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JUNE 2015 / $4
EARN MCLE CREDIT
THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION
Los Angeles lawyer Joseph C. Gjonola
advises employers on the role of the
workers’ compensation defense counsel
page 14
PLUS
Legal MalpracticeDefensepage 19
WorkingRelationships
Title IXEnforcement
page 24
2015
Lawyer-to-Lawyer
Referral Guide
EmploymentLawDevelopmentspage 11
Ethics of ContingencyFee Riskpage 40
When to DeclineRepresentationpage 44
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COVER PHOTOGRAPH:TOM KELLER
14 Working RelationshipsBY JOSEPH C. GJONOLA
For employers, a risk of the workers’ compensation bargain is being targeted by the investigations of defense attorneys
19 Defense DilemmaBY KURT L. SCHMALZ
Issues of conflict of interest, confidentiality, and client rights make bright-linerules in predecessor/successor legal malpractice cases unlikelyPlus: Earn MCLE credit. MCLE Test No. 247 appears on page 21.
24 Unequal PlayBY ELIZABETH KRISTEN AND CACILIA KIM
Ollier v. Sweetwater serves as a model Title IX case for its ruling on equal opportunities, equal treatment, and retaliation
30 Special Section2015 Lawyer-to-Lawyer Referral Guide
F EATU RE S
Los Angeles Lawyer
the magazine of
the Los Angeles County
Bar Association
June 2015
Volume 38, No. 4
06.15
8 Letters to the Editor
9 On DirectJim McDonnellINTERVIEW BY DEBORAH KELLY
10 Barristers TipsPrinciples for new associates when working with law firm staffBY MATTHEW A. YOUNG
11 Practice TipsRecent developments in employment lawaffecting CaliforniaBY ANTHONY J. ONCIDI
40 Ethics Opinion No. 526Contingency lawyer’s right to negotiate afee agreement that gives first proceeds tothe lawyer and shifts to the client the riskof nonpayment
44 Closing ArgumentThe types of clients a new solo practitioner should learn to avoidBY MICHAEL RUBINSTEIN
DE PARTM E NTS
LOS ANGELES LAWYER (ISSN 0162-2900) is published monthly,except for a combined issue in July/August, by the Los AngelesCounty Bar Association, 1055 West 7th Street, Suite 2700,Los Angeles, CA 90017 (213) 896-6503. Periodicals postagepaid at Los Angeles, CA and additional mailing offices. Annualsubscription price of $14 included in the Association mem-bership dues. Nonmember subscriptions: $28 annually; singlecopy price: $4 plus handling. Address changes must be sub-mitted six weeks in advance of next issue date. POSTMASTER:Address Service Requested. Send address changes to LosAngeles Lawyer, P. O. Box 55020, Los Angeles CA 90055.
4 Los Angeles Lawyer June 2015
VISIT US ON THE INTERNET AT WWW.LACBA.ORG/LALAWYERE-MAIL CAN BE SENT TO [email protected]
EDITORIAL BOARD
ChairMARY E. KELLY
Articles CoordinatorDONNA FORD
Assistant Articles CoordinatorTED M. HANDEL
SecretaryJOHN C. KEITH
Immediate Past ChairPAUL MARKS
JERROLD ABELES (PAST CHAIR)K. LUCY ATWOODETHEL W. BENNETTSCOTT BOYERCHAD C. COOMBS (PAST CHAIR)HON. MICHELLE WILLIAMS COURTGORDON K. ENG STUART R. FRAENKELMICHAEL A. GEIBELSON (PAST CHAIR)CHRISTINE D. GILLESHARON GLANCZJEFFREY A. HARTWICKSTEVEN HECHT (PAST CHAIR)ERIC KINGSLEYKATHERINE KINSEYDANIELLE LACKEYJENNIFER W. LELANDSANDRA MENDELLMICHELLE MICHAELSCOMM. ELIZABETH MUNISOGLUPAUL OBICOCARMELA PAGAYDENNIS L. PEREZ (PAST CHAIR)GREGG A. RAPOPORTGARY RASKIN (PAST CHAIR)JACQUELINE M. REAL-SALAS (PAST CHAIR)A. JOEL RICHLINDAVID SCHNIDER (PAST CHAIR)NANCY L. SCHROEDERSTEVEN SCHWARTZHEATHER STERNMATTHEW D. TAGGARTDAMON THAYERTHOMAS H. VIDAL
STAFF
EditorERIC HOWARD
Art DirectorLES SECHLER
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Copyright © 2015 by the Los Angeles County Bar Association. All rightsreserved. Reproduction in whole or in part without permission is pro -hibited. Printed by R. R. Donnelley, Liberty, MO. Member BusinessPublications Audit of Circulation (BPA).
The opinions and positions stated in signed material are those ofthe authors and not by the fact of publication necessarily those of theAssociation or its members. All manuscripts are carefully considered bythe Editorial Board. Letters to the editor are subject to editing.
Los Angeles Lawyer June 2015 5
LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATIONOF THE LOS ANGELES COUNTY BAR ASSOCIATION1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2553Telephone 213.627.2727 / www.lacba.org
LACBA OFFICERS
PresidentLINDA L. CURTIS
President-ElectPAUL R. KIESEL
Senior Vice PresidentMARGARET P. STEVENS
Vice President and TreasuerMICHAEL K. LINDSEY
Assistant Vice PresidentHON. BRIAN S. CURREY
Assistant Vice PresidentCHRISTINE C. GOODMAN
Assistant Vice PresidentDAVID K. REINERT
Barristers PresidentDEVON MYERS
Barristers President-ElectROBERT S. GLASSMAN
Immediate Past PresidentPATRICIA EGAN DAEHNKE
Chief Executive Officer/SecretarySALLY SUCHIL
Chief Financial & Administrative OfficerBRUCE BERRA
General Counsel & Chief Administrative OfficerW. CLARK BROWN
BOARD OF TRUSTEESHARRY W.R. CHAMBERLAINBRIAN K. CONDONDUNCAN W. CRABTREE-IRELANDDANIEL M. CROWLEYREBECCA A. DELFINOHARUMI HATASTACY R. HORTH-NEUBERTRICHARD D. KAPLANSAJAN KASHYAPSARAH E. LUPPENMARCELLUS A. MCRAEANNALUISA PADILLAJUAN A. RAMOSDIANA K. RODGERSSARAH V.J. SPYKSMASUSAN KOEHLER SULLIVANJEFF S. WESTERMAN
AFFILIATED BAR ASSOCIATIONS
BEVERLY HILLS BAR ASSOCIATION
CENTURY CITY BAR ASSOCIATION
CULVER MARINA BAR ASSOCIATION
GLENDALE BAR ASSOCIATION
IRANIAN AMERICAN LAWYERS ASSOCIATION
ITALIAN AMERICAN LAWYERS ASSOCIATION
JAPANESE AMERICAN BAR ASSOCIATION
JOHN M. LANGSTON BAR ASSOCIATION
KOREAN AMERICAN BAR ASSOCIATION OF SOUTHERN CALIFORNIA
LESBIAN AND GAY LAWYERS ASSOCIATION OF LOS ANGELES
MEXICAN AMERICAN BAR ASSOCIATION
PASADENA BAR ASSOCIATION
SAN FERNANDO VALLEY BAR ASSOCIATION
SANTA CLARITA VALLEY BAR ASSOCIATION
SANTA MONICA BAR ASSOCIATION
SOUTH BAY BAR ASSOCIATION
SOUTHEAST DISTRICT BAR ASSOCIATION
SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION
WOMEN LAWYERS ASSOCIATION OF LOS ANGELES
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6 Los Angeles Lawyer June 2015
body cameras. The legislature in Sacramento has also responded with a slate of pro-posed laws, including mandatory body cameras (AB 66), annual reporting of use offorce incidents (AB 619) mandatory police reporting on stops, seizures, and arrests(AB 953), requiring prosecutors to criminally charge officer-involved shootings onlyby way of preliminary hearing and prohibiting prosecutorial use of grand jury pro-ceedings in these cases (SB 227), and appointment of a special prosecutor in criminalcases involving an officer’s use of force (AB 86). A recent article in the Los AngelesTimes, “‘Tired of prayer vigils,’” summarizes these developments.
Assemblyman Jim Cooper and Los Angeles Times reporter Sandy Banks, however,are among those who argue that while these measures may be laudable, they do notaddress the plight of the poor, who are segregated economically to live in crime-ridden neighborhoods that lack properly funded and performing schools, grocerystores, banks, employment opportunities, and services for struggling families andat-risk youth. Others note laudable programs place too much emphasis on personalaccountability, without addressing racial discrimination. Dr. Martin Luther King, Jr.aptly summed up the poor person’s dilemma: “It is cruel jest to say to a bootlessman that he ought to lift himself up by his own boot straps.”
A recent op ed in the New York Times (“Forcing Black Men Out of Society”)found that 1.5 million, or “more than one in every six black men in the 24-to-54 agegroup disappeared from civic life, mainly because they died young or are locked-awayin prison.” In addition, “many millions more are shut out of society” because of “theshrinking labor market for low skilled workers, racial discrimination, or sanctionsthat prevent millions who have criminal convictions from getting all kinds of jobs.”
California legal services and civil rights advocates recently analyzed the sanctionsissue by examining the impact of the state’s legislatively mandated court fees, finesand assessments. The report, Not Just a Ferguson Problem: How Traffic CourtsDrive Inequality in California, available at www.wclp.org, found that “low incomeCalifornians are being disproportionately impacted by state laws and proceduresrelated to driver’s license suspensions.” Four million plus driver’s licenses have beensuspended as the result of “increased fines and fees and reduction in access to thecourts.” These suspensions hinder the ability to obtain and retain employment.
The report’s meritorious solutions include amnesty and reduction of debt basedon ability to pay. The report, however, does not address the issue of judicial authorityor discretion to impose, reduce, or waive fees and sanctions based on ability to payor mitigating factors. Perhaps perceived as burdensome on the strained resourcesof high-volume courts, the exercise of judicial authority has been crucial to thepublic perception of fairness, as well as access to justice, since Marbury v. Madison.
On February 2, 2015, the Judicial Council reported in “Funding California’sCourts: 2015-2016 Budget Considerations” that “a comprehensive approach is neededto address court funding and the impact of court-related fees and collections on thepublic.” To achieve the goal of court funding from the state’s general fund, the NotJust a Ferguson Problem report deserves comprehensive consideration. n
The recent spate of officer-involved deaths of men ofcolor in poverty-stricken communities stains a swathof states. Various solutions are being implemented,
such as the Department of Justice’s funding of a $20 millionpilot program for the LAPD to outfit all patrol officers with
Mary E. Kelly is a nurse attorney and an administrative law judge II with the CaliforniaUnemployment Insurance Appeals Board. She is cochair of the California Access to JusticeCommission’s Administrative Agency Committee.
8 Los Angeles Lawyer June 2015
letters to the editor
I was thrilled to read the article “CrossingBorders” by Jeff Dasteel and Natalia de laParra Ferreiro in the November 2013 issueof Los Angeles Lawyer. In 2004 I chaired asubcommittee of the Arbitration Committeeof the Business Law Section (it was then apart of that committee). Our goal was toachieve parity for foreign attorneys so thatthey could appear for foreign clients in Cal -ifornia international arbitrations without hav-ing to go through a pro hac vice procedure. Ilooked through my old (really old!) files andfound the State Bar lobbyist who was preparedto carry it—I believe with the blessing of theState Bar. At that time, at the suggestion ofthe lobbyist’s office, it was also submitted tothe Judicial Council, and it was totally buriedby the Judicial Council, notwithstandingefforts that we made to get past their refusalto consider it.
I had started this, along with others, inour committee because we had situationsarise where foreign (i.e., out of state) attorneyswere prevented from appearing. Neither theState Bar nor the arbitral agents had anyauthority to prevent this misjudgment and,as you mention, it flies in the face of Cal -ifornia’s purported desire to be a haven forinternational arbitrations.
Many thanks for again making it an issue,and good luck! Maybe we have a differentJudicial Council by now with a more openapproach.
Dixon Q. Dern
The recent opinion piece by Brad Seiling andJustin Jones Rodriguez (“The Ninth CircuitRejects First Amendment Arguments in Favorof SOCE,” Closing Argument, April 2014),regarding challenges to California’s new lawprohibiting sexual orientation change efforts(SOCE) with minors, was misleading withregard to both the therapy involved and thelaw.
If there is an “overwhelming consensusthat SOCE is harmful and ineffective,” asthe authors claim, that “consensus” existsonly as a diktat of political correctness, notas a scientific finding. Even the AmericanPsychological Association, in its 2009 TaskForce Report on the subject, admitted: “Weconclude that there is a dearth of scientificallysound research on the safety of SOCE.…Thus, we cannot conclude how likely it isthat harm will occur from SOCE.”
The assertion by Seiling and Rodriguez
that “[c]hildren who undergo SOCE are morelikely than their peers to experience alcoholand drug dependence… [and] to commit sui-cide,” among other negative outcomes, hasno scientific support. The APA declared, “Wefound no empirical research on children whorequest SOCE.”
Seiling and Rodriguez would have usbelieve that what Pickup v. Brown is reallyabout is a mere clarification that the “FirstAmendment does not insulate medical pro-fessionals from giving negligent advice topatients.” Actually—as Judge DiarmuidO’Scannlain noted in his dissent—the court,“contrary to common sense and without legalauthority, simply asserts that some spokenwords—those prohibited by SB 1172—arenot speech.” Should SB 1172 come beforethe U.S. Supreme Court, the Court should(and likely will) strike it down as exactly thetype of unconstitutional restriction on unpop-ular minority speech the First Amendmentwas meant to prevent.
Travis Weber
There is a widespread belief that lawyers arelousy with numbers. While I enjoyed readingGordon K. Eng’s article (“Cost-Efficient Waysto Improve Desk Space Productivity,” Com -puter Counselor, July/August 2014), sentenceslike this one help to perpetuate this mathmyth: “While not as fast as a sheet-fed scan-ner, which can scan around 10 to 20 pagesper minute, the SV600 takes about three sec-onds for a pair of pages.” Three seconds fortwo pages equals 40 pages per minute (solvefor x, where 2/3 = x/60).
Aaron Craig
CorrectionOn the cover of the April 2015 issue describ-ing Robert M. Heller’s article “DoublingDown,” the term “double derivative indem-nity” was mistakenly used instead of “doublederivative litigation.” Los Angeles Lawyerregrets the error.
Articles Solicited
Los Angeles Lawyer encourages the submis-sion of substantive, researched legal articles.Manuscripts, queries, and requests for a styleguide may be sent to Eric Howard ([email protected]). The Los Angeles Lawyer Edi -torial Board carefully considers all submis-sions.
Eric Howard, editor
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Los Angeles Lawyer June 2015 9
What is the perfect day? A work day? They’reall work days. To set a plan—and carry theplan through—that’s a great day.
What is overrated in the law enforcementprofession? As a result of Hollywood, thatthe police department and the sheriff’s depart-ment have unlimited resources. We’ve createda false sense of expectation, and people holdus to it.
What is underrated? The dedication, com-mitment, and effort put forth, every day, bythe people who are out there doing their job.
Why did you personally choose to go into lawenforcement? I need something where I’mout there, where I’m meeting new people allthe time and where there are new challengesevery day…where at the end of the day, insome small way, I have helped someone. I’venever looked back.
What was your best job? Working homicidecases and investigating the ultimate crimethat one person can do to another.
What was your worst job? I had every crum-my job you can imagine. I started off at eightyears old delivering papers in Boston, justtrying to make a dollar here and there.
You were raised in a working-class neighbor-hood in Boston. Did that help you be a bettercop? I think so—a sensitivity that we’re allvery complex with many pressures weighingon us.
You went to Saint Anselm College in NewHampshire and received a Bachelor of Sci-ence in criminal justice. Later, you received amaster’s degree in public administrationfrom USC. Are you an East Coast guy or an LAguy? I’d like to say I’m the best of both.
You graduated from the LA police academy in1981 and then worked in a variety of assign-ments as an officer. Which of those assign-ments was the most dangerous? Patrol.
You are credited with presenting to then-LAPD Chief Bratton, when you were his sec-ond-in-command, a plan for community-based policing. How does that work? Beingmore community focused as far as how wedeliver services. Embracing the startingpoint that all public safety partners need towork together with—not simply in—ourcommunity.
What characteristics do you most admire inyour mother? Her positive attitude and per-severance.
If you were handed $1 million tomorrow,what would you do with it? I’d start a foun-dation to help kids.
Who is on your music play list? The older Iget, the less loud the music I listen to is. I likecountry, easy-listening, and oldies.
What book is on your nightstand? AmericanSniper.
What worried you the most the when youfirst took office as sheriff of the largest sher-iff’s department in the nation, with morethan 18,000 employees? We are spread outover 4,000 square miles. There is diversity
of terrain, diversity of population, whichmakes this county so great, but from apolicing standpoint, it offers great chal-lenges.
You came up through the LAPD ladder andthen you were the chief of police for LongBeach. Are you accepted by LASD rank andfile? I wouldn’t say I am, yet. I’m hopeful tobe. I couldn’t be more proud of the men andwomen in this organization.
With a $3.1 billion yearly budget, aren’t mostof your decisions about money? You needmoney to get anything done. Eighty-threepercent of our budget is personnel.
Your department has suffered a loss of thepublic faith and trust. What is the best kindof civilian oversight to address this issue?The Citizens’ Commission on Jail Violencerecommended we put in place an inspectorgeneral. That’s been done. I believe that theinspector general should be overseen by acivilian oversight commission. If we have aproblem, let’s find it, let’s fix it.
Your department offers education-based in-carceration to certain inmates. Who quali-fies? A screening is done and for people whoare able to collaborate in a communal set-ting, where they can get along with others ina classroom setting. It’s pretty wide-open.
What do you do on a three-day weekend?What’s a three-day weekend?
Which person in history would you most liketo take out for a beer? Winston Churchill.
What would you ask him? How did he rallythe support of a nation during the toughesttimes of that nation?
What are the three most deplorable condi-tions in the world? Violence, poverty, anduntreated disease that is treatable.
Who are your two favorite U.S. presidents?Ronald Reagan and Abraham Lincoln.
What is the one adjective you would like onyour tombstone? Caring.
on direct INTERVIEW BY DEBORAH KELLY
JIM MCDONNELL | Former chief of the LongBeach Police Department, Sheriff McDonnellserved 29 years at the LAPD, earning the depart-ment’s highest honor for bravery, the Medal ofValor.
Jim McDonnell Sheriff
10 Los Angeles Lawyer June 2015
AFTER SURVIVING THREE GRUELING YEARS of law school, enduringthe firm interview process, and passing the bar examination, a newlylicensed lawyer has every right to be proud upon receiving an offer tojoin his or her first law firm. It is only natural to want to revel in suchan accomplishment. The trick, though, is to temper those feelings ofpride and accomplishment lest they slide into a sense of entitlement.
An offer to become an associate at a law firm is undoubtedly thewell-deserved fruit of years of hard work and commitment. For manya freshly minted attorney (many of whom are in their mid-20s), anassociate position is the first job in which anyone will be workingunder him or her. So, the young associate hasfinally earned the right to call himself or herselfsomeone’s boss, as staff members are in factnow working for the associate, right? Wrong.
An associate is no one’s boss. Granted, theassociate may have the authority to requestthat certain tasks be performed by the staffand have supervisory responsibility over anassistant’s work, but an associate is first andforemost a coequal member of the team assem-bled by the firm’s partners. In the partners’eyes, every employee under them is an integralcomponent of the machine that allows the firmto address its cases efficiently. Each employeein the office was hired because the partnersbelieved he or she could play a specific role. Only when everyonesuccessfully fulfills his or her assigned role will the office run smoothly.Therefore, although the associate may perceive a hierarchical structurein the office, it is a mistake to think that beyond the fact that thepartners are at the top of the food chain, there are any other bosses.
At any reputable law school, students are advised countless timesto treat their future assistants and staff with respect. However, lawstudents are seldom taught that the reasoning behind this goes muchdeeper than common cordiality. The bottom line is that a seasonedsupport staff member will know a lot more about the practice of lawand legal procedure than a first- or second-year associate. And if itever comes down to a serious disagreement or rift between the twoemployees—assuming there is no clear law or procedure on the issuedebated—a partner will almost certainly side with the more experiencedstaff member, who has earned the partner’s trust and appreciationthrough the years. Moreover, a lawyer’s first few years of practice arecertainly not the time to display unmerited cockiness. At that earlystage in an associate’s career, he or she is in no position to be playingoffice politics.
And as counterintuitive as it may seem, the support staff actuallyyield a considerably greater amount of power over the firm’s newestattorneys than the other way around. Consider the assistant who hasalready spent decades in the work force. The last thing he or sheneeds is to be derided by some pompous 20-something with little tono real-world experience. If the associate allows his or her relationship
with an assistant to get off to a rough start, there is no doubt that theassociate’s life will be miserable. Important documents may begin toarrive at the associate’s desk later than they should. Typos may notbe caught. The formatting of a pleading may be off. The point is,any of a number of errors (intentional or not) caused by staff will bethe associate’s—and only the associate’s—fault. After all, it is theattorney’s responsibility alone to ensure that the firm’s overall workproduct is perfect. A new associate especially needs to be mindful ofthis, as he or she must not only supervise support staff but also ensurethat the partners avoid mistakes as well. Thus, when a junior associate’s
name is on a file, any errors that occur will ultimately be the associate’sfault, whether they originate from above or below. The associate’srole in this regard can be described as one of strict liability.
Despite these harsh words of caution, courting favor with theoffice staff and legal assistants can—nay, will—be beneficial to a newlawyer’s long-term interests. While the assistant certainly has thepower to make the associate’s life difficult, by the same token, he orshe can also make the associate’s life a whole lot easier. Simply put,it is a balancing act. One can be assertive without being a jerk. Whileit is important to be in charge, it is also prudent to avoid beingoppressive. It is all right to horse around in moderation but neverinappropriately. Most of all, an associate should treat others withrandom acts of kindness. If the associate gives the support staffmembers cause to genuinely like him or her, and if he or she treatsthem with the respect they deserve, that positive energy will manifestitself in returns to the associate. Support staff may start doing favorsfor the associate beyond what is required. They might start volunteeringtheir services when they have yet to be asked. They might even staylate to help out on a tight deadline. Whether for selfish reasons orotherwise, nothing bad can come of being nice to the office staff. Onthe other side of the coin, only harm will come as a result of anattitude of entitlement. n
barristers tips BY MATTHEW A. YOUNG
Principles for New Associates When Working with Law Firm Staff
At any reputable law school, students are advised countless times
to treat their future assistants and staff with respect. However,
law students are seldom taught that the reasoning behind this
goes much deeper than common cordiality.
Matthew A. Young is an associate at Kiesel Law, LLP in Beverly Hills, wherehis practice focuses on mass torts and class actions.
Los Angeles Lawyer June 2015 11
WITHIN THE PAST YEAR, there have been significant new developmentsin California employment law from both the legislature and thecourts. In addition, the U. S. Supreme Court decided a number ofimportant federal questions that directly impact employers in andoutside the state. Moreover, the National Labor Relations Board(NLRB) weighed in with several important new precedents thataffect California employers—including those without a unionizedwork force.
In enacting the Healthy Workplaces, Healthy Families Act of 2014(AB 1522),1 which becomes effective July 1, 2015, California joinsConnecticut in mandating paid sick leave for all employees.2 Employersthat have at least one employee who works more than 30 days in ayear in California must provide up to 24 hours of annual paid sickleave. The new law requires that this benefit be provided to all employeeswho work the requisite number of days (including those who are tem-porary or are employed part-time). Sick leave may be used for the“diagnosis, care, or treatment of an existing health condition of, orpreventive care for, an employee or an employee’s family member.”3
Nonexempt employees accrue paid sick leave at the rate of one hourfor every 30 hours worked; exempt employees accrue sick leave basedon the lesser of their normal work schedule or a 40-hour workweek.An employee can use accrued sick leave after being employed for 90days, and accrued but unused sick leave carries over to the followingyear of employment (subject to a 48-hour cap at the employer’s option).
There are extensive posting, notice, and recordkeeping obligationsbuilt into the law as well, including a requirement that employersprovide written notice on an itemized wage statement or a separatenotice that is distributed with the wage statement setting forth theamount of then-current paid sick leave available to the employee.Exempted from the law are employees who are covered by a collectivebargaining agreement if the agreement expressly provides for paidsick leave as well as employees of in-home supportive service providersand flight deck and cabin crew members of an air carrier that issubject to the provisions of Title II of the federal Railway Labor Act.4
Perhaps the most obvious shot over the bow fired by the legis-lature at California employers last year was AB 2053, which amendedGov ernment Code Section 12950.1 by adding an additional trainingrequirement for large employers (those with 50 or more employees).5
Prior to this amendment, Section 12950.1 required these employersto provide at least two hours of classroom or “other effective interactivetraining and education regarding sexual harassment to all supervisoryemployees in California within six months of their assumption of asupervisory position” and then once every two years thereafter. Underthe new law, employers are required to add another component tothis mandatory training: prevention of “abusive conduct” in theworkplace. Abusive conduct is defined in the statute as “conduct ofan employer or employee in the workplace, with malice, that a rea-sonable person would find hostile, offensive, and unrelated to anemployer’s legitimate business interests. Abusive conduct may includerepeated infliction of verbal abuse, such as the use of derogatory
remarks, insults, and epithets, verbal or physical conduct that a rea-sonable person would find threatening, intimidating, or humiliating,or the gratuitous sabotage or undermining of a person’s work per-formance. A single act shall not constitute abusive conduct, unlessespecially severe and egregious.”6 This statute is a shot over the bowin the sense that it introduces into the law the notion that an employer’sor supervisor’s hostile or even unfriendly treatment of an employeethat is not linked to some legally protected category (e.g., race, age,sex, disability, religion, whistleblower, etc.) may lead to civil liability.For now, so-called bullying is not expressly illegal under Californialaw—though, of course, it is an extremely unwise management tech-nique for a variety of reasons—but this new training requirementmay be the first step toward a possible future expansion of the law.
California Supreme Court Cases
The California Supreme Court finally decided to follow the U.S.Supreme Court’s lead and recognize that class action waivers are
practice tips BY ANTHONY J. ONCIDI
Recent Developments in Employment Law Affecting California
Anthony J. Oncidi is a partner at Proskauer and chair of the Labor and Employ -ment Law Department in Los Angeles, representing employers and man-agement.RI
CHA
RD E
WIN
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enforceable under the Federal ArbitrationAct7 irrespective of contrary state law. InIskan ian v. CLS Transportation Los Angeles,LLC,8 the California Supreme Court heldthat under the authority of AT&T MobilityLLC v. Concepcion,9 class action waivers areenforceable in the employment context. In so holding, the Iskanian court declined tofollow recent precedent from the NLRB thatthe National Labor Relations Act10 (NLRA)generally prohibits contracts that compelemployees to waive their right to participatein class action proceedings to resolve wageclaims.11 However, the Iskanian court alsorecognized a notable exception to its hold-ing—that representative actions brought underthe California Labor Code Private AttorneysGeneral Act of 200412 (PAGA) cannot bewaived. The court’s reasoning is that a PAGAaction “functions as a substitute for an actionbrought by the government itself” and there-fore is a type of qui tam action that is notwaivable.13 Since employers in California aremore likely to be sued under PAGA than bymeans of a traditional class action these days,Iskanian provides little comfort.14
In Patterson v. Domino’s Pizza, LLC, theCalifornia Supreme Court reversed the courtof appeal and reinstated summary judgmentfor Domino’s after giving deference to thefranchise agreement.15 At issue in the casewas whether the franchisor, Domino’s Pizza,was potentially liable for the alleged sexualharassment of a young female employee byher assistant manager, both of whom wereemployees of the franchisee Sui Juris, LLC.In her pleadings, the plaintiff alleged she wasemployed both by Sui Juris and its franchisor,Domino’s Pizza. Domino’s filed a motion forsummary judgment that the trial court grantedand the court of appeal reversed. However,the supreme court concluded that Domino’sdid not retain or assume “the traditional rightof general control an ‘employer’ or ‘principal’has over factors such as hiring, direction,supervision, discipline, discharge, and relevantday-to-day aspects of the workplace behaviorof the franchisee’s employees.”16 On the otherhand, the court of appeal had emphasizedthat inferences could be drawn from the fran-chise agreement that “Sui Juris lacked man-agerial independence” and that Domino’s“meddled” in Sui Juris’s employment decisions,including what to do with the alleged harasserin this particular case. Referring to the assistantmanager, an area leader from Domino’s report-edly told the franchisee, “You’ve got to getrid of this guy.”17 Although Domino’s narrowlywon the case (4 to 3), the California SupremeCourt noted:
Nor do we mean to imply that fran-chisors, including those of immensesize, can never be held accountablefor sexual harassment at a franchised
location. A franchisor will be liable ifit has retained or assumed the rightof general control over the relevantday-to-day operations at its franchisedlocations.18
It may be significant that the Pattersonopinion was authored by now retired JusticeMarvin Baxter, an appointee of former Gov -ernor George Deukmejian, who has sincebeen replaced by former Stanford Law Schoolprofessor Mariano-Florentino Cuellar, whomay have voted with the dissent if the casehad been decided this term instead of last.
In a case involving an unauthorized alienwho claimed disability discrimination, Salasv. Sierra Chemical Company,19 the high courtruled in favor of the employee. Vicente Salasworked on Sierra Chemical’s productionline, filling containers with various chemicals.At the time of his hire, Salas provided Sierrawith a resident alien card and a Social Sec -urity card and signed an I-9 EmploymentEligibility Verification Form. After allegedlyinjuring his back several times and presentingdoctors’ notes restricting his ability to lift,stoop, and bend, Salas was laid off as partof Sierra’s annual reduction in its productionline staff. Salas received a recall-to-work let-ter, but Sierra did not permit him to returnto work after he told the company he was“still seeing a doctor.”20 Salas later filed alawsuit against Sierra, alleging disability dis-crimination and denial of employment inviolation of public policy. After filing an inlimine motion stating that he would asserthis Fifth Amend ment right against self-in -crimination to any questions concerning hisimmigration status, Sierra discovered thatthe Social Security Number that Salas hadused to secure employment belonged to aman in North Carolina. Sum mary judgmentwas granted in favor of Sierra on the groundthat it never would have hired or recalledSalas if it had known he was using someoneelse’s Social Security number.21 How ever, inthis opinion, the California Supreme Courtreversed summary judgment and held thatthe federal Im migration Reform and ControlAct preempts California’s Fair Employmentand Housing Act, which protects employeesregardless of their immigration status, onlyfor lost-pay damages for the period of timeafter the employer discovers that the em -ployee was ineligible to work in the UnitedStates.22
U.S. Supreme Court Cases
In Integrity Staffing Solutions, Inc. v.Busk,23 the U.S. Supreme Court held thatan employer is not required to pay employ-ees for time spent in security screenings.The employer in this case, Integrity StaffingSolutions, provides staffing to Amazon.comthroughout the United States. Plaintiffs
worked as hourly employees, retrieving andpackaging products at Integrity Staffingwarehouses in Nevada. Integrity Staffingrequired its employees to undergo a securityscreening before leaving the warehouse atthe end of each day. Plain tiffs filed a putativeclass action against In tegrity Staffing onbehalf of similarly situated employees forviolations of Nevada state law and the fed-eral Fair Labor Standards Act (FLSA). Thesuit alleged that the employees were entitledto compensation for time spent at the endof their shifts waiting to undergo and actu-ally undergoing security screenings to pre-vent employee thefts—the plaintiffs allegedthat the screenings amounted to roughly25 minutes per day. In a unanimous opinion,the Supreme Court held that the securityscreenings at issue were “non-compensablepostliminary activities” because the screeningswere not the principal activity that theemployees were employed to perform norwere they “integral and indispensable” tothe employees’ duties as warehouse workers.24
Although the FLSA applies to Californiaemployers who are engaged in interstate com-merce, the Busk opinion is likely to haveminimal effect here because California statelaw defines “hours worked” as “the timeduring which an employee is subject to thecontrol of an employer….”25
In another unanimous opinion, the U.S.Supreme Court invalidated President Obama’sJanuary 2012 recess appointments to theNLRB, thus calling into question scores ofopinions issued by an improperly constitut -ed board.26 Notable NLRB opinions at issueinvolve: 1) imposing an obligation to bargainover the discretionary aspects of disciplinewhile collective bargaining was still underway,2) determining that dues check-off clausessur vive the expiration of a collective bar-gaining agreement, 3) finding the discipliningof a union member who wrote vulgar pro-union statements on union newsletters—thenlying about it to the company—to be unlawfulbecause the activity was protected by theNLRA, and 4) requiring employers to turnover witness statements as part of the dutyto provide information to the union.
In another U.S. Supreme Court case,Burwell v. Hobby Lobby Stores, Inc.,27 thehigh court held that private employers arepersons within the meaning of the First Amend -ment and the Religious Freedom RestorationAct of 199328 (RFRA) and that the federalgovernment had overstepped its bounds byrequiring faith-based private, for-profit em -ployers to pay for certain forms of birth controlthat those employers argued contradicted theirsincere religious beliefs. At issue in the casewas whether the requirement of the PatientProtection and Affordable Care Act29 thathealth insurance plans cover “preventive ser-
12 Los Angeles Lawyer June 2015
vices”—which included four “abortifacients”that may have the effect of preventing a fer-tilized egg from developing—violated theemployers’ right to freedom of religion underthe constitution and RFRA.30 Specifically, theSupreme Court determined that there wereless restrictive alternatives available such asrequiring the government or the employers’insurers to assume the cost of providing the“preventive services” without charge eitherto the employers or their em ployees.
In a decision that reverses existing lawon employee use of an employer’s e-mail sys-tem, the NLRB decided that employees mayuse their employer’s e-mail system duringnonworking time to discuss unionization andthe terms and conditions of their em ploy -ment.31 The board overruled its own prece-dent in Register Guard32 on the ground thatthe earlier opinion accorded too much weightto an employer’s property rights over employ-ees’ NLRA Section 7 rights to engage in con-certed activity.
U.S. District Court Case
Although not a binding appellate opinionor a statutory mandate, a November 2014verdict from a federal court jury in SanDiego is a reminder of how unpredictablejuries can be when deciding discriminationand harassment cases.33 Rosario Juarez, aformer manager of AutoZone, claimed shewas fired after complaining that she wasdemoted after giving birth. Juarez joinedthe company in 2000 and was promoted toparts sales manager the following year. Sheclaimed that AutoZone had a glass ceilingfor female managers that was perpetuatedthrough an opaque promotion process.Juarez was promoted to the position of storemanager in 2004 after complaining aboutdiscrimination. After she became pregnantin 2005, her district manager urged her tostep down, saying that she would not beable to handle the responsibilities of runningthe store and being a mother at the sametime. Juarez claimed she continued to bediscriminated against after the birth of herson and that she was demoted in 2006because of her complaints. In 2007, she fileda complaint over the demotion with the Cal -ifornia De part ment of Fair Employment andHousing and was fired the following yearafter another employee allegedly misplacedan envelope containing cash from the registerfor which Juarez was blamed. Juarez suedfor wrongful termination of employment,pregnancy and gender discrimination, retal-iation, and failure to prevent harassment.The jury awarded Juarez $393,759 for pasteconomic losses, $228,960 for future eco-nomic losses, $250,000 for emotional dis-tress damages, and $185 million in punitivedamages—presumably a world record ver-
dict in a single-plaintiff employment dis-crimination case.
One in eight Americans lives in Cali f ornia—so what happens here has a significant impacton the nation as a whole. The developinglabor and employment law impacts not justthe employees who live and work in the statebut also the judges and lawmakers throughoutthe country who look to developments in theGolden State as they contemplate changes totheir own laws and regulations. The past yearhas been a blockbuster in terms of majorchanges—and there is little reason to believethat 2015 will be much different. n
1 LAB. CODE §§245 et seq.; 2810.5(a)(1)(H).2 New California Paid Sick Leave Law is Nothing toSneeze At, THE NATIONAL LAW REVIEW, Oct. 8, 2014,http://www.natlawreview.com/article/new-california-paid-sick-leave-law-nothing-to-sneeze. 3 LAB. CODE §246.5(a)(1)4 45 U.S.C. §§181 et seq.5 GOV’T CODE §12950.1.6 GOV’T CODE §12950.1(g)(2)7 9 U.S.C. §§1 et seq.8 Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (2014).9 AT&T Mobility LLC v. Concepcion, 131 S. Ct.1740 (2011).10 29 U.S.C. §§151 et seq.11 In re D.R. Horton, Inc., 357 NLRB No. 184 (2012),rev’d in part, 737 F. 3d 344 (5th Cir. 2013).12 LAB. CODE §§2698, et seq.
13 Iskanian at 381-83 (citing Arias v. Superior Court,46 Cal. 4th 969, 986 (2009). 14 On January 20, 2015, the U.S. Supreme Courtdenied the employer’s petition for certiorari in Iskan -ian; in October 2014, the NLRB reaffirmed its positionthat mandatory arbitration provisions violate theNLRA in Murphy Oil USA, Inc., 361 NLRB No. 72(Oct. 28, 2014).15 Patterson v. Domino’s Pizza, LLC, 60 Cal. 4th 474(2014).16 Id. at 503. 17 Id. at 485. 18 Id. at 503. 19 Salas v. Sierra Chem. Co., 59 Cal. 4th 407 (2014).20 Id. at 416. 21 Id. at 417.22 Id. at 430-31.23 Integrity Staffing Solutions, Inc. v. Busk, 135 S.Ct. 513 (2014). See also Sandifer v. United StatesSteel Corp., 134 S. Ct. 870 (2014) (steelworkers’ don-ning and doffing of protective gear constituted non-compensable time spent “changing clothes” withinthe mean ing of the FLSA).24 Integrity Staffing Solutions, 135 S. Ct. at 519.25 See generally IWC Wage Order No. 4-2001 §2(k.)26 NLRB v. Noel Canning, 134 S. Ct. 2550 (2014).27 Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct.2751 (2014).28 42 U.S.C. §§2000bb et seq.29 42 U.S.C. §§18001 et seq.30 Burwell, 134 S. Ct. at 2754-59. 31 Purple Commc’ns, Inc., 361 NLRB No. 126 (Dec.11, 2014).32 Register Guard, 351 NLRB 1110 (2007).33 Juarez v. AutoZone Stores, Inc., No. 08CV417-L(BLM) (S.D. Cal 2014).
Los Angeles Lawyer June 2015 13
14 Los Angeles Lawyer June 2015
WORKERS’ COMPENSATION defensecounsel are not engaged in the usual tripartiterelationship that arises in other liability insur-ance contexts.1 The workers’ compensationinsurance company is often the workers’compensation defense attorney’s only client,and thus it is the only one entitled to attor-ney-client protections such as the attorney’sduties of loyalty and confidentiality. Never -theless, employers may be required by con-tract to cooperate in the defense of theiremployees’ claims. Therefore, an attorneyfor an employer may not have the same clientas a workers’ compensation defense attorney,even if they work together on a claim.
In California, workers’ compensation lia-bility arises from the constitution and lies inneither tort nor contract.2 The workers’ com-pensation system “is exclusive of all otherstatutory and common law remedies, andsubstitutes a new system of rights and oblig-ations for the common law rules governing
liability of employers for injuries to theiremployees.”3 Because the workers’ compen-sation system seeks to ensure funding for thecare of injured workers, workers’ compen-sation policies in California make insurancecompanies primarily and directly responsiblefor an injured worker’s benefits.4 In confor-mity, the legislature has defined the word“employer” to include the employer’s work-ers’ compensation insurer.5 Workers’ com-pensation claims have their own forum aswell—the Workers’ Compensation Appeals
Joseph C. Gjonola practices business litigation,specializing in workers’ compensation bad faithand surrounding matters, at Roxborough, Pom - erance, Nye & Adreani in Woodland Hills. He wouldlike to thank Diane L. Karpman for her expert guid-ance through this specialized subject matter, DrewPomerance for reviewing drafts and providinginsight, and Nicholas Roxborough, Gary Nye, andMichael Adreani for their constant support.
WorkingRelationships
Canton Poultry’s holding that workers’compensation defense attorneys owe noduties to employers is a reminder of the“workers’ compensation bargain”
by Joseph C. Gjonola
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Board (WCAB). When an insurer gives noticeof its liability to an injured worker, “[t]heinsurer shall…be substituted in place of theemployer in any proceeding theretofore orthereafter instituted by such claimant to re -cover such compensation, and the employershall be dismissed therefrom.”6 Under thisstatute, courts have ruled that employers donot share an attorney-client privilege withworkers’ compensation defense attorneysbecause only the insurer is potentially liablefor a claim, so only the insurer is the defenseattorney’s client.7
The workers’ compensation scheme centerson the “workers’ compensation bargain” inwhich injured workers are provided medicaltreatment consistent with Labor Code 4600,temporary disability indemnity payments,permanent disability indemnity payments,and other statutory workers’ compensationbenefits, all in exchange for giving up theopportunity to sue employers for damages.Em ployers trade the risk of potentially un -limited damages that accompany litigationfor the limited obligation to fund injuredworkers’ reasonable medical and indemnityneeds. It is essentially statutory liability with-out regard for fault and may even pay benefitsfor life.8 Because the law of workers’ com-pensation sets the employer’s liability, theremaining issue is what medical care andindemnity payments are reasonably due toan injured worker. Injured workers can hireattorneys to pursue their workers’ compen-sation benefits. Defense attorneys, in turn,make sure injured workers are not receivingmore than reasonable and necessary benefits.
The X-Mod
Workers’ compensation insurance is regularlyone of the three highest costs facing averageCalifornia employers. An employer’s premiumis determined, in part, by its loss history—both the frequency of injuries and the costof benefits. A state-regulated formula derivedfrom the employer’s loss history generateswhat is known as an experience modificationrating (also called the x-mod or EMR), whichis multiplied (along with other factors) againsta base premium amount to determine anemployer’s workers’ compensation premium.9
Therefore, an employer’s future premium—and possibly its ability to survive as a busi-ness—are affected by every benefit payout.If the x-mod is too high, some employerssuffer additional penalties. For example,almost every application to bid for a publiccontract in California asks the applicant busi-ness to disclose its EMR. One extremely high,outlier workers’ compensation claim mayaffect the EMR and prevent a company frombidding for a contract.
Employers and their attorneys must there-fore be aware that a workers’ compensation
defense attorney’s duties of loyalty and con-fidentiality are owed to the insurance com-pany, not the employer. For example, in thecase of Canton Poultry & Deli, Inc. v.Stockwell, Harris, Widom & Woolverton,10
the plaintiff, Canton Poultry, sued its workers’compensation defense counsel for malpractice.The workers’ compensation insurance defensefirm, Stockwell, was hired by Canton Poultry’sinsurance carrier, California Indemnity Insur -ance Company. Stockwell handled the defenseof a workers’ compensation claim from anemployee, Duran, who also filed a civil suitagainst Canton Poultry. Duran’s attorney inthe civil suit told the workers’ compensationdefense counsel that Duran wanted a settle-ment of both actions, which likely wouldhave been a bargain for Canton Poultry. Theworkers’ compensation defense counsel, how-ever, never told Canton Poultry of Duran’sdesire, and no global settlement was made.Instead, after the workers’ compensationclaim was finished, Canton Poultry had tolitigate the civil suit at great expense. Cantonsued Stockwell for failing to inform them ofDuran’s desire for a global settlement. Asthe appellate court put it, “The question pre-sented by plaintiffs’ appeal is what duties, ifany, did Stockwell attorneys owe to CantonPoultry in conjunction with the informationit had about Duran’s civil suit and his desirefor a global settlement?”11
Labor Code Section 3755
To answer this question, the court relied onSection 3755 of the Labor Code. “[T]heinsurer is substituted in place of the employerin any proceeding instituted by the claimantto recover such compensation, and the em -ployer is dismissed from such proceeding. Theproceedings then continue against the in - surer instead of the employer.”12 Therefore,the court reasoned, Stockwell was not CantonPoultry’s attorney at the time Duran men-tioned a global settlement. The court heldthat it was appropriate for Stockwell to tellDuran that “the civil action was none of itsconcern.”13 Moreover, the court held thatStockwell had no particular duty to informCanton Poultry that Stockwell was notCanton Poultry’s attorney. According to thecourt, Canton Poultry should have known.“An employer’s reasonable belief at that pointin time must necessarily be that the attorneyrepresents the party who has been substitutedin place and stead of the employer, and whoremains involved in the case—the insurancecarrier.”14 Moreover, according to the Cantoncourt, Canton Poultry did not have the pro-tection of Section 2860 of the Civil Code,the Cumis counsel statute.15 That right toindependent counsel is triggered by a conflictof interest. The Canton court held, “SinceCanton Poultry was relieved of liability in
the workers’ compensation case by operationof Labor Code section 3755, there could beno conflict of interest between itself andCalifornia Indemnity in that case.”16
In California, there is a long line of casesthat recognize the duties carriers owe toemployers when handling workers’ compen-sation claims. Cases decided over the past25 years have held that carriers have a dutyto properly manage benefits, defend againstclaims, and settle claims when appropriate,because an employer’s premium can be neg-atively affected at each step in the process.17
Canton’s conclusion that workers’ com-pensation defense attorneys owe no dutiesto employers means that although insurancecarriers owe affirmative duties to protectemployers’ interests arising from claims, suchduties are contractual and do not extend tothe lawyers who have no direct relationshipwith the insured employers.18 Other stateshave followed California, even when theemployers directly face liability due to havingcontracted for a high deductible policy.19
For example, in In re XL Specialty In -sur ance Company and Cambridge IntegratedSer vices Group, Inc., Relators,20 the TexasSu preme Court went one step further thanthe Canton court and refused to recognizethe employer’s interest in workers’ compen-sation litigation, even though the first $1 mil-lion of benefits was payable by the employer,Cintas. It had a large deductible policy withXL Specialty Insurance Company, with a $1million retention. The claims were managedby Cambridge, a third-party administrator(TPA), rather than by the insurance companyitself. Under their contractual arrangement,the TPA directed benefit payments made byXL, and Cintas reimbursed XL up to $1 mil-lion per claim.
In the underlying workers’ compensationclaim brought by Cintas employee Wagner,the TPA denied benefits. Workers’ compen-sation litigation resulted in Wagner’s favor.Counsel hired by XL communicated withXL, the TPA, and Cintas about the progressof the case. Later, Wagner brought a civilsuit against all three for breach of the com-mon law duty of good faith and fair dealing,violations of the Insurance Code and TexasDeceptive Trade Practices Act. During dis-covery Wagner sought communications be -tween XL’s attorney and the TPA and Cintas.The three asserted the attorney-client privilege,which the trial court denied. The threebrought a writ of mandamus to the TexasSupreme Court.21
Section 406.031 of the Texas Labor Code,similar to California Labor Code Section3755, makes the insurance carrier rather thanthe employer directly “liable for compensationfor an employee’s injury without regard tofault or negligence.” Based on that statute,
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and despite the $1 million that Cintas hadat risk, the Texas Supreme Court decidedthat the attorney hired by XL never repre-sented Cintas. “Thus, the insurer, not theinsured, is the client and party to the pendingaction, and it retains counsel on its ownbehalf. In contrast, in a lawsuit involving astandard liability insurance policy, only theinsured is a party to the case, and the insurertypically retains counsel on its insured’sbehalf.”22 The court acknowledged that ina typical liability insurance case a tripartiterelationship is created because the insuredand insurer’s interests are aligned.23 Yet inthe case before it, even though the insurerand insured’s interests were aligned throughthe $1 million retention, the court refusedto apply the typical tripartite relationship.
Claims Adjusters Beware
Another case, American Zurich InsuranceCom pany v. Montana Thirteenth JudicialDis trict Court,24 arose in Montana’s SupremeCourt and addressed “whether, in a claimfor [workers’ compensation] benefits, anattorney’s communication to its client insureris privileged when the client voluntarily dis-closes the communication to the nonclientemployer.”25 The court held that “Montanastatutes require an employer to elect one ofthree plans for insuring [workers’ compen-sation] liability. Pertinent here is Plan II,under which the employer purchases coveragethrough an authorized insurance company.…The Plan II insurer is directly and primarilyliable to the employee, and must pay directlyto the employee any compensation for whichthe employer is liable.”26 In addition, thecourt found that “the common interest inkeeping litigation and premium costs down[for the employer], by itself, is not sufficientto extend the [attorney-client] privilege be -yond the attorney client relationship.”27
The court denied the attorney-client priv-ilege to the employer despite recognizing that“the employer…retains a ‘duty to cooperateand assist its insurer, including [a] duty toassist in responding to discovery.’”28 As aresult, claims adjusters—who are not lawyersbut who work with defense counsel—shouldbe clearly informed whenever they are receivingconfidential information from defense counsel,so as not to inadvertently waive the attorney-client privilege by passing on confidential infor-mation to cooperating employers.
Employers Must Pay Attention
Because workers’ compensation defense attor-neys owe duties to insurance companies, theseattorneys may be free to act against an insured’sinterests. In State Compensation InsuranceFund v. Scheffield Medical Group, et al.,29
Scheffield provided medical services to injuredworkers and filed liens for those services at
the WCAB. Many of those injured workerswere covered by State Compensation InsuranceFund (SCIF). It so happened that SCIF wasScheffield’s workers’ compensation carrier forScheffield’s own employees. At the WCAB,SCIF filed a petition for removal, consolidationand stay of lien proceedings alleging that lienclaimant Scheffield “engaged in a pattern offraudulent conduct” regarding the medicalservices underlying their liens against SCIF.30
For its fraud claims, SCIF apparently reliedon evidence gathered by its in-house workers’
compensation defense attorney, Roth, duringSCIF’s defense of workers’ compensationclaims brought by Scheffield’s own employees.“Scheffield contended that in workers’ com-pensation cases in which SCIF insured andundertook to defend Scheffield as an employeragainst claims brought for industrial injuriesby Scheffield’s employees, SCIF and Rothengaged to attack Scheffield by obtaining fab-ricated testimony to use against Scheffield’slien claims in other cases, and by creating an un favorable claims history to increaseScheffield’s insurance premiums. Scheffieldclaimed that SCIF’s petition to consolidatethe lien proceedings was primarily based uponfabricated testimony obtained from formerScheffield employees in exchange for liberalcompensation for their claims.”31
The WCAB refused to find that evidencegathered by Roth was problematic as a matterof law. The board held that the lower tribunal“does not identify how any privileges Schef -field possesses or the duty SCIF owes toScheffield in the cases involving claims byScheffield employees is connected to the sub-ject matter of the consolidated [lien] cases....We do not believe a conflict of interest existswhere an insurer, pursuant to Labor Code
section 3755, assumes liability and substitutesin place of an employer, who is thereby dis-missed from the proceedings.”32 On thatbasis, SCIF’s attorneys were free to build acase against Scheffield as a provider of al -legedly fraudulent medical services, as theattorneys were defending SCIF against work-ers’ compensation claims made by Scheffield’semployees. “Scheffield has not establishedthe existence of a possible conflict of interesthere. Counsel for SCIF entered the casesinvolving Scheffield as an insured employer
and represented the interests of SCIF, whichhad assumed full liability for any award, andhad full control over the settlement of theclaims. SCIF’s actions in those cases are irrel-evant to the proceedings in the consolidated[lien] cases where SCIF is challenging Schef -field’s operations as a provider of medicalservices to injured workers and not as aninsured employer.”33
Even employers that are not medical ser-vice providers therefore need to be awarethat the law allows for investigation of theemployer by workers’ compensation defenseattorneys, as there are many different basesfor suits by insurers against their insuredsfor breach of contract. The bases could beas simple as an employer’s misrepresentingthe type of work employees do or how manyemployees are engaged in risky activities.
Accordingly, employers must understandthat even if they have regular communicationswith the workers’ compensation defense attor-ney regarding the defense of the claim, thatattorney ultimately owes duties to the insur-ance carrier and not to the employer. Em -ployers need to be aware that there are dif-ferences in the attorney-client relationshipwith respect to workers’ compensation insur-
Los Angeles Lawyer June 2015 17
ance and the standard tripartite relationshipthat exists in other lines of insurance. A lackof awareness or confusion about the natureand extent of the attorney-client relationshipcould have serious consequences. n
1 State Farm Mut. Auto. Ins. Co. v. Federal Ins. Co.,72 Cal. App. 4th 1422, 1428-29 (1999).2 See generally the California’s Workers’ CompensationAct (WCA), CAL. CONST. Art. XIV, §4; Quong HamWah Co. v. Industrial Accident Comm’n of Calif.,184 Cal. 26, 36 (1920).3 Graczyk v. Workers’ Comp. Appeals Bd., 184 Cal.App. 3d 997, 1003 (1986).4 Under Insurance Code §11651, every workers’ com-pensation insurance policy “shall contain a clause tothe effect that the insurer will be directly and primarilyliable to any proper claimant for payment of any com-pensation for which the employer is liable, subject tothe provisions, conditions and limitations of the policy.”See also INS. CODE §11650.5 LAB. CODE §3850(b).6 LAB. CODE §3755.7 Canton Poultry & Deli, Inc. v. Stockwell, Harris,Widom & Woolverton, 109 Cal. App. 4th 1219 (2003);In re XL Specialty Ins. Co. and Cambridge IntegratedServs. Group, Inc., Relators, 373 S.W. 3d 46 (Tex.2012); American Zurich Ins. Co. v. Montana ThirteenthJudicial Dist. Court, 364 Mont. 299 (2012).8 CAL. CONST. art. XIV, §4.9 The regulations governing the experience ratingsystem are contained in the California Workers’Compensation Experience Rating Plan—1995. SeeCAL. CODE REGS. tit. 10, §2353.1.10 Canton Poultry & Deli, Inc. v. Stockwell, Harris,Widom & Woolverton, 109 Cal. App. 4th 1219 (2003).11 Id. at 1221.12 Id. at 1226.13 Id. at 1228.14 Id.15 See, e.g., http://dictionary.law.com for a definitionof Cumis counsel.16 Canton Poultry & Deli, Inc., 109 Cal. App. 4th at1228.17 See, e.g., Security Officers Inc. v. State Comp. Ins.Fund, 17 Cal. App. 4th 887 (1993); MacGregor Yachtv. State Comp. Ins. Fund, 63 Cal. App. 4th 448 (1998);Notrica v. State Comp. Ins. Fund, 70 Cal. App. 4th911 (1999).18 Id.19 In re XL Specialty Ins. Co. & Cambridge IntegratedServs. Group, Inc., Relators, 373 S.W. 3d 46 (Tex.2012); American Zurich Ins. Co. v. Montana ThirteenthJudicial Dist. Court, 364 Mont. 299 (2012).20 In re XL Specialty Ins. Co. & Cambridge IntegratedServs. Group, Inc., Relators, 373 S.W. 3d 46 (Tex.2012).21 Id. at 48.22 Id. at 54.23 Id. at 55.24 American Zurich Ins. Co. v. Montana ThirteenthJudicial Dist. Court, 364 Mont. 299 (2012).25 Id. at 302.26 Id. at 304 (citing MONT. CODE ANN. §§39-71-2201,39-71-2203(3)).27 Id.28 Id. (quoting MONT. ADMIN. R. 24.5.301(4)).29 State Compensation Ins. Fund v. Scheffield Med.Group, et al., WCAB Case No. LAO 20 681543 (Apr.30, 2001).30 Id. at 2.31 Id. at 2-3.32 Id. at 4.33 Id. at 5.
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Los Angeles Lawyer June 2015 19
TO SUE OR NOT TO SUE? That is thequestion that many defendants in legal mal-practice cases have to confront if they wantto allocate a proportionate share of liabilityto other attorneys whom the plaintiff haschosen not to sue. Legally and strategicallythe question is not easy to answer and requiresanalysis of how to apply the unsettled lawof equitable indemnity, contribution, andcomparative fault.
Historically, courts have analyzed the allo-cation of damages among multiple tortfeasorsin terms of two mutually exclusive doctrines:contribution and indemnity. The apportion-ment of loss between multiple tortfeasorswas thought to present a question of contri-bution. Indemnity, on the other hand, dealtwith whether a loss should be entirely shiftedfrom one tortfeasor to another rather thanapportioning the loss between the two.1
In 1957, the legislature enacted statutesthat created, for the first time in California,a right of contribution among joint tortfea-
sors.2 This contribution right limited the lia-bility of each joint tortfeasor for a plaintiff'sjudgment to his or her pro rata share of thejudgment. Thus, if a joint tortfeasor paidmore than his or her pro rata share of thejudgment, the tortfeasor who paid more hada right to recover the amount in excess ofhis or her pro rata share from the other tort-feasors.
In 1978, the California Supreme Court,in American Motorcycle Association v. Su -perior Court, merged traditional concepts ofimplied indemnity and contribution and estab-lished the doctrine of comparative indemnity.3
It permitted the apportionment of compara-tive fault among multiple joint tortfeasors,allowing a joint tortfeasor to seek partialindemnity from other joint tortfeasors on acomparative fault basis. In addition to a com-parative fault allocation between defendants,the plaintiff's conduct was also allocated apercentage of fault so that the total compar-ative fault among all plaintiffs and defendants
equaled 100 percent. None theless, each tort-feasor whose negligence was a proximatecause of an indivisible injury to the plaintiffwas individually liable for all proximatelycaused damages.4
After American Motorcycle, the distinc-tion between the doctrines of equitable in -demnity and contribution became almostindistinguishable. Many courts now refer tocontribution or indemnity actions under the“partial indemnity” or “comparative indem-nity” labels.5 For simplicity, the two conceptsmay be generally referred to as indemnityunless differentiation between contributionand indemnity is essential.
For many years, the appellate courtsseemed to be developing a bright-line rulethat prohibited a legal malpractice defendant’s
Kurt L. Schmalz, a shareholder in the Beverly Hillslaw firm of Lurie, Zepeda, Schmalz, Hogan & Martin,has practiced business litigation in state and fed-eral courts for more than 30 years.
MCLE ARTICLE AND SELF-ASSESSMENT TEST
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DEFENSEDilemma
Musser v. Provencher did little to reduce the risks for a defendant in a legalmalpractice case in which liability could attach to multiple attorneys
by Kurt L. Schmalz
indemnity claim against that defendant’scocounsel, concurrent counsel, or successorcounsel.6 However, that rule got blurry inMusser v. Provencher, in which the CaliforniaSupreme Court confronted “whether consid-erations of public policy require the adoptionof a blanket rule barring concurrent counselor cocounsel from suing one another for indem-nification of legal malpractice damages.”7
In Musser, a family law attorney obtainedthe advice and services of a bankruptcy attor-ney in a divorce action. The bankruptcy attor-ney gave erroneous advice to the family lawattorney that resulted in the family law attor-ney’s improperly pursuing the wife’s childsupport claim even though the husband hadfiled for bankruptcy. The pursuit of the claimfor child support violated the automatic stay.Facing punitive damages, the wife settledwith her husband for less than the originalsupport order and sued the family law attor-ney for malpractice and breach of contract.The family law attorney filed an indemnitycross-complaint against the bankruptcy attor-ney and settled the malpractice case with thewife. The bankruptcy attorney refused tocontribute to the settlement and ultimatelyobtained a judgment of nonsuit against thefamily law attorney on the indemnity claims.The court of appeal reversed the trial court’sjudgment and specifically found that the fam-ily law attorney’s indemnity claim againstcocounsel was not barred by public policy.8
The supreme court in Musser analyzedthe numerous appellate cases involvinglawyer indemnity claims, including Kroll &Tract v. Paris & Paris9 and Shaffery v. Wil -son, Elser, Moskowitz, Edelman & Dicker,10
both of which involved cocounsel indemnityclaims that arose in insurance defense cases.The supreme court discussed a bright-linerule that generally barred in demnity claimsby a predecessor attorney against the suc-cessor attorney in a legal malpractice case.Without expressly endorsing a blanket pre-sumption against indemnification claims in“predecessor/successor cases” the courtnoted that the lower appellate courts, “withone much criticized exception, have barredindemnification.”11
Setting aside the “predecessor/successor”cases, the court held that the courts shouldcarefully analyze, on a case-by-case basis,whether the public policy concerns of avoid-ing conflict of interest between attorney andclient and protecting the confidentiality ofattorney-client communications are presentbefore the courts prohibit indemnificationclaims in concurrent or cocounsel cases.12
The Musser court specified the public policyconcerns that inform a case-by-case analysisas follows:
The first policy consideration is avoid-ing conflicts of interest between attor-
ney and client: The threat of an indem-nification action would arguably createa conflict of interest between the suc-cessor attorney and the client becausethe greater the award the successorattorney managed to obtain for theclient in the malpractice action, thegreater the exposure to the predecessorattorney in indemnification action. Thesecond policy consideration is protect-ing confidentiality of attorney-clientcommunications: In order to defendagainst an indemnification action, thesuccessor attorney might be temptedto compromise the confidentiality ofcommunications with the client.13
The court in Musser also noted a thirdpolicy concern, which was to protect the rightof clients to choose their attorneys. This policyconcern was geared to reducing the risk thatan indemnification action might discouragethe successor attorney from representing theclient in a malpractice action because the suc-cessor would be limited in defending theindemnification claim by the attorney’s dutyto maintain confidentiality of client commu-nications.14 The court, however, noted thatthis policy concern had been given little weightand was characterized as of “secondary impor-tance” in some appellate cases.15
Ultimately, the supreme court affirmedthe court of appeal and found that none ofthe public policy concerns was present in thefamily lawyer’s indemnity action against thebankruptcy lawyer.16 The public policy con-cerns discussed in Musser, which the courtderived from several prior court of appealcases, seem to apply most clearly in situationsin which the successor attorney still representsthe client in the malpractice case against theprior attorney. Yet the court of appeal hasfound, in both predecessor/successor andcocounsel cases, that the policy concerns canbe present if an attorney other than successoror cocounsel represents the client in the mal-practice action.17
The supreme court left undecided whetherthe rule prohibiting a malpractice defendantfrom suing successor counsel for indemnityis also subject to the case-by-case analysis.18
Thus, if predecessor counsel, sued by a formerclient for legal malpractice, tried to sue suc-cessor counsel for indemnity, would theindemnity cross-complaint be allowed tostand when, as in Musser, neither of the twopublic policy concerns was present? This isnot an easy question to answer. Many pre-Musser courts bar lawyer indemnity suits inlegal malpractice cases against successor coun-sel if the client hired the successor attorneyto extricate the client from the condition cre-ated by the original attorney. These courtsappear to base their holdings on a presump-tion (rather than a fact-intensive analysis)
that public policy precludes the predecessorattorney from suing the successor attorneyfor indemnity.19 When the successor counselis also representing the client in the legalmalpractice case against the predecessor attor-ney, the rule prohibiting indemnity cross-complaints clearly applies.20
After Musser, however, an argument canbe made that other predecessor/successorcases may not so clearly invoke the publicpolicy concerns to preclude attorney indem-nity cross-complaints, especially if the indem-nity claim does not raise conflict of interestor confidentiality issues with the successorcounsel.21 Nonetheless, substantial case law(mostly pre-Musser) supports a blanket ruleto preclude indemnity claims in legal mal-practice actions by the predecessor attorneyagainst a successor attorney.
There is a dearth of published decisionsin California on this issue after Musser. For -ensis Group, Inc. v. Frantz, Townsend & Fol - de nauer is the leading post-Musser case discussing indemnity cross-complaints in malpractice litigation.22 Forensis, however,dealt with the indemnity cross-complaint ofnonlawyer expert witnesses who had beensued by the client for malpractice. The expertssettled the malpractice case and sued thelawyers who represented the client in theunderlying action. The lawyers had not beensued by the client in the malpractice case.The trial court granted summary judgmentfor the lawyers and dismissed the indemnitycross-complaint. The court of appeal, how-ever, reversed and remanded and found thatthe indemnity cross-complaint should havebeen allowed.23 The court in Forensis usedan extensive analysis of whether the publicpolicy concerns were present. This result isnot surprising following Musser because theexperts concurrently worked with the attor-neys and the case could not be construed asa predecessor/successor attorney situation inwhich the successor attorney had been hiredto extricate the client from a problem causedby the predecessor attorney.
Accordingly, the first issue the attorneydefendant must confront when consideringwhether to sue or not is whether the indem-nity cross-complaint has any legal viabilityfollowing Musser and case law prohibitingindemnity claims by predecessor counselagainst successor counsel. An indemnity cross-complaint will undoubtedly bring a demurreror other dispositive motion. This motionpractice could further complicate and prolongthe malpractice case and increase the lawyer’slitigation expenses. Indeed, an insurer defend-ing a lawyer in a legal malpractice case wouldprobably not fund a cross-action by thelawyer defendant for indemnity. The lawyermight have to self-fund the action.
The lawyer defendant should, therefore,
20 Los Angeles Lawyer June 2015
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MCLE Test No. 247The Los Angeles County Bar Association certifies that this activity has been approved for MinimumContinuing Legal Education credit by the State Bar of California in the amount of 1 hour.
1. The doctrine of comparative indemnity was estab-lished by the California Supreme Court in AmericanMotorcycle Association v. Superior Court.
True.False.
2. The doctrine of contribution was established inCalifornia when the legislature enacted Sections 875through 878 of the Code of Civil Procedure in 1957.
True.False.
3. In Musser v. Provencher, the California SupremeCourt confronted the issue of whether successor counselcan sue predecessor counsel for indemnification oflegal malpractice damages.
True.False.
4. Musser v. Provencher:A. Rejected a bright-line, or blanket rule on lawyerindemnity claims.B. Adopted a case-by-case public policy analysisto determine whether a lawyer defendant couldsue cocounsel for indemnity in a legal mal -practice action.C. Left open whether the rule prohibiting amalpractice defendant from suing successorcounsel for indemnity was also subject to a case-by-case analysis.D. All of the above.
5. The two primary policy concerns that the Mussercourt analyzed to determine whether to prohibit indem-nification claims between cocounsel were 1) avoidingconflicts of interest between attorney and client, and2) protecting the confidentiality of attorney-client com-munications.
True.False.
6. Kroll & Tract v. Paris & Paris and Shaffery v. Wilson,Elser, Moskowitz, Edelman & Dicker both involve:
A. Cocounsel indemnity claims.B. Predecessor/successor indemnity claims.C. Post-Musser lawyer indemnity cases.D. None of the above.
7. Many published appellate cases in California supporta “blanket” or “bright-line” rule to preclude indemnityclaims in legal malpractice actions by a predecessorattorney against a successor attorney.
True.False.
8. The appellate courts in California have issued manypublished opinions since Musser to analyze a lawyer’sclaims against other lawyers for indemnification in legalmalpractice cases.
True.False.
9. Forensis Group, Inc. v. Frantz Townsend & Foldenauerdealt with:
A. A predecessor lawyer suing successor lawyerfor indemnification.B. Cocounsel suing each other for indemnifi cation.C. A bright-line or blanket rule against lawyer in -dem nification claims in legal malpractice actions.D. Expert witnesses who were sued by the clientfor malpractice bringing indemnity claims againstthe client’s lawyers.
10. There is no strategic downside to a lawyer defendantadding lawyer cross-defendants for indemnity in a legalmalpractice case.
True.False.
11. A cause of action for implied indemnity does notaccrue or come into existence until the defendant hassuffered actual loss through payment.
True.False.
12. A lawyer defendant’s indemnity claim against otherlawyers not joined in the malpractice action is auto-matically time-barred if the client’s action against thoseother lawyers is barred by the statute of limitations.
True.False.
13. A viable strategy for a lawyer defendant in a legalmalpractice action is to wait for the malpractice caseto conclude before suing the plaintiff’s other lawyersfor indemnity.
True.False.
14. Concurrent tortfeasors’ claims for partial indemnityor contribution are barred if not filed in the main actionbrought by the plaintiff.
True.False.
15.One risk of a lawyer defendant not joining cocounselto the malpractice action on an indemnity cross-com-plaint is potential joint and several liability for 100 per-cent of the malpractice damages.
True.False.
16. Proposition 51 protection against deep-pocket jointtortfeasor defendants generally does not apply in legalmalpractice cases.
True.False.
17. A lawyer defendant in a legal malpractice action islegally barred from pleading comparative fault defensesas to the plaintiff and cocounsel.
True.False.
18. Holland v. Thacher is noteworthy because it suggeststhat a lawyer defendant could use a comparative faultdefense to impute the negligence of the other nonde-fendant attorneys to the plaintiff to reduce the recoveryof plaintiff based upon an agency theory.
True.False.
19. A lawyer defendant who is found liable for a client’smalpractice damages may file a second lawsuit for con-tribution or indemnity against any culpable cocounselnot joined in the original malpractice action.
True.False.
20. In the 13 years since Musser, the appellate courtsand legislature have done little to clarify the law gov-erning attorney indemnification cross-complaints inlegal malpractice cases.
True.False.
Los Angeles Lawyer June 2015 21
inquire whether there is an advantage toexpanding the complexity and scope of themalpractice case by bringing in one or moreattorney cross-defendants. Strategically, thelawyer defendant’s adding lawyer cross-de -fendants could be a defense nightmare. Theplaintiff in a legal malpractice case wouldlike nothing more than to have two or morelawyers pointing fingers at one another and,in essence, making the plaintiff’s case. Cer -tainly, the lawyer-versus-lawyer sideshowcould derail the usual attorney defenses ofstatute of limitations or lack of causation anddamages. A lawyer indemnity cross-complaintagainst another attorney in a legal malpracticecase could, if it is not carefully drafted, validatethe existence of malpractice or a breach ofthe standard of care without the plaintiff’sdoing much of anything. At a minimum, thelawyer’s squabbles with other lawyers overindemnity can provide a road map to a plain-tiff who otherwise might struggle to prosecutea legally viable malpractice claim.
Three Options
So what should the lawyer defendant do?The following three options involve varyingrisks. The first is to wait for a resolution ofthe malpractice case before raising indemnityissues. This option avoids expanding the scopeof the malpractice action and the potentialfor finger-pointing by other lawyer defendants.Concurrent tortfeasors are not required tolitigate their claims for partial indemnity orcontribution in the main action. A cause ofaction for implied indemnity does not accrueor come into existence until the defendanthas suffered actual loss through payment.24
Because the lawyer indemnity claims usuallyaccrue long after the client’s malpractice claimaccrues and expires, the client’s malpracticeclaims against the other lawyers may be barredby the statute of limitations, and this may bethe reason why the client did not sue the otherlawyers. However, the defendant lawyer’s in -demnity claim against the other lawyers wouldstill be timely and could breathe new life intoan otherwise dead malpractice claim.25
Waiting for the malpractice action to con-clude is not without risk, but delaying thefiling of indemnity cross-complaints is a goodoption if the lawyer defendant has strongdefenses that could result in summary judg-ment or if plaintiff’s malpractice allegationsappear weak or are difficult to prove. Indeed,if the lawyer defendant can win the malprac-tice case outright, there is no need to sue anyindemnity cross-defendants. Similarly, thelawyer defendant who settles the malpracticeaction but still believes that other lawyersare fully or partially responsible for thesedamages can bring a subsequent action forindemnity and/or contribution against thoseother attorneys without the risk and com-
plication of helping the disgruntled formerclient establish a legal malpractice case. Thisis similar to the option that the defendantattorney and her insurer chose in Musser.26
A second option is to add the other culpableattorneys to a special verdict form for appor-tionment of damages. The lawyer defendantmay plead comparative fault defenses andseek to include a comparative fault jury instruc-tion with a special verdict asking the jury toassign comparative fault to those lawyers whoarguably are responsible for plaintiff’s dam -ages.27 The lawyer defendant would have tobring a motion to add a nondefendant to thespecial verdict and to prove to the court thatthe nondefendant was negligent.28
One court suggested that the defendantlawyer could use a comparative fault defenseto impute the negligence of the other nonde-fendant attorneys to reduce the recovery ofthe plaintiff based upon an agency theory.29
This strategy would lessen the risk of not suingother culpable attorneys in the malpracticeaction; however, there is no published authorityin the legal malpractice context to supportthis court’s suggestion that the negligence ofthe nondefendant attorneys could be allocatedto the plaintiff on an agency theory.
A third option is suing other culpableattorneys for indemnity in the malpracticeaction. While the other options militatestrongly against adding other attorneys tothe malpractice action on indemnity claims,there are risks to leaving a potentially liableattorney tortfeasor out of the malpracticecase. For example, assume that the lawyerdefendant decides not to join (or cannot join)cocounsel to the malpractice action on anindemnity cross-complaint and that the lawyerdefendant is able to put nonparty cocounselon the special verdict form for an apportion-ment of negligence. If the jury finds that thelawyer defendant is 10 percent comparativelynegligent and that the nonparty cocounsel is90 percent negligent, and the jury awardsthe plaintiff $1 million in damages, the lawyerdefendant who is only 10 percent negligentin the jury’s estimation is liable for the entirejudgment if liability is joint and several. Ofcourse, if the lawyer defendant can get thejudge or jury to assign all of the other non-party lawyer’s negligence to the plaintiff ona comparative fault defense, then this horribleresult could be avoided.
This result obliges the lawyer defendantto file a postjudgment action for indemnityor contribution against cocounsel to recoverthe difference between the lawyer’s 10 percentliability and the remainder of the judgment,plus costs. Unless the nonparty cocounselwas heavily involved in the malpractice action(which is unlikely given the assumed facts),the jury’s finding of 90 percent liability forcocounsel will not be collateral estoppel
against the nonparty.30 It is possible the unfor-tunate lawyer defendant turned judgmentdebtor will have to prove cocounsel’s liabilityall over again in a second lawsuit.
There may, though, be a postjudgmentsummary proceeding in the trial court toenforce the jury’s finding regarding allocationof fault. One option would be to use a Codeof Civil Procedure Section 187 postjudgmentproceeding to add a judgment debtor andallocate a percentage of fault to the newlyadded judgment debtor, provided the courthad or could obtain jurisdiction over thenewly added judgment debtor.31 The courtshave mostly used Section 187 to add a non-party as an additional judgment debtor insituations in which the new party and judg-ment debtor are alter egos or in which thenew party was added merely to correct thename of the real defendant.32 Nonetheless,“even if all the formal elements necessary toestablish alter ego liability are not present,an unnamed party may be included as a judg-ment debtor if ‘the equities overwhelminglyfavor’ the amendment and it is necessary toprevent unjustice.”33 Thus, one way for thecourt to get around the jurisdictional hurdlein a Section 187 proceeding would be to allo-cate the other nondefendant attorney’s per-centage of fault to the plaintiff in the mal-practice action on the agency theory suggestedby the court of appeal in Holland v. Thacher.34
The dilemma for the lawyer defendant getsworse if the cocounsel who was found to be90 percent at fault is impecunious or otherwisejudgment-proof. In that scenario, the defendantwho is 10 percent culpable would have tobear the entire amount of the judgment, andany indemnity claim against a judgment-proofcocounsel would be worthless.
The passage of Proposition 51, the FairResponsibility Act of 1986,35 eliminated theforegoing nightmare scenario for certain tort-feasors with regard to apportionment of faultfor noneconomic damages in actions allegingpersonal injury, property damage, or wrongfuldeath.36 In those cases, the defendant who isfound by the jury to be 10 percent at faultwould only be responsible for 10 percent ofthe judgment as it related to noneconomicdamages (e.g., compensation for pain and suf-fering). Unfortunately, in virtually all legalmalpractice cases, the plaintiff’s malpracticeclaim is not for personal injury, property dam-age, or wrongful death. Moreover, recoverabledamages in legal malpractice cases are eco-nomic damages rather than noneconomic dam-ages. Thus, Proposition 51 protection generallydoes not apply in legal malpractice cases.37
Despite questionable legal viability andnumerous strategic reasons against indemnitycross-complaints in legal malpractice cases,the worst-case scenario described above couldeasily drive a decision by a lawyer defendant
22 Los Angeles Lawyer June 2015
to file one or more indemnity cross-complaintsagainst other attorneys who may have con-tributed to plaintiff’s alleged damages. Well-planned and executed legal strategies generallyshould not be upended by worst-case scenariosor contingencies that are unlikely to arise.Nonetheless, the lawyer defendant’s decisionon whether “to sue or not to sue” remains ajudgment call that could have serious reper-cussions in any legal malpractice case in whichliability could attach to multiple attorneys.
In the years since Musser, the appellatecourts and legislature have done little toclarify the law governing attorney indemni-fication cross-complaints in legal malpracticecases. Moreover, nothing has been done toeliminate the risk that a defendant in anlegal malpractice case found to be minimallynegligent by a jury would have to pay theentire malpractice judgment because thelawyer defendant did not sue the more neg-ligent attorneys for indemnity in the mal-practice action—assuming the lawyer couldhave done so in the first place. Until suchclarification is given, the question whether“to sue or not to sue” will remain a difficultcall for the lawyer defendant. n
1 American Motorcycle Ass’n v. Superior Court, 20 Cal.3d 578, 591-92 (1978) (discussing historical evolutionof indemnity and contribution concepts in Calif ornia). 2 CODE CIV. PROC. §§875-78. See also id. at 592, 600-04.3 American Motorcycle Ass’n, 20 Cal. 3d at 582-84,590.4 Id. at 607-08.5 Far West Fin. Corp. v. D & S Co., 46 Cal. 3d 796,808 (1988).6 See, e.g., Kroll & Tract v. Paris & Paris, 72 Cal. App.4th 1537 (1999) (cocounsel); Shaffery v. Wilson, Elser,Moskowitz, Edelman & Dicker, 82 Cal. App. 4th 768(2000) (cocounsel); Held v. Arant, 67 Cal. App. 3d 748(1977) (successor counsel); Gibson, Dunn & Crutcherv. Superior Court, 94 Cal. App. 3d 347 (1979) (successorcounsel). But see Parker v. Morton, 117 Cal. App. 3d751 (1981) (indemnity claim allowed against successorcounsel). Parker, however, is an anomaly; as one courtnoted. See, e.g., Shaffery, 82 Cal. App. 4th at 761.7 Musser v. Provencher, 28 Cal. 4th 274, 274-76 (2002).8 Id. at 277-79.9 Kroll & Tract v. Paris & Paris, 72 Cal. App. 4th1537.10 Shaffery, 82 Cal. App. 4th at 768.11 Musser, 28 Cal. 4th at 280-81.12 Id. at 284-85.13 Id. at 281 (citations omitted) (emphasis in original).14 Id. at 281 n.3.15 Id.16 Id. at 285.17 See Kroll & Tract v. Paris & Paris, 72 Cal. App.4th 1537, 1542 (1999), and Shaffery v. Wilson, Elser,Moskowitz, Edelman & Kicker, 82 Cal. App. 4th 768,770 (2000), for examples of cocounsel cases in whichneither attorney represented the client in the malpracticeaction. In Musser, however, the client who broughtthe malpractice action expressly waived the attorney-client privilege for the malpractice action so the policyconcern regarding confidentiality of client informationin the indemnity action did not apply. Musser, 28 Cal.4th at 284.
18 In a concurring opinion, Justice Kennard noted thatthe scope of indemnity between predecessor and successorcounsel was “not an issue in this case.” Musser, 28Cal. 4th at 287.19 See Major Clients Agency v. Diemer, 67 Cal. App.4th 1116, 1130 (1998) (For sound policy reasons, cross-complaints for indemnity by predecessor counsel againstsuccessor attorney hired to extricate client from conditioncaused by predecessor counsel are prohibited.); Hollandv. Thacher, 199 Cal. App. 3d 924, 929-30 (1988) (“theclear weight of judicial authority prohibits the firstattorney from cross-claiming for indemnity against thesecond attorney”).20 Held v. Arant, 67 Cal. App. 3d 748, 750 (1977).21 Gibson, Dunn & Crutcher v. Superior Court, 94 Cal.App. 3d 347, 356 (1979). However, Justice Jefferson’sdissenting opinion seems to foreshadow the fact-intensivecase-by-case analysis by the California Supreme Courtin Musser.22 Forensis Group, Inc. v. Frantz, Townsend &Foldenauer, 130 Cal. App. 4th 14 (2005).23 Id. at 18-20.24 E.L. White, Inc. v. City of Huntington Beach, 21Cal. 3d 497, 506 (1978).25 Crouse v. Brobeck, Phleger & Harrison, 67 Cap.App. 4th 1509, 1541-44 (1998).26 The attorney’s insurer, to the extent it paid the settle-ment to the malpractice plaintiff, could have a subrogationclaim, based on the defendant attorney’s indemnity claimagainst the other culpable attorney. See Musser v.Provencher, 28 Cal. 4th 274, 285-87 (2002). The otherimportant holding in Musser was that an insurer couldbe subrogated to the insured attorney’s indemnity claimagainst cocounsel without violating the rule againstassignability of legal malpractice claims. Id.27 Henry v. Superior Court, 160 Cal. App. 4th 440, 455(2008) (In a slip-and-fall case, the property owners were
allowed to admit evidence regarding malpractice ofmedical providers, even though neither the plaintiff northe defendant had named the providers.). See also Kroll& Tract v. Paris & Paris, 72 Cal. App. 4th 1537, 1545(1999) (The lawyer defendant can show that the negligenceof other nonparty lawyer was the cause of the plaintiff’sinjury through the affirmative defense of comparativenegligence, thereby reducing personal liability.).28 Wilson v. Ritto, Cal. App. 4th 361, 369 (2003).See also Da Fonte v. Up-Right, Inc., 2 Cal. 4th 593,603 (1992) (Damages must be apportioned amongthe “universe of tortfeasors,” including “non-joineddefendants.”).29 Holland v. Thacher, 199 Cal. App. 3d at 929-30(“[B]ecause a successful affirmative defense would reducethe client-plaintiff’s recovery, cross-complaints have asuperficial appeal.”).30 There is no collateral estoppel of the jury’s finding asto a nonparty who did not have an incentive or oppor-tunity to litigate the issue of liability among joint tort-feasors. Bostick v. Flex Equipment Co., 147 Cal. App.4th 80, 90 (2007).31 See CODE CIV. PROC. §187.32 SeeTokio Marine & Fire Ins. Corp. v. Western PacificRoofing Corp., 75 Cal. App. 4th 110, 116-17 (1999)(nonparty insurer could not be added as judgmentdebtor to judgment against insured pursuant to Section187).33 Carolina Casualty Ins. Co. v. L.M. Ross Law Group,LLP, 212 Cal. App. 4th 1181, 1188-89 (2012) (quotingCarr v. Barnabey’s Hotel Corp., 23 Cal. App. 4th 14,20-22 (1994)).34 Holland, 199 Cal. App. 3d at 929-30.35 CIV. CODE §§1431.1 et seq.36 CIV. CODE §1431.2.37 Brandon G. v. Gray, 111 Cal. App. 4th 29, 39(2003).
Los Angeles Lawyer June 2015 23
24 Los Angeles Lawyer June 2015
AM
AN
E KA
NEK
O
P L A YTITLE IX of the Education Amendments of1972 forbids educational institutions thatreceive federal funds from discriminating onthe basis of sex. While Title IX has trans-formed aspects of our society as diverse aslaw school admissions and the Olympicgames, its mandate for equality in athleticsremains underenforced. Athletics is often thelast bastion of inequality for girls in schools.Although we would not tolerate classroominequality such as giving new textbooks toboys but not to girls, schools often allowsimilar disparities in athletics.
Athletic participation, however, is not aluxury.1 Besides the health benefits, partici-pation in sports is directly linked to criticalgains in education and employment. In arecent Ninth Circuit case, Ollier v. SweetwaterUnion High School District,2 the court af -firmed the trial court’s rulings in a Title IXathletics case brought on behalf of a class of
girls from a low-income, predominatelyLatino community at Castle Park High Schoolin Chula Vista. This case was a first in pre-vailing under all three parts of Title IX’s man-date for equity in athletics—equal opportu-nities for girls to play, equal treatment andbenefits for female athletes, and no retaliationfor raising concerns about violations.3
A review of Title IX jurisprudence showsthat while courts have generally sided withthe plaintiffs in Title IX athletics cases, therehave been very few cases brought comparedwith other civil rights statutes such as TitleVII. Moreover, while Title IX’s equal partic-ipation mandate has been the subject of mostof the Title IX athletics cases, there havebeen few cases asserting equal treatment andbenefits claims. Finally, although there wasa notable Supreme Court case affirming theretaliation prohibition in Title IX, these claimstoo have been underdeveloped in the law.4
The Ollier case provides guidance in all theseareas.
Title IX’s prohibition against discrimina-tion covers all forms of sex discriminationby an educational institution unless specifi-cally exempted.5 Title IX forbids teacher-stu-dent and student-student sexual harassment,discrimination against pregnant students, dis-crimination in academic admissions and hir-ing, and unequal treatment in athletics. WhenTitle IX was passed, fewer than 300,000 girlsparticipated in high school athletics. By the2013-14 school year, that number was morethan 3,200,000.6
Despite these gains, the athletic playing
Elizabeth Kristen is the Director of the GenderEquity & LGBT Rights Program, and Cacilia Kim isspecial counsel, at The Legal Aid Society-Employ -ment Law Center. They both served as trial andappellate counsel in Ollier v. Sweetwater.
Despite evidence of the benefits resulting fromparticipation in sports, opportunities for girls in school
athletics still lags behind those for boys
by Elizabeth Kristen and Cacilia Kim
UNE UALQ
field is still far from level. In fact, the numberof girls competing in high school sports todaystill does not match the number of boys com-peting in high school sports back in 1972.7
Schools are providing girls with about 1.3million fewer opportunities to play highschool sports than boys.8 During the past 10years, this equity gap has been wideningrather than decreasing as schools continueto provide more athletic opportunities forboys than girls.9
Girls who play sports in high school are20 percent more likely to graduate from highschool and 20 percent more likely to attendcollege. Participating in sports appears tocause these gains, as participation in otherafter-school activities did not result in similargains.10 The educational benefits of playingsports in high school and college appear tolast well beyond school, translating into sig-nificant gains in later employment.11 Girlswho play sports are not only more likely towork in traditionally male-dominated (andusually higher paying) occupations, they alsoappear more likely to succeed—one studyfound that more than four out of five womenexecutives played sports in school.12 On aver-age, girls who participate in high school ath-letics make 7 percent higher wages 15 yearslater when employed.13
The physical, mental health, and socialbenefits of playing sports is also well docu-mented.14 Girls who play sports are less likelyto smoke or use drugs, less likely to becomepregnant as teenagers, and less likely to at -tempt or consider suicide.15 And as little asfour hours of exercise a week may reduce ateenage girl’s risk of breast cancer by up to60 percent.16 Providing girls with sportsopportunities offers them a proven pathwayleading out of poverty and into academic,health, and em ployment success.
Ollier v. Sweetwater
Ollier offers a comprehensive legal roadmapto the enforcement of Title IX compliance.From 2006 to 2015, girls at Castle Park HighSchool sought to enforce Title IX’s provisionsin athletics. Before the lawsuit was initiated,the girls’ softball field was poorly maintainedand lacked basic amenities, in stark contrastwith the boys’ baseball field.17 A closer lookat Castle Park’s athletic program revealedthat the inferior treatment of female studentathletes was not limited to softball. An exam-ination of the entire program revealed thatgirls were disadvantaged and provided inferiortreatment and benefits in every substantivecomponent of the athletic program.
The district court in Ollier found that theschool district had violated all three parts ofTitle IX’s athletics equity mandate, holdingon summary judgment that the district failedto provide Castle Park female students with
equal athletic participation opportunities,and finding after a bench trial that the districtfailed to provide equal athletic treatment andbenefits and that the school retaliated againstfemale students when they complained aboutthe unfair treatment.18 Recently, the NinthCircuit affirmed the district court’s rulingson all claims and clarified several questionsof importance, including the viability of classretaliation claims, particularly in Title IXclass action lawsuits on behalf of studentathletes.19
Equal Athletic Opportunities
Ollier provides guidance on all three com-ponents of Title IX compliance in school ath-letics. One critical part of Title IX, as ex -plained in its implementing regulations,requires that schools provide equal athleticopportunities for girls.20 This mandate ismeasured by a three-part test explained inan Agency Policy Interpretation and AgencyPolicy Clarifications.21 As the Ninth Circuitrecently confirmed in Ollier, this test appliesto high schools as well as colleges.22
Title IX’s equal participation mandate,along with the three-part test, is perhaps themost well-developed area of Title IX jurispru-dence. An early groundbreaking case, Cohenv. Brown University, established that thisportion of Title IX had teeth.23 BrownUniversity I provides an important frameworkfor Title IX equal participation claims.24
There, the court granted a preliminary injunc-tion to a class of female athletes at BrownUniversity after the school discontinued cer-tain female sports. In Brown University II,25
the First Circuit affirmed the district courtand elucidated burdens of proof. In BrownUniversity III,26 the district court, followinga trial on the merits, found that the schoolviolated Title IX. The First Circuit upheldthis judgment in Brown University IV27 butremanded to allow the school to submit arevised compliance plan. The Ninth Circuitfavorably analyzed the First Circuit’s BrownUniversity cases in Neal v. Board of Trusteesof the California State Universities.28 Therehave been a number of other university-levelcases regarding Title IX’s equal participationmandate. In Brust v. Regents of the Universityof Calif ornia, the plaintiffs challenged UCDavis’s failure to provide equal participationopportunities for female students when therewas a 6 percent disparity between femaleenrollment and participation that amountedto more than 80 women who could haveplayed sports had the numbers been propor-tionate.29 In the Second Circuit, plaintiffsestablished that Quinnipiac University failedto provide equal participation opportunitieswhen it had a 3.62 percent disparity betweenfemale enrollment and female athletic par-ticipation (amounting to 38 roster posi-
tions).30 The Quinnipiac case is also notablefor its ruling regarding cheerleading and theschool’s failure to show that cheer involvedsufficient competition to be counted as asport.31
Title IX’s three-part test was a key elementin Ollier. The first part of the test considerswhether the school has achieved substantialproportionality, meaning that the percentageof girls enrolled in the school matches thepercentage of girls playing sports. For exam-ple, at Castle Park in the school year 2007–08, girls were 45.4 percent of the studentbody but only 38.7 percent of the athletes.This difference represented a 6.7 percent dis-parity, “equivalent to 47 girls who wouldhave played sports if participation were ex -actly proportional to enrollment and no fewerboys participated.”32 Because 47 girls could“sustain at least one viable competitive team,”Castle Park did not show substantial pro-portionality.33
The second part of the three-part testaffords schools a safe harbor if they canprove, as an affirmative defense, that theyhave a history and continuing practice ofexpanding athletic programs for girls. Thissecond portion of the three-part test was lit-igated in Mansourian v. Regents of the Uni -versity of California, a case involving femalewrestlers at UC Davis.34 The Mansourianplaintiffs challenged the elimination ofwrestling opportunities, and the universityclaimed it had added opportunities for womenover the years. The district court grantedsummary judgment for the defendant. TheNinth Circuit reversed and expanded on themeaning of the “history and continuing prac-tice” defense. It found that the school hadexpanded women’s opportunities “only be -tween 1996 and 2000” and then began reduc-ing opportunities.35 The case was remanded,and the plaintiffs prevailed at trial on theirequal participation opportunities claim be -cause UC Davis did not meet its burden underprong two.36
The school district in Ollier contendedthat it had added a number of teams for girlsand that it offered more teams for girls thanfor boys at the school. However, the NinthCircuit affirmed the district court’s determi-nation that the district failed to meet theirburden under prong two, correctly observingthat “[t]he number of teams on which girlscould theoretically participate is not control-ling under Title IX, which focuses on thenumber of female athletes.”37 Applying thatprinciple to Castle Park, the Ninth Circuitfound that “there were more girls playingsports in the 1998–1999 school year (156)than in the 2007–2008 school year (149).”Girls’ athletic participation fluctuated widely,and the “‘dramatic ups and downs’ [were]far from the kind of ‘steady march forward’
26 Los Angeles Lawyer June 2015
that an institution must show to demonstrateTitle IX compliance under the second prongof the three-part test.” Also, Castle Park hadeliminated teams for girls and therefore couldnot meet its burden under prong two.38
Therefore, the court concluded that therewas no “history and continuing practice ofprogram expansion for women’s sports atCastle Park.”39
Finally, under the third part of the three-part test, a school can show compliance if itdemonstrates that it is meeting all the unmetathletic interest of female students. The NinthCircuit squarely placed the burden on theschool to show that there is no unmet interestamong female students to prevail under prongthree.40 Moreover, the burden is on the schoolto assess student interest in athletics “‘peri-odically’ to ‘identify in a timely and responsivemanner any developing interests and abilitiesof the underrepresented sex.’”41 If a schooleliminates a viable team, as Castle Park didwith field hockey, there is a presumption ofunmet student interest.42 Finally, the NinthCircuit rejected Sweetwater’s attempt to relyon the rules of the California InterscholasticFederation (the body governing high schoolsports in California) to determine whichsports to offer for girls.43 The Ninth Circuitaffirmed the district court’s entry of summaryjudgment to the plaintiffs, concluding thatthe school district had “not fully and effec-tively accommodated the interests and abilitiesof its female athletes.”44
Persistent Inequality
Despite Title IX, many educational institu-tions, including high schools throughout thecountry, continue to place male sports pro-grams in a position of superiority over femaleprograms.45 This is due in part to the dearthof “equal treatment” claims under Title IX.The majority of the litigation under Title IXhas focused on the first component concerningathletic opportunities.46 Few have focusedon the second, for which the “governing prin-ciple is that male and female athletes shouldreceive equivalent treatment, benefits, andopportunities.”47 Moreover, the few casesthat have analyzed Title IX’s equal treatmentcomponent have mainly focused on oneissue—disparities in scheduling48—or in -equities within a single sport. Ollier, on theother hand, offers a comprehensive analysisof Title IX’s equal treatment requirementbeyond a single issue or one sport.49
Under the equal treatment prong of TitleIX, compliance is assessed based on an overallcomparison of all treatment and benefits pro-vided in an athletic program.50 This meansthat identical benefits and opportunities arenot required provided that the overall effectsof any differences are negligible.51 However,disparities in individual components of the
program alone can be found to violate TitleIX if the disparity is substantial enough inand of itself to deny equality of athletic oppor-tunity.52 The individual components to beassessed, particularly at the high school levelinclude: the provision of equipment and sup-plies, scheduling of games and practice time,provision of recruitment and coaching ben-efits, provision of facilities and medical ser-vices, as well as publicity and fundraisingopportunities and benefits.53 For each com-ponent, the Policy Interpretation lists the fac-
tors that should be examined to determinecompliance.54
At Castle Park, girls received inferiortreatment and benefits throughout the athleticprogram. The district court found that girlswere provided with fewer coaches, coacheswho were less experienced and had higherturnover rates, coaches who were hired laterin the athletic season, and coaches burdenedwith excessive additional assignments—allfactors that negatively affected both recruit-ment and coaching benefits.55 The court alsofound that the athletic facilities at CastlePark were of higher quality and better main-tained for male athletes. Unequal facilitiesincluded a separate locker and meeting roomequipped with athletic-sized lockers for male
athletes while female athletes had accessonly to general P.E. locker rooms with lockerstoo small to store athletic equipment. Boysalso had greater access to superior compet-itive and practice facilities with greater ameni-ties such as scoreboards and snack bars.56
Other courts have found Title IX equal treat-ment violations based on such single-sportdisparities. For example, in Landow v. SchoolBoard of Brevard County, the court heldthat disparities between boys’ baseball andgirls’ softball programs at two high schools
in the county violated Title IX, includingthe fact that girls had to play on off-site,public softball facilities while boys enjoyeddedicated facilities on school grounds.57 InCook v. Colgate University, the court heldthat the university’s unequal treatment ofmen’s and women’s ice hockey teams violatedTitle IX.58
The district court in Ollier also foundthat girls were provided with less and lowerquality equipment than boys and had lessaccess to dedicated and accessible storageareas for field maintenance and athletic equip-ment.59 Scheduling benefits were also dis-parate—girls were provided with fewer com-petitive opportunities than boys, and as othercourts have found,60 unequal access to opti-
Los Angeles Lawyer June 2015 27
mum practice and competition times.61 Asfound in Communities for Equity v. MichiganHigh School Athletic Associa tion,62 sched-uling athletic seasons and tourna ments forgirls’ sports during nontraditional and lessadvantageous times of the academic yearthan boys’ sports is also a type of schedulingdisparity relegated to girls (but not boys).Similarly, in Alston v. Virginia High SchoolLeague, Inc., greater variation in the sched-uling of girls’ sports seasons compared withboys’ seasons precluded summary judgmentof alleged Title IX violations.63
In terms of medical and training supportsat Castle Park, the district court found thatathletic trainers and doctors were providedpredominately during the fall football season,disproportionately benefiting boys.64 Andthe equipment in the school’s weight roomwas designed for the “absolute-strength-basedsports” in which boys participate.65 Boys’sports were also provided with greater cov-erage in school yearbooks, more signage onthe school’s electronic marquee and greatersupport from band, cheerleaders, and pepsquads—resulting in greater publicity andpromotional support.66 And boys’ teams wereprovided with more readily available fundrais-ing resources, like snack bars.67 All of thesefactors contributed to the unequal treatmentof girls at Castle Park.
Retaliation
Like many of our civil rights laws, Title IXalso prohibits retaliation for raising com-plaints about violations of the law. Strongantiretaliation provisions are critical to en -suring vigorous Title IX enforcement. TheU.S. Supreme Court explained in Jackson v.Birmingham Board of Education, that acoach who complains on behalf of his studentathletes and then loses his job as a resultstates a viable claim for retaliation underTitle IX.68 In Ollier, the class made out aclaim for retaliation based on adverse actionstaken against them after complaints aboutTitle IX violations were raised. These adverseactions included terminating the softball teamcoach after a softball player’s parent com-plained about inequality for girls. Sweetwatervigorously argued that the class did not havestanding to bring such a retaliation claimand that only the coach could pursue a re -taliation claim for his termination. However,the district court and the Ninth Circuit agreedwith the plaintiffs and held that there wasstudent standing for such a claim.69 “[S]tu -d ents like Plaintiffs surely fall within the zoneof interests that Title IX’s implicit antiretal-iation provisions seek to protect.”70
On its merits, the district court appliedTitle VII standards71 to Title IX retaliationclaims and made a finding of retaliation,which the Ninth Circuit affirmed.72 Speci -
fically, the plaintiffs demonstrated that theyengaged in protected activity when “theycomplained about Title IX violations in Mayand July 2006 and when they filed their com-plaint in April 2007.”73
Sweetwater took adverse actions againstthe plaintiffs when “among other things, [thesoftball coach] was fired and replaced by afar less experienced coach.”74 The terminationof the coach disrupted the plaintiffs’ “suc-cessful softball program…to the detrimentof the program and participants.” In addition,“the team was stripped of its assistant coach -es;…the team’s annual award banquet wascanceled; parents were prohibited from vol-unteering with the team; and…the team wasnot allowed to participate in a Las Vegastournament attended by college recruiters.”75
The Ninth Circuit affirmed the district court’sretaliation finding because “a reasonable per-son could have found any of these actions‘materially adverse’ such that they ‘well mighthave dissuaded [him] from making or sup-porting a charge of discrimination.’”76 Indoing so, the Ninth Circuit rejected the schooldistrict’s unsupported argument that thereshould be a higher standard for adverseactions under Title IX than Title VII.77
The Ninth Circuit also affirmed a linkbetween the protected activity and adverseaction through temporal proximity.78 Thedistrict court had rejected as pretextual allof the defendants’ asserted reasons for ter-minating the softball coach.79 The NinthCircuit concluded by chastising the defendantsfor attempting to “relitigate the merits of itscase.” It further recognized that “Title IXlevels the playing fields for female athletes.In implementing this important principle, thedistrict court committed no error.”80
After winning at trial, plaintiff NaudiaRangel remarked: “With this victory, futuregenerations of girls at Castle Park HighSchool will get the same opportunities andtreatment as boys at the school. That’s all Iwanted from this lawsuit. I just wanted thingsto be fair. I’m proud that we changed thefuture for female athletes at Castle ParkHigh School.”81 With the Ninth Circuit vic-tory, the girls in Ollier did more than justhelp future female athletes at Castle Park—they helped ensure that girls throughout thecountry can benefit from Title IX’s promiseof equality in athletics. n
1 Ollier v. Sweetwater Union High Sch. Dist., 858 F.Supp. 2d 1093, 1115-16 (2012) (citation omitted).2 Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843 (9th Cir. 2014).3 While athletic financial assistance, equal treatmentand benefits, and equal athletic opportunities (accom-modation claims) are often discussed as the three majorareas of regulatory compliance under Title IX, theauthors have reorganized these concepts and includedretaliation as the main components of Title IX for thisarticle.
4 Jackson v. Birmingham Board of Education, 544U.S 167 (2005).5 Id. at 174-75.6 National High School Athletics Federation, http://www.nfhs.org/ParticipationStatics/ParticipationStatics.aspx.7 Brief for Nat’l Women’s Law Ctr. et al. as Amici CuriaeSupporting Plaintiffs-Appellees at 2, Ollier v. Sweetwater,768 F. 3d 843 (41).8 Id.9 Brief for Women’s Sports Found. et al. as Amici CuriaeSupporting Plaintiffs-Appellees at 2-3, Ollier v.Sweetwater, 768 F. 3d 843 (45) [hereinafter Brief forWomen’s Sports Found.].10 Id. at 9-10.11 Id. at 11.12 Id. at 11-12.13 Betsey Stevenson, Beyond the Classroom: UsingTitle IX to Measure the Return to High School Sports,4-5 (Nat’l Bureau of Econ. Research, Working PaperNo. 15728, 2010).14 Brief for Women’s Sports Found., supra note 9 at12-16.15 Id. at 14-15.16 Benefits—Why Sports Participation for Girls andWomen: The Foundation Position, Women’s SportsFound ation, http://www.womenssportsfoundation.org(last visited Apr. 13, 2015).17 Ollier v. Sweetwater Union High Sch. Dist., 858 F.Supp. 2d 1093, 1100-04 (2012).18 Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843 (9th Cir. 2014). The Ninth Circuit affirmedthe district court’s rulings on all claims.19 Id.20 34 C.F.R. §106.41(c).21 44 Fed. Reg. 71,413, 71,418 (Dec. 11, 1979). TheNinth Circuit has adopted this test. Ollier, 768 F. 3dat 854. See also U.S. Department of Education, Officeof Civil Rights, Clarification of Intercollegiate AthleticsPolicy Guidance: The Three-Part Test (Jan. 16, 1996),http://www.ed.gov/about/offices/list/ocr/docs/clarific.html andDear Colleague Letter, Office of the AssistantSecretary, http://www2.ed.gov/about/offices/list/ocr/letters/colleague-20100420.html.22 Ollier, 768 F. 3d at 855.23 Cohen v. Brown Univ., 991 F. 2d 888 (1st Cir.1993).24 Cohen v. Brown Univ., 809 F. Supp. 978 (D.R.I.1992).25 Cohen, 991 F. 2d 888.26 Cohen v. Brown Univ., 879 F. Supp. 185 (D.R.I.1995).27 Cohen v. Brown Univ., 101 F. 3d 155 (1st Cir.1996).28 Neal v. Board of Trustees, 198 F. 3d 763, 772 (9thCir. 1999). Neal involved a challenge to the decisionby California State University, Bakersfield, to reducethe numbers of the male wrestling team allegedly tocomply with Title IX. The court concluded that gen-der-conscious remedies were appropriate.29 Brust v. Regents of Univ. of Cal., No. 2:07-CV-1488, 2007 WL 4365521, at *4 (Dec. 12, 2007)30 Biediger v. Quinnipiac Univ., 691 F. 3d 85, 91 (2dCir. 2012).31 Id. at 103-05.32 Ollier v. Sweetwater Union High Sch. Dist., 768 F.3d 843, 856-57 (9th Cir. 2014).33 Id. at 857.34 Mansourian v. Regents of the Univ. of Cal., 602 F.3d 957, 958 (9th Cir. 2010).35 Id. at 970.36 Mansourian v. Regents of the Univ. of Cal., 816 F.Supp. 2d 869, 926 (2011).37 Ollier, 768 F. 3d at 855; see also Mansourian, 816F. Supp. 2d at 888.38 Ollier, 768 F. 3d at 859; see also Mansourian, 602F. 3d at 971.
28 Los Angeles Lawyer June 2015
39 Ollier, 768 F. 3d at 859.40 Id. at 858.41 Id. (citing the 1996 Intercollegiate Athletics PolicyGuidance).42 Id. at 858.43 Id.44 Id. at 859.45 Parker v. Franklin County Cmty. Sch. Corp., 667F. 3d 910, 916 (7th Cir. 2012) (noting educationalinstitutions continue to place male sports in a positionof superiority) (citation omitted).46 Id. at 916 (“Few cases have focused on “equal treat-ment” claims seeking substantial equality in programcomponents of athletics.”).47 44 Fed. Reg. 71,414.48 Parker, 667 F. 3d at 924; see also McCormick v.School Dist. Of Mamaroneck, 370 F. 3d 275, 295-96(2d Cir. 2004); Communities For Equity v. MichiganHigh Sch. Athletic Ass’n, 178 F. Supp. 2d 805, 855-57 (W.D. Mich. 2001), aff’d, 377 F. 3d 504 (6th Cir.2004), vacated on other grounds, 544 U.S. 1012 (2005),aff’d on remand, 459 F. 3d 676, 695-96 (6th Cir.2006).49 Cruz v. Alhambra School District also examinedan entire athletic program under Title IX but wassettled before trial with “wide-ranging changes.” Cruzv. Alhambra Sch. Dist., 601 F. Supp. 2d 1183, 1187-88 (C.D. Cal. 2009).50 34 C.F.R. §106.41(c).51 44 Fed. Reg. 71,415-17.52 McCormick, 370 F. 3d at 293 (“a disparity in oneprogram component (i.e., scheduling of games andpractice time) can alone constitute a Title IX violationif it is substantial enough in and of itself to denyequality of athletic opportunity to students of one sexat school.”).
53 34 C.F.R. §106.41(c).54 44 Fed. Reg. 71,416-17.55 Ollier v. Sweetwater Union High Sch. Dist., 858 F.Supp. 2d 1093, 1099-1100, 1105-06, 1110-12 (2012).56 Id. at 1100-04, 1111.57 Landow v. School Bd. of Brevard County, 132 F.Supp. 2d 958, 961-67 (M.D. Fla. 2000).58 Cook v. Colgate Univ., 802 F. Supp. 737 (N.D.N.Y. 1992), vacated as moot, 992 F. 2d 17 (2d Cir.1993).59 Ollier, 858 F. Supp. 2d at 1104-05, 1111.60 See Parker v. Franklin County Cmty. Sch. Corp.,667 F. 3d 910 (7th Cir. 2012); McCormick v. Sch.Dist. Of Mamaroneck, 370 F. 3d 275 (2d Cir. 2004);Communities For Equity v. Mich. High Sch. AthleticAss’n, 178 F. Supp. 2d 805 (W.D. Mich. 2001), aff’d,377 F. 3d 504 (6th Cir. 2004), vacated on othergrounds, 544 U.S. 1012 (2005), aff’d on remand, 459F. 3d 676, 695-96 (6th Cir. 2006).61 Ollier, 858 F. Supp. 2d at 1105, 1111.62 Michigan, 178 F. Supp. 2d at 855-57.63 Alston v. Virginia High Sch. League, Inc., 144 F.Supp. 2d 526, 533-36 (W.D. Va. 1999).64 Ollier, 858 F. Supp. 2d at 1106.65 Id. at 1106, 1112.66 Id. at 1107, 1112.67 Id. While unequal expenditures on boys’ and girls’sports do not alone constitute noncompliance, com-pliance may be assessed by examining the “failure toprovide necessary funds for teams for one sex….” 34C.F.R. §106.41(c).68 Jackson v. Birmingham Bd. of Educ., 544 U.S 167,181 (2005).69 Ollier v. Sweetwater, 768 F. 3d 843, 865-66 (9thCir. 2014).70 Id. at 866.
71 “Under [Title VII’s] framework, a ‘plaintiff wholacks direct evidence of retaliation must first make outa prima facie case of retaliation by showing (a) thathe or she was engaged in protected activity, (b) thathe or she suffered an adverse action, and (c) that therewas a causal link between the two.’” Id. at 867 (citingEmeldi v. University of Or., 698 F. 3d 715, 724 (9thCir. 2012)). Once a plaintiff makes this minimal show-ing, “the burden shifts to the defendant to “articulatea legitimate, non-retaliatory reason for the challengedaction.” Ollier, 768 F. 3d at 867. “If the defendantcan do so, the burden shifts back to the plaintiff toshow that the reason is pretextual.” Id.72 Id. at 870-71. Burch v. Regents of the Universityof California also had applied Title VII retaliationstandards when a terminated coach sued for retaliation.Burch v. Regents, 433 F. Supp. 2d 1110 (2006).73 Ollier, 768 F. 3d at 867-68. (“The relief of injunctionis equitable.”)74 Id. (internal quotation omitted).75 Id. at 869.76 Id.77 The defendants argued that “to show adverse action,[the plaintiffs] must prove ‘that they were denied accessto the educational opportunities or benefits providedby the school as a direct result of retaliation.’” TheNinth Circuit found its Emeldi decision foreclosedsuch an argument. Id. at 868 n.15.78 Id. at 867, 869.79 Id. at 869-70.80 Id. at 871.81 Press Release, San Diego Court Judge Rules in Favorof Female Athletes in Title IX Class Action Case AgainstSweetwater Union High School District (Feb. 10, 2012),available at http://www.reuters.com/article /2012 /02/10/idUS219833+10-Feb-2012+BW20120210.
Los Angeles Lawyer June 2015 29
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33131, e-mail: singerman@bergersingerman
.com. Website: www.bergersingerman.com.
Contact Paul Steven Singerman. BergerSingerman LLP is Florida’s business law firm.We have experience in all areas of commer-cial law, including banking, business reorga-nization, corporate securities and M&A, dispute resolution, employment law, whitecollar crime, real estate, environmental andland use, tax, estate planning, and probate.We have a passionately enforced no-poach
rule: we will help you satisfy your clients’ needs
in connection with the matter entrusted to us
and then return your clients safely to you. See display ad on page 37.
COMPLIANCE & ETHICS(POLITICAL)
THE SUTTON LAW FIRM22815 Ventura Boulevard, Suite 405, Los
Angeles, CA 91364, (818) 593-2949, fax (818)
593-2948, e-mail: bhertz@campaignlawyers
.com. Contact Bradley W. Hertz. The Sutton
Law Firm and Los Angeles-based partner
Bradley W. Hertz represent businesses, individ-
uals, candidates, ballot measures, PACs, and
nonprofit organizations involved in the political
and legislative processes on the local, state,
and national levels.
COPYRIGHT LAW
LAW OFFICE OF PAUL D. SUPNIK 9401 Wilshire Boulevard, Suite 1250, Beverly
Hills, CA 90212, (310) 859-0100; fax (310) 388-
5645, e-mail: [email protected]. Website: sup-
nik.com; www.NotSoBIGLAW.com. Federal
court litigation; local counsel for out of town
firms; infringement, fair use, subject matter
issues, ownership, registration, public domain,
termination of transfer and duration issues; past
chair of both LACBA’s Entertainment and Intel-
lectual Property Section as well as International
Law Section; past chair Los Angeles Copyright
Society; author “Copyright Infringement” in CEB
publication Proof in Competitive Business Liti-gation. See display ad on page 32.
CORPORATE, SECURITIES, & GOVERNANCE
GIRARDI |KEESE1126 Wilshire Boulevard, Los Angeles, CA
90017, (213) 977-0211, fax (213) 481-1554.
Website: www.girardikeese.com. Contact Tom
Girardi. Specialties: ADR, class action practice,
and product liability. Recognized as one of the
leading trial firms in the country. Professional
affiliations: LACBA; Beverly Hills Bar Association;
American Board of Trial Advocates; International
Academy of Trial Lawyers; Inner Circle. See dis-
play ad on page 31.
CRIMINAL DEFENSE LAW
FAY ARFA, A LAW CORPORATION10100 Santa Monica Boulevard, Suite 300,Los Angeles, CA 90067, e-mail: [email protected]. Website: www.bestdefender.com. Contact Fay Arfa. Fay Arfa, specializesin state and federal criminal law, criminal trials,criminal appeals, and postconviction matters(habeas c orpus). The California State Bar’s,board of legal specialization has certified her asa specialist in criminal law. She has also beencertified as a specialist in appellate law. TheNational Board of Trial Advocacy (an ABA-accredited organization) certified her as a crim-inal trial advocate. Fay Arfa vigorously fights foranyone accused or convicted of a crime. Seedisplay ad on page 5.
HUTTON & WILSON1055 East Colorado Boulevard, Suite 310,
Pasadena, CA 91106, (626) 397-9700, fax
(626) 397-9707, e-mail: huttonandwilson
@aol.com. Website: www.hutton-wilson.com.
Contact Robert J. Wilson. Hutton & Wilson
specialize in driving under the influence, vehicu-
lar manslaughter, and DUI murder. We also
represent persons accused of other types of
crimes, including political corruption, drug pos-
session, theft, and juvenile crimes. Additionally,
we represent drivers before the Department of
Motor Vehicles involving drivers’ license suspen-
sions of all kinds. Prosecution without compas-
sion is legal blasphemy.
CRIMINAL DEFENSE/WHITECOLLAR
NASATIR, HIRSCH, PODBERESKY,
& KHERO 2115 Main Street, Santa Monica, CA 90405,
(310) 399-3259, fax (310) 392-9029, e-mail:
[email protected]. Contact Richard
Hirsch. Delivering high quality and professional
representation to both individual and corporate
clients, our firm specializes in federal and state
white collar and nonwhite collar criminal
defense. Members of our firm have served as
former state and federal prosecutors. Members
of the firm have received numerous awards for
excellence in practice, as well as being named
in Best Lawyers of America and Super Lawyers
of Southern California.
DISPUTE RESOLUTION
JUDGE LAWRENCE W. CRISPO (RET.) 501 Glen Court, Pasadena, CA 91105,
(213) 926-6665, fax (626) 744-0363, e-mail:
[email protected]. Website: www
.judgecrispo.com. Contact Lawrence W.
Crispo. Mediator-discovery referee/special
master arbitrator, and early neutral evaluation.
See display ad on page 5.
EATING DISORDER INSURANCE ISSUES
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
32 Los Angeles Lawyer June 2015
NotSoBIGLAW.com
copyright • trademark
NOT SO BIGLAW® is a service mark of Paul D. Supnik
Dan F. Oakes
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www
.kantorlaw.net. Contact Glenn Kantor or
Alan Kassan. Administrative appeals, litigation,
state and federal court, appellate work, free
consultations, and all cases are taken on a con-
tingency fee basis. See display ad on page 38.
EMINENT DOMAIN
CALIFORNIA EMINENT DOMAIN LAW
GROUP, APC3429 Ocean View Boulevard, Suite L, Glendale,
CA 91208, (818) 957-0477, fax (818) 957-3477,
e-mail: [email protected]. Web site: www
.caledlaw.com. Contact A. J. Hazarabedian.
The attorneys at California Eminent Domain Law
Group—a Martindale-Hubbell AV® Rated law
firm—are California’s premier eminent domain
attorneys with extensive experience in all facets
of eminent domain. Our attorneys practice
exclusively eminent domain law and have suc-
cessfully handled hundreds of eminent domain
cases. We are committed to obtaining maximum
compensation for our property and business
owner clients, and are happy to work with other
law firms to assist their clients in their eminent
domain needs. Referral fees paid per State Bar
guidelines. See display ad on page 32.
EMPLOYEES WORKERS’ COMPENSATION BENEFITS
GOODCHILD AND DUFFY PLC
16133 Ventura Boulevard, Suite 1250,
Encino, CA 91346, (818) 380-1600, fax (818)
380-1616. Website: www.jackgoodchildlaw
.com. Contact Martha Castillo or Betty
Dent. Certified specialist for 35 years. We
handle workers’ compensation cases, social
security disability, and personal injury. To
referring attorneys we pay 20 percent of the
fees regarding regular issues. Referrals are
handled in strict accordance with the State
Bar rules.
EMPLOYMENT & LABOR LAW
LAW OFFICE OF ELI M. KANTOR 9595 Wilshire Boulevard, Suite 405, Beverly
Hills, CA 90212, (310) 274-8216, fax (310) 273-
6016, e-mail: [email protected]. Website:
www.beverlyhillsemploymentlaw.com. Contact
Eli Kantor. We specialize in all aspects of labor
and employment law, including sexual harass-
ment, wrongful discharge, employment discrim-
ination, wage and hour, as well as class action
litigation.
MORRIS POLICH & PURDY LLP1055 West Seventh Street, 24th floor, Los
Angeles, CA 90017, (213) 891-9100, fax (213)
488-1178, e-mail: jandrews@mpplaw
.com. Website: www.mpplaw.com. Contact
Julie Andrews. Commercial, technology,
employment and labor, environmental, insur-
ance, international, real estate and real
property.
STEPHEN DANZ & ASSOCIATES 11661 San Vicente Boulevard, Suite 500,
Los Angeles, CA 90049, (877) 789-9707,
fax (310) 207-5006, e-mail: stephen.danz
@employmentattorneyca.com. Website:
www.employmentattorneyca.com. Contact
Stephen Danz. Over 30 years of trial and settle-
ment experience. Stephen Danz and Associates
is California’s largest employee only, statewide
law firm with offices in Los Angeles, San Diego,
Sacramento, Fresno, Orange County, San
Bernardino, and San Francisco. Our firm is dedi-
cated to representing employees in disputes
against their employers. Our attorneys represent
employees and workers in class actions, wrong-
ful termination cases, discrimination (age, sex,
race, national origin, religion, and physical or
medical condition) harassment cases, wage dis-
putes, overtime pay cases, and rest and meal
period cases. Our experienced lawyers have rep-
resented thousands of employees throughout
the state of California and have won numerous
trials and arbitrations on their behalf. If you think
you have a possible claim please contact our
office immediately. We don’t make empty
promises; we deliver results. We provide free ini-
tial consultations. No attorneys’ fees unless we
make a recovery on your behalf. Paying highest
referral fees (per State Bar rules). See displayad on page 38.
ENVIRONMENTAL
GIRARDI |KEESE1126 Wilshire Boulevard, Los Angeles, CA
90017, (213) 977-0211, fax (213) 481-1554.
Website: www.girardikeese.com. Contact Tom
Los Angeles Lawyer June 2015 33
Girardi. Specialties: ADR, class action practice,
and product liability. Recognized as one of the
leading trial firms in the country. Professional
affiliations: LACBA; Beverly Hills Bar Association;
American Board of Trial Advocates; International
Academy of Trial Lawyers; Inner Circle. See display ad on page 31.
MORRIS POLICH & PURDY LLP1055 West Seventh Street, 24th floor, Los
Angeles, CA 90017, (213) 891-9100, fax (213)
488-1178, e-mail: andrews@mpplaw
.com. Website: www.mpplaw.com. Contact
Julie Andrews. Commercial, technology,
employment and labor, environmental, insur-
ance, international, real estate and real
property.
ERISA BENEFITS
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www.kantor-
law.net. Contact Glenn Kantor or Alan Kas-
san. Administrative appeals, litigation, state and
federal court, appellate work, free consultations,
and all cases are taken on a contingency fee
basis. See display ad on page 38.
ESTATE PLANNING, TRUSTAND PROBATE
SIRKIN AND SIRKIN21550 Oxnard Street, 3rd floor, Woodland Hills,
CA 91367, (818) 340-4479, fax (818) 340-
7952, e-mail: [email protected]. Website:
www.sirkinlaw.com. Contact Mina N. Sirkin.
Estate planning, probate, conservatorships,
elder law, and structured settlements. See dis-play ad on page 39.
EXPERT WITNESS
OSTROVE, KRANTZ & ASSOCIATES 5757 Wilshire Boulevard, Suite 535, Los Ange-
les, CA 90036, (323) 939-3400, fax (323) 939-
3500, e-mail: [email protected]. Web-
site: www.lawyers.com/ok&alaw. Contact
David Ostrove. Expert witness for over 47
years. Specializes in lawyer/accountant mal-
practice, forensic accounting, tax matters, busi-
ness valuation, value of services, computation
of damages, mediator, and arbitrator. Professor
of law accounting. See display ad on page 33.
FAMILY LAW
BRANDON LAW GROUP 200 Oceangate, Suite 1500, Long Beach, CA
90802, (562) 901-9800, fax (562) 983-9383,
e-mail: [email protected]. Website:
www.brandonlaw.net. Contact Lisa Brandon,
CFLS. Certified specialists in family law offering
family law litigation and mediation services for
complex matters and/or large estates.
GORDON | GORDON | LAWYERS, APC 1200 Wilshire Boulevard, Suite 508, Los Ange-
les, CA 90017, (213) 482-1200, fax (213) 482-
4508, e-mail: [email protected]. Web-
site: www.gordon-gordon.com. Contact
Christiaan Gordon or Errol Gordon. A family
law firm dedicated to providing the highest level
of services and professional competence for
over 40 years. The firm practices in all aspects
of family law litigation and appeals.
LAW & MEDIATION OFFICES OF
LYNETTE BERG ROBE16133 Ventura Boulevard, Suite 855, Encino,
CA 91436, (818) 980-9964, e-mail: portia1000
@aol.com. Website: www.lynettebergrobelaw
.com. Contact Lynette Berg Robe. Family law
mediation, collaborative law and consensual dis-
pute resolution in all family law matters.
WALZER MELCHER LLP 21700 Oxnard Street, Suite 2080, Woodland
Hills, CA 91367, (818) 591-3700, fax (818) 591-
3774, e-mail: [email protected]. Web-
site: www.walzermelcher.com. Contact
Christopher C. Melcher. Complex marital dis-
solution litigation at trial court level or on appeal
involving property disputes, businesses, or mar-
ital agreements. Certified Family Law Specialist.
See display ad on page 1.
FRANCHISE LAW
MOHAJERIAN INC. 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067, (310) 556-3800, fax
(310) 556-3817, e-mail: [email protected].
Website: www.mohajerian.com. Contact Al
Mohajerian. Specialties: Franchising & licens-
ing. Mohajerian Inc. is a multipractice law firm in
Century City. It proudly offers efficient, innova-
tive, and proactive legal services throughout the
USA. Representative cases or clients: Burger
King, Quiznos, Vestar, Carl’s Jr., Jack in the
Box, Medicine Shoppe, Pizza Man, Peter Piper
Pizza. Professional affiliations: Franchise Law
Committee of State Bar, INTA, ABA, Super
Lawyer 2008-2013. Law school attended:
UWLA. Billing arrangements: Hourly. See dis-play ad on page 35.
GOVERNMENT (ELECTIONLAW)
THE SUTTON LAW FIRM22815 Ventura Boulevard, Suite 405, Los
Angeles, CA 91364, (818) 593-2949, fax (818)
593-2948, e-mail: hertz@campaignlawyers
.com. Contact Bradley W. Hertz. The Sutton
Law Firm and Los Angeles-based partner
Bradley W. Hertz represent businesses, individ-
uals, candidates, ballot measures, PACs, and
nonprofit organizations involved in the political
and legislative processes on the local, state,
and national levels.
HEALTH INSURANCE CLAIMS
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www
.kantorlaw.net. Contact Glenn Kantor or
Alan Kassan. Administrative appeals, litigation,
state and federal court, appellate work, free
consultations, and all cases are taken on a con-
tingency fee basis. See display ad on page 38.
HEALTHCARE LAW
LAW OFFICES OF MICHAEL
GOCH, APC5850 Canoga Avenue, Suite 400, Woodland
Hills, CA 91367, (818) 710-7190, fax (818) 710-
7191, e-mail: [email protected]. Website:
MichaelGoch.com. Contact Michael Goch.
Licensing and related disciplinary proceedings
with emphasis on healthcare practitioners, as
well as Department of Health Services matters
and related issues, from investigatory stage
through trial and writ proceedings. Degrees/
licenses: JD Southwestern University School of
Law, Cum Laude, 1978; admitted in California
since 1978. Also admitted in Central, Eastern,
Northern, Southern District and Ninth Circuit.
IMMIGRATION AND NATIONALITY LAW
LAW OFFICE OF ELI M. KANTOR 9595 Wilshire Boulevard, Suite 405, Beverly
Hills, CA 90212, (310) 274-8216, fax (310) 273-
6016, e-mail: [email protected]. Website:
www.beverlyhillsimmigrationlaw.com. Contact
Eli Kantor. Specializes in all aspects of busi-
ness, entertainment, investor, and family immi-
gration law.
LAW OFFICE OF CARL SHUSTERMAN 600 Wilshire Boulevard, Suite 1550, Los Ange-
les, CA 90017, (213) 623-4592, fax (213) 623-
3720, e-mail: [email protected]. Website:
www.shusterman.com. Contact Carl Shus-
terman. Corporate and individual cases.
Seven-attorney law firm headed by former trial
attorney for the U.S. Immigration and Natural-
ization service (1976-82).
LAW OFFICES OF BRIAN D. LERNER, A
PROFESSIONAL CORPORATION3233 East Broadway, Long Beach, CA
90803, (562) 495-0554, e-mail: blerner
@californiaimmigration.us. Contact Brian D.
Lerner. Certified Specialist by the Board of
Legal Specialization, CA Bar in Immigration and
Nationality Law. We do deportation, business
visas, family visas, asylum, appeals, criminal
relief, writs and all other areas of Immigration
Law. We pay referral fees in accordance with
the Rules of Professional Conduct. Over 20
years of experience in Immigration Law. If you
have clients with immigration issues or an
employment, family, business or criminal law
immigration crossover matters, call my office for
a free consultation. See display ad on page 30.
INSURANCE LAW
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www
.kantorlaw.net. Contact Glenn Kantor or
Alan Kassan. Administrative appeals, litigation,
state and federal court, appellate work, free
consultations, and all cases are taken on a con-
34 Los Angeles Lawyer June 2015
tingency fee basis. See display ad on page 38.
MORRIS POLICH & PURDY LLP1055 West Seventh Street, 24th floor, Los
Angeles, CA 90017, (213) 891-9100, fax (213)
488-1178, e-mail: jandrews@mpplaw
.com. Website: www.mpplaw.com. Contact
Julie Andrews. Commercial, technology,
employment and labor, environmental, insur-
ance, international, real estate and real
property.
INTELLECTUAL PROPERTY
GIRARDI |KEESE1126 Wilshire Boulevard, Los Angeles, CA
90017, (213) 977-0211, fax (213) 481-1554.
Website: www.girardikeese.com. Contact
Tom Girardi. Specialties: ADR, class action
practice, and product liability. Recognized as
one of the leading trial firms in the country.
Professional affiliations: LACBA; Beverly Hills
Bar Association; American Board of Trial Advo-
cates; International Academy of Trial Lawyers;
Inner Circle. See display ad on page 31.
MOHAJERIAN INC. 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067, (310) 556-3800, fax
(310) 556-3817, e-mail: [email protected].
Website: www.mohajerian.com. Contact Al
Mohajerian. Specialties: Franchising & licens-
ing. Mohajerian Inc. is a multipractice law firm in
Century City. It proudly offers efficient, innova-
tive, and proactive legal services throughout the
USA. Representative cases or clients: Burger
King, Quiznos, Vestar, Carl’s Jr., Jack in the
Box, Medicine Shoppe, Pizza Man, Peter Piper
Pizza. Professional affiliations: Franchise Law
Committee of State Bar, INTA, ABA, Super
Lawyer 2008-2013. Law school attended:
UWLA. Billing arrangements: Hourly. See display ad on page 35.
INTERNATIONAL
TANIGUCHI GJB OFFICE3-20-1 Minami Azabu, Azabu Green Terrace
5F, Minato-Ku, Tokyo, Japan, (81) 3-6859
8548, fax (81) 3-6859-8401, e-mail:
[email protected]. California lawyer
admitted to practice in Japan as a foreign legal
consultant, along with correspondent Japanese
law firms. Provide legal services to US and
other foreign businesses in Japan.
LABOR/EMPLOYER DEFENSE
MOHAJERIAN INC. 1901 Avenue of the Stars, Suite 1100, Los
Angeles, CA 90067, (310) 556-3800, fax
(310) 556-3817, e-mail: [email protected].
Website: www.mohajerian.com. Contact Al
Mohajerian. Specialties: Franchising & licens-
ing. Mohajerian Inc. is a multipractice law firm in
Century City. It proudly offers efficient, innova-
tive, and proactive legal services throughout the
USA. Representative cases or clients: Burger
King, Quiznos, Vestar, Carl’s Jr., Jack in the
Box, Medicine Shoppe, Pizza Man, Peter Piper
Pizza. Professional affiliations: Franchise Law
Committee of State Bar, INTA, ABA, Super
Lawyer 2008-2013. Law school attended:
UWLA. Billing arrangements: Hourly. See display ad on page 35.
LIFE INSURANCE CLAIMS
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www.kantor-
law.net. Contact Glenn Kantor or Alan Kas-
san. Administrative appeals, litigation, state and
federal court, appellate work, free consultations,
and all cases are taken on a contingency fee
basis. See display ad on page 38.
LITIGATION
GILCHRIST & RUTTER PROFESSIONAL
CORPORATION1299 Ocean Avenue, Suite 900, Santa Monica,
CA 90401, (310) 393-4000, fax (310) 394-
4700. Website: www.gilchristrutter.com.
Contact Frank Gooch. Represent clients as
plaintiffs and defendants at trial and appellate
levels in state and federal courts, as well as
mediations/arbitrations. Practice areas include
business (unfair competition, trade secret,
antitrust, shareholder disputes,
entertainment/intellectual property litigation),
real estate (breach of lease and sales agree-
ments, quiet title, easement, owner-contractor
and landlord-tenant disputes, environmental
clean-up) securities, employment and insurance
(e.g., coverage disputes, breach of contract,
bad faith and punitive damage actions).
LITIGATION (POLITICAL)
THE SUTTON LAW FIRM22815 Ventura Boulevard, Suite 405, Los
Angeles, CA 91364, (818) 593-2949, fax (818)
593-2948, e-mail: bhertz@campaignlawyers
.com. Contact Bradley W. Hertz. The Sutton
Law Firm and Los Angeles-based partner
Bradley W. Hertz represent businesses, individ-
uals, candidates, ballot measures, PACs, and
nonprofit organizations involved in the political
and legislative processes on the local, state,
and national levels.
LONG TERM CARE
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www.kantor-
law.net. Contact Glenn Kantor or Alan Kas-
san. Administrative appeals, litigation, state and
federal court, appellate work, free consultations,
and all cases are taken on a contingency fee
basis. See display ad on page 38.
LONG TERM DISABILITY
KANTOR & KANTOR LLP 19839 Nordhoff Street, Northridge, CA 91324,
(818) 886-2525, fax (818) 350-6272, e-mail:
[email protected]. Website: www.kantor-
law.net. Contact Glenn Kantor or Alan Kas-
san. Administrative appeals, litigation, state and
federal court, appellate work, free consultations,
and all cases are taken on a contingency fee
basis. See display ad on page 38.
MEDIATION
THE HOLMES LAW FIRM 225 South Lake Avenue, Suite 300, Pasadena,
CA 91101, (626) 432-7222, fax (626) 432-
7223, e-mail: [email protected].
Website: www.theholmeslawfirm.com. Contact
Reginald A. Holmes. Esq. Intellectual proper-
ty, employment, and international law. Arbitra-
tor, mediator, referee, special master, and pri-
vate judge in the resolution of complex business
disputes. See display ad onpage 6.
PERSONAL INJURY EXPERT
MICHAEL LOUIS KELLY 2041 Rosecrans Avenue, 3rd floor, El
Segundo, CA 90245, (310) 536-1000, fax (310)
5361001, e-mail: [email protected].
Website: ww.CourtroomWarrior.com. Contact
Michael Louis Kelly. Mr. Kelly is recognized
as one of the leading 500 plaintiff lawyers in the
United States, and year after year is voted a
Southern California Super Lawyer. His numer-
ous record-setting jury verdicts have dramati-
cally impacted the legal landscape in California.
Mr. Kelly utilizes a team of talented lawyers
whose varying backgrounds, training, and
experience combine to create a formidable liti-
gation team.
REAL ESTATE/REAL PROPERTY
MORRIS POLICH & PURDY LLP1055 West Seventh Street, 24th floor, Los
Angeles, CA 90017, (213) 891-9100, fax (213)
488-1178, e-mail: jandrews@mpplaw
.com. Website: www.mpplaw.com. Contact
Julie Andrews. Commercial, technology, em -
ployment and labor, environmental, insurance,
international, real estate and real property.
REAL PROPERTY FORECLOSURES
RICHARD G. WITKIN 530 South Glenoaks Boulevard, Suite 207,
Burbank, CA 91502, (818) 585-7302, fax (818)
845-4015. Contact Richard G. Witkin. Spe-
cializing in nonjudicial foreclosures for the past
25 years. See display ad on page 8.
SOCIAL SECURITY DISABILITY/SSI
LAW OFFICE OF JERRY PERSKY5657 Wilshire Boulevard, Suite 410, Los Ange-
les, CA 90036, (323) 938-4000, fax (323) 938-
4068, e-mail: [email protected]. Website:
www.jerryperskylaw.com. We represent Social
Security claimants to help them qualify for dis-
ability benefits or to help them with termination
of benefits or overpayments.
36 Los Angeles Lawyer June 2015
SPECIAL EDUCATION LAW
VALERIE VANAMANNewman Aaronson Vanaman, 14001
Ventura Boulevard, Sherman Oaks, CA 91423,
(818) 990-7722, fax (818) 501-1306, e-mail:
[email protected]. Website: www.navlaw
.net. Contact Intake Department. For four
decades, Valerie Vanaman Has been providing
knowledgeable and compassionate representa-
tion to people who need help obtaining services
from school districts and regional centers.
Since the inception of her firm, Newman Aaron-
son Vanaman, in 1981, she has been the
acknowledged leader in representing clients at
IEP meetings, due process mediations and
hearings, and related federal court actions. She
also assists families with school discipline mat-
ters and in securing eligibility and services from
regional centers.
TAXATION LAW
HOCHMAN, SALKIN, RETTIG, TOSCHER
& PEREZ9150 Wilshire Boulevard, Suite 300, Beverly
Hills, CA 90212-3414, (310) 281-3200, fax
(310) 859-1430, e-mail: [email protected]
Web site: www.taxlitigator.com. Contact
Charles Rettig. The firm specializes in federal
and state civil tax and criminal tax litigation con-
troversies with federal, state, and local taxing
authorities, white collar crime criminal defense,
forfeitures, estate and business planning, pro-
bate, tax-exempt organizations, real estate,
business and corporate transactions.
TECHNOLOGY
MORRIS POLICH & PURDY LLP1055 West Seventh Street, 24th floor, Los
Angeles, CA 90017, (213) 891-9100, fax
(213) 488-1178, e-mail: jandrews@mpplaw
.com. Website: www.mpplaw.com. Contact
Julie Andrews. Commercial, technology,
employment and labor, environmental, insur-
ance, international, real estate and real property.
TRADEMARK LAW
LAW OFFICE OF PAUL D. SUPNIK 9401 Wilshire Boulevard, Suite 1250, Beverly
Hills, CA 90212, (310) 859-0100; fax (310) 388-
5645, e-mail: [email protected]. Website:
www.supnik.com www.NotSoBIGLAW.com.
Trademark litigation in federal courts; local
counsel for out-of-town firms; trademark regis-
tration in the United States; trademark registra-
tion internationally in association with foreign
counsel; trademark availability searches; trade-
mark Trial and Appeal Board proceedings;
licensing; right of publicity; domain name mat-
ters. Past chair of both LACBA’s Entertainment
and Intellectual Property Section as well as
International Law Section. See display ad onpage 32.
TRUST & WILL LITIGATION
ALBERTSON & DAVIDSON, LLP3491 Concours Street, Suite 201, Ontario, CA
91764, (909) 466-1711, e-mail: keith@aldavlaw
.com. Website: www.aldavlaw.com. Contact
Keith Davidson. Trust and will contests,
trustee breach, accounting trials, contested
trust and will probate matters, and financial
elder abuse. See ad on page 39.
WATER LAW
BEST BEST & KRIEGER LLP300 South Grand Avenue, 25th floor, Los
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38 Los Angeles Lawyer June 2015
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40 Los Angeles Lawyer June 2015
ISSUE:
Based on these facts, we are asked whether Lawyer acted improp-erly in entering into a contingent fee agreement that shifted to herclient the risk of partial payment of any resulting settlement orjudgment.
DISCUSSION:
Introduction. As a general rule, a lawyer is entitled to collect a con-tingent fee only as and when the client receives payment on a resultingsettlement or judgment. This is recognized by Restatement Third,
The Law Governing Lawyers §35(2): “Unless the contract construedin the circumstances indicates otherwise, when a lawyer has contracted
ethics opinion LOS ANGELES COUNTY BAR ASSOCIATION PROFESSIONAL RESPONSIBILITY AND ETHICS COMMITTEE
Opinion No. 526: Contingency Lawyer’s Right to Negotiate a FeeAgreement That Gives First Proceeds to the Lawyer and Shifts tothe Client the Risk of Nonpayment
The LACBA Professional Responsibility and Ethics Committee (PREC) prepareswritten opinions and responds to questions by lawyers concerning lawyers’ethical duties and responsibilities. You may access PREC's formal opinionsthrough the LACBA’s website at http://www.lacba.org/showpage.cfm?pageid=427. Formal opinions are completed within six months to a year. If youhave a legal ethics issue (not currently in litigation), please contact GraceDanziger at (213) 896-6407 or [email protected].
SUMMARY: A lawyer may enter into a binding and enforceable contingency fee agreement that provides to the lawyer some or all of the first
proceeds of suit so as to impose on the client greater risk that the defendant’s financial condition will limit the amount recovered from a
settlement agreement or judgment. Any such risk-shifting agreement requires the client’s informed consent based on the lawyer’s full and fair
disclosure of pertinent information known to the lawyer.
AUTHORITIES CITED: Rules of Professional Conduct: California Rules of Professional Conduct, Rules 3-300 and 4-200. Statutes: Bus. & Prof.
Code §6147; Civ. Code. §1670.5; 28 U.S.C. §2678; 42 U.S.C. §1983. Cases: Brobeck, Phleger & Harrison v. Telex Corp., 602 F. 2d 866 (9th Cir.
1979); Yerkovich v. MCA, Inc., 11 F. Supp. 2d 1167 (C.D. Cal. 1997); Tarver v. State Bar, 37 Cal. 3d 122 (1984); Cetenko v. United California Bank, 30
Cal. 3d 528 (1982); Herrscher v. State Bar, 4 Cal. 2d 399 (1934); Goldstone v. State Bar, 214 Cal. 490 (1931); Cotchett, Pitre & McCarthy v. Universal
Paragon Corp., 187 Cal. App. 4th 1405 (2010); Ramirez v. Sturdevant, 21 Cal. App. 4th 904 (1994); Alderman v. Hamilton, 205 Cal. App. 3d 1033
(1988); Sayble v. Feinman, 76 Cal. App. 3d 509 (1978); Setzer v. Robinson, 57 Cal. 2d 213 (1962); Matter of Phillips, 2011 Calif. Op. LEXIS 22 (Rev.
Dept. 2011); Matter of Goddard, 2011 Calif. Op. LEXIS 13 (Rev. Dept. 2011); Matter of Wells, 2005 Calif. Op. LEXIS 9 (Rev. Dept. 2005); Matter of Van
Sickle, 2005 Calif. Op. LEXIS 3 (Rev. Dept. 2005); Matter of Yagman, 3 Cal. State Bar Ct. Rptr. 788, 1997 Calif. Op. LEXIS 8 (Rev. Dept. 1997); In re
Stochel, 792 N.E. 2d 874 (Ind. 2003). Ethics Opinions: Cal. State Bar Op. 1994-135; L.A. County Bar Ops. 496 (1998) and 518 (2006). Other
Authorities: Restatement Third, The Law Governing Lawyers §35(2).
STATEMENT OF FACTS: XYZ, Inc., wishes to pursue a contract breach claim against Potential Defendant. XYZ asks Lawyer to represent it on a
contingent fee basis. XYZ explains to Lawyer that it has limited cash and credit, which it wishes to use to deal with the consequences of Potential
Defendant’s conduct, and that it therefore lacks the financial ability to pay Lawyer on an hourly basis or even on a mixed contingent-hourly
basis. XYZ believes that the amount of its potential damages could be “devastating” to Potential Defendant. XYZ shares this view with Lawyer,
and it further provides Lawyer with information it has regarding Potential Defendant’s business activities, financial strength, and possible
inability to satisfy XYZ’s claim fully. Lawyer has no information that suggests that XYZ’s beliefs are not well founded. Because of the nature of
the claim, Lawyer expects that Potential Defendant will have no insurance to provide defense or indemnity, so that the entire financial burden
of the proposed litigation will fall on Potential Defendant. Lawyer recognizes the resulting risk that her investment of time and other resources
in pursuing Potential Defendant might result in a recovery limited by the Potential Defendant’s financial condition. As a result, and at Lawyer’s
insistence, Lawyer and XYZ negotiate a contingency fee agreement that shifts to XYZ the entire risk of limited payment by Potential Defendant by
giving Lawyer the right to the first proceeds of any settlement or judgment up to the full amount of the agreed contingent fee. The fee agreement
is contained in an unambiguous writing that complies with Business & Professions Code §6147 and explains in clear language the risk that
XYZ’s recovery might be reduced or even eliminated by Lawyer’s superior rights. Although the conduct of Potential Defendant has left XYZ in a
perilous financial situation, and its management facing difficult operating problems, its management is experienced and capable.
for a contingent fee, the lawyer is entitled toreceive the specified fee only when and tothe extent the client receives payment.” Seealso In re Stochel, 792 N.E. 2d 874 (Ind.2003); Sayble v. Feinman, 76 Cal. App. 3d509 (1978); and Cal. State Bar Op. 1994-135. However, while the restatement andother sources consider the lawyer’s collectionright in the absence of a fee agreement tothe contrary, we are not aware of any civilor disciplinary opinion or advisory ethicsopinion that directly addresses the questionof whether a contingent fee lawyer may enterinto a fee agreement that gives the lawyerthe first proceeds of any recovery, up to thefull amount of the lawyer’s agreed fee, inorder to shift to the client the risk that thedefendant might be financially unable to sat-isfy any resulting settlement or judgment.We will address that issue in this opinion.Fee Negotiations and Agreements. A lawyer’sfee negotiation with a client generally is anarm’s-length transaction in which the lawyeris entitled to act to advance and protect hisor her own interests. See, e.g., Cotchett, Pitre& McCarthy v. Universal Paragon Corp.,187 Cal. App. 4th 1405, 1421 (2010); Ram -irez v. Sturdevant, 21 Cal. App. 4th 904, 913(1994); and Setzer v. Robinson, 57 Cal. 2d213, 217 (1962).1
However, there are limitations on a lawyer’sability to negotiate a fee agreement. With re -
spect to a contingent fee agreement, the firsttwo restrictions are that the fee agreementwill be enforceable only if it fully complieswith the requirements of Business & Profes -sions Code §6147 and is reasonably under-standable to the client. The latter prerequisitefollows from the rule that any lack of claritywill be read against the lawyer, at least if thelawyer drafted the agreement. See, e.g.,Alderman v. Hamilton, 205 Cal. App. 3d1033, 1036-37 (1988), which states the rulethat a fee agreement must be “fair, reasonableand fully explained to the client” (“explained”means that it must be fully stated and under-standable, not that the lawyer has an obligationto provide legal advice to someone who is notyet a client2). The Statement of Facts showsthat Lawyer has met both of these standardsin her fee agreement with XYZ.Illegal and Unconscionable Fees. The thirdand fourth limits on a lawyer’s fee agreementare stated in California Rules of Pro fessionalConduct, Rule 4-200: “(A) A member shallnot enter into an agreement for, charge, orcollect an illegal or unconscionable fee.”(emphasis added) Examples of an “illegal”fee agreement under Rule 4-200(A) includeone that violates 28 USC §2678 (making ita federal crime to enter into a contingent feeagreement for handling claims under theFederal Tort Claims Act for a fee in excessof statutory limits), one that attempts to pre-
vent the federal district court from exercisingits authority to determine the reasonablenessof fees in an action under 42 USC §1983(Matter of Yagman, 3 Cal. State Bar Ct. Rptr.788, 1997 Calif. Op. LEXIS 8 (Rev. Dept.1997)), taking fees in a bankruptcy matterwithout permission of the federal bankruptcycourt (Matter of Phillips, 2011 Calif. Op.LEXIS 22 (Rev. Dept. 2011)), and any feeswhen engaged in the unauthorized practiceof law (Matter of Wells, 2005 Calif. Op.LEXIS 9 (Rev. Dept. 2005)). There is nostatute, rule, or case law that would makeillegal the contingent fee agreement that isthe subject of this opinion.
The concept of “unconscionable” underRule 4-200(A) is more complex. A fee canbe unconscionable without respect to its sizewhen the fee is arrived at by some form ofdishonesty or overreaching by the lawyer.This was described as follows in Herrscherv. State Bar, 4 Cal. 2d 399, 402 (1934): “Inthe few cases where discipline has beenenforced against an attorney for chargingexcessive fees, there has usually been presentsome element of fraud or overreaching onthe attorney’s part, or failure on the attorney’spart to disclose the true facts, so that the feecharged, under the circumstances, constituteda practical appropriation of the client’s fundsunder the guise of retaining them as fees.”(citations omitted) An example of the Herrs -
Los Angeles Lawyer June 2015 41
42 Los Angeles Lawyer June 2015
cher kind of unconscionability is found inMatter of Van Sickle, 2005 Calif. Op. LEXIS3 (Rev. Dept. 2005). There, a lawyer agreedto represent a client on a contingent fee basisas the replacement for the client’s prior con-tingency fee lawyer in the same matter. Thesecond lawyer’s fee was to be an unremarkable35 percent, but the fee agreement was heldto be unconscionable because he failed to dis-close to this client that this fee would be inaddition to any fee payable by the client toher prior lawyer. There is nothing in theStatement of Facts that suggests such a vio-lation because the surrounding facts wereknown fully to XYZ, and Lawyer did nothide or misrepresent any fact or any aspectof the fee agreement.
More commonly, a fee can be uncon-scionable from its size alone: “[I]f a fee ischarged so exorbitant and wholly dispropor-tionate to the services performed as to shockthe conscience of those to whose attention itis called, such a case warrants disciplinaryaction by this court.” Goldstone v. State Bar,214 Cal. 490, 498-99 (1931) (followed, e.g.,in Tarver v. State Bar, 37 Cal. 3d 122 (1984)(lawyer disbarred based, among other things,on charging an unconscionable fee). The“shock the conscience” standard is measuredby the nonexclusive list of factors set out inRule 4-200(B).
There is no known authority that wouldmake unconscionable under the “shock theconscience” standard a fee agreement thatshifts to the client the risk of limited collec-tability and thereby results in the lawyer’sreceiving compensation that is dispropor-tionate as measured by usual contingencyfee rates or when compared to any netamount received by the client. As stated inthe first sentence of Rule 4-200(A), the pro-priety of a fee normally is measured at thetime the fee agreement is made. See, e.g.,L.A. County Bar Op. 518 (2006). The ruleis the same in the civil context. See, e.g., inBrobeck, Phleger & Harrison v. Telex Corp.,602 F. 2d 866, 875 (9th Cir. 1979) (applyingCalifornia law), cert. denied, 444 U.S. 981(1979) and Cetenko v. United CaliforniaBank, 30 Cal. 3d 528, 532 (1982). The re -quirement that the measurement be at thetime the fee agreement is made is consistentwith general principles of contractual un -conscionability. Yerkovich v. MCA, Inc., 11F. Supp. 2d 1167, 1173 (C.D. Cal. 1997)and Civ. Code §1670.5. Because of this rule,the eventuality that Lawyer receives mostor even all of the recovery does not factorinto the unconscionability analysis. Rather,the inquiry must be whether the facts knownwhen the fee agreement was made requirethe conclusion that the risk-shifting device
was unconscionable.In other circumstances, such as hourly fee
arrangements in which the amount of anattorney’s fee turns out to match or evenexceed the amount of the client’s recovery,and even where the client recovers nothing,the fee agreement does not become uncon-scionable simply because the client receivesa small recovery or none at all. The same istrue when a lawyer represents a losing defen-dant in litigation or when a transactionallawyer represents a client in an unconsum-mated deal that therefore has no financialreward for the client. Likewise, in the con-tingent fee context the amount of contractualattorney fees might result in little or no netrecovery to the client.
CONCLUSION
To the extent a lawyer’s fee is contingenton the outcome of a representation, thelawyer invests time and other resources withknowledge that he or she might earn littleor no fee for a host of possible reasons.These include, among others, the client’shaving misrepresented or misunderstoodthe facts on which the lawyer decided toaccept the representation, changes in thelaw governing the matter, and the unavail-ability of witnesses or other evidence. Wherea lawyer and client recognize the additionalrisk that there might be a successful outcome,but only a limited recovery because of thepotential defendant’s financial condition,they can shift that risk in whole or part tothe client with informed consent that isbased on a full sharing by the lawyer ofpertinent information known to the lawyer.Where a lawyer’s fee agreement would nothave been unconscionable had the matterresolved in a financial favorable manner forthe client, it does not become unconscionableby reason that the defendant later defaultsin satisfying a judgment or contractual set-tlement obligation, or negotiates a settlementlimited by its financial weakness, so thatthe amount actually obtained by the lawyer’sclient is reduced or nonexistent.
This opinion is advisory only. The com -mittee acts on specific questions submittedex parte, and its opinion is based on the factsset forth in the inquiry submitted. n
1 A lawyer does not engage in a business transactionwith a client when entering into an agreement for anhourly or flat fee or, as is the case here, a contingencyfee agreement, and the business transaction rule, Rule3-300 of the California Rules of Professional Conductdoes not apply in any of those situations. See L.A.County Bar Op. 496 (1998).2 It is only to a current client that a lawyer is obligatedto provide representation, but a fee is unconscionableunder Rule 4-200(A) of the California Rules ofProfessional Conduct if charged without the client’sinformed consent. See Matter of Goddard, 2011 Calif.Op. LEXIS 13 (Rev. Dept. 2011).
To learn more, visit www.lacba.org/c�
(formerly the Los Angeles County Bar Foundation)
Introducing
Working together for a more just LA
44 Los Angeles Lawyer June 2015
A YOUNG ATTORNEY BEGINNING a solo personal injury practicefaces unique challenges. Competition is steep. There is no shortageof competent plaintiff’s lawyers in the community, and the youngsolo must convince clients of his or her abilities despite the dearth ofdecades of experience. The desire to stand out in a crowded field, thepressures of the contingency fee business model and deferred com-pensation, as well as the challenge of overcoming the perceived lackof experience all can lead the young attorney to accept questionableclients or cases. It is vital for the young solo to seek the mentorship ofmore experienced counsel to help decide whether to say no. My officehas encountered some of the following scenarios,which are common but not exclusive to thenew personal injury attorney attempting tobuild his or her book of business.
The malingering client is one to avoid.Black’s defines “malingering” as one who feignssickness or disability to escape a task or duty.Many personal injury attorneys can recall rep-resenting a client who seemed to exaggeratehis or her injuries. A plaintiff’s lawyer must keep in mind the eggshellskull rule and zealously advocate on behalf of injured clients. It iscertainly not the function of a plaintiff’s attorney to minimize ordownplay a client’s injuries. Nevertheless, if it becomes evident thatthe client is exaggerating his or her condition, ethical considerationsmay incline the attorney toward ceasing the representation. At theminimum, discussing the facts of the case with a more seasoned plain-tiff’s lawyer may be in order for the young solo confronted with thissituation.
The Untruthful Client
Clients are occasionally untruthful. Whether this is intentional ornot depends on the facts of each particular case. For example, aclient who was recently injured in an automobile accident claimedthat the adverse driver ran a red light. Upon reviewing the trafficcollision report, however, it became apparent that it was the clientwho ran the red light, which was confirmed by three independentwitnesses at different vantage points in the intersection. When theclient remained unconvinced by this evidence and suggested in itsplace a wide-ranging conspiracy to assign the blame to him, experi-enced counsel advised me to withdraw from the matter. While itmay cause a new attorney some dismay to turn down a case, bydoing so the attorney can avoid litigating a case that is likely toyield a poor result for the client and the attorney.
Another client it may be better to avoid is one who argues aboutfees. Most attorneys who work on contingency will agree to takebetween 331⁄3 to 50 percent of the total recovery or some variationthereof. When preparing the contingency fee agreement, the attorneyshould bear in mind Business and Professions Code Sections 6147and 6148. At the outset of representation, the attorney must explainthe contingency fee to the client to avoid confusion. The advice of
solo practice guru Jay Foonberg comes to mind. He advises that theclient who disputes your fee before the case is completed is the sameclient who will dispute your fee after the case is completed.
Another warning sign is the client who discusses the case withother attorneys after engaging your firm. Clients sometimes wish todiscuss their case with other attorneys they meet. This is human.The attorney who represents the client, however, should make itclear to the client that the other attorney’s advice is not what controlsthe outcome of the case. If the client habitually seeks the opinion ofother attorneys and second-guesses his or her own attorney, it may
be advisable to withdraw from the representation or to refer thecase to other counsel. Many attorneys will gladly pay referral feesprovided that the rules of Professional Conduct (2-200) are fol-lowed.
Similarly, clients tend to “lawyer shop” and interview severallawyers before making a decision on whom to hire. An importantquestion the young solo should ask is whether the client has inter-viewed other lawyers about the case. One should strive to learn whyprior interviewees might have rejected the client’s case. Many larger,more-established personal injury firms will turn down smaller cases,so one should not automatically reject a new case if the client saysthat other firms have done so. The young solo is uniquely situatedto accept smaller personal injury cases that are not as expensive tolitigate. One firm’s crumbs may very well be another firm’s loaf.
Just as there are clients to avoid, there are also cases that maycause a new plaintiff’s attorney to think twice. Medical malpracticecases, for example, are notoriously difficult. They are extremelyexpensive to litigate and are often beyond the financial means of anewly established solo practice. If one must accept a medical mal-practice case, consider partnering with a more established firm thathas the resources to help litigate the case.
The practice of law takes decades to improve and perfect. Theyoung attorney just embarking on the rewarding work of representinginjured plaintiffs should remember this as he or she develops a clientbase, builds a book of business, and accumulates more experience.The young solo should never discount a gut feeling as to the likelihoodof success in each particular case. Remember that just as the client isinterviewing you, you are interviewing the client. With persistenceand determination, the young solo can be sure that success awaits. n
closing argument BY MICHAEL RUBINSTEIN
The Types of Clients a New Solo Practitioner Should Learn to Avoid
The young solo should never discount a gut feeling as to the
likelihood of success in each particular case.
Michael Rubinstein practices personal injury and consumer law in Los Angeles.
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