Appellate courts have broad power when it comes to judicial notice, and that power is comprised of two types of matters: mandatory and discretionary. In the first part of this two-part post, I discussed matters that an appellate court must judicially notice. (See Judicial Notice on Appeal: Mandatory Subject Matter, Appellate Insight, October 2021.) This post will discuss those matters that an appellate court may judicially notice.
In CoreCivic, Inc. v. Candide Group, LLC, 46 F.4th 1136 (2022), the Ninth Circuit reaffirmed 20 years of decisions holding that special motions to strike under California’s “Anti-SLAPP statute” may be filed in federal diversity actions. As the court reflected, circuits have split over the federal implementation of the various states’ Anti-SLAPP motions. See id. at 1142–43. But the Ninth Circuit’s position on this question has been long settled. Id. at 1140. And the Ninth Circuit’s latest published opinion on the issue does not reconsider the merits of the issue or even attempt to defend its rule against the criticism it has faced from other circuits and even Ninth Circuit judges. See, e.g., Travelers Cas. Ins. Co. of Am. v. Hirsh, 831 F.3d 1179, 1182 (Kozinski, J. concurring). Rather, the decision merely explains the court’s refusal to reverse itself. The relative merits of its precedent and the strength of a party’s arguments against it are largely irrelevant; a Ninth Circuit panel is bound to follow the court’s past decisions except in exceptional circumstances. See id. at 1140–43.
So, what is a litigant to do when it has a need and good faith basis to challenge otherwise binding case law from intermediate appellate courts? Some discussion of the governing principles will help inform an approach.
In the wake of the Coronavirus pandemic, countless policyholders made insurance claims with their carriers based on the closure or interruption of their businesses. The insurers with near-uniformity denied coverage, presenting a united front against their insureds. Thousands upon thousands of cases ensued testing the propriety of the insurers’ denial of coverage.
Many business-interruption insurance policies are meant to cover losses tied to the “direct physical loss or direct physical damage” of (or to) the insured’s premises. Nationwide, courts are facing a complicated question—whether the COVID-19 virus can be said to cause “direct physical loss or direct physical damage.”
In an opinion that is the first of its kind in the California appellate courts, the Second District Court of Appeal, Division 7, has ruled that certain COVID-19-related business losses may be covered by business-interruption insurance (BII) policy provisions. Marina Pacific Hotels & Suites, LLC v. Fireman’s Fund Ins., No. B316501, 2022 WL 2711886 (Cal. Ct. App. July 13, 2022) (slip op.), available at https://www.courts.ca.gov/opinions/documents/B316501.PDF.
The groundbreaking opinion gives a leg up to policyholders struggling with pandemic-era debt and business losses. The decision may also inspire the California Supreme Court, other California Courts of Appeal, and the U.S. Court of Appeals for the Ninth Circuit (among other reviewing courts nationwide) to give policyholders the opportunity to prove BII coverage in the context of the pandemic.
When the 9th Circuit issued Monster Energy Company v. City Beverages, LLC, 940 F.3d 1130 (9th Cir. 2019), there was immediate concern over how far the decision would extend and how many cases it would spawn. The decision vacated an arbitral award in favor of Monster Energy. The court found there was evident partiality “given the Arbitrator’s failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS has administered 97 arbitrations for Monster over the past five years.” Id. at 1132.
As the dissent pointed out, the decision left open a number of troubling questions. For example, “how many prior arbitrations must a corporation have engaged in with an arbitration firm for there to be nontrivial business dealings…that require disclosure?” Id. at 1141. Or “must prior arbitrations with the lawyers or law firms representing the parties also be disclosed?” Id. The dissent predicted there would be endless litigations to resolve the questions. Id.
California Code of Civil Procedure 904.1 is probably not a stranger to appellate lawyers who practice in California, as the statute provides a list of certain types of pre-trial orders from which an appeal may be taken. One of the categories of orders listed is “order[s] granting or dissolving an injunction, or refusing to grant or dissolve an injunction.” The statutory phrase “injunction” is interpreted broadly (subject to some exceptions) and applies to a number of different types of injunction orders. (See Valley Casework, Inc. v. Comfort Const., Inc. (1999) 76 Cal.App.4th 1013, 1019 [preliminary injunctions]; Nakamura v. Parker (2007) 156 Cal.App.4th 327, 332 [temporary restraining orders]; R.D. v. P.M. (2011) 202 Cal.App.4th 181, 187 [civil harassment restraining orders]; North Beverly Park Homeowners Ass’n v. Bisno (2007) 147 Cal.App.4th 762, 765 [postjudgment orders granting or denying requests to modify or dissolve injunctions].)
Under the California Arbitration Act (“CAA”), an adverse award is subject to judicial review. Any party may petition the superior court to either vacate or correct the award. (Code Civ. Proc. § 1285.) But in most instances, such review is limited by statute, and such petitions face a number of substantive and procedural obstacles. Before seeking review of an arbitrator’s award, consider the following principles:
Generally, a party challenging an award may only petition to correct or vacate a final award. Where the award is interim, meaning it did not resolve all issues in the arbitration, a court lacks jurisdiction to vacate or correct it. (See Maplebear, Inc. v. Busick (2018) 26 Cal.App.5th 394, 407.) A party may seek writ review of an interim award, but such writ petitions are “extraordinary,” discretionary, and rarely granted.