July 1995 Vol.1 No.1 ISSN 1087-6219
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In This Issue

• Ninth Circuit holds lawyer's criticism of judge protected by First Amendment
• Court of Appeal continues trend favoring summary judgment motions in two recent cases.
• Employer may defeat wrongful termination claim with "after-acquired" evidence of wrongdoing
• Court of Appeal overturns punitive damage award on due process grounds
• Ninth Circuit upholds Judge Wilson's application of his "rocket docket" rules
• UPDATES

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Ninth Circuit holds lawyer's criticism of judge protected by First Amendment

The Ninth Circuit has held that the First Amendment protects a lawyer's "disparaging remarks" about a judge. The court reversed a decision by the federal district court in Los Angeles, which had suspended the lawyer for two years.

Stephen Yagman is an outspoken civil rights attorney, who has tangled with sitting judges a few times. After Judge Keller sanctioned him, Yagman made several disparaging statements. Among other things, Yagman said that the imposition of sanctions against himself and two other Jewish attorneys was "evidence of anti-Semitism," and that Judge Keller was "drunk on the bench."

The Ninth Circuit held that lawyers' factual statements about judges are protected, unless the statements are proved false, and lack a reasonable factual basis. A court may not impose sanctions for statements of opinion, unless the opinion implies a false assertion of fact.

Yagman's statement about anti-Semitism was merely an opinion about the "evidence" that he cited. The "drunk on the bench" statement did not warrant sanctions, because the disciplinary committee had presented no evidence to show that it was false.

The decision closed with the following quotation from Justice Black's opinion in Bridges v. California, 314 U.S. 252, 270-71 (1941):

"The assumption that respect for the judiciary can be won by shielding judges from published criticism wrongly appraises the character of American public opinion. For it is a prized American privilege to speak one's mind, although not always with perfect good taste, on all public institutions. And an enforced silence, however limited, solely in the name of preserving the dignity of the bench, would probably engender resentment, suspicion, and contempt much more than it would enhance respect."

Standing Committee on Discipline v. Yagman, 95 Daily Journal D.A.R. 6873 (9th Cir. May 31, 1995).

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Court of Appeal continues trend favoring summary judgment motions in two recent cases.

In two recent decisions by Justice Turner, the Court of Appeal in Los Angeles has provided encouragement for proponents of summary judgment motions. These decisions together with an earlier decision by the same court and one by the California Supreme Court suggest that California is close to adopting the much-admired federal summary judgment standard.

Admirers of the federal procedure have pointed to the United States Supreme Court's decision in Celotex Corp. v. Catrett, 477 U.S. 317 (1986) as an example of its benefits. In Celotex, the plaintiff claimed that asbestos manufactured by the defendant had caused her husband's death. However, in her responses to the defendant's interrogatories, she was unable to produce any evidence to show that her husband had ever been exposed to the defendant's product. The Supreme Court ruled that the defendant satisfied its summary judgment burden by simply pointing to the absence of evidence to support plaintiff's claim. The defendant did not have to produce evidence of its own to negate plaintiff's claim.

In Montrose Chemical Corp. v. Superior Court, 6 Cal. 4th 287 (1993), the California Supreme Court said that 1993 amendments to the summary judgment statute had brought California into conformity with at least certain aspects of the federal standard for plaintiffs' summary judgment motions. In Union Bank v. Superior Court, 31 Cal. App. 4th 573 (1995), the Court of Appeal went further, and ruled that a defendant could meet its summary judgment burden by pointing to "factually devoid" written discovery responses from the plaintiff. Relying on Celotex, the court overruled its earlier decision to the contrary in Barnes v. Blue Haven Pools, 1 Cal. App. 3d 123 (1969).

The two most recent cases continue the favorable trend. In the FSR Brokerage case, the Court of Appeal relied on the Union Bank case to hold that plaintiffs had not overcome defendants' showing in support of their motion for summary judgment. It also ruled that the trial court had improperly denied summary judgment to allow the plaintiffs additional time to conduct discovery. While the summary judgment statute authorizes continuances, it is not enough for a party just to state that it has not conducted discovery. A party seeking a continuance must identify specific material facts that it hopes to develop through that discovery, and explain why there has not been adequate time to obtain the discovery. Plaintiffs in this case did neither.

In the Villa decision, the court again reaffirmed its statements in the Union Bank case. It then determined that the defendant had not met its summary judgment burden in its own moving papers, because the deposition testimony that it submitted did not negate the possibility of a conspiracy. However, plaintiff's opposition contained evidence that did negate that possibility. The summary judgment statute provides that summary judgment "shall" be granted if "all the papers" show that there is no triable issue. Therefore, the trial court properly relied on plaintiff's evidence to grant summary judgment for the defendant.

Villa v. McFerren, 35 Cal. App. 4th 733 (1995); FSR Brokerage, Inc. v. Superior Court, 35 Cal. App. 4th 69 (1995).

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Employer may defeat wrongful termination claim with "after-acquired" evidence of wrongdoing

In the second California decision to address the doctrine of after-acquired evidence in wrongful termination lawsuits, the Second District Court of Appeal in Los Angeles has ruled that a couple who lied about past criminal convictions on their employment applications may not pursue wrongful termination claims.

In 1983, Kendra and Ronald Camp pled guilty to two felony counts involving fraud on a federally insured bank, for which they served a year in prison. After their release from prison, the law firm of Jeffer, Mangels, Butler & Marmaro hired the Camps as legal secretaries. They falsely stated on their job applications that they had never been convicted of a felony. In 1990, Jeffer Mangels became a contractor for the Resolution Trust Corporation. In order to represent the RTC, Jeffer Mangels periodically had to certify that none of its employees had ever been convicted of a felony.

Jeffer Mangels terminated the Camps' employment in March 1991 for reasons unrelated to the statements on their employment applications. The Camps filed a lawsuit alleging, among other things, that the firm had terminated their employment in violation of public policy.

When Jeffer Mangels learned during discovery that the Camps had been convicted of felonies, it argued that this "after-acquired evidence" barred their wrongful termination claims. The trial court agreed that the wrongful termination claims were without merit. It found that Jeffer Mangels would have discharged the Camps in any event.

In affirming the grant of summary judgment, the Court of Appeal discussed two recent decisions in which courts had refused to dismiss wrongful discharge claims based on after-acquired evidence. In McKennon v. Nashville Banner Publishing Co., 115 S. Ct. 879 (1995), the United States Supreme Court had held that a plaintiff could pursue an age discrimination claim despite after-acquired evidence of wrongdoing during the last year of her 30 years of employment with the employer. In Cooper v. Rykoff-Sexton, Inc., 24 Cal. App. 4th 614 (1994), the California Court of Appeal permitted the plaintiff to pursue a wrongful termination claim despite after-acquired evidence of false statements in his job application about his work history. In this case, the Court of Appeal did not disagree with the decisions in McKennon and Cooper. Instead, it decided that there should be a distinction where a job applicant used misrepresentations to obtain a job in violation of government-imposed requirements. "Since the Camps were not lawfully qualified for their jobs, they cannot be heard to complain that they improperly lost them," the court concluded.

Camp v. Jeffer, Mangels, Butler & Marmaro, 35 Cal. App. 4th 620 (1995).

Practice Tip: While the Camp case is good news for employers defending wrongful termination claims, it is not likely to apply to all cases involving after-acquired evidence. Rather, those cases that involve employee misconduct directly affecting eligibility for the job are the most likely candidates for dismissal based on after-acquired evidence. Nevertheless, counsel defending employers should always vigorously attempt to discover any misconduct by the plaintiff during his or her employment.

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Court of Appeal overturns punitive damage award on due process grounds

In one of the first cases to consider the impact of the United States Supreme Court's most recent ruling on punitive damage limits, the Fourth District Court of Appeal in San Diego has overturned a punitive damage award on due process grounds. The court held that the trial court incorrectly denied the defendant its right to "meaningful post-trial review," when it refused to consider a motion for a new trial.

In Honda Motor Co. v. Oberg, 114 S.Ct. 2331 (1994), the United States Supreme Court reversed a punitive damage award in an Oregon case. The Oregon constitution did not permit post-trial review of whether the amount of the award was excessive. That left too much to the unreviewable discretion of the jury, and violated the due process clause. The constitution requires "meaningful and adequate" review of the possible excessiveness of a jury's punitive damages award.

In the case before the Court of Appeal in San Diego, the trial court had refused to consider defendant's new trial motion that raised the excessiveness issue. (The trial court believed, incorrectly, that it had lost jurisdiction over the motion when defendant filed a notice of appeal.) Plaintiff argued that appellate review of the award would be sufficiently "meaningful and adequate" to satisfy Oberg's requirements.

The Court of Appeal noted that California law severely limits the scope of appellate review of punitive damages awards, particularly where the trial court has not considered the issue. Therefore, appellate review alone would not provide "meaningful and adequate" review. Oberg requires review by the trial court, which is in the best position to weigh all the evidence, and to determine whether the jury was influenced by passion and prejudice.

Fleming v. Imperial Corp. of America, 95 Daily Journal D.A.R. 7903 (Cal. Ct. App. June 16, 1995).

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Ninth Circuit upholds Judge Wilson's application of his "rocket docket" rules

In an en banc decision, the Ninth Circuit has affirmed the refusal of the federal district court in Los Angeles to continue a trial to allow discovery. The court determined that there could be no appealable error in such situations without a showing that the denial of discovery caused prejudice.

The district court judge, Stephen V. Wilson, had a standing order that counsel should ordinarily be ready for trial within three months of the filing of the first answer. Litigants commonly refer to this procedure as Judge Wilson's "rocket docket." In this case the first answer was filed on May 17, but plaintiff's counsel did not identify all the individual defendants until August 2. Counsel was participating in other trials through much of the summer. Therefore, he was unable to take any depositions of those individuals before the August 27 trial date. Judge Wilson refused to continue the trial to allow the depositions to go forward. Plaintiff lost at trial.

Initially, a divided three-judge panel of the Ninth Circuit ruled that plaintiff deserved a new trial. Martel v. County of Los Angeles, 34 F.3d 731 (9th Cir. 1994). The panel determined that Judge Wilson's standing order violated his court's local rules, which allowed for a more leisurely pace.

The en banc majority refused to consider the possible violation of the local rules, because plaintiff had not discussed the local rules in the district court or in his appellate briefs. The majority also did not decide whether the refusal to grant a continuance was an abuse of Judge Wilson's discretion. It affirmed the judgment, because plaintiff had not established a reasonable probability that the outcome would have been different if Judge Wilson had allowed the continuance. Plaintiff identified no facts that he hoped to gain through discovery that would have advanced his cause at trial.

The dissenters from the en banc decision (Judges Kleinfeld, Fletcher and Reinhardt) felt that it was too much to ask plaintiff to identify the facts that he would have obtained through discovery. A litigant should instead be able to establish prejudice by demonstrating the inability to collect material evidence, which the deposition testimony of the individual defendants certainly was.

The dissenters also felt that the rocket docket gave up too much justice for the speed that it gained. "Ever since Roscoe Pound said 'justice delayed is justice denied' some people have inferred that faster is always better. But too much speed as well as too much delay can deny justice. Speed of the litigation process should be managed so that the truth, not the speed, determines the outcome. One reason why 'the law's delay' is an ancient phrase is that fair resolution of a dispute takes time."

Martel v. County of Los Angeles, 95 Daily Journal D.A.R. 7000 (9th Cir. June 1, 1995).

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UPDATES

Subsequent treatment of decisions reported on in earlier issues:

Hilb, Rogal and Hamilton Ins. Services of Orange County v. Robb (June 1995 issue), now reported at 33 Cal. App. 4th 1812 (1995).

People v. Gionis (June 1995 issue), now reported at 9 Cal. 4th 1196 (1995), time for granting or denying rehearing extended (May 25, 1995).

Regents of the University of California v. Superior Court (June 1995 issue), now reported at 33 Cal. App. 4th 1710 (1995).

Resolution Trust Corp. v. Rossmoor Corp. (June 1995 issue), now reported at 34 Cal. App. 4th 93 (1995).

Spann v. Irwin Memorial Blood Centers (June 1995 issue), now reported at 34 Cal. App. 4th 644 (1995).

Todd v. Thrifty Corp. (June 1995 issue), now reported at 34 Cal. App. 4th 986 (1995).

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