When Rental Car Companies Add To The Carnage (con’t)
Continuing from previous post:
3. Analyzing and Arguing the Safe Vehicle Duty
The key to analyzing a car rental company’s liability for renting an unsafe vehicle is establishing how a reasonable rental operation should act in fulfilling its statutory duty to rent only safe vehicles. The means of establishing proof is a discovery plan focused on how the rental car company inspects, prepares and approves vehicles for use in its rental fleet.
Most automobile manufacturers publish new vehicle preparation guidelines to instruct service personnel at dealerships and rental companies on how to prepare a new automobile or truck for use. It becomes important during discovery to obtain the guidelines and depose mechanics and other rental company personnel responsible for readying vehicles for rental. Likewise, owner manuals and maintenance guides can provide useful insights into whether a maintenance issue contributed towards an accident causing injury.
Many service organizations have checklists of items that are intended to be filled out so as to provide a record of what was performed during a vehicle inspection, preparation or repair. Discovery should seek to determine whether such checklists exist at the subject rental car company, whether or not the checklists were followed and whether or not they were preserved.
A failure by a rental company to follow manufacturer guidelines or internal standards can constitute evidence of negligence in and of itself. See, e.g., Dillenbeck v. City of Los Angeles (1968) 69 Cal.App.2d 472, 480, 72 Cal.Rptr. 321. So, by way of example, in a product liability action involving a vehicle with a known defect, where that condition is a substantial cause of the accident, it should be argued that the rental company failed in its duty to rent a safe vehicle.
Evidence that pre-rental inspection fell below the company’s own internal standards or that vehicle preparation either did not meet or cannot be shown to meet the manufacturer’s specifications is also valuable evidence showing that the rental company failed in its statutory duty to rent only safe vehicles. Inadequate or non-existent inspection records can likewise support an argument that the rental car company failed in its duty of care, since inspection and maintenance record keeping is an important part of assuring the safety of any vehicle.
In addition, any discovery plan should include an investigation into National Highway Traffic Safety Administration (NHTSA) technical service bulletins, safety studies or other such resources to determine just what known safety problems the subject vehicle presents. For example, NHTSA has twice published cautionary warnings to users of 15-passenger vans because of a rollover risk “that increases dramatically as the number of occupants increases from fewer than five to more than ten,” and has stated that such vans “be operated [only] by trained, experienced drivers. (NHTSA 27-02, Apr. 15, 2002.) Where a rental company has rented such a vehicle to an inexperienced driver and a rollover accident occurs, there is a strong argument for a breach of duty tied to the NHTSA warning alone.
An expert consultant should be able to help you understand how a failure to follow procedure or heed a NHTSA advisory amounts to negligent rental of an unsafe vehicle under Section 24010.
4. Establishing Links between Manufacturers and Car Rental Companies.
Where the major rental companies — Hertz, Avis and Thrifty — are concerned, a consumer attorney should research public corporate filings such as 10K annual reports for evidence that the entities are actually involved in a joint venture with their vehicle supply partners to assist in accessing the rental marketplace, stimulate demand for branded vehicles and keep production lines flowing by providing an economic need for additional production.
Discovery in this area should be extended to any vehicle supply agreements or other contractual ties between rental company and vehicle manufacturer, as these documents can be expected to support the reasonable inference of a joint venture and/or partnership by virtue of exclusive advertising and promotion ties, favorable financing, credit and depreciation terms and other factors. Where a car rental company is established as a joint venturer and partner with an automobile manufacturer, the rental company has imputed knowledge of any defects that the manufacturer knew about as a matter of law. See, BAJI 13.40; Orlopp v. Willardson Co. (1965) 232 Cal.App.2d 750, 754, 43 Cal.Rptr. 125; Engineering Services Corp. v. Longridge (1957) 153 Cal.App.2d 404, 409-411, 314 P.2d 563.
5. Rental Car Franchises and Vicarious Liability.
Though some rental car companies own and operate their own rental outlets, it is common for such companies to operate on a franchise model. In the later instance, independent franchisees act as the retail rental outlets while the corporate franchisor acts as wholesaler, negotiating vehicle supply agreements, creating marketing plans and managing the rental process.
An independent franchisee will generally maintain limited insurance resources in the event of its own negligent acts. Where a rental vehicle causes a catastrophic injury or death, the franchisor is generally a proper defendant under the principles of actual or ostensible agency.
Discovery should be conducted to demonstrate that the franchisor controls the entire scope of the rental process through its licensee/franchise agreements and any operations manuals that might be published by the entity. Usually, the franchisor is intimately involved in regulating how the franchisee conducts business, dictating everything from the rental agreement forms, to employee uniforms to the color of the paint on the walls of the rental agency.
Substantial control by the franchisor of the franchisee’s daily rental operations gives rise to an agency relationship that, in turn, will arguably impose vicarious liability as an actual agent for any negligence of the franchisee in negligently preparing a new vehicle for rental, negligently maintaining a rental vehicle or renting a vehicle where design or latent defect renders it unsafe. See, Nichols v. Arthur Murray, Inc. (1967) 248 Cal.App.2d 610, 613, 56 Cal.Rptr. 728.
In the alternative, the franchisee will arguably be liable under the principles of ostensible agency under the three-prong test that: (1) the person dealing with the agent must do so with belief in the agency authority and this belief must be a reasonable one; (2) such belief must be generated by some act or neglect of the principal sought to be charged; and (3) the third person, in relying on the agent’s apparent authority must not themself be guilty of negligence. Seneris v. Haas (1955) 45 Cal.2d 811, 830, 291 P2d 915.
Since the consumer who rented the vehicle in the first instance will invariably testify that they believed they were renting from Hertz or Avis or Thrifty and that they never knew that the actual renter was an independent franchisee, the ostensible agency argument is strong where the rental agency is not actually owned by the franchisor rental car company.
6. Conclusion.
Car rental companies should not be overlooked where a defective rental vehicle causes injury or death. The Legislature has declared that such companies are responsible for ensuring that the public may depend upon rental vehicles as being safe and mechanically sound.
A car rental company is responsible for its own negligence in renting unsafe vehicles, and where it violates the statutory duties imposed by Vehicle Code § 24010, may be held liable under a negligence per se theory.
Given these legal realities, a consumer attorney faced with a product liability case involving a rental vehicle causing injury should always pay close attention to the car rental company in their at-fault analysis.
Acknowledgment: The author wishes to thank and acknowledge Scott Raphael, Legal Coordinator, Bisnar & Chase, for his invaluable research and assistance in preparing this article.
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When Rental Car Companies Add To The Carnage
1. Car Rental is a Big Business with Big Responsibilities.
Automobile companies don’t just sell and lease cars, they also distribute them through rental chains. Each of the major U.S. auto manufacturers has its special outlet. Hertz is an indirect, wholly-owned subsidiary of Ford Motor Company. Avis rents primarily General Motors vehicles. Thrifty trades almost exclusively in vehicles from DaimlerChrysler Corporation.
In an automobile product liability action, rental companies are often treated as if — absent some evidence of negligent entrustment — their liability is limited to $15,000 under the permissive user statute. That is a shortsighted view.
The Legislature recognized the critical role auto rental companies play in keeping defective vehicles out of the stream of commerce by imposing special duties of care on the industry. While car rental entities are generally not considered liable for strict products liability, they are subject to claims for direct negligence where they know, or reasonably should know that a vehicle is unsafe, either through design, manufacture or maintenance. As consumer attorneys, it is important to understand the ins and outs of these independent duties.
2. Rental Cars must be Safe and Sound.
Vehicle Code § 24010 sets forth the standard in clear, concise terms:
(a) No person engaged in the rental of any vehicle, for periods of 30 days or less, shall rent, lease or otherwise allow the operation of such vehicle unless all the following requirements are met:
(3) The vehicle is mechanically sound and safe to operate within the meaning of Section 24002. Section 24002 of the Vehicle Code says: (a) It is unlawful to operate any vehicle or combination of vehicles which is in an unsafe condition, or which is not safely loaded, and which presents an immediate safety hazard.
Though it has never been construed by an appellate panel in a published decision, Section 24010 is plain on its face. The obvious intent is that any car rental agency whose business is short term rentals has an independent duty to ensure that those vehicles are not only in good repair, but are safe to drive as well.
Instances where an accident involving a rental vehicle occurs because of a maintenance problem present relatively simple cases, since vehicle owners have a general, non-delegable duty to adequately maintain their vehicles. See, Maloney v. Rath (1968) 69 Cal.2d 442, 448, 71 Cal.Rptr. 897 (motorist’s duty to maintain automobile brakes in compliance with provisions of Vehicle Code was non-delegable).
Where the analysis becomes more complex is where the rental company has not independently contributed to the unsafe nature of vehicle by an affirmative relating to maintenance, yet still places that vehicle into the stream of commerce resulting in injury.
Given the duty imposed by Vehicle Code section 24010, consumer attorneys analyzing rental car company liability in a product setting need to consider the nature of the offending defect and whether the rental company reasonably knew or should have known about it. The BAJI 3.11 standard is useful in conducting this analysis, since the relevant inquiry is whether a rental car company of ordinary prudence “in the same situation and possessed of the same knowledge [] would have foreseen or anticipated that someone might have been injured by or as a result of [its] action or inaction.” Where the evidence shows that a rental car company knew or reasonably should have known of a defect that caused injury, direct negligence should be alleged under section 24010.
It is important to recognize that a failure to meet the section 24010 standard that causes a consumer to be injured by a defective vehicle is negligence per se, since “[t]he failure of a person to exercise due care is presumed if . . . [they] violated a statute, ordinance, or regulation of a public entity [and] the violation proximately caused death or injury to person or property.” (Evid. Code § 669(a)(1,2).) The presumption is rebuttable, affecting the burden of proof. (Id. at § 669(b); see also, BAJI 3.45.)
In other words, section 24010 creates an effective equivalent to strict products liability for a rental car company even though that entity will argue it is outside of the stream of commerce and so not liable under conventional product liability theories.
Check back later this week for more on this topic.
Checklists, Reading Lists and Connecting the Dots
Connect the dots from planning to success
Last year I wrote about how I was starting my own practice and it seems many of you have lived similar experiences. Thank you so much for your kind emails and for sharing your own experiences with me. I’m truly honored and humbled by your good wishes.
One email that caught my attention came from James Whigham, who wrote:
I read your article in the July 2009 edition of the Advocate with keen interest. I am a newly minted attorney (April 2009) looking to start my own firm. Being new… I am attempting to inform myself on all of the legal, ethical, and business requirements involved in starting my own practice.
I have a book published by the State Bar of California, “The California Guide to Opening and Managing a Law Office.” The book centers on the business aspects of starting a practice. It does not go into detail about the basic requirements like: California Business License or incorporation.
I am wondering if you can recommend a book or a series of articles that contains a complete check list or a series of articles from which I can create a check list of things I must do to start my own practice?
Well, James, the answer is, I don’t really know of any books directly on point I would recommend, though the American Bar Association’s How to Start and Build a Law Practice (5th Ed.) seems highly regarded. For a reading list, I’d suggest searching Amazon.com and the web (I found a useful list by typing “starting a law practice in California into the Bing.com search engine). For some sample checklists, I Googled “law practice start up checklist” and found several that seemed to cover all the basics, including organization, office selection, bank/finance, licensing, etc.
That being said, I believe the most important checklist is the one you create yourself to help connect your passion with your practice.
For many years, the first item on my personal list has been: Make sure you are doing work you love. I fixated on this notion while clerking on the Westside during law school. My then boss, Tony Stuart, introduced me to the works of Deepak Chopra (The Seven Spirtual Laws of Success; The Book of Secrets: Unlocking the Hidden Dimensions of your Life), the pop guru. Chopra said he told his own children, “Don’t worry about success. Just figure out what you love, do that and success will naturally follow.” From my experience, that advice is exactly right on.
To connect the dots from planning to success, there are some time tested tools you can add to your personal checklist:
1. Write a business plan and keep it current.
Before I opened my own shop, I drafted a business plan, which I cobbled together using a format I found for free on the internet. The written plan lay out my strategy going forward and I keep it as a living document, meaning I update it regularly and use it both to check my progress and stay focused on the path that is taking me where I need to be.
2. Create a marketing strategy.
We’re a learned profession and so, as a culture, we tend to look askance at marketing and advertising our services. In my view, that’s foolish prejudice.
We live in a modern economy and provide a necessary service. Within the boundaries of decorum and understanding that as officers of the court, one of our noble privileges is to put a public face on the American civil justice system, your checklist needs to have a section devoted to identifying precisely how you intend to let people know what you do so they will hire you to do it.
3. Find an organizational system that works for you and stick with it.
My sense is, the biggest problem lawyers old and new face every day is how to get organized in their practices and their lives.
Organization is something I struggled with early on. For several years, I managed to mask my own disorganization. Then I began working for a brilliant lawyer who was even more disorganized than I. When I adopted his bad habits on top of my own, the result was pain and misery for those around me (especially my poor staff) and not a lot of happiness on my side as well.
I solved my organizational problem by taking a one day seminar from the Franklin-Covey people (the same ones who produce the famous Franklin planner) and then disciplining myself to follow the system they taught. If you’ve got similar issues, I highly recommend you seek out some training sooner rather than later.
4. Make ongoing education part of your basic plan.
Some folks figure that once they’ve earned their degree and license, it’s okay to coast for the rest of their career. Trust me, it doesn’t work, so let’s just not go there.
Plan for change and keep your tools sharp by planning ahead. Some useful reading for solo practitioners is Free Agent Nation: The Future of Working for Yourself, Daniel H. Pink (2001), which reveals that we’re not just a group, we’re a demographic trend. Art of Cross-Examination, Francis L. Wellman (1903) will give you some time tested tips on how to zero in on a witness, while The Art of War, Sun Tzu (5th Cen. B.C.) and Tao Te Ching, Lao Tzu (6th Cen. B.C.) will help you strategize your cases and balance your life.
Rules of the Road: A Plaintiff Lawyer’s Guide to Proving Liability, Rick Friedman & Patrick Malone (2007) and David Ball on Damages, David Ball, Ph.D. (2005) are required reading for all consumer attorneys. The Mind Map Book, Tony Buzan (1993) will teach you how to organize all that important knowledge so that it is also useful.
Read The Making of a Country Lawyer, Gerry Spence (1996) for inspiration and A History of the English Speaking People, Winston S. Churchill (1956) for perspective.
Finally, don’t forget your Bible, Torah, Koran or other spiritual text to stay connected with your moral roots.
I wish you success in your personal quest to succeed.
Ten Insurance Claims Do’s & Don’ts
Some Simple Rules in Making an Insurance Claim
Insureds who have a claim should keep ten simple rules in mind as they pursue benefits due them under their insurance contract:
DO:
1. Report your loss as soon as possible. Don’t procrastinate with an insurance claim. On the other hand, you should not be making needless claims, because the carriers keep track of what you claim and too many claims can affect your ability to obtain insurance in the future. Use your best judgment, but make your decision as quickly as possible.
2. Document your loss as thoroughly as possible in writing. The insurance company keeps an extensive claim file. You should have one too. Get a manila folder or a binder and collect receipts, notes, photographs – everything having to do with the claim – in one place. Try to keep it organized, but it’s more important to keep it than anything else
3. Keep a written diary of all communications and contacts during your claim. The insurance company adjuster is supposed to keep a diary of every communication he or she has with you but very often will only record the communications that are helpful to them.
You need to keep your own diary of every contact you have with the company. You should also confirm all important oral communications in writing. It is amazing how this one simple practice can solve so many problems during the course of a claim.
4. Take photographs of your loss where possible. Don’t be cheap with the film, either. This is especially important with property losses such as fire, earthquake or automobile accident. Make sure you document visible evidence of your loss. Your adjuster may not get around to taking photographs until a significant amount of time has passed, and if the visible evidence of your damage has disappeared (such as when a flood scene is cleaned) the carrier will use that lack of evidence against you.
5. Be truthful and accurate about your loss. Don’t overstate your claim, but don’t understate it either. Insurance adjusters are much like investigators and they are trained to be suspicious. You need to be candid with your carrier. At the same time, you need to take care that you can support your claim with accurate information.
Don’t assume that a carrier will accept your estimates of value, quantity or whatever without question. That seldom happens in all but the smallest claims. Be ready to defend your estimate.
6. Be polite but firm with claims personnel. Claims adjusters are people too. They have a job to do and you should attempt to treat them with all due courtesy. Now, it is true, there may come a time when the adjuster will be difficult if not rude, especially when pressed for additional payment. Avoid being drawn into a battle with the adjuster. Keep your head, commit important communications to writing and be polite but firm. If the dispute erupts into litigation, everything you say or do is subject to scrutiny and criticism and you want a clear record that the insurance company is the wrongdoer, not you.
DON’T:
7. Do not misstate facts. Once again, adjusters are trained to be suspicious. You should report your loss like a news reporter reports a story. Just the facts, ma’am.
8. Do not intentionally overstate the value of your loss. We call this “overreaching” in the legal profession and it is an excellent way to get into trouble on your claim. Remember, claims professions adjust claims day in and day out. They have probably seen claims similar to yours dozens if not hundreds of times and have a notion about the value of your loss is likely to be.
9. Do not engage in any act that might be considered fraudulent. Fraud is a intentional act calculated to mislead. Don’t do that during your claim. A carrier’s favorite defense is to yell “fraud!” even where there is none. So don’t give the insurance company any ammunition. Also, insurance fraud is not only grounds to deny a claim, but it is a criminal offense as well. During your claim, honesty is always the best policy.
10. Do not be intimidated into settling your claim for less than its reasonable value. Insurance adjusters are trained negotiators. They are trained to attempt to settle a claim within a range of value.
The first offer you hear is most often the number at the low end of the adjuster’s range and you will only find out what the top offer is by negotiating. Don’t be intimidated. Present your evidence. Insist on a thorough, fair, objective investigation and evaluation of your claim, which is the standard the law requires.
If you believe that you don’t have the skill to negotiate successfully, consider getting some help in settling.
Download a copy of these 10 points and share them with your friends and family.
Asking for Whom the Statute Tolls: Continuing Representation and the Statute of Limitations
A. Continuing Representation and Tolling.
As a general rule, the statute of limitations for legal malpractice claims is tolled during the time that an attorney continues to represent a client. A recent Court of Appeal decision, Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort, 91 Cal. App. 4th 875, 110 Cal. Rptr. 2d 877 (2001), demonstrates that where there is objective evidence of a continuing attorney-client relationship, tolling becomes an indefinite proposition.
Lockley involved plaintiff Kim David Lockley, a former City of Seal Beach police officer of Korean descent who was subjected to racial taunts and harassment at work. When his brother became involved in legal problems out of state, the City targeted Lockley in an April 1988 internal affairs investigation and terminated him. Lockley appealed the firing to the civil service board, filed a workers’ compensation claim and filed an Equal Employment Opportunity Commission complaint alleging racial discrimination.
Cantrell, Green, Pekich, Cruz & McCort (“Cantrell”) represented Lockley on his workers compensation claim. The City and Lockley entered into a compromise and release agreement (“C&R”) under which Lockley agreed to relinquish all claims against the City. For its part, the City agreed to process an application for retirement benefits for Lockley, treating him as having a non-work related disability and to notify the Public Employees Retirement System (“PERS”) that Lockley was entitled to retirement benefits. With the C&R in hand, Lockley resigned from the force and dropped all his claims.
The City reneged on its agreement. It notified PERS that Lockley was terminated for misconduct and delayed notifying PERS of Lockley’s entitlement to retirement benefits for four months, long enough to disqualify him.
Lockley revived his workers’ compensation claim. After a long episode of legal wrangling, the matter worked its way up to the Fourth District Court of Appeal, where Justice Sonenshine’s concurring opinion wondered aloud why Lockley’s attorney had not pursued a breach of contract claim after the City breached the C&R agreement.
Cantrell filed a petition for rehearing, asking that Justice Sonenshine’s remarks be deleted or clarified. The Court of Appeal ordered a modification of the opinion to add a footnote stating: “Lockley’s attorney on this appeal did not represent him at the time.”
Lockley sued Cantrell for legal malpractice on February 8, 2000. The trial court sustained a demurrer without leave to amend based on the statute of limitations after taking judicial notice of the modified opinion. The Second District Court of Appeal reversed.
B. The Statute of Limitations.
The statute of limitations for legal malpractice is found at Code of Civil Procedure section 340.6, which states:
(a) An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. In no event shall the time for commencement of legal action exceed four years except that the period shall be tolled during the time that any of the following exist:
(1) The plaintiff has not sustained actual injury;
(2) The attorney continues to represent the plaintiff regarding the specific subject matter in which the alleged wrongful act or omission occurred;
(3) The attorney willfully conceals the facts constituting the wrongful act or omission when such facts are known to the attorney, except that this subdivision shall toll only the four year limitation; and
(4) The plaintiff is under a legal or physical disability which restricts the plaintiff’s ability to commence legal action.
(b) In an action based upon an instrument in writing, the effective date of which depends upon some act or event of the future, the period of limitations provided for by this section shall commence to run upon the occurrence of such act or event.
The statute was adopted in 1997 as the Legislature’s response to the companion cases of Neel v. Magana, Olney, Levy, Catchcart & Gelfand, 6 Cal. 3d 176, 98 Cal. Rptr. 837 (1971) and Budd v. Nixen, 6 Cal. 3d 195, 98 Cal. Rptr. 849 (1971), which established that delayed discovery and lack of actual (called “appreciable”) harm both acted to toll the statute of limitations.
In Neel, the Supreme Court acknowledged that introducing tolling into the limitations equation came with a cost. We recognize that the instant ruling will impose an increased burden upon the legal profession. An attorney’s error may not work damage or achieve discovery for many years after the act, and the extension of liability into the future poses a disturbing prospect. On the other hand, when an attorney raises the statute of limitations to occlude a client’s action before that client has had a reasonable opportunity to bring suit, the resulting band of the action not only starkly works an injustice upon the client but partially impugns the very integrity of the legal profession. The solution, the high court suggested, was for the Legislature to provide a limitation period for legal malpractice similar to that found in Section 340.5, the medical malpractice statute, which has a one year from date of discovery, four year absolute limit. Section 340.6 adopted the one year/four year scheme as suggested in Neel. However, along with the notion of defined time limits are specific tolling mechanisms designed to extend the time frames in (1) absence of actual damage, (2) during continuing representation, (3) where there is misrepresentation by the attorney and (4) where physical or legal disability restricts the client. An attorney’s special fiducial relationship with the client, combined with the reality that defective legal work will not always cause appreciable harm for sometime are the primary reasons why tolling is specifically incorporated in Section 340.6.
C. Continuing Representation is Interpreted Broadly The purpose of the “continuous representation” rule is to avoid disrupting the attorney-client relationship by a lawsuit and to enable an attorney to correct or minimize an apparent error, while at the same time preventing lawyers from defeating malpractice claims by continuing to represent the client until the statute has run. Laird v. Blacker, 2 Cal. 4th 606, 618, 7 Cal. Rptr. 2d 550 (1992). The Court of Appeal in Lockley applied an objective standard in analyzing whether Cantrell’s representation of Lockley met the standard for tolling. “Continuity of representation ultimately depends, not on the client’s subjective beliefs, but rather on evidence of an ongoing mutual relationship and of activities in furtherance of the relationship.” The general rule is that the attorney’s representation does not end “until the agreed tasks or events have occurred, the client consents to termination or a court grants an application by counsel for withdrawal.” [Emphasis in original.]Lockley, supra, 91 Cal. App. 4th at 887-888, 110 Cal. Rptr. 2d 877. Using the objective standard, the Court held that Lockley’s complaint stated a claim that avoided the statute of limitations by virtue of its allegations that Cantrell had continued to represent him until within one year of filing. “On appeal, Lockley contends that statute of limitations governing attorney malpractice claims was tolled while [Cantrell] continued to represent him. This is a correct statement of the law.” 91 Cal. App. 4th at 887. In reaching its holding, the Second District panel decided it was not bound by the Fourth District’s earlier footnote implying that Cantrell’s representation of Lockley was not continuous. In a lengthy discussion of judicial notice doctrine, the Second District concluded that the additional footnote added to Justice Sonenshine’s concurring opinion did not meet the standard of being based on an adversary proceeding adjudicating a fact question and found no substantial evidence in the record to support the conclusion. The question of whether or not Cantrell’s representation was continuous, the Second District determined, remained in dispute. Cantrell, for its part, argued that during the relevant period, it represented Lockley only on his workers’ compensation claim, not the C&R agreement. Since the two items were not the same specific subject matter, the continuing representation doctrine did not apply. The Court of Appeal rejected that argument without difficulty. Distinguishing Foxborough v. Van Atta, 26 Cal. App. 4th 217, 229, 31 Cal. Rptr. 2d 525 (1994) (“the limitations period is not tolled when an attorney’s subsequent role is only tangentially related to the legal representation the attorney provided to the plaintiff”), in which a continuing representation was held as not occurring where the attorney was discharged, then rehired as an expert witness, the court found that Cantrell’s argument attempted to draw too fine a line in defining the limits of representation. On its face, Lockley’s complaint alleges [Cantrell] continuously represented appellant’s legal interests on the same specific matter of “claim for worker’s compensation from 1988 until March 1999.” We may reasonably infer from the amended complaint that Lockley hired [Cantrell] in only one capacity, that of legal representative. [Emphasis in original.] Lockley, supra, 91 Cal. App. 4th at 889, 110 Cal. Rptr. 2d 877.
D. Applying Lockley’s Lesson The moral of the story is that in analyzing whether there is a continuing representation that will toll the statute of limitations, look to see if the attorney has continued to represent the client without interruption in the same capacity throughout the relationship. As a practical matter, Lockley means that as long as there are objective facts pointing to the continuation of an attorney-client relationship past what would otherwise be a time barred by the statute of limitations, there will be an argument that the Section 340.6(a)(2) tolling provision applies and a claim is timely. In your own practice, Lockley underlines the importance of documenting precisely the outlines of the attorney-client relationship in a fee agreement and the termination of that relationship in writing. As counselors-at-law who are privileged to represent people in California’s legal system, we carry great responsibility. Section 340.6 and decisional law such as Lockley underline that a breach of that responsibility carries with it a consequence that the prudent lawyer should not ignore. 1. Class Actions Help Address Common Problems. 2. Class Actions are a Unique Class of Case. In simplest terms, class actions are a way for groups of people with common problems to seek a common solution. Class actions typically seek to solve simple questions that impact large number of people. So, that notice that comes in the mail is worth reading, because it means that someone is trying to determine if you have been harmed by a third party and, if so, how you might have been damaged. 3. Understanding Class Action Procedure is Important. Class actions start with the filing of a complaint. Generally, the complaint will have specifics about what it is that the class actions seek to address and what kind of remedies the plaintiff class is looking for. The class plaintiffs named in the complaint seek to be representatives for the entire class. 4. Resources for researching Class Actions. The notice will also tell you where the case is being litigated and include the case name and docket number. With this information and a web browser, you can often log onto the court’s website and get detailed information about when the complaint was filed, what has happened in the case and any critical dates you should know about. 5. Deciding whether to respond. The law has changed so the judges are now supposed to look hard at settlements to make sure the class is receiving something of substance where there is a legitimate legal claim. So read the notice closely. You may be pleasantly surprised that the legal system is working for you, just as it should. *** William A. Daniels is a Trial Attorney with BILL DANIELS | LAW OFFICES, APC, in Encino, CA. His practice focuses on class actions, employment and serious personal injury. A graduate of Loyola Law School of Los Angeles, he is a member of the Consumer Attorney Association of Los Angeles Board of governors and a founding member of the Civil Justice Program and the 21st Century Trial School at Loyola. For several consecutive years he has been names a “Super Lawyer” Los Angeles Magazine in Southern California. He can be reached at William.Daniels@BillDanielsLaw.com; www.BillDanielsLaw.com
A. Introduction.
Whenever there are two or more causes of a loss, it is likely that the carrier’s investigation will focus on exaggerating an excluded cause and ignoring any fact that argues for coverage. Carriers habitually push the envelope when trying to deny coverage in concurrent causation situations. The most recent evidence is found in Palub v. Hartford Underwriters Ins. Co.,92 Cal. App. 4th 645, 112 Cal. Rptr. 2d 270 (2001) (rev. den. Dec. 12, 2001), where the Court of Appeal reaffirmed the basic principal that when the proximate cause of a loss is a covered peril, it doesn’t matter if there is an excluded peril somewhere else in the causation chain. To the extent that the “exclusion” would exclude loss proximately caused by [a covered peril], it violates Insurance Code section 530 and the long-standing principal that a property insurer is liable whenever a covered risk is the proximate cause of a loss, and is unenforceable. 92 Cal. App. 4th at 650, 112 Cal. Rptr. 2d at 274. Since this is an area fraught with the potential for the carrier to manipulate its investigation and coverage analysis to the policy holder’s detriment, it is critical to understand how California law applies proximate cause to insurance claims. B. Proximate Cause, Efficient or Otherwise. In California, it is settled that where a policy exclusion conflicts with state law the exclusion has no effect. Howell v. State Farm Fire & Cas. Co., 218 Cal. App. 3d 1446, 1464, n.4, 267 Cal. Rptr. 708 (1990). It is also settled that where there are two or more causes of loss “concurrent causes” and the efficient proximate cause is a covered peril, then there is coverage for the loss, even if one or more of the concurrent causes is excluded.. Garvey v. State Farm Fire & Cas. Ins. Co., 48 Cal. 3d 395, 257 Cal. Rptr. 292 (1989). Just as Justice Stanley Mosk warned in his Garvey dissent, the insurance industry has devoted considerable energy to twisting and contorting efficient proximate cause to fit any claims denial situation. Plaintiff’s counsel’s job is to us to cut through the confusion. Whenever there are two or more causes of a loss, and one or more of those causes is excluded, the analysis begins with Insurance Code section 530, which states: An insurer is liable for a loss of which a peril insured against was the proximate cause; although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause. If the covered cause is closer in time to the loss than the excluded cause, this is generally where the analysis will stop. A prime example of how this works is found in Brooks v. Metropolitan Life Ins. Co., 27 Cal. 3d 305, 163 P.2d 689 (1945). In Brooks, an insured with terminal cancer died in a fire. The carrier denied coverage under an accidental death policy, arguing essentially that since the insured would have not have died of his burns if he had not already been sick, the exclusion for “disease and mental infirmity” applied. Disease, argued the insurance company, was a concurrent cause and trumped the covered peril, i.e., death by fire. The California Supreme Court rejected the argument: The presence of preexisting disease or infirmity will not relieve the insurer from liability if the accident is the proximate cause of death; and [] recovery may be had even though a diseased or infirm condition appears to actually contribute to cause the death if the accident sets in progress the chain of events leading directly to death, or if it is the prime or moving cause. In other words, in a hypothetical claim situation such as where wind a covered peril requires replacing a roof that was previously functioning adequately and the carrier denies the claim by arguing (1) the roof was negligently installed, (2) third-party negligence is excluded, (3) the wind would not have blown off the roof but for the negligent installation, Brooks tells us that the carrier is not being reasonable. The Brooks rule is critical in understanding proximate cause and efficient proximate cause because it was expressly followed when our Supreme Court examined an excluded cause of loss within the causal chain in Sabella v. Wisler, 59 Cal. 2d 21, 32, 27 Cal. Rptr. 689, 696 (1963) and Garvey v. State Farm Fire & Cas. Co., 48 Cal. 3d 395, 403, 257 Cal. Rptr. 292, 296 (1989). Both Sabella and Garvey demonstrate how concurrent causation analysis becomes a shade more complex when an excluded cause occurs after a covered peril. The analysis then becomes a search for the “efficient proximate cause” of the loss, also known as the “predominate” cause. When an excluded peril appears within the causal chain, carriers often look to Insurance Code section 532 as a basis for denying coverage. The statute provides: If a peril is specially excepted in a contract of insurance and there is a loss which would not have occurred but for such peril, such loss is thereby excepted even though the immediate cause of loss was a peril which was not excepted. In 1963, the California Supreme Court reconciled sections 350 and 352 in Sabella v. Wisler, 59 Cal. 2d 21, 27 Cal. Rptr. 689 (1963), which concerned a subsidence damage claim made under a homeowner policy. In Sabella, the policy specifically excluded “settling” and the carrier denied coverage, relying on section 352. The policy holder argued that the reason the house settled was that a negligently installed sewer line had ruptured, spilling water into loose fill and “setting in motion the forces tending towards settlement.” The Supreme Court held that the loss was covered because third party negligence was a covered peril under the policy and that negligence was the efficient cause of the damage. “In determining whether a loss is within an exception in a policy, where there is a concurrence of different causes, the efficient cause the one that sets the others in motion is the cause to which the loss is attributed, though the other causes may follow it and operate more immediately in producing the disaster.” Sabella, supra, 59 Cal. 2d at 31, 27 Cal. Rptr. at 695 (quoting, 6 Couch, Insurance (1930) § 1466). As the high court later explained in Garvey: We reasoned [in Sabella] that sections 530 and 532 were not intended to deny coverage for losses whenever “an excepted peril operated to any extent in the chain of causation so that the resulting harm would not have occurred ‘but for’ the excepted peril’s operation.” Rather, we explained that when section 532 is read along with section 530, the “but for” clause of section 532 necessarily refers to a “proximate cause” of the loss, and the “immediate cause” refers to the cause most immediate in time to the damage. Garvey, supra, 48 Cal. 3d at 402, 257 Cal. Rptr. at 295. Garvey reaffirmed the Sabella analysis in 1989 when the Supreme Court considered another claim for damage to a home damaged by earth movement. Again the carrier denied coverage under an earth movement exclusion and again the insureds argued that their policy covered losses caused by third party negligence. The Supreme Court looked to efficient proximate cause to solve the coverage question. Sabella defined “efficient proximate cause” alternatively as the “one that sets others in motion” and as “the predominating or moving efficient cause.” We use the term “efficient proximate cause” (meaning predominating cause) when referring to the Sabella analysis because we believe the phrase “moving cause” can be misconstrued to deny coverage erroneously, particularly when it is understood to mean the “triggering” cause. Garvey, teaches a number of lessons. First, in determining an efficient proximate cause, look for an active cause that sets a causal chain in motion. Following Brooks, a simple condition of person or property can never be an efficient proximate cause. Second, an efficient proximate cause is a predominating cause and a term of art. In denying coverage, carriers will be creative and expansive in their own definitions of efficient proximate cause, but cannot be allowed to get away with loose definitions. C. Reading Exclusions Out of the Policy. Even though Sabella, Garvey, Howell and their progeny have been the law in California for over a generation, carriers still attempt to push the efficient proximate cause doctrine beyond its limits to deny coverage. For example, some carriers will argue that efficient proximate cause translates into the “most important” cause of a loss and then will fixate on an excluded event in the chain of causation in order to document a denial. This is a position that relies on a misstatement of the law. Garvey, after all, establishes that efficient proximate cause is equivalent to predominating cause, the meaning first offered in Sabella. Nowhere do the cases discuss “most important” cause as a standard. The distinction is not mere linguistics. Going back to our roof loss hypothetical, a sloppy roofing job may well prove adequate against the elements for a decade or more before a windstorm tears it apart. The roofer’s negligence cannot by definition be an efficient proximate cause of the loss because it sets nothing in motion. It is simply a state of condition and the Brooks rule is that “recovery may had even though a diseased or infirm condition appears to actually contribute to cause the [loss] if the [covered peril] sets in progress the chain of events leading directly to [the loss], or if it is the prime or moving cause.” 163 P.2d 689, 691. Since it is the windstorm a covered peril that sets the damage chain in motion, following Brooks, Sabella and Garvey, windstorm is the efficient proximate cause and triggers coverage under the policy. For its part, roofer negligence an excluded peril is an infirm condition that is a remote cause as a matter of law and cannot defeat coverage. The reasonable expectations of both insured and insurer that wind damage is covered are met. The carrier is free to pursue the roofer on its own in subrogation, but it must pay the claim benefits provided by the policy. Palub v. Hartford Underwriters Ins. Co., 92 Cal. App. 4th 645, 112 Cal. Rptr. 2d 270 (2001), provides a good example of how carriers continue to try to abuse efficient proximate cause analysis. In Palub, the insureds made a claim under their all-risk homeowner policy for damage to their home after a slope behind the house failed. The insured argued that weather conditions caused the slope to fail and were the efficient proximate cause of the loss. The insurer argued that weather conditions were excluded under the policy by a provision stating, “We do not insure against loss to property . . . caused by any of the following . . . (a) Weather conditions. However, this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in paragraph 1. above to produce the loss.” The Court of Appeal observed that in light of this language, weather conditions were not an excluded cause of loss by themselves. The Court also held that to the extent that the policy provision attempted to exclude coverage for weather conditions that acted as the efficient proximate cause of a loss, the exclusion violated Insurance Code section 530 and was unenforceable. Palub, in turn, relied on Howell v. State Farm Fire & Cas. Co., 218 Cal. App. 3d 1446, 267 Cal. Rptr. 708 (1990), which addressed much the same problem. Howell involved an all-risk homeowner’s policy and a claim for damage due to landslide. The insured argued that fire had destroyed the vegetation on a nearby slope and unusually heavy rains then drenched the bare unprotected ground, resulting in a landslide. An expert testified that the landslide probably would not have happened had the ground cover been intact. The Court held that the fire was the efficient proximate cause of the loss under this analysis and found coverage. 218 Cal. App. 3d at 456, 267 Cal. Rptr. at 714-715. The primary issue decided by Howell is that an insurer cannot contractually exclude coverage when an insured peril is the efficient proximate cause of the loss, no matter how the policy is written. Any exclusion purporting to defeat coverage where the efficient proximate cause is a covered peril is simply read out of the policy. D. Conclusion. Just as Justice Mosk warned in Garvey, the efficient proximate cause analysis has tempted many a carrier to engage in studied mischief. But Sabella and Garvey provide the bedrock definitions for efficient proximate cause. Brooks confirms that a pre-existing, latent infirmity can never be an efficient proximate cause since is a condition rather than a moving cause. And Palub and Howell render inapplicable exclusions that seek to limit coverage where a covered peril is the efficient proximate cause of loss.
5 Tips for Understanding Class Actions
A notice in the mail is usually how we learn that we might be connected to a class action. The notice might say that a claim has been made on our behalf, or that we can receive some benefit by mailing back a form. So, what is it all about, this “class action” thing and is it a good thing or a bad thing?
Class actions can be brought in either state of federal court. Though state courts remain an important forum for class action litigation, recent federal legislation has tended to make Class actions more of a federal area than traditionally.
When you get a class action notice in the mail, it will always contain certain types of information. Most importantly, the notice will include the names of the lawyers of both sides of the case. If you have questions, simply pick up the phone and call or, if available, use the Internet to find the informational website that is often set up to give class members the lastest scope on what is happening with the case.
In the not so distant past, class actions might settle for a small discount or non-cash benefit to the class members, known as a “coupon settlement,” along with a fee for the attorneys. These coupon settlements have been criticized as not providing a real benefit to the class members.
Exposing Carriers Who Abuse Efficient Proximate Cause
Brooks, supra, 163 P. 2d at 691.
Garvey, supra, 48 Cal. 3d at 403-404, 257 Cal. Rptr. at 296.
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William A. Daniels is a Trial Attorney with BILL DANIELS | LAW OFFICES, APC, in Encino, CA. His practice focuses on class actions, employment and serious personal injury. A graduate of Loyola Law School of Los Angeles, he is a member of the Consumer Attorney Association of Los Angeles Board of governors and a founding member of the Civil Justice Program and the 21st Century Trial School at Loyola. For several consecutive years he has been names a “Super Lawyer” Los Angeles Magazine in Southern California.
He can be reached at William.Daniels@BillDanielsLaw.com; www.BillDanielsLaw.com
Whole Brained Law
My wife, Cheryl, is fairly direct. “You need to read this,” she commanded, as she handed me an orange book by Daniel H. Pink. The cover graphic was a UPC bar code label juxtaposed against a piano keyboard. A Whole New Mind: Moving from the Information Age to the Conceptual Age, read the title.
“My high school kept saying they’re better because they train whole-brained students and I wanted to see what that was all about,” Cheryl explained. “This is the text they mentioned. I think you’ll get more out of it than me.”
I looked at the cover again. A pull-quote from Wired magazine promised the volume would explain “Why right-brainers will rule the future.” Being a right brained individual trapped in a left brain profession I thought, “What the heck?”
Pink’s introduction hooked me:
The last few decades have belonged to a certain kind of person with a certain kind of mind – computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers. But the keys to the kingdom are changing hands. . . .
This book describes a seismic – though as yet undetected – shift now underway in much of the advanced world. We are moving from an economy and a society built on the logical, linear, computer-like capabilities of the Information Age to an economy and a society built on the inventive, empathic, big-picture capabilities of what’s rising in its place, the Conceptual Age.
I thought, “Wow! He’s saying people who think like plaintiff lawyers are coming into their own?
I thumbed through the volume and, sure enough, that’s pretty much what Pink is positing, though I’m sure he doesn’t think about it in those terms. Even so, Pink’s recommended reading list includes many of the primary texts that cutting edge jury trial experts are making required reading for their adherents. Books like Robert McKee’s Story: Substance, Structure, Style, and the Principles of Screenwriting, George Lakoff and Mark Johnson’s Metaphors We Live By and Paul Elkman’s works on reading facial expression.
In case you’re not familiar with the notion of “right-brained,” “left-brained” and “whole-brained,” it boils down to this. Left-brained thinkers, the theory goes, tend to be logical and linear. Right-brained thinkers are more creative and artful. Whole-brained thinkers combine both logical/linear-creative/artful approaches. A stereo-typical left-brained professional is the engineer laboring in a cube-farm. The artist in his/her loft is the stereo-typical right-brainer. Columnists for Advocate fall into the whole-brained category.
Anyhow, a couple of days later, an email hit my computer from Advocate publisher, Richard Neubauer. The subject line was “idea for column or article” and it included a short story from the Daily Journal.
The page one article by Mindy Farabee was titled “’March Madness’ Rings in New ADR Program” and darned if the article doesn’t illustrate how Pink’s theories about success in this new conceptual age are proving themselves out right in downtown Los Angeles.
The Daily Journal piece talked about a push at the Los Angeles Central courthouse to reintroduce the Voluntary Settlement Conference Program, which is specifically designed to handle p.i. cases. Apparently, personal injury doesn’t fit well in the traditional (read “left-brained”) court-ordered mediation process. As incoming Southern California Mediation Association incoming president Phyllis Pollack was quoted, “The general feeling among mediators is that defendants were not appearing at mediations in good faith. In many cases, insurance adjusters attended the mediation with little or no money to offer in settlement. Many mediators got the impression that defendants were appearing at mediation simply because the court ordered them to be there, with no real desire to resolve the matter.”
Of course, what Ms. Pollack is describing is nothing new. On the plaintiff side, we all understand that unless a carrier has decided a case is ripe for settlement, nothing is getting accomplished by mediation.
So, it seems that the Central District ADR people figured out that the standard routine wasn’t working to settle cases, so they decided to be disruptive, innovate and shake things up a little to help clear the crowded dockets.
The result was “March Mediation Madness,” a push to process 252 p.i. cases at more than a dozen L.A. County courthouses, all in the month of March. Rather than follow the standard single mediator approach, the program paired plaintiff and defense lawyers as co-mediators while also changing the standard rules on confidentiality.
Now, if I’m recalling correctly, the format of pairing a plaintiff lawyer and a defense lawyer as mediators in a personal injury case isn’t new – I volunteered for those programs myself back in the old CRASH settlement program days.
What is new – and encouraging – is that the program represents a whole-brained approach to settling cases by adapting a mediation format to fit the problem at hand, instead of trying to force uniformity just because it’s easier to use an existing mediation system. Dare I characterize the approach as practical?
I called the Honorable Rex Heeseman, chair of the court’s ADR committee, to find out how the month-long push worked out, but his clerk said the judge was on vacation. Still, the Daily Journal quoted Judge Heeseman as saying that initial reaction was positive.
Which delighted me, because I see it as further proof that creative, whole-brained approaches, can succeed in our left-brained profession.
As I mentioned, Pink’s book has a piano keyboard on the cover, so I guess it’s appropriate that I bought Cheryl a baby grand for her birthday. Being whole-brained doesn’t seem to have hurt my own practice at all.
Here’s to being a well-rounded, creative and successful lawyer in our new Conceptual age.
Sun Tzu, Lao Tsu; Using yin and yang to help make your cases stronger.
Yin and yang are, of course, Chinese archetypes describing two opposing aspects of a single common principle. Yin is generally characterized as soft, slow, tranquil and gentle, while Yang is hot, restless, hard and rapid. Westerners assume one is female and the other male, but that’s not strictly true. In Chinese philosophy, both coexist, complementing even as they stand opposite. Either gender can possess elements of either aspect without automatically being labeled as “sissy” or “butch.”
Still, we’re talking about practical principles here and what yin and yang teach us is, when working your cases, it is important not to overload on any one approach. Too gentle never works, but neither does too harsh.
The best lawyers find a balance point and they work it. Ever notice how folks will speak in admiring tones about attorneys who are fierce opponents in the courtroom but great to have a drink with afterwards? That’s what I’m talking about.
So, two useful perspectives on being a more effective trial lawyer can be found in the writings of those yinny and yangy Chinese ancients: Sun Tzu and Lao Tsu.
Sun Tzu, in case you never saw Wall Street or plotted the overthrow of anyone in particular, wrote The Art of War in 500 B.C. His slender volume is the oldest military Lao Tsu, on the other hand, authored the Tao Te Ching, which according to tradition was completed somewhere in the 6th Century B.C. The book embodies the essence of Taoism and, 2,500 years later, provides one of the major underlying influences in Chinese thought and culture.
Both volumes contain crisp little axioms that you can either ponder endlessly in search of higher meaning or, toss away dismissively. I suppose it all depends on your personal outlook. Could be you are George Harrison at the feet of the swami. Could be you’re a native New Yorker who stumbles into a Malibu ashram on saffron robe Sunday.
Personally, being part Chinese (Portuguese trading family. Someone’s long ago mistress, apparently), I try to remember and apply both schools. Two more arrows in my quiver, if you will.
Starting with the yang:
Sun Tzu said: The art of war is of vital importance to the state. It is a matter of life and death, a road either to safety or to ruin. Hence it is a subject of inquiry which can on no account be neglected.
Practicing civil law is very much like engaging in the kind of warfare Sun Tzu describes in his book. There are strategic challenges, supply and maneuver, training, intelligence, discipline and tactics. The objective, of course, is to win justice for your client. The battlefield is the courtroom. The ground is generally hostile and consumer attorneys are usually out-manned and outgunned.
Accordingly, when pursuing a case, getting to the point is critical to success. In war, then, let your great object be victory, not lengthy campaigns. So, be proactive in litigation, not reactive. Even if the temptation is to lay back and let your files work themselves, that’s not a winning strategy. Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in the field and has to hasten to the battle, will arrive exhausted.
Keep your plan of attack to yourself when possible. You can maintain tactical surprise while adhering to the letter and spirit of the Discovery Act. The spot where we intend to fight must not be made known; for then the enemy will have to prepare against a possible attack at several different points; and his forces being thus distributed in many directions, the numbers we shall have to face at any given point will be proportionately few.
When you work your cases, don’t get stuck in a rut. Vary your tactics to prevent becoming overly predictable. The general who thoroughly understands the advantages that accompany variation of tactics knows how to handle his troops. The general who does not understand these may be well acquainted with the configuration of the country, yet he will not be able to turn his knowledge to practical account.
I highly suggest taking a couple of hours to either acquaint or reacquaint yourself with The Art of War. Grab a printout off the internet and read it by the pool. It’s only thirteen short chapters. Read it and you’ll really get a supercharged educational experience. Nothing like imagining 10,000 charging warhorses while getting the latest tips on when to ask for supermarket sweep sheets in your slip and fall case. Adds spice to the proposition.
More in the yin category is Lao Tsu’s way of thinking. This is softer philosophy but, again, you can’t have effective yang without its opposite and, Taoist principles are so cool, they even make wrinkled puppets sound profound in pretty much every George Lucas film ever made.
The three basic virtues in Taoism, called the “Three Jewels” or “Three Treasures” are compassion, moderation and humility. All are virtues, even here in the West, though sometimes we throw one or more aside in our headlong rush to win.
Lao Tsu reminds us that in order to truly succeed, we need to accept that from time to time, we will fail. Accept disgrace willingly. Accept misfortune as the human condition. What do you mean by ‘Accept disgrace willingly’? Accept being unimportant.
We always need to be willing to speak openly and earnestly with jurors and judges as we present our client’s case. He who does not trust enough will not be trusted. Juries, after all, are bull#$%@ meters. Spinning a false yarn leads only to disaster. In all your dealings, treat others with dignity and respect. A good soldier is not violent. A good fighter is not angry. A good winner is not vengeful. A good employer is humble. This is known as the Virtue of not striving. This is known as ability to deal with people. This since ancient times has been known as the ultimate unity with heaven. This is also known as the mensch principle.
So, I guess the lesson for today is, don’t forget to ground your wisdom and knowledge in humanity. As the Gerry Spence people teach, what we do is all about finding our own voice and using it to speak eloquently for our clients. Whether it’s Eastern, Western, Christian, Jewish, whatever, stay true to your basic principles and according to the great rule of the universe, you will thrive.
A Class Action Primer
1. Class Actions Help Address Common Problems.
Class actions are a way for groups of people with common problems to seek a solution in a convenient format.
Class actions typically seek to solve simple questions that impact large number of people. Whether all of an insurance company’s claims personnel are entitled to overtime or whether all of the bank’s credit card customers were overcharged because of a single, unfair, interest calculation are good examples of problems that class actions best address.
2. Class Actions are a Unique Class of Case.
For purposes of news reporting, it is important to remember that a class action is a process that is unique unto itself. For example, a class action is different than a “mass tort,” which tends to involve problems such as when a large number of people are injured in different ways by a single type of defective drug or product. Mass tort cases might involve one common element – generally a single defective product – that affects each affected individual in a unique manner.
Cases involving products like Vioxx or asbestos fall under the mass tort label. These cases are not generally prosecuted as class actions because, even though they involve a common product, the injuries each consumer suffers are individual to them. So, mass torts are generally litigated in systems such as the federal Multi-District Litigation system – where a single judge will preside over hundreds or thousands of individual cases coordinated for administrative purposes. While these systems allow large numbers of people with one common problem to have their claims resolved in an efficient fashion, they are not the same as class actions and make different demands on the reporter.
The point is, when reporting on a large action involving numerous individuals, always make sure that you know whether it is a class action, or some other legal mechanism that serves a similar, but different purpose. Then approach the story accordingly.
3. Understanding Class Action Procedure is Important in Covering the Story.
Class actions tend to be driven by legal procedure. Understanding the procedural steps is key to accurately capturing breaking class action stories.
Class actions can be brought in either state of federal court. State courts remain an important forum for class action litigation. Even so, recent federal legislation known as the “Class Action Fairness Act” has tended to make Class actions more of a federal area than it has ever been before.
The legislation was passed after years of effort by business interests and was intended to shrink the number of class actions filed across the country. Early reports indicate that during the first six months of the new legislation, there has been a “precipitous decline” in class action activity. Even so, class actions continue to make up an important part of legal landscape.
Unlike covering trials, class actions tend to take place mostly on paper. This can be both a blessing and a curse. It is blessing because, if a reporter is able to obtain a copy of an interesting case complaint or pleading at the time it is filed, it becomes relatively simple to write a story. On the other hand, trying to follow day-to-day activity in a class action can be quite difficult since legal filing generally take place at the clerk’s counter without notice or fanfare. Still, there are some constants in covering class action stories.
Class actions start with the filing of a complaint. Generally, the complaint will have specifics about what it is that the class actions seek to address and what kind of remedies the plaintiff class is looking for. The class plaintiffs named in the complaint seek to be representatives for the entire class, which may in turn total multiple thousands of people.
The fact that a class action complaint has been filed can in and of itself be a news event. Even so, a reporter needs to remember that the allegations and complaint are just that: they are the plaintiff’s counsel’s view of the best facts supporting their side of the argument and there are always two sides to every story.
After the complaint is filed, there will generally be some sort of paper work filed with the court attacking the complaint as deficient and asking the court to either knock the complaint out completely or require that it be amended. These pleadings are called demurrers and motions to strike in state court and motions to dismiss in federal court.
If the judge rules that the complaint is dismissed, then that could be a new story. On the other hand, if the judge says the complaint is sufficient, that fact might be of interest to a reporter following the story but may not prove newsworthy.
A motion for class certification is one of the defining events in a class action, because simply filing a complaint does not by itself a class action make. In the class action process, the judge acts as a gatekeeper for the case being formally designated as a vehicle to resolve problems applying to an entire class, and counsel for the plaintiff must bring a motion asking that the class be certified as such.
The ruling on class certification is generally a newsworthy event where there is interest in the underlying case. Obtaining class certification is considered to a major victory in the process for the plaintiff’s side. Conversely, denial of certification is generally seen as a major victory for the defense.
Either before or after class certification, a summary judgment/adjudication motion is likely. These motions ask the court to decide important parts of the case in favor of one side or the other.
For example, the plaintiff may ask the court rule that the defense is liable as a matter of law and that the only thing in dispute is damages. Or, the defense may ask the court to rule that the plaintiffs have no case as a matter of law and the thing should be thrown out in its entirety. Either way, rulings on summary judgment can generate news.
Just as important, the papers in support and in opposition to both summary judgment motions and certification motions can provide reporters with invaluable background information as they prepare their stories. Since the papers are part of the court file which is a public record, a reporter has a valuable resource available if there is time to review it.
4. Reporter Resources for Class Action Reporting.
More and more court systems are making court filings available on the internet. Since class actions are so paper intensive, subscribing to such a service can save quite a bit of leg work. Even so, it may be days before a key filing is scanned into the court system and available for downloading. So, it is a good idea to contact the lawyers in the case early on and ask if they are willing to provide tips on when key filings will make their way into the public record.
As always, where a reporter is following a story regarding a class action, it is critical to develop outside sources that can help explain the details behind each step of the process. While attorneys on both plaintiff and defense side can be valuable sources, developing relationships with law school professors or experts in the area can give the reporter an important edge.
Organizations such as the Consumer Attorneys Association of Los Angeles or the Association of Trial Lawyers of America have resources both over the telephone and on the internet. Also a Google search on the subject matter of the class action will often turn up leads for sources that are familiar with the case subject matter. As always, the internet is a powerful research tool.
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William A. Daniels is a Trial Attorney with BILL DANIELS | LAW OFFICES, APC, in Encino, CA. His practice focuses on class actions, employment and serious personal injury. A graduate of Loyola Law School of Los Angeles, he is a member of the Consumer Attorney Association of Los Angeles Board of governors and a founding member of the Civil Justice Program and the 21st Century Trial School at Loyola. For several consecutive years he has been names a “Super Lawyer” Los Angeles Magazine in Southern California.
He can be reached at William.Daniels@BillDanielsLaw.com; www.BillDanielsLaw.com
