SEPTEMBER 2016 / $5

THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION

Los Angeles lawyerAmir A. Amini discusses homeowner rights and responsibilities involvedin protecting scenic viewspage 18

A RIGHT TO A VIEW

On Direct:Mia Yamamotopage 9

Turnover and Preference Lawpage 12

Special Pullout

CORPORATE COUNSEL’S

Guide to California Attorneys

EARN MCLE CREDIT PLUS

CorporateResponsibility

page 26

SurvivingMST

page 32

http://www.chapman.edu/law/

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18 A Right to a ViewBY AMIR A. AMINI

Cases like the "Bird Streets" litigation highlight that California law does not protect views, absent written agreement or restrictionPlus: Earn MCLE credit. MCLE Test No. 260 appears on page 21.

26 Partners in Responsibility BY URSULA WYNHOVEN

The United Nations Global Compact has been tasked to facilitate the promotion ofcorporate responsibility around the world

32 Less than HonorableBY DWIGHT STIRLING AND LAURA RILEY

Discharge upgrades can restore to survivors of military sexual trauma VA benefitsthat otherwise would not be available to them

Special Pullout SectionCorporate Counsel's Guide to California Law Firms and Attorneys

F EATU RE S

Los Angeles Lawyer

the magazine of

the Los Angeles County

Bar Association

September 2016

Volume 39, No. 6

COVER PHOTO: TOM KELLER

09.16

9 On DirectMia YamamotoINTERVIEW BY DEBORAH KELLY

11 Barristers TipsThe challenges of working with first-time expertsBY SARAH KELLY-KILGORE

12 Practice TipsBankruptcy procedure in the context of turnover and preference lawBY CATHY TA

15 Practice TipsGuidelines for managing a forensicinspection of ESIBY KATHERINE V.A. SMITH AND MICHAEL HOLECEK

40 Closing ArgumentUsing assignment and charging orders to enforce judgments and ordersBY IRA M. FRIEDMAN AND DAVID FRIEDMAN

39 Index to Advertisers

DE PARTM E NTS

LOS ANGELES LAWYER (ISSN 0162-2900) is publishedmonthly, except for a combined issue in July/August, by theLos Angeles County Bar Association, 1055 West 7th Street,Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Period -icals postage paid at Los Angeles, CA and additional mailingoffices. Annual subscription price of $14 included in theAssociation membership dues. Nonmember subscriptions:$38 annually; single copy price: $5 plus handling. Addresschanges must be submitted six weeks in advance of nextissue date. POSTMASTER: Address Service Requested. Sendaddress changes to Los Angeles Lawyer, P. O. Box 55020,Los Angeles CA 90055.

4 Los Angeles Lawyer September 2016

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6 Los Angeles Lawyer September 2016

LOS ANGELES LAWYER IS THE OFFICIAL PUBLICATIONOF THE LOS ANGELES COUNTY BAR ASSOCIATION

1055 West 7th Street, Suite 2700, Los Angeles CA 90017-2553Telephone 213.627.2727 / www.lacba.org

LACBA EXECUTIVE COMMITTEEPresidentMARGARET P. STEVENS

President-ElectMICHAEL E. MEYER

Senior Vice PresidentPHILIP H. LAM

Vice PresidentTAMILA C. JENSEN

TreasurerDUNCAN W. CRABTREE-IRELAND

Assistant Vice PresidentHON. SHERI A. BLUEBOND

Assistant Vice PresidentANNALUISA PADILLA

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Immediate Past PresidentPAUL R. KIESEL

Barristers PresidentDAMON A. THAYER

Barristers President-ElectMARIANA ARODITIS

Chief Executive Officer/SecretarySALLY SUCHIL

Chief Financial & Administrative OfficerBRUCE BERRA

General Counsel & Chief Administrative OfficerW. CLARK BROWN

BOARD OF TRUSTEESRONALD F. BROTHARRY W.R. CHAMBERLAINNATASHA R. CHESLERREBECCA A. DELFINOKENNETH C. FELDMANJO-ANN W. GRACEJOHN F. HARTIGANMARY E. KELLYLAVONNE D. LAWSONRICHARD LEWISF. FAYE NIABRADLEY S. PAULEYANGELA REDDOCKDIANA K. RODGERSMARC L. SALLUSEDWIN C. SUMMERS IIIDAVID W. SWIFTWILLIAM L. WINSLOW

AFFILIATED BAR ASSOCIATIONS

BEVERLY HILLS BAR ASSOCIATION

CENTURY CITY BAR ASSOCIATION

CONSUMER ATTORNEYS ASSOCIATION OF LOS ANGELES

CULVER MARINA BAR ASSOCIATION

GLENDALE BAR ASSOCIATION

IRANIAN AMERICAN LAWYERS ASSOCIATION

ITALIAN AMERICAN LAWYERS ASSOCIATION

JAPANESE AMERICAN BAR ASSOCIATION

JOHN M. LANGSTON BAR ASSOCIATION

THE LGBT BAR ASSOCIATION OF LOS ANGELES

MEXICAN AMERICAN BAR ASSOCIATION

PASADENA BAR ASSOCIATION

SAN FERNANDO VALLEY BAR ASSOCIATION

SANTA MONICA BAR ASSOCIATION

SOUTH BAY BAR ASSOCIATION

SOUTHEAST DISTRICT BAR ASSOCIATION

SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION

WOMEN LAWYERS ASSOCIATION OF LOS ANGELES

For More Information Call 213-617-7775Or visit us on the web at www.hmlinc.com

Business litigation is increasingly complex. That is why we believe valuationissues must be addressed with the same meticulous careas legal issues. Analysis must be clear. Opinions must bedefensible. Expert testimony must be thorough andarticulate. HML has extensive trial experience and canprovide legal counsel with a powerful resource for experttestimony and litigation support.

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8 Los Angeles Lawyer September 2016

Pull up a chair alongside an Angeleno on a pleasantsummer evening and say the name “Vin.” Many—even those with no interest in baseball—will assume

you can only be re ferring to one individual: Vincent EdwardScully. For 67 years, Vin’s mellifluous voice has been calling

Ted M. Handel is the 2016-17 chair of the Los Angeles Lawyer Editorial Board and ChiefExecutive Officer of Decro Corporation, a nonprofit housing developer, which has developedand manages affordable multifamily housing projects for low-income families.

the play-by-play of the then-Brooklyn and, since 1958, L.A. Dodgers. He was firstheard over large radios and small TVs operated with dials and tubes, then pockettransistor radios, and, today, big screen TVs using LED technology. In October,however, Vin will leave the broadcasting booth for good, and the mike that hascarried his recognizable voice through many memorable games will go silent.

In April 1950, Vin began his Dodger career at 22 when he joined the team’sother announcers, Red Barber and Connie Desmond, at Philadelphia’s Shibe Park.In 1982, he was enshrined in the Baseball Hall of Fame as a recipient of the FordFrick award honoring broadcasters. In May, Sports Illustrated noted Vin “rankswith Walter Cronkite among America’s most-trusted media personalities.”

Over Vin’s career he called three perfect games, including the only one pitchedby Don Larsen in the World Series; Sandy Koufax’s four no-hitters; Hank Aaron’s715th record-breaking home run; and Kirk Gibson’s shot that propelled the Dodgersto their last world championship in 1988. Incredibly, he has been the Dodgers’announcer for nearly half the games since the team was formed in 1890.

Technology and baseball history aside, consider the course of American jurispru-dence over Vin’s career. Despite Jackie Robinson’s breaking baseball’s color line in1947, “separate but equal” was still good law in this nation when Vin joined theDodgers. The U.S. Supreme Court did not render its decision in Brown v. Board ofEducation until 1954. Coincidentally, the Supreme Court has since issued decisionswith party names matching other noteworthy Dodgers like Obergefell v. Hodges,Roe v. Wade, and Caplin and Drysdale, Chartered v. United States.

Vin’s broadcasting techniques and his ability to capture and hold listeners’attention offer lessons that attorneys can apply to their advocacy skills:

Paint a picture with words. Vin’s call of the last inning of Koufax’s perfect gamein 1965 began with, “It is 9:41 P.M. on September the ninth. There are 29,000people in the ballpark and a million butterflies.” Two batters later, “Sandy backsoff, mops his forehead, runs his left index finger along his forehead, dries it off onhis left pants leg. Into his windup, and the 2-1 pitch to Kuenn: swung on andmissed, strike two. It is 9:46 P.M. Two and two to Harvey Kuenn. Sandy into hiswindup. Here’s the pitch: swung on and missed, a perfect game!”

Give context to the story. This was Vin’s call of Aaron’s record-breaking homerun: “It is over, at 10 minutes after nine o’clock in Atlanta, Georgia. Henry Aaronhas eclipsed Babe Ruth. You could not get two more opposite men—the Babe, bigand garrulous, oh so sociable, immense in all his appetites—and then the quiet ladout of Mobile, Alabama, slender.”

A pregnant pause can give emphasis to your closing. After Vin announcedGibson’s game-winning home run, he let the crowd speak for 67 seconds before hedelivered his memorable line, “In a year that has been so improbable, the impossiblehas happened.”

Vin’s retirement will leave a deafening void. We thank him for the gift andlegacy he has graciously shared with us as a broadcaster without peer. n

Los Angeles Lawyer September 2016 9

on direct

MIA YAMAMOTO | Cofounder of the AsianPacific Islander Law Student Associa tionand the Multicultural Bar Alliance of South ern California (a coalition of min or -ity, women’s, and LGBT bar associationsof Los Angeles), Mia Yamamoto has prac-ticed law since 1974, first as a public de -fender and, since 1984, in private practice.She has been named “Southern Calif o r -n ia Super Lawyer” by her peers in LosAngeles magazine from 2005 to 2016.

Mia Yamamoto Criminal Defense Attorney

practice of the profession, and you have tokeep up with it.

Were you frightened the first time you appearedin front of a Judge? I was never afraid.

In 1943, you were born in an internment camp in Arizona. How did that inform your childhood?My mom insisted I call them concentrationcamps. She said not to use euphemisms,candy-coated words. I was too young to remember the camp, but I do remember theaftermath of the war, the anti-Japanese sentiments.

The reality of your birth gender dawned uponyou at an early age. What caused the epiphany?I was about five years old and I had threeolder brothers; they were violent bullies.But I had a little sister, and once we were inthe tub together. She looked at my bodyand said, “You are turning into one of thebrutes.” I didn’t want to be one of thoseguys.

You were a mediocre student at Maryknoll Elementary School and Cathedral High School,but later got serious at Los Angeles City College.What motivated you? I flunked out with allfails; I had 30 units of zero points. So, Ihad to get all As to get to a 2.0. I had tostudy hard and I started to enjoy it.

As a student, you visited libraries studying gender dysphoria. Was there much on the subject? I read over 100 cases studies.There were so many other people dealingwith the same issues, but every single per-son I read about was extraordinarily un-happy.

After getting your bachelor’s degree in Englishand government, you went to serve in Vietnamduring the height of the war. Why? I was con-stantly thinking about suicide, and the warwas an attractive alternative.

You were sent to the infantry in Pleiku. Were you scared? I was only in the field for a couple of months. It was the monsoon season, and there was not a lot of engage-ment.

In Transgender in Law you wrote that you witnessed the politics and payoffs of military bureaucracy. How so? For valor awards, thehigher your rank, the higher your award.There was a lot of hierarchy—it was agood old boys’ club that way. If you’re alifer, the only thing that distinguishes you is the medal.

You enrolled in UCLA Law School in 1968. Whydid you want to become a lawyer? My dad was a lawyer; I felt it was the way to helppeople.

How did your clients react when you made yourtransition? I came out to them all, individu-ally. They said, “No shit, man, you’re real-ly going to do that.” Then, they said, “I’llstick with you.”

You were voted a Southern California SuperLawyer for more than 10 years in a row? Whatsets you apart? I don’t know; I just try to domy job.

What is an example of a “cultural defense”?I believe that every single person’s experi-ence shapes his or her perceptions. Thathas to be taken into consideration by thetrier of fact and placed in context. It is relevant to the mens rea.

You cofounded the Multicultural Bar Alliance, a coalition of minority, women’s, and LGBT barassociations of Los Angeles. What is its goal?To bring together all the minority bar associations of those who have sufferedsome kind of exclusion.

What is the biggest legal challenge facing thetransgender community? There is exclusion in just about every part of society. That is a huge challenge. We are uncommon, but utterly ordinary.

You have said that you are a card-carrying, die-hard member of the ACLU. Why? They were the only ones who stood up for theJapanese Americans against the over-whelming sentiment of the country—itmattered to me.

What characteristic did you most admire in your

INTERVIEW BY DEBORAH KELLY

What is the perfect day? I’ve got a court ap-pearance, I have a motion on calendar, andI get to help somebody.

You are a private criminal defense attorney. What is your biggest challenge? Workingagainst the odds, working against thepower, working against the establish-ment.

From 1974-84, you worked as a Public De fender. Why did you leave? For freedom;I loved the job, but I didn’t love the limitations.

You have been practicing for decades. Whathas changed? The biggest change is thetechnology. Technology is overtaking the

mother? Oh, my mom…she was a fighter.My dad died when I was 13, and she be-came a single mom of six children.

What was your best job? Being a public de-fender.

What was your worst job? Working in a gasstation on Pico and Union.

If you were handed $10 million tomorrow, whatwould you do with it? I would donate to Inter-national Bridges to Justice and the ACLU. Iwould endow UCLA Law School, where Iwent, and Loyola Law School, where myfather went.

Who is on your music play list? Bruce Spring-steen and the E Street Band, the RollingStones, and the Beatles—I’m old; that’s my sound track.

What book is on your nightstand? Petty: TheBiography.

Which magazine do you pick up at the doctor’soffice? Sports Illustrated.

Where is your favorite vacation spot? Poipu,Kauai. My parents were from Hanalei,Kauai—I feel like it’s a return to my roots.

What do you do on a three-day weekend? Playthe guitar. I was in a rock ‘n roll band for25 years. It was called Use a Guitar, Go toPrison.

Do you have retirement plans? No.

What is your favorite sport as a participant?Basketball.

Do you have a favorite exercise? Ballet.

If your house were on fire, what would you grabon your way out the front door? My vintageLes Paul guitar.

Which feature on your iPhone do you wish youcould operate? I can barely use Uber.

Who is your favorite movie star? Gregory Peck, especially in To Kill a Mockingbird.

How do you get your news? I read the newspapers—Los Angeles Times and the DailyJournal.

If you could eat only one entrée for the rest ofyour life, what would it be? Filé gumbo.

What are the three most deplorable con ditions in the world? Poverty, ignorance, and war.

Who are your two favorite U.S. presidents?John F. Kennedy and Barack Obama.

What is the one word you would like on yourtombstone? Kindness.

10 Los Angeles Lawyer September 2016

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EXPERTS COME FROM ALL different backgrounds and practices.While some come from academia and may have provided experttestimony in dozens—even hundreds—of cases, others are workingprofessionals who may have little to no experience in a legal setting.Working with the latter group presents special challenges. First, theseexperts may be unfamiliar with their role and any associated privilegeconsiderations and might show little regard for counsel’s concernsabout potential disclosure of damaging information. Second, first-time testifying experts may rely too heavily upon counsel in preparingtheir reports, which can undermine the expert’s credibility and evenlead to the exclusion of his or her opinions.

One early challenge is determining what role the expert will play.In most cases, experts are retained to provide 1) consulting or advisoryservices before or during the course of litigation or 2) testimony in thelitigation.1 The differences between the two roles are stark. Generally,the consulting expert’s work is limited to assisting counsel in the“preparation of pleadings, the manner of presentation of proof, andcross-examination of opposing expert witnesses” while the testifyingexpert’s work will include findings and opinions “that go to the estab-lishment or denial of a principal fact in issue.”2 Although the consultingexpert’s work product and communications with counsel enjoy atleast qualified protection against disclosure,3 the testifying expert’sreport must be produced, and his or her prior work product and com-munications with counsel may also be discoverable.4

As a result, determining the expert’s role may have significantconsequences. For example, a testifying expert’s opinion, once pro-duced to the opposing party, will be exposed to criticisms regardingcredibility, reliability, and admissibility,5 while a consulting expert’sopinion will not be disclosed and therefore will not be subject tothe same scrutiny. Counsel should consider the expert’s public speak-ing abilities, presentation style, prior statements or work productrelated to the topic, and communications with counsel before de -ciding whether the expert should testify, as each of these issues maybe exposed to the trier of fact.

Once the expert’s role has been determined, counsel must manageprocess and communications to protect against the disclosure ofdamaging information. Counsel should closely monitor materialsprovided to the expert and, in general, avoid making privilegedmaterials available to the expert, as those materials could becomediscoverable.6 Counsel should also remind the expert that his or hercommunications may be discoverable, particularly in state courtwhere there are few protections against disclosure of a testifyingexpert’s materials.7 First-time experts may need frequent remindersof this, particularly if they are prone to self-deprecation or off-handremarks that could undermine their credibility or the weight of theiropinions. Counsel should consider conducting all communicationstelephonically to minimize the risk that these remarks will be subjectto production.

A second challenge lies in preparing the testifying expert’s report.Developing a report that presents the testifying expert’s opinions in

the most logical and persuasive manner is critically important. Thatreport may be submitted in support of summary judgment or attrial, and can help persuade fact-finders to accept a particular factor theory. In light of this, counsel might be tempted to take a primaryrole in drafting the expert’s report, and may even be asked by first-time experts to prepare the first draft of the report so the expert hassomething on which to base future efforts. Counsel must resist thistemptation.

One series of questions the expert is sure to be asked in depositionis: “Who prepared your report? How was it prepared? What assump-tions did you make in preparing it?” If the answers suggest theexpert merely adopted the opinions developed by counsel, there issure to be a significant fight over the credibility, reliability, andadmissibility of the expert’s report and testimony.8 This can largelybe avoided by making sure the expert had primary responsibilityfor drafting his or her report and that any edits from counsel areprovided in the form of comments or suggestions—not instructions.

Finally, first-time experts may not know what to expect duringtheir deposition or trial testimony. Counsel should always informthe expert in advance whether the deposition will be audio- orvideotape recorded, and should provide guidance regarding attire,tone, and mannerisms. More important, however, counsel shouldensure the expert knows everything about his or her own writtenreport—including citations—and is prepared to speak about his orher opinions and the bases for them. As with fact witnesses, preparationis key. Many first-time experts require assistance and guidance fromcounsel to complete their assigned roles. Working with these expertsrequires counsel to walk the fine line between providing that assistanceand avoiding any implication that the expert merely adopted opinionsdeveloped by counsel. While challenging, successful navigation ofthese issues can have a tremendous impact on the litigation and leadto a better resolution for the client. n

1 In some cases, an expert who provides consulting services may later be designatedas a testifying expert. See DeLuca v. State Fish Co., 217 Cal. App. 4th 671, 690(2013) (evaluating expert’s dual role).2 National Steel Prods. Co. v. Superior Court, 164 Cal. App. 3d 476, 489 (1985).3 See DeLuca, 217 Cal. App. 4th at 688-89; FED. R. CIV. P. 26(b)(4)(D).4 CompareNational Steel, 164 Cal. App. 3d at 489, with FED. R. CIV. P. 26(a)(2)(B),and FED. R. CIV. P. 26(b)(3)-(4).5 See People v. Kelly, 17 Cal. 3d 24 (1976); EVID. CODE §801. See also Daubert v.Merrell Dow Pharms., 509 U.S. 579 (1993); FED. R. CIV. P. 702.6 See National Steel, 164 Cal. App. 3d at 488; FED. R. CIV. P. 26(a)(2)(B)(i)-(ii),(B)(4)(C)(ii)-(iii).7 Since 2010, the Federal Rules of Civil Procedure have designated “draft reports”and “communications” as being “ordinarily” protected, although exceptions stillexist. See FED. R. CIV. P. 26(b)(4)(B).8 Federal courts have excluded expert terstimony when counsel had primary respon-sibility over drafting the report. See, e.g., Bekaert Corp. v. City of Dyersburg, 256F.R.D. 573, 579-80 (W.D. Tenn. 2009).

barristers tips BY SARAH KELLY-KILGORE

The Challenges of Working with First-Time Experts

Sarah Kelly-Kilgore is a securities litigation associate at Paul Hastings LLPand a member of the Barristers Executive Committee.

12 Los Angeles Lawyer September 2016

practice tips BY CATHY TA

RICH

ARD

EW

ING

IN THE COURSE OF COLLECTIONS ACTIVITIES, a creditor can becomesingularly focused on aggressively pursuing enforcement of a debtby levying against the debtor’s property or by demanding and receiv-ing payment from the debtor. However, if and when a debtor filesfor bankruptcy, the creditor may become the target of unwantedlitigation when it levied against or received property that, throughthe mere occurrence of the debtor’s bankruptcy filing, is consideredproperty of the bankruptcy estate. Thus, the creditor becomes partof the bankruptcy estate trustee’s litigation efforts to marshalproperty back into the bankruptcy estate under either turnover orpreference law, depending on whether the creditor’s collectionsactivities extinguished the debtor’s interest in property prior to thebankruptcy filing.

To put a bankruptcy estate trustee’s marshaling efforts against acreditor into context, it is helpful to understand that today’s bankruptcylaw exists to provide a debtor a financial “fresh start” from burden-some debts. As stated by the Supreme Court in 1934, the law’spurpose has both a public and a private interest, in that “it gives tothe honest but unfortunate debtor who surrenders for distributionthe property which he owns at the time of bankruptcy, a new oppor-tunity in life and a clear field for future effort, unhampered by thepressure and discouragement of preexisting debt.”1

To provide this fresh start, modern bankruptcy law has been for-mulated as an exchange between a debtor and his creditors of assetsfor a discharge. This exchange is rooted in Congressional legislationpassed in 1833, abolishing the English-originated legal practice ofimprisonment for debt and paving the way for today’s decriminalizationof bankruptcy.2 Fundamental to effectuating this modern exchangeare the several ways in which the current Bankruptcy Code providesfor the maximization and marshaling of a debtor’s assets from theway in which property of the estate is broadly defined to turnoverand preference law provisions. These recovery tools are designed tomaximize payment to creditors on a ratable basis, so that when a dis-charge is ultimately granted to a debtor, the exchange is not onlymodern, but fair.3

Property of the Estate

Under the Bankruptcy Code, a major tool for maximizing a bankruptcyestate is how property of the estate is defined, which includes 1) allnonexempt “legal or equitable interests of the debtor in property,”as of the bankruptcy filing—otherwise known as the petition date,4

2) all interests of the debtor and the debtor’s spouse in communityproperty as of the petition date,5 and 3) certain property that thedebtor acquires (or becomes entitled to acquire) within 180 daysafter the petition date.6

Property of the estate is also defined to take into account atrustee’s marshaling work against creditors by including property inwhich a debtor has no possessory interests as of the petition datebut which the trustee recovers from creditors.7 Moreover, the term“property” has been generously construed to include “all kinds of

property, including causes of action, disputed, contingent or rever-sionary interests, and all other forms of property.”8

Turnover and Preference Law

A bankruptcy estate trustee has two principal tools to recoverproperty that was levied by or paid to a creditor prior to the petitiondate. They are turnover and preference law.

Under the Bankruptcy Code, turnover law is focused on bringingback property of the estate that is in the hands of a third party sothat the bankruptcy estate trustee may monetize the property forthe benefit of the bankruptcy estate and its creditors. Specifically,turnover law applies when a noncustodian9 entity10 is in possession,custody, or control of estate property at any time during the case,and the property is of a type that a trustee may use, sell, or lease, tothe benefit of creditors.11 Unless the property is of inconsequentialvalue or benefit to the estate, the entity is required to deliver andturn over the property or its value to the trustee.12

In fact, this turnover power has been construed to allow a trustee

Bankruptcy Procedure in the Context of Turnover and Preference Law

Cathy Ta is an attorney with Best Best & Krieger LLP. Her practice focuses onbankruptcy, insolvency, and business litigation.

to recover property or its value from a creditorwho once had, but no longer has, possession,custody, or control of the property at thetime a turnover motion is filed.13 Currentpossession, custody, or control is not required,but possession, custody, or control at anytime during the case is sufficient.14 By allow-ing a trustee to seek recovery from any cred-itor so long as it had possession, custody, orcontrol of estate property at some point dur-ing the case reinforces the principles under-lying turnover law, which are to marshalassets back into the bankruptcy estate andto affirmatively require a creditor to turnover estate property that comes into the cred-itor’s possession.

Similarly, preference law is aimed at bring-ing back property of the estate into the handsof a third party, but unlike property subjectto turnover law, this property had been trans-ferred to the third party prior to the petitiondate. Additionally, preference law serves theadditional purpose of guarding against adebtor who, while sliding into bankruptcy,favored one creditor over another by makinga payment or other transfer to that creditor.Preference law avoids the preferential transferso that the recovered property may be mar-shaled back into the bankruptcy estate to beredistributed ratably among its creditors.

Specifically, under the Bankruptcy Code,any transfer made by a debtor within 90 daysof the petition date15 is statutorily defined aspreferential if and when the transfer is madeto or for the benefit of a creditor, for or onaccount of an antecedent debt, and the resultof which enables the creditor to receive morethan it would have received—in a Chapter 7liquidation, had the transfer not been made—and in the bankruptcy case, as otherwise pro-vided for under the Bankruptcy Code.16

There are some defenses, for example newvalue, ordinary course of business, and con-temporaneous exchange.17 However, in es -sence, under preference law, a creditor is tar-geted for recovery on account of a certainpayment or transfer statutorily defined as pref-erential so that assets may be marshaled backinto the estate for a ratable distribution tocreditors.

Whether a trustee uses turnover or pref-erence law against a creditor will depend onwhether there was a transfer in ownershipor title of property. If there was an incompletetransfer, the debtor and the estate wouldretain some identifiable property interest thatwould be included in the broadly definedproperty of the estate, and turnover lawwould apply. If there was a complete transferin ownership or title, the debtor and theestate would not maintain any identifiableproperty interest to be included in propertyof the estate. In this circumstance, the prop-erty must be recovered first through avoidance

of the transfer before the property may beincluded in property of the estate.18

Whether there was a transfer in ownershipor title of property prior to the petition datewill depend on state law. While bankruptcylaw provides for what a debtor’s interests inproperty is included in property of the estate,it is state law that determines the extent of adebtor’s interests, if any, in property itself.19

Illustrative Cases

In re Churchill Nut Co. is an unusual casethat highlights how turnover and preferencelaw are two sides of the same coin. 20 In thiscase, a walnut grower delivered 236 tons ofwalnuts to the debtor, a nut processor, forprocessing. After receiving minimal payment,the grower sued the debtor for damages andto foreclose on its producer’s lien. The growerobtained a judgment in its favor and thereafterobtained a writ of execution. The sheriff leviedon the writ by seizing 166 tons of shelled nutsfrom the debtor, but before the actual sale ofnuts, the debtor filed for bankruptcy. Thebankruptcy court found that under Californialaw when the sheriff seized the shelled nuts,possession was transferred to the benefit ofthe grower. However, this transfer did notextinguish the debtor’s interest in the shellednuts because 1) they were still subject to otherproducers’ liens and 2) they were tangibleproperty with uncertain value that had to beliquidated into money in order to effectuate atitle transfer. As a result, the grower and thesheriff, as a custodian of the debtor’s property,were ordered to turn over the shelled nuts tothe bankruptcy estate trustee.

Had the sheriff completed the sale priorto the debtor’s bankruptcy filing, so thatthe only duty left for the sheriff would beto turn over money to the grower,21 the salewould have extinguished the debtor’s inter-est prior to the bankruptcy filing and placedthe money outside of turnover law. Never -theless, the sale would be subject to avoid-ance under preference law as the sale wouldbe a preferential transfer from the debtorto the grower.

In contrast to In re Churchill Nut Com -pany, in which there was a money asset in -volved, In re Paul22 was a case in which theCalifornia State Board of Equalization leviedthe debtor’s bank accounts—a money asset—prior to the petition date. The bankruptcycourt held that under California law, at themoment the notice of levy was served, own-ership of the funds transferred to the Board.As a result, the bankruptcy court concludedthat the funds were not property of the estateand therefore would only be recoverable as apreferential transfer.

Even when a money asset is involved, how-ever, there may be a scenario in which a cred-itor’s levying activities will not terminate or

overcome a debtor’s interest in the moneyasset because the debtor’s interest may be spe-cial or superior to any one creditor’s claim.In Hernandez,23 the sheriff levied funds onbehalf of a judgment creditor but had yet to turn them over to the creditor when thebankruptcy was filed. The Bankruptcy Ap -pellate Panel for the Ninth Circuit U.S. Courtof Ap peals found that the levied funds wereexempt Social Security benefits; therefore,ownership had not transferred. “Becausedebtor had an exempt property interest in the[Social Security] funds, we conclude that [thecreditor’s] levy did not operate to extinguishthose interests.”24

Another distinctive and nuanced scenarioinvolving levying a money asset is a wagegarnishment. In the Carlsen case,25 the IRSlevied wages that had been earned prepetition.Because in California a wage garnishmentmerely creates a lien and does not divest thedebtor of all interest in the wages, the bank-ruptcy court held that the garnished wagesconstituted property of the estate. The courtdetermined that the IRS had a duty to takepositive action to halt the postpetition con-tinuation of the garnishment, and it had toreturn the garnished wages.26

To the extent a collection activity createsa lien, a lien may be subject to avoidanceunder preference law unless the lien is perfectedprior to the 90-day preference period. In theHilde case,27 the Ninth Circuit U.S. Court ofAppeals found that under California law alien is created on all of the debtor’s nonexemptpersonal property from the date of an orderto appear for a debtor’s examination once thedebtor is served with the order, otherwiseknown as an ORAP lien. Likewise, an ORAPlien is created on the debtor’s personal propertyin the hands of a third party when the thirdparty is served with a notice of the order.28 Ifa turnover order is issued at the end of thedebtor’s examination, another lien is createdthat relates back to the ORAP lien. Therefore,if a bankruptcy proceeding is filed more than90 days after an ORAP lien is created, theORAP lien is not avoidable under preferencelaw and has priority over the claim of a bank-ruptcy trustee. In this case, the Ninth Circuitheld that the ORAP lien was not avoidablebecause it was created more than 90 daysprior to the petition date and therefore attachedto all of the debtor’s nonexempt personalproperty in the bankruptcy.29

Under California law, creditors are withintheir rights and powers to proceed against adebtor to enforce and collect on debts. How -ever, creditors should be aware that should adebtor file for bankruptcy, all that a creditormay have completed, whether it be levyingon property or receiving payment on the debt,may be subject to unwinding, and the creditormay be required to return property included

Los Angeles Lawyer September 2016 13

in property of the estate. A bankruptcy estatetrustee, or a debtor-in-possession in a Chapter11 reorganization case,30 under turnover orpreference law, would be tasked in the fun-damental work of marshaling property of theestate for the benefit of the bankruptcy estateand its creditors, as an essential part of modernbankruptcy law. n

1 Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)(emphasis in original).2 Charles J. Tabb, The History of Bankruptcy Laws inthe United States, 3 AM. BANKR. INST. L. REV. 5, 6, 16(1995).3 Ehring v. Western Cmty. Moneycenter (In re Ehring),91 B.R. 897, 903 (B.A.P. 9th Cir. 1988).4 11 U.S.C. §541(a)(1).5 11 U.S.C. §541(a)(2) (all community property is includ -ed in property of the estate, except for community prop-erty that is under the sole management of the debtor’sspouse).6 11 U.S.C. §541(a)(5).7 11 U.S.C. §§541(a)(3), 542, 543, 547, 548, 550.8 United States v. Sims (In re Feiler), 218 F. 3d 948(citing S. REP. No. 989 (1978), reprinted in 1978U.S.C.C.A.N. 5787, 5868; H.R. REP. No. 595 (1978),reprinted in 1978 U.S.C.C.A.N. 5963, 6323 (footnoteomitted)).9 The Bankruptcy Code provides a separate section forturnover of estate property by custodians. See 11 U.S.C.§543.10 The term “entity” is defined as including person,estate, trust, governmental unit, and U.S. trustee. 11U.S.C. §101(15).

11 11 U.S.C. §542(a).12 Id.13 Shapiro v. Henson, 739 F. 3d 1198, 1200-01 (9thCir. 2014).14 Id.15 This 90-day preference period is extended to oneyear as to insider-creditors. 11 U.S.C. §547(b)(4)(b).See also 11 U.S.C. §101(31) (“insider” is defined toinclude an individual debtor’s relatives, general partners,partnership, and corporation of which the debtor is adirector, officer, or person in control, among others).16 11 U.S.C. §547(b).17 11 U.S.C. §547(c).18 United States v. Whiting Pools, Inc., 462 U.S. 198,209 (1983). See also In re Anaheim Elec. Motor, Inc.,137 B.R. 791, 794-96 (Bankr. C.D. Cal. 1992).19 Paul v. State Bd. of Equalization (In re Paul), 85 B.R.850, 853 (Bankr. E.D. Cal. 1988).20 Richardson v. Wells Fargo Bank (In re Churchill NutCo.), 251 B.R. 143 (Bankr. C.D. Cal. 2000) (the bank-ruptcy court also conducted a preference analysis toconclude that the shelled nuts constituted recoverableproperty of the estate, but its main reasoning was thata transfer of ownership had not occurred prior to thebankruptcy).21 See also Ramirez v. Fuselier (In re Ramirez), 183B.R. 583 (B.A.P. 9th Cir. 1995) (The B.A.P. reversedthe bankruptcy court, finding that the California levystatute did not specify that a completed levy—in thiscase, an installation of a keeper on the premises by theMarshal—transfers ownership in property; the propertyhad to be liquidated; and the property of client fileswas necessary for the attorney- debtor’s representationof clients. The B.AP. held that the judgment debtorretained a possessory and reversionary interest in allthe levied property, thus the property constituted property

of the estate. The B.A.P. remanded the case to determinewhether the Marshal’s violation of the automatic staywas willful and whether actual and punitive damageswere appropriate.)22 In re Paul, 85 B.R. 850.23 Collect Access LLC v. Hernandez (In re Hernandez),483 B.R. 713 (B.A.P. 9th Cir. 2012).24 Id. at 724.25 Carlsen v. Internal Revenue Service (In re Carlsen),63 B.R. 706 (Bankr. C.D. Cal 1986).26 But see In re Crosier, No. LAX 90-52768 VZ, 1991Bankr. LEXIS 1102 (Bankr. C.D. Cal. July 5, 1991)(The IRS levied the debtor’s IRA prior to the bankruptcyfiling. The bankruptcy court held that the IRA wasintangible property and that the levy transferred titleand ownership to the IRS, thus the IRA was not propertyof the estate).27 Southern Cal. Bank v. Zimmerman (In re Hilde),120 F.3d 950 (9th Cir. 1997).28 See CIV. PROC. CODE §§708.110(d), 708.120(c).29 See, e.g., Dewhirst v. Citibank (In re ContractorsEquipment Supply Co.), 861 F. 2d 241, 245 (9th Cir.1988) (The debtor gave a creditor a security interest inits accounts receivable. The debtor then contracted witha company to provide equipment before filing bank-ruptcy. The debtor completed the order postpetitionand the company paid the debtor direct instead of thecreditor. The Ninth Circuit held that the accounts receiv-able were part of the estate because the assignmentinvolved only a security interest, not a transfer title;therefore, the debtor retained an interest in the accountsreceivable and was sufficient to bring the accountsreceivable into the debtor’s reorganization estate.)30 11 U.S.C. §1107(a) (a Chapter 11 debtor-in-possessionshall have all the rights, powers, and duties of a trustee,except for the right to compensation).

14 Los Angeles Lawyer September 2016

Los Angeles Lawyer September 2016 15

FORENSIC INSPECTION HAS BECOME a powerful new tool in civillitigation as discovery focuses more on electronically stored infor-mation (ESI). Although forensic inspections can vary in scope andpurpose, most involve the copying (or mirror imaging) of a computerhard drive and the use of software to comb through data in anattempt to identify and recover files.1 Increasingly, forensic inspectionsalso involve the examination of web-based e-mail and cloud storageaccounts.

In the digital age, a forensic inspection is a potential game-changerin almost any litigation involving electronically stored evidence. Itcan uncover a “smoking-gun” document, oreven evidence of spoliation, the latter of whichmay lead the court to issue severe—even ter-minating—sanctions.2 For this reason, courtsare quickly becoming more versed in (andreceptive to) forensic inspections. Certain con-siderations and guidelines may assist in securingand managing a forensic inspection of ESI.

Demonstrating the Need

The first step in conducting discovery of ESIis to demonstrate the need. To secure a forensicinspection of another party’s hard drives ore-mail accounts, an attorney first must be ableto show the court that such an inspection isneeded. Generally, courts are looking for evidence that the opposingparty failed to conduct an adequate search for documents in responseto discovery requests.3 To prove the failure, counsel may considerusing depositions and interrogatories to explore the scope of theother side’s document searches: What hard drives, e-mail accounts,and other electronic platforms were searched? What types of fileswere searched? What search terms were used? Or counsel may pointto discrepancies and inconsistencies in document productions, suchas the production of e-mail with missing attachments or metadata.For example, in White v. Graceland College, the federal districtcourt granted in part a motion for a forensic inspection after themoving party revealed inconsistencies in the creation and sent datesof certain e-mail and attachments that the opposing party was unableto explain.4 Furthermore, counsel should examine e-mail and corre-spondence that include multiple senders and recipients. Did some ofthe senders or recipients fail to produce their copies of the same e-mail? If so, this may demonstrate that those people did not conductadequate searches of their e-mail (or improperly destroyed evidence).In Advante International Corp. v. Mintel Learning Technology, forexample, the district court for the Northern District of Californiagranted a forensic inspection after the plaintiff produced “materi-ally-different versions” of the same e-mail, indicating that the e-mailmay have been “altered.”5

In addition, evidence of spoliation—whether negligent or inten-tional—can also provide a compelling basis for a forensic inspection.6

This is especially true when there is reason to believe a forensic exam-ination may be able to resurrect deleted or corrupted files. Even ifthe inspection does not result in the recovery of actual documents, itmay uncover additional evidence of spoliation, for example, evidencethat the user downloaded and ran software designed to erase files.7

In the same vein, courts often grant forensic inspections when a partyfails to issue a litigation hold, reasoning that lack of preservationefforts increases the chance that electronic data has been deleted andcan only be recovered through a forensic inspection.8

While it is a common misconception that courts will order a

forensic inspection only when the moving party can show intentionalspoliation or bad faith, courts, in fact, regularly award inspectionsfor negligent or inconsistent document searches—or even in theabsence of any discovery misconduct whatsoever. As long as thepotential benefit of the forensic inspection outweighs the burden,there is an argument to be made for the inspection.9

Planning for an Inspection

Once an inspection has been ordered, negotiated, or authorized, thenext step is to make a plan. Forensic inspections generally are con-ducted pursuant to a protocol that sets out the scope of the inspection(i.e., what hard drives and e-mail accounts will be searched), themethods by which the forensic examiner will conduct the inspection,and the schedule for completing the inspection. Because many courtsdo not have extensive experience with forensic examinations, it isadvisable to include a draft forensic inspection protocol with anymotion to the court. This will help the court understand exactlywhat is being sought. Indeed, some courts will not even consider amotion for forensic inspection without first seeing a detailed protocol.

practice tips BY KATHERINE V.A. SMITH AND MICHAEL HOLECEK

Guidelines for Managing a Forensic Inspection of ESI

A forensic inspection is a potential game-changer in almost any

litigation involving ESI. It can uncover a “smoking-gun” document,

or even evidence of spoliation...which may lead the court to issue

severe—even terminating—sanctions.

Katherine V.A. Smith is a partner in the Los Angeles office of Gibson, Dunn& Crutcher LLP, where she practices with the firm’s labor and employmentand litigation departments. Michael Holecek is an associate in Gibson Dunn’sLos Angeles office, where he practices in the firm’s litigation and appellateand constitutional law departments.

In Thompson v. Workmen’s Circle MulticareCenter, for example, the federal district judgeheld that “before [the court] could determinewhether to grant plaintiff access to defendant’scomputers, she would need to obtain anexpert forensic technician and submit a spe-cific proposal identifying the expert, describ-ing his credentials, and setting forth theprecise nature of the inspection he intendedto conduct.”10

To draft a forensic inspection protocolthat both fits the client’s needs and will bemore amenable to a court, an attorney shouldreview protocols that have been adopted byother courts—a judge may be more comfort-able adopting a protocol that is substantiallysimilar to those that have been approved inthe past.11 The attorney should also confirmthat the protocol is workable for his or hercase and the types of devices at issue, oftenby showing the protocol to someone experi-enced in this area to ensure that it doesn’tspecify timelines or results that are unrealistic.The attorney should also be sure the proposedprotocol is broad enough to cover all antic-ipated needs and identifies all electronicdevices, hard drives, and cloud-based storagethat may yield discoverable information. Fore-mail, the protocol should identify all therelevant e-mail accounts for each party-affil-iated witness and specifically request thateach witness disclose his or her usernamesand passwords.

The attorney should consider incorporatinginto the protocol steps for privilege and privacyreview by opposing counsel. For example,the protocol may direct the forensic examinerto first send all of the inspection results tothe opposing counsel for review and redaction.Although there may be situations when thistype of provision is akin to the fox guardingthe hen house, in other cases, these precau-tionary measures will make it difficult for theother side to oppose the inspection. In PlayboyEntertainment v. Welles, for example, thedistrict court overruled privacy and privilegeconcerns, reasoning that counsel “ha[s] anopportunity to control and review all of therecovered [documents]...and produce...onlythose documents that are relevant, responsive,and non-privileged.”12

The goal should be to show the courtthat if it grants the motion for a forensicinspection, the inspection will proceed accord-ing to an orderly and self-executing plan.This will alleviate what is likely to be one ofthe court’s primary concerns in granting sucha motion: that it will have to spend its valu-able time overseeing and intervening in theinspection process.

Choosing an Examiner

A forensic examination is only as good asthe examiner. Accordingly, it is critical to

choose a reliable and reputable forensic exam-ination firm. This is true not only becausethe forensic examiner will play a crucial rolein the forensic inspection but also becausehe or she may submit reports to the court,or even testify at a hearing or trial, regardingthe results of the forensic inspection. Thecourt will likely give the examiner’s opinionsignificant weight since the court appointedthe examiner on the basis of his or her sub-ject-matter expertise. In addition, when dis-putes arise between the parties regarding thescope of the forensic inspection (for example,whether a particular forensic test or reportis called for by the protocol), the forensicexaminer may end up playing the role of ade facto mediator. Indeed, some courts for-mally appoint the forensic examiner as an“officer of the court.”13

Thus, the attorney should take the forensicexaminer selection process seriously. Courtsoften ask each party to submit a list of accept-able examiners. The attorney should dili-gently vet each examiner’s credentials andcap abilities, and be sure to run conflictschecks.

An attorney seeking a forensic inspectionmay also wish to retain a forensics consultantto help navigate the process. This individualis someone hired and paid independently,outside of the court-approved forensic inspec-tion. This consultant can advise the attorneyas to the likelihood of recovering useful data(i.e., whether the potential benefit of theforensic inspection is worth the expenditureof time and money), assist in crafting theforensic inspection protocol submitted to thecourt, and review and help make sense ofthe results of the forensic inspection. Theattorney should consider engaging the forensicconsultant early in the process to garner thesebenefits.

Who Pays?

While some courts require the moving partyto pay for the forensic inspection, other courtssplit the cost between both parties. Othercourts require the opposing party—the partywhose conduct necessitated the inspection—to pay the full cost. In Helget v. City of Hays,for example, the district court held that thedefendant should “bear the cost of the foren-sic examination” because the defendant “hadan obligation to preserve this information…[r]egardless of whether it was destroyed inten-tionally or negligently.”14

Whether an attorney should ask the courtto force the other side to pay for the inspec-tion will depend on the circumstances of thecase. Certainly, the case for such an allocationwill be stronger when there has been delib-erate misconduct by the opposing party.However, when there is no evidence of badfaith, a party will likely appear more rea-

sonable—and its motion will be easier togrant—if it offers to pay for some or all ofthe inspection.

Some courts prefer to shift the costs ofthe forensic inspection down the road, de -pending on the results.15 For example, a courtmay initially require the moving party to payfor the inspection, but then shift the costs tothe opposing party if the inspection ultimatelyreveals discovery misconduct. Alternatively,the court may initially require the opposingparty to pay for the inspection and then shiftthe costs to the moving party if the inspectionis not fruitful (although arguably the opposingparty should still pay, because its conductcompelled the inspection in the first place).

Managing Expectations

Any attorney seeking a forensic inspectionmust be careful to manage expectations.Before moving the court for a forensic inspec-tion, the attorney should carefully considerthe costs and the realistic benefits. What doc-uments are likely to come out of the inspec-tion, and is it realistic that the inspectionwill uncover those documents? This is some-thing a forensics consultant can help assess.For example, is the opposing party a largecorporation that maintains sophisticatedbackup and storage systems? Or is it an indi-vidual who recently replaced his only com-puter and phone? An inspection in the formercase is more likely to be fruitful, but alsomore expensive. If the scope of the forensicinspection will include e-mail, the attorneyshould consider whether they are Web-basede-mail accounts (like Gmail), or server-basede-mail accounts (like Outlook). Some Web-based e-mail accounts permanently erasedeleted e-mail after a relatively short periodof time, such as 30 days, making recoveryof deleted e-mail unlikely.16 Managing expec-tations regarding the outcome of the forensicinspection is therefore critical.

With increasing frequency, litigants areusing forensic inspections of their opponent’shard drives and e-mail accounts to recoverkey evidence not produced in the ordinarycourse of discovery. Knowing how to get aforensic inspection—and then how to prop-erly manage the inspection process—can pro-vide a potent new weapon in the civil dis-covery arsenal. n

1 See generally Orin S. Kerr, Searches and Seizures ina Digital World, 119 HARV. L. REV. 531, 562 (Dec.2005).2 See, e.g., Ceglia v. Zuckerberg, 2013 U.S. Dist. LEXIS45500 (W.D. N.Y. Mar. 26, 2013).3 See Peskoff v. Faber, 244 F.R.D. 54, 65 (D.D.C.2007).4 SeeWhite v. Graceland Coll. Ctr. For Prof. Dev. &Lifelong Learning, Inc., 2009 WL 722056, at *7 (D.Kan. Mar. 18, 2009).5 See Advante Int’l Corp. v. Mintel Learning Tech.,2006 WL 3371576, at *1 (N.D. Cal. Nov. 21, 2006);

16 Los Angeles Lawyer September 2016

see also, e.g., Ameriwood Indus., Inc. v. Liberman,2006 WL 3825291, at *4-5 (E.D. Mo. Dec. 27, 2006)(ordering a forensic inspection when the requestingparty identified an e-mail that the defendant shouldhave produced but did not); Simon Prop. Group L.P.v. mySimon, Inc., 194 F.R.D. 639, 641 (S.D. Ind.2000) (allowing the plaintiff to mirror image thedefendant’s computers when there were “troublingdiscrepancies with respect to defendant’s documentproduction”).6 See Ellis v. Toshiba Am. Info. Sys., Inc., 218 Cal.App. 4th 853, 861 (2013) (affirming a decision toorder forensic examination when, according to thetrial court, a lawyer seeking attorney’s fees had “exer-cised extremely poor judgment to wipe and delete anoriginal file of [her] timesheets”); Preferred CarePartners Holding Corp. v. Humana, Inc., 2009 WL982460, at *14−15 (S.D. Fla. Apr. 9, 2009); PlayboyEnter. v. Welles, 60 F. Supp. 2d 1050, 1052 (S.D. Cal.Aug. 2, 1999).7 See 1-800-East W. Mortg. Co. v. Bournazian, 2010WL 3038962 (Mass. Super. Ct. July 18, 2010).8 See Klipsch Grp., Inc. v. Big Box Store Ltd., 2014WL 904595, at *6-7 (S.D. N.Y. Mar. 3, 2014) (“autho-riz[ing] plaintiff to undertake a forensic investigationinto the state of defendants’ computer systems” inpart due to “defendants’ failure to issue a timely oradequate [litigation] hold”); Ferron v. Search Cactus,L.L.C., 2008 WL 1902499, at *2-3 (S.D. Ohio April28, 2008).9 See A.M. Castle & Co v. Byrne, 123 F. Supp. 3d895, 899 (S.D. Tex. 2015); Brady v. Grendene USA,Inc., 2015 WL 4523220, at *9 (S.D. Cal. July 24,2015) (denying a motion to compel forensic exami-nation because the moving party was unable to establishthat “such an examination is likely to yield emailsthat have been deleted or purged”).10 See Thompson v. Workmen’s Circle Multicare Ctr.,2015 U.S. Dist. LEXIS 74528, *5 (S.D. N.Y. June 9,2015) (finding that the “plaintiff has not met thethreshhold requirements for forensic examination ofdefendant’s computers or other equipment because itis not clear that she has selected an expert, and shehas not specified what tests her expert would per-form”).11 See, e.g., Campbell All. Grp., Inc. v. Dandekar,2014 WL 145037, at *3 (E.D. N.C. Jan. 13, 2014);Ameriwood, 2006 WL 3825291, at *6.12 See Playboy Enter. v. Welles, 60 F. Supp. 2d 1050,1054 (S.D. Cal. Aug. 2, 1999).13 See id.; Dodge, Warren & Peters Ins. Servs., Inc. v.Riley, 105 Cal. App. 4th 1414, 1421 (2003) (affirmingan injunction that “require[d] the preservation of elec-tronic evidence by prohibiting Defendants from destroy-ing, deleting or secreting from discovery any of theirelectronic storage media and…allow[ing] a court-appointed expert to copy all of it, including computerhard drives and discs, to recover lost or deleted files”).14 See Helget v. City of Hays, 2014 WL 1308893, at*6 (D. Kan. Mar. 31, 2014); see also, e.g., Peter KiewitSons, Inc. v. Wall St. Equity Grp., Inc., 2012 WL1852048, at *20 (D. Neb. May 18, 2012) (the pro-ducing party should pay for the forensic examinationwhen it failed to conduct a good faith search for ESI);Peskoff v. Faber, 251 F.R.D. 59, 62-63 (D. D.C. 2008).15 See, e.g., Fidelity Nat’l Title Ins. Co. v. CaptivaLake Invs., LLC, 2015 U.S. Dist. LEXIS 1350, *21(E.D. Mo. Jan. 7, 2015).16 See, e.g., https://support.google.com/a/answer/151128?hl=en (Google’s e-mail retention policy); seealso Brady v. Grendene USA Inc., 2015 U.S. Dist.LEXIS 97734, *26-27 (S.D. Cal. July 24, 2015) (deny-ing a forensic inspection request in part because “[t]hedefendants have not established through declarationor exhibit…that such an examination is likely to yieldemails that have been deleted or purged”).

Los Angeles Lawyer September 2016 17

18 Los Angeles Lawyer September 2016

MIC

HA

EL C

ALL

AW

AY

who has everwatched a Cali-

fornia sunset or gazed out at Los Angeles’scity lights at night knows firsthand how spec-tacular and unique these images can be.Therefore, it should come as no surprise thatpeople pay a significant premium for LosAngeles properties that display one or moreof the city’s stunning views. Despite the sig-nificant monetary and emotional value attrib-uted to views, most people know very littleabout whether their views are protected. Theyare dismayed when they later discover thatCalifornia law does not protect views absentan express written agreement or restriction.They mistakenly believe that because theypaid extra for their view, it must be protected.Even home buyers who review title and con-firm that there are recorded restrictions pro-tecting the views are blindsided when theylater discover that such restrictions are notenforceable.

View protection disputes are on the riseand likely to continue. Homeowners anddevelopers are increasingly remodeling hillsideproperties, often disregarding the impact onneighboring properties. Armed with deeppockets, the developers often play a game ofchicken with the affected homeowners. Eitherthe homeowners lack the resources to engagein an expensive drawn-out litigation, or if theydo, the developer can rely on a laundry list ofaffirmative defenses that may render the applic-able deed restrictions unenforceable.

In a recent high-profile view dispute in -volving two properties situated in the “BirdStreets,” the plaintiff and defendant werenext-door neighbors in a residential plannedcommunity known as the Beverly Highlands.1

The Beverly Highlands, which consists ofproperties spread out along Blue Jay Wayand many of the surrounding streets, is gov-erned by a declaration of restrictions that wasrecorded in 1952 and subsequent ly amended

in 1960 to include a recorded Schedule F.2

Because of the community’s topography, thedeveloper included height restrictions inSchedule F, which have the effect of protectingthe residents’ privacy and preserving theircity and ocean views. Schedule F restricts theheight of any structure on the respective prop-erties to no more than 16 feet above gradeand one story.

The defendant purchased his property in2009. At the time, the plaintiff’s propertywas owned by an A-list actress who wasfilming a feature movie abroad. Sometimebetween late 2009 and early 2010, the defen-dant, without requesting a variance from hisneighbors, began second-floor constructionon his property. The plaintiff’s predecessor-in-interest was unaware of the second-floor

Amir A. Amini is senior counsel with Sanchez &Amador, LLP, in its Los Angeles office, and leadsthe firm’s business and real estate litigation team.

A Right to a

VIEWCovenants that run with the land andequitable servitudes are both fundamentalto land use restrictions that protect views

by Amir A. Amini

MCLE ARTICLE AND SELF-ASSESSMENT TEST

By reading this article and answering the accompanying test questions, you can earn one MCLE credit.

To apply for credit, please follow the instructions on the test answer sheet on page 21.

ANYONE

construction. Several neighbors complainedto the defendant, sending him written noticethat the second-floor construction violatedthe declaration’s height restrictions and re -minded the defendant of his obligation toobtain a variance before proceeding. Despitethe neighbors’ objections, the defendant com-pleted the remodeling.

The plaintiff purchased the property in2013. Sometime in late 2014, the defendantbegan expanding the existing second floorof his property thus impacting the plaintiff’spanoramic view of the Los Angeles basin.The defendant ignored the plaintiff’s requeststo halt construction. With no homeowner’sassociation to help protect his rights—theBeverly Highlands Homeowners Associationhad been dissolved in 1999—the plaintifffiled suit, alleging causes of action for breachof restrictive covenant, private nuisance, anddeclaratory relief relating to the infringing2010 construction and separately for theinfringing 2014 construction. The plaintiffimmediately moved for a preliminary andmandatory injunction, seeking not only tohalt the infringing 2014 construction butalso to tear it down. Subsequently, the courtgranted the plaintiff’s motion and issued amandatory injunction ordering the defendantto tear down the infringing 2014 constructionwithin thirty days, whereupon the defendantimmediately appealed the ruling.

After nearly a year and a half of contestedlitigation, including a full briefing of theappeal, the parties reached a global settlement.Under the terms of the ensuing agreement,the defendant would sell his property to athird party who would agree to tear downthe entire second floor, honor the height restric-tions in Schedule F so long as they remainedenforceable, pay the plaintiff’s attorney’s fees,and provide the plaintiff with a 60-year vieweasement. The plaintiff, in return, would with-draw the lis pendens recorded against thedefendant’s property and dismiss the case.

Although the plaintiff obtained a favorableresult, the defendant did raise several poten-tially colorable defenses. The defendant’s pri-mary argument on appeal was that the heightrestrictions are neither covenants that runwith the land nor equitable servitudes butrather personal powers of the associationthat were abandoned with the association’sdissolution. In addition, the defendant raisedthe following defenses: lack of notice, statuteof limitations, laches, estoppel, waiver, changedcircumstances, and that height restrictions areunreasonable.

Covenants That Run With the Land

There are two basic methods of enforcingland use restrictions like the declaration: 1)covenants that run with the land, or 2) equi-table servitudes.3 Only covenants specified

by statute run with the land, primarily thosein Civil Code Sections 1462 and 1468.4 UnderSection 1462, a covenant that benefits theproperty may run with the land, but not onethat burdens it.5 Under Section 1468 bothbenefits and burdens can run with the land,but the former Section 1468 only applied toa covenant between the owner of land withthe owner of other land.6 Section 1468 wasamended in 1968 and 1969 to apply to cov -enants between a grantor and grantee aftertheir enactment.7

In the Bird Streets litigation, the defendantargued that the height restrictions burdenedthe defendant’s land and thus did not runwith the land under Section 1462. Further,former Section 1468 does not apply becausethe declaration of restrictions applied betweenthe grantor (declarant) and the grantee (pur-chasers of the individual lots).

The plaintiff responded that the heightrestrictions are mutual covenants involvingan entire subdivision, thus the burdens canalso be classified as benefits.8 As the defendantcorrectly pointed out, however, the mutualbenefit theory was rarely applied under Section1462. The majority of cases rejected themutual benefit theory.9 It is unlikely that thecourt of appeals would have found the heightrestrictions enforceable as covenants runningwith the land under either Section 1462 orformer Section 1468.

Equitable Servitudes

Equity courts, recognizing that the limitationson covenants running with the land led toinequitable results, adopted the concept of“equitable servitudes”10—restrictions on theuse of land that run with the land. The threerequirements of an equitable servitude arethat 1) the deeds must reflect the intentionof both the grantor and the grantee that theproperty be restricted pursuant to a generalplan, 2) the deeds must show that the parcelconveyed is subject to the restriction at issuein accordance with the plan for the benefitof all the other parcels in the tract and suchother parcels are subject to the same restric-tion for its benefit, and 3) the dominant andservient tenements must be adequately de -scribed.11 However, when a declaration ofrestrictions is recorded before the first deedout from the subdivider, all lots in the sub-division will be governed by the restrictionswhether or not each deed expressly referencesthe recorded declaration.12

Courts have drawn a distinction betweenan equitable servitude and a personal power.Generally, when a grantor reserves the rightto enforce or waive a deed restriction, it isconsidered a personal power of the grantorand not an enforceable equitable servitudethat runs with the land.13 A personal powerlacks the mutuality of enforcement charac-

teristic of an equitable servitude. The deter-mination of whether a restriction is personalor runs with the land is factual and rests uponintent, notice, and other equitable factors.14

In the Bird Streets litigation, the defendantargued that while some provisions in the dec-laration might be enforceable equitable servi-tudes, the height restrictions were personalpowers. The defendant focused on Section4.01(b) in Schedule F, which the defendantargued gave the declarant discretion to ap -prove changes to the height restrictions. Themanner in which the declarant approved vari-ations was set forth in Section 7.01 of ScheduleF, and any variation required written approvalof the declarant. Finally, the defendant arguedthat under Schedule F the approval rights andpowers of the declarant could only be assignedto the association and not to individual home-owners. Thus, the defendant concluded thatthe language of the declaration clearly indi-cated that the height restrictions were intendedto be a personal power of the declarant andits assignee association, and not mutual equi-table servitudes enforceable by individualhomeowners.

In response, the plaintiff argued that thedeclaration satisfied the requirements for anequitable servitude. The declaration 1) wasrecorded and provided a legal description ofthe properties in the subdivision, 2) statedthat each of the restrictions therein wouldbind and benefit each parcel as a plannedcommunity, 3) stated that the intention ofthe declarant to establish a general plan forthe development and improvement of thedescribed property and to subject the prop-erties to the restrictions therein, includingthe height restrictions, and 4) stated thateach of its restrictions ran with the land andwere binding on grantees and successors.

The plaintiff rejected the defendant’s per-sonal power argument. Section 7.01 ofSchedule F, Approval of Plans, did not addresshow to obtain a variance. To the contrary, itaddressed how to obtain approval of con-struction plans, all of which must be com-pliant with the declaration’s restrictions.Further, the discretion of either the declarantor the association, or both, is limited to ensur-ing that any proposed structure is not “inhar-monious or out of keeping with the generalplan.” Either the declarant or association,or both, had a fiduciary duty to enforce therestrictions in good faith.15 If the homeownerswere dissatisfied, Article XIV of the decla-ration gave them the right to remove thedeclarant’s approval power. Accordingly, theplaintiff concluded that neither the declarantnor the association had absolute discretionto vary the height restrictions. Rather, toobtain a variance, the defendant was requiredto comply with the procedure set forth inArticle XIV, which can be employed by any

20 Los Angeles Lawyer September 2016

Los Angeles Lawyer September 2016 21

MCLE Answer Sheet #260

A RIGHT TO A VIEW

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INSTRUCTIONS FOR OBTAINING MCLE CREDITS

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2. Answer the test questions opposite by markingthe appropriate boxes below. Each questionhas only one answer. Photocopies of thisanswer sheet may be submitted; however, thisform should not be enlarged or reduced.

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5. For future reference, please retain the MCLEtest materials returned to you.

ANSWERS

Mark your answers to the test by checking theappropriate boxes below. Each question has onlyone answer.

1. n True n False

2. n True n False

3. n True n False

4. n True n False

5. n True n False

6. n True n False

7. n True n False

8. n True n False

9. n True n False

10. n True n False

11. n True n False

12. n True n False

13. n True n False

14. n True n False

15. n True n False

16. n True n False

17. n True n False

18. n True n False

19. n True n False

20. n True n False

MCLE Test No. 260The Los Angeles County Bar Association certifies that this activity has been approved for Minimum ContinuingLegal Education credit by the State Bar of California in the amount of 1 hour. You may take tests from backissues online at http://www.lacba.org/mcleselftests.

1. Two methods of enforcing land use restrictions con-tained in a recorded declaration of restrictions are ascovenants that run with the land or as equitable servi-tudes.

True.False.

2. Only covenants specified by statute run with theland.

True.False.

3. Under Civil Code Section 1462, a covenant that ben-efits or burdens the property may run with the land.

True.False.

4. Civil Code Section 1468 was amended in 1968 toinclude covenants between a grantor and grantee andcan be applied retroactively.

True.False.

5. Whether or not a declaration of restrictions isrecorded before the first deed out from the subdivider,lots in the subdivision will only be governed by therestrictions if each deed expressly referenced therecorded Declaration.

True.False.

6. The determination of whether a restriction is a per-sonal power or runs with the land is factual and restsupon intent, notice, and other equitable factors.

True.False.

7. A restrictive covenant is not enforceable against asubsequent grantee unless the grantee had notice ofthe restriction at the time title to the property wasreceived.

True.False.

8. A recorded restriction constitutes constructive notice,which has the same effect as actual notice.

True.False.

9. A homeowner may rely on the title report receivedfrom the insurance company as the accurate status oftitle.

True.False.

10. A cause of action for violation of a restrictivecovenant must be filed within four years from the timethe person seeking to enforce the restriction discovered,or through the exercise of reasonable diligence shouldhave discovered, the violation.

True.False.

11. For purposes of determining when the statute oflimitations begins, what a plaintiff knows, or reasonably

should know, is a question of fact.True.False.

12. A laches defense requires a showing that the delayin asserting the right to enforce the restriction wasunreasonable such that enforcement of the restrictionnow would cause material prejudice to the party againstwhom enforcement is sought.

True.False.

13. The laches defense may be applicable even whenthe party seeking enforcement has notified the violatingparty of the violation yet the party continues to violatethe restrictions.

True.False.

14. For a demurrer to be sustained on the grounds oflaches, both the delay and injury must be disclosedin the complaint.

True.False.

15. Estoppel may apply when the offending party detri-mentally relies on the actions of the party seeking toenforce the restriction.

True.False.

16. Under the doctrine of changed circumstances, arestriction may become unenforceable when the originalpurpose of the restriction has become obsolete andcontinued enforcement would be oppressive andinequitable.

True.False.

17. The defense of changed circumstances does notapply so long as the original purpose of the restrictioncan still be realized, even if the unrestricted use ofthe property would be more profitable to its owner.

True.False.

18. Courts may enforce equitable servitudes even ifthey are determined to be unfair or inequitable.

True.False.

19. Reasonable height and view restrictions are enforce-able.

True.False.

20. To create a uniform general plan, as long as thegeneral plan or scheme applies to all of the parcels inthe tract, specific restrictions may apply differently toseparate parcels within the tract.

True.False.

property owner and is not contingent uponthe existence of the declarant, association,or review board. The language of the declar -ation evidenced a clear intent to create acommon plan, with each of the restrictionsrunning with the land, and enforceable byindividual homeowners. Finally, the plaintiffargued that the court of appeals had alreadydetermined that the declaration “clearly cre-ate[d] covenants running with the land orequitable servitudes.”16 Although Committeeto Save Beverly Highlands Home Associationv. Beverly Highlands Home Association dealtwith Article X of the declaration, Article Xwas subject to the identical approval andassignment rights as the height restrictions.By the same logic, the plaintiff argued, ifArticle X runs with the land, so do the heightrestrictions.

Although the issue was not ultimatelyresolved in the Bird Streets litigation, whethera restriction is a personal power or equitableservitude has significant ramifications espe-cially in Los Angeles County where many ofthe covenants, conditions, and restrictionswere drafted in the 1950s and 1960s andcontain poorly drafted language. Whereason the face of the declaration, it appears thatthe intent was to create equitable servitudesthat run with the land, in practice their poorconstruction may result in a finding of per-sonal powers.

Abandonment of Height Restrictions

What was the effect of the dissolution of theassociation on the height restrictions? Thedefendant argued that because the heightrestrictions were a personal power of thedeclarant and its assignee association andbecause the homeowners dissolved the asso-ciation, the height restrictions have beenabandoned. The defendant conceded, how-ever, that other than dicta in Beverly High -lands, the defendant could not find any otherCalifornia decisions that have addressed thisprecise issue. As a result, the defendant reliedon a series of out-of-state authorities.17

The plaintiff rejected the defendant’s aban-donment argument and claimed that ArticleXVI of the declaration specifically gave indi-vidual homeowners the right to enforce thedeclaration. In fact, in Beverly Highlands,defendants who were officers of the associa-tion, in support of their argument that theassociation should be dissolved, asserted that“even if the Association is dissolved, theBeverly Highlands property owners still canenforce the Declaration.”18 Although dicta,the court of appeals agreed.19 The plaintiffalso referred the court to the court of appealsunpublished decision in Chevrets v. Docksondealing with the same declaration and theprecise issue of abandonment.20 Chevretwanted to build on Lot 53 even though Section

10.05 of the declaration expressly prohibitedany “building or other structure” to be erectedon it “without the written approval of theAssociation.” When other property ownersobjected, Chevret brought suit and, like thedefendant in the Bird Streets litigation, arguedthat because the declarant and associationwere dissolved, the declaration was no longerenforceable.21 The trial court ruled in thedefendants’ favor, and the court of appealsaffirmed, determining that although “theAssociation [was] now defunct,” Article XIVset “forth the method for obtaining approvalto build on the lot.”22

Not surprisingly, the defendant objectedto the plaintiff’s reliance on the unpublisheddecision in Chevrets. While Chevrets seemsto conflict with the out-of-state authoritycited by the defendant, as it stands there areno published California decisions addressingthe defendant’s abandonment argument.Given the rise in property prices, poorlydrafted declarations from the 1950s and1960s, and dissolution of many homeownerassociations, it is just a matter of time beforeCalifornia courts will have to issue a pub-lished decision addressing this issue.

Lack of Notice

A restrictive covenant is not enforceable againsta subsequent grantee unless the grantee hadnotice of the restriction at the time title to theproperty was received.23 A recorded restriction,however, constitutes constructive notice, whichhas the same effect as actual notice.24 This istrue even if the recorded restriction is not ref-erenced in any of the deeds to the propertydescribed in the declaration.25

In the Bird Streets litigation, the defendantargued that there was insufficient notice toenforce the height restrictions against himbecause the title company did not providehim with the restrictions at the time he pur-chased his property.26

The plaintiff countered that the noticewas proper not only because the restrictionswere recorded but also because the defendanthad received a copy from his neighbors.Further, the defendant could not rely on thetitle report as the status of title.27 JudgeO’Brien granted the plaintiff’s motion forinjunctive relief finding that the notice wassufficient. The defendant did not raise thisissue on appeal.

Statute of Limitations

A cause of action for violation of a restrictivecovenant must be filed within five years28

from the time the person seeking to enforcethe restriction discovered, or through theexercise of reasonable diligence should havediscovered, the violation.29 What a plaintiffknows, or reasonably should know, is a ques-tion of fact.30 In the Bird Streets litigation,

the defendant’s demurrer argued that theplaintiff’s cause of action relating to the 2010construction was time-barred. The complaintwas filed in October 2014. The defendantasked the court to take judicial notice of cer-tain Los Angeles City Building Departmentrecords that the defendant al leged showedsignificant second-floor construction on his property since September 2009. The courtgranted the defendant’s request but refusedto take judicial notice of the truth of thematters asserted there in. Regardless, thecourt determined that nothing in the build -ing records suggested any second-floor con-struction. Further, the court reasoned thatbecause the plaintiff also claimed a heightrestriction violation, it may have been impos-sible for the plaintiff to have known aboutthe viol ation until after construction wascompleted.

While the court in the Bird Streets litiga-tion acknowledged in its ruling on the plain-tiff’s demurrer that it may be impossible todetermine a violation of a height restrictionuntil construction is complete, there is noassurance that other courts will reach thesame conclusion. As such, it is important tokeep in mind that the statute of limitationsserves as an absolute bar to maintaining acause of action against the alleged wrongdoer.If property has been affected by infringingconstruction, one should act promptly andexpeditiously to resolve the matter informallyand, if that fails, to file suit and seek injunctiverelief. Even though within the statute of lim-itations, any delay in filing suit may poten-tially bar a claim.

Laches

A laches defense requires a showing that thedelay in asserting the right to enforce therestriction was unreasonable such that en -forcement of the restriction now would causematerial prejudice to the party against whomenforcement is sought.31 Laches is not applic-able when the party seeking enforcement hasnotified the violating party of the violationyet the party continues to violate the restric-tions.32 Additionally, when construction iscompleted before a violation of a restrictivecovenant can be confirmed, laches is not adefense because “it would not have matteredwhether plaintiff was diligent.”33 Finally, fora demurrer to be sustained on the groundsof laches, both the delay and injury must bedisclosed in the complaint.34

In the Bird Streets litigation, the defen-dant’s demurrer alleged that the plaintiff’sclaims relating to the defendant’s 2010 con-struction were barred by the doctrine oflaches. The defendant argued that the neigh-boring homeowners were aware of the vio-lation but stood idly by and watched thedefendant incur costs yet did nothing. The

22 Los Angeles Lawyer September 2016

neighbors’ behavior constituted prejudiceand acquiescence by the homeowners, includ-ing the plaintiff as successor-in-interest.

In response, the plaintiff argued that thedefendant failed to cite any legal authorityestablishing that the neighbors’ failure tobring suit was unreasonable, or that it resultedin delay attributable to the plaintiff. Theplaintiff’s predecessor-in-interest was unawareof the violation until after construction wascomplete. The defendant was notified of theviolation yet continued the infringing con-struction.

Although the court declined to rule ondemurrer whether laches applied, the courtseemed somewhat convinced by the defendant’slaches argument. The best way to discard thisdefense is to act diligently if a neighbor beginsinfringing construction, i.e. im mediately re -quest that the infringing party cease and desistfrom further infringing construction, and ifthat proves unsuccessful, be ready to promptlyinitiate litigation.

Estoppel

Estoppel may apply when the offending partydetrimentally relies on the actions of theparty seeking to enforce the restriction.35

Thus, in the Bird Streets litigation, the defen-dant’s demurrer contended that the plaintiffwas estopped from enforcing the heightrestrictions because the plaintiff’s propertyviolated the same restrictions. To support itsallegation, the defendant asked the court totake judicial notice of an old constructionapplication for the plaintiff’s property. Thecourt rejected the defendant’s argument, find-ing that it was based on matters outside thescope of the complaint and not subject tojudicial notice.

When evaluating the applicability of theestoppel defense, it is important to understandthat in many neighborhoods in Los AngelesCounty, homeowners have worked aroundheight restrictions by building below the lot’sgrade level, i.e. they have technically createda “basement.” For example, although the BirdStreets lots are generally limited to one-storybuildings, many lots contain two-story resi-dences with the first floor built below grade.

Waiver

The right to enforce a restrictive covenantmay be deemed generally waived when thereare a sufficient number of waivers so thatthe purpose of the general plan is un der -mined.36 Further, a restriction can be waivedif a plaintiff fails to meet the burden of de -monstrating fair and uniform enforcement.37

A waiver may also occur when a plaintiffknowingly delays bringing suit.38

In the Bird Streets litigation, the defendantmade two separate waiver arguments. First,he argued that the height restrictions had

been waived because several other homes inthe immediate vicinity exceeded the heightrestrictions. Then, he argued that the plain-tiff’s delay in asserting the right to enforcethe height restrictions relating to the 2009infringing construction constituted waiver.

The plaintiff responded that the defen-dant’s only evidence that other propertiesexceeded the height restrictions—a declarationfrom the defendant’s contractor—did not layproper foundation that the allegedly infringingproperties were in the same tract or that theyex ceeded 16 feet above grade level. Relyingon declarations of other homeowners in thetract, the plaintiff argued that Beverly Highlandhomeowners had complied with the heightrestrictions, continued to believe that they areenforceable, and requested that the defendantbring his property into compliance. In grantingmandatory injunction, the court determinedthat the plaintiff had not waived the right toobject to the 2014 construction.39

Similar to the estoppel defense above, itis important to keep in mind that in manyneighborhoods in Los Angeles County, home-owners have worked around height restric-tions by building below the lot’s grade level—exactly what many homeowners in the BirdStreets had done while complying with thedeeded height restrictions.

Changed Circumstances

A restriction may become unenforceable when,by reason of changed circumstances,40 theoriginal purpose of the restriction has becomeobsolete and continued enforcement wouldbe oppressive and inequitable.41 Whether thisequitable defense may be in voked is a factualdetermination with no fixed formula.42 Oneimportant factor is the location of the changedconditions—changes within the disputed tractare given greater weight than changes outsidethe tract that are not subject to the samerestrictions.43 However, so long as the originalpurpose of the restriction can still be realized,it will be enforced even though the unre-stricted use of the property would be moreprofitable to its owner.44

In the Bird Streets litigation, the defen-dant’s opposition to the injunction motionargued that the declaration relied on the asso-ciation for the execution and enforcementof many of its provisions, including the heightrestrictions. Because the association had dis-solved, there was no procedure for the defen-dant to request a variance. Thus, under thedoctrine of changed circumstances, the heightrestrictions were unenforceable.

In response, the plaintiff asserted that theoriginal purpose of the declaration to createa residential planned community subject tocertain restrictions, including height restric-tions, was still intact. The other propertieswithin the tract had continued to comply

with the declaration. Further, to obtain avariance, the defendant would have to complywith the procedures set forth in Article XIVof the declaration.

The court’s order granting injunctive reliefindicates that the court found the defense ofchanged circumstances inapplicable becausethe land area surrounding the defendant’sproperty is being used the same way as ithad been over 10 years earlier when the re -strictive covenants were first imposed on theproperty. As long as the neighborhood con-tinues to be used for residential purposes, itis unlikely that this defense will apply.

Unreasonable Restrictions

Courts will not enforce equitable servitudesthat are determined to be unfair or inequit -able.45 Reasonable height and view restric-tions are enforceable.46 Courts will examinethe restrictions by applying an objective stan-dard of reasonable intent to give a just andfair application of the restrictions as wouldbe understood and intended by a reasonableperson.47 Courts will weigh all factors, includ-ing whether the harm caused by the restrictionis disproportionate to the benefit of its en -forcement.48

To create a uniform general plan, it is notnecessary that the restrictions apply identicallyto all parcels within the community.49 Aslong as the general plan or scheme appliesto all of the parcels in the tract, specificrestrictions may apply differently to separateparcels within the tract.50

In the Bird Streets litigation, the defen-dant’s appeal presented a many-pronged argu-ment challenging the reasonableness of theheight restrictions. Many of the argumentshave already been addressed above and willnot be repeated here, but the defendant didraise two new arguments. First, the defendantargued that several lots in the tract were notsubject to height restrictions, thus enforcementof height restrictions against the defendant’sproperty would be unfair and discriminatory.The plaintiff countered that the clear intentof the declaration was to create a generalplan for the Beverly Highlands. Out of the63 lots in the tract 58 are subject to heightrestrictions to ensure that adjacent lots donot impair each other’s light, air, and views.The five lots without height restrictions aresituated in a canyon below a hill and, due totheir natural topography, could not possiblyblock the view of another lot.

The defendant’s main argument challeng-ing the reasonableness of the height restric-tions was a variation of the abandonmentargument. The defendant argued that underthe declaration only the declarant or associ-ation could approve changes to the heightrestrictions and that power was not assignableto the individual homeowners. It would be

Los Angeles Lawyer September 2016 23

unreasonable to allow homeowners to enforcethe height restrictions because it would createchaos as each homeowner would have a vetoright over every minor change a neighborwants to make to his or her property. Theplaintiff’s response to this argument largelymirrored the response made to the personalpower and abandonment argument. The plaintiff emphasized that Article XIV of thedeclaration provided the mechanism for home-owners to request a variance since the asso -ciation has been dissolved.

Because the defendant raised this issuefor the first time on appeal, it is unclearwhat, if any, merit the court of appeals wouldhave given it. That said, there are a numberof California cases finding that height restric-tions are not unreasonable.

Given the rise in real estate prices and theemotional attachment people ascribe to theirviews, it is likely that we will see an increasein view disputes. The Bird Streets litigationhighlights only some of the issues that mayarise when a homeowner seeks to enforcerecorded height restrictions. These disputescan be expensive and drawn out. It is advisablethat homeowners develop relationships withtheir neighbors in an effort to prevent disputes.If that does not work, however, and yourneighbor begins construction in violation ofrecorded height restrictions, it is importantto act swiftly in order to preserve all availableremedies. n

1 The Beverly Highlands is not a “community interestdevelopment” as defined by the Davis Sterling Act.See Committee to Save Beverly Highlands Home Ass’nv. Beverly Highlands Home Ass’n, 92 Cal. App. 4th1247 (2001); see also Davis Sterling Act, CIV. CODE

§§4000 et seq.2 The declaration was recorded with the Los AngelesCounty Recorder’s Office on June 27, 1952, in book39264, p. 95 of the official records. Schedule F wasrecorded on March 22, 1960, as Instrument No. 2948.3 Citizens for Covenant Compliance v. Anderson, 12Cal. 4th 345, 352 (1995). 4 CIV. CODE §1460.5 CIV. CODE §1462; Marra v. Aetna Constr. Co., 15Cal. 2d 375, 378 (1940).6 Anderson, 12 Cal. 4th at 355. 7 Id. at 353.8 Anthony v. Brea Glenbrook Club, 58 Cal. App. 3d506, 511-12 (1976).9 Scaringe v. J.C.C. Enters., Inc., 205 Cal. App. 3d1536, 1543 (1988).10 Werner v. Graham, 181 Cal. 174, 180, 181 (1919).11 Id. at 174.12 Citizens for Covenant Compliance v. Anderson, 12Cal. 4th 345, 349 (1995).13 McCaffrey v. Preston, 154 Cal. App. 3d 422, 428(1984).14 Id. at 438.15 Clear Lake Riviera Cmty. Ass’n v. Cramer, 142Cal. App. 3d 642, 650-52 (1983).16 Committee to Save Beverly Highlands Home Ass’nv. Beverly Highlands Home Ass’n, 92 Cal. App. 4th1247, 1255 (2001).17 See e.g. Pulver v. Mascolo, 155 Conn. 644, 646(1967); Julian v. Lawton, 240 N.C. 436 (1954); Allison

v. Greear, 188 Va. 64, 65 (1948).18 Beverly Highlands Home Ass’n, 92 Cal. App. 4that 1272.19 Id.20 Chevrets v. Dockson, et. al., B173237, 2005 WL1006853 (May 2, 2005).21 Id. at *5.22 Id. at *6-7.23 Taormina Theosophical Cmty., Inc. v. Silver, 140Cal. App. 3d 964, 972 (1983).24 Citizens for Covenant Compliance v. Anderson, 12Cal. 4th 345, 355 (1995).25 Id.26 The height restrictions are contained in Schedule Fto the declaration of restrictions.27 Siegel v. Fidelity Nat’l Title Ins. Co., 46 Cal. App.4th 1181 (1996).28 If there is an enforceable view restriction, then anaggrieved homeowner may also allege a nuisance causeof action, which has a three-year statute of limitations.See, e.g., Tint v. Sanborn, 211 Cal. App. 3d 1225,1235 (1989).29 CIV. PROC. CODE §336(b).30 Jolly v. Eli Lilly & Co., 44 Cal. 3d 1103, 1111(1988).31 Wells Fargo Bank v. Goldzband, 53 Cal. App. 4th596, 632 (1992).32 Morgan v. Veach, 59 Cal. App. 2d 682, 689 (1943).33 Pacific Hills Homeowners Ass’n. v. Prun, 160 Cal.App. 4th 1557, 1565 (2008). When a homeowner hasconstructed an improvement in violation of a heightor view restriction, the court may apply a three-parttest known as the hardship doctrine to determinewhether the improvement must be taken down. SeeClear Lake Riviera Cmty. Ass’n v. Cramer, 182 Cal.App. 4th 459, 471-73 (2010).34 Sangiolo v. Sangiolo, 87 Cal. App. 3d 511, 514(1978).35 Diederichsen v. Sutch, 47 Cal. App. 2d 646, 650(1941).36 Bryant v. Whitney, 178 Cal. 640, 643 (1918).37 Prun, 160 Cal. App. 4th at 1566; Alfaro v. Cmty.Hous. Improvement Sys. & Planning Ass’n, Inc., 171Cal. App. 4th 1356, 1380 (2009).38 Los Angeles v. Arizona Land Co. v. Marr, 187 Cal.126, 133 (1921).39 The injunction motion only addressed the defendant’s2014 construction, and the defendant’s waiver defenseconcerning the 2009 construction was not ad dress edat all.40 This defense may not apply to a restriction enforce-able by statute as a matter of law.41 Hirsch v. Hancock, 173 Cal. App. 2d 745, 761(1959).42 Arrowhead Mut. Serv. Co. v. Faust, 260 Cal. App.2d 567, 582 (1968).43 Bard v. Rose, 203 Cal. App. 2d 232, 236 (1962);compare Atlas Terminals, Inc. v. Sokol, 203 Cal. App.2d 191, 202 (1962).44 Marra v. Aetna Construction Co., 15 Cal. 2d 375,378-79 (1940).45 Hotz v. Rich, 4 Cal. App. 4th 1048, 1057 (1992).This type of defense may not apply to a restrictionenforceable by statute as a matter of law. Moreover,restrictions in common interest developments are pre-sumed reasonable unless proven otherwise. See CIV.CODE §§4000 et. seq.46 King v. Kugler, 197 Cal. App. 2d 651, 655 (1961).47 Hannula v. Hacienda Homes, 34 Cal. 2d 442, 444-45 (1949).48 Moss Dev. Co. v. Geary, 41 Cal. App. 3d 1, 13(1974).49 Cebular v. Cooper Arms Homeowners Ass’n, 142Cal. App. 4th 106, 120 (2006); but see Moe v. Gier,116 Cal. App. 403, 408 (1931).50 Martin v. Ray, 76 Cal. App. 2d 471, 476 (1946).

24 Los Angeles Lawyer September 2016

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Demand for this advice is growing. More than8,000 companies across 160 countries have madeexplicit commitments to respect universal prin-ciples on human rights, labor, the environment,and anticorruption through the United NationsGlobal Compact, the UN’s corporate sustainabilityinitiative.4 More than 1,600 companies in over40 countries have taken the step of being certifiedas B Corpor ations, a social and environmentalcertification program for for-profit companies.5

Around the world, societal expectations forresponsible corporate behavior are increasinglybeing enacted as laws and regulations. For exam-ple, the UK Modern Slavery Act of 2015 requiresall companies with annual worldwide revenuesabove £36 million that do any part of their busi-ness in the UK to publish an annual slavery andhuman trafficking statement.6 In the United States,

Ursula Wynhoven is Chief, Social Sustainability, Governance and Legal at the UN Global Compact. The authorwould like to thank Christina Koulias and Hinako Gojima for their assistance in the preparation of this article.

PARTNERSIN RESPONSIBILITY

In California, the United States, and around the world, corporations

and their general counsel are increasingly seeking compliance with

sustainability and human rights initiatives

by URSULA WYNHOVEN

THE ROLE

28 Los Angeles Lawyer September 2016

the California Transparency in Supply ChainsAct of 2010 requires companies with annualrevenues above $100 million to disclose“efforts to eradicate slavery and human traf-ficking from [their] direct supply chain.”7

President Barack Obama issued an executiveorder in 2012 to avoid human trafficking infederal contracts.8 The president also recentlysigned a law allowing for stronger enforce-ment of the Tariff Act of 1930, which aimsto block the import of products of forcedlabor.9 Investigation of and enforcementagainst bribery of government officials is alsoon the rise, not only under the Foreign Cor -rupt Practices Act but also under local lawsin other countries.10

At the same time, businesses are increas-ingly engaging in voluntary initiatives thatgo beyond legal responsibilities, as the con-nection between the corporate bottom lineand their environmental, social, and gover-nance practices becomes more clear. In a2013 study by the UN Global Compact andAccenture, 93 percent of the more than 1,000CEOs surveyed considered sustainabilityimportant to the future success of their busi-ness; 80 percent saw it as a route to compet-itive advantage in their industry; and 78 per-cent viewed it as an opportunity for growthand innovation.11 In addition to the businesscase, many businesses today recognize themoral responsibility to go beyond the law.For instance, in a 2014 survey by The Econ -omist, 83 percent of 853 senior executivesagreed that human rights is a matter for busi-ness as well as governments, and 71 percentfurther stated that their company’s respon-sibility to respect these rights goes beyondcompliance with local laws.12

The UN Global Compact

The UN Global Compact is tasked by theUN General Assembly with the ambitiousagenda of promoting responsible businesspractices and UN values among the globalbusiness community and within the UN sys-tem itself.13 It creates opportunities for com-panies to learn and share good practices oncorporate sustainability and provides a report-ing framework, called the Communicationon Progress, for companies to report on theirprogress to their own stakeholders.

To promote further implementation withincompanies, the UN Global Compact aims tobring greater specificity to what companiesshould and can do to become more sustain-able. Through country level networks in morethan 85 countries, the UN Global Compactpromotes geographic specificity by engagingwith various stakeholders—including busi-nesses, governments, investors, academia,and civil society—to advance corporate sus-tainability as it relates to a specific countryor region.14 Through working groups, special

initiatives, and guidance materials on a rangeof corporate sustainability themes includinghuman rights, labor, climate, water, anticor-ruption, peace, rule of law, and women’sempowerment, the UN Global Compact pro-motes issue specificity.15 Through a forumwith industry associations, the UN GlobalCompact and the International Chamber ofCommerce are exploring sectoral specificity,for example how various industry associa-tions, including those for basic materials,consumables, finance, healthcare, industrialand transport, can support their members toact responsibly and advance corporate sus-tainability.16 One of the most recent andpromising areas the initiative has been explor-ing, and which has led to engaging lawyerson a much greater level than the past, is func-tional specificity within companies, includinglegal, procurement, risk, or production. TheUN Global Compact began its focus on func-tional specificity by looking at the role ofcorporate boards in corporate sustainability.17

The initiative also worked with lawyers, espe-cially within companies, to understand betterhow they were viewing and acting in theirrole in achieving their organization’s sustain-ability goals and the opportunities to leveragecorporate sustainability to be more effectivein their legal roles.

The concept of corporate sustainabilityhas evolved over time. Initially, sustainabilityhad a strong environmental focus. However,as understanding of business impacts on soci-ety, both negative and positive, has grown,the concept has expanded to encompass otherdimensions. The UN Global Compact definescorporate sustainability as the creation oflong-term value by a business in economic,social, environmental, and ethical terms—aquadruple bottom line.18 While the definitionspeaks of value creation, also implicit withinthe definition is the idea that businesses shouldnot give with one hand and take with theother—good deeds in one area cannot com-pensate for causing harm in others. There areopportunities, but there are also responsibilitiesand they cannot be offset against each other.These two dimensions—responsibility andopportunity—19are thought of as respect andsupport. “Respect” means not causing harm,taking responsibility for ad dressing businesses’own impacts or externalities on society andthe environment and not just focusing on therisks to businesses.20 It is the minimum thatcorporate sustainability requires. “Support”means additional voluntary action that a com-pany may take that goes beyond avoiding oraddressing harm. It can be core businessactions like product or service innovation,use of social marketing, access pricing, jobcreation, or inclusive sourcing and distributionpractices. Support may also take the form ofphilanthropy or strategic social investment,

public policy engagement, or partnershipsand other forms of collective action.21

Sustainable Development Goals

The field of sustainability received a signifi-cant boost in September 2015 with the adop-tion of the 17 Sustainable Development Goals(SDGs) by all 193 member states of the UnitedNations.22 The SDGs and Agenda 2030,23 ofwhich the SDGs are a major part, were keyoutputs of a process set in motion in 2012 to guide international and national actiontowards sustainable development for the next15 years. They succeed the Millen nium Dev -elopment Goals, which expired at the endof 2015.24 Along with civil society, the busi-ness community was extensively en gaged inthe consultations.

The SDGs present an enormous opportu-nity for businesses. Businesses are not islandsapart from the communities in which theyoperate, but rather are organs of society andtheir long-term success depends increasinglyon the state of the societies in which theyoperate. Issues like climate change, healthcrises like Ebola and Zika, the large numbersof refugees and other displaced persons, risingincome inequality within countries, youthunemployment, corruption, violence and con-flict, and the rise of all kinds of fundamentalismpose threats—sometimes existential ones—tobusinesses. These issues also present oppor-tunities for responsible companies to assist inaddressing such challenges and risks and turn-ing them into value for society and for busi-nesses.25

The SDGs extend to all aspects of sus-tainable development—economic, social, envi-ronmental, and governance—including, inGoal 16, the importance of the rule of law,calling for access to justice for all and “effec-tive, accountable and inclusive institutions.”

Achieving the SDGs will require, and cre-ate the opportunity for, unprecedented levelsof cooperation by companies, including cross-functional collaboration within companies,allowing for and necessitating greater align-ment of corporate and societal goals. TheSDGs are a long-term universal benchmarkfor all societal actors in their own goal-settingand other planning processes because of theinternational consensus on which they werebuilt to achieve sustainable development.They set the overarching direction for gov-ernments and others around the world for a15-year period. Because there is a follow-upprocess in governments to track implemen-tation progress, all countries will be usingthem and they are expected to shape stake-holder expectations, policy direction, andinvestment flows throughout this period.

As corporate sustainability rises on theagendas of a growing number of corporateboards,26 in-house lawyers have an opportunity

Los Angeles Lawyer September 2016 29

to make a renewed value proposition to theircompanies. The legal content of sustainabilityis also growing as some areas of soft law arehardening into binding legal requirements andsustainability itself is increasingly being seenas imperative for businesses.27 Such changesfacilitate greater alignment of lawyers’ pro-fessional duties with clients’ en lightened inter-ests creating the opportunity for lawyers toplay a more proactive role in corporate sus-tainability. For companies, this is also an oppor-tunity to explore organizational synergies andcost savings between legal and other depart-ments and to minimize risks by engaging withtheir in-house counsel at earlier opportunities.When identified at an early stage, some riskslinked to corporate sustainability issues canbe mitigated or eliminated by ensuring thatthe right internal and external stakeholdersare engaged in addressing such risks effectively.For instance, corporate sustainability, engi-neering, and legal specialists of a mining com-pany, seeking to set up operations in a givencountry, proactively engage with representativesfrom government and the indigenous commu-nity to ensure that, wherever possible, humanrights—including culture, health, land andwater—are protected and respected in theestablishment of those operations.

A growing number of in-house counsel arealready involved in value creation throughcommunity initiatives sometimes in partnershipwith law firms. For example, in-house lawyersin the technology and other sectors in the SanFrancisco Bay Area provide pro bono legalservices to community members.28 In doingso, they help improve access to justice in thecommunity. But they also build their compa-nies’ social license to operate in an area wherethere is wide income inequality and sometimesprotests against business activity.29 Anotherexample is the CEO and general counsel ofLexisNexis, who worked together to spearheadan initiative promoting the role of businessesin advancing the rule of law, which also engagescustomers.30 General counsel who embracevalues-based management and proactivelyhelp to build a company culture with highintegrity also add value in terms of employeemorale, productivity, and loyalty as well assaving the costs of noncompliance.31 Lawyerscan be more effective over the long term andcontribute to the sustainability of client orga-nizations by taking the opportunity to buildand maintain relationships with the commu-nity, rather than sacrifice them for short-termvictories. Sus tainability is synonymous withembracing a long-term view.

Advancing Corporate Sustainability

From the UN Global Compact’s work onengaging the legal profession in corporate sus-tainability, two main resources have emerged.

The first is the Guide for General Counsel

on Corporate Sustainability (Guide).32 TheGuide was launched in June 2015 after 18months of interviews with general counselaround the world about their evolving role,including on dimensions of corporate sustain-ability. It was born out of recognition thatcompanies increasingly needed and were seek-ing advice on what is socially acceptable, notjust what is legally permissible, and that theanswers were informed by universal principlessuch as those of the UN Global Compact.The Guide offers practical guidance based on

emerging good practices on how general coun-sel can leverage the corporate sustainabilityagenda to be more effective in their legal func-tions and to create long-term value.

The interviews confirmed that many gen-eral counsel are seeing their role as trustedadvisers expand and that others who havenot experienced this change welcomed guid-ance on how to open doors to play thisbroader role. While there is concern aboutthe challenge of exercising expanded rolesin the context of limited resources, there isalso a recognition that corporate sustainabilitymay help drive greater collaboration withother departments, including to enable moreeffective risk management. Both in-houselawyers and corporate sustainability officersconfirmed the traditional perception of thelegal department as the “department of no”and were eager for guidance to help changethis dynamic. There is need for, and interestin, capacity building as many legal teams arenot yet fully prepared for their role as adviserson corporate sustainability. There is also astrong desire for metrics to drive engagement

and measure progress, to show that the legaldepartment is a strategic investment and notjust an operational cost.

Complementary to the Guide is Businessfor the Rule of Law Framework (Frame work),also launched in June 2015.33 This initiativeseeks to demystify the notion of the rule oflaw for businesses and to encourage them,often through the office of general counsel,to explore ways relevant for their companiesto strengthen the legal framework in countriesin which they operate. The UN Global Com -

pact, with the support of its participant com-panies, law firms, and Global Compact LocalNetworks, facilitated multistakeholder work-shops in 19 locations around the world thatsought to build understanding of the rule oflaw as it relates to businesses, identify thebusiness case for respecting and supportingthe rule of law, and gather examples of theactions businesses can take to support therule of law. Output from the workshopsinformed the development of the Framework,which aims to guide businesses in understand-ing why and how to take action to supportthe strengthening of the legal framework inwhich they operate as a complement, not sub-stitute, for government action in this area.

The UN Global Compact has also compiledover 110 examples of how businesses arealready supporting the rule of law. 34 The ex -amples gathered include Microsoft’s develop-ment of online tools to help businesses identifythe risks of human trafficking, developmentof a program to aid government investigationof child exploitation, development of a refugeeregistration system used by the UN Refugee

Agency in the distribution of aid and reunifi-cation of families, and public advocacy infavor of same-sex marriage. Another projectled by the legal department of Symantec offerspro bono legal support to community memberson issues ranging from landlord-tenant disputesto the protection of survivors of domestic vio-lence. Other initiatives include the provisionof mobile and web systems to register births(with legal identity being essential to accessbasic services such as healthcare and educa-tion), support for training of judges and pros-ecutors, and advocacy for law reform in linewith international standards.

The Framework highlights an emergingtrend that businesses are increasingly playingan active role in helping governments to fillgaps in the rule of law. Existing initiatives areprimarily driven by necessity as weak rule oflaw makes it harder for companies to operatesustainably and with integrity. Strengtheningthe rule of law in line with international stan-dards is therefore a matter of precompetitivecommon interest, and businesses are preparedto collaborate with one another to level theplaying field. To foster collaboration, there isa real need to share information about ongoingrule of law initiatives and opportunities forpartnership. Collective action, particularlywith the UN and other reputable global andlocal organizations, is also seen as providing

legitimacy and security against concerns gov-ernments might have with regard to businesses’involvement in such efforts.

Based on observations from the interviewsand workshops, general counsel are also look-ing for guidance on how to start the conver-sation on advancing corporate sustainabilityand business for the rule of law within theirown companies, and how they themselves mayadd value to their organization in this regard.There was great interest in the Guide as a keytool in addressing this issue, as many lawyersto date have had limited engagement in theircompany’s corporate sustainability efforts.Many lawyers are energized by the discussionand are eager to support the building of thelegal framework in the communities in whichthey operate—several lawyers who attendedthe workshops said they were reminded ofwhy they became a lawyer in the first place.

While several aspects of lawyers’ profes-sional training, position, and relationshipswithin companies make them well placed toperform this new expanded role with respectto corporate sustainability, there is also anopportunity and a need for additional capac-ity building. In particular, this will likelyrequire the building of multidisciplinarycapacities and skills that are not currentlybeing taught in most law schools or in con-tinuing legal education on a wide scale. While

the legal department not need become anexpert in corporate sustainability to effectivelyspot issues, it is encouraged to proactivelypartner with various corporate functions,especially corporate sustainability specialists,and invest in some capacity building in orderto transition from being the department ofno to effectively leveraging the corporate sus-tainability agenda to manage risk and createvalue. Additionally, in-house lawyers mayturn to law firms for guidance and supportin navigating this new terrain. Fortunately,CLE provides lawyers, within companies andlaw firms, the opportunity to develop thesenew skills and support responsible businessesin effectively managing risk and creatingshared value for the long term. n

1 See, e.g., DEVELOPING CORPORATE HUMAN RIGHTS

POLICIES AND THE ROLE OF LEGAL COUNSEL, UNGLOBAL COMPACT (2012), available at https://www.unglobalcompact.org/library/971.2 See, e.g., INTEGRATING CONCERNS FOR HUMAN RIGHTS

INTO THE MERGERS & ACQUISITIONS DUE DILIGENCE

PROCESS, UN GLOBAL COMPACT (2013), available athttps://www.unglobalcompact.org/library/941.3 See, e.g., BUSINESS AND RESPONSIBLE TAXATION, UNGLOBAL COMPACT, (2016), available at https://www.unglobalcompact.org/library/4011.4 See participants list at http://www.unglobalcompact.org.5 See http://www.bcorporation.net.6 Modern Slavery Act, 2015, c.30 (U.K.) available athttp://www.legislation.gov.uk/ukpga/2015/30/contents/enacted/data.htm. See also REGISTRY OF SLAVERY AND

HUMAN TRAFFICKING STATEMENTS UNDER UK MODERN

SLAVERY ACT, BUSINESS & HUMAN RIGHTS RESOURCE

CENTER, available at http://business-humanrights.org/en/registry-of-slavery-human-trafficking-statements-under-uk-modern-slavery-act.7 See, e.g., Kamala D. Harris, The California Trans -parency in Supply Chains Act Resource Guide (2015),available at https://oag.ca.gov/sites/all/files/agweb/pdfs/sb657/resource-guide.pdf; CIV. CODE §1714.43(a)(1).8 The White House, Fact Sheet: Executive Order Strength -ening Protections Against Trafficking in Persons in Fed -eral Contracts (Sept. 25, 2012), at https://www.white-house.gov/the-press-office/2012/09/25/fact-sheet-executive-order-strengthening-protections-against-trafficking.9 Trade Facilitation and Trade Enforcement Act of2015, Pub. L. No. 114-125 (Feb. 24, 2016). See alsoSTAFF, THE GUARDIAN, Obama revives anti-slavery lawto target Thailand’s seafood exports (Feb. 26, 2016),available at http://www.theguardian.com.10 GLOBAL ENFORCEMENT REPORT, TRACE INTER NATION -AL (2015), available at http://www.traceinternational.org/publications.11 ACCENTURE CEO STUDY, UN GLOBAL COMPACT

(2013), available at https://www.unglobalcompact.org/library/451.12 The Economist Intelligence Unit, The Road from Princi -ples to Practice (2015), at http://www.economistinsights.com/business-strategy/analysis/road-principles-practice/fullreport.13 UN Global Compact, http://www.unglobalcompact.org (last visited Apr. 1, 2016). In December 2015, theUN General Assembly renewed the mandate of theUN Global Compact. Towards Global Partner ships:A Principle-Based Approach to Enhanced Cooper a -tion between the United Nations and All Rele vantPart ners, G.A. Res. 70/224, available at http://www.unglobalcompact.org.14 See ENGAGE LOCALLY, UN GLOBAL COMPACT, at

30 Los Angeles Lawyer September 2016

https://www.unglobalcompact.org/engage-locally.15 See OUR WORK, UN GLOBAL COMPACT, at https://www.unglobalcompact.org/what-is-gc/our-work/all.16 See SCALING UP SUSTAINABILITY COLLABORATION:CONTRIBUTIONS OF BUSINESS ASSOCIATIONS AND SECTOR

INITIATIVES TO SUSTAINABLE DEVELOPMENT, UN GLO -BAL COMPACT, (2015), available at https://www.unglobalcompact.org/library/3121.17 See A NEW AGENDA FOR THE BOARD OF DIRECTORS:ADOPTION AND OVERSIGHT OF CORPORATE SUSTAIN -ABILITY, UN GLOBAL COMPACT (2014), at https://www.unglobalcompact.org/library/303.18 See, e.g., GUIDE TO CORPORATE SUSTAINABILITY 9,UN GLOBAL COMPACT (2015), available at: https://www.unglobalcompact.org/library/1151.19 See A GLOBAL COMPACT FOR SUSTAINABLE DEV -ELOPMENT—BUSINESS AND THE SDGS: ACTING RESPONS -IBLY AND FINDING OPPORTUNITIES, UN GLOBAL COMPACT

(2015), available at https://www.unglobalcompact.org/library/2291.20 See GUIDING PRINCIPLES ON BUSINESS AND HUMAN

RIGHTS: THE CORPORATE RESPONSIBILITY TO RESPECT

HUMAN RIGHTS 13, UNITED NATIONS (2011), availableat http://www.ohchr.org. See also GUIDING PRINCIPLES

AND THE GLOBAL COMPACT’S HUMAN RIGHTS PRINCIPLES,UN GLOBAL COMPACT & OFFICE OF THE HIGH COM -MISSIONER FOR HUMAN RIGHTS (2014), available athttps://www.unglobalcompact.org/library/1461.21 See, e.g., Dimension 2: Taking Action in Support ofBroader UN Goals and Issues, in BLUEPRINT FOR COR -PORATE SUSTAINABILITY LEADERSHIP, UN GLOBAL COM -PACT (2010), available at https://www.unglobalcompact.org/library/229.22 SUSTAINABLE DEVELOPMENT GOALS, UNITED NATIONS,available at http://www.un.org.23 See generally, TRANSFORMING OUR WORLD: THE

2030 AGENDA FOR SUSTAINABLE DEVELOPMENT, A. RES.70/1, UNITED NATIONS, available at https://sustainabledevelopment.un.org.24 UNITED NATIONS, MILLENNIUM DEVELOPMENT GOALS,at http://www.un.org/millenniumgoals.25 See MONDAY MORNING GLOBAL INSTITUTE UNITED

NATIONS GLOBAL COMPACT, GLOBAL OPPORTUNITY REPORT

2016, DNV GL, at https://www.unglobalcompact.org/library/1171.26 See, e.g., CORPORATE SUSTAINABILITY: AN IMPORTANT

AGENDA FOR BOARDS OF DIRECTORS, UN GLOBAL COMPACT

(2015), available at https://www.unglobalcompact.org/library/4021.27 See, e.g., Paul Polman, Sustainable Business: WhereOur Moral Compass Meets the Bottom Line, HUFFING -TON POST (Oct. 8, 2013), available at http://www.huffingtonpost.com.28 See, e.g., the Bay Area Pro Bono Collective, SanFrancisco Pro Bono Alliance.29 See, e.g., Biz Carson, The Tech Bus Protests AreDead. The problems that sparked them are not, BUS -INESS INSIDER (May 1, 2015), available at http://www.businessinsider.com.30 See http://www.lexisnexis.com/en-us/rule-of-law/default.page31 Ben W. Heineman, William F. Lee, & David B.Wilkins, Lawyers as Professionals and as Citizens KeyRoles and Responsibilities in the 21st Century at 22(Harvard Law School Center on the Legal Profession2015), available at https://clp.law.harvard.edu.32 GUIDE FOR GENERAL COUNSEL ON CORPORATE SUS -TAINABILITY, UN GLOBAL COMPACT & LINKLATERS LLP(2015), at https://www.unglobalcompact.org/library/1351.33 BUSINESS FOR THE RULE OF LAW FRAMEWORK, UNGLOBAL COMPACT (2015), available at https://www.unglobalcompact.org/library/1341.34 UN GLOBAL COMPACT, EXAMPLES OF BUSINESS

ACTIONS IN SUPPORT OF RULE OF LAW (2015), availableat https://www.unglobalcompact.org.

Los Angeles Lawyer September 2016 31

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are many ways that civil attorneys can assist veterans who have experienced military sexualtrauma (MST). Each situation is unique, but one common area of need is a discharge upgrade. The trauma of the sexualharassment or assault itself within the military is often compounded by a frustrating reporting process. These experiencescan lead to MST-related conditions, including post-traumatic stress disorder (PTSD), depression, and other difficultiesthat can negatively affect job performance. This can result in discharge with one of the stigmatized characterizations, i.e.besides honorable. This type of characterization is termed “bad paper” and deprives veteran survivors of MST of benefitsthat would otherwise be available to them.

A discharge upgrade is a restorative legal process that enables survivors of MST to obtain valuable benefits and helpsput the pieces of their lives back together after military service. Successfully upgrading a less than honorable dischargeextinguishes survivors’ bad paper, unlocking valuable educational benefits and disability compensation while openingthe door to free mental health and medical care. In addition to knowing the law, it is important that lawyers representingMST clients understand the singular components of military culture, which are unique markers of the military experiencethat often contribute to sexual assault and harassment.

Military Sexual Trauma

MST is defined as “psychological trauma which…resulted from a physical assault of a sexual nature, battery of a sexualnature, or sexual harassment.”1 The Uniform Code of Military Justice, the military’s penal code, defines “sexual assault”as the commission of a sexual act on a person by threat, force, or while the person is asleep or otherwise unaware the sexualact is occurring.2 Sexual harassment is “repeated, unsolicited verbal or physical contact of a sexual nature which is threateningin character.”3 The U.S. Depart ment of Defense (DoD) estimates that 18,900 service members in 2014 were victims ofsexual assault.4 A 2015 study by the Depart ment of Veterans Affairs found that two in five women endure MST while inmilitary service, making women 10 times more likely than men to be sexually assaulted or hara ssed.5

Since survivors commonly fear retaliation, the majority of people who experience MST choose either not to report the

Dwight Stirling is a military JAG officer as well as CEO and cofounder of the Veterans Legal Institute, a nonprofit law firm. Laura Riley isan attorney serving on the board of directors of the Veterans Legal Institute. Both are adjunct professors of veterans law at the USCGould School of Law.

Less thanH O N O R A B L E

Understanding the sociocultural context of military life in

which sexual trauma takes place is crucial in advocating for

survivors who receive "bad paper"

THERE

by DWIGHT STIRLING and LAURA RILEY

34 Los Angeles Lawyer September 2016

assault at all or to file a restricted report. (A restricted report is onein which the sexual assault is not reported to the victim’s commanderor to military law enforcement officials, a procedure affording medicaland mental health assistance without triggering a formal criminalinvestigation.)6 The DoD estimates that 75 percent of the servicemembers who were sexually assaulted in 2014 did not report theassault to their leadership or to law enforcement in any way.7 Un -fortunately, it is not only the assault or harassment itself that can betraumatic to a service member but also the process of reporting it.Marine Corps General James F. Amos stated in 2014 that manyfemale survivors do not come forward because “they don’t trusttheir chain of command.”8 Researchers have found that “[v]eteranswith MST fear stigmatization and do not discuss their military expe-rience with friends or partners, leaving them feeling isolated, withfewer supports or coping resources for dealing with emotional distress.”9

Characterizations of Service and Discharge Upgrades

Every service member receives a characterization of service upon com-pletion of his or her tenure in the military, essentially a grade depictingpersonal performance during a military career. There are five types ofcharacterizations of service, consisting of—from best to worst—hon-orable, general (under honorable conditions), other than honorable,bad-conduct, and dishonorable.10 Eighty-five percent of service membersreceive an honorable discharge.11 Any of the four types of character-izations besides honorable is referred to by advocates in the field as“less than honorable,” carrying with it a social stigma. A less thanhonorable discharge damages a veteran’s postservice employmentopportunities and disqualifies him or her from many VA benefitsdepending on the type. The latter two types, bad-conduct and dis-honorable, known as punitive discharges, can bar a veteran from vir-tually all VA benefits.

Many MST survivors experience symptomology in the immediateaftermath of the assault that negatively affects their job performanceand may lead to low-level misconduct, including misuse of drugs andalcohol, insubordination, or absenteeism. The National Coalition forHomeless Veterans has found that women who experience MST arenine times more at risk for PTSD than those who do not experienceMST.12 PTSD is a disability that can have MST as its cause, alongwith other physical or mental traumatic events, for example observinga colleague killed in combat. Other common MST-related conditionsinclude depression and other mood disorders, as well as substanceuse disorders.

As a result, survivors disproportionately receive a characterizationof service that is less than honorable, that is, bad paper, making themineligible for, inter alia, the Post-9/11 G.I. Bill, the extraordinary edu-cational benefit that pays for four years of college tuition and anapproximately $2,000 per month living stipend.13 Focusing solely ona survivor’s posttrauma behavior—rather than the factors, includingthe MST, that lead to it—a survivor’s overall service record can bedistorted. In issuing the bad paper, the survivor’s command team mayeither be unaware of the sexual assault or, in some tragic instances,may retaliate against the survivor because of it.

Discharge Review Board

There is a way, however, to amend bad paper postservice, allowing aveteran to improve the characterization of service. A discharge upgradeis an administrative process by which a veteran’s characterization ofservice, or paper, may be improved or increased from a less desirableto a more desirable type. Each branch of the military has an adminis-trative agency called a Discharge Review Board (DRB)—a cadre ofofficers empowered to evaluate and change a veteran’s characterizationof discharge in certain circumstances. A veteran has 15 years fromthe date of separation to file an application with the DRB of his or

her former branch.14 For instance, a former army service memberwould file with the army’s DRB.

By regulatory fiat a DRB adopts a “presumption of regularity inthe conduct of governmental affairs,” a policy under which militaryofficials are assumed to have acted properly in the assignment of theapplicant’s characterization of service and wherein military recordsare assumed to be correct.15 The veteran thus carries the burden ofpresenting “substantial credible evidence” that the original character-ization was improper.16

A DRB is authorized to upgrade a discharge characterization onthe basis of either propriety or equity. A characterization of servicewill be changed on the basis of propriety if an “error of fact, law, pro-cedure or discretion occurred, and the error was prejudicial to theveteran during the discharge process.” Propriety will also serve as thebasis for an upgrade if a statute or administrative rule has changedsince the separation date, and the change would have affected the dis-charge type.17 In this way, veterans who received a general (underhonorable conditions) characterization of service due to the Don’tAsk, Don’t Tell policy can apply and receive an honorable charac-terization on the basis of propriety since the rules regarding serviceby homosexual military personnel have changed subsequent to theirseparation.

Alternatively, upon consideration of the veteran’s complete record,the DRB will upgrade a discharge on the basis of equity if the char-acterization does not accurately represent the quality of service. Amore nuanced analysis than when propriety is at issue, an equitychallenge takes into consideration a veteran’s overall military per-formance, including annual evaluations, decorations and commen-dations, length of service, acts of merit, and postservice record.18

An application made on the grounds of equity also considers moreabstract concepts, including “total capabilities” and “family andpersonal problems,” as well as an examination into whether an“arbitrary or capricious action” was taken against the applicant.19

The quality of a veteran’s advocacy is often the decisive factor inhow persuasively these latter factors are set forth in the applicationpaperwork—complex, layered concepts well-suited to lawyers’ rhetor-ical abilities, critical reasoning, and analytical skills. Without legalassistance, a MST survivor’s chances of success in an equity situationare low.

DRB applicants are able to decide how they would like the reviewprocess to occur. They can either opt for a records review in whichthe DRB simply reviews the application and supporting documents,a personal hearing in the Washington, D.C. area, or a personal hearingbefore a traveling board. An applicant’s odds of success are increasedby a personal appearance in which live testimony can convey thedestructive force of military sexual trauma more poignantly thanwords on a page can.20 However, travel costs are borne by theapplicant, which can be a burden for California-based veterans attend-ing hearings in Washington, D.C. Pursuant to the AdministrativeProcedures Act, denials can be appealed to the district court in whichthe applicant resides.21

Board for Correction of Military Records

If more than 15 years have elapsed since the date of discharge, aveteran is ineligible to apply for an upgrade to the former branchDRB. In these instances, however, there is still a path to upgradingbad paper, namely, through application to the Board for Cor rectionof Military Records (BCMR). As with DRBs, each branch of themilitary has a BCMR—an administrative agency of last resort thatpossesses much broader powers than does a DRB. BCMRs have wide-ranging authority to alter or modify the military service record of aservice member or veteran, including changing the characterizationof service listed on a former service member’s certificate of discharge—a document commonly referred to as a DD 214. BCMRs are also

Los Angeles Lawyer September 2016 35

Consider the case of “Linda.” (The actual name and some other

personal details of the case have been changed, but Linda’s story

is typical of the survivors of military sexual trauma.) A 19-year-old

woman from a small town, Linda is naturally introverted, having

joined the army directly out of high school, wanting to serve her

country, see the world, and receive financial assistance for college.

She attended basic combat training at Fort Jackson, South Carolina,

her first time outside of California and away from her family for

any length of time. From the moment Linda arrived at boot camp,

she received unwanted sexual attention from the males in her pla-

toon in the form of gestures, comments, and innuendos—behavior

she countered by adopting a more masculine appearance and

closing down emotionally. A few of her female colleagues complained

about the sexually charged atmosphere to the sole female drill

sergeant, only to be told to “suck it up and drive on.” Despite the

low-level harassment—which she said to herself was just boys

being boys—she felt at home within her platoon, developing close

bonds with her colleagues and a deep admiration for the senior

drill sergeant, a 28-year-old infantryman with a strict manner rem-

iniscent of her father. On the last day of boot camp, there was a

party to celebrate finishing 10 long weeks of being yelled at,

running in formation at the break of dawn, and firing an M4 semi-

automatic rifle for hours on end at the range. Linda drank four or

five beers that night—the first time she had drunk alcohol since

enlisting—and eventually passed out on a bed in a friend’s room.

When she awoke, her clothes were off and there was a man on

top of her. She realized to her terror that he was having sexual

intercourse with her. She said “Stop!” and pushed at the man’s

face, at which point her assailant jumped up, grabbed his clothes,

and was gone before she was fully conscious. Lying on her back

in stunned amazement, Linda’s world shattered into pieces, and

her faith was replaced by betrayal, fear, anger, and emptiness. A

couple of days later, she confided in a female friend, who told her

there was no point in reporting the incident and that nothing was

going to happen because “you don’t know who did it. “Plus,” the

friend said a moment later, “if you report, it’s just going to tear

the platoon apart. Do you want that?”

A civil attorney, however, agreed to represent Linda on a pro

bono basis, assisting with an application for discharge upgrade.

Turning to alcohol to cope in the wake of being raped rather than

“tearing the unit apart” by reporting to her chain of command,

Linda had been involuntarily separated from military service a

short time thereafter when her work performance was suffering

and a bottle of gin was discovered in her desk drawer. Showing

compassion and understanding, her attorney established an attor-

ney-client relationship built on trust, a dynamic that facilitated

Linda’s sharing the details of the assault and resultant impact on

her life. That trust allowed the attorney to gain the information

needed to make the strongest legal case for Linda. When her dis-

charge was later up graded to honorable, Linda enrolled in college

via the Post-9/11 G.I. Bill, received PTSD counseling from specially

trained psychologists, and was granted a generous living stipend,

all of which provided a transformative change of circumstances

that set her life on an entirely new course.*

* There are many resources that are available to provide assistance to MST

survivors, including LACBA’s Veterans Legal Service Project and other services

at Patriotic Hall. Also, each VA facility has a designated MST coordin ator.

THE CASE OF LINDA

authorized to change inaccurate performance evaluations, alter reen-listment codes, and, in certain limited cases, order a veteran to bereinstated into military service.22

A MST survivor has three years after discovering an “error orinjustice” in his or her military records to apply to the BCMR for cor-rection.23 While not codified, the argument is frequently made in thedischarge upgrade context that the error or injustice triggering thethree-year clock is the denial by the DRB. This approach allows aveteran who experiences MST to apply to the BCMR as a kind ofappellate process post-DRB rejection. Courts have held that actualknowledge of the error or injustice is required for statute of limitationspurposes.24 The BCMR is authorized to waive the three-year timelimit “in the interests of justice.” 25 As the board is required to reviewthe application before ruling on whether the time limit should bewaived or not, submission of an application after the deadline hasexpired is almost always the wisest course of action.

As part of its vast powers, the BCMR can upgrade a punitive(bad-conduct and dis honorable) discharge issued by a special orgeneral court-martial on clemency grounds.26 (A DRB has no corre-sponding capacity.) Curiously, “clemency,” “error,” or “injustice” isnot defined by either statute or regulation, leaving commentators tosuggest that the practical meaning of the latter two terms is the sameas “impropriety” and “inequity” in the DRB context.27 Postserviceconduct is considered to be particularly critical in the clemency contextsince members of the BCMR are positively influenced by evidence of

a MST survivor’s rehabilitation, exemplary citizenship, and salubriouscontributions to society.28

Military Culture

Skillful interaction with a client who has experienced MST and effectiveadvocacy in the discharge upgrade context requires an understandingof the defining components of military culture. The day-to-day lifestyleof members of the military is unlike the mainstream, civilian lifestylewith which most civil attorneys are familiar. Military culture is a suigeneris blend of norms, values, and customs that the U.S. SupremeCourt calls a “specialized society separate from civilian society.”29

Researchers have found that the military experience is characterizedby five factors: (1) strict regulation of personal conduct, (2) an author-itarian, hierarchical leadership system based on obedience to orders,(3) tight-knit, “familial” bonds amongst members, (4) a code of honor,and (5) aggressive masculinity.30

In contrast with civilian life, in which the government manages arelatively small swath of daily activity, military directives “essay morevaried regulation of a much larger segment of the activities of themore tightly knit military community.”31 Service members can be heldcriminally liable for being disrespectful to their bosses, late to theirjobs, and derelict in carrying out their duties. Certain friendships andsexual relationships are barred as inappropriate, certain tattoos aredeemed prejudicial to good order, jewelry must be displayed in certainways (even when off duty), and specific language must be used (or

36 Los Angeles Lawyer September 2016

not used) at certain times. Recognizing that the terminal purpose ofthe armed forces is to fight and win the nation’s wars, the SupremeCourt allows increased governmental intrusiveness in the personalconduct arena because “[n]o military organization can function withoutstrict discipline and regulation that would be unacceptable in a civiliansetting.”32

One consequence of living within a culture in which dress code,physical fitness, and meal times are prescribed—and in which livesare placed in one another’s care—is that powerful attachments formbetween members. There is a level of interdependence and connectednessin which members rely on one another’s word for both vocational

success and personal well-being. Bonds bordering on familial start totake root during the indoctrination phase, the 10-week characterdevelopment program known as basic training or boot camp, whenlargely 18-year-old recruits cast off their civilian willfulness and learnto think, look, and act like each other. Obedience to orders, respectfor the chain of command, and putting the good of the group abovepersonal interest are painstakingly instilled into trainees during bootcamp. Researchers have found that young recruits transfer the trustpreviously reposed in parents, teachers, and coaches to their drillsergeants, while the emotional closeness of sibling relationshipstransfers to platoon members.33 A military unit’s familial dynamicis in fact the essence of military culture—the factor underlying itscode of honor—in which selflessness is a central tenet, disloyalty isthe ultimate sin, and risking your life to protect your comrades inthe face of danger is performed reflexively.

Rape Subculture

While the idiosyncrasies of military culture “produce men and womenwho comprise perhaps the most powerful fighting force on Earth,”the cruel irony is that the factors also combine to create what researchersdescribe as a “rape subculture.”34 A rape subculture is said to existin which the number of sexual assault incidents exceed the norm,victims are frequently blamed for their assaults, and internal forcescollaborate to deincentivize reporting to authorities. Dr. KristenZaleski, a professor and psychotherapist at the USC School of SocialWork who works with survivors of MST, says that the touch pointsof military culture “can rapidly turn into rape-supportive attitudes ifa victim is seen as ‘not a part’ of the collective group and thereforean acceptable target of violence.”35

Even with more women in uniform today than ever before, theystill make up only 15 percent of the active duty military.36 Women’s“outsider” status is accentuated by the dich otomy of military language,a gendered vocabulary in which “girls” and “ladies” describe sub-standard performers, and toughness—a first-order value—is associatedwith being a “man.” The research has found correlations betweenthe “othering” of women and sexual violence against women. Con -nections have also been drawn between the military’s masculinizedculture and the emphasis on enduring pain in silence, on the onehand, and the reluctance of MST victims or survivors to report beingassaulted, on the other.37

The rape subculture is exacerbated by an “us versus them” dialectic

that predominates the military’s combat-masculine-warrior mentality.In order to acclimate recruits to kill the enemy without a second thoughtand pull the trigger instantly in war-time situations, recruits are trainedto dehumanize their combat opponents and instructed to give no con-sideration to the enemy’s feelings, emotions, or lives. Effective in turningyoung people into fighting machines, the highly developed capacity todehumanize other people can have unintended consequences in non-combat scenarios, a skill set capable of devastating misuse in off-dutysituations. Brought into the barracks context, in which 18- to 24-yearold men and women interact socially against a background of high-stress jobs, readily accessible alcohol, close-quarter gossip, and sexual

politics, the ability to disassociate from others—to dehumanize out-siders— can result in “unspeakable acts of sexual violence (committed)on its own members.”38 The cross-currents of the “us versus them”dialectic and the familial bond dynamic may collide to intensify theresultant trauma. The MST survivor, like the incest survivor, must con-tinue to interact with the perpetrator on a daily basis, pressured towithhold the information in order to protect the perpetrator, a brother-in-arms, and the military unit as a whole.

Repercussions of Reporting

A variety of factors within military culture discourage victims fromreporting instances of sexual assault. As Elizabeth L. Hillman, presidentof Mills College and formerly a professor of law at UC Hastings, writesin Front and Center: Sexual Violence in U.S. Military Law, “Reportingfellow troops for sexual misconduct can…be interpreted as disloyal; itcan lead to the humiliation and punishment of the military offenderand cause damage to the public image of the armed forces.”39 Theperception of being disloyal to one’s unit—a military member’s surrogatefamily—is fraught with risk.

Many MST survivors tell of being ostracized in the wake of informingauthorities about their assault, accused by their leadership of beingweak, or of having brought the incident upon themselves by their own“slutty behavior.”40 Wrenching criminal investigations can ensue thatforce unit members to take sides, which may result in a division ofallegiances that often turns in favor of the male perpetrator, with thesurvivor unable to move to another unit and forced to work in proximitywith the assailant. Perpetrators, frequently older and more senior inthe hierarchy, insulate themselves against accusations by fostering closerelationships within the chain of command while simultaneously selectingsurvivors who lack meaningful political support. In what often turnsout to be a “he said, she said” situation, perpetrators have carefullygreased the wheels in their favor long in advance.41

Whether or not MST survivors choose to report, the trauma theysustain routinely leads to their separation from the military with a lessthan honorable discharge, i.e. bad paper. Self-medication with drugsor alcohol or both, depression, eating disorders, and many other physicaland psychological conditions stemming from trauma can diminishwork performance, lead to antisocial behavior, and result in positivedrug tests, thus causing the chain of command to initiate involuntaryseparation proceedings against the MST survivors. In particular, denialof the Post-9/11 G.I. Bill—a necessary result of bad paper—throws a

INDEED, effective advocacy in the MST context often turns on thelawyer’s understanding the military cultural experience that led to theMST. Many layers of trust often have already been destroyed before aMST survivor meets with a lawyer since the bonds have been brokenwith his or her surrogate military family.

Los Angeles Lawyer September 2016 37

MST survivor’s postmilitary life into chaos.Instead of attending four years of college forfree along with an approximately $2,000 livingstipend, an MST survivor with bad paper isforced to find and hold a civilian job, negotiatethe fallout of the MST, and repair their brokenidentities at the same time. In addition, medicalbenefits are often denied as a result of badpaper, leaving survivors without a viable optionfor critical therapeutic services.

Advocacy

Restoration occurs through a successful dis-charge upgrade. The chances of success in -crease exponentially when a lawyer preparesthe veteran’s discharge upgrade application,be it before the DRB or BCMR. An applica-tion consists of a standard legal brief accom-panied by declarations, medical documenta-tion, and other supporting evidence. Thebrief tells the veteran’s complete story—aversion of reality often diametrically op posedto the version contained in the survivor’sofficial military file—by describing the MST,the attendant trauma, and the cause-effectrelationship between the symptomology andthe survivor’s downward career trajectory.Without adept legal assistance and untrainedin developing evidentiary records, a veteran—uncertain of what is im portant—will almostcertainly fail to convince either the DRB orthe BCMR to change the characterization ofdischarge.

Indeed, effective advocacy in the MST con-text often turns on the lawyer’s understandingthe military cultural experience that led to theMST. Many layers of trust often have alreadybeen destroyed before a MST survivor meetswith a lawyer since the bonds have been brokenwith his or her surrogate military family.Additionally, telling the story of the underly -ing experience often triggers the feelings thatarise out of the MST.42 An attorney can avoidfurther trauma on the part of the MST survivorand help him or her on the appropriate paththrough a willingness to listen to the survivor’sexperiences without judgment, thus creatingan environment that fosters trust.

In this context, lawyers are at their mosteffective when they are aware of their use oflanguage when interacting with MST clients.It is frequently useful to allow the client todescribe his or her experiences in the client’sown language. Indeed, a good rule of thumbis to mirror the language that the client isusing back to him or her. If a lawyer feels it isnecessary to use different phraseology in orderto explain certain legal definitions, it can helpto clearly articulate to the client why differentlanguage is being used. Then, the client willnot mistakenly think the lawyer is definingthe client’s experience in a way with whichthe client may not identify.

Also, it can be helpful for lawyers to jet-

38 Los Angeles Lawyer September 2016

tison expectations formed from past experi-ences or histories. That is, it is advisable toexercise caution about trying to make one’sclient into a “perfect victim.” Thus, it isimportant to take care before even labelingthe client a victim at all. n

1 38 U.S.C. §1720D(a)(1).2 10 U.S.C. §920.3 38 U.S.C. §1720D(f).4 U.S. DEP’T OF DEFENSE SEXUAL ASSAULT PREVENT AND

RESPONSE, 2014 ANNUAL REPORT HIGHLIGHTS, availableat http://sapr.mil/index.php/fy14-annual-report-highlights[hereinafter 2014 ANNUAL REPORT].5 SHANNON K. BARTH, ET AL, Military Sexual TraumaAmongst Recent Veterans, 50 AM. J. OF PREVENTATIVE

MED. 77-86 ( 2016).6 ARMY REG. 600-20, §8-4.7 2014 ANNUAL REPORT at 8.8 KIRBY DICK, Don’t Trust the Pentagon to End Rape,N.Y. TIMES, June 3, 2013, available at http.www.nytimes.com.9 MARYLENE CLOITRE, ET AL., STAIR for StrengtheningSocial Support and Relationships Among Veterans WithMilitary Sexual Trauma and PTSD, 181 MILITARY MED.183-87 (2016).10 CONN. VETERANS LEGAL CTR., VETERANS DISCHARGE

UPGRADE MANUAL, 17 (2011) [hereinafter CONN.VETERANS] .11 Human Rights Watch, Booted: Lack of Recourse forWrongfully Discharged U.S. Military Rape Survivors,2 (May 19, 2016), available at https://www.hrw [here-inafter Human Rights Watch].12 Nat’l Coal. for Homeless Veterans, Homeless FemaleVeterans, available at http://www.nchv.org.13 Human Rights Watch, supra note 11, at 3.14 32 C.F.R. §70.8(a)(2). 15 32 C.F.R. §70.8 (b)(12)(vi).16 Id.17 32 C.F.R. §70.9(b).18 2 C.F.R. §70.9(c)(3)(i).19 32 C.F.R. §70.9(c)(3)(ii).20 CONN. VETERANS, supra note 10, at 15.21 28 U.S.C. §2401.22 10 U.S.C. §1552.23 10 U.S.C. §1552(b).24 Dickson v. Sec’y of Def., 68 F.3d 1396, 1405 (D.C.Cir. 1995).25 Allen v. Card, 799 F. Supp. 158, 166 (D.D.C. 1992).26 10 U.S.C. §1552(f)(2).27 KATHLEEN GILBERD, Upgrading Less-Than-Fully-Honorable Discharges, in THE AM. VETERANS AND

SERVICE MEMBERS SURVIVAL GUIDE, 346, 353-54 (2009). 28 Id.29 Parker v. Levy, 417 U.S. 733, 743 (1974).30 KRISTEN ZALESKI, UNDERSTANDING AND TREATING SEX-UAL TRAUMA 17-25 (2015) [hereinafter ZALESKI].31 Parker, 417 U.S. at 749.32 Chappell v. Wallace, 462 U.S. 296, 300 (1983).33 ZALESKI, supra note 30, at 22-24.34 Id. at 20 .35 Id. at 21.36 By the numbers: Women in the U.S. Military, Jan.24, 2013, CNN.COM., http://www.cnn.com.37 ZALESKI, supra note 1, at 23.38 Id. at 21.39 ELIZABETH HILLMAN, Front and center: Sexual violencein U.S. Military law, 37 POL. & SOC. 106 (2009).40 BESSEL A. VAN DER KOLK, ET AL, TRAUMATIC STRESS:THE EFFECTS OF OVERWHELMING ON MIND, BODY AND

SOCIETY 24-46 (2007).41 MIETTE WELLS, UNDERSTANDING MILITARY SEXUAL

TRAUMA 58 (2013).42 For a more in-depth discussion on trauma memory,see ZALESKI, supra note 30, at 82-83.

Los Angeles Lawyer September 2016 39

4x Forensic Engineering Laboratories, Inc., p. 38

Tel. 714-450-8500 www.4xforensic.com

AHERN Insurance Brokerage, Back Cover

Tel. 858-571-9030 or 800-282-9786 www.AHERNinsurance.com

Chapman University School of Law, Inside Front Cover

Tel. 877-CHAPLAW (877-242-7529) www.chaplaw.edu/law

Corporate Realty Advisor, p. 17

Tel. 800-507-6673 www.Attorneysleasespecialist.com

CPT Special Needs Trusts, p. 38

Tel. 877-695-6444 Ext: 2 www.snthelp.com

Lawrence W. Crispo, p. 6

Tel. 213-926-6665 e-mail: judgecrispo@earthlink.net

E. L. Evans & Associates, p. 31

Tel. 310-559-4005

First Republic Bank, p.2

Tel. 855-866-4824 www.firstrepublic.com

Fragomen, p. 4

Tel. 310-820-3322 www.fragomen.com

Higgins, Marcus & Lovett, Inc., p. 6

Tel. 213-617-7775 www.hmlinc.com

The Holmes Law Firm, p. 8

Tel. 626-432-7222 www.theholmeslawfirm.com

Jack G. Cohen Expert Witness, p. 6

Tel. (747) 222-1550 jack@coheninv.com

Jurisco, Inc., p. 10

Tel. 800-274-2663 www.Jurisco.com

Kantor & Kantor, LLP, p. 31

Tel. 877-783-8686 www.kantorlaw.net

LawBiz Management, p. 31

Tel. 800-837-5880 www.lawbiz.com

LawPay/Affinipay, Inside Back Cover

Tel. 866-376-0950 www.lawpay.com

Lawyers’ Mutual Insurance Co., p. 7

Tel. 800-252-2045 www.lawyersmutual.com

Mercury Document Imaging, p. 4

Tel. 310-201-0010 www.marcusmediation.co

Michael Marcus, p. 4

Tel. 800-350-1672 www.mercurydoc.com

The National Academy of Distinguished Neutrals, p. 10

Tel. 310-341-3879 www.californianeutrals.org

Noriega Clinics, p. 14

Tel. 213-716-3744

Ron J. Anfuso, CPA/ABV - An Accountancy Corp., p. 24

Tel. 310-378-6606 www.anfusocpa.com

SoCal Private Fiduciary, p. 31

Tel. 213-221-5038 www.SoCalPrivateFiduciary.com

Stephen Danz & Associates, p. 10

Tel. 877-789-9707 www.employmentattorneyca.com

Vicenti, Lloyd & Stutzman LLP, p. 30

Tel. 626-857-7300 www.vlsllp.com

Walzer & Melcher, p. 1

Tel. 818-591-3700 e-mail: al@walzermelcher.com

Research Refresh RechargeThe next time you visit LACBA, be sure to stop by the new Member Lounge, located adjacent to the visitor reception area on the 27th floor.

LACBA's Member Lounge is open Monday through Friday during regular business hours from 8:45 a.m. until 5:00 p.m.

An eBranch of the LA Law Library

A space to work

Convenient WiFi connection for your laptop and smartphone

A place to enjoy a snack or beverage and recharge

A small conference room (seats 4) where members can work or meet privately with clients

Member Lounge

40 Los Angeles Lawyer September 2016

THE ENFORCEMENT OF JUDGMENTS ACT contained in Civil Code ofProcedure Sections 680.010 to 724.260 can be thought of as a toolchest requiring the practitioner to use the right tool for the rightjob. When doing repairs around the home, you want to use thecorrect utensil, and a lawyer trying to enforce a judgment or anorder also needs to use the right utensil. If the tried-and-true wagegarnishment or bank levy is not effective to reach a debtor’s incomeor assets, an assignment order and charging order are additionaltools a judgment creditor can use.

Code of Civil Procedure Section 708.510 authorizes a court toassign a debtor’s right to receive a paymenteven if that right is conditioned upon futureevents that are out of the control of the debtor.An assignment order is akin to a wage gar-nishment or earnings withholding order, whichis useful in cases in which a debtor receivesmoney from third parties other than by salaryor as a contract worker, for example royaltiesfor books or music, residuals, profit partici-pation, and partnership distributions. When seeking an assignmentorder, the request for the order and the actual order must specifyfrom which entity the debtor’s income stream should be taken. TheAmerican Society of Composers, Authors and Publishers (ASCAP)or Broadcast Music Inc. (BMI), which license music, collect licensingfees, and pay royalties, are used regularly by musicians.

It is important to know the debtor’s sources of income prior tofiling the motion for assignment order, or in a family law matter arequest for order (RFO) for an assignment order. A third-party judg-ment debtor examination order may be required for a trade guild(for example., SAG/AFTRA, DGA). In conducting the judgmentdebtor examination, be sure to ask about all streams of income,even potential income, which may come in many forms, for exampledistributions from limited liability companies or limited partnerships,spousal support, or one-time payments such as lottery win nings.Assuming the motion or RFO is granted, you will need to serve iton any third parties that have been paying monies to the debtor.One advantage of an assignment order is that the creditor candiscover the money before the debtor has a chance to hide it. Goingdirectly to the source of the funds assures the order will be honored.

If a debtor has an interest in a limited partnership or a limitedliability company and is not receiving distributions from the part-nership or limited liability company, a charging order may beeffective. Assets of a general or limited partnership or limited liabilitycompany are not liable for the debts of a debtor. However, the wayto reach the interest of a partner (in a general or limited partnership)or member of a limited liability company is to apply to the courtfor an order charging the debtor’s interest pursuant to Section708.310.

A motion for a charging order and request for an assignmentorder require a declaration from the creditor. The declaration must

show the debtor has an interest in a partnership or limited liabilitycompany. If this information has not been obtained, follow the sameprocedures for a motion for an assignment order: obtain a third-party judgment debtor examination order directed to the partnershipwith the records of the partnership or limited liability company,including a copy of the partnership agreement or operating agreement(or both), showing the debtor’s interest in the partnership or limitedliability company.

The motion or RFO, when filed, is served on the debtor and allpartners or the partnership, all members or the limited liability com-

pany. Filing the motion and service on the partnership or limitedliability company creates a lien on the debtor’s interest in the part-nership or limited liability company.1 The lien is in effect until thecharging order is issued or, if the motion for charging order is denied,the lien is extinguished.2

Once obtained and properly served, the charging order acts as alien on the debtor’s interest in the partnership or limited liabilitycompany. This is similar to a lien on real property, and the creditorcan be paid if the debtor’s interest in the partnership or limited liabilitycompany is liquidated by the partnership or limited liability companyitself or if the entire partnership is sold. A charging order that is notfully understood may also cause a debtor to think his or her interestin the limited liability company or partnership will be sold. It mayalso cause the debtor embarrassment among other members of thepartnership or limited liability company.

Assignment and charging orders are powerful tools for enforcementof judgments and orders. Like most collection methods, they arenot mutually exclusive. It is usually a good idea to file for both anassignment order and a charging order at the same time. Althoughit is possible to file them at the same time, some courts require thatthey be filed separately or that two filing fees be charged. It is bestto be creative and not limit the scope of the request to the court.The worst outcome is the judicial officer denies the request, but itmay be possible to persuade the judicial officer to grant the requestand strike gold with these new enforcement hammers. n

1 CODE CIV. PROC. §708.320.2 CODE CIV. PROC. §§687.030, 697.040, 708.320(b).

closing argument BY IRA M. FRIEDMAN AND DAVID FRIEDMAN

Using Assignment and Charging Orders to Enforce Judgments and Orders

Assignment and charging orders are powerful tools for enforcement

of judgments and orders

Ira M. Friedman and David Friedman are certified family law specialists andpartners in the Beverly Hills law firm of Friedman and Friedman.

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