1. RECON 2011
Recapping New Laws from 2010 and
The Who When and What to Expect In 2011
Allen Matkins Leck Gamble Mallory & Natsis LLP
December 8, 2010

2. RECON 2011
 "Dodd-Frank" Act - The most significant
financial legislation since the 1930’s
 California’s new one-day jury trial process
and what to expect
 Overview of the new employment laws
affecting California employers

3. Dodd Frank Act
Overview
 Enacted July 21, 2010
 Most sweeping change to the regulation of the
Financial Services Industry since the 1930's
 848 pages long
 6 to 24 months before full impact
 Stated purpose of the Act:
 Promote financial stability by improving
accountability and transparency
 Ending bailouts
 Protect consumers from abusive financial service
practices

4. Dodd Frank Act
What is the Impact?
 Creates an Advance Warning System
 Greater Transparency and Accountability for Exotic
Instruments
 Executive Compensation and Corporate Governance
 Enhances Regulation, Oversight and Enforcement
Mechanisms for Existing Regulations
 Puts an end to “Too Big to Fail” Bailouts
 Creates Bureau of Consumer Financial Protection

5. Dodd Frank Act
Bureau of Consumer Financial
Protection (BCFP)
 BCFP
 Responsible for virtually all federal consumer financial
protection regulations
 Powers and authority transferred to the BCFP
 Who will be subject to the regulations of the BCFP?
- all consumer financial institutions
- anyone extending consumer credit or servicing
- anyone providing real estate settlement services
- financial advisors, including credit counselors and debt
management services
- issuers of stored value or payment instruments

6. Dodd Frank Act
Executive Compensation
Say-On-Pay Provisions
 shareholders get opportunity for a non-binding vote on
executive compensation.
 institutional investors must report annually on how they
voted on “say on pay”.

7. Dodd Frank Act
Executive Compensation
Golden Parachutes in Connection with
Solicitations
 any solicitation subject to SEC regulation for approval
of a merger, proposed sale of assets, etc., the solicitor
must give shareholders non-binding vote on any
compensation paid to executives as a part of the
proposed transaction.
Clawbacks of Bonuses Where Financials Are
Restated
 companies required to recapture incentive based
compensation paid for financial performance where
financials are later restated

8. Dodd Frank Act
Executive Compensation
Nominating Directors
 Companies will be required to include in proxy
materials nominees for director from shareholders or
groups holding at least 3% of the voting power.

9. Dodd Frank Act
New Whistleblower Provisions for SEC
Whistleblower Incentives
 Greater protections afforded to whistleblowers.
 Monetary incentive – whistleblowers may be paid
10%- 30% of all sanctions collected over $1 million.

10. Expedited Jury Trials Act (AB 2284)
Overview
 Signed into law by Arnold Schwarzenegger on
September 30, 2010
 Based on a “summary jury trial program”
developed by the plaintiff and defense bars in
South Carolina in the late 1990’s.
 Intented to be a voluntary, inexpensive, and
binding program that will increase access to
the courts.
 Goes Into Effect January 1, 2011
 Lasts Until January 1, 2016

11. Expedited Jury Trials Act (AB 2284)
What Is It?
 Completely voluntary – parties must agree to use
after dispute arises
 Binding if used – not a “free look” or “mock trial”
 Trial lasts one day
 Jurors are permitted to deliberate as long as needed

12. Expedited Jury Trials Act (AB 2284)
How Does It Work – Key Features
 8 jurors instead of 12
 6 out of 8 needed for verdict
 3 peremptory challenges for each side, instead of 6
 Voir dire is streamlined
 Each side has three hours to present its case-in-
chief
 Standard rules of evidence apply, unless parties
agree to use relaxed rules

13. Expedited Jury Trials Act (AB 2284)
How Does It Work – Key Features
 Verdict can be subject to a written “high/low
agreement” entered into by the parties concerning
the amount of the award
 This guarantees the plaintiff a minimum damage award while
capping the maximum liability that the defendant faces.
 Neither the existence of such agreement, nor the amounts
contained in it, may be disclosed to the jury.

14. Expedited Jury Trials Act (AB 2284)
How Does It Work – Key Features
 No post-trial motions
 No motions for directed verdict
 No motions to set aside judgment
 No motions for new trial (with some limited exceptions)
 Still allowed to bring motions to recover costs and
attorneys’ fees

15. Expedited Jury Trials Act (AB 2284)
Limited Appeal Rights
 Verdict is binding
 Can move for new trial or appeal only if trial
involved:
1. Judicial misconduct that materially affected the
substantial rights of a party
2. Juror misconduct
3. Corruption, fraud, or other undue means that prevented a
fair trial

16. Expedited Jury Trials Act (AB 2284)
Additional Features
 No statutory limitations on discovery
 Judicial Council may limit in forthcoming rules
 Rules of evidence still apply
(privileges, hearsay, etc.)
 Parties generally free to stipulate to alternative rules
of evidence, discovery, etc.

17. Expedited Jury Trials Act (AB 2284)
No Pre-Trial Agreements to Use
Expedited System
“Any agreement to participate in an expedited jury
trial under this chapter may be entered into only
after a dispute has arisen and an action has been
filed.”
 Arguably, contracts with clauses mandating use of system
are illegal.

18. Expedited Jury Trials Act (AB 2284)
Why Use?
 Primary reason: cost
 Some estimate trial could be up to 80% less
expensive
 Less discovery with only 3 hours per side
 Trial in one day (maybe & with jury selection)
 No appeal (in most cases)
 Expedited system may mean trial occurs in relatively
short order.

19. Expedited Jury Trials Act (AB 2284)
Potential Drawbacks
 Three hours –really?
 Very difficult to manage case so efficiently
 Jury will have very little time to think, get past the emotional
aspects of the case
 No appeal
 Judges are not perfect

20. Expedited Jury Trials Act (AB 2284)
When to Use?
 Too early to tell
 Judicial Council ordered to promulgate additional
rules by January 1, 2011
 Additional rules will cover:
 Time limits for argument vs. presentation of evidence
 Time limits for jury selection (what happens if you run
out?)
 Pre trial exchanges and submissions
 Could include limitations on discovery
 No appeal anyway – could prove to be a judicial free-for-
all

21. Expedited Jury Trials Act (AB 2284)
Bottom Line
 It is unclear how well the system will work - time will
tell
 Could be useful tool for smaller cases with relatively
straightforward issues
 With high/low agreement, may essentially be
another ADR option
 May have psychological benefit of giving the parties their
“day in court”

22. Labor & Employment Update
The Re-Emergence of
Discrimination Class Actions
 The Equal Employment Opportunity Commission has
announced that it will be focusing on "systemic"
claims of discrimination and has filed 111 systemic
class action lawsuits.
 Dukes v. Wal-Mart, U.S. Court of Appeals for the
Ninth Circuit case, in which the Court certified a class
of almost 1.5 million members alleging sex
discrimination.
 Suggestions to minimize the risk of discrimination
class actions.

23. Labor & Employment Update
Suggested Revisions to Arbitration Agreements
 Trivedi v. Curexo Technology Corp., 189 Cal.App.4th
387 (9/28/10)
 Suggested revisions
 Employers should provide a copy of the arbitration rules
being applied when the employee signs the arbitration
clause.
 The employer cannot use a prevailing party attorneys’ fees
provision.
 The employer cannot include language that either party can
seek injunctive relief.

24. Labor & Employment Update
California Supreme Court Rejects Adoption
of Stray Remarks Doctrine
 Reid v. Google, 50 Cal.4th 512 (8/5/10)
 Issue: Should California courts follow the federal courts
in adopting the stray remarks doctrine in discrimination
cases?
 Holding: The Court rejected the categorical exclusion of
"stray remarks" holding that it may lead to unfair results.

25. Labor & Employment Update
NLRB Claims Termination Due to Facebook
Comments is Illegal
 American Medical Response of Connecticut, a large
ambulance service provider, terminated an
employee after she criticized her boss on Facebook.
 The Company claims the employee's Facebook
comments were not the only reason for her
termination.
 NLRB investigated the circumstances and claimed
that the Company "maintained and enforced an
overly broad blogging and Internet posting policy." A
hearing is scheduled for January 23, 2011.

26. Labor & Employment Update
No Double Dipping with the
Private Attorney General Act
 Villacres v. ABM Industries (189 Cal.App.4th 562 (10.22.10)
A class member is barred not only from bringing claims that
were actually alleged in a previously settled class action, but
also claims that could have been raised.
 The Court held that the court-approved settlement in the prior
case bars any further litigation, not only on the claims that
were actually alleged, but also on the claims that could have
been alleged.
 Remember: The language in the release must be properly
drafted to cover all claims which were or could have been
brought. Also, note that if Villacres had opted out of the prior
class, he would not have been barred from bringing the
claims.

27. Labor & Employment Update
The Successor in Interest Rule
Under the Family Medical Leave Act
 Sullivan v. Dollar Tree Stores, Inc. (2010 U.S. App.
Lexis 19932, 9th Cir. 2010) – Was Dollar Tree
obligated to provide FMLA leave for employees who
previously worked for a company whose leasehold
interests were purchased by Dollar Tree?
 Ruling: Dollar Tree was not a successor in interest
under the Department of Labor regulations.
 Factors to be Considered

28. Labor & Employment Update
Increased Scrutiny of Proper Worker Classification
 Proposal before Wage and Hour Division of
Department of Labor

29. Labor & Employment Update
Failure to Retain Job Applications May Nudge
Claim Past Summary Judgment
 Reeves v. MV Transportation, 186 Cal.App.4th 666
(7/9/10)
 A failure to retain job applications for two years, as
required by California Government Code Section
12946, could nudge a close claim past a motion for
summary judgment.

30. Contact
Stephen J. Kepler Julie W. Russ
Partner Senior Counsel
Orange County Office Orange County Office
Phone: 949.851.5489 Phone: 949.851.5494
Facsimile: 949.553.8354 Facsimile: 949.553.8354
skepler@allenmatkins.com jruss@allenmatkins.com
Robert C. Shaia
Senior Counsel
Orange County Office
Phone: 949.851.5477
Facsimile: 949.553.8354
rshaia@allenmatkins.com