Source: https://www.declarationsandexclusions.com/new_cases_miscellaneous/
Timestamp: 2019-04-26 16:44:03+00:00

Document:
Justice Sills Returns Fire on Prop. 65 "Bounty Hunters"
I am glad that someone around here -- specifically Professor Shaun Martin of California Appellate Report -- has the time to keep up with the newest decisions, because otherwise I might have missed out on Justice Sills' virtuoso performance in Consumer Defense Group v. Rental Housing Industry Members.[PDF] If anything, Professor Martin is understating the case when he observes: "Rarely have I read something as unceasingly bitter and visceral as this."
The first notice was literally predicated on only two things: One, each apartment had . . . parking facilities! Thus the apartment allegedly 'exposed' tenants and visitors to carcinogens in auto exhaust without giving them a Proposition 65 warning.
Two, each apartment did not prohibit tobacco smoking everywhere on the premises. Hence somewhere on the property the apartment allegedly 'exposed' its tenants and visitors to second-hand tobacco smoke, again without posting a Proposition 65 warning.
First, go on the internet and find some common objects (e.g., furniture, paper, carpeting) which may 'contain' a substance on the regulatory carcinogen list. As we have just noted, a common place item, like a chair, doesn’t have to contain any significant amount either, even a few molecules will do. Next, call up a local chemistry professor who will tell you that, at least in sufficient quantities, substances in those common objects will cause cancer, and are in fact on the list. . . . [I]t will be particularly helpful if your chemistry professor opines that as any substance 'degrades' over time (and it can be a very long time indeed given that Proposition 65 puts the burden on any issue of amounts on the defendant), it will emit a few molecules of its constituents into the air -- that will allow you to claim 'exposure' by inhaling or touching.
Third, develop (as here) a plenary omnibus 'macro' notice form which guarantees that yes, somewhere on the premises, there will be a molecule of a substance listed as carcinogenic. Then send your notice in the stentorian Wizard-of-Oz- berates-Dorothy legal style of an indictment. ('You (hereinafter "Violator,") are hereby informed that you have exposed the following [long list of categories of sorts of people who might happen onto your property] to Designated Chemicals'.) This notice will be intended to frighten all but the most hardy of targets (certainly any small, ma and pa business) into a quick settlement when they get it.
Given the ease with which it was brought, and the absolute lack of any real public benefit from telling people that things like dried paint may be slowly emitting lead molecules or that parking lots are places where there might be auto exhaust, instead of $540,000, this legal work merited an award closer to a dollar ninety-eight.
An opinion well worth reading for pure entertainment value, but also as an illustration of how well-intentioned (if overreaching) legislation can be put to less than laudable use in the wrong hands.
Sometimes a Judge simply cannot resist the urge have some fun with the facts of the case before him. The Honorable Barry G. Silverman of the Ninth Circuit U.S. Court of Appeals succumbs to temptation today in ruling on a case of alleged trademark infringement.
The holding in the case will be welcomed by many, and especially by angry consumers with Web access. The Court holds that the non-commercial use of a trademark as the domain name for a web site critical of the trademark owner is not an infringement of the trademark under the Lanham Act.
Defendant Michael Kremer was dissatisfied with the hair restoration services provided to him by the Bosley Medical Institute, Inc. In a bald-faced effort to get even, Kremer started a website at www.BosleyMedical.com, which, to put it mildly, was uncomplimentary of the Bosley Medical Institute. The problem is that 'Bosley Medical' is the registered trademark of the Bosley Medical Institute, Inc., which brought suit against Kremer for trademark infringement and like claims. Kremer argues that noncommercial use of the mark is not actionable as infringement under the Lanham Act. Bosley responds that Kremer is splitting hairs.
Like the district court, we agree with Kremer. We hold today that the noncommercial use of a trademark as the domain name of a website — the subject of which is consumer commentary about the products and services represented by the mark — does not constitute infringement under the Lanham Act.
Any harm to Bosley arises not from a competitor's sale of a similar product under Bosley's mark, but from Kremer's criticism of their services. Bosley cannot use the Lanham Act either as a shield from Kremer's criticism, or as a sword to shut Kremer up.
The news is not all good for Kremer: the Court also finds that the trial judge acted prematurely in dismissing Bosley Medical's "cybersquatting" claims, and in finding that Bosley Medical's state law claims are barred by California's Anti-SLAPP statute.
The Court's full opinion in Bosley Medical Institute v. Kremer (April 4, 2005), Case No. 04-55962, is available from the 9th Circuit's site at the following link in PDF format.
J. Craig Williams sounds the alarm about a new California Supreme Court opinion (authored, whether curiously or not, by libertarian-admired Justice Janice Rogers Brown) which would seem to open a door for lawyers to start claiming punitive damages in contract disputes.
Hold on to your towels and don't panic, gentlemen: there appears to be a good deal of overstatement going around about the Court's year-end decision in Robinson Helicopter Company v. Dana Corporation. While that decision may well mean that punitive damages will become an issue in some cases that also involve breach of contract claims, it does not stand for the proposition that one can recover punitive damages for breach of contract. Decs&Excs' summary and analysis of the decision continues in the extended body of this post, below.
For those who want to read it for themselves, the decision in Robinson Helicopter Company, Inc. v. Dana Corporation (December 23, 2004), Case No. S114054 can be accessed at these links in PDF and Word formats.
Update [01/11/05]: Timothy Sandefur of the Pacific Legal Foundation, guest-posting at Crime & Federalism, is also interested in the possible consequences of this case, in which he participated by filing an amicus brief.
The decision is somewhat off topic for this weblog, so I have posted initial impressions of the California Supreme Court's opinion today in the San Francisco gay marriage case at the more wide-ranging A Fool in the Forest.
The California Supreme Court has upheld state laws that require that wine sold under a brand name that includes the word "Napa," or any other designation of a designated viticultural area, must be made principally with grapes that were actually grown in the area referred to. The court has disallowed the practice of Fred Franzia's Bronco Wine Co. of bottling wines under brand names such as "Napa Ridge," "Napa Creek" and "Rutherford Vintners" when the grapes from which they were produced came from less respected areas, often hundreds of miles from the Napa Valley.
Bronco asserts that it specializes in 'premium wines at affordable prices.' Some of Bronco’s wine is bottled at its facilities in Ceres (near Modesto, in Stanislaus County) and in Sonoma County; other Bronco wines are bottled by petitioner Barrel Ten Quarter Circle, Inc., at a recently completed facility in the City of Napa, in Napa County. The latter plant is capable of producing approximately 18 million 12-bottle cases per year -- output that would be more than double the current annual production of Napa-grown wines.
Bronco acquired these three brand names, and the right to use these labels, from predecessor owners of wineries located in Napa County. The Napa Ridge brand, which Bronco acquired in January 2000 from Beringer Wine Estates for more than $40 million, had been in use since the early 1980s. The Napa Creek Winery brand, introduced in 1981, was acquired by Bronco in 1993. The Rutherford Vintners brand originated in the early 1970s, and was acquired by Bronco in 1994.
The prior owner of the Napa Ridge brand had used that name and label for wines made from grapes grown in California’s Central Coast, North Coast, and Lodi appellation areas, as well as from Napa County. All of the wines previously marketed by the prior owner under the Napa Creek Winery brand and most wines previously marketed by the prior owner under the Rutherford Vintners brand had been made from Napa County grapes. Under Bronco’s ownership, all three of these brands have been used exclusively to sell wines made from grapes grown outside Napa County.
Bronco's labeling practices are entirely legal under the relevant federal regulations: while new brands with geographical designations in them are required to be made at least 75% from grapes grown in the indicated area, older preexisting brands such as the ones Bronco acquired were "grandfathered" in and are permitted to use grapes from most anywhere so long as their labels also indicate those grapes' place of origin. For instance, the Napa Ridge and Napa Creek labels in issue specified that their grapes came from Lodi, and the Rutherford Vintners label indicated grapes from Stanislaus County in California's Central Valley.
In the year 2000, the California legislature at the urging of various Napa Valley-based vintners passed a statute imposing a stricter rule: any California wine with a viticultural region name in its brand must be made at least 75% from that area's grapes, or it cannot be sold or distributed in California.
Bronco has failed to carry its burden of demonstrating federal preemption of a long established and legitimate exercise of state police power with respect to the subject regulated by section 25241. As we have seen, there is no express preemption in the present context, and Bronco’s assertions of implied preemption are contradicted by the long history we have described of concurrent state and federal regulation of wine labels including, historically, the representations appearing on labels suggesting the place of origin of the grapes used to make wine. Nor has Bronco succeeded in providing any persuasive indication that this longstanding concurrent regulatory scheme no longer is compatible with Congress’s overall purposes -- which have been to support the states’ efforts to protect consumers from misleading labeling, not to permit the type of labeling at issue here. Finally, Bronco has not established that, by purchasing a brand name that had been used prior to 1986, it acquired a federally recognized right or license exempting it from stricter state regulation.
California is recognized as a preeminent producer of wine, and the geographic source of its wines -- reflecting the attributes of distinctive locales, particularly the Napa Valley -- forms a very significant basis upon which consumers worldwide evaluate expected quality when making a purchase. We do not find it surprising that Congress, in its effort to provide minimum standards for wine labels, would not foreclose a state with particular expertise and interest from providing stricter protection for consumers in order to ensure the integrity of its wine industry.
The "federal vs. state" nature of the decisive issue suggests that Bronco Wine Co. may well petition the U.S. Supreme Court to review the case: details will be posted here if and when that occurs.
The need for expert witnesses to be able to articulate reasons for their opinions is emphasized in Jennings v. Palomar Pomerado Health Systems (January 8, 2004), Case No D040393 (opinion at these links in PDF and Word formats). In a medical malpractice case arising from a post-surgical infection, the court of appeal found that the plaintiff’s expert witness had no basis other than speculation for concluding that the infection in one location had been caused by the defendant’s negligent failure to remove a retractor from another, unrelated location.
California’s 4th District Court of Appeal has disapproved language in one of its own earlier decisions and has reemphasized that parties have a right to a hearing and opportunity to present oral argument when any party presents a motion for summary judgment. No matter how thoroughly the trial court has considered the motion in coming to a tentative decision, that decision may not be made final without the opportunity for argument. Brannon v. Superior Court of San Diego County (January 13, 2004), Case No. D042907 (opinion at these links in PDF and Word formats).
In a dispute over the payment of merchandising royalties between the Walt Disney Company and Gary K. Wolf, the author of the book that formed the basis for Who Framed Roger Rabbit? the 2nd District Court of Appeal has vacated a partial summary judgment in Disney’s favor. The appellate court concludes that there are genuine factual issues requiring trial in order to determine which of the parties is correct concerning the interpretation of the term “gross receipts” in the royalty agreement. Wolf v. Superior Court of Los Angeles County (January 21, 2004), Case No. B169265 (opinion at these links in PDF and Word formats).
As we celebrate Mickey Mouse’s 75th birthday, we are called upon to address the legal status of Disneyland in the context of its Resident Salute program, a marketing concept that offers nearby residents a discount as an incentive to visit during the slow season. Essentially, during certain times of the year, if Mickey lives in Los Angeles, he pays $8 to $10 less per ticket than his girlfriend, Minnie, assuming she lives in some far off land such as Oz or Fresno.
Recognizing there is no such thing as a “free ride,” Disney fans fork out lots of money to buy a ticket to enter the Magic Kingdom and partake of its many sights and sounds. Appellants allege that Disney discriminated against them by offering cheaper admission tickets to nearby residents than all others and that doing so is unlawful because Disney is a “common carrier” under Civil Code section 2168.
We conclude that Disney is not a common carrier under section 2168 with respect to all who pay admission to enter its Disneyland theme park in Anaheim, California. If we were to conclude otherwise, the next logical step would be to characterize a baseball park as a common carrier or a movie theatre as a common carrier—just because they also contain elevators, escalators and other people-moving devices. In reaching our conclusion, we offer no opinion regarding whether any particular ride within the Disneyland theme park is or is not a common carrier as it is irrelevant to our decision regarding the park as a whole.
If you are sufficiently intrigued to want to read the entire opinion in the case -- Simon v. Walt Disney World Co. (January 8, 2004), Case No. F040732 -- it can be found at these links in PDF and Word formats.
Following on the heels of the case summarized below, the California Court of Appeal has invalidated another contractual arbitration provision, declaring it to be "unconscionable."
Ryan Gutierrez responded to a televised infomercial by defendant Autowest offering affordable leasing of a Dodge Durango. After telephoning ahead to confirm that he qualified for the advertised price, Gutierrez went to Autowest's dealership to close the deal. There, he was informed that he could lease the vehicle at the advertised rate if he made a more substantial downpayment than the infomercial suggested. Ultimately, he made a lower downpayment, but was obliged to make monthly payments several hundred dollars more than had been advertised.
We conclude that where a consumer enters into an adhesive contract that mandates arbitration, it is unconscionable to condition that process on the consumer posting fees he or she cannot pay. It is self-evident that such a provision is unduly harsh and one-sided, defeats the expectations of the nondrafting party, and shocks the conscience. While arbitration may be within the reasonable expectations of consumers, a process that builds prohibitively expensive fees into the arbitration process is not. [Citation omitted.] To state it simply: it is substantively unconscionable to require a consumer to give up the right to utilize the judicial system, while imposing arbitral forum fees that are prohibitively high. Whatever preference for arbitration might exist, it is not served by an adhesive agreement that effectively blocks every forum for the redress of disputes, including arbitration itself.
(Emphasis added.) The court's decision in Gutierrez v. Autowest, Inc. (Dec. 9, 2003), Case No. A098704, may be found at the following links in PDF and Word formats.
“Seldom do we see cases so readily covered by established case law.” So begins the analysis leading the Court of Appeal to affirm the trial court’s refusal to enforce an arbitration clause in a dispute between a concrete contractor and the homeowners whose plumbing and drainage systems he is alleged to have damaged.
The Harpers hired the contractor, Frank Ultimo, to stabilize soil and re-level their backyard swimming pool. The contracts included a provision requiring any and all disputes arising from the contract or work to be submitted to arbitration “in accordance with the Uniform Rules for Better Business Bureau Arbitration.” In the course of the work, Ultimo allegedly broke a sewer pipe, permitting concrete to enter the pipe, the sewer system and surrounding soil, causing blockages. Ultimo was also alleged to have damaged the backyard drainage system and to have lied about the amount of work he had performed.
Only after the harm was done did the Harpers discover that the Better Business Bureau arbitration rules limit the available remedies to no more than $2,500 above any out of pocket loss or property damage, and specifically prohibit any award for “personal injuries” unless the parties agreed in writing to permit such compensation. Ultimo, the court notes, “has conspicuously not made an offer to so agree.” The Harpers sued Ultimo for negligence, fraud and breach of contract. Ultimo sought to have the case ordered to arbitration. The superior court refused, finding the arbitration provision to be “unconscionable” and unenforceable. Ultimo appealed and the Court of Appeal agreed.
The rule in California is that a contract provision will not be voided as unconscionable unless it displays both “procedural” and “substantive” unconscionability.
Here is the surprise: The customer must inevitably receive a nasty shock when he or she discovers that no relief is available even if out and out fraud has been perpetrated, or even if he or she merely wants to be fully compensated for damaged property.
by merely referencing the Better Business Bureau arbitration rules, and not attaching those rules to the contract for the customer to review. The customer is forced to go to another source to find out the full import of what he or she is about to sign -- and must go to that effort prior to signing.
Substantive unconscionability lies in the one-sidedness overly harsh effect of the provision. Here, unbeknownst to the homeowners, their agreement to the arbitration provision left them without even the possibility of full relief, as there were entire classes of harm for which they effective waived any potential compensation.
The decision in Harper v. Ultimo (Dec. 5, 2003), Case No. G031671, can be found at these links in PDF and Word formats.
“When the Levee Breaks, We’ll Have No Place to Stay,” But We’ll Have a Claim Against the State of California . . .
The environmental aftermath of the Gold Rush continues to plague California. Hydraulic mining debris caused flooding which led to the building of levees at the confluence of the Yuba and Feather Rivers. Almost a century ago the Linda levee was built with uncompacted mining debris, and the use of that debris caused the levee to collapse on February 20, 1986.
When a public entity operates a flood control system built by someone else, it accepts liability as if it had planned and built the system itself. A public entity cannot be held liable for failing to upgrade a flood control system to provide additional protection. But the trial court found the levee was built with porous, uncompacted mining debris, in a location which encouraged seepage, leading directly to the failure of the levee, and that long before the failure, feasible cures could have fixed the problems. Use of such technology would not have been an upgrade, but would have ensured the planned flood control capacity was achieved.
Inverse liability stems from the California Constitution and is not dependent on tort or private property principles of fault. [Citation.] California Supreme Court precedent dictates that a landowner should not bear a disproportionate share of the harm directly caused by failure of a flood control project due to an unreasonable plan. . . .
There follows a lengthy dissertation on hydraulic gold mining, with sightseeing tips -- “The environmental damage is indescribable, and must be seen at the Malakoff Diggins State Historic Park to be believed” -- and an extended history of the California Debris Commission (founded 1893) and of the enormous Sacramento River Flood Control Project (SRFCP), “‘a vast and intricate general plan for levees, bypasses, weirs and other works designed for flood control, reclamation and improvement of navigation. It is a cooperative federal-state venture which has been in the process of design and construction for over half a century.’” Ultimately, after an extensive analysis and application three alternative logical frameworks, the court concludes that the State’s decision not to take any steps to upgrade the levee despite knowledge of the risks posed by its manner of construction makes the incorporation of the levee into the overall SRFCP unreasonable, such that the State may be held liable for the harm caused by the failure.
For those who want to survey these somewhat arcane topics in depth, the decision in Paterno v. State of California (Nov. 26, 2003), Case No. C040553, can be found at these links in PDF and Word formats.

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