May 1999 Vol. 5 No. 5 ISSN 1087-6219
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In This Issue

• “MovieBuff” trademark claim trumps “moviebuff.com” domain registration
• Arbitration agreements upheld in health care disputes
• Constitutional challenge to random urine tests survives motion to dismiss
• Judicial estoppel held not to bar ADA claim
• Police officer has no right to notice and hearing before ratification of hearing officer's recommendation to uphold demotion
• UPDATES

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“MovieBuff” trademark claim trumps “moviebuff.com” domain registration

The Ninth Circuit has instructed a federal district court to enjoin use of a domain name that infringes on a senior user's trademark. The underlying dispute involved two companies that provide searchable entertainment databases.

Brookfield Communications began offering software and services for entertainment industry professionals in 1987. It expanded into the broader consumer market for entertainment industry information in December 1993, using the “MovieBuff” trademark. It obtained California trademark registration for the mark in 1994. In August 1997, it began using “MovieBuff” in association with Internet-based products and services. It also applied for federal trademark registration, which issued in September 1998.

West Coast Entertainment, a national video rental store chain, obtained federal registration for “The Movie Buff's Movie Store” in 1991. That registration covered video sales and rentals. It registered the “moviebuff.com” domain with Network Solutions in February 1996. In November 1998, West Coast announced plans to launch an entertainment database web site at its domain. The district court denied Brookfield's motion for a preliminary injunction against West Coast's use of “MovieBuff” to market its services. The Ninth Circuit reversed.

Brookfield was the senior user of the “MovieBuff” mark, because it first associated the mark with Internet-based products and services in August 1997. West Coast did not do so until its November 1998 announcement. Its 1996 domain registration was not a sufficient commercial use of the mark to confer trademark rights.

There was sufficient likelihood of confusion to enjoin West Coast's use of the “moviebuff.com” domain and of the term “moviebuff” in any meta tags on its web pages. West Coast may still use the descriptive term “movie buff” with a space to describe a motion picture enthusiast.

Brookfield Communications, Inc. v. West Coast Entertainment Corp., No. 98-56918 (9th Cir. Apr. 22, 1999).

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Arbitration agreements upheld in health care disputes

The Riverside and the Santa Ana divisions of the Fourth District Court of Appeal have reversed orders denying enforcement of arbitration clauses contained in health care service plans.

In the Erickson case, the handbook for Aetna's Senior Choice health service plan stated that “[a]ny differences between you and [Aetna] (other than those subject to the Medicare Appeals Procedure) are subject to binding arbitration.” Donald Erickson sued Aetna for unlawfully declining to cover proton beam therapy for his prostate cancer. The superior court denied Aetna's petition to compel arbitration. The Court of Appeal reversed.

Health and Safety Code section 1363.1 requires that any agreement to arbitrate contain a clear statement about jury trial waiver immediately before the signature line. Aetna's agreement did not comply. However, in Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996), the Supreme Court ruled that the Federal Arbitration Act (FAA) precludes states from singling out arbitration provisions for suspect status. Since section 1363.1 imposed a special notice requirement not applicable to contracts generally, it is preempted by the FAA.

The Court of Appeal also rejected Erickson's argument that the provision was invalid under general contract principles. Although the clause “could have been clearer,” it was clear enough to be enforceable in light of the FAA's policy favoring arbitration.

In the Hollister case, Karen Hollister purchased a medical benefit plan from FHP, Inc. Ten years later she sought treatment from Jerry Benzl, who had contracted with an FHP-affiliated medical group. Dr. Benzl had Hollister sign an arbitration agreement. When Hollister sued for medical malpractice, Dr. Benzl sought to compel arbitration.

Hollister argued that Dr. Benzl was required to comply with the Health and Safety Code provisions regulating arbitration provisions in health care service plans. However, the statute only applied to health care service plans, and not to independent contractors for plans, like Dr. Benzl.

Erickson v. Aetna Health Plans of California, Inc., No. E021505 (Cal. Ct. App. Apr. 21, 1999); Hollister v. Benzl, 1999 WL 235652 (Cal. Ct. App. Apr. 20, 1999).

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Constitutional challenge to random urine tests survives motion to dismiss

The Ninth Circuit has reversed the dismissal of a challenge to random drug-testing for bus dispatchers and instructors. The complaint did not allege sufficient facts about the nature of the positions and the testing procedures to permit a decision on the pleadings.

The Los Angeles County Metropolitan Transportation Authority conducts random, unannounced testing for drugs and alcohol pursuant to federal law. A husband and wife, who were employed as a radio dispatcher and an instructor, respectively, challenged the MTA's program. They asserted that their jobs could not be considered “safety-sensitive,” that the testing was inaccurate, and that the program did not provide for employees who were extremely sensitive to invasion of their privacy.

Urine testing by government agencies is a search under the Fourth Amendment. If the agency does not have individualized reasonable suspicion for a test, the test's constitutionality depends on balancing the special needs of the government against the extent of the intrusiveness of the testing procedure.

In this case, the MTA had a legitimate concern with preventing accidents. However, there were no facts before the court to show that testing dispatchers and instructors (who did not get behind the wheel) was necessary to serve that interest. Further, it was not possible to determine how intrusive the testing was, nor how accurate it was.

The Gonzalezes might be able to prove facts that would show an unjustified invasion of their privacy. Therefore, the district court should not have dismissed the complaint.

Gonzalez v. Metropolitan Transportation Authority, 1999 WL 212229 (9th Cir. Apr. 14, 1999).

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Judicial estoppel held not to bar ADA claim

The Ninth Circuit has ruled that an award of state temporary disability insurance benefits did not bar the recipient's claim under the Americans with Disabilities Act (ADA). There were factual issues about whether the recipient could perform her job.

January Fredenburg worked for Contra Costa County as a mental health treatment specialist. The County placed her on leave after she was diagnosed as suffering from paranoia. When the County refused to allow her to return to work, Fredenburg applied for and received California disability benefits. Such benefits are only available to those who are unable to perform their regular and customary work. The state discontinued the benefits after six months when a psychiatrist found her fit to return to work. However, the County refused to take her back when she declined to undergo a fitness-for-duty examination. Fredenburg sued under the ADA.

The application for state disability benefits did not bar Fredenburg's ADA claim. Ninth Circuit decisions limit judicial estoppel to cases where a party's position is tantamount to a knowing misrepresentation. As a general rule, statements like those on Fredenburg's disability benefits application are just evidence to be considered with other evidence concerning a plaintiff's ability to perform her job.

In this case, Fredenburg was not attempting to mislead the court. She was simply reacting to changing circumstances.

The court also permitted Fredenburg to pursue a separate claim based on the fitness-for-duty examination. There were factual issues about whether the examination satisfied the ADA's requirement that medical examinations be job-related and consistent with business necessity.

Fredenburg v. Contra Costa County Dept. of Health Servs., 1999 WL 221854 (9th Cir. Apr. 19, 1999).

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Police officer has no right to notice and hearing before ratification of hearing officer's recommendation to uphold demotion

The San Diego division of the Fourth District Court of Appeal has ruled that neither the Brown Act nor the Due Process Clause confers a right to be heard in connection with deliberations on a hearing officer's recommended discipline decision.

The San Diego Police Department demoted Michael Bollinger for misconduct. He appealed the demotion to the Civil Service Commission. One of the Commissioners served as the hearing officer for a three-day evidentiary hearing. The hearing officer filed factual findings and a recommendation that the demotion be upheld. The Commission adopted the hearing officer's recommendation in a closed session. It posted an agenda listing that item 72 hours before the closed session, and mailed a copy to Bollinger's employee association. It did not provide Bollinger with a copy of the hearing officer's findings and recommendation until after the closed session. Bollinger claimed that the Commission's actions violated Government Code section 54957 and the Due Process Clause.

The Brown Act generally requires that meetings of local legislative bodies be open and public. Section 54957 provides an exception for meetings to consider personnel matters and to hear complaints and charges against employees. Any closed session to hear complaints or charges must be preceded by 24-hour written notice to the employee of his right to have the matter heard in open session.

The 24-hour notice requirement did not apply to the Commission's actions. The closed session was for the purpose of deliberating on the hearing officer's recommendation rather than holding a hearing on charges against Bollinger.

The Due Process Clause requires that public entities, before imposing discipline, provide (1) notice of the intended discipline, (2) the grounds for the intended discipline, (3) the charges and materials upon which the intended discipline is based, and (4) the opportunity to respond to the charges before a reasonably impartial and noninvolved reviewer.

Those requirements were satisfied in this case by the proceedings leading to the hearing officer's recommendation. There was no due process right to a separate hearing to respond to the recommendation. However, the court opined that providing such an opportunity would be the “better practice.”

Bollinger v. San Diego Civil Serv. Comm'n, 1999 WL 233922 (Cal. Ct. App. Mar. 30, 1999).

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UPDATES

Subsequent treatment of decisions reported on in earlier issues:

Adams v. City of Fremont (January 1999 issue), review denied (Mar. 24, 1999).

Dawavendewa v. Salt River Project Agricultural Improvement & Power Dist. (October 1998 issue), petition for certiorari filed (Apr. 9, 1999).

Drain v. Betz Laboratories, Inc. (March 1999 issue), review denied (Apr. 21, 1999).

Gonzalez v. Hughes Aircraft Employees Federal Credit Union (March 1999 issue), opinion withdrawn, to be republished.

Lee v. Technology Integration Group (March 1999 issue), petition for review filed (Mar. 31, 1999).

Zukle v. Regents of the University of California (March 1999 issue), now reported at 166 F.3d 1041 (9th Cir. 1999).

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