California's Prohibition Against E-mail Inquiries Not Preempted

In Powers v. Pottery Barn, decided on September 22, 2009, a California Court of Appeal held that California's Song-Beverly Credit Card Act ("Song-Beverly") was not pre-empted by the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act ("CAN-SPAM.") Song-Beverly prevents businesses and others who accept credit card payments from requesting, requiring, or obtaining written personal identification information, such as the cardholder's address and telephone number. CAN-SPAM subjects the sender of any unsolicited commercial email message to liability unless the email provides an opt-out mechanism from future emails, an accurate subject line, an accurate identification of the sender, a physical address of the sender, and a warning if the email contains adult material. The Court held that CAN-SPAM did not pre-empt Song Beverly because Song-Beverly does not expressly regulate internet activity, let alone commercial emails, and the CAN-SPAM pre-emption clause expressly excludes state laws that are not specific to email.
The bottom line is that Song-Beverly's prohibitions respecting credit card transactions remain fully enforceable in California.

Attorney-Client Privilege

The Supreme Court has two cases on its docket pertaining to the attorney-client privilege, which protects communications between client and attorney. In Mohawk v. Carpenter, the Court will decide whether a trial court ruling that the privilege has been waived can be immediately appealed. Those who favor immediate appeals argue that absent an interim appeal, the disclosure of the arguably privileged information will occur and the damage will be done. Those opposing immediate appeals are concerned about the volume of interim appeals that could ensue and their impact on expeditious resolution of cases.

Under the Bankruptcy Abuse Prevention and Consumer Protection Act, attorneys and other professionals designated as "debt relief agencies" may not advise clients to incur additional debt if they are about to file for bankruptcy protection. In Milavetz v. United States, the Court will determine whether this restriction can be upheld as to attorneys advising clients.

Federal Age Discrimination Claims

In August, I discussed a US Supreme Court decision which held that age discrimination claims are subject to more stringent standards of proof than other employment discrimination claims. This past week, Democratic Senators Pat Leahy and Tom Harkin, and Democratic representative George Miller, have proposed legislation that would put age discrimination claims on the same footing as other employment discrimination claims.

California Lawyers Must Disclose Lack of Insurance

A new rule of professional conduct adopted by the California Supreme Court, effective January 1, 2010, will require attorneys to disclose to clients in writing if they do not carry malpractice insurance. If attorneys lose their insurance while representing a client, they must inform the client within 30 days.
The rule will not apply to government or in-house lawyers.
This action by the California Supreme Court resolves a dispute between those who wanted such a rule in the interests of consumer protection and those who opposed the rule--primarily on the basis it would impose undue burdens on solo practioners and small firms.

Supreme Court Decision Impacts Federal Age Discrimination Claims

The Age Discrimination in Employment Act (“ADEA”) makes it unlawful for employers to discriminate against an employee “because of” the employee’s age. In Gross v. FBL Financial Services, decided on June 18, 2009, the United States Supreme Court, in a 5-4 decision, held that a plaintiff alleging age discrimination under the ADEA must thus prove that age was the cause of the challenged adverse employment action. The Supreme Court rejected the notion that a plaintiff could establish discrimination by showing age was a motivating factor in the decision. The Supreme Court further rejected the notion that the burden of persuasion shifts to the employer in cases involving mixed motives for the employment decision.

In Title VII claims, by contrast, a plaintiff need only establish that race, religion, sex, or national origin was a “motivating factor” in the employment decision. If a plaintiff has done so, she will prevail unless the employer then establishes that the adverse action would have been taken regardless of the race, religion, sex, or national origin of the employee.

The Gross majority based its decision on differences in the statutory language of the ADEA and Title VII, the latter of which expressly authorizes discrimination claims where an improper consideration is “a motivating factor” for the adverse employment decision. The ADEA contains no such language.

Gross thus puts federal age discrimination claims on a different footing than other employment discrimination claims, at least concerning the burdens of proof and persuasion. As the difference is based solely on the Supreme Court majority’s interpretation respecting the differences in the statutory provisions, Congress can, if it chooses, put age discrimination claims on an equal footing with other employment discrimination claims by amending the ADEA to comport with Title VII.

My Space Not Liable for Sexual Assaults

Various girls aged 13 to 15 brought suit against MySpace Incorporated, the owner of the social networking site myspace.com, after they were sexually assaulted by men they met on the site. The cases were dismissed at the trial court level and consolidated for appeal. Plaintiffs argued that liability was premised on a breach of MySpace's legal duty to provide reasonable safety measures to ensure sexual predators did not gain otherwise unavailable access to minors through the myspace site, and contended the suit thus fell outside of the immunities granted by the Comunications Deceny Act ("CDA"). In a decision issued on June 30, 2009, a California Court of Appeal disagreed. The appellate court found that MySpace: 1) was an interactive computer services provider, 2) was not an information content provider as to the disputed activity, and 3) that plaintiffs were seeking to hold MySpace liable for information originating with a third party user of its services. As such, the Court held, MySpace was immune from liability under the CDA.

Copyright Act--Attorneys' Fees

A prevailing party in copyright actions may recover attorneys' fees under the Copyright Act. In Cadkin v. Loose, decided on June 26, 2009, the Ninth Circuit Court of Appeals held that a defendant is not entitled to attorneys' fees as a prevailing party under the Copyright Act when a plaintiff dismisses without prejudice a complaint for copyright infringement. The Cadkin decision represents a change in the law in the Ninth Circuit.

The Ninth Circuit in Cadkin found that a 2001 Supreme Court decision interpreting the definition of "prevailing party" in the context of the Fair Housing Amendments Act applied. The key inquiry in the Supreme Court case, Buckhannon v. Care Home Inc., was whether there had been a material alteration in the relationship of the parties. Since the plaintiffs in Cadkin voluntarily dismissed their copyright claim, they were free to re-file the case in the future and, as such, there was no material alteration in the relationship.

The Ninth Circuit now joins the First, Sixth, and Seventh Circuit Courts of Appeal in holding that Buckhannon applies to Copyright Act claims. No federal circuit court of appeal has held to the contrary.