David O. Carter

The case involves consolidated class actions by students Kevin Ferguson and Sandra Muniz against Corinthian Colleges and related entities, alleging breach of contract, fraud, negligent misrepresentation, and violations of California consumer protection statutes based on claims that the schools misrepresented educational quality, leading to high tuition, loans, and poor job outcomes. Defendants moved to compel individual arbitration under enrollment agreements containing arbitration clauses. The court granted the motions in part, finding the agreements valid and enforceable under the Federal Arbitration Act, with broad scope covering the plaintiffs' individual claims for damages and restitution, which were stayed pending arbitration; it denied the motions in part as to claims for public injunctive relief, which may proceed in court because they seek to protect the public rather than individual interests.

business & regulatoryprocedure

The case involved two former employees of Rockwell Collins, Inc. who sued for violations of the California Labor Code, Business & Professions Code § 17200, and the Private Attorneys General Act (PAGA), seeking to represent a class. The defendant moved to compel arbitration under employment agreements containing arbitration clauses, but did so only after removing the case from state court, transferring venue, participating in a scheduling conference, and conducting discovery—nearly thirteen months after filing. The court denied the motion in full as to one plaintiff because the defendant had waived its right to arbitrate by acting inconsistently with that right and prejudicing the plaintiff. It denied arbitration of the second plaintiff's PAGA claims on the ground that California law prohibits waivers of the right to bring representative PAGA actions and such rules are not preempted by the FAA. For the second plaintiff's remaining claims, the court ordered further discovery on whether the arbitration agreement is enforceable under the Gentry test.

labor & employmentprocedure

In Mattel, Inc. v. MGA Entertainment, Inc., the dispute centered on MGA's counterclaim alleging that Mattel had willfully and maliciously misappropriated 26 categories of MGA's trade secret information in violation of the California Uniform Trade Secrets Act. The jury found in MGA's favor on the misappropriation claim and awarded compensatory damages, after which the court addressed MGA's application for exemplary damages, attorneys' fees, and costs. The court granted in part and denied in part the application, awarding MGA $85 million in exemplary damages, $2,172,000 in attorneys' fees, and $350,000 in costs. The core reasoning applied CUTSA's provision allowing exemplary damages up to twice the compensatory award when misappropriation is willful and malicious, while evaluating the reprehensibility of the conduct, the amount of harm, comparable penalties, and constitutional limits on excessive awards, along with common-law factors such as the defendant's financial condition.

business & regulatorytorts & liability

This case involves thirty-nine current and former truck drivers employed by McLane Foodservices, Inc., who sued under California's Private Attorneys General Act and Unfair Competition Law, claiming the company's piece-rate pay formula failed to compensate them for pre- and post-shift duties, rest breaks, meal periods, and waiting time, and that wage statements were inaccurate. The court granted in part and denied in part the plaintiffs' motion for summary judgment while denying the defendant's motion for partial summary judgment. On the piece-rate claims, the court held that the formula was unlawful because it did not separately pay for all required duties and could not rely on an averaging method to meet minimum wage obligations. The court denied summary judgment on the preemption issue, finding that the meal and rest break claims were not preempted by the Federal Aviation Administration Authorization Act because the state rules were not sufficiently related to motor vehicle safety. Other portions of the defendant's motion regarding UCL restitution and PAGA notice requirements were also denied.

labor & employmentbusiness & regulatoryfederal power

The case involved plaintiff Rick Aversano suing law firm Greenberg Traurig for civil RICO violations under 18 U.S.C. § 1962, along with state claims, stemming from the firm's advice on tax shelter transactions called POPS and HOMER that allegedly involved mail and wire fraud, undisclosed promoter fees, and resulted in over $3 million in losses after IRS audits and bans. The court granted the defendant's motion to dismiss the RICO claim. It reasoned that the complaint's allegations showed the transactions were investments in securities with a common enterprise and profit expectation, triggering the Private Securities Litigation Reform Act bar on civil RICO claims based on securities fraud. The RICO claim was dismissed with prejudice, and the case was remanded to state court for lack of federal jurisdiction.

criminal lawbusiness & regulatorytaxes

The case involved plaintiff Martinez suing Infinity Insurance after the company denied her claim for a stolen 2001 Ford Excursion that she insured and used but did not own. Martinez reported the vehicle missing in June 2006, but Infinity identified multiple inconsistencies in her statements about mileage, witnesses, and events, along with her failure over many months to provide requested financial records, maintenance history, or timely complete an examination under oath. Infinity concluded these issues created a genuine dispute over coverage due to possible misrepresentation and non-cooperation under the policy terms. The court granted Infinity's motion for summary judgment on both the breach of contract and bad faith claims, holding that the insurer's denial was based on a reasonable interpretation of the policy and that no evidence showed unreasonable conduct.

business & regulatorypropertyprocedure

This case is a class action lawsuit brought by former Account Representatives against Monex Deposit Company and related entities, alleging violations of the Fair Labor Standards Act (FLSA) and California law for unpaid overtime, withheld commissions, unreimbursed expenses, and missed meal and rest breaks. The court addressed Defendants' motion for summary judgment on the FLSA overtime claims, specifically whether Monex qualifies as a 'retail or service establishment' eligible for the Section 7(i) exemption from overtime requirements. The court granted the motion, holding that Monex's sales of precious metals to individual customers constitute retail sales to ultimate consumers rather than for resale. The reasoning centered on undisputed facts showing that customers purchased metals for personal investment without intent to resell through Monex, that the business operates at the end of the distribution stream, and that industry recognition and regulatory factors support classifying the sales as retail.

labor & employmentbusiness & regulatory

In this case, California Pharmacy Management sued Zenith Insurance and ZNAT Insurance under the federal RICO statute, alleging that the insurers engaged in a scheme of mail and wire fraud by filing baseless objections and pursuing sham litigation in workers' compensation proceedings to avoid paying valid pharmacy bills for injured workers, with the goal of driving CPM out of business. The defendants moved to dismiss the second amended complaint, arguing defects in the RICO pleading and seeking a stay under the Colorado River doctrine due to a related state court action. The court denied the motion to dismiss, holding that the complaint adequately alleged the elements of a RICO violation under 18 U.S.C. §§ 1962(c) and (d), including an enterprise and predicate acts of fraud. It also denied the request for a stay, finding that the pending state action did not warrant federal abstention as the state claims did not overlap sufficiently with the federal RICO claims.

criminal lawbusiness & regulatorylabor & employmenthealthcare

The case involved a lawsuit by the mother of Andrew MacEachern against the City of Manhattan Beach, its police department, and Officer Kristopher Thompson under 42 U.S.C. § 1983, alleging excessive force and conspiracy after the officer shot and killed MacEachern during a confrontation where he was suspected of threatening a woman with a knife. The court granted the defendants' motion for summary judgment on all claims. It reasoned that the officer's use of force was reasonable under the circumstances as MacEachern advanced with a knife despite commands to drop it, there was no evidence of a municipal policy or custom causing the violation, and the conspiracy claims lacked sufficient factual support. The court denied the defendants' request for attorneys' fees, finding the suit was not frivolous.

civil rights

The case involved seven defendants charged in Counts 59-117 with conspiring to provide material support to the Mujahedin-e Khalq (MEK), a group designated as a foreign terrorist organization by the Secretary of State in 1997, by soliciting donations at airports and other locations and forwarding funds to the MEK between 1997 and 2001, in violation of 18 U.S.C. § 2339B. The defendants moved to dismiss those counts on grounds that the statute violated the Ex Post Facto Clause and constituted a bill of attainder, that it infringed the First and Sixth Amendments, and that the indictment alleged only solicitation rather than material support. The district court denied all three motions. It reasoned that the MEK's designation was in effect during the charged period, that the conduct alleged fell within the statutory definition of material support, and that the statute was not unconstitutionally vague or overbroad as applied to the defendants' knowing solicitation and contribution activities.

criminal lawfree speech

The case is an appeal by Elaine Marshall, as successor trustee of various family trusts, from three bankruptcy court orders in the Chapter 11 proceeding of debtors Howard and Ilene Marshall, which arose after a Texas probate court entered a multimillion-dollar fraud judgment against Howard in disputes over J. Howard Marshall II's estate plan. The district court affirmed the bankruptcy court's denial of the trusts' motion for recusal or reassignment of the presiding judge, its confirmation of the debtors' first amended reorganization plan, and its denial of the motion to dismiss the case for bad faith. The court reasoned that the record showed no actual bias or appearance of impropriety by the bankruptcy judge, that the plan was feasible, proposed in good faith, and satisfied the requirements of the Bankruptcy Code, and that the debtors faced genuine financial distress from the judgment and related litigation, making their filing a legitimate effort to reorganize rather than an improper attempt to harass creditors.

business & regulatoryprocedureproperty

This case involves former employees of Decision One Mortgage Company and related HSBC entities who allege violations of the Fair Labor Standards Act and state laws, claiming they were misclassified as exempt from overtime or not properly paid for overtime hours worked as Inside Account Executives, Account Manager II, or Account Manager III. Plaintiffs sought conditional certification of a collective class under FLSA § 216(b) for similarly situated employees nationwide, along with production of a class list, while defendants moved to strike the class allegations. The court granted conditional certification for Account Manager IIIs and certain Inside Account Executives (with tolling of the statute of limitations), denied the motion to strike, and ordered defendants to produce an Excel-formatted class list containing employee details within a specified timeframe; it also denied sanctions against defendants. The decision rested on the plaintiffs meeting the lenient first-stage standard for showing that potential class members were subject to a common policy or practice regarding overtime exemptions and pay.

labor & employmentprocedure

In Safarian v. Maserati North America, Inc., plaintiff Michelle Safarian sued the defendant for defects in a 2006 Maserati vehicle she purchased in Van Nuys, California, seeking a refund of the $122,442.60 purchase price after originally filing in state court. The case was assigned to the Southern Division of the U.S. District Court for the Central District of California, prompting the defendant to move for intradistrict transfer to the Western Division on grounds of improper assignment under General Order No. 98-03 and convenience of parties and witnesses under 28 U.S.C. § 1404. The court denied the motion, ruling that venue in the Southern Division was proper because the corporate defendant resides there due to its dealerships in Orange County, and that the plaintiff's choice of forum warranted substantial deference with no strong showing that convenience or justice required transfer.

procedure

The case involved the IRS seeking to enforce summons against a law firm and its attorney to obtain documents related to their alleged promotion of abusive tax shelters, as part of an investigation into potential penalties for failing to register such shelters and maintain investor lists. The district court had previously ordered compliance with the summons and additional document production, which the respondents appealed; they then moved for a stay of that order pending appeal. The court denied the stay, finding that the respondents failed to demonstrate a likelihood of success on the merits or irreparable injury, that the balance of hardships did not tip sharply in their favor, and that the public interest favored prompt resolution of tax investigations without further delay.

taxesbusiness & regulatoryprocedure

In Burnett v. Rowzee, one of several consolidated cases, plaintiffs alleged that defendants including James Halstead participated in a Ponzi scheme involving false promises of investments in short-term bridge loans tied to PIPEs financing, with funds instead diverted for personal use and earlier investors paid from new contributions. Plaintiffs brought claims under Section 10(b) of the Securities Exchange Act and Rule 10b-5, as well as related state claims, asserting that Halstead acted with scienter by soliciting investments through companies he controlled and distributing returns from later funds. The court denied defendants' motion to dismiss under Rule 12(b)(6), holding that the complaint adequately pleaded the required elements of securities fraud, including scienter, based on Halstead's sophistication as a licensed professional, his active role in raising and transferring funds, and suspicious transactions such as large wire transfers used for personal purchases. The court applied heightened pleading standards under the PSLRA and Rule 9(b) but found the allegations sufficient to support a strong inference of intent or recklessness rather than innocent involvement.

business & regulatoryprocedure

The case involved the IRS seeking enforcement of its demand for additional documents from law firm Lee, Goddard & Duffy, LLP and partner William A. Goddard, whom the IRS was investigating for potential promoter penalties under 26 U.S.C. §§ 6707 and 6708 for failing to register tax shelters and maintain investor lists as required by §§ 6111 and 6112. After an earlier court order enforcing IRS summonses, the firm produced some documents but disputed the need for more related to certain transactions linked to KPMG-promoted shelters; the IRS argued these modified deals remained within the summons scope. The court granted the IRS's demand, holding that the government met its burden under the Powell standards via an investigating agent's declaration establishing relevance and good faith, while respondents failed to allege specific facts showing bad faith or an improper purpose.

taxesbusiness & regulatoryprocedure

This case involves a shareholder class action lawsuit brought by Middlesex Retirement System against Quest Software Inc. and its executives, alleging securities fraud related to the backdating of stock options and the resulting misstatements in the company's financial reports during the class period from 2001 to 2006. The court considered the defendants' motion to dismiss the amended complaint under federal rules and the PSLRA. It granted the motion in part and denied it in part, dismissing the primary securities fraud claim without prejudice against one defendant (Lambert) while allowing it to proceed against the others, and making similar partial rulings on control person liability and insider trading claims. The core reasoning centered on whether the plaintiffs had sufficiently pleaded particularized facts establishing scienter and material misrepresentations for each defendant under the heightened pleading standards.

business & regulatory

In this case, plaintiff Teresa Moore sued La Habra Relocations, Inc. after a moving company allegedly refused to release her furniture from an interstate shipment until she paid extra fees, claiming breach of contract and a violation of the federal Carmack Amendment. La Habra, acting as an agent for the carrier Wheaton, moved for summary judgment. The court granted the motion, first because the plaintiff failed to file any opposition by the deadline set in the local rules and a prior court order, which was treated as consent to the motion under Local Rule 7-12. On the merits, the court held that La Habra could not be held liable under the Carmack Amendment because it was a disclosed agent that was not a party to the bill of lading, with liability instead resting solely on the carrier. The court cited the statute, agency principles, and supporting case law to conclude that summary judgment was appropriate as a matter of law.

business & regulatoryprocedurefederal power

This case involves defendants Houston and Bridgewater, alleged Aryan Brotherhood prison gang members charged with federal racketeering and violent crimes in aid of racketeering (VICAR) for their roles in a 1997 attack at USP Lewisburg that killed two rival inmates. The government moved to bar a duress defense, while the defendants requested jury instructions on duress, self-defense, defense of others, and imperfect self-defense for the relevant racketeering acts and VICAR counts. The court analyzed the legal standards for such instructions under Mathews v. United States and related precedent, concluding that the defenses were unavailable as a matter of law due to the defendants' voluntary gang affiliation, the absence of any evidence of imminent threat or lack of alternatives, and the incompatibility of duress with the specific intent element of VICAR. It therefore granted the government's motion and denied the defense requests, barring argument on these defenses at trial.

criminal lawprocedure

In White v. Trans Union, LLC, six individuals who had received Chapter 7 bankruptcy discharges brought a class action against the credit reporting agency TransUnion, alleging that it erroneously reported their discharged debts as still due and owing on credit reports furnished to third parties. The plaintiffs claimed this resulted from TransUnion's reliance on voluntary updates from creditors, which produced more inaccurate than accurate reports, and from its failure to properly reinvestigate disputes, in violation of the Fair Credit Reporting Act, the California Consumer Credit Reporting Agencies Act, and California's Unfair Competition Law. The court denied TransUnion's motion to dismiss the second amended complaint, concluding that the allegations sufficiently stated claims by showing that the agency's procedures did not ensure maximum possible accuracy and that the plaintiffs had adequately pleaded injury for standing to seek injunctive relief under the UCL.

business & regulatoryprocedure