Appellate Court Limits Local Prosecutors’ Jurisdictional Authority to Pursue Statewide Relief in UCL Claims

On May 31, California public prosecutors and attorneys representing targets of Unfair Competition Law investigations received long-awaited guidance on two key questions. In Abbott Laboratories v. The Superior Court of Orange Co. (2018 DJDAR 5247), the court held that a local prosecutor suing under the UCL (1) may only seek monetary relief for conduct occurring within the county or city where he or she serves and (2) lacks jurisdiction to pursue statewide monetary remedies absent the California Attorney General’s involvement. The California Fourth District Court of Appeals’ opinion foretells new litigation strategies for all parties in UCL cases, investigations, and settlements that are pursued by district attorneys and city attorneys. The court’s analysis has ramifications for how defendants respond to district attorney investigations and the terms on which settlement is feasible for defendants.

Nancy Harris, Chair of Meyers Nave’s Commercial Litigation Practice, published an article in the Daily Journal that explains the court’s decision and its impact on UCL litigation. Nancy’s article also covers important issues that the court did not address, including the prospect of inconsistent treatment and concepts of res judicata.

Please click here to read Nancy’s article.

Can You Impeach with Request For Admission Denials? Victaulic Company’s $55 Million Dollar Question

In written discovery, litigators know that drafting questions and responses must be done carefully because both are strategically important. Expertly crafted questions are designed to be well-hidden minefields and responding to them requires extraordinary care to anticipate and diffuse them. Many litigators have declared victory when a cleverly drafted question achieves its goal of boxing in the opponent and obtaining an admission on a critical element of the case. However, a denial camouflaged in lawyerly objections presents the tricky question of what to do with those denials.

Last month, in Victaulic Company v. American Home Assurance Company (2018) 20 Cal. App. 5th 948, the First District Court of Appeal told litigators exactly what NOT to do: Do not try to beat up an unsuspecting witness with the other side’s denials or well-versed objections. In Victaulic Company, the Court of Appeal threw out a $55 million verdict in favor of plaintiff Victaulic Company and confirmed that the prohibition on using request for admission denials or responses to contention interrogatories at trial cannot be circumvented by laying an impeachment trap for the witness.

Nancy Harris, Chair of Meyers Nave’s Commercial Litigation Practice, published an article in The Recorder that explains what went wrong and what went right in Victaulic Company, what post-trial remedies still exist, and what litigators can do to stay out of trouble. Please click here to read her article.

A Summary Guide for California’s New Affordable Housing Laws

A package of fifteen bills designed to help communities combat California’s affordable housing crisis became law in 2018. The approved bills take different approaches to the housing shortage in California, including providing more funding for affordable housing development, streamlining local government approval of housing projects, restoring local government’s authority to impose inclusionary housing requirements on private housing developers, and strengthening the state’s anti-NIMBY laws.

The new laws have implications and obligations for municipalities, housing related public agencies, and private developers. Meyers Nave attorney Jon Goetz published a one-page guide in the Daily Journal that explains each component of the new affordable housing regulatory landscape. Please click here to read his article.

Challenges Ahead for Clean Power Plan as EPA Eyes Repeal

Under President Barack Obama’s administration, the Environmental Protection Agency promulgated the Clean Power Plan on October 23, 2015. The Clean Power Plan requires states to regulate existing coal-fired power plants in a manner that effectively shuts some down in favor of lower-emission fuel sources such as natural gas, wind, and solar. On October 16, 2017, EPA published a proposal to announce its intention to repeal the Clean Power Plan, and the agency is accepting comments through January 16, 2018 regarding the proposed repeal.

Meanwhile, the Clean Power Plan is subject to a stay issued on February 9, 2016 by the Supreme Court in State of West Virginia v. EPA. That case is held in abeyance. Twenty states and localities have issued a press release notifying the EPA and the public that they support the Clean Power Plan’s current compliance deadlines, which commence September 6, 2018, and disagree that the Supreme Court’s stay has the effect of extending the deadlines. The news release was issued in response to EPA Administrator Scott Pruitt’s letter advising 47 states that they are not ”expected to work towards meeting the compliance dates set in the” Clean Power Plan.

As advised in a March 28, 2017 Executive Order, President Donald Trump’s administration intends to ”suspend, revise, or rescind” any regulation, which includes the power plant standards, that, in the view of  the Trump administration, “unduly burdens the development of U.S. energy resources.” Meyers Nave attorneys Joshua Bloom and Viviana Heger recently published an article in Bloomberg BNA’s Daily Environment Report that reviews how the Trump administration’s proposed draft rule changes the Clean Power Plan, how it will directly and indirectly impact coal plants, and how it will address overall emissions targets and trading. Please click here to read their article.

Tools and Strategies for Streamlining CEQA Compliance

The California Environmental Quality Act (CEQA) has been a part of the California legislative landscape for 47 years, requiring local and state agencies to analyze and identify environmental impacts before approving projects. CEQA compliance is often the biggest source of time delays and litigation risk for project development.

Shaye Diveley, Principal in Meyers Nave’s Land Use and Environmental Law Practice groups, published an article in the League of California Cities’ Western City magazine that provides information about statutory changes and judicial decisions which create opportunities to reduce time and cost burdens involved in the CEQA process. Shaye explains various options, including expanded use of exemptions, “fast-track” legislation, and tiering off existing EIRs. Please click here to read her article titled “CEQA: New Strategies for Streamlining Environmental Review.”

Extension of California’s Cap-and-Trade Program: Three-Bill Package Extension Leaves Unanswered Questions

Last year, under SB 32, California increased its greenhouse gas (GHG) reduction goal to 40% below 1990 levels by 2030.  One-third of that reduction goal is anticipated to be achieved through the State’s pioneering cap-and-trade program.  However, the existing cap-and-trade program has been controversial, subject to several legal challenges, and was set to expire in 2020.  In response, recent legislation extends the cap-and-trade program to 2030 through a three-bill package that is needed to secure support for its passage.  The three measure are AB 398, AB 617 and ACA 1 (a proposed constitutional amendment).

In addition to the extension itself, the bill package addresses four primary points of controversy: (1) measures to address local air quality issues in the state’s most polluted communities, (2) restrictions on local air district regulation of pollutants regulated under the cap-and-trade program, (3) a requirement for future legislative approval of the use of cap-and-trade funds, and (4) tax cuts.  The extension of the program is a major milestone for the State’s GHG reduction program.  However, it leaves important issues unresolved, including the types of programs that may be funded by cap-and-trade revenue and how the California Air Resources Board (a State agency) will regulate industrial emissions to address health impacts on adjacent communities.

Despite the challenges, the significance of the passage of the cap-and-trade extension should not be underestimated.  It was accomplished through a bipartisan agreement and could serve as a model in other states and nations.  It remains to be seen whether the extended and revised cap-and-trade program can be successfully implemented and become a key component of California’s aggressive GHG reduction goals. For an explanation of the three-bill package, the unresolved implications of the extension, and the challenges ahead, please click here to read an article published in the Daily Journal by Meyers Nave Principals Tim Cremin and Josh Bloom.

Cannabis Law Update: Local Regulatory Environment Determines Business Location

U.S. retail cannabis sales reached $6.5 billion in 2016, 35% more than 2015, and are estimated to increase to $7.7 billion in 2017.  With California expected to account for 40% of the market, all sectors of the burgeoning cannabis industry are rushing to launch and expand business operations.  While the market potential is statewide, deciding where to locate a cannabis business is a localized question.

To help established and entrepreneurial cannabis businesses proceed effectively and efficiently, Meyers Nave attorney Richard Pio Roda authored an article in MG magazine that addresses six key steps when examining where to locate and grow a cannabis business.  The article, “Think Locally: Working with local government agencies is critical to the success of your cannabis business,” also helps regulatory entities understand the factors that cannabis business owners consider when evaluating the opportunities and challenges of locating their business in a particular jurisdiction.

Please click here to read Richard’s article.

Appellate Court Bars FAA from Requiring Hobbyists to Register Drones: What It Means for Drone Operators and Local Agencies

The Federal Aviation Administration estimates that small unmanned aerial systems (UAS) will increase from 2.5 million in 2016 to 7 million in 2020, 4.3 million hobbyist UAS and 2.7 million commercial UAS. In response to concerns about the safety of the national airspace system and of people and property on the ground, the FAA issued a rule in December 2015 titled “Registration and Marking Requirements for Small Unmanned Aircraft,” (the “Registration Rule”) which requires web-based registration for small UAS, including model aircraft. Failure to register small UAS under the Registration Rule could subject operators to civil and criminal penalties.

The U.S. Court of Appeals for the District of Columbia Circuit recently struck down the FAA’s authority to issue those registration requirements as to model aircraft. (Taylor v. Huerta, 15-1495, D.C. Cir. 2017.) The Court’s ruling makes it unlikely that the FAA will attempt to further regulate hobbyist small UAS use absent new Congressional authority. However, hobbyist drone operators could face attempts by state or local agencies that seek to develop and administer new rules and regulations on model drone use. Under this scenario, hobbyists could ultimately have to navigate different rules and regulations in different jurisdictions.

The ruling has no impact on businesses using small UAS for commercial purposes; such operators are still required to register their small UAS with the FAA. However, if hobbyists attempt to monetize their use of small UAS (and associated photography and surveillance videos), they must understand what activities could transform them into a commercial user subject to the Registration Rule.

To understand what the Court’s ruling means for drone operators and local agencies, please click here to read an article published in The Recorder by Meyers Nave attorney Kristopher Kokotaylo. Please also click here to read Kris’ Client Alert that covers additional legal and practical implications of the Court’s decision.

Government Revenues: A How-To Guide for Implementing Propositions 26 and 218

Establishing sufficient and sustainable revenue streams is vital for the hundreds of municipalities and special districts throughout California. The key question is how to develop and implement traditional and non-traditional revenue measures within the parameters set by the California Constitution and state law. The League of California Cities recently completed a new “Implementation Guide for Propositions 26 and 218” to help public entities understand what is and is not allowed and how to structure revenue programs that comply with a complex matrix of laws and regulations. The Guide was prepared by an Implementation Guide Committee consisting of 14 people, including Meyers Nave Principals John Bakker and Sky Woodruff.

The Guide includes specific chapters on taxes, assessments, fees, fiscal initiatives and referenda, and litigation issues. The Guide also includes an introduction which provides historical context and basic information regarding Constitutional limitations on taxes and other local government revenue measures imposed by Propositions 13, 218 and 26. Please click here for a copy of LOCC’s “Implementation Guide for Propositions 26 and 218,” which is a valuable resource for public officials navigating this complex area of public finance. Questions about the Guide may be directed to John or Sky.

California vs. Trump Administration: A Battle Over Vehicle Fuel Efficiency Standards

California is gearing up for a battle over the Trump administration’s proposed repeal of existing regulations that significantly increase vehicle fuel efficiency standards by 2025. Greenhouse gas reduction and lower vehicle emissions to combat climate change are cornerstones of California’s current environmental policy. California will assert its rights to continue to regulate vehicle emissions under a waiver granted by the Environmental Protection Agency under the Clean Air Act. The dispute will provide an opportunity to reinforce the regulation of greenhouse gases under the Clean Air Act to reduce the public health threats of climate change. The battle could prove to be a test of the Trump administration’s plans to roll back other environmental protection regulations.

The undoing of the regulations will not be an easy process. It will involve a public and lengthy administrative process and inevitably end up in court. Tim Cremin, Chair of Meyers Nave’s Climate Change and Green Initiatives Practice Group, published an article in Bloomberg BNA Daily Environment Report that outlines the possible paths this battle will take and the steps and outcomes that could occur along the way. Please click here to read his article.