On October 1, 2021, the Ninth Circuit Court of Appeals ruled in favor of MG+M client The Boeing Company (“Boeing”) in an appeal of an order that remanded the case to state court. The Ninth Circuit reversed the district court’s remand order and adopted Boeing’s argument that the thirty day removal clock is not triggered until “an amended pleading, motion, order, or other paper” makes the grounds for removal “unequivocally clear and certain.”[1]

The federal officer removal statute is codified at 28 U.S.C. § 1442 and permits removal if: (1) the removing party is a “person”; (2) a causal nexus exists between the plaintiff’s claims and defendant’s actions taken at the direction of a federal officer; and (3) the removing party has a colorable federal defense.[2] 28 U.S.C. § 1446 governs the corresponding procedure for such removal and allows two pathways for perfecting removal:  (1)  if the basis for removal is clear from the initial pleading, the case must be removed within thirty days from receipt of that pleading; or (2)  if the case stated by the initial pleading is not removable, the case must be removed within thirty days of receipt of “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.”[3]

In the underlying case, Plaintiff sued Boeing and other defendants in Los Angeles Superior Court, alleging that she developed mesothelioma as a result of exposure to asbestos. Plaintiff’s Complaint failed to state any basis for removal, but Plaintiff later alleged that she was exposed to asbestos through the work her husband allegedly performed on Boeing aircraft while serving in the U.S. Marine Corps, thus triggering federal officer jurisdiction.  Boeing removed the case, pursuant to 28 U.S.C. § 1446(b)(3), within thirty days of ascertaining that the case was removable.[4]  Nevertheless, the district court, relying on its interpretation of Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir. 2006), rejected the “unequivocally clear and certain” standard for triggering removal argued by Boeing, and concluded that Boeing’s removal was untimely because it was in possession of “sufficient facts” to justify removal prior to receiving Plaintiff’s amended discovery responses.  Accordingly, the district court granted Plaintiff’s motion to remand and awarded attorneys’ fees to Plaintiff, finding that Boeing’s removal was objectively unreasonable. Boeing appealed.

The Ninth Circuit reversed the district court, finding that Boeing removed the case within thirty days of ascertaining that the case was removable.  Dietrich v. The Boeing Company, et al., No. 19-56409 (Ninth Circuit 2021) at 14.  The Court explained that the district court’s reliance on Durham’s statement that the removal clock begins to run when “sufficient facts” are disclosed was misplaced because it “does not tell us when the facts disclosed” are sufficient.  Id. at 13 (emphasis in original).  Its reliance equated “facts sufficient to allow removal with facts sufficient to require removal.” Id.  (emphasis in original).  To avoid such confusion
Continue Reading Ninth Circuit Adopts “Unequivocally Clear and Certain” Standard to Determine When 30-Day Removal Clock is Triggered

On October 1, 2021 Governor Newsom approved Senate Bill Number 447 (“SB 447”) amending the California Code of Civil Procedure to permit damages for a decedent’s pain, suffering, or disfigurement to be recovered in an action brought by the decedent’s personal representative or successor in interest. Like many States, in California a cause of action that survives the death of the person entitled to commence an action or proceeding passes to the decedent’s successor in interest and an action may be commenced by the decedent’s personal representative or, if none, by the decedent’s successor in interest. As previously reported by the Defense Litigation Insider in September 2021 here, prior to the enactment of SB 447, California law limited the damages recoverable in such an action or proceeding to the loss or damage that the decedent sustained or incurred before death, including any penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived. Specifically, California law prohibited the recovery of damages for the decedent’s pain, suffering, or disfigurement in that action or proceeding.

SB 447, now codified as California Code of Civil Procedure (“CCP”) Section 377.34 as amended, permits damages for a decedent’s pain, suffering, or disfigurement to be recovered in an action brought by the decedent’s personal representative or successor in interest if the action or proceeding was granted a specified preference under CCP Section 36 before January 1, 2022, or was filed on or after January 1, 2022, and before January 1, 2026. The amendment requires plaintiffs recovering under this statute to report their awards to the Judicial Council and the Judicial Council will provide this information to the Legislature. We anticipate that after a period of collecting this data the Legislature will revisit whether to maintain CCP Section 337.34 in its current iteration or consider amendments to same.

The new law goes into effect in January 2022 and reads, as amended, in full as follows:

(a) In an action or proceeding by a decedent’s personal representative or successor in interest on the decedent’s cause of action, the damages recoverable are limited to the loss or damage that the decedent sustained or incurred before death, including any penalties or punitive or exemplary damages that the decedent would have been entitled to recover had the decedent lived, and do not include damages for pain, suffering, or disfigurement.
(b) Notwithstanding subdivision (a), in an action or proceeding by a decedent’s personal representative or successor in interest on the decedent’s cause of action, the damages recoverable may include damages for pain, suffering, or disfigurement if the action or proceeding was granted a preference pursuant to Section 36 before January 1, 2022, or was filed on or after January 1, 2022, and before January 1, 2026.
(c) A plaintiff who recovers damages pursuant to subdivision (b) between January 1, 2022, and January 1, 2025, inclusive, shall, within 60 days after obtaining a judgment, consent judgment, or court-approved settlement agreement entitling the plaintiff to
Continue Reading New California Law Expands Non-Economic Damages in January 2022

Senate Bill 447 (“S.B. 447”), which proposes a change to the current California law to allow recovery of noneconomic damages, such as pain and suffering, after a plaintiff dies is headed to the governor’s desk after the state Senate approved amendments by the Assembly.[1] Currently, California Code of Civil Procedure Section 377.34 limits damages solely to economic damages if a plaintiff dies before judgment enters.[2] As amended, the bill attempts to alter Section 377.34 and would no longer exclude noneconomic damages if the cause of action or proceeding was granted a preferential trial date before 2022, or if it was filed between January 1, 2022, and January 1, 2026. The call for change in procedure comes after lobbying from interest groups primarily consisting of plaintiff attorneys, who stand to benefit if this proposed legislation is enacted.

After passing in the state Senate, the Assembly revised the bill to further limit the scope of S.B. 447 and added a reporting requirement for plaintiffs who received noneconomic damages between January 1, 2022, and January 1, 2025. In such cases, the plaintiff must submit to the Judicial Council, the policymaking body of the California courts, the amount and type of damages received. The Judicial Council will, in turn, create a report detailing the information for the state Legislature. On September 3, 2021, the Senate voted in concurrence with the Assembly’s amendments and ordered the bill to be proofread and prepared for Governor Gavin Newsom to either veto or approve.

DISCUSSION

Introduced by California State Senator John Laird (D), S.B. 447 has some compelling arguments in its favor and has received enough votes to advance.  The bill, however, also has dozens of registered opponents with several arguments against it. Proponents of the bill note that most states allow a decedent’s personal representative or successor in interest to collect damages currently barred by Section 377.34, and claim that defendants take advantage of the present law, which contributes to the influx of cases awaiting trial in California. Opponents cite the longstanding rules in California and argue that such changes in legislation are unnecessary, as there are alternative means to recoup noneconomic damages.

While proponents attempt to refute economic concerns that may materialize if the bill is enacted by arguing that similar legislation exists in a majority of states, California, having the fifth largest economy globally, has a complex economic system that may not necessarily be comparable to most states. According to the fiscal impact report by the Assembly Appropriations Committee, the bill could cost state agencies, including Cal Fire and CalTrans, hundreds of thousands, if not millions, of dollars. Additionally, concerns over the impact the bill may have in driving businesses out [3] of California, while not formally addressed by registered opponents, certainly are valid considerations.[4]

Arguments in Support of S.B. 447

There are essentially three arguments made in support of S.B. 447: (1) that California is among the minority of states in the country that prohibit recovery for intangible damages or damages
Continue Reading CA Senate Bill 447 Expanding Non-Economic Damages in Wrongful Death Suits on Newsom’s Desk

Punitive damages are meant to serve two purposes: punish the defendant for the conduct at issue in the lawsuit and deter similar conduct in the future. But, sometimes a punitive damages award goes beyond serving these two purposes and moves into the territory of violating the Due Process Clause of the 14th Amendment to the United States Constitution. The 14th Amendment, through the Due Process Clause, prohibits the imposition of grossly excessive or arbitrary punishments.

Punitive damages are allowed in California under California Civil Code section 3294(a), which states “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” Although California law does not define “clear and convincing evidence”, it carries a higher burden of proof than “preponderance of the evidence,” which is the burden of proof necessary to prevail in a civil lawsuit. In determining whether to award punitive damages, the jury considers: (1) the reprehensibility of the defendant’s conduct; (2) whether there is a reasonable relationship between the amount of punitive damages and the plaintiff’s harm; and (3) what amount will punish the defendant and discourage similar future conduct. In determining this amount, the jury considers the defendant’s financial condition. In California, there is no official cap on punitive damages.
Continue Reading Excessive Punitive Damages Awards Continue To Be An Issue In California

In September 2018, Governor Jerry Brown signed a series of bills aimed at drastically reshaping California’s approach to claims of discrimination and harassment amidst the “#MeToo” Movement. Among the legislation is Senate Bill 1300 which clarifies and expands employee rights under the California Fair Employment and Housing Act (“FEHA”). SB 1300, which was met with both opposition and support, became effective January 1, 2019. In addition to Senate Bill 1300, Gov. Brown also signed into law a series of bills on issues relating to workplace harassment, gender equality and human trafficking.

CALIFORNIA SENATE BILL 1300: HEIGHTENED EXPOSURE FOR EMPLOYERS

SB 1300 intends to close loopholes in the law that discourage or prevent victims from speaking out, and allow employers to avoid sexual harassment and discrimination laws and leave employees vulnerable to sexual harassment at work. In an attempt to aid these efforts, SB 1300 provides the following enhancements, further described below: 1) a new “single occurrence” standard for sexual harassment cases; 2) increases the challenges of recovering litigation costs for defendants; 3) potentially holds employers liable for third-party harassment; 4) prohibits release of both claims and non-disparagement agreements; and 5) provides for workplace accommodation and bystander training.

“SINGLE OCCURRENCE” STANDARD

One highly significant implication of SB 1300 is that it now makes a single instance of sexually harassing conduct a potentially triable sexual harassment claim by statute. Under FEHA, action was required to be so “severe or pervasive” so as to create a hostile work environment before it was actionable. However, the term “severe or pervasive” was subjective, leaving room for interpretation as to what conduct would be significantly severe or pervasive to support a claim under the existing law. For example, in Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000), the Ninth Circuit Court of Appeals found that an employee touching another employee’s chest under her sweater was not significant enough to rise to the level of “severe or pervasive,” and, thus, granted the employer’s motion for summary judgment.

SB 1300 narrows the definition of “severe or pervasive” by clarifying that a single incident of harassing conduct is sufficient to create a triable issue, so long as the conduct limited the employee’s work performance or created a hostile work environment. The Legislation specifically rejects the court’s holding in Brooks and states that the case opinion shall not be used in determining what kind of conduct is sufficiently severe or pervasive to constitute a violation of the FEHA.

Of significance to litigation resulting from employment claims, SB 1300 affirms the court’s opinion in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243. In Nazir, the Plaintiff filed a lawsuit against his former employer, United Airlines, and his former supervisor (“Defendants”). Defendants filed a motion for summary judgment/summary adjudication, seeking adjudication of 44 issues. The appellate court found that hostile work environment cases involve issues that are “not determinable on paper.” SB 1300’s reference to the finding in the Nazir case that employment issues are too complex for motions for summary judgment may be a threat to the validity of future motions for summary judgment in employment law cases which has been a common and successful defense tactic.
Continue Reading California Enacts Legislation to Combat Discrimination and Harassment