Cal.4th 826, where the court, in Justice Mosk's
final opinion released only five days before his death, clarified the
proper interpretation of 1992 and 1993 amendments to the summary
judgment procedure followed by state courts.
Aguilar was a complex antitrust case brought as a
class action against a number of petroleum companies alleging a
conspiracy to raise prices by restricting the output of gasoline in
California. As often happens in such cases, the plaintiffs did not
have "smoking gun" evidence of a conspiracy. Instead, there was
evidence that the companies gathered and disseminated information
about capacity, production and pricing through the independently owned
and operated Oil Price Information Service; that the companies
sometimes employed the same consultants; and that the companies had
executed certain exchange agreements. The question was whether this
type of evidence was sufficient to withstand defendants' motion for
summary judgment, which was supported by evidence explaining how
pricing and output decisions were made, asserting that such decisions
were made independently, and denying that such decisions were made
collaboratively with competitors.
The court used the case as an opportunity to
clarify the extent to which state summary judgment law is now
essentially the same as federal summary judgment law, particularly in
the antitrust context. Applying the federal standards, the U.S.
Supreme Court held in Matsushita Elec. Industrial Co. v. Zenith Radio
(1986) 475 U.S. 574, that ambiguous evidence showing conduct that is
as consistent with permissible competition by independent actors as
with illegal conspiracy by colluding actors is insufficient to
overcome a defense motion for summary judgment.
Applying the state summary judgment standards,
the court in Aguilar reached the same conclusion. The court recognized
that the plaintiffs "did indeed present evidence that the petroleum
companies may have possessed the motive, opportunity, and means to
enter into an unlawful conspiracy. But that is all. And that is not
enough. Such evidence merely allows speculation about an unlawful
conspiracy. Speculation, however, is not evidence."
It is evident after Aguilar just how similar the
federal and state standards for summary judgment are. State summary
judgment law no longer requires a plaintiff moving for summary
judgment to disprove any defense as well as prove each element of
plaintiff's own cause of action; it is enough for the plaintiff to
establish each element of plaintiff's cause of action, and it is up
to the defendant to establish triable fact questions on defenses. It
also no longer requires a defendant moving for summary judgment to
conclusively negate an element of the plaintiff's case; instead, it
is enough if the defendant shows that one or more elements of the
cause of action cannot be established by the plaintiff.
One of the remaining differences between the
federal and state standards is that state summary judgment law
continues to require - as it should - that a defendant moving for
summary judgment must actually present evidence supporting the
contention that the plaintiff cannot establish an element of the cause
of action. It is not enough in state court simply to point out by
legal argument a gap in the plaintiff's evidence. This difference
may be more theoretical than practical, however, since any good
defense counsel - whether in state or federal court - will file
appropriate documents (e.g., affidavits, declarations and such) to
support a motion for summary judgment.
Aguilar hopefully ends a decade-long debate about
the status of summary judgment law in state court. There has been much
talk about summary judgment being used "sparingly" in state court
and about a more "liberal" standard in federal court. Aguilar
should put such talk to rest. As Justice Mosk noted, "although
[summary judgment] motions should be denied when they should, they
must be granted when they must." Aguilar clearly sets forth the
rules for determining when such motions should be denied or must be
The court's most important civil rights
decision this year was Hi-Voltage Wire Works Inc. v. City of San Jose
(2000) 24 Cal.4th 537, where the court, in its first decision
interpreting Proposition 209, struck down San Jose's program that
required contractors bidding on city projects to utilize a specified
percentage of minority and women subcontractors or to document
outreach efforts to include such subcontractors in bids.
The court held that both the utilization and
documentation components of the city's program violated Proposition
209 since each component discriminated against a class of
subcontractors, and granted preferential treatment to another class of
subcontractors, on the basis of race and gender. The court suggested
that only race- and gender-neutral outreach programs - for example,
programs that promote outreach to all types of subcontractors without
regard to impermissible classifications - would satisfy Proposition
Although the result in Hi-Voltage was not
particularly surprising, the opinion drew an enormous, angry response
from civil rights advocates, primarily because of its recitation of
the history of civil rights and affirmative action in California and
the U.S. Some of these critics have truly gone over the top. First,
many critics have personalized their attacks on the author of the
opinion, Justice Brown, as though the opinion somehow reflected only
her views (which these critics condemned as extreme). This was not,
however, a separate concurring opinion. It was an opinion for the
court joined by Justices Mosk, Baxter, Brown and Chin who, by any
measure, represent a broad spectrum of perspectives. Ad hominem
attacks serve no one.
Second, some critics are apparently so
disappointed with the passage and consequences of Proposition 209 and
the result in Hi-Voltage, that they seem unable or unwilling to give
the opinion a fair or even accurate reading. A good example is
Professor Gerald Uelmen's criticism in the July edition of
California Lawyer. Although I am sure there are other things in the
opinion which Professor Uelmen would find objectionable, the only shot
he takes at the opinion in his article utterly misses the mark.
Professor Uelmen complains that the majority's opinion, in
the second paragraph of its legal discussion, "characterized the
late U.S. Supreme Court Justice William J. Brennan Jr.'s dissent in
McCleskey v. Kemp (1987) 481 U.S. 279, 343-44 as a low point in the
effort to articulate a coherent vision of civil rights." He then
takes the majority to task for this apparent affront, instructing
readers to "Go read what Justice Brennan wrote on those pages, and
see if Justice Brown's analysis raises the temperature of your blood
as much as it did mine."
Let's lower the temperature just a bit. The
problem with Professor Uelmen's argument is that the majority
clearly did not characterize Justice Brennan's dissent as a low
point. Instead, the majority was citing Justice Brennan's dissent,
along with Justice Powell's concurring opinion in Fullilove v.
Klutznick (1980) 448 U.S. 448, to support the proposition that,
"While the courts have been instrumental in effecting positive
change in the quest for equality, their involvement in articulating a
coherent vision of the civil rights guaranteed by our Constitution has
not been without its low points." Hi-Voltage, 24 Cal.4th at 545.
That is precisely the point Justice Brennan made in his dissent in
McCleskey and precisely the point Justice Powell made in his
concurring opinion in Fullilove. See McCleskey, 481 U.S. at 343-44
(Brennan, J., dissenting); Fullilove, 448 U.S. at 516 (Powell, J.,
concurring). Professor Uelmen did not make it more than a few
sentences into the majority's legal analysis before seriously
misreading its content.
A more dispassionate reading of the court's
opinion in Hi-Voltage is in order. The legal history that the opinion
sets forth is uncomfortable for advocates of affirmative action, and
from their perspective, inaccurate. After all, the opinion essentially
characterizes the law of affirmative action as an unwarranted and
unwise extension of what had previously been race-neutral civil rights
laws, an extension which sacrificed equal treatment of individuals in
the name of equality for various minority groups, notwithstanding
unequal treatment of individuals. But that version of history (and it
is clearly only one version) clearly contributed to the enactment of
Proposition 209, is reflected in some of the language used in the
ballot arguments in favor of 209, explains why the drafters of the
measure thought they had to ban both "discrimination" and
"preferential treatment," and is certainly relevant to any
understanding of the legal, political and social context which
informed the voters. To demonize that version of history, as critics
have tried to do, ignores the reality of the legal changes wrought by
Proposition 209's provisions.
Guns and product liability
The recent successes in tobacco litigation,
including the spectacular settlement of suits by governmental
entities, have given renewed hope to plaintiffs who are injured by
products that are legal to sell but which cause substantial harm to
users and third parties even when used as intended. In the wake of the
tobacco cases, a number of states and municipalities considered filing
suits against gun manufacturers, and a few such suits were actually
brought. Private plaintiffs also might have hoped courts would be more
receptive to their claims.
In Merrill v. Navegar Inc. (2001) 2001 Westlaw
877117, the court broadly rejected such private suits in California
based on a 1983 statute which provides, in part, that "[i]n a
products liability action, no firearm or ammunition shall be deemed
defective in design on the basis that the benefits of the product do
not outweigh the risk of injury posed by its potential to cause
serious injury, damage, or death when discharged." Civ. Code §1714.4(a).
Product liability law in California has been
marked by a surfeit of theories of liability. A plaintiff could make
claims against a manufacturer based on common law negligence,
negligence per se, breach of warranty, strict product liability design
defect, strict product liability failure to warn, strict product
liability manufacturing defect, or strict liability for an abnormally
dangerous activity. The court has struggled over the years to try to
draw distinctions between negligence and breach of warranty, on the
one hand, and strict product liability theories, on the other hand,
while maintaining the rule that a manufacturer is not an insurer of
products. See, e.g., Anderson v. Owens-Corning Fiberglas Corp. (1991)
53 Cal.3d 987, 1005-1006; Barker v. Lull Engineering Co. (1978) 20
Cal.3d 413, 418. The struggle has created much more confusion than
clarity as the court has repeatedly introduced negligence-based
concepts into strict products liability, most notably in the
definition of what constitutes a design defect, while nevertheless
trying to maintain separate causes of action for negligence and strict
The plaintiffs in Navegar tried to exploit this
confusion by asserting, quite plausibly in light of the statutory
language, that §1714.4(a) was limited to "products liability"
causes of action and therefore did not bar their independent claim for
negligence. Plaintiffs further distinguished a general negligence
claim that the particular gun at issue should not be made at all from
a narrower claim that the gun should not be marketed to the general
public and should, instead, be sold only to law enforcement or the
The distinctions the plaintiffs tried to draw
were reasonable, but ultimately unavailing. The majority read §1714.5(a)
as establishing the state's public policy in both products liability
and negligence claims that were substantially similar to products
liability. The majority also rejected the distinction between
negligently making a product with a defective design and negligently
marketing a product to a class of customers who are particularly
likely to injure others by misusing the product.
Aside from its specific holding regarding the
particular gun at issue, the decision has two interesting features.
First, the court does not appear inclined to take the lead in changing
liability rules applicable to an industry to reflect changing social
conditions and perceptions when the legislature has itself also
regulated the industry, even if the legislature's regulation would
seem to leave room for action by the judiciary.
Second, the decision is another example of the
significant overlap between strict products liability and negligence,
suggesting once again that the differences between these causes of
action are more ephemeral than real.
Contract Law 101
Is a newspaper advertisement an offer which can
be accepted merely by tender of the purchase price? Does a unilateral
mistake of fact by the offeror negate the offeror's intention to be
bound, thereby preventing a contract from coming into existence? If
not, is a unilateral mistake a permissible basis for rescission of a
contract? What constitutes an unconscionably low price justifying
rescission of a contract on the basis of unilateral mistake?
If these questions trigger fond memories from
your first-year contracts class, you should definitely take a moment
or two to read Donovan v. RRL Corp. (July 30, 2001) 2001 Daily Journal
D.A.R. 7821. A car dealership ran an ad in the local newspaper
advertising a particular 1995 Jaguar XJ6 Vanden Plas for sale without
stating a price. The dealership wanted to replace this ad with an ad
for a 1994 Jaguar at a price of $25,995 and instructed the newspaper
to make the substitution. The newspaper's staff got confused and
printed an advertisement for the 1995 Jaguar with the $25,995 price.
The plaintiff went to the dealership and tendered the advertised
price. When the plaintiff showed the sales representative the
advertisement, the sales rep immediately said that the ad was
mistaken. A sales manager apologized and offered to pay for
plaintiff's fuel, time and effort expended in traveling to the
dealership. Plaintiff rejected this offer and insisted on purchasing
the car at the advertised price. In fact, the car cost the dealership
$35,000 to purchase, and the dealership indicated it would sell the
car to the plaintiff for $37,016. Plaintiff refused and filed suit.
The car subsequently sold for $38,399.
Armed with a statute providing that it is a
violation of the Vehicle Code for a dealer to "[f]ail to sell a
vehicle to any person at the advertised total price" (Veh. Code §11713.1(e)),
the plaintiff no doubt had good reason to expect a successful trip to
court. The plaintiff should also have been encouraged when counsel for
the dealership limited its defense to the contention that the mistaken
ad prevented a contract from coming into existence and did not so much
as mention or brief the question of whether, if a contract had been
formed, the mistake was a basis for rescission.
The plaintiff was in for a surprise. The Supreme
Court saved the dealership's bacon in an opinion that, although
legally correct as a matter of contract law, leaves one rooting for
the consumer. The court first had to deal with the argument that,
under traditional common law principles, an advertisement that merely
identifies goods and specifies a price is only an invitation to
negotiate and not an offer. The plaintiff asked the court to reject
this general rule as contrary to consumers' reasonable expectations.
The court refused to rule so broadly, however, holding only that,
because of Vehicle Code §11713.1(e), an auto dealer's advertisement
for the sale of a particular vehicle at a specific price constituted
an offer. Score one for the consumer.
The argument that the dealer's unilateral
mistake on the price somehow prevented a contract from forming, which
was the only defense given by the dealer to the trial court, was
rejected by the court in a single sentence. As my readers will of
course recall, under the objective theory of contract formation, the
offeror's hidden, unexpressed thoughts or mistakes are irrelevant to
The question is whether a person in the
offeree's position had reason to believe that the communication was
intended as an offer such that an acceptance would conclude the
bargain. As the court explained, "[b]ecause the existence of an
offer depends upon an objective interpretation of defendant's assent
as reflected in the advertisement, . . . the mistaken price (not
reasonably known to plaintiff to be a mistake) is irrelevant in
determining the threshold question whether the advertisement
constituted an offer." The score is now two for consumer, zero for
In my opinion, the court should have ended its
opinion at this point and declared the consumer the winner. As
dissenting Justices Werdegar and Baxter observed, "defendant did not
seek in the trial court to rescind its contract with plaintiff, . . .
[and] at no point on appeal or on review in this court has defendant
argued for rescission; defendant's position throughout has been,
instead, that no contract was formed between plaintiff and itself."
Having lost on this point and having failed to seek rescission (which
would have given the plaintiff the opportunity to make a record
opposing rescission), the defendant should have been held to its
apparently strategic choice.
Even at oral argument before the Supreme Court,
defense counsel resisted rescission, expressing concern that seeking
rescission would in effect concede the existence of a contract.
Rescission was essentially crammed down counsel's throat by the
court. When counsel finally realized what was happening, he
acknowledged that he "would be pleased to prevail on any theory."
The lesson here? No matter what the score, if a court is determined to
rule in favor of one of the parties, there is precious little a
litigant can do.
The question of whether the mistake in the
advertisement justifies rescission is a close one, but the most
analogous precedents in California involving mistakes in construction
contract bids suggest that such a substantial mistake - a 32 percent
error in stating the price - is a proper basis for rescission.
Absent detrimental reliance by the consumer (and it is worth recalling
that the dealer offered to pay for the consumer's time and expenses
in coming to the lot), see Drennan v. Star Paving Co. (1958) 51 Cal.2d
409, there is no compelling reason for giving the consumer a windfall
because of an honest mistake that the dealer attempted to correct in
good faith as soon as the mistake was drawn to the dealer's
This is all good contract law, but my heart still
wishes the consumer could just drive off the lot with his used Jaguar.
It might be healthy for the dealer and the newspaper to fight between
themselves over the loss instead of relieving them of their mistake
and visiting the disappointment upon the consumer.
J. Clark Kelso is professor of law and director of the Capital
Center for Government Law and Policy at University of the Pacific
McGeorge School of Law.