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August 1998 
Vol. 4 No. 8 ISSN 1087-6219
Copyright and Trademark Notice | Disclaimer
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The California Supreme Court has ruled that supervisors are not personally liable for discrimination under the Fair Employment and Housing Act (FEHA), or for common law wrongful discharge. The ruling reversed a decision by the First District Court of Appeal, which was discussed in the October 1997 issue of Appellate Decisions Noted. The decision brings California law in line with the prevailing interpretation of federal laws against discrimination.
FEHA prohibits “an employer ... or any other person” from harassing an employee for an unlawful reason, but prohibits only “an employer” from engaging in unlawful discrimination. Cal. Gov't Code § 12940(h)(1). It defines “employer” as “any person regularly employing five or more persons, or any person acting as an agent of an employer.” Cal. Gov't Code § 12940(a).
There is a fundamental distinction between harassment and discrimination. Harassment consists of conduct outside the scope of necessary job performance, presumably engaged in for personal motives. By contrast, discrimination arises out of the performance of necessary personnel management duties. Supervisors must make personnel management decisions, some of which may turn out to constitute discrimination. They need not engage in harassing conduct that may turn out to be unlawful.
With that distinction in mind, the Court agreed with the decision in Janken v. GM Hughes Electronics, 46 Cal. App. 4th 55 (1996) that “the Legislature intended only to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer's policy.”
The Court did not express any opinion on the scope of an individual supervisor's liability for harassment. It also declined to comment on the scope of employer liability for discrimination and harassment.
Reno v. Baird, 1998 WL 396346 (Cal. Sup. Ct. Jul. 16, 1998).
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The California Supreme Court has upheld the dismissal of Dow Chemical from the coordinated silicone breast implant cases pending in the California state courts. Its toxicology research efforts in the 1940's and 1950's did not establish a negligence duty to those who eventually received breast implants. The liability of the related bankrupt entity that actually made and sold the implants was not before the Court.
Dow Chemical was responsible for several reports on the toxicology of silicone that were provided to the manufacturer of the breast implants in the 1940's and 1950's. Plaintiffs claimed that some of the reporting was inadequate. The first silicone breast implant operation occurred in 1962. By 1964 the implant manufacturer had its own staff of scientists.
California follows section 324A of the Restatement (Second) of Torts, which provides: “One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to [perform] his undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm, or (b) he has undertaken to perform a duty owed by the other to the third person, or (c) the harm is suffered because of reliance of the other or the third person upon the undertaking.”
When Dow Chemical conducted and reported silicone toxicology research, the risk of physical harm to plaintiffs was unforeseeable as a matter of law. It could not reasonably be concluded that Dow Chemical should have recognized that the research services were necessary for plaintiffs' protection.
Artiglio v. Corning Inc., 1998 WL 378284 (Cal. Sup. Ct. Jul. 9, 1998).
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The Second District Court of Appeal in Los Angeles has affirmed the verdict for City Council Member Nate Holden on the sexual harassment claims asserted against him by Marlee Beyda. The trial court correctly granted Holden's motion in limine to exclude evidence that Holden might have harassed other employees.
To establish sexual harassment, a plaintiff must prove that she viewed her environment as hostile. If she is not aware of harassment directed at others, conduct directed at them cannot create a hostile work environment. In this case, there was no proof that Beyda knew about the conduct that was the subject of the motion in limine.
The court cautioned that a plaintiff need not personally witness the harassment. A reasonable person may be affected by knowledge that co-workers are being sexually harassed in the workplace, even if she herself does not witness it.
Beyda v. City of Los Angeles, 1998 WL 378868 (Cal. Ct. App. Jul. 9, 1998).
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The Ninth Circuit has affirmed the dismissal of claims that the Gallo Winery infringed the trademark and trade dress of a competitor in the premium wine business. There was not a sufficient showing of distinctiveness to support the claims.
Kendall-Jackson Winery produces high quality mid-priced varietal wines. Its “Vintner's Reserve” wine featured a downward-pointing stylized grape leaf design using various shades of green, yellow, orange, red and brown. The labels included a Kendall-Jackson banner that intersected the leaf. It packaged the wine in “burgundy-style” and “bordeaux-style” bottles.
In 1995, Gallo introduced a line of premium wine called “Turning Leaf.” It packaged the wine in burgundy-style and bordeaux-style bottles, with labels that featured a downward-pointing, stylized grape leaf design in various shades of green, yellow, orange, red and brown.
Kendall-Jackson claimed that Gallo infringed its grape leaf trademark and the “trade dress” comprised of the overall look of its wine bottles with the labels. Both claims depended upon proof that the identified features were (1) distinctive and (2) non-functional, and that Gallo's actions created (3) a likelihood of confusion.
There are five categories of increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Using a grape leaf to identify wine could fall into the suggestive category, because the connection is not direct. A viewer must associate the leaf with a grape vine, a grape vine with grapes, grapes with wine. However, grape leaves have been used to identify wine for so long by so many bottlers that they have become generic emblems for wine. Therefore, Kendall-Jackson had no claim for infringement of a trademark in the grape leaf design.
The trial court submitted the trade dress claim to the jury, which found for Gallo. Gallo presented sufficient evidence from which a reasonable jury could have found that Kendall-Jackson's trade dress was not sufficiently distinctive. It also presented evidence that the look of Kendall-Jackson's wine bottles was functional. Granting it exclusive use of that look would put competitors at a significant non-reputation-related disadvantage.
Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 1998 WL 390795 (9th Cir. Jul. 8, 1998).
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The Ninth Circuit has affirmed a $376,000 jury verdict against two California state hospital administrators for searching a doctor's private office. The court rejected defendants' claim of qualified immunity.
Dr. Magno Ortega came under suspicion at Napa State Hospital in connection with the acquisition of a new computer through donations by other employees. Dr. Michael O'Connor, the executive director, and Richard Friday, the hospital administrator, commenced a lengthy investigation that involved several intrusive searches of Dr. Ortega's private office. Their investigators read private letters, and seized personal possessions. They stored the entire contents of the office in a special locked storage area to which Dr. Ortega did not have a key.
Dr. Ortega's civil rights lawsuit against the two administrators made its way to the United States Supreme Court. In 1987, the Court held that he had a reasonable expectation of privacy in his office, but that there were factual issues to be resolved about the purpose, justification and scope of the search. O'Connor v. Ortega, 480 U.S. 709 (1987).
On remand, the District Court instructed the jury that defendants were not liable if they had an objectively reasonable belief that the search was lawful, a “classic“ qualified immunity instruction. Defendants argued that the law regarding searches of public employee offices was not clearly established until the Supreme Court's 1987 decision in their case. Earlier Supreme Court decisions had conclusively established that employees have reasonable expectations of privacy in their offices. The application of that principle to government employees was well established by Court of Appeals decisions long before 1987.
Therefore, the state of the law at the time of the searches in 1981 was that a public employee had a reasonable expectation of privacy in his office. A public employer may only search an employee's office for work-related reasons, or to look for specific work-related misconduct, subject to the requirement that any search be reasonable in inception and scope.
Ortega v. O'Connor, 1998 WL 338018 (9th Cir. Jun. 26, 1998).
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Subsequent treatment of decisions reported on in earlier issues:
Aaris v. Las Virgenes Unified Sch. Dist. (July 1998 issue), now reported at 64 Cal. App. 4th 1112 (1998).
Astaire v. Best Film & Video Corp. (July 1997 issue), petition for certiorari filed (Jun. 25, 1998).
Craig v. State Bar of California (May 1998 issue), now reported at 141 F.3d 1353 (9th Cir. 1998).
Delew v. Wagner (June 1998 issue), now reported at 143 F.3d 1219 (9th Cir. 1998).
Johnson v. State of Oregon (May 1998 issue), now reported at 141 F.3d 1361 (9th Cir. 1998).
Oona R.-S.- v. McCaffrey (September 1997 issue), petition for certiorari filed (Jun. 19, 1998).
Ortega v. Pajaro Valley Unified Sch. Dist. (July 1998 issue), now reported at 64 Cal. App. 4th 1023 (1998), modified on denial of rehearing (Jul. 10, 1998).
Panavision International, L.P. v. Toeppen (May 1998 issue), now reported at 141 F.3d 1316 (9th Cir. 1998).
People v. Johnson (May 1998 issue), review denied (Jul. 8, 1998).
Quackenbush v. Superior Court (January 1998 issue), petition for certiorari filed (Jun. 22, 1998).
Reno v. Baird (October 1997 issue), superseded by 1998 WL 396346 (Cal. Sup. Ct. Jul. 16, 1998). The decision may no longer be cited. Cal. R. Ct. 976(d), 977.
Robison v. Six Flags Theme Parks Inc. (July 1998 issue), now reported at 64 Cal. App. 4th 1294 (1998).
Shulman v. Group W Prods., Inc. (July 1998 issue), time for grant or denial of rehearing extended to August 30, 1998.
Yeaw v. Boy Scouts of America (July 1997 issue), review dismissed and cause remanded (Jul. 8, 1998).
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