Tag Archive for: gina-och

Court Rejects Plaintiff’s Plea to Extend Negligent Infliction of Emotional Distress for Bystanders

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The role technology plays in negligent infliction of emotional distress claims was at the heart of a case successfully handled by Stephen K. Anderson and Gina E. Och. The case arose out of injuries allegedly sustained by Plaintiff Michaela Kellner in February 2007, when she slipped, or tripped, and fell down a set of stairs that she was descending on premises owned by Defendant California College of the Arts, which is located in Oakland, California.

Michaela Kellner was talking to her mother, Sheryl Kellner, on her mobile phone when the incident occurred. As a result, Sheryl Kellner claimed that she was “present” at the scene of her daughter’s fall, and sustained emotional distress premised on her status as a “bystander.” Prominent San Francisco plaintiff attorney Christopher Dolan argued that, with the advancement of technology, experiencing the injury of her daughter via a cell phone satisfied the requirements for Sheryl Kellner to be considered a bystander. Plaintiff used the example of people watching loved ones perish on television during the 9/11 attacks to support her argument.

In their Motion for Summary Judgment, Mr. Anderson and Ms. Och countered plaintiff’s argument with recent case law limiting the scope of negligent infliction of emotional distress based on a bystander theory. The basic elements, as set forth in Thing v. La Chusa, 48 Cal.3d 644, 663-664 (1989), are:

  • plaintiff must be closely related to the victim,
  • plaintiff must be present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim, and
  • as a result, suffers emotional distress beyond that which would be anticipated in a disinterested witness.

The defense argued that, while Sheryl Kellner is closely related to Michaela Kellner as her mother, and although she heard some commotion over the telephone at the alleged moment of the incident, there was absolutely no showing that she had an appropriate level of sensory awareness at the scene of the injury-producing event, or that she was then aware that California College of Arts was causing her daughter harm. The Superior Court agreed with the defense and granted its Motion for Summary Judgment.

Summary Judgment Granted Based on Language of Liability Agreement

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Gina E. Och and Edmund G. Farrell, III successfully defended client, Motorcycle Safety Foundation (“MSF”) up to the Court of Appeal.
Plaintiff, Mary Stout, signed up for a motorcycle riding training course with MSF. Prior to taking the course, she signed an agreement, which contained a release of all claims arising out of injuries that may occur during the training. After injuring herself following a crash during the class, she sued MSF.

Ms. Och brought a Motion for Summary Judgment, based on the language of the release. The Court granted the motion, and plaintiff appealed the case. Mr. Farrell represented MSF in the Court of Appeal, which unanimously held that the release barred all claims.

As a Matter of FACTA: Your Next Customer May Take You to the Cleaners

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By: Gina E. Och

USLAW Magazine

Merchants beware. This statement may strike an unfamiliar chord, but with the passage of the Fair and Accurate Credit Transaction Act, 15 U.S.C. § 1681 et seq. (FACTA) in 2003, a single receipt for $1 can expose a merchant to anywhere from $100 to $1000 in statutory damages without proof of any actual harm, as well as punitive damages, attorney fees, and costs. As severe as this may seem, the potential implications are even more drastic. A FACTA non-complying receipt affords any consumer the ability to spearhead a class action lawsuit against, for example, the local dry cleaning establishment whereby the collective statutory damages could reach into the millions of dollars and potentially bankrupt that dry cleaners. Of course, Congress did not intend this result when it enacted FACTA in 2003; yet, it is a reality that merchants everywhere must now face.

BACKGROUND ON FACTA

In a society inundated by credit and debit transactions on a daily basis, the United States Congress passed FACTA without much fanfare or publicity. Congress enacted the new legislation as an amendment to the Fair Credit Reporting Act (FCRA) to aid in the prevention of identity theft, and credit or debit card fraud. Under FACTA, 15 U.S.C. § 1681c(g), beginning in December 2006, “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or expiration date upon any receipt provided to the cardholder at the point of sale or transaction.” This means that, since December 2006, all merchants, both large and small, in the United States have been required to comply with FACTA.

Congress recognized that proving actual identity theft; thus, proving actual damages for a FACTA violation, is not always easy to do. Moreover, requiring individual proof of the violation would effectively make such cases unqualified for class action certification. Consequently, any violation amounting to “willful” noncompliance with FACTA allows a consumer to recover statutory damages from $100 to $1,000 per occurrence without showing any actual harm to the consumer. In addition, a consumer may recover costs of suit, attorney fees, and punitive damages. The simplicity of FACTA’s provisions and the ease by which a consumer can recover money without showing actual injury, as well as the potential damages and fees associated with a technical violation of FACTA, have proven particularly attractive and seemingly well-suited for class action lawsuits.

In 2007, the United States Supreme Court clarified the meaning of “willfulness” under 15 U.S.C. § 1681n. In Safeco Ins. Co. of Am. v. Burr, the Supreme Court explained that “where willfulness is a statutory condition of civil liability, it is generally taken to cover not only knowing violations of a standard, but reckless ones as well.” However, because the term “reckless” is not self-defining, the Court further explained that recklessness necessitates “a known or obvious risk that was so great as to make it highly probably that harm would follow.” Therefore, a business willfully violates FACTA only if it: (1) knowingly and intentionally performs an act that violates FACTA; and (2) either (a) knows that the action violates the rights of the consumers or (b) recklessly disregards those rights.

THE IMPACT OF FACTA ON COMMERCE

Although the Supreme Court’s holding refines the boundaries on FACTA’s interpretation and application, the more relevant and unsettling issue pertaining to this statutory amendment is the amount and nature of damages imposed on FACTA violators. At first glance, the damages provision is straightforward and appears harmless. However, when the legislative purpose for FACTA is considered and compared to its application in the real world, it becomes apparent that the damages provision has led to results unintended by the Legislature.

The purpose of FRCA was to ensure that consumers would maintain the benefit of accurate credit reporting and have reassurance that their credit reports could not be accessed in an inappropriate manner. The bulk of its statutory framework generally reflects this purpose and pertains to the banking system, credit reporting techniques, and “unfair credit reporting methods” that serve to undermine the public’s confidence in commerce.

Given the number of sales transactions of any business, the pursuit of FACTA claims through the class action vehicle exposes businesses to enormous liability. While the vast majority of class action lawsuits tend to settle prior to trial, not all businesses can survive the typical class action lifespan. Most large scale businesses have the financial capabilities to weather the storm of a class action; however, smaller businesses are often not financially equipped to carry the same burden. As a consequence, FACTA claims unduly burden smaller businesses to a greater extent than their larger counterparts. Additionally, because of the number of sales transactions during any given time period, the potential damages associated with a $1 receipt for a cup of coffee may be greater than those damages associated with a $50,000 receipt for an automobile purchase. A small business, therefore, can reach the brink of financial ruin with a single FACTA class action.

Not surprisingly, within the first quarter of its passage, courts across the country experienced an onslaught of FACTA-related class action lawsuits against unwitting merchants, ranging from national retailers to small mom and pop stores and restaurants, alleging willful violations of the Act. By the end of 2007, approximately 130 lawsuits were filed in California alone, and nearly 100 others in courts in Florida, Illinois, Kansas, Maryland, Nevada, New Jersey, and Pennsylvania. A survey of twenty-one FACTA class action lawsuits in California, for example, revealed that the potential classwide statutory damages in these cases alone (not even including the statutory attorney fees) collectively range from $4 billion to almost $40 billion.

In light of these class action lawsuits and the putative, financial exposure to businesses, President George W. Bush signed an amendment to FACTA in 2008. Specifically, the Credit and Debit Card Receipt Clarification Act of 2007 declares that any person who prints an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction, but otherwise complied with FCRA requirements for such a receipt, shall not be in willful non-compliance by reason of printing such expiration date on it. Congress passed this amendment after coming to the conclusion that a consumer’s identity cannot be procured from credit card’s expiration date. This amendment certainly quelled the number of FACTA-related class action lawsuits in the country, but did not end them.

RECOMMENDATIONS FOR PREVENTING POTENTIAL LITIGATION

Identity theft is a serious problem that plagues the American consumer. According to the FTC, each year over 9 million identities are stolen in the United States. In its totality, FACTA is well intended and evidence presented to Congress shows that disclosure of more than five digits of any credit card or debit card receipt may allow for identity theft. However, despite its good intentions, when class action litigation is pursued in conjunction with FACTA violations, the staggering costs jeopardizes the livelihood of any business.

As Benjamin Franklin aptly stated, “an ounce of prevention is worth a pound of cure.” Accordingly, the first step any company should take is to indentify whether it is in fact violating the statute’s provisions. For example, the company should verify that its registers and electronic equipment are properly upgraded; thus, in compliance. Next, in the event that a company is found to be in violation of FACTA, it should immediately remedy any non-compliant point-of-sale equipment or software. These initial steps will mitigate the potential for lawsuits as well as mitigate any damages arising from these lawsuits, particularly any claim based on willfulness.

If the company is purchasing new point-of-sale equipment or software, it should require the distributor or manufacturer of the equipment to ensure that the equipment is fully compliant with FACTA and all other relevant regulations. By doing so, the equipment or software distributor or manufacturer may bear a portion of liability and litigation costs. Additionally, prior to purchasing new software or equipment, any company would be wise to seek indemnification or to be added as an additional insured on the distributor’s or manufacturer’s insurance policy.

CONCLUSION

Given today’s economy, survival for the typical “mom and pop” corner shop is already precarious. While the recent amendment and judicial opinions have taken some of the sting out of FACTA-related class action lawsuits, the continued filings of these claims will have lasting effects on the small business community and the U.S. economy. Imposed damages of hundreds of millions of dollars may result in companies filing for bankruptcy or closing their doors. This will inevitably lead to job losses and higher unemployment. Even those companies who evade bankruptcy will undoubtedly pass their costs onto the consumers in the form of higher prices at the register. In the end, everyone, even the FACTA claimant, will suffer some form of economic harm. So, the next time a consumer swipes his or her credit card, the merchant should beware.

Murchison & Cumming Hiring Committee Member to Speak out on Diversity

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Gina E. Och, partner and Hiring Committee team member for Murchison & Cumming, LLP, is scheduled to be a panelist for the Beverly Hills Bar Association’s (BHBA) Diversity in Law Firms seminar at the Beverly Hills Country Club on May 21, 2009. The seminar, conducted by BHBA’s newly formed Diversity Committee, will focus on strategies for attorney career growth for minorities, women and immigrants. The panelists will be discussing ways in which law students can use their diversity to further their careers, and lawyers can increase client development during a time when law firms are facing more competition, fewer clients, shrinking markets, and fallout from the economic recession. As a panelist, Ms. Och will address issues such as the challenges and opportunities faced in career development, family friendly work policies in the office, and responding to discrimination in the workplace.

Ms. Och, a Guatemalan immigrant, has sought to set herself as an example for Latina professionals in the private sector and legal community during her years as both a law student and an attorney. At UCLA Law School, she served as Managing Editor of the Chicano-Latino Law Review, was a member of the Women’s Law Journal, and helped establish the California La Raza Law Students group. As a member of Murchison & Cumming’s Hiring Committee, Ms. Och continues her efforts to bring diversity to the law firm and legal field, and to advise her peers on the topic through events promoting diversity.

 

About Murchison & Cumming, LLP

With a firm history dating to 1930, Murchison & Cumming, LLP is a premier civil litigation firm with five offices in California and Las Vegas, whose attorneys specialize in the defense of domestic and international businesses, insurers and individuals, at trial and on appeal. The Firm’s attorneys also handle employment matters and business transactions. For additional information, please visit our website at www.murchisonlaw.com.

Complex Medical Malpractice Matter Thrown Out of Court

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Guy R. Gruppie and Gina E. Och recently won  summary judgment for their physician client in a complex matter where plaintiffs alleged medical malpractice and a variety of claims, including fraud and Unfair Competition Law (“UCL”) claims.

Plaintiffs were a young married couple. One day, the husband experienced severe pain in one of his testicles. He deferred seeking medical attention before finally going to defendant’s urgent care clinic, even though a major medical center’s emergency room was even closer to his house. He was seen by a physician assistant who could not rule out testicular tortion with certainty because ultrasound was not available. Instead, he prescribed medication, which did provide the patient with some relief for a few days, before he again began experiencing severe pain.

At that point, he went to a hospital emergency room where various tests diagnosed tortion and revealed  that tissue in the area had essentially died, making surgical removal necessary.

Plaintiffs sued the clinic, its owners, the lead physician and physician’s assistant. M&C’s client was not present on the day the husband sought evaluation and treatment at the urgent care clinic, and another physician was on duty partly for the purpose of supervising the physician assistant. That evidence, in addition to the inability of plaintiffs to submit any admissable evidence in support of the fraud and UCL allegations, led to the granting of summary judgment by a three-judge binding arbitration panel, headed by former Orange County Superior Court Judge, Robert Jameson.

Racquetball Case Bounced Out of Court

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Plaintiff was injured while playing racquetball on a court at the Lake Arrowhead Resort. Plaintiff claimed that he slipped and fell on a slippery substance causing him to lose his balance and strike his head against the back wall of the court. As a result of the incident, plaintiff alleged brain damage, including a loss of memory. Plaintiff contended that the Resort negligently maintained the racquetball floor resulting in a dangerous condition unknown to plaintiff.

The Resort contended that plaintiff impliedly assumed the risk of injury while playing racquetball and, further, that there was no dangerous condition that caused plaintiff’s fall and injuries. Rather, the evidence established that plaintiff merely tripped over his own feet.

On July 31, 2008, the Superior Court for the County of San Bernardino granted summary judgment in favor of defendants, finding that plaintiff assumed the risk of injury and that he could not establish the existence of a dangerous condition. Guy R. Gruppie and Eric P. Weiss led the defense team’s efforts, with support from Gina E. Och and Jonathan S. Dennis.

Liability Waiver is Basis for Victorious Summary Judgment

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A Los Angeles Superior Court judge recently granted defendants’ Motion for Summary Judgment in a case which tested the legal sufficiency of a waiver executed by plaintiff Mary Stout before she took motorcycle riding classes at the Nelson Motorcycle Training Center in Palmdale. Guy R. Gruppie, Gina E. Och and Nanette G. Reed successfully represented defendants.

The court determined as a matter of law that the waiver signed by Ms. Stout completely barred the negligence lawsuit that she made against defendant for injuries that she sustained while riding a motorcycle during training as she agreed to assume all risks attendant with motorcycle riding in the event of any accidents including her single motorcycle accident.

Plaintiff alleged that the training course was negligently designed and that the design caused her accident.

Discovery established that defendants’ negligence, if any, did not rise to the level of gross negligence and thus the Waiver and Indemnification Agreement signed by Ms. Stout expressly and voluntarily released defendants of liability.

Stout, a 51 year old court reporter, claimed to have sustained trauma to her left knee and was diagnosed with a contusion microfracture to her left medial femoral condyle. She claimed $2,000 in medical expenses, $33,000 in future medical expenses, and $77,000 in current and future lost earnings and sought an additional $200,000 for pain and suffering.

Although the court’s ruling was consistent with California law and national appellate rulings regarding the validity of waivers in the context of sport and recreational activities, Ms. Stout has filed a Notice of Appeal.

Mitsubishi Cement Corporation Victorious In Major Personal Injury Action – Summary Judgment Granted

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Senior Partner Guy R. Gruppie, Partners Corine Zygelman and Gina E. Och and Associate Adrian J. Barrio have successfully defended Mitsubishi Cement Corporation in a major personal injury action filed on behalf of a truck driver who was seriously injured in a tractor-trailer accident.

Judge Joseph E. DiLoreto, of the South District of the Los Angeles Superior Court, granted Mitsubishi Cement’s summary judgment motion, finding as a matter of law that Mitsubishi Cement did not cause or contribute to the incident that occurred after the driver had picked up a load of cement at a facility owned by the defendant. The driver lost control of the tractor-trailer as it rounded a curve, leading to a crash where the driver suffered serious and alleged permanent injuries with medical bills reaching into the hundreds of thousands of dollars.

Mitsubishi Cement submitted undisputed evidence that its loading facility at the Port of Long Beach contained electronic and computerized scales that included fail-safe devices to prohibit any tractor-trailer from leaving the facility in an over-loaded condition. Moreover, the moving party successfully argued that the same driver had made other prior load deliveries from the Mitsubishi Cement facility with bills of lading issued each time confirming the gross load of the vehicle was under the 80,000-pound cut off. As such, the court was able to conclude that factors other than the conduct of Mitsubishi Cement — including, quite possibly, the conduct of the driver himself — were substantial factors in the occurrence of the accident. At a pending trial against other defendants, plaintiffs are expected to seek a total award exceeding seven figures.

California’s Unfair Competition Law After Proposition 64

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By: Gina E. Och

California’s Unfair Competition Law (UCL), codified at Business and Professions Code section 17200, prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising….”1 Any person could sue under section 17200; thus, a plaintiff did not have to have “standing” to sue.2 Unfortunately, legislation originally meant to protect consumers and competitors began plaguing businesses, serving as a cash cow for some attorneys, and creating a surge in UCL litigation.

No case symbolized the fallout from UCL lawsuits more than the Trevor Law Group scandal in 2003.3 Specifically, the Trevor Law Group, a law firm, created and funded an alter ego, “consumer” organization called, Consumer Enforcement Watch Corp. (CEW).4 On behalf of CEW, it filed 24 lawsuits against thousands of mostly minority-owned and small businesses, namely automobile repair shops and restaurants, for violations already cited by regulatory agencies.5 The firm then sent letters to these businesses demanding settlement monies.6 The fee arrangement between the firm and CEW granted the firm up to 90 percent of any financial recovery.7 Because these businesses were small, most businesses decided to settle instead of going through the expense of litigation.8.

Eventually, the Trevor Law Group came to the attention of state authorities. The State Bar petitioned to disbar three attorneys in the Trevor Law Group.9 Faced with disbarment, in July, 2003, the three attorneys resigned with 36 counts of misconduct.10 In an ironic twist of fate, the State’s Attorney General’s Office filed a complaint against these attorneys pursuant to section 17200.11 The State seeks to recover a $1 million fine and restitution on behalf of the businesses that settled with the law firm.12.

Prompted by this scandal,13 on November 2, 2004, California voters passed Proposition 64.14 This initiative amended the UCL in two significant ways: (1) it prohibited plaintiffs from filing UCL lawsuits without demonstrating their standing to sue; and (2) it prohibited the filing of “representative actions” as a substitute for the class action process. Now, in order to meet the new standing requirement, a plaintiff must show he “has suffered injury in fact and has lost money or property as a result of such unfair competition.”15 Moreover, a plaintiff can only file a representative lawsuit as a “private attorney general” on behalf of the people of California if he meets the new standing requirement and complies with the procedures governing class actions.16.

Although Proposition 64 became effective on November 3, 2004, it is unclear whether Proposition 64 applies to cases filed before November 3, 2004. By the end of February, 2005, one appellate court held that Proposition 64 did not apply retroactively.17 Four other opinions found Proposition 64 applied retroactively.18 One case stated that the plaintiff should be able to substitute in the lawsuit an affected plaintiff with standing.19 Another case stated that if, after a hearing, no affected plaintiff could be found, a substitution could not be made.20 Still yet, another case, determined that the plaintiff should have leave to amend the complaint to meet the Proposition 64 requirements.21 The California Supreme Court has, thus far, accepted only one of these cases for review.

It is also unclear whether the standard of pleading and proof of the “false” business practice or act prong under section 17200 will need to be revised. Before Proposition 64, a business practice was “fraudulent” if “members of the public are likely to be deceived.”22 Thus, a plaintiff did not have to establish intent, scienter, actual reliance, or damage; even actual deception was not necessary. Yet, after Proposition 64, courts may have to decide whether the current “fraudulent” standard can be reconciled with the standing requirement.

In all, the defense attorney and client should evaluate any pending or new UCL cases, and determine whether a demurrer, motion for judgment, or motion to strike should be filed. In the appropriate cases, until the California Supreme Court concludes otherwise, one should argue that Proposition 64 applies retroactively. Moreover, one should attack the complaint where the plaintiff lacks the standing to sue; paying particular attention where the “fraudulent” business practice and act prong is alleged. Finally, where the plaintiff is suing in representative capacity and fails to meet section 17203, those private attorney general allegations should be stricken from the complaint.

Accordingly, gone are the days when a plaintiff could sue without having to see the advertisement, to purchase the product, or to be injured by the business act.

Motion For Summary Judgment Successful On Recreational Use Immunity suit v. Utility

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Murchison & Cumming, LLP successfully obtained a motion for summary judgment in a personal injury case, the matter having been handled by Friedrich W. Seitz, Kenneth H. Moreno and Gina E. Och.

Two minor girls were injured when one of the girls contacted electrical equipment at a substation owned by Southern California Edison Company (“Edison”). The two girls lived in the neighborhood next to the substation. On the day of the incident, the girls were playing ball and the ball flew over the wall of the substation and into a fenced-off area containing the electrical equipment. The two girls decided to retrieve the ball and climbed onto the substation’s surrounding brick wall and over into the substation. One of the girls then climbed a locked, chain link fence, measuring 6 feet tall, and jumped down into the area with the electrical equipment. As she was reaching for the ball, she made contact with the electrical equipment. Warning signs and “Do Not Enter” signs were posted around the perimeter of the substation, inside the substation, and around the perimeter of the chain link fence. Additionally, barbed wire, chain link fencing, and spikes were affixed to the outside brick wall.

Plaintiffs sued Edison for negligence and premises liability. In response, the defense filed a Motion for Summary Judgment based on a statutory immunity codified at Civil Code section 846, commonly known as the “recreational use immunity.” The immunity is intended to prohibit any negligence claims against property owners by uninvited, non-paying recreational users. Edison argued that the recreational use immunity applied in this instance because it met the two elements of section 846: (1) it owned the substation; and (2) plaintiffs’ injuries resulted from their entry into the premises for a recreational purpose. Based on the legislative purpose, the statutory language, and current case law, the Court granted the defense’s summary judgment motion. The Court found that not only did Edison own the substation, but that the girls’ actions were included in the statutory definition of “recreation.” Moreover, the Court held that none of the three statutory exceptions to the recreational use immunity applied. Namely, there was no evidence that (1) Edison willfully or maliciously failed to guard or warn against a dangerous condition on its property; (2) Edison did not grant the plaintiffs permission to enter the property in exchange for a paid fee; and (3) Edison did not expressly invite plaintiffs to come upon its property. Accordingly, plaintiffs’ entire complaint was barred and Edison was not liable as a matter of law.