Monday, June 27, 2005

New 17200 Case

One of the most versatile and poorly understood statutes in California law, Business & Professions Code Section 17200, has been the subject of much attention in recent years. Section 17200 allows a plaintiff to sue for violation of any California law. Proposition 64 recently limited the class of persons that can bring a 17200 claim, and the remedies under Section 17200 have also been limited by court decisions -- and they are getting more limited all the time. In Madrid v. Perot Systems, the court of appeal addressed two questions about the scope of available relief under Section 17200. First, the court held that "non-restitutionary disgorgement" is not available. Non-restitutionary disgorgement is disgorgement of profits that were not obtained from the plaintiffs. Section 17200 only authorizes restitutionary disgorgement of money obtained from the plaintiffs. Second, the court held that Section 17200 authorizes only prohibitory injunctions to stop an ongoing or threatened unfair business practice. If there is no threat of an ongoing or future unfair business practice, then no injunctive relief is available.

Wednesday, June 15, 2005

Nagging Question

There are many issues in the law that are important to practitioners but that never seem to be addressed by courts. In California environmental cases, lawyers have been using continuing nuisance and continuing trespass cases to avoid the bar of the statute of limitations for decades, but there don't seem to be any cases that define the time period covered by a continuing tort claim: is it only the three years preceding the filing of the claim? or the three years preceding the filing of the claim up through trial? The latter rule would make much more sense, but try finding a plain statement of it in the cases.

Last week a new case came out that at least by implication adopts the "through trial" rule. The case was Watson v. Shell, and it concerned whether Shell would have to pay damages for the "benefit" it received from causing contamination beneath Watson's land. (Answer: no.) But tucked into the decision is this statement: "According to the jury, the amount Watson should receive for remediation was $3,915,851, and the value of the benefits obtained by Shell as a result of the gasoline contamination it caused at the Watson Center from June 1, 1993, to June 30, 2001, was $14,275,237." (Slip op. at 7.) Other portions of the opinion (unpublished unfortunately) show that trial was conducted in 2001. Because the case was tried on a continuing trespass theory, this statement strongly implies that the trial court allowed the plaintiff to seek damages up to the time of trial. The unanswered question is not directly answered, but we have a clue.

Sunday, June 05, 2005

Takings

In Lingle v. Chevron, the U.S. Supreme Court cut a branch out of its takings jurisprudence. Twenty-five years ago in Agins v. City of Tiburon, the Supreme Court suggested that a regulatory law could effect a taking of private property if it did not "substantially advance legitimate state interests." This formulation led the lower courts into inquiries about whether particular laws made rational sense. Indeed, in Lingle, the district court conducted just such an inquiry and concluded that Hawaii's Act 257 limiting gasoline service station rents made no economic sense, and thus constituted a taking. Lingle, however, held that the focus in a takings case should be on whether a particular regulatory act impinges upon property rights to such a degree that it effects a taking, not on whether the law is good policy.

Wednesday, June 01, 2005

What's left when cleanup is done?

In Hogan v. United States, a Sixth Circuit decision published on May 10, the court addressed one of those problems that lurks in environmental law but never seems to be directly addressed – whether the owner of contaminated property has sustained damage even after his property has been cleaned up. Indeed in Hogan, the question is never directly answered. In Hogan, the United States conceded that it had inadvertently sold Hogan radioactive thorium alloy that Hogan had intermixed with scrap metal and soil at his salvage yard. The cleanup of the property could not remove all of the thorium, and so the US left Hogan with a barrel in which he could place radioactive waste whenever he found it on his property. Unlike many radioactive materials, the “mag-thor” alloy on Hogan’s property did not pose a health threat unless inhaled, but there was nevertheless no dispute that there remained radioactive waste on Hogan’s property. The district court, and the Sixth Circuit, both decided that despite the presence of this waste, Hogan was not damaged. Hogan argued that “’common sense and every day experience’ suggest that the remaining mag-thor ‘certainly would have some affect [sic] upon the purchase price.’” The Sixth Circuit acknowledged that “Hogan’s position has a certain intuitive appeal, [but] the evidence presented at trial persuaded the district court to the contrary.” Ultimately, this case like many turned on the burden of proof. Hogan had the burden, and he was unable to produce credible evidence that in the absence of a health threat the remaining mag-thor had caused damage.