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UL Green Leaf Mark and the CEC

The California Energy Commission (CEC) adopted sign lighting regulations on January 1, 2010, which can be found in the 2008 Building Energy-Efficiency Standards, Title 24, Part 6, Section 148 of the California Code of Regulations. The 2008 Sign Lighting Standards address both indoor and outdoor signs and include mandatory automatic control requirements for all illuminated signs. In addition, the Standards set limits on installed lighting power for internally and externally illuminated signs.

Federal Legislation

Hiring Practices . . .
By Jeff Aran, CSA Legal Counsel

As every employer knows, Discrimination in hiring based on race, color, religion, national origin, gender, sexual orientation, disability and age (40+) is illegal. In today’s world of personal websites, Facebook and other social media, when an employer monitors or investigates a potential employee’s internet activities, it is also important to be careful not make employment decisions based on the person’s membership in a protected class. In a recent Federal case, an astronomy professor was denied employment by the University of Kentucky’s search committee based on his creationist views posted on his website, in particular due to an article he wrote, “Modern Astronomy, the Bible and Creation.” The information was shared with the school’s biology department which warned that it would not cooperate with the physics and astronomy department in building an “outreach science team” if one of “these types of individuals” was hired. The lawsuit was settled for $125,000.

“Payment in Full” — Not Quite What You Think
By Jeff Aran, CSA Legal Counsel

Most businesses are familiar with the general rule that when a dispute exists between two parties as to a balance due or obligation to be paid, and the debtor or payer tenders a check marked, “payment in full” (or words of similar effect), there is an implied agreement that the funds constitute an “accord and satisfaction” which extinguishes the obligation when the check is cashed.

Like any contract, such an arrangement requires an offer, acceptance and consideration. Here the check marked “payment in full” is the offer; cashing of the check constitutes acceptance, and the money exchanged is the consideration. Generally, most creditors are under the impression that if a greater sum is due they can strike the magic words, cash the check regardless, and render the “satisfaction” ineffective.

But as with many things California, neither the law nor the procedure is black and white. Civil Code Section 1526 states that a creditor can strike through the “payment in full” wording to avoid the effect of an accord and satisfaction. But, Commercial Code Section 3311 provides that the “payment in full” verbiage is binding whether or not or the creditor strikes the language.
How do you harmonize these provisions?

Bottom Line: It’s clear as mud.
No appellate court has ruled conclusively on the issue. In one Federal case the court held that in order to avoid the effect of the “satisfaction,” the creditor must return the check to the debtor. But what if the check is cashed in error along with other receivables? Comm Code Section 3311 provides that the creditor has 90 days to discover the error and return the funds to the debtor. Another lower State court has held that it’s an issue of fact requiring the process of a trial (which, of course, is what “payment in full” is supposed to avoid).

Guidance: Operate with due diligence. If you offer a check marked, “Payment in Full,” first obtain a separate written release from the creditor for any future monetary obligation. If you inadvertently deposit a check marked, “Payment in Full,” when there hasn’t been full payment or an agreement to accept less money, promptly strike the words and notify the debtor in writing (via certified mail) that acceptance of the check does not constitute an accord and satisfaction, pursuant to Civil Code Section 1526. If you don’t intend to accept the check, even in the case of partial satisfaction, return it to the debtor with an explanation and demand payment in full. Last, if the amount due warrants it, file a Small Claims action for the balance due.

Commercial Speech Rights in California – Not so Broad
By Jeff Aran
CSA Legal Counsel

Over the past decade several cases suggested that under the California Constitution, which is more liberal than the US Constitution with regard to freedom of speech, that commercial speech in California was entitled to similar protection as non-commercial speech. That all came to end effectively when the 9th Circuit Court of Appeals ruled in June that it simply is not the case.

In Vanguard Outdoor v. City of Los Angeles, another in a series of billboard cases attacking the Los Angeles billboard laws, the Plaintiff challenged the City's supergraphic and offsite sign bans on the ground that they violated the California constitutional guarantee of free speech. Cal. Const, Art. I, § 2. Plaintiff relied on prior a California Supreme Court decision that suggested, unlike the First Amendment, that the California Constitution does not afford lesser protection to commercial speech than non-commercial speech.

Plaintiff reasoned that the banning of supergraphic offsite signs, a prohibition on commercial speech, would not withstand scrutiny under the California Constitution under the holding of Gerawan Farming, Inc. v. Lyons, 24 Cal. 4th 468, 497 (2000). The court in Gerawan held as a general matter, "the California liberty of speech clause is broader and more protective than the free speech clause of the First Amendment."

In response, the City argued that another decision after Gerawan, Kasky v. Nike, Inc., 27 Cal. 4th 939, 959 (2002), recognized that "the protections for commercial speech under the California Constitution are co-terminus with the protections under the First Amendment.” Kasky, 27 Cal. 4th at 959. The City also claimed that, notwithstanding any distinction between commercial and non-commercial speech or any greater protection afforded by the California Constitution, the California Constitution required the Court to apply the same standard as the First Amendment for content-neutral time, place, and manner restrictions like the supergraphic and offsite sign bans. In the City's view, the supergraphic and offsite sign bans would pass muster under the California Constitution as content-neutral restrictions.

The Federal Court decided to follow the teaching of Kasky, "which defeats Plaintiff's argument that the protections for commercial speech under the California Constitution are different than the protections under the First Amendment."

In Kasky, the California Supreme Court addressed whether allegedly false statements by a corporation could be subject to false advertising and unfair competition claims without running afoul of either the First Amendment or the California Constitution. In order to decide the question, the court had to determine whether the speech at issue was commercial or non-commercial because "commercial speech receives a lesser degree of constitutional protection than many other forms of expression, and because governments may entirely prohibit commercial speech that is false or misleading." The court extensively analyzed the distinction between commercial and non-commercial speech under the First Amendment, and explained that the scope of the free speech clause in the California Constitution was co-extensive with the First Amendment: "[t]his court has never suggested that the state and federal Constitutions impose different boundaries between the categories of commercial and noncommercial speech.”

The Kasky court also cited language from Gerawan that Plaintiff relied on, namely, that the free speech clause of the California Constitution is at least as broad in scope as the First Amendment, but the Kasky court nevertheless drew a distinction between protection for commercial speech and non-commercial speech in order to determine whether the defendant's false advertising was actionable.

The Kasky court then extensively analyzed the issue under the First Amendment and concluded that the defendant's allegedly false advertising was commercial speech that could be subject to false advertising and unfair competition claims without violating the First Amendment. Importantly, the Kasky court also reached the same conclusion under the California Constitution in a brief passage, explaining that, "[i]n the few cases in which this court has addressed the distinction between commercial and non-commercial speech, we have not articulated a separate test for determining what constitutes commercial speech under the state Constitution, but instead we have used the tests fashioned by the United States Supreme Court."

Thus, according to the 9th Circuit decision in Vanguard, the California Supreme Court’s holding in Kasky under the First Amendment was dispositive of the issue under the California Constitution; and therefore it held that any argument that "enhanced protection exists for commercial speech under the California Constitution is unpersuasive."

REGULATORY REFORM HEARINGS
(Reprinted from CBPA)

Business groups have complained for years that the California regulatory system is cumbersome, inefficient, and dampening the economic recovery. Last year, several bills were introduced meant to relieve some of the pressure, only to die in early policy committees. However, with California falling deeper, harder, and longer into recession than some other parts of the country, Legislators and non-business policy groups are taking a second look at what can be done.

To that end, in February the E3 (Environment, Education, and Energy) Roundtable of the Republican Caucus, held a hearing and invited the Little Hoover Commission and business representatives to discuss the issues to provide a variety of suggestions on how the existing regulatory development process could be improved. One point that seemed to resonate with lawmakers was the fact that many state agencies have an inherent conflict of interest when producing an economic impact analysis of their own regulations. The homebuilders stressed the need to have access to a “neutral” third-party within state government who could, on an as-needed basis, critique the regulatory impact analysis produced by a state agency.

We are expecting more than a dozen bills on regulatory reform this year, and will do everything we can do identify those ideas that make the most sense, and help push them to the Governor’s desk

Legal Quips

IHOP v. IHOP . . . A trademark battle finding the pancake house in a flap with the International House of Prayer, which IHOP the restaurant claims commandeered its logo and marketing without consent, is set to be resolved out of court. In the world of trademarks, the issue usually is whether the similar use confuses or deceives the consumer. So, unless they’re selling pancakes at church on a regular basis, don’t see much of a problem here.