State High Court Rulings a Mixed Bag for Business

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Recent opinions from the California Supreme Court were a mix of good and bad news for California businesses. The victories came in a case dealing with attorney fees in a disability access lawsuit, and another on liability for an injury on an amusement park ride. In the third case, however, the California Supreme Court held that a labor union had statutory rights to picket in front of the only entrance to a Ralph’s grocery store.

Disability Access

In Jankey v. Lee, Les Jankey, a wheelchair user, sued Song Koo Lee, owner/operator of a small market in San Francisco. Jankey alleged that he and other similarly situated disabled persons were denied access to full and equal enjoyment of the goods and services offered at the store because a four-inch step at the market’s entry was an architectural barrier that prevented him from wheeling into the store.

Lee does not own the building but has operated the market since 1985. 

Jankey asserted claims under the federal Americans with Disabilities Act (ADA), the Unruh Civil Rights Act, the Disabled Persons Act, and Health and Safety Code Section 19955 et seq. Among other relief, Jankey sought an injunction compelling Lee to make the market readily accessible to individuals with disabilities. 

Finding that Lee had established that removal of the barrier was not "readily achievable," the trial court ruled in his favor on all four disability claims. Lee then sought attorney’s fees under California Civil Code Section 55, which provides attorney’s fees to a prevailing party in an action to enjoin disability access violations.

Jankey argued that Section 55 was pre-empted by the ADA and that an award for attorney’s fees could be made only upon a finding that the complaint was "frivolous, unreasonable, or groundless."

The trial court concluded attorney’s fees for a prevailing defendant under Section 55 were mandatory and awarded Lee $118,458. The court of appeal affirmed. 

The California Supreme Court granted review to consider whether: 1) the trial court erred in determining that Section 55 fees are mandatory; and 2) the federal ADA pre-empts an award of mandatory fees. 

The CalChamber joined 10 other industry and trade organizations in a friend-of-the-court brief supporting Lee, arguing that business owners and operators who prevail in a disability access lawsuit deserve to recover their attorney’s fees if the lawsuit includes a claim under Civil Code Section 55. The brief was prepared by Lizbeth West of Weintraub Tobin. 

The Supreme Court agreed in its December 17, 2012 ruling, concluding that an award of attorney’s fees under Section 55 to any prevailing party was mandatory. Furthermore, the court concluded that the award of mandatory fees under Section 55 was not pre-empted by the federal ADA. 

Amusement Park Ride

The second win occurred in Nalwa v. Cedar Fair, published December 27, 2012. Smriti Nalwa fractured her wrist while being bumped on a bumper car ride at Great America amusement park. She sued the park owner for negligence in not configuring or operating the bumper car ride so as to prevent her injury.

The trial court granted summary judgment for the defendant on the basis of the primary assumption of risk doctrine, under which participants in and operators of certain activities have no duty of ordinary care to protect other participants from risks inherent in the activity.

The court of appeal reversed, holding that the public policy of promoting safety at amusement parks, as demonstrated by the extensive state regulations governing amusement rides, precluded applying the primary assumption of risk doctrine and that the doctrine was applicable only to activities considered "sports."

The CalChamber submitted a friend-of-the-court brief arguing that the primary assumption of risk doctrine can apply to activities other than "sports" and that commercial enterprises subject to safety-related regulations may invoke the doctrine. CalChamber’s brief was prepared by Mary-Christine Sungaila and Jessica Yates of the law firm of Snell & Wilmer.

The Supreme Court agreed with the CalChamber brief. The court found that "the primary assumption of risk doctrine is not limited to activities classified as sports, but applies as well to other recreational activities ‘involving an inherent risk of injury to voluntary participants . . .where the risk cannot be eliminated without altering the fundamental nature of the activity.’"

The court noted that the doctrine was not applicable to any activity with an inherent risk but does apply to injuries from physical recreation, whether in sports or nonsports activities. Thus, the doctrine applied to bumper car collisions. The court also agreed that the existence of safety regulations governing amusement park rides did not exempt them from the primary assumption of risk doctrine.

Union Picketing on Private Property

In a 6-1 vote, the state Supreme Court ruled that "the state’s interest in promoting collective bargaining to resolve labor disputes" allows labor unions the right to picket on a privately owned entrance to a shopping center supermarket.

The ruling in Ralphs Grocery Company v. United Food and Commercial Workers Union Local 8 (2012 WL 6699628) was issued December 27 2012.

The court’s willingness to protect one type of speech (labor) over another (non-labor) is one of many concerns with the decision.

In July 2007, union members began picketing a Sacramento store. Between four and eight picketers walked back and forth in front of the entrance walkway, carrying picket signs, handing out flyers and talking to customers. 

Ralphs asked the Sacramento Police Department to stop the picketing, but the police declined to do so without a court order. Ralphs attempted to obtain a court order (an injunction) to stop the picketing. Ralphs argued that the entrance was privately owned and that the company could regulate speech activities at the entrance. The case ultimately was elevated to the state high court.

The Supreme Court first examined whether the California Constitution’s free speech provisions protected the picketers. On this point, the court agreed with Ralphs, ruling that the privately owned entrance area was not a public forum: "For this reason, a union’s picketing activities in such a location do not have state constitutional protection."

State Protection for Unions

Despite the fact that the entrance was private property, the court went on to rule that the union had the right to picket there under a California statute known as the Moscone Act. Although other conduct may be limited on the private property, such as a protest or signature gathering, unions have special protections.

"Certain activities undertaken during a labor dispute are legal and cannot be enjoined," the court stated. These activities include peaceful picketing on private property. 

Unlawful Activity Subject to Injunction

Employers still can seek an injunction under the Labor Code if certain unlawful activity occurs. Conduct such as violence, impeding a customer’s ability to enter or exit store property, or disorderly conduct would not be protected. The Chief Justice and two other justices drafted a concurring opinion which sought to provide further guidance as to the types of labor activities that might be unprotected.

To clarify what unlawful activity is, the Chief Justice stated in the concurring opinion that "labor activity with an objective other than communicating labor’s grievances and persuading listeners exceeds the right to engage in peaceful picketing within the meaning of the Moscone Act."

In a separate concurring and dissenting opinion, Justice Ming Chin also agreed with the Chief Justice’s cautionary comments about the scope of the Moscone Act. 

Obtaining an injunction to stop unlawful activity is not an easy task, however.

Witness testimony in court is required and the testimony must show that unlawful acts have been threatened and will be committed unless restrained, and that substantial and irreparable injury will occur. An injunction can be issued only if it can be shown that public safety officers who are supposed to protect the property are unable or unwilling to provide adequate protection.

These are not easy hurdles to jump.