A Delaware corporation's bylaw requiring any shareholder derivative suit be brought in Delaware Chancery Court is enforceable. Such a forum selection clause does not offend any federal statute or public policy. Here, the complaint alleged a claim under Securities Exchange Act section 14(b) (15 USC 78n) which governs proxy statements. The Securities Exchange Act's non-waiver provision applies only to the… Read More
This suit was filed in the name of a trust, not its trustee. After lengthy litigation with the original defendants, an intervenor moved to expunge the lis pendens on the ground that the trust was not a legal entity and could not sue in its own name. The trial court agreed, held it had no subject matter jurisdiction, and dismissed… Read More
Gov. Code 818 immunizes governmental agencies from liability for damages imposed primarily for the sake of example and by way of punishing the defendant. This decision holds that section 818 bars a claim for treble damages under CCP 340.1(b) for a childhood sexual assault resulting from the defendant's concerted effort to hide evidence relating to such assaults. Section 340.1 imposes… Read More
The NLRA does not shield strikers who fail to take “reasonable precautions” to protect their employer’s property from foreseeable, aggravated, and imminent danger due to the sudden cessation of work. Here, workers waited until the employer's cement trucks were loaded with wet concrete. Then they struck, allowing the concrete to harden and destroying the employer's trucks. That conduct was not… Read More
A claim under section 11 of the Securities Act (15 USC 77k) may be stated only by purchasers of shares registered under the registration statement that contains the allegedly misleading statements, not other unregistered shares that become marketable once the registration of other shares is accomplished. Read More
The federal False Claims Act prohibits "knowingly" submitting a false claim. It defines knowingly to mean actual knowledge, deliberate ignorance, or reckless disregard of truth or falsity. (31 U.S.C. §3729(b)(1)(A).) This decision holds that especially as read against the background of common law fraud which the False Claims Act builds on, the statutory definition of "knowingly" sets a standard governed… Read More
This decision holds that a complaint alleging a false implied certification violation of the California False Claims Act must be pleaded with particularity. But, it also holds that the plaintiff satisfied that standard in this case in which plaintiff claimed that remarketing agents had breached their contracts with local agencies in setting the interest rates on local agencies' variable rate… Read More
Under California's False Claims Act, there is a public disclosure bar to suit if the information on which the suit is based was publicly disclosed in a criminal, civil, or administrative hearing, in a report, hearing, audit or investigation by the Legislature, or in news media. (Gov. Code 12652(d)(3)(A).) This decision holds that interest rates on government bonds automatically reported… Read More
An employer's arbitration agreement contained a carve-out provision stating that claims under PAGA are not arbitrable under this agreement. This decision holds that the plain language of the carve-out excludes from arbitration all PAGA claims--including those individual PAGA claims that Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 are arbitrable (absent the parties' contrary agreement). Hence, the trial… Read More
After his house was destroyed in a fire, Tipton filed a claim under his homeowner's policy with Nationwide. In a criminally stupid move, Tipton's claim sought payment for destruction of Van Gogh's original Starry Night painting which he said was in the house when the fire broke out. Tipton was later charged and pled guilty to insurance fraud and perjury,… Read More
Under McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, the trial court properly denied defendant's motion to compel arbitration because the arbitration clause forbade award of a public injunction in any forum. Contrary to the defendant's argument, its arbitration agreement did not authorize the arbitrator to award a public injunction. It provided instead that arbitration is to be “conducted only… Read More
Following Ajamian v. CantorCO2e, LP (2012) 203 Cal.App.4th 771, this decision holds that an arbitration agreement does not clearly and unambiguously delegate arbitrability questions to the arbitrator if the otherwise clear, broad delegation clause is contradicted by a severance provision that recognizes the possibility that a court may determine the arbitration clause or a part of it to be unenforceable. … Read More
CCP 2023.030(f) provides that "absent exceptional circumstances, the court shall not impose sanctions on a party or any attorney of a party for failure to provide electronically stored information that has been lost, damaged, altered, or overwritten as the result of the routine, good faith operation of an electronic information system." This decision holds that this provision does not shield… Read More
A post-trial motion under Rule 50 is not required to preserve for appellate review a purely legal issue resolved at summary judgment. By contrast, a post-trial motion is required if the summary judgment motion was denied on sufficiency of the evidence grounds since the evidentiary record may be (and usually is) different at trial. Read More
The county's sale of plaintiff's condo at a tax sale to collect delinquent taxes plaintiff owed. The sale netted a sum greater than the taxes owed. The county kept the surplus sale proceeds. That was a taking of plaintiff's property that violated the Fifth Amendment even though state law allowed the county to keep the surplus. To determine the scope… Read More
Plaintiff appealed adverse judgment claiming the trial court erred in refusing a jury instruction regarding an adverse inference from the opposing party's concealing evidence during discovery. This decision holds that the plaintiff forfeited the issue on appeal by misstating the record in her brief--asserting that the trial court had found that the defendant improperly concealed documents, when the trial court… Read More
A special needs trust is one established for a severely disabled person. The trust is designed to supplement public assistance the beneficiary receives without rendering the beneficiary ineligible for that public assistance. This decision holds that the trustee has discretion under a special needs trust to pay for goods and services for the beneficiary that are not supplied by public… Read More
An administrative agency’s discretionary order may be upheld only on the same basis articulated in the order by the agency itself. If a court finds the agency's articulated basis to be legally erroneous, it must reverse and remand to the administrative agency for further proceedings, not affirm the agency's order on other grounds. Read More
California's statute forbidding retaliation against employee whistleblowers protects an employee who discloses to supervisors or public prosecutors or regulators information about what he believes are his employer's violations of law--even if the recipient of the information is already aware of the reported violations. Section 1102.5 protects "disclosures," a term broad enough to encompass emphasizing already known facts. The term “disclosure”… Read More
Following Balistreri v. Balistreri (2022) 75 Cal.App.5th 511, this decision holds that if a trust provides a procedure or method for amending the trust, whether phrased as exclusive or optional, any amendment must conform to that procedure or method; otherwise it is invalid. Prob. Code 15402’s “qualification ‘[u]nless the trust instrument provides otherwise’ indicates that if any modification method is… Read More
