Newsletter: California Inc.: Landmark case asks if Samsung ripped off Apple


Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.

I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.

Friday’s lackluster jobs report suggested that the era of monthly payroll gains of at least 200,000 may be over, but economists said that’s a good thing. Although the 156,000 net new jobs added in September was down from the previous month, wage growth was solid and the labor force continued to expand. Those are signs of a healthy labor market as more people come off the sidelines to look for jobs.



Phone feud: The U.S. Supreme Court will hear arguments Tuesday in a hotly disputed case that began in 2011 when Apple accused rival Samsung Electronics of illegally copying the look of its phones. If the court upholds an earlier ruling, Samsung would have to turn over $399 million to Apple, or all the profit from smartphones that took advantage of the iPhone maker’s patents. This will be the first time in 120 years that the high court has heard a design patent case.

Factory closure: Tuesday will be the final day of operation for one of American Apparel’s factories in Los Angeles. The struggling retailer announced in August that the facility, which handles knit apparel, would close and about 50 employees would lose their jobs. Earlier this year, the company closed a Hawthorne plant that dyed fabrics. American Apparel’s downtown manufacturing facility, its largest, remains open, but sources have said the company is contemplating moving that operation to a lower-wage part of the country.

Video game fest: IndieCade, one of the most respected festivals in the video game industry, will be held Thursday through Sunday on the campus of USC. The 10-year-old festival, which drew about 7,000 people in fall 2015, has long called Culver City home. But increasing development in Culver City forced organizers to move to USC – a pretty good fit, since the university is home to the nation’s most highly regarded video game design program. The 200-plus games at IndieCade often showcase the industry’s more experimental and risk-taking side.

‘Splaining from Stumpf: Wells Fargo will announce its third-quarter earnings and hold a conference call with investors on Friday, giving the bank’s shareholders and outside investment analysts a chance to ask CEO John Stumpf and other executives about the ongoing scandal over the San Francisco-based bank’s sales practices. Investor calls are normally chummy affairs, but Stumpf could face some pointed questions from investors, who have seen shares tumble to prices not seen since 2013.

Consumer spending: On Friday, the Commerce Department releases September retail sales figures, a closely watched indicator of U.S. economic health. Last month’s report showed a 0.3% drop in sales, a lackluster showing that raised questions about whether consumers can continue to drive economic growth in the remaining months of 2016. Still, with the holiday shopping season ahead, retailers are gearing up. Target will hold a “hiring event” for seasonal workers this Friday and Saturday from noon to 6 at all its stores.



Monday’s Business section explains why there’s less love these days for Tony the Tiger, Cap’n Crunch and Lucky the Leprechaun. U.S. sales of breakfast cereals have turned as flat as soggy corn flakes amid consumers’ heightened concerns about cereal’s nutrition and lack of convenience. Sales of cold and hot cereals combined are expected to total $10.4 billion this year, down 18% from $12.7 billion in 2009. “The cereal category has undoubtedly had a challenging few years,” admits Craig Bahner, president of morning foods at Kellogg.


Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:

Bloody mess: The troubled Palo Alto blood-testing start-up Theranos said it was shutting its labs and patient testing centers, a move that will cause 340 employees to lose their jobs. The news, delivered in a letter by the company’s founder and CEO, Elizabeth Holmes, appears to be the end of its much hyped Edison technology, which the company had boasted would revolutionize the nation’s blood-testing industry.

Obamacare in action: Even as turmoil in insurance markets nationwide fuels renewed election-year attacks on the Affordable Care Act, California is emerging as a clear example of what the law can achieve. The state has recorded some of the nation’s most dramatic gains in health coverage since 2013 while building a competitive insurance marketplace that offers consumers enhanced protections from high medical bills.


Superbug reporting: Los Angeles County plans to require hospitals to begin reporting infections of patients with a certain superbug that is so lethal that it can kill half its victims. Unlike two dozen other states, California has not required hospitals to report when patients are sickened with the dangerous bacteria. The change comes after The Times reported about how a Manhattan Beach resident was sickened after a May 2014 surgery.

Naughty Netflix? Long-simmering tensions between Netflix and the traditional movie theater industry may be coming to a boil once again. The National Assn. of Theatre Owners expressed concerns about the streaming giant’s plan to release movies online and in theaters at the same time through a deal with IPic Entertainment. Netflix contends the traditional release window is out of step with changing consumer habits.

Cable bills: Charter Communications, following its acquisition of Time Warner Cable, is now rolling out its Spectrum brand. What will happen to people’s cable bills? As current bundles and promotions expire, Charter will transition customers to a new — and newly priced — array of service packages, and that will mean price hikes for many people.


And some recent stories from other publications that caught our eye:

My little pony: The New Yorker profiles Sam Altman, head of Silicon Valley’s Y Combinator, “a three-month boot camp, run twice a year, in how to become a ‘unicorn’ – Valleyspeak for a billion-dollar company.”

Fat stacks: Quartz looks at the huge pile of cash kept offshore for tax-avoidance purposes by the likes of Apple and Nike. How much money are we talking? Try six times the annual cost of Obamacare, or “30% more than the total annual cost of all U.S. elementary and secondary schools.”


Worrisome warning: The Wall Street Journal reports on a warning from Johnson & Johnson that its insulin pump may be vulnerable to cyberattacks. It’s “the latest indication of the susceptibility of medical devices to computer hacking.”

Longevity’s limit: How long can people live? As the Atlantic tells it, 115 years old may be as far as we can go. “Medical advances might keep us healthier for longer, but biology could have limits that technology can’t overcome.”

Am I blue? From the New York Times Magazine, the quest for a truly blue M&M – the most coveted of candies – and the elaborate steps Big Food is taking to move away from artificial colors. Fun fact: “The greater the variety of colors consumed, the longer it takes someone to feel full.”


That story on blue M&Ms leads inevitably to a discussion of songs with “blue” in the title (not “blues,” which is something else). There’s the tune mentioned above. Beyond that, take your pick. Perhaps this one from Neil Diamond. Or some Linda Ronstadt. Or Elvis. Me, I’ll go with either this one from CS&N or this gem from the Marcels.

For the latest money news, go to Until next time, I’ll see you in the Business section.


David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to