The Los Angeles County Bar Blog

Foreclosure Workshop Praised

As noted on page 22 in USC Law Magazine, "[M]ost of the nearly 22,000 L.A. County attorneys who work in small firms or solo practice are rarely offered public service opportunities. Through their work with the Los Angeles County Bar Association Barristers [USC alumni] David Swift '04 and Jennifer Flory '05 are changing that....Swift and Flory decided to hold foreclosure prevention clinics in partnership with three of L.A.'s most prominent public service organizations: Public Counsel, Neighborhood Legal Services and the Legal Aid Foundation."

CA Supreme Court Satellite Clerk's Office to Close

According to a press release from the Judicial Council, "Chief Justice Ronald M. George has announced that the California Supreme Court will close its satellite Clerk's Office in the Ronald Reagan Building at 300 South Spring Street, Los Angeles, at the close of business on December 31, 2009. The decision to close the office was made for budgetary reasons, following a review of the work processed by the office and the cost of operations."

LACBA Announces a New Executive Director

The Los Angeles County Bar Association announces the selection of Sally Suchil as its new Executive Director.

Ms. Suchil is a graduate of the University of Southern California and the University of Santa Clara School of Law and is admitted to the State Bar of California, Ninth Circuit Court of Appeals, and the U.S. District Courts for the Central and Eastern Districts of California. Currently, as the Director of Corporate and Legal Affairs for the Hammer Museum in Los Angeles, she is responsible for a wide range of museum matters, including general corporate, regulatory, litigation, intellectual property, contractual, art and museum legal, administrative, governance, internal policy, and other business.

Previously, Ms. Suchil served as General Counsel for the California Endowment. Prior to that assignment she served as Senior Vice President and General Counsel for Spelling Entertainment Group Inc., where she managed the Legal Department, served as a member of the senior management and executive team and as Secretary to the Board of Directors. Prior to Spelling, she served as Senior Vice President and Assistant General Counsel at Metro-Golden-Mayer Inc., where she managed the Corporate Legal Department. Ms. Suchil also served as staff counsel for the Securities & Exchange Commission’s Los Angeles Regional Office in both enforcement and corporate finance.

In addition, Ms. Suchil has served on and chaired numerous professional, philanthropic, and foundation boards and commissions, including, among others: Chair, ABA Minority In-House Counsel Group; Vice President, Board of Directors, CSULA Foundation; Secretary, Board of Directors, Police Foundation (Washington D.C.); Board of Councilors, USC Law Center; Deputy General Counsel, Webster Commission; and President, Women Lawyers Association of Los Angeles.

Ms. Suchil will assume the position of Executive Director upon the departure of current Executive Director Stuart Forsyth, who announced he will be leaving the Association on December 1st, after serving the Association for the past five years. Mr. Forsyth will return to his very successful consulting practice, "The Legal Futurist," which provides leadership coaching, visioning, strategic planning, and guidance to components of the system of administration of justice, including bar associations, law firms, courts, CLE providers, judges, and lawyers.

Courts Scrutinized during Budget Crisis

According to the Sacramento Bee, "Judges, law enforcement officials and union workers joined together Tuesday to release an accountability plan for the Administrative Office of the Courts, calling on the Legislature to increase the agency's openness and ensure that state courts do not have to close one day a month." In response to criticisms about court policies, Chief Justice Ronald George said: "Much of the loudest, much of the shrillest criticism--and I'm being charitable here--are from people who aren't fully informed."

Newslines

The medical marijuana fray has gotten complicated, with no signs of mellowing. Judge James C. Chalfant has reversed a ban on new dispensaries in the city, while Steve Cooley and City Attorney Carmen Trutanich have come out against the dispensaries. The U.S. Attorney General, Eric Holder, has announced that the federal government will not seek to enforce federal laws against marijuana distribution when they run counter to state laws. And in United States v. $186,416 in Currency (9th Cir. - Oct. 20, 2009), the Ninth Circuit rules against the LAPD and in favor of the United Medical Caregivers Clinic on Wilshire. LAist has details about Trutanich's proposed new ordinance.

California Attorney General Jerry Brown has launched a suit against State Street Bank and Trust, charging that the bank defrauded Calpers and the California State Teachers Retirement System.

Ever try to win an argument with a cable TV company? How about a credit card company? The Ninth Circuit rules in favor of John Gorman, who sued after his credit rating went down because he wouldn't pay the cable company. The ruling addresses FCRA preemption of California's arguably more pro-consumer credit reporting law.

Tax Amnesty Deadline Passes; UBS Sends Sends Warning Letters to Clients

As the October 15 deadline has come and gone, many people have reported receiving letters from UBS. These letters advise clients that after an initial investigation, UBS has determined that the client's account will likely be disclosed to the IRS. This has, understandbly, sent a wave of panic through many clients.  But it is too early to panic.

UBS was ordered a couple of weeks ago, by a Swiss court, to begin notifying clients as early as possible that their identity may be disclosed to the IRS. UBS has not completed its analysis yet and does not yet know the identity of the accounts that will be disclosed.  That is scheduled to happen by November 18.  In the meantime, UBS has played it safe and is notifying all of their U.S. clients that their account may be disclosed.  Which is technically accurate. Statistically, only 10% of all US accounts are expected to be disclosed.

Newslines

According to a story by Christine Pelisek in the LA Weekly, the murder of Deputy Abel Escalante may have been retaliation for the death of gang member Danny Leon in a shootout with the LAPD on Drew Street. A recent crackdown on the Avenues Gang in Northeast Los Angeles resulted in the arrest of 46 members of the gang.

According to Injuryboard.com, "The Los Angeles regional rail system, Metrolink, Wednesday agreed to pay $30 million to settle most of the remaining lawsuits that resulted from a 2005 Glendale crash that killed 11 and injured more than 180."

The Cloud and the Black Box

Some observations in the wake of the T-Mobile Sidekick debacle, which includes server failure, a $100 customer appreciation card, and discussions of the dark side of cloud computing: The cloud is a mysterious black box. The cloud is a representation of primarily corporate sponsored, for-profit activities hosted on the larger Internet, with no duty other than to shareholders of the various corporations. One uses the cloud at one's own risk. T-Mobile and Microsoft have given alarmists a clear and convincing example of exactly what those risks are.

Cloud computing is defined at Wikipedia as:

"Cloud computing is the provision of dynamically scalable and often virtualised resources as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them. Cloud computing services often provide common business applications online that are accessed from a web browser, while the software and data are stored on the servers."(emphasis added)

Cloud computing is not new. If you have a hotmail account, you use the cloud. What is new is the extent to which things beside webmail are being offered via the cloud, including, in the case of T-Mobile's Sidekick service, "personal information stored on [a] device--such as contacts, calendar entries, to-do lists or photos."

Large corporations like T-Mobile and Google encourage users to rely on their services for storage of and access to this kind of personal information, and it seems that the number of people who truly rely on these services is ever on the rise. But only a very few of those users are aware of the dangers associated with such reliance, not the least of which being that the terms of service may include language such as this from T-Mobile:

21. * Disclaimer of Warranties. EXCEPT FOR ANY WRITTEN WARRANTY THAT MAY BE PROVIDED WITH A DEVICE YOU PURCHASE FROM US, AND TO THE EXTENT PERMITTED BY LAW, THE SERVICES AND DEVICES ARE PROVIDED ON AN “AS IS” AND “WITH ALL FAULTS” BASIS AND WITHOUT WARRANTIES OF ANY KIND. WE MAKE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE CONCERNING YOUR SERVICE OR YOUR DEVICE. WE CAN'T PROMISE UNINTERRUPTED OR ERROR-FREE SERVICE AND DON'T AUTHORIZE ANYONE TO MAKE ANY WARRANTIES ON OUR BEHALF. THIS DOESN'T DEPRIVE YOU OF ANY WARRANTY RIGHTS YOU MAY HAVE AGAINST ANYONE ELSE. WE DO NOT GUARANTEE THAT YOUR COMMUNICATIONS WILL BE PRIVATE OR SECURE; IT IS ILLEGAL FOR UNAUTHORIZED PEOPLE TO INTERCEPT YOUR COMMUNICATIONS, BUT SUCH INTERCEPTIONS CAN OCCUR.

That paragraph ostensibly applies to services T-Mobile provides via the cloud:

Please read these T&Cs carefully. They cover important information about all T-Mobile services provided to you (“Service”) and your T-Mobile phone, handset, device, SIM card, data card, or other equipment (“Device”).

What engineers might have called a black box has been tarted up with the fluffier label, the cloud.

Black box is a technical term for a device, system or object when it is viewed in terms of its input, output and transfer characteristics without any knowledge required of its internal workings. Almost anything might occasionally be referred to as a black box: a transistor, an algorithm, humans, the Internet.

The opposite of a black box is a system in which the inner components or logic are available for inspection (such as a free software/open source program), which is sometimes known as a white box, a glass box, or a clear box.

The cloud is a black-box into which one throws one's personal data with no knowledge of the internal workings. If that black box is provided by a responsible purveyor of services then use of that black box for mission critical information may make sense. If, however, that black box is provided by entities that expressly disclaim any responsibility to the user, one might do better to put into it nothing of importance (and certainly nothing unique).

Calling this particular black box the cloud subtly shifts users away from commonsense concerns over reliance on black-box technology. In the case of the T-Mobile Sidekick failure, users paid the price for accepting that shift and failing to recognize the dangers of the black box that so eagerly swallowed their personal information.

This Month in LAL

Who is to blame for the economic implosion? In two feature articles, authors Mark Labaton and Mark Anchor Albert explore the legal fallout from the absence of regulatory control over derivatives and the legal arguments against the First Amendment shield that bond ratings agencies have traditionally enjoyed. And in "Take It to the Bank," authors Maura O'Connor, James Bryce Clark, and Edward Karlin offer insight into the differences between and FDIC bank receiverships and other corporate insolvencies. The economic crisis and the law also receive attention in Dennis L. Perez's article on tax relief for victims of Ponzi schemes. For those looking to reduce child support or alimony in the wake of financial loss, however, no relief is likely. Lance S. Spiegel has more in his article concerning the recession's effect on family law matters. Finally, Ken Swenson offers an overview on starting a law practice in a home office.

Vacating Awards for Arbitrator Error

As a ground for vacating an award, C.C.P. 1286.2 [a][5]) includes an arbitrator's "refusal to hear evidence material to the controversy," causing "substantial prejudice" to the parties; Flanagan v. Orbison, 2005 WL 2224836 (Cal. App.). The court must accept the arbitrator's legal theory and conclude the arbitrator might have rendered a different award having excluded the evidence; Hall v. Sup. Ct., 18 Cal. App. 4th 427 (1993); Gonzales v. Interinsurance Exchange, 84 Cal. App. 4th 58 (1978). Without citing either of these cases, the court in Burlage v. Sup. Ct., 2009 WL 2712382 (Cal.App.) vacated an award on the ground (apparently) the court majority disliked the arbitration award despite two California Supreme Court cases holding arbitrator legal error is not subject to review; Cable Connection, Inc. v. DIRECTV, Inc., 44 Cal. 4th 1334 (2008); Moncharsh v. Heily and Blasé, 3 Cal. 4th 1 (1992).

Failure to "hear material evidence", literally interpreted, would engender an endless round of appeals if reviewed in litigation terms of "materiality." The ground, if established, requires substantial prejudice; Schlessinger v. Rosenfeld, et al., 40 Cal. App. 4th 1096 (1995). CCP 1286.2 is "a safety valve in arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case;" Schlessinger; Hall v. Sup. Ct.

In Kaiser Foundation Health Plan, Inc. v. Ayon Alexandre, 2006 WL 552631 (Cal. App.) [Non. Cite.] the court interprets CCP 1286.2 [a] [5] to require evidence of prejudice first, not materiality.

See, Cable Connection, Inc. v. DIRECTV, 143 Cal. App. 4th 207 (2006) (distinguishing the failure to "hear" material evidence and "consider" material evidence), reversed on other grounds); Gonzales v. Interinsurance Exchange.