Thoughts on Today's Prop 64 Conference

[UPDATE: Apparently, a Court of Appeal has allowed a UCL action with no injured-in-fact Plaintiff to proceed. Shows what I know.]

[UPDATE: Apparently at least one demurrer has been granted on the basis that Prop. 64 applies retroactively by a Judge in Los Angeles. Shows what I know.]

I sat in on today's teleconference given by the anti-trust section of the state bar on the changes to the UCL brought on by prop 64. I have to say that I was pretty unimpressed with the arguments presented by the defense bar (of which I am a member). I don't blame them for making them--it's their job--but I just don't think they're convincing at all. My apologies to those who disagree, but it seems to me that this only became a research project since Election Day, and there hasn't been much notice of the increasingly stronger anti-retroactivity language coming out of California's courts in the past years.

I also think the argument flowing from the procedural/substantive distinction is, frankly, farcical. I think there is merit to the contention that the portion that requires class certification might be considered purely procedural, but the part that withholds standing from others destroys their former substantive right to enforce laws against unfair competition. In other words, from the point of view of a citizen or a public interest group that didn't lose actual money or property, they now do not have a right they previously had. If that's not substantive, I don't know what is. I think we can also dismiss summarily the arguments that because the right is statutory that it can be retroactively changed automatically (clearly refuted by the recent McClung case, ruling on the FEHA, which involves statutory rights) or that it "merely" governs how these actions are prosecuted, and, most absurbly, distorting the language of the voter information pamphlets—of all things—to coax an inference of retroactivity.

I will at least grant that the style, if not the substance, of the defense bar presenters was excellent. It's just that I can only picutre in my mind what an appellate panel would do to it.

There was high level political genius behind Proposition 64. First, those who explained that the funding provision of the penalty amendments was done to give the appearance that this wouldn't hurt consumer protection because it would provide funding for the public agencies responsbile for it to do so plainly ignored the commentary given by the District Attorney who was present. This was meant to give that appearance, but not only to the people voting on it, but also to the Legislators controlling the purse strings later. They can rely on this, correctly or not, to fund this enforcement and slash its funding from the general fund. Political tactics of this level of genuis only come from very well put-together organizations. The Prop 64 opponents were not playing on this level, and they weren't playing on that level when they failed to reach a legislative compromise last spring. Welcome to the NFL.

So far, the only court to rule on this has agreed with me. In my practice, every single UCL case I defend against (or have brough as a plaintiff) includes a plaintiff who was injured in fact, and the majority now include class allegations. I understand if you're in the middle of defending a "public interest" case that you hope this will save you, but I doubt it will. You can run it up to the Appeals systems, but something tells me most Courts are just going to allow amendments to the pleadings to include class allegations and a correctly injured plaintiff (if there is one), and the courts will probably stretch the "money and property" provision as far as they can. There will probably be a small number of outright dismissals—and it seems to me those won't be the cases of the family business, but environmental ones.

In sum, I know the issue of retroactivity is hot right now, but I don't think it's really all that important except in cases of vague injury in fact, which, to me, is where the action will be in the courts.

[Editorial Note: I normally refrain from expressing opinions, as is my policy. I am not expressing my opinion on the propriety of Proposition 64 or the UCL itself; just on the arguments put forth for and against the retroactive application of Prop 64, which is consistent with my meta-commentary on the reporting and editorializing done by others, without commenting on the underlying issue. Please do not take offense.]

Writ.

CLEL will be working on an extraordinary writ filing this week, and, therefore will not be covering the news. If I see any interesting cases, I'll still post them.

P.S. Thanks to The UCL Practitioner for the reference. I can't imagine that the Defense bar will be able to get around McClung and the long-term march of California's courts against retroactivity. I wonder what the CLE program tomorrow will say about it? (CLEL will try and squeeze that one in.)

Oh, NOW you end it (=

So, the lockout ends in San Francisco. Thanks guys. No way you could have gotten that done in time for my conference? (= Those scab maids had no idea how to do a room. Seriously. Apparently, the honchos at the management companies agreed. [No, of course I don't seriosly expect any of this done on my timetable.]

Workers' Comp judge files a workers' comp case after death threat. Cue Alanis. It's ironic. The Sacramento Bee reports.

California's 150 workers' compensation judges are six times more likely to file on-the-job injury cases than their judicial counterparts in state government, a Bee investigation has found.

Six times more? Attention appeals court judges: file claims for tongue whiplash after intense colloquy. Is that amount attributable to just knowing their rights alone? Do Superior Court judges not know their rights?

NELI Update

I stepped out for a minute to check on things while the discussion veered into something that I simply do not do in my practice, namely Sarbanes-Oxley Compliance.

So far the speakers have been interesting and professional. The hotel strike outside provides an interesting backdrop for the discussion, especially this mornings Labor Lab update. Most of what we're hearing here is not that useful for most of us, because we practice in California and the FEHA is uber alles here, but definately built on the wider backbone of this kind of Federal law, so your have to have it.

No significant news or cases to report on today.

Case Watch.

CLEL will be watching for results in these cases:

• Dore v. Arnold Worldwide, Inc., pending before the California Supreme Court. Issue: at-will employment.


• Lyle v. Warner Bros. Television Prods., pending before the California Supreme Court. Issue: FEHA/sexual harassment.
  
• Powers v. The Rug Barn, pending before the California Supreme Court. Issue: tortious interference with at-will employees.


• Reynolds v. Bement, pending before the California Supreme Court. Issue: wage/hour.


• Smith v. Jackson, pending before the U.S. Supreme Court. Issue: ADEA
  

Fresno Nurses Strike?

The Fresno Bee reports:

The California Nurses Association, which represents about 300 nurses at University Medical Center, delivered the 10-day strike notice to hospital officials late Friday. The advance notification, required by law, was delivered not long after contract negotiations between the two sides concluded earlier in the day. The two sides have been trying to come to a contract agreement for more than a year.

In the California Journal, this article discusses the trends in union membership and other changes over the years.

NELI

CLEL will be attending NELI this Thursday and Friday in San Francisco. Hope to see you there.

News

More on State-Board-Members-Gate from the Sac Bee.

News.

The Chronicle has this personal story piece on the hotel lockout.

Class-action age discrimination suit against Vons coming soon? The Fresno Bee reports.

Unemployment Insurance Appeals Board, Workers Compensation Appeals Board, Agricultural Labor Relationsh Board, and Cal-OSHA official told "they'll be back" from 9-5. The LA Times reports.

A group of injured workers has filed a legal challenge to the recent workers' compenstaion reform. The LA Times reports.

Currently, an injured worker is allowed to choose any doctor after the first month of treatment is completed. After Jan. 1, a worker will have to pick from a pool of doctors who belong to tightly controlled physician networks organized by companies or insurers.The suit maintains that the new rule should be applied only to people hurt on the job after Jan. 1. The suit filed in Sacramento by the California Applicants' Attorneys Assn. names as defendants the state Division of Workers' Compensation and Director Andrea Hoch.

Westside Concrete Co., Inc. v. DIR, DLSE, et al.

2d App. Dist. No. B167037

This case stops short of ruling on and giving specific standards for the applicability of the DLSE Opninion Letters, but it strongly suggests that any of them that purport to show a general rule that isn't the only possible interpretation (a la Tidewater), are probably in violation of the APA.

This is probably enough for parties, defendants especially, to start filing motions about, but it's far from conclusive.

The DLSE's website itself notes that the letters are currently under review for APA compliance.

I can see why there is controversy, but it sure helps to have an explanation of how the agency is thinking on any given issue. If they're wrong, you can always fight it, but at least you know where they're coming from.

I'm afraid rather than helping either side, this kind of ruling will simply force the DLSE to go underground with their procedures.

Governor Names Jack Henning to head EDD

The LA Times reports.

After upsetting labor unions by favoring corporate interests this year, Gov. Arnold Schwarzenegger on Tuesday appointed a Democrat and longtime labor leader to manage the sprawling bureaucracy of the Employment Development Department.

The AFL-CIO confronts the future. The LA Times reports.

Lines have already been drawn, with fast-growing, aggressive unions such as the 1.7-million-member Service Employees International Union demanding that the labor movement consolidate much as corporate America has. The presidents of five unions have established the New Unity Partnership, which advocates a massive reduction in the number of unions — from 63 to 15 — with those remaining to be divided clearly along sectoral lines, such as hospitality and construction.

McClung v. Employment Development Department

Fair Employment and Housing Act amendment imposing personal liability on nonsupervisory employees for harassment of coworkers, following Supreme Court ruling that there was no such liability under existing law, changed rather than clarified the law notwithstanding legislative declaration to the contrary.

The Supreme Court has some very harsh words for legislative overreaching in terms of retroactivity. Let's see if this affects the Salazar II / Carter dispute.

Supreme Court No. S121568.

Proposition 64 In Effect

Proposition 64, by law is now in effect, according to Cal. Const. Art. II Sec. 10(a). The UCL Practitioner, citing a defense lawyer's article, wonders whether it is retroactive. It is not. No section of Proposition 64 explicitly claims retroactivity and the California Supreme Court has just raised the bar on retroactivity.

See the following case summary if you doubt that.

Hiatus

I apologize for my unanounced hiatus. It was a busy week plus, of course, there was the election. I will post a first look at Proposition 64 soon.