The decision is Fanuc Corp. v. Superior Court (Cal. Ct. App., 4th Dist., Div. 2, Oct. 9, 2026), and it turns on personal jurisdiction, the legal power a court needs over a defendant before it can enter a binding judgment against it. The injured worker here had a sympathetic case. He still lost the jurisdiction fight, because the law asks a narrower question than most people expect.

How a Robot Injury Became a Jurisdiction Fight

Abraham Bernal was a maintenance technician at a Niagara Bottling plant. In June 2020, while he was securing a ladder beneath a machine’s gripper head suspended 15 to 20 feet above the floor, the machine released the head and severely injured him. A robot made by Fanuc Corporation, a Japanese company, had malfunctioned during the same incident. Bernal sued the Japanese manufacturer along with its American subsidiary, Fanuc America, a Delaware corporation headquartered in Michigan.

Fanuc America didn’t contest being sued in California. Fanuc Japan did. It filed a motion to quash, the procedural tool a defendant uses to argue a court has no power over it, pointing out that it has no California office, no California property, no California bank accounts, and no registration to do business here. The trial court let the case proceed anyway, reasoning that the parent could be reached through its subsidiary. The Court of Appeal disagreed and reversed.

Why Personal Jurisdiction Didn’t Reach the Foreign Parent

Courts recognize two ways to acquire personal jurisdiction. General jurisdiction, which lets a court hear any claim against a defendant, exists only where a company is “essentially at home,” meaning, for a corporation, its state of incorporation or its headquarters. Specific jurisdiction is narrower and applies only when the lawsuit itself arises out of the defendant’s contacts with the state.

Bernal’s theory was that Fanuc America’s California activity should be attributed to Fanuc Japan, making the parent “at home” here. The court rejected it for a clean reason. Even if you treat the subsidiary’s contacts as the parent’s, Fanuc America itself isn’t “at home” in California, because it’s incorporated in Delaware and headquartered in Michigan. A subsidiary that isn’t at home in the forum can’t anchor all-purpose jurisdiction over its foreign parent, whether the theory is agency (one company acting for another) or alter ego (treating two companies as one because the corporate separation is a sham). The court also noted that the U.S. Supreme Court’s Daimler decision gutted the older California cases that let plaintiffs reach foreign parents through a “representative services” theory, so that route is effectively closed.

The Injury Has to Connect to the Company’s California Contacts

That left specific jurisdiction, and here the court focused on a requirement called relatedness: the plaintiff’s injury has to arise out of or relate to the defendant’s contacts with California. Even assuming Fanuc Japan reached into the state through its subsidiary, Bernal couldn’t clear that bar. The specific robot model that hurt him was sold in Europe to the company that built the larger machine, not in California. Bernal pointed to Fanuc America’s three California service centers and to his employer’s purchase of other Fanuc robots. But neither fact showed that this robot’s alleged defect connected to Fanuc’s California business. Selling other products here, and running repair shops here, doesn’t create jurisdiction over a product that was never shown to be marketed, sold, or installed in the state.

What This Means for Companies With Cross-Border Structures

If you operate through a parent-subsidiary structure that crosses borders, the protection here is concrete. Your American subsidiary can do substantial business in California without exposing the foreign parent to all-purpose jurisdiction, as long as the subsidiary is incorporated and headquartered somewhere else. That’s a planning point, not just a litigation outcome. Where you incorporate and base a U.S. subsidiary shapes where the parent can be sued.

For companies defending product claims, relatedness is a gate worth using. A plaintiff has to tie the specific product that caused the harm to your contacts with the forum, and a generalized market presence won’t do it. And for anyone on the other side, bringing the claim, the lesson is to build the jurisdictional record around the actual product, its actual sales, and its actual path into the state, not the defendant’s overall footprint.

The Bottom Line

Corporate structure is risk management, and this decision shows how much can ride on where a subsidiary is incorporated and based. A foreign parent isn’t automatically suable in California just because its U.S. arm sells heavily here, and a product claim won’t reach a foreign manufacturer unless the specific product is tied to that manufacturer’s California contacts. Companies with cross-border structures should map their jurisdictional exposure before a lawsuit forces the question, and companies facing product claims should test relatedness early. Horst Legal Counsel advises businesses on jurisdictional strategy, cross-border litigation risk, and the defense of product and personal injury claims. If you want to understand where your company, or its parent, can actually be sued, we’re glad to talk it through.

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The case is Schneider v. Warner Bros. Discovery, Inc. (Cal. Ct. App., 2d Dist., Sept. 10, 2026). Schneider, the producer behind Nickelodeon shows like All That, Drake & Josh, and iCarly, is one of the main subjects of Quiet on Set: The Dark Side of Kids TV, a five-part documentary about the culture behind those shows. The series also recounts sexual crimes against child actors committed by other Nickelodeon figures, three men who were named in the film and criminally convicted. Schneider sued for defamation, arguing that through editing, voiceovers, and juxtaposition the film implied that he too had abused children. Warner Bros. Discovery and the producers moved to dismiss under California’s anti-SLAPP statute, the fast-track law for ending lawsuits that target protected speech. The trial court refused. The Court of Appeal reversed.

Defamation by Implication Has a Gatekeeper

Schneider did not claim the documentary stated an outright falsehood about him. He relied on defamation by implication, a theory that lets a plaintiff sue when a publisher arranges otherwise true facts so as to suggest a false and defamatory connection between them. It’s a real doctrine in California. But it comes with a threshold. Before any of it reaches a jury, the court decides, as a matter of law, whether the work is even reasonably capable of the defamatory meaning the plaintiff claims. That question is where this case turned.

Angry Comments Are Not Evidence

To show that viewers understood the film as branding him an abuser, Schneider submitted screenshots of online reactions: YouTube comments, posts on X, and comments under his own apology video. The trial court let that evidence in. The Court of Appeal held that was an error of law and an abuse of discretion.

The reasoning is worth keeping. Whether a work is reasonably susceptible to a defamatory meaning is a question for the court, not one answered by taking a poll of the audience. A pile of comments showing that some viewers drew the worst inference does not make that inference reasonable, and it does not manufacture a jury question. The court went further and flagged how unreliable social media evidence tends to be, given fake accounts, anonymity, and the performative nature of online posting. For any content producer, that is real protection. Your exposure is measured by what your work reasonably conveys, not by the hottest takes it provoked.

Context Still Controls, and Sometimes the Trailer Stands Alone

The court also addressed context. A publication is normally judged as a whole, not carved into fragments. Yet the court recognized that audiences often encounter a piece of a work on its own, so it analyzed the separately released trailer as its own unit. Even then, neither the trailer nor the full documentary supported Schneider’s reading. The film pointedly separated the workplace misconduct its participants attributed to Schneider, things like a toxic environment and inappropriate innuendo, from the child sexual abuse it attributed to the three named, convicted men. It also stated plainly that an internal investigation found no evidence Schneider had abused children. Drawing on an older California decision, the court refused to split hairs to find an accusation the work does not make.

Bottom Line

Schneider is a strong result for anyone who publishes hard, newsworthy content. It confirms that defamation by implication has a real threshold, that the judge guards it, and that a plaintiff cannot get past it simply by showing the internet was outraged. If you produce documentaries, journalism, reviews, or any public commentary that names names, the takeaway is to build your record around what the work reasonably says in full context, and to stop treating a viral reaction as your legal problem. It usually isn’t. If you’re weighing the defamation exposure in something you’re about to publish, or defending a claim built on audience reaction, we’re glad to talk it through.

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The case is Velocity Investments, LLC v. Nguyen (Cal. Ct. App., 3d Dist., No. C102846, Aug. 28, 2026), and it turns on two documentation rules that every debt buyer in the state already has to follow.

Two Rules Every Debt Buyer Has to Follow

California’s Fair Debt Buying Practices Act, which lawyers call the Debt Buyers Act, was passed to stop a wave of collection lawsuits built on thin evidence, cases where the person being sued couldn’t tell whether the debt was even theirs. The Act sets two requirements. Before collecting, a debt buyer must have access to a document evidencing the consumer’s agreement to the debt (the access requirement), and it must attach that document to the collection complaint (the attachment requirement). Violate either, and the consumer can recover actual damages plus statutory damages of $100 to $1,000.

The Paperwork Problem

Velocity Investments sued Thong Huu Nguyen in 2019 to collect an unpaid balance of $5,158.61. To its original complaint, Velocity attached a generic borrower agreement between “the borrower” and WebBank, pages of terms plus a blank loan agreement and promissory note, and it referred to a transaction history it never attached. The trouble was that the borrower agreement didn’t tie Nguyen to any debt. It carried no signature, didn’t name him as the borrower, and read as a precursor to a loan rather than proof of one. The blank note inside had empty fields where the loan amount, dates, interest rate, and member ID should have been.

Nguyen cross-complained on behalf of a class. Velocity then tried to clean things up with an amended complaint attaching the executed $8,000 note and the transaction history, and the trial court found the error corrected and granted summary judgment for Velocity.

The Fix Came Too Late

The Court of Appeal reversed. The borrower agreement attached to the original complaint didn’t evidence Nguyen’s agreement to the debt, so the attachment requirement was violated the day the complaint was filed. And here’s the part that matters for anyone collecting debt: the amended complaint did nothing to erase that violation. The court noted that the Rosenthal Act, a related California collection statute, expressly lets collectors cure their mistakes, yet the Debt Buyers Act contains no such provision. When the Legislature leaves a cure option out of one statute while writing it into a sibling statute, that silence is deliberate. A defective complaint stays defective.

Velocity had one more card. It argued any mistake was a “bona fide error,” an honest, unintentional slip made despite reasonable procedures, because it relied on an experienced collection firm that automated its filings and had an attorney check each complaint against a checklist. The court refused to resolve that on summary judgment. Whether those procedures were actually reasonable is a jury question, including whether it’s reasonable to lean entirely on outside counsel for compliance. That goes to trial.

The court also held Nguyen could sue without showing he lost a dime. Unlike federal courts, California courts don’t require a concrete injury, and the Act makes statutory damages available on top of any actual damages, not instead of them.

What This Means for Businesses That Collect Debt

The lesson isn’t subtle. If you file collection complaints in California, the documents have to be right the first time, because an amendment is no longer a reset button. A class cross-complaint can survive even where the consumer suffered no measurable loss.

The bona fide error ruling reaches past debt buyers. Many businesses lean on automation and outside professionals to stay compliant and treat that reliance as a defense. Still, “our system was supposed to catch it” is an argument you make to a jury, not a shield that ends the case early. If your compliance runs on a process, you should be able to explain how it’s built to prevent the exact error that happened.

The Bottom Line

Debt collection in California runs on documentation, and the margin for error just narrowed. A missing or mismatched attachment is a completed violation, not a fixable typo, and statutory damages plus class exposure make it costly. If your business collects consumer debt, or leans on a firm that does, now is the time to audit how your complaints get assembled and reviewed before they’re filed, not after a cross-complaint lands. Horst Legal Counsel works with businesses on collection compliance and consumer finance litigation. If you’d like a second set of eyes on your process, we’re glad to help. Contact us here.

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The decision is Tesoro Refining & Marketing Company LLC v. City of Carson (Cal. Supreme Ct., Aug. 10, 2026), and it reaches every business paying a local tax in a city with its own refund ordinance. Chief Justice Guerrero, writing for a unanimous Court, held that the Government Claims Act preempts these local procedures.

How Carson’s Local Tax Refund Detour Worked

Carson voters approved an Oil Industry Business License Tax in 2017, charging refinery and petroleum storage operators a quarterly tax of one-quarter of one percent of their gross receipts from business in the city. Tesoro runs a refinery there. After an audit, Carson decided Tesoro had underpaid for a stretch spanning late 2017 into 2018 and sent a deficiency notice. Tesoro paid under protest, then filed a refund claim with the city clerk on the standard state form, arguing the assessment was untimely and the city’s calculation method was wrong. The city denied it, and Tesoro sued.

Carson’s response was procedural. It argued Tesoro had skipped steps, because the city’s ordinance says a taxpayer must first ask the finance director for a refund, then appeal to the city manager, before going to court. The trial court agreed and dismissed, and so did the Court of Appeal. But the Supreme Court reversed.

One Statewide Rulebook for Claims Against Local Government

The Government Claims Act sets a single, uniform procedure for presenting “all claims for money or damages against local public entities.” It spells out who files, what the claim must say, which form to use, where it goes, and how long the government has to respond, generally 45 days before the claim is deemed rejected and the claimant can sue. The Legislature built that system in the late 1950s and early 1960s to replace a chaotic patchwork of local rules the courts had long called “traps for the unwary.”

The legal engine of the decision is field preemption, the rule that when the Legislature means a statute to occupy an entire subject, a local law regulating in that same area cannot be enforced. Reading the Act’s text, structure, and history, the Court concluded the Legislature occupied the whole field of claim presentation. A city may write its own procedures only for the narrow categories the Act carves out, and local tax refunds are not among them.

A Refund Request Is a Claim, Whatever the City Calls It

Carson’s main move was to relabel its refund process as a separate administrative remedy the taxpayer had to exhaust first. The Court rejected the relabeling. A claim for money or damages is a demand asserting a right to be paid, and a request to recover an allegedly unlawful tax is exactly that. Because the city was imposing extra presentation steps on a claim the Act already governs, those steps fell. And once a procedure is preempted, there’s nothing left to exhaust.

One limit matters. The ruling covers local taxes set by a city’s own ordinance. It doesn’t touch property taxes, sales and use taxes, or other taxes whose refund procedures come from the Revenue and Taxation Code or another state statute.

What This Means for Businesses and Property Owners

If your company pays a local business or gross receipts tax and you think the city miscalculated it or assessed it too late, you no longer have to complete the city’s internal refund-and-appeal process before suing. Pay under protest if you must, file your claim under the state Act, and if the city denies it or misses its deadline, you can go to court. The city can’t add steps, add delay, or set a trap that forfeits your claim over one of its internal deadlines. That’s true even in charter cities, which often assume home rule lets them design their tax machinery end to end. It doesn’t reach how a refund claim gets presented.

The Bottom Line

Tesoro is a win for predictability. Businesses challenging a local tax now follow one clear procedure instead of a city-specific maze. If you’re weighing whether to contest a municipal assessment, the path to court is shorter and surer than the ordinance might suggest, and any local rule demanding extra pre-suit steps for a refund is now vulnerable. Tax disputes with local government, and the strategy around preserving and pursuing a refund, are work Horst Legal Counsel handles for business clients. If a city has assessed your business a tax you believe is wrong, we’re glad to talk it through. Contact us here.

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The case is Gilead Tenofovir Cases (Cal. Supreme Ct., Aug. 3, 2026), and while the facts are about HIV medication, the principle reaches every manufacturer that has ever kept one product on the shelf while working on the next.

Two Drugs and a Fifteen-Year Gap

Gilead makes tenofovir-based HIV treatments. Its first, TDF, won FDA approval in October 2001 and became a cornerstone of therapies that save millions of lives worldwide each year. (Before these drugs, HIV carried a 95 percent fatality rate.) One month after that approval, Gilead filed to begin human testing of a second compound, TAF, as a potential backup. A small early trial, fourteen days and thirty subjects, suggested TAF could match TDF’s antiviral effect at a much lower dose, which plaintiffs say meant less risk of kidney, bone, and tooth damage. In 2004, Gilead announced it was shelving TAF. It resumed development in 2010, ran its first large-scale clinical trial in 2013, and won FDA approval in November 2015, ahead of the 2017 expiration of its TDF patent.

The plaintiffs took TDF and allege they suffered serious injuries. Here is the key move. They concede TDF was not defective and don’t say Gilead should have pulled it. They say Gilead should have brought TAF to market years earlier, that they would have switched, and that the delay cost them a safer option. They also concede the data Gilead had in 2004 was not enough to get TAF approved.

Why the Court Refused to Require a Safer Alternative

The plaintiffs built their claim on negligence, the failure to use reasonable care, and on Civil Code section 1714, which sets a default rule that everyone must act with reasonable care to avoid harming others. The trial court let the negligence claim proceed. The Court of Appeal agreed that a manufacturer’s duty of care, its legal obligation to act reasonably toward others, could extend beyond simply not selling a defective product.

The Supreme Court reversed. It signaled doubts about whether a manufacturer can ever be liable in negligence for a nondefective product. Still, it did not have to resolve that larger question. Even assuming such a duty could exist, the Court held that the Rowland factors, the considerations California courts weigh when deciding whether to carve out an exception to the default duty of care, compel an exception here.

The reasoning is practical. A manufacturer cannot reliably know during early testing that a drug in development is safer, so it cannot foresee that any delay will harm users of the existing product. The link between a development decision and a later injury is attenuated, running through a chain of uncertain science and choices by regulators, doctors, and patients. And imposing the duty would backfire. It would invite hindsight second-guessing of complex research decisions, and it could push companies to stop investigating backup products, since an early hint of a safety improvement could later be turned into a lawsuit.

What This Means for Manufacturers and In-House Counsel

The holding is written for drug makers, but the logic travels. A manufacturer’s duty stays anchored to the product it actually sold and whether that product was defective. Your internal decisions about what to develop, how to prioritize research, and when to launch are not a separate source of tort liability just because a plaintiff can later point to something better in your pipeline.

Two things follow. First, if you sell a product that is not defective, a “you should have built a safer one faster” claim now runs straight into Gilead. Second, the Court’s willingness to use Rowland to rein in an expanding duty is worth remembering whenever a plaintiff tries to stretch ordinary negligence into new territory.

Bottom Line

Innovation involves timing, and timing involves judgment calls made under uncertainty. After Gilead, those judgment calls are far harder to convert into a negligence case in California, at least where the product you sold was not defective. If your company makes anything, read it before your next product-liability threat letter arrives. Horst Legal Counsel advises manufacturers, product companies, and in-house teams on liability exposure, litigation strategy, and risk management. If you want to talk through how Gilead affects your product line or a pending claim, we’re glad to help. Contact us here

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Winning a lawsuit is only half the job. If the company or person that owes you money has no assets, the judgment can be close to worthless on its own. A recent California Court of Appeal decision, 8451 Melrose Property, LLC v. Akhtarzad, gives businesses another way to collect, letting a court add new parties to a judgment after the case is over when the evidence shows they were the real players behind it.

A Judgment Is Only as Good as Your Ability to Collect It

Your business wins a lawsuit. After years of fighting, you finally have a judgment worth millions of dollars.

Then reality sets in.

The party you sued has no real assets. That courtroom win suddenly doesn’t feel like much of a win at all. Most business owners assume that’s where the story ends. But in some cases, it doesn’t.

In 8451 Melrose Property, LLC v. Akhtarzad, the California Court of Appeal held that the people truly running a business can be put on the hook for its judgment, even when their names never appeared on the case, if they controlled the litigation and shared in the rewards.

The Tenant Wasn’t the Only One Behind the Lease

The dispute started with a commercial lease. The tenant stopped paying rent soon after moving in and left the building gutted, and the landlord was out millions. After two trials and two appeals, the landlord won a judgment of more than $10.5 million for unpaid rent and the cost of restoring the property.

Winning didn’t solve the real problem. The landlord still had to collect.

That’s when the picture changed. As the landlord dug in, evidence surfaced that the named tenant, Sina Akhtarzad, had never been acting alone. He was one member of an undisclosed “one-for-all” family partnership, a group of relatives who for decades pooled their real estate investments, income, and expenses and ran the whole thing as a single pot of money. The partnership, not Sina by himself, was the real tenant. A family corporation called Amey Enterprise handled the leasing.

So the landlord asked the court to amend the judgment under Code of Civil Procedure section 187, a state law that lets a court fix who is really named on a judgment, and add the individual partners and Amey as judgment debtors, the parties legally required to pay. The trial court did, and the Court of Appeal affirmed.

Knowing About the Lawsuit Wasn’t Enough. Controlling It Was.

Here’s the part that should get every business owner’s attention. The partners didn’t get added just because they knew about the case. Under California law, simply knowing your business partner is being sued does not make you personally responsible for the result. If that were the rule, anyone loosely tied to a lawsuit could be dragged onto the judgment.

What pushed these partners over the line was control. The partnership paid for the defense. It let Sina fight the case on everyone’s behalf through both trials and both appeals. The partners sat behind the litigation the entire time, funding it and benefiting from it, while keeping their names off the caption.

On those facts, the court applied a three-part test: whether the added parties controlled the underlying lawsuit, whether they shared such a unity of interest with the original debtor that their separate identities didn’t really exist (in plain terms, whether they were all effectively one operation), and whether it would be unfair to treat the debt as the named tenant’s alone. The court also made clear that alter ego, the usual doctrine for holding the people behind a company liable for its debts, is not the only path. Here, equity was enough.

What This Means for Business Owners

There are two lessons here, and which one applies depends on which side of the “v.” you’re on.

If your business wins a judgment, don’t assume your options stop at the party named in it. When the evidence supports it, you may be able to reach the people who were actually running the business or the litigation from behind the scenes, even years after the fact. Section 187 carries no statute of limitations, so a defendant who thought the case was long over can still be added.

If you operate through several entities, a partnership, or a handshake arrangement, the warning runs the other way. Courts will look past the names on the paperwork. If you’re directing the litigation, paying for the defense, and sharing in the upside, you can end up personally liable even though you were never named as a defendant. Structure matters, but so does conduct. If your real role in a business doesn’t match what’s on paper, you may be carrying risk you can’t see.

Bottom Line

Winning in court is a milestone, but it only counts if you can collect. 8451 Melrose Property, LLC v. Akhtarzad shows that California courts will look past formal business structures when the evidence proves someone else was really running the dispute.

If you’re holding a judgment that looks impossible to collect, or you’re worried about how your own business setup could expose you in a future fight, Horst Legal Counsel can help you weigh your options and build a strategy that protects you before a small problem becomes an expensive one. Contact us here.

Source link: https://www.courts.ca.gov/opinions/documents/B340673.PDF

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When your business files a lawsuit, an early ruling from the judge can change the entire course of the case. If that ruling goes against you, it may be tempting to look for the fastest way to get in front of the Court of Appeal. A recent California Supreme Court decision shows why one shortcut, voluntarily dismissing your case too soon, can cost you the very appeal you’re trying to pursue.

A Shortcut That Can Cost You More Than Time

You’ve spent months preparing your lawsuit. The complaint is filed, the case is moving forward, and then the judge dismisses several of your claims. The judge gives you permission to amend them, but you believe the ruling is legally wrong.

Now you’re faced with a decision. Do you spend more time and money continuing the case, or do you end it now and appeal?

At first glance, dismissing the lawsuit might seem like the quickest route. If the case is over, you should be able to appeal, right?

Not necessarily.

In Maniago v. Desert Cardiology Consultants’ Medical Group, the California Supreme Court made clear that voluntarily dismissing your case before the trial court has finally resolved your claims does not automatically create a right to appeal. In the wrong circumstances, it can do the opposite.

The Shortcut That Didn’t Work

The plaintiffs in Maniago sued a cardiologist and his medical group, alleging multiple causes of action. The trial court sustained demurrers to several claims with leave to amend, meaning the plaintiffs had the opportunity to revise those claims and continue litigating. One negligence claim was still pending, and another claim had not been challenged at all.

Rather than amend the complaint or continue with the remaining claims, the plaintiffs voluntarily dismissed the entire lawsuit before the trial court had entered a final judgment on any claim. They then attempted to appeal the rulings that had gone against them.

The Supreme Court held that this approach did not create an appealable judgment under these circumstances. Because the plaintiffs dismissed the action before the trial court had finally resolved any of their claims, the Court of Appeal did not have jurisdiction to hear the case.

Why the Supreme Court Reached That Result

California generally follows what’s known as the final judgment rule. In most civil cases, an appeal is available only after the trial court has entered a final judgment resolving the case.

The Supreme Court explained that allowing parties to voluntarily dismiss a lawsuit before any claim has been finally decided, simply to obtain immediate appellate review, would undermine that rule and encourage piecemeal appeals. At the same time, the Court emphasized that its decision was limited to the facts before it. It did not decide every situation involving a voluntary dismissal, only the one presented in Maniago.

There Was a Better Option

One of the most useful parts of the decision is what the Court suggested the plaintiffs could have done instead.

Depending on the circumstances, a party may ask an appellate court to review an important issue early by filing a writ petition. Writ review is discretionary, so it is not available in every case, but it is one recognized path to early appellate review.

Another option is to allow the trial court’s rulings to become a final judgment before dismissing any remaining claims. That approach follows California’s normal appellate process and helps preserve the right to appeal.

The lesson is simple: before making a procedural decision that ends your case, make sure you understand how it could affect your appellate rights.

What This Means If You’re Suing to Protect Your Business

Business litigation is full of strategic decisions. Some involve settlement, others involve trial, and some involve deciding when, and how, to appeal.

After Maniago, businesses that bring lawsuits should think carefully before voluntarily dismissing a case after an unfavorable ruling. What looks like a faster path to appellate review could end up closing that door altogether.

If you’re considering an appeal, talk with your attorney before taking any step that could affect the timing of your case. A few extra months in the trial court may be far less costly than losing the opportunity to appeal altogether.

Bottom Line

The Maniago decision shows that litigation strategy is about more than winning or losing individual motions. The procedural choices you make along the way can determine whether an appellate court ever gets the chance to review your case.

If your business is involved in litigation and you’re considering an appeal, it’s important to understand your options before making a move that’s difficult to undo. The right strategy at the trial court level can protect your ability to challenge an unfavorable decision later. An experienced litigation attorney can help you evaluate those options and preserve your rights every step of the way.

The post This Litigation Shortcut Could Cost You Your Right to Appeal appeared first on Horst Legal Counsel.

If your business uses generative AI to draft anything that goes out under your name, a California appellate court just showed you how the failure actually happens, and it is not the failure most people brace for. The problem here wasn’t a company that banned AI or ignored the risk. It was a professional who had an AI policy requiring human verification, and who still filed a document full of fabrications. A policy on paper did not save him.

The case is Del Biaggio v. Bansen (Cal. Ct. App., 1st Dist., Div. 4, July 10, 2026), and although it grew out of a dairy contract dispute in Humboldt County, the lesson has nothing to do with cows.

A Dairy Contract That Turned Into an AI Cautionary Tale

Daniel Del Biaggio worked at the Bansens’ dairy under an agreement that promised him salary, livestock transferred over time, and an eventual chance to lease the operation. When the Bansens allegedly failed to hand over the livestock he was owed, he sued and won a $52,850 jury verdict. As the prevailing party, the side that wins, he asked for his attorney fees under the contract, including hours his lawyer’s paralegal had billed. That fee fight is what carried the case up on appeal.

It might have stayed an ordinary fee dispute. Then the court read the opening brief.

What the Court Actually Held

On the money questions, the result was mixed. The court upheld the trial judge’s decision to cut the attorney’s hours, since block billing, lumping many tasks into a single time entry, and several thin causes of action gave the judge room to trim. It reversed the exclusion of paralegal fees, holding that a contract promising the prevailing party its “attorneys’ fees,” a term the contract left undefined, reasonably includes the reasonable cost of paralegal work. It also erased a sanction the trial court had imposed on Del Biaggio’s lawyer, finding that his reconsideration motion, a request that the trial judge revisit its own ruling, was proper.

Then the court turned to something it raised on its own. Del Biaggio’s opening brief attributed quotations to the California Supreme Court’s decision in PLCM Group v. Drexler that appear in no case at all, and it misdescribed other authority. Those invented quotations stated the exact proposition counsel wanted to prove. The lawyer’s own declaration acknowledged the passages came from generative AI and were never properly verified before filing.

Why “We Have an AI Policy” Wasn’t Enough

Here is the part every business should sit with. The lawyer told the court his office uses AI “consistent with State Bar guidance,” with “protocols requiring human verification of all outputs.” The court was unmoved, and its reasoning is the real takeaway.

First, the protocol did not actually deliver the review it promised. The lawyer planned to have a paralegal confirm that the citations existed while he was tied up in another trial. The court said that plan was inappropriate even if it had worked, because he never intended to read the cited law himself. Checking that a source exists is not the same as reading what it says.

Second, the court flagged a detail worth remembering. The fabricated quotations said precisely what the lawyer was hoping to prove. That should have been the warning sign. AI output is most dangerous at the exact moment it tells you what you want to hear.

The sanction was $1,500, paid to the court, with the opinion forwarded to the State Bar. The dollar figure is small. The professional and reputational consequence is not.

What This Means for Businesses Using AI

Read the holding as a governance standard, because that is how it will be used. A written AI policy is not a defense unless the review it promises actually happens, on the real output, performed by someone competent to catch the error. Delegating verification to a proxy step, like confirming a citation exists rather than reading it, is precisely the gap that produced this result. And when AI hands you something that confirms your position perfectly, that is the moment to slow down, not speed up.

For regulated professionals, the exposure is discipline and sanctions. For everyone else, it is contracts built on invented terms, reports with fabricated support, and decisions made on facts that were never real.

Bottom Line

If your organization uses generative AI, the question is not whether you have a policy. It is whether a qualified human reviews the substance of what the tool produces before it leaves the building. This decision turns that from a nice-to-have into a benchmark a court is now willing to enforce. Horst Legal Counsel advises businesses on AI governance, professional risk, and the disputes that follow when controls fail. If you want a candid look at where your current process would leave you, we are glad to talk it through.

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In Doe v. Marysville Joint Unified School District (Cal. Supreme Ct., July 2, 2026), the Court held that a plaintiff who voluntarily dismisses the same claims twice, the second time in federal court, isn’t barred from bringing those state law claims all over again in California state court. For anyone who tracks litigation exposure, that’s a meaningful gap between what a federal dismissal feels like and what it actually does.

Two dismissals, then a third filing

The plaintiffs are former students who allege a school counselor abused them years ago. Those underlying facts, disturbing as they are, aren’t what the case turned on. The Court set them aside as irrelevant to the legal question. What matters here is the sequence of filings.

The plaintiffs first sued the school district in state court, then voluntarily dismissed, which simply means a plaintiff chooses to drop their own case. The same day, they refiled in federal court, adding federal claims alongside their state law claims. When the district moved to dismiss, the plaintiffs dismissed again, this time under Federal Rule of Civil Procedure 41(a)(1)(A)(i), which lets a plaintiff drop a case early without a judge’s sign-off. Each dismissal was “without prejudice,” meaning the plaintiffs reserved the right to come back. Then they filed a third time, in California state court, raising only their state law claims.

The district saw an opening. Federal Rule 41(a)(1)(B) contains what’s known as the two-dismissal rule: if a plaintiff dismisses the same claim a second time, that dismissal “operates as an adjudication on the merits,” which is legal shorthand for a ruling that treats the claim as decided. The district argued this converted the second dismissal into a final loss, one that should block the state court case under claim preclusion, the doctrine that stops a party from relitigating a claim already resolved. The trial court agreed and threw the case out. A divided Court of Appeal affirmed.

What the Supreme Court actually held

The Supreme Court reversed, and its reasoning is worth understanding because it corrects a common misreading. Leaning on the U.S. Supreme Court’s decision in Semtek Int’l Inc. v. Lockheed Martin Corp., the Court explained that the two-dismissal rule is a rule of federal procedure, not a rule of claim preclusion. “Adjudication on the merits,” as Rule 41 uses the phrase, means only that the plaintiff can’t refile the same claim in the same federal court. That’s a necessary condition for claim preclusion. It is not a sufficient one.

In plain terms, the rule polices the door of the federal courthouse where the dismissals happened. It doesn’t lock every other courthouse in the country. A dismissal that bars a refiling in federal court still doesn’t touch a plaintiff’s ability to press state law claims in state court, where the federal rule has no force at all. California, the Court noted, has no equivalent two-dismissal rule of its own.

Reading the rule any other way would raise real problems. It would push past the limits of the federal Rules Enabling Act, which bars procedural rules from enlarging or shrinking substantive rights, and it would create the very state-federal outcome gap that federalism principles exist to prevent. Because the plaintiffs’ voluntary dismissals weren’t judgments on the merits under either federal or California law, the result came out the same under both the federal and the California rules of claim preclusion.

Why this matters for your litigation strategy

For defendants, the practical lesson is direct. Don’t assume a plaintiff’s repeated dismissals mean the threat is gone. If the claims can stand on state law, they can reappear in California state court, and a federal procedural rule won’t stop them. That possibility belongs in how you evaluate settlement posture, reserves, and overall risk.

For plaintiffs and their counsel, the decision preserves flexibility. A stumble in federal court, or a deliberate retreat from it, doesn’t automatically forfeit state law claims that belonged in state court in the first place.

And for anyone choosing between forums, the case is a reminder that where you file, and where you dismiss, carries consequences that don’t always travel with you. Federal and state litigation run on different rules, and the seams between them are exactly where disputes like this one live.

The Bottom Line

A dismissed case isn’t always a closed case. Doe v. Marysville draws a clean line: the federal two-dismissal rule bars refiling in the same federal court, and nothing more. If you’re weighing whether a matter is truly behind you, or planning your next move across state and federal forums, that line is worth knowing before you lean on it.

Business litigation, appellate strategy, and the procedural questions that decide where a case can be fought are central to Horst Legal Counsel’s practice. If you’re assessing whether a dismissed matter can return, or mapping strategy across state and federal court, we’re glad to talk it through. Contact us here.

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The case is Askins v. CRST Expedited, Inc. (Cal. Ct. App., 1st Dist., No. A172921, June 4, 2026), and the facts are about as ordinary as employment disputes get. Terry Askins applied online to drive for CRST, a trucking company, and received a stack of forms that included a disclosure that the company would run a background check. He later sued on behalf of a class of applicants, claiming CRST’s forms didn’t comply with the FCRA’s rule that the disclosure appear in a clear, standalone document. The trial court certified the class, clearing it to proceed as a group claim. Then the Fifth District Court of Appeal decided Limon v. Circle K Stores Inc., holding that an FCRA plaintiff in California must show a concrete injury to have standing, the legal right to bring a claim at all. Relying on Limon, the trial court decertified the class, calling Askins’s confusion about the forms merely “informational.” The First District reversed, and it didn’t hedge.

Why Background Check Class Actions Just Got Easier

Start with the part that lands on your desk. For a willful violation of the FCRA, meaning a knowing or reckless one, the statute lets a consumer recover either actual damages or statutory damages of $100 to $1,000. The second option requires no proof of loss. No denied job. No inaccurate report. No measurable harm. A viable class action all the same.

How the court got there matters, because it explains why this won’t be easy to undo. Federal courts operate under Article III of the Constitution, which limits them to actual cases and controversies, so a federal plaintiff generally has to show concrete harm. California courts carry no such constraint. When a claim rests on a statute, standing turns on what that statute says, read with its purpose and history. So the court read the FCRA, and the text answered the question. The statutory damages clause deliberately drops the words “sustained by the consumer” and “as a result of the failure.” Congress titled the 1996 amendment that created it “Minimum Civil Liability for Willful Noncompliance.” And Congress allowed statutory damages only for willful violations, while holding negligent ones to actual damages. Those choices, taken together, show that proof of injury was never the price of admission. The denial of the disclosure Congress promised is the injury the law exists to prevent.

The court then took Limon apart. Limon leaned on a 2019 dictionary definition of “damages,” and the court noted the FCRA was amended in 1996, when the controlling definition plainly reached technical invasions of rights with no measurable loss. It lined Askins up next to a string of recent California rulings reaching the same result under parallel consumer statutes. The split between the districts is now open and acknowledged, which is usually how cases find their way to the California Supreme Court.

What This Means for California Employers

The takeaway is blunt. A plaintiff who lost no job and saw no inaccurate report can still build a class action out of your hiring paperwork, and every willful violation carries $100 to $1,000 in statutory exposure multiplied across each applicant in the class. Anyone who might fail the harm test in federal court now has a reason to file in state court, or to stay there. The defense that worked under Limon is no longer safe in the First District.

The fix isn’t a litigation strategy. It’s paperwork. The FCRA requires the background check disclosure to stand alone in its own document, clear and conspicuous, free of extra releases, waivers, and clutter. That’s exactly the kind of form a company drafts once and reuses for years without a second look. If yours bundles the disclosure with other content, or buries it, that’s the defect these cases are built on.

The Bottom Line

Askins doesn’t change what the FCRA asks of employers. It changes who can sue you for getting it wrong, and in California state court the answer is now nearly anyone you ran a check on, harmed or not. Pull your background check disclosure and authorization forms and have them reviewed against the standalone-document rule before a plaintiff’s lawyer reviews them for you. Horst Legal Counsel works with employers on FCRA compliance and employment litigation, and if you want a clear read on where your forms stand, we’re glad to take a look.

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