The other week I attended the California State Bar Conference. In an early Sunday morning session, I had the privilege of listening to Erwin Chemerinsky, Dean and Distinguished Professor of Law, University of California, Irvine, School of Law and nationally acclaimed expert on constitutional law, discuss recent developments in constitutional law. More specifically, he analyzed the 82 cases decided by the U.S. Supreme Court in its 2010-2011 term by themes.

            One theme he discussed was the Court’s tendency to close the courthouse doors to litigants. In support of his thesis, Dean Chemerinsky pointed to several decisions. First, he cited AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740, 179 L.Ed.2d 742 (2011) in which the Court held that the Federal Arbitration Act pre-empted a California Supreme Court decision holding that a provision prohibiting class action arbitration in AT&T’s agreement with its customers was unconscionable and thus unenforceable. That is, in the Court’s view, AT&T could prohibit class action arbitration thereby forcing each customer to arbitrate his own individual claim, which in plaintiff’s (that is, Vincent Concepcion) case equaled approximately $30.22.

            The second case referenced was Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 180 L.Ed.2d 374 (June 20, 2011) in which the Court held that an employment discrimination class involving millions of female Wal-Mart employees throughout the United States could not be certified as a class as the members of the alleged class did not meet the threshold requirement of commonality, typicality and adequacy required in Federal Rule of Civil Procedure 23(a). Thus, each plaintiff was forced  to sue Wal-Mart individually for back pay, a very expensive and time consuming proposition.

            The third example was PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 180 L.Ed.2d 580 (June 23 2011), rehearing denied, ___S. Ct.___, 2011 WL 3557247 (August 15, 2011) in which the Court held that manufacturers of generic prescription drugs could not be sued on a failure to warn theory. The Court ruled that such suits are prohibited by a federal law allowing generic drugs to be sold if they are equivalent to drugs approved by the FDA and carry the same warning label approved by the FDA for the non-generic drug. Thus, the plaintiff who is harmed by a generic drug has no recourse; she cannot sue for any injuries/death suffered due to a lack of warning by the manufacturer.

            The fourth example was Cullen v. Pinholster, 131 S. Ct. 1388, 179 L.Ed.2d 557 (2011),rehearing denied, 131 S. Ct. 2951 (May 31, 2011) in which the Supreme Court held that any new evidence demonstrating the ineffective assistance of counsel could not be used or introduced in a habeas corpus proceeding questioning a state court conviction even though the statute in question provides for an ‘evidentiary” hearing – 28 U.S.C.§2254(d)(1),(e)(2). Rather, the Court ruled that the defendant was limited to the evidence presented in the original state trial court to prove that his counsel did not effectively assist him.

            Another example was Arizona Christian School Tuition Organization v. Winn, 131 S. Ct. 1436, 179 L.Ed.2d 523 (2011) in which the Court held that taxpayers lacked standing and so could not sue to challenge a state program providing tax credits for tuition for parochial schools. Plaintiffs alleged that the tax credit program violated the First Amendment’s Establishment Clause. (“Congress shall make no law respecting the establishment of religion. . . .”)    

            Finally, there was Connick v. Thompson, 131 S. Ct. 1350, 179 L.Ed.2d 417 (2011) in which the Supreme Court stated that the Orleans Parish District Attorney could not be held liable for its failure and/or “deliberate indifference” to turn over exculpatory evidence to the defendant during the eighteen years that Thompson – the criminal defendant – had been convicted, sentenced and was serving time (including 14 years on death row) for a crime he did not commit. His investigator discovered the evidence one month before his execution which discovery led to his convictions being vacated. Had the evidence been turned over to his counsel prior to trial, he would have been exculpated of the crime and never convicted. Consequently, because he failed to prove “deliberate indifference”, the Court held that Thompson had no recourse against the Orleans Parish District Attorney for his wrongful conviction.

            In each of these cases, the Court’s ruling either shut the courthouse door completely in the plaintiff’s face or made it so prohibitively expensive, and/or time consuming to go forward that, in practical terms, the door to the courthouse is slammed shut.

            Given this predilection of the country’s highest court, it appears that alternative dispute resolution – especially mediation – is now a “must” and no longer simply an “alternative” to many plaintiffs. Contrary to Professor Frank E.A. Sander’s (Harvard Law School) concept of the multi-door courthouse first articulated in April 1976, it appears that the courthouse can no longer be viewed as an alternative dispute resolution center offering an array of options by which to resolve disputes. Rather, the “alternative” has become the only door.

            . . . .Just something to think about!

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            While I did not intentionally post this blog this week to coincide with the execution of Troy Davis, this blog seems especially timely; please consider it in light of this past week’s events.

            On August 24, 2011, the New Jersey Supreme Court issued a 142 page opinion in State v. Larry R. Henderson (A-8-08) (062218) holding that the current legal standards used in assessing eyewitness identifications must be revised because such standards do not insure adequate reliability, do not sufficiently deter improper police conduct and overstates a jury’s ability to evaluate identification evidence. (Id. at syllabus at p.2). (Henderson-A8-08)

            While this opinion focuses on how a  faulty eyewitness identification can send an innocent person to jail under the criminal law, it has implications for civil cases as well: they too, depend on eyewitness testimony that can be no less faulty.

            In reaching its conclusion that standards for eyewitness identification must be revamped, the court extensively discussed the voluminous scientific research on memory and identification. First and foremost, the court pointed out that we are incorrect in assuming that “memory is like a video recording.” (Id. at p. 46). Rather, “. . .[t]he process of remembering consists of three stages: acquisition – “the perception of the original event”; retention – “the period of time that passes between the event and the eventual recollection of a particular piece of information”; and retrieval – the “stage during which a person recalls stored information”.” (Id. at pp. 46-47). Unfortunately;

“ “[a]t each of those stages, the information ultimately offered as “memory” can be distorted, contaminated and even falsely imagined. The witness does not perceive all that a videotape would disclose by [sic] rather  “get[s] the gist of things and constructs a “memory” on “bits of information. . . and what seems plausible.” The witness does not encode all the information that a videotape does; memory rapidly and continuously decays; retained memory can be unknowingly contaminated by post-event information; [and] the witness’s retrieval stored “memory” can be impaired and distorted by a variety of factors. . . .” ” (Id. at p. 47).

             Consequently, various factors affect the accuracy of our memories. A high degree of stress during the event will impair our ability to remember. (Id. at pp. 45, 70-71). Or, the wording used in asking us to recall will be suggestive of our response, causing us to reconstruct our memory. One study found that asking how fast a car was traveling when it “smashed” into another car produces a response with a higher rate of speed than one using the word “collided”, “bumped”, “hit”, or “contacted”. (Id. at pp. 47-48). Similarly, the use of seemingly innocuous words and subtle cues – such as pauses, hesitations or smiles- can influence the response given, even though the witness is unaware of such subtle cues. (Id. at p. 52). This is true whether such cues are given before or after the response. Researchers found that not only can memories be altered by remarks made before the identification is made, but by confirmatory feedback as well. Those who received confirmation “expressed significantly more. . . confidence in their decision compared with participants who received no feedback.” (Id. at p. 58). And, the researchers found that it was the confidence of the witness that the jurors depended upon the most in reaching their verdict. (Id. at p. 90). Unfortunately, the researchers also found that eyewitness confidence is generally an unreliable indicator of accuracy. . . unless the witness is highly confident in which case the identification is accurate 90% of the time. (Id. at p. 59).    

            Other factors that affect our memory include the duration of the event. When it is a matter of seconds, our memories are not so reliable. Further, we tend to overestimate short durations, especially where a lot was occurring or it was very stressful. (Id. at pp. 74-75). 

            Similarly, distance and lighting will affect the accuracy of our memory. Poor lighting (e.g. at night) and great distance will diminish the accuracy of what we think we saw. (Id. at p. 75).

            Not surprisingly, our age will affect the accuracy of our memory. Accuracy declines with age such that witnesses who are between 19-24 years old were the most accurate while those ranging in age 68-74 years old were not so accurate. The researchers found that the age of the alleged target was relevant in that there is an “own-age bias” meaning that “witnesses are “better at recognizing people of [their] own age. . . than people of other ages.” ” (Id. at pp. 76-77).

            Time also plays a factor: memories fade over time and memory decay is irreversible. Obviously, this affects reliability. (Id. at pp. 78-79).

            Other factors include race-bias and other actors. Studies have shown that “. . .a witness may have more difficulty making a cross-racial identification” (Id. at p. 79) and that the memory of a witness can be altered when a co-witness shares information about what she observed. This is especially so if that co-witness has a relationship (friend, romantic partner, spouse, etc.) with the witness. The observations of the co-witness may cause the witness to create false memories or non-existent details. (Id. at pp. 80-84).

            Finally, and perhaps most troubling, the court reviewed the perceptions of the average juror., Various studies revealed that the average juror is insensitive to the factors discussed above. Rather, jurors focused on and gave disproportionate weight to the confidence of the witness. “Eyewitness confidence “was the most powerful predictor of verdicts.” ” (Id. at p. 90). And, as we know, most witnesses are truly sincere in their belief even if 100% wrong. They misidentify out of good faith, and not malice (Id. at p. 29).

             While the opinion is lengthy, it makes for interesting reading, especially the parts discussing all of the various studies and results on memory. I invite the reader to at least peruse it. Clearly, the results indicating how faulty our memories really are, have far reaching implications both in our everyday lives, and in our civil disputes.

            The moral of this tale is that we simply do not remember people, things, or events as accurately as we think we do. We must take this fallibility into account and be more malleable about this in resolving every dispute we encounter.

            . . .Just something to think about!

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            Oftentimes, during litigation, a party will serve a set of requests for admission on another party asking the latter to admit or deny certain facts or that certain documents are genuine. To the extent that the responding party admits the request, the response is deemed conclusive, and the fact or genuineness of the document is a “given” that need not be proven at trial.

            Thus, admitting a fact can come back to haunt a party at trial. Ford Motor Company found this out in Daniel Joyce v. Ford Motor Company, in which the Third Appellate District of the California Court of Appeal (Case No. C064453 – September 6, 2011) reversed the nonsuit entered by the trial court in favor of Ford partially because of its admission and remanded the case back to the trial court for a limited trial on the issue of civil penalties. (Joyce v. Ford)

            Plaintiff Joyce filed suit under the Song-Beverly Consumer Warranty Act (“Act”) also known as the “lemon” law, after taking his new 2005 Ford F-250 truck in for repairs many times but getting no satisfaction. He wanted Ford to repurchase or replace the truck.  Ford refused.

            During the litigation, Joyce, a licensed contractor, admitted that he used the truck as his “work truck” in his own excavation business. (Id. at p. 3). The truck weighed 6,787 pounds and had a gross vehicle weight rating of 10,000 pounds. (Id.)

            For a vehicle to quality under the Act, it must be a “new motor vehicle” defined as one that “. . .is bought or used primarily for personal, family or household purposes.” (Id. at p. 13 – Civil Code §1793.22(e)(2).) But this section also defines a “new motor vehicle” to be one that has a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes. . . .” (Id.)

            During the litigation, Plaintiff Joyce served a set of requests for admission upon Ford asking it, among other things, to admit that his F-250 truck qualified as a “new motor vehicle” under the Act. Ford admitted so.

            But then, at trial, Ford moved for a nonsuit on the ground that the truck did not qualify as a “new motor vehicle” under the Act as it was used primarily for business and had a gross vehicle weight rating (vs gross vehicle weight) of 10,000 pounds.

            After the jury returned a verdict in favor of Plaintiff, awarding him $35,323.87, the trial court overturned it, by granting Ford’s motion for a nonsuit ruling that as a matter of law, the F-250 did not qualify as a “new motor vehicle” under the Act, despite Ford’s admission to the contrary.

            The appellate court reversed. Initially, it noted that one of the applicable California statutes governing admissions states that “[a]ny matter admitted in response to a request for admission is conclusively established against the party making the admission. . . .” (Id. at p. 16 – Code of Civil Procedure §2033.410(a).) Thus, when Ford admitted that the F-250 was a “new motor vehicle” under the Act, this fact was conclusively established; Ford was estopped to argue the contrary (Id. at p. 16-17).

            As importantly, the appellate court found that there was substantial evidence that the F-250 did, indeed, qualify as a “new motor vehicle” under the Act. Although Plaintiff used the F-250 primarily for business purposes, rather than personal, family or household purposes, the Act allows for this in its definition of “new motor vehicle.” Further, the court, looking at the plain language of the statute and its legislative history, determined that this definition clearly speaks in terms of actual gross weight of the vehicle being under 10,000 pounds; not in terms of its gross vehicle weight rating. (“Gross vehicle weight” refers to the overall total amount that the vehicle weighs or the vehicle  curb weight plus cargo, plus passengers. (Id. at pp. 20, 21). “Gross vehicle weight rating” refers to “the maximum allowable weight of the fully loaded vehicle (including all options, equipment, passengers and cargo.”) (Id.)) Here, the gross vehicle weight of the F-250 was 6,787 pounds, or well under the 10,000 pound limit. The court concluded that the legislative history intended to refer to the gross vehicle weight and not to the gross vehicle weight rating. Further, while Ford argued the term “gross vehicle weight”  to be vague and ambiguous and possibly referring to “gross vehicle weight rating”, the appellate court rejected this argument. It found that not only Ford’s own consumer oriented literature but similar literature of both the Department of Transportation and many other automotive manufacturers clearly delineated the difference between “gross vehicle weight” and “gross vehicle weight rating” (as set out above). In short, the appellate court disagreed with Ford’s arguments. (Id. at pp. 18-25).

            Finally, the court determined that “. . .there was substantial evidence to support a finding that Ford’s failure to comply with the Act was “willful” entitling plaintiff to a limited jury trial on whether a civil penalty should be assessed against Ford for its refusal to repurchase or replace the truck after numerous unsuccessful attempts to fix it. (Id. at pp. 25-29). The court remanded the case back to the trial court for this purpose.

            I have always heard about how powerful requests for admission can be as a tool in litigation, especially at trial. They often come up during a  mediation; one party seeks to leverage the fact that the other party admitted such and such. The other party usually makes little of it, discounting the “admission” as much as possible. But now, this case is a reminder that requests for admission are, indeed, powerful, do work and must be taken seriously during a mediation: an admission can, indeed, come back to haunt the admitting party at trial.

            . . .Just  something to think about! 

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         On August 31, 2011, the Second Appellate District of the California Court of Appeal issued an opinion that while ostensibly discusses the validity of an arbitration provision, recites facts that are so bizarre, one can only wonder, “What were they thinking?”

            In Duick v Toyota Motor Sales, USA, Inc. (Case No. B22483) (Duick v. Toyota), Amber Duick sued both Toyota and its advertising agency, Saatchi & Saatchi North America, Inc. for intentional infliction of emotional distress, negligence and false advertising, among other claims, seeking many millions in damages.

            The facts are so bizarre, I must quote them in full:     

           Duick’s claims arise from her apparently unwitting participation in an internet-based advertising campaign launched by defendants in connection with Toyota’s Matrix automobile. The campaign, known as “Your Other You,” “consisted of sending an unwitting recipient emails from an unknown individual.”  During the campaign, any visitor to the Toyota Matrix web site (“player 1”) could designate another person (“player 2”) for participation in the Your Other You “interactive experience.”  Player 2 would then receive an email purportedly from player 1, inviting player 2 to click a hyperlink that was in some manner “identified with Toyota.” The link would direct player 2 to a web page entitled “Personality Evaluation,” which displayed a drawing of a door with the word “Begin” underneath. Clicking on the door would direct player 2 to a second web page entitled “Personality Evaluation Terms and Conditions.” In order to continue beyond that page, according to evidence introduced by defendants, player 2 was required to scroll through certain text (the “terms and conditions”) and, at the end of that text, click a box next to the following sentence:  “I have read and agree to the terms and conditions.”

          The first paragraph of the terms and conditions states, “You have been invited by someone  who has indicated that he/she knows you to participate in Your Other You.  Your Other You is a website provided by [Toyota] that offers you . . . an interactive experience.”  The second paragraph further states, “If you review and agree to the Terms and Conditions detailed below . . . you may participate in a 5 day digital experience through Your Other You. . . . You may receive email messages, phone calls and/or text messages during the 5-day experience.” A subsequent paragraph also states, “You understand that by agreeing to these Terms, you are agreeing to receive emails, phone calls and text messages from Toyota during the 5-day experience of Your Other You.”  The terms and conditions contain the following arbitration provision:  “You agree that . . . any and all disputes, claims, and causes of action arising out of, or connected with, Your Other You . . . shall be resolved individually, without resort to any form of class action, and exclusively by arbitration to be held solely in Los Angeles, California under the auspices of the American Arbitration Association and pursuant to its Commercial Dispute Resolution Rules and Procedures.”

          The record before us does not describe the further web pages (if any) to which player 2 would be directed after agreeing to the terms and conditions.  Over the next several days, however, player 2 would receive emails of an unsettling nature from an “unknown individual” who appeared to have access to some personal information concerning player 2 (information that presumably was provided by player 1, without player 2’s knowledge, at the initial stage).

          Duick was apparently cast in the role of player 2. She received “an unsolicited email asking [her] to take a personality test.”  She does not remember clicking the box signifying her agreement to the terms and conditions, and she claims that for various technical reasons the text of the terms and conditions was impossible to read in its entirety.

           In any event, Duick later began to receive emails from an individual identifying himself as “Sebastian Bowler.” The text of the first email reads, “Amber mate!  Coming 2 Los Angeles Gonna lay low at your place for a bit. Till it all blows over.  Bringing Trigger.”  Duick received another email from Bowler the following day, accurately stating her previous home address, describing it as a “Nice place to hide out,” and advising her that “Trigger don’t throw up much anymore, but put some newspaper down in case.”  The email also provided a link to Bowler’s MySpace page, which portrayed him as a 25-year-old Englishman and “a fanatical English soccer fan who enjoyed drinking alcohol to excess”; the page also displayed photographs of a pit bull dog.

          Additional emails from Bowler to Duick over the next few days purported to describe his cross-country journey by car to visit her, including photos and videos of his travels and references to his efforts to evade law enforcement (“I seem to have lost the coppers for now, so I’m all good, mate”; “Had a brush with the law last night.  Anyway, hopefully I’ll have lost them by the time I get to your place”). One message explained that Bowler “ran into a little problem at the hotel,” and Duick subsequently received an email from an individual identifying himself as “Jimmy Citro,” purporting to be the manager of a motel and billing Duick for the damage Bowler had done to the motel’s property. The final email included a link to a video revealing that Bowler was a fictional character and that the entire sequence of emails was an elaborate prank, all part of an advertising campaign for the Toyota Matrix.  ( Id. at pp 2-4.).

             Pursuant to the arbitration clause, the defendants moved to compel arbitration. The trial court denied the motion, and the appellate court affirmed on this appeal.

            The appellate court agreed with Ms. Duick that the provision compelling arbitration was unenforceable because of “fraud in the inception or execution.” That is, “ “the fraud goes to the inception or execution of the agreement, so that the promisor is deceived as to the nature of his act, and actually does not know what he is signing, or does not intend to enter into a contract at all, mutual assent is lacking and [the contract] is void. In such a case it may be disregarded without the necessity of recession.” “ (Id. at p.5.) (Emphasis original.)

            The  appellate court pointed out that the terms and conditions were drafted by defendants, not by Ms. Duick, and were given the misleading title of “Personality Evaluation Terms and Conditions”. In the court’s view, this title gave the impression to any reader that a personality evaluation test was involved and not the advertising prank that was about to descend onto Ms. Duick. Indeed, it certainly did not provide any sort of notice whatsoever of what was about to occur to Ms. Duick! (Id. at  p.6). Moreover, as the appellate court noted, because the terms used in the agreement were so vague and opaque, it was impossible to fully understand what was about to occur, even after reading them. (Id.)

            In sum, because “defendants deprived Duick of a reasonable opportunity to know the character of the proposed contract,” ( Id. at  p.7), the appellate court found the contract void from its inception and thus unenforceable. Consequently, the defendants could not compel arbitration.

            Notably, the appellate court took pains to note that it was not deciding the matter on the merits and was in no way addressing the merits of the case or its possible outcome.

            So… I guess this case stands for the obvious proposition that one must have a valid, enforceable agreement  (and not one induced by fraud) in order to then enforce its arbitration provision (or any of its other provisions for that matter.) But, I still wonder…. What  were  the defendants thinking when they dreamed up and approved this advertising campaign!

           …. Just something to think about!

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            Let us suppose that Jane Jones is driving along one of the many freeways in Los Angeles, and as is typical, the flow of traffic suddenly and abruptly comes to a halt. That is, in a nanosecond, Jane goes from 60 mph to 0 mph. While she is alert and stops in time, the driver behind her, Patricia Smith, is not – she is busy texting. Consequently, Ms. Smith’s vehicle plows into the rear of Ms. Jones’ vehicle, causing Ms. Jones to suffer various and multiple soft tissue injuries.

            Ms. Jones seeks medical treatment, going first to the emergency room to be checked out and then to the chiropractor to be treated. By the time all is said and done, her medical expense is $15,000, but luckily, Ms. Jones has fantastic medical insurance. Her insurer is able to negotiate both with the ER hospital and her chiropractor for a reduced rate and is able to pay $7,500 in full settlement of all medical expenses.

            This being the litigious state of California, Ms. Jones sues Ms. Smith for her injuries and medical expenses. Because of the “collateral source” rule, Ms. Smith cannot obtain an offset or otherwise benefit from the fact that Ms. Jones had fantastic insurance which paid her medical expenses. That is, Ms. Smith can not pay less to Ms. Jones simply because Ms. Jones was prudent enough to have health insurance. Rather, Ms. Jones will be entitled to claim the full amount of her damages from Ms. Smith. (See, Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1,6). But, the question remains: Is Ms. Jones entitled to collect from Ms. Smith the amount of $15,000 actually billed by the ER and her chiropractor – or the amount of $7,500 that was actually paid?

            Over the past twenty years, the appellate courts in California have split on the answer; some ruled Ms. Jones would be entitled to the $15,000 while others have held she would be entitled to only what was actually paid – the $7,500.

            On August 18, 2011, in Howell v. Hamilton Meats & Provisions, Inc., Case No. S179115, (Howell v Hamilton Meats) the California Supreme Court settled the dispute by holding that in such situations, the plaintiff would be entitled to only the amount actually paid out – or $7,500 in our example:

We hold, therefore, that an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff of his or her insurer for the medical services received or still owing at the time of trial. (Id. at p. 28.)

            In reaching this conclusion, the court concluded that a defendant – Ms. Smith in our example – is not obtaining a “windfall” “. . .merely because the injured person’s health insurer has negotiated a favorable rate of payment with the person’s medical provider.” (Id. at p. 18). The court reached this conclusion based on a 2005 study of hospital costs (Id. at p. 18) revealing that “[h]ospital charge setting practices are complex and varied.” (Id.) Consequently, the court responded that neither as the full bill that a provider charges represents the “real” value of the services, neither does the “discounted” amount represent an “artificial” or “arbitrary” value. Rather, the court concluded that the discounted amount neither is a “windfall” to the defendant nor acts to encourage the defendant to engage in “risky conduct.” (Id. at p. 22).

            Perhaps, the court’s most realistic appraisal appears at the end of its opinion:

 There is, to be sure, an element of fortuity to the compensatory damages the defendant pays under the rule we articulate here. A tortfeasor who injures a member of a managed care organization may pay less in compensation for medical expenses than one who inflicts the same injury on an uninsured person treated at a hospital (assuming the hospital does not offer the person a discount for its chargemaster prices). But, as defendant notes, “[f]ortuity is a fact in life and litigation.” (Id. at p. 27).

            Or, to quote Forrest Gump, “My momma always said, “Life was like a box of chocolates, you never know what you’re gonna get.”  Forrest Gump (1994).

            . . .Just something to think about!

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