Gregory M. Smith, an attorney in The Maloney Firm, APC’s Business Litigation Department, discusses best practices for videoconferencing legal venues during the pandemic in an article for the Los Angeles Lawyer Magazine. Read the article by downloading the PDF below or clicking the link here.
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Greg Smith represents attorneys in disputes over legal fees and legal malpractice. If you have questions regarding this article contact Greg Smith at gsmith@maloneyfirm.com.
Just eight months after California businesses began to adapt to the rigorous new standards for classifying workers as independent contractors under Assembly Bill 5 (AB5), California lawmakers have enacted AB 2257, which creates additional exemptions for certain occupations and contractual relationships from the restrictions that AB5 posed on many employers and workers. Importantly, AB 2257 upholds the ABC Test for classifying independent contractors, with additional exemptions. Find out more about how AB 2257 affects California businesses and workers below.
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Brief History of AB5
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In response to concerns about the rise of the gig economy in California, AB5 (also known as the “gig worker bill” and the independent contractor law) was signed into law by Governor Gavin Newsom on September 18, 2019. The bill, which went into effect on January 1, 2020, created the ABC Test for determining if a worker is an employee or an independent contractor under California law. The bill originates from the California Supreme Court’s groundbreaking Dynamex Operations v. Superior Court ruling in 2018, in which the Court outlined the significant losses employers, workers, and the state incur as a result of the misclassification of workers as independent contractors.
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Workers’ designation as employees or independent contractors determines their ability to access worker’s compensation benefits and social security plans, as well as other significant workplace protections. In the text of AB5, the Legislature cites “the misclassification of workers as independent contractors” as a “significant factor in the erosion of the middle class and the rise in income inequality” in California. AB5 reclassified millions of California workers previously considered independent contractors as employees in order to grant them access to workplace protections offered by employers to employees. Many industries found these restrictions problematic and have sought additional exemptions.
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How does AB2257 Amend AB5?
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AB2257 does not make any changes to the structure of the ABC Test created by AB5, and the ABC Test is still considered the standard for classifying independent contractors under California law. However, swift and acute backlash against the bill has led the state to create several new exemptions from the ABC Test. Businesses exempted from using the ABC Test are required to use the Borello test, which is significantly less rigorous than the ABC Test, to classify their workers as independent contractors. Some significant exemptions that AB2257 creates or amends are:
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Find a full list of the exemptions stipulated in AB2257 here.
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In addition to widening the exemptions from the ABC Test, AB2257 gives district attorneys, along with the Attorney General and specific city attorneys, the ability “to prosecute an action for injunctive relief” for intentionally misclassifying workers as independent contractors.
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How do I apply the ABC Test?
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Under AB5 and AB2257, all workers are still considered employees by default. It is the employer’s responsibility to use either the ABC Test or the Borello test (only if exempted from the ABC Test) to prove that their workers are independent contractors. Non-exempted employers must satisfy all three of the ABC Test’s rigorous conditions to lawfully classify their workers as independent contractors. The three conditions are as follows:
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Willful misclassification of workers as independent contractors may lead to civil penalties of between $5,000 and $25,000 per violation, in addition to potential penalties for wage violations.
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The California Supreme Court and California Labor and Workforce Development Agency clarify the application of the ABC Test as follows:
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Part A:
Part B:
Part C:
How Do I Apply the Borello test?
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Unlike the ABC Test, the Borello test does not rely on any single factor to determine if a worker is an employee or independent contractor. Instead, it is a “multi-factor” test that prioritizes “statutory purpose” and requires a wholistic consideration of all of the available facts. The California Supreme Court specified the following factors that are considered in classifying workers as independent contractors or employees under the Borello test:
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Resources for California Employers
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Find detailed instructions on how to apply the ABC Test here.
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Find out more about the Borello test here.
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Find the full text of Assembly Bill 2257 here.
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Find the full text of Assembly Bill 5 here.
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Read more about what “Control of an Employee” means in California here.
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If you have questions regarding the application of AB5 and AB2257 to your business, contact The Maloney Firm at 310.540.1505.
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CalSavers, a state-sponsored retirement savings program for private sector workers, has extended its first implementation deadline, which applies to businesses with 100 or more employees, to September 30, 2020. Learn more about how California’s mandatory retirement program will affect businesses and workers below.
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What is CalSavers?
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CalSavers was created in 2016 to serve the millions of California workers that lack retirement savings programs through their employers. California employers who do not already sponsor retirement plans must either register with CalSavers or offer an alternate retirement plan by the applicable deadline, which is based on employer size. CalSavers accounts are also available to self-employed workers. The program gives employers an uncomplicated, low-cost means of helping their employees build retirement savings.
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A CalSavers account is set up as a payroll-deducted Roth Individual Retirement Account (IRA), which an employee can opt in or out of at any time. This account belongs to the employee, and will remain with the employee even if they change jobs. Employees that do not opt out of the CalSavers plan proactively will automatically be enrolled 30 days after their eligibility or hiring date. The standard contribution rate for eligible employees is 5 percent, with 1 percent automatic escalation, up to 8 percent of the employee’s salary. Employees also have the option to choose their own savings and investment rates.
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How will CalSavers affect California business owners?
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Business owners that register for and implement CalSavers have no fiduciary duties, reporting tasks, or employer fees associated with the program. The plan is designed to give employers minimal responsibilities in implementing the program; after a business is registered with CalSavers, the employer must only continue to add new employees and submit participating employees’ contributions via payroll deduction.
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Any employer can register for the CalSavers program at any time at this link. All businesses with 5 or more employees are required by California law to offer a retirement plan or register for and facilitate the implementation of CalSavers by the appropriate deadlines, which are staggered by business size over three years. The deadlines are as follows:
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Non-compliance with these deadlines may result in penalty fees of either $250 or $500 per eligible employee, depending on the length of time an employer has failed to comply with the mandate.
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Resources for California Employers
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If you anticipate California’s retirement program mandate affecting your business in the next couple of years, it is important to begin weighing your options. Below are some resources to help you navigate this process:
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Register for CalSavers or certify your exemption here.
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Access the CalSavers Employer Overview PDF here.
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Access resources for implementing CalSavers here.
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If you have questions regarding this article, contact The Maloney Firm at 310.540.1505.
By Nicholas Grether, Esq., The Maloney Firm, APC
Many businesses utilize arbitration as an efficient means of dispute resolution for different types of legal claims. If you have been to your doctor recently or purchased a cell phone, you likely agreed to arbitrate any dispute with them. Other common examples are employment claims (e.g. wage and hour issues, discrimination, harassment) and misappropriation of confidential information.
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Arbitration is a method for private dispute resolution that is subject to state and federal laws and that has important limitations that differentiate it from a lawsuit in court. These limitations are either defined by state and federal statutes or are modified by an agreement between an employer and employee or consumer and business (most commonly). For example, the U.S. Supreme Court has consistently held that the Federal Arbitration Act (“FAA”) provides that class action procedures available in court are not available to plaintiffs who agreed to arbitrate their claims individually.
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The FAA and California Arbitration Act (“CAA”) were designed to take advantage of the efficiency of the arbitration process. Both the FAA and CAA give arbitrator(s) relatively broad powers to subpoena documents for and to compel witnesses to attend arbitration hearings, similar to a judge’s power to compel individuals to testify at trial in court. However, an arbitrator’s power before the actual hearing is limited; while, in court, the parties to a lawsuit have broad powers to seek testimony and documents before trial in a process known as “discovery,” parties engaged in arbitration may not have these abilities before the hearing. A recent California Court of Appeals case shows how important it is for the drafter of the agreement to consider what an actual arbitration may look like, so they do not inadvertently limit what can be done in the arbitration.
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Former Employee Allegedly Took Confidential Information to New Employer
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In Aixtron, Inc. v. Veeco Instruments, Inc., Appellate Nos. H04516 and H045464 (July 16, 2020), an employee of Veeco resigned and accepted an offer with Aixtron. As part of his employment with Veeco, the employee signed a confidentiality agreement drafted by Veeco, which contained a clause requiring disputes to be resolved in binding arbitration. The clause requiring arbitration did not refer to discovery, only the use of an arbitration company’s rules.1
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Shortly after he began employment at Aixtron, Veeco claimed the employee had retained confidential information because it was copied onto the employee’s personal computer. Veeco claimed that the employee did not delete the confidential information and that this confidential information may have made its way to Aixtron, a claim that Aixtron and the employee denied.
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Veeco Sought Discovery from a Nonparty
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During the arbitration, Veeco sought discovery from Aixtron in the form of a subpoena for documents and data.2 It is undisputed that Veeco and the employee were parties to both the agreement containing the arbitration clause and the arbitration. Aixtron was a non-party to the arbitration. Veeco wanted to review documents and data from Aixtron to determine if Aixtron had received confidential information. Unlike a lawsuit in court, parties to an arbitration generally must request that the arbitrator sign a subpoena for it to be valid.3
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After failed negotiations on the extent of a subpoena, the arbitrator signed off on the subpoena to be sent to Aixtron. Aixtron objected by claiming that the subpoena was overbroad and sought Aixtron’s confidential information, and that the arbitrator did not have the power to issue the subpoena. The arbitrator disagreed and issued an order compelling Aixtron to comply. Aixtron and Veeco both filed motions in the superior court, which were won by Veeco, and Aixtron appealed the rulings.
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The Court of Appeal did not get to Aixtron’s other arguments, because it found that the arbitrator had no authority to issue the subpoena to a nonparty. In its detailed analysis, the Court identified three different scenarios where an arbitrator could issue a subpoena to a nonparty. The first scenario is where the governing law, the FAA or CAA, grants the arbitrator this power. The second scenario is where the arbitration rules are incorporated into the agreement and provide the arbitrator with this power. The third is where the arbitrator is given that power in the actual arbitration agreement or clause. However, the third scenario was inapplicable to this case because the arbitration clause at issue made no reference to discovery.
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The FAA and CAA Did Not Permit Nonparty Discovery for a Misappropriation of Confidential Information Arbitration
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Moving on to the governing law, the Court found that whether using the FAA or CAA, the arbitrator was not permitted to issue a subpoena to nonparties in the case. Under the FAA, the Ninth Circuit follows the majority rule that an arbitrator is not granted the power to order a nonparty to produce documents as part of pre-hearing discovery. See CVS Health Corp. v. Vividus, LLC, 878 F. 3d 703 (9th Cir. 2017). This power is granted to arbitrators to subpoena nonparties and documents only for the arbitration hearing. The CVS Health court reasoned that permitting pre-hearing discovery to nonparties would encourage fishing expeditions, thus undermining the quicker and cheaper system of arbitration. 878 F. 3d at 708.
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Under the CAA, the Court similarly found the arbitrator did not have the power to issue subpoenas to nonparties. Under the CAA, arbitrations arising from wrongful death or personal injury claims are permitted to use the same discovery as allowed in court. However, the CAA does not grant arbitrators this power for arbitrations stemming from any other types of claims. In response, Veeco then argued that the CAA authorized discovery subpoenas whenever signed by the arbitrator. The Court of Appeal disagreed and found that the CAA only explained the types of subpoenas that could be issued by an arbitrator, and that this power was limited to the arbitration hearing. This was confirmed by reviewing legislative history, which stated that subpoenas to nonparties were limited to attending the arbitration hearing, not for discovery.
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The JAMS Rules Did Not Provide for Nonparty Discovery
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Lastly, the Court of Appeal reviewed the arbitration company’s rules to determine if they provided the arbitrator with the power to issue a subpoena for a nonparty. The Court of Appeal found that: first, the arbitration company’s rules explained that limited discovery was available “between the parties;” second, the arbitration company’s rules allowed for subpoenas to compel attendance at the hearing, but not for purposes of discovery; and third, Aixtron was not a party to the agreement. The Court noted that an arbitrator’s authority is derived from consent, and Aixtron never consented to be bound by the rules or the agreement to arbitrate the dispute over confidential information. In its conclusion, since none of the FAA, CAA, the arbitration company’s rules, or the agreement permitted the arbitrator to issue a nonparty subpoena for discovery, the Court held that the subpoena should never have been issued and was rightfully quashed.
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How Does This Apply to Your Business?
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These are all conversations to have with your legal counsel to make sure arbitration will provide the benefits sought. While companies generally default to arbitration, a careful analysis of how arbitration will play out in reality and the rights of the parties in an arbitration is necessary to make an informed decision about using arbitration and draft any agreements accordingly.
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About the Author:
Nicholas Grether is an employment attorney in the Employment Law Department at The Maloney Firm, APC. If you have questions regarding this article, contact Nicholas Grether at ngrether@maloneyfirm.com.
1 The agreement refers to the American Arbitration Association Rules. However, the Court noted that while the record was not entirely clear, it appeared that Veeco and the employee agreed to utilize the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) rules to arbitrate the dispute. This was not disputed by the parties to the arbitration, but there was no written agreement on the record that would have superseded the original confidentiality agreement.
2 The court noted the distinction between requiring pre-arbitration discovery and requiring witnesses and documents to be present at the actual arbitration hearing.
3 In arbitration, the arbitrator is technically issuing the subpoena.
By Nicholas Grether, Esq., The Maloney Firm, APC
In this article, we discuss the California appellate court ruling in Michael Oliver v. Konica Minolta Business Solutions U.S.A., Inc. (June 2, 2020) Appellate No. H045069, Santa Clara County Super. Ct. No. 2014-1-CV-263183, which states that commute time could be paid while carrying employers’ tools and equipment. The Court found that there was a factual dispute as to whether or not the employees were under the employer’s control. If the employees were under the employer’s control during their commutes, they must be paid for that time.
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Service Technicians Carried Their Tools in Personal Cars
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The Plaintiff in this matter was a former service technician for Konica Minolta Business Solutions’ (Konica) printing, copying, and scanning products. Service technicians were responsible for maintaining or repairing products at the customer’s site. They were required to commute in their own cars and to be at the site of the first customer by 8:00 a.m. The technicians were expected to leave their last customer site by 5:00 p.m. The technicians were paid for their work hours and reimbursed for mileage between 8:00 a.m. and 5:00 p.m., which included drive time between customer sites during regular work hours. The technicians were not paid wages or reimbursed for mileage for commuting to the first site or commuting home from the last site.
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Ordinarily, when an employee has no regular, fixed location, they are not entitled to be paid for the time spent commuting to and from work. However, Konica required service technicians to have a car with at least 25 cubic feet of space to “hold their tools and anything else they need for the job.” Konica supplied all the tools and parts needed to work on the machines, and expected technicians to have all the tools and parts necessary to do their job. Depending on the machines worked on by the particular technician, they carried different tools. Storing the tools in the technician’s residence or other non-approved area was forbidden, unless the technician received written permission.
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Technicians were judged on the percentage of jobs that were completed on their first visit, which meant that it would be in a technician’s interest to carry as many tools and parts as necessary to complete jobs on the first visit. Additionally, Konica had a policy where it could perform a check on their technicians. During this check, the technician was expected to find 20 items within 20 seconds. This meant that for all practical purposes during working hours, a technician needs to have at least 20 tools and parts with them in the event Konica decided to perform a check. For these reasons, the technicians argued that driving with the tools and parts constituted “hours worked,” and they should be compensated for the time spent traveling from home to the first customer site and traveling from the last customer site back home. The Plaintiff filed a class action lawsuit for unpaid wages and unreimbursed business expenses.
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The Santa Clara Superior Court granted summary adjudication in favor of Konica. It found that transporting tools did not mean Konica controlled the technicians’ routes or prevented them from completing personal errands before arriving to the first customer site or when returning home. The Plaintiff appealed the ruling, arguing that there was a question of fact whether technicians’ commutes constituted “hours worked.” The Appellate Court found there was sufficient evidence that the technicians were under Konica’s control and reversed the grant of summary adjudication.
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What Does Control of an Employee Mean in California?
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In California, hourly (non-exempt) employees must be paid at least the minimum wage for all “hours worked,” which is defined in California as the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, “whether or not required to do so.” In its analysis, the Court reviewed cases for what is considered “control.” Typically, this is when an employer “directs, commands, or restrains” an employee. An employer may also hire an employee “to do nothing, or to do nothing but wait for something to happen…” Courts observed that readiness to serve may be hired, just as service itself. There is no requirement that an employee actually be working to be compensated. The level of control exercised over employees is determinative when deciding if the time is compensable.
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The Court noted the general proposition that commute time is not compensable. If an employer provides optional free transportation, commute time is not compensable. On the other hand, compulsory commute time is compensable where employees must meet at a certain time and place and use the employer’s transportation.
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The analysis evolves when employees are transporting tools or equipment required for the job. In Hernandez v. Pacific Bell Telephone Co., (2018) 29 Cal.App.5th 131, the court found that an optional program that allowed employees to drive a company vehicle home did not require that employees be paid for their commute time to the first work site and from the work site home. Even though the employees could not use the company vehicle for personal use and contained the company’s tools and equipment, the program was optional. Employees could also choose to start their day at the employer’s premises and drive the company vehicle from there, and they would be paid for the travel time from the employer’s premises to the first work site.
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Sufficient Evidence Existed that the Technicians were Under Konica’s Control1
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The court noted two undisputed facts. One, technicians were required to use their personal vehicle to commute to the customer site. Two, they were free to engage in other activities prior to their first service appointment at 8:00 a.m.
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However, the Court found there were factual disputes that warranted reversing the grant of summary adjudication. It focused on two issues essential to determining if the technicians were under the employer’s control. First, there was a dispute as to whether the technicians were required to carry the tools. Some technicians had access to and the option to use a field stocking location where parts could be stored, but some did not have access. The Court found there was a reasonable inference that technicians were better able to accomplish their performance goals by carrying tools and parts in their vehicle. In effect, a jury could find that while not required to carry the tools and parts in their vehicles, the demands of their job did not afford the technicians a real option.
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Second, there was a factual dispute about the volume of tools and parts the technicians were required to carry. Konica required at least 25 cubic feet of space. Some technicians drove vehicles without sufficient space. One technician claimed he had to carry upwards of 400 pounds, another claimed his trunk was full, and another claimed he could fit everything in an Audi coupe. The Court noted that one technician drove his spouse’s car on weekends to avoid unloading his car, and another took all the tools and parts out each weekend and put them back in Sunday night.
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Given these factual disputes, the Court determined that if carrying the tools and parts was optional, the technicians would not be under the control of their employer. If technicians had to carry tools and parts, this would not be control if the technicians could use the time commuting for their own purposes. On the other hand, if being required to carry the tools and parts as a practical matter prevented the technicians from using the time effectively for their own purposes, the technicians would be subject to Konica’s control and must be compensated at least the minimum wage for this time. Since the evidence was disputed on these issues, summary adjudication for Konica was not warranted.2
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What Can Employers Do?
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This case underscores a key issue in California employment law. Namely, when an employee is subject to the control of the employer, an employee needs to be paid. We have just seen that employers must pay for employees waiting for and undergoing bag checks. Even small amounts of time that are for the employer’s benefit must be recorded and paid. Commute time mandated by the employer as to type and time should be paid.
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In addition, employers should make sure they are not exposing themselves to liability when employees carry around tools and parts. Think if your employees are required by policy or practicality to carry tools, equipment, or parts to do their jobs. A policy that allows employees to either pick up their tools before the start of the work day or carry the tools with them at the employee’s convenience would not necessitate paid commute time.
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If your business requires employees to carry company property, now is a good time to determine if there is potential wage and hour liability. If this practice is essential to your business, consider if you need to pay your employees for their commute time. If employees cannot use the commute time for their own purposes, a court could find that employees are subject to your control, subjecting your business to wage and hour liability. Lastly, ensure that your policies are up to date in your employee handbooks and that optional practices are clearly communicated to your employees. If an employee chooses to use a company vehicle or wants to carry tools in their car to make their work day easier, have them sign an acknowledgment that this is an optional practice and is provided for the benefit of the employee.
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.A copy of the opinion can be found here.
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About the Author:
Nicholas Grether is an employment attorney in the Employment Law Department at The Maloney Firm, APC. If you have questions regarding this alert, contact Nicholas Grether at ngrether@maloneyfirm.com.
1 This court is reviewing an order granting summary adjudication. Thus, all reasonable inferences must be drawn in the light most favorable to the opposing party. The court did not find that commute time was compensable, rather that triable issues of fact existed as to whether the technicians were under Konica’s control during their commutes. A jury may find that the Konica did not subject their technicians to control and did not have to compensate them for commute time.
2 The Court noted that if service technicians are owed wages for their commute time, then they are also owed reimbursement for their mileage while commuting under Labor Code section 2802. Konica only provided reimbursement when the travel took the technicians outside of a defined area for this commute time from home to the first customer site and from the last customer site back home. Konica reimbursed technicians for mileage driven during regular work hours.
Note: This article was posted on August 12, 2020 at 9:30am PDT. Because the COVID-19 situation is rapidly changing as the federal government and State of California continue to fight this pandemic, individuals and businesses should consult with counsel for the latest developments and updated guidance on this topic.
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Senate Bill 4317, or the “SAFE TO WORK Act,” would provide employers engaged in interstate commerce with extensive immunity from liability for COVID-19 related claims. The Act was introduced to the United States Senate by Texas Senator John Cornyn on July 27th, and is meant to “lessen the burdens on interstate commerce by discouraging insubstantial lawsuits relating to COVID-19 while preserving the ability of individuals and businesses that have suffered real injury to obtain complete relief.”
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The Act, as it is currently drafted, offers sweeping liability protections to many businesses, non-profit organizations, schools, and healthcare providers that have made “reasonable efforts” to comply with applicable public health guidelines. Significantly, the Act establishes a more rigorous evidence standard, limits compensatory damages, and prohibits punitive damages for COVID-19 exposure claims, except in the case of intentional misconduct. The Act establishes a one-year statute of limitations for COVID-19 exposure claims, and covers business actions, services, activities, and accommodations that occur between December 1, 2019 and the later of either the end of the coronavirus emergency declaration or October 1, 2024.
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While the Act creates a floor for liability, it does not preempt state laws that create further liability limitations. The Act also does not preempt or supersede stricter workers’ compensation laws, government enforcement actions, intentional discrimination claims, or maintenance and cure benefits.
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Resources for California Employers
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Although the “SAFE TO WORK Act” could potentially protect businesses from liability for COVID-19 exposure claims, it is important that employers follow appropriate guidelines to mitigate the risk of COVID-19 exposure in the workplace and create and abide by a documented return-to-work policy.
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Read more on Creating a Return to Work Policy here.
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Read more on California’s Industry Guidance to reduce risk here.
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Read the California State’s Employer Playbook for a Safe Reopening here.
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Read the full text of the draft of the pending “SAFE TO WORK Act” (Senate Bill 4317) here.
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If you have questions regarding this article, contact The Maloney Firm at 310.540.1505.
By Nicholas Grether, Esq., The Maloney Firm, APC
Note: This article was posted on August 7, 2020 at 12:21pm PDT. Because the COVID-19 situation is rapidly changing as the federal government and State of California continue to fight this pandemic, individuals and businesses should consult with counsel for the latest developments and updated guidance on this topic. Specifically, the federal government continues to update the regulations related to PPP Loans. The federal government may create additional exemptions and procedures that affect forgiveness.
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If your business was fortunate enough to receive a Paycheck Protection Program (“PPP”) loan, you likely have questions about what to do next. We’ve provided several resources to assist you in applying for forgiveness and some updates on the process of applying for PPP loan forgiveness.
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Pending Legislation May Ease Forgiveness
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Currently pending in the U.S. Senate, is Senate Bill 4321 , which provides that loans made to eligible recipients for under $150,000, will be forgiven if the borrower submits a one-page form attesting that the borrower complied with the PPP requirements. The Senate also proposes easing forgiveness requirements on for loans between $150,000 and $2,000. The bill would also establish provisions to protect lenders that rely on the documentation and certifications provided by the borrower. It also proposes limiting enforcement actions to borrowers who commit fraud or spend the loan proceeds improperly. If and until the bill is passed and signed, we will not know the exact details, but the bill has bipartisan support and it is expected to pass in some form.
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Resources to Help Apply for PPP Loan Forgiveness
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The Association of International Certified Professional Accountants (AICPA) had created a downloadable tool to estimate loan forgiveness.
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If using one of the forms created by the Small Business Administration (“SBA”), the SBA has provided instructions on filling out the Form 3508 or 3508 EZ. If the borrower did not reduce any employee’s pay more than 25% and did not reduce the number of employees, they will likely be able to use the EZ version. Review the instructions for the Form 3508 EZ to find out if you are eligible.
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Link to the SBA Form 3508 here and instructions here.
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Link to the SBA Form 3508EZ here and instructions here.
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Some Borrowers May Choose an 8-week or 24-week Period for PPP Loan Forgiveness
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The amount of the loan forgiven depends on how the funds have been spent during a certain time period after receiving them. If the borrower received their PPP loan funds prior to June 5th, 2020, the borrower can choose between an 8-week period or 24-week period. The borrower should calculate potential forgiveness amounts for both periods and select the period that is more beneficial. Use a tool like the AICPA calculator to assist in that process. Please note that if the borrower received the PPP loan funds after June 5th, 2020, they must use a 24-week period.
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If you have questions regarding your PPP loan or this article, contact The Maloney Firm at 310.540.1505.
By Carl I. S. Mueller, Esq. and Sam Fogas, Esq., The Maloney Firm, APC
Although it may seem counterintuitive, certain situations may require an attorney to advocate to a court on behalf of the due process rights of an adversary. In June 2020, the California Court of Appeal published its opinion, Davis v. Superior Court (Sathre) (2020) 50 Cal.App.5th 607, emphasizing that indigent, pro-per judgment debtors have the same access to the courts as litigants represented by an attorney and encouraging the superior courts to embrace remote appearances, particularly during the COVID-19 pandemic era. The opinion encourages attorneys to consider when to treat adversaries combatively versus when to look out for adversaries’ rights.
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In Davis, Plaintiff Curtis Sathre attempted to enforce an almost $160,000 judgment against Defendant Jamie Davis, an indigent, pro-per judgment debtor, and conduct a judgment debtor examination. A 16-month battle ensued in which Davis filed multiple ex parte applications, motions to quash service, and a motion to stay proceedings pending appeal. At their crux, Davis’s motions centered around the fact that she lived too far away to be compelled to come to Los Angeles for a judgment debtor exam because she was indigent and unable to afford to travel. Many of Davis’s efforts were thwarted as the trial court’s department rules did not allow a pro per litigant to appear telephonically, even though Davis claimed she could neither travel to Los Angeles or afford counsel for the hearings. When Davis was finally able to hire an appearance attorney, the trial court denied Davis’s request for a court appointed court reporter, despite the fact that the court had previously granted Davis’s request for a waiver of court reporter fees.
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The Court of Appeal vacated the trial court’s rulings, ordered that Davis’s motions be reheard, and ordered that Davis be allowed to appear telephonically and without counsel, if so desired. The Court of Appeal emphasized three points in its opinion. First, court rules and policies should be consistent with increasing access to the courts by indigent and pro-per litigants. Rules functionally requiring pro-per litigants to hire appearance attorneys or restricting indigent, pro-per litigants from appearing telephonically are inconsistent with this principle. Second, trial courts need to embrace remote appearances by everyone, particularly during the COVID-19 pandemic. Third, and finally, indigent litigants must be provided a court reporter at hearings, given a timely request.
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Attorneys are trained to continuously push their adversaries, challenge them, and take advantage of any possible leverage over an opponent. However, as the Davis Court instructed, this strategy can sometimes backfire. Attorneys cannot take a blanket combative approach in litigation if it means their adversary is denied basic rights. While it is unclear what exactly Sathre’s attorney could have done differently, the trial court’s rulings blocking Davis’s access to the courts resulted in increased costs, appearances, an appeal, and sixteen months the client will never get back. Attorneys should endeavor to remind all courts to protect the minimum rights and access of all litigants, when possible. Failure to account for your adversary’s rights may ultimately cost your client additional time and money.
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About the Authors:
Carl Mueller is a business litigation attorney and represents clients in attorney-client disputes of all kinds. Sam Fogas is a civil litigation attorney. If you have questions regarding this article, contact Carl Mueller at cmueller@maloneyfirm.com or Sam Fogas at sfogas@maloneyfirm.com.
By Carl I. S. Mueller, Esq., The Maloney Firm, APC and Ellen A. Panksy
Maloney Firm business litigation attorney Carl Mueller and Ellen Panksy, Principal at Pansky Markle Attorneys at Law, co-author an editorial for the Daily Journal discussing the ongoing struggle between the California State Bar and LegalMatch.com, a prominent online attorney matching service. Read the full article here.
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Carl Mueller is a business litigation attorney that represents clients in all phases of civil litigation. Mr. Mueller’s practice has a focus on attorney-client disputes of all kinds. If you have questions regarding this article contact Carl Mueller at cmueller@maloneyfirm.com.
By Gregory M. Smith, Esq., The Maloney Firm, APC
Under most circumstances, missing the opportunity to file an action within the statute of limitations deprives a party of their right to seek redress. But on April 6, 2020, as part of a sweeping rules package to deal with the impacts of the COVID-19 pandemic, the Judicial Council of California adopted Emergency Rule 9 which tolls statutes of limitations in all civil actions from April 6, 2020 to “90 days after the Governor declares that the state of emergency related to the COVID-19 pandemic is lifted.” Many attorneys, judges, and commentators expressed concern at the vague and open-ended nature of the rule, with some recommending that potential plaintiffs simply ignore it and timely file less the tolling later be found to be ineffective or impermissible.
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However, by way of a far less reported Circulating Order Memorandum on May 29, 2020, the Judicial Council amended the Emergency Order to close the indefinite tolling. Under the Amended Emergency Rule 9, the statute of limitations for most civil actions are tolled from April 6, 2020 to October 1, 2020. The (few) causes of action with statutes of limitations of less than 180 days are tolled from April 6, 2020 to August 3, 2020.
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As we are now a little more than a week away from the August 3, 2020 deadline, it remains to be seen if the Judicial Council will again amend Emergency Rule 9 in light of the pandemic which is still very much ongoing. The Judicial Council has a public meeting set for July 24, and although the agenda for that meeting is focused on Court budgets and Court appearances by video, it would not be surprising if the tolling period is continued. Either way, potential plaintiffs and their attorneys must be vigilant to ensure that they comply with all statutes of limitations and properly calculate the applicable tolling period. When in doubt, file early!
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About the Author:
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Greg Smith represents attorneys in disputes over legal fees and legal malpractice. If you have questions regarding this article contact Greg Smith at gsmith@maloneyfirm.com.
