New appellate case holds cities can't ban medical marijuana dispensaries

The old adage, "When it rains, it pours," can now be applied to legal cases as well.   Cases concerning medical marijuana are being decided by the courts of appeal.  In many of those cases, the attorneys sought review before the California Supreme Court but their petitions were denied.  Now we have the Supreme Court taking up four cases, although it appears one case, Traudt v. City of Dana Point, was recently dismissed.   In Traudt, a case previously published by the Court of Appeal, Fourth Appellate District, Division Three, in Santa Ana, the appeal was dismissed after the court concluded an individual medical patient lacked standing to assert her rights to medical marijuana, and more specifically, from a dispensary in Dana Point.  Now that the appeal has been dismissed, the case is no longer citable law.

Right in the middle of my preparations to argue the Lake Forest appeals, the California Supreme Court surprised a lot of people by granting review inTraudt, Pack v. Superior Court, City of Riverside v. Inland Empire Patient's Health & Wellness Center and People v. GC Holistic, Inc..  The Court of Appeal (the same court that decided Traudt) issued its opinion in City of Lake Forest v. Evergreen Holistic Collective, 2012 Cal.App. LEXIS 239,  and my appeals, City of Lake Forest v. Lake Forest Wellness Center & Collective and Independent Collective of Orange County, which referred to Evergreen and unpublished..

In what some have described as "splitting the baby," the court came out with a decision that is both pleasing and disappointing to everyone.  This court has faced many similar lawsuits, probably read dozens of briefs on the subject, and listened to dozens of oral arguments.  So, it was no surprise when the court concluded its opinion by stating, "We recognize our conclusions today may disappoint the parties in this case and the opposing sides in California's ongoing debate concerning medical marijuana:  dispensaries, because they may wish to operate independently of cultivation sites, and some cities and other local governments, because they want to ban dispensaries altogether.  We emphasize that these are policy outcomes outside our power to reach or grant because we are constrained by the voters' and the Legislature's enactments.  Although courts will continue to resolve disputes over the meaning of the CUA and MMPA, policy choices about the role of medical marijuana in this state, including any changes or adjustments that may be made, rest ultimately with the people and their representatives."  (Id. at p. 79.)

The decision reversed a preliminary injunction requested by the City of Lake Forest, sending the case back to the superior court.  The court concluded that an absolute ban contradicted and is preempted by state law.  However, and this is a big however, while cities may not ban medical marijuana dispensaries altogether, the Legislature authorized dispensaries only at sites where medical marijuana is 'collectively or cooperatively . . . cultivate[d].'"  (Id. at p. 1-2.)  That means that when the City requests a preliminary injunction, it must show the dispensary does not grow its marijuana onsite "or otherwise failed to comply with applicable state medical marijuana law or permissible location regulations."  (Id. at pp. 2-3.)

Now before you start scratching your head, you might wait until this appeal is considered by the California Supreme Court.  The City of Lake Forest has already voted to instruct its attorneys to file a petition for review.    That petition can be filed within a 10-day window starting on March 31, 2012.  I would anticipate that review will be granted.  Cities are already facing applicants for licenses who come armed with a copy of this decision.  One might expect the cities to delay action until they hear from the Supreme Court.  As an alternative, they may pass restrictive regulations dealing with on-site cultivation.  While in theory it could be argued that the case is somewhat favorable to medical marijuana proponents, the difficulties of growing on-site will prevent many dispensaries from being able to comply.  In a few months, this dilemma may be moot and we will be facing ongoing legal battles as we wait for a decision from the Supreme Court.

Appellate court holds plaintiffs not required to comply with C.C.P. 425.13 when suing a health care plan

Appellate court holds plaintiffs not required to comply with C.C.P. 425.13 when suing a health care plan

by Donna Bader

In  Kaiser Foundation Health Plan, Inc. v. Superior Court (Rahm) (2012) ___ Cal.App.4th ____, Anna Rahm and her parents sued Kaiser Foundation Health Plan and two Kaiser health care providers, alleging they had devised an insurance compensation scheme that induced Kaiser's physicians to deny medical services to plan members.  They alleged Kaiser's system allowed its contracted physicians the responsibility of deciding whether to give insureds benefits under their contracts.  Part of that decision must be based in part upon cost savings to Kaiser.  These cost savings are translated into rewards and bonuses to the physicians who withhold treatment. Plaintiffs alleged four causes of action and prayed for punitive damages for breach of implied covenant of good faith and fair dealing and intentional infliction of emotional distress.
Anna was suffering from severe pain, and although she and her parents requested an MRI, the Kaiser health care providers refused, resulting in a three-month delay.  When it was finally done, the MRI indicated Anna had an "aggressive mass" in her pelvis and a biopsy revealed she was suffering from a fast-growing osteosarcoma.  That delay allowed the cancer to spread and Anna, who underwent chemotherapy, lost her right leg and portions of her pelvis and spine.
The defendants filed a motion to strike the punitive damages, pursuant to Code of Civil Procedure section 425.13(a).  The trial court denied the motion and defendants filed a petition for writ of mandate.  The petition was summarily denied by the appellate court.  Defendants then filed a petition for review in the California Supreme Court.  While the petition was pending, the plaintiffs dismissed their punitive damages claims.  The Supreme Court granted reviewed and ordered the appellate court to hear the matter.
The appellate court concluded plaintiffs were not required to comply with Code of Civil Procedure section 425.13 because the statute did not apply to plaintiffs' claims against Kaiser Foundation Health Plan and because plaintiffs had dismissed their punitive damage claims against defendants.  Pursuant to Code of Civil Procedure section 425.13, a plaintiff cannot include a prayer for punitive damages unless the trial court enters an order allowing an amended pleading that includes such a prayer.  The plaintiffs are generally required to show there is a substantial probability they will prevail on their claims.  The trial court concluded plaintiffs' claims were related to insurance bad faith, rather than medical malpractice, and therefore, section 425.13 did not apply.
The court in Kaiser Foundation Health Plan, Inc. concluded section 425.13 does not apply to a health care service plan.  It found the language in the statute was unclear.  As a consequence, the court turned to the legislative history of section 425.13, which established it was only intended to apply to medical care providers.  This holding was not changed because the decisions were made by Kaiser health care providers.  The Health Plan was being sued because it provided financial incentives to providers to deny expensive medical treatment. Thus, the trial court did not err in refusing to strike the prayer for punitive damages against the Health Plan.

Hurray! Proposition 8 is ruled unconstitutional!

Hurray!  Proposition 8 is ruled unconstitutional!

California again has reason to celebrate as the 9th Circuit Court of Appeals struck down Proposition 8 as unconstitutional.  This may seem like old news to gays in other states who enjoy the right to marriage, or civil unions and domestic partnerships that provide the same rights.  The celebration is sweet to those of us in California because of the turmoil that supporters of gay marriage have endured:  a voter-approved ban, legal fights over the right to marry, which seemed to support the right and then withdrew it, and then the loss of the  opportunity to marry that was later taken away.  One day we may all look back on these battles as strange in a society that claims to honor personal freedom and human rights. 

Supports of Proposition 8 may ask the 9th Circuit to rehear the case, conduct an en banc hearing (heard by 11 judges), or go directly to the U.S. Supreme Court.  The windows of opportunity changes according to the relief sought, but at least by the end of 90 days we will have our answer.

The Court's Opinion in Perry v. City and County of San Francisco is a whopping 128 pages long.  In the opinion written by Judge Reinhardt, he concludes Proposition 8 violates the Fourteenth Amendment of the U.S. Constitution.  While the Constitution allows communities to enact many desirable laws, they must at least have a "legitimate reason for the passage of a law that treats different classes of people differently."   The Court held there was no such reason for enacting Proposition 8:  it could not have been enacted to advance California's interests in childrearing or responsible procreation nor could it have any effect on religious freedom or on parents' rights to control their children's education.  Judge Reinhardt explained:

                "All that Proposition 8 accomplished was to take away from same-sex couples the right to be granted marriage licenses and thus legally to use the designation of 'marriage,' which symbolizes state legitimization and societal recognition of their committed relationships.  Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in California, and to officially reclassify their relationships and families as inferior to those of opposite-six couples.  The Constitution simply does not apply for 'laws of this sort.'  Romer v. Evans, 517 U.S. 620, 633 (1996)."

(Opn., p. 5.)

Rather than making a broad ruling, the Court narrowly decided the issue, reasoning that Proposition 8 only took away the designation of "marriage" while "leaving in place all of its incidents."  (Opn., p. 6.)  It also limited the holding to California, which may make review by the U.S. Supreme Court less likely.

While acknowledging the official sponsors of Proposition 8 have standing to appeal the decision by the district court, the Court concluded "The People may not employ the initiative power to single out a disfavored group for unequal treatment and strip them, without a legitimate justification, of a right as important as the right to marry."  (Opn., p. 7.)  It traced the development of laws relating to marriage, noting that California's Domestic Partner Act provides domestic partners with the same rights, protections, and benefits of married couples, only withholding  the official designation of "marriage."  In Marriage Cases, the California Supreme Court held that the fundamental right to marriage could not be denied to same-sex couples.  Then Proposition 8 came along, providing that only marriage between a man and woman was valid.   

In response to the publication of the Court's opinion, there were a flurry of newspaper reports and editorials.  In one editorial written by Dean Erwin Chemerinsky of the UC Irvine School of Law, he notes, "No doubt many are offended by the idea of same-six marriage.  But, of course, those who don't like the idea of same-sex marriage don't have to marry someone of the same sex."  (Los Angeles Times, Op-Ed, Feb. 8, 2012.)

You can find the decision, including the concurring/dissenting opinion of Judge Smith, here: http://www.ca9.uscourts.gov/datastore/general/2012/02/07/1016696com.pdf.

How the Doctrine of Invited Error can ruin your appeal.

In Transport Ins. Co. v. TIG Ins. Co. (2012) ___ Cal.App.4th ___, the First Appellate District, Division Two, the court was faced with an appeal dealing with reinsurance, and more particularly, the jury's finding that the lawsuits were barred by the statute of limitations.  The appeal "generated over 8,000 pages of appendices, 35 volumes of reporter's transcripts, and 425 pages of well-written briefing, including a 180-page appellant's reply bief."  Whew! (Opn., p. 2.) (I would love to see - or have - the attorneys' fees in this case.)

The appellant argued the appeal involved several issues of first impression in California and looked to the court to become the lead authority on these issues.  Instead, the court resolved the appeal under principles of appellate review, including the doctrine of invited error. 

Appellant first argued that the trial court committed instructional error because the instruction on the statute oflimitations contained an incorrect statement of law regarding accrual and omitted any mention of tolling.  The court concluded the argument was barred by the doctrine of invited error.

Invited error occurs when an appellant's conduct induces or invites the commission or error by the trial court, resulting in an estoppel to raise it as a ground for reversal on appeal.  (As an interesting side note, the court cited to Cal. Practice Guide: Civil Appeals and Writs.  One of the authors of that treatise, Jon B. Eisenberg, is co-counsel for appellant.) 

While the instruction in this case was submitted by another party, appellant agreed to the instruction.  Appellant later argued that an attorney who submits to the trial court after an adverse ruling and after making appropriate objections, does not waive the error.  The court of appeal did not see it the same way, indicating that appellant's recitation of the fact was less than candid.

One complaint that I frequently hear is that attorneys cease objecting because they are fearful of a trial court's reaction.  The court stated, "the claim that advocating a position with an experienced judge would somehow 'aggravate' her is sheer speculation -- not to mention demeaning."  (Opn., pp. 25-26)  In reality, making objections can irritate a judge, and the attorney is mindful of the fact that during the course of trial, the judge has many opportunities to hurt the attorney's presentation of the case.  However, failing to object also results in the loss of valuable rights and grounds for appeal, so the attorney has to risk a judge's displeasure so the record on appeal can be preserved.

The court also noted that appellant did not request an instruction on equitable tolling.  Each party "'must propose complete and comprehensive instructions in accordance with his theory of the litigation; if the parties do not do so, the court has no duty to instruct on its own motion.'"  (Opn., p. 27.)

The court also found that appellant's challenge to the trial court's order denying its motion for summary adjudication failed because an order granting or denying summary adjudication is generally reviewable only by a petition for writ of mandamus, especially where the parties litigated the same issues at trial.  The court also found the argument would fail on its merits.

Finally, the court rejected appellant's last argument that the trial court erred in rejecting its equitable estoppel instruction.  Although appellant proposed such an instruction, the trial court did not find any evidence to support the instruction.  It concluded, "A party is entitled to 'correct' instructions on 'every theory of the case advanced by [it] which is supported by substantial evidence," citing Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 572. (Opn., p. 32.)

How frustrating and expensive to have gone through this appeal, spending a boatload of money on attorneys' fees and producing a hefty boatload of paper, only to have the door shut on you on strictly procedural issues.

The importance of integrity in the appellate process

When I first entered the legal profession, I believed it was truly a noble profession.  Over time my belief in the legal system has eroded and I have observed plenty of examples of dishonesty, unnecessary aggression, and lack of civility.  It doesn't surprise me that many people have a rather low opinion of attorneys.

Times are changing and it seems that people also have a rather low opinion of politicians, bankers, mortgage brokers, etc.  The list could go on.  The importance of credibility and connecting with one's customers or clients cannot be denied.  While the Internet was first thought of a place where people did not have to make personal connections, my experience has been otherwise, that people are connecting in new ways and in numbers that I could never envision.

Right after Thanksgiving, the Court of Appeal in the Fourth Appellate District, Division Three, filed an opinion in Kim v. Westmoore Partners, Inc., in which it sanctioned attorney Timothy J. Donahue $10,000 for lying to the court when seeking an extension of time, and for filing a boilerplate accusation and request for sanctions against opposing counsel.  The decision included a "cautionary tale for appellate counsel.  Those who practice before this court are expected to comport themselves honestly, ethically, professionally and with courtesy toward opposing counsel."  (Opn., pg. 3.)

What had Donahue done?  He sought an extension of time to file his respondent's brief, which is not a required document, stating additional time was needed to address the "complex issues raised" and to research and finalize the brief.  The extension request was granted.  When his brief was filed, it turned out to be an almost exact duplicate of a brief he filed years earlier.  In fact, the court could observe where some words from the earlier case that had not been changed.  (A warning about using cut-and-paste and then failing to adequately proofread the brief.)  The court reasoned that frivolous appeals do not require significant time to rebut.  Mr. Donahue's letter brief was conclusory, even to the point of suggesting that the order was issued in error, and the court must have meant it was considering sanctions against appellant's counsel.

On the day of oral argument, Donahue sent another attorney, who was unaware of the sanction request.  What a surprise!  The court issued a second order to demand Donahue's personal appearance.  The court noted that not every request for an extension will be deemed sanctionable merely because it doesn't contain much detail, but given the facts in this case, the request was not reasonable.

The court decided it could not overlook Donahue's conduct and used its published opinion to instruct the legal profession:

"Our legal profession is rife with cynicism, awash in incivility.  Lawyers and judges of our generation spend a great deal of time lamenting the loss of a golden age when lawyers treated each other with respect and courtesy.  It's time to stop talking about the problem and act on it.  For decades, our profession has given lip service to civility.  All we have gotten from it is tired lips.  We have reluctantly concluded lips cannot do the job; teeth are required.  In this case, those teeth will take the form of sanctions."

(Opn., pg. 30.)

This is the start of a new year.  People are searching for others who will be honest and try to solve problems honestly and simply, without escalating disputes into modern warfare.  If you have a list of resolutions for 2012, let this be the first one on it.