Bitcoin and Cryptocurrency Are Here to Stay, but Will They Be “Money”?

I am a practicing lawyer in California, and one of my passions is cryptocurrency and its underlying blockchain technology.

I have an entrepreneurial alliance with another lawyer from my parents’ generation who no longer practices. He holds an Economics degree from a leading institution and turned down a Ph.D. program to focus on his law degree.

His first Econ professor promised to save aspiring lawyers a lot of time— “There is only one law; it is always followed, it is always obeyed. That is the law of supply and demand. The rest, my friends, is politics.” More on that later…

To do their jobs, economists employ mirages like “holding everything else constant, the effect of x is y”. It is a useful tool, because it is the only rational way to analyze the effect of x, but it is a mirage because it is impossible to hold everything else constant. Other economic factors are always changing as well.

For example, conomists still have not solved the “Technology Productivity Paradox” where they cannot find any evidence for productivity gains from technology investments. This can even cause negative productivity according to their figures. Yet no one can doubt the incredible progress and benefits from tech investments all around us.
It can be argued that since economists have no measure for technology investments, their models are seriously flawed and therefore their monetary policies are completely wrong and heading toward disaster. Their only answer lately has been more debt — which isn’t working to squash the deflation.

Deflation is a wonderful way to spread the technological wealth of society. The broader the application of technologies across industries, the more deflation we will have, and the benefits are distributed globally.

For the last ten years, Bitcoin maximalists often cite the programmed scarcity and finite supply of the coins as the key to its inevitable world dominance as “money” and its ultimate skyrocketed price “to the moon”.

For any economy in equilibrium and holding everything else constant (there it is again!), a finite and/or scarce money supply would be a disaster. As the economy grows, and/or gains by becoming more efficient, or technology advances, the same amount of money chases the added growth, and the only way for equilibrium to be restored is for the general level of prices to fall. Deflation, followed by contraction, recession, and depression likely result. This has happened in some third-world countries where there is no further money available because of central economic monetary mismanagement.

That realization is what led to Milton Friedman’s “Chicago School” of Monetarism in the 60’s and 70’s, which advocated a small but steady increase in the money supply to account for growth, but small enough so as not to trigger inflation of general price levels.

If Bitcoin enthusiasts expect it be the “world money” like fiat money, it ain’t going to happen. Nor does it need to, because more “money” is easily created in the form of another cryptocurrency. In fact, that is what is happening as you read this.

On the other hand, Bitcoin’s scarcity and finite supply helps its price supports in relation to other forms of exchange like fiat currency. It is a critical factor there.

But is it then just a speculative asset, or is it really money? It certainly for now is a store of value and a means of exchange.

Money is primarily a means of exchange by which you may secure value in modern times. It has been backed primarily by the power, and full faith and credit of the government who has by fiat declared it to be money. Money’s power in this regard requires the acceptance of all those within the economic system to recognize it as money and the means of exchange.

Consensus in the form of acceptance of the means of exchange might mean inherent value, or it might mean no inherent value, but there must be a consensus, or you do not have money. In the dark ages, people were not hoarding the gold coins that had been around for almost 1000 years, they were seeking to acquire farmland because of its inherent value to produce food. Like other economic factors, consensus is dynamic rather than static.

Inherent value commodities such as precious metals have disappeared from money long ago, and slowly over time in different stages. Modern fractional banking controlled by central government has obliviated them.

Bitcoin’s inherent value has been secrecy, privacy, liberty, convenience, and to some extent, novelty. Much of its inherent value has dissipated as the rest of the world has caught up. Yet crypto’s acceptance as a mean of exchange is likely just in its beginning stages.

In America, there is “full employment”, yet interest rates, the traditional price of money, remain at historical lows that most domestic economists thought they would never see in their lifetime. That should be a super-stimulus, but it is not. Middle class people with one or two jobs cannot even pay their rent or mortgage, much less save to stimulate investment. Changing accredited status rules will not help.

It makes no sense unless you consider governments’ endless military spending, the monopolies and oligarchies that control business and distribute resources inefficiently, banks and financial organizations that dictate economic conditions, and the wealth class that has appropriated most of the world’s economic resources to themselves.

In fact, the only market where there may be free competition anymore is the creation of currency, thanks to the blockchain!

There have been many economic epochs, but we like to think of them broadly as (1) fueled by access to natural resources of the earth (many, many centuries), then (2) fueled by collective capital and financial resources, and technology advances, leading to and encompassing the industrial revolution (just a few centuries), and the future will be (3) fueled by access to computing resources.

Cryptocurrency in some form will likely be the primary monetary exchange of access to those computing resources.

Big government and big business will not surrender their positions easily. Central Banks are planning digital currencies (CBDC’s), Facebook and other centralized corporate behemoths are planning corporate cryptocurrencies, versus the decentralized platforms that created the current cryptocurrencies, whose networks are expanding.

Remember the politics part?

The worldwide financial crisis in 2008, brought about largely by a loosely-knit cabal of the Fed, big banking organizations, Wall Street operatives, and the political interests who represent them; was papered over in the last 10 years by untold trillions of government dollars in bank bailouts, easy money for centralized organizations like other too-big-to-fail businesses, money supply increases ostensibly meant to stave off deflationary spiral, and tax cuts which primarily enabled corporate stock buy-backs.

Markets volatility, like income inequality, seems to have soared to all-time highs. Does that sound like a sustainable economic model to you?

We appear to be headed for another major economic crisis or crash of some type. Someone or something like Putin Worldwide Enterprises, or a super-authoritarian government, might be the inevitable result if we do not change economic fundamentals. This time, the decentralization of economic power afforded by cryptocurrencies founded in blockchain-based networks might give us a chance at real economic evolution. The decentralized finance (DeFi) revolution occurring in blockchain as you read this is testament to that evolution.

We can all thank bitcoiners for that. Bitcoin did not really take off until enough individuals stood up for the propositions that your government did not have the right to spy on you and your economic life, nor could it delegate to government-licensed banks the right or obligation to spy on you and your economic life.

As for the law, supply and demand, I know that the supply curve for Bitcoin is inelastic, meaning the quantity supplied will not vary much if any with price. I know the supply curve will not shift because it has been pre-programmed mainly as a function of finiteness and time. Demand, however, is a different story. The quantity demanded is responsive to price, meaning more quantity is demanded as price goes down, and vice-versa. The demand curve itself, shifts wildly in both directions, both contractionary and expansionary, depending upon psychology and preferences about the future of the cryptocurrency and its blockchain. That is why its price is so volatile; it’s a speculative asset at this point with some of the properties of “money”.

The complicating factor of course is the potentially almost infinite supply of “altcoins” in the form of other cryptocurrencies, whose respective markets likely depend upon the general popularity of its adoption as an asset or currency, and the value or usefulness of its particular blockchain. The ability to run “smart contracts” is probably just the beginning, as projects such as Chainlink begin to aggregate and interoperate.

Bitcoin will likely continue to lead the way for the foreseeable future, but there are certainly no guarantees it will continue to dominate as it has forever, or even for the next few years. It may become the symbolic leader of a movement if the movement grows big enough, and that may be enough to secure its position for a long, long time.

I’m not qualified to conclude whether Bitcoin is “money”, or where its price is going, but I do not believe it is irresponsible to say decentralized cryptocurrency is here to stay, as much as government or big business would prefer to have it all to themselves.

We will need to change the way we think about “money” in this future economy.

Stephen King, the writer, said about my associate’s generation, the baby boomers— “We had a chance to change the world, but instead, we chose The Home Shopping Network.” Let us hope succeeding generations do not fall into the same trap.

For now, I look forward to a future accelerated by technology-fueled deflation that ends up being the key to an abundant and egalitarian future where we all share in its gains.

See you on the Blockchain!

SCHEDULE A FREE CONSULTATION TODAY WITH ATTORNEY NATHAN MUBASHER.

Call (800) 691-2721 and let’s talk about your options.

CONTACT INFORMATION FOR NATHAN MUBASHER:

Law Offices of Nathan Mubasher
2621 Green River Rd, Ste 105 PMB 403
Corona, CA 92882
tel 1-800-691-2721 | fax 1-310-356-3660
www.mubasherlaw.com

DISCLAIMER:

Thank you for reading. I hope I could have been educational as I endeavor to provide my knowledge as a free public service. Please note that all the materials and information on this blog are general analyses made available for the public’s general informational purposes only. These analyses are not in any way intended to serve as specific legal advice to be applied in your particular situation. Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes, since this information would likely change based on any additional facts. Thus the transmission and receipt of information on this blog by anyone does not form or constitute an attorney-client relationship. My knowledge of laws is limited to California. Anyone receiving any information on this blog should not act upon the information provided without first obtaining the services of professional legal counsel licensed in their respective jurisdiction. Best of luck.

The Regulation of Bitcoin and Other Digital Currencies

Bitcoin and other cryptocurrencies are based on blockchain technology.  These are revolutionary technologies that that can be utilized in many diverse fields such as finance and healthcare.

The use of Bitcoin and other cryptocurrencies is still in its early stages and is at present, like email in the 1990’s, or for those more technically astute, like modems when the technology transitioned from 28.8 kbps to 56.6 kbps right before the advent of  high speed cable and DSL.

Bitcoin and other cryptocurrencies are also known as digital currencies.

Now, there at least 1,000 digital currencies, with a total market cap of approximately $150 billion.

Bitcoin was the first and is the most well known digital currency and has the largest market capitalization which is currently $70 billion.  Numerous other digital currencies have arisen that have other functions.  Ethereum is a digital currency that can be used with smart contracts that can be self-executing.   A digital currency that has a much faster transaction time than Bitcoin is known as Litecoin.   Banks can send international payments across networks in real-time with Ripple.

Bitcoin was first used in 2009.  Bitcoin was created in order to provide more privacy, a lower transaction cost, and to offer protection from online thefts as occurred through providers such as PayPal.

The blockchain technology utilized by Bitcoin allows individuals and companies to establish a level of trust with unknown parties over the Internet.  Bitcoin allows for transfers of any type of digital information in a quick, secure, and verifiable fashion anywhere in the world.  Large corporations including IBM and NSADAQ, and even some governments around the world are in the process of utilizing blockchain technology.

Bitcoin is a digital currency that is created electronically.  It utilizes peer-to-peer technology to operate which means that there is no central authority such as a government or bank involved in the transactions.  Each transaction made with Bitcoin is recorded on an online ledger known as a blockchain that is very similar to a standard accounting ledger.  Anyone in the world can check to verify that the transaction took place.

The production process (mining) for Bitcoin involves people and businesses from all around the world operating computers that use special software designed to solve mathematical problems.

Bitcoins can be obtained in many different ways.  In addition to mining, Bitcoin can be obtained by exchanging a currency like the U.S. dollar for bitcoins on an online exchange such as Coinbase.

Bitcoins can also be obtained in exchange for goods or services.   Even some law firms are accepting payment in bitcoins.   Another method of obtaining Bitcoin is through a process known as “Bitcoin mining.”  This involves using special software to solve complex math problems in order to validate the authenticity of new network transactions.   Bitcoin miners are paid in Bitcoins.

While previous digital currencies suffered from the problem of double spending, where on could commit to one transaction, and if they were quick enough, able to commit to yet another transaction using the original amount spent, Bitcoin eliminates the possibility of the same Bitcoin being spent by more than user through the use of public-key cryptography in which both a public and private cryptographic key are generated.

Each user is assigned both a public and private key to conduct and authenticate all of their Bitcoin transactions.   Using Bitcoin does allow for a certain level of privacy.  However, it is not completely anonymous.  It is closer to being considered as pseudo-anonymous.

Tracking transactions involving large quantities of Bitcoins is possible by using sophisticated computer analysis on the blockchain.  Thus, it is possible for law enforcement using currently available technology to obtain information on individuals that are involved in Bitcoin transactions.

The use of Bitcoin is expanding rapidly.  For example, the online Bitcoin exchange known as Coinbase currently has over 8.8 million users and 29 million wallets.  At the present time, there are at least 46,000 merchants accepting Bitcoins via its payment network, including such well known companies as Dish Network, Expedia, and Overstock.com.

Bitcoin has increasingly become accepted around the world for its use in storing value, including derivatives, commodities, and securities products.

Consumers with low incomes have had difficulties accessing traditional banking opportunities not only in California and the United States, but also in other parts of the world, where the infrastructure simply does not exist otherwise.  Venezuela is a current case study.  Africa is expected to benefit most greatly from the technology underlying Bitcoin.

Bitcoin provides the billions of consumers around the world that do not have access to traditional banking opportunities a mobile platform to store and transact money.  Bitcoin can be transacted outside of normal banking business hours and does not require a visit to a brick-and-mortar branch.

Bitcoin is also an excellent method for transferring money internationally.  The transaction fees are lower than most currency exchange fees or Western Union.

Bitcoin offers more protection to merchants due to the fact that transactions cannot be reversed which eliminates the possibility for chargebacks or credit fraud, or data privacy leaks by hackers or scammers.  Bitcoin also protects consumers, who ultimately have a lower risk of credit phishing scammers and/or hackers from collecting, and ultimately exploiting, sensitive financial data.

A common misconception is that digital currencies are lightly regulated and transactions are allegedly essentially anonymous.  The truth is that digital currencies are highly regulated and it is possible for law enforcement to trace any particular Bitcoin transaction, much more so actually than paper currency.

Additionally, people and companies engaging in bitcoin-related business are heavily regulated by many regulatory authorities.  The United States Department of Treasury – Financial Crimes Enforcement Network known as FinCEN regulates bitcoin businesses that operate like Coinbase in the same way it regulates traditional money services businesses.  Coinbase complies with the same FinCEN reporting requirements as companies such as Western Union, by filing “Suspicious Activity Reports” meeting FinCEN-prescribed thresholds.

Numerous states such as Washington and New York, have regulations that cover Bitcoin-related businesses.

Many states are contemplating regulations even more stringent than those covering traditional financial services businesses.  On July 25, 2017, the SEC issued guidance covering what are known as Initial Coin Offerings, and the CFTC has stated that its regulations can apply to Bitcoin-related transactions.

Bitcoin is also anything but anonymous.  Bitcoin transactions can be tracked via the blockchain, which is a publicly viewable ledger. See Nicholas Godlove, Regulatory Overview of Digital Currency, 10 Okla. J. L. & Tech 71 (2014).

Because bitcoin transactions can be reverse-engineered via the blockchain, using bitcoin for money laundering or other illicit purposes “does not seem . . . particularly attractive.”

The European Union recently issued a report concluding that criminal use of digital currencies is “quite rare” due to transaction fees and a lack of sophistication when it comes to the technology tied to using them.

A recent case in the Northern District of California clearly demonstrates that Bitcoins are not anonymous or untraceable.  In that case two former federal agents were charged on March 25, 2015 with Bitcoin money laundering and wire fraud – in that case Bitcoin tracing analysis was used.

Some argue that the way money transmission is regulated may impede or stifle the growth of such new technology.  For example, payment companies in the United States are at present forced to have regulatory conversations with 53 states or territories rather than dealing with one federal body such as is done in the United Kingdom.

Any successful regulatory scheme will balance promoting the profound benefits of global banking via digital currency and protecting the public at large with sensible law making.

Contact attorney Nathan Mubasher for a free consultation and evaluation of your case.

SCHEDULE A FREE CONSULTATION TODAY WITH ATTORNEY NATHAN MUBASHER.

Call (800) 691-2721 and let’s talk about your options.

CONTACT INFORMATION FOR NATHAN MUBASHER:

Law Offices of Nathan Mubasher
2621 Green River Rd, Ste 105 PMB 403
Corona, CA 92882
tel 1-800-691-2721 | fax 1-310-356-3660
www.mubasherlaw.com

DISCLAIMER:

Thank you for reading. I hope I could have been educational as I endeavor to provide my knowledge as a free public service. Please note that all the materials and information on this blog are general analyses made available for the public’s general informational purposes only. These analyses are not in any way intended to serve as specific legal advice to be applied in your particular situation. Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes, since this information would likely change based on any additional facts. Thus the transmission and receipt of information on this blog by anyone does not form or constitute an attorney-client relationship. My knowledge of laws is limited to California. Anyone receiving any information on this blog should not act upon the information provided without first obtaining the services of professional legal counsel licensed in their respective jurisdiction. Best of luck.

What Attorneys Should Know About Bitcoin and More Importantly, Blockchain

Attorneys should increase their familiarity with Bitcoin and blockchain technology.

Assisting in securely transferring assets constitutes a substantial percentage of the work performed by many attorneys.  This form of asset management includes mortgage closings, sales of businesses, divorce cases and securities transactions.  Attorneys have a professional and ethical duty to oversee that such transactions occur successfully.  Because blockchain promises to provide such facility at volume, attorneys should become more knowledgeable about Bitcoin and the blockchain technology that makes it possible.

Some may argue that the odds are against Bitcoin gaining universal acceptance as an alternative currency.  Bitcoin was embroiled in controversy in its early years with the Silk Road, and more recently, Alphabay, both dark markets that ended up being disbanded.  However, it has become clearer over time that the technology is not to blame.  Criminals tend to be among the first adopters of any successful technology.  The internet is a great example.  However, when the drama and mystique are pushed aside, what is Bitcoin really?

Bitcoin is based on the blockchain technology that allows a transparent and efficient transfer of an asset between two parties in a decentralized and cryptographically secure ledger.  Blockchain is best thought of as a very innovative ledger that is distributed in a very secure manner that allows it to be “trustless.”

The blockchain technology records ownership of a particular asset such as a Bitcoin, and this information is transmitted across the entire ledger from the registered owner of the asset to the collection of parties in a network using an anonymous key.  If there is any change in ownership of an asset by any member of the anonymous network it is recorded and broadcast across the entire network yet again, including the anonymous authorization key that is used to verify the legitimacy of the transfer.  The risk of fraud and simple bookkeeping errors are drastically reduced because the entire record of the transactions is recorded by numerous parties across the network.  Blockchain technology thus can be used to record medical records, educational records and business records in a decentralized way that blows wide open the accessibility, malleability and applicability of such information.  This is especially true since because the information is no longer centralized, there is no single point of failure, that once struck, could bring the whole system down.  One power outage, or hack, has disabled many a large hospital or company in the past.

Blockchain technology is thus a very relevant technology for attorneys due to the fact that, if it does become widely adopted, not only for its use with digital currencies like Bitcoin, but for its use with digital assets or digital asset protocols, it will reduce the need for many transactions that are currently very complex, and that take a lot of time, such as escrow accounts and title checks.

The fact is that many Fortune 500 companies are currently investigating as to how they will be able to utilize the blockchain technology in their operations. These companies include many large banks and utility companies.  Banks for example are investigating how to do away with currency exchange fees that are incurred by exchanging one currency into a digital asset by utilizing a system called Ripple that automatically converts the house currency with the target currency in a matter of seconds saving banks potentially hundreds of millions of dollars a year.

Other cryptocurrencies such as Ethereum have already been developed and are currently being fine tuned to utilize them in corporate finance and other industries using “smart contracts.”

These newer cryptocurrencies are not intended for widespread use by consumers.  Instead they were developed and were intended to be used by businesses to utilize to ensure that the recording of the ownership of an asset, or any transfers of ownership can proceed faster and at a lower cost.  Some have called blockchain the future, as it is conceivable that as everything is moved on to blockchain, that such blockchains will act as the backbone for the Internet of Everything (IoE) as well as applications for artificial intelligence.

Attorneys that work in specialized areas of the law including securities law and litigation finance are likely to be among the first to become aware of blockchain technology in their practices.  In fact, blockchain technology has just recently begun to be utilized to speed the process for clearing securities.  Another potential use for blockchain technology would be in litigation finance where the companies could use it to create smart contracts that would allow them to become more efficient.

As we head toward the end of 2017, attorneys who haven’t already, should become more familiar with both Bitcoin and blockchain technology so that they will understand what a potential client is referring to.  Clients have already begun contacting attorneys asking for more information on using a smart contract based on blockchain technology.  Because blockchain is now moving from the innovation phase into the early adoption phase, those attorneys who understand blockchain now will be in the best position to be able to provide the clients much more complete legal services.  As more services move on to the blockchain, including court and county records, knowledge acquisition on blockchain will likely become mandatory to maintain competence as a legal professional in various practice areas.

See you on the blockchain!

Contact attorney Nathan Mubasher for a free consultation and evaluation of your case.

SCHEDULE A FREE CONSULTATION TODAY WITH ATTORNEY NATHAN MUBASHER.

Call (800) 691-2721 and let’s talk about your options.

CONTACT INFORMATION FOR NATHAN MUBASHER:

Law Offices of Nathan Mubasher
2621 Green River Rd, Ste 105 PMB 403
Corona, CA 92882
tel 1-800-691-2721 | fax 1-310-356-3660
www.mubasherlaw.com

DISCLAIMER:

Thank you for reading. I hope I could have been educational as I endeavor to provide my knowledge as a free public service. Please note that all the materials and information on this blog are general analyses made available for the public’s general informational purposes only. These analyses are not in any way intended to serve as specific legal advice to be applied in your particular situation. Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes, since this information would likely change based on any additional facts. Thus the transmission and receipt of information on this blog by anyone does not form or constitute an attorney-client relationship. My knowledge of laws is limited to California. Anyone receiving any information on this blog should not act upon the information provided without first obtaining the services of professional legal counsel licensed in their respective jurisdiction. Best of luck.

Motion for a new trial in California

A motion for a new trial in California is the topic of this blog post.

The advantage of a motion for a new trial in California as compared to a motion for judgment notwithstanding the verdict is that it permits the court to reexamine an issue of fact or law. The trial court has broad discretion to reweigh the evidence, reassess credibility, disbelieve witnesses, and act as a thirteenth juror as stated by several published decisions of the California Courts of Appeal.

Law authorizing a motion for a new trial in California.

A motion for a new trial in California is governed by the statutes found in Code of Civil Procedure sections 656 through 663.2.

Code of Civil Procedure section 656 states that “A new trial is a re-examination of an issue of fact in the same court after a trial and decision by a jury, court, or referee.”

Code of Civil Procedure section 657 states in pertinent part that

“The verdict may be vacated and any other decision may be modified or vacated, in whole or in part, and a new or further trial granted on all or part of the issues, on the application of the party aggrieved, for any of the following causes, materially affecting the substantial rights of such party:

  1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.
  1. Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors.
  1. Accident or surprise, which ordinary prudence could not have guarded against.
  1. Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.
  1. Excessive or inadequate damages.
  1. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.
  1. Error in law, occurring at the trial and excepted to by the party making the application.”

When the application for a new trial is made for a cause mentioned in the first, second, third and fourth subdivisions of Section 657, it must be made upon affidavits; otherwise it must be made on the minutes of the court. See Code of Civil Procedure § 658.

Deadline to file a motion for a new trial in California.

There are strict deadlines that must be met in order to file a motion for a new trial in California.

A party that wants to file a motion for a new trial in California must first serve and file a notice of their  intention to move for a new trial and specify all of the seven grounds listed in section 657. This MUST be done in a timely manner or the motion will be denied.

Code of Civil Procedure § 659 states that, “(a) The party intending to move for a new trial shall file with the clerk and serve upon each adverse party a notice of his or her intention to move for a new trial, designating the grounds upon which the motion will be made and whether the same will be made upon affidavits or the minutes of the court, or both, either:

(1) After the decision is rendered and before the entry of judgment.

(2) Within 15 days of the date of mailing notice of entry of judgment by the clerk of the court pursuant to Section 664.5, or service upon him or her by any party of written notice of entry of judgment, or within 180 days after the entry of judgment, whichever is earliest; provided, that upon the filing of the first notice of intention to move for a new trial by a party, each other party shall have 15 days after the service of that notice upon him or her to file and serve a notice of intention to move for a new trial.

(b) That notice of intention to move for a new trial shall be deemed to be a motion for a new trial on all the grounds stated in the notice. The times specified in paragraphs (1) and (2) of subdivision (a) shall not be extended by order or stipulation or by those provisions of Section 1013 that extend the time for exercising a right or doing an act where service is by mail.”

Within 10 calendar days after filing the notice of intention to move for new trial the party must file and serve any supporting affidavits unless a stipulation or court order has been obtained extending the time period. See Code of Civil Procedure § 659a.

A memorandum of points and authorities with citations to case law and statutory authority must be drafted and should be filed and served at the same time as the supporting affidavits.

The power of the court to rule on a motion for a new trial shall expire 60 days from and after the mailing of notice of entry of judgment by the clerk of the court pursuant to Section 664.5 or 60 days from and after service on the moving party by any party of written notice of the entry of the judgment, whichever is earlier, or if such notice has not theretofore been given, then 60 days after filing of the first notice of intention to move for a new trial. If such motion is not determined within said period of 60 days, or within said period as thus extended, the effect shall be a denial of the motion without further order of the court. See Code of Civil Procedure § 660 for more details.

The California Supreme Court has stated that trial courts have broad discretion in ruling on motions for new trial, with great deference given to the ruling, which will be set aside only on a showing of “manifest and unmistakable abuse of discretion.” See Brandelius v. City and County of San Francisco (1957) 47 Cal.2d 729, 733-734; see also Jimenez v. Sears Roebuck & Co. (1971) 4 Cal.3d 379, 387.

The California Supreme Court has also stated that,

“The determination of a motion for a new trial rests so completely within the court’s discretion that its action will not be disturbed unless a manifest and unmistakable abuse of discretion clearly appears.  This is particularly true when the discretion is exercised in favor of awarding a new trial, for this action does not finally dispose of the matter.  So long as a reasonable or even fairly debatable justification under the law is shown for the order granting the new trial, the order will not be set aside.”  See Jimenez v. Sears, Roebuck & Company, supra 4 Cal. 3d at 387. (Citations and quotations omitted.)

The California Supreme Court has stated that a motion for a new trial in California can also challenge judgments of dismissal after a demurrer is sustained without leave to amend, judgments of dismissal generally, judgments on the pleadings and decisions granting judgments on agreed statements of ultimate facts. See Carney v. Simmonds, (1957) 49 Cal. 2d 84, 88.

An experienced litigation attorney can evaluate your situation and determine whether filing a motion for a new trial is the appropriate strategy in your case.

Nathan Mubasher earned a post-doctorate LL.M. in International Financial Transactions with emphasis on Money Laundering and Compliance at Thomas Jefferson School of Law, a J.D. at American College of Law, and his B.A. at University of California, Riverside. He is a member of the State Bar of California and is admitted to practice before all state and federal courts in California. He is also an active member of the American Health Lawyers Association and the California Society for Healthcare Attorneys. He has performed over 1,000 mediations and has Alternative Dispute Resolution (ADR) training from the United Nations Institute for Training and Research (UNITAR).

Contact attorney Nathan Mubasher for a free consultation and evaluation of your case.

Schedule a free consultation today with attorney Nathan Mubasher.

Call (800) 691-2721 and let’s talk about your options.

CONTACT INFORMATION FOR NATHAN MUBASHER:

Law Offices of Nathan Mubasher
2621 Green River Rd, Ste 105 PMB 403
Corona, CA 92882
tel 1-800-691-2721 | fax 1-310-356-3660
www.mubasherlaw.com

DISCLAIMER:

Thank you for reading. I hope I could have been educational as I endeavor to provide my knowledge as a free public service. Please note that all the materials and information on this blog are general analyses made available for the public’s general informational purposes only. These analyses are not in any way intended to serve as specific legal advice to be applied in your particular situation. Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes, since this information would likely change based on any additional facts. Thus the transmission and receipt of information on this blog by anyone does not form or constitute an attorney-client relationship. My knowledge of laws is limited to California. Anyone receiving any information on this blog should not act upon the information provided without first obtaining the services of professional legal counsel licensed in their respective jurisdiction. Best of luck.

Collateral attack on a judgment in California

A collateral attack on a judgment in California is the topic of this blog post.

A collateral attack on a judgment in California requires the filing of a separate lawsuit which is also known as an independent action in equity.  A collateral attack on a judgment is fundamentally different from a standard motion to vacate a judgment in that it involves the filing of another lawsuit to vacate the judgment for lack of personal jurisdiction.  The complaint could also include other causes of action such as vacating the judgment on the grounds of extrinsic fraud or mistake if appropriate.

Advantages of a collateral attack on a judgment in California.

A collateral attack on a judgment in California has some very important advantages which include,

(1) there is NO time limit for a collateral attack on a judgment,

(2) because filing an independent action in equity involves a separate lawsuit, the party seeking to vacate the judgment is allowed the full range of discovery methods authorized in California litigation including interrogatories, requests for admission, requests for production of documents, depositions, and most importantly, the use of oral testimony as witnesses can be served with a subpoena to appear at the trial, and

(3) the fact that a California Court of Appeal ruled in a recently published decision that laches cannot be invoked as a defense in cases where there has been a complete failure of service of process upon a defendant.

And there is another important advantage in that even if a motion to vacate is made under section 473 of the Code of Civil Procedure and is denied that does not always preclude an independent action in equity to set aside the judgment, in other words the denial of the previous motion is not entitled to collateral estoppel effect although collateral estoppel may apply if the defendant had an opportunity to present oral testimony at the section 473 motion hearing and the issues were fully litigated.  See Groves v. Peterson (2002) 100 Cal.App.4th 659, 668.

The California Supreme Court has stated that the reasoning behind the general rule that the denial of the previous motion is not entitled to collateral estoppel effect, which has been well settled in California for over 100 years, is the fact that, in the standard motion procedure, the moving party is limited to presenting ex parte affidavits of voluntary witnesses in most cases unless the trial court exercises discretion and permits a greater latitude.  In using the motion procedure the party does not have the right to produce oral testimony or to compel witnesses to attend for deposition or cross-examination.  The motion procedure, while simpler and more convenient, does not involve all the aspects of full litigation.  Because the remedies of a motion in the underlying case and an independent action in equity are cumulative, parties should be entitled to resort first to the convenient and expeditious remedy without worrying about the issue of collateral estoppel if the motion is denied.  Thus even if a section 473 motion has been denied, parties may still pursue an independent action that affords them all the advantages of a regular trial of the issue.

Technically speaking there is no time limit to filing an independent action in equity to vacate a judgment.  However if you have recently become aware that a judgment has been entered against you should contact an experienced civil litigation attorney that can evaluate your situation and determine if a collateral attack on the judgment is appropriate.

Contact attorney Nathan Mubasher for a free consultation and evaluation of your case.

Nathan Mubasher earned a post-doctorate LL.M. in International Financial Transactions with emphasis on Money Laundering and Compliance at Thomas Jefferson School of Law, a J.D. at American College of Law, and his B.A. at University of California, Riverside. He is a member of the State Bar of California and is admitted to practice before all state and federal courts in California. He is also an active member of the American Health Lawyers Association and the California Society for Healthcare Attorneys. He has performed over 1,000 mediations and has Alternative Dispute Resolution (ADR) training from the United Nations Institute for Training and Research (UNITAR).

Schedule a free consultation today with attorney Nathan Mubasher.

Call (800) 691-2721 and let’s talk about your options.

CONTACT INFORMATION FOR NATHAN MUBASHER:

Law Offices of Nathan Mubasher
2621 Green River Rd, Ste 105 PMB 403
Corona, CA 92882
tel 1-800-691-2721 | fax 1-310-356-3660
www.mubasherlaw.com

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Thank you for reading. I hope I could have been educational as I endeavor to provide my knowledge as a free public service. Please note that all the materials and information on this blog are general analyses made available for the public’s general informational purposes only. These analyses are not in any way intended to serve as specific legal advice to be applied in your particular situation. Although I am an attorney, absent a signed retention and engagement letter, I am not your attorney. There are no exceptions to this rule. Moreover, you shall not rely on the information I am providing you, as it is only for your general knowledge and educational purposes, since this information would likely change based on any additional facts. Thus the transmission and receipt of information on this blog by anyone does not form or constitute an attorney-client relationship. My knowledge of laws is limited to California. Anyone receiving any information on this blog should not act upon the information provided without first obtaining the services of professional legal counsel licensed in their respective jurisdiction. Best of luck.