Source: https://calawyers.org/Sections/Business-Law/Publications/Business-Law-E-News/November-2017
Timestamp: 2018-12-13 13:06:07
Document Index: 89676506

Matched Legal Cases: ['§1831', '§3426', '§1', '§4', '§2', '§151', '§4', '§1833', '§10', '§6', '§4', '§1', '§2', '§13', '§11', '§4', '§11', '§11', '§14', '§14', '§12']

Here is your November eNews from the Business Law Section (“BLS”) :
Insolvency Law Committee Publishes Judicial Profiles: Hon. Laura S. Taylor, Chief Bankruptcy Judge, Southern District of California and Hon. Sheri Bluebond, Chief Bankruptcy Judge, Central District of California
Internet & Privacy Law Committee Co-Sponsors Conference on Content Moderation and Removal at Scale
Partnerships and LLCs Committee Hosts Presentation on Financial Reporting and How to Evaluate Data and Numbers
Health Law Committee Reviews U.S. Supreme Court’s GlaxoSmithKline Decision
In addition to the above library of previously-recorded programs, the BLS offers the following upcoming live webinars for lawyers, including members of Group 2 who are still completing their MCLE hours:
Title: Benefits of Corporate Chapter 7 Bankruptcy
Standing Committee: Insolvency Law Committee
The myth is that a corporate Chapter 7 bankruptcy is pointless because there is no corporate discharge. In reality, a corporate bankruptcy terminates most litigation and tells creditors the likelihood of recovery is low. The challenges for management in closing a business can be substantially reduced and shortened. The program will address the benefits of a corporate bankruptcy and how to prepare the case for filing.
Speaker: Michael O'Halloran
Legal Specialization Credit: Bankruptcy Law
Title: Notice, Take and Defend Entity (aka PMK) Depositions
Standing Committee: Business Litigation Committee
Learn the key fundamentals of how PMK depositions should be noticed, taken and defended in state court civil actions. A review of California case law as well applicable federal law precedents, will also help practitioners better prepare for issues that may arise during depositions.
Title: Equal Employment Opportunity, Harassment & Discrimination
Standing Committee: Financial Institutions Committee
This program offers 1 hour participatory MCLE credit, including Elimination of Bias. Presentation is geared toward compliance with California employment laws in 2018 and beyond. Topics covered include definitions of harassment and discrimination, protected classes, the California Department of Fair Employment and Housing Anti-Harassment Regulations, California’s Fair Pay Act, volunteer and intern protection, anti-bullying training and political correctness. Workplace Harassment Hypotheticals are used to illustrate employee and employer rights, responsibilities and remedies, including common sense solutions to typical situations.
MCLE Credit: Recognition and Elimination of Bias in the Legal Profession and Society
Title: Why Delaware?: A Spirited Conversation About LLC Formation
Standing Committee: Partnerships and Limited Liability Companies Committee
The speakers will discuss the considerations for choosing whether to form a limited liability in California or Delaware. They will explore the default provisions in Delaware and California law, and discuss the laws that cannot be overridden by agreement of the parties. There will be a focus on the fiduciary duties of managers.
Title: Dancing Through the Mine Field of Business Regulation
Standing Committees: Franchise Law Committee and Corporations Committee
The program will discuss the impact of business regulation on a variety of everyday transactions that may require disclosure, registration and licensing and that may entail significant liability for noncompliance. The discussion will address the following types of scenarios that may be subject to business regulation:
When does a business consultant become an “Investment Adviser?”
Gerard Davey and Michelle Jacko
Legal Specialization Credit: Franchise and Distribution Law
I encourage BLS members to take advantage of the above high-quality, low-cost programs to help you complete your MCLE requirements.
Who is in charge of the separation activity?
The separation process has been conducted jointly by State Bar staff and the Council of Sections, the leadership body through which all Sections interact. Pam Wilson & Associates was selected as the Sections’ consultant to assist in the transition. Pam Wilson served as Senior Director of Education for the State Bar and retired last year after 36 years of service to the Sections.
Where are the Sections going?
The California Lawyers Association will be the new home for the Sections effective January 1, 2018. The staff and employees will be located for at least six months in subleased space at the State Bar headquarters at 180 Howard Street in San Francisco, California.
What do I have to do to become a member of CLA?
If you are now a member of any one or more Sections, your membership will continue in the CLA until the end of the year, unless you affirmatively terminate your membership. Your Section membership will be renewed when you pay your license fees to the State Bar. Section dues will remain the same through 2018.
Will CLA offer the same education offerings, events, and conferences that are offered by the Sections now?
Yes. The CLA will continue to offer the same quality educational programs, conferences and events as they have in the past. Current Section membership benefits, such as Newsletters and eBulletins, will continue. The CLA looks forward to offering even more as a new entity separate from the regulatory Bar.
Who tracks my MCLE activity after separation?
The State Bar will continue to do so through its website. You will report your MCLE certification to the State Bar as you now do. You do not report your MCLE certification to CLA.
Will the CLA operate differently from the way the Sections operate now?
There will be virtually no change from the current Section operations. The goal is to make the transition entirely seamless to Section members. Every service that is now available will continue to be available and will be provided with greater efficiency and speed. There are two major changes. First, as an independent, non-profit entity, the CLA will not be compelled to operate under restrictions on communication, operations and policy that are required of government agencies. Second, the CLA will operate pursuant to a legislatively mandated “one section one vote” principle, whereby each of the 17 Sections elect a representative to serve on the CLA Board and all Sections, large and small, will have an equal voice in governance.
The Insolvency Law Committee (ILC) published eBulletins with judicial profiles of the Honorable Laura S. Taylor, Chief Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of California and the Honorable Sheri Bluebond, Chief Bankruptcy Judge of the United States Bankruptcy Court for the Central District of California. The profiles are part of the ILC’s ongoing series of profiles of judges of the United States Bankruptcy Court in the Ninth Circuit. The ILC’s judicial profiles of Judge Taylor and Judge Bluebond discuss the judges’ personal and professional backgrounds, including their experiences as practitioners, and on the bench, and tips for attorneys. The profile on Judge Taylor was written by ILC member Gary Rudolph with editorial contributions by immediate past BLS Chair Jim Hill, both of Sullivan Hill (San Diego). The profile on Judge Bluebond was written by ILC member Michael W. Davis and Business Law Section Executive Committee member Corey R. Weber, both of Brutzkus Gubner Rozansky Seror Weber LLP, immediate past ILC Co-Chair Asa Hami of SulmeyerKupetz A.P.C. and past ILC Co-Chair Leib Lerner of Alston & Bird LLP. The eBulletin on Judge Taylor can be found HERE.
The eBulletin on Judge Bluebond can be found HERE.
The ILC welcomes its new leadership for the 2017-2018 Bar year—Co-Chairs, Radmila Fulton and John Tedford, Co-Vice Chairs, Rebecca Winthrop and Marcus Colabianchi, and Secretary, Kyra Andrassy. Please contact John Tedford (JTedford@dgdk.com) or Radmila Fulton (Radmila@rfultonlaw.com) if you are interested in getting involved with the ILC or drafting Insolvency Law eBulletins on case updates or other topics of interest.
The ILC kicked off the new Bar year with the webinar presentation, “Benefits of Chapter 7 Corporate Bankruptcy,” held on Thursday, November 30, from 12-1 p.m. with speaker, Michael O’Halloran. The myth is that a corporate Chapter 7 bankruptcy is pointless because there is no corporate discharge. In reality, a corporate bankruptcy terminates most litigation and tells creditors the likelihood of recovery is low. The challenges for management in closing a business can be substantially reduced and shortened. The program addressed the benefits of a corporate bankruptcy and how to prepare the case for filing.
The Internet & Privacy Law Committee is pleased to co-sponsor an upcoming conference, “Content Moderation and Removal at Scale,” being held at Santa Clara University School of Law on February 2, 2018. This conference will explore how internet companies operationalize the moderation and removal of third-party/user-generated content (UGC). UGC services routinely say that moderating and removing content is hard and expensive. This conference will explain the operational challenges and how companies are trying to solve them.
The conference was organized by the High Tech Law Institute and Professor Eric Goldman, who have put together an all-star roster of panelists from Automattic, Facebook, Google, Yelp, Wikimedia, and other companies handling mass amounts of UGC. Forum topics include an overview of each company’s UGC policies, outsourcing, transparency, and the issue of “human vs. machine” moderation. This conference is the first time representatives from each of these industry giants are coming together to discuss their UGC practices and the future of content moderation.
Attendees can earn up to 6.25 hours of California CLE. (Note: MCLE is not provided by the State Bar.) The conference is expected to sell out, so early registration is recommended. The details are as follows:
Event: Content Moderation and Removal at Scale
Organizer: The High Tech Law Institute (law.scu.edu/hightech)
Time: 8:40 a.m. to 6 p.m.
Place: Mission Room, Benson Center, Santa Clara University, 500 El Camino Real, Santa Clara, CA 95053
Website: http://law.scu.edu/event/content-moderation-removal-at-scale/
Cost: Conference registration is $195, with discounts for Santa Clara Law alumni, and several categories for free registration.
Do financial charts and spreadsheets cause your eyes to glaze over? Does your mind yearn for generalized numbers? If any of the above apply to you, congratulations: You are a typical lawyer who thinks in concepts and impressions rather than in decimal point details. On November 7, 2017, the Partnerships and LLCs Committee presented "How to Read Financial Statements" to allay discomfort and improve their practices by learning from an empathetic Seiler CPA. The Palo Alto Area Bar Association co-sponsored this event with the Partnerships and LLC Committee and BNY Mellon Menlo Park hosted the venue.
Debbie McCall, Audit Partner at Seiler LLP, presented on the subject of financial reporting and how to evaluate data and numbers. In order to set the context, Ms. McCall reviewed the roles of those who request these reports, and those who prepare the financial statements; discussed the differences between audited, reviewed and compiled financial statements and outlined the purpose for financial statement preparation. The participants were guided through the different bases of accounting, key line items on the balance sheet and what the metrics represent. Ms. McCall finished by providing tips on how to spot potential red flags and what might require further inquiry. Handouts provided presentation materials as well as key financial statement ratios and what they represent. In attendance were attorneys in the practice areas of criminal law, estate planning, business, intellectual property, investment banking, employment and mediation counseling as well as professionals in banking, wealth management and accounting. The Chair of the Partnership and LLC Committee is Soyeun D. Choi, Soyeun@SoyeunEsq.com.
The Health Law Committee November meeting featured Shanley Curran, who spoke on the U.S. Supreme Court’s Oct. 2 decision in GlaxoSmithKline v. MM, ex rel Meyers (upholding the decision authorizing specific personal jurisdiction over out-of-state drug manufacturers for claims of out-of-state plaintiffs filed in states where the drug manufacturer conducted clinical trials on the involved drug). Mr. Curran also addressed the impact of the revised Common Rule governing human subjects research set to become effective on January 19, 2018; and newly-issued FDA Guidance for device approvals and related billing compliance issues. The Health Law Committee is chaired by Craig Rutenberg, Manatt Phelps & Phillips, LLP.
Courtesy of CEB, we are bringing you selected legal developments in areas of California business law that are covered by CEB’s publications. This month’s feature is from the November 2017 update to Trade Secrets Practice in California. References are to the book’s section numbers. See CEB’s BLS Landing Page for special discounts for Business Law Section members. The most significant legal developments since the last update include developments in such important topic areas as trade secrets protection, workplace issues, trade secrets misappropriation, procedural issues in litigation, and insurance issues.
Comparing State and Federal Law
The Defend Trade Secrets Act of 2016 (DTSA) (Pub L 114–153, 130 Stat 376) (18 USC §§1831–1839)), which became effective in May, 2016, provided for the first time a federal private civil action for trade secret misappropriation and accompanying federal jurisdiction. A chart comparing key provisions of the California Uniform Trade Secrets Act (UTSA) (CC §§3426–3426.11) and the DTSA has been added in Chapter 1. See §1.1C.
Waymo LLC v Uber Technols., Inc. (ND Cal, July 5, 2017, No. 17–cv–00939–WHA (JSC)) 2017 US Dist Lexis 103663, presents an example of the risks of accidentally copying unintended recipients when e-mailing sensitive documents. In this case, Uber’s supplier accidentally copied Google’s affiliate, Waymo, on an e-mail that contained machine drawings that Waymo considered to be confidential. See §4.33.
Three recent decisions from the U.S. District Court for the Southern District of California discussed contractual language concerning ownership of trade secrets in employer-employee agreements. Allergia, Inc. v Denis Borboulis (SD Cal, June 13, 2017, No. 14–CV–1566 JLS (RBB)) 2017 US Dist Lexis 90844; Freeman Inv. Mgmt. Co. v Frank Russell Co. (SD Cal, July 18, 2016, No. 13–CV–2856 JLS (RBB)) 2016 US Dist Lexis 93201; Odyssey Wireless, Inc. v Apple, Inc. (SD Cal, June 30, 2016, No. 15–cv–01735–H–RBB) 2016 WL 4496844. See §2.26.
The U.S. Court of Appeals for the District of Columbia Circuit held that an employer’s overbroad confidentiality agreement violated the National Labor Relations Act (NLRA) (29 USC §§151–169). Banner Health Sys. v NLRB (DC Cir 2017) 851 F3d 35. See §4.6.
Under the DTSA, employee confidentiality agreements must contain a notice that the disclosure of trade secrets by an informant or whistleblower in good faith to attorneys or government agents investigating corporate wrongdoing grants immunity to the informant. 18 USC §1833(b)(3)(C). See §10.3 and form provisions in §§6.20, 6.24, 6.39, and 6.54.
A motion to dismiss a trade secret misappropriation claim under the DTSA was denied when the claim was based on the inevitable disclosure doctrine. Molon Motor & Coil Corp. v Nidec Motor Corp. (ND Ill, May 11, 2017, No. 16 C 03545) 2017 US Dist Lexis 71700. See §4.11A.
Plaintiff demonstrated wrongful misappropriation sufficient to support an injunction when it offered evidence suggesting that defendants obtained unfair advantage from their use—or threatened use—of plaintiff’s source code, specifications, and customer list by identifying multiple customers for which plaintiff and defendants were directly or indirectly competing. Bartech Sys. Int’l, Inc. v Mobile Simple Solutions, Inc. (D Nev, May 24, 2016, No. 2:15–cv–02422–MMD–NJK) 2016 US Dist Lexis 68030. See §1.11.
In granting in part and denying in part a motion to dismiss in a misappropriation case, the U.S. District Court for the Northern District of California, San Jose Division, cogently opined on the issue of standing. Bladeroom Group Ltd. v Facebook, Inc. (ND Cal 2017) 219 F Supp 3d 984. See §2.1.
The U.S. District Court for the Northern District of California has ruled that, for purposes of summary judgment, “permission to look at data does not equate with permission to take it.” Opperman v Path, Inc. (ND Cal 2016) 205 F Supp 3d 1064. See §13.5.
Procedural Issues in Trade Secrets Litigation
An employer could not compel a third party publisher’s disclosure of an anonymous online poster’s identity, absent a prima facie showing that the poster had breached the parties’ nondisclosure agreement. Glassdoor, Inc. v Superior Court (2017) 9 CA5th 623. See §11.68.
In the first published decision to address the DTSA’s whistleblower immunity provision, a Massachusetts federal district court characterized the whistleblower immunity defense as an affirmative defense. Unum Group v Loftus (D Mass 2016) 220 F Supp 3d 143. See §§4A.13, 11.119.
The federal district court in Delaware dismissed, without prejudice, DTSA claims that failed to allege any nexus between interstate or foreign commerce and trade secrets. Hydrogen Master Rights, Ltd. v Weston (D Del, Jan. 9, 2017, No. 16–474–RGA) 2017 US Dist Lexis 2694. See §11.119.
A Northern California federal district court found that seizure under the DTSA was not necessary and instead ordered the defendants to preserve and deliver the items at issue. OOO Brunswick Rail Mgmt. v Sultanov (ND Cal, Jan. 6, 2017, No. 5:17–cv–00017–EJD) 2017 US Dist Lexis 2343. See §11.119.
A California federal district court has held that the unauthorized use of another company’s logo, without copying or implementing its training program, does not constitute “advertising injury” arising out of “the use of another’s advertising idea.” Infinity Micro Computer, Inc. v Continental Cas. Co. (CD Cal, Sept. 29, 2016, No. CV 15–04777 DDP (SSx)) 2016 US Dist Lexis 134957. See §14.9.
An Illinois federal district court held that misappropriation of trade secrets that relate primarily to technology, manufacture, and sale of products, not to advertising and marketing of such products, does not trigger coverage by the company’s insurance policy against advertising injury (Zurich Ins. Co. v Sunclipse, Inc. (ND Ill 2000) 85 F Supp 2d 842), while another Illinois federal district court held that stealing confidential business information to contact customers does not constitute a covered advertising injury (Sentinel Ins. Co. v Yorktown Indus. (ED Ill, Feb. 2, 2017, No. 14–cv–4212) 2017 US Dist Lexis 14439). See §14.9.
The California Supreme Court held that attorney fees awarded for an insurer’s bad faith conduct may be considered as compensatory damages in calculating damages if the ratio of punitive to compensatory damages exceeds due process limits. Nickerson v Stonebridge Life Ins. Co. (2016) 63 C4th 363. See §12.22.