Articles Posted in Civil Litigation

photo-forum-300x200Courts are like private clubs. They can decide whether you and your lawsuit belong there. If not, you have to go elsewhere. Just because you’d like to have a legal dispute resolved in a particular court in a particular jurisdiction doesn’t mean that will actually happen, even if the other party agrees with your choice.
A Taiwanese company (Quanta Computer, Inc.) entered a contract concerning supplying cell phones made in China to a Japanese company (Japan Communications, Inc., or JCI), which sold them in Japan. Japanese law would apply to warranties and defects of the phone. Quanta supplied the phones, 14,246 of which were defective. There was an oral agreement Quanta would fix the phones and that JCI would make payments over time. Quanta accused JCI of not making the payments.

As part of the agreement both parties agreed that if there was a dispute over the contract the courts of the State of California was the “exclusive jurisdiction” for them to be resolved. JCI filed a lawsuit in Japan, Quanta filed one in Los Angeles.

Though the contract spells out that California is the agreed upon place for this dispute, does that mean the court is required to be the place to litigate the issue, given the lack of any contacts or relevance to the state? JCI filed in California court a motion asking the court to dismiss the case because it’s the wrong forum (“forum non conveniens” in legal speak). That means that though the court has the ability to make a decision on the issue (jurisdiction) it shouldn’t do so because it’s not practical, it lacks any contacts with the parties or the disputed transaction and the parties can go elsewhere.

The trial court agreed. The judge stated given the lack of connection to California, the court and taxpayer dollars shouldn’t be used to resolve the dispute. Quanta appealed the decision and the Court of Appeal of the State of California, Second Appellate District, Division Five, agreed with the trial court.

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phot-file-sharing-300x163Traditional offices for many businesses are a thing of the past so information needs to shared more often and more widely. Employees may work from their homes and work that’s outsourced to independent contractors could be done in a business’ home city or on another continent. Businesses may also want to share documents with customers, prospective customers and contractors online for easy access. This method of doing business often involves the use of file sharing sites like DropBox or Google Drive. While this may be very convenient it can also result in the loss of legal protections if not done correctly.

“Privilege” is an exception to the rules of evidence when it comes to what can or cannot be used as evidence in litigation. An example is attorney-client privilege, which covers documents or conversations between a client or potential client and an attorney. Depending on what was said or written by whom, when, to whom, that may not be admissible, but it must be communicated in private. A conversation between a client and an attorney behind closed doors in an office may be privileged while the same conversation in a busy restaurant may not be.

Earlier this year a judge in a Virginia federal court in the case of Harleysville Insurance Co. v. Holding Funeral Home, Inc., ruled that Harleysville waived its right to privilege in a lawsuit when one of its employees uploaded documents to an unprotected file sharing site. The judge wrote that by uploading what otherwise would’ve been confidential documents to a site that was accessible by anyone with access to the hyperlink was like leaving them on a public bench for anyone to come along and take a look.

photo-fiduciary-rule-300x200Despite criticism by the President during his campaign about the fiduciary rule (as it applies to retirement investments) and his claims it would be stopped, the federal Department of Labor largely put it into effect on June 9, according to The Oregonian. Though like any rule or regulation, it may not live forever. If you’re making retirement investment decisions you may want to enjoy it while you can.

The rule was first put together by the Obama administration with the goal of trying to protect retirement investors from high costs and conflicts of interest by financial planners. The rule was delayed earlier this year after President Trump asked the Department of Labor to reevaluate the rule and the review is expected to last through January. Large sections of the rule are now in effect.
Why should you care about this?

Your financial advisor needs to act in your best interest, which is partially the definition of a fiduciary: a party putting your best interest ahead of his or her own, someone who can’t “self deal” (benefit him or herself to the detriment of the client).

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photo-suing-supplier-300x199No business is an island. Without trusted suppliers businesses would close shop. What happens when that trust is breached and you’re left holding the bag? If disagreements can’t be worked out and your company is facing or may face a serious loss as a result you may want to consider legal action against a supplier or former supplier.

Huy Fong Foods Inc., based in Irwindale, makes the Sriracha brand hot sauce from chiles (which are peppers). Without chiles there is no Sriracha but that hasn’t stopped the company from suing its chile supplier, Underwood Ranches, based in Camarillo, according to NBC4. Underwood’s website describes the company’s history and its current business including, “Today the farm grows red jalapeños for Huy Fong Foods…”The two companies have had a relationship for thirty years.

Underwood is being sued for breach of production agreement, breach of contract and civil theft. The complaint alleges,

The American civil legal system normally doesn’t allow for a successful party to recoup its legal costs, unless that’s spelled out by statute. Though in other countries a plaintiff brining a lawsuit runs the risk of paying the defendant’s lawyers’ bills, normally unless a claim is particularly groundless and “frivolous” the plaintiff need only cover his or her own costs. A recent Los Angeles County Court case is an exception to that rule, according to the Daily Journal.
Nancy Arambula Corona, a former on-site building manager, sued her ex-employer, Weiss Family Properties, LLC, (which owns apartment buildings in Los Angeles County) under the state’s Fair Employment and Housing Act and its Labor Code. According to the filings in the case,

• Corona suffered an injury on the job.
• Defendant states it reasonably accommodated her by having another employee clean her building.
• Weiss eventually fired Corona because she couldn’t perform her job and plaintiff’s physician stated her condition wouldn’t improve.
• Corona also claimed she was owed unpaid overtime pay while Weiss claimed they paid her for the hours she submitted on her time sheets.

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Good morning!  Let’s talk a little bit about conflict of interest. Conflict of interest arises in two situations.  One is what we call successive representation.  This occurs when  I represented Bob 2 or 3 years ago and now David comes to my office and wants me to represent him because of issue that he has with Bob.  That’s a conflict of interest because I would be representing a new client suing a former client.  That’s a no‑no.  A court in that situation would determine whether or not attorney learned a secret about Bob and that will aid David in this situation.  This is what we call successive representation.

The other situation is we call multiple representation, where we present two or three or more clients in a same lawsuit.  Client always want to share cost with attorney’s fee, which is understandable, but oftentimes we find that each one has their own interest.  For example, each has a different opinion about the direction of litigation.  One might want to settle, while another wants to move forward with litigation, etc..   In this situation, if the defendant side needs to come up with the settlement, often times the defendants will point the finger at each other as to who is more at fault.  So that’s where the situation becomes sticky.

Good Morning.  I still can say it’s good morning even though it’s almost noon time.  I woke up early this morning and went to Torrance courthouse for a hearing. On the way back to my office, I thought about a video that I put out last month where I talked about how your attorney’s character count.

Not only does your attorney’s character count, but also your attorney’s personality, the way that they handle your matter, and how they litigate a case. All of these shape the landscape of your case; Meaning, they can affect whether or not your case is going to find resolution, whether or not your case is going to be litigated efficiently as efficient as possible, and/or whether or not your case is going to be settled within a reasonable time.

I currently have two partnership dispute cases that are in the extreme. They’re both dealing with dispute between partnerships that have a significant amount of real estate holdings.  In one case, I filed on behalf of my client against the other partner and received a call from the other attorney. The first thing that came out of his mouth was, “Hey, what does your client want?”. I told him exactly what I’m expecting and what my client wants in terms of resolving this issue. The other side’s attorney listened and we worked out a resolution plan.

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photo-PDC-EB5-scam-300x200It’s never a good thing to have a federal judge order a freeze on your business’ assets. That’s what happened to an Orange County firm that federal officials claim stole money from foreign investors, mostly Chinese citizens, who hoped their cash would lead to permanent U.S. residency, the Los Angeles Times reports.

Newport Beach lawyer Emilio Francisco and his investment firm, PDC Capital, face civil fraud charges filed by the Securities and Exchange Commission (SEC). It claims Francisco spent at least $9.5 million of investors’ cash on personal expenses (some going to help pay for a yacht, a yacht-club membership and his credit card) instead of investments that would qualify investors for the EB-5 visa program, which offers permanent residency to foreigners who make job-creating investments in the U.S.

Investors provided PDC with more than $72 million from 2013 to 2016, according to the SEC’s suit. More than a hundred investors put in $500,000 each. They believed the money would be spent building assisted-living facilities and opening new locations of Caffe Primo, a Los Angeles coffee shop and restaurant chain. The SEC states some of the money went to the promised projects, but millions of dollars were invested in other projects and more than $2 million went to pay Francisco’s personal expenses.

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photo - toy idea theftA stagnant company, one that’s not looking to improve on its products or come up with new ones, may not have a bright future. There may be pressure to come up with the next successful products as well as pressure to cut costs and improve profits. That may result in legal problems if a company illegally uses someone else’s concept without their approval or paying them. A recent Bloomberg article spelled out this problem of intellectual property theft in the toy industry.

Ellie Shapiro came up with a toy in 2012. They were little animal figurines with snow globes in their bellies which she called Wishables. She worked as a freelance toy inventor but prior to that she spent ten years as an executive at Mattel Inc. and Walt Disney Co. Shapiro pitched her toy ideas to toymakers including Hasbro, Inc.

She signed a confidentiality agreement, met with Hasbro executives in Santa Monica in 2013 and showed off her prototypes, sample packaging and feed back from focus group testing. Executives liked the presentation, asked for samples but later told her they were passing on the idea.

In the fall of 2014 she walked into a Target store and saw a new Hasbro toy, an animal figurine that was also a snow globe. “At first, I was in shock and in disbelief,” Shapiro told Bloomberg. “Then I felt completely sick.” She later sued Hasbro for stealing her idea in federal court in the Central District of California. The company responded by saying snow globes have been used in toys for years and a similar design was developed in-house in 2012, prior to her submission.

Shapiro sued an Australian toy maker previously and settled the case in 2014. In the past she felt Hasbro stole a previous idea, threatened to sue them but ultimately did not. Freelancers like Shapiro face the double threats of having their ideas stolen and not making any money or suing (which can be expensive) and getting a litigious reputation risking being avoided by toy companies and not making any money. Some inventors see theft as the cost of doing business, hoping eventually a company may agree to pay for an idea.

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photo - hold the mayoNew companies seeking investment and funding are under a lot of pressure to show success. One such company is facing an investigation by the Securities and Exchange Commission (SEC) to see if it tried to boost its sales numbers by hiring contractors to buy their product then reimburse them for the purchases.

The SEC is looking into San Francisco based Hampton Creek, Inc., according to Bloomberg, which broke the story about the potentially bogus sales numbers in order to impress potential investors. The agency is trying to determine if the startup broke federal law by failing to disclose it was buying its own vegan mayonnaise from stores, making it appear to be more successful than it actually was, according Bloomberg’s sources.

At issue is whether company founder and CEO Joshua Tetrick improperly recognized revenue from purchases made with company money. Bloomberg reported Hampton Creek started an operation to purchase its own mayonnaise starting as early as 2014. The SEC has jurisdiction over the closely held company because it has raised money from outside investors.

Investors have come up with more than $220 million for Hampton Creek and Tetrick told employees in August he expects to raise another round of financing by September that will increase the value of the company to $1.1 billion, according to Bloomberg.

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