In a simple asset purchase agreement (an “APA”), a seller makes warranties about assets, a buyer purchases them, and if the warranties turn out to be inaccurate, the buyer’s main recourse is to collect damages from the seller. However, in the sale of an existing dealership business, where the selling entity often exits the business and may even dissolve shortly after a sale, a buyer may worry that the entity and its owners have less incentive to stand behind their representations regarding the assets and operations of the business. The risks of purchasing the operating assets of an existing dealership are numerous and difficult to estimate: the fixtures, equipment, inventory, and any real estate purchased may have unknown and costly problems, the prior dealer’s employment policies and practices could be non-compliant, and there may be unknown claims resulting from questionable prior customer dealings that have not yet come to light.

The U.S. Supreme Court validated an employer’s ability to impose mandatory arbitration agreements as a condition of employment in Epic Systems Corp. v. Lewis. The implications of this decision was recently demonstrated in the Ninth Circuit’s August 25, 2018 decision of O’Connor v. Uber, highlighting the power of a properly drafted arbitration agreement as a pro-active measure for employers.

Many litigators will tell you that the best defense is a good offense. As a result, it is always important for defense attorney to assess whether a cross-complaint should be filed when responding to any lawsuit filed against his or her client, asserting any counterclaims the defendant may have against the plaintiff whether related to the plaintiff’s claims or not. Often, bringing pressure down on the plaintiff with counterclaims will make the plaintiff reevaluate their commitment to prosecuting the case and may facilitate early settlement of the action.

In May of this year the U.S. House followed the Senate in passing a measure that effectively ends Obama-era guidance aimed at limiting dealerships' retail margins on auto loans. The Consumer Financial Protection Bureau issued the guidance in 2013 on the basis that flexibility in retail lending margins may have led to minority borrowers being charged more on loans as compared to other similarly situated borrowers.

If you haven’t been a defendant in a class action, or a lawyer working on one, you likely have not heard about the Class Action Fairness Act (“CAFA”). Even when told that the purpose of the Act is to allow class actions that meet certain criteria to be tried in federal court, the significance of that often isn’t clear. The long-story short is that the consensus is that federal court is the preferable place to be as a defendant in a class action, and CAFA makes it much easier to get there.

As is tradition in California, the end of September brings a flurry of activity as the Governor evaluates which of the Legislature’s bills to sign into law and which to veto. In the last year of his fourth and final term, but the first full year after the rocketing of the #MeToo movement into the public consciousness, Governor Edmund G. (“Jerry”) Brown, Jr. reviewed legislation addressing sexual harassment from myriad directions. His choices to enact many of the bills, seven of which are featured here, will have both immediate and lasting impact on California employers.

Firm Partner, Bert Rasmussen, discusses the significance of our successful challenge to General Motors in this article, originally published in Automotive Buy Sell Report.

In the recent employment class action case of Fritsch v. Swift Transportation Company of Arizona, LLC, the Ninth Circuit Court of Appeals ruled that future recoverable attorneys’ fees can be considered in determining the amount in controversy under the Class Action Fairness Act of 2005 (“CAFA”). The Ninth Circuit opined “We have held that attorneys’ fees awarded under fee-shifting statutes or contracts are part of the amount in controversy, and that the amount in controversy includes all relief to which the plaintiff is entitled if the action succeeds.” “We may not depart from this reasoning to hold that one category of relief—future attorneys’ fees—are excluded from the amount in controversy as a matter of law.”

When an employment dispute is settled, the employer often makes the settlement contingent on the employee agreeing never to seek employment with the company again (and if currently employed by the company, to immediately resign). In one case, Golden v. California Emergency Physicians Medical Group, there was some disagreement among the federal courts as to the reasonableness of a provision regarding a former employee’s future employment prospects.