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. 

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?

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.

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.

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.

Really.

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. 

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. 

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 statements.  ArvinMeritor 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? 

Hmmmm.

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

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!

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 ProPublica.org reporter Justin Elliott and Washington University Law Professor Kathleen Clark to examine the ethics, legalities and secrecy of these Congressional trips abroad.

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.