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Read the latest news from Scali Rasmussen, including legal alerts and event listings.

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In Patterson v. Superior Court , a California Fair Employment and Housing Act (FEHA) case, the Court of Appeal granted the petition for writ of mandate and directed the trial court to vacate its order awarding attorney fees to defendant Charter. The court held that a fee-shifting clause awarding fees in connection with a motion to compel arbitration risks chilling an employee's access to court in a FEHA case, and that the legislature amended the law to make clear that defendants are not entitled to fees unless the defendant establishes plaintiff's opposition to a motion to compel arbitration was groundless. The Court reversed and remanded, instructing the trial court to consider whether the opposition was groundless, because no such finding was made by the trial court.

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In Contreras v. Superior Court the Court was called upon to decide whether the determination of Plaintiff’s standing to pursue Public Attorney General Act (often called “PAGA”) claims was for an arbitrator or the court. PAGA claims, brought by an aggrieved employee, are not subject to arbitration per California law. So the Court was ultimately deciding whether the arbitrator had the authority to determine his own authority to decide the matter. The defendant was a transportation service with an app that required the drivers to agree to terms of service when logging in for the first time. The agreement included an arbitration provision with a class action waiver. The plaintiffs, who were former drivers through the app, filed a PAGA suit against the defendant, alleging misclassification as independent contractors. The trial court granted the defendant’s motion to compel arbitration.

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In 2019 California’s legislature passed and the governor signed AB 51, which makes it unlawful for employers to condition employment or a benefit of employment on the employee waiving their right to trial and being required to arbitrate their disputes. The employer in this case argued that the Federal Arbitration Act preempts AB 51, an argument that was successful in previously casting aside California law preventing class action waivers. This time the argument fell flat, and the Ninth Circuit upheld most of the law, holding that mandatory arbitration agreements are enforceable in an employment context. The Court reasoned that since agreements generally, arbitration or otherwise, are only enforceable if both parties have a choice to enter into the agreement, a law codifying this notion with respect to arbitration agreements did not run afoul of the Federal Arbitration Act that prohibits laws that discriminate against agreements to arbitrate.

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The Ninth Circuit ruled that despite language in an insurance policy requiring that the insurer cover defense fees for false advertising or unfair competition claims, a retailer was required pay for its own defense in a state consumer protection lawsuit brought against it by the California Attorney General. The retailer was therefore forced to pay to its insurer approximately two million Dollars to compensate the insurer for the amounts it already had expended to defend the retailer.

Court of Appeal holds that Covid 19 losses not covered by commercial property insurance

2021 case review: The Inns by the Sea v. Cal. Mutual Ins. Co.

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In this case a hotel sued its insurer to recover for COVID related losses. As the Court itself related in the decision, the case “[P]resent[ed] an issue of first impression for a California appellate court: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic?” The Appellate Court affirmed the trial court’s decision that there was no coverage, as the spread of the disease did not cause direct physical damage to the business’ property that resulted in losses.

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The Daily Journal looked to founding shareholder Bert Rasmussen, and his depth of experience with mergers and acquisitions, for commentary in their coverage of Activision-Blizzard's acquisition by Microsoft Corp. The $68.7 billion all cash deal has come under scrutiny given Activision-Blizzard is currently under a federal consent decree and facing a state lawsuit over allegations of a discriminatory workplace.

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In the past decade, several large-scale data breaches have resulted in troves of personal information (PI) and other data falling into the hands of malicious actors. For instance, in 2013, the records of over a billion users were compromised from the email system of Yahoo, including names, birth dates, phone numbers, passwords, backup email addresses, and security question answers. More recently, a massive breach of Facebook's databases compromised the PI of over 533 million users from 106 countries, including over 32 million records on users in the United States. These data included phone numbers, Facebook IDs, full names, locations, birthdates, bios, and, in some cases, email addresses.

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2021 was a relatively quiet year for legislation for the automotive industry, as CNCDA’s sponsored bill, SB 361, that would have provided certainty for dealers that want to engage in electronic contracting, failed to pass. The legislature passed a number of bills that continue to move the state towards a zero-carbon transportation sector, as well as some small changes to off-road vehicle and trailer laws. There are important regulatory changes affecting the automotive industry going into 2022, though, and this section gives an overview of what is coming ahead of the curve.

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The 2021 legislative session touched on a wide array of business topics. Changes in the law include regulating debt collection, automatically renewing service contracts, and privacy. These laws do not affect all businesses, but are nonetheless worth every business owner’s attention, as they may shape you conduct business in California in the future.

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