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Personal Injury Law Just Got Trickier For Hospitals

What Is Reasonable and Necessary?

We thought the tort law in personal injury cases was fairly well defined, but a new appellate opinion has got hospitals and their attorneys in a dither, while plaintiffs and their lawyers are throwing a big party.

Especially now that they can afford it.  Let me explain.

Michael Huff got injured in a car accident and went to the hospital.  When he left the hospital's care seven days later, it slapped him with a $34,000 bill that he didn't pay.  Huff's lawyer then sued Steven and Matthew Wilkins for negligence in causing the car collision that injured Huff.  State Farm insurance defended the Wilkinses.  The hospital, Pioneer's Memorial Healthcare District, duly filed a lien in Huff v. Wilkins, claiming the $34,000 that Huff owed.

The jury awarded Huff more than $350,000, and before State Farm could even get out its checkbook to pay Huff, the hospital said, "First dibs on the $34,000 that Huff owes us."

That's legal talk, in case you missed it.

Summoning all of the chutzpah they could muster, Huff's lawyers replied to the hospital, "Hold on there, bucko, those expenses weren't needed."

That's more legal talk.  I'm getting into a pattern here in case you were wondering.

Like any good neighbor, State Farm put the disputed $34,000 in the Court's hands and told Huff and the hospital that they had to fight over the disputed money. 

In legal talk, that step is called an interpleader.  I know, legal talk is really boring.  That's why I was warming you up to the first couple of legal phrases like "first dibs" and "bucko."  Well, sure enough, Huff and the hospital both told the Court that they wanted the $34,000.  At the trial of the matter, four things happened:

1.  The hospital submitted the bills that Huff didn't pay;

2.  Huff told the hospital that he had no insurance but should bill the Wilkinses;

3.  The hospital submitted its lien notice that it sent to State Farm; and,

4.   Huff's personal injury attorney confirmed that he had submitted all of Huff's medical bills in the case Huff filed against the Wilkinses and authenticated the $350K Judgment in Huff's favor.

Notice what's missing.  Didn't notice?  Well, how about the hospital's proof of the expenses it charged to Huff?  Nowhere did the hospital say that the charges were reasonable or necessary.  It just said Huff incurred the expenses.

Those are magic words in personal injury law.  "Reasonable and necessary."

You see, in order for the hospital to recover the $34,000 lien that it placed on Huff's recovery of the $350,000, the hospital should have proved that the expenses it charged Huff were both reasonable and necessary.  Under the Hospital Lien Act at California Civil Code sections 3045.1-3045.6 (a whopping five subparts), the hospital can only recover on its personal injury lien if it can prove that the expenses were both reasonable and necessary.

Look back on that list of four items that were introduced in the trial.  Look carefully to see if there's anything there about the expenses being "reasonable" or "necessary."  Can't find it?  Neither could I, and I wrote it.

That's because the hospital either forgot or failed to do so.  Now comes the Court's ruling.  Because the hospital had the opportunity in the trial to introduce this evidence, say through a doctor who treated Huff, but failed to do so, the hospital got stiffed.

That's right:  no recovery for the hospital, and Huff walked away with the $34,000.  But don't get excited.

I suspect this case isn't completely over, however.  Despite the hospital's failure to recover on its lien, the hospital can still sue Huff on both a breach of contract and equitable basis.  Huff did get $34,000 in services that he apparently still hasn't paid for, and with this loss, that debt is pretty high on the hospital's radar screen.  We'll see.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, June 11, 2013 at 14:01 Comments Closed (0) |
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You Can't Stop Your Home Address From Being Given to Your Union

Local 721 of the Service Employees International Union is the exclusive bargaining representative of all Los Angeles County employees.  No one employee can even ask his or her boss for a raise.  SEIU speaks on behalf of everyone, whether the employees want them to or not.  I don't know.  I've never been in a union.

But from the sounds of the requirements, I'm not sure I would like it, especially because just about everyone else thinks the union is more important than the employees.

That's the sum and substance of the most recent California Supreme Court ruling on the subject.  Let me give you a quick rundown of the facts here.  First, the SEIU wanted the County to provide the home addresses of all County employees, including those the Union doesn't represent.

Let's just cut to the chase.  Our Supreme Court sided with the Union. 

The County initially refused to provide its employees' home addresses.  The LA County Employee Relations Commission decided that refusal was an unfair labor practice.  The County sued.  The Los Angeles County Superior Court then denied the County's petition for relief.  The County appealed, and the appellate court held that the County must provide the home addresses of its employees, but imposed an "opt-out" procedure that would allow employees who had privacy concerns to not provide their home addresses to the Union.

The Union, at all times, was able to reach the employees it represented while they were at work.

After the appellate court ruling, however, the Union appealed to the California Supreme Court, which reversed the appellate court's opt-out procedure, saying that the "balance" between the Union's "right" to know and the employees' privacy tipped in favor of the Union "who represented them" - even though there are County employees who have opted out of union representation. 

You be the judge here.  Which is more important?  Your privacy or your union?

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Monday, June 03, 2013 at 10:06 Comments Closed (0) |
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When Is An Insurance Agent Not An Agent?

When She's the Middleman!

You may be surprised to learn that an insurance broker, despite the broker's more commonly known name of "insurance agent," isn't really always considered an agent of the insurance company.  Sure, there are some insurance companies that actually have insurance agents, like Farmers and Allstate, but not other companies that lack an actual agent force who sells only for that particular company. 

Why is this distinction important?

Just as American Way Cellular.  It purchased an insurance policy for its warehouse from Travelers through an insurance broker (note the name, "broker") and then as you would expect, had a fire loss.  That's right.  The warehouse burned down.  When it submitted a claim for coverage, Travelers denied the claim because the application, filled out by the broker, said that the warehouse had a sprinkler system.

As I am sure you have already guessed, the Court of Appeal in American Way Cellular v. Travelers didn't just issue this guidance for our benefit, it was deciding the lawsuit that erupted between American Way Cellular and Travelers.  American Way didn't have a sprinkler system (thus the reason that there was more damage), so Travelers cited the application condition and denied American Way's claim. 


American Way sued claiming that it was Traveler's insurance agent who wrongly wrote down on the application that it had a sprinkler system, so it was really the broker's fault, and therefore, since the broker was an agent of Travelers, Travelers had to pay the fire claim.

By definition, a broker can sell insurance for more than one company.  According to the Second District Court of Appeal here in Los Angeles, that ability means that the broker is not an agent of any of the insurance companies the broker represents, but instead a "middleman."

A "middleman?"

Yep.  The guy in between.  The one who takes a cut, but cannot act on behalf of the insurance company.  But wait a minute here.  The definition says, "represents."  Doesn't an agent also represent?  Yes, but. 

Here, that "but" means that in order for the situation to rise to the level of an agency relationship between the broker and the insurance company, the Court of Appeal ruled, "the principal, and not the agent, must make statements or commit acts causing the person relying on the apparent agency to believe the agency exists."

So, when an insurance broker or agent tells you that he/she is the agent of the insurance company, don't believe them.  Make sure you get something from the insurance company where the insurance company tells you who its agent is. 

That's a pretty stiff requirement to do a lot of extra work when you're buying an insurance policy, especially if you don't review in advance the application that the insurance broker fills out before it is sent to the insurance company.  You might just not have any insurance coverage like American Way Cellular, Inc. didn't if your broker fills out the application wrong, perhaps mistakenly checking the box that says you have a sprinkler system when you don't.  Then, after a fire, you've got no coverage, and most likely an insurance broker who doesn't carry enough insurance to cover the cost of the broker's mistake.

Double ouch.

We can't tell from the opinion whether that's the case here, but logic initially tells us that's the case since American Way sued Travelers Insurance instead of the insurance broker.  If that's the case, and given the results of this appellate opinion, American Way was just out of luck all the way around.

Triple ouch.

This case is a hard one to take a lesson from, however, because we find out the real reason coverage was denied and that denial was upheld by the Court of Appeal.  This case may fall into that realm where one fact makes bad law.  Here's the fact they don't list up front in the opinion:  apparently, one of the owners of American Way told the broker that it had a sprinkler system in its warehouse when it didn't.  As an aside here, and this is just a guess, but there may be a reason why the owner said the warehouse had a sprinkler system:  insurance companies offer lower premiums for sprinkler systems.

That's the real reason why American Way didn't sue the broker.  The broker was just doing as he was told to do.  That's also the most likely reason that the Court of Appeal reached the decision it did.  Even if there was an agency relationship between Travelers and the broker, the negligence was on the owner's side, not the agent or the insurance company's side. 

But wouldn't it have just been easier to say it the way I just said it instead of creating a whole bunch of extra work to find out whether they guy or gal that sells you insurance is a broker or an agent?


But then you wouldn't really know whether your coverage is good or not.  Better to review the application before the broker/agent sends it off to the insurance company, and better to know whether you can take what the agent says as if the insurance company said it.

That way, when the fire comes, you won't have to hire me to sort it all out for you.  By doing your homework ahead of time, the problem will never affect you.

And that's the best kind of legal advice:  the advice that avoids the problem altogether.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, May 31, 2013 at 18:09 Comments Closed (0) |
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Oh my! The Folks in Marin Might Have to Look At Big Water Tanks

Faced with a predicted water shortage in 2025, the Marin Municipal Water District imposed significant water conservation restrictions on its residents and businesses.  When those efforts failed, however, the District started looking around for more water sources.  Fortunately, they didn't have to look too far since the Pacific Ocean abuts Marin County.

The ocean's so big it's hard to miss.  Plus, it's got plenty of water; just not drinkable water.

With a desalinization plant, however, the MMWD could easily meet its predicted water shortage, and perhaps then some.  With the type of planning unknown to other governmental agencies like CalTrans, even though the MMWD needed an additional 5 million gallons per day, the District planned to build a plant that could produce as much as 15 million gallons per day. 

As an aside here, can we send some of the MMWD's engineers over to CalTrans to teach them how to build overcapacity highways?   But I'm getting off-track here.

In order to hold the potable (drinkable) water that the MMWD plant is expected to produce once built, the District also planned to build three big water tanks, sufficient to hold 2-3 million gallons of water.  Those tanks have to go somewhere, and the MMWD planned to place them on nearby mountain ridges. 

According to the laws of gravity, water flows downhill, so putting a water tank higher than the homes and businesses it services means that those folks will have water pressure for their sinks, faucets, showers and toilets.  It also means that they get to see the tanks perched on the top or near the top of mountain ridges, and affecting the scenic views.

And Marin has some beautiful scenic views.

You know what comes next.  That's right.  The folks at the North Coast Rivers Alliance didn't like the idea of looking at big water tanks on mountain ridges, so they did what every red-blooded Northern Californian would do:  they sued.

That's right.  The NCRA filed a lawsuit challenging the sufficiency of the EIR (Environmental Impact Report) under the California Environmental Quality Act that the MMWD used to approve the project.  The NCRA claimed that the EIR did not provide enough information to the MMWD Board of Directors to allow them to approve the placement of the tanks.

Now let's pause for a moment here for some background on EIRs.  An EIR is simply designed to provide information about significant environmental impacts.  Projects that have significant environmental impacts can still be approved - they just have to be adequately mitigated or the approving agency can override the adverse impacts with the appropriate findings of necessity.  But, the EIR is simply informational.

As the court said in its opinion:  "the issue is whether substantial evidence supports the agency's conclusions, not whether others might disagree with those conclusions."  That's a hard pill for environmental groups to swallow.  There's some legal jargon in that quote that didn't know you might have overlooked, but you shouldn't have.  "Substantial evidence" has been defined by courts as not much more than a "scintilla." 

Most groups like the NCRA challenge EIRs because the challenge creates a long delay that typically kills a project because the developer cannot service the debt load of the project without income from home sales in the interim.  And since the development can't be built while the legal challenge is pending, the project dies due to lack of funding.

But the MMWD doesn't have that problem.  In fact, it has an almost endless supply of tax dollars.  Those tax dollars come from some who belong to the NCRA, so those folks are actually funding both sides of the dispute; the ultimate irony here. 

When the dispute gets to the court, the court then looks at a series of criteria to determine whether the EIR provided enough information to the MMWD Board of Directors to make the decision to proceed with the project, despite the adverse visual impact.  To mitigate this impact, however, the Board required a landscaping plan to hide the tanks on the ridges.  Nonetheless, you'd still be able to see where the tanks were if you looked.

In the court's analysis, it looked at the EIR, which set forth the following standards of significance: "For the purposes of this EIR, the project would have a significant impact with regard to aesthetics if it would:

          [1.]     Have a substantial adverse effect on a scenic vista. For this EIR, a scenic vista is defined as a publicly accessible viewpoint that provides expansive views of a highly valued landscape. A viewpoint that is accessible only from private property is not considered a scenic vista.

          [2.]     Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway.

          [3.]     Substantially degrade the existing visual character or quality of the site and its surroundings.

          [4.]     Create a new source of substantial light or glare that would adversely affect daytime or nighttime views in the area."

Where these elements are met, the court has no choice but to approve the agency's decision.  Here, the court ruled:

the EIR included a detailed discussion of potential aesthetic impacts of development of the [...] tank, including the size and shape of the tank, satellite image analysis of impacts from four directions, visual simulation, and impacts on vistas from homes and hiking trails and the highway. This analysis constitutes substantial evidence supporting the conclusion that the impact is less than significant.

So with that, the court thought that the MMWD Directors had enough information and made a fully informed decision to overcome a significant public issue:  the need for water. 

Marin will get its desalinization plant and three water tanks, and the residents of the area will have to see three big tanks on their mountains, hopefully mostly blocked by landscaping designed to hide the tanks. 

Insert "Awwww..." here if you're from Southern California, where most folks don't understand the things that bother their fellow residents up North, and for that matter, vice versa.  As Joni Mitchell sang, they "paved over paradise" in SoCal, and that's what they're trying to prevent in Marin.

The message to take away from this case was succinctly stated by the court itself:  ‘the reviewing court may not set aside an agency's approval of an EIR on the ground that an opposite conclusion would have been equally or more reasonable, "for, on factual questions, [the court's] task" is not to weigh conflicting evidence and determine who has the better argument" (citations omitted).   

In other words, the court's task is simply to determine whether the EIR provided enough information to the District's Directors to make the decision they did.  The court cannot substitute its own decision for the District's Directors. 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, May 23, 2013 at 10:04 Comments Closed (0) |
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Convicted Killer of Seven Wants Playstation in Jail Cell

Sues to Get Toy; You Be the Judge

You may never have heard of Julian Knight, but that's likely because not only is he down under, but he's also under sentence.  Seven of them.  Life sentences, that is.  Knight (I can't bring myself to put a "Mr." before his name) was an army cadet and in 1987, he clambered up a billboard overlooking Hoddle Street, a very busy street in Melbourne. 

That's Melbourne, Australia, in case you haven't been following along.  As a disclaimer, I am not licensed to practice law in Australia, but the situation this case raises is one we face in the states where I am licensed to practice law.  Plus, I'm going to bet that even if you don't own a license to practice law, you are still going to have an opinion on this one.

Read on.

As he climbed up the billboard, Knight took with him two rifles and a shotgun.  As you've likely guessed, he then fired shots at numerous passing cars (as well as a police helicopter).  He killed seven people and wounded 19 - thus the seven life sentences.  Since the Hoddle Street massacre (as it became known) was in 1987, you're likely now asking. "why am I just hearing about this now?"

That's because Knight now - some 26 years later - wants to be able to play on the computer while he's in jail.  He wants a playstation.  He also wants the computer so he can become a better jailhouse lawyer so he can fight his way out of jail legally.  He's already been labeled as a vexatious litigant according to news sources, which means he pretty well understands how to file lawsuits from the jailhouse.  He's apparently not very good at it, however, since he's still in jail.  That's why he needs to conduct legal research on the computer. 

And play.  After conducting legal research, I'm guessing that one of his arguments is that he needs to relax and rest your mind.  I can attest to that need, but I'm just not sure that Australia is all that willing to plug a computer into his jail cell and attach a playstation to it just so Knight can relax after a hard day on the computer

By spending more time on the computer.  Although that argument is lost on me, Knight's request isn't.  The jailers turned down his request, so now he's suing to get a playstation in his jail cell. 

It raises the question of what constitutes punishment, retribution, rehabilitation and deterrance.  Those are genreally considered the four main goals of our criminal justice system.  As a society, we've also agreed with each other to avoid cruel and unusual punishment.

Knight claims that there are other prisoners in his jail who have computers and playstations.  Just not him, and he claims that disparate treatment is unfair.  I suspect that if we were now able to ask those seven people who Knight killed whether it was fair that they were killed, they'd say no.  But those answers don't seem to deter Knight from his request, if that thought even crossed his mind before he asked.

Perhaps the jury that considers this question - if it ever got to a jury - should be made up of the 19 people who were wounded by Knight but survived, and see what they'd rule.

My guess is that they'd say no.  How would you rule?

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, May 14, 2013 at 10:03 Comments Closed (0) |
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The Big Print Giveth and the Small Print Taketh Away

In Other Words, Read What You Sign First

People never cease to amaze me. Let's say you're a computer manufacturer in China, and you agree to sell, oh, say $2 million in computer parts to a computer company in the United States. Logistically, you've got one big problem on your hands. How do you get all of those parts from China to the US?

They're too heavy for a plane and trucks don't float, so you choose a boat. Well, actually a freighter. You know, those great big boats with lots of containers to hold your computer parts.

So here's the deal. The manufacturer signs a contract with a shipping company, and then sets off to make the parts. A year later, the parts are finished and loaded on the boat. Er, freighter.

The shipping company, however, doesn't work with contracts, they work with Bills of Lading. So, the shipping company issues two bills of lading, one for each container. Those Bills of Lading, however, contain a limitation that prevents the manufacturer from suing them more than a year after the parts are delivered. That limitation was not in the original contract that the manufacturer and shipper signed.

Well, as things sometimes happen, the deal went awry. The original contract said that the shipper was not to release the parts to the US computer company without the manufacturer's permission.

As you have guessed, the shipper released the $2 million of computer parts to the US computer company without the manufacturer's permission. Unfortunately for the manufacturer, the US computer company filed for bankruptcy shortly after receiving the parts from the shipper, and never paid the manufacturer the $2 million.

How this next part happened eludes me, but the manufacturer DIDN'T NOTICE that it hadn't been paid the $2 million FOR MORE THAN A YEAR. Must be nice to have that much money that you don't miss $2 million for a year. Wow.

When the manufacturer finally woke up realized that the money was missing and the computer company had filed bankruptcy, it called the shipper and told the shipper to return the computer parts since it had never given permission to the shipper to release the parts to the computer company.

The shipper fessed up and admitted that it had improperly released the computer parts without permission, but relying on the one-year limitation in its Bills of Lading, refused to pay the manufacturer. Not surprisingly, the manufacturer sued the shipper.

Guess who wins here?

That's right....the shipper. The manufacturer tried to rely solely on the original contract, but the court said that the Bills of Lading constituted a subsequent and valid contract, and the one-year limitation against suit was enforced.

Just goes to show you. Read the small print on the back. That's where the one-year limitation was printed.

Here's the actual court opinion.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, April 26, 2013 at 15:42 Comments Closed (0) |
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When Is a Volunteer an Employee Covered by Work Comp? It Depends on the Pixie Dust you Sprinkle.

Well, Disneyland is in Orange County, after all, so the term "Pixie Dust" is considered jargon around here. Not legal jargon, mind you, but anyone who's gone to Disneyland understands. In this case, it means the words you use to get what you want.

Let me give you the setup, even though the opinion is shy on details. Diane Marie Minish went to the Mount Madonna Center of the Hanuman Fellowship (a group that teaches the theory and practice of yoga). The Mount Madonna Center is a "conference and retreat center located on 355 acres of mountain-top redwood forest and grassland overlooking Monterey Bay, between Santa Cruz and Monterey, in Northern California," according to their website.

Ohm. Are you relaxed now?

It turns out that Ms. Minish went to the Center's property to visit a sick friend, and then when asked to get someone from elsewhere on the property, the Center directed her to hop on the forks of a forklift, and off she went. Well, you know what happened next. That's right. She fell, was injured and went off to the hosptial.

Here's where the parties' stories differ. The Fellowship apparently submitted a workers' compensation claim for her and she started to get money, which she tried to return and informed the workers compensation appeal board that she was neither an employee nor a volunteer and that the work comp claim was fraud. The Fellowship listed her as a volunteer, and having previously sprinked the Pixie Dust of Labor Code section 3363.6 over its volunteers, submitted the work comp claim.

This Labor Code section allows not-for-profit organizations to ensure that its volunteers are covered by worker's compensation just like their employees. It's a good idea for the non-profits - it avoids the liability for lawsuits like Ms. Minish's because once you're covered as either an employee or volunteer, your remedies against the non-profit are limited to the benefits provided under workers compensation.

No tort or punitive damages liability. That's a big benefit for the non-profits. And if you've been following along like the diligent reader that you are, you just figured out the rub in this case. Yep. Ms. Minish didn't want the workers compensation benefits. She wanted the big money that was available in an everyday, run-of-the-mill personal injury lawsuit.

The tort refomers are rolling over in their figurative graves.

In this case, there are a series of unusual facts that resulted in reversing the trial court's judgment in favor of the non-profit, and allowing Ms. Minish to proceed to argue that she should recover tort and punitive damages and not be limited to only the workers compensation benefits. Those facts most interest the two parties - not you - because you've already learned what you came here to learn.

If your non-profit wants to avoid getting sued by volunteers who get injured on your property, you must get a "Volunteer Endorsement" on your workers compensation employee and you must have your Board of Directors adopt the resolution required by California Labor Code section 3363.6. If you are a volunteer, you've learned not to hop on the forks of a fork lift and travel across uneven ground. You might fall and get hurt, and if you do, you just might be limited to workers compensation remedies.

Especially if your non-profit got to this blog post first.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, March 14, 2013 at 09:37 Comments Closed (0) |
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When Is A 10˘ Charge Imposed by the Government Not A Tax?

You'll be happy to know that the 10¢ charge that Los Angelinos are required to pay to grocery stores for using a paper bag isn't a tax, even though the charge was imposed by the Los Angles County Board of Supervisors.  That's right, even though you get to pay more, it's really not a tax.


Let's think about this one for a minute.  Ok.  I'm done. How about you?  Convinced yet?  If not, then think about the argument that the County used to convince the state court (wonder why this case wasn't tried in federal court?):   the County argued that it wasn't a tax because the money wasn't paid to the County. 

Actually, the ordinance allows the grocery stores to keep the 10¢ charge to offset the "cost of compliance."  What?  How much could it possibly cost to comply with this ordinance?  There's some bagger at the end of the check out counter saying, "Hey there, customer, you have to pay 10¢ to use that paper bag."

Right.  That statement alone must cost the grocery store a whopping 10¢. 

Don't get me wrong here, I'm all for the purpose of the ordinance - eliminate the use of plastic bags, cut down on the use of paper bags and encourage grocery shoppers to bring reusable canvas bags.  You knew, didn't you, that deep down, us Angelinos are all just grown-up hippies, tree huggers, earth-shoe wearing liberals who want to save the environment? 

Well, some of us actually rail at taxes. This case, Schmeer v. County of Los Angeles, had plenty of environmental star power at the helm (Surfrider Foundation and the Environment California Research and Policy Center), but this tax case went down in flames anyway.

Judge Chalfant, an excellent judge, saw it the other way and looked past the wording of the ordinance and ruled that because the 10¢ charge didn't go to the County it wasn't a tax, reasoning that in order to be a tax, the money has to go to the County.  Where the 10¢ charge stayed with the grocery store, neither Judge Chalfant nor Justice Croskey, writing for the Court of Appeal, thought we all expect taxes to go to the government, and when the money doesn't, it's not a tax.

Sounds reasonable, until you read the wording of the definition of a tax.  Nowhere in that definition do you see the reasoning that the money has to go to the government:

"As used in this section, ‘tax' means any levy, charge, or exaction of any kind imposed by the State [County], except the following [five exceptions, none of which require that the money be paid to the State [County]]"

I don't know about you, but that 10¢ charge sounds an awful lot like a tax to me, even if the money doesn't end up in the State's hands (which some of it will anyway, because the grocery store has to pay tax on its income, but that's a different story, they say). 

Maybe one of the parties will get the California Supreme Court's attention, and perhaps they will see it differently. 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, February 21, 2013 at 18:16 Comments Closed (1) |
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The Endless Summer...Keep SurfAid Working Year 'Round

My friend Paul Riehle is an avid surfer; he's one of those guys who's up at the crack of dawn and out on his surfboard enjoying what we Californians know as the endless summer.  You can surf all year 'round here - of course you've got to wear something thicker than a 3/2 wetsuit in the winter, but as Jimmy Buffet says, "The weather is here.  Wish you were beautiful." 

While Jimmy has a way with words, Paul's got a way with surfing.  In fact, he's competing in the Malibu Cup, and is asking for your help to raise money. 

Here's Paul's plea:  "I write because I am participating in the SurfAid Malibu Cup this Saturday, September 8.  The Cup is a surfing competition to raise funds for SurfAid, a non-profit humanitarian organization with malaria eradication, emergency preparedness and response, and community health programs in Indonesia.  I have been on the SurfAid Board since its inception.  I am competing on the Beck Riehle Good Surf Team.  Our goal is to raise the most money of any team before the event starts, thereby helping SurfAid."

While you might not know Paul, you can get to know the good work that they do.  In SurfAid's own words, "SurfAid is a non-profit humanitarian organization whose aim is to improve the health, well-being and self-reliance of people living in isolated regions connected to us through surfing."

If you can't jum on your board this weekend to help raise money, you can donate by clicking on this link

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, September 05, 2012 at 09:05 Comments Closed (2) |
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Jury Awards $4.5 Million Punitive Damages Against Company With Negative Net Worth

A Jury Run Amuck Or A Well-reasoned Punishment? Don't Jump To A Conclusion Until You Read Further...

How could a jury be so insensitive?  Certainly this jury is from one of those Judicial Hellholes!  This is exactly why we need tort reform ... runaway juries ... just like that McDonald's spilled coffee cup case

You would expect to hear those comments after reading the first headline.  But there's a clue in the subheadline that may cause you to pause for a moment and think that there just might be more than the first headline communicates.

You'd be right.  And you'd be one of those critical thinkers who realizes that the sound bite does a disservice to "the rest of the story," as Paul Harvey would have said.

So here's the set up of Bankhead v. ArvinMeritor.  Now I could spin these facts for you to put you in the mood for the ultimate outcome, but rather than do that, let's let the Court of Appeal tell you what the facts were as they saw it (omitting footnotes):

ArvinMeritor [...] manufactured brake shoes for installation on commercial trucks during the time frame involved in this case. The brake shoes were fitted with asbestos-containing linings [...].

By the 1960's, ArvinMeritor knew that workers exposed to asbestos dust were at risk of developing asbestos-related diseases. Indeed, in 1973 and again in 1975, it wrote letters to [...] manufacturers complaining about the presence of asbestos dust in the brake linings it was receiving from them. Nonetheless, ArvinMeritor did not place any warnings on its products until the early 1980's, and continued to market asbestos-containing brakes until its inventory of them was exhausted sometime in the early 1990's. Not until the fall of 1987 did ArvinMeritor include an express reference to cancer in the warnings on its products.

[Gordon] Bankhead was exposed to asbestos dust from brake linings during the 30 years he worked at automotive maintenance facilities, primarily as a "parts man," starting in 1965 and continuing through his retirement in 1999. As a result of this exposure, Bankhead contracted mesothelioma, a form of lung cancer, in 2009. Before his mesothelioma was diagnosed in January 2010, Bankhead experienced difficulty breathing, and underwent painful medical treatment to drain fluid from one of his lungs. After the diagnosis, Bankhead was told he only had 12 months to live, and as his disease progressed, the quality of his life decreased significantly. At trial, Bankhead's medical experts testified that his condition would become increasingly painful until his inevitable death.

 So there you have it.  In the 1960's the company knew that it was exposing its workers to asbestos fibers, but did not warn its employees of the danger until 1987.  The jury found ArvinMeritor liable for Gordon Bankhead's exposure to asbestos as the cause of his mesothelioma.  After the liability and damages portion of the trial was completed, the Court asked the jury about punitive damages.

Here's where it gets tricky.  ArvinMeritor submitted financial statements that showed the company had a negative net worth.  Despite that "upside down" financial statement, however, the jury awarded Gordon Bankhead $4.5 million in punitive damages.

How could that possibly be, you ask? 

Well, before you get your knickers in a twist, read on and then decide (the following directly quotes the Court of Appeals): 

A separate trial was held to determine the amount of punitive damages to be assessed against each defendant. By the time of that trial, all defendants except ArvinMeritor [...] had settled. At the punitive damages trial, respondents presented an expert witness, Robert Johnson, to testify about ArvinMeritor's financial condition. In evaluating ArvinMeritor's economic status, Johnson reviewed publicly available documents filed with the Securities and Exchange Commission, including ArvinMeritor's 2008, 2009, and 2010 annual 10-K reports; its adjusted 2009 10-K reports; a 2010 proxy statement sent to shareholders; and data regarding its market capitalization. These are "generally accepted financial documents used and relied upon by economists or experts in finance to evaluate a company."

Johnson testified that between 2006 and 2010, ArvinMeritor attained over $3 billion in sales revenue each year, and an average annual cash-flow profit of $111 million. [fn. omitted]  ArvinMeritor's lowest performing year during that period was 2009, but even in that year, it had $95 million in cash available to it. In 2010, ArvinMeritor's annual sales revenues reached $3.59 billion; its annual report indicated it had earned $211 million in cash-flow profit; and it reported to its shareholders that it had earned a $12 million net profit-a conservative figure, as Johnson explained, because companies seek to reduce their reported net income, using legally available deductions such as depreciation, in order to minimize their tax liability. At the end of 2010, ArvinMeritor had on hand some $343 million in cash and cash equivalents, and its outstanding stock had a total market value of almost $2 billion.

ArvinMeritor's chief executive officer, who also served as its board chair and corporate president, earned over $7.6 million in 2010, and stood to receive between $19.9 million and $26.9 million upon leaving the company. Johnson explained that a company's willingness and ability to pay sums of this magnitude to its chief executive is an indicator of financial strength. Given all of these facts, Johnson opined that ArvinMeritor is financially sound.

Johnson acknowledged that ArvinMeritor reported that as of 2010, it had a negative net worth of $1.023 billion. He opined, however, that this number, taken on its own, did not "reflect the full context of ArvinMeritor's financial condition and ability to pay." Johnson explained that net worth is only one of "a number of different tools that we use to assess a company's financial health, wealth and condition," and opined that "net worth is probably one of the least reliable financial metrics or statistics you can use," because there are "a number of financial or accounting transactions" in which a company can engage to lower its net worth, while remaining profitable. Johnson testified that net worth "is not a measure of a company's financial condition totally or their ability to pay," because "even within the guidelines of the generally accepted accounting principles . . . net worth is something that can be pretty easily manipulated." As an example, Johnson noted that a company can reduce its net worth simply by repurchasing shares of its stock.

Johnson explained that because net worth can be unreliable, banks look instead to a company's cash flow and profits, which are the most reliable indicators of its ability to repay debt, in determining whether to lend money to it. For this reason, companies with a negative net worth are still able to borrow money. Indeed, ArvinMeritor itself borrowed a total of $245 million in 2010, and still had $539 million available on its line of credit as of September 30 of that year.

Don't believe it?  Judge for yourself with ArvinMeritor's financial statementsArvinMeritor still exists as Meritor, and was a spinoff of Rockwell. 

Now that you've read why the jury awarded what it did, does the headline accurately tell the rest of the story? 


Guess you'll have to keep a cynical eye on those headllines.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Monday, April 30, 2012 at 08:50 Comments Closed (0) |
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Legal Crackdown on Human Trafficking

Lawyer2Lawyer Internet Radio Podcast

Human trafficking is "modern-day slavery." And if you think it isn't happening near you, think again. The United Nations estimates nearly 2.4 million people may be the victims of this crime.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Bob Ambrogi, as we take a legal look at this troubling issue with Professor Bridgette Carr from the University of Michigan Law School, Attorney Ann Johnson from Houston, Texas and Mary C. Ellison, Director of Policy for Polaris Project.

Click on the link below and give a listen!


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, April 27, 2012 at 08:56 Comments Closed (0) |
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How Congress Takes A Congressional Junket Without Letting Anyone Know

Members of Congress and their staffers who travel at the expense of private organizations must follow a long list of legal restrictions and requirements.  However, there is a little known exemption that allows the same federal employees to travel with virtually no accountability and very little transparency.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Bob Ambrogi, as we welome reporter Justin Elliott and Washington University Law Professor Kathleen Clark to examine the ethics, legalities and secrecy of these Congressional trips abroad.


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, April 19, 2012 at 21:08 Comments Closed (0) |
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Women's Rights: Who Gets To Decide What Happens To Women's Bodies? Your Favorite Government?

From the Obama Administration's decision on female contraception coverage, to the Congressional hearing on women's health featuring an all-male panel of witnesses, to the Rush Limbaugh/Sandra Fluke firestorm, legislation targeting women's health is causing quite the political controversy across the country. Please join me as I welcome Attorney Shari Rendall, Director of Legislation and Public Policy for Concerned Women for America and Attorney Gretchen Borchelt, Senior Counsel for Health and Reproductive Rights for the National Women's Law Center, to discuss current legislation aimed at women's issues, reaction from women's groups and the present state of women's rights.


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, April 12, 2012 at 10:00 Comments Closed (3) |
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What Would You Do?

Driving back from LA on Friday, traffic was stopped: dead stopped.  You know, the kind of stopped you just know will turn you and several thousand of your nearest friends into a 30-second segment on the 6:00 evening news, while the rest of us watching groan with an at-too-well understanding of your plight.

Traffic started to move slowly on both sides of the freeway, but not in the middle.  Fortunately, I was on one of the the sides that was moving, not too far from the start of the traffic jam.  Within a car length or two, I saw what was going on.

One 6x6x8 piece of lumber lay askance in the middle lane, blocking traffic.  It looked like it had already been run over; a couple of chunks of lumber (the size of 2x4's) were scattered nearby.

Perhaps realizing the futility of his position, the guy driving - ok, well parked - in the middle lane immediately behind the offending tree trunk, was getting out of his car.   

On the 405 freeway.

In Los Angeles.

One of the busiest freeway in the world.  

As he got out of his car, his intent became clear.  That tree trunk was going into the back seat so he could go forward.  Into the back seat it went, but it didn't fit completely in, so part of it ended up sticking out the back window a bit, but not so far that it would interfere with anyone driving alongside him.

But the most amazing part about the whole situation on the freeway was what wasn't happening.  No one passed him.  It was as if we all realized that if our cars in the front allowed the cars in the backed up lanes behind us to speed by, someone would hit this guy and likely injure him, if not kill him.

The guy who was doing all of those cars behind him a favor.  Saving their cars from getting hit with that piece of lumber otherwise known as a tree trunk, saving those lives who surely would have been changed if hit by a large flying piece or pieces of wood.

So we stopped and waited for him to finish.  Sure, there were a few doors that opened in an attempt to offer help, but he waved us off, thinking I'm sure that it was safer if we all stayed put and let him get the lumber off the road and get it done quickly so we could all go forward again.

I have no idea who this good Samaratin was, but I sure want to thank him.  For those you who were stuck behind the six cars that stopped all traffic so this guy could do his good deed for the day, you never knew how close you may have come to changing your life for the worse, even though you were sitting in your car complaining about the traffic back-up.  

But know this.  One man and a few onlookers saved you. It didn't take a CHP traffic break.  It didn't take an accident.  It took one person who did a good deed.

Remember that the next time you see an opportunity to do your part.    

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Sunday, March 11, 2012 at 10:36 Comments Closed (0) |
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Using Endangered Species Laws To Save The Earth's Inhabitants

Lawyer2Lawyer Internet Radio

The world's tiger population has declined by 97%. The African elephant population has been cut in half. 33% of open-ocean sharks are now threatened with extinction. These and other alarming statistics have created worldwide legal action to save the Earth's endangered species. Please join me as I  explore laws and initiatives designed to save threatened species with attorney and WildAid board member, David Kracke of Nichols and Associates in Portland, Oregon.


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Sunday, February 05, 2012 at 20:10 Comments Closed (1) |
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USEPA's Approval of California Air Quality Plan Overturned Due To Use Of Six-year, Outdated Data

The United States Environmental Protection Agency just lost a battle that it has been fighting with the Sierra Club since 2004.  As you know, the USEPA sets the standards for air quality around the country.  Since the air pollution is particularly bad in California, and especially in the San Joaquin Valley, the Sierra Club filed a challenge to the USEPA's approval of certain air quality standards for the Valley in 2010.

While the Sierra Club argued that the approval had a number of problems - including the fact that the standards were impossible to comply with - the Ninth Circuit relied on just one of those problems to overturn the USEPA's approval. 

The Court said that the USEPA could not rely on data from 2004 in 2010 when approving the standards in California's State Implementation Plan.  That's right - a six-year gap in data.

Six years outdated, and yet the USEPA still approved the 2004 SIP in 2010.  Read that last sentence again.  The USEPA was six years behind in reviewing data supplied to it, and refused to consider more current data in reaching its decision.

The USEPA failed to explain why it would not consider the new data, and the Ninth Circuit consequently held that refusal as "arbitrary and capricious," and ordered the USEPA to do it over again, and this time, consider new, relevant data.

I've had cases against the USEPA before, and this tactic is quite common.  They don't do their homework, and when challenged about it, retort back that they have the statutory/regulatory right to rely on old, out-of-date data.  Finally, thanks to the Sierra Club, the USEPA has been called on its tactics and hopefully, we'll see the last of this bureaucratic nonsense. 


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Saturday, January 21, 2012 at 08:41 Comments Closed (1) |
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California's State Board of Equalization's End-run Attempt Around Prop 13 Thwarted

If you run a business, you know all about the California State Board of Equalization.  It's a euphemestically named government organization that is our equivalent of the IRS.  You know, those folks who collect taxes.

Proposition 13 was enacted by California voters in an attempt to keep property taxes down.  The SBE's mission, it seems, is to figure out ways to increase tax revenue to the state.  One of the ways the SBE tried to do that was to avoid the annual decrease in the value of fixtures (those things that are attached to real property, like machines bolted to the floor and the like).

You see, each year, fixtures depreciate, which means less taxes are due because the value of those fixtures have declined.  Worn out.  Not as useful as the year before.  Requires more maintenance.

You get the idea.

Well, so did the SBE, and they saw tax revenues slip away.  Until some bright bulb in the SBE got the idea to reclassify fixtures as real property.  We all know that real property increases in value over time - at least that was the theory that fueled the sub-prime mortgage crisis, but that's a whole 'nother story for another day.

In the SBE's test-dummy attempt to pull this switcheroo, the SBE applied this theory to the petroleum industry first before attempting to apply it to every other industry in California.  If you think about that plan, it wasn't the smartest.  The petroleum industry has cash flow, and lots of it - especially since we keeep buying gas for our cards and trucks.  So when the petroleum industry caught wind of this plan, it tasked its association, the Western States Petroleum Association, to file a legal challenge.

The WSPA did just that, citing to the agoe-old division between the valuation of fixtures and the valuation of real property, and the attendant accounting methodologies used to appraise those two items. Accountants depreciate fixtures, but not real estate.

Prop 13 was designed to limit taxes, not increase them, and the Court saw right through the SBE's plan, telling the government to keep the distinction between fixtures and real property, never the twain to meet.

Your fixtures are once again safe from the evil overlord of taxes. 


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, January 20, 2012 at 09:08 Comments Closed (1) |
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Revisiting Citizens United in an Election Year

The Role Of The Super-PAC

Since 2010, there has been great debate over the controversial ruling commonly called Citizens United.  Most recently, the Montana Supreme Court challenged the decision while Senator McCain called it "one of the worst decisions I have ever seen." Please join me as I welcome Attorney Joseph M. Birkenstock, former chief counsel of the Democratic National Committee and Bradley A. Smith, Chairman and Co-Founder of the Center for Competitive Politics and former Commissioner on the Federal Election Commission, for an in-depth discussion on the impact of the ruling during an election year and its influence on the upcoming Presidential election.


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, January 19, 2012 at 19:24 Comments Closed (0) |
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A Lawyer In Your Pocket?

You may say it would be better to have a judge in your pocket, but then, so does everyone else.  I'm talking about a level playing field, with a lawyer in your pocket.  You know, the kind you can ask any question to when you have a legal problem, and get a solid answer that will avoid you having to breach a contract, make a mistake that actually would be a crime or anything else that would land you in a courtroom.

Why not?  You can get a doctor in your pocket with Web MD, so why not all professions, especially law?

Diagnosing a medical condition can be a difficult proposition.  So can diagnosing a legal problem.  But for those problems that have not yet landed you in court, good legal advice can steer you away from that eventuality. 

If you think about it, you do have a lawyer in your pocket.  It's your cell phone.  When you're facing a difficult legal problem, do what my clients do.  Pick up the phone and call your laywer.  We're happy to answer your questions, and even happier when our advice avoids landing you in court.

For those who call their lawyers and get good advice, you're lucky.  Many others who don't call end up calling when a legal disaster hits, and then it's too late.  At that point, you need the other part of what I do - litigation.  It's time consuming and can be very costly.

Good legal advice before the problem hits is worth its weight in gold, especially since you will never experience the inside of a courtroom.  Pay your lawyer a visit and avoid hiring me.  Otherwise, I'm glad to take your call.

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Tuesday, January 17, 2012 at 19:19 Comments Closed (1) |
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What Are The Hottest Legal Trends For 2012?

Lawyer2Lawyer Internet Radio

Decriminalizing medical marijuana, fighting to repeal healthcare reform and using social media as evidence are just a few of the topics trending in the legal industry in 2012.  My co-host, Bob Ambrogi, is off today, so please join me as I discuss the hottest trends currently transforming the legal world with attorney and legal trend-watcher Danny Cevallos, the founding partner of Cevallos & Wong, L.L.P.  


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, January 12, 2012 at 10:21 Comments Closed (0) |
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Invest In An Internet Video Start-up And Get Sued

How Michael Eisner Avoided Liability

In yet another of a long line of cases involving copyright infringement, we now have the case of UMG Recordings v. Shelter Capital Group, where Universal Music Group attempted to get around the Digital Millenium Copyright Act by suing the investors in video-sharing case, with hints of Napster-like allegations.  UMG sued Veoh, a web-sharing site for videos.

Unlike Napster, however, Veoh took all kinds of pains to ensure that it was not posting videos that were protected by copyright.  In the Court's words, "Veoh also began developing an additional filtering method of its own, but in 2007 opted instead to adopt a third-party filtering solution produced by a company called Audible Magic. Audible Magic’s technology takes audio “fingerprints” from video files and compares them to a database of copyrighted content provided by copyright holders. If a user attempts to upload a video that matches a fingerprint from Audible Magic’s database of forbidden material, the video never becomes available for viewing."

That's a lot of effort, but it doesn't address the most interesting aspect of Universal's case against Veoh's investor.

That's right.  Read that last line again.  Universal sued Veoh's investors for vicarious infringement, contributory infringement and inducement of infringement.  Gives a whole new meaning to being an angel investor, one of whom was Michael Eisner.  The Court noted, "UMG argues, however, that ... "the [Investor] Defendants remain potentially liable for their related indirect infringement" because ... the Investor Defendants do not qualify as "service providers" who can receive DMCA safe harbor protection."

While the Court held that Veoh was protected by the DCMA for reasons noted in the opinion, it analyzed the contributory copyright infringement claim under the "site and facilities" test first announced in Fonovisa v. Cherry Auction, a test that was used to shut down Napster and hold one investor liable for the copyright infringment because that investor was able to control the start-up's funding, and directed its spending, holding significant power over Napster's operations.

Unlike Napster, however, Michael Eisner was not the only investor.  The Court found that the three investors who were on Veoh's Board of Directors did not  either singly or with the other investors, individually control Veoh's operations to the point that would make them liable to UMG. 

Unfortunately for UMG, its Complaint did not make that allegation, and so the Court found that the "three investors individually acquiring one seat apiece is not the same as agreeing to operate as a unified entity to obtain and leverage majority control. Unless the three independent investors were on some level  working in concert, then none of them actually had sufficient control over the Board to direct Veoh in the way UMG contends."

So, the lesson here is at least two-fold.  Read the copyright cases beforehand and ensure that you know how to properly plead around these issues, and if you're an investor, make sure you're not the only one, and make sure you don't work together with the other investors to control your start-up.

And finally, just go ahead and pay Universal its fees to play its music.



Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, January 11, 2012 at 20:43 Comments Closed (0) |
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How Many Settlements Will This Insurance Company Have To Pay?

You can bet there will be a host of litigation spawned because of this accident:  the death of a Mother, who was survived by her minor children and an adult daughter.  But it might not be the lawsuits you're thinking.

Let me explain.

Mom was a passenger in a car. After she died, her oldest daughter made a claim against the driver's insurance company, and the insurance company settled without the daughter even filing suit.  She told the insurance company that she was the sole heir of her mother's, and on that basis, the insurance company paid her.

Apparrently someone didn't look too close at Mom's family tree - also known as a Table of Consanguinity.  Mom had five other children through a different father.  It may be that the oldest daughter didn't know about the other FIVE children, but stranger things have happened.  She may also have truly been Mom's only heir - if the other children were written out of the will.  It will likely take some time to sort this out.

As you can expect from what I've told you so far and your keen sense of observation (since you know that the insurance company settled only with the oldest daughter), the FIVE children sued the driver, too.  What a surprise.

So, when the FIVE children sued, the insurance company said, "Oh no you don't.  We already paid the sole heir, and we're not paying you anything."  Well, the insurance company didn't say exactly that, but something probably quite a bit like that.  The insurance company denied the FIVE children's claim, citing to the One Action Rule.   No money was paid to the FIVE children.

Now, if you know anything about the law, you may know about the one-action rule.  That rule does provide the insurance company with a solid defense against any further payments to Mom's heirs.  But, unfortunately for the insurance company, there are a couple of other elements to the One Action Rule.  One of those elements requires the oldest daughter to have sued the insurance company, and then a settlement.

As you know from your keen sense of observation, the oldest daugther did not sue.  In fact, the insurance company settled voluntarily.

Those last two facts doomed the insurance company's denial of the FIVE childrens' claim for wrongful death against the driver of the car, and ultimately his insurance company, who will now have to pay the FIVE children.

You can read more about the case (and the One Action Rule) here in the case of Moody, a Minor, etc., et al, v. Bedford, et al, Cal. Court of Appeal, Second Appellate District, Division Five, No. B226074 (January 9).

Now about that other litigation. 

Yup.  You got that right.  You can bet the insurance company will be suing the oldest daughter for a refund - assuming she hasn't spent all the settlement money yet. 


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Monday, January 09, 2012 at 17:53 Comments Closed (0) |
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Predictions For 2012 And Grades For Last Year's Predictions

Lawyer2Lawyer Internet Radio Podcast

From the spectacle of the Casey Anthony trial, to the great debate over the health care law, to the controversial immigration law in Arizona, 2011 was a big year in the law.  Please join me and my fellow Lawyer2Lawyer co-host and attorney, Robert Ambrogi as we welcome our returning guest, Stephen L. Kaplan from the firm Hicks, Mims, Kaplan & Burns, to review his 2011 predictions and look ahead to a brand new year, 2012!


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Thursday, January 05, 2012 at 10:05 Comments Closed (0) |
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Finally, Some Sanity In CEQA Land Use Decisions

One of my favorite cities, Carmel-by-the-Sea (isn't that a great name for a city?) decided to sell the Flanders Mansion (a historical mansion it owned) because it was tired of paying the upkeep.  True to California law, it completed an Environmental Impact Report (here known as a Final Environmental Impact Report).  As part of that FEIR, the City determined that it did not need to analyze the low-income housing componet because the mansion was subject to certain land use restrictions that would prevent use as a low-income house.

Think about that one logically.  It's a mansion, not a project

The Flanders Foundation is trying to raise money to buy the house from the City, but they have been unable to reach an agreement with the City.  So, when the City decided to sell the mansion, the Foundation did what everyone in California does when they are trying to stop development:  they filed a California Environmental Quality Act lawsuit, challenging the City's failure to analyze the low-income housing component required by EIRs. 

At the trial Court, the Foundation won.  The trial court ruled that since CEQA requires analysis of low-income housing and that component was missing in the FEIR, the City had to redo the FEIR.  That apparently bought the Flanders Foundation time to raise more money to buy the mansion.

As with many trial court wins, that ruling wasn't the final decision.  You can read the Court of Appeal's opinion here.  The Court of Appeal looked at the case and essentially said, "Get real."  Given the multiple historical restrictions on the use of the mansion, it could not be used for low income housing, so what was the sense in forcing the City to review the low-income housing component in the FEIR?

Logic won, and that translates into a valid FEIR, allowing the City to sell the mansion.

Anybody got multiple millions?  I don't know what it's worth, but it is surrounded by parkland and in a beautiful area.  If you won the lotto, you may be in business.


Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, January 04, 2012 at 16:30 Comments Closed (0) |
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Font Row Seats For The Rose Bowl Parade

The sun is rising oh-slow-slowly on the far East side of Colorado Boulevard with the palm trees silhoutted against the pale blue sky with twiges of light orange.  Behind me the sky is still dark blue and black.  A fire crackles in a rusted-out half drum on the grass, and people are still sleeping on tarps and air mattresses nearby. Some enterprising company has erected stadium-style seats just across the street and the liquor store down the street is pedaling coffee and donuts.  Surprisingly cars are driving up and down the street and carts are pushing horns, blow-up characters and stuffed toys.

The street is littered with silly string, marshmellows and tortillas.

Tortillas. You have to have cruised Colorado Boulevard (not at all related to the Rose parade) as a kid to understand the tortillas and marshmellows.  As it has been explained tome, they were used as "weapons" against other cuisers who had the temerity to roll their car windows down.  Go figure.  It's Pasadena.  Home of the newly wed and nearly dead.

 A quiet plan flys overhead and suddenly the conversation turns to the Stealth figher flyby at 8:00 a.m., hours from now.  The sun is up high enoughthat the neon signs are flickering off, but it's still so dark that it can't read the signs.  Half the street lights are off, half still on. In case you've got your map browser handy, MIPTC is at the corner of Colorado Boulevard and San Marino.

Most of the plastic chairs are empty, still waiting for people.  The nearby Volvo dealership has cleared out its inventory of cars and rented out its lot to big, rock-star recreational vehicles.

I've seen the after-effects of the parade before, but never the parade itself.  For several days afer the parade, they display the floats on certain side streets in Pasadena, and it's really cool to see and touch them up close and personal.  This time, there will be no toching, just looking.  Plus there will be bands and dancers.

Maybe I'lleven be able to see Stephanie Edwards, the -on-the-street reporter for KTLA channel 5.  The other co-host on the TV, Bob Eubanks, will be gushing over the horses in the parade.  A stick of cotton candy just walked by with green and pink spun sugar in plastic bags.  The American RedCross pickup truck drove by. Where's the disaster?  Some 30,000 feet overhead, a jet leaves abright pink contrail in the sky.  People are startingto wake up.  Me?  I've been up since 3:30 a.m. to get ready to drive here.

Parade time is getting closer.  A young man in a white suit on a red scooter with a Rose parade sticker quietly scooted by, followed by a pickup truck towing a horse trailer.

The parade is waking up.  A group of runners ran by, followed by my fiance's shouted question to them: "Why are you running?  There's no one chasing you.  After all, we have a bus system and cars." Humor this early in the morning is lost on me.  I'm still not awake.

That's about it for the on-site report so far.

The rest you already know.  You've seen it on TV. 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Monday, January 02, 2012 at 05:56 Comments Closed (0) |
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