Click here to remove Verdict from subsequent Justia newsletter(s). | New on Verdict Legal Analysis and Commentary | The Hidden Ideological Stakes of SCOTUS Patent Case | MICHAEL C. DORF | | Cornell law professor Michael C. Dorf describes the ostensibly complex legal issues presented in United States v. Arthrex, Inc., in which the U.S. Supreme Court heard argument earlier this week, and explains how those issues reflect an ideological divide as to other, more accessible matters. Professor Dorf argues that although many conservatives would like to dismantle the modern administrative state, our complex modern society all but requires these government agencies, so conservatives instead seek to make them politically accountable through a Senate-confirmed officer answerable to the president, furthering the so-called unitary-executive theory of Article II. | Read More |
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California Courts of Appeal Opinions | Chen v. Paypal, Inc. | Docket: A158118(First Appellate District) Opinion Date: March 2, 2021 Judge: Richman Areas of Law: Business Law, Commercial Law, Contracts, Internet Law | California residents who sell goods on eBay, an online marketplace, as part of their online businesses and use PayPal to receive payments for many of their sales filed a putative class action. The suit challenged provisions of the user agreements, including PayPal’s policy of placing a temporary hold on funds in a user’s account when PayPal believes there is a high level of risk associated with a transaction or a user’s account; PayPal’s retention of interest on users’ funds that are placed in pooled accounts when users maintain a balance in their PayPal accounts; PayPal’s buyer’s protection policy, which allows buyers, under certain circumstances, to dispute transactions up to 180 days after the date of purchase; and a claim that PayPal aids and abets buyers in defrauding sellers by the manner in which it resolves disputes. The court of appeal affirmed the dismissal of the claims against PayPal, without leave to amend. The challenged practices are not unconscionable. The degree of procedural unconscionability that arises from the fact that a contract is one of adhesion is 'minimal.” | | Holistic Supplements, LLC v. Stark | Docket: B300711(Second Appellate District) Opinion Date: March 2, 2021 Judge: Tricia A. Bigelow Areas of Law: Business Law | Plaintiff alleged that defendant transferred his ownership in the LLC, a medical marijuana dispensary, to her in April 2015. Unbeknownst to plaintiff and despite that alleged transfer, defendant later converted the LLC from a limited liability company to a corporation and then a mutual benefit corporation in his name called Holistic Supplements Inc. (the corporation) and changed the business address. Defendant also claimed rights to a Business Tax Registration Certificate, a city-issued tax document that enabled the dispensary to operate. Plaintiff and the LLC filed suit against defendant and the corporation for conversion, unfair competition, and declaratory relief, among other claims. The Court of Appeal concluded that nonsuit was erroneous on plaintiff's individual claims because she has standing to sue for conversion of her personal property membership interest in the LLC; nonsuit was erroneous on claims against defendant in his individual capacity, since he can be held liable for personally participating in the tortious conduct of the corporation; nonsuit was erroneous on the unfair competition law claims because the court rejected the only two grounds for nonsuit defendants raise on appeal; and the Business Tax Registration Certificate is property subject to conversion, so the trial court prejudicially erred when it instructed the jury it was not. The court also rejected defendant's contention that plaintiff lacked standing because she failed to file a petition for reinstatement of the LLC pursuant to Government Code section 12261. The court explained that plaintiff and the LLC permissibly sought reinstatement as part of this lawsuit, so they did not need to file a separate petition in the superior court. Accordingly, the court reversed and remanded. | | In re I.R. | Docket: B307093(Second Appellate District) Opinion Date: March 2, 2021 Judge: Frances Rothschild Areas of Law: Family Law | After a domestic violence incident between mother and father that was witnessed by the children, DCFS started dependency proceedings on behalf of both children. The juvenile court found jurisdiction over the children under Welfare and Institutions Code section 300, subdivision (b)(1), and ordered I.R. removed from father and released to mother. The Court of Appeal concluded that the evidence does not support either of the findings necessary to justify removal under section 361, subdivision (c)(1). In this case, the record does not contain substantial evidence that I.R. would be in "substantial danger" in father's care, nor does it contain substantial evidence that there were no "reasonable means" to protect I.R. other than removing her from father. Given the lack of any connection between drug use and the domestic violence underlying the petition, the court concluded that the juvenile court was acting within its discretion in denying I.R.'s request that mother submit to more extensive drug testing. Accordingly, the court reversed the dispositional order against father and remanded. | | Gray v. Quicken Loans, Inc. | Docket: B304532(Second Appellate District) Opinion Date: March 2, 2021 Judge: Steven Z. Perren Areas of Law: Insurance Law, Real Estate & Property Law | Plaintiff filed suit against Quicken, on behalf of himself and others similarly situated, alleging causes of action for breach of fiduciary duty and violations of Civil Code section 2954.8 and Business and Professions Code section 17200, contending that section 2954.8 requires a lender to pay interest on insurance proceeds held in escrow following the partial or total destruction of the insured's residence or other structure. In this case, plaintiff's home was destroyed by Ventura's Thomas Fire and his hazard insurance policy jointly paid him and his mortgage lender, Quicken, a total of $1,342,740. The Deed of Trust allowed Quicken to hold the insurance proceeds in escrow and to disburse the funds as repairs to the home were being made. The Court of Appeal affirmed the trial court's decision sustaining Quicken's demurrer to the complaint without leave to amend, concluding that neither section 2954.8 nor the parties' loan agreement required the payment of interest. Based upon the statutory and contractual language, the court agreed with Lippitt v. Nationstar Mortgage, LLC (C.D.Cal. Apr. 16, 2020, No. SA CV 19-1115-DOC-DFM) 2020 U.S. Dist. Lexis 122881, that section 2954.8 "applies to common escrows maintained to pay taxes, assessments, and insurance premiums -- not to the comparatively unique example of hazard insurance proceeds held by a lender pending property rebuilding." Therefore, the court concluded that the insurance proceeds held by Quicken pursuant to section 5 of the Deed of Trust fall outside the scope of section 2954.8. Furthermore, plaintiff's secondary reliance on the purported purposes of section 2954.8 does not and cannot circumvent the statute's plain language. | |
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