McMillan's Law Events

Mediation - Latest Experiences

2006-09-16T12:01:00.000-07:00

During the last couple of weeks, I've participated in several mediations. Some of those have been successful; one was not. I've come to the conclusion that the mediators that claim to have some of the highest result rates might be engaging in conduct that is inappropriate and unethical. One practice that I've seen is that a mediator will suggest that the client is unsavory, or should not be represented. The mediator might even suggest that the attorney should state that they will not continue to represent the client, in order that the case might settle.

To reach an agreement that is equally unhappy for each side might be a noble objective, but where an attorney is importuned to abandon a client's righteous cause because the client is physically unattractive, not "jury friendly", or will not "present well", is not in keeping with the attorneys' duty to not "reject, for any consideration personal to himself or herself, the cause of the defenseless or oppressed." Bus. & Prof. Code section 6068(h). The California Legislature did not put in its instructions to attorneys that they may only represent the "presentable."

It appears that some of these mediators have simply ignored or forgotten the requirements of professional responsibility once they engage in the role of a mediator. What I've taken to doing at the outset of the mediation is simply informing everyone that I'm not going to discuss the case outside my client's presence unless the other side's attorney is present. In other words, I won't speak separately with the mediator.

I'm not going to tolerate anyone bad mouthing my clients and expecting me to sit by silently, particularly not a supposedly unbiased mediator who my client is paying to attempt to acheive a settlement.

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2006-06-01T07:05:00.000-07:00

Kudos for Qwest Holding Out on the Phone Records

2006-05-21T06:53:00.000-07:00

A civil liberties group praised telecommunications carrier Qwest for refusing to turn over its customers' phone records to a U.S. spy agency. The Electronic Frontier Foundation (EFF) applauded Qwest's decision not to participate in a broad surveillance program, run by the National Security Agency (NSA), even though other large carriers have apparently complied.

In January, the EFF filed a class-action lawsuit against AT&T for its alleged participation in the NSA's "massive and illegal program to wiretap and data-mine Americans' communications."

"In our country, we follow the law," said Rebecca Jeschke, the EFF's media coordinator. "We don't follow orders. Qwest decided it had a responsibility to its customers and also its shareholders to follow the law."

Without court-issued warrants, the NSA's collection of phone records violates federal law, according to the EFF and the Center for Democracy and Technology (CDT), another civil liberties group.

USA Today, said the NSA has secretly collected the phone call records of "tens of millions" of U.S. citizens since late 2001. Telecom carriers AT&T, Verizon, and BellSouth have participated in the NSA surveillance program, launched after the Sept. 11, 2001, terrorist attacks on the U.S., USA Today said.

Qwest declined to turn over phone records to the NSA when it discovered U.S. agents would not seek court approval, said Herbert J. Stern, lawyer for Joseph Nacchio, a former CEO at Qwest.

The U.S. government approached Nacchio and asked for customer phone records in late 2001, Stern said in a statement released Friday. The phone records requests continued until Nacchio left Qwest in June 2002, Stern said. A federal grand jury in Colorado indicted Nacchio in December, 2001, on 42 counts of insider trading.

Qwest asked "whether a warrant or other legal process had been secured in support of that request," Stern said. "When he learned that no such authority had been granted and that there was a disinclination on the part of the authorities to use any legal process... Mr. Nacchio concluded that these requests violated [federal] privacy requirements. Accordingly, Mr. Nacchio issued instructions to refuse to comply with these requests."

President George W. Bush defends his administration's terrorist-fighting methods, saying government agents are not monitoring the individual phone calls of "innocent Americans." Instead, the NSA has monitored records to detect calling patterns that suggest terrorist activity, USA Today reported.

It is notable that Mr. Nachio was later indicted for "insider trading." Guess that government has its means of demonstrating what happens to those that don't comply with its requests.

One of my lawyer friends, upon hearing this news, cancelled his Verizon subscription and immediately signed up with Qwest. I think that is appropriate.

Work-a-holic, overwhelmed, or simply enjoy working?

2006-05-19T18:57:00.000-07:00

I thought this was a particularly funny cartoon. I like what I do, and sometimes feel guilty about working too much. I am not sure if I do so because I expect things to get done sooner, or because I simply like to work.

At our San Diego Real Estate law practice, we certainly enjoy what we do, the clients we serve, and the problems that we get to resolve.

9/11 Conspirator Zacarias Moussaoui Sentenced to Life

2006-05-07T09:46:00.000-07:00

The jury's decision to allow Zacarias Moussaoui to live, in jail, without possibility of parol is a truly remarkable decision given the testimony that Zacarias Moussaoui provided following the testimony of the victims' family members.

On April 13, 2006, September 11 conspirator Zacarias Moussaoui said that he had no regrets for those who died in the hijacked plane attacks and told jurors in his death penalty trial he wished "there would be more pain."

In comments that brought at least one relative of a victim to tears, Moussaoui mocked survivors of the attacks who had told the court of their pain and said he would like to see similar attacks against Americans every day.

"I find it disgusting that some people would come here to share their grief in order to get the death of someone else," he said.

"We wanted you to have pain in your country," said Moussaoui, an admitted al Qaeda member. "I just wish it would have happened September 12, September 13, September 14 ... there's no remorse for justice."

He was speaking after a week of graphic testimony by guilt-stricken survivors of the deadly attacks and sobbing family members of some of the nearly 3,000 people who died.

Asked during his 2-1/2 hours of testimony whether he had any regret for the suffering caused by the attacks, Moussaoui responded: "None whatsoever."

Moussaoui said he had enjoyed recent images in court showing the Pentagon after it was attacked on September 11 and said reports of all the deaths "make my day."

His comments prompted tears from a distraught family member of one victim who eventually got up and left the courtroom.

Moussaoui, 37, who has pleaded guilty to six counts of conspiracy in connection with the attacks, pulled back from statements made after his indictment that indicated he would welcome a death sentence.

His lawyer Gerald Zerkin showed him a filing he made to the court in August 2002 in which he said the "greatest jihad in Islam is to speak the truth in front of the tyrant and be executed for it."

Moussaoui said he no longer wanted to include the "and be executed" part, because he had consulted Islamic books and decided that violated Muslim religious beliefs.

"TRUST IN GOD"

Moussaoui, who was taking the stand for the second time at his sentencing trial against the advice of his lawyers, also criticized his court-appointed defense team. He said their strategy should have included the argument that life in prison was the best punishment since execution would reward him with martyrdom.

Defense lawyers are trying to persuade the jury that Moussaoui is mentally unstable with delusions of importance in al Qaeda and should not be sentenced to death.

Moussaoui said in court last month that he was supposed to fly a fifth plane into the White House as part of the al Qaeda hijacking plot. That contradicted his previous claims that he was not meant to be part of the September 11 hijacking, but was supposed to be in a second wave of attacks.

Moussaoui, dressed in a green prisoner jumpsuit and a white cap, said on Thursday his testimony made little difference.

"I thought about ... the consequences for me saying I was a part of 9/11. I decided to just put my trust in God and tell the truth and time will tell," he said.

"Even without my testimony, taking into account the emotion of the case, there was definitely a chance I would be found eligible for death," he said.

The 12-person jury had already found that Moussaoui is eligible for execution. Jurors are now deciding whether to sentence him to death or life in prison.

What does this mean? I interpret it as a failure on the part of the United States Government, who has a particularly bloodthirsty bent towards killing and destruction. I view the verdict as a victory of the wisdom of the jury, who decided to end the cycle of death. The symbolism of this act of mercy is hard to ignore; it will be fascinating to watch the Muslim reaction to the jury decision that allows Moussasaoui to live.

From a litigation point of view, I question the benefit of not putting a client in a criminal trial on the stand. In my criminal cases, I've always engaged the client with the intent of having them testify. Of course, I've only engaged with clients that could testify truthfully. I've yet to have a criminal defense client take a guilty plea or suffer a conviction.

Energy Consumption - Gas Prices Still Climbing

2006-05-07T09:07:00.000-07:00

Despite the recent increases in fuel, there is no indication that petroleum prices will level off. Maybe, we should start focusing on the positive aspects of these increased prices -- such as lower carbon dioxide emissions, lessening the global warming effect? Or, since fuel is so expensive, that more people will stay off the roadways, or if they do need to travel, will use cleaner and more efficient public transportation. Will this result in increased home improvement work by homeowners? Should we expect shares of stock in Home Depot, and Loews to increase?

Since carbon-based fuel use is directly related to global warming, isn't ironic that two topics have been discussed in the last two weeks -- gas prices and the extinction of the polar bear by 2030?

According to a recent article:

Many Arctic animals, including polar bears and some seal species, could be extinct within 20 years because of the effects of global warming.

Traditional ways of life for many indigenous people in the Arctic will also become unsustainable unless the world "takes drastic action to reduce climate change," according to the World Wide Fund for Nature.

"If we don't act immediately the Arctic will soon become unrecognisable" said Tonje Folkestad, a WWF climate change expert. "Polar bears will be consigned to history, something that our grandchildren can only read about in books."

By 2026, the earth could be an average 2° Celsius warmer than it was in 1750, according to research commissioned for WWF to be presented to a February 1-3 conference on climate change in Exeter, England.

"In the Arctic this could lead to a loss of summer sea ice, species and some types of tundra vegetation as well as to a fundamental change in the ways of life of Inuit and other arctic residents," WWF said in a statement.

The total area covered by summer sea ice in the Arctic is already decreasing by 9.2% a decade and "will disappear entirely by the end of the century" unless the situation changes, WWF said.

Food source in jeopardy

This would threaten the existence of polar bears and seals that live on the ice, which in turn would remove a major source of food for the indigenous communities who hunt them.

Forested areas will spread northward as those areas become warmer, threatening habitats for birds like ravens, snow buntings, falcons, loons, sandpipers and terns.

"Migratory birds will lose a vital breeding ground in the Arctic, affecting biodiversity around the globe," WWF said.

Indigenous peoples such as the Eskimos in North America and Saami in Scandinavia could lose their traditional livelihoods, and their communities will be threatened by the thinning sea ice, melting glaciers and thawing permafrost.

WWF said it was calling on participants at the Exeter conference to send a clear message to governments of the Group of Eight nations, meeting in Britain later this year.

Must reduce climate change

"If we are to ensure that unique ecosystems like the Arctic are not lost, the G-8 meeting must take drastic action to reduce climate change," said Catarina Cardoso, a WWF expert on sustainable energy, adding that this must include a commitment to keeping global average temperatures down.

Findings released in November 2004 by the Arctic Council - which comprises Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States - showed that the annual average amount of sea ice in the Arctic has decreased about 8% in 30 years.

In the past 50 years, average yearly temperatures in Alaska and Siberia have increased by about 2° Celsius to minus 15° C.

The United States is the only country in the Arctic region that has not signed the Kyoto Protocol. Russia ratified the UN-sponsored accord to combat global warming in November 2004.

My question is very self-centered. Should I be looking at moving to a location that will have a cooler climate while I can still sell my house? San Diego Real Estate is certainly going to take a dive if the average temperature here rises by 10 degrees.

Criminalizing Status, Illegal Immigration, and Extortion or Exploitation

2006-05-03T21:21:00.000-07:00

The debate over the pending illegal immigration has reached a fever pitch in the Latino community. Rather than challenging the proponents of immigration reform by pointing out the contribution of the illegal immigrant community, California has witnessed demonstrations that nearly turned into riots.

To be sure, the present state of immigration policy in the United States encourages undocumented border crossings by illegal immigrants. The immigrants need to work, and to work they drive a burgeoning forged document industry, which they then show to unscrupulous employers who themselves -- dishonest people that they are -- proceed to exploit the illegal employees by failing honor the obligations imposed by the labor laws. In turn, we San Diego Employment Lawyers enforce the California labor code, and money that would otherwise go into capital improvements, increased wages, health benefits, and the benefits of honest competition go to pay attorneys fees and liquidated damages.

Immigration policy in the United States is entirely without reason, the talented persons that should be recruited from throughout the world and are required to wait patiently for their chance at the lottery take a back seat to family members of citizens. The illegal immigrants trump both the family member immigrants and the lottery players -- they simply break the law and walk across the line.

Meanwhile, without the immigrants California will not have its agriculture. It will not have its offices cleaned.

Fuel Prices Out of Control. My Prediction: more demands for reimbursement by employees.

2006-05-01T07:20:00.000-07:00

With fuel prices spiraling out of control, more California employees will likely be availing themselves of the protection of Labor Code section 2802, which requires an employer to reimburse the employees for expenditures incurred in the performance of their duties.

Labor Code 2802. (a) An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct
consequence of the discharge of his or her duties, or of his or her
obedience to the directions of the employer, even though unlawful,
unless the employee, at the time of obeying the directions, believed
them to be unlawful.
(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary expenditures
under this section shall carry interest at the same rate as judgments
in civil actions. Interest shall accrue from the date on which the
employee incurred the necessary expenditure or loss.
(c) For purposes of this section, the term "necessary expenditures
or losses" shall include all reasonable costs, including, but not
limited to, attorney's fees incurred by the employee enforcing the
rights granted by this section.

It is surprising to me how many employees accept an assignment to drive across town without requesting reimbursement for that expense. Those employees have a right to reimbursement for those expenditures.

The Ethics of Torture: Extraordinary rendition.

2006-04-29T11:32:00.000-07:00

The title is a hoax. I could not think of an instance where "torture" would be ethical. I suppose that there are some Hollywood-imaginings that could develop a scenario that justified torture; but, a real life example --- nah....

Recently, there has been a complete silence on this subject in the media. Maybe the short attention span of the American public has been exhausted?

Mexico's decriminalization of drugs - a first blow to the illicit drug industry.

2006-04-29T11:10:00.000-07:00

MEXICO TAKES A COURAGEOUS STEP TOWARDS INTERNAL SECURITY

In what appears to be an extremely canny move by the Mexican Government, it stands on the cusp of decriminalizing the personal possession of narcotics, as reported by Reuters:

Possessing marijuana, cocaine and even heroin will no longer be a crime in Mexico if they are in small amounts for personal use under new reforms passed by Congress that quickly drew U.S. criticism.

The measure given final passage 53-26 by senators in a late night session on Thursday is aimed at letting police focus on their battle against major drug dealers, and President Vicente Fox is expected to sign it into law.

"This law provides more judicial tools for authorities to fight crime," presidential spokesman Ruben Aguilar said on Friday.

He said the reforms, which were proposed by the government and approved earlier this week by the lower house of Congress, made laws against major traffickers "more severe."

The legislation came as a shock to Washington, which counts on Mexico's support in its war against drug smuggling gangs who move massive quantities of cocaine, heroin, marijuana and methamphetamines through Mexico to U.S. consumers.

"I would say any law that decriminalizes dangerous drugs is not very helpful," said Judith Bryan, spokeswoman for the U.S. Embassy in Mexico City. "Drugs are dangerous. We don't think it is the appropriate way to go."

She said U.S. officials were still studying the reforms, under which police will not penalize people for possessing up to 5 grams of marijuana, 5 grams of opium, 25 milligrams of heroin or 500 milligrams of cocaine.

People caught with larger quantities of drugs will be treated as narcotics dealers and face increased jail terms under the plan.

The legal changes will also decriminalize the possession of limited quantities of other drugs, including LSD, hallucinogenic mushrooms, amphetamines and peyote -- a psychotropic cactus found in Mexico's northern deserts.

Fox has been seen as a loyal ally of the United States in the war on drugs, but the reforms could create new tensions.

A delegation from the U.S. House of Representatives visited Mexico last week and met with senior officials to discuss drug control issues, but was told nothing of the planned legislative changes, said Michelle Gress, a House subcommittee counsel who was part of the visiting team. "We were not informed," she said.

HARDENED CRIMINALS

Hundreds of people, including many police officers, have been killed in Mexico in the past year as drug cartels battle for control of lucrative smuggling routes into the United States.

The violence has raged mostly in northern Mexico but in recent months has spread south to cities like vacation resort Acapulco.

Under current law, it is up to local judges and police to decide on a case-by-case basis whether people should be prosecuted for possessing small quantities of drugs, a source at the Senate's health commission told Reuters.

"The object of this law is to not put consumers in jail, but rather those who sell and poison," said Senator Jorge Zermeno of the ruling National Action Party.

Hector Michel Camarena, an opposition senator from the Institutional Revolutionary Party, warned that although well intentioned, the law may go too far.

"There are serious questions we have to carefully analyse so that through our spirit of fighting drug dealing, we don't end up legalizing," he said. "We have to get rid of the concept of the (drug) consumer."

(Additional reporting by Anahi Rama)

DRUG USE IS A PERSONAL CHOICE, THAT IS INFLUENCED BY MARKET FORCES

At our San Diego law firm, we successfully defended a parapalegic who had been charged with cultivation of Marijuana, obtaining a "dismissal in the interest of justice." Personally, I believe that it is absurd for the Government to be chasing users given that economics of the problem. Users are not the market force that creates the ills associated with illicit drugs; i.e., reduced productivity, illness, addiction, crime, and poor parenting and damage to the family structure. Those problems are merely results of the marketing and distribution efforts of the illicit drug industry. But for the continued efforts to sell drugs, supply would be limited, interest in drug use would diminish and the incidence of addiction and abuse to illicit substances would likely be similar to the addiction and abuse of prescribed medications.

Application of Antitrust Principles to Win the War on Drugs

The United States Government could eliminate the Drug Problem in the United States in eighteen months time by a few simple changes, applying economic principles described in common antitrust treatises:

First, market controls: Decriminalize all drugs, and provide the drugs by prescription or in limited dosages to adults.

Second, exclusive control of distribution channels: The Government should have the exclusive right to determine who sells illicit drugs, and thereby who profits. Licensed facilities, located far away from schools, churches, parks and other public places should be the only locations that drugs should allowed to be sold.

Third, pricing controls: Illicit drugs should be sold below cost in limited quantities, for personal use only. Selling below the cost of production, in limited quantities, will eliminate the profit motive to other market players in the drug industry. Sales of drugs for recreational use at a price that is obscenely low will result in economic damage to the other competitors, i.e., the bad people who import and distribute the drugs. At some point, there will be no point in selling drugs due to the remaining other risks.

Finally, barriers to market entry: Continued or even increased enforcement of the existing laws prohibiting distribution or importation of narcotics will have a greater effect than those efforts have at present, simply because a reduced market for the drugs and reduced profit potential for a successfully completed transaction will not justify what was previously a risk that would result in a sufficiently great reward to justify the risks.

The present War on Drugs is simply a misguided taxpayer boondoggle, a waste of precious public resources, and a justification for increased government intrusion into the lives of the members of the public. Mexico's courageous and forward thinking effort will provide the United States an example in problem solving.

Dan Lawton's $12 Million verdict against Big Government and its minions.

2006-04-09T20:01:00.000-07:00

I recently learned of an absolutely astounding verdict that Dan Lawton, an attorney who I greatly respect and admire, obtained against a number of government employees who work for California's Department of Health Services (DHS). The employees were sued in their individual capacity, although I expect the State of California will write a check for their liability.

Dan Lawton and his colleagues represented a health care management company that operated the only hospital in Calexico. Due to the DHS's refusal to certify the hospital, it was unable to bill for services received, and ultimately went out of business. The owners of the management company sued the DHS employees and ultimately prevailed before an Imperial County Jury.

Lawton's case demonstrated the wrongful closure of the Calexico Hospital – the only hospital in the border city of Calexico, California. Calexico lies about 125 miles east of San Diego. Calexico has about 25,000 residents and is growing. CHMG formerly managed the Hospital for profit. State officials employed by the California Department of Health falsely promised to survey the Hospital for Medicare-Medi-Cal certification – then concocted a pretext for not doing the survey. The result was the Hospital’s inability to collect millions of dollars in reimbursements from the federal and State governments – and ultimate closure. CHMG sued these officials for violation of 42 U.S.C. section 1983 (deprivation of rights under color of law) and fraud. CHMG proved millions of dollars in lost profits as damages, through the skilled analysis of Dana A. Basney, C.P.A., CHMG’s damages expert.

Lamely, the defense did not identify a C.P.A. or economist as a countervailing expert witness.

Who was involved

CHMG is a California limited liability company. Its principals, Jay E. Ash and Randolph R. Smith, organized CHMG in 1996 for the sole purpose of managing the Hospital. As a direct result of the Hospital’s closure in 1998, CHMG lost all revenues or operations. Mr. Ash and Mr. Smith lost their entire investment in CHMG (collectively, about $150,000.00).

The owner of the Hospital is Heffernan Memorial Hospital District (the “District”). The District was not a party to this case. The District employed CHMG to manage the Hospital for profit pursuant to a written contract entered into in November 1996.

Defendants are all current or former State officials employed by DHS. Each had a role in the shutting of the Hospital in 1997. Now, they owe Mr. Ash & Mr. Smith, $12,000,000. They will also owe Lawton & Co. their attorneys fees, which will likely be substantial.

Background

When CHMG came on the scene in 1996, the Hospital (which had 34 beds) was shuttered and in bankruptcy.

The District’s directors wished to reopen the Hospital, but had no money and no plan. Messrs. Ash and Smith formed CHMG and made a proposal. The District accepted it. The District and CHMG signed a contract dated November 4, 1996. It provided for CHMG to run the Hospital. In return, CHMG would be paid 65% of the Hospital’s gross revenues. The contract had a 2-year term. All parties expected a renewal and (ultimately) a 5-year relationship.

CHMG set out to “change the model” at the Hospital – bringing in the highest quality physicians in Imperial County (including oncologists and surgeons); installing a first class laboratory; and providing a full-time pharmacist with a 24/7 presence. It began a seven-month process aimed at reopening the Hospital and getting a license from DHS. DHS issued the license after the Hospital passed a licensing inspection. The Hospital reopened on June 27, 1997. CHMG put its first patient in a bed that same day. Soon it was treating many patients – some of them insured, but many of them un- or underinsured.

All the Hospital needed was certification from DHS to bill and collect reimbursement for services from the federal and State governments (pursuant to their Medicare and Medi-Cal programs). Certification was a must for the Hospital. This was because so many of its patients were Medicare- and Medi-Cal-eligible – most of its anticipated revenues would be government reimbursements for the services it was providing, as had been true historically.

CHMG asked DHS for (and got) a certification survey in August 1997. The Hospital flunked the survey after a DHS evaluator flipped on an autoclave, temporarily tripping a circuit breaker and causing a power outage in part of the hospital – something that had never happened before. CHMG got the breaker re-set and all power restored within 30 to 40 minutes. No patient suffered any problem as a result of the temporary partial outage. Survey team leader Glenda Shekell, however, was not impressed. She ordered the Hospital to transfer its 25 patients elsewhere; cease operations; close the ER; and neither admit nor see any other patients until DHS certified all issues were corrected. The following day, DHS and a fire marshal inspected the facility; agreed that there was “no problem”; and gave the go-ahead to re-open (the next day). The 2-day closure cost the Hospital momentum at a critical time. It created a “great financial hardship” from which the Hospital never recovered.

Later, CHMG received a statement of deficiencies from DHS, and corrected all problems therein identified. By early October 1997, CHMG had corrected all deficiencies. It needed another certification survey so that it could start billing and collecting from the federal and State governments for the services it was providing to most of its patients.

In the meantime, CHMG had learned that Shekell and other DHS officials had a “great deal of prejudice against the Hospital.” CHMG heard reports that “individuals that were on the particular inspection team” were “anti-Calexico Hospital[,]” and that at least one of them “did not want the Hospital ever to be reopened.” Shekell, at her deposition, admitted to this prejudice. The District board believed DHS’ prejudice stemmed, in part, from the fact the Hospital treated a lot of undocumented aliens (and sought to do so at taxpayer expense). The Hospital’s close proximity to the border (ten blocks) meant that many residents of Mexicali, Mexico often sought care at the Hospital (in lieu of seeking care at a Mexican hospital).

By October 1997, Ash and Smith had “run ten months without an income stream.” They wanted assurances of fairness. CHMG had reached the limits of its credit lines and consumed $1.7 million of operating capital. Ash and Smith had put $150,000.00 in personal monies into the Hospital. They wanted an “honest conversation” with DHS officials before the next certification survey occurred. They called a meeting with DHS’ top-ranking local official (Joan Carmen-Briggs) and a supervisor (Nelsen Ford, who had been on the survey teams previously).

The meeting happened on October 16, 1997. Blunt words were spoken at this meeting.

Ash and Smith told Carmen-Briggs and Ford they didn’t want to keep borrowing and pouring cash into the Hospital if DHS’ true agenda was simply to shut it down – they’d rather shut the doors now and save everyone the expense and trouble. The Hospital needed another survey within 3-4 weeks and to get certified so it could start to collect the millions of dollars in accounts receivable it was accumulating for services to patients eligible for Medicare and Medi-Cal coverage. Ash and Smith explained their concern about the “anti-Calexico Hospital” prejudice amongst survey team members.

Carmen-Briggs and Ford “responded.” Carmen-Briggs assured Ash and Smith they would “have a fair certification survey,” and that it would be done within “two to three weeks . . . end of October . . .” Carmen-Briggs and Ford assured CHMG there would be a “fair survey” and a “level playing field,” with no “personal agendas by any state employees . . .” They acknowledged CHMG was “experiencing . . . financial difficulties in reimbursement” in the meantime.

Ash memorialized these promises in his letter sent to Carmen-Briggs the same day. Carmen-Briggs, at her deposition, admitted making the specific promise identified in this letter (a fair survey done within 3-4 weeks).

What CHMG didn’t know was that the assistant deputy director of DHS, Carla Framiglio, had made a secret decision in the fall of 1997 to revoke the Hospital’s license and close the Hospital. Though it was DHS policy to communicate such decisions in writing, Framiglio put nothing in writing – she told Carmen-Briggs and Donna Loza about it, but otherwise kept it to herself. Carmen-Briggs and Loza said nothing of Framiglio’s secret decision to Ash and Smith.

With Carmen-Briggs’ and Ford’s assurances in mind, CHMG prepared for the next certification survey. They filled out all necessary paperwork, including HCFA Form 855 (a form identifying the Hospital’s ownership to its fiscal intermediaries, such as Blue Cross), and submitted it to DHS. Ash and Smith signed personal guaranties of repayment of a $450,000.00 loan (gotten by the District to continue to fund operations in the meantime). They pledged their homes as security for the guaranties. CHMG used the loan proceeds to meet payroll, pay suppliers, and continue to treat all patients. As of early November, CHMG had sufficient funds left to continue to run the Hospital for another 30-60 days. After that time, it would die unless it could start collecting reimbursement from the federal and State governments.

CHMG awaited the promised survey.

It never came. The Hospital would have passed. It was in “A-1 condition.” All items noted as deficient during the August survey had been corrected.

Carmen-Briggs and Ford never followed up on their promises, nor did they tell anyone to do the survey they had promised to CHMG. Ford rotated off the survey team; Barry Giles (now Hitesvara Saravan) replaced him. Had Saravan been told to get a team together to do a survey, he “would have done everything possible to accomplish it.” Never having been told to do it, he did nothing.

Ford kept promising Smith he would “get on it” and “take action.” No “action” materialized. Weeks passed. When Ford told Smith that Saravan had replaced Ford, Smith called Saravan. Saravan “knew nothing about” any survey, except that a survey anytime soon was “off the table.” Saravan told CHMG there could be no survey until January or February 1998. Ash begged Saravan for a prompt survey, telling him that if the Hospital flunked it, Ash would personally carry the Hospital’s license to Saravan’s office and surrender it then and there. Ash told Saravan that the Hospital couldn’t afford to stay open until February and reminded him of Carmen-Briggs’ promise (of a fair survey within 3-4 weeks of October 16, 1997).

On December 4, 1997, a meeting ensued among the District’s board members, the District’s lawyer, most of the defendants, Framiglio, Ash, and Smith. At this meeting, DHS dropped a bombshell. DHS told Ash and Smith that, before any survey could happen, CHMG first had to obtain Blue Cross’ approval of its Form 855. DHS had never mentioned such a rule previously to CHMG. No paperwork given by DHS to CHMG previously had identified this as a prerequisite to a survey.

The Plaintiffs demonstrated at trial the truth: there was no such rule. The previous survey (in August 1997) had taken place without Blue Cross’ approval of any Form 855. None of the defendants, when deposed, could identify the source of such a supposed rule.

By now, the otherwise successful business CHMG and the only community hospital in Calexico was doomed by the DHS employees. There was no way CHMG get its Form 855 approved by Blue Cross, await a certification survey weeks or months hence, continue to treat patients and run up its accounts receivable, and survive financially in the interim. CHMG was dead. It had spent the entire $450,000.00 borrowed by the District in early November. It, Ash, and Smith were out of money. CHMG closed all operations at the Hospital on January 8, 1998.

The Hospital (which opened in 1951) remains shuttered to this day, except for an urgent care clinic operated in a part of the premises by Pioneers Memorial Healthcare District (which also operates a 107-bed hospital in Brawley).

The only California hospital ever closed as a result of the State’s failure to schedule a certification survey (or as a result of a hospital’s failure to pass a certification survey) is Calexico Hospital. Discovery has shown no instance of any fiscal intermediary (such as Blue Cross) ever not ultimately approving a hospital’s Form 855. DHS could have simply done a follow-up survey in October or November 1997; awaited Blue Cross’ approval of CHMG’s Form 855; and approved certification. Instead, DHS simply refused to do the survey at all – sealing CHMG’s doom.

Procedural Efforts

CHMG filed an administrative action with the State Board of Control, which failed to respond. CHMG timely filed their action on November 24, 1999 – over six years ago.

The trial court sustained defendants’ demurrer without leave to amend. CHMG appealed and prevailed; the Court of Appeal reversed the trial court’s dismissal, reinstating CHMG’s 1983 and fraud claims. Defendants moved for judgment on the pleadings. The trial court denied the motion. Defendants demurred to CHMG’s second amended complaint. The trial court overruled the demurrer. Defendants moved for summary judgment. The trial court denied the motion in its entirety (except for defendant Robert Hunt, as to whom the court granted summary adjudication on the fraud claim only).

Testimony from the Learned Professionals

CHMG’s regulatory experts testified that CHMG would have passed a fair certification survey in 1997. They also testified that the supposed Form 855 rule invoked by the State as a bar to a prompt survey did not exist in 1997 and that DHS never enforced such a supposed rule vis-a-vis any other hospital. Dana Basney testified that CHMG’s lost profits exceed $6 million on the low end based on CHMG’s actual daily patient census in August 1997 and industry data.

Defense expert John Hagerty (a former DHS official) will testify that DHS officials followed the rules and that the supposed Form 855 rule barred the prompt certification survey Carmen-Briggs and Ford promised in October 1997. Philip Dalton (not an economist or CPA) testified that Dana Basney’s assumptions are faulty and that the Hospital couldn’t have earned the profits it has projected. Guess the Jury didn't believe those two!

This hard work and dedication by the attorneys for the Plaintiff, and the steadfast patience by the Mssr's Ash & Smith resulted in a stunning $12,000,000 verdict. It also, likely taught the Department of Health Services carefully consider derailing those who would make a positive contribution to their community by succesfully operating a business.

A copy of the verdict, in PDF, is available at www.fearnotlaw.com at this link.

What's the "concrete harm" in a little government surveillance?

2006-01-01T10:49:00.000-08:00

Professor Fried queries what's the "concrete harm" in a little friendly surveillance?
A few days ago the Boston Globe published this opinion piece arguing that President Bush's conduct in engaging in surveillance was justified by "urgent necessity." Nothing could be further from the truth. There has been no suggestion that the unauthorized surveillance was successful, or was even helpful. There is no guarantee that the "few key" words that Fried suggests will assist law enforcement, will not be expanded to include "code words". Could those code words be common, everday words that encompass everyone's everyday language? Of course. At what point does Fried suggest that individuals should be allowed to have unmonitored conversations; where does warrantless monitoring end?

The appropriate test for whether "concrete harm" will result from monitoring is by answering a simple question: "If every law abiding person within the United States believed that the government would monitor everything that was said to another individual, would our life change?" Obviously, the answer is "yes."

Obviously, we would not be as free to speak if we believed that a third person, who lacking the context of the relationship, of the topic, and of the entire conversation, would analyze that conversation for the presence of an intent to commit an unlawful act. The absence of an unfettered ability to speak candidly, and without reservation, would diminish the entire population's ability to create, discuss ideas, solve problems, politic, engage in business transactions, and develop personal relationships.

Professor Fried is naive to believe that the information collected would not be maintained, and would only be used for legal purposes. Assuming that no conversation is safe from electronic monitoring, is it beyond the imagination to suppose that a government employee might be able to listen in to discussions involving businesses to obtain and trade on "inside information?" The opportunities for abuse of this power are countless. Fried makes no suggestion as to how that abuse should be avoided. Rather, he merely implies by silence, that the government is beyond such reproach.

The value of privacy, i.e., the "concrete harm," arising from a loss of privacy can be easily determined by looking at totalitarian regimes who interfered with their citizens' ability to communicate without fear: the Soviet Union, North Korea, and military-junta era Argentina. Countries that were willing to impose intrusive internal security later proved incapable of creating an economy able to feed its citizens, and are now "reorganized."

The genius of the drafters' of the Fourth Amendment's proscription against unreasonable searches and seizures is now apparent. The prohibition against wire tapping, and the promise of communicative privacy, remains a bulwark of protection of the rights guaranteed by the First Amendment, which in turn allows creativity and innovation, which results in prosperity.

I can't believe a law professor, let alone a state supreme court justice, would write what Fried wrote.

Article below:

By Charles Fried | December 30, 2005

PRESIDENT GEORGE W. BUSH has acknowledged that he authorized surveillance of electronic communications between people in the United States and people beyond our borders without asking for court authorization. The president claims that congressional authorization for military action against Al Qaeda, together with his inherent constitutional powers, make such action lawful. There is some plausibility to that claim but until tested in the courts it is impossible to give a definitive opinion about it.

I am convinced of the urgent necessity of such a surveillance program. I suppose but do not know -- the revelations have been understandably and deliberately vague -- that included in what is done is a constant computerized scan of all international electronic communications. (The picture of a G-Man in the basement of an apartment house tapping into a circuit board is certainly inapposite.)

Programmed into this computerized scan are likely to be automatic prompts that are triggered by messages containing certain keywords, go to certain addresses, occur in certain patterns or after specific events. Supposedly those messages that trigger these prompts are targeted for further scrutiny.

In the context of the post-9/11 threat, which includes sleeper cells and sleeper operatives in the United States, no other form of surveillance is likely to be feasible and effective. But this kind of surveillance may not fit into the forms for court orders because their function is to identify targets, not to conduct surveillance of targets already identified. Even retroactive authorization may be too cumbersome and in any event would not reach the initial broad scan that narrows the universe for further scrutiny.

Moreover, it is likely that at the first, broadest stages of the scan no human being is involved -- only computers. Finally, it is also possible that the disclosure of any details about the search and scan strategies and the algorithms used to sift through them would immediately allow countermeasures by our enemies to evade or defeat them.

If such impersonal surveillance on the orders of the president for genuine national security purposes without court or other explicit authorization does violate some constitutional norm, then we are faced with a genuine dilemma and not an occasion for finger-pointing and political posturing.

If the situation is as I hypothesize and leads to important information that saves lives and property, would any reasonable citizen want it stopped? But if it violates the Constitution can we accept the proposition that such violations must be tolerated?

We should ask ourselves what concrete harm is done by such a program. Is a person's privacy truly violated if his international communications are subject to this kind of impersonal, computerizerd screening? If it is not, at what stage of further focus do real, rather than abstract and hysterical concerns arise? And to what extent is the hew and cry about this program a symptom of a generalized distrust of all government, or of just this administration?

If of all government, then we are in a state of mind that renders us incapable of defending ourselves from real threats. If of this administration, then can we afford to disarm the only government we have until the result of the next election, which is likely to be as partisan and closely divided as the last?

The resolution of this dilemma to allow both the use of an important tool of national security and respect for the rule of law needs ingenuity, discretion, and a good faith search for sensible solutions. So far I have heard only alarmist and hyperbolic pronouncements calculated neither to illuminate nor resolve this problem.

Charles Fried teaches constitutional law at Harvard Law School. He served as solicitor general in the second Reagan administration and as a justice on the Supreme Judicial Court of Massachusetts.

Latest decision affecting Indian Country.

2005-12-14T10:14:00.000-08:00

RUSSELL MEANS, Petitioner-Appellant, v. NAVAJO NATION, a
federally recognized Indian Tribe; RAY GILMORE, Judge of the
Judicial District of Chinle, Navajo Nation, Arizona; ROBERT
YAZZIE, Chief Justice of the Navajo Nation,
Respondents-Appellees, and UNITED STATES OF AMERICA,
Respondent-Intervenor-Appellee.

No. 01-17489

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

2005 U.S. App. LEXIS 27169

January 28, 2005 *, Resubmitted, San Francisco, California

* We withdrew submission of this case when the Supreme Court
granted certiorari in United States v. Lara, 324 F.3d 635
(8th Cir.), cert. granted, 539 U.S. 987 (2003), rev'd, 541
U.S. 493 (2004), because Lara appeared likely to resolve
many of the important and difficult issues presented in this
case. Lara was decided April 19, 2004 , but on June 10,
2004, the United States advised the court that because this
case challenged the constitutionality of a federal statute,
the United States was entitled to intervene. See 28 U.S.C. §
2403(a); Fed. R. App. P. 44. The United States filed a
motion to intervene as of right on September 2, 2004. We
granted the United States' motion, and the court
subsequently received further briefing by the intervenor,
the parties, and amicus curiae.
December 13, 2005, Filed

PRIOR HISTORY: [*1] Appeal from the United States District Court for the
District of Arizona. D.C. No. CV-99-01057-EHC. Earl H. Carroll, District Judge,
Presiding.

DISPOSITION: AFFIRMED.

COUNSEL: John Trebon, Trebon & Fine, P.C., Flagstaff, Arizona, for the
appellant.

Donovan D. Brown, Sr., Acting Deputy Assistant Attorney General, Navajo Nation
Office of the Attorney General, Window Rock, Arizona, for the appellees.

Thomas L. Sansonetti (briefed), Assistant Attorney General, U.S. Department of
Justice, Env. & Nat. Resources Division, Washington, D.C., for the intervenor.

Jon Metropoulos (briefed), Gough, Shanahan, Johnson & Waterman, Helena, Montana,
for amicus curiae Thomas Lee Morris and Elizabeth S. Morris.

JUDGES: Before: Andrew J. Kleinfeld, Johnnie B. Rawlinson, Circuit Judges, and
Justin L. Quackenbush, ** District Judge. Opinion by Judge Kleinfeld.

** The Honorable Justin L. Quackenbush, Senior United States District Judge for
the Eastern District of Washington, sitting by designation.

OPINIONBY: Andrew J. Kleinfeld

OPINION:

ORDER

The opinion filed August 23, 2005, and appearing at 420 F.3d 1037 (9th Cir.
2005), is withdrawn. Pursuant to General Order 5.3.a, an opinion is filed [*2]
contemporaneously with this order. With the withdrawal and substitution of the
opinion, the petitions for rehearing and rehearing en banc are denied as moot.
Subsequent petitions for rehearing and rehearing en banc may be filed. Federal
Rule of Appellate Procedure 40 now controls.

KLEINFELD, Circuit Judge:

This case concerns whether an Indian tribe can exercise criminal jurisdiction
over a person who is not a member of the tribe, but who is an enrolled member of
another Indian tribe.

Facts

This is an appeal from a denial of a petition for a writ of habeas corpus.
The petitioner, Russell Means, an enrolled member of the Oglala-Sioux Indian
Tribe, seeks to prevent the Navajo Nation from criminally prosecuting him in
Navajo tribal court for an incident that occurred on the Navajo Reservation.

In December 1997, Means allegedly threatened and battered his then
father-in-law, who is an Omaha Indian, and allegedly threatened another man, a
Navajo Indian. The offenses are misdemeanors under the Navajo Code, with
potential maximum penalties of 90 days in jail and a $ 250 fine for each threat,
n1 and 180 days in jail and a $ 500 fine for the [*3] battery. n2

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n1 See Navajo Nation Code tit. 17, § 310.

n2 See Navajo Nation Code tit. 17, § 316.

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Means moved in the Navajo tribal court to dismiss the tribal proceedings. He
argued that the tribal court had no jurisdiction over him because he was not a
Navajo. Means testified that he is an enrolled member of the Oglala-Sioux Tribe
of Indians and a permanent resident of Porcupine, a town in South Dakota on the
Pine Ridge Sioux Indian Reservation. Means lived on the Navajo Indian
Reservation from 1987 to 1997 when he was married to a woman who was a
half-Navajo, half-Omaha Indian. Means moved back to the Sioux reservation in
1997, and the alleged offenses occurred later when Means was visiting the Navajo
reservation.

Means testified that the difference between an Oglala-Sioux and a Navajo is
analogous to the difference in nationalities between an American and a French
person. Although Means lived on the Navajo reservation for a decade while
married to his ex-wife, he could never become a member [*4] of the Navajo tribe
because membership required at least one quarter Navajo blood. n3 Means does not
speak Navajo, and as a non-Navajo, he had difficulty obtaining employment
because of tribal preferences given to Navajos and restrictions that make it
difficult for a non-Navajo to find employment, participate in civic life, and
license a business.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n3 Enrolled membership in the Navajo Nation is conditioned upon no less than
one-fourth degree of Navajo blood. One may not become a Navajo by adoption or
custom, and one cannot become a Navajo if he is an enrolled member of another
Indian Nation or Tribe. See Navajo Nation Code tit. 1, §§ 701-703.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

The Navajo Nation trial court denied Means' motion to dismiss for lack of
jurisdiction. Means appealed to the Navajo Nation Supreme Court which also
denied his motion. The decision of the Navajo Supreme Court explains that the
Navajo reservation covers about 25,000 square miles, making it larger than many
U.S. states and foreign countries. n4 Over 9,000 Indians of other [*5] tribes
live within the Navajo Nation, so domestic violence cases involving non-Navajo
Indians arise from time to time. The Navajo Supreme Court explained that the
considerable amount of violence arising from alcohol, when combined with the
size and ethnic inclusiveness of the reservation, generates a "need to exercise
criminal jurisdiction over all who enter the Navajo Nation," not just Navajo
Indians. The Navajo Supreme Court decision says that while there are preferences
for Navajos in employment and contracting, they are not absolute barriers, and
that Means could have qualified for jury service in the Navajo tribal courts had
he been registered to vote in Arizona. The Navajo Supreme Court also noted that,
because Means had married a Navajo, he was a "hadane," or in-law, during his
residence on the reservation, connected by rights and obligations to his wife's
clan. As the Navajo Supreme Court notes, however, becoming a "hadane" does not
make one a Navajo.

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n4 The Navajo Reservation is almost three times the size of New Jersey.

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After exhausting his remedies in the Navajo courts, Means petitioned the
United States District Court for a writ of habeas corpus to enjoin the tribal
courts from proceeding further in his case. The district court denied Means's
petition, and he appeals.

Analysis

All the questions before us are purely matters of law and arise on appeal of
the district court's denial of a writ of habeas corpus under 25 U.S.C. § 1303,
so we review de novo. n5

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n5 See McCoy v. Stewart, 282 F.3d 626, 629 (9th Cir. 2002); Moore v. Nelson,
270 F.3d 789, 790-92 (9th Cir. 2001).

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I. Jurisdiction

Means has exhausted his tribal court remedies regarding jurisdiction, but he
has still not been tried for the alleged threats and battery. Nonetheless, Means
remains subject to conditions of pretrial release. Means cannot have any contact
with his former father-in-law or go within 100 yards of his former father-in-law
's home. Means also must appear as ordered by the [*7] Navajo trial court or
face re-arrest and additional punishment for any failure to appear. The district
court therefore concluded that Means was in custody for purposes of habeas
jurisdiction under Justices of Boston Municipal Court v. Lydon n6 and Hensley v.
Municipal Court. n7 The parties have not challenged that conclusion before us,
and, although we are required to examine jurisdiction sua sponte, n8 we agree
with the district court. The charges against Means remain pending in the Navajo
Nation trial court, and although the Navajo Nation and Means have stipulated to
a stay in the trial court until this appeal is decided, the Navajo Nation states
that it fully intends to prosecute Means if jurisdiction is resolved in its
favor. Accordingly, we have jurisdiction to consider this appeal.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n6 Justices of Boston Mun. Court v. Lydon, 466 U.S. 294, 300-02, 80 L. Ed. 2d
311 (1984).

n7 Hensley v. Mun. Court, San Jose-Milpitas Judicial Dist., Santa Clara
County, 411 U.S. 345, 351-52, 36 L. Ed. 2d 294 (1973).

n8 See Bernhardt v. County of Los Angeles, 279 F.3d 862, 868 (9th Cir. 2002).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*8]

II. The 1990 Amendments to the Indian Civil Rights Act

In Oliphant v. Suquamish Indian Tribe, n9 the Supreme Court held that Indian
tribes do not possess criminal jurisdiction over non-Indians. n10 In Oliphant,
the Suquamish Tribe had prosecuted two non-Indians, one for racing down a
highway and colliding with a tribal police car, and another for assaulting an
officer and resisting arrest. n11 The tribe did not claim that Congress had
given it authority to exercise jurisdiction, but rather that the tribe had an
inherent sovereign authority to exercise criminal jurisdiction over incidents
that occurred on its reservation -- an authority that Congress had never taken
away. n12 The Supreme Court disagreed and held that, although Indian tribes
enjoy some sovereign powers, their "domestic, dependent" n13 nature
distinguishes them from the governments of foreign countries. n14 It also held
that citizens of the United States who are not Indians cannot be subjected to
Indian tribal sovereignty for criminal purposes. n15

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n9 Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 55 L. Ed. 2d 209 (1978).
[*9]

n10 Id. at 194.

n11 Id.

n12 Id. at 195-96.

n13 See Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17, 8 L. Ed. 25
(1831).

n14 Oliphant, 435 U.S. at 211; see also United States v. Kagama, 118 U.S.
375, 379, 30 L. Ed. 228 (1886).

n15 Oliphant, 435 U.S. at 212.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Following Oliphant, the Supreme Court suggested in United States v. Wheeler
n16 that the inherent sovereignty of a tribe might extend only to its own
enrolled members. n17 Then, in Duro v. Reina, n18 the Court explicitly held that
"the retained sovereignty of the tribe as a political and social organization to
govern its own affairs does not include the authority to impose criminal
sanctions against a citizen outside its own membership." n19 Duro reasoned that,
as American citizens, n20 Indians were entitled not to be subjected to the
criminal authority of sovereigns of which they were not and could not become
full members. n21

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n16 United States v. Wheeler, 435 U.S. 313, 55 L. Ed. 2d 303 (1978). [*10]

n17 Id. at 323, 326-29.

n18 Duro v. Reina, 495 U.S. 676, 109 L. Ed. 2d 693 (1990).

n19 Id. at 679.

n20 See Indian Citizenship Act of 1924, 8 U.S.C. § 1401(b).

n21 Duro, 495 U.S. at 692-93.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

In 1990 Congress responded to Indian tribes' concerns about the holding in
Duro by amending n22 the Indian Civil Rights Act n23 to say that the "powers of
self-government" of Indian tribes "means the inherent power of Indian tribes,
hereby recognized and affirmed, to exercise criminal jurisdiction over all
Indians." n24 "All Indians" plainly includes Indians who are not enrolled
members of the particular tribe exercising jurisdiction. It is significant for
the equal protection discussion below, however, that the 1990 Amendments do not
cover all persons who may be ethnically Indian. In addition to extending tribal
criminal jurisdiction to "all" Indians, the 1990 Amendments make it plain that
the definition of "Indian" is the same as "Indian" in the Major Crimes Act. n25

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n22 See Pub. L. 101-511, Title VIII, § 8077(b)-(c), 104 Stat. 1892 (1990).
[*11]

n23 Indian Civil Rights Act of 1968, 25 U.S.C. §§ 1301-1303.

n24 25 U.S.C. § 1301(2).

n25 18 U.S.C. § 1153.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

The 1990 Amendments define "Indian" as "any person who would be subject to
the jurisdiction of the United States as an Indian under section 1153, Title 18,
if that person were to commit an offense listed in that section in Indian
country to which that section applies." n26 The statute referred to, 18 U.S.C. §
1153 (the Major Crimes Act), says it applies to "any Indian." n27 In United
States v. Antelope, n28 enrolled Indians prosecuted under the Major Crimes Act
argued that they were denied equal protection of the laws, because, had they not
been Indians, they would have been prosecuted under more favorable state law.
The Court described the federal scheme as one in which "except for the offenses
enumerated in the Major Crimes Act, all crimes committed by enrolled Indians
against other Indians within Indian country are subject to the jurisdiction of
tribal courts." The Court rejected [*12] the Equal Protection challenge because
"respondents were not subjected to federal criminal jurisdiction because they
were of the Indian race but because they were enrolled members of the Coeur d
'Alene Tribe." n29 The Court pointed out that "federal jurisdiction under the
Major Crimes Act does not apply to 'many individuals who are racially to be
classified as "Indians."'" n30 The Court noted in dictum that lower courts had
held that enrollment was not an "absolute" requirement for federal jurisdiction
in some circumstances, but because respondents were enrolled, the Court was "not
called upon to decide" whether enrollment was an absolute requirement and
"therefore intimated no views on the matter." n31

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n26 25 U.S.C. § 1301(4).

n27 See 18 U.S.C. § 1153(a).

n28 United States v. Antelope, 430 U.S. 641, 51 L. Ed. 2d 701 (1977).

n29 Id. At 646.

n30 Id. at 646 n.7 (quoting Morton v. Mancari, 417 U.S. 535, 553 n.24, 41 L.
Ed. 2d 290 (1974)).

n31 Id. At 646-47, n. 7.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*13]

Taken together, the 1990 Amendments, the Major Crimes Act, and Antelope mean
that the criminal jurisdiction of tribes over "all Indians" recognized by the
1990 Amendments means all of Indian ancestry who are also Indians by political
affiliation, not all who are racially Indians. For that reason, subjecting Means
to tribal court jurisdiction but not non-Indians, is, as we explain further
below, not a racial classification.

Means argues that the 1990 Amendments were outside the powers of Congress
because they were an unconstitutional delegation of federal governmental
authority and because they went beyond the congressional power authorized under
the Indian Commerce n32 and Treaty n33 Clauses. Indian tribes are not bound by
the United States Constitution in the exercise of their powers, including their
judicial powers, n34 so federal judicial power over nonmembers could not be
delegated to them. n35

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n32 U.S. Const. art. I, § 8, cl. 3.

n33 U.S. Const. art. II, § 2, cl. 2.

n34 See Talton v. Mayes, 163 U.S. 376, 382-85, 41 L. Ed. 196 (1896).

n35 See Duro, 495 U.S. at 686.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*14]

Following the 1990 Amendments, Means's theory was tested in other cases.
Double jeopardy cases examined whether the statutory language, "recognizing and
affirming" the power of tribes over nonmember Indians rather than "delegating"
it, avoided double jeopardy problems when both a tribe and the federal
government punished someone for the same conduct. If the tribe was exercising
its inherent sovereign authority, an Indian defendant could be punished in both
the tribal court as well as in federal district court under the "dual
sovereignty" doctrine. n36 If the tribe was exercising delegated federal power,
then the federal government would be punishing the Indian twice for the same
conduct, which it could not do under the double jeopardy clause. n37 More
broadly, after the Supreme Court in Duro had concluded that the tribe had not
retained sovereign power over nonmember Indians, n38 the question was whether
Congress even had the ability to "recognize" an inherent power. n39

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n36 See, e.g., United States v. Lara, 324 F.3d 635, 636 (8th Cir. 2003) (en
banc), rev'd, 541 U.S. 193, 158 L. Ed. 2d 420 (2004); United States v. Enas, 255
F.3d 662, 675 (9th Cir. 2001) (en banc). [*15]

n37 See Enas, 255 F.3d at 667.

n38 See Duro, 495 U.S. at 679.

n39 See Enas, 255 F.3d at 667-75.

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These questions raised by Means's statutory argument n40 have, subsequent to
the original briefing in this case, been definitively answered by the Supreme
Court. United States v. Lara n41 holds that "Congress does possess the
constitutional power to lift the restrictions on the tribes' criminal
jurisdiction over nonmember Indians as the statute seeks to do." n42 As for
whether the tribe's exercise of criminal jurisdiction was a delegated power or
an inherent sovereign power, the Court held, with certain reservations, that
"the Constitution permits tribes, as an exercise of their inherent tribal
authority, to prosecute nonmember Indians." n43 Thus, except for the questions
reserved in Lara, n44 it is settled law that, pursuant to the 1990 amendment to
the Indian Civil Rights Act, an Indian tribe may exercise inherent sovereign
judicial power in criminal cases against nonmember Indians for crimes committed
on the tribe's reservation. [*16]

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n40 Cf. Enas, 255 F.3d at 665; Means v. N. Cheyenne Tribal Court, 154 F.3d
941, 942 (9th Cir. 1998), overruled in part, Enas, 255 F.3d at 675 n.8.

n41 United States v. Lara, 541 U.S. 193, 158 L. Ed. 2d 420 (2004).

n42 Id. at 200.

n43 Id. at 210.

n44 See id. at 207-09 (declining to address equal protection and due process
challenges to the Indian Civil Rights Act).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

III. Equal Protection and Due Process

A. Equal Protection

Lara expressly declined to answer the question of whether the tribal criminal
prosecution of a nonmember Indian would violate the Due Process and Equal
Protection guarantees of the Fifth Amendment. n45 Means argues that by
recognizing tribal criminal jurisdiction over nonmember Indians, the 1990
Amendments violate the equal protection guarantees of the Fifth Amendment n46
and the Indian Civil Rights Act n47 because they discriminate against [*17] him
as an Indian, subjecting him to adverse treatment on account of his race.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n45 See id. at 208-09; see also id. at 213-14 (Kennedy, J., concurring).

n46 See U.S. Const. amend. V.

n47 See 25 U.S.C. § 1302(8).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Means's equal protection argument has real force. He argues that, although
the 1990 Amendments permit the Navajo tribe to criminally prosecute its own
members and members of other Indian tribes, the Navajo tribe cannot
constitutionally prosecute whites, blacks, Asians, or any other non-Navajos who
are accused of crimes on the reservation. n48 This makes Means's case different
from, say, an Alaskan who threatens and batters his father-in-law in Los
Angeles, and then is prosecuted by the State of California. Not only can an
Alaskan become a Californian, but the State of California, although "sovereign,"
nonetheless is bound by the Due Process and Equal Protection Clauses of the
Fourteenth Amendment. Although he is an Indian, Means [*18] is nonetheless a
citizen of the United States, entitled to the full protection of the United
States Constitution. But unlike states, when Indian tribes exercise their
sovereign authority they do not have to comply with the United States
Constitution. n49 As an Oglala-Sioux, Means can never become a member of the
Navajo political community, no matter how long he makes the Navajo reservation
his home.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n48 See Oliphant, 435 U.S. at 194.

n49 See Talton, 163 U.S. at 382-85; Trans-Canada Enterprises, Ltd. v.
Muckleshoot Indian Tribe, 634 F.2d 474, 476-77 (9th Cir. 1980). Although the
Indian Civil Rights Act imposes due process limitations upon Indian tribes, 25
U.S.C. § 1302(8), not all the constitutional restraints are imposed. They are
statutory, not constitutional, and the sole remedy for violations is habeas
corpus. See Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56-57, 56 L. Ed. 2d 106
(1978).

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Despite the force of [*19] Means's argument, we nonetheless conclude that
the weight of established law requires us to reject Means's equal protection
claim. Morton v. Mancari n50 holds (albeit in the distinguishable context of
Indian employment preferences by the federal government) that federal statutory
recognition of Indian status is "political rather than racial in nature." n51
Means argues that Mancari is undermined by Adarand Constructors, Inc. v. Pena,
n52 but both the Supreme Court and our court have continued to rely on Mancari,
n53 and we are bound to follow it under the doctrine of Agostini v. Felton. n54

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n50 Morton v. Mancari, 417 U.S. 535, 41 L. Ed. 2d 290 (1974).

n51 Id. at 553 n.24.

n52 Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 227, 132 L. Ed. 2d 158
(1995); see also Johnson v. California, 543 U.S. 499, 125 S. Ct. 1141, 1147-48,
160 L. Ed. 2d 949 (2005).

n53 See Rice v. Cayetano, 528 U.S. 495, 518-22, 145 L. Ed. 2d 1007 (2000);
Kahawaiolaa v. Norton, 386 F.3d 1271, 1279 (9th Cir. 2004). [*20]

n54 Agostini v. Felton, 521 U.S. 203, 237, 138 L. Ed. 2d 391 (1997); see also
United States v. Hatter, 532 U.S. 557, 567, 149 L. Ed. 2d 820 (2001); State Oil
Co. v. Khan, 522 U.S. 3, 20, 139 L. Ed. 2d 199 (1997); Rodriguez de Quijas v.
Shearson/Am. Express, Inc., 490 U.S. 477, 484, 104 L. Ed. 2d 526 (1989).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Mancari held that an employment preference for Indians in the Bureau of
Indian Affairs was not "invidious racial discrimination in violation of the Due
Process Clause of the Fifth Amendment" n55 because "it is not even a 'racial'
preference." n56 "Legislation that singles out Indians for particular and
special treatment" is in a special category because of the historical
relationship of the United States with the Indians and the Indian Commerce
Clause, n57 and "as long as the special treatment can be tied rationally to the
fulfillment of Congress' unique obligation toward the Indians, such legislative
judgments will not be disturbed." n58 The preference at issue passed this
"rational tie" standard, because it was "reasonable [*21] and rationally
designed to further Indian self-government." n59

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n55 Mancari, 417 U.S. at 551.

n56 Id. at 553.

n57 See id. at 551-55.

n58 Id. at 555.

n59 Id.

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We conclude that a law subjecting nonmember Indians to tribal criminal
jurisdiction in "Indian country" passes the "rational tie" standard of Mancari.
First, recognizing criminal jurisdiction of tribal courts over nonmember Indians
furthers Indian self-government. The Navajo reservation, larger than many states
and countries, has to be able to maintain order within its boundaries. The 1990
Amendments to the Indian Civil Rights Act were meant to protect Indians and
others who reside in or visit Indian country against lawlessness by nonmember
Indians who might not otherwise be subject to any criminal jurisdiction. As the
Navajo Supreme Court notes, there are a significant number of Indians who are
not Navajos but live on the Navajo reservation because of intermarriage. [*22]
It is a matter of ordinary experience that many people are not at their best
when their marriages break up, so misdemeanor jurisdiction over nonmember
Indians is rationally related to Indian self-government in an area where rapid
and effective tribal responses may be needed. The Navajo Nation has a
sophisticated body of published laws, and an experienced court system in which
trained trial and appellate judges adjudicate thousands of cases per year. If
Means was not subject to prosecution in the Navajo courts, he could not be
prosecuted in any court. The state of Arizona, like the majority of states, does
not have jurisdiction to try Indians for offenses committed on a reservation,
n60 and there is no federal court jurisdiction because Means's alleged offenses
do not fall within the Major Crimes Act. n61

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n60 See, e.g., Application of Denetclaw, 83 Ariz. 299, 320 P.2d 697, 698-701
(Ariz. 1958).

n61 See 18 U.S.C. § 1153.

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Second, the reason Congress can recognize [*23] the power of a tribe to
exercise criminal jurisdiction over a nonmember Indian like Means -- but not
over a nonmember, non-Indian who like Means might become involved in a domestic
dispute -- is the same reason given by the Supreme Court for the employment
preference in Mancari: Indian tribal identity is political rather than racial,
and the only Indians subjected to tribal court jurisdiction are enrolled or de
facto members of tribes, not all ethnic Indians.

In United States v. Antelope, Indians who were enrolled members of the Coeur
d'Alene Tribe challenged the applicability of federal law to a prosecution for a
murder that had taken place on the tribe's reservation. n62 Had they been of a
different race, they argued, a more favorable provision of state law would have
applied under the Assimilative Crimes Act, n63 rather than the less favorable
federal provision that applied under the Major Crimes Act. n64 But the Supreme
Court noted its holding in Mancari that the employment preference was granted to
Indians "not as a discrete racial group, but rather, as members of
quasi-sovereign political entities," n65 and extended Mancari even though the
context did not [*24] involve Indian self-government. The Court found that the
respondents were subjected to federal law "not because they are of the Indian
race but because they are enrolled members of the Coeur d'Alene tribe." n66

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n62 Antelope, 430 U.S. at 642-44.

n63 18 U.S.C. § 13; see United States v. McBratney, 104 U.S. 621, 621-24, 26
L. Ed. 869 (1881).

n64 18 U.S.C. § 1153.

n65 Antelope, 430 U.S. at 645 (quoting Mancari, 417 U.S. at 554).

n66 Antelope, 430 U.S. at 646.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

There is no sound distinction in principle between Antelope and this case.
The statute subjects Means to Navajo criminal jurisdiction not because of his
race but because of his political status as an enrolled member of a different
Indian tribe. n67 We need not decide whether the same principle would apply if
he had been expelled from or had voluntarily and formally withdrawn from his
tribe n68 prior to committing [*25] the alleged misdemeanors because those
hypothetical facts are not claimed in this case. Morton v. Mancari suggests that
Indians "emancipated from tribal relations" or whose tribes have been terminated
are not subject to the Major Crimes Act even if they are "racially to be
classified as 'Indians.'" n69

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n67 25 U.S.C. § 1301(2); see Antelope, 430 U.S. at 646.

n68 The authorities suggest that members of Indian tribes can renounce their
membership. See Felix S. Cohen's Handbook of Federal Indian Law 22 (1982 ed.) (
"Tribal membership is a bilateral relation, depending for its existence not only
upon the action of the tribe but also upon the action of the individual
concerned. A member of any Indian tribe is at liberty to terminate the tribal
relationship whenever he or she so chooses, although such termination will not
lightly be inferred."); see, e.g., Smith v. Bonifer, 154 F. 883, 886 (C.C.D. Or.
1907) (No. 2,683), aff'd, 116 F. 846 (9th Cir. 1909); United States ex rel.
Standing Bear v. Crook, 5 Dill. 453, 25 F. Cas. 695, 699 (C.C.D. Neb. 1879) (No.
14,891); Thompson v. County of Franklin, 180 F.R.D. 216, 225 (N.D.N.Y. 1998).
[*26]

n69 Morton, 430 U.S. at 646-47, n. 7.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Our court is among the lower courts that have gone where the Supreme Court
did not in Antelope, holding that formal enrollment in a tribe is not an
"absolute" requirement for Indian status even though it is the "common
evidentiary means of establishing Indian status." n70 United States v. Bruce n71
was a federal prosecution under 25 U.S.C. § 1152 (the Indian General Crimes Act)
for assault on a child on an Indian reservation. The defendant in Bruce argued
that she was an Indian, so she was entitled to the benefit of the exception in
that statute for crimes committed by an Indian against an Indian. She was not
enrolled in any tribe nor was she eligible for enrollment. We held (over a
strong dissent) that she was nevertheless entitled to the benefit of the Indian
exception because her mother's enrollment, two of her three children's
enrollment, and other evidence of affiliation with the tribe demonstrated "'a
sufficient non-racial link to a formerly sovereign people'" n72 to make her an
"Indian" for purposes [*27] of the exception

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n70 United States v. Bruce, 394 F.3d 1215, 1224. (9th Cir. 2005).

n71 Id.

n72 Id. At 1224 (quoting St. Cloud v. United States, 702 F. Supp. 1456, 1461
(D.S.D. 1988)).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Means's case is distinguishable from Bruce, most especially by his tribal
enrollment. We therefore can and do leave for another day the challenging
question Bruce invites: whether a person who was racially Indian, but who was
not enrolled or eligible for enrollment in any tribe, would be subject to tribal
court jurisdiction. While Bruce was a federal prosecution which would have
implicitly limited tribal sovereignty if the Indian exception did not apply,
this case is a tribal court prosecution. Means has chosen to affiliate himself
politically as an Indian by maintaining enrollment in a tribe. His Indian status
is therefore political, not merely racial. Bruce concluded, as we do, that
"Tribal courts may . . . prosecute misdemeanors against Indians [*28] who are
not members of that tribe." n73

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n73 Id. At 1220.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

B. Due Process

Because the criminal proceedings against Means in the Navajo trial court have
been stayed pending the outcome of his jurisdictional challenge, an "as applied"
due process challenge to the Navajo trial proceedings would be premature. n74
Means's facial due process challenge to the 1990 Amendments has no force.
Although the U.S. Constitution does not bind the Navajo tribe in the exercise of
its own sovereign powers, n75 the Indian Civil Rights Act confers all the
criminal protections on Means that he would receive under the Federal
Constitution, except for the right to grand jury indictment and the right to
appointed counsel if he cannot afford an attorney. n76 The right to grand jury
indictment would not pertain regardless, because Means is charged with a
misdemeanor. n77 The right to appointed counsel is conferred by the Navajo Bill
of Rights to any person within its jurisdiction. n78 Thus as a facial matter,
Means will not be [*29] deprived of any constitutionally protected rights
despite being tried by a sovereign not bound by the Constitution.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n74 See Broadrick v. Oklahoma, 413 U.S. 601, 610, 37 L. Ed. 2d 830 (1973).

n75 See Talton, 163 U.S. at 382-85.

n76 See 25 U.S.C. § 1302; Santa Clara Pueblo, 436 U.S. at 61; Randall v.
Yakima Nation Tribal Court, 841 F.2d 897, 899-900 (9th Cir. 1988).

n77 See U.S. Const. amend. V; cf. Fed. R. Crim. P. 7(a)(2).

n78 See Navajo Nation Code tit. 1.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

IV. The Treaty of 1868

The war between the United States and the Navajo Nation, which began in the
middle of the U.S. Civil War, ended in 1868 with a treaty n79 signed on behalf
of the United States by General William Tecumseh Sherman. Means argues that,
under the terms of this treaty, he may not be criminally prosecuted by the
Navajo tribe but must be turned over to the federal [*30] government for trial.

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n79 Treaty between the United States of America and the Navajo Tribe of
Indians, June 1, 1868, U.S.-Navajo, 15 Stat. 667.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Means bases his argument on the so-called "bad men" clauses of the 1868
Treaty. Indian tribes warred, not only with the federal government, but also
with other tribes. Guaranteeing that the Indians would return to a peaceful way
of life, therefore, required some means of dealing with the hostile foreign
tribes.

One clause in the 1868 Navajo Treaty -- which is identical to language used
in a number of Indian Treaties of the time -- says that

If bad men among the whites, or among other people subject to the
authority of the United States, shall commit any wrong upon the person
or property of the Indians, the United States will, upon proof made to
the agent and forwarded to the Commissioner of Indian Affairs at
Washington City, proceed at once to cause the offender to be arrested
and punished according to the laws of the United States. n80

A second clause, [*31] speaking expressly about Indians, is analogous:

If bad men among the Indians shall commit a wrong or depredation upon
the person or property of any one, white, black, or Indian, subject to
the authority of the United States and at peace therewith, the Navajo
tribe agree that they will, on proof made to their agent, and on
notice by him, deliver up the wrongdoer to the United States, to be
tried and punished according to its laws. n81

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n80 Id.

n81 Id.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Means argues that even if the Navajo Nation at one time possessed the
sovereign power to assert criminal jurisdiction over nonmember Indians, it
relinquished that right by entering into the 1868 Treaty, which requires that
the Navajo Tribe deliver the wrongdoer to the United States, to be tried and
punished according to federal, not Indian, law. Means also argues that the 1990
Amendments to the Indian Civil Rights Act cannot abrogate the protections to
which he is entitled under the 1868 Treaty because Congress has never expressly
abrogated [*32] the treaty.

The Navajo Nation, however, argues that a discussion between General Sherman
and the Navajo Chief Barboncito during the treaty negotiations expresses an
understanding that the Navajo were entitled to "drive out" raiders from the Ute
and Apache tribes who might molest them, and that the Indian "bad men" clause
therefore meant to confer jurisdiction over nonmember Indians, not to remove it.
The Navajo Nation also suggests that we are bound to defer to the understanding
of the treaty expressed well over a century after its adoption by the Navajo
Nation Supreme Court. That court found that the 1868 Treaty provides for
criminal jurisdiction over Means because he entered the Navajo Nation, married a
Navajo woman, and engaged in business and civic activities while residing on the
reservation.

We accept neither argument because the 1868 Treaty does not conflict with,
and is easily reconciled with, the language of the 1990 Amendments to the Indian
Civil Rights Act that recognizes the inherent sovereign power of the tribe. A
common sense understanding of the treaty language would be that the United
States was obligating itself to protect the Navajos from "bad men," of whom the
[*33] world is never short, and the Navajos were obligating themselves to turn
the "bad men" over to the United States when appropriate under the specified
conditions. n82 The treaty obligates the United States to arrest and punish
offenders against the Navajo, under federal law, but it does not say that the
Navajo cannot do so on their own, and there is nothing in the treaty language
inconsistent with the concurrent jurisdiction that we have recognized in other
contexts. n83

- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -

n82 Cf. Tsosie v. United States, 825 F.2d 393, 400-02 (Fed. Cir. 1987); Hebah
v. United States, 192 Ct. Cl. 785, 428 F.2d 1334, 1338-40 (Ct. Cl. 1970).

n83 See Babbitt Ford, Inc. v. Navajo Indian Tribe, 710 F.2d 587, 595-98 (9th
Cir. 1983); Arizona ex rel. Merrill v. Turtle, 413 F.2d 683, 685-86 (9th Cir.
1969); see also Williams v. Lee, 358 U.S. 217, 221-22, 3 L. Ed. 2d 251 (1959).

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

The remedies provided for by the 1868 treaty do not purport to be exclusive.
[*34] Under the treaty, Indian offenders are to be delivered to the United
States for prosecution under federal law on request. This provision, however, is
conditioned on a request from the United States's agent. The treaty conditions
have not been fulfilled in this case, so the rendition provision in the treaty
does not apply. The United States has not demanded that the Navajo turn Means
over for federal prosecution, and the Navajo have chosen to prosecute Means
themselves in tribal court, which the 1990 Amendments to the Indian Civil Rights
Act recognize they have the power to do.

Conclusion

The Navajo Nation is empowered, under the 1990 Amendments, to prosecute and
punish Indians for crimes even though they are not members of the tribe. The
denial of Means's petition for a writ of habeas corpus is

AFFIRMED.

California Overtime and Minimum Wage Rules

2005-07-03T10:09:00.000-07:00

Link to a free geocities test page that I've been practicing my html on. California Overtime and Minimum Wage Rules

San Diego Lawyer

2005-06-29T20:47:00.000-07:00

The McMillan Law Firm, APC is conveniently located in San Diego County, California. The Firm serves small businesses, employees, homeowners, in defending and prosecuting lawsuits. Our practice focuses on wage claims arising from nonpayment of overtime and minimum wage, failure to provide rest breaks, failure to provide meal periods, and failure to timely tender paychecks. San Diego's McMillan Law Firm

La Mesa Lawyer

2005-06-29T05:41:00.000-07:00

The McMillan Law Firm, APC is conveniently located in La Mesa, California. The Firm serves small businesses, employees, homeowners, in defending and prosecuting lawsuits. Our practice focuses on wage claims arising from nonpayment of overtime and minimum wage, failure to provide rest breaks, failure to provide meal periods, and failure to timely tender paychecks. La Mesa's McMillan Law Firm

Daily Cartoon - Testing a new service

2005-06-04T12:51:00.000-07:00

Pay my wage for travel to the job? Certainly, if I've got to take your bus!

2005-06-04T10:19:00.000-07:00

I keep track of the google searches that are made that result in visitors to our site. One recent search indicated that someone had a question about whether an employer was required to pay for travel to the workplace. A recent case addressing that issue is Morillion v. Royal Packing Co., 22 Cal. 4th 575, 579 (Cal., 2000).

In Morillion v. Royal Packing Co., 22 Cal. 4th 575, 579 (Cal., 2000) the California Supreme Court evaluated an employer's practice of busing farm workers to the work site. The Court adopted the rule that when an employee is "subject to the control of an employer" the employee is entitled to pay, regardless of whether the employee is sufferred to work or permitted to work.

The defendant Royal Packing Company was a agricultural company in northern California. The plaintiffs were present and past agricultural employees of Royal. Royal required plaintiffs to meet for work each day at specified parking lots or assembly areas. After plaintiffs met at these departure points, Royal transported them, in buses that Royal provided and paid for, to the fields where plaintiffs actually worked. At the end of each day, Royal transported plaintiffs back to the departure points on its buses. Royal's work rules prohibited employees from using their own transportation to get to and from the fields.

The laborers claimed that they were entitled to compensation (including overtime wages and penalties) for the time they spent traveling to and from the fields. Specifically, the employees claimed Royal should have paid them for the time they spent (1) assembling at the departure points; (2) riding the bus to the fields; (3) waiting for the bus at the end of the day; and (4) riding the bus back to the departure points.

The fact that the employer refused to allow the employees to use their own vehicles resulted in the classification of the travel time as "compulsory." This reference to distinguish between travel to and from a work site that an employer controls and requires, and an ordinary commute from home to work and back that employees take on their own. Accordingly, this compulsory travel time did not include the time employees spent commuting from home to the departure points and from the departure points back again.

Interpreting the plain language of "hours worked" in the relevant wage order, the Court found that employees' compulsory travel time, which includes the time they spent waiting for Royal's buses to begin transporting them, was compensable. Royal required plaintiffs to meet at the departure points at a certain time to ride its buses to work, and it prohibited them from using their own cars, subjecting them to verbal warnings and lost wages if they did so. By " 'direct[ing]' " and " 'command[ing]' " plaintiffs to travel between the designated departure points and the fields on its buses, Royal " 'control[led]' " them within the meaning of "hours worked" under the wage order. (Morillion v. Royal Packing Co., 22 Cal. 4th 575, 587 (Cal., 2000).)

Moral: Don't make your employees take your bus if you don't want to pay them for their travel time.

When things don't work out as planned, your pay gets docked.

2005-06-03T21:54:00.000-07:00

In Steinhebel v. Los Angeles Times Communications, 126 Cal. App. 4th 696, 700-712 (Cal. Ct. App., 2005), the 2nd District Court of Appeal has held that "draws" against ccommissioned sales people who's sales don't stick can be recovered by the employer. This is a truly interesting result.

OPINIONBY: FLIER [*700] [**353]

OPINION: FLIER, J.--Appellants, Kurt Steinhebel et al., former telesales employees of respondent Los Angeles Times Communications LLC, appeal from a summary judgment issued on the ground it was lawful for respondent to contract with such employees to pay a commission upon the sale of a subscription immediately, subject to a chargeback if the customer did not keep the subscription for at least 28 days.

After reviewing pertinent law, we conclude that respondent's chargeback policy does not violate the Labor Code and thus is lawful. n1 We accordingly affirm the judgment of the trial court.

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n1 All section references are to the Labor Code unless otherwise noted.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [***2]

FACTS n2

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n2 Respondent has moved to strike those portions of appellant's opening brief referring to facts not contained within the stipulated factual record on appeal. Alternatively, respondent requests that we disregard the passages of the opening brief referring to evidence not contained in the record. We will disregard matters not supported by the record (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 599, fn. 5 [90 Cal. Rptr. 2d 510]) and otherwise deny the motion to strike.

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Respondent is the publisher of Los Angeles's leading local newspaper. Each of the appellants worked for respondent as a telesales employee. Telesales employees telephoned prospective customers to sell them newspaper subscriptions. They also telephoned existing customers with limited subscriptions to attempt to convert their subscriptions into broader ones. The type of subscriptions sold by respondent's telesales employees enlarged over time, and the list ultimately included: (1) a daily subscription, (2) [***3] a daily subscription plus a Sunday subscription, (3) a Sunday-only subscription and (4) a "Weekender" (Saturday and Sunday) subscription. Different values were ascribed to each type of subscription sold to calculate a telesales employee's productivity and level of commission. The employee received additional commissions for sales by credit card.

Each of the appellants read and signed substantially similar versions of the Los Angeles Times Telesales Agreement (Agreement), discussed more fully below, when they began their employment, and respondent provided each with a copy of the Agreement. Respondent required each telesales employee to sign an acknowledgment confirming he or she understood the Agreement and agreed with its terms before making any sales. With the exception of commission rates and productivity calculations not material to this case, the provisions governing payment of commissions in the Agreement remained unchanged during appellants' employment. [*701]

Appellants were trained on how they should perform their jobs and received a copy of respondent's Telesales Training Manual (Training Manual). The Training Manual explained respondent's compensation policies and practices and [***4] how telesales employees were to be compensated. Each telesales employee earned an hourly base pay at the statutory minimum wage. In addition to the hourly minimum wage, telesales employees received a commission payout for each verified sale they made. It was stipulated that each telesales employee received his or her full hourly wage regardless of his or her net level of sales during a given pay period.

Under the Agreement, appellants received a commission only on "commissionable orders," defined as "a sale that is input into the L.A. Times home delivery computer ... where the customer keeps the paper for a minimum of 28 days without giving a specific stop date." Such an order [**354] may be placed for either "a customer who is inactive in the system" or "a Sunday customer who is being converted to a Daily/Sunday order or Daily Only order."

The Agreement also defined what was not a commissionable order: (1) an order with a specific stop date (term order); (2) a misrepresented order; (3) an order placed with a customer currently active in respondent's delivery system; and (4) "a chargedback order (when a customer does not keep the paper for at least 28 days)." (Italics added.) [***5]

Under respondent's policies, each time a telesales employee made a sale, the sale was subject to verification. Another employee, called a "verifier," would call the customer to ensure certain prerequisites were met before a sale could qualify for a commission payout. Specifically, the verifier ascertained whether the customer really wanted the subscription, whether the customer already had delivery of the same product and whether respondent had previous collection problems with the customer.

Respondent retained discretion to terminate or rescind a sale (an "in[-]house kill") prior to commencing delivery of the paper. In cases of an in-house kill, no sale was attributed to the telesales employee, no subscription was ever delivered to the customer and no commission was ever paid to the telesales employee for the sale. n3

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n3 The parties stipulated these in-house kills are not "chargebacks" for purposes of the summary judgment motion, and they are not at issue here.

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If the verifier verified the sale, respondent [***6] would pay out a commission to the telesales employee according to the terms of the Agreement.

The Agreement, signed by each telesales employee, provides: "Even though an order is not commissionable until the customer keeps it 28 days, [*702] The Times will pay you two weeks in advance for the order. Beginning on the second pay period after your start date, you will receive an advance against your commissions. The amount will be equal to the commissions attributable to the preceding pay period. However, if the subscription is rejected by The Times [an "in-house kill"] or by the customer before 28 days, the amount advanced in respect to the rejected subscription will be deducted from your compensation payable subsequent to the date of such rejection based on your commission rate for [the] current week and you hereby authorize such deductions." (Italics added.)

Respondent paid out commissions to a telesales employee based on his or her net sales for the week. To arrive at the net sales figure for any given week, respondent started with the employee's gross number of sales for the week and subtracted from that the number of subscriptions canceled during that week which had not been [***7] held long enough to qualify as commissionable orders. If the net amount for the week fell below zero, the commission total for the week would be deemed to be zero and any negative amount carried over into the following week.

The Training Manual advised employees that "[t]elesales representatives work a 30-hour shift weekly. Each representative should make 1 Everyday sale an hour. This represents 30 Everyday sales a week." The manual further advised the employee that "[d]ue to charge-backs it is recommended that you try and get two extra sales a day. Remember[,] the customer may change their mind and stop the paper." (Boldface omitted.)

Telesales employees were only charged back for their own noncommissionable orders. [**355]

PROCEDURAL HISTORY

Appellants filed a complaint seeking relief under sections 203 (waiting time penalties), 221 (collection or receipt of wages previously paid), 223 (secret payment of wage lower than designated scale), 225 (unlawful receipt or withholding of wages and secret payment of wage below scale) and 400 through 410 (restrictions on employee bonds, "the Employee's Bond Law") and Business and Professions Code section 17200 [***8] (unfair competition). Appellants sought relief on their own behalf and on behalf of a class of inside telephone sales representatives, telemarketers, associates and other inside sales personnel employed by respondent in California who were or are subject to chargebacks against future commissions. The complaint alleged three causes of action, seeking compensation for allegedly illegal commission chargebacks (first cause of action), waiting time penalties (second cause of action) and an injunction and monetary relief for unfair competition (third cause of action). [*703]

Respondent moved for summary judgment or, alternatively, summary adjudication of issues. Respondent asserted the first cause of action fails because respondent's commission advance/chargeback policy is lawful and the second and third causes of action also fail because they are derivative of the first cause of action. Appellants opposed the motion.

The parties jointly submitted a set of stipulated facts to the trial court as set forth above for use in the summary judgment motion. (See, e.g., Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 443 [97 Cal. Rptr. 2d 179, 2 P.3d 27].)

Based on that submission, the trial court orally granted respondent's [***9] motion for summary judgment at a hearing on September 16, 2003. The court ruled on the first cause of action that, although commissions were earned at the time work was complete, the commissions were subject to a 28-day condition precedent and that the second and third causes of action also failed because they were derivative of the first cause of action.

The trial court issued a written order granting respondent's motion for summary judgment on October 23, 2003. The court determined that appellants' first cause of action failed because respondent's chargeback policy is lawful under California's wage and hour laws, namely, sections 221, 223, 225 and 400 through 410. The court found cases such as Kerr's Catering Service v. Department of Industrial Relations (1962) 57 Cal.2d 319 [19 Cal. Rptr. 492, 369 P.2d 20] (Kerr's), Quillian v. Lion Oil Company (1979) 96 Cal. App. 3d 156 [157 Cal. Rptr. 740] (Quillian), and Hudgins v. Neiman Marcus Group, Inc. (1995) 34 Cal.App.4th 1109 [41 Cal. Rptr. 2d 46] (Hudgins), on which appellants relied, did not support a rule barring chargebacks against commission advances. The court stated those cases addressed different legal [***10] issues, such as the prohibition against employers holding employees personally financially responsible for cash shortage, breakage or loss of equipment, that were not implicated by respondent's chargeback policy.

The court ruled it was lawful for respondent to condition payment of a commission on the customer maintaining a subscription for 28 days without canceling. The court also ruled it was legal for respondent to advance a commission to its telesales employees immediately upon the sale of the subscription, subject to a chargeback if the customer canceled before the 28-day holding period was satisfied.

The court further ruled that appellants' second cause of action for waiting time penalties under section 203 and third cause of action for unfair business practices under Business and Professions Code section 17200 et seq., [**356] also [*704] failed because each is derivative of the first cause of action and appellants had agreed at the hearing that those causes of action would fail if the first cause of action failed.

The court entered a judgment in respondent's favor on October 23, 2003. Appellants timely appealed from the judgment.

STANDARD OF REVIEW [***11]

CA(1)(1) HN1Because the issues were presented on stipulated facts, the trial court ruled solely on questions of law. Accordingly, we review the matter de novo on appeal. (Carroll v. County of Los Angeles (1997) 60 Cal.App.4th 606, 608 [70 Cal. Rptr. 2d 504]; Sea World, Inc. v. County of San Diego (1994) 27 Cal.App.4th 1390, 1397 [33 Cal. Rptr. 2d 194].)

DISCUSSION

CA(2)(2) In the present case, we are presented with the issue whether an employer may advance commissions to its employees and then by agreement charge back any excess of advances over commissions earned against future advances. As we discuss below, we hold HN2an employer may legally advance commissions to its employees prior to the completion of all conditions for payment and, by agreement, charge back any excess advance over commissions earned against any future advance should the conditions not be satisfied.

1. A Chargeback of Advanced Commission Against Future Advances Does Not Violate Labor Code Section 221

Appellants contend that respondent's chargeback of commission advances against their future advances on commission is a violation of section 221. We disagree.

CA(3)(3) Section 221 provides that "HN3[i]t shall [***12] be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee." HN4Section 200, subdivision (a) defines "wages" to include "all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation." (Italics added; see Reid v. Overland Machined Products (1961) 55 Cal.2d 203, 207-208 [10 Cal. Rptr. 819, 359 P.2d 251] (Reid) [commissions are wages].) Section 200, subdivision (b) defines "labor" to include "labor, work, or service whether rendered or performed under contract, subcontract, partnership, station plan, or other agreement if the labor to be paid for is performed personally by the person demanding payment." [*705]

CA(4)(4) HN5While Reid makes clear that commissions are "wages," even under Reid contractual terms must be met before an employee is entitled to a commission. (Reid, supra, 55 Cal.2d at pp. 209-210 [trial court erred in excluding evidence that employment agreement provided commission only upon gross business invoiced during employment].)

In the present case, under the stipulated [***13] facts, appellants' commission was contingent upon two general conditions: (1) the sale had to be a "verified" sale, i.e., the customer confirmed he or she really wanted the subscription, the customer was not already taking delivery of the product purportedly sold by the salesperson and there was no prior collection problem with the customer; and (2) the customer had to keep the subscription for at least 28 days. Unless both conditions were met, there was no "commissionable sale." Appellants' commissions were predicated on a successful [**357] sale, and unless a sale met both conditions, there was in fact no sale.

Appellants executed acknowledgments indicating they read and understood the Agreement which specified that commissions were payable only on commissionable sales, i.e., subscriptions that were verified sales and were kept by the customer for at least 28 days. Appellants' right to commissions therefore must be governed by the provisions of the Agreement. (Lucian v. All States Trucking Co. (1981) 116 Cal. App. 3d 972, 975 [171 Cal. Rptr. 262] [employees who voluntarily left employment before end of accounting period not entitled to pro rata share of profits under bonus [***14] incentive plan requiring employee to work the entire accounting period before benefits vested]; Commeford v. Baker (1954) 127 Cal. App. 2d 111, 117 [273 P.2d 321] [employees' right to commission determined by terms of their contract].) "[T]he right of a salesman or any other person to commissions under given circumstances depends upon the terms of his contract for compensation." (Commeford, at p. 118.)

CA(5)(5) HN6The essence of an advance is that at the time of payment the employer cannot determine whether the commission will eventually be earned because a condition to the employee's right to the commission has yet to occur or its occurrence as yet is otherwise unascertainable. An advance, therefore, by definition is not a wage because all conditions for performance have not been satisfied.

Courts have found enforceable the terms of employment agreements providing for payment of commissions upon certain postsale conditions where the salesperson's duties included not only the initial sale but substantial follow up services to be performed in the future. (Bach v. Curry (1968) 258 Cal. App. 2d 676, 680 [66 Cal. Rptr. 220] [conditioning receipt of "service fees" [***15] upon insurance agent's continued employment found valid where agent [*706] voluntarily left employment in light of importance of maintaining continuing relationship with customer]; Powis v. Moore Machinery Co. (1945) 72 Cal. App. 2d 344, 354-355 [164 P.2d 822] [upholding agreement providing salesman would receive commissions only after goods were delivered and paid for where duties included not only initial sale of equipment but also invoicing, supervising installation of equipment and instructing customer as to its use].)

Hudgins observed that prior cases, such as Commeford, supra, 127 Cal. App. 2d 111, have dealt with "the issue of when a commission has been earned by a terminated employee on a 'sale' transaction that is not an instantaneous event (as in the context of retail sales) but, rather, is 'completed' over a relatively long period of time during which the sales agent may be required to perform additional services for the customer." (Hudgins, supra, 34 Cal.App.4th at p. 1121, fn. 9.) Although the telesales employees in this case had no further responsibilities to the customer and provided no further services to the customer once [***16] a sale was verified, the sales transactions in the present case are not instantaneous as in ordinary retail sales. A subscription by definition occurs over a period of time, and the costs of the sale must be recouped over a period which respondent has determined to be 28 days. While no additional services are required from the telesales person over this period, the value of his or her services is realized by respondent only if and after the customer maintains the subscription for the minimum period, i.e., there is in fact a commissionable sale.

CA(6)(6) Appellants were aware that a sale did not qualify as a "commissionable order" unless and until the customer kept the [**358] subscription for 28 days without a stop date. They also knew and agreed that they would receive advances before respondent could ascertain whether the sales would actually ripen into "commissionable orders." Advances on commissions under the Agreement therefore did not constitute payment of wages. The trial court correctly determined the 28-day requirement was a condition precedent to appellants' entitlement to a commission and respondent could charge back any unearned advances from appellants' future advances on commissions. [***17]

2. The Agreement Between Appellants and Respondent Was Not an Illegal Agreement for a Deduction or "Kickback" of Earned Wages

Appellants argue that section 221 specifically states that any form of taking back "wages" already paid is illegal and the Agreement here is illegal because it takes back their "wages theretofore paid." We do not agree.

CA(7)(7) HN7Section 221 prohibits an employer from collecting or receiving any part of "wages theretofore" paid an employee. Section 223 further provides [*707] that "HN8[w]here any statute or contract requires an employer to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage while purporting to pay the wage designated by statute or by contract." HN9CA(8)(8) Thus, it is unlawful for an employer to pay less than any contract or statute requires while purporting to pay the required wage.

CA(9)(9) HN10The Legislature enacted section 221 and its related provisions to proscribe secret deductions or "kickbacks" that made it appear as if an employer was paying wages in accordance with an applicable contract or statute but in fact paying less. (Hudgins, supra, 34 Cal.App.4th at p. 1118, citing Kerr's, supra, 57 Cal.2d at pp. 328-329.) [***18]

CA(10)(10) HN11Section 221 must be read with its companion statutes rather than in isolation. (Prudential Ins. Co. v. Fromberg (1966) 240 Cal. App. 2d 185, 192 [49 Cal. Rptr. 475] (Fromberg).) Section 224 provides in pertinent part that "HN12[t]he provisions of Sections 221, 222 and 223 shall in no way make it unlawful for an employer to withhold or divert any portion of an employee's wages ... when a deduction is expressly authorized in writing by the employee to cover ... deductions not amounting to a rebate or deduction from the standard wage arrived at ... pursuant to wage agreement or statute ... ." CA(11)(11) Under Fromberg, HN13an employee's compensation remains "subject to all the contingencies set forth in the parties' agreement." (Fromberg, at p. 192.)

CA(12)(12) HN14In referring to "wages" paid, section 221 prohibits an employer only from collecting or receiving wages that have already been earned by performance of agreed-upon requirements. Prior cases have sanctioned arrangements whereby an employer makes advances on commissions to employees and later reconciles any overpayments by deductions from future commissions. (See Korry of California v. Lefkowitz (1955) 131 Cal. App. 2d 389, 393 [280 P.2d 910] [***19] [allowing recovery of excess of advances over earned commissions where agreement specifically provided employee would have weekly advance that would be charged against his commissions]; Agnew v. Cameron (1967) 247 Cal. App. 2d 619, 622, 624 [55 Cal. Rptr. 733] ["it is clearly the law in California that a salesman is required to repay the excess of advances made over commissions earned when there is an express agreement on the part of the salesman to repay such excess"; "when there is an express or implied promise by the salesman to repay excess advances to his principal, the salesman [**359] is obliged to repay the surplus 'draws'"].)

Appellants argue that, once paid to an employee, an advance can never be legally "collect[ed]" or "receive[d]" from an employee because it is part of "wages theretofore paid" under section 221. We do not agree. [*708]

Each appellant was informed at the time of employment that he or she would be paid the minimum wage plus a commission on any sales where the customer maintains a subscription for at least 28 days. Under the Agreement, respondent agreed to provide appellants with an advance against his or her future commission and appellants agreed [***20] and authorized respondent to deduct from his or her future advance "the amount advanced in respect to [a] rejected subscription ... based on [his or her] commission rate for [the] current week ... ."

It was stipulated that each telesales employee received his or her full hourly statutory minimum wage regardless of the net level of sales during a given pay period. Appellants therefore received a lawful compensation for their hours of work. Under the Agreement, telesales employees were further provided with an opportunity to obtain additional compensation for their productivity based on commissionable sales. Appellants were on notice and agreed that their future commission advances were subject to a chargeback for past advances that failed to qualify as an earned commission. The Training Manual specifically informed appellants that they should make one "Everyday" sale an hour or 30 "Everyday" sales per week and they should attempt to get two extra sales a day to cover anticipated chargebacks.

CA(13)(13) HN15A chargeback on future commission advances does not take back wages "theretofore paid" or encompass an improper or unfair deduction to an employee's wages. As respondent explains, when [***21] a chargeback occurs, respondent does not take back wages from telesales employees. Respondent merely reduces the amount of the next advance to the employee to account for the fact that the earlier advance never ripened into a commissionable order. Such advances allow an employee immediate access to cash rather than having to wait until all contingencies, such as the 28-day waiting period here, have been satisfied and provide an incentive to increase sales for the employer. Appellants bear the reasonable risk that the customer may not retain the subscription for at least 28 days, in which case the minimum hourly wage serves as his or her compensation for the time spent. Respondent correspondingly bears the risks of the customer not paying the bill at all or canceling on or after the 29th day. If the sale is commissionable, a telesales employee receives his or her full commission. Payment of a commission does not depend in any way on whether the customer pays for the subscription. Even if the customer fails to pay for a commissionable subscription, respondent bears the costs of initiating the subscription, billing, collecting and maintaining the subscription and all the attendant costs [***22] of producing and delivering its newspaper.

In this way, a highly productive employee could increase sales and, thus, profits for his or her employer and at the same time be rewarded for the [*709] increased value of his or her labor. Such advances work to the benefit of employees and are to be encouraged, since they provide present income even though subject to adjustment once initial sales have been reconciled with commissionable sales. On the other hand, if appellants are correct that once paid an employer can never recoup advanced commissions from an employee, an employer would not maintain such a practice because it would shift the risk of cancellation prior [**360] to the expiration of the 28-day period to the employer.

Compensating employees in part with advances on commissions is a longstanding practice. No prior case has held the practice to violate the California Labor Code, and we are pointed to no statute that expressly bars such a practice. In view of its widespread nature, we are loath to hold the Labor Code bars such a practice by implication. Should we hold such a beneficial arrangement in violation of statute, the most likely result would be the elimination of commissions and any [***23] incentive or opportunity for employees to earn income exceeding their hourly wage in proportion to their efforts.

Appellants cite Boothby v. Atlas Mechanical, Inc. (1992) 6 Cal.App.4th 1595 [8 Cal. Rptr. 2d 600], for the proposition that California law makes it extremely difficult for anyone, including an employer, to simply take money from an employee's wages. Boothby, however, is of no assistance to appellants. In Boothby, the court held that a proportionate right to a paid vacation vests as labor is rendered, and a forfeiture of vested vacation pay by an employee's failure to take a vacation during a prescribed time period is a violation of applicable statutes. (Id. at pp. 1601-1602.) Even so, the court held an employment agreement that precludes an employee from accruing more vacation time, after he or she accumulates a certain amount of unused vacation time, is not an attempted illegal forfeiture of vested vacation. (Id. at p. 1602.) "A 'no additional accrual' policy simply provides for paid vacation as part of the compensation package until a maximum amount of vacation is accrued." (Ibid.) In the present case, even if commissions may [***24] be earned when the sale is made, the employer may properly condition the right to receive the commission upon the customer keeping the subscription for at least 28 days without an illegal forfeiture.

Relying on Barnhill v. Robert Saunders & Co. (1981) 125 Cal. App. 3d 1, 6 [177 Cal. Rptr. 803] (Barnhill), appellants contend that a paycheck belongs to an employee and the employer "may not use self-help to offset claims that money previously paid was just an un-earned advance." In Barnhill, the court held that an employer could not set off a debt owing it by an employee against the employee's wages. "Permitting [an employer] to reach [an employee's] wages by setoff would let it accomplish what neither it nor any other creditor could do by attachment and would defeat the legislative policy [*710] underlying that exemption." (Ibid.) Barnhill, however, merely held that an employer could not take advantage of its status as an employer to place itself at an advantage over other creditors by unilaterally recouping a debt from its employee's paycheck. (Ibid.)

That, however, is not the case here. The chargeback procedure was used to reconcile unearned commissions [***25] by reducing the next advance to the employee against commissions. Such a procedure is permissible under Fromberg, supra, 240 Cal. App. 2d 185, where the court found an employer's practice of advancing sums to its salesperson that were then charged back against the salesperson's actual commissions to equalize his take-home pay did not violate California law. (Id. at pp. 188, 192.)

Incentive salary plans, as in Fromberg and the present case, differ from self-help situations as in Phillips v. Gemini Moving Specialists (1998) 63 Cal.App.4th 563, 567 [74 Cal. Rptr. 2d 29], where the employer attempted to collect a debt owed by its employee by unilaterally deducting the debt from his wages without his consent. Indeed, Phillips itself distinguished its [**361] facts from the incentive salary plan in Fromberg, noting that "Prudential's withholding of its advances from the plaintiff's commissions was simply in accordance with its salary plans." (Phillips, supra, at p. 574, fn. 5.) Here, as in Fromberg, the withholding of advances from commissions was simply in accordance with the Agreement entered into by appellants and respondent. [***26]

Since appellants read, signed, acknowledged and received the Agreement at the onset of their employment, appellants were well aware that sales were not commissionable unless the customer kept the subscription for at least 28 days. Each appellant was also aware that he or she was to receive "an advance against [his or her] commissions" equal to the commissions attributable to the preceding pay period. Each was further aware of respondent's chargeback procedure and each signed an acknowledgement that he or she had read and understood what was set forth. In those acknowledgements, each appellant stated he or she "hereby authorize[d] such deductions" to be taken from his or her "compensation payable subsequent to the date of such rejection based on [his or her] commission rate for [the] current week."

The Agreement between appellants and respondent was therefore not an illegal agreement for a deduction or "kickback" of earned wages.

3. Cases Holding That an Employee Cannot Be Charged with Business Losses Do Not Apply

Appellants contend that because wages are accorded special consideration in California, sections 221 and sections 400 through 410 prohibit deductions [***27] [*711] from an employee's wages for business losses unless the employer establishes the loss was caused by a dishonest or willful act, or by the culpable negligence of the employee. (Hudgins, supra, 34 Cal.App.4th at p. 1111.)

In urging this position, appellants rely on a series of cases relating to an employer's deductions from wages for cash or merchandise shortages or other business losses. (Kerr's, supra, 57 Cal.2d 319; Quillian, supra, 96 Cal. App. 3d 156; Hudgins, supra, 34 Cal.App.4th 1109; Ralphs Grocery Co. v. Superior Court (2003) 112 Cal.App.4th 1090 [5 Cal. Rptr. 3d 687] (Swanson).) We find such cases inapplicable.

CA(14)(14) Kerr's, Quillian, Hudgins and Swanson all hold that HN16an employer cannot force an employee to become an insurer of the employer's business by making deductions for cash, merchandise and other business shortages from an employee's wages. Indeed, in holding deductions for unidentified sales returns unlawful, Hudgins implicitly sanctioned deductions for identified sales returns where the individual sales associate was required to return a commission [***28] because a sale he or she had made was rescinded. (See Hudgins, supra, 34 Cal.App.4th at p. 1122 ["As to identified returns, the sale is reversed and the individual sales associate is required to return the commission because his or her sale was rescinded"].) As in Hudgins, the sales in question here were in effect "rescinded," making advanced commissions subject to chargeback, by the customer's failure to keep the subscription for at least 28 days.

As explained above, respondent's chargeback policy does not hold appellants personally financially responsible for cash or merchandise shortages or business losses. Respondent merely imposed reasonable conditions on payment of commission. In charging excess advances to future advances on commission, respondent is not "taking back" any of the wages "therefore [**362] paid" or charging any "business losses" to appellants.

4. Appellants' Remaining Causes of Action Are Not Viable

Appellants conceded at the hearing in the trial court that the claims for waiting time penalties and violation of the unfair competition law are derivative of their claim for unlawful chargebacks. Accordingly, we need not separately [***29] discuss these claims.

In any case, these claims fail on their merits.

Section 203 provides, in pertinent part: "HN17If an employer willfully fails to pay, without abatement or reduction, ... any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action [*712] therefore is commenced; but the wages shall not continue for more than 30 days. ..." Because respondent did not violate section 221, there was no failure to pay "without abatement or reduction," and appellants are not entitled to any waiting time penalties under section 203.

CA(15)(15) HN18While an employer's policy or practice that violates the Labor Code may also be held an "unlawful business practice" under Business and Professions Code section 17200 et seq. (see Hudgins, supra, 34 Cal.App.4th at p. 1126), where, as here, an employer's policy is lawful and permissible, there is no basis for relief under the unfair competition law. (See Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 827-830 [135 Cal. Rptr. 2d 1, 69 P.3d 927].)

DISPOSITION

The judgment is affirmed. Respondent is [***30] to recover its costs on appeal.

Rubin, Acting P. J., and Boland, J., concurred.

Commission Sales Problems - No problem!

Criminal defendants now have a better chance at discovery of cop misconduct; finally.

2005-06-03T21:39:00.000-07:00

According to the California Supreme Court's opinion in Warrick v. Superior Court, 2005 Cal. LEXIS 5782 (Cal., 2005), Criminal defendants now need only that misconduct "might have occurred." Given the fact that most declarations are made by counsel on information and belief, this relaxed standard will eliminate much of the difficulty and harassment inflicted by criminal court judges with the assistance of prosecutor friendly. Here's the opinion:

On a showing of good cause a criminal defendant is entitled to discovery of relevant documents or information in the personnel records of a police officer accused of misconduct against the defendant. (Evid. Code, § 1043, subd. (b).) Good cause for discovery exists when the defendant shows both “ ‘materiality’ to the subject matter of the pending litigation and a ‘reasonable belief’ that the agency has the type of information sought.” (City of Santa Cruz v. Municipal Court (1989) 49 Cal.3d 74, 84 (Santa Cruz).) A showing of good cause is measured by “relatively relaxed standards” that serve to “insure the production” for trial court review of “all potentially relevant documents.” (Ibid.)
At issue here is the first part of the good cause requirement—the materiality to the pending litigation of the discovery sought. Specifically, the question is this: What must the defendant show to warrant the court’s in-chambers review of documents or information in the officer’s personnel file that is potentially relevant to the claimed misconduct? We hold that to obtain in-chambers review a defendant need only demonstrate that the scenario of alleged officer misconduct could or might have occurred.
I.
According to the police report, which was attributable to the three arresting officers, about 6 p.m. on April 23, 2002, Officers Quezada, Lopez, and Ramirez of the Special Enforcement Unit of the Los Angeles Police Department (LAPD) were in a marked car patrolling Fifth Street between Spring Street and Towne Avenue, an area known for violent crime and narcotics activities. The officers noticed defendant standing next to a wall looking at a clear plastic baggie in his left hand; the baggie contained “off-white solids.” When the officers got out of the patrol car, defendant fled, discarding “numerous” off-white lumps “resembling rock cocaine.” While Officer Quezada retrieved 42 lumps from the ground, Officers Lopez and Ramirez arrested defendant after a short pursuit. Defendant had an empty baggie in his hand; his pockets contained $2.75 in cash and three porcelain sparkplug chips, which Officer Quezada described as “a common tool” of auto thieves for smashing car windows. Defendant was arrested for possession of cocaine for sale (Health & Saf. Code, § 11351.5), and for possession of burglary tools (Pen. Code, § 466). At the time of the arrest, defendant was on parole for burglary.
Defendant was charged with one count of possessing cocaine base for sale (Health & Saf. Code, § 11351.5), and was alleged to have a prior conviction for a serious or violent felony (Pen. Code, §§ 1170.12, subds. (a)-(d), 667, subd. (b)), as well as having served a prior prison term (id., § 667.5, subd. (b)). Defendant pled not guilty and denied the allegations.
Before trial, defendant filed a so-called Pitchess motion (Pitchess v. Superior Court (1974) 11 Cal.3d 531 (Pitchess)) under section 1043 for disclosure of any previous citizen complaints against the three arresting officers for making false arrests, falsifying police reports, or planting evidence. Defendant also sought discovery of a long list of other misconduct by the officers. (See post, pp. 9-10.)
In support of the motion, defense counsel submitted a declaration giving this version of the events leading to defendant’s arrest: When the three officers got out of the patrol car, defendant, who feared an arrest on an outstanding parole warrant, started to run away, but within moments the officers caught up with him. Meanwhile, there were “people pushing and kicking and fighting with each other” as they collected from the ground objects later determined to be rock cocaine. After two officers retrieved some of the rocks, an officer told defendant, “ ‘You must have thrown this.’ ” Defendant denied possessing or discarding any rock cocaine. He said he was in the area to buy cocaine from a seller who was present there. Defense counsel suggested that the officers, not knowing who had discarded the cocaine, falsely claimed to have seen defendant, who was running away, do so. Seeking to show that the officers had falsely arrested defendant and fabricated the facts in the arrest report, the defense sought to discover previous complaints against the officers for dishonesty.
In opposition, the city attorney on behalf of the LAPD argued that defendant had done nothing more than deny his guilt, and that he had not affirmatively set out any facts to describe a specific factual scenario. Arguing that defense counsel’s declaration was essentially a denial of the charges, the “logical equivalent” of defendant’s not guilty plea, the city attorney maintained that defendant “needs to assert plausible facts, not reenter his plea.” The city attorney also asserted that defendant’s contention that the officers falsely claimed to have seen defendant discard the cocaine was not plausible because defendant failed to explain how he happened to be in precisely the area where rock cocaine was allegedly discarded by another person, or why the officers would accuse him of having possessed the cocaine, or knowing that he was innocent why they would have planted it on him. According to the city attorney, a scenario “which might have happened” was implausible; to be plausible a scenario must be “believable.”
Concluding that defendant had not made the required showing of good cause, the trial court declined to order the LAPD to produce the officers’ records for in-chambers review, and it denied defendant’s Pitchess motion. Referring to the allegations in defense counsel’s affidavit the trial court stated: “It appears to me that this is not police misconduct but really an argument about what happened, one that should be resolved by the trial court, but not one that gives rise to looking at a police personnel file based on the paucity of information and the implausibility of the defendant’s allegation as to why somehow these officers must have engaged in misconduct.” The court paraphrased defendant’s claim of officer misconduct in these words: “ I don’t know what they did, but I did not have drugs, therefore they must have done something wrong. ”
In August 2002, after the Court of Appeal’s summary denial of his petition for a writ of mandate, defendant sought review in this court. We granted review and transferred the matter to the Court of Appeal, directing that court to issue an order to show cause why defendant was not entitled to the relief he sought. After issuing the order and receiving briefing from the parties, the Court of Appeal denied issuance of the writ. It held that defendant had satisfied only one of the two requirements for good cause. The Court of Appeal acknowledged that defense counsel’s declaration presented a specific factual scenario of police misconduct. But the court concluded, as the trial court had, that defendant’s declaration failed to satisfy “the second element of good cause, the articulation of a ‘plausible factual foundation’ ” for his officer misconduct claim. Quoting a dictionary definition of the word plausible as “ ‘worthy of approval or acceptance; credible; believable,’ ” the Court of Appeal concluded that defendant’s factual scenario failed to show “a degree of reasonable probability, a degree of apparent credibility greater than mere possibility.” It held that the trial court had not abused its discretion in denying defendant’s Pitchess motion, and it denied defendant’s petition for a writ of mandate. As we explain below, the Court of Appeal applied a stricter standard for obtaining in-chambers review of officer personnel information than is required by law.
II.
This court’s 1974 decision in Pitchess, supra, 11 Cal.3d at pages 536 to 537, established that a criminal defendant could “compel discovery” of certain relevant information in the personnel files of police officers by making “general allegations which establish some cause for discovery” of that information and by showing how it would support a defense to the charge against him.
In 1978, the California Legislature codified the holding of Pitchess by enacting Penal Code sections 832.7 and 832.8, as well as Evidence Code sections 1043 through 1045. (Added by Stats. 1978, ch. 630, §§ 1-3 & 5-6, pp. 2082-2083; see City of Los Angeles v. Superior Court (2002) 29 Cal.4th 1, 9.) To initiate discovery, the defendant must file a motion supported by affidavits showing “good cause for the discovery,” first by demonstrating the materiality of the information to the pending litigation, and second by “stating upon reasonable belief” that the police agency has the records or information at issue. (§ 1043, subd. (b)(3).) This two-part showing of good cause is a “relatively low threshold for discovery.” (Santa Cruz, supra, 49 Cal.3d at p. 83.)
If the trial court finds good cause for the discovery, it reviews the pertinent documents in chambers and discloses only that information falling within the statutorily defined standards of relevance. (People v. Mooc (2001) 26 Cal.4th 1216, 1226-1227; see City of Los Angeles v. Superior Court, supra, 29 Cal.4th at pp. 9-10.) The trial court may not disclose complaints more than five years old, the “conclusions of any officer” who investigates a citizen complaint of police misconduct, or facts “so remote as to make [their] disclosure of little or no practical benefit.” (§ 1045, subd. (b); City of Los Angeles, supra, 29 Cal.4th at p. 9.) Typically, the trial court discloses only the names, addresses, and telephone numbers of individuals who have witnessed, or have previously filed complaints about, similar misconduct by the officer. (See Haggerty v. Superior Court (2004) 117 Cal.App.4th 1079, 1089-1090.) That practice “imposes a further safeguard to protect officer privacy where the relevance of the information sought is minimal and the officer’s privacy concerns are substantial.” (Id. at p. 1090.)
At issue here is the showing of good cause required for Pitchess discovery. According to the Court of Appeal, to establish good cause under section 1043 the defense must show materiality to the pending action by setting forth a “ ‘specific factual scenario’ ” that establishes “a ‘plausible factual foundation’ ” for the alleged officer misconduct. The quoted phrases of the Court of Appeal’s test derive from language in certain decisions of this court, which we discuss below.
III.
In Santa Cruz, supra, 49 Cal.3d at pages 78-79, the defendant, who was charged with resisting arrest, contended that officers had used excessive force to arrest him, and he sought disclosure of prior complaints of excessive force made against those officers. Defense counsel’s supporting declaration asserted that the defendant had been handcuffed, grabbed by the hair, thrown to the ground, and one officer had stepped on his head while another “ ‘twisted his arm behind his back.’ ” (Id. at p. 79.) Focusing on the materiality of the information sought to the pending litigation, we concluded that the declaration’s description of specific acts of officer force against the defendant set out “a specific factual scenario” to support the defendant’s claim of excessive force. (Id. at p. 85, italics added.) We went on to say that when considered together with the police reports (stating that one officer punched defendant and then helped another officer wrestle the defendant to the ground), “counsel’s averments establish a plausible factual foundation for an allegation of excessive force.” (Id. at p. 86, italics added.) Moreover, we continued, defense counsel’s averments “put the court on notice that the officers’ alleged use of excessive force” was a potential defense to the resisting arrest charge against the defendant, and they “articulate[d] a valid theory” of how prior excessive force complaints against the officers “might be admissible.” (Id. at p. 86.) In sum, in Santa Cruz the declaration of defense counsel “plainly demonstrated” the materiality of the information sought to the crime charged and the proposed defense to it. (Ibid.)
The origins of the “plausible factual foundation” language this court used in Santa Cruz can be traced to cases of criminal discovery predating our 1974 decision in Pitchess, supra, 11 Cal.3d 531. Eight years earlier, in Ballard v. Superior Court (1966) 64 Cal.2d 159, we stated that a criminal defendant’s motion for discovery must describe the information sought and “must be sustained by plausible justification.” (Id. at p. 167, italics added.) Thereafter, in Hill v. Superior Court (1974) 10 Cal.3d 812, we quoted the “ ‘plausible justification’ ” language from Ballard and said that a criminal defendant was “not entitled to inspect material as a matter of right” but must make “a prior showing of good cause.” (Id. at p. 817.) Three months later, we decided Pitchess. As mentioned earlier, under Pitchess a criminal defendant is entitled to discover certain information from a police officer’s personnel records that would support a defense to the charge against the defendant—a holding that the Legislature codified in 1978. Several years later, we noted the similarity between the “good cause” test of the statutory scheme and the “plausible justification” test used in our pre-Pitchess cases, and we concluded that the Legislature had not intended to abrogate that older case authority when it codified our Pitchess holding. (People v. Memro (1985) 38 Cal.3d 658, 679, fn. 19.)
IV.
In the 15 years since our decision in Santa Cruz, supra, 49 Cal.3d 74, the Courts of Appeal have repeatedly had to determine whether a defendant has shown good cause for in-chambers review of a police officer’s personnel records by making the threshold showing that the information sought is material to the pending litigation. Some Courts of Appeal have described the good cause inquiry in language that hews rigorously to descriptive terms this court used in Santa Cruz, and they assess good cause under a two-part test requiring a “specific factual scenario” that establishes a “plausible factual foundation.” (See, e.g., California Highway Patrol v. Superior Court (2000) 84 Cal.App.4th 1010, 1020-1023; City of San Jose v. Superior Court (1998) 67 Cal.App.4th 1135, 1146-1150.) Other Courts of Appeal have framed the good cause inquiry around the statutory formulation of materiality to the subject matter of the pending litigation (§ 1043, subd. (b)) or some equivalent terminology. (See, e.g., People v. Johnson (2004) 118 Cal.App.4th 292, 303 [defense counsel’s declaration provided “a sufficient factual foundation” to show materiality of the officer’s truthfulness]; People v. Hustead (1999) 74 Cal.App.4th 410, 416-417 [defendant “must make an initial showing that the information he is seeking is material to the case at hand”].)
Regardless of how the materiality inquiry is described, however, a showing of good cause requires a defendant seeking Pitchess discovery to establish not only a logical link between the defense proposed and the pending charge, but also to articulate how the discovery being sought would support such a defense or how it would impeach the officer’s version of events. This court has long required that the information sought must be described with some specificity to ensure that the defendant’s request is not so broad as to garner “ ‘all information which has been obtained by the People in their investigation of the crime’ ” but is limited to instances of officer misconduct related to the misconduct asserted by the defendant. (Pitchess, supra, 11 Cal.3d at p. 537; accord, People v. Mooc, supra, 26 Cal.4th at p. 1226; Santa Cruz, supra, 49 Cal.3d at p. 85.)
This specificity requirement excludes requests for officer information that are irrelevant to the pending charges. (See, e.g., People v. Hustead, supra, 74 Cal.App.4th at p. 416 [prior complaints of excessive force by arresting officer “irrelevant” after charge of resisting arrest was dropped and remaining charge was evasion of arrest in an automobile].) And it enables the trial court to identify what types of officer misconduct information among those requested will support the defense or defenses proposed to the pending charges. This inquiry establishes the statutorily required materiality prong of the good cause showing that a defendant must make to receive in-chambers review of potentially relevant officer records.
V.
Here, the Court of Appeal characterized defendant’s discovery request as overbroad. Defendant’s Pitchess motion sought complaints of officer misconduct and discipline relating to acts or attempted acts of “aggressive behavior, violence, excessive force, . . . racial bias, gender bias, ethnic bias, sexual orientation bias, coercive conduct, violation of constitutional rights . . . . [] . . . [and] misconduct amounting to moral turpitude” such as “false arrest, planting evidence, fabrication of police reports, fabrication of probable cause, false testimony, perjury, using excessive force, making false arrests, writing false police reports to cover up the use of excessive force, and false or misleading internal reports including . . . false overtime or medical reports.” Included in this exhaustive list were items, such as gender or sexual orientation bias, that were completely untethered either to the factual scenario or to the proposed defenses outlined in defense counsel’s declaration. At the hearing on the Pitchess motion, defense counsel did not advance any additional justification for the relevance of all the requested categories. The Court of Appeal observed that “the vast majority of categories of possible misconduct” listed by the defense had “no support” in the factual scenario outlined by counsel, and it specifically rejected the request for documents in the officers’ personnel files that would relate to false overtime claims. The Court of Appeal concluded that only information about prior complaints that any of the three officers “had made false statements in police reports” would have relevance to petitioner’s claims of officer misconduct.
The Court of Appeal also concluded that defendant had not shown good cause for discovery of prior complaints of false statements in police reports written by the three arresting officers, because he had not established a “plausible” factual scenario. Defendant’s factual scenario, according to the Court of Appeal, “was not objectively plausible,” that is, “no reasonable person would find it plausible.” Correctly acknowledging that “collateral supportive evidence” is not necessary to establish a plausible factual foundation for alleged officer misconduct, the Court of Appeal nonetheless concluded that such evidence “contributes” to such a finding.
As we mentioned earlier, defendant was charged with possessing cocaine base for sale. Defense counsel’s declaration in support of the Pitchess motion, however, denied that defendant had “possess[ed] any narcotics for the purpose of sale on the date of his arrest” and denied that defendant had discarded any rocks of cocaine. Instead, the declaration stated, defendant was at the scene to buy cocaine and, fleeing at the sight of the officers because he feared arrest for an outstanding parole warrant, ran past the actual seller. Defense counsel postulated two explanations—either the officers did not know who had discarded the rocks of cocaine and they falsely accused defendant of having done so, or they knew who had discarded the cocaine but falsely accused defendant. Under either theory, defense counsel asserted, the officers falsely arrested defendant and made false statements in the police report to support his arrest. This factual scenario, the Court of Appeal concluded, was specific. We agree.
We are not persuaded, however, by the Court of Appeal’s further conclusion that defendant’s factual foundation was not “plausible.” His proposed defense to the charge of possessing cocaine base for sale was straightforward: he asserted he did not possess, and therefore could not have discarded, the 42 rocks of cocaine. By denying the factual assertions made in the police report—that he possessed and discarded the cocaine—defendant established “a reasonable inference that the [reporting] officer may not have been truthful.” (People v. Hustead, supra, 74 Cal.App.4th at p. 418.)
In the Court of Appeal’s view, defendant’s showing fell short by not providing a plausible factual foundation for his allegations of officer misconduct. Referring to a dictionary definition, the court stated that “ ‘[p]lausible’ means ‘seemingly true’ ” and “denotes a degree of reasonable probability, a degree of apparent credibility greater than mere possibility.” The Court of Appeal, in effect, concluded that to establish good cause for Pitchess discovery a defendant must show not only that the proposed factual scenario when “[v]iewed in conjunction with the police reports” will support his allegations of officer misconduct (Santa Cruz, supra, 49 Cal.3d at p. 86), but also a reasonable probability that the defendant’s version of events actually occurred.
According to the Court of Appeal, defendant’s factual scenario was “not objectively plausible.” It reasoned that his possessing only $2.75 when arrested was materially inconsistent with his story that he was on the scene to buy, not to sell, cocaine and that he brought an empty baggie to hold his purchase. The Court of Appeal also noted that “[o]ther undisputed facts add to the implausibility of the scenario” defendant had asserted. Questioning why a person other than defendant would have discarded the 42 rocks of cocaine in public view, the Court of Appeal stated: “[I]t defies belief that a person would have followed” the fleeing defendant pursued by officers “in order to discard the cocaine in [defendant’s] proximity, in the middle of a street.”
The Court of Appeal’s conclusion that defendant’s factual scenario was implausible turns on assumptions lacking any factual basis or relies on inferences it drew that went beyond the facts as described in the police report and in defense counsel’s declaration. Defense counsel’s declaration asserted that the true seller tossed the cocaine as defendant ran past the seller “who was not running.” The police report stated that two officers pursued defendant as he ran down the sidewalk and that he discarded the cocaine as he started to run across a street. But neither the police report nor defense counsel’s declaration described the discarded cocaine as having been found “in the middle of the street,” as the Court of Appeal asserted.
Defense counsel’s declaration in support of the Pitchess motion, the parties’ argument at the hearing on the motion, and the police report make no mention of the street price of a single rock of cocaine the size of the 42 pieces recovered, which together weighed only 0.10688 of an ounce. The Court of Appeal questioned why, if defendant was buying cocaine, he had so little cash. One could just as well question why, if defendant was selling 42 rocks of cocaine, he had only $2.75 in his pockets with which to make change for his customers. Nor is it unlikely that in an area described by the officers as one of “blatant” narcotics sales, someone other than defendant might discard 42 rocks of cocaine to avoid being found in possession of a saleable quantity of drugs.
Having decided that defendant had too little cash to buy cocaine and that only he would have discarded the rocks of cocaine in question, the Court of Appeal concluded that defendant’s factual scenario was implausible, not because his version of events could not have occurred, but because in the court’s view that version of events was unlikely. In doing so, the Court of Appeal elevated the showing of good cause for Pitchess discovery beyond that required by law.
To show good cause as required by section 1043, defense counsel’s declaration in support of a Pitchess motion must propose a defense or defenses to the pending charges. The declaration must articulate how the discovery sought may lead to relevant evidence or may itself be admissible direct or impeachment evidence (People v. Hustead, supra, 74 Cal.App.4th at p. 417; Larry E. v. Superior Court (1987) 194 Cal.App.3d 25, 32-33) that would support those proposed defenses. These requirements ensure that only information “potentially relevant” to the defense need be brought by the custodian of the officer’s records to the court for its examination in chambers. (People v. Mooc, supra, 26 Cal.4th at p. 1216; Santa Cruz, supra, 49 Cal.3d at p. 84.)
Counsel’s affidavit must also describe a factual scenario supporting the claimed officer misconduct. That factual scenario, depending on the circumstances of the case, may consist of a denial of the facts asserted in the police report. In People v. Hustead, supra, 74 Cal.App.4th 410, a defendant facing a charge of felony evasion of arrest brought after a high-speed automobile chase sought Pitchess discovery of whether the pursuing officer had “a history of misstating or fabricating facts” in police reports. (Id. at p. 416.) In support of the motion, the defense declaration denied that defendant had driven in the way or along the route described by the officer. (Id. at p. 417.) Presiding Justice Ardaiz, writing for the Court of Appeal in Hustead, concluded that the defendant had met his burden of making “an initial showing that the information he is seeking is material to the case at hand.” (Id. at p. 416.) In other words, defense counsel’s declaration in Hustead made allegations sufficient to “establish a plausible factual foundation” for a defense that the defendant did not drive in the fashion described in the police report and that the officer’s report was untrue. (Id. at p. 417.)
In other cases, the trial court hearing a Pitchess motion will have before it defense counsel’s affidavit, and in addition a police report, witness statements, or other pertinent documents. The court then determines whether defendant’s averments “[v]iewed in conjunction with the police reports,” and any other documents suffice to “establish a plausible factual foundation” for the alleged officer misconduct and to “articulate a valid theory as to how the information sought might be admissible” at trial. (Santa Cruz, supra, 49 Cal.3d at p. 86.) Although a Pitchess motion is obviously strengthened by a witness account corroborating the occurrence of officer misconduct, such corroboration is not required. What the defendant must present is a specific factual scenario of officer misconduct that is plausible when read in light of the pertinent documents. (Santa Cruz, supra, 49 Cal.3d at p. 86; Haggerty v. Superior Court, supra, 117 Cal.App.4th at p. 1087.)
A Pitchess motion need not, however, provide a motive for the alleged officer misconduct. We do not require the prosecutor to prove motive at trial in order to obtain a conviction. (CALJIC No. 2.51.) It would be anomalous to require a criminal defendant to do so in order to obtain discovery. Moreover,

because most defendants will only be able to postulate an officer’s motive for misconduct, to require every defendant to demonstrate a motive would require most of them “to allege with particularity the very information” they seek to discover. (People v. Memro, supra, 38 Cal.3d at p. 684.) Imposing a motive requirement would be contrary to the principles of discovery and would, in most instances, require defense counsel to engage in rank speculation.
The question remaining is this: What degree or quantity of justification must the moving party offer to establish a plausible factual foundation for the claim of officer misconduct? Here, the Court of Appeal concluded that to be plausible a factual foundation must be reasonably probable or apparently credible and not merely possible. In so doing, the Court of Appeal imposed a greater burden on the party seeking Pitchess discovery than required by our prior cases or the statutory scheme. To require a criminal defendant to present a credible or believable factual account of, or a motive for, police misconduct suggests that the trial court’s task in assessing a Pitchess motion is to weigh or assess the evidence. It is not. A trial court hearing a Pitchess motion normally has before it only those documents submitted by the parties, plus whatever factual representations counsel may make in arguing the motion. The trial court does not determine whether a defendant’s version of events, with or without corroborating collateral evidence, is persuasive—a task that in many cases would be tantamount to determining whether the defendant is probably innocent or probably guilty. (See People v. Johnson, supra, 118 Cal.App.4th at p. 304.)
Moreover, a credibility or persuasiveness standard at the Pitchess discovery stage would be inconsistent with the statutory language and with our previous decisions requiring only that defense counsel’s affidavit or declaration supporting a defendant’s Pitchess motion be made on information and belief. (§ 1043, subd. (b)(3); People v. Mooc, supra, 26 Cal.4th at p. 1226; Santa Cruz, supra, 49 Cal.3d at pp. 86-89; Fletcher v. Superior Court (2002) 100 Cal.App.4th 386, 395.) As we have previously noted, the legislative history of section 1043 shows that the “Legislature expressly considered and rejected a requirement” that counsel’s affidavit be made on personal knowledge. (Santa Cruz, supra, 49 Cal.3d at pp. 88-89, original italics.) Because defense counsel would only rarely be present when the alleged officer misconduct occurred, counsel has little information to offer based on counsel’s personal knowledge.
What standard must a moving party meet to show a “plausible” factual foundation for the Pitchess discovery requested? We conclude that a plausible scenario of officer misconduct is one that might or could have occurred. Such a scenario is plausible because it presents an assertion of specific police misconduct that is both internally consistent and supports the defense proposed to the charges. A defendant must also show how the information sought could lead to or be evidence potentially admissible at trial. Such a showing “put[s] the court on notice” that the specified officer misconduct “will likely be an issue at trial.” (Santa Cruz, supra, 49 Cal.3d at p. 86.) Once that burden is met, the defendant has shown materiality under section 1043.
To determine whether the defendant has established good cause for in-chambers review of an officer’s personnel records, the trial court looks to whether the defendant has established the materiality of the requested information to the pending litigation. The court does that through the following inquiry: Has the defense shown a logical connection between the charges and the proposed defense? Is the defense request for Pitchess discovery factually specific and tailored to support its claim of officer misconduct? Will the requested Pitchess discovery support the proposed defense, or is it likely to lead to information that would support the proposed defense? Under what theory would the requested information be admissible at trial? If defense counsel’s affidavit in support of the Pitchess motion adequately responds to these questions, and states “upon reasonable belief that the governmental agency identified has the records or information from the records” (§ 1043, subd. (b)(3)), then the defendant has shown good cause for discovery and in-chambers review of potentially relevant personnel records of the police officer accused of misconduct against the defendant.
Here, defendant’s version of events is plausible given the factual scenario described in defense counsel’s declaration. The declaration asserted that the officers mistook defendant for the person who actually discarded the cocaine, and falsely accused him of having done so. The scenario described in defense counsel’s declaration is internally consistent; it conflicts with the police report only in denying that defendant possessed any cocaine and that he was the one who discarded the rocks of cocaine found on the ground. Those denials form the basis of a defense to the charge of possessing cocaine for sale. Thus, defendant has outlined a defense raising the issue of the practice of the arresting officers to make false arrests, plant evidence, commit perjury, and falsify police reports or probable cause. (People v. Jackson (1996) 13 Cal.4th 1164, 1220 [overbroad discovery request is properly narrowed by the trial court to misconduct similar to that alleged]; People v. Memro, supra, 38 Cal.3d at pp. 681-683 [“evidence that the interrogating officers had a custom or habit of obtaining confessions by violence, force” or threats would be admissible to support a coerced confession claim].) Defendant has established the relevance of such information to his pending trial (see, e.g., People v. Gill (1997) 60 Cal.App.4th 743, 750 [prior complaints that arresting officer fabricated probable cause and planted evidence were material to defense that drugs were planted on a defendant changed with drug possession]), and having advanced a basis for admitting it into evidence at trial, he has shown its materiality.
To summarize, defendant has established good cause for Pitchess discovery, entitling him to the trial court’s in-chambers review of the arresting officers’ personnel records relating to making false arrests, planting evidence, fabricating police reports or probable cause, and committing perjury. In other words, defendant has “satisfied the criteria for discovery under section 1043, subdivision (b),” thus entitling him to a determination of relevance under the provisions of section 1045. (Santa Cruz, supra, 49 Cal.3d at p. 93.) Section 1045 requires in-chambers record review by the trial court, permits that court to issue an order protecting the officer against “unnecessary annoyance, embarrassment or oppression” (subd. (d)), and requires the trial court to limit the use of any records that are disclosed. By doing so, the section maintains a balance between the officer’s legitimate privacy interests and the criminal defendant’s constitutionally guaranteed right to a fair trial. (People v. Mooc, supra, 26 Cal.4th at p. 1227.)
DISPOSITION
The judgment of the Court of Appeal is reversed, and the matter is remanded to that court with directions to issue a writ of mandate consistent with the views we have expressed here.

KENNARD, J.
WE CONCUR:

GEORGE, C. J.
WERDEGAR, J.
CHIN, J.
MORENO, J.

DISSENTING OPINION BY BROWN, J.

I dissent.
Defendant’s arrest took place in a location known for “blatant use and sales of narcotics.” Police arrived on the scene. They targeted defendant, and defendant began to run, the police in close pursuit. Then, according to defendant’s Pitchess affidavit, some unknown person spilled 42 rocks of cocaine at defendant’s feet as he ran past. Defendant was arrested in possession of an empty baggie and $2.75. Nevertheless, his affidavit asserted he was in the area to purchase, not to sell, narcotics. Both the trial court and the Court of Appeal found defendant’s story that someone else spilled the cocaine utterly unconvincing. And no wonder. When the lion culls the slowest, weakest, or unluckiest from the herd, the other gazelles run a safe distance and then return to grazing. No gazelle commits suicide by flinging itself in the lion’s path. These behaviors are instinctive, and we encounter them in our everyday experiences. When freeway commuters who are traveling faster than the posted speed limit spot a police cruiser in their rearview mirrors, they slow inconspicuously, avoiding any sudden changes that might draw police attention. When the police flashers are activated and one commuter is pulled over, the others breathe a sigh of relief and gradually return to cruising speed. People no more than animals invite calamity when fate has already selected another victim.
The majority concedes that a defendant must set forth a “plausible factual foundation” (City of Santa Cruz v. Municipal Court (1989) 49 Cal.3d 74, 86 (City of Santa Cruz)) to support a discovery motion under Evidence Code section 1043, subdivision (a), but the majority then deprives the term “plausible” of any substantive content by holding that a defendant satisfies this requirement so long as his version of the facts “could have occurred” and is “internally consistent.” (Maj. opn., ante, at p. 16.) “Plausible,” however, implies something more than mere internal consistency. (See, e.g., People v. Hernandez (2003) 30 Cal.4th 835, 869-870 [using “plausible” to mean believable]; People v. Cash (2002) 28 Cal.4th 703, 724 [using “plausible” to mean reasonably believable]; People v. Kipp (2001) 26 Cal.4th 1100, 1123-1124 [using “plausible” to mean believable]; People v. Trevino (2001) 26 Cal.4th 237, 244 [using “plausible” to mean persuasive]; In re Cudjo (1999) 20 Cal.4th 673, 695-696 [using “plausible” to mean believable]; People v. Wader (1993) 5 Cal.4th 610, 645 [using “plausible” to mean reasonably believable]; People v. Jones (1991) 53 Cal.3d 1115, 1138 [same].) I admit that plausibility in the Pitchess context might mean something less than believable or persuasive. It certainly does not require circumstances that are probable or likely, and a trial judge ruling on a discovery motion should not predetermine issues that are ultimately for the trier of fact. The judge nevertheless must exercise some discretionary judgment, especially when, as here, the defendant’s factual assertions are highly unlikely and, though related to matters within the personal knowledge of the defendant, they are made by his attorney on information and belief, rather than by the defendant directly, thereby shielding the defendant from perjury. At the very least, an assertion that runs counter to experience, nature, logic, and reason should be rejected—even if it is technically possible.
Defendant’s affidavit claimed he was at the location to purchase narcotics. That claim is patently absurd. The majority concedes that 42 rocks of cocaine were strewn on the ground near where defendant had been running and that defendant was arrested holding an empty plastic baggie. Nevertheless, the majority credits defendant’s unlikely assertion that someone else—the real seller—spilled the cocaine just as defendant happened to run past. (Maj. opn., ante, at p. 12.) The majority also admits defendant had only $2.75 with which he could make his narcotics purchase. (Ibid.) More precisely, defendant had a $1 bill and seven quarters, and he possessed no paraphernalia for consuming narcotics. In the course of many years of studying criminal records, I have never encountered a case in which (a) a drug purchaser brought his own baggie, and (b) narcotics were sold on the street in $1 or $2 increments, making defendant’s story very doubtful. The majority responds that defendant’s lack of money just as readily undermines the conclusion that he was selling narcotics because, with so little money, he could not make change for his customers. (Maj. opn., ante, at p. 13.) Anyone, however, who has walked around the neighborhood in which this court has its San Francisco office knows that narcotics are sold with a simple handoff: narcotics for cash.
The majority’s credulity with respect to defendant’s unlikely assertions completely shifts the careful balance the Legislature struck between the rights of defendants to reasonable discovery and the privacy interests of police officers. I would hold that, because defendant failed to establish a “plausible factual foundation” for his discovery motion (City of Santa Cruz, supra, 49 Cal.3d at p. 86), the trial court was correct to deny the motion, and the Court of Appeal was also correct to deny the petition for a writ of mandate.
Accordingly, I dissent.
BROWN, J.
I CONCUR:
BAXTER, J.

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Warrick v. Superior Court
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 107 Cal.App.4th 1271
Rehearing Granted

__________________________________________________________________________________

Opinion No. S115738
Date Filed: June 2, 2005
__________________________________________________________________________________

Court: Superior
County: Los Angeles
Judge: Stephen A. Marcus

__________________________________________________________________________________

Attorneys for Appellant:

Michael P. Judge, Public Defender, Albert J. Menaster, Leslie Ringold and Mark G. Harvis, Deputy Public Defenders, for Petitioner.

__________________________________________________________________________________

Attorneys for Respondent:

No appearance for Respondent.

Rockard J. Delgadillo, City Attorney, Cheryl J. Ward and Claudia McGee Henry, Assistant City Attorneys, Kim Rodgers Westhoff, Martin R. Boags and Michelle S. Wright, Deputy City Attorneys, for Real Parties in Interest.

Counsel who argued in Supreme Court (not intended for publication with opinion):

MarkG. Harvis
Deputy Public Defender
320 West Temple Street, Suite 590
Los Angeles, CA 90012
(213) 974-3056

Kim Rodgers Westhoff
Deputy City Attorney
500 City Hall East
200 North Main Street
Los Angeles, CA 90012
(213) 978-8024

We just love Pitchess motions!a

Wage and hour trouble dot com

2005-06-03T21:18:00.000-07:00

Great site if your boss is oppressing you.

Interesting Social Experiment Blog

2005-06-03T20:52:00.000-07:00

A blog where anonymous artists share their secrets.

http://postsecret.blogspot.com/

As attorneys, we hear a lot of secrets too.

But, we don't talk about them.

My little brother Shawn McMillan, Mayor to be?

2005-06-03T08:31:00.000-07:00

As of yesterday, my brother Shawn McMillan is officially a candidate for Mayor of the City of San Diego.

I wholeheartedly endorse him. As he's two years nine, months younger than me, I've known him since he was born. I assure my readers that he is qualified to lead the City of San Diego.

He is has an uncanny business sense, and coupled with his legal knowledge, if elected he will be able to navigate San Diego through this most difficult time.

Update on Bivens v. Sanford case.

2005-06-03T08:20:00.000-07:00

Proposition 64 continues to wreak havoc on my portfolio of cases involving both affected and unaffected plaintiffs; the price I pay for pleading a 17200 violation.

This week, Judge Goodman, accepting the arguments of the defendants' attorneys Greg Long, and Chad Levy and -- dismissed Webster Bivens claims brought under the former unfair competition law against Sanford and Costco.

Judge Goodman ruled that because the case lacked a plaintiff that had been injured, it was to be dismissed. We were not allowed to substitute in another plaintiff.

An ignominious end to a case that arose from Sanford's practice of shipping less product than their packaging indicated.

But, is it really the end.....

Stay tuned for more details

FTC Cracks Down on Tropicana's Bogus Health Claims!

2005-06-03T08:18:00.000-07:00

From the FTC.gov Website:

FTC Puts the Squeeze on Tropicana’s Orange Juice Claims

Tropicana Settles FTC Charges It Lacked Evidence to Support Heart and Stroke-Related Claims Made for Its “Healthy Heart” Juice

The Federal Trade Commission has settled a complaint against Tropicana Products, Inc., in which it alleged the company misled consumers with claims that drinking two to three glasses a day of its “Healthy Heart” orange juice would produce dramatic effects on blood pressure, cholesterol, and homocysteine levels, thereby reducing the risk of heart disease and stroke. Under the terms of the consent agreement settling the charges, Tropicana is prohibited from making similar health-related claims in the future unless they can be substantiated by reliable scientific evidence.

According to the Commission, Tropicana ran the “Healthy Heart” ads between 2002 and early 2004, on television and in publications such as Newsweek magazine. The ads claimed that drinking two to three cups of Tropicana orange juice each day would lower systolic blood pressure by 10 points, raise HDL cholesterol by 21 percent and improve the HDL to LDL cholesterol ratio by 16 percent, increase blood folate levels by 45 percent and lower blood homocysteine levels by 11 percent. The complaint charges that the benefits were not substantiated and claims of clinical support for them were false.

“Orange juice contains many nutrients important to a healthy diet, and advertising can be an important source of information about the health benefits of foods,” said Lydia Parnes, Director of the Bureau of Consumer Protection. “But it is essential that such advertising be truthful. In this case Tropicana’s claims went well beyond its scientific support.”

According to the Commission, Tropicana ran the “Healthy Heart” ad as a two-page spread in Newsweek magazine in February 2004. In 2002, Tropicana ran a more extensive national advertising campaign, including several television commercials and a full-page print ad in the New York Times, as cited in the Commission’s complaint. The 2002 ad campaign made a claim virtually identical to the 10-point blood pressure reduction claim that appeared in the 2004 advertising. The Commission staff had specifically expressed its concerns about the blood pressure claim made in the earlier campaign in a public closing letter in July 2002, but did not seek formal agency action at that time. As the letter noted, although foods that are rich in potassium and low in sodium such as orange juice have been recognized by public health authorities, including the Food and Drug Administration (FDA), to help reduce the risk of hypertension and stroke, the 10-point blood pressure reduction claim did not appear to be substantiated.

The Commission’s complaint charges Tropicana with making unsubstantiated claims that: 1) drinking three cups of Tropicana orange juice a day for four weeks will raise HDL cholesterol by 21 percent and improve the ratio of HDL to LDL cholesterol by 16 percent; 2) drinking 20 ounces of Tropicana orange juice a day will increase blood levels of folate by almost 45 percent and decrease homocysteine levels by 11 percent; and 3) drinking two cups of Tropicana orange juice a day for six or eight weeks will lower systolic blood pressure an average of 10 points. The complaint also charges that Tropicana’s claims that clinical studies demonstrated these benefits were false.

The consent order prohibits Tropicana from making the challenged claims or any similar claims about the effects of orange juice or other foods on blood pressure, cholesterol levels, folate levels, and homocysteine levels or other biological markers or health-related endpoints unless the company substantiates the claim with competent and reliable scientific evidence. The order also prohibits claims by Tropicana that any food will have an effect on the risk of heart disease, stroke, or cancer unless substantiated by competent and reliable scientific evidence. The order also prohibits any misrepresentations relating to tests or studies. Tropicana is permitted under the settlement to make certain claims that comply with specific FDA regulations for food labeling. Finally, the order contains various record keeping requirements to assist the FTC in monitoring compliance.

Tropicana Products, Inc. is based in Chicago, Illinois, and is a subsidiary of PepsiCo.

The Commission vote to issue the administrative complaint and accept the consent agreement for public comment was 5-0. An announcement regarding the consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 30 days, until July 1, 2005, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the administrative complaint and consent agreement are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

The False Advertising of Tort Reform...

2005-03-29T08:27:00.000-08:00

The same large companies who were at risk under Bus. & Prof. Code 17200 find that the same false and deceptive advertising is effective in directing public opinion:

http://www.usatoday.com/news/opinion/2005-01-30-tort-reform_x.htm

Spyware on the way out. (From Adlaw)

2005-01-25T10:00:00.000-08:00

Spyware Legislation Likely To Pass Congress This Year
Industry insiders predict that legislation targeting so-called spyware—commonly defined as software that is installed on consumers’ computers without their knowledge or consent—will pass Congress this year.

House Representatives Mary Bono of California and Joe Barton of Texas have reintroduced H.R. 29, which passed the House last year by a 399-1 vote, but did not reach a vote in the Senate. The bill requires companies to obtain consumers’ consent before placing software on their computers. It provides exceptions for cookies installed by an Internet service provider, “interactive computer service” or Web site, as long as the information collected is not shared with anyone other than the provider, service or site.

The cookie exception would apply to Internet companies that use cookies to recognize consumers and make recommendations, but would not apply to a company that uses cookies to track consumer behavior across more than one company’s Web site, a staffer from Rep. Bono’s office stated.

Adware companies such as New York-based WhenU and California-based Claria, which deliver targeted ads to users’ computers based on consumer browsing habits, say they already obtain users’ permission before installing their software. They might entice users to install their software by, for example, bundling it with free, desirable software.

However, consumer advocates claim few computer users are aware that their computers harbor adware. Privacy experts in Washington warn that the federal antispyware legislation targets a type of technology without clearly distinguishing between bad behavior and legitimate business practices

California, FTC Take Action

California passed its own antispyware law, which became effective Jan. 1. The Consumer Protection Against Spyware Act bans the installation of software that takes control of another computer, modifies security settings, deceptively collects certain personably identifiable information, interferes with the removal of certain software, or otherwise deceives an authorized user in specified ways.

The law requires companies and Web sites to disclose whether their systems will install spyware. Consumers can seek as much as $1,000 for being subjected to illegal spyware.

Last year, the Federal Trade Commission concluded that the unauthorized installation of software on computers already is prohibited under existing deceptive practices law and that new legislation is not needed.

The FTC filed its first suit targeting the use of spyware last fall, against an already infamous online marketer. In October, the FTC charged Sanford Wallace and his company, Seismic Entertainment Products, with infecting computers with spyware that displayed pop-up advertisements selling antispyware software.

In early January, the agency announced it had reached an agreement with Wallace in which he and his companies, Seismic and SmartBot.net, are prevented from installing alleged spyware programs on users’ computers while the FTC’s lawsuit proceeds. Wallace and the named companies also agreed to limit advertising to their Web sites.

Wallace gained the moniker “Spamford” in the late 1990s for sending millions of unsolicited email message through his company, Cyber Promotions, according to media reports. Earthlink won a $2 million judgment against Wallace, and he reportedly ceased email marketing operations.

A recent survey by Earthlink and Webroot revealed that 90 percent of PCs contain spyware, with an average of 28 programs installed per computer.

Why This Matters: Businesses involved with online marketing should monitor legislative efforts to target so-called spyware carefully, and seek to ensure any law passed does not hinder the growing practice of interactive marketing precisely at a time when consumers are increasingly responding to more personalized advertising.

UPDATE ON BIVENS V. SANFORD (PROP 64)

2005-01-20T11:21:00.000-08:00

We filed an action against Sharpie pen manufacturer Sanford L.P. and its general partner Newell Operating Company for selling packages of pens through Costco. Some percentage of the pens that Costco sold were did not contain the unit count advertised on the label. This case has put us up against the Sheppard Mullin firm, and its formidable attorneys Greg Long and Chad Levy. Mr. Long was voted California's Trial Lawyer of the Year for 2004.

We conducted depositions in Nashville, Tennesee, and Chicago, Illinois, just before the passage of Proposition 64. We presently face a motion for summary judgment based on Sanford's claim that it complies with the National Institute of Standards and Testing's guidelines on unit count of packages.

Prior to the hearing on the motion for summary judgment, Proposition 64 passed. Sanford brought a motion for judgment on the pleadings to knock out the case. We opposed the motion, and made an alternative motion to substitute an injured plaintiff. Judge Goodman invited us to come back and have additional oral argument in early January, 2005.

On Tuesday, January 18, 2005, I appeared before Judge Goodman. After excoriating California's trial attorney of the year, Greg Long of the Sheppard Mullin firm, for objecting to our supplemental citation to Elsner v. Uveges, 34 Cal. 4th 915 (Dec. 20, 2004), Judge Goodman indicated that he believed that Elsner may be controlling. We had filed supplemental briefs raising this issue as briefing had been completed. Defense counsel objected to the case update as briefing had been completed.

Judge Goodman asked defense counsel to explain why the language in Elsner did not apply in Bivens. In my opinion, there was not a good reason expressed by the defense attorneys.

I did my argument, then we discussed whether there were any appellate cases on the issue and when we expected some to publish. I disclosed that we've got oral argument on proposition 64 in Bivens v. Lytwyn, and Bivens v. Corel. Both are set for February 17, 2005.

Judge Goodman asked if either of us had an objection to staying the case for a bit to get some guidance from the courts of appeal. Neither of us did. So, Judge Goodman continued our hearing to May 31, 2005, at 8:30 a.m. We'll sort through the meaning of Proposition 64 as interpreted by the Courts of Appeal at that time.

Trial is set for November of 2005.

Another Prop 64 tracking blog

2005-01-20T10:53:00.000-08:00

Here is a site I just found operated by attorneys with interests similar to mine. In fact, so similar, that some of my cases are referenced:

www.17200blog.com

Passage of Proposition 64

2005-01-09T08:19:00.000-08:00

On November 2, 2004, California Voters approved Proposition 64 to amend California's Business and Professions Code provisions which previously allowed an unaffected person to sue another on behalf of the general public to stop unlawful conduct and false advertising. This appointment as Attorney General extended to a broad category of "persons."

Proposition 64 amended the statute to require that a person suing had to be personally injured by the conduct that prompted the lawsuit. The prior law had no such requirement.

Presently, defense firms across the State are bringing motions to dismiss actions that were filed before the passage of Proposition 64. The appellate courts are ordering briefing from litigants as to whether the effect of Proposition 64 is "retroactive."

Whether Proposition 64 is retroactive will determine whether existing cases won at the trial level, are now to be determined a loss. That question is one of the hottest open questions in California courts today.

I'll post more news as this issue develops.