Arbitrary Tiered Water Rates Violate California Constitution – Capistrano Taxpayers Association v. City of San Juan Capistrano – What the Appellate Court’s Ruling Means

Arbitrary Tiered Water Rates Violate California Constitution

Today, the California Court of Appeal, 4th District, Division 3, issued its long-awaited opinion in the Capistrano Taxpayers Association v. City of San Juan Capistrano water rates case.  Louis C. Klein, a partner in Foley & Mansfield’s Los Angeles office, represented Amicus Curiae Mesa Water District in this case siding with the taxpayers association which sought to invalidate the City’s tiered water rates.

Capistrano Tax Payers Association v. City of San Juan Capistrano
California Court of Appeal
4th Appellate District, Division 3
Case No. G048969

Today, the California Court of Appeal, 4th District, Division 3, issued its long-awaited opinion in the Capistrano Taxpayers Association v. City of San Juan Capistrano water rates case. The ruling sheds much needed light on the State Constitutional requirements for determining how municipalities and water districts can set water rates.  Proposition 218, enacted by the voters in 1996, set certain constitutional limitations on the ability of government agencies to generate revenues without taxpayer approval.

First, and most importantly, the Court’s ruling does not invalidate all tiered water rates.  Instead, in line with many state, regional and locally-instituted conservation efforts, as well as Governor Brown’s recent mandate to cut water usage by more than 25% in California, the Court’s ruling only invalidates arbitrary rate structures, whether tiered, blocked or flat, that do not meet the mandatory requirements found in Proposition 218.

Commentators should not read the Court’s ruling as a death knell for water conservation.  It is not.  Harmonizing Proposition 218 with water conservation efforts are not mutually exclusive endeavors.  Water conservation as mandated by the California Constitution, Article X, section 2 is not at odds with Proposition 218 so long as conservation is attained in a manner that does not exceed the proportional cost of service attributable to the owner’s property.  As such, legal conservation efforts to reduce water usage is not in jeopardy by the Court’s ruling.  The Court’s ruling only covers those government agencies who, for expediency’s sake or to arbitrarily generate revenue and create slush funds, circumvent strict constitutional standards and protections for California’s citizens without first providing proper notice, rate making documentation and calculations, and an opportunity to be heard.  This is what the City of San Juan Capistrano failed to do.  Instead, the City created a rate model that jumped exponentially between tiers creating inherent inequalities, without any explanation, justification, or backup data to support its model – a rate model that was never disclosed to the City’s rate payers and never warranted as Proposition 218 compliant.

Compliance with the mandates of Proposition 218 is not an exceptionally difficult endeavor. Reliable and credible rate models and calculations that take into account Proposition 218 standards will more than likely be given credence by the courts.  Arbitrary and untrustworthy rate models will not, purely revenue-generating rate models will not, and rate models that are not proportional to the cost of service will not.  If the costs of service increase due to constrictions in water supplies as envisioned by the Governor and the State’s water suppliers, then these increased costs can be passed through to the rate payers through Proposition 218’s constitutional safeguards, not in spite of them.  This is the rub for most government agencies – to take the steps needed to draft, vet and create credible rate models and to expend sufficient effort to ensure accountability under Proposition 218.

The Court’s ruling today only emphasizes the need for government agencies to follow the State’s Constitution in creating and implementing water rates so that all Californians have a say in how they utilize, pay for and conserve one of the State’s most precious commodities.

Below is a chart of the legal issues and the rulings of the Court of Appeal, 4th District, Division 3


1.  Are Tiered Water Rates Constitutional?  Yes.  Tiered water rates are constitutional as long as they (1) satisfy the proportionality and revenue-neutrality provisions of Proposition 218, (2) relate to a service that is immediately available, and (3) have been disclosed to the public prior to implementation.  Allocation-based conservation pricing consistent with California Constitution, article X, section 2, and Water Code section 372, is not at odds with Proposition 218 so long as conservation is attained in a manner that shall not exceed the proportional cost of the service attributable to the parcel and there is adequate support for the inequality between tiers, depending on the category of user.

2.  Are the City’s tiered water rates compliant with Proposition 218?  No.  The City failed to present credible evidence that the arbitrary and incremental increases between its tiered rates were compliant with Proposition 218.  First, the City failed to provide any specific financial data to support its tiered rates.  Second, the City’s significant rate jumps between tiers are not cost-related.  Finally, the tiered rates are not proportional to the cost of service to each parcel.

3.  Are the City’s tiered rates a penalty?  No. The City’s tiered water rates cannot be considered a penalty because such a theory would be inconsistent with the Constitution.  Penalty rates that bear no relationship to the actual cost of providing water service would make a “mockery of the Constitution.”

4.  Does the City bear the burden of proof in demonstrating compliance with the mandates of Proposition 218?  Yes.  Proposition 218 expressly provides that the challenged agency (the City) bears the burden of proving compliance with Proposition 218.  It is clear that the voters intended to reverse the usual deference accorded governmental action and to reverse the presumption of validity by placing the burden on the governmental agency.

5.  Can the City charge rate payers for non traditional, non-potable water services (recycled water)?  Yes.  The Court found that providing recycled water is not a fundamentally different kind of service from providing traditional potable water. When each kind of water is provided by a single local agency that provides water to different kinds of users, some of whom can make use of recycled water while other can only make use of traditional potable water, providing each kind of water is providing the same service.  Non-potable water for some customers frees up potable water for others.  Since water service is already immediately available to all customers of the City, there is no violation of Proposition 218 (Constitution, Article XIII(D), section 6(b)(4) requiring that a service is actually used by, or immediately available to, the owner of the property.)

6.  Is there sufficient evidence to determine whether residential rate payers who are lower than average water users are being required to pay for recycling facilities that would not be necessary but for above-average consumption?  Insufficient evidence.  The Court remanded this issue back to the trial court for further findings on whether charges to develop the City’s nascent recycling operation have been improperly allocated to users whose levels of consumption are so low that they cannot be said to be responsible for the need for that recycling.

Read the ruling here. For more information, contact Louis Klein at 213.283.2112 or

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Architects Subject to Suit by Homeowners Despite Lack of Contractual Relationship

Architects in California may believe they are immune from a direct lawsuit by homeowners where their only contract is with the builder, and certainly where their contract with the builder disclaims any third party beneficiary rights.  Not so says the California Supreme Court.  In Beacon Residential Community Ass’n v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568, the Court held that the prime architect on a condominium project owes a duty of care to future homeowners with whom it has no contractual relationship, even if the architect does not make final decisions regarding construction.  Pursuant to a contract with the owner and developer, the defendants/architects in Beacon provided architectural and design services for a 595 unit condominium building in San Francisco, knowing the finished construction would be sold as condominiums.  The homeowners association later sued the architects and others for various defects, including “solar heat gain” allegedly caused by the use of less expensive, substandard windows and an overall design that caused inadequate ventilation.  The architects challenged the complaint on the grounds they owed no duty of care to the Association or its members.

The Supreme Court relied on a 1958 decision, Biakanja v. Irving (1958) 49 Cal.2d 647, in analyzing whether the architects owed a duty of care despite a lack of contract between them and the plaintiffs.  The Court concluded that (1) the architects’ work was intended to benefit the homeowners living in the units, (2) the homeowners were among the class of persons who would foreseeably be harmed by negligently designed units, (3) the homeowners suffered injury due to the design defects, (4) given the nature of the architects’ role as the sole architects on the project, there was a close connection between their conduct and the injury suffered, (5) there was significant moral blame attached to the architects’ conduct, (6) and the policy of preventing future harm supported a finding of duty of care.  In their defense, the defendants argued that the plaintiff could sue the developer who could in turn sue the architects or the developer could seek an assignment of the developer’s rights against the defendants.   The Court noted that “the chief interest of prospective homeowners is to avoid purchasing a defective home, not only to have adequate redress after the fact” and found that holding the architects directly accountable would best vindicate this interest.

It remains to be seen how the Beacon decision will impact construction litigation going forward or, for example, how it will impact architects when they are not the sole project architect being paid $5 million for their services.  But certainly the class of potential claimants has been expanded.  Architects must be prepared to deal not just with developer’s cross-claims, but with plaintiff’s direct claims as well.

Darren Johnson is an attorney in Foley & Mansfield’s Los Angeles office, where he focuses his practice in commercial litigation, including construction litigation.

He can be reached at or 213.283.2100.



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California’s New Paid Sick Leave Law: What Employers Should Know

California’s new paid sick leave law, the Health Workplaces, Healthy Family Act of 2014 (“Paid Sick Leave Law”) came into effect on January 1, 2015. Starting July 1, 2015, the new law entitles an employee to accrue up to three paid sick days in a 12-month period for the diagnosis, treatment or care of an existing health condition or for preventative care for the employee or the employee’s family members. Because the new Paid Sick Leave Law brings about significant changes regarding sick leave, employers should be aware of the changes and ensure that their sick leave policies and procedures are compliant with the new law.

Who is covered by the law?

All California employees, including part-time, per diem, and temporary employees, are covered by the law, as long as they work 30 days or more within a year. The law applies to both exempt and non-exempt employees, and there is no minimum number of employees needed in a workplace for the Paid Sick Leave Law to apply.

Only four groups of employees are exempt from coverage: (1) employees covered by collective bargaining agreements with specific paid leave provisions, (2) providers of publicly-funded in-home supportive services, (3) employees in the construction industry covered by a valid collective bargaining agreement, and (4) flight deck and cabin crew members of air carriers that receive compensation for time off equivalent under the new law.

How is paid sick leave earned?

Employees accrue paid sick leave at the rate of at least one (1) hour per every thirty (30) hours worked beginning either July 1, 2015 or on the first date of employment – whichever comes later. An employee may accrue up to 24 hours (or three days) per each 12-month employment year. Exempt employees accrue at least one (1) hour every forty (40) hours worked.

How much paid sick leave may an employee take?

Employees may request and use accrued paid sick days beginning on the 90th day of employment. Employers must allow employees to carry over paid sick days to the following year of employment up to six (6) days or forty-eight (48) hours of paid leave, but can limit the number of sick leave days used up to three (3) days in any one year. Employees may take as little as two (2) hours at a time in paid sick leave.

How is sick leave pay calculated?

The rate of sick leave pay is the employee’s hourly wage. If, during the 90-day period of employment before taking accrued sick leave, the employee had differing hourly pay rates, was paid by commission, or was a non-exempt salaried employee, then an employer must calculate the sick leave pay by dividing the employee’s total wages (not including any overtime pay), by the employee’s total hours worked in the full pay periods worked during the 90-day period.

What must an employer do to comply with the Paid Sick Leave Law?

Beginning January 1, 2015, an employer must provide notice to employees of their rights under the Paid Sick Leave Law when they are first hired and must place a poster informing employees of their rights in a conspicuous place in the office. Beginning July 1, 2015, an employer must comply with the sick day accrual, carry over, and use requirements. An employer cannot deny an employee the right to use accrued sick days and cannot discharge, demote, or discriminate against an employee for using accrued sick days. Further, an employer must provide notice on an employee’s itemized wage statement of the number of available sick days. Finally, an employer must keep records which document the number of hours worked, the number of paid sick days an employee has accrued, and the number of paid sick days an employee has used for at least three years.

For those employers that already have sick leave policies in place, changes are not necessarily required, so long as the policies provide no fewer than three paid sick days (24 hours) annually, allow for sick leave to carry over year to year up to six (6) days or forty eight (48) hours per year, and allow sick leave to be used for the employee and their family members, including parents-in-law, grandparents, grandchildren, and siblings.


The new Paid Sick Leave Law is significant, since California had no mandatory sick leave (paid or otherwise) prior to this law coming into effect. All California employers – no matter the size – should examine their sick leave policies and ensure they are in compliance prior to July 1, 2015, when the accrual period starts.

Amadea Groseclose, an attorney in the Los Angeles office, of Foley & Mansfield, is a member of the firm’s national employment law group. For more information or assistance, Amadea can be reached at 213-283-2100 or

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Marijuana Businesses Face Numerous Regulatory Hurdles


Earlier this month, voters in three more states passed laws making the recreational use of marijuana lawful.  Those states are Alaska, Oregon and the District of Columbia.  They join Washington and Colorado as the only other states in which recreational use of marijuana is lawful.

Although this means that Alaska, Oregon and D.C. will likely see significant increases in state revenue when the laws go into effect, it also means that those involved in the business of distributing, manufacturing and selling marijuana will have lots of regulatory hurdles to jump through.  Each person and company that desires to be involved in the legal marijuana industry in those states will need to undergo a rigorous licensing and application process with the states in which they conduct business.  Furthermore, they will need to find alternative ways to do their business, as most credit card companies and financial institutions will not do business with members of the state-legal marijuana industry because of their own regulatory hoops and hurdles.

For example, the manufacturing, distribution and selling of marijuana is still illegal under federal law, namely the Controlled Substance Act.  Furthermore, it is unlawful under the Bank Secrecy Act and Anti-Money Laundering Act for financial institutions to do business with clients that are involved the illegal drug industry (at the federal level, even if it is legal at the state level).  Although the federal government has provided some guidance in an attempt to ease the concerns of financial institutions (namely through the Cole Memo, the Ogden Memo and a FinCEN report from February 2014), such efforts are nothing more than guidance and do not insulate financial institutions from liability if they do business with clients in the marijuana industry.

As a result, most businesses in Alaska, Oregon and D.C. will experience what their colleagues in Colorado and Washington have experienced, a significant headache trying to do business without banking services, credit services and once profitable, the ability to invest their profits through broker / dealers or investment advisory firms.  Eventually the laws will have to change to make it easier for financial institutions to do business with marijuana clients, but until that happens, the highly profitable and state-legal business of marijuana is in limbo.

Chris Parrington works with clients involved in the marijuana industry and regularly comments on developments in this emerging area of law. For information or assistance, contact him at

Additional information on the medical marijuana business nationwide can be found at

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Los Angeles Attorneys Joseph Macha and Maryam Danishwar Obtain Defense Verdict in Los Angeles County Superior Court

Joseph Macha and Maryam Danishwar of Foley and Mansfield’s Los Angeles office received a defense verdict on behalf of Hood Corporation after a 3 ½ week jury trial in Los Angeles County Superior Court.

Plaintiff was an employee of a Southern California utility company who worked primarily on pipelines.  Plaintiff sued Hood Corporation, a sub-contractor to the utility company at issue, claiming that Hood Corporation’s removal of an asbestos containing product exposed him to asbestos, causing his asbestosis.  The jury deliberated for 1½ days before returning a defense verdict on September 26, 2014 finding that Hood did not act in a negligent fashion.

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MN Asbestos Litigation Update – Jury verdict (Neil Humphreys & Lona Jensen v. 3M, et al.)

On October 22, 2014 after a six day trial, an eight-member jury returned a verdict in favor of plaintiff in a Minnesota living mesothelioma case  (Neil Humphreys and Lona Jensen v. 3M, et al.).  This is the first plaintiff verdict in a Minnesota asbestos case in the past five years. 

Trial began on October 13, 2014 against Smith-Sharpe and Owens-Illinois.  Smith-Sharpe settled during voir dire. Plaintiff’s expert testimony was given by Dr. Richard Lemen, Philip John Templin, Dr. Arnold Brody and Robert Johnson.   Owens-Illinois called Dr. Randall M. German, Dr. Peter Neushul, and Dr. Earl D. Gregory.

Owens-Illinois defended the case by arguing a State-of-Art defense and that plaintiff was mistaken as to the identity of the insulation he used.   Plaintiff worked three months as an insulator the Summer of 1967 at Taconite Harbor, a power plant located in Minnesota along the North Shore of Lake Superior.   Plaintiff testified he used Mundet asbestos cement and Owens-Illinois’ pipecovering and block.

After two days of deliberation, the jury assigned the following fault: 36.5% to Owens-Illinois;  23.5% to Mundet; and 40% to API (employer).  The total damages were $4,516,000 with the following breakdown:  $856,000 for pl’s past damages;  $2,756,000 for pl’s future damages;  $904,000 for spouse consortium.

For additional information, contact David Scouton in the Minneapolis office of Foley & Mansfield at 612.338.8788.


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Minnesota Supreme Court Confirms Reallocation of Damages

A Minnesota Supreme Court ruling today prohibiting reallocation of uncollectable damages will affect the allocation of fault on defendants at trial in asbestos cases.

The Minnesota Supreme Court issued an opinion today that will affect asbestos-related cases in the State of Minnesota. In Staab v. Diocese of St. Cloud,[1] the Minnesota Supreme Court held that a party who is severally liable under Minnesota’s apportionment-of-fault statute, Minn. Stat. § 604.02, subd. 1, “cannot be required to contribute more than that party’s equitable share of the total damages award through the reallocation-of-damages provision in Minn. Stat. § 604.02, subd. 2.”

In an opinion authored by Justice Wilhelmina M. Wright, the supreme court found that there was more than one reasonable interpretation of the statute in concluding that under Minn. Stat. § 604.02, subd. 2, an uncollectible portion of a party’s equitable share of damages cannot be reallocated to a party that is only severally liable under Minn. Stat. § 604.02, subd. 1. Justice David L. Lillehaug penned a dissent that was joined by Justice Alan C. Page.

The apportionment-of-fault statute directly affects asbestos cases when a party or tortfeasor (who is not sued) is found liable but is insolvent or for which a judgment is not collectable. Often bankrupt entities are assigned an apportionment of fault by the jury in asbestos litigation. When this happened prior to today’s opinion, uncollectable damages from other entities assigned liability were reallocated among the remaining defendants that the jury found liable for the plaintiff’s injury. The court’s ruling today prohibits reallocation of uncollectable damages, ensuring that severally liable defendants are responsible only for the amount originally allocated to them by the jury.

It must be noted, however, that the opinion rendered today does not alter Minn. Stat. § 604.02, subd. 3, which applies to product liability claims. Subdivision 3 provides that an amount uncollectable from any person in the chain of manufacture and distribution can be reallocated among all other persons in the chain of manufacture and distribution of the product. (See Minn. Stat. § 604.02, subd. 3.) For instance, uncollectable damages from a bankrupt insulation manufacturer may still be reallocated to defendants that distributed or sold the bankrupt insulation manufacturer’s products.

Today’s opinion is a step forward for defendants in Minnesota asbestos litigation. The decision balances the scale in Minnesota by requiring people and companies to pay for the harm they cause, but not for harm caused by others. “Allowing uncollectible damages attributable to the fault of one party to be reallocated to a severally liable party would be contrary to the clear purpose of the 2003 amendment—requiring severally liable parties in the Minnesota tort system to pay only for the harm caused by their own conduct and not for the harm caused by others.”

[1] The court’s opinion today will be known as Staab IV. Staab I was the first court of appeals decision in this case, 780 N.W.2d 392 (Minn. App. 2010). Staab II was the supreme court’s decision affirming and modifying Staab I. Staab III was the court of appeals decision after subsequent proceedings, 830 N.W.2d 40 (Minn. App. 2013), which the supreme court reversed today in Staab IV.

Summary of Staab v. Diocese of St. Cloud

Alice Staab was injured when her husband Richard Staab pushed her wheelchair through an open doorway and over an unmarked five-inch drop-off at Holy Cross Parish School. Staab v. Diocese of St. Cloud (Staab I), 813 N.W.2d 68, 71 (Minn. 2012). Staab sued the owner and operator of the school, the Diocese of St. Cloud, alleging the Diocese failed to protect her from an unreasonable risk of harm created by the unmarked five-inch drop-off. Id. Richard Staab was not named as a party in the lawsuit. Id. The jury awarded Staab compensatory damages, attributing 50 percent of the negligence that caused Staab’s injuries to the Diocese and 50 percent to Richard Staab. Id. In Staab I, the supreme court held that Minn. Stat. § 604.02, subd. 1, “applies when a jury apportions fault between a sole defendant and a nonparty tortfeasor, and limits the amount collectible from the defendant to its percentage share of the fault assigned to it by the jury.” 813 N.W.2d at 80.

On remand, Staab sought reallocation of Richard Staab’s equitable share of the damages award to the Diocese. The district court determined that Richard Staab’s equitable share was uncollectible and entered judgment against the Diocese for the entire damages award after finding that the uncollectible share of damages attributable to a nonparty tortfeasor can be reallocated under Minn. Stat. § 604.02, subd. 2.

The court of appeals affirmed the reallocation. Staab v. Diocese of St. Cloud (Staab II), 830 N.W.2d 40, 47 (Minn. App. 2013). The supreme court granted the Diocese’s petition for review, the result of which, is today’s opinion. The Court has clarified that Under Minn. Stat. § 604.02, subd. 2, an uncollectible portion of a party’s equitable share of damages cannot be reallocated to a party that is only severally liable under Minn. Stat. § 604.02, subd. 1.

The entire opinion can be found here.

Contact David Scouton for  more info0rmation at 612-338-8788.




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ADA Does Not Protect the Cantankerous

Recently, in Weaving v. City of Hillsboro, 12-35726, 2014 WL 3973411 (9th Cir. Aug. 15, 2014), a U.S. Court of Appeals addressed ADHD as a mental impairment under the Americans with Disabilities Act (“ADA”). The 9th Circuit has previously recognized that “interacting with others” is a major life activity, the impairment of which is protected under the ADA. However, in this case, the 9th Circuit held that as a matter of law the jury could not have found that ADHD substantially limited the officer’s ability to work or to interact with others within the meaning of the ADA, given the absence of evidence that the officer’s ADHD affected his ability to work, and in light of substantial evidence of his technical competence. Also, the 9th Circuit found that the officer’s interpersonal skills and problems did not amount to a substantial impairment of his ability to interact with others. In other words, absent a real impairment of the officer’s ability to interact with others (i.e., panic attacks, communicative paralysis, or fear reactions), the plaintiff’s failure to “get along” with his co-workers was not protected by the ADA.

In this case, Weaving was diagnosed with ADHD as a child. Weaving ultimately became a police officer and later a detective, joining the Hillsboro, Oregon, Police Department (“HPD”) in 2006. As an adult, Weaving believed that he had outgrown ADHD, and he did not report this condition to the HPD. Over the course of three years, Weaving consistently had difficulty getting along with his co-workers and subordinates, and they often complained that he was often sarcastic, patronizing, and demeaning. In 2009, following a bullying complaint, the HPD put Weaving on paid leave while an investigation was performed into the claims. While on leave, Weaving sought a mental-health evaluation, where a physician found that some of his interpersonal difficulties had been caused by his continuing ADHD.  Very soon afterwards, the HPD released the findings of its investigation, determining that Weaving had “fostered a hostile work environment for his subordinates and peers,” was “tyrannical, unapproachable, non-communicative, belittling, demeaning, threatening, intimidating, arrogant and vindictive,” and noting that he “does not possess adequate emotional intelligence to successfully work in a team environment, much less lead a team of police officers.” Consequently, the HPD fired Weaving, who sued under the ADA, claiming that the HPD fired him after he disclosed his ADHD diagnosis. Weaving’s case went to trial and a jury found in his favor, awarding him more than $500,000. The appeal to the 9th Circuit followed.

The 2009 ADA amendments relaxed the standard for determining whether a plaintiff is substantially limited in engaging in a major life activity. However, even under these relaxed standards, the 9th Circuit found that Weaving could not satisfy the lower standard under the current law. The record showed that Weaving was a very skilled police officer who had developed coping and compensatory mechanisms for his ADHD, and had been selected for high-level assignments and promoted. Consequently, the record did not contain substantial evidence showing that Weaving was limited in his ability to work as compared to “most people in the general population.”

In deciding this case, the 9th Circuit stated: “recognizing interacting with others as a major life activity of course does not mean that any cantankerous person will be deemed substantially limited in a major life activity. Mere trouble getting along with coworkers is not sufficient to show a substantial limitation . . . In addition, the limitation must be severe . . . We hold that a plaintiff must show that his ‘relations with others were characterized on a regular basis by severe problems, for example, high levels of hostility, social withdrawal, or failure to communicate when necessary.”

Here, Weaving’s evidence differed starkly from that in other cases where the 9th Circuit had determined that a plaintiff’s ADHD had severely limited a major life activity. He was able to engage in normal social interactions and he had little difficulty in comporting himself appropriately with his supervisors.” Although Weaving’s ADHD “may well have limited his ability to get along with others . . . that is not the same as a substantial limitation on the ability to interact with others.”

Finally, the 9th Circuit stated that “[o]ne who is able to communicate with others, though his communications may at times be offensive, ‘inappropriate, ineffective, or unsuccessful,’ is not substantially limited in his ability to interact with others within the meaning to the ADA . . . To hold otherwise would be to expose to potential ADA liability employers who take adverse employment actions against ill-tempered employees who create a hostile workplace environment for their colleagues.”

The take away: In general, employers should not rely on this case to show that either employees with ADHD do not have a potential disability claim or that they will be able to win ADA cases by arguing that an employee’s medical condition is not severe enough to be an ADA disability. ADA cases are assessed on individual issues. However, what this case does show is that even with the very relaxed standards under the 2009 ADA amendments, a court (even the 9th Circuit) is willing to draw a line in the sand.

Louis C. Klein, Of Counsel in Foley & Mansfield’s Los Angeles office, and M. Amadea Groseclose, associate in the Los Angeles office, are members of the firm’s national employment law group. For more information or assistance, Lou can be reached at 213-283- 2100 or Amadea can be reached at 213-283-2100 or



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Six Foley & Mansfield Attorneys Named to 2014 Michigan Super Lawyers® and Rising Star® Lists

Foley & Mansfield is pleased to announce that six attorneys in the firm’s Detroit and Grand Rapids offices have been named to the 2014 Michigan Super Lawyers® and Rising Star® Lists. Joining the firm’s 2014 roster is partner Melinda A. Balian, Chair of the firm’s Health Care practice group.

Recognized on the Super Lawyers® list:

  • Gary D. Sharp, Partner – Named for the eighth consecutive year for Personal Injury Defense.
  • Melinda A. Balian, Partner – Named to the 2014 list for Employment and Labor Law.
  • David L. Haron, Partner –  Named for the seventh consecutive year for Health Care Law.

Attorneys named to the Rising Star® list:

  • Scott S. Holmes, Partner  –  Named for the fourth consecutive year for Business Litigation.
  • Maro Bush, Attorney – Named for the third consecutive year for Health Care Law.
  • Mercedes Varasteh Dordeski, Attorney  – Named for the fifth consecutive year for Health Care Law.

Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a rigorous multi–phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. Rising Stars follows a similar process to recognize up-and-coming attorneys who are age 40 or younger, or who have been in practice for 10 years or less. No more than 2.5 percent of lawyers in a state receive this recognition

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Foley & Mansfield Wins Summary Judgment for City of Fraser

On August 26, 2014, the Macomb County Circuit granted summary judgment in favor of our client, the City of Fraser, in a case brought against Almeda University, an institution with its place of business located in Puerto Rico, in the amount of $600,000.  This case of first impression was brought against Almeda University under the recently passed Authentic Credentials In Education Act, MCL 390.1601, and  involved Almeda University issuing Bachelors and Masters degrees to police officers which were used by the officers for promotion and salary increases. The Bachelors and Masters degrees were issued to the officers based solely on submission of their life experiences – and the payment of a fee.

The Macomb County Circuit Court found that because Almeda University was not a qualified institution under the Act necessary to issue advance degrees in the State of Michigan, Almeda “knowingly issued or manufactured a false academic credential.”  In addition to the statutory damages awarded in the amount of $600,000, the Act provides for the award of actual costs and fees incurred in the matter.  A hearing on fees and costs is scheduled for September.

For additional information or assistance, contact Greg Meihn in the Detroit office of Foley Mansfield at 248-721-4200.

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Stellpflug to Present ABOTA “Masters in Trial” Program at DAJV Conference in Berlin

Janet Stellpflug, a partner in the firm’s Minneapolis office, is a featured presenter at the upcoming DAJV Annual Conference on German and American Law in Berlin, Germany. Stellpflug will participate in the American Board of Trial Advocates’ (ABOTA) “Masters in Trial” program, a mock-trial featuring a civil litigation scenario.  The conference is being held September 5-6, 2014 in Berlin.

Stellpflug sits on the Executive Committee of the Minnesota Chapter of ABOTA. For more information on this program, visit the DAJV website. 

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Responding to EEOC Charges – Webinar

Lou Klein of Foley & Mansfield’s Los Angeles office will provide practical guidance on how employers should respond to EEOC charges at this upcoming webinar.

See more at:



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EEOC Expands Scope of Protections Under the Pregancy Discrimination Act With New Enforcement Guidelines

On July 14, 2014, the Equal Employment Opportunity Commission (“EEOC”) issued controversial new enforcement guidelines on pregnancy discrimination and related issues. The new guidelines greatly expand the protections afforded pregnant employees by aligning the Pregnancy Discrimination Act more closely with the ADA. However, the Commission was not unanimous in setting forth its guidance with two of its Commissioners, Victoria Lipnic and Constance Barker, issuing strong statements against the new guidelines.

The EEOC’s Enforcement Guidance is the Commission’s first comprehensive update of its position on pregnancy discrimination since 1983. The Guidance takes immediate effect and attempts to clarify the EEOC’s position on numerous pregnancy and pregnancy-related issues. For instance, through the new Guidance, the EEOC effectively stated that it is irrelevant whether a pregnant employee has a disability for purposes of reasonable accommodation because the employer must accommodate a pregnant employee with work restrictions under the PDA if it accommodates non-pregnant employees similar in their ability or inability to work. By doing so, the EEOC imported ADA reasonable accommodation requirements directly into the PDA.

In fact, the Guidance covers a broad range of pregnancy-related conditions for which an employer will be required to provide a reasonable accommodation including: anemia, sciatica, carpal tunnel syndrome, gestational diabetes, nausea, abnormal heart rhythms, swelling in the legs, pelvic inflammation, depression and/or mandatory bed rest. Reasonable accommodations can include redistributing marginal job functions, temporary assignment to light duty work, modification of workplace policies, alteration of how essential or marginal job function is performed (e.g., modifying standing, climbing, lifting or bending requirements), modification of work schedules, and/or granting leave.

But the EEOC has also taken an additional step by indicating in its Guidance that a pregnant employee who is not suffering from a pregnancy-related impairment by still be entitled to ADA-type reasonable accommodations under the PDA.  Specifically, the EEOC cited to lifting restrictions as an example of a reasonable accommodation that a pregnant employee is entitled to receive even if the employee is not otherwise disabled under the ADA.

Commissioners Lipnic and Barker have loudly dissented. Commissioners Lipnic and Barker expressed their disappointment in the non transparent way the EEOC went about finalizing the Guidance – no public notice or comments – particularly because the Guidance “adopts new and dramatic substantive changes to the law.” Commissioners Lipnic and Barker also questioned the “wisdom of the timing of the Commission’s actions.” Commissioner Lipnic stated that “[t]he most significant questions addressed in the Pregnancy Guidance are pending before the U.S. Supreme Court for review and decision. See Young v. United Parcel Services Inc., 707 f.3d 437 (4th Cir. 2013), cert. granted, 86 USLW 3602 (U.S. July 1, 2014)(No. 12-1226).” The new Guidance, there fore, is premature and may not represent the state of the law after the Supreme Court decision much like the Guidance’s discussion of discrimination based on the use of infertility treatments and contraception. Commissioner Lipnic argued that this discussion “has already been overtaken by events, specifically the Court’s recent decision in Burwell v. Hobby Lobby Stores, Inc., et al., — S.Ct. –, 2014 WL 2921709 (June 30, 2014).” Indeed, Commissioner Lipnic stated that it is “not the proper role of the Commission to decide . . . questions of policy, particularly where, as here, the law enacted by Congress plainly does not contemplate the Commission’s answers to those questions.” In Commissioner Lipnic’s view, the Commission reached far beyond its purview by legislating, rather than regulating or interpreting current law.

Part Four of the Guidance provides a number of “Best Practices” which even to the Commission “may go beyond federal non-discrimination requirements . . .” The use of these suggestions may potentially “decrease complaints of unlawful discrimination and enhance employee productivity.” The practices include: developing, disseminating and enforcing strong policies based on the requirements of the PDA and ADA, training managers and employees regularly, conducting employee surveys and reviewing current employment policies, responding to pregnancy discrimination complaints efficiently and effectively, and protecting applicants and employees from retaliation. As both Commissioners Lipnic and Barker noted in their dissents, the new Guidance imposes requirements that are simply not supported by the language of the ADAA or the PDA, or are in complete contradiction to existing court decisions.

Employers are urged to review their policies relating to pregnancy, discrimination, leave and disability accommodation based on the new Guidance.

Louis C. Klein, Of Counsel in Foley & Mansfield’s Los Angeles office, is a member of the firm’s national employment law group.  For more information or assistance, Lou can be reached at 213-283- 2100 or

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Is It Illegal To Do Business With Businesses In the Legal Drug Industry?

The recent legalization of medical marijuana in Minnesota “will create significant complications for financial institutions and members of the financial services industry seeking to do business with the companies and their owners engaged in Minnesota’s legal drug trade,” according to attorney  Chris Parrington. Read his full analysis from the July, 2014 edition of Attorney at Law Magazine!

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Roger Yuen Named to Lawyers of Color “Hot List”

Foley & Mansfield is pleased to congratulate attorney Roger Yuen of the firm’s Oakland office on being named to the Lawyers of Color’s Second Annual Hot List, which recognizes early to mid career attorneys excelling in the legal profession. Roger will be feted at a reception for the Western Region on July 23rd in San Francisco The Honorable Jay C. Gandhi, U.S. Magistrate Judge for the Central District of California has been invited to offer remarks. Roger will also be profiled in the Hot List 2014 Issue released on July 28.

The “Hot List” honorees were selected by a committee comprised of the editorial staff and advisers, as well as law school fellows and interns, who reviewed nominations and researched bar publications and legal blogs to identify promising candidates. Selections were also based on research that identified attorneys who had noteworthy accomplishments or were active in legal pipeline initiatives.

Learn more about Roger and his practice here.

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