consummate the transaction, why
should the costs of a bad faith attack on that
petition be borne by the other beneficiaries
who, arguably, are protected against something less momentous—a bad faith attack
on a list of assets and liabilities? Is it probable that the legislature, in enacting Section
17211(b), intended for beneficiaries to be
entitled to an award of attorney’s fees incurred
in connection with a trustee’s bad faith opposition to a contest of their account but would
not be entitled to attorney’s fees if they
brought an action to compel a distribution or
an accounting by a trustee, who then files an
opposition without reasonable cause and in
bad faith?
The Leader court does a decent statutory
analysis and comes to the right conclusion
that Section 17211(b) should be available in
actions related to a trustee’s account. It
reached this result under circumstances in
which the trustee used his position of power
to establish a negotiating advantage unrelated to the trust corpus. The court was not
required to go further and rule that the statute
must be applied whenever a trustee or beneficiary contests a matter brought under Section
17200 without reasonable cause and in bad
faith, but that result would have been much
easier to understand than a rule that applies
the statute when the contest is “related” to an
account.
Soria, in which the trustee denied even the
existence of a trust and proved that money
was to be paid by others, declines to follow
that path because there was no bright line of
bad faith. A court can only apply a remedial
statute when it clearly perceives misconduct.
In Olmstead v. Arthur J. Gallagher &
Company, the California Supreme Court
states: “[T]he language of a specific Section
must be construed in the context of the larger
statutory scheme of which it is a part.”29 A
court must interpret code sections “to ascertain the intent of the lawmakers so as to
effectuate the purpose of the law.…But it is
settled principle of statutory interpretation
that language of a statute should not be given
a literal meaning if doing so would result in
absurd consequences which the Legislature
did not intend….”30 Both the Leader and
Soria courts agree that Section 17211 is remedial but disagree as to which wrongs are to
be remedied.
The legislature needs to amend Probate
Code Section 17211 as well as Sections
2622.5 and 11003 to clarify that if a litigant
in a probate matter is pursuing a claim without reasonable cause and in bad faith, the litigant must pay all costs and fees incurred.
Whether the litigation involves a report, an
account, an accounting, a distribution, an
expense reimbursement, a failure to perform
under the code, or any other legitimate function of conservators, guardians, estate administrators, or trustees, any party found to have
acted without reasonable cause and in bad
faith ought to pay. Litigation depletes assets—
not only those of directly affected parties but
also innocent third parties, including taxpayers.
■
1 Leader
v. Cords, 182 Cal. App. 4th 1588 (2010), rev.
denied, No. S182335 (June 9, 2010).
2 Soria v. Soria, 185 Cal. App. 4th 780, 783 (2010), rev.
denied, No. S184803 (Sept. 1, 2010).
3 Leader, 182 Cal. App. 4th 1588.
4 Soria, 185 Cal. App. 4th 780.
5 Leader, 182 Cal. App. 4th at 1596 (citing Mayo v.
DMV, 193 Cal. App. 3d 406, 408 (1987)).
6 Id.
7 Rich v. Maples, 33 Cal. 102, 106 (1867); Miller v.
Hart, 11 Cal. 2d 739, 741 (1938).
8 Leader, 182 Cal. App. 4th at 1598 (citing Tintocalis
v. Tintocalis, 20 Cal. App. 4th 1590, 1592 (1993)
(citing Ford Dealers Ass’n v. DMV, 32 Cal. 3d 347, 356
(1982))).
9 Id. at 1599.
10 Soria
v. Soria, 185 Cal. App. 4th 780, 783 (2010),
rev. denied, No. S184803 (Sept. 1, 2010).
11 Id. at 784.
12 Id. at 787 n.3.
13 Id. (citations omitted).
14 Id. at 787. The statute does not employ the term “success” or “prevailing party” or otherwise require a certain outcome, although the likelihood of a court making the requisite finding but ruling against the petitioner
seems slim. The Senate Committee report on SB 392
on January 16, 1996, described the new statute as
“authoriz[ing] a court to award [attorney’s] fees to a
prevailing party where there is a bad faith challenge or
defense to a [trustee’s] account.” CAL. SENATE JUDICIARY
COMM. PROBATE LAW OMNIBUS BILL, 1995-96 Reg.
Sess., at 6 (1996).
15 Soria, 185 Cal. App. 4th at 788.
16 Id. at 789.
17 Id.
18 Id.
19 Id. at 785 (citing Gray v. Don Miller & Assocs., Inc.,
35 Cal. 3d 498, 504 (1984)).
20 Rudnick v. Rudnick, 179 Cal. App. 4th 1328 (2009)
(citing Hollaway v. Edwards, 68 Cal. App. 4th 94, 99
(1998)).
21 Estate of Ivey, 22 Cal. App. 4th 873 (1994).
22 ARNOLD H. GOLD, MONICA DELL’OSSO & MARY F.
GILLICK, CALIFORNIA CIVIL PRACTICE PROBATE AND
TRUST PROCEEDINGS §§10:51, 24:118 (2005 & Supp.
2009). Judge Arnold Gold (ret.) filed an amicus curiae
letter on February 10, 2010, with the California
Supreme Court in support of a petition for review of
Rudnick. In this letter, Judge Gold stated that the ruling in Rudnick was “quite dangerous—it opens the
door to a flood of requests for attorneys fees awards
in trust litigation based solely on the argument that
such an award would be ‘equitable’ under the
circumstances—excessively encouraging litigation
and discouraging settlements.” Amicus Curiae Letter
from Hon. Arnold H. Gold to California Supreme
Court, at 1 (Feb. 10, 2010) (“Judge Gold Amicus
Curiae Letter”), in Rudnick, No. S179383. However,
Rudnick specifies that an equitable apportionment is
not an abuse of discretion when a beneficiary’s contest is unfounded. Rudnick, 179 Cal. App. 4th at
1334 (citation omitted).
23 Conley v. Waite, 134 Cal. App. 505, 506 (1933).
24 Rudnick, 179 Cal. App. 4th at 1334.
25 Ivey, 22 Cal. App. 4th at 883 (citations and quotations omitted).
26 See also Vokal v. Davison, 121 Cal. App. 2d 252,
260-61 (1953); Estate of Reade, 31 Cal. 2d 669, 67172 (1948), cited in Rudnick, 179 Cal. App. 4th at
1336 n.2; Estate of Kann, 253 Cal. App. 2d 212, 223
(1967); Serrano v. Priest, 20 Cal. 3d 25, 35 (1977) (citing Quinn v. State of Cal., 15 Cal. 3d 162, 167 (1975)).
27 See Rudnick, 179 Cal. App. 4th 1328.
28 Judge Gold takes credit for authoring Section 17211
and “shepherd[ing] it through the legislative process.”
Judge Gold Amicus Curiae Letter, supra note 22, at 2.
He describes this statute as granting probate courts the
power to order the losing party in a contest over an
accounting to pay attorney’s fees and other expenses
of the contest if the contest or defense thereof was
without reasonable cause and in bad faith and notes it
was modeled after Ivey. Id. His letter concludes, “Why
did I bother? According to the Rudnick opinion, the
probate court already had that power as part of its equitable powers (and especially when bad faith has been
shown)! I suspect that a review of the legislative history of Probate Code Section 17211 would reflect that
the Legislature didn’t think it was engaging in an idle
act when it adopted that statute.” Id.
29 Olmstead v. Arthur J. Gallagher & Co., 32 Cal.
App. 4th 804, 811, 11 Cal. Rptr. 3d 298, 303 (2004).
30 Id. (citations omitted).
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CLASS
DISTINCTIONS
The circuits have invoked a variety of different
standards in certifying classes for litigation
in class action filings has caused a corresponding rise in the number of federal appellate court decisions on issues relating to class
certification. Particularly since 1998, when
Rule 23 of the Federal Rules of Civil Procedure was amended to allow for discretionary interlocutory review of class-certification decisions,3 federal appellate courts
have been thrust into a developing and complex area of the law.
The U.S. Supreme Court has, however,
remained largely silent. The most recent
Supreme Court decision to address class certification in any significant detail was Ortiz
v. Fibreboard Corporation, over 10 years
ago.4 Lower federal courts have thus been left
to wrestle with the complex issues related to
class certification, and clear splits among
these courts have developed.
The lack of Supreme Court guidance has
led to divergent approaches by the lower
courts in many key areas, including 1) the
standards governing the extent to which
claims for monetary relief may be pursued in
Rule 23(b)(2) “mandatory” class actions for
injunctive and declaratory relief, 2) the use of
so-called hybrid class actions, 3) the standing
requirements for absent class members, 4)
the burden of proof on plaintiffs at the classIn Gibson, Dunn & Crutcher LLP’s Los Angeles
office, Julian W. Poon is an appellate, class actions,
and general commercial litigation partner, and
Blaine H. Evanson is an associate with the Appellate
and Constitutional Law and Class Actions practice
groups. The authors or their firm represented the
defendants in Dukes, Gianzero, Bateman, Bates,
and Klay.
KEN CORRAL
T
he number of class actions in
California and the country is
rising at a dramatic pace.
According to a report in the
Los Angeles Daily Journal, 30
percent of U.S. companies and 39 percent of
California companies had a class action filed
against them in 2009.1 Between late 2001 and
early 2007, consumer class actions rose 156
percent and accounted for more than 20 percent of all class action filings in the latter
period. Labor class actions increased 228
percent, constituting 46.9 percent of class
action filings in late 2007. The Ninth Circuit,
in particular, has experienced a surge in class
actions. There was a 560 percent increase in
filings between July-December 2001 and
January-June 2007.2
It should not be surprising that the increase
certification stage, and 5) the certification of
punitive damages and statutory penalties,
and the aggregation problem to which they
give rise. Practitioners should pay careful
attention to developments and divergences in
these areas.
Monetary Relief in 23(b)(2) Classes
As most practitioners are aware, there are
three types of class actions under Rule 23 of
the Federal Rules of Civil Procedure. In the
past decade, plaintiffs have increasingly
resorted to Rule 23(b)(2) class actions in
seeking injunctive relief and monetary damages.5 They have done so in part because
Rule 23(b)(2) avoids the expensive notice
and opt-out requirements of (b)(3) certification.6 Defendants have also sought (b)(2)
certification in certain circumstances in order
to avoid the added inefficiency and cost of
dealing with individual plaintiffs who exercise their right under Rule 23(b)(3) to opt
out.7
Rule 23(b)(2) only authorizes the certification of a class if “the party opposing the
class has acted or refused to act on grounds
that apply generally to the class, so that final
injunctive relief or corresponding declaratory relief is appropriate respecting the class
as a whole.” The Supreme Court in Ticor
Title Insurance Company v. Brown suggested
that monetary relief may not be sought in
(b)(2) classes, because “class members may
have a constitutional due process right to
opt-out of any class action which asserts
monetary claims on their behalf,” and (b)(2)
does not require notice or provide for opt-out
rights.8 But Ticor did not resolve this issue,
and lower courts have adopted different standards on how district courts are to analyze
whether a putative class seeks relief that is predominantly injunctive and/or declaratory, as
Rule 23(b)(2) requires.
The Fifth Circuit was the first to address
the issue, holding in Allison v. Citgo
Petroleum Corporation that claims for monetary relief impermissibly predominate in
putative (b)(2) class actions unless they are
“incidental” to plaintiffs’ requests for declaratory and injunctive relief.9 Monetary relief is
“incidental” when the damages “flow directly
to the class as a whole,” and the court can calculate damages without the need for individualized determinations.10 The Allison test
is the most stringent of the three major standards to have been adopted by different circuits so far. Although it is not completely in
keeping with the Supreme Court’s concern in
Ticor, the Allison test is less likely to raise due
process concerns for defendants than the
competing standards. The Third, Sixth,
Seventh, and Eleventh Circuits all generally
follow the Fifth Circuit’s rule.11
The Second Circuit, in contrast, adopted
a more malleable, pro-plaintiff interpretation of when claims for monetary relief impermissibly predominate. In Robinson v. MetroNorth Commuter Railroad Company, the
Second Circuit rejected the Allison rule and
applied an “ad-hoc balancing” test instead.12
Robinson holds that the court must assess
“whether (b)(2) certification is appropriate in
light of ‘the relative importance of the remedies sought, given all of the facts and circumstances.’”13 This flexible approach focuses
on whether the plaintiffs’ request for injunctive relief is just a sham.14
The Ninth Circuit fashioned a new, third
approach earlier this year in Dukes v. WalMart Stores, Inc.15 The court held that a
(b)(2) class may seek only monetary damages
that are “not superior in strength, influence,
or authority to injunctive and declaratory
relief.”16 The Ninth Circuit formulated this
new standard based on a collegiate dictionary
definition of “predominate” as “superior in
strength, influence, or authority”—as well
as other not-yet-enumerated factors.17
However, the main thrust of its test
remains functional:
[W]hether the monetary relief sought
determines the key procedures that
will be used, whether it introduces
new and significant legal and factual
issues, whether it requires individualized hearings, and whether its size and
nature—as measured by recovery per
class member—raise particular due
process and manageability concerns.18
The Supreme Court has granted certiorari
to review the Ninth Circuit's decision.
There are at least two significant concerns that will likely influence any resolution of this issue by the Supreme Court. First,
certification of a (b)(2) class seeking monetary
relief runs counter to the Supreme Court’s reasoning in Ortiz v. Fibreboard Corporation,
which rejected an expansive application of
Rule 23(b)(1) because the case went beyond
(b)(1)’s historical roots.19 Allowing significant claims for monetary relief in a (b)(2)
class similarly extends (b)(2) beyond its historical roots.
Second, a (b)(2) class seeking monetary
relief may raise due process and fairness concerns because it may give rise to intra-class
conflict. Some members may have large monetary claims and others small claims.20 These
conflicts of interest undermine the fairness of
binding divergent class members to the same
outcome in the settlement or other resolution.
Hybrid Class Actions
Some courts and commentators have suggested that any concerns regarding monetary relief claims in putative (b)(2) class
actions could be resolved through hybrid
class actions, to the extent the concerns can
be resolved at all.21 Unfortunately, the term
“hybrid” has sometimes been used imprecisely to describe a number of distinct hybrids.
The different hybrids include 1) the quasi
hybrid of providing notice and possibly optout rights in a (b)(2) class, and 2) the
(b)(2)/(b)(3) hybrid. These hybrids suffer
from significant flaws that militate against
their use.
For example, in an attempt to alleviate due
process concerns, some courts and litigants
have provided notice and opt-out rights in a
(b)(2) class action. Some courts have permitted individual plaintiffs with conflicting
interests to opt out of the class on the basis
that because courts may have more discretion
to deviate from the (b)(3) requirement of
“best notice practicable,”22 the cost of notice
may be lower than in a comparable (b)(3)
class.23
But this resulting quasi hybrid (b)(2) class
action raises the same concern that has split
the circuits over how to determine when
claims for monetary relief in putative (b)(2)
classes impermissibly “predominate” over
claims for injunctive and declaratory relief.
The quasi hybrid also runs counter to Ortiz,
given that it arguably departs too much from
the historical antecedents and models for
(b)(2) classes. For example, a federal court in
California certified a putative gender-discrimination class action under (b)(2) that
sought compensatory and punitive damages.24
In doing so, the court noted that the monetary damages could require 19 individualized determinations.25 Such a case could be
seen as standing in stark contrast to the examples that the Advisory Committee on the
Federal Rules of Civil Procedure has provided. The committee’s (b)(2) examples all
requested classwide injunctive (or declaratory) relief to the exclusion of individualized
claims for money damages.26
A (b)(2)/(b)(3) hybrid may ameliorate
some of the problems affecting (b)(3) hybrids
and quasi hybrids, but the concerns remain.
In a (b)(2)/(b)(3) hybrid, the court certifies an
injunctive class under (b)(2) and separately
certifies a damages class under (b)(3), effectively treating two different (but related)
cases as one.27 This process may at least
address some due process concerns, because
individual plaintiffs would receive notice and
the opportunity to opt out.28
The (b)(2)/(b)(3) hybrid raises problems of
its own, however. Courts may be tempted to
cut the analysis short as to whether each of
the respective requirements of Rules 23(b)(2)
and (b)(3) have been satisfied. But essential to
the validity of this hybrid is that the district
court performs a full (b)(2) analysis (i.e., the
defendant must have “acted or refused to
act on grounds that apply generally to the
class,” and injunctive relief must be “appro-
priate respecting the class as a whole”) for the
injunctive class, and a full (b)(3) analysis for
the monetary relief class (i.e., predominance
of common questions, manageability, and
superiority of a class action). Too often courts
fail to ensure that each class component satisfies these requirements.29
There are also Seventh Amendment concerns with the (b)(2)/(b)(3) hybrid.30 By seeking to recover claims for monetary damages,
the (b)(3) portion of a (b)(2)/(b)(3) hybrid
could implicate the jury-right clause.
action and likely redressable. 36 Although
there is broad agreement among courts
(including the Ninth Circuit)37 and commentators that at least one named plaintiff
must have standing, there is currently a circuit split on whether every class member
must have standing.
In Denney v. Deutsche Bank AG, the
Second Circuit held that every class member
must have standing, reasoning that standing
is a threshold, constitutional requirement
that may not be relaxed or modified through
at class certification is the burden of proof on
plaintiffs, as movants, to establish each of the
Rule 23 factors. Rule 23 does not specify
the amount of proof required, and the
Supreme Court has not yet addressed the
issue. The trend among the circuits is to
require plaintiffs to prove the Rule 23 factors
by a preponderance of the evidence. The
Third Circuit, in In re Hydrogen Peroxide
Antitrust Litigation, held that “to certify a
class the district court must find that the evidence more likely than not establishes each
Monetary damages are traditionally recoverable in common-law courts (rather than
courts of equity).31 Although the (b)(2) portion of this hybrid typically would not trigger a jury-trial right (because it seeks only an
injunction or declaration), the Seventh
Amendment requires a jury to decide all disputed facts affecting the right to recover on
the (b)(3) money damages claim, including
those facts that overlap with the (b)(2) injunctive relief claim.32
The right to a jury also implicates the
Seventh Amendment’s reexamination clause.
Due to the complexity of a typical (b)(2)/(b)(3)
hybrid, a single jury may not always be able
to hear and decide all of the pertinent issues
triable to a jury. The reexamination clause
prohibits a second jury from reexamining
the factual findings of the first jury. 33
Therefore, the court must ensure, through, for
example, careful instructions or innovative
procedures, that successive juries do not come
to different factual conclusions.34 However,
this approach could render the (b)(2)/(b)(3)
hybrid unmanageable and inefficient, and an
unmanageable and inefficient class action
defeats the purpose of a (b)(3) class action and
should not be certified.35
the procedural device of Rule 23 or any other
Federal Rule of Civil Procedure.38 In contrast, the Seventh Circuit, in Kohen v. Pacific
Investment Management Company, held that
only one named plaintiff must have standing.39 Writing for a unanimous panel, Judge
Richard A. Posner reasoned that proving a
class member was not injured leads to a dismissal on the merits, not a dismissal for lack
of jurisdiction.40
Arguably, Denney more faithfully applies
Article III’s requirements to the class-action
context. Kohen, in contrast, could be read as
conflating an Article III injury-in-fact with an
injury sufficient to win the lawsuit on the
merits. As the Denney court explained, “[A]n
injury-in-fact need not be capable of sustaining a valid cause of action under applicable tort law.”41 The proper rule is likely
that all class members must have suffered
some injury, “[b]ut this requisite of an injury
is not applied too restrictively.”42
fact necessary to meet the requirements of
Rule 23,”43 and other courts, including the
Second and Fifth Circuits, have held the
same.44 Commentators have lauded this trend
because plaintiffs, as movants, bear the burden of establishing that class adjudication is
appropriate. In addition, because class actions
are the “exception to the usual rule,”45 the
“preponderance of the evidence standard
makes the most sense.”46
Still, there remains much confusion among
other courts, which have not specified what
standard of proof applies.47 The standard
district courts use therefore tends to vary, on
an “ad hoc, case-by-case basis.”48 And the
guidance from some appellate courts has
been somewhat confusing. For example, in the
Tenth Circuit plaintiffs must meet a “strict
burden of proof” at class certification.49 At
the same time, the Tenth Circuit has held
that allegations in the complaint should be
accepted as true at that stage of the proceeding.50
Another question that has been largely
resolved is the district court’s burden at class
certification, separate and apart from the
burden on the plaintiffs. The previous confusion dates back to the Supreme Court’s
decision in Eisen v. Carlisle & Jacquelin, in
which it stated that “nothing in either the language or history of Rule 23…gives a court any
authority to conduct a preliminary inquiry
into the merits of a suit to determine whether
it may be maintained as a class action.”51
Some courts had read this statement as pro-
Standing Requirements
Another constitutional issue dividing the
courts of appeal is Article III’s case-or-controversy limitation on the jurisdiction of federal courts. This limitation requires an injuryin-fact that is traceable to the challenged
Burden of Proof
Issues of constitutional law are not the only
area of divergence. Perhaps the most fundamental question related to class certification
is the level of proof required of plaintiffs in
order for a court to certify a class. This question, along with that of the appropriate level
of rigorousness with which district courts
should analyze plaintiffs’ proffered evidence,
has led to serious disagreement among the circuits.
A preliminary question relating to burdens
hibiting any analysis at the class certification
stage of issues that go to the merits of the case,
even if those same issues are relevant and necessary to resolve the question whether a plaintiff has satisfied the requirements of Rule 23.
The emerging consensus, however, is that
courts are not only permitted but required to
resolve issues that go to the merits when necessary to resolve an issue of Rule 23 certification.52 There was, for a time, a line of
cases from the Second Circuit that held otherwise.53 Some district courts had cited those
cases as support for eschewing any analysis
of the merits of the case at class certification. But those decisions were disavowed in
the Second Circuit’s landmark In re IPO
decision, which held that district courts can
and must resolve any merits inquiry that
overlaps with a proper analysis of the Rule 23
requirements.54 Courts of appeal across the
country have largely followed In re IPO.
An interesting exception to this emerging trend is the Ninth Circuit’s en banc decision in Dukes v. Wal-Mart, which distinguished In re IPO and other similar cases,
instead following a Southern District of New
York decision rejecting such a rigorous analysis at class certification. The en banc court
refused to follow In re IPO because it was a
securities fraud case, not a Title VII case,
and because the Second Circuit was analyzing Rule 23(b)(3)’s predominance requirement, rather than the Rule 23(a) commonality
requirement at issue in Dukes. The approach
in Dukes represents a clear break with the In
re IPO line of cases, and it remains to be seen
whether the court’s reasoning will gain traction with the Supreme Court or in other
appellate courts.
The final issue relating to burden of proof
is the question of how district courts are to
deal with competing expert testimony offered
by the parties in support of and in opposition
to class certification. The use of expert testimony in support of class certification has
continued to grow as class actions become
more widespread and more complex. And
the proper level of scrutiny district courts
should engage in with respect to expert testimony offered in support of or in opposition
to class certification has been the subject of
much controversy, recently creating a circuit
split on the issue.
When expert evidence is offered by a
plaintiff in support of class certification, the
initial question becomes whether a district
court should analyze the testimony, analysis,
or report for admissibility under Rule 702 of
the Federal Rules of Evidence. The Seventh
Circuit recently held that a full Daubert
analysis is required at the class-certification
stage to ensure that district courts are only
relying on admissible evidence.55
Other courts have recognized that some
scrutiny of expert testimony is warranted at
the class-certification stage, and have therefore performed some Daubert analysis, without engaging in full-fledged Daubert scrutiny.
This line of cases stems from a district court
decision in In re Visa Check/MasterMoney
Antitrust Litigation, in which the Eastern
District of New York held that a full Daubert
inquiry is inappropriate at class certification;
the court must only inquire as to whether the
expert opinion is “fatally flawed.”56 The
“fatally flawed” standard does not require the
same rigorous analysis as does Daubert and
allows expert testimony at the class-certification stage that could ultimately be inadmissible for use at trial on the merits.
Apart from the analysis of whether expert
testimony is admissible, many courts have
held that even this is insufficient scrutiny at
the class-certification stage, when the district
court is the finder of fact, and must therefore
weigh expert testimony and determine
whether a plaintiff’s evidence is sufficiently
persuasive to meet his or her burden of establishing the Rule 23 factors. This was the
focus of the Third Circuit’s Hydrogen Peroxide decision, in which the court held summarily in a footnote that the testimony was
admissible57 but undertook significant further
analysis to weigh the plaintiff’s testimony
against the analysis of the defendant’s competing testimony.58
The Third Circuit’s analysis in Hydrogen
Peroxide seems to be more in keeping with the
Supreme Court’s admonition that a class
action “may only be certified if the trial court
is satisfied, after a rigorous analysis, that the
prerequisites of Rule 23(a) have been satisfied.”59 As the Seventh Circuit remarked, failing to engage in this analysis would amount
to a “delegation of judicial power to the plaintiffs,” who could obtain certification simply
by hiring a competent expert.60 But this issue,
particularly with respect to expert testimony,
is far from settled in the courts of appeal.
Certification of Penalties
A final class certification issue that is still
developing in the circuits is the question of
how to handle certification of punitive damages or statutory penalties. Certification of
penalties raises numerous questions about
the superiority of a class action as well as the
due process rights of defendants. As one
scholar has put it, “[O]nce a class is certified,
a statutory damages defendant faces a bet-thecompany proposition and likely will settle
rather than risk shareholder reaction to theoretical billions in exposure even if the company believes the claim lacks merit.”61
Based on a 1972 district court decision,
Ratner v. Chemical Bank NewYork Trust
Company, several courts have held that statutory penalties may in some circumstances be
inappropriate in Rule 23(b)(3) class actions,
because the existence of a penalty makes the
class action not “superior” to individual
actions, as Rule 23(b)(3) requires.62 In Ratner,
Judge Marvin E. Frankel, one of the principal architects of Rule 23, held that paying the
statutory minimum of $100 to each of the
130,000 class members for violations of the
Truth in Lending Act “would be a horrendous, possibly annihilating punishment, unrelated to any damage to the purported class or
to any benefit to defendant, for what is at
most a technical and debatable violation.…”63
The court further held that “the allowance of
thousands of minimum recoveries like plaintiff’s would carry to an absurd and stultifying extreme the specific and essentially inconsistent remedy Congress prescribed as the
means of private enforcement.” Courts in
the Sixth, Ninth, Tenth, and Eleventh Circuits
have followed Ratner,64 but a recent decision casts some doubt on whether the Ninth
Circuit will continue to follow it.65
This superiority rule is intended to balance
the values of a class action, such as providing a mechanism for claims that otherwise
would not be brought in individual actions,
with the risks a proposed class raises. The
existence of a built-in statutory penalty may
increase the likelihood that individual claims
will be brought, because of the incentive of
increased potential recovery. A built-in penalty
may at the same time raise the risks of a class
adjudication, given that such a penalty, when
aggregated across tens or hundreds of thousands of class members, would result in a
damages award so large that it violates the
defendant’s right to due process.
Here again, courts have not uniformly
followed Ratner. Some circuits have held that
concerns over the excessiveness of penalties
are inappropriate at the class-certification
stage, as an unconstitutionally excessive
penalty can be reduced postverdict.66 The
problem with this argument is that postverdict review in many class actions may not be
a realistic or practically feasible check, because
once a class has been certified, class actions—
particularly those involving potential penalties—settle at an overwhelmingly high rate.
The risk of an extremely high penalty award
that courts such as Ratner have highlighted
is thus extremely important at the class-certification stage. This is therefore another issue
of class-certification law that seems ripe for
Supreme Court review.
Several core issues of class-certification
law have led to deep divisions in the courts
of appeal and are ripe for Supreme Court
review. The three-way split on the proper
standard for determining the extent (if any)
to which monetary damages are permissible
in a (b)(2) class presents an important and
recurring question. And the so-called hybrid
class action—a potential, but extremely problematic, response to plaintiffs’ attempts to
include monetary damages in a (b)(2) class
action—has not been sanctioned by the
Supreme Court or uniformly adopted by the
courts of appeal. Other issues, such as the
standing of absent class members, the burden
of proof on plaintiffs at class certification, and
the propriety of certifying classes seeking
punitive damages or other penalties, raise
important and recurring issues that have similarly split the circuits.
■
1 See Robert W. Fischer Jr., California Tops Litigation
Wave, L.A. DAILY J., Dec. 2, 2009.
2 Stephen G. Grygiel, The Impact of Four Years of
Precedent on Litigating Class Actions, in CLASS ACTION
LITIGATION 2009: PROSECUTION AND DEFENSE STRATEGIES
267 (2009).
3 FED. R. CIV. P. 23(f).
4 Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).
5 See Mark A. Perry & Rachel S. Brass, Rule 23(b)(2)
Certification of Employment Class Actions: A Return
to First Principles, 65 N.Y.U. ANN. SURV. AM. L. 681,
689 (2010) [hereinafter Perry & Brass]; Jon Romberg,
The Hybrid Class Action as Judicial Spork: Managing
Individual Rights in a Stew of Common Wrong, 39 J.
M ARSHALL L. R EV . 231, 253 (2006) [hereinafter
Romberg].
6 See Romberg, supra note 5, at 243.
7 See id.
8 Ticor Title Ins. Co. v. Brown, 511 U.S. 117, 120–21
(1994).
9 Allison v. Citgo Petroleum Corp., 151 F. 3d 402, 415
(5th Cir. 1998).
10 Id.
11 See Reeb v. Ohio Dep’t of Rehab. & Corr., 435 F.
3d 639 (6th Cir. 2006); Barabin v. Aramark Corp.,
2003 WL 355417 (3d Cir. Jan. 24, 2003) (unpublished); Murray v. Auslander, 244 F. 3d 807 (11th
Cir. 2001); Jefferson v. Ingersoll Int’l, Inc., 195 F. 3d
894 (7th Cir. 1999).
12 Robinson v. Metro-North Commuter R.R. Co., 267
F. 3d 147, 164 (2d Cir. 2001).
13 Id. (citation omitted).
14 See id.
15 Dukes v. Wal-Mart Stores, Inc., 603 F. 3d 571, 616
(9th Cir. 2010) (en banc), cert. granted, 79 U.S.L.W.
3128 (U.S. Dec. 6, 2010) (No. 10-277).
16 Id. (internal quotations and brackets omitted).
17 Id.
18 Id. at 617.
19 Ortiz v. Fibreboard Corp., 527 U.S. 815, 864-65
(1999); Perry & Brass, supra note 5, at 682–83.
20 See Romberg, supra note 5, at 283; Tobias Barrington
Wolff, Preclusion in Class Action Litigation, 105
COLUM. L. REV. 717, 737 (2005).
21 See, e.g., Jefferson v. Ingersoll Int’l, Inc., 195 F. 3d
894, 898 (7th Cir. 1999); Eubanks v. Billington, 110
F. 3d 87, 95–96 (D.C. Cir. 1997); Romberg, supra note
5, at 283.
22 FED. R. CIV. P. 23(c)(2).
23 Romberg, supra note 5, at 254–55.
24 Ellis v. Costco Wholesale Corp., 240 F.R.D. 627,
642-44 (N.D. Cal. 2007) (currently before the Ninth
Circuit on interlocutory review).
25 See id. at 643.
26 See Perry & Brass, supra note 5, at 699.
27 See Jefferson v. Ingersoll Int’l, Inc., 195 F. 3d 894,
898 (7th Cir. 1999).
28 See id.
29 See, e.g., Gianzero v. Wal-Mart Stores Inc., No.
09-00656, 2010 U.S. Dist. LEXIS 38426, at *13 (D.
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BUSINESS VALUATION • LOSS OF GOODWILL • ECONOMIC DAMAGES • LOST PROFITS
Colo. 2010) (glossing over the four factors pertinent to
certifying under Rule (b)(3)); Mathers v. Northshore
Mining Co., 217 F.R.D. 474, 487 (D. Minn. 2003) (failing to analyze any of the (b)(2) or (b)(3) factors).
30 U.S. CONST. amend. VII. “In Suits at common law,
where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and
no fact tried by a jury, shall be otherwise re-examined
in any Court of the United States, than according to the
rules of the common law.”
31 See, e.g., Dukes v. Wal-Mart Stores, Inc., 603 F. 3d
571, 621 (9th Cir. 2010) (en banc), cert. granted, 79
U.S.L.W. 3128 (U.S. Dec. 6, 2010) (No. 10-277).
32 See id.; Romberg, supra note 5, at 287–92.
33 See Gasoline Prods. Co. v. Champlin Ref. Co., 283
U.S. 494, 497 (1931); 1 JOSEPH M. MCLAUGHLIN,
MCLAUGHLIN ON CLASS ACTIONS §8:3 (6th ed. 2009).
34 See Romberg, supra note 5, at 287–92.
35 See FED. R. CIV. P. 23(b)(3)(D).
36 U.S. CONST. art. III; Lujan v. Defenders of Wildlife,
504 U.S. 555, 560–61 (1992).
37 Bates v. UPS, Inc., 511 F. 3d 974, 985 (9th Cir. 2007)
(en banc).
38 Denney v. Deutsche Bank AG, 443 F. 3d 253, 263
(2d Cir. 2006).
39 Kohen v. Pacific Inv. Mgmt. Co., 571 F. 3d 672, 677
(7th Cir. 2009).
40 See id.
41 Denny, 443 F. 3d at 264.
42 7AA CHARLES A. WRIGHT, ARTHUR R. MILLER &
MARY K. KANE, FEDERAL PRACTICE AND PROCEDURE
§1785.1 (3d ed. 1998).
43 In re Hydrogen Peroxide Antitrust Litig., 552 F. 3d
305, 320 (3d Cir. 2008).
44 See, e.g., Teamsters Local 445 Freight Div. Pension
Fund v. Bombardier Inc., 546 F. 3d 196, 202 (2d Cir.
2008); Oscar Private Equity Invs. v. Allegiance Telecom,
Inc., 487 F. 3d 261, 269 (5th Cir. 2007).
Califano v. Yamasaki, 442 U.S. 682, 700–01 (1979).
46 L. Elizabeth Chamblee, Comment, Between “Merit
Inquiry” and “Rigorous Analysis”: Using Daubert to
Navigate the Gray Areas of Federal Class Action
Certification, 31 FLA. ST. U.L. REV. 1041, 1048 (2004)
[hereinafter Chamblee].
47 See, e.g., In re PolyMedica Corp. Sec. Litig., 432 F.
3d 1, 17 (1st Cir. 2005) (acknowledging that “generalities” on the issue of burden of proof “are the best
we can do”); CE Design Ltd. v. Cy’s Crabhouse N., Inc.,
259 F.R.D. 135, 140 (N.D. Ill. 2009) (concluding that
the Seventh Circuit has not adopted a burden of proof,
“but it has stated that district courts ‘should make
whatever factual and legal inquiries are required under
Rule 23’”) (citing Szabo v. Bridgeport Machs., Inc., 249
F. 3d 672, 675-76 (7th Cir. 2001)).
48 Chamblee, supra note 46, at 1048.
49 Reed v. Bowen, 849 F. 2d 1307, 1309 (10th Cir.
1988).
50 Vallario v. Vandehey, 554 F. 3d 1259, 1265 (10th
Cir. 2009).
51 Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177
(1974).
52 See, e.g., In re Hydrogen Peroxide Antitrust Litig.,
552 F. 3d 305, 316-17 (3d Cir. 2008); Blades v.
Monsanto Co., 400 F. 3d 562, 567 (8th Cir. 2005);
Gariety v. Grant Thornton, LLP, 368 F. 3d 356, 36566 (4th Cir. 2004); Szabo, 249 F. 3d at 676–77.
53 In re Visa Check/MasterMoney Antitrust Litig., 280
F. 3d 124, 141 (2d Cir. 2001); Caridad v. MetroNorth Commuter R.R., 191 F. 3d 283, 292 (2d Cir.
1999).
54 In re IPO Sec. Litig., 471 F. 3d 24, 42 (2d Cir.
2006).
55 American Honda Motor Co. v. Allen, 600 F. 3d 813,
815–16 (7th Cir. 2010).
45
56 In re Visa Check/MasterMoney Antitrust Litig., 192
F.R.D. 68, 76-77 (E.D. N.Y. 2000).
57 Hydrogen Peroxide, 552 F. 3d at 315 n.13.
58 Id. at 323–25.
59 General Tel. Co. of the Sw. v. Falcon, 457 U.S.
147, 161 (1982).
60 West v. Prudential Sec. Inc., 282 F. 3d 935, 938 (7th
Cir. 2002).
61 Sheila B. Scheuerman, Due Process Forgotten: The
Problem of Statutory Damages and Class Actions, 74
MO. L. REV. 103, 104 (2009); see also MARCY H.
GREER, A PRACTITIONER’S GUIDE TO CLASS ACTIONS
503 (2010) (“Aggregated penalties…have the potential
to distort the underlying legislative scheme, force defendants to settle meritless lawsuits, and result in a punishment that is grossly disproportionate to the reprehensibility of the defendant’s conduct.”).
62 Ratner v. Chemical Bank N.Y. Trust Co., 54 F.R.D.
412, 414 (S.D. N.Y. 1972).
63 Id.
64 See, e.g., Watkins v. Simmons & Clark, Inc., 618 F.
2d 398, 400 n.4 (6th Cir. 1980) (citing Ratner, 54
F.R.D. 412); Wilcox v. Commerce Bank of Kan. City,
474 F. 2d 336, 342 (10th Cir. 1973) (citing Ratner, 54
F.R.D. 412); London v. Wal-Mart Stores, Inc., 340 F.
3d 1246, 1255 n.5 (11th Cir. 2003) (citing Kline v.
Coldwell, Banker & Co., 508 F. 2d 226 (9th Cir.
1974) and Ratner, 54 F.R.D. 412); Klay v. Humana,
Inc., 382 F. 3d 1241, 1271 (11th Cir. 2004) (citing
Ratner, 54 F.R.D. 412); see also Parker v. Time Warner
Entm’t Co., 331 F. 3d 13, 22 (2d Cir. 2003) (adopting similar analysis).
65 See Bateman v. American Multi-Cinema, Inc., 623
F. 3d 708, 715-16 (9th Cir. 2010) (en banc petition
pending).
66 See Murray v. GMAC Mortgage Corp., 434 F. 3d
948, 954 (7th Cir. 2006); Parker, 331 F. 3d at 22.
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MCLE ARTICLE AND SELF-ASSESSMENT TEST
By reading this article and answering the accompanying test questions, you can earn one MCLE credit.
To apply for credit, please follow the instructions on the test answer sheet on page 27.
By CLAY WILKINSON and ERIC BROWN
L O S S
H O R I Z O N
The economic loss doctrine is designed to establish
a demarcation between contract and tort law
In its basic form, the economic loss doctrine—
a fixture in tort law—holds that a party will
not be liable under a negligence theory for
damages that represent the lost benefit of a
bargain unless those damages are accompanied
by personal injury or property damage. Since
negligence requires harm to person or property, purely economic losses must be recovered
in contract or warranty. While the economic
loss doctrine frequently applies in the context
of third-party liability lawsuits, it can also
apply to parties in privity.
The doctrine has well-recognized underpinnings in the common law of England and
thrives in modern California jurisprudence.
It is a liability-limiting doctrine—not unlike
proximate causation—but is developing into
somewhat of an enigma as a result of several
contradictory California decisions. Even
California courts have shown confusion over
their own precedents regarding the doctrine
and its impact on tort duty analysis and seem
reluctant to follow them.
Perhaps the most confusing wrench
thrown into the doctrine’s development is
J’Aire v. Gregory,1 a decision in which the
California Supreme Court imposed tort liability in a case of pure economic loss. Despite
the pomp and circumstance of the court’s
methodology, its analysis—while couched in
the terminology of tort law—was essentially
identical to its approach for determining
damages to third-party beneficiaries in contract cases.
J’Aire is still good law, and it is unclear
whether the multifactored analysis it embraces
is really the exception to the liability-limiting
economic loss doctrine. While the J’Aire
court’s imposition of tort liability seems to be
nothing more than a recasting, in tort parClay Wilkinson is an associate at Collins Collins
Muir & Stewart LLP. His practice areas include
defense of design professionals and general business litigation. Eric Brown is a senior associate at
the firm. He is an appellate counsel and trial attorney in the areas of general business litigation,
government entity defense, and construction law.
lance, of liability to intended third-party beneficiaries in contract, it remains to be seen
whether the California Supreme Court will
affirmatively address J’Aire’s place in economic loss analysis. Doing so would provide
the necessary clarity on which potential economic loss defendants can rely.
Various theories underlie the purpose and
rationale of the economic loss doctrine.
Commentators view it as a line of demarcation between tort and contract law.2 They also
find in the doctrine a means for avoiding
limitless liability.3 In addition, the doctrine is
seen as a brake on damages for harm that is
less concrete, or more speculative, than harm
to person or property.4
Robins Dry Dock & Repair Company v.
Flint5 provides the classic formulation of the
economic loss doctrine. The plaintiffs in the
case chartered a steamship from its owners.
The charter required the ship to dock every
six months for repairs, and so long as the ship
was docked, the chartering parties were not
responsible for any payment to the owners for
the hiring of the ship.
While the steamship was in port, dock
workers damaged the propeller, delaying the
ship’s scheduled departure by two weeks.
The dock and its workers had no knowledge
of the charter between the ship’s owners and
the plaintiffs until the delay had begun.6
The charterers sued on the theory that
the two weeks of lost use caused by the dock
workers violated a property right the charterers had in the ship. After they won at the
district and circuit court levels, this argument did not go so well at the U.S. Supreme
Court. The charterers raised the argument
that they were third-party beneficiaries of
the contract between the dry dock and the
owners, but because the charterers and their
arrangement with the ship’s owners were not
known to the defendant, this argument was
to no avail.7 Regarding a basis of liability in
tort, the Court stated, “The question is
whether the [charterers] have an interest protected by the law against unintended injuries
inflicted upon the vessel by third persons
who know nothing of the charter.”8
The Court concluded that if the charterers had a legally protected interest in the
steamer, “it must be worked out through
their contract with the owners, not on the
postulate that they have a right in rem
against the ship.” Reasoning that the damage was “material to [the charterers] only as
it caused the delay in making the repairs, and
that delay would be a wrong to no one
except for [the charterers’] contract with
the owners,” the Court noted the charterers
loss “arose only through their contract with
the owners.” Moreover, “no authority need
be cited to show that, as a general rule…a
tort to the person or property of one man
does not make the tortfeasor liable to
another merely because the injured person
was under a contract with that other,
unknown to the doer of the wrong.”9 In
essence, the Court held that to recover in tort
the charterers needed to show that the dry
dock negligently harmed the charterers’
physical property. Without that showing,
the charterers had recourse only to their
contract with the owners.
California’s economic loss doctrine began
in 1965 within the context of strict products
liability in Seely v. White Motor Company.10
After the plaintiff in Seely purchased a truck
from a dealership, the plaintiff discovered
that the truck was defective and could not be
used to advance the plaintiff’s business. The
plaintiff sued the manufacturer of the truck
not only for out-of-pocket losses (including
the purchase price and repairs) but also for
lost profits. The plaintiff’s claims were based
on strict liability and the defendant’s express
warranty that its product was free from
defects. The defendant raised the lack of
privity between itself and the plaintiff as a
defense.
After a comprehensive survey of the development of warranty and strict liability law up
to the date of the ruling,11 the California
Supreme Court in Seely found that warranty—a contractual promise—was the
proper vehicle for the award of economic
damages in the case. The defendant’s express
warranty of its product obviated the need
for privity.12 As to whether this rationale
limited recovery of economic loss to contractual situations, the court stated:
A consumer should not be charged at
the will of the manufacturer with bearing the risk of physical injury when he
buys a product on the market. He can,
however, be fairly charged with the
risk that the product will not match his
economic expectations unless the manufacturer agrees that it will. Even in
actions for negligence, a manufacturer’s liability is limited to damages for
physical injuries and there is no recovery for economic loss alone.13
After Seely, the lower courts in California
applied the doctrine in construction defect
cases.14 On occasion, though, the courts
would issue a decision that seemed far afield
from Seely. Some cases articulated an exception from the economic loss rule for “professionals,” including engineers, architects,
and developers.15 A similar exception was
found when the contract was for the performance of services; according to the court of
appeal in North American Chemical Company v. Superior Court (Trans Harbor Inc.),
the plaintiff had an election of remedies—
either suing in tort or contract, at the plaintiff’s preference.16 However, neither of these
limitations of the doctrine would survive into
the twenty-first century.
Reign of the J’Aire Exception
But the decision that created the largest divergence from Seely was J’Aire in 1979. According to the supreme court in J’Aire, foreseeability of harm trumped the lack of personal
injury or property damage as the most important consideration in finding a duty in tort.
For 20 years, J’Aire operated as an exception to the economic loss rule. But the J’Aire
court seemed to conflate economic loss analysis with duty analysis. To understand whether
J’Aire is a true exception to the economic
loss doctrine in California or a hiccup in the
state’s stare decisis on the issue first requires
an examination of its most direct progenitor,
the 1958 decision Biakanja v. Irving.17
In Biakanja, the plaintiff, who was not in
contractual privity with the defendant, sought
damages against the defendant for loss of an
expectancy, or an intangible future interest.
The case involved a notary who prepared a
will for the plaintiff’s brother.18 While the will
provided that the plaintiff would take the
entirety of her brother’s estate, it was denied
probate because it was insufficiently attested.
Instead of taking all of the estate as a bequest,
the plaintiff took only one-eighth by intestate
succession. The plaintiff sued the notary for
the difference and won at trial. On appeal, the
supreme court framed the “principal” issue
as “whether defendant was under a duty to
exercise due care to protect plaintiff from
injury and was liable for damage caused
plaintiff by his negligence even though they
were not in privity of contract.”19
The court addressed the issue of liability
in circumstances involving harm to person or
property and cited authority for the proposition that liability is present even when the
harm is to intangible interests.20 However, the
court’s holding did not address the type of
harm about which the plaintiff complained:
the loss of an expectancy, which is a purely
economic loss. Rather, the court addressed the
issue of duty.
The Biakanja court held that liability
under circumstances in which the defendant
was not in privity of contract with the plaintiff is “a matter of policy” involving the “balancing of various factors.” These factors
include:
• The extent to which the transaction was
intended to affect the plaintiff.
• The foreseeability of harm to the plaintiff.
• The degree of certainty that the plaintiff suffered injury.
• The closeness of the connection between the
defendant’s conduct and the injury suffered.
• The moral blame attached to the defendant’s
conduct.
• The policy of preventing future harm.21
MCLE Test No. 200
The Los Angeles County Bar Association certifies that this activity has been approved for Minimum
Continuing Legal Education credit by the State Bar of California in the amount of 1 hour.
MCLE Answer Sheet #200
LOSS HORIZON
Name
Law Firm/Organization
1. The economic loss doctrine generally bars recovery
in tort absent harm to person or property.
True.
False.
2. The economic loss doctrine:
A. Prevents limitless liability.
B. Prevents recovery for speculative harm.
C. Serves as a line of demarcation between tort
and contract.
D. A and B.
E. A, B, and C.
3. Seely v. White Motor Company marked the
beginning of the economic loss doctrine in
California.
True.
False.
4. Cooper v. Jevne held that the economic loss
doctrine applies to architects in professional
negligence actions.
True.
False.
5. According to Rowland v. Christian, the foundation
of negligence law in California is:
A. Civil Code Section 1717.
B. Civil Code Section 1714(c).
C. Civil Code Section 1714(a).
D. None of the above.
6. Biakanja v. Irving did not involve pure economic
loss because the plaintiff had an expectancy that
constituted harm to her property.
True.
False.
7. Company X chartered a steamboat owned by Y.
While in dry dock, Company Z’s dock workers
negligently damaged the steamboat’s propeller. X
suffered harm because it could not charter the
steamboat while the negligently inflicted damage
was being repaired. Who, if anyone, has an action in
tort against Z?
A. X.
B. Y.
C. X and Y.
D. Neither X nor Y.
8. Using the same hypothetical as Question 7, which
party suffered pure economic loss only?
A. X.
B. Y.
C. Z.
D. X and Y.
9. J’Aire v. Gregory is an exception to the economic
loss doctrine in California.
True.
False.
10. Which of the following, if any, are factors
considered in tort duty analysis?
A. Foreseeability of the harm.
B. Intent to benefit the plaintiff.
C. A and B.
11. According to Bily v. Arthur Young & Company,
courts “will not treat the mere presence of a
foreseeable risk of injury to third persons as
sufficient, standing alone, to impose liability for
negligent conduct.”
True.
False.
12. Aas v. Superior Court held that “appreciable,
non-speculative, present injury is an essential
element of a tort cause of action.”
True.
False.
13. The Aas court characterized tort remedies in
California for pure economic loss as “uncertain.”
True.
False.
14. Foreseeability in the J’Aire/Biakanja multifactored analysis is the functional equivalent of
intent to benefit in third-party beneficiary analysis.
True.
False.
15. J’Aire confuses questions of duty with the type of
harm suffered.
True.
False.
16. Which, if any, of the following statements are
true?
A. Strangers to the agreement cannot bring an
action on it.
B. Foreseeable beneficiaries of the agreement
can bring an action on it.
C. A and B.
17. Aas characterized the J’Aire analysis as involving
“fairly subjective judgments.”
True.
False.
18. Third-party beneficiary analysis would not
relieve courts of the necessity to engage in
“considerations of policy” in situations similar to
J’Aire.
True.
False.
19. According to Civil Code Section 1559, only
intended beneficiaries may bring an action on a
contract to which they are not parties.
True.
False.
20. J’Aire is still good law.
True.
False.
Address
City
State/Zip
E-mail
Phone
State Bar #
INSTRUCTIONS FOR OBTAINING MCLE CREDITS
1. Study the MCLE article in this issue.
2. Answer the test questions opposite by marking
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5. For future reference, please retain the MCLE
test materials returned to you.
ANSWERS
Mark your answers to the test by checking the
appropriate boxes below. Each question has only
one answer.
1.
■ True
■ False
2.
■A
3.
■ True
4.
■ True
5.
■A
6.
■ True
7.
■A
■B
■C
■D
8.
■A
■B
■C
■D
9.
■ True
10.
■A
11.
■ True
■ False
12.
■ True
■ False
13.
■ True
■ False
14.
■ True
■ False
15.
■ True
16.
■A
17.
■ True
■ False
18.
■ True
■ False
19.
■ True
■ False
20.
■ True
■ False
■B
■C
■D
■E
■ False
■ False
■B
■C
■D
■ False
■ False
■B
■C
■D
■ False
■B
■C
■D
Since, in the view of the Biakanja court,
the “end and aim” of the transaction was to
provide for the plaintiff’s brother’s estate to
pass to the plaintiff, the defendant notary
had a legal duty to prepare the will reasonably and prudently.22 The Biakanja court
essentially held that the harm suffered by the
plaintiff was pure economic loss—the loss
of an expectancy—arising from a breach of
contract to prepare a will between the plain-
there is a duty of care owed by the defendant
to the plaintiff.”26 It cited Biakanja, stating,
“Where a special relationship exists between
the parties, a plaintiff may recover for loss of
expected economic advantage through the
negligent performance of a contract although
the parties were not in contractual privity.”27
After applying the factors from Biakanja,
the J’Aire court concluded that the defendant contractor “had a duty to complete con-
Superior Court, a case that was the direct
progeny of Seely.31 Aas involved homeowners and a homeowners association bringing
suit against the developer/general contractor and subcontractors on a condominium
project.32 According to the court’s characterization, the plaintiffs’ homes suffered “from
a variety of construction defects affecting
virtually all components and aspects of construction.”33 The plaintiffs alleged causes of
Indeed, the Aas court was reluctant to acknowledge
that J’Aire represents an exception to the economic loss
doctrine in California and that J’Aire, from its issuance
in 1979 until the decision in Aas in 2000, virtually
abrogated the economic loss doctrine in the state.
tiff’s brother and the defendant notary.23
Prior authority allowed recovery when the
harm was to person or property, and authority in other states allowed recovery for intangible interests. However, the court ultimately
applied a multifactor analysis to determine
whether the defendant owed the plaintiff a
duty of care under the particular circumstances of the case. This analysis included a
factor on the certainty of the harm suffered
but not its type.
The J’Aire court applied Biankanja in the
context of construction defects. The dispute
in J’Aire involved a delay in construction.24
The plaintiff operated a restaurant at the
Sonoma County Airport in space leased from
the county. The lease terms obligated the
county to provide heat and air conditioning
for the restaurant. The county contracted
with the defendant contractor to renovate
the heating and air and provide insulation.
The contract did not specify a time for performing the renovation, but the defendant was
urged to complete the construction promptly.
Nevertheless, the defendant did not complete
the work within a reasonable time. Plaintiff
J’Aire sued the contractor for negligence
because it suffered loss of business and lost
profits during the delay. The defendant
demurred successfully at trial.25
The J’Aire court began its discussion
where Biakanja left off: “[L]iability for negligent conduct may only be imposed where
struction in a manner that would have
avoided unnecessary injury to [the plaintiff’s]
business.”28
The court admitted that the most important factor in its view was foreseeability:
Rather than traditional notions of duty,
this court has focused on foreseeability as the key component necessary to
establish liability: “While the question
whether one owes a duty to another
must be decided on a case-by-case
basis, every case is governed by the
rule of general application that all persons are required to use ordinary care
to prevent others from being injured as
the result of their conduct.…
[Foreseeability] of the risk is a primary consideration in establishing the
element of duty.”29
Within this discussion on duty, the J’Aire
court then made the statement that appears
to have injected confusion and uncertainty
into economic loss analysis in California:
Where the risk of harm is foreseeable,
as it was in the present case, an injury
to the plaintiff’s economic interests
should not go uncompensated merely
because it was unaccompanied by any
injury to his person or property.30
The Impact of Aas
In 2000, the California Supreme Court surveyed the law of economic loss in Aas v.
action for negligence and strict liability in
tort as well as breach of implied warranty,
contract, and express warranty.34
The court began its discussion by warily
providing a general formulation of the doctrine: “Speaking very generally, tort law provides a remedy for construction defects that
cause property damage or personal injury.”35
The court acknowledged that the legal question in the case was “fairly narrow” but “not
simple” because it arose from the “nebulous
and troublesome margin between tort and
contract law.”36 Moreover, the court noted
that in California “tort remedies have been
uncertain” for defective products or negligent
services causing neither personal injury nor
property damage.37
The Aas court attempted to clarify the
application of the doctrine in California.
After reciting the development of case law on
the subject, including the divergence of the
doctrine into strict liability and negligence theories, the court held that “appreciable, nonspeculative, present injury is an essential element of a tort cause of action.”38 It explained
that the “breach of a duty causing only speculative harm or the threat of future harm
does not normally suffice to create a cause of
action.”39
Much like the Robins Dry Dock court of
73 years before, the Aas court noted that the
plaintiffs’ recourse for economic losses should
be limited to contract (or, it also noted, war-
ranty).40 In fact, the court underscored this
observation with a recounting of its ruling in
another landmark case, Erlich v. Menezes:
This court recently rejected the argument that the negligent performance
of a construction contract, without
more, justifies an award of tort damages. (Erlich v. Menezes at pp. 550554 [reversing an award of damages
for emotional distress for negligent
construction].) In so doing, however,
we reiterated that conduct amounting
to a breach of contract becomes tortious when it also violates a duty independent of the contract arising from
principles of tort law.41
The Aas court also limited the holdings of
earlier lower court decisions in such a way as
to strongly imply that “professionals” (contractors, subcontractors, or design professionals) could not be held liable in negligence
without actual harm to person or property.42
However, the Aas court did not criticize J’Aire
in any way that could be described as direct,
even though it did say that application of
the J’Aire test for finding a tort duty “tends
to involve a court in making fairly subjective
judgments.”43 An appellate court describing
another court’s judgments as “subjective” is
certainly not a ringing endorsement.
The Aas court clearly noted the conundrum by observing that “tort remedies have
been uncertain” when it comes to the economic loss doctrine as a result of case law
development in California. While it reaffirmed
the doctrine in California, the Aas court did
not put to rest the questions springing from
J’Aire or even the confusion regarding how to
apply the economic loss doctrine in California
in the face of J’Aire and its progeny.
Indeed, the Aas court was reluctant to
acknowledge that J’Aire represents an exception to the economic loss doctrine in
California and that J’Aire, from its issuance
in 1979 until the decision in Aas in 2000, virtually abrogated the economic loss doctrine
in the state. The fact that the doctrine has
exceptions is not in itself troublesome. Good
law rarely applies uniformly across a broad
universe of circumstances, and exceptions
and nuance are necessary to ensure just outcomes. The J’Aire exception is problematic in
its insistence on imposing a legal duty in situations in which one previously did not exist
as well as its brief, perhaps even dismissive,
treatment of the nature of the harm that the
litigation sought to remedy.
Third-Party Beneficiary Analysis
So even while Aas succeeded in providing
some guidance post-J’Aire, confusion remains.
Still, whether the economic loss doctrine limits liability, polices the border between tort
and contract, or is a damages-certain princi-
ple, its applicability must relate to the harm
caused and not whether a tort duty should be
imposed. The California Supreme Court
seemed to recognize this idea in Seely, and the
J’Aire exception apparently does not apply in
the strict products liability line of cases.44
If the plaintiff’s harm is to an expectancy,
or if economic losses flow from the expected
performance of a party not in privity of contract with the plaintiff, the plaintiff should be
limited to whatever contract remedies the
plaintiff has. The plaintiff’s harm is more
akin to a contractual expectation interest.
J’Aire confuses the issue by injecting the
question of duty, and thereby policy, into the
question of the type of harm suffered by the
plaintiff. The relatively easy question of
whether the plaintiff experienced physical
harm thus becomes a more nebulous question
as to whether a duty was owed.45 Along with
the confusion and greater complexity comes
uncertainty. Economic transactions rely upon
certainty in the law. If liability is indeterminate because of multifactored tests in situations in which the plaintiff and the defendant
have no contract, and the harm is measured
purely in terms of what benefit one party
expected to receive, how can potential defendants adequately account for risk?
Since the harm is to an expectancy interest, and the remedy is to make good the
expectation, contract law can eliminate the
indeterminacy created by the J’Aire exception.46 The general rule at common law and
in California is that a stranger to the agreement cannot bring an action on it.47 However,
the courts recognized an exception for
intended beneficiaries of the agreement,48
and this exception was codified at Civil Code
Section 1559.49
The contracting parties must intend to
benefit the third party.50 It is sufficient that the
promisor must have understood that the
promisee had this intent. No specific manifestation by the promisor of an intent to benefit the third person is required.51 Persons
who are only incidentally or remotely benefited cannot enforce the agreement.52 The
third party bears the burden of proving that
it was an intended beneficiary.53
The situations in which the J’Aire exception applies will always be those in which the
plaintiff could claim to be a third-party beneficiary on a contract claim. When analyzing
the application of the J’Aire factors to a given
fact pattern, “California courts have held
that the defendant’s transactions must have
been ‘specifically intended to affect the particular needs’ of the plaintiff.”54 If a potential plaintiff is a third-party beneficiary of
an agreement, there is no need for the court
to engage in “those considerations of policy”
necessary to imposing a tort duty. The factfinder need only look to the agreement
between the contracting parties. If there was
an intention to benefit a third party, that party’s expectation interest would be protected
against all breaches, negligent or otherwise.
If there was no such intention, there would
be no recovery: The economic loss doctrine
would clearly and definitively bar recovery in
tort for pure economic loss.
In this analysis, “intention” supplants
“foreseeability,” the keystone in the J’Aire
court’s imposition of tort liability.55 Indeed,
one can argue that intention and foreseeability are functional equivalents—at least
in light of the willful overtones that J’Aire
ascribes to foreseeability.56 However, while
foreseeability is expansive, and courts have
virtually limitless discretion to decide what is
and is not foreseeable, the parties’ agreement
provides structure and parameters to the parties’ intentions.
Third-party beneficiary analysis takes the
mystery out of what constitutes a “special
relationship”: It is simply the relationship of
an intended third-party beneficiary to the
contracting parties. Perhaps the greatest doctrinal advantage of third-party beneficiary
analysis is that it unifies the interest to be protected (expectancy) with the legal apparatus
(contract) designed to protect it.
■
1 J’Aire
Corp. v. Gregory, 24 Cal. 3d 799 (1979).
Dan B. Dobbs, An Introduction to Non-Statutory
Economic Loss Claims, 48 ARIZ. L. REV. 713, 723 n.35
(2006). See also Vincent R. Johnson, The BoundaryLine Function of the Economic Loss Rule, 66 WASH.
& LEE L. REV. 523, 546 (2009). For an overview of the
issues and current debate in economic loss scholarship,
see Ellen M. Bublick, Economic Torts: Gains in
Understanding Losses, 48 ARIZ. L. REV. 693 (2006).
3 See Dobbs, supra note 2, at 715.
4 See Johnson, supra note 2, at 542. This view makes
little sense considering that economic harm is no more
“speculative” or difficult to measure than harm to
dignity or reputation—both of which are compensable
in tort.
5 Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303
(1927) (superseded by statute).
6 Id. at 307.
7 Id. at 308-09.
8 Id. at 308.
9 Id. at 308-09.
10 Seely v. White Motor Co., 63 Cal. 2d 9 (1965).
11 Id. at 16-18.
12 Id. at 15.
13 Id. at 18.
14 See, e.g., Cooper v. Jevne, 56 Cal. App. 3d 860
(1976).
15 Id. at 868. Cooper held that the economic loss rule
does not apply to architects accused of professional negligence in the design of a construction project. But
this statement was disapproved as mere dicta. See infra
note 42. See also Huang v. Garner, 157 Cal. App. 3d
404, 421-22 (1984).
16 North Am. Chem. Co. v. Superior Court (Trans
Harbor Inc.), 59 Cal. App. 4th 764, 773-74 (1997). See
also Gagne v. Bertran, 43 Cal. 2d 481, 489 (1954).
17 Biakanja v. Irving, 49 Cal. 2d 647 (1958). Biakanja
represents a general liberalization and expansion of tort
liability in California that even led to renewed interest
in an 1872 statute, codified at Civil Code §1714(a),
2 See
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which does not distinguish between injury to person or
property and economic interests. The California Supreme
Court in Rowland v. Christian cited §1714(a) as “a
civil law” that serves as the foundation of negligence law
in California. Rowland v. Christian, 69 Cal. 2d 108, 112
(1968) (superseded by statute on other grounds).
18 Biakanja, 49 Cal. 2d at 648.
19 Id.
20 Id. at 649. For the latter proposition, the Biakanja
court cited Glanzer v. Shepard, a famous break with the
economic loss doctrine authored by then-Judge Benjamin
Cardozo. Glanzer v. Shepard, 233 N.Y. 236 (1922).
21 Biankaja, 49 Cal. 2d at 650.
22 See id. at 650-51 (quoting the “end and aim” language from Glanzer, 233 N.Y. 236).
23 The Biakanja court did not miss the fact that a
notary prepared the will, stating that the notary’s conduct was “not only negligent but was also highly
improper” because he “engaged in the unauthorized
practice of law.” Id. at 601. However, as to actual attorneys, the court soon imposed a tort duty on attorneys
to nonclient bequest recipients for negligently drawn
wills. Lucas v. Hamm, 56 Cal. 2d 583 (1961); Heyer
v. Flaig, 70 Cal. 2d 223 (1969). In addition to citing
Biankaja, J’Aire cited to these cases for the proposition
that, in the absence of privity, a “special relationship”
would allow for the recovery of purely economic damages for the negligent performance of a contract. See
J’Aire Corp. v. Gregory, 24 Cal. 3d 799, 804 (1979).
24 J’Aire, 24 Cal. 3d at 802.
25 Id. at 803.
26 Id.
27 Id. at 804.
28 Id. at 805.
29 Id. at 806 (quoting Weirum v. RKO Gen. Inc., 15
Cal. 3d 40, 46 (1975) (footnote omitted)).
30 Id. at 805.
31 Aas v. Superior Court, 24 Cal. 4th 627 (2000)
(superseded by statute as to residential properties).
The Aas decision led to the enactment of Civil Code
§§895-945.5 and particularly §§896 and 942, which
provide a statutory procedure for the owners of residential property to seek damages for construction
defects even in the absence of harm to person or property. These statutes thus allow a path around the economic loss doctrine in this limited context.
32 Aas, 24 Cal. 4th at 633.
33 Id.
34 Id. Only the homeowners alleged breach of contract
and express warranty.
35 Id. at 635.
36 Id.
37 Id. at 636.
38 Id. at 646. The divergence into “two distinct” theories refers to the Seely line of cases (strict products liability in tort) and the Biakanja line of cases, including
J’Aire (negligence). See Aas, 24 Cal. 4th at 638-39.
39 Aas, 24 Cal. 4th at 646.
40 See id. at 652.
41 Id. at 643 (citing Erlich v. Menezes, 2 Cal. 4th 543
(1995)).
42 See id. at 647-48. Aas disapproved Huang v. Garner,
157 Cal. App. 3d 404 (1984). That case had allowed
the third successive purchasers of a commercial building to recover pure economic losses on a tort theory.
Huang used J’Aire to find a duty in tort. 157 Cal.
App. 3d at 422-23. Aas also limited the holding of
Cooper v. Jevne, 56 Cal. App. 3d 860 (1976). The
Cooper court ruled that Seely’s economic loss rule did
not apply to professional negligence claims, basing
this ruling primarily on attorney malpractice cases.
56 Cal. App. 3d at 868. The supreme court in Aas left
Cooper intact because it reached the correct result but
expressed displeasure with the rationale: “[T]he
[Cooper] court’s conclusion that Seely’s economic loss
rule does not apply to professional negligence claims
[citation omitted] is dictum.” Aas, 24 Cal. 4th at 648.
43 Aas, 24 Cal. 4th at 646; see also id. at 636-37, 645.
44 See Seely v. White Motor Corp., 63 Cal. 2d 9, 18
(1965). The California Supreme Court’s most recent
pronouncement on economic loss in the strict products
liability context is Robinson Helicopter Co. v. Dana
Corp., 34 Cal. 4th 979 (2004). Robinson does not
mention J’Aire and instead follows Aas. The Robinson
court held that the economic loss rule did not bar the
plaintiff’s misrepresentation claims because they were
“independent of [the defendant’s] breach of contract.”
Id. at 991. The court explained that “[c]ourts will
generally enforce the breach of a contractual relationship through contract law, except when the actions that
constitute the breach violate a social policy that merits the imposition of tort remedies.” Id. at 991-92.
Accordingly, the court stated that “[t]he economic
loss rule is designed to limit liability in commercial activities that negligently or inadvertently go awry, not to
reward malefactors who affirmatively misrepresent
and put people at risk.” Id. at 991.
45 See Anita M. Bernstein, Keep It Simple: An
Explanation of the Rule of No Recovery for Pure
Economic Loss, 48 ARIZ. L. REV. 773 (2006).
46 Indeed, tort and contract are fundamentally different in the interests that they seek to protect. Tort concerns itself with making the plaintiff whole. Contract
concerns itself with giving the plaintiff the benefit of the
bargain. J’Aire exposes the gap between tort and contract in which the type of harm cannot be remedied in
tort but no bargain exists between the plaintiff and the
defendant. Rather than impose a tort duty based on a
multifactored analysis, why not introduce consistency
and predictability by applying a third-party beneficiary analysis?
47 See McLaren v. Hutchinson, 18 Cal. 80 (1861).
48 See Sacramento Lumber Co. v. Wagner, 67 Cal.
293 (1885).
49 Civil Code §1559 states: “A contract, made expressly
for the benefit of a third person, may be enforced by
him at any time before the parties thereto rescind it.”
50 Hess v. Ford Motor Co., 27 Cal. 4th 516, 524
(2002).
51 Lucas v. Hamm, 56 Cal. 2d 583, 591 (1961).
52 Id. at 590.
53 Garcia v. Truck Ins. Exch., 36 Cal. 3d 426, 436
(1984).
54 Avago Techs. United States, Inc. v. Venture Corp.,
2008 U.S. Dist. LEXIS 105528 (N.D. Cal. 2008) (quoting Greystone Homes, Inc. v. Midtec, Inc., 168 Cal.
App. 4th 1194, 1231 (2008)).
55 Even though the J’Aire court relied heavily on the
foreseeability factor, the California Supreme Court
has since discounted its importance. In Bily v. Arthur
Young & Co., 3 Cal. 4th 370, 398 (1992), the court
stated that foreseeability is “but one factor to be considered in the imposition of negligence liability.”
Perhaps in implied rejection of J’Aire, the Bily court
stated: “In line with our recent decisions, we will not
treat the mere presence of a foreseeable risk of injury
to third persons as sufficient, standing alone, to impose
liability for negligent conduct.” Id. at 399. The Bily
court added three more factors for consideration in
imposing a tort duty: 1) liability out of proportion to
fault, 2) the prospect of private ordering, and 3) the
effect of imposing liability to or in favor of third parties on the particular class of defendant. Id. at 399-405.
56 See the J’Aire court’s discussion of contractors who
willfully fail to complete a construction project and
compare with their discussion of the defendant contractor failing to speed up construction even after the
danger of the plaintiff’s economic loss was brought to
his attention. J’Aire Corp. v. Gregory, 27 Cal. 3d 799,
804-05 (1979). The court seems to intertwine the
plaintiff’s “foreseeable” injury with the contractor’s
“intentional” choice to not behave more reasonably.
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BY JOHN B. LOUGH Jr.
TEST
RESULTS
WRITTEN EXAMS can serve as a legitimate gatekeeper into many careers, but they also have a nefarious history of being used to keep out minorities.1 As Justice Ruth Bader Ginsburg observed in Ricci v.
DeStefano, “Firefighting is a profession in which the legacy of racial discrimination casts an especially long
shadow.”2 While exams can remove nepotism and subjectivity from the selection process,3 not all exams
are the same, nor does committing something to paper necessarily mean that impermissible biases have
disappeared.
The touchstone of a fair exam or practice is how accurately it tests for the requisite skills.4 In the employment setting, the exam or practice is not fair if 1) it disproportionately impacts those with a protected identity, such as race, color, sex, national origin, religion, disability, or age (40 or older),5 2) it is not job related,
and 3) a less discriminatory one exists but is not used. In Lewis v. City of Chicago,6 black firefighter applicants claimed they faced an unfair practice.
In Lewis, the city failed to justify its use of an entry-level firefighter exam with a score cutoff of 89 that
had a disparate impact on black applicants. The applicants’ victory, however, depended on a statute of limitations question: May a “plaintiff who does not file a timely charge challenging the adoption of a practice—here, an employer’s decision to exclude employment applicants who did not achieve a certain
score—…assert a disparate-impact claim in a timely charge challenging the employer’s later application
of that practice[?]”7 The answer is yes.
Lewis may be compared to Ricci v. DeStefano.8 Both cases involved firefighters and written exams. In
Ricci, white firefighters sued the city of New Haven, Connecticut, for disparate-treatment discrimination.
The city did not certify a promotion exam because of a good faith belief that disparate-impact liability would
result. The U.S. Supreme Court held that the city lacked a strong basis in evidence that it would face disJohn B. Lough Jr. practices employment law in the San Francisco Bay area.
He thanks Elizabeth Kristen for her thoughtful comments.
MICHAEL CALLAWAY
Despite the ruling in Lewis, employees still
face an uphill battle in discrimination cases
parate-impact liability, so its refusal to certify
the results amounted to intentional discrimination against white firefighters. In Lewis,
black firefighter applicants sued the city for
disparate-impact discrimination because the
city used an exam with a score cutoff that had
a disparate impact. The similarities, however, end there.
Ricci addresses the supposed tension
between disparate-impact and disparate-treatment discrimination, while Lewis focuses on
when the courthouse doors are closed. Thus,
Lewis does not modify Ricci.9 In fact, Lewis
seems more like a companion to Ledbetter v.
Goodyear Tire & Rubber Company, which
involved timeliness and disparate treatment.10
The facts of the Lewis case start in 1995,
when the city of Chicago administered a written exam to over 26,000 people to compile an
eligibility list for entry-level firefighters. The
1995 test had two parts: a written multiple
choice section (weighted 15 percent) and a
video demonstration section (85 percent).
The written section was designed “to measure
an applicant’s ability to comprehend written
information.” The video section was designed
to measure an applicant’s ability to understand oral instructions, take notes, and learn
from a demonstration of a fictitious device.11
The city sorted the applicants into three
categories: “well qualified” for scores 89 or
above (out of 100), “qualified” for 65 to 88,
and “not qualified” for 64 or below. The
city set the well-qualified cutoff at 89 “because
it was the most administratively convenient
way to trim the list of potential applicants to
a manageable number while still fulfilling
the [Fire Department’s] hiring needs.”12
On January 26, 1996, the city sent letters
informing applicants of their results, stating
that it would likely not invite qualified candidates for further processing. But the letters
said that the city would keep the applicant’s
name on the eligibility list for as long as it used
the list. The city also issued a press release that
announced the general results, next steps for
well-qualified applicants, and the racial
makeup of those applicants.
In the pool of more than 26,000 applicants, 11,649 (45 percent of test takers) were
white and 9,497 (37 percent) were black.
The city categorized 1,782 (6.8 percent) of the
applicants as well qualified: 75.8 percent
white and 11.5 percent black.13 Of the 11,649
white applicants, 10,877 (93 percent) passed
the exam (scores 65 or above); and of the
passing white applicants, 1,350 (12 percent)
scored 89 or above. Of the 9,497 black applicants, 6,855 (72 percent) passed; and of the
passing black applicants, 204 (3 percent)
scored 89 or above.14 The cutoff meant that
white applicants were five times more likely
than blacks to advance to the next stage.15
The racial makeup disappointed the city,
but it planned to proceed with hiring.16 From
1996 to 2001, the city used the eligibility list
11 times to fill 11 classes of entry-level firefighters. The city filled 10 classes with wellqualified applicants (and certain qualified
paramedics and veterans) and filled the 11th
class with the remaining well-qualified applicants before drawing from the qualified candidates.
The plaintiffs,17 qualified black applicants, filed an EEOC charge of discrimination
on March 31, 1997, more than 300 days
after the results came out on January 26,
1996, but within 300 days of the city’s second use of the eligibility list on October 1,
1996. Receiving right-to-sue letters, the plaintiffs sued in federal district court. The city
moved for summary judgment for failure to
file a timely charge, but the district court
denied the motion because “the City’s ‘ongoing reliance’ on the 1995 test results constituted a ‘continuing violation.’”
Undeterred, the city conceded that the
1995 test with a cutoff had a disparate impact
but argued that business necessity justified its
practice. In a bench trial, the district court
rejected the city’s business-necessity defense
and found, among other things, that the 1995
test may not have been a reliable measure of
the four specified cognitive skills, and the
89-score cutoff was “statistically meaningless”
as “it fail[ed] to distinguish between candidates based on their relative abilities.”18
Further, even assuming that the city could justify its discriminatory practice, a less discriminatory alternative existed, which it later
adopted: the random selection of candidates
who passed the exam.19 The district court
ordered the city to hire 132 randomly selected
class members and awarded back pay to be
divided among the remaining members. The
U.S. Court of Appeals for the Seventh Circuit
reversed, holding that the plaintiffs failed to
timely challenge the sorting of applicants,
the only discriminatory act. The Supreme
Court granted review.
As an aside, the city announced in 2005
that it would administer the firefighter/EMT
entrance exam every three years, rather than
letting a decade lapse between tests.20 And,
since 2006, the city has used a pass–fail
approach, so applicants who passed could
become firefighters.21 Under the new policy,
the Chicago Fire Academy continues to produce quality firefighters.22
Title VII of the Civil Rights Act of 1964
prohibits employment practices that discriminate against a person because of the
individual’s race, color, religion, sex, or
national origin.23 Three forms of discrimination violate Title VII: 1) intentional discrimination (disparate treatment), 2) discrimination, regardless of intent, that occurs
when “practices…are fair in form, but dis-
criminatory in operation” (disparate impact),
and 3) harassment.24 The black firefighter
applicants asserted disparate impact.
To prove that an employment practice
has a disparate impact under 42 USC Section
2000e-2(k), plaintiffs must specifically identify the employment practice that allegedly
causes the disparate impact and then must
demonstrate through statistical evidence that
the employer “uses a particular [facially neutral] employment practice that causes a disparate impact” on a protected class. The burden then shifts to the employer to demonstrate
that the employment practice is “job related”
and “consistent with business necessity.” If the
employer meets its burden, the plaintiffs can
still prevail if they can demonstrate that a less
discriminatory alternative exists and the
employer refuses to adopt it. But before complainants can prove liability, they need to file
an EEOC charge of discrimination within
300 days of the discriminatory act (or 180
days in those jurisdictions without a state or
local fair employment practice agency).25
A Unanimous Decision
The Supreme Court (with Justice Antonin
Scalia writing) held that a complainant may
file a timely EEOC charge that asserts a disparate-impact claim each time the employer
applies a practice.26 The Court focused on
Title VII’s text and emphasized its role in
interpreting statutes: “It is not for us to
rewrite the statute so that it covers only what
we think is necessary to achieve what we
think Congress really intended.”27
Before bringing a Title VII suit, the plaintiff must file a timely charge that precisely
identifies the unlawful employment practice.
The Court looked to Title VII’s disparateimpact provision for the essential elements of
a disparate-impact claim, emphasizing the
word “uses.” A cognizable claim arises when
an employer uses an employment practice
that causes a disparate impact. In Lewis, the
employment practice was “the exclusion of
passing applicants who scored below 89 (until
the supply of scores 89 or above was
exhausted) when selecting those who would
advance.” According to the Court, “Although
the City had adopted the eligibility list
(embodying the score cutoffs) earlier and
announced its intention to draw from the
list, it made use of the practice of excluding
those who scored 88 or below each time it
filled a new class of firefighters.” This practice of sorting could form the basis of a
claim.28
Rather than adopting the city and the
Seventh Circuit’s limited view of “use,” the
Court gave “use” its plain meaning. The city
argued that the only unlawful employment
practice occurred when it used the exam
results to create the eligibility list, limited
hiring to well-qualified applicants, and notified the plaintiffs in 1996. Since no one challenged this initial decision, later uses of the
unchallenged, and now not actionable, practice do not create new violations.29
The city and the Seventh Circuit’s position
rested on the view that the Evans line of
cases30 asserts present effects, and automatic
consequences of past but time-barred discrimination cannot violate Title VII. While the
Court agreed that the decision to adopt the
cutoff score and create the eligibility list gave
rise to a disparate-impact claim, the Court
clarified that these cases actually assert that
a “present violation” must occur within the
limitations period.31
The type of claim determines when a present violation occurs. Disparate-treatment
claims require plaintiffs to demonstrate deliberate discrimination within the limitations
period. Disparate-impact claims, however,
do not require discriminatory intent, so plaintiffs only need to show that the employer
uses the practice within the limitations period.
In Lewis, the plaintiffs asserted disparateimpact discrimination, so new and present
violations could flow from each use of the cutoff decision.32
The Seventh Circuit resisted recognizing
the plaintiffs’ claims because it viewed disparate-treatment and disparate-impact claims
as two different means to intentional discrimination, so these means should cover the
same wrongs, but the Court disagreed. If
Title VII’s text recognizes some claims under
one theory but not the other, this “is the
product of the law Congress has written,”
which the Court must follow, even if it thinks
Congress meant something else.33
Practical Concerns
Faced with competing interpretations and
policy concerns, the Court stuck to the text.
The city and its amici warned that the Court
could create practical problems for employers and employees; that is, new disparateimpact claims for practices used for years
and the loss of evidence needed to assert the
business necessity defense. If an employer
uses an unlawful practice and no one files a
timely challenge, then the employer could
use the practice with impunity despite the
disparate impact. While equitable tolling or
estoppel would help some, others would have
no recourse. Further, the city’s reading would
encourage plaintiffs to file premature lawsuits upon the mere announcement of a practice. The Court stated, “In all events, it is not
our task to assess the consequences of each
approach and adopt the one that produces the
least mischief. Our charge is to give effect to
the law Congress enacted.”34
If Congress did not intend the disparateimpact provision to cover claims regardless of
the employer’s motive or prior use of the
same practice, Congress, not the federal
courts, should fix this.35 Thus, the black firefighter applicants had a cognizable disparateimpact claim each time the city used the eligibility list, without having to challenge the
list’s adoption.
The Court enabled the firefighter applicants to attack a discriminatory practice that
would otherwise be untouchable, but the
battle is not over. The Court’s plain reading
employers will express dismay about possible
forthcoming litigation, their alarm ignores
the importance of the disparate-impact theory and the state of federal employment litigation. First, when Title VII was enacted,
“Employers responded to the law by eliminating rules and practices that explicitly
barred racial minorities from ‘white’ jobs.
But removing overtly race-based job classifications did not usher in genuinely equal
opportunity. More subtle—and sometimes
of the disparate-impact provision meant that
each use of the cutoff was an independent,
actionable harm. The plaintiffs timely challenged the use of the cutoff not in the first hiring round but in the second and those that
came after.36 The Court remanded to the
Seventh Circuit to determine if the judgment
needed to be modified and if the parties had
preserved the issue of whether each use of the
cutoff caused a disparate impact.37
Almost 15 years after the litigation began,
it now turns on the 89-score cutoff’s disparate impact in each round. The city contends that the plaintiffs failed to prove this,
but the plaintiffs’ experts testified that each
time the city used the discriminatory cutoff in
each of the 11 hiring rounds, the city selected
black applicants at “rates far lower than the
percentage they represented in the pool of testpassers.”38 The argument continues.
unintended—forms of discrimination replaced
once undisguised restrictions.”39
Second, disparate-impact cases are difficult to win. One may expect disparate-impact
plaintiffs to do well in court because they
do not have to prove intent, but there is no
evidence to suggest these cases are easier than
disparate-treatment ones; in fact, they may
even be more difficult.40 The business-necessity defense is one hurdle for plaintiffs. While
courts have established standards to evaluate
testing cases, courts do not have clear standards on how to evaluate, for instance, subjective employment practices. When required
to make a normative judgment of discrimination, courts tend to defer to the employer’s
explanation because of the courts’ general
“reluctan[ce] to identify ambiguous behavior
as discriminatory.”41
Finally, it is worth noting that employment discrimination plaintiffs tend to fare
poorly in federal court, compared to other
plaintiffs.42 A possible explanation for this
trend is that some federal judges are skeptical
of employment and civil rights plaintiffs
because they do not identify or empathize
with them, which can influence how much discrimination the judges see.43 Thus, Lewis’s
detractors may cry foul, but the reality is that
plaintiffs—regardless of the strengths of their
cases—face an uphill battle.
What Employers Can Do
Following the Court’s employee-unfriendly
results in Ledbetter (paycheck discrimination) and Ricci (firefighter promotion exam),
Lewis could have gone against the black firefighter applicants, but fortunately for them,
the Court gave “use” its ordinary meaning.
Now, disparate-impact plaintiffs can challenge unlawful practices that employers continue to use many years after adoption. While
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As the Lewis litigation demonstrates, the
employer-employee relationship can be a contentious one, but it does not have to be.
Employers are important players in the civil
rights movement. They are in the best position to protect civil rights and ensure equal
opportunity through their practices and conduct. Employers should keep three lessons in
mind: 1) They should review their policies regularly to ensure compliance, 2) if they suspect
a present practice might violate Title VII,
they should stop using it, and 3) if they suspect a proposed practice might violate Title
VII, they should not use it. Employers can be
the good guys too.
While Lewis does not signal a proemployee trend by the Court under Chief Justice
John Roberts, workers can take some small
solace that the Roberts Court is probably
not antiworker. Workers can still seek enforcement of their civil rights, and employers need
to remain vigilant in ensuring that their practices provide true equal opportunity.
■
1
Home of Sir Winston
Pictured Above
See, e.g., Thomas D. Russell, “Keep the Negroes
Out of Most Classes Where There Are a Large Number
of Girls”: The Unseen Power of the Ku Klux Klan and
Standardized Testing at the University of Texas,
1899–1999 at 41–47 (U. of Denver Legal Studies
Research Paper No. 10-14, Mar. 22, 2010), available
at http://www.ssrn.com.
2 Ricci v. DeStefano, 129 S. Ct. 2658, 2690 (2009)
(Ginsburg, J., dissenting).
3 See generally Malcolm Gladwell, Getting In: The
Social Logic of Ivy League Admissions, NEW YORKER,
Oct. 10, 2005, available at http://www.gladwell.com
/pdf/getting_in.pdf.
4 See, e.g., University of California, Berkeley, School of
Law, Law School Admission Project: Looking Beyond
the LSAT, http://www.law.berkeley.edu/beyondlsat
(last visited June 12, 2010).
5 Civil Rights Act of 1964, tit. VII, 42 U.S.C. §§2000e
to 2000e-17 (as amended); Americans with Disabilities
Act of 1990, 42 U.S.C. §§12101–12213; Age
Discrimination in Employment Act of 1967, 29 U.S.C.
§§621–34. State and local laws can protect more identities. See, e.g., GOV’T CODE §12940(a) (sexual orientation, marital status).
6 Lewis v. City of Chicago, 130 S. Ct. 2191 (2010).
7 Id. at 2195 (emphasis in original).
8 Ricci v. DeStefano, 129 S. Ct. 2658, 2664, 2681
(2009).
9 See Briscoe v. City of New Haven, No. 3:09-cv-1642
(CSH), 2010 WL 2794231, at *1–4 (D. Conn. July 12,
2010) (adhering to its prior dismissal of black firefighter’s disparate-impact challenge to the same exam
challenged in Ricci).
10 Ledbetter v. Goodyear Tire & Rubber Co., 550
U.S. 618, 621 (2007) (holding that pay-setting decision,
not paycheck receipt, is discrete, actionable act), superseded by statute, Lilly Ledbetter Fair Pay Act of 2009,
Pub. L. No. 111-2, 123 Stat. 5 (Jan. 29, 2009) (codified as amended in scattered sections of 29 U.S.C. and
42 U.S.C.).
11 Lewis v. City of Chicago, No. 98 C 5596, 2005 WL
693618, at *3–4 (N.D. Ill. Mar. 22, 2005).
12 Id. at *5.
13 Id. at *2, *5.
14 Joint Appendix at JA 24-27, Lewis v. City of Chicago,
130 S. Ct. 2191 (2010) (No. 08-974).
15 Lewis, 2005 WL 693618, at *2.
16
Joint Appendix at JA 51, 54, Lewis, 130 S. Ct.
2191.
17 The African American Fire Fighters League of
Chicago, Inc., later joined.
18 Lewis, 2005 WL 693618, at *9.
19 Id. at *14.
20 Press Release, Office of the Mayor, City of Chicago,
Fire Department Announces Plans for New Entrance
Exam (Oct. 26, 2005), available at http://egov
.cityofchicago.org.
21 David G. Savage, Supreme Court Backs Black
Applicants in Firefighter Discrimination Suit, L.A.
TIMES, May 25, 2010, available at http://articles.latimes
.com.
22 See Lewis, 2005 WL 693618, at *14.
23 42 U.S.C. §§2000e to 2000e-17.
24 Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971);
Race and Color Discrimination §15, 15-9 to 15-22 in
EEOC COMPLIANCE MANUAL (No. 915.003, 2006),
available at http://www.eeoc.gov/policy/docs/racecolor.pdf.
25 42 U.S.C. §2000e-5(e)(1). The Department of Fair
Employment and Housing is California’s fair employment practice agency, and it enforces California’s Fair
Employment and Housing Act. G O V ’ T C O D E
§§12900–12996. Complainants have one year to file
a complaint that alleges FEHA violations. GOV’T CODE
§12960(d).
26 Lewis v. City of Chicago, 130 S. Ct. 2191, 2195,
2200 (2010).
27 Id. at 2200.
28 Id. at 2196–98.
29 Id. at 2198-99.
30 United Air Lines, Inc. v. Evans, 431 U.S. 553, 558
(1977); see, e.g., Ledbetter v. Goodyear Tire & Rubber
Co., 550 U.S. 618 (2007).
31 Lewis, 130 S. Ct. at 2198–99.
32 Id. at 2199.
33 Id. at 2199–2200.
34 Id. at 2200.
35 Id.
36 Unlike the district court, the Court did not invoke
the continuing violation doctrine, which the plaintiffs
later abandoned, to preserve the plaintiffs’ claim. The
Court has been reluctant to expand the doctrine beyond
harassment claims. See, e.g., Ledbetter, 550 U.S. at
638–40. The California Supreme Court, however, has
expanded the doctrine under the FEHA. See, e.g.,
Yanowitz v. L’Oreal USA, Inc., 36 Cal. 4th 1028,
1056 (2005) (retaliation).
37 Lewis, 130 S. Ct. at 2200–01.
38 See Reply Brief for the Petitioners at 13-14 and
Brief for Respondent at 32, Lewis, 130 S. Ct. 2191; see
also Cynthia Dizikes, Supreme Court Rules in Favor
of Blacks for Chicago Firefighter Jobs, CHI. TRIB.,
May 24, 2010, available at http://www.chicagotribune.com.
39 Ricci v. DeStefano, 129 S. Ct. 2658, 2696 (2009)
(Ginsburg, J., dissenting); see also Katharine T. Bartlett,
Making Good on Good Intentions: The Critical Role
of Motivation in Reducing Implicit Workplace
Discrimination, 95 VA. L. REV. 1893, 1956, 1960–71
(2009).
40 Michael Selmi, Was the Disparate Impact Theory a
Mistake?, 53 UCLA L. REV. 701, 734–40 (2006).
41 Id. at 768–69.
42 Kevin M. Clermont & Stewart J. Schwab,
Employment Discrimination Plaintiffs in Federal Court:
From Bad to Worse?, 3 HARV. L. & POL’Y REV. 103,
104–05, 127–32 (2009).
43 See Elizabeth M. Schneider, The Changing Shape of
Federal Civil Pretrial Practice: The Disparate Impact
on Civil Rights and Employment Discrimination Cases,
158 U. PA. L. REV. 517, 562–68 (2010); Selmi, supra
note 40, at 770.
2011
GUIDE TO TRIAL SUPPORT SERVICES
AS THE MEDIA CAPITAL OF THE WORLD,
Los Angeles is understandably at the
forefront of trial presentation—from the
O.J. Simpson and Robert Blake murder
trials to the recent highly publicized
Dodgers divorce trial of Frank and Jamie
McCourt, during which David Boies
appeared daily in Judge Gordon’s
Downtown courtroom and then evenings
on every local TV news program. If a
high-profile trial happens in Los Angeles,
chances are the rest of the world is
watching.
Regardless of who may or may not be
watching your case on the evening news,
it is critical to remember that there are
12 people in the courtroom with you and
that your primary responsibility is to
convince them that your client should
win the trial. Every reasonable effort
should be made to provide the best representation possible, and this can
include bringing in some help with trial
preparation and court presentation.
Where do you begin? In part, by reading what you are reading now. The 2011
Guide to Trial Support Services features
many of the top local providers of services you’ll need to help make your trial
presentation run smoothly and flawlessly. Make no mistake—trial is not the
place to try new things or do it yourself.
You’re better off calling in the experts
who do this sort of thing daily—especially in larger and/or high-profile matters. Even smaller matters can take
advantage of the technology, however.
Gone are the days when a firm’s size
would determine the level of technology
at its disposal. Now, with the increased
accessibility and availability of litigation
and trial support software, consultants,
and highly specialized vendors, the
scales have truly been leveled.
There are a few key steps necessary
when entering the next generation of
trial presentation. They include preparing a trial support database, creating
demonstrative exhibits, preparing deposition video designations, and finally,
the trial presentation.
Trial Support Database
Once you’ve identified all or part of
your potential trial exhibits, you’ll need
to have them scanned into a digital format, such as PDF or TIFF images. Most
litigation-specific vendors will know
what to do and how to do it properly.
Simply taking it to a copy vendor may
produce files that cannot be used with
trial presentation software. It is not
uncommon (if you expect to go to mediation or trial) to bring in a trial presentation consultant at the early stages of
case workup to help ensure that everything is done right the first time.
Database organization and file structure
are critical, and if not done properly, may
result having to do it over—or worse yet,
problems during the trial.
Demonstrative Exhibits
There is no topic that cannot benefit
from visual display. Simple bullet-point
slides, document callouts, timelines, or
even complex animations may be used.
Studies have repeatedly shown that we
(read: jurors) learn and retain more
when we can see what is being
explained. Blowups may be used for a
few key items, and a large quantity of
demonstratives can quickly be displayed
onscreen. This is particularly important
for opening and closing, as well as with
expert witnesses in explaining how
things work.
Deposition Video Designations
Although you may think it is boring to
watch an absentee witness testify via
video, it is far worse to read the testimony into evidence. With video, the
actual witness testifies to the jury, and
exhibits may be displayed simultaneously so the jury can follow along. And,
what about impeachment? There is no
comparison between reading that
“gotcha” statement from the transcript
and watching it on video. The jury sees
two versions of one witness—a very
powerful tool for damaging credibility. It
is recommended that you videotape any
witness of importance to your case.
Trial Presentation
All the aforementioned steps potentially lead to trial, mediation, settlement
conferences, or other ADR. Trial presentation can be used effectively to communicate to audiences, be they the judge,
mediator, opposing counsel, or the jury.
You simply cannot try a case more effectively or efficiently than when bringing in
state-of-the-art technology. Your jurors
understand and retain your message
better, your trial will go much faster, and
you will be able to get far more evidence
introduced, displayed, and admitted.
There is no matter so small or large
that it cannot benefit greatly from the
best available tools for your client. Cost
does not always equal value. Check each
vendor’s reputation, and remember that
each vendor included in this guide is an
active supporter of your LACBA.
Ted Brooks is a trial consultant, author and speaker, with offices in Los Angeles and San Francisco. He has provided trial presentation services in many
high-profile and high-stakes matters, including the Dodgers McCourt divorce and People v. Robert Blake. You may read more of Ted’s articles on his blog:
http://trial-technology.blogspot.com.
ANIMATION
PROLUMINA
Los Angeles and Orange Counties, (213) 985-7411. Web
site: www.prolumina.net. Contact Noah Wick. STRESS
LESS,WIN MORE™. Prolumina is nationally recognized for its
design and development of trial graphics, animations and
demonstrative evidence—across all types of cases. Please
view our graphics samples at http://www.prolumina.net
/services/trial-graphics. Different ways to present demonstrative evidence: opening and closing arguments, PowerPoint,
flowcharts, timelines, callouts, enlargements in trial exhibits,
graphs, charts, 2-D/3-D animation, and trial boards and courtroom displays. See display ad on this page.
AUDIO VISUAL EQUIPMENT
RENTAL FOR TRIALS
WOVA - WORLD OF VIDEO & AUDIO
8717 Wilshire Boulevard, Beverly Hills, CA 90211, (310) 6595959, fax (310) 659-8247, e-mail: [email protected]. Web
site: www.wova.com. Contact Ben Parnassi. Over 28 years
in business. We offer equipment rentals for all your audio/visual needs, including audio, video, AV/presentation, projectors, screens, visual presenters, computers, LCD, and Plasma
monitors, office equipment, and more. WOVA also offers delivery and setup.
COURT REPORTERS
BEN HYATT CERTIFIED DEPOSITION
REPORTERS
17835 Ventura Boulevard, Suite 310, Encino, CA 91316, (888)
272-0022, fax (818) 343-7119, e-mail: mhyatt@benhyatt
.com. Web site: www.benhyatt.com. Contact Mitch Hyatt.
Ben Hyatt Certified Deposition Reporters is a full-service court
reporting company based in Los Angeles and operating
throughout the entire United States and internationally. We offer
a full spectrum of litigation support services. Beyond standard
court reporting services, Ben Hyatt offers interactive real-time
reporting, legal videography services, videoconferencing, and
interpretation services. See display ad on page 39.
We Take You
Inside th
the
e Jury Room
❊JURY BEHAVIOR RESEARCH INC
www.JuryBehavior.com
Serving Los Angeles County since 1981
Persuasion Tools
for a Psychological Edge
PRE-TRIAL
JURY SELECTION
Focus Groups
Mock Trials
Online Surveys
Juror Profiles
Juror Ques onnaires
In-Court Consulta on
TRIAL
WITNESS PREP
Trial Monitoring
Shadow Jury
One-on-One Training
Group Workshops
POST-TRIAL
TRIAL GRAPHICS
Juror Interviews
Juror Affidavits
PowerPoint/Flash
Anima ons
HAHN & BOWERSOCK, INC., CERTIFIED COURT
REPORTERS
151 Kalmus, Suite L-1, Costa Mesa, CA 92626, (800) 6603187. Web site: www.hahnbowersock.com. Hahn & Bowersock is one of the most technologically advanced court reporting firms in the nation. Count on us for services that streamline deposition delivery, storage and review. Complimentary
online deposition and exhibit repository 24/7, digital signatures, and scanned and hyperlinked exhibits with every deposition. Serving California and across the nation with worldclass court reporting. Over 150 deposition suites across the
state and you never pay for an interpreter cancellation fee in
California. We have in-house videographers with state-of-theart equipment and deposition video synching. We have fullyequipped IP and ISDN videoconference suites in Los Angeles
and Costa Mesa and we are networked with hundreds of
videoconference facilities worldwide to always give you the
best rate on a room in any state, any nation. Last-minute settings are never a problem. See display ad on page 41.
SOUSA COURT REPORTERS
(800) 843-7348. Web site: www.sousa.com. Contact Karina
Sousa. Now is the time to take advantage of all the technology available to bring your case to life. Our goal is to provide
you with powerful technological solutions that address your
litigation needs while increasing productivity through tools
such as a full searchable CD-rom depository, e-transcripts
with exhibits, effective trial presentations and interactive animations. We will provide all the trial tools, Elmos, screens,
projectors and more at a fraction of the cost. Sousa Court Reporters is your one stop for all your litigation and trial needs,
give us a call today!
COURTROOM PRESENTATION
TECHNOLOGY
COURTROOM PRESENTATIONS, INC.
835 Wilshire Boulevard, Suite 310, Los Angeles, CA 90017,
(213) 488-9600, fax (213) 488-9630, e-mail: kelly
@CourtRoomPres.com. Web site: www.CourtRoomPresentationsInc.com. Contact Kelly G. Chrisman. Los Angeles premier litigation support service, trial technicians/digital trials,
trial equipment rental, power points, charts, graphs, timelines,
animations, illustrations, and document scanning.
INTERACTIVE PRESENTATION SOLUTIONS (IPS)
18401 Burbank Boulevard, Suite 107, Tarzana, CA 91356,
(818) 776-3470. Web site: www.ipsone.com. Contact
Christine Froehlich. IPS offers superior trial presentation and
graphic services while still keeping your client’s budget in
mind. Our track record speaks for itself—over 2000 cases
with a 90 percent success rate. We have full-time graphic
artists on site. We work one-on-one with expert witnesses and
counsel to create animations, presentations, time lines, flow
charts, and exhibit boards. We are specialists in evidence presentation and video clip playback. All of our presentation
equipment is available for rent and installation. When you
need a high quality, cost-effective presentation, you
need IPS.
LITIGATION-TECH LLC
555 West 5th Street, Suite 3100, Los Angeles, CA 90013,
(213) 798-6608, e-mail: [email protected]. Web
site: www.litigationtech.com. Contact Ted Brooks. With offices in Los Angeles and San Francisco, Litigation-Tech provides full-service trial support to law firms for trial, mediation
and ADR. Clients and cases include the Los Angeles Dodgers
divorce trial (with David Boies), People v. Robert Blake (with
M. Gerald Schwartzbach), Western MacArthur v. USF&G ($3
billion), May-Carmen v. Wal-Mart (defense verdict), PG&E v.
U.S., Shropshire v. City of Walnut Creek ($27.5M), Liou v. Caltrans ($12.5M), and a large number of others on both sides of
civil, criminal, and family law matters. See display ad on
page 5.
ON THE RECORD, INC.
5777 West Century Boulevard, Suite 1415, Los Angeles, CA
90045, (310) 342-7170, fax (310) 342-7172, e-mail: ken
@ontherecord.com. Contact Ken Kotarski. On The Record,
Inc.TM (OTR) is a full-service litigation support firm specializing
in the preparation and presentation of evidentiary material at
trials as well as other dispute resolution proceedings. We
work as a part of your trial team to integrate document images, photographs, graphics, video, animation, and other exhibits into a clear and convincing computer-based courtroom
presentation. From discovery to verdict to final appeal, OTR
provides customized presentation support services and equipment configurations for any litigation communications challenge and venue in the United States. On The Record, Inc.TM—
The Trial Presentation Professionals. See display ad on
page 39.
PROLUMINA
Los Angeles and Orange Counties, (213) 985-7411. Web site:
www.prolumina.net. Contact Noah Wick. STRESS LESS, WIN
MORE™ Prolumina’s PhD-trained trial services team has extensive experience in matters ranging from simple arbitrations
and mediations to extensive Daubert hearings, and full-scale
major litigation across the country. Services we provide: database construction and management, electronic courtroom
setup and integration, trial presentation, war room design, and
staffing and equipment rentals. For more information visit:
http://www.prolumina.net/services/trial-technology. See
display ad on this page.
DEMONSTRATIVE EVIDENCE/TRIAL
GRAPHICS
EXECUTIVE PRESENTATIONS, INC.
3345 Wilshire Boulevard, Suite 1234, Los Angeles, CA
90010, (213) 480-1644, fax (213) 480-1838, Web site:
www.epdelivers.com. Established in 1986 we specialize in
complete trial, video, and graphic services. No matter the size
or complexity of your case, our consultants, technicians, and
designers have the skills and experience to produce effective
presentations that visually simplify and enhance case themes.
Our services include graphic design (timelines, charts, and
graphs), PowerPoint presentations, forensic photography, animation, video documentaries, Sanction II trial presentations,
and equipment rental packages, including complete installation and teardown services. EP delivers unmatched quality,
outstanding service, and quick turnaround.
LITIGATION-TECH LLC
site: www.litigationtech.com. Contact Ted Brooks. With offices in Los Angeles and San Francisco, Litigation-Tech provides full-service trial support to law firms for trial, mediation
U.S., Shropshire v. City of Walnut Creek ($27.5M), Liou v. Caltrans ($12.5M), and a large number of others on both sides of
civil, criminal, and family law matters. See display ad on
page 5.
PROLUMINA
Los Angeles and Orange Counties, (213) 985-7411. Website:
www.prolumina.net. Contact Noah Wick. STRESS LESS,
WIN MORE™, Prolumina is nationally recognized for its design
and development of trial graphics, animations and demonstrative evidence—across all types of cases. Please view our
graphics samples at http://www.prolumina.net/services/trialgraphics. Different ways to present demonstrative evidence:
opening and closing arguments, PowerPoint, flowcharts, timelines, callouts, enlargements in trial exhibits, graphs, charts,
2-D/3-D animation, and trial boards and courtroom displays.
See display ad on page 38.
DEPOSITION SUMMARIES
DEPOSUMS DEPOSITION SUMMARIES
2183 Santa Anita Avenue, Suite A, Altadena, CA 91001, (800)
789-DEPO, e-mail: [email protected]. Web site:
www.deposums.biz. Contact John Harnagel. The acknowledged leader for deposition summaries in Southern California!
Why use an outside vendor for your summaries? Lower cost,
greater efficiency, and better allocation of your personnel resources. We focus on precision, succinctly and carefully capturing all substantive testimony. And we will prepare your
summaries in any format you chose! Call us at (800) 789DEPO for rates and samples. See display ad on page 41.
INTERNET DEPOSITION STREAMING
REPORTERS
151 Kalmus, Suite L-1, Costa Mesa, CA 92626, (800) 6603187. Web site: www.hahnbowersock.com. Do you need to
travel to an out-of-state deposition, but want to save on the
high-cost of travel expenses and reduce your carbon footprint
at the same time? Our Internet Deposition Streaming services
allow you to attend depositions across the state or worldwide
from your desktop. No special software of videographer
needed—just an internet and phone connection. Would you
like to have co-counsel, clients, experts, or “war room” participants attend an important deposition remotely from their laptops? With Internet Deposition Streaming it is possible and
cost-effective. Our multipoint interactive technology allows for
up to 250 participants to attend. Call us for a demonstration
today. See display ad on page 41.
injury and consumer litigation, employment, civil rights, criminal defense, and government litigation.
investigations. Background and general investigations as well
as difficult and rush service of process. See display ad on
page 30.
JURY BEHAVIOR RESEARCH, INC.
400 Continental Boulevard, LAX-Continental Grand, Suite 600,
El Segundo, CA 90245, (310) 372-8140, fax (310) 426-2001,
e-mail: [email protected]. Web site: www
.JuryBehavior.com. Contact Aaron R. Abbott, Ph.D. JBR
provides mock trials, online surveys, witness preparation,
juror questionnaires, jury selection, courtroom graphics design, and posttrial juror interviews and juror affidavits. Our
Ph.D. specialists offer expertise in psychology, communications, research design, and statistics. We use the science of
persuasion and experience of nearly 30 years of jury research
and trial consulting to help you connect with the hearts and
minds of the people in the jury box who will decide your next
case. See display ad on page 38.
JURY/TRIAL CONSULTANTS
BONORA D’ANDREA, LLC
115 Sansome Street, Suite 125, San Francisco, CA
94104, (415) 773-0100, fax (415) 773-0330, e-mail: will
@bonoradandrea.com, Web site: www.bonoradandrea.com.
Contact: Will Rountree, J.D., Ph.D. Our experienced consultants have been leading the field for over three decades. Our
services include assistance with developing case themes and
arguments, opening statement and closing arguments, and
trial strategy; mock jury research; witness evaluation; jury selection; trial monitoring; graphics consulting; community attitude surveys; venue evaluation; and post-trial interviews. Our
practice areas include: complex business litigation, intellectual
property, professional negligence, product liability, personal
Concentrating on providing the highest quality reporting in the
United States, with an emphasis on general reporting and expertise in the
management of discovery in complex litigation
Members of the Los Angeles County Bar Association receive a special discount.
17835 Ventura Blvd., Suite 310, Encino, California 91316
888.272.0022 ■ 818.343.7040 ■ 310.273.5040 ■ 323.225.2040
www.benhyatt.com ■ Fax 818.343.7119 ■ E-mail [email protected]
—EXCLUSIVELY SERVING THE LEGAL COMMUNITY SINCE 1987—
VERBATIM VIDEO
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WEB: www.verbatimdepos.com
E-MAIL:
800-520-8273
818-886-5824
INVESTIGATIONS
HERMANN & HERMANN INVESTIGATION
AGENCY
P.O. Box 398, Tujunga, CA 91043, (818) 352-6274, fax (818)
352-1273, e-mail: [email protected]. Contact Mitch
Hermann. We conduct professional and highly personalized
investigations in English and Spanish, spoken Armenian, other
languages as required throughout Los Angeles and Southern
California; service of process, jury polls,relocate witness, detailed witness statements, full background investigations, surveillance, assets research and public records. When you need
it done fast and expertly call us.
SHORELINE INVESTIGATIONS
(818) 344-2193 fax (818) 344-9883, e-mail: ken@shorelinepi
.com. Web site: www.shorelinepi.com. Contact Ken Shigut.
Over 23 years of experience in locate asset, and surveillance
New York 212.430.5959 • Los Angeles 310.342.7170 • San Francisco 415.835.5958
LITIGATION-TECH LLC
site: www.litigationtech.com. Contact Ted Brooks. With
offices in Los Angeles and San Francisco, Litigation-Tech
provides full-service trial support to law firms for trial, mediation and ADR. Clients and cases include the Los Angeles
Dodgers divorce trial (with David Boies), People v. Robert
Blake (with M. Gerald Schwartzbach), Western MacArthur v.
USF&G ($3 billion), May-Carmen v. Wal-Mart (defense verdict),
PG&E v. U.S., Shropshire v. City of Walnut Creek ($27.5M),
Liou v. Caltrans ($12.5M), and a large number of others on
both sides of civil, criminal, and family law matters. See display ad on page 5.
MOLLY MURPHY TRIAL CONSULTANT/
MEDIATOR
1541 Ocean Avenue, 2nd Floor, Santa Monica, CA 90401,
(310) 458-7720, fax (310) 458-7298, e-mail: mickeyslaw
@yahoo.com. Web site: www.jury-trialconsultant.com.
Contact Molly M. Murphy, MDR. Theme development, voir
dire strategy, jury questions, jury questionnaires and jury selection, trial/evidence strategy, strategy and design of case
presentation, preparation of expert/lay witnesses, presentation
and strategy for opening statement/closing argument, mock
trials, jury monitoring throughout the trial, and post-trial jury
interviews.
NATIONAL JURY PROJECT/WEST
1901 Harrison Street, Suite 1550, Oakland, CA 94612, (510)
832-2583, fax (510) 839-8642. Web site: www.njp.com.
Contact Lois Heaney. Highly respected trial consultants with
over 30 years’ experience providing full range of services, including trial simulations, focus groups, surveys, jury selection,
voir dire materials, witness preparation, venue evaluation, and
courtroom graphics. Expert testimony and posttrial interviews
available. Nationwide service. Areas of specialization include
commercial litigation, intellectual property, personal injury,
products liability, mass torts, and criminal defense.
PROLUMINA
MORE™. Our jury consultants can help you identify and test
key issues for your case, prepare your witnesses for deposition and trial, manage the details of jury selection, and design
the overall presentation blueprint. Key services: case/theme
strategy, witness preparation, focus groups, mock trials, online jury research, and jury selection. For more information
visit: http://www.prolumina.net/services/litigation-strategy.
VERDICT SUCCESS LLC
(310) 545-7914, e-mail: [email protected].
Web site: www.verdictsuccess.com or www.linkedin.com/in
/cynthiacohenphd. Contact Cynthia R. Cohen, Ph.D. Explore
strategic solutions for jury trials in a focus group facility or via
online mock trials. Professionals in persuasive verbal and visual communication, settlement decision-making, venue
changes, jury selection, jury questionnaires, jury interviews,
detecting lying behavior, virtual shadow juries, witness preparation, and voir dire workshops for complex civil litigation. Established in 1986.
LANGUAGE SERVICES/TRANSLATION/
INTERPRETER
AGNEW TECH-II DBA AGNEW MULTILINGUAL
741 Lakefield Road, Suite C, Westlake Village, CA 91361,
(805) 494-3999, fax (805) 494-1749, e-mail: i.agnew
@agnew.com. Web site: www.agnew.com. Contact Irene
Agnew or Silvia Scally. Document translation, Web site
translation, voiceover recording-subtitles, interpretation, consecutive and simultaneous.
AMERICAN LANGUAGE SERVICES
“Making the World a Little Smaller”
1849 Sawtelle Boulevard, Suite 600, Los Angeles, CA
90025, (800)-951-5020, (310) 829-0741, fax (866) 7738591, e-mail: [email protected]. Contact Alan Weiss.
American Language Services (ALS) is one of the premier interpreting, translating, and transcription providers in the United
States. ALS is a Southern California based agency and has
served the legal community since 1985. We provide cost-effective, highly responsive language services, worldwide, to
prominent law firms, in-house legal departments, governmental institutions, as well as to corporate America. We work in
over 200 languages and provide a high level of expertise for
document translations, verbal interpreting and audio transcription services. We offer qualified and certified interpreters
for all languages and provide both simultaneous and consecutive interpreters. Our linguists are native speakers from
around the world, specializing in legal matters such as depositions, arbitrations, mediations, hearings, trials, medical
exams, insurance statements and client meetings. Our certified/notarized translations are completed by credentialed and
experienced legal translators who possess specialized skills in
legal terminology and handle matters such as patents, employee handbooks business contracts, litigation and medical
documents among many others. Our service is outstanding,
our rates are cost competitive and we provide fast quotes, last
minute scheduling and quick turnaround times. To answer any
questions you may have, please call (800) 951-5020, e-mail,
or visit our Web site at www.alsglobal.net to submit orders
on-line.
LITIGATION SUPPORT SERVICES
LITIGATION-TECH LLC
both sides of civil, criminal, and family law matters. See
display ad on page 5.
PROLUMINA
Los Angeles and Orange Counties, CA, (213) 985-7411. Web
site: www.prolumina.net. Contact Noah Wick. STRESS LESS,
WIN MORE™. Prolumina’s PhD-trained trial services team has
extensive experience in matters ranging from simple arbitrations and mediations to extensive Daubert hearings, and fullscale major litigation across the country. Services we provide:
database construction and management, electronic courtroom
setup and integration, trial presentation, war room design, and
http://www.prolumina.net/services
/trial-technology. See display ad on page 38.
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ON THE RECORD, INC.
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VIDEOTAPING
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Los Angeles, (800) 520-8273. Web site: verbatimdepos.com.
Providing legal video services to the Los Angeles legal community for over twenty years! Experience videographers, sharp
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Los Angeles, (800) 520-8273. Web site: verbatimdepos.com.
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editors, and attentive trial presenters. NCRA member, certified
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VIDEO/AUDIO TRANSFER AND
DUPLICATION
VISUAL EQUIPMENT FOR TRIALS
WOVA - WORLD OF VIDEO & AUDIO
8717 Wilshire Boulevard, Beverly Hills, CA 90211, (310) 6595959, fax (310) 659-8247, e-mail: [email protected]. Web site:
www.wova.com. Contact Ben Parnassi. Over 28 years in
business. Video/audio transfer, duplication, and conversions.
Audio restoration, micro audio cassette transfers, Deposition
video copies, video editing, DVD authoring, video to
QuickTime files, and more.
VIDEOCONFERENCING
REPORTERS
272-0022, fax (818) 343-7119, e-mail: mhyatt@benhyatt.
com. Web site: www.benhyatt.com. Contact Mitch Hyatt.
throughout the entire United States and internationally. We
offer a full spectrum of litigation support services. Beyond
standard court reporting services, Ben Hyatt offers interactive
real-time reporting, legal videography services, videoconferencing, and interpretation services. See display ad on
page 39.
VIDEOGRAPHY
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272-0022, fax (818) 343-7119, e-mail: mhyatt@benhyatt.
com. Web site: www.benhyatt.com. Contact Mitch Hyatt.
throughout the entire United States and internationally. We
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standard court reporting services, Ben Hyatt offers interactive
real-time reporting, legal videography services, videoconferencing, and interpretation services. See display ad on
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REPORTERS
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in-house videographers have the talent and technology to
capture your legal videos on time and on budget. Our in-house
video technicians can synchronize any video to the deposition
text so that your team can create professional quality clips for
trial with our complimentary embedded software. Training to
create trial clips is always complimentary. We offer editing
and duplication services and also provide optional equipment
rental for courtroom multimedia playback. We understand the
power of legal video technology and have the experience and
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PASCAL PRODUCTION
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90401, (310) 656-1155, cell (310) 666-5606, 24/7, fax (310)
862-1880, e-mail: [email protected]. Web site:
www.allvideoproductions.com. Contact Pascal Sangary.
Video deposition, legal videography, day-in-the-life videos, accident reconstruction video production, editing and courtroom
playback, audio streaming, video streaming, video digitization,
trial presentation, digitizing photos, equipment rentals and intrial technicians.
INTERACTIVE PRESENTATION SOLUTIONS (IPS)
(818) 776-3470. Web site: www.ipsone.com. Contact
Christine Froehlich. IPS offers superior trial presentation and
graphic services while still keeping your client’s budget in
mind. Our track record speaks for itself—over 2000 cases
with a 90 percent success rate. We have full-time graphic
artists on site. We work one-on-one with expert witnesses
and counsel to create animations, presentations, time lines,
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presentation, and video clip playback. All of our presentation
equipment is available for rent and installation. When you
need a high quality, cost-effective presentation, you
need IPS.
ON THE RECORD, INC.
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The Trial Presentation Professionals. See display ad on
page 39.
WAR ROOM SUPPORT SERVICES
LITIGATION-TECH LLC
offices in Los Angeles and San Francisco, Litigation-Tech provides full-service trial support to law firms for trial, mediation
U.S., Shropshire v. City of Walnut Creek ($27.5M), Liou v.
Caltrans ($12.5M), and a large number of others on both sides
of civil, criminal, and family law matters. See display ad on
page 5.
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Business Opportunities
WANT TO PURCHASE MINERALS and other oil/gas
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Conference Room Space for Rent
THE LOS ANGELES COUNTY BAR ASSOCIATION
HAS CONFERENCE ROOM RENTALS AVAILABLE.
Plan your next business meeting or networking
conference right here at the Los Angeles County
Bar Association. Projection screens, state-of-the
art audio/video, conference streaming, program
seating up to 125 people, Webcasting and recording capabilities, spectacular views of downtown
Los Angeles. For more information, call Kevin Good
at 213.896.6515 or e-mail roomreservations
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Consultants and Experts
COMPETENCE TO SIGN A WILL assessed by Alex D.
Michelson, M.D., Diplomate American Board of
Psychiatry and Neurology with additional certification in forensic psychiatry. www.drmichelson.yourmd.com. Evaluations and testimony in disabilityconflicting employment, malpractice, hospital standards, sexual harassment, custody evaluations,
retirement defense, testamentary capacity, and
probate conservatorship. Call (949) 462-9114.
NEED AN EXPERT WITNESS, legal consultant, arbitrator, mediator, private judge, attorney who outsources, investigator, or evidence specialist? Make
your job easier by visiting www.expert4law.org.
Sponsored by the Los Angeles County Bar Association, expert4law—the Legal Marketplace is a comprehensive online service for you to find exactly
the experts you need.
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SELLING OR BUYING A LAW PRACTICE? Call Ed Poll.
See www.lawbiz.com or call (800) 837-5880.
LAW PRACTICE FOR SALE. Contingency litigation
practice focuses on lucrative practice areas such as
construction defects, personal injury, and complex
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for business/corporate contracts and disputes, and
construction defect matters. Significant growth history. Small office. See www.lawbiz.com or call (800)
837-5880 for more information.
Accident Reconstruction Specialists, p. 17
Litigation-Tech LLC, p. 5
Tel. 562-743-7230 www.FieldAndTestEngineering.com
Tel. 213-798-6608 www.litigationtech.com
Affiniscape Merchant Solutions, p. 24
MCLE4LAWYERS.COM, p. 30
Tel. 866-376-0950 www.lawpay.com
Tel. 310-552-5382 www.MCLEforlawyers.com
Ahern Insurance Brokerage, p. 2
Mediation Alliance, Inc., p. 6
Tel. 800-282-9786 x101 [email protected]
Tel. 213-383-0438 e-mail: [email protected]
Ben Hyatt Certified Deposition Reporters, p. 39
Michael Marcus, p. 17
Tel. 888-272-0022 www.benhyatt.com
Tel. 310-201-0010 www.marcusmediation.com
Cheong, Denove, Rowell & Bennett, p. 31
Law Offices of Matthew C. Mickelson, p. 31
Tel. 310-277-4857 www.cdrb-law.com
Tel. 818-382-3360 www.mickelsonlegal.com
Cook Construction, p. 23
On The Record, Inc., p. 39
Tel. 310-342-7170 www.ontherecord.com
Lawrence W. Crispo, p. 8
Pacific Health & Safety Consulting, Inc., p. 36
Tel. 949-253-4065 www.phsc-web.com
Crowe Horwath, LLP, Inside Front Cover
Prolumina, p. 38
Tel. 800-599-2304 www.crowehorwath.com
Tel. 213-985-7411 www.prolumina.net
DepoSums Deposition Summaries, p. 41
Receivership Specialists, p. 6
Tel. 800-789-DEPO (800-789-3376) www.deposums.biz
Tel. 310-552-9064 www.receivershipspecialists.com
James R. DiFrank, PLC, p. 36
Anita Rae Shapiro, p. 30
Tel. 562-789-7734 www.bardefense.net
Tel. 714-529-0415 www.adr-shapiro.com
E. L. Evans & Associates, p. 4
Shoreline Investigations, p. 30
Tel. 310-559-4005
Tel. 800-807-5440, 818-344-2193 www.shorelinepi.com
Steven L. Gleitman, Esq., p. 4
Thomson West, Back Cover
Tel. 310-553-5080
Tel. 800-762-5272 www.west.thomson.com
Hahn and Bowersock, p. 41
Trope and Trope, p. 23
Tel. 800-660-3187 www.hahnbowersock.com
Tel. 310-207-8228 www.TropeandTrope.com
Higgins, Marcus & Lovett, Inc., p. 23
USC Gould School of Law Continuing Legal Education, p. 15
Tel. 213-617-7775 www.hmlinc.com
Tel. 213-740-2582 www.law.usc.edu/cle
Jack Trimarco & Associates Polygraph, Inc., p. 9
University of LaVerne College of Law, Inside Back Cover
Tel. 310-247-2637 www.jacktrimarco.com
Tel. 877-858-4529 www.law.ulv.edu
Jury Behavior Research, Inc., p. 38
Verbatim Video, p. 39
Tel. 310-372-8140 www.jurybehavior.com
Kantor & Kantor, LLP, p. 8
Walzer & Melcher, p. 1
Tel. 877-783-8686 www.kantorlaw.net
The Keller Law Firm, p. 4
Waronzof Associates, p. 17
Tel. 310-343-9893 www.calcodes.com
Tel. 310-954-8060 www.waronzof.com
Lawyers’ Mutual Insurance Co., p. 7
Witkin & Eisinger, LLC, p. 31
Tel. 800-252-2045 www.lawyersmutual.com
Tel. 818-845-4000
New E-Discovery Competency Requirements
ON THURSDAY, FEBRUARY 10, the Los Angeles County Bar Association will present a
program on what lawyers need to know about e-discovery competency
requirements. California and the Federal Rules of Civil Procedure now require
counsel to become competent with complex electronic discovery concepts, rules,
and protocols. Counsel who are not up to speed with electronic discovery are
ethically required to withdraw from representation or associate competent
counsel. This program is the first step toward meeting competency requirements.
Speaker Alexander H. Lubarsky will explore the new California Electronic Discovery
Act, cutting edge technologies, and best practices pertaining to managing
electronically stored evidence at trial. The program will take place at the Los
Angeles County Bar Association, 1055 West 7th Street, 27th floor, Downtown.
Parking is available at 1055 West 7th and nearby parking lots. On-site registration
will begin at 4:30 P.M., with the program continuing from 5 to 8:45 P.M. This
program is also available as a live Webcast. The registration code number is
011185. The prices below include the on-site meal.
$60—CLE+PLUS member
$75—Small and Solo Division member
$100—LACBA member
$115 to $150—live Webcast
$130—all others
3.5 CLE hours
CROSS-BORDER
DISTRESSED
TRANSACTIONS
ON THURSDAY, FEBRUARY 17, the
International Law and Corporate Law
Departments Sections will host a program
on the purchase and sale of distressed
companies in the United States and
abroad. Speakers Monique C. Bedford,
Miranda Clark, and Malhar S. Pagay will
highlight the specialized regulations that
companies need to comply with when
dealing with distressed companies as well
as the most effective negotiation tips and
due diligence required to ensure that
companies achieve their intended
objectives. The program is designed for
in-house counsel and other professionals
advising on cross-border transactions
involving distressed companies. The
program will take place at the Los Angeles
County Bar Association, 1055 West 7th
How to Manage Archived Data in Litigation
ON WEDNESDAY, FEBRUARY 16, the Los Angeles County Bar Association will host a
program on archival data, which often is found on backup tapes, removable drives,
and Web repositories. Speaker Alexander H. Lubarsky will explore the rules, case law,
techniques, technology, and best practices for identifying, requesting, retrieving,
reviewing, and producing archival data. The program will take place at the Los
Angeles County Bar Association, 1055 West 7th Street, 27th floor, Downtown. Parking
is available at 1055 West 7th and nearby parking lots. On-site registration will begin
at 4:30 P.M., with the program continuing from 5 to 8:45. This program is also
available as a live Webcast. The registration code number is 011186. The prices below
include the on-site meal.
$75—Small and Solo Division member
$100—LACBA member
$130—all others
3.5 CLE hours
Street, 27th floor, Downtown. Parking is
available at 1055 West 7th and nearby
parking lots. On-site registration will
begin at 5:30 P.M., with the program
continuing from 6 to 8. This program is
also available as a live Webcast. The
registration code number is 011112. The
prices below include the on-site meal.
$55—Corporate Law Departments Section
and International Law Section member
$65—LACBA member
$75—all others
$85—at-the-door registrants
2 CLE hours
The Los Angeles County Bar Association is a State Bar of California MCLE approved provider. To register for the programs
listed on this page, please call the Member Service Department at (213) 896-6560 or visit the Association Web site at
http://calendar.lacba.org/where you will find a full listing of this month’s Association programs.
closing argument
BY LAUREN WOLKE
Kids’ Court
Childhood fairy tales are filled with heartache and violence, conTHE AMERICAN LEGAL SYSTEM DICTATES that ignorance of the law
is no excuse for breaking it. Even if we do not know the speed limit, fusion and compromise. Jack’s mom asked him to sell his best friend
we are still expected to obey it. However, the real problem is not that (the cow) to help feed the family. Little Red Riding Hood and Hansel
people do not know the law; it’s that they do not care why it exists and Gretel all learned the dangers of walking in the woods and relyin the first place. This apathy is responsible for the curious lack of ing on the kindness of strangers. Dorothy melted the Wicked Witch,
respect that many Americans have for the most innovative legal sys- and Peter Pan sent Captain Hook back into the crocodile’s mouth.
tem on the planet. To remedy that void, high schools across the Obviously, each of these acts cries out for litigation! The trials the
nation conduct mock trials and moot courts to help our youth Laurence students conduct, unlike the stories they are based on, censor the Grimm details for the sake of the delicate sensibilities of
develop an understanding of the American judicial system.
Unfortunately, for most kids, high school is too late. If we want their intended audience. However, the message is the same, and the
to improve the civic responsibility of our future
citizens, we need to start young. Very young.
Reading, writing, and arithmetic are no longer
Young students, perhaps even more than adults, have a
enough. There is a fourth “R” that our schools
are ignoring at the peril of the future of
American jurisprudence—reality.
seemingly innate sense of what is right and what is just.
High school baseball stars first learn to
swing a bat in little league. The leads in your
local school’s production of The Music Man
probably learned to sing before they could count all the way up to impact the process has on its participants, is nothing short of profound.
Kids’ Court’s sixth graders take on the roles of various courtroom
76 trombones. Yet mock trial participants typically have to wait
until high school to argue their first salient point before a jury of admin- actors in these trials—judge, bailiff, witnesses, and prosecution and
istrators and peers. It is possible that sports and creative endeavors defense lawyers. All of the students in the school are taught about
are inherently more popular than law-themed clubs. However, a courtroom procedure, and all students are served with jury notices
simple shift in priority and focus could have lasting effects on the future and questionnaires and then involved in the voir dire process. A
random jury is selected and, after the trial, it deliberates and decides
of this nation.
First, let us dispel some popular misconceptions. Many people guilt or innocence.
This is a lot of fun. But is it useful? And, more importantly, is it
assume that mock trial is intended for future lawyers, and some
would argue that we do not need to encourage more students to go appropriate?
The law is based upon reasonable people thinking in a reasonable
to law school. However, just a fraction of 1 percent of high school
athletes will go on to play professional sports, and the vast majority way, and young students, perhaps even more than adults, have a seemof drama students will never set foot onto a Broadway stage. Still, mil- ingly innate sense of what is right and what is just. Even though the
lions of children participate in these activities in order to develop self- setting is fantasy in Kids’ Court proceedings, the legal process it
confidence, discipline, a sense of teamwork, and a variety of other soft illustrates is very realistic. And the children, as it turns out, respond
skills. Perhaps if students were exposed to the power of argument, to this reality as long as it is a reality that they can grasp on their own
precedent, and deliberation at a younger age, mock trial teams would terms. We have a unique and inspiring justice system in America, and
be holding the same cutthroat auditions and tryouts as their coun- this brand of fantasy-infused reality is doing wonders to help children
see the positive side of that system early in their lives. True respect
terparts in the theater and on the field.
Perhaps the question we should be asking is whether elementary for something as complex as law and justice comes when a person
school students are, in fact, ready to face reality before they hit gets it on his or her own terms and appreciates it in a way that fits
puberty. We do not simply believe that they are; at Laurence School, his or her personal needs.
Our nation can only benefit from having its children see the legal
we have proven it. In 1989, I created Kids’ Court, a law and ethics
program for the elementary schoolchildren of our school in Valley system as their ally rather than their enemy. And this battle is best won
Glen, California. The program encourages students to explore the early. By playing out and then analyzing the decisions of their childworld of law through debates, mock trial, trial strategy, creative hood heroes and villains, our future lawyers, jurors, and, most imporwriting, and public speaking—all on a level commensurate with tantly, children will grow up seeing the legal system as something to
their maturation and cognitive ability. For 21 consecutive years the embrace rather than fear—something they can be a part of rather than
■
program has delivered fairy tale justice (literally) as the kids debate something they hope to avoid.
the legal merit of actions taken by some of their favorite storybook
Lauren Wolke is an attorney and the head of Laurence School.
characters.
GREAT
LAWYERS
make the most of
their opportunities.
This is
is Soheila
Sohe
So
heililila
he
a Azizi,
Aziz
Az
izi,i, Principal
iz
Pri
P
rinc
ri
ncip
nc
ipal
ip
al of
of Soheila
Sohe
So
heililila
he
a Azizi
Aziz
Az
izii & Associates
iz
Asso
As
soci
so
ciat
ci
ates
at
es
This
and Class
Clas
Cl
asss of 1993
as
199
1
993
99
3 graduate.
grad
gr
adua
ad
uate
ua
te..
te
and
Read
Re
ad Soheila’s
Soh
S
ohei
oh
eila
ei
la’s
la
’s ssto
story
tory
to
ry a
att
www.go2lavernelaw.com/soheila
www.
ww
w.go
w.
go2l
go
2lav
2l
aver
av
erne
er
nela
ne
law.
la
w.co
w.
com/
co
m/so
m/
sohe
so
heililila
he
a
The University
Unive
Un
iversi
ive
rsity
rsi
ty of La Verne
Verne College
Colleg
Col
legee of
leg
of Law
Law has been
been provisionally
provis
pro
vision
vis
ionall
ion
allyy approved
all
appr
appr
pprove
ovedd by
ove
by the
the Council
Counci
Cou
ncill of
nci
of the
the Section
Sectio
Sec
tionn of
tio
of Legal
Lega
Lega
egall Education
Educ
Educ
ducati
ation
ati
on and Admissions
Admis
Ad
missio
mis
sions
sio
ns to the Bar
Bar of
of the
the
American
Americ
Ame
rican
ric
an Bar Association
Assoc
As
sociat
soc
iation
iat
ion since
since 2006.
2006. The
The Section
Sect
Sect
ection
ion of Legal
Legal Education
Educa
Ed
ucatio
uca
tionn may
tio
may be contacted
contac
con
tacted
tac
ted at 321
321 North
Nort
Nort
orthh Clark
Clar
Clar
larkk Street,
Stre
Stre
treet,
et, Chicago,
Chica
Ch
icago,
ica
go, IL 60610
60610 or by phone
phone at (312)
(312) 988-6738.
988-6
98
8-6738
8-6
738..
738
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Los Angeles Lawyer February 2011

Transcription

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