Seth Rosenberg's Anti-Bullying Work Featured in Palo Alto Media

An anti-bullying case filed by Emergent LLP partner Seth Rosenberg, who leads the firm's personal injury trial practice, has been featured in both the Palo Alto Daily Post and Palo Alto Online.  The lawsuit seeks compensation on behalf of a special education middle school child who was bullied repeatedly, without intervention by the school district.

Emergent LLP stands against bullying.  To learn more about Seth's practice, email him ( or contact us.

Pure Market Manipulation Claims Remain Out of Reach For Some Shareholders Victimized By Mysterious Stock Price Reversals

Emergent LLP partner Chi-Ru Jou, who leads the firm's securities litigation practice, provides representation and advice on complex, cutting-edge matters affecting investors and businesses in the financial services industry.  Below, she discusses recent unexplained spikes in the stock price of Chinese lender Wins, and the challenges facing wronged shareholders seeking compensation.  You can reach Chi-Ru by emailing her ( or contacting us.

Wins Finance Holdings Inc. (“Wins”), a company that guarantees loans and leases equipment for small businesses in China, has been the target of multiple securities class action lawsuits ever since the news broke in March of this year that it was under investigation by the SEC for market manipulation of its stock.  Incredibly, the stock price of Wins soared over 4,000% since the inception of trading near the end of 2015, with no company news headlines to explain this market bubble.  On March 30, 2017, the investment analytics site Seeking Alpha reported the SEC investigation and the fact that Wins had mislead the Russell Index into including the company based upon a false report of the location of its headquarters.  On this news, the stock price plunged back to levels below $50 per share, only to be followed by another mysterious spike up to the $200 level in the early summer of this year.  On June 7, 2017, NASDAQ announced that it was halting trade in Wins stock pending the receipt of further information from the company.  On August 4, 2017, NASDAQ sent Wins a delisting determination letter, but withdrew this letter on October 19, 2017.  The stock remains halted while NASDAQ awaits further information from Wins.

For securities practitioners, the most interesting and perplexing part of this scenario was the nature of the class action complaints that were filed during the months following the Seeking Alpha article, asserting claims under Rule 10b-5 of the Securities Exchange Act.  Several plaintiff-side securities firms issued press releases stating that they had filed complaints, but only two firms engaged in a battle for lead counsel status in the Southern District of New York and the Central District of California, leading to the voluntary dismissal of the SDNY lawsuit.  Although the subject of the SEC investigation was believed to be the company’s market manipulation, the class action complaints relied for the most part on theories of misrepresentation, drawing upon news headlines such as Wins’ misrepresentations to the Russell Index.  The currently pending putative class action in California features an amended complaint pleading both misrepresentation and scheme liability as separate causes of action, yet the substantive allegations focus upon the misrepresentation regarding the company headquarters.

This fact was obviously due to the lack of information available about what manipulative acts the insiders at Wins could have perpetrated to drive these mysterious spikes in its stock price.  Securities class action lawsuits are frequently brought in the New York federal courts, where the Second Circuit case ATSI Communications v. Shaar Fund, 493 F.3d 87 (2d Cir. 2007) imposes a stringent pleading standard for market manipulation cases.  In ATSI, the Second Circuit held that a plaintiff had to allege “something more” than open-market trading activity that was otherwise perfectly legal in order to support claims of market manipulation.  Although the court clarified that for market manipulation claims, the pleading standard was slightly lower than the standard for misrepresentation claims, due to the fact that the information was mostly in the hands of the defendant, it still spelled out that the plaintiff had to plead with particularity “what manipulative acts were performed, which defendants performed them, when the manipulative acts were performed, and what effect the scheme had on the market for the securities at issue.”  Id. at 102. 

In the wake of these events involving Wins, it may be time for the Second Circuit to take another look at the pleading standard for market manipulation.  Otherwise, shareholder plaintiffs may need to resort to other devices such as derivative litigation rather than the securities class action lawsuit to address such mysterious instances of apparent market manipulation.

Seven Tips to Get Your North Bay Fires Insurance Claim Paid

For survivors of disasters such as the recent North Bay fires, insurance coverage is crucial for recovery and for rebuilding.  As an advocate for insurance policyholders, Emergent LLP partner Peter Roldan helps them to maximize coverage for their losses.  Below are a few of his tips for navigating the claims process and dealing with insurers.  You can reach Peter by emailing him ( or contacting us.

1) Give prompt notice of your claim

I can’t stress enough how important it is to give notice of a loss as soon as possible.  Obviously, if your insurance company doesn’t know about the claim, it can’t pay it.  In situations like the North Bay fires, insurance companies will be inundated with claims, so it’s imperative that policyholders get their claims into the queue.  Opening a claim also allows you to request cash advances for additional living expenses (ALE) and for purchasing necessities.

Finally, notifying your insurer starts the clock running with respect to fair claims handling deadlines, putting the onus on the insurer to promptly begin its investigation and adjustment of your claim.

2) Document your loss as thoroughly as possible

Your insurer can’t pay for damages that it doesn’t know about.  Ultimately, it’s up to the policyholder to provide the insurer with proof of loss.  To help speed up the process and ensure that you’re reimbursed for all covered losses, you should send your insurer as much information as possible regarding your damaged property and any additional expenses relating to the loss.  This includes receipts, photos, or videos of damaged items, as well as property inventories.

3) Keep written records of all communications with your insurer

Maintain a file of all written communications with your insurance company, and keep a detailed log of all your telephone conversations and any face-to-face meetings with the insurer’s representatives.  These records will come in handy when you need to follow up on your claim (see tip no. 4, below) and will be especially important if you need to file a lawsuit against the insurance company to recover your insurance benefits.

4) Follow up and be proactive

Even the most well-meaning claims adjuster sometimes gets swamped.  To keep your claim from falling through the cracks or getting sent to the bottom of the to-do pile, follow up with your insurance company on a regular basis—don’t let more than two weeks pass without some sort of contact with your insurer.   Squeaky wheel gets the oil, etc.  But be polite—nasty letters won’t necessarily help, and they certainly won’t look good if you end up having to go to court.

5) Know the coverage available under your policy

Although a good claims adjuster will work with a policyholder to try to identify the elements of a covered loss, you shouldn’t rely solely on the adjuster’s representations regarding the available coverage (see tip no. 7, below).  Familiarize yourself with the coverage provided in your policy and don’t be afraid to ask the claims adjuster whether a loss or expense is covered (and make your request in writing).

6) Don’t sign any contracts or legal documents without consulting an attorney

As part of the claims handling process, your insurer may ask you to sign a release or an assignment of rights.  It’s a good idea to have any such release or assignment reviewed by an attorney before signing, as you may be giving up important rights.  Always ask for copies of documents you sign.

7) Remember that the insurance company is not your friend

Insurance companies spend a lot of money to convince you that you’re in good hands or that they make good neighbors.  They also hire famous athletes and actors, and have cute mascots to help bolster their images in the eyes of consumers.  Don’t believe the hype.  Treat your insurance claim like any other business transaction or negotiation.

While there’s no need to be paranoid and to think that all insurance companies are out to get you, do remember that insurance companies are run by human beings and that human beings make mistakes and make bad decisions.  Don’t count on your insurance company to look out for your interests.  By being knowledgeable about your policy and the claims process, you can usually ensure that you are getting the benefits you are entitled to under your policy.

However, be sure to seek out the services of an experienced and qualified insurance law attorney, if needed.  Insurance companies have plenty of lawyers on their side, so you’ll want to have your own attorney to fight for you if you are being treated unfairly.

California Appellate Court Clarifies When Construction Professionals’ Knowledge Will Be Imputed to Real Property Seller

Emergent LLP partner and real estate litigator Johnny J. Yeh closely follows developments in the California appellate courts.  Below, he discusses a recent decision analyzing when an architect, engineer, or general contractor’s knowledge of property defects will be imputed to the seller in litigation brought by the buyer.  To stay up to date with this and other Emergent news, contact us.

Recently, the Court of Appeals issued its opinion in RSB Vineyards, LLC v. Orsi, 2017 WL 4325299 (Cal. Ct. App. Sept. 29, 2017), which was certified for partial publication.  The setup of the case is straight-forward.  Defendants purchased a vineyard and engaged in remodeling work to convert a residence on the property into a wine tasting room.  Throughout the process, defendants, who were not construction professionals, relied on their architect, structural engineer, and general contractor to ensure that the work conformed to applicable building codes and standards.  Subsequently, plaintiff purchased the vineyard from the defendants, including the wine tasting room.  Shortly thereafter, plaintiff discovered that the wine tasting room was structurally unsound and had to demolish it.  Plaintiff then sued defendants, claiming misrepresentation and omissions with respect to the sale.  Defendants, in turn, successfully moved for summary judgment, arguing that they had no actual knowledge of the defects at issue.

On appeal, plaintiff argued: (1) that it had provided evidence creating a triable issue of fact as to defendants' actual knowledge; and (2) that it had no obligation to demonstrate defendants' actual knowledge because the knowledge of their construction professionals could be imputed to them, and the evidence showed the deficiencies were so severe that those professionals must have known of these defects.

The court quickly disposed of the first point, noting that many of the alleged defects "were discovered only during the process of demolition."  Id. at *4.  The court further observed there was a lack of evidence showing that the defects "would have been apparent to a non-professional."  Id.  The court likewise rejected plaintiff's appeal to the sheer number and severity of the defects, noting that they were "technical matters" that would not be "apparent to a person unskilled in construction or structural engineering."  Id. at *5.

The court's discussion of plaintiff's second point was more interesting.  The court accepted the rule (fairly well-established in the law) that a principal could be charged with the knowledge of his agent "while the agent was acting in that role and within the scope of his or her authority as an agent."  Id.

However, the court did not accept plaintiff's suggestion that defendants’ contractual professionals were necessarily "agents."  Specifically, the court pointed to Civil Code section 2295, which defines an agent as "one who represents another . . . in dealings with third persons."  Id. at *6.  Based on this language, the court noted that "if a service provider simply furnishes advice and does not interact with third parties as the representative of the recipient of the advice, the service provider is not acting as an agent."  Id.  The court then concluded that there was "no evidence to suggest [defendants'] professionals were acting in the role of agent when they acquired . . . knowledge" about the defects.  Id.  Indeed, such knowledge "would have been gained while the professionals were planning or carrying out the work of renovating the residence," and not while acting in their role as agents.  Id.

In addition, the court dismissed plaintiff's affirmative misrepresentation claims on the basis that the representations were, in fact, true.  Finally, the court dismissed plaintiff's breach of contract claim, which was also premised on defendants' failure to disclose.

Ultimately, RSB reminds litigants of an important wrinkle in the process of proving the actual knowledge requirement for a fraud-based claim against a seller of property.  Specifically, if a litigant is going to impute a contractor’s or other professional's knowledge of a defect to the seller, the litigant should prepare to demonstrate that the contractor or professional acquired knowledge of the defect while acting as an agent (as opposed to acting as a mere service provider).  Careful and thoughtful use of discovery is a must in this respect, and creating a solid record of the conduct and actions of the construction professionals is critical.

Justice for Julia

As part of its civil rights practice, which includes both appellate and trial work, Emergent LLP has filed a Section 1983 suit in the United States District Court for the Northern District of California on behalf of Julia Rivera, a resident of San Francisco's Bayview-Hunters Point neighborhood.

In September 2015, a group of San Francisco Police officers barged into Julia's home, supposedly looking for one of her sons.  They did not have a warrant, permission to enter, or claim there was an emergency.  The officers went in anyhow, searching Julia's home illegally.

As they moved through the house, the officers roughly handled her possessions, including delicate flower arrangements, pottery, and other curios she had crafted.  When they began to search a closet that contained some of Julia's most prized work, she asked them to be careful, and again requested that they leave.  In response, the officers abruptly handcuffed her, wrenching her arm and knocking her down in the process, and then dragged her down a flight of stairs.  Those actions caused Julia, a diminutive woman, so much pain that she lost consciousness.  When she came to, the officers handed her a certificate noting that she had been briefly taken into custody and released, and left without having found anything relating to illegal conduct.

Julia was severely injured by the officers.  She has suffered lasting damage to her shoulder and arm, limiting her ability to create her prized handicrafts, and was deeply traumatized, experiencing recurring nightmares.

Julia's complaint is here.  We will provide ongoing updates on the blog and in the Emergent LLP newsletter.

Emergent LLP stands for civil rights.  To find out more about our pro bono practice, contact us.

U.S. Supreme Court Alters Ninth Circuit Case Law on Excessive Force Claims

Emergent LLP’s attorneys are skilled in civil rights litigation and committed to protecting victims of police violence and misconduct.  Emergent’s active pro bono practice supports the National Police Accountability Project of the National Lawyers Guild (“NPAP”), and participated in this litigation before the Supreme Court as amicus curiae for the respondents.  The NPAP brief is available here.

In a carefully drafted 8-0 opinion, the Supreme Court this week struck down the Ninth Circuit’s “provocation rule” previously relied on by some victims of police abuse in California.  The rule had allowed plaintiffs to recover damages for the use of excessive force by police in circumstances in which an officer used otherwise “reasonable” or defensive force that was nevertheless the result of circumstances created by unlawful and provocative police action.

Tragic Facts, Difficult Law

The case, County of Los Angeles v. Mendez, presented exceedingly sympathetic facts juxtaposed with a much more complex legal question.  In 2010, Los Angeles County Deputies searching for a parole violator entered a dilapidated shack in which Angel and Jennifer Mendez were residing.  They did so without a warrant and without announcing their presence, in violation of the Fourth Amendment.  Upon entering, they encountered Mr. Mendez—not the person they were looking for—sitting up in bed, holding a BB gun and completely oblivious to the police presence.  Upon seeing what looked like a rifle, the officers fired fifteen shots at Mr. Mendez and his pregnant fiancée, hitting Angel Mendez multiple times and shooting Jennifer Mendez in the back.

Both miraculously survived the shooting, as did the baby, but Mr. Mendez’s leg was amputated.  The indigent couple soon faced over a million dollars in medical expenses.  They sued the police in a § 1983 action, seeking damages and compensation for their injuries.  No one disputed they were innocent victims of a police shooting; but the police claimed that at the moment they opened fire, they reasonably believed their lives to be in danger—notwithstanding their illegal entry.

The Trial Verdict and the Provocation Rule

At trial, the district court accepted the crux of the deputies’ argument, and found that the Mendezes could only recover nominal damages for the Fourth Amendment violations of warrantless entry and failure to knock-and-announce.  However, citing the provocation rule, the court awarded approximately $4 million in damages on the couple’s excessive force claim, since the deputies’ use of “otherwise reasonable” force was also the result of the police’s unlawful conduct in the first instance.

Although this was a rather novel application of the provocation rule, since there was no real “provocation” in the case—Mr. Mendez was not actually provoked to violence in response to police conduct—the district court’s ruling was nevertheless affirmed by the Ninth Circuit, perhaps to ensure that the innocent victims of police violence would be afforded some form of relief.  The provocation rule was always on shaky legal ground, however.  The Ninth Circuit had never clearly established the practical parameters for its application, nor explained how it squared with existing Supreme Court precedent in excessive force cases.  

The Supreme Court Opinion and Emergent's Amicus Brief

On petition to the Supreme Court, Los Angeles County not only sought to abrogate the provocation rule, but also asked the Court to establish a new bright-line rule to prohibit courts from considering any unlawful acts of the police prior to their decision to use force.  Such a rule would have been a terrible outcome for the thousands of innocent families affected by police violence every year, as it would effectively preclude recovery whenever police claim “reasonable fear” as justification for firing their weapons or other acts of force, even when the officers’ own unconstitutional actions—such as warrantless entry, unconstitutional stop-and-frisk, illegal traffic stop, etc.—are the proximate cause of the harms suffered.

Emergent counsel Joshua Paulson and founding partner Christopher Wimmer participated in the litigation before the Supreme Court as lead pro bono counsel for the National Police Accountability Project (NPAP), an amicus curiae in support of the Mendez couple.  NPAP’s Supreme Court brief described the flexible, context-sensitive ways in which different circuits throughout the country have analyzed excessive force claims, and warned of the terrible precedent that would be set if these claims were analyzed only as of the moment the police applied force, ignoring whether the police had acted unconstitutionally in the moments leading up to the use of force.  The brief also provided real-world examples, drawn from NPAP members’ practices, of innocent citizens killed by police misconduct who would be denied justice under the rule proposed by Los Angeles County.

In the end, the Supreme Court’s unanimous opinion was carefully tailored to strike a middle ground:  While it dispensed with the provocation rule per se, it declined to adopt the narrow rule requested by Los Angeles.  The problem with the provocation rule, said the Court, was that it allowed for judges to award liability even after making a specific finding that the use of force was reasonable under the totality of the circumstances.  Instead, the Court suggested that on remand the Mendez couple should perhaps ask whether the district court erred in its initial determination that the use of force was reasonable in the first place—and whether the totality of the circumstances relevant to the shooting should include the “unreasonable police conduct prior to the use of force that foreseeably granted the need to use it.”  The Court declined to answer this question, but explicitly suggested that it be taken up by the Ninth Circuit.

In addition, and perhaps most importantly, the Court highlighted a second roadmap to relief for plaintiffs such as Angel and Jennifer Mendez, finding that they may still be able to recover damages for their injuries based on the warrantless entry alone—even if the officers’ use of force is deemed reasonable, and the excessive force claim is foreclosed.  “[T]here is no need to dress up every Fourth Amendment claim as an excessive force claim,” wrote the Justices.  “On remand the court should revisit the question whether proximate cause permits respondents to recover damages for their shooting injuries based on the deputies’ failure to secure a warrant at the outset.”  In many ways, this is a simpler and more practical embodiment of the principles underlying the provocation rule itself—a recognition that, as the Court acknowledged, “it is important to hold law enforcement officers liable for the foreseeable consequences of all of their constitutional torts.”  

Emergent values pro bono service.  If you are seeking representation for your public interest organization in the appellate courts or elsewhere, contact us.