Join Coblentz partner Jennifer Scharre on June 18, 2024 for the California Lawyers Association MCLE webinar “Property Taxes: Just When You Think You’ve Planned For Everything.” Jennifer will discuss how property tax can impact an estate plan, things practitioners should watch out for, and strategies that planners can use to optimize property tax planning both during life and at death and what to do when the planning was not done. For more details and to register, please click here.
On Friday, June 7, 2024, Coblentz partner Fred Alvarez will be speaking on the panel “Diversity in the Profession: How Far We Have Come & Where Are We Going From Here” during the 2024 NorCal Diversity Leadership Summit, hosted by the California Employment Lawyers Association (CELA) and Foundation for Advocacy Inclusion and Resources (FAIR). This event is open to all attorneys and law students. For more details and to register, please click here.
On Thursday, June 6, 2024, Coblentz partner Sabrina Larson will be speaking on the “Trademarks in Practice: Searching, Clearance and the Application Process in the United States” panel during the Practising Law Institute program “Fundamentals of Trademark Law in the Global Marketplace 2024.” Sabrina will provide an instructional review of how to navigate the trademark prosecution process. After completing this session, participants will be able to:
For more details and to register, please click here.
On May 30, 2024, Coblentz partner Jennifer Scharre will present “Planners Plan and Litigators Laugh: How Will a Court Interpret Your Well-Intended Plan?” during the 2024 Sacramento Estate Planning Council (SEPC) Estate Planning Forum. For more details and to register, please click here.
The San Francisco Board of Supervisors recently amended the Planning Code’s controls to further regulate Fleet Charging and Parcel Delivery Service uses, primarily affecting Production, Distribution, and Repair (PDR) zoning districts. Below, we provide an overview of the legislative changes.
Fleet Charging[i] describes facilities that exclusively serve commercial or institutional vehicular fleets, including autonomous vehicles. These are distinguished from Electric Vehicle Charging Locations, which are open to the public. Starting in 2022, the Planning Code has generally required a Conditional Use Authorization (CUA) in the zoning districts where Fleet Charging uses are allowed, and has prohibited Fleet Charging as an accessory use to any other principal use. In most PDR districts (PDR-1-D, PDR-1-G, and PDR-2), however, an exception was available to convert existing private parking lots or vehicle storage lots to Fleet Charging uses by right, without a CUA.
In 2023, Supervisor Peskin introduced amendments to the Fleet Charging legislation, which were unanimously approved by the Board on March 5, 2024 and signed by the Mayor on March 15, 2024. The amendments do not change the zoning districts where Fleet Charging uses may be allowed, but require a CUA in all PDR districts, regardless of the existing or former use of the site. This change removed the by-right exception available in three PDR districts to convert existing private parking lots or vehicle storage lots to Fleet Charging uses. Development applications submitted before January 11, 2024 are grandfathered into the prior regime.
Demand for Parcel Delivery Service[ii]—a use category that includes traditional package shipping providers as well as services for delivery of e-commerce goods, food orders, cannabis, and more—has grown in recent years, largely in response to online shopping and fast delivery guarantees. In San Francisco, Parcel Delivery Service was historically permitted in districts that allow PDR uses, generally clustered in the southeast sector of the City.
In 2022, District 10 Supervisor Walton introduced and the Board approved interim Parcel Delivery Service controls, initially effective for 18 months between April 1, 2022, and September 30, 2023, and later amended and extended to March 30, 2024. Although sometimes described as a “moratorium,” the interim controls did not prohibit new Parcel Delivery Services, but newly required a CUA for those uses in all zoning districts. (The interim controls included a CUA exemption for temporary Parcel Delivery Services for up to 60 days within a 12-month period). Subsequent legislation prohibited Parcel Delivery Service activity, including unloading, sorting, and/or reloading merchandise, as part of a Fleet Charging use.
The Planning Department’s post-passage report from March 30, 2023 noted that several cannabis delivery businesses were impacted by the interim controls because they were classified under the Parcel Delivery Service definition.
As the extended Parcel Delivery Service interim controls were set to expire, the Board amended the Planning Code on March 5, 2024 (signed by the Mayor on March 15, 2024) to establish permanent regulations for these uses. In general, the changes are focused in the following areas:
The Board is currently considering additional amendments, introduced by Supervisor Chan, that would add a new CUA criterion regarding impacts to educational institutions located near a proposed Parcel Delivery Service site and refine the existing employment analysis criterion to study AI utilization and use of autonomous vehicles. We’ll continue to track these and other important legislative updates affecting Fleet Charging and Parcel Delivery Service uses in the City’s PDR districts.
[i] Defined in the Planning Code as “Automotive Use, Non-Retail that provides electricity to electric motor vehicles through one or more Electric Vehicle Charging Stations that are dedicated or reserved for private parties pursuant to contract or other agreement and are not available to the general public. Fleet Charging is not allowed as an accessory use to any other principal use. Parcel Delivery Service activity, including unloading, sorting, and/or reloading merchandise for deliveries, is prohibited as part of a Fleet Charging use.”
[ii] Defined in the Planning Code as “[a] Non-Retail Automotive Use limited to facilities for the unloading, sorting, and reloading of local retail merchandise for deliveries, including but not limited to cannabis and cannabis products, where the operation is conducted entirely within a completely enclosed building, including garage facilities for local delivery trucks, but excluding repair shop facilities. Within PDR Districts, this use is not required to be operated within a completely enclosed building. Parcel Delivery Service for merchandise or products other than cannabis and cannabis products is not allowed as an accessory use to any other principal use.”
Coblentz Patch Duffy & Bass LLP filed an amicus brief on behalf of the Bay Area Council in Sheetz v. County of El Dorado before the U.S. Supreme Court to advocate for a legal process to challenge development impact fees. On April 12, 2024, the Supreme Court unanimously ruled that the Takings Clause of the Fifth Amendment does not distinguish between legislative and administrative land use permit conditions. The decision was covered in the Bay Area Council article, “Bay Area Council Hails Supreme Court Decision on Costly Impact Fees.” “This ruling is hopefully the first step on the path to returning some fairness in how housing and other local impact fees are charged,” said Jim Wunderman, President and CEO of the Bay Area Council. Coblentz partners Miles Imwalle, Sarah Peterson, and Katharine Van Dusen drafted the brief in collaboration with the Bay Area Council.
By Christopher Wiener, Sabrina Larson, and Bina Patel
Key Takeaways
On May 9, 2024, the U.S. Supreme Court issued a landmark decision in Warner Chappell Music, Inc. v. Nealy, holding that under the Copyright Act, “a copyright owner possessing a timely claim for infringement is entitled to damages, no matter when the infringement occurred.” No. 22–1078, 601 U.S. ____ , Slip Op. at 5 (emphasis added). The Warner decision marks a significant retreat from the view that copyright damages are limited to the three years before an infringement suit is filed under Section 507(b) of the Copyright Act and raises the risk of more damages claims based on undiscovered copyright infringement. It also aligns the rest of the country with the Ninth Circuit’s view that a plaintiff can seek damages for all alleged infringing acts even if those acts occurred more than three years before the plaintiff filed suit. See Starz Ent., LLC v. MGM Domestic Television Distribution, LLC, 39 F.4th 1236, 1247 (9th Cir. 2022). Overall, this decision is significant for companies of all sizes that use copyrighted material, as it is likely to lead to a surge of litigation based on outdated actions. It will affect both plaintiff and defense strategies, and could result in substantially higher damages awards for plaintiffs.
The underlying dispute arose when Sherman Nealy discovered that, unbeknownst to him, his former business partner had licensed music from their prior company to Warner Chappell while he was in prison. In 2018, Nealy sued Warner Chappell, alleging that he held copyrights to the songs at issue and that Warner Chappell’s licensing activity had infringed his rights. The infringing acts dated back to 2008, ten years before Nealy brought suit. Nealy sought damages and profits for the alleged infringement under the Copyright Act.
The Supreme Court held that Nealy could recover damages for Warner Chappell’s infringing acts beyond the three-year period before his lawsuit. While the Court acknowledged that Section 507(b) establishes a three-year statute of limitations for filing a lawsuit, it reasoned that that provision “establishes no separate three-year period for recovering damages.” Warner Chappell, Slip. Op. at 5. As a result, so long as the copyright infringement claim is timely filed, a successful plaintiff can recover damages with “no time limit on monetary recovery.” Id.
Most notably, the majority opinion did not resolve a longstanding question of whether the discovery rule governs the timeliness of copyright claims under Section 507(b), an issue that circuit courts are split on and that the Supreme Court has not directly addressed. Under the “injury rule”, a copyright claim “accrue[s]”—meaning, the clock to bring a claim starts ticking—when “an infringing act occurs.” Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670 (2014). The discovery rule, on the other hand, extends the accrual date for unknown infringements to the time “the plaintiff discovers, or with due diligence should have discovered” the infringing act. Id. n.4 (internal citations and quotations omitted). To establish the timeliness of his claims, Nealy invoked the discovery rule for infringing acts that occurred ten years before his lawsuit. The majority assumed that Nealy’s lawsuit was timely filed without actually deciding whether copyright claims are subject to the discovery rule.
Conversely, the dissent steadfastly argued that the Copyright Act “does not tolerate a discovery rule” and disagreed with the majority’s decision to assume—without deciding—that the discovery rule applied here. This question may well end up in front of the Supreme Court in the future, as there is a currently pending petition for certiorari that squarely presents the question of “[w]hether the ‘discovery rule’ applies to the Copyright Act’s statute of limitations for civil claims.” See Petition for Writ of Certiorari, Hearst Newspapers, L.L.C. v. Antonio Martinelli, No. 23–474, at i (Nov. 2, 2023).
Following last week’s decision, the expanded timeframe for damages recovery means that businesses not only need to prepare to defend against older infringement claims—and to carefully vet the risk those potential claims may pose when considering acquisitions—but should also consider the viability of pursuing infringement claims that were previously considered time-barred.
Please contact the Coblentz Intellectual Property team with any questions.
A roundup of news and multimedia from the Unfamiliar Terrain team:
Small and Mighty: How small businesses can reinvent downtown San Francisco (SPUR Policy Brief): SPUR’s research, drawn from a literature review and interviews with City staff, small business owners, and nonprofits, pinpoints seven interventions that would make a difference to help small downtown businesses succeed.
These tech workers want to build a co-living ‘campus’ across a square mile of S.F. But for whom? (SF Chronicle): The nonprofit City Campus envisions turning one square mile of the Lower Haight, Hayes Valley, and Alamo Square neighborhoods into a multigenerational campus.
S.F. prioritized building homes for the ‘missing middle.’ 80% of units sit empty (SF Chronicle): Developers who have recently built apartments aimed at moderate-income families in San Francisco have discovered a harsh reality: The missing middle seems to have gone missing.
Making the Ive Hive: Jony Ive’s bold plans to reshape a small slice of San Francisco (SF Standard): Entities tied to the legendary Apple designer are buying up nearly a city block in Jackson Square.
Berkeley recognized as ‘pro-housing’ by state, eligible for millions in grants (Business Times): Berkeley is now eligible to apply for a share of an exclusive state housing grant after being named among 10 cities recognized for their pro-housing policies.
California’s most controversial housing law could get a makeover (CalMatters): Some California lawmakers want to clear up, but also rein in, the Builder’s Remedy.
California is building fewer homes. The state could get even more expensive (LA Times): Across California and the nation, developers moved to start fewer homes in 2023, a decline some experts say could eventually send home prices and rents even higher as supply shortages worsen.
Not your grandma’s granny flat: How San Diego hacked state housing law to build ADU ‘apartment buildings’ (CalMatters): A 2021 state law radically changed the housing equation in San Diego. Advocates, developers, and policymakers are split on whether it should be exported to other jurisdictions.
These California Companies Want to Buy Your Backyard — and Build a House (KQED): Companies are hoping to jumpstart the construction of SB 9 projects by taking on the permitting and development work themselves, as well as making it easier for homeowners to take advantage of the law.
‘Getting out of hand’: Legislator blasts California Coastal Commission on housing (SF Gate): Amid the state’s housing crisis, some legislators and housing advocates are arguing that the 12-member commission’s powers have expanded too far.
California’s population is on the rise. So much for the claims of the state’s demise (LA Times): California has resumed adding people after three years of shedding them.
