CITY OF BURBANK v. MUELLER CO.

Filed 8/30/06

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

NORA ARMENTA ex rel.

CITY OF BURBANK et al.,

Plaintiffs and Appellants,

MUELLER CO. et al.,

Defendants and Respondents.

B175530

(Los Angeles County

Super. Ct. No. BC173487)

APPEALS from an order and judgments of the Superior Court of Los Angeles County, Peter D. Lichtman, Judge. Reversed.

Irell & Manella, Gregory R. Smith, S. Thomas Pollack, Mark Paluch; Phillips & Cohen, Eric R. Havian and Harry Litman for Plaintiffs and Appellants.

Beck, DeCorso, Daly, Kreindler & Harris, Bryan D. Daly, Charles L. Kreindler, Barbara E. Taylor; Stanzler, Funderburk & Castellon and Ruben A. Castellon for Defendants and Respondents Mueller Co. and Tyco International (US) Inc.

Weston, Benshoof, Rochefort, Rubalcava & MacCuish, David S. MacCuish, Kurt V. Osenbaugh and Andrew M. Gilford for Defendant and Respondent Watts Industries, Inc.

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INTRODUCTION

Qui tam[1] plaintiff Nora Armenta (Armenta), the City of Burbank, the City of Pomona and the Alameda County Water District appeal from summary judgments entered in favor of defendants Mueller Co. (Mueller) and Tyco International (US) Inc. (Tyco). Armenta challenges the propriety of revoking the court's grant of leave to file her second amended complaint, arguing that the trial court abused its discretion in imposing and enforcing an unfair condition upon Armenta's ability to file her second amended complaint, which alleges the violation of the California False Claims Act (CFCA) (Gov. Code, § 12650 et seq.)[2] with respect to an additional 130 governmental entities. All of the plaintiffs attack the summary judgments, contending that they raised triable issues of material fact regarding Mueller's and Tyco's liability for violation of the CFCA.

We agree that the trial court abused its discretion in conditioning leave to amend and that the abuse requires reversal of the subsequent order partially revoking the court's grant of leave to amend. We further agree that the summary judgments must be reversed, in that triable issues of fact exist as to Mueller's and Tyco's liability.

FACTUAL BACKGROUND[3]

James Jones Company (Jones) and its parent companies, Mueller, Tyco and Watts Industries, Inc. (Watts), â€

Description	Where qui tam plaintiff in action under False Claims Act sought to name 130 new governmental entities in complaint, trial court abused its discretion in conditioning plaintiff's leave to amend upon each of the newly-named governmental entities responding to defendants' detailed discovery demands, and then revoking leave to amend with respect to those newly named governmental entities that did not respond. Trial court erred in granting summary judgment to defendants as to Sec. 12651(a)(8) claim that they were knowing beneficiaries of a false claim submitted by their subsidiary, where sample testing and memoranda by one parent company could have supported conclusion that it was aware its subsidiary selling was substandard pipes to municipalities.
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CITY OF BURBANK v. MUELLER CO. Part I

Filed 8/30/06