Selectees are considered to be among the top 2.5 percent of all practicing lawyers in California under the age of 40. MAPC associates have been selected as Rising Stars in past years on multiple occasions, and several of the firm’s attorneys honored this year include past selectees. Repeat selectees this year are:

Joshua Robert Dale,
Scott M. Franklin,
Thomas E. Maciejewski, and
Clint B. Monfort.

Joining them are first-time selectees:

Anna M. Barvir, and
Joseph A. Silvoso.

MAPC has a tradition and reputation of employing excellent attorneys who produce ground-breaking legal work. For veteran attorneys, Super Lawyers are selected from the top five percent of all practicing attorneys in the state. MAPC attorneys who have been so honored include:

C.D. Michel,
W. Lee Smith, and
Glenn S. McRoberts.

MAPC is proud to offer the services of this very select group of attorneys to assist you in your legal matters. Visit www.michellawyers.com for more information about how we assist our clients.

After being sued by the plaintiffs regarding a land boundary dispute, MAPC’s client filed a cross-complaint against the plaintiffs for trespassing on the disputed property and creating a nuisance.  In response to the cross-complaint,  the plaintiffs filed an anti-SLAPP motion, claiming that the cross-complaint was little more than an attempt to punish plaintiffs for utilizing the courts.

California law permits defendants who are sued to bring an anti-SLAPP motion – a summary motion – when the purpose of the lawsuit is brought to punish defendant’s free speech on a matter of public importance, or if the lawsuit is designed to impede defendant’s access to the courts.   When such a motion is filed, an evidentiary hearing is held on the merits of the purportedly punitive lawsuit.

In this instance, the court fully rejected the claim that the cross-complaint was punitive or punished the plaintiffs’ free speech.  The court further found that the plaintiffs’ anti-SLAPP motion itself was frivolous – a rare finding – and ordered plaintiffs and their attorney to reimburse MAPC’s client for its fees and costs incurred for fighting the frivolous motion.

This latest win comes on the heels of MAPC successfully filing an anti-SLAPP motion on behalf of a client defendant last year.  MAPC’s efforts there also resulted in an attorney’s fee award in favor of its client.

On February 21, 2013, the California Court of Appeal held that a high-risk pregnant employee who exceeded the permissible four month leave under the PDLL and was subsequently terminated by her employer may still state a claim under California’s FEHA for employment discrimination.  (Sanchez v. Swissport, Inc. (2013) 213 Cal.App.4th 1331.)

In Sanchez, appellant and ex-employee Sanchez worked for Swissport for almost two years.  After becoming diagnosed as a high-risk pregnancy in February 2009, she informed her employer of her diagnosis and requested temporary leave of absence.  Ms. Sanchez alleged that her employer knew that the baby was due in October of 2009.  Ms. Sanchez was granted 19 weeks of pregnancy leave, which included her accrued vacation time and 4 months under PDLL.  She was then terminated in July 2009.

Ms. Sanchez then filed a lawsuit, alleging that she was fired “because of her pregnancy, her pregnancy-related disability and/or her requests for accommodations.”  She alleged “(1) discrimination based on pregnancy-related disability, (2) discrimination based on sex, (3) failure to prevent discrimination, (4) failure to accommodate and engage in a timely, good faith interactive process, (5) retaliation, (6) wrongful and tortious discharge, (7) intentional infliction of emotional distress, (8) unfair business practices under California Business and Professions Code section 17200 et seq., and (9) breach of implied and/or express contract.”

Ms. Sanchez claimed that her employer never once considered any reasonable accommodations, nor did her pregnancy cause her employer undue hardship.  Nevertheless, Swissport filed a demurrer on the grounds that it provided Ms. Sanchez with the four months permitted under PDLL, and no further accommodations were required.  This position was accepted by the trial court and the demurrer was sustained without leave to amend.  An order of dismissal was thereafter entered, and Ms. Sanchez appealed.

The Court of Appeal analyzed the language of both the FEHA and the PDLL.  The Court stated:

The FEHA prohibits discrimination in employment based on, inter alia, sex, physical disability, or medical condition. ([Gov. Code,] § 12940, subd. (a).) “Sex” is defined to include “[p]regnancy or medical conditions related to pregnancy.” (§ 12926, subd. (q)(1).) The FEHA also requires an employer to provide reasonable accommodation for an employee’s known disability, unless the employer demonstrates that the accommodation would produce “undue hardship … to its operation.” (§ 12940, subd. (m).) However, the FEHA does not prohibit an employer from discharging an employee with a physical disability or medical condition who “is unable to perform his or her essential duties even with reasonable accommodations, or cannot perform those duties in a manner that would not endanger his or her health or safety or the health or safety of others even with reasonable accommodations.” (§ 12940, subd. (a)(1).)

As for PDLL, it states in pertinent part:

(a) In addition to the provisions that govern pregnancy, childbirth, or a related medical condition in Sections 12926 and 12940, each of the following shall be an unlawful employment practice, unless based upon a bona fide occupational qualification:

(1) For an employer to refuse to allow a female employee disabled by pregnancy, childbirth, or a related medical condition to take a leave for a reasonable period of time not to exceed four months and thereafter return to work, as set forth in the commission’s regulations. The employee shall be entitled to utilize any accrued vacation leave during this period of time. Reasonable period of time means that period during which the female employee is disabled on account of pregnancy, childbirth, or a related medical condition.

(Gov. Code, § 12945(a)(1) [emphasis added].)

Another section of PDLL reinforces that PDLL will not negatively affect other aspects of California law.  (Gov. Code, § 12945(b) ["This section shall not be construed to affect any other provision of law relating to sex discrimination or pregnancy, or in any way to diminish the coverage of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth under any other provision of this part, including subdivision (a) of Section 12940."].)  Further, “[i]f an employer has a more generous leave policy for similarly situated employees with other temporary disabilities than is required for pregnancy purposes under these regulations, the employer must provide the more generous leave to employees temporarily disabled by pregnancy. If the employer’s more generous leave policy exceeds four months, the employer’s return policy after taking the leave would govern, not the return rights specified in these regulations.”  (Cal. Code Regs. tit. 2, § 7291.9(b).)

Upon review of these statutes, the Court reasoned that:

[U]nder the PDLL, an employee disabled by pregnancy is entitled to up to four months of disability leave, regardless of any hardship to her employer. (§ 12945, subd. (a).) Under the FEHA, a disabled employee is entitled to a reasonable accommodation—which may include leave of no statutorily fixed duration—provided that such accommodation does not impose an undue hardship on the employer.

Swissport attempted to argue that under PDLL, all that is required of employers is to permit four months of disability leave because “PDLL displaces, rather than augments” provisions of the FEHA related to pregnancy.  The Court disagreed.  Instead, the Court found that the PDLL expressly clarifies an employer’s obligations under the PDLL which are in addition to the employer’s obligations under FEHA.  “Indeed, to construe compliance with the PDLL as satisfying all other requirements of the FEHA, including section 12940, would violate the express mandate of the PDLL[.]“  The court further acknowledged that California case law provided a handful of examples of where pregnancy disability exceeded four months.

The Court found that Ms. Sanchez properly alleged FEHA causes of action because she alleged (1) her pregnancy disability was the reason that she was fired, (2) “had she been granted additional leave until childbirth, she would have been able to perform the essential functions of her job with little or no further accommodations[,]” (3) reasonable accommodations would not have imposed undue hardship on Swissport, and (4) she was fired because she sought reasonable accommodations for her pregnancy disability.  The court held that these allegations were sufficient at the pleading stage, so the trial court’s order of dismissal was reversed.

In Gore, the Yolo County District Attorney and District Attorney’s Office appealed a trial court ruling which required them to hold a hearing for Rick Gore to determine if there was good cause to deny issuing Mr. Gore an identification certificate authorizing him to carry a concealed weapon.  Mr. Gore began working as an investigator for the District Attorney’s Office in 1997, a position which classified him as a peace officer under Penal Code section 830.1 and permitted him to carry a concealed firearm.

In 2008 Mr. Gore allegedly made false accusations against the District Attorney’s Office and other individuals, effectively resulting in his termination in 2008 after the discovery of his violations of office policies, off-duty misconduct, and insubordination.  Mr. Gore appealed his termination and an arbitrator agreed with the District Attorney’s investigations.  Although the arbitrator reduced Mr. Gore’s termination to a long suspension and ordered his statements to be retracted, a settlement agreement was reached among the parties which required Gore to retract his statements and submit his resignation.

Gore began collecting his retirement pension in 2010 and also requested to receive a carry concealed weapon identification certificate.  That request was denied.  Pursuant to Penal Code section 12027.1, Gore requested to have a hearing take place to determine whether the agency should revoke or deny the identification certificate, but the District refused to hold such hearing.  That refusal resulted Gore suing the District Attorney’s Office.

Appellants argued that Gore was not a retired peace officer within the meaning of Penal Code section 12027, nor was he an “honorably retired peace officer.”  As such, he was not entitled to a hearing to consider his good cause for a retired officer identification certificate.

Penal Code section 12027 provides:

Section 12025 [making it a crime to carry a concealed firearm] does not apply to, or affect, any of the following:

(a)(1)(A) Any peace officer … whether active or honorably retired…. Any peace officer described in this paragraph who has been honorably retired shall be issued an identification certificate by the law enforcement agency from which the officer has retired…. As used in this section … the term ‘honorably retired’ includes all peace officers who have qualified for, and have accepted, a service or disability retirement. For purposes of this section … the term ‘honorably retired’ does not include an officer who has agreed to a service retirement in lieu of termination.”

Appellants claimed that the “Yolo County District Attorney’s Office is not a law enforcement agency from which Gore retired because he resigned from the office, rather than retiring from the office.”  After reviewing an opinion of the Attorney General, the Court agreed that Gore’s election was to resign, not retire, so he could not be qualified as an “honorably retired peace officer.”  “We conclude that a person must enter retirement from active service as a peace officer to be considered a peace officer who is honorably retired, and the interpretation the Attorney General has given the statute is consistent with this conclusion.”

The Court further agreed with Appellants that “honorably retired” relates to the nature in which the employee separated from the his employer, not the age at which the employee left.  The Court stated:

The only persons entitled under the statute to carry a concealed and loaded weapon are retired employees, i.e., those employees who are no longer employed because they reached retirement age working as peace officers, and accepted retirement upon leaving employment.  In other words, someone who quits or is fired before retirement age is not an honorably retired peace officer, even when they later reach retirement age and are entitled to collect their pension.

If you are an active peace officer who wishes to continue carrying a concealed weapon after you retire under former section 12027, ensure that you do not quit or resign early to be qualified as an “honorably retired peace officer.”

The withheld documents fell into four categories:

(1)    raw financial data obtained from farmers,

(2)    drafts of the study, including communications between researchers working on the study,

(3)    prepublication communications between researchers and their board of advisors, and

(4)    communications between researchers and outside consultants.

HSUS filed a petition with the Court in 2011 to challenge the trial court’s ruling.  It is important to note that HSUS’ appeal did not include a challenge as to documents containing raw financial data that were withheld, and thus the Court did not issue a ruling on that issue.

Ultimately, the Court’s evaluation turned on California Government Code section 6255, which provides for case-by-case balancing, and only allows records to be withheld if “the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record.”  The Court expressly disregarded the heavily argued position that there is an “academic researcher’s exemption immunizing disclosure of university documents[.]” Similarly, the Court rejected the request that it apply the “deliberative process privilege,” noting that California’s courts do not recognize that privilege as to academic research documents.

In performing the balancing required by section 6255, the Court held the “disclosure of prepublication research communications would fundamentally impair the academic research process to the detriment of the public that benefits from the studies produced by that research” because researchers and those consulted by researchers would be less candid and open in their discussions if such discussions could be made public.  The foregoing was clearly based in large part on the opinion of a UCD researcher the Court treated as an “expert witness.”  The Court found the researcher’s opinion was not speculation, but “competent evidence” “grounded upon his 30 years of experience as a governmental and academic researcher.”

The Court also held, however, that “the objectivity of public university researchers is of vital importance[,]” and that there was a public interest in ensuring the study, being used as authority regarding a ballot initiative, was based on proper methodology and free from improper influence.  The Court found these interests, however, insufficient to justify production of documents sought by HSUS.

Several factors tipped the balance in favor of non-disclosure for the Court.  The Court gave heavy weight to the presumptions that “a published report itself states its methodology and contains facts from which its conclusions can be tested” and that “published academic studies are exposed to extensive peer review and public scrutiny that assure objectivity.”  Thus, the Court concluded, the need for disclosure of documents to evaluate issues of methodology or influence is “diminished” in this instance. Further diminishing the need for disclosure was the fact that the trial court previously oversaw an in camera review of documents being withheld, and it actually ordered the release of some documents previously withheld.  Had all of these factors not been at issue, it seems the Court might not have reached the ruling it did.

There are several takeaways from this ruling.  First, regardless of the Court’s express rejection of a per se researcher’s privilege, it seems clear that the opinion of university researchers vis-à-vis the risks of document disclosure will be given great weight, even if the opinion is not based on any first-hand experience regarding a previous disclosure.  Second, facts matter.  For example, if the Court did not believe the study at issue could have its methodology verified by replication because some data originally collected for the study had been intentionally omitted from the study, that fact might have given HSUS a better shot a obtaining the records it sought.  Third, because the Court expressly recognized that the trial court’s review of the withheld documents helped blunt the concerns related to the documents that were not ultimately disclosed, this should encourage trial courts to exercise their discretion to perform in camera reviews.  Fourth, the ruling does not explain what are, and are not “research communications.”  There is a strong logical argument that, setting aside actual research team members, researchers should not be able to cloak their communications with outside sources by labeling them as “consultants.”  Indeed, if this were the case, isn’t everyone a researcher communicates with in the scope of their employment a “consultant” in one form or another?

At the least, this ruling confirms that if a university researcher wants to withhold documents related to a matter of public interest, he or she will likely be able to.  Thus, in this very narrow context, one could argue the burden of section 6255 is flipped.  That is, when research-related records held by a university researcher are sought, it is the duty of the one seeking records to show that the public interest served by disclosure of the records clearly outweighs the public interest served by not disclosing them.  Thus, it is foreseeable that publically funded research facilities will use this ruling as a shield to hide the very data that is required for scientific verification and evaluation of possible improper influence, notwithstanding the fact that the ruling expressly states it does not “create an academic researcher’s exemption immunizing disclosure of university documents[.]”

Litigation regarding California’s Public Records Act is difficult, especially for those seeking records from a university researcher.  If you have made a request for public records under California’s Public Records Act and records have been withheld from you, Michel & Associates, P.C. may be able to assist you.

Humane Society of the United States v. Super. Ct. (Regents), case no. c067081.

This strategic Second Amendment civil rights case was filed in 2009 as one of the first “test” cases in the wake of the Supreme Court’s confirmation that the Second Amendment secures an individual, fundamental rights to arms in Heller v. District of Columbia. The Jackson case seeks to resolve many of the issues left unanswered by the Supreme Court in Heller, including the appropriate standard of review for future Second Amendment challenges, as well as the scope of the Second Amendment’s protections for ammunition and commercial transactions, among other things.

On February 14, four important amicus curiae or “friend-of-the-court” briefs were filed in support of the NRA’s efforts in the Jackson case.

Amici curiae Center for Constitutional Jurisprudence (CCJ), represented by constitutional law scholar and former Dean at Chapman University School of Law, Dr. John Eastman, and esteemed appellate litigator and former Chief Counsel for the Pacific Legal Foundation, Anthony T. (Tom) Caso. CCJ’s brief addresses the appropriate standard of review applicable to Second Amendment challenges. The brief explains that restrictions on fundamental rights are subject to the strictest judicial review, and that the fundamental right to arms is no different.

Renowned civil rights attorney Don B. Kates filed an amicus brief on behalf of Gun Owners of California (GOC) and FFLGuard. GOC is among the leading voices in California in support of Second Amendment rights. FFLGuard is the nation’s premiere compliance and legal defense program for Federal Firearms Licensees. This important brief expands upon the widespread common use of hollow-point ammunition, particularly for self-defense, and explains how the City’s policies have a disproportionate impact on law-abiding gun owners, and a discriminate impact on the underprivileged who often have the greatest need for self-defense.

Amicus curiae CRPA Foundation also submitted a brief in support of the NRA, authored by Harvard Law School graduate, accomplished firearms law attorney and author of countless articles on the subject, civil rights attorney Dan Peterson. CRPA joined forces on the brief with the Independence Institute, represented by legal scholar and prolific Second Amendment author, Professor David Kopel. This comprehensive brief addresses the various standards of review adopted by the federal courts to date. The brief explains the conflict between courts that have adopted a watered-down view of the Second Amendment with the Supreme Court’s landmark Heller and McDonald decisions.

Finally, the Law Enforcement Alliance of America (LEAA) submitted a brief authored by their long time counsel, accomplished criminal and civil rights attorney Richard Gardiner. The LEAA brief provides a valuable law enforcement perspective about the dangers posed to law-abiding citizens by the City’s policy requiring firearms be kept locked away throughout the night, when they are at greatest risk of a criminal attack.

Counsel for these amicus organizations and for the NRA now await the City’s response brief, which is due on March 7, 2013. Please support the NRA and CRPA Foundation litigation efforts in support of law abiding California gun owners to keep their firearms available for self-defense and to purchase effective self-defense ammunition.

Copies of all of the court filings in the lawsuit can be viewed at http://michellawyers.com/guncasetracker/jacksonvsf/.　

In a recent ruling, the California Court of Appeal held that now assigned judgment creditors can claim and recover the unclaimed property of judgment debtors which escheated to the state prior to the assignment.  (Weingarten Realty Investors v. Chiang (2012) 150 Cal.Rptr.3d 813.)

So if you are a judgment creditor who needs assistance in obtaining an assignment order and collecting against unclaimed property of the judgment debtor, the lawyers at Michel & Associates, P.C. can assist you in that effort.

In August 2010, a superior court assigned the property of judgment debtor Novadyne Computer Systems, Inc. (Novadyne) to judgment creditor Weingarten Realty Investors (Weingarten.)  (Id. at 814.)  Weingarten located some of the judgment debtor’s property with the state Controller and submitted its assignment order and claim.  The Controller denied Weingarten’s claims, stating that Weingarten was not an “owner” of the property before it escheated to the state.  After a lawsuit was initiated, the Controller also claimed that the superior court lacked jurisdiction over both the escheated property and the Controller.

These claims were rejected by both the trial court and the Court of Appeal.  (Id. at 814-818.)  The Court of Appeal first considered the issue of whether the superior court had jurisdiction to render an assignment order over Novadyne’s unclaimed property.  “In order to assign Novadyne’s rights to recover the unclaimed property from the State to Weingarten, the superior court was not required to have jurisdiction over the Controller.  Rather, it was only required to have jurisdiction over Novadyne[.]“  (Id. at 815.)  Pursuant to Code of Civil Procedure section 708.510 – which permits judgment creditors to apply to the court and seek an assignment order over a judgment debtor’s property – the court had authority to force the judgment debtor to assign its right of payment from the state to Weingarten.  (Id.)

The court next analyzed Code of Civil Procedure section 1540 which pertains to filing claims with the state Controller.  The court had to decide whether that statute permitted an assigned judgment creditor to recover unclaimed property that already escheated to the state prior to the assignment.  (Id. at 816.)  According to the Controller, even though the section 1540 allows anyone to file a claim for unclaimed property, only owners can actually recover the property.  The court disagreed.  (Id. at 816-817.)

“Given the subject matter of the Article and the context of section 1540, it does not make sense to allow a person to file a claim (§ 1540, subd. (a)) and require the Controller to consider that claim with the ability to hold a hearing and receive evidence (§ 1540, subd. (b)), and not allow the claimant to recover.  Further, we see nothing in the statute suggesting that the Legislature intended to allow claimants to file claims without the ability to recover.”  (Id. at 817.)

The court further reasoned that by construing section 1540 in such narrow terms proffered by the Controller, the court would be required to insert the term “owner” into subdivision (a) which unambiguously allows any person to file a claim with the state.  Such construction would be improper.  (Id. at 817.)  Moreover, nothing in the legislative history suggested the legislature’s intent to narrow the statute as such.  Indeed, if the legislature intended that only “owners” would be able to claim property and judgment creditors would need to receive an assignment order before the property escheated to the state, the statute would have so indicated.  However, “[i]n our view, this [omission] suggests that the Legislature deliberately chose to permit any persons who claim an interest in unclaimed property, such as an assignee, to recover under section 1540.”  (Id. at 818.)

Deborah Edgerly was the city of Oakland’s Finance Director in 1997. She was appointed as the City Manager in 2003, and renamed as the City Administrator in 2004. Pursuant to the city charter, she could be discharged at any time and for any reason. (Id. at 1195.) Part of her duties included designating and appointing directors, department heads, or assistants, executing all city laws and ordinances, and controlling and administering the financial affairs of the city. She could address all concerns about the allocation of city funds with the city attorney’s office.

When Mayor Dellums was appointed in 2007, things started to change for Ms. Edgerly. She questioned several of the Mayor’s expense reimbursement requests (including his personal expenses, payments for his wife’s cell phone, overtime pay for his driver, and utility costs associated with his residence.) Ms. Edgerly sought an opinion from the city attorney’s office as to whether the Mayor’s utility costs were permissible, and informed the Mayor that she could not reimburse him for the improper requests. (Id. at 1196.)

Besides these expense issues, Ms. Edgerly claimed that the Mayor attempted to usurp her authority by directing personnel to report to him directly rather to her. When her nephew was involved in a police incident in 2008, Ms. Edgerly claimed that the Mayor directed her to work solely on a competitive bidding service contract in response to the incident, as the Mayor saw the police incident as a distraction and an appearance of a conflict of interest. (Id. at 1197.) Finally, when the Mayor asked Ms. Edgerly to sign documents giving control of the police department to an interim director, she refused to appoint the Mayor’s designee.

On July 1, 2008 the Mayor terminated Ms. Edgerly’s employment. (Id. at 1197-1198.) Ms. Edgerly then filed a complaint against the City of Oakland alleging three causes of action for retaliation under the whistle-blower statute, and one cause of action for gender discrimination under Government Code section 12900 et seq. (Id. at 1194.) The complaint was met with a demurrer as to all whistle-blower causes of action which the trial court sustained with leave to amend as to the first two causes of action, stating that Ms. Edgerly did not identify any violation of state law. (Id. at 1194-1195.)

The City demurred again to her First Amended Complaint as to all three whistle-blower statutes, and this time the trial court sustained the demurrer as to the first and second causes of action without leave to amend. (Id. at 1195.)

Summary adjudication was subsequently granted as to the third cause of action because evidence was not produced which showed that a state statute was violated. An appeal followed after a verdict was rendered in the City’s favor for the gender discrimination cause of action. (Id. at 1195.)

The Court of Appeal examined the language and purpose of Labor Code section 1102.5, stating the statute “prohibits employers from retaliating against an employee ‘for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation.’ ” (Id. at 1199 [quoting Labor Code, § 1102.5(c).) "The purpose of section 1102.5(c) is ‘to ‘ "encourag[e] workplace whistle-blowers to report unlawful acts without fearing retaliation.’ ” (Id. [internal citation omitted].)

The Court of Appeal determined that Ms. Edgerly was unable to prove a prima facie case for retaliation. It said:

The Court examined the scope of Labor Code section 1102.5 and noted that unlike other whistle-blower statutes which included “local laws” in their language, such language was omitted from section 1102.5. (Id. at 1201 [compare with Education Code, § 44112 and Gov. Code, § 8547.2].) Thus, the Court declared that the “omission of the term ‘local laws’ is indicative of legislative intent to exclude such laws from the purview of section 1102.5.” (Id.) While it is true that the whistle-blower statute does apply to city charter employees when the retaliation involves activities that violate a state law, here Ms. Edgerly’s claims were premised on alleged violations of local laws.

The Court also reasoned that public policy considerations weigh against the adoption of having the statute include whistle-blowers of local laws. For example, “there is no reason to micromanage the employment practices of a charter city, which is ‘specifically authorized by our state Constitution to govern [itself], free of state legislative intrusion, as to those matters deemed municipal affairs.[’]” (Id. at 1204.)

Because the plain language of section 1102.5 and public policy considerations did not support Ms. Edgerly’s claims, and because her opposition to the mayor’s reimbursement requests was not protected activity under the whistle-blower statute, the court affirmed the trial court’s findings.

A dismissal is precisely what happened in Bates v. Mortgage Elec. Registration Sys., Inc. (9th Cir. 2012) 694 F.3d 1076.  Realtor Barrett Bates filed a qui tam action under the CFCA in July 2009 alleging that Defendants Mortgage Electronic Registration System, Inc. (“MERS”), Bank of America, N.A., Countrywide Home Loans, Inc., Citimortgage, Inc., GMAC Mortgage LLC, J.P. Morgan Chase Bank, and Wells Fargo, N.A. were making false representations to various counties in California in an attempt to avoid paying recording fees.  (Id. at 1078-79.)  As part of his state court qui tam action, Bates claimed that “he discovered that Defendants were making false statements in order to avoid or decrease recording fees. . . [by] falsely nam[ing] MERS as a beneficiary in recorded mortgage documents.”  (Id. at 1079.)  Thus, California counties were being deprived of their recording-fee revenues.

When Defendant MERS removed the action to federal court under a claim of diversity jurisdiction, Bates filed a motion to remand to state court and claimed that diversity was destroyed because the State of California was listed as a real party in interest.  (Id. at 1079).  The Court denied Bates’ motion because Bates’ complaint sought to recover recording fees which, when due, would be payable to the counties which were identified in his complaint.  Because Bates failed to plead how he was suing on behalf of California, the motion to remand was denied. When the district court subsequently granted Defendants’ motion to dismiss on the grounds that Bates’ claims were jurisdictionally barred under an exception to the CFCA, Bates immediately appealed.  (Id. at 1080.)

The Ninth Circuit evaluated the granted motion to dismiss and agreed with the district court that “Bates ‘failed to point to any allegation in his complaint showing that he is also suing on behalf of the State.’ ” (Id. [internal citations omitted].)  Further, “[i]f Bates were successful in his suit, the State would not realize any benefit as a result.”  (Id.)  Thus, the district court properly denied the motion to remand.

The Ninth Circuit also determined that Bates’ qui tam action was jurisdictionally barred by the CFCA.  As a whistle-blower statute, the CFCA is “designed to protect public finances by allowing individuals to file suit under seal on behalf of the State or Counties.”  (Id.)  However, jurisdiction can not be based upon the public disclosure of transactions.  (Id. at 1081.)

“This public disclosure provision ‘erects a jurisdictional bar to qui tam actions that do not assist the government in ferreting out fraud because the fraudulent allegations or transactions are already in the public domain.’ “  (Id. at 1081 [quoting State ex rel. Grayson v. Pac. Bell Tel. Co. (2006) 142 Cal.App.4th 741, 748).  "An action is barred under the public disclosure provision when the prior public disclosures are ‘sufficient to place the government on notice of the alleged fraud’ or ‘practice prior to filing the qui tam action.’ " (Id. [internal quotation omitted].)

Despite Bates’ claims of being the “original source” of the allegations in his complaint, the Court determined that “equivalent information [was] already available to the public through other cases and published articles.”  Thus, “substantially similar information to Bates’ allegations already existed in the public domain at the time he filed suit.”  (Id.)

The lesson here is that if you intend on filing a qui tam action under the CFCA and want to ensure your lawsuit does not get dismissed on a technicality, besides knowing who the parties are in order to file in the proper court, it is important to ensure you are not “substantially repeating” facts that are already known to the general public.  Otherwise, your lawsuit may be found to be under an exception to the CFCA, prohibiting your lawsuit from proceeding.

The firm’s hilarious 2011 Christmas card was the water cooler conversation piece of the holiday season. It still gets rave reviews and compliments from clients. Click here to read 2011.

This year the firm’s 2012 Christmas card is even funnier and more outrageous. Just wait till you read what Santa thinks of entitlement programs!
               Our 2012 Holiday Card

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