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Alleged Discriminatory Hiring Practices at CBS News Stations in Los Angeles Deemed to be Protected Activity under California’s Anti-SLAPP Statute

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Stephen L. RaucherA California Court of Appeal recently decided that CBS’s decision to hire a young, attractive woman as opposed to an older man as a weather anchor constitutes protected free speech.  Hunter v. CBS Broadcasting, Inc., 2013 Cal. App. LEXIS 997 (B244832) (Nov. 18, 2013).  Kyle Hunter filed an employment discrimination complaint in March 2012 against two local CBS television stations alleging that they had repeatedly shunned him for various weather anchor positions because of his age and gender.  Hunter claimed that CBS had a plan to turn prime time weather broadcasting over to younger attractive females and engaged in discriminatory practices in their employment decisions.

California’s anti-SLAPP statute requires a court to strike claims brought against an individual that arise from acts in furtherance of the right to free speech in connection with a public issue.   There is a two-step process to determine whether an anti-SLAPP motion should be granted.  First, the court decides whether the defendant has made a threshold showing that the challenged cause of action arises from protected activity.  Second, if the defendant makes this showing, the court then decides whether the plaintiff has demonstrated a reasonable probability of prevailing at trial on the merits of its challenged causes of action.  However, if the defendant does not meet its burden on the first step, the court should deny the motion and does not need to address the second step.

In Hunter’s case, the trial court held that CBS did not make the showing under the first step.  Thus, the trial court concluded that CBS’s hiring decision did not arise from protected activity.  The Court of Appeal disagreed, noting that the labeling of the plaintiff’s claim as a case about employment discrimination is not definitive and that courts must examine the principal thrust or gravamen of the cause of action.  In other words, courts must distinguish between the acts underlying a plaintiff’s cause of action and the claimed illegitimacy of those acts.

In reversing the trial court, the Court equated CBS’s selections of its weather anchors to “casting decisions,” which are a form of protected activity.  The Court of Appeal distinguished two discrimination cases cited by Hunter where an anti-SLAPP motion was denied.   In those cases, the alleged protected activity was incidental to the discrimination causes of action, whereas in Hunter’s case, it was the very conduct on which the claims were based – the gravamen of the cause of action.  The Court further stated that even if the act of hiring a weather anchor by itself does not qualify as an exercise of free speech (a question the Court refrained from deciding), California’s anti-SLAPP statute also extends to conduct undertaken “in furtherance” of constitutionally-protected activities.  The Court reasoned that hiring a weather anchor was at least an act in furtherance of the exercise of protected activities under the anti-SLAPP statute and Hunter did not present any argument to the contrary.

The Court of Appeal remanded the case to the trial court to decide the second part of the anti-SLAPP test – whether the plaintiff can demonstrate a reasonable probability of prevailing at trial on the merits of its challenged cause of action.  Those proceedings also promise to be interesting.  Is a news station permitted to discriminate on the basis of looks? Gender?  Age?

As they say on the news, stay tuned . . .

Unpredictability in the Law Surrounding Employer Liability for Torts Committed by Employees Driving to and from Work

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Stephen L. RaucherIn the span of two weeks, two cases involving the doctrine of respondeat superior were decided in California resulting in opposite outcomes.  Under the legal theory of respondeat superior, employers are vicariously liable for the tortious acts committed by employees during the course and scope of employment if the acts could reasonably be foreseen by the employer.  Unlike the test for foreseeability in negligence, an event is foreseeable in the respondeat superior context if it is not so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employer’s business.

Various rules have developed that either limit or eliminate an employer’s liability, including the “going and coming” rule.  Under this rule, an employer is exempt from liability for tortious acts committed by its employees while on their way to and from work because employees are said to be outside of the course and scope of employment during their daily commute.  An exception to the going and coming rule arises where the commute involves an incidental benefit to the employer, which is not common to commute trips by ordinary members of the work force.

In Moradi v. Marsh USA Inc., 219 Cal. App. 4th 886 (2013), decided on September 17, 2013, the employer was held vicariously liable when its employee collided with a motorcycle after work when driving to buy frozen yogurt and attend a yoga class on her way home.  Judy Bamberger commuted to and from work in her personal vehicle on a daily basis.  As part of her job, she was also required to use her car to attend off-site meetings and seminars, to transport and/or meet with clients in other locations, and to make presentations from two to five times a week.  The court stated that under the required vehicle exception, the key inquiry is whether there is an incidental benefit derived by the employer.  Further, the court emphasized that acts necessary to the comfort, convenience, health, and welfare of the employee while at work, though strictly personal to oneself, do not take one outside of the scope of employment.  The court found that it was a required condition for Bamberger to use her vehicle and that it was not so unusual or startling that an employee might stop for yogurt and to take a yoga class as necessary for her comfort, convenience, health and welfare.

By contrast, in Halliburton Energy Services, Inc. v. Department of Transportation, 220 Cal. App. 4th 87 (2013), decided on October 1, 2013, the employer was not held vicariously liable when its employee went to meet his family to purchase a car in between shifts.  Troy Martinez had an assigned company pickup truck to drive as part of his job.  Martinez was assigned to work on an oil rig near Seal Beach for an estimated period of 2-3 weeks.  Martinez lived in Caliente, California, which is about 50 miles from Bakersfield.  After his shift at the oil rig, Martinez drove approximately 140 miles to Bakersfield to meet his family at a car dealership to purchase a car for his wife.  On the way back to Seal Beach, Martinez was involved in an accident.  The court reasoned that even if the incidental benefit exception applied, there were undisputed facts establishing that Martinez was engaged in purely personal business at the time of the accident, and was not acting within the scope of his employment for Halliburton to be held vicariously liable.  The court acknowledged that minor and foreseeable deviations from a direct commute are within the scope of employment, but that if it is purely personal and has no nexus to his employment, then there is no liability imposed on the employer.  The court held that the trip to Bakersfield, which was 50 miles from his home, was not foreseeable and was purely personal.

It is possible that confusion will arise regarding the doctrine of respondeat superior considering the very fine distinctions made between cases.  Although Halliburton can be distinguished from Moradi in that Martinez was not on his way home, but went to purchase a car 50 miles away from his home, it is still difficult to predict how the court will rule in these cases.  The Halliburton court strongly emphasized that there must be a nexus between the deviation and employment.  However, in Moradi, there was arguably no nexus between Bamberger’s trip to buy frozen yogurt and take a yoga class and her job.  The Moradi court, on the other hand, emphasized that acts necessary to the comfort, convenience, health, and welfare of the employee do not take that employee outside of the scope of employment.  Martinez’s trip between shifts to purchase a car with his family could potentially be necessary to his comfort, convenience, health and welfare.  Unless the California Supreme Court clarifies the respondeat superior doctrine, the factually intensive analysis will likely lead to more confusion and unpredictable results.  Both Halliburton and Moradi are good law in California.

Fame Does Not Guarantee First Amendment Protection

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Even inStephen L. Raucher today’s world of reality television, where people are famous for being famous, such fame does not create an issue of public interest entitled to special protection.  In the recently published decision of Albanese v. Menounos, 2013 Cal. App. LEXIS 626 (B240866) on August 7, 2013, the Court of Appeal affirmed a lower court’s ruling denying the dismissal of a defamation lawsuit.  The lawsuit was brought by Lindsay Albanese, a celebrity stylist and fashion consultant, against Maria Menounos, a television personality and special correspondent for Access Hollywood during the time of the controversy.  Albanese’s complaint alleges that Menounos accused Albanese of stealing Dolce & Gabbana products in front of peers, colleagues and prospective business clients during an event at the W Hotel in Hollywood.  Menounos sought to dismiss the case pursuant to California’s anti-SLAPP statute, claiming that Albanese was a public figure.  Among the examples Menounos gave of Albanese’s fame was that Albanese appeared on the national television show Hair Battle Spectacular, that she worked with nationally known figures such as Paula Abdul and Lara Flynn Boyle, and that she dressed the female cast members of Glee and contestants on the Bachelor and Bachelorette television shows.  The Court held that even if Albanese was a well-known celebrity stylist, there was no evidence that she was involved in a public controversy or that she was so famous that her private dispute became a matter of public interest.

Under California’s anti-SLAPP statute (Code of Civil Procedure § 425.16), a lawsuit may be subject to dismissal if the  underlying activity is based on “conduct in furtherance of the exercise of the constitutional right . . . of free speech in connection with a public issue or an issue of public interest.”  The anti-SLAPP statute was enacted in an effort to encourage participation in matters of public significance and to prevent meritless litigation designed to chill the exercise of First Amendment rights.  Under this statute, an individual sued for making defamatory statements can move to strike the complaint and dismiss the case if it arises from the protected activity enumerated in the statute, including matters that are a public issue.  Because “public issue” is undefined in the statute, case law has developed analyzing this requirement.

In considering whether Menounos’ alleged statements were deserving of anti-SLAPP protection, the court analyzed several cases discussing the public issue requirement.  In Hall v. Time Warner, Inc., 153 Cal. App. 4th 1337 (2007), the Court of Appeal ruled that Marlon Brando’s retired housekeeper Blanche Hall, although not a public figure, became involved in an issue of public interest when she was named as a beneficiary in his will while some of Brando’s heirs were disinherited.  Even though Hall did not voluntarily seek publicity, she was deemed to have become involved in a matter of public interest by being named in Brando’s will.  The public issue requirement was also met in Nygard, Inc. v. Uusi-Kerttula, 159 Cal. App. 4th 1027 (2008), where the court held that statements regarding a Finnish company and founder that were published in a magazine article were of great interest to the Finnish public.

Alternatively, in D.C. v. R.R., 182 Cal. App. 4th 913 (2003), the Court of Appeal held that the public issue requirement was not met just because a statement was made about a person in the public eye.  In that case, derogatory statements were made online against a high school student who had some involvement in acting and singing.  The court emphasized that an issue is not a matter of public interest simply because it involves a statement about a public figure or limited public figure.  Rather, a public issue is implicated if the subject of the statement or activity underlying the claim 1) was a person or entity in the public eye, 2) could affect large numbers of people beyond the direct participants, or 3) involved a topic of widespread, public interest.

Analogizing Albanese’s case to D.C., the Court held that even though there is some public interest in Albanese, there was no evidence of a public controversy concerning Albanese, Menounos, or Dolce & Gabbana.  Rather, their dispute concerning theft was entirely private with no evidence that the disputed remarks were topics of public interest, that Albanese had invited public comment regarding her alleged theft of property, or that Albanese’s fame is so great that her private dispute was of interest to the public.  Thus, having achieved some level of fame does not automatically bring an individual within the “public eye” or make a dispute concerning that individual a “public issue.”

ABC Wins “LOST” Idea Submission Lawsuit

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Stephen L. RaucherOn March 8, 2013, the California Court of Appeal ruled in favor of ABC in an idea submission lawsuit regarding the television series LOST.  Spinner v. American Broadcasting Companies, Inc., 215 Cal. App. 4th 172 (2013).  The lawsuit centered on Anthony Spinner’s allegations that an implied-in-fact contract was created when he submitted scripts to ABC in 1977, 1991 and 1994 (although Spinner’s 1991 and 1994 scripts dealt with a spaceship crash, which he admitted were not substantially similar to LOST).  Ruling that the uncontradicted evidence showed that ABC independently created the TV series LOST, the Court of Appeal affirmed the trial court’s earlier decision granting summary judgment against Spinner.

Spinner’s 1997 script was tentatively entitled “L.O.S.T.” and revolved around a plane crash similar to LOST.  The 1977 script focused on eight survivors connected to the U.S. Olympic team, who crawl through a mountainside tunnel and emerge in a prehistoric world inhabited by dinosaurs and primitive humans – interestingly, an idea itself reminiscent of a different show, Land of the Lost.  In addition to the survival aspect of the show, several of the characters in the 1977 script bore some similarities to those in LOST (i.e. a former military man and a spoiled rich girl).  The script was deemed too expensive for ABC to produce at the time and thus, was not developed.  Spinner alleged that ABC did use his ideas in the 1977 script years later when it developed and produced LOST in 2004.

Ordinarily, an idea can be the subject of an express or implied contract if 1) the plaintiff can show that he clearly conditioned the submission of his idea on an obligation by the defendant to pay for any use, 2) defendant voluntarily accepts submission of the idea knowing of the condition, and 3) the defendant actually uses the idea.  When the plaintiff cannot show direct evidence of actual use, an inference of use can be raised by showing defendant had access to the ideas and that the defendant’s work is substantially similar to plaintiff’s ideas.  If the plaintiff is able to raise this inference, the defendant can try to dispel the inference with evidence that conclusively demonstrates that the defendant independently created the project.  If the defendant can show this, it is appropriate for a court to grant summary judgment on an implied-in-fact contract claim.  In this case, the Court rested its holding on 1) Spinner’s insufficient showing of access and 2) ABC’s uncontroverted and conclusive evidence of independent creation.

When analyzing access, the Court assumed for the sake of argument that there were substantial similarities between the 1977 script and LOST.  The Court borrowed from the reasoning of copyright infringement cases and concluded that Spinner had only “shown a bare possibility of access based on speculation, supposition, and guess work.”  None of the executives involved in the creation of LOST had a reasonable opportunity to view the 1977 Script because there was no evidence that ABC kept a “script library” with old, unreturned scripts.  Further, the nexus between the creators of LOST and the people to whom Spinner submitted the 1977 script was weak – none of the individuals around in 1977 were still employed by ABC when LOST was developed.

The Court then summarized the evidence of independent creation assuming that an inference of use had been successfully raised:  LOST was originally conceived as the melding of TV show Survivor and the movie Cast Away, the idea was transcribed by ABC during an initial brainstorming session, and various writers wrote and revised the script.  Thus, the evolution of the creation process of LOST was well-documented.  Additionally, the Court gave weight to uncontradicted declarations by the creators of LOST that they had no connection to or knowledge of Spinner or his 1977 script.  Concluding that ABC independently created LOST, the Court put an end to years of litigation nearly three years after the series aired its final episode.

California Supreme Court Clarifies the “Continuous Accrual” Exception to the Statute of Limitations, Expanding the Ability of Plaintiffs to Sue

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Stephen L. Raucher

On January 24, 2013, the California Supreme Court decided the case Aryeh v. Canon Business Solutions, Inc., 55 Cal. 4th 1185 (2013), and clarified the common law theory of continuous accrual as it pertains to statutes of limitation.  The Court also settled a split of authority among appellate courts and held that continuous accrual does apply to causes of action arising under California’s unfair competition law codified in the Business and Professions Code § 17200 et seq. (UCL).

The ability to bring a lawsuit depends on whether the time period on a statute of limitations has run on a particular cause of action.  The statute of limitations begins to run when a cause of action accrues.  Under the common law “last element” accrual rule, this typically occurs when the elements of wrongdoing, harm and causation are complete.  Because certain harms have the potential of recurring and repeating over time, courts and the California Legislature developed a series of equitable exceptions that modify the rules governing the initial accrual of a claim and the subsequent running of the statute of limitations period.

One of these exceptions is the theory of continuous accrual.  The theory posits that a series of wrongs or injuries may be viewed as each triggering its own limitations period, allowing for newer violations to come within the applicable limitations period.  Thus, although the initial violation might be time-barred because it occurred before the limitations period, events occurring within the statue of limitations are deemed timely.  Further, Aryeh clarified that in continuous accrual cases, the series of wrongs are discrete and independently actionable.  This is in contrast with the continuing violation doctrine, another exception to the “last element” accrual rule, which involves a series of small harms, any one of which may not be actionable on its own and does not trigger its own limitations period.

Following the federal trial court decision in Stutz Motor Car of America v. Reebok Intern., Ltd., 909 F. Supp. 1353 (C.D. Cal. 1995), a split of authority developed over whether continuous accrual applies in UCL cases.  Stutz held that the UCL categorically foreclosed application of another accrual rule exception – the discovery rule.  Cases following Stutz extended the reasoning to the continuous accrual rule.  The contrary view was expressed in Broberg v. The Guardian Life Ins. Co. of America, 171 Cal. App. 4th 912 (2009), where the court reasoned that it is the underlying nature of the claim, not its form, that should control.  Thus, just because a cause of action is pleaded under the UCL, application of the continuous accrual exception is not precluded.

The Aryeh case articulates and clarifies the nature of the continuous accrual exception, and distinguishes it from similar exceptions to the traditional common law “last element” accrual rule.  But beyond holding that the continuous accrual exception applies to UCL claims, the decision also has important implications for many other types of claims, such as breach of contract and employment discrimination.  After Aryeh, claims which might have been assumed to be stale in the past may have new life.

 

Evidence of Fraudulent Statements At Variance With Contractual Language Allowed by New California Supreme Court Case

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Stephen L. Raucher

The California Supreme Court recently decided Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Association, 55 Cal.4th 1169 (2013), and changed the fraud exception to the parol evidence rule. The Court departed from the highly criticized Pendergrass rule, which took a narrow view of the fraud exception and limited the type of evidence that could be introduced when interpreting contracts. The Riverisland decision makes it easier to challenge a contract by expanding the type of evidence of fraud that can be introduced by a party.

The parol evidence rule is codified in Code of Civil Procedure §1856 and Civil Code §1625. It is intended to protect the integrity of written contracts by prohibiting courts from considering extrinsic evidence to alter or add to the terms of the contract itself. The fraud exception allows a party to introduce extrinsic evidence, including oral representations not included in the final written agreement, to establish that an agreement was tainted by fraud.

In Bank of America etc. Assn. v. Pendergrass, 4 Cal.2d 258, 263 (1935), the California Supreme Court imposed a limitation on the fraud exception by holding that “parol evidence of fraud to establish the invalidity of the instrument . . . must tend to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing.” This effectively disallowed a party from introducing parol evidence of an alleged misrepresentation if it contradicted the written terms of the final agreement.

The Pendergrass rule received much criticism over the years. The Pendergrass rule had the potential to actually further fraudulent practices by encouraging individuals to make oral promises they never intended to perform because evidence of these promises would be inadmissible. In 1977, the California Law Revision Commission ignored the Pendergrass rule when proposing modifications to section 1856, even though it could have codified the limitation. Finally, the Pendergrass rule was a minority view in the United States, as the majority of states, the Restatements, and most commentators declined to subscribe to the limitation.

The seminal decision in Riverisland abrogates a rule that not only had little legal support, but that was also unpopular in other jurisdictions and among commentators. Proving fraud through parol evidence will still require a showing of justifiable reliance on the defendant’s misrepresentation. However, the stringent limitation that prohibited parol evidence of promises at odds with the terms of a written agreement is no longer a part of California law.

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