Developments of Interest

New Cases of Interest - August 4, 2015

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Finton Construction, Inc. v. Bidna & Keys, APLC (2015) 238 Cal.App.4th 200.  This is a SLAPP case.  The plaintiff sued defendant attorneys contending that a computer hard drive, which constituted potential evidence in an underlying case, should have been unconditionally returned to plaintiff.  The court granted the defendants' SLAPP motion finding that defendants had demonstrated that their conduct arose from protected activity by showing that it occurred in connection with defendants' representations of their clients in an underlying case.  The only reason they ever had possession of the hard drive was because they had received it from their clients as legal counsel.  The litigation privilege applied and plaintiff's evidence fell far short of what was necessary to establish a prima facie case of either conversion or receipt of stolen property.

Pinela v. Nieman Marcus Group, Inc. (2015) 238 Cal.App.4th 227.  This was an employee class action case brought against their employer in which the employer sought contractually agreed upon arbitration.  The court denied the petition to compel arbitration finding first that it was proper for a court to determine the enforceability of the arbitration agreement and in this case a provision in the agreement which delegated the issue of enforceability of the agreement to the arbitrator was unconscionable and thereby revocable.  This delegation provision was part of what the court viewed as a contract of adhesion and thus procedurally unconscionable and also substantively unconscionable because the agreement required application of Texas law and thereby eliminated the employee's ability to contend that the agreement as a whole is unconscionable under California law.  Substantive unconscionability arose because of the choice of law provision and Texas law did not recognize a private right of action to enforce wage and hour protections which amounted to an advance waiver of rights under the Labor Code.

This case is particularly interesting when considered in light of the California Supreme Court's decision years ago in Grafton v. Superior Court outlawing predispute jury waivers.  A number of form contracts since, particularly in the financial industry, have sought to avoid that result by inserting choice of law clauses that are different than California law.  Might a California court now under Pinela find that those attempts are unenforceable because of the strong public policy inherent in the Supreme Court's finding that a predispute jury waiver is unenforceable? 

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