Case Updates Archive

California has strengthened its stance against non-compete agreements with the signing of an amendment to the state's non-compete ban, known as S.B. 699. The amendment, which takes effect on January 1, 2024, declares non-compete agreements void regardless of when or where they are signed, including those signed outside of California. S.B. 699 also introduces a new private cause of action, allowing employees to take legal action against employers who use unenforceable non-competes as a deterrent. However, there are still unanswered questions surrounding the amendment, including its impact on Labor Code §925, and its potential retroactivity. Employers, both within and outside of California, should carefully review their use of restrictive covenants in light of these developments.

On October 16, 2023, the California Court of Appeal for the Second Appellate District reversed an order by the Santa Barbara County Superior Court granting a motion in limine excluding the testimony of plaintiff Dana Brancati’s medical expert in a mold bodily injury case. That exclusion order resulted in the dismissal of the plaintiff’s action. Finding that the medical expert was qualified and that his opinion was “based on facts and a differential diagnosis,” the Court of Appeal reversed the trial court’s orders.

The Connecticut Supreme Court recently handed down a pair of important opinions in Mills v. Hartford Healthcare Corp. and Manginelli v. Regency House of Wallingford, Inc. The opinions answered the question of whether health care providers and facilities could be civilly liable for healthcare services undertaken in support of the state’s COVID-19 response pursuant to Governor Ned Lamont’s Executive Order No. 7V. In both decisions, the court’s review included the consideration of acts and omissions undertaken due to the lack of resources that often plagued those in the medical field during the pandemic as well as examining the principles for interpreting an executive order by the Connecticut Governor.

In a recent appellate decision that will have far-reaching implications for brokers in the freight industry, Illinois' First District Appellate Court reversed a judgment in the groundbreaking case of Cornejo v. Alliance Shippers, Inc. (2023) IL App.1st No. 220633. The court determined that an agency relationship did not exist between the freight broker and the motor carrier, thereby relieving the broker of vicarious liability for the driver's negligence. This pivotal decision, handed down on September 27, 2023, has sent shockwaves through the industry and has the potential to redefine the legal landscape for brokers.

The California Supreme Court answered two certified two questions in the case of Kuciemba v. Victory Woodworks, Inc. (2023)_Cal.5th_, 2023 WL 4360826. The decision signals a significant development that could have wide-reaching implications surrounding employer liability related to COVID-19. The Court's decision is poised to influence how future cases involving the derivative nature of workplace-related "injuries" from COVID-19 are adjudicated moving forward.

On September 30, 2023, Governor Gavin Newsom signed SB-235 into law. SB-235 will affect the rights and obligations of the parties as it pertains to the exchange and disclosure of factual information during discovery. Specifically, the new law amends California Code of Civil Procedure section 2016.090 and institutes a procedure for initial disclosure of information and documents that is similar to that followed in Federal court. The changes apply only to civil actions filed on or after January 1, 2024 and shall remain in effect until January 1, 2027.

Inzunza v. Naranjo et al. (2023) __Cal.App.5th__[2023 WL 5344893], involved a wrongful death action initiated against a truck driver and his employer. The plaintiffs claimed that the truck driver’s negligence caused the death of the decedent. After a jury returned a verdict in favor of the plaintiffs, the trucking company employer appealed claiming that they were improperly precluded from bringing evidence to combat the vicarious liability claim against them as well as bringing evidence of comparative fault on the part of the decedent. In this recently published decision, the court reversed the judgment against the employer and remanded for a new trial. The Court based its finding for remand on the fact that deemed admissions of an agent employee-codefendant do not bind the employer as the principal in the same action, even when the claim involves vicarious liability.

Can a mother who heard the injury of her daughter occur over a cell phone sustain a cause of action for negligent infliction of emotional distress against not only the driver causing the injury, but also against the City and homeowner for allegedly allowing a dangerous conditions that plaintiffs claim contributed to the crash? In Downey v. City of Riverside (2023) 90 Cal.App.5th 1033, the court found that liability for negligent infliction of emotional distress cannot be imposed for the consequences of allegedly harmful conduct when she was neither present at the scene of the accident nor did she have knowledge at the time of the accident of the connection between the defendants’ alleged negligent conduct and her daughter’s injuries. Although the court noted that Downey potentially had perceived the incident through the cell phone, she did not successfully establish a causal connection between the alleged dangerous condition and the emotional damages she suffered as a result of the accident.

On June 16, 2023, the Supreme Court of Texas issued an important decision in Chohan v. New Prime, Inc, following a petition for review from the Court of Appeals for the Fifth District of Texas, addressing the award of noneconomic damages in a wrongful death case and emphasizing the need for an actual nexus between the award of noneconomic damages and the evidentiary record.

On August 30, 2023 the United States Department of Labor announced a notice of proposed rulemaking that would extend overtime pay to an additional 3.6 million salaried workers. In a nutshell, the proposed rule guarantees overtime pay for previously exempt salaried workers who earn less than $1,059 per week, or about $55,000 per year. This proposed change revises section 13(a)(1) of the Fair Labor Standards Act (FLSA), which exempts minimum wage and overtime pay requirements for certain executive, administrative and professional employees. It also provides for an automatic updating mechanism that streamlines the process to update and accurately reflect current earnings data.

In a precedent-setting decision by California’s Third District Court of Appeal, the court clarified the reach of Code of Civil Procedure (“CCP”) section 998, California’s cost-shifting statute. (Madrigal v. Hyundai Motor America (2023) 90 Cal.App.5th 385, as modified on denial of reh’g (May 9, 2023), review granted (Aug. 30, 2023)¹.) The case is noteworthy because it clarifies that a plaintiff who does not accept a section 998 offer, and later obtains a less favorable result through a stipulated settlement, rather than through a formal “judgment,” may still invoke the cost-shifting provisions of section 998. The court reasoned that a contrary interpretation would undermine the purpose of CCP section 998, as it would improperly benefit a party who did not accept a section 998 offer that proved to be reasonable based on the amount that party ultimately accepted through a stipulated settlement.

In Greenfield v. Dep't of Labor & Indus. of State, No.57156-1-II (Wash. Ct. App. Jun. 21, 2023), the court found that a intake counselor for the ACLU who worked on a volunteer basis for almost a year was not subject to the Washington Minimum Wage Law. As a volunteer working for a non-profit, he was exempt from the statute and the ACLU could not be held liable for refusing to pay him or offer him a future opportunity or employment.

The Supreme Court of Georgia recently delivered its highly anticipated decision in Ga. CVS Pharmacy v. Carmichael, S22G0527 (June 29, 2023), shedding light on the liability of proprietors and security contractors for injuries resulting from third-party criminal activity. While the ruling addresses various aspects of these claims, some unresolved questions remain.

In King County v. Walsh Construction Company, No. 83787-7-1 (July 3, 2023), the Washington Court of Appeals' discusses the effect of warranty language in construction contracts when design errors are implicated. Contractors should review the warranty language in their contracts to make sure they are not unknowingly agreeing that the design drawings are sufficient.

On July 23, 2023, California Senate Bill 652 was signed into law, changing the standard of proof required for admissibility of expert opinion testimony regarding alternative medical causation at trial. The new law, which was drafted in response to a California Court of Appeal decision that affirmed the existing standard of proof for admission of defense expert medical opinions at trial, imposes a higher standard of proof on defendants. This amendment to the California Evidence Code, under new section 801.1 goes into effect in 2024.

In its first comprehensive overhaul of the prevailing wage provisions of the Davis-Bacon Act in over 40 years, the Department of Labor (DOL) issued a new ruling that alters how prevailing wages for federally-funded or sponsored construction projects are calculated. On August 8, 2023, the DOL announced the issuance of the final rule entitled "Updating the Davis-Bacon and Related Acts Regulations." This final rule aims to redefine how prevailing wages and benefits are determined in federally-funded or assisted construction projects. This will vastly impact how construction workers are compensated.

In a head-spinning tale of battling court decisions and competing precedents, yet another important decision has hit the books on the question of standing under the Private Attorneys General Act of 2004 (PAGA). In Adolf v. Uber Techs., S274671 the court considered whether an aggrieved employee compelled to arbitrate induvial (July 17, 2023), claims under PAGA maintains standing to pursue PAGA claims arising out of events involving other employees. In an act of clear opposition to a recent U.S. Supreme finding on this topic, the California Supreme Court answered this question in the affirmative and found in favor of the plaintiff employee.

Professional malpractice claims in the construction industry present unique questions with respect to statute of limitations issues. One particular challenge practitioners often encounter is determining which statute of limitations applies to each claim. When problems occur on a construction site, owners and developers often involve their design professionals and expect that they will be held at least partially responsible for any legal losses.

In Dardar v. Farmers Auto. Ins. Ass'n, 2023 Ill. App. 5th 220357 (Ill. App. Ct. 2023), the Illinois Fifth District Appellate Court reviewed the lower court's dismissal of a plaintiffs' complaint demanding property insurance coverage for the destruction of a home that they had never lived in. It agreed that the term "reside" was not ambiguous as to the terms of plaintiffs' specific agreement with the insurance company. The fact that the word "reside" has multiple meanings did not in and of itself render the term ambiguous as to this contract.

Fan on fan violence was at the root of a lawsuit brought by Enrique Romero against the Los Angeles Rams (“Rams”); and against the Rams’ private security contractor, Contemporary Services Corporation (“CSC”). In Romero v. L. A. Rams, No. B310152 (Cal. Ct. App. Apr. 27, 2023). Romero alleged causes of action for negligence, premises liability and related torts after Romero was injured in an altercation with another fan during a Rams football game at the Los Angeles Coliseum.

In granting defendants’ motions for summary judgment, the trial court ruled that, even if defendants had a duty to protect plaintiffs and had failed to take the necessary steps outlined in plaintiffs’ complaint, these failures did not establish causation for Romero's injuries. On appeal, the court affirmed.

In Blaylock v. DMP 250 Newport Center, the court upheld the long-standing Privette doctrine. In its analysis it found that the employee of a contractor who failed to properly inspect the worksite in accordance with industry standards could not later recover from the owner of the building for his injuries sustained while performing his work. 

We are delighted to announce that New York partner Kevin Fitzpatrick and senior associate Andrew Cota secured a significant victory in successfully arguing a Motion for Summary Judgment in favor of a client involved in a contentious premises liability suit.

In a recently released technical assistance document, titled “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964,” the Equal Employment Opportunity Commission (“EEOC”) explained how employers can run afoul of the American’s with Disabilities Act (“ADA”) by using computer-based tools when making decisions about hiring, monitoring, compensation, and/or terms and conditions of employment. Building upon earlier advice, contained in the “Artificial Intelligence and Algorithmic Fairness Initiative,” published in 2021, the EEOC warned of possible adverse impacts arising from the use of AI in employment. This new article particularly focuses on the adverse impact of using AI for employment decisions.

The case of Cvejic v. Skyview Capital, LLC, No. B318880 (Cal.App. Jun. 28. 2023), explored the question of whether a party was entitled to withdraw from arbitration if the other party did not pay their arbitration fees on time. According to the California Code of Civil Procedure section 1281.98, the court found that the answer is yes. This case is illustrative of the importance of paying fees on time and not relying on the arbitrator in the case to provide extensions, or expecting the opposing party to simply go along with changing payment deadlines even if approved by the arbitrator.

When a federal district court denies a motion to compel arbitration, the losing party has a statutory right to an interlocutory appeal pursuant to 9 U. S. C. §16(a). In the case of Coinbase, Inc. v. Bielski, 22-105 (June 23, 2023), the Supreme Court of the United States considered the sole question of whether the district court must stay its proceedings while the interlocutory appeal is ongoing. The court answered in the affirmative and ruled that the district court must stay its proceedings.

In Stelzer v. Nw. Cmty. Hosp., 2023 Ill. App. 220557 (Ill. App. Ct. 2023), a hospital was vindicated when the court found that their consent forms clearly informed patients that the doctors performing surgery were neither employees nor agents of the hospital. A patient required emergency open heart surgery and signed several consent forms that clearly stated that the doctors performing his procedures were not employees of the hospital where the procedure was being performed. Despite this, he sued the hospital under a theory of apparent agency. The court denied his claim and granted the hospital partial summary judgment. Where the consent forms stated multiple times that the doctors were not employees and used bold and all capitalized font to express this fact, the plaintiff could not prevail.

In this interlocutory appeal, the Supreme Court of Texas reversed in part the decision of the court of appeals in Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, _S.W.3d_2023 (Tex. May 12, 2023). The high court found that Whiteley, a subsequent purchaser who claimed construction defects against Lennar Homes of Texas Land & Construction, Ltd. (“Lennar”) was bound by the arbitration clause contained in the purchase and sale agreement (“PSA”) between Lennar and the original owner of the home pursuant to the doctrine of direct-benefits estoppel. Despite the fact that Whiteley’s implied warranty claims against Lennar arise partly from common law, nonliability arises from the provisions of the express warranty between Lennar and the original purchaser because the express warranty was incorporated by reference into the original PSA. The court found that the warranty claims asserted by Whitely did not stand on their own, but instead relied on the existence of the original PSA containing the arbitration clause.

In Cothron v. White Castle System, Inc., 2023 IL. 128004 (Feb. 17, 2023), the Illinois Supreme Court examined the question of whether claims under section 15(b) and(d) of the Illinois Biometric Information Privacy Act (the Act) accrue each time a piece of biometric data is scanned or transmitted. In a much-anticipated decision, the high court found that businesses will be liable for each and every infraction; not only the first instance. The impact of this case is far-reaching in assessing potential liability for businesses collecting biometric data in violation of BIPA.

Get ready to take a swing at this golf course injury case! In Wellsfry v. Ocean Colony Partners, 2023 S.O.S. 1709, the court upheld the age-old doctrine of assumption of the risk, affirming the inherent dangers of teeing off. Despite a nasty trip on a tree root, the golfer was not entitled to recover for his injuries due to the primary assumption of the risk doctrine. This case sets a precedent for understanding the potential hazards of the sport and reinforces the importance of personal responsibility on the greens and potentially beyond.

Employers must post a separate appeal bond after an amount is awarded to an employee by the Labor Commissioner. That was the lesson learned in Adanna Car Wash Corp. v. Gomez (2023) 87 Cal. App.5th 642. In this case, the court found that an employer could not substitute the $150,000 bond it already had for the car wash it operated with an appeal bond. Labor Code section 2055, requires a bond as a condition of business licensure, but a separate bond is required under Labor Code section 98.2, which addresses bond requirements in regard to Labor Commissioner awards.

In a victory for LBGTQ+ rights, the 4th Circuit Court of Appeals in Richmond, Virginia, recognized gender dysphoria as a medical condition and determined that those suffering from it are entitled to protections under the Americans with Disabilities Act. Businesses should take note of this important legal development and the expanded protections under the ADA in the 4th Circuit as similar cases are sure to be adjudicated in halls of justice across the country.

The California Court of Appeal just dropped a bombshell for those defending cases involving bodily injury claims that implicate the right to conduct a mental independent medical examination. In Randy’s Trucking, Inc. v. Superior Court (Buttram) (2023) (“Randy’s Trucking”), the court tackled the thorny issue of whether an examined party can demand that raw test data and other confidential materials be sent directly to the party’s attorney, rather than to a licensed neuro-psychologist or equivalent professional (collectively, “neuro/psych expert(s)”). The decision has major implications for the defense community, as most neuro/psych experts refuse to participate in exams if forced to disclose test information to non-experts, due to ethical and copyright concerns. This is a major shift in the legal landscape, potentially preventing defendants from obtaining the mental examinations to which they are entitled as a matter of law, and it remains to be seen how the Supreme Court and/or Legislature will address the issue going forward.

Hold onto your hats, folks – the U.S. Supreme Court has agreed to hear an insurance coverage dispute in a rare case that could have major implications for policyholders and insurers alike. Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC, 47 F.4th 225 (3d. Cir. 2022), involves a maritime coverage dispute in which interested parties are watching closely to see how the Supreme Court chooses to handle the choice-of-law issue at its heart, in a decision which could potentially have far-reaching consequences. Basically, the case revolves around whether the “strong public policy” of a state can override the validity of a choice-of-law provision in a maritime insurance contract. While this may sound dull, it is actually a pretty big deal – different states have vastly different legal standards when it comes to determining whether an insurer has denied coverage in bad faith, and deciding which state’s law applies can be game-changing. So, buckle up – this one is going to be a wild ride.

In a closely watched insurance coverage action out of Washington State related to the big tunnel project in Seattle, the Washington Supreme Court provides a primer on the evolution and application of the related to spoliation of evidence. This case involved an insurance claim arising out of the construction of a tunnel in Seattle meant to replace the Alaska Way Viaduct. During the course of the relationship between the parties Seattle Tunnel Partners (STP) disposed of important evidence that was relevant to the determination of its insurance claim it filed after the tunneling mechanism failed. As a result of this loss of evidence, the trial court imposed spoliation sanctions and allowed an adverse jury instruction.

The court in Oberstein v. Live Nation Ent. Inc., No. 21-56200 (9th Cir. Feb. 13, 2023) considered whether the arbitration clause included on Ticketmaster and Live Nation's websites was enforceable. The Oberstein plaintiffs sought to file a class action suit against Live Nation and Ticketmaster for antitrust violations resulting from the companies' alleged over-charging of fees for ticket purchases. In response Ticketmaster and Live Nation filed a motion to compel arbitration pursuant to the Terms of Use on their ticket sales websites.

A tenant's risky decision to drop from the roof to his balcony was potentially within the scope of foreseeable dangers a landlord has the duty to protect tenants from. In the case of Razoumovitch v. 726 Hudson Avenue, LLC, the court reminded the parties that California law imposes a general duty on everyone, including property managers, to take reasonable care to keep others safe. In this case. the landlord did not successfully show that a public policy exception changed that duty. The court concluded that the granting of summary judgment was not proper because foreseeability may not be determined as a matter of law, but rather was a question for a jury to determine.

If the person suing can't afford to pay, defendants may be required to pick up the tab. Nursing home that successfully compelled arbitration proceedings with family of decedent client was required to pay for all fees and costs or waive arbitration, where the patient was indigent. Hang v. RG Legacy I, LLC, No. G061265 (Cal. Ct. App. Feb. 8, 2023). 

Can a public entity rely upon design immunity where the public entity failed to warn of a design element that resulted in a dangerous condition of a roadway? In Tansavatdi v. City of Rancho Palos Verdes (S267453) 60 Cal. App. 5th 423, the California Supreme Court examined whether the design immunity found in California Government Code section 830.6 extends to claims alleging that the public entity failed to warn of a design element that resulted in a dangerous condition and held that public entities still "retain a duty to warn of known dangers that the roadway presents to the public."

Illinois lawmakers passed the Paid Leave for All Workers Act, which was signed by Governor Pritzker on March 13, 2023 and will become effective on January 1, 2024. This new legislation is significant because it requires employers to allow paid leave for any reason or no reason at all. The only other states in the nation with type of mandate so far are Maine and Nevada.

Amid nationwide hesitance by courts to extend business coverage to businesses that shut down during COVID, Coast Restaurant Group came closer to winning its case than most. In the case of Coast Rest. Grp. v. Amguard Ins. Co., No. G061040, 2023 Cal. App. LEXIS 269 (Ct. App. April 10, 2023), although the court agreed that the government shutdown qualified as a "direct, physical loss" under the policy, the existence of a virus exclusion as well as a clause specifically excluding coverage for loss caused by an ordinance or law foiled Coast Restaurant's hopes of getting Amguard to pay up. This ruling is significant because it effectively splits the opinion of the appellate courts on this issue and leaves more wiggle room for trial courts on this issue.

The Supreme Court of the United States in Bartenwerfer v. Buckley, NO. 21-908, Slip Opinion, 506 U.S. _(2023), resolved split opinions in the circuit courts regarding the fraud exception to the discharge of debts in the Bankruptcy Code. SCOTUS established a precedent favoring fraud victims by preventing those who not only perpetrated the fraud, but also those who benefited from it, from having the capability to discharge that debt in bankruptcy. In this case, a wife who was unaware of her husband's fraudulent activity in selling their home with known defects that he failed to disclose, was not permitted to discharge her portion of a judgment for damages against the couple in bankruptcy. The court found that to rule otherwise, would shield those who potentially benefitted from the fraud and allow them to escape liability.

Biometric data is an emerging trend, and jurisdictions around the nation have been enacting statutory schemes. These statutes are now getting tested, and we are starting to see a growing body of case law. On March 31, 2023, the court held that an insured was entitled to coverage for claimed expenses it incurred in an Illinois Biometric Information Privacy Act (“BIPA”) class action lawsuit.

It is the Oregon Supreme Court's turn to answer the question addressed in many courts across the country. Do losses related to COVID-19 constitute direct physical loss or damage to property under a commercial general liability insurance policy? Oregon Clinic PC v. Fireman's Fund Insurance Co. No. 22-35047 (9th Cir. 2023) tackled this question after the U.S. District Court in Portland granted the insurer's motion to dismiss finding that COVID did not qualify as physical loss under the insurance policy. On appeal, the court determined that it needed further guidance before coming to a final decision.

Can you sue a business for violations of the Americans with Disabilities Act even if you've never actually patronized it? Federal appellate circuits around the country have answered this question differently. To resolve this circuit split, the United States Supreme Court granted certiorari in the case of Laufer v. Acheson Hotels, LLC, 50 F.4th 259 (1st Cir. 2022). The case involves the question of whether or not a plaintiff has standing under the Americans with Disabilities Act ("ADA") to sue a hotel for failing to provide information regarding its accessible accommodations. The plaintiff – who never planned to stay at the hotel and never visited the property – claimed she had "standing," or the legal ability to file a lawsuit, because she qualified as someone who "tested" whether businesses around the country violated the ADA.

The Third Appellate District Court of Appeal has issued a decision in which it found that an indemnitee defense clause contained within a general liability insurance policy affords the indemnitee mere status as an incidental third party beneficiary, and that such an indemnitee lacks standing to sue the carrier to provide a defense. LaBarbera et al. v. Security National Insurance Company, C093414 (Super. Ct. No. 34-2019-oo248873-CU-IC--GDS).

COVID-19 business interruption claims have surged nationally since the beginning of the pandemic. The majority of these claims have been unsuccessful for policyholders. However, in Cajun Conti LLC v. Certain Underwriters at Lloyds, 2023 La. LEXIS 563 (La. Mar. 17, 2023), the Louisiana Fourth Circuit Court of Appeals found that COVID-19 constituted "a direct physical loss of or damage to" the insured's New Orleans restaurant. The insurer appealed the Fourth Circuit’s ruling to the Louisiana Supreme Court, who reversed and affirmed what most courts around the country have held – COVID-19 does not constitute physical loss or damage triggering insurance coverage.

In Williamson v. Evans Nail and Spa Corp., 2023 IL. App. (1st) 220084, the appellate court reversed the trial court's order granting summary judgment for the defendant-nail salon finding that plaintiff provided sufficient evidence to create an issue of fact on whether the failure of the defendant to provide: (1) a handrail was in violation of a local ordinance and (2) a sufficient slip resistant mat surrounding a pedicure pedestal created an unreasonably dangerous condition. The appellate court determined that the plaintiff had brought sufficient evidence to create a fact question regarding proximate cause in her slip and fall litigation.

Gig companies, Uber and Postmates, successfully obtained a revival of their claim in federal court alleging that California A.B. 5 unfairly disadvantages app-based ride and delivery services. The U.S. Court of Appeals in Olsen v. State of California, No. 21-55757, 2023 WL 2544853, at *2 (9th Cir. Mar. 17, 2023). found that the plaintiffs "plausibly alleged" that the main motivation behind A.B. 5 in the California legislature was to disadvantage companies like Uber, Postmates and similar gig-based businesses in violation of equal protection. 

In Hoffmann v. Young, et. al, (2022) 13 Cal.5th 1257, the California Supreme Court held that a teen's parents were liable for injuries sustained by a guest while riding a motorcycle on the motocross track built on their property. The court found that the exception to the recreational immunity defense (Civil Code Section 846(a)) does not apply when the injured party was expressly invited by an agent of the landowner whom the landowner has properly authorized to extend invitations to enter the land on their behalf.

In Brianna Garza and Mario Garza v. Matthew Perry and American Family Insurance Company, No. 83377-4-I, the Washington Court of Appeals determined that an insurance company could not intervene in an action intending to nullify a settlement agreement involving a covenant judgment. The court denied the insurer's attempt to nullify the covenant judgment settlement because it was not a party to the agreement, and upheld the lower court's approval of the agreement through a reasonableness hearing.