California Litigation Attorney Blog

With many Inland Empire residents hitting hard times, bankruptcy petition preparers have offered their services to help debtors file for bankruptcy. Hiring a bankruptcy attorney may be a much better decision in the long run.

Increased Use of Bankruptcy Petition Preparers

BankruptcyAs reported by the U.S. Courts, there has been an increased use of bankruptcy petition preparers in recent years, which the courts describe as a “concern.” The Bankruptcy Court for the Central District of California, which includes Riverside and San Bernardino counties, even keeps a list of bankruptcy petition preparers that have been enjoined (prohibited) from preparing bankruptcy petitions.

What is a Bankruptcy Petition Preparer?

A bankruptcy petition preparer (often known as a “BPP”) is as a person who is not an attorney or employed by an attorney who prepares a petition or any other document for filing by a debtor in a bankruptcy court or district court. 11 U.S.C. § 110(a).  The charge typically allowed for preparing a bankruptcy petition is no more than $200, which does not include the court filing fee.

A Bankruptcy Petition Preparer Cannot Provide Legal Advice

As the United States Trustee for the Central District of California explains, “a bankruptcy petition preparer may only type forms.” If they go further, they risk violation the prohibition on offering “legal advice,” which includes:

  1. whether to file a file a bankruptcy petition;
  2. whether filing under Chapter 7, 11, 12 or 13 is most appropriate;
  3. whether the debtor’s debts will be discharged in bankruptcy;
  4. whether a debtor will be able to retain their home, car, or other property after filing for bankruptcy;
  5. the tax consequences of filing for bankruptcy, including whether tax claims will be discharged;
  6. whether the debtor may or should promise to repay debts to a creditor or enter into an agreement to reaffirm a debt (e.g. a mortgage on a house or loan on a car);
  7. advice concerning how to characterize the nature of the debtor’s interests in property or the debtor’s debts; or
  8. advice concerning bankruptcy procedures and rights.

See 11 U.S.C. § 110(e)(2).

Why is the Government Concerned About Bankruptcy Petition Preparers?

The courts and the U.S. Trustee’s office are concerned that bankruptcy petition prepapers may not properly serve debtors who need their services. Notably, too many bankruptcy petition preparers provide legal advice by advising debtors which chapter of the bankruptcy code is best for them, the nature and extent of their property, which exemptions might apply and whether a bankruptcy will discharge their debts. The bankruptcy trustees and U.S. Trustee’s office are skilled at detecting petitions that were prepared with the assistance of a bankruptcy petition preparer when they fail to list their name. When these petitions are detected, the remedies can be severe.

Advice to Debtors: Hire a Bankruptcy Attorney

More importantly, why would a debtor want to file a bankruptcy without obtaining proper legal advice from an individual who is legally allowed to provide such advice?

Debtors may believe they are saving money, but too often, this minor savings results in a a legal mess. For example, a debtor may realize after their petition is filed that bankruptcy was not the right solution to their problems because they have property that must be turned over to the bankruptcy trustee or that all of their debts may not be discharged. They may even find themselves accused of lying on their bankruptcy petition, which has serious consequences.

These are all issues that can be addressed before you file for bankruptcy by consulting with a bankruptcy attorney.

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distressed lawyer

Americans enjoy the myth that bankruptcy only happens to other people. We have the top 9 REAL reasons that Americans file bankruptcy, and tips on how to avoid these mistakes.

The Myth of the Medical Bankruptcy

NerdWallet.com claims that “medical bankruptcy accounts for a majority of personal bankruptcies.” President Obama furthered this myth in defending ObamaCare, claiming that “no one should go broke just because they get sick.”

This myth was debunked by TheHill.com, which found that “among Americans who cited medical debt as a contributing factor in their bankruptcy filing, only 12 to 13 percent of their total debts were medical. ”

So where did the other 87 to 88 percent of debts come from? The experienced bankruptcy attorneys at one California law firm have advice that may save you from needing their services!

 1. Mortgage Debt

Americans love their homes, but too many have followed the myth that an expensive house (purchased on credit) equates to wealth. As long as you are living in your house (rather than renting it out), you are consuming its value. Bankruptcy courts have explained that “[s]helter is certainly a higher priority than the possibility of realizing a profit.” In re Grover, 2013 WL 3994608 (Bankr. N.D. Iowa Aug. 2, 2013). Stay within your means by purchasing a modest house to minimize the risk of foreclosure and bankruptcy.

2. Cars

Cars are an expense. Other than certain classic cars, they depreciate over time. After years of making principal and interest payments, your car will likely have little value. Check the true cost of ownership to determine you really need an expensive car, or if a modest vehicle will keep you out of financial trouble.

3. Student Loans

Even though student loans are generally not dischargeable in bankruptcy, those monthly payments will make it harder to meet your other obligations. Be wary of taking on student loan debt that you won’t be able to afford.

4. Spending Money You Don’t Have & The Optimism Bias

Spending on credit cards can be a acceptable if you are paying the card in full every month. If not, you’ll end up paying exorbitant interest rates for the money you borrowed to eat at a restaurant, buy clothes, take a vacation or something else you didn’t have the money for. Steve Martin explained it best on Saturday Night Live: Don’t buy things you can’t afford. If you’re buying things you can’t afford under the belief that you’ll have the money tomorrow (after you get that promotion at work, the stock market goes up, etc.), you may have fallen victim to the optimism psychological bias. Plan your finances as though tomorrow will be just like today (or potentially worse) to avoid these problems. The only good news is that unsecured credit card debt is usually dischargeable in bankruptcy.

5. Taking on Other People’s Problems

Too many Americans are willing to take on the financial or personal problems of other people. Does your friend or family member not qualify for a lease, mortgage, credit card or student loan on their own? Maybe the lender knows something that you don’t, namely that this friend or family member is a high risk. Be very careful in co-signing or becoming the guarantor on loans, and know when to pull the plug if you’re paying for someone else’s problems as you may get pulled under as well.

6. Excessive Leverage & Risk-Taking

Leverage is the financial principle that borrowing to purchase an investment can multiply the gains and the losses. For example, if you borrow money at 5% to buy an investment that generates enough income to pay the interest, you have positive leverage. However, if that investment does not generate enough income to cover that interest, you’ve obtained negative leverage and may find yourself going broke as you pay out of pocket to keep that investment, which may lead to a bankruptcy filing. Other forms or risk-taking can include not purchasing title insurance, homeowners insurance or health insurance.

7. Litigation

Most Americans cannot afford the attorney’s fees of a protracted court fight. If you’re being sued, there is always the possibility that the other side may obtain a judgment against you, and potentially obtain an award of their attorney’s fees. This may come up in the context of a nasty divorce, an unpaid credit card or breach of contract. If you can settle a lawsuit early for a reasonable sum, you may be able to avoid bankruptcy. Of course, consult with an attorney about these complex matters.

8. Spending Uncle Sam’s Money

When times get tough, too many Americans borrow by decreasing their tax withholdings (employees), failing to pay taxes that will be due (contractors), or borrowing from the employee trust fund- money that was deducted from employee payroll for taxes for the purpose of being paid to the government (employers). Whether or not bankruptcy will discharge such taxes is a complex issue that requires consultation with an experienced bankruptcy attorney.

9. Catastrophes

Contrary to common perceptions, serious life catastrophes are the least common reason that Americans file bankruptcy. Such catastrophes can include prolonged job loss, divorces involving significant debt and serious medical bills. Although these do occur, do not fall into the trap of believing that these are the common way to find yourself in bankruptcy.

If you’ve found yourself unable to pay your debts, bankruptcy may provide you with the fresh start that you need. Consult with an experienced bankruptcy attorney to determine if you qualify for bankruptcy and whether it will provide you with the relief that you may need.

Disclaimer: This blog post provides commentary based on the personal observations of a California bankruptcy attorney. No statistical analysis has been used.

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For those employers who had all but given up hope of receiving relief from the courts, the California Supreme Court recently provided a glimmer of hope with its holding in Duran v. U.S. Bank.

Duran involved a class of 260 business banking officer (“BBO”) employees who sued U.S. Bank to recover unpaid overtime wages.  U.S. Bank contended that each BBO was subject to an “outside salesperson exemption,” which was met when an employee spent more than half of his or her time away from the employer’s business.  The prime issue in Duran, therefore, was whether the BBO’s were properly classified as exempt (and therefore not entitled to overtime). 

 In order to answer that question the trial court conducted a mini-trial of 20 randomly selected employees.  During the course of the mini-trial, the trial court determined that U.S. Bank had misclassified 19 of the 20 randomly selected employees.  The trial court then decided it could extrapolate from the mini-trial results that all 260 employees had been misclassified because the Plaintiffs’ expert statistician testified that he had calculated  “with 95% confidence that all 260 employees” have been misclassified.  The trial court refused to allow U.S. Bank to put forth evidence that at least 70 of the 260 employees were not misclassified. 

The California Supreme Court ultimately held that while statistical sampling can in some instances be used to determine both liability and damages, the employer must be given a chance to present proof of all of his or her affirmative defenses and must be given the chance to impeach any statistical model which plaintiff proffers.  Because the trial court did not allow the employer to present his affirmative defenses and impeach the plaintiff’s statistical model, the case was remanded back to the trial court for a new trial.  Thus, although the California Supreme Court has given its tacit approval to the theoretical use of statistical sampling to prove liability (which was a setback for employers), in practice this will likely be difficult to achieve.

Hopefully, Duran will rein in class action plaintiffs and will slow down the onslaught of class action litigation.   If nothing else, Duran provides employers with a few more arrows with which to defend class actions.  If you are presently involved in a class action lawsuit, make sure to discuss this case with your California employment attorney  to determine if there are portions of the decision helpful to your defense.

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Friends:

 This month’s employer tip concerns an employer’s ability to seek reimbursement from an employee for the cost of education or training.   

 Many employers train or educate employees at considerable expense. Can employers be reimbursed if an employee leaves shortly (within a few years) after completing the training/education?  Can you deduct the cost of training/education from an employee’s wages?

 The good news is that employers can require employees to execute training/education cost repayment contracts if the employees are contractually obligated to repay the cost of education/training in the event that the employee leaves employment before a certain date. (See Hassey v. City of Oakland (2008) 163 Cal.App. 4th 1477.) In order to increase the chance that such a repayment contract will be upheld in the event of a legal challenge, the amount of repayment should be based upon the actual and realistic estimated expenses and should be pro-rated based upon the total time worked. For example, an employer might forgive 20% of the cost each year for a five year period.  To the extent the training/education involves the employer’s trade secrets or intellectual property, the employer may also want to include a paragraph or two in the contract that the employee agrees not to disclose trade secrets or intellectual property to third parties.

 The bad news is that employers cannot deduct the cost of the education/training directly from an employee’s wages.  Instead, the contract must be treated like a loan where the employee provides reimbursement to the employer. Employers should not make the mistake of withholding any amount owed under the contract as that could subject you to penalties which far exceed the amount actually owed. In the event an ex-employee does not repay the loan, the employer’s remedy will likely be found in small claims court or a limited civil action, depending upon the amount owed.

 Of course, always consult a qualified employment attorney to determine the lawfulness of any actions taken in the scope of an employee training/education cost repayment contract.

 

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Anonymous Internet SurferCompanies commonly spend substantial resources in developing information that allows for profitable operation. Valuable information may take many forms, such as customer lists, pricing formulas, product specifications and business plans. A challenging problem that must be addressed by any employer is how to protect those trade secrets from being used by former employees after they leave to work for a competitor.

Like most states in the United States, California has adopted the Uniform Trade Secrets Act (“UTSA”), found at Civil Code sections 3426.1-3426.11. Under the UTSA, if a company takes reasonable measures to protect its information, and if steps are taken to maintain the secrecy of the information, California Courts will protect the information as a trade secret.

The protection afforded to trade secrets under the UTSA is not limited to recorded versions of information, such as documents or electronic data. In California, it is not a requirement that an employer establish that the employee physically took trade secret information. Rather, the UTSA also affords protection of the contents of an employee’s memory. Therefore, the misappropriation of a trade secret can be shown simply by establishing that the employee used or disclosed the content of his or her memory regarding a trade secret.

The most prudent approach for an employer is to minimize the risk of loss of trade secrets by taking all reasonable measures available to protect the trade secrets. The measures taken by the employer should include:

  • Use a confidentiality agreement that is signed when an employee is hired. The agreement should clearly state that the employee will come into possession of company trade secrets and that the trade secrets are not to be disclosed both while employed by the employer and after the employment ends. If possible, list specific items that are deemed trade secrets, such as customer lists, pricing information and business strategies.
  • Update the confidential agreements on an annual basis to include any new areas of important information and have the employees sign a confidentiality agreement on an annual basis.
  • Have detailed internal policies regarding the use of electronic storage devices, internet use, and use of the company’s email system.
  • Have secured networks with limited employee access with firewalls, multi-character passwords, or other ways to limit access or to track employee network activity.
  • Conduct exit interviews with all departing employees and remind them of the confidentiality agreements they signed and attempt to obtain signed confirmation from the departing employee that they received and agreed to the confidentiality agreements.

In summary, the best way to avoid protracted and expensive litigation against a former employee for the misappropriation of trade secrets is to protect the information before the employee leaves.

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Most employers know that they will have to begin paying their employees a minimum of $9.00 an hour as of July 1, 2014. In addition to effecting their hourly/non-exempt employees, this change may also effect some of their salary/exempt employees.

Presently, exempt employees (for many businesses, its managers) must be paid at least $2,774 per month/$33,288 a year due to California’s requirement that exempt employees make at least twice the minimum wage for a standard 40 hour work week. After July 1, 2014, employers will need to pay those same employees at least $3,120 per month/ $37,440 per year, or a raise of $4,152. After January 1, 2016, when the minimum wage increases to $10.00 an hour, employers will have to pay those same employees at least $3,467 per month/$41,604 per year.

Employers must take these cost increases into account when thinking about their strategic planning for 2015 and beyond.

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Contract picOver the many years I have practiced law in California, I have dealt with a wide array of disputes involving written contracts. In some instances, my clients’ have asserted that prior to signing a written contract (whether it was a business contract, real estate contract, construction contract etc.) they and the other contracting party had both orally negotiated and agreed that certain terms were to be included in the written contract. However, as is sometimes the case, after the written contract was prepared (either by an attorney for one of the parties, or by using a generic form such as an AIA construction contract or California Association of Realtors form) the parties fail to closely review the written contract to ensure that all bargained for terms were included, before they both signed the contract.

In some instances, as performance of the contract ensues, a dispute later arises between the parties when one of the parties contends that the other party failed to perform a condition and/or term that they had earlier “orally” agreed to perform. If the parties are unable to informally resolve the contract dispute, it may lead to litigation and a detailed legal analysis (by an attorney) of what rights a party has to enforce “oral” terms that were intentionally or inadvertently omitted from the final written contract.

Many written contracts (drafted by attorneys or included in some of the form contracts referenced above) include a short paragraph usually entitled “Entire Agreement” or “Integration Clause.” Although brief in nature, this paragraph has huge implications to both contracting parties, especially if one of the parties is attempting to enforce a term that was orally agreed to between the parties, but omitted from the final contact. Integration clauses generally read as follows:

All understandings between the parties are incorporated in this Agreement. Its terms are intended by the parties as a final, complete and exclusive expression of their Agreement with respect to its subject matter and supersede and replace all prior or contemporaneous discussions, negotiations, letters, memoranda or other communications, oral or written, with respect to the subject matter hereof and may not be contradicted by evidence of any prior agreement (either written or oral).

Integration clauses are strictly enforced by courts in the State of California. Although some exceptions may exist to enable a party to enforce an oral term that was omitted from the final contract, the party seeking to enforce such a term faces an uphill and very difficult battle. The exceptions to this rule are rare, and parties should immediately contact legal counsel to determine if such an exception may apply in their case. Consequently, a party signing a written contract involving a substantial financial commitment or a significant legal obligation, should closely review the contract and may wish to retain legal counsel to review the contract and ensure it includes all essential terms before the contract is signed.

The California business attorneys at Reid & Hellyer have extensive experience in construction, real estate and contract law.

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Contract picIf you have ever purchased or sold a home, or seen a medical doctor, no doubt you were presented with a proposed written agreement, possibly on a preprinted form, that contained an arbitration provision. The typical arbitration provision requires any dispute arising under the subject agreement to be arbitrated, as opposed to having it decided by a jury. Some of these agreements also contain provisions that require the parties to mediate their disputes (essentially have a settlement conference) prior to arbitrating it. The rationale behind arbitration provisions is that it’s quicker, and in many cases, more cost effective than going to court.

Although one of the rationales for an arbitration provision is to keep costs down, arbitrators can be very expensive and generally charge by the hour for ALL work performed. In addition to presiding over the hearing, arbitrators will often charge for reviewing materials and for the time it takes them to draft their ruling. In some cases, the out of pocket costs can be thousands to tens of thousands of dollars. Whereas, in civil court, for the one time cost of a filing fee or answer fee, the parties have an arbitrator (the judge) for the duration of the dispute. Accordingly, when dealing with a lawyer or a medical office in the context of an arbitration provision on one of their forms, ask who pays the initial costs of the arbitration and whether or not the prevailing party can be reimbursed by the losing side.

In the context of real estate transactions in California, there are several kinds of form contracts that I have come across in my practice. The difference between one of these contracts and the ones you might get if you transact with a law firm is that the person on the other side may be just as uninformed about the arbitration provision as you are. Although you stand little chance of convincing a law firm or a medical office into scratching out the arbitration provision in their contracts, when you deal with another lay person in a real estate transaction, undertake to determine whether or not arbitration makes sense in the context of the transaction and consider the possibility with the other side of the transaction of crossing out the provision. Depending on the specifics of the transaction, a court of law might actually be cheaper than an arbitration and you will preserve your right to have your matter decided by a jury.

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Newspaper of General Circulation

When a publication believes it meets the requirements to be adjudicated as a newspaper newspaper of general circulation (NGC), it can file a petition with the Superior Court requesting the right to run legal notices in compliance with various statutes (e.g., publishing fictitious business name statements).

However, what happens when a newspaper files for adjudication, but it doesn’t meet those requirements? The answer is that the legislature created a system that is largely self-effectuating since there is no government body (other than the courts) that scrutinize such petitions.

Instead, it is up to any individual (or individual on behalf of an entity) to file a a contest to a petition for adjudication. (Gov. Code section 6022.) In filing this contest, a contestant can obtain the facts through formal or informal discovery, then present the evidence and the law at a formal hearing in court. (Gov. Code section 6023.)

Obviously, if the facts support the adjudication, don’t bother. But, if they don’t, then go for it. A lawyer with experience in adjudications can advise if the contest stands much chance of success, as the criteria for adjudication are subject to evolving judicial interpretations. Some cases are clear, some are not.

Recently, we filed a contest to an adjudication order that had been obtained by misrepresenting the facts to the court. We were able to present the true facts and the other side decided to toss in the towel by ceasing publication.

In another recent case, we deposed the petitioner (the person seeking adjudication) and exposed the weakness of the facts he’d presented to the court. His petition was denied.

In a third case, the petitioner testified that the newspaper had certain subscribers. During the noon recess, we called some of them and learned that they had not paid for their subscriptions (a requirement). We presented this fact to the petitioner’s lawyer, who withdrew the petition after conferring with his client. (Thankfully, the lawyer was ethical and was not going to present false “facts” to the court.)

Every case is different and the facts matter. Assemble the facts, compare them to the law (see Gov. Code sections 6000 and 6008) and then decide if a contest makes sense or not, especially since they are so expensive to mount in court.

Given the importance of an adjudication, it is always wise to consult with an attorney experienced in California newspapers of general circulation, as the law is not as simply as it may appear.

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Ninth Circuit Court of AppealsThe Ninth Circuit Court of Appeals provides an outline that all attorneys practicing before it should read when filing or responding to an appeal.

The document, entitled “Ninth Circuit Appellate Jurisdiction Outline,” reviews the numerous grounds that the Ninth Circuit will consider in rejecting an appeal on procedural grounds. For example, did you or your opposing counsel properly raise the issue below? Is the order appealable? Was the appeal filed timely?

The Ninth Circuit covers the largest geographic region of any circuit in America. It is also the busiest circuit in America. Its hard-working judges may be glad to rule on the merits of a case that has been properly brought before its jurisdiction, but may be equally glad to dispose of a case without considering the merits where jurisdictional issues exists.

Attorneys and self-represented litigants are wise to review the Ninth Circuit’s outline to advocate for their position.

For more information, review the Ninth Circuit Appellate Jurisdiction Outline and visit ca9.uscourts.gov.

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CNewspaper of General Circulationalifornia Government Code sections 6000 and 6008 are the two statutes that allow a publication to become adjudicated as a newspaper of general circulation (NGC) in California. This entitles the newspaper to publish legal advertising in its particular jurisdiction of adjudication. This article outlines the general parameters of these two statutes.

California Government Code Section 6000

Section 6000 provides:

A “newspaper of general circulation” is a newspaper published for the dissemination of local or telegraphic news and intelligence of a general character, which has a bona fide subscription list of paying subscribers, and has been established, printed and published at regular intervals in the State, county, or city where publication, notice by publication, or official advertising is to be given or made for at least one year preceding the date of the publication, notice or advertisement.

To expand, the requirements of Government Code Section 6000 are:

  1. “Published for the dissemination of local or telegraphic news and intelligence of a general character”
    • Government Code section 6001 explains that a newspaper of general circulation (NGC) cannot be “devoted to the interests, or published for the entertainment or instruction of a particular class, profession, trade, calling, race, or denomination, or for any number thereof, when the avowed purpose is to entertain or instruct such classes . . . .”
  2. “Bona fide subscription list of paying subscribers”
    • A list is “bona fide” if it is a “real, actual, genuine subscription list.” In re Herman (1920) 183 Cal. 153, 164. There is no statute specifying the number of paying subscribers that must be on this list.
  3. “Established” in the county, city or other political jurisdiction where where adjudication is sought for at least one year preceding the petition.
    • Government Code section 6002 explains that a newspaper is “established” if it has “been in existence under a specified name during the whole of the one-year period . . . .”
  4. “Printed” at least weekly in the county, city or other political jurisdiction where adjudication is sought for at least one year preceding the petition.
    • Government Code section 6003 explains that a newspaper is “printed” as required by law if “the mechanical work of producing it, that is the work of typesetting and impressing type on paper” is completed in the city or county where adjudication is sought.
  5. “Published” at least weekly in county or city where adjudication is sought for at least one year preceding the petition for adjudication.

This outline provides only the broad requirements for adjudication under Section 6000. Contact a California newspaper of general circulation attorney to understand the intricacies of the law.

Government Code section 6000 was enacted in 1943 and was the only method for adjudication until Section 6008 was enacted in 1974 providing the alternative criteria.

California Government Code Section 6008

Section 6008 provides:

Notwithstanding any provision of law to the contrary, a newspaper is a “newspaper of general circulation” if it meets the following criteria:

(a) It is a newspaper published for the dissemination of local or telegraphic news and intelligence of a general character, which has a bona fide subscription list of paying subscribers and has been established and published at regular intervals of not less than weekly in the city, district, or judicial district for which it is seeking adjudication for at least three years preceding the date of adjudication.

(b) It has a substantial distribution to paid subscribers in the city, district, or judicial district in which it is seeking adjudication.

(c) It has maintained a minimum coverage of local or telegraphic news and intelligence of a general character of not less than 25 percent of its total inches during each year of the three-year period.

(d) It has only one principal office of publication and that office is in the city, district, or judicial district for which it is seeking adjudication.

For the purposes of Section 6020, a newspaper meeting the criteria of this section which desires to have its standing as a newspaper of general circulation ascertained and established, may, by its publisher, manager, editor, or attorney, file a verified petition in the superior court of the county in which it is established and published.

As used in this section:

(1) “Established” means in existence under a specified name during the whole of the three-year period, except that a modification of name in accordance with Section 6024, where the modification of name does not substantially change the identity of the newspaper, shall not affect the status of the newspaper for the purposes of this definition.

(2) “Published” means issued from the place where the newspaper is sold to or circulated among the people and its subscribers during the whole of the three-year period.

To expand, the requirements of Section 6008 are:

  1. “Dissemination of local or telegraphic news and intelligence of a general character”
    • Government Code section 6001 explains that a newspaper of general circulation cannot be “devoted to the interests, or published for the entertainment or instruction of a particular class, profession, trade, calling, race, or denomination, or for any number thereof, when the avowed purpose is to entertain or instruct such classes . . . .”
  2. “It has maintained a minimum coverage of local or telegraphic news and intelligence of a general character of not less than 25 percent of its total inches during each year of the three-year period.”
    • In other words, 25% of the content in the publication must be the local or telegraphic news and intelligence of a general character. The use of the term “inches” suggests that in a close case, a court could compare the number of square inches in a publication used for the content as compared to the total number of square inches in the publication.
  3. “[H]as a bona fide subscription list of paying subscribers” and “has a substantial distribution to paid subscribers in the city, district, or judicial district in which it is seeking adjudication.”
    • A list of paying subscribers is “bona fide” if it is a “real, actual, genuine subscription list.” In re Herman (1920) 183 Cal. 153, 164. Although there is no statute specifying the number of subscribers that must be on this list, Section 6008 requires a “substantial” distribution to paying subscribers. In contrast, Section 6000 provides no “substantial” requirement.
  4. “[H]as been established . . . for at least three years preceding the date of adjudication.”
    • “‘Established’ means in existence under a specified name during the whole of the three-year period . . . .” Gov. Code section 6008(1).
  5. “[H]as been . . . published [at least] weekly in the city, district, or judicial district for which it is seeking adjudication”
    • “‘Published’ means issued from the place where the newspaper is sold to or circulated among the people and its subscribers during the whole of the three-year period.” Gov. Code section 6008(2).
  6. “It has only one principal office of publication and that office is in the city, district, or judicial district for which it is seeking adjudication.”
    • In other words, the publication’s “principal” office of publication must be in the city, county, district or judicial district for which adjudication is sought. See In re Tri-Valley Herald (1985) 169 Cal.App.3d 865 for a more expansive discussion of this requirement.
  7. “[A] newspaper meeting the criteria of this section which desires to have its standing as a newspaper of general circulation ascertained and established, may, by its publisher, manager, editor, or attorney, file a verified petition in the superior court of the county in which it is established and published.”
    • A petition for adjudication must be verified by the publication’s publisher, manager, editor, or attorney.

Again, the outline, above, provides only the broad requirements for adjudication under Section 6008. Contact a California newspaper of general circulation attorney to understand the intricacies of the law.

If you have specific questions about the statutory scheme governing newspapers of general circulation, contact a California media lawyer with experience counseling publications large and small with concerns related to newspaper legal advertising.

Associate Attorney Scott Talkov and Senior Attorney James J. Manning, Jr. have represented petitioners and contestants of national, regional and local prominence in newspaper of general circulation litigation in Los Angeles, Orange, San Diego, Riverside and San Bernardino counties. Scott may be contacted at stalkov@rhlaw.com and at (951) 682-1771. Jim may be contacted at jmanning@rhlaw.com and at (951) 682-1771.

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Plaintiffs asserting breach of contract/fraud claims often want to enforce those claims against more than just the signatories to the contract. Often times, for example, plaintiffs will also want to enforce a claim against the shareholders of a corporation who entered into an agreement, or against one or more members of an LLC that entered into a contract. Where a contract calls for arbitration among the contracting parties, can a nonsignatory be compelled participate? Interestingly enough, yes.

California and Federal courts have recognized six theories by which a nonsignatory may be bound to arbitrate: (1) incorporation by reference (e.g., construction subcontractors); (2) assumption; (3) agency; (4) veil-piercing or alter ego; (5) estoppel; and (6) third-party beneficiary. (See, Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 268.)

Thus, it behooves a business or an individual to seek legal assistance at the inception of a case to determine whether a particular arbitration provision can be invoked as to all relevant parties. As arbitration in some instances may  be a quicker and cheaper alternative to pursuing a suit in state or federal court, research and analysis should be performed at the on-set to determine whether any of the six above theories can be used to compel arbitration to any nonsignatories so that the matter can be resolved in one legal forum.

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