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Commercial/Business Litigation

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Privacy Policies: Are You in Compliance?

My previous post was regarding cybersecurity and some of the dangers lurking behind our widely-used “secure” technologies and authentication systems. A related issue is what you, as a business owner, chief technology officer or other data collector, must do to advise customers and other users of your website of your privacy policies and procedures – in short, how are you going to protect their identities, credit card information and other personal data you collect? This post will address what is legally required of you if you collect any sort of data, as well as the question of whether you need to implement Terms and Conditions. Hint: the answer is yes!

Many businesses are required by law to have a Privacy Policy posted conspicuously on their website. In California, the law requires “any commercial web sites or online services that collect personal information on California residents through a web site to conspicuously post a privacy policy on the site.” California Online Privacy Prevention Act of 2003, Business & Professions Code §§ 22575-22579. In other words, if you are gathering the personal data of your website users, you must have a formal Privacy Policy.

The primary federal agency that regulates and implements rules and regulations related to data privacy is the Federal Trade Commission, but other federal and state laws and acts have provisions that impose requirements on certain persons and businesses. For example, the Americans With Disabilities Act, the Children’s Internet Protection Act of 2001, the Computer Fraud and Abuse Act of 1986, the Computer Security Act of 1997 and the Consumer Credit Reporting Control Act all have laws relating to data privacy. The bottom line is that you must know and comply with federal laws as well as the laws of your state.

Another thing you should strongly consider – implementing and posting Terms and Conditions, which may also be called Terms of Use. While not required by law (and undeniably the dullest page on your website), Terms and Conditions can limit your liability, set forth your security features, link to your Privacy Policy and define acceptable use of your site (for example, you can specifically prohibit certain “hacking” activities). Here is some sample language from a Terms of Use policy related to cybersecurity:

You agree not to misuse Acme Company’s services (“Services”) or help anyone else to do so. For example, you must not even try to do any of the following in connection with the Services:

breach or otherwise circumvent any security or authentication measures; or

violate the privacy or infringe the rights of others.

Terms and Conditions can and should be specialized to your unique business activities. In other words, copying one from another website, changing a few words and posting it is not the best means of implementing your Terms and Conditions.
In sum, cybersecurity and privacy are hot issues these days, and whether you are a business owner, chief technology officer or someone else in a position that requires you to deal with stored customer information, you have many duties in connection with protecting your customers’ information. If you have questions about cybersecurity or your compliance with privacy laws, or if you would like assistance drafting and implementing your Privacy Policy and/or Terms and Conditions, please contact me or one of our other attorneys at (805) 546-8785. The attorneys at Carmel & Naccasha have extensive experience in handling such matters and are happy to answer your questions and assist you.

The information contained in this article does not constitute legal advice and neither the author nor Carmel & Naccasha make any representations or warranties as to the accuracy of the information contained herein. Your access or reading of the article and/or your following of any of the suggestions contained herein do not create an attorney-client relationship between you and the author or you and Carmel & Naccasha LLP.

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ADA compliance
Legal Alert: Multiple ADA Lawsuits Target Central Coast Businesses

A recent string of lawsuits have many local businesses again paying close attention to their own compliance with the Americans with Disabilities Act (“ADA”). One individual, along with the same attorney in each case, appears to be targeting restaurants and retail businesses across the Central Coast. The two individuals have filed a number of lawsuits alleging violations of the Act in SLO County and down south as far as Ventura. As you may know, under California law, any violation of the ADA is considered a civil rights violation and subject to a minimum statutory penalty of $4,000, plus attorney’s fees.

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Proposition 65 Claims may be Covered by Insurance

Proposition 65 requires warning labels to be placed on all products containing lead.  Although there is a clear need for the protections and warnings that the statute was intended to provide, unfortunately, in San Luis Obispo and throughout California, attorneys seem to be using Prop 65 to prey on businesses, particularly those without the resources to fight back. Not unlike some of the ADA lawsuits brought against California business owners, some attorneys have filed suit based on alleged violations of Proposition 65 as a mechanism not to necessarily enforce compliance in order to protect the consumer, but rather to line their pockets with the attorney fees the statute affords.

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The Life Cycle of a Civil Lawsuit – Part Two

What is Our Judge Doing?

Although the assigned judge is not attending depositions or participating directly in the discovery proceedings, she is still very interested in the case.  The court will typically hold a case management conference (CMC) about 90 days after the complaint is filed. 

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The Life Cycle of a Civil Lawsuit Before Trial – Part One

The lucky reader has never been involved in a civil lawsuit.  However, a suit, whether as plaintiff or defendant, is certainly a possibility for every reader.  Suddenly an automobile accident happens and you end up the plaintiff or defendant in a personal injury lawsuit. 

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Sometimes the Law Makes Sense

The legal cases that typically capture the most public attention are those that appear to be ridiculous or outrageous.  Probably the most infamous example is the McDonald’s “hot coffee” case.  However, for every instance in which a court or jury reaches an outrageous decision, dozens of cases are ignored where the jury or court “got it right.”  One such case is Espinosa v. Kirkwood, decided by the Second District Court of Appeal on June 23, 2010.

The case was a personal injury action by Michael Espinosa and Angel Vertiz arising from an automobile accident.  Espinosa and Vertiz sued Kenneth Kirkwood, the driver of the car in which they were passengers at the time of the accident.  The twist in the case was that the trio had just committed a residential burglary, for which they were later convicted, and were fleeing the police when Kirkwood’s car crashed into three other vehicles about a mile from the location of the burglary. 

At this point, you must certainly be feeling sorry for poor Espinosa and Vertiz for having suffered bodily injuries.  In the case that makes the cover of the supermarket tabloids, the duo recovers millions.  In real life, the pair gets nothing.

In the trial court, Kirkwood (or more likely his insurance company) moved for summary judgment on the ground the case was barred by Civil Code section 3333.3, which says: 

In any action for damages based on negligence, a person may not recover any damages if the plaintiff's injuries were in any way proximately caused by the plaintiff's commission of any felony, or immediate flight therefrom, and the plaintiff has been duly convicted of that felony.

The trial court granted summary judgment against Espinosa and Vertiz.  Unhappy with that result, they appealed the decision.  Plaintiffs argued that the statute required proof that the felony or flight caused the injuries.  The court of appeal disagreed, stating:

The purpose of the initiative would be defeated if a defendant was required to prove that the actual commission of the felony or flight caused the injuries.  To the contrary, the intent of the drafters [of section 333.3] was to require plaintiffs who are felons to assume the risk of any injuries sustained during the commission of a crime or during the flight to avoid apprehension for the crime.

Not surprisingly, the court concluded that the plaintiff’s injuries resulted from their act of flight.  The court also noted that the act of fleeing makes collisions of this type highly foreseeable.  Finally, the court noted that their status as passengers in the getaway car did not change anything because their own conduct in committing the crime and getting into the car caused their injuries.

So, Espinosa and Vertiz were unlucky and got no money in their personal injury action.  However, maybe they’ll get lucky and spill excessively hot coffee on themselves in prison.

Michael M. McMahon

mmcmahon@carnaclaw.com

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A Useful Step in Choosing a Lawyer

Corporate CEOs, career criminals, and Larry King may have substantial experience in selecting lawyers to represent their interests but many people don't know how to go about selecting a lawyer.  A yellow pages ad will typically provide general information about the attorney's areas of specialty and length of experience.  However, an attorney advertisement, just like any advertisement, is intended to appeal to a prospective "buyer."  This means an ad is likely to present the attorney's strong points, while leaving out any problem areas.  Referrals from friends, family members, or co-workers may prove useful but should not be relied on to the exclusion of additional research into an attorney's background.  One useful tool in conducting this research is provided by the State Bar of California.

The State Bar website provides an Attorney Search page that allows a user to obtain basic information about an attorney, including educational background any specialization in any area of law in which the State Bar recognizes specialization, including family law, bankruptcy law, workers' compensation law, and tax law.  Keep in mind, though, that specialization is not recognized in most areas of law.  The web page will also tell the user when the attorney was admitted to practice in California and whether the attorney has been "inactive" at any time. 

Crucially, the Attorney Search page will also tell the user whether the attorney has ever been disciplined by the State Bar of California.  If an attorney has been disciplined, the site will sometimes take the reader directly to a linked document that describes the discipline and the reasons for it.  Even where the linked documents are not provided the site will tell the user what discipline was imposed and when it was imposed.  Where such minimal information is provided, an interested party can obtain copies of official disciplinary records directly from the State Bar.  The Bar charges for photocopying and related services, however, considering the importance of choosing the right attorney, consider the money well spent.

In considering the disciplinary information on the Bar website, please keep a few things in mind.  First, as stated on the site, there aremany attorneys in California and some have the same name.  Be sure you're checking the background of the right attorney by confirming address and phone number information.  Second, a history of discipline should not necessarily automatically disqualify an attorney.  Some acts leading to discipline are more serious than others and the passage of time without repeated problems may also be considered.  Third, a lack of disciplinary history, in itself, does not mean an attorney is qualified to handle your legal matter.

The State Bar website is by no means the only source one should consider when looking for an attorney.  Word of mouth, internet searches, attorney referral services, and numerous other sources provide useful information about attorneys.  The Bar website is, however, a useful early step in the selection process.

Mike McMahon – mmcmahon@carnaclaw.com

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A Litigator’s Guide to Avoiding Litigation through Mediation

With apologies to Richard Nixon, "now more than ever" is the time to consider mediation rather than expensive litigation.  Lawsuits are costly, in many ways.  The financial costs of litigation are no secret.  Attorneys typically bill at an hourly rate and the hours add up quickly considering all the work necessary to get a case to the point at which it's ready for trial.  Costs and fees mount even faster when the case gets to trial.  In addition to attorney's fees for 10 to 12 hours a day during trial, parties are responsible for expert witness fees, court reporter fees, and jury fees if the case is tried to a jury.  Indirect litigation "costs" that are often not considered can be as difficult to handle as the financial outlay.  People who have never been involved in litigation often do not anticipate the emotional impact of being involved in a lawsuit for months or even years.  Sleepless nights, domestic upheaval, missed work, and constant aggravation too frequently accompany involvement in lawsuits.  Like surgery, litigation should seriously be considered only after less drastic steps have failed.

One option that should seriously be considered before filing or proceeding with a lawsuit is mediation.  Mediation is generally defined as "a process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement."  Code of Civil Procedure section 1775.1(a).  Although this definition applies specifically in case filed in superior court, it captures what mediation is about in most situations.  For years, mediation has been the favored method of alternative dispute resolution ("ADR") in California.  Mediation, whether before or after the filing of litigation, can be used to resolve business disagreements, neighbor disputes, family disputes, personal injury claims, employment claims, and just about any other type of disagreement that could be the subject of a lawsuit.

Mediation has many benefits, some of which have already been identified.  Successfully mediating a dispute allows parties to avoid incurring substantial expenses and puts a relatively quick end to a dispute, which frees people to focus on their families, businesses, and other essential matters.  Furthermore, unlike a dispute that is submitted to a judge or jury for decision, mediation allows the parties to control the outcome.  The parties can agree in writing to just about anything, as long as it doesn't violate the law or public policy.  In other words, parties can't settle a family dispute with a mediated agreement that someone will kill Uncle Charlie.  However, mediated agreements can encompass issues that would not necessarily have been part of the litigation.

Especially with mediation before the filing of a lawsuit, the parties have substantial control over the ground-rules.  If the dispute is not legally complex, the parties might consider mediating without attorneys.  Although a mediator cannot provide legal advice, a mediator can help the parties narrow the legal issues involved in a dispute.  The parties also have substantial latitude in selecting a mediator.  Although many mediators are attorneys, many qualified mediators have no formal legal training.  Non-attorney mediators typically charge less for mediation than attorney-mediators.

In civil cases assigned to mediation under California statutes, the mediation is conducted under strict confidentiality to ensure that parties speak openly and candidly without fear that statements made at mediation will later be used against them.  With very limited exceptions, primarily in the case of commission of a crime at a mediation hearing, mediators cannot be called to testify as a witness about anything that occurred at mediation.  In pre-filing mediations, the parties can agree to conduct mediation under these confidential conditions.

Our attorneys have handled hundreds of mediations.  Although the most of these mediations have been in matters that had already proceeded to litigation, we have also represented clients in mediations that were undertaken in the hope of avoiding lawsuits.  If you are involved in a dispute that might benefit from mediation but need more guidance or assistance, plenty of information is available on the internet.  If you have more specific questions about potential mediation in San Luis Obispo County, please call us.

Mike McMahon mmcmahon@carnaclaw.com

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Be Sure It’s a “Work of Improvement” before Filing a Mechanic’s Lien

California's Mechanic's Lien law provides an effective tool for contractors and material suppliers to ensure payment on projects.  Although it clearly is not the only tool, it is effective because it potentially ties up the property where the work was performed and gives the owner extra incentive to pay.  However, Mechanic's Liens are not appropriate for every project and a contractor filing an invalid Lien runs the risk of paying the owner's attorneys fees if the owner brings a proceeding to release the real property from the Lien.  One area where care must be exercised, and our focus here, is whether work or materials were provided to a "work of improvement."

Civil Code section 3110 defines work of improvement to include "the construction …  or repair …  of any building, machinery, railroad, or road, the seeding, sodding, or planting of any lot or tract of land for landscaping purposes, the filling, leveling, or grading of any lot or tract of land, the demolition of buildings, and the removal of buildings."  However, California case law provides more useful guidance on what constitutes a work of improvement for Mechanic's Lien law.

The crucial factor in determining whether a project qualifies as a work of improvement is whether the improvement is "permanent" in nature or a "fixture."  In one case the court of appeal expressed skepticism about whether a contractor's work qualified where:

The findings affirm that none of the labor performed and materials furnished by the plaintiff and put into the building ever became a part of the said building or fixtures, or constituted or formed any improvement or alteration of or in said building, or any addition thereto, and that conduits, electric wiring, and switchboards were not so installed as to become permanently attached to said building, or to become fixtures therein.   Moses v. Pacific Building Co. (1922) 58 Cal. App. 90, 94.

Although some contractors may file Mechanic's Liens where work may not have been permanent in nature to bolster their chances of timely payment, the risk of doing so is being forced to pay the owner's attorney's fees in a proceeding to release the property from a Mechanic's Lien under Civil Code section 3154.  If a contractor receives a demand to release a Lien that does not actually involve a permanent improvement or fixture, the contractor should consider doing so rather than running the risk of an attorney's fees award.  As was mentioned at the beginning of this note, a contractor will still have other means of attempting to recover payment.

Mike McMahon mmcmahon@carnaclaw.com

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Running for a Good Cause (and Great Scenery and Wine) in Paso Robles

Because I get to post under the title "Postings from Paso" I don't feel my contribution is limited to legal issues but is more about events and issues affecting Paso Robles.  Or at least I'm going to use that as my rationale for writing a non-legal (illegal?) entry.  The subject?  The inaugural Paso Robles Harvest Marathon to be held on October 24, 2010.

The Marathon is hosted by the Paso Robles Rotary Club and net proceeds will benefit charities and local youth.  Long-running Paso Robles Rotary events like the Winemakers Cookoff have been hugely successful in raising funds for important needs including scholarships for Paso Robles High School students.  Almost as importantly, these events have been a lot of fun.  We expect the Marathon to follow in this tradition.

Appropriately for a "harvest" event in Paso (don't call us the New Napa) Robles, the start and finish location for the Marathon will be Sylvester Vineyards & Winery.  From Sylvester, the run will wind its way into the scenic and quiet hills of Paso Robles and San Miguel, passing numerous other vineyards and wineries along the route.  To a non-runner like me, the course seems fairly challenging, with a mix of hills separated by flat sections.

The weather is typically fantastic but can be unpredictable in Paso Robles in late October.  We could be experiencing a late snap of temperatures near 100 degrees or an early storm.  However, we'll cross our fingers for one of those beautiful fall days with crisp morning temperatures and a sunny afternoon with a temperature in the low 70s.

If you're not a runner, please tell your friends who do run that we would love to have them at this inaugural event.  We hope years from now, runners will proudly boast that they ran the first Paso Robles Harvest Marathon.  And please wave if you see me patrolling the course on my bicycle.

Mike McMahon mmcmahon@carnaclaw.com

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