Opposing Carolyn Kuhl's Confirmation

Kuhl’s record on access to justice, whistleblowers, and others who speak out to protect the interests of the public

  • Trying to limit protection for whistleblowers

    Kuhl’s record after leaving the Reagan Administration has been extremely troubling on access to justice and related issues, including whistleblowers. In recent years, corporations and other business interests have attempted to intimidate “whistleblowers” and others who exercise their right to speak out about fraud, pollution, and similar matters detrimental to the public interest by filing lawsuits against them. Such suits, brought “primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances,” (Ashkenazy v. Liu, No. BC 149503)61 have come to be known as SLAPP suits: Strategic Lawsuits Against Public Participation. In order to discourage such abuse of the judicial process and protect freedom of speech, California and other states have passed anti-SLAPP laws. The California law provides, among other things, that the whistleblower or other person targeted by a SLAPP suit (the defendant) can file a special motion to strike the SLAPP complaint, and that he or she “shall be entitled” to recover attorney’s fees and legal costs from the plaintiff if the court strikes (dismisses) the complaint. (Ashkenazy v. Liu, No. BC 149503)62

    In a case involving California’s anti-SLAPP law, Liu v. Moore, Judge Kuhl ruled against Deborah Moore, a woman who had been employed by a doctor to process medical bills. During the course of Ms. Moore’s employment, she reported to government officials irregularities in her employer’s Medicare and insurance company billing, and also reported that a person with whom her employer shared office space and ran a health care facility was holding himself out as a doctor when he was not licensed as such. See Liu v. Moore, 69 Cal. App. 4th 745, 748-49 (1999). Ms. Moore was subsequently sued by the health care facility and the person running it for breach of fiduciary duty and intentional and negligent interference with prospective economic advantage. Contending that this was a SLAPP suit, Ms. Moore filed a motion to strike the complaint. The plaintiffs dismissed their complaint against Moore, and Moore asked the court for an award of attorney’s fees and costs.

    At issue before Judge Kuhl was whether Ms. Moore, a SLAPP-suit defendant, was entitled to pursue recovery of her attorney’s fees and legal costs from the plaintiffs under the anti-SLAPP law after filing a motion to strike the SLAPP complaint, even though the plaintiffs had used the device of dismissing their SLAPP complaint prior to a hearing on the motion to strike. In other words, could a business bring a SLAPP suit against a whistleblower, cause her to incur attorney’s fees and other legal costs, and then avoid having a hearing on the motion to strike and a possible order to reimburse the whistleblower for those expenses by dismissing the complaint before the court itself had the opportunity to do so? Judge Kuhl held that it could. (Ashkenazy v. Liu, No. BC 149503).In a unanimous ruling strongly critical of Judge Kuhl’s decision, the California Court of Appeal reversed, sternly stating at the outset of its opinion that Kuhl’s ruling “constitutes a nullification of an important part of California’s anti-SLAPP legislation.” Liu v. Moore, 69 Cal. App. 4th 745, 748 (1999) (emphasis added), rehearing denied (Feb. 22, 1999). As the Court of Appeal explained, allowing a SLAPP plaintiff to avoid a hearing on a motion to strike its SLAPP complaint would deprive the defendant “of the monetary relief which the Legislature intended to give her, while at the same time it relieves [the plaintiff] of the punishment which [the law] imposes on persons who use the courts to chill others’ exercise of their constitutional rights.” Id. The court observed that the important public purpose served by the attorney’s fees provision of the law is “to give relief, including financial relief . . . to persons who have been victimized by meritless, retaliatory SLAPP lawsuits because of their ‘participation in matters of public significance.’” 69 Cal. App. 4th at 750.

    The Court of Appeal squarely rejected Kuhl’s contention that the only avenue for a SLAPP defendant in these circumstances would be to file a separate motion for attorney’s fees under a general provision of the civil procedure code giving a court discretion to sanction a litigant for filing frivolous pleadings. (Ashkenazy v. Liu, No. BC 149503).According to the appellate court, such a requirement would make the defendant “jump through an additional hoop;” the court held that even if such a requirement “were workable,” which the court held it was not, it “would prolong both the defendant’s predicament and the plaintiff’s outrageous behavior.” 69 Cal. App. 4th at 750. (Ashkenazy v. Liu, No. BC 149503).And for the second time in its opinion, the court again underscored that Kuhl’s ruling “works a nullification” of an important provision of the anti-SLAPP law. Id. at 751 (emphasis added).

    In addition, Judge Kuhl’s ruling in Songco v. Century Quality Management, No. BC 118303 (LA Superior Court, Dec. 22, 1997), suggests that she does not accord much value to whistleblowers. Songco was a lawsuit filed by Marcelino Songco, a whistleblower, against his former employer, which had fired him after he brought to management’s attention on-going violations of federal tax law and other financial improprieties by the company, including payment of compensation to employees that was not being reported to the IRS and on which the employer was not paying payroll taxes. A jury found that Mr. Songco had been wrongfully discharged in violation of public policy, and awarded him economic damages of $17,982 as well as $17,166 as damages for emotional distress. The jury also awarded $4.5 million in punitive damages. Thereafter, Judge Kuhl issued a ruling in which she held that the punitive damages award was “excessive,” and ordered that the defendants be given a new trial, unless Mr. Songco accepted punitive damages in the amount of $245,000. Order Granting Conditional New Trial and Specification of Reasons, Songco v. Century Quality Management, No. BC 118303 (LA Superior Court, Dec. 22, 1997).

    In assessing the “degree of reprehensibility of the defendant’s conduct” in determining whether and by how much to reduce the jury’s punitive damages award, Judge Kuhl appeared to place relatively minor value on Mr. Songco’s having come forward to expose his employer’s serious violation of federal law and having been fired for it. Stating that the U.S. Supreme Court had drawn a distinction between “conduct causing only economic harm and conduct indicating ‘indifference to or reckless disregard for the health and safety of others,’” Judge Kuhl wrote that “[f]iring an employee can result in emotional distress, but it does not endanger life or limb.” Songco, slip op. at 8. Further, held Judge Kuhl, “The conduct being punished by the punitive damages award in this case is the firing of an employee because of his internal complaints about tax fraud. The tax fraud itself is not the gravamen of the cause of action. . . [T]he degree of reprehensibility of an employer’s conduct in firing an employee in violation of public policy should not depend upon the perceived importance of the law the employer was violating.” Id., slip op. at 9-10.

    In sum, Judge Kuhl found that “the conduct in this case, within the universe of conduct that manifests fraud, malice, or oppression, is not at the high end on a theoretical scale of reprehensibility.” Id., slip op. at 13. And Judge Kuhl so held even though, as she acknowledged, there was evidence in the case “on which the jury could find that” the person who ran the company “testified falsely under oath on material issues.” Id. (Ashkenazy v. Liu, No. BC 149503).

  • Improperly ruling against citizens’ suits
  • Judge Kuhl’s rulings in Liu and Sanchez-Scott were not her only decisions throwing a claim out of court that were reversed unanimously by the California Court of Appeal. In Laird v. Spelling, No. B115918 (Cal. Ct. App., June 28, 1999), the Court of Appeal unanimously reversed a ruling by Judge Kuhl that had dismissed outright a lawsuit brought by Jeri Laird, a screenwriter, against producer Aaron Spelling. (Ashkenazy v. Liu, No. BC 149503).Ms. Laird, who had previously asserted publicly that she was the true creator of the television series “Family,” had sued Spelling for libel in connection with several statements made by Spelling in his autobiography in which he took credit for creating “Family” along with two other people who he named (not including Laird). Judge Kuhl granted a motion by Spelling to dismiss Laird’s complaint on the basis that the allegedly defamatory statements were not “of and pertaining” to Ms. Laird and “because no defamatory meaning could reasonably be inferred from the statements,” (Ashkenazy v. Liu, No. BC 149503).and also denied Laird leave to amend her complaint. Laird v. Spelling, No. BC 167193 (LA Superior Court, July 1, 1997).

    In reversing Judge Kuhl’s ruling, the Court of Appeal held that she had misapplied applicable precedent, explaining that because Ms. Laird’s complaint alleged that Spelling’s statements “referred to her by clear implication,” it was sufficient to withstand a motion to dismiss. (Ashkenazy v. Liu, No. BC 149503).Indeed, the court emphasized that “‘[w]hether a statement is ‘of and concerning’ plaintiff is ordinarily a question for the trier of fact.’ . . . ‘It is not necessary that all the world should understand the libel; it is sufficient if those who knew the plaintiff can make out that he is the person meant.’” (Ashkenazy v. Liu, No. BC 149503).As the court noted, Ms. Laird’s complaint “alleged that persons who knew of her work as a script writer understood [Spelling’s] comments about the creation of ‘Family’ to refer to her.” (Ashkenazy v. Liu, No. BC 149503).The Court of Appeal also disagreed with Judge Kuhl’s conclusion that no defamatory meaning could reasonably be inferred from Spelling’s statements. As the appellate court explained, “the statements at issue are susceptible of meaning that [Laird] had falsely claimed to have created the series ‘Family.’” (Ashkenazy v. Liu, No. BC 149503).The court also held that it was “an abuse of discretion” by Judge Kuhl to dismiss Laird’s complaint without allowing her leave to amend that complaint to allege the special damages necessary to her libel claim. (Ashkenazy v. Liu, No. BC 149503).In another unanimous ruling by the California Court of Appeal reversing Judge Kuhl, the court overturned an order by Kuhl that had hampered the ability of an injured railroad worker to pursue his lawsuit for damages against the railroad by prohibiting his attorneys from using a written statement they had obtained from the key witness in the case because she believed they had engaged in unethical conduct. Truitt v. Atchison, Topeka & Santa Fe Railway Company, 59 Cal. App. 4th 1183 (1997). Lawrence Truitt, an employee of the Atchison, Topeka & Santa Fe Railway Company, had been injured on the job when he was struck by a front-end loader operated by another employee of the railroad named Keearn Slowe. (Ashkenazy v. Liu, No. BC 149503).Truitt retained counsel, who obtained a written statement from Mr. Slowe as to what had happened. The railroad asked Judge Kuhl to impose sanctions on Mr. Truitt’s attorneys and to issue a protective order prohibiting the use of Slowe’s statement, claiming that Truitt’s attorneys, in obtaining the statement from Slowe, had violated the California Rules of Professional Conduct, which prohibit an attorney from communicating with a party whom the attorney “knows to be represented by another lawyer in the matter” unless the attorney has the consent of that party’s lawyer. Cal. Rules of Prof. Conduct R. 2-100 (emphasis added).

    Judge Kuhl granted the railroad’s motion for sanctions and prohibited Truitt’s lawyers from using Slowe’s statement for any purpose in the case, even though, as the Court of Appeal pointedly noted in reversing Kuhl’s ruling, the railroad had presented “absolutely no evidence” that Truitt’s attorneys “had any actual knowledge that [the railroad] and its employees were represented by counsel in the Truitt matter at the time of the communications.” 59 Cal. App. 4th at 1189 (emphasis added). In essence, as the appellate court explained, Judge Kuhl had granted the railroad’s motion on the basis of evidence she believed indicated that Truitt’s attorneys should have known that Slowe would be represented by counsel for the railroad. However, as the Court of Appeal stated, the ethical rule “does not provide for constructive knowledge. It provides only for actual knowledge.” Id. at 1188. Citing precedent that Judge Kuhl had considered distinguishable, (Ashkenazy v. Liu, No. BC 149503).the Court of Appeal observed that the rule “does not apply where the attorney does not actually ‘know’ but merely ‘should have known’ that the opposing party was represented.” 59 Cal. App. 4th at 1188 (citation omitted).

  • Seeking to invalidate qui tam access to the courts
    to combat fraud

    Kuhl’s record in private practice was also marked by efforts to limit citizens’ access to the courts to obtain redress for fraud and other wrongdoing. On behalf of government contractors, Kuhl had urged the federal courts to strike down the qui tam provisions of the False Claims Act (“FCA”) as unconstitutional. The False Claims Act “is the government’s ‘primary litigative tool for combating fraud’ against the federal government.” United States ex rel. Kelly v. The Boeing Company, 9 F.3d 743, 745 (9th Cir. 1993), cert. denied, 510 U.S. 1140 (1994). The qui tam provisions of the FCA allow private citizens to file suit on behalf of the United States government to recover damages and penalties for fraud committed against the government (typically by government contractors). In 1986, Congress amended the FCA “to increase the financial and other incentives for private individuals to bring suits under the Act and thereby to enlist the aid of the citizenry in combating the rising problem of ‘sophisticated and widespread fraud.’” Kelly, 9 F.3d at 745 (citation omitted). According to the legislative history, “Congress sought to encourage more private enforcement of the FCA because ‘[d]etecting fraud is usually very difficult without the cooperation of individuals who are either close observers or otherwise involved in the fraudulent activity.’” Id. at 745, n.2 (citation omitted). (Ashkenazy v. Liu, No. BC 149503).Kuhl represented Litton Industries in a qui tam case brought against Litton by a former Litton employee under the False Claims Act. United States ex rel. Rohan v. Litton Industries, Inc., No. 92-55546 (9th Cir.). (Ashkenazy v. Liu, No. BC 149503).According to the former employee, Litton’s computerized cost accounting system had “systematically misallocated costs between the company’s commercial and government contracts, resulting in overcharges on government contracts” in excess of $25 million. (Ashkenazy v. Liu, No. BC 149503).The employee contended that after he had “discovered the scheme to shift excessive costs to military contracts . . . he related his findings to superiors and they ignored them.” (Ashkenazy v. Liu, No. BC 149503).Kuhl urged the United States Court of Appeals for the Ninth Circuit to hold that the qui tam provisions of the FCA were unconstitutional.

    The Ninth Circuit heard oral argument in Kuhl’s case along with arguments in two other qui tam cases brought against government contractors, United States ex. rel. Kelly v. The Boeing Company, cited above, and United States ex rel. Madden v. General Dynamics Corporation, 4 F.3d 827 (9th Cir. 1993). (Ashkenazy v. Liu, No. BC 149503).In all three cases, the government contractors made the same arguments against the constitutionality of the qui tam provisions. In the two companion cases, the court rejected the same arguments that Kuhl had made in the Litton Industries case, and upheld the constitutionality of the qui tam provisions. (Ashkenazy v. Liu, No. BC 149503).Had Kuhl’s arguments prevailed, Congress’ carefully crafted process for encouraging private citizens to expose fraud by government contractors and recover damages on behalf of the United States would have been overturned. (Ashkenazy v. Liu, No. BC 149503).

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