CALIFORNIA ATTORNEY'S FEES

Discovery, Sanctions: $5,684 Discovery Sanction Against Plaintiffs Affirmed Where They Could Not Produce A Written Confirmation Of A Discovery Extension

Beyond That, The Defense Did Not Pull The Trigger Too Hastily On Motions To Compel, Trying To Work It Out.

            Discovery frequently is the bane of both practitioners and judges, not to mention studies that confirm it has led to an increase in the costs of civil litigation for many, many cases.  California has a scheme allowing parties to stipulate to discovery extensions, but they must be confirmed in writing (although emails certainly satisfy this requirement).  The next case shows the importance of creating an adequate record where sanctions are being fought on the basis that a discovery extension was obtained from the other side.

            In Cantu v. Equinox Holdings, Inc., Case No. B295973 (2d Dist., Div. 5 Sept. 15, 2020) (unpublished), Plaintiffs failed to answer some paper discovery requests and failed to obtain a firm written confirmation of a discovery extension, although the propounding defense attorneys tried to work it out.  Plaintiffs finally propounded boilerplate objections to the requests and tried to argue that a blanket-type extension had been granted without evidence of a written confirmation.  The defense waited a little while longer, filing motions to compel and seeking $9,440 in attorney’s fees as discovery sanctions.  The trial judge used a blended hourly rate and reduced the number of hours to impose a sanction of $5,684 against plaintiffs.

            Plaintiffs’ appeal was not successful.  As a stark reminder to which we have posted on before, the failure to provide a reporter’s transcript of the relevant law-and-motion hearings was fatal, especially where a discretionary ruling was involved as opposed to one on legal issues.  Further, there was no clear proof of a written discovery extension such that there was no substantial justification for the opposition to the motions to compel.  The appellate court also observed that the defense did not file the motions to compel too soon, only doing so after receiving boilerplate objections and no plan by the other side as to providing real answers.

Discovery, Sanctions: Trial Court Cannot Impose Discovery Sanctions Once A Vexatious Litigant Motion Is Filed

Imposition Of Sanctions Was Error Because Filing Of Motion Stayed Further Proceedings Except A Ruling On The Vexatious Litigant Motion.

            In Hanna v. Little League Baseball, Inc., Case Nos. E070995 et al. (4^th Dist., Div. 2 Aug. 18, 2020) (partially published; sanctions discussion published), defendant filed a motion to have plaintiff declared a vexatious litigation under CCP § 391(b), requesting plaintiff post security and requiring plaintiff to obtain judicial prefiling permission for other pleadings—common requests in this type of motion.  Defendant also had moved to obtain discovery sanctions against plaintiff.  The lower court entertained all these motions at the same time, granting the vexatious litigant motion and ordering plaintiff to pay $1,200 in discovery sanctions.  Although affirming the vexatious litigant determination, the 4/2 DCA reversed the grant of discovery sanctions.  The reason was based on the clear statutory language of CCP § 391.6, which stays proceedings such that the lower court lacked jurisdiction to entertain and to impose discovery sanctions.

Discovery: Central District Of California Case Awarded Some Attorney’s Fees Where Party Responding To Rule 30(b)(6) Notice Failed to Specify Production Date

Practice Point For Litigators:  Specify A Time For Production Or Develop A Good Email Chain!

            In QC Labs v. Green Leaf Lab, LLC, 2019 WL 6797250 (C.D. Cal. July 19, 2019), a responding party to a F.R.Civ. P. 30(b)(6), under Rule 34(b)(2)(B), failed to specify a time for production of documents/EIS even though Rule 34 requires to specify a reasonable response date beyond the date mentioned in the production notice.  The responding party did not indicate an end date for production, even on a rolling basis, which resulted in a motion to compel grant and award of some attorney’s fees/costs to the requesting party.  So, the practice tip for federal practitioners is to specify a reasonable end date or develop an agreement through emails which shows there is no firm deadline, but the parties will communicate about time frames for a “rolling production” where a document/EIS production is time-consuming.

Appealability, Discovery, Family Law, Requests For Admission, Sanctions: Appeal Dismissed For Petitioner Who Was Dissatisfied With Trial Court’s Order On His Motion To Have Requests For Admission Deemed Admitted And For Sanctions

The Appellate Court Has No Jurisdiction To Review A Discovery Order.

            Petitioner father and respondent mother in Minasian v. Katz, Case No. A158517 (1^st Dist., Div. 2 June 11, 2020) (unpublished) were involved an incredibly protracted action – dating back to 2004 – regarding their child who was born the year before. 

            In 2018, petitioner served respondent with Requests for Admission, but considered petitioner’s original and second sets of responses inadequate, and filed a Request for Order to have the RFAs deemed admitted and for sanctions against respondent.  When the trial court ultimately ordered sanctions of $195 against respondent and that she file proper responses within 21 days, petitioner appealed – arguing the trial court exceeded its authority and discretion in ruling the respondent would have 21 additional days to file her RFA responses.  Unfortunately for petitioner, his appeal turned out to be an exercise in futility.  The 1/2 DCA dismissed.  The panel concluded petitioner’s appeal was of a discovery order, not a judgment, and that it was without jurisdiction to rule on the discovery order given there is no statutory provision allowing for an appeal of an order on a discovery motion.  (Lund v. Superior Court of Orange County, 61 Cal.2d 698, 709 (1964); Code Civ. Proc. § 904.1.)  

Discovery, Sanctions: $7,862.50 Sanctions Award Against Cross-Complainant In Insurance Case Affirmed On Appeal For Presenting An Unsuccessful Motion To Augment An Expert Witness Designation

Cross-Complainant’s Dilatory Conduct Justified The Sanctions Award.

            Code of Civil Procedure section 2034.630 states that a trial court “shall impose a monetary sanction . . . against any party, person, or attorney who unsuccessfully makes or opposes a motion to augment or amend expert witness information, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”   This section was front and center in Black v. Fireman’s Fund Ins. Co., Case No. A155428 (1^st Dist., Div. 1 Apr. 23, 2020) (unpublished).

            In this case, a cross-complainant/insured brought an insurance bad faith suit against cross-defendant/insurer Fireman’s Fund.  He designated two expert witnesses.  Fireman’s Fund tried for over 1 ½ years to depose one of these experts, although the expert had informed cross-complainant that he would not provide expert testimony unless paid.  A trial judge ordered the deposition of the expert under penalty of exclusion of his testimony at trial or otherwise.  Cross-complainant did not produce the expert before the expert discovery cut-off and then brought a motion to augment the expert designation based on the claim that he needed time to find/designate a new expert.  The trial judge denied the motion and imposed $7,862.50 in sanctions under section 2034.630. 

            Cross-complainants’ appeal of the sanctions order was unsuccessful.  The record showed, quite clearly, that the initially designated expert was not going to provide testimony until he was paid, and cross-complainant showed no “substantial justification” for his delay in resolving the matter or designating a new expert for 1 ½ years.  Beyond that, the appellate court found this event was part and parcel of dilatory conduct by cross-complainant, who had obtained 6 continuances of the trial date during the course of the litigation.  Sanctions order affirmed.

Discovery: Litigant Ordered To Pay 50% Of Discovery Referee Costs Did Not Demonstrate An Abuse of Discretion

Litigant’s Claims Of Inability To Pay Was Not Adequately Documented And Raised Too Late.

            In Duran v. Atlantic Memorial Hospital Associates, Inc., Case No. B286660 (2d Dist., Div. 7 Apr. 8, 2020) (unpublished), a litigant was ordered to bear 50% of a discovery referee’s costs. CCP § 639(a)(5) does allow a trial court to apportion a referee’s costs, modified by the condition that it must also gauge whether the party has the economic ability to pay under § 639(d)(6)(A).  It is an abuse of discretion for the lower court to not consider inability to pay in this area of the law.  (McDonald v. Superior Court, 22 Cal.App.4^th 364, 370 (1994).). The appellate court determined there was no abuse of discretion in the discovery referee fee apportionment, given that the appealing litigant did not specify the limited funds available to the party and given that the litigant waited way down the line to claim financial distress, which was a credibility issue for the lower court to weigh against the litigant. 

Discovery, Sanctions: Louisiana Federal District Judge Assesses Fees And Sanctions Against Defendant And/Or Its Attorney For Deposition Interruptions, Speaking Objections, Instructions To Not Answer, Witness Coaching, And Failure To Prepare The Deponent

Various Fees And Sanctions Ordered Under FRCP 37.

            We sometimes blog on cases outside of California.  This one caught our eye because it received press in a March 30, 2020 post by Debra Cassens Weiss in the ABA Journal.

            In REC Marine Logistics, LLC v. Richard, No. 19-11149 (E.D. La. Mar. 27, 2020) (Docket Doc. 93) [linked here], U.S. Magistrate Judge Dana M. Douglas confronted plaintiff’s request for attorney’s fees for bringing an earlier motion to compel and then fees/costs/sanctions under FRCP 37 for defense counsel’s dilatory discovery actions and his tactics during a noticed deposition in a maritime injury case.  Magistrate Judge Douglas initially awarded $3,675 in fees for an earlier motion to compel, which then turned the focus upon defense counsel’s conduct during the deposition.  He made 145 interruptions during questioning, 16 instructions to the witness not to answer, 106 objections (including 52 speaking objections), and 11 instances of interrupting to ask his own questions during the cross-examination of the witness, not to mention that the witness was coached and was unprepared for the deposition.  Defense counsel appeared on 170 pages of the 255-page deposition transcript.  Based on this conduct, the magistrate judge ordered the defendant and his attorney to pay the attorney’s fees and costs associated with the deposition and pay plaintiff’s fees associated with the sanctions motion, as well as defense counsel paying individual sanctions in the amount of $1,000.  Wisely, defendant did not oppose the fees/sanctions motion brought by plaintiff.

            BLOG OBSERVATION—The seminal federal case for deposition protocol is Hall v. Clifton Precision, 150 F.R.D. 525 (E.D. Pa. 1993).   A Southern District of California district judge in the past issued a Hall-type order.  (See Vestin Realty Mortgage II Inc. v. Klaas, No. 08-CV-2011 (S.D. Cal. Oct. 25, 2010).) However, some of the Hall protocols have been found to be too inflexible such that more moderate approaches are followed.  (See Chesbrough v. Life Care Centers, Inc., 2014 WL 861200 (Mass. Super. Feb. 14, 2014) at *2, 3, 5 [especially addressing attorney conferences with deponents during legitimate breaks, not deposition special interruptions].). District courts are generally not impressed with conferences in depositions where a question is pending unless a privilege/trade secret/privacy issue is involved, frequently sanctioning for such interruptions.  (See, e.g. New Age Imports, Inc. v. VD Importers, Inc., 2019 WL 1427468, at *3 (C.D. Cal. Feb. 21, 2019) [motion to compel second deposition of witness due to in-deposition conference was “substantially justified” so as to support an award of costs]; Horowitz v. Chen, 2018 WL 4560697, at *3-5 (C.D. Cal. Sept. 20, 2018) [attorney and client “repeatedly left the room together while a question was pending;” costs and redeposition ordered].)

Appeal Sanctions, Discovery: Discovery And Family Code Section 271 Sanctions Of $3,250 Against Father Affirmed On Appeal

Also, Father Ordered To Pay Mother $2,980 For Prosecuting A Frivolous Appeal.

            Father, in Rybolt v. Riley, Case No. C086056 (3d Dist. Mar. 24, 2020 (unpublished), appealed from a non-appealable vocational evaluation order and discovery/Family Code section 271 totaling $3,250 for bringing motions to compel which were denied/did not further legitimate purposes of the overall litigation.  Father’s appeal did not go well.  Although it is true sanctions were awarded under both section 271 and the discovery statutes, discovery sanctions do not require an ability to pay as a necessary predicate such that they were no abuse of discretion.  The vocational evaluation order was non-appealable and father’s other arguments were frivolous, prompting the appellate court to award mother $2,980 in attorney’s fees and costs expended in responding to father’s appeal. 

Appealability, Discovery, Sanctions: $3,456.70 In Fee Sanctions Based On Denial Of Postjudgment Discovery Order Upheld On Appeal

Motion Denying Discovery Order Is Nonappealable, But 2/8 DCA Treated It As Mandate Petition; CCP § 128.5 Principles Were Not Involved, Because Discovery Sanctions Were At Issue Instead.

            The 2/8 DCA in Dalessandro v. Mitchell, Case No. B293472 (2d Dist., Div. 8 Dec. 17, 2019 unpublished), but certified for publication on January 3, 2020, dealt with a plaintiff who had a postjudgment discovery motion denied for failure to affix postage to the demand (making service improper) and who was also assessed (along with his counsel) with discovery sanctions of $3,456.70.  Plaintiff appealed.

            On a liminal jurisdictional issue, the appellate panel did agree that the postjudgment discovery was not appealable, acknowledging a split in authority but siding with the non- appealability decisions.  However, it did exercise discretion to treat the appeal as a mandate petition so the merits could be heard expeditiously.

            Because there was no postage attached to the discovery demand, service was improper such that sanctions were warranted.  Plaintiff’s argument that there was noncompliance with CCP § 128.5(f) by failing to give “safe harbor” leeway was bogus because the lower court issued fees as sanctions for discovery abuse.  Nothing demonstrated that an opposing party had to meet and confer with respect to alerting the demanding party to defects in discovery requests (such as improper service).  Finally, opposing party did request sanctions in his motion to compel opposition, a perfectly valid way of presenting the issue to the lower court. 

Discovery, Sanctions: Failure To Designate The Deposition Video In The Appellate Court Doomed Challenge To $11,000 Sanction For Unilaterally Terminating A Videotaped Deposition

Motion To Augment The Record To Include The Video, One Day After The Appellate Argument, Was Deemed Untimely.

            Genesis Media, LLC v. Misle, Case No. B294620 (2d Dist., Div. 3 Sept. 10, 2019) (unpublished) is an appeal from a discovery sanction where an inadequate appellate record and untimely motion to augment sealed the fate of the sanctioned parties.

            However, the facts are interesting to say the least. 

Plaintiff Genesis Media, whose founder was Howard Misle, filed a breach of contract action against Ownzones Media and an individual in connection with Ownzones’ agreement to produce and operate a cannabis-focused media and lifestyle business.  Defendant Ownzones noticed Mr. Misle’s videotaped deposition in Las Vegas at the defense firm which had an armed security guard in the firm’s lobby.  A kerfuffle then ensued, with Mr. Misle apparently leaving the deposition room before any question could be answered based on the security guard’s presence in the law firm lobby.  Ultimately, plaintiff’s attorney terminated the deposition because the security guard was not removed from the lobby.  Plaintiff moved to compel the deposition and for resultant sanctions, even though no protective order motion was filed by the defense (although defense counsel claimed he suspended the deposition in order to seek a protective order).  The lower court reviewed the deposition video, granting the motion to compel and sanctioning Mr. Misle, plaintiff, and plaintiff’s counsel, jointly and severally, in the reduced amount of $11,000—expressly finding that the deposition video confirmed defendant counsel’s account of events leading to the motion to compel. 

            Mr. Misle and plaintiff’s counsel appealed, but they failed to designate the deposition video.  Big mistake.  The sanctions award was affirmed based on an inadequate record.  However, appellants obviously sensed at the appellate argument that they should have designated the video, bringing a motion to augment the record with the video one day after the oral argument.  This was denied as untimely.  (Regents of University of California v. Sheily, 122 Cal.App.4^th 824, 826 n. 1 (2004).) 

Appealability, Discovery: Appeal From Final Judgment Does Preserve Challenges To Discovery Rulings.

2/4 DCA Finds Persuasive Reasoning From Prior 2/8 Decision On This Issue.

            We found Baiul-Farina v. Crown Media Holdings, Inc., Case No. B279653 (2d Dist., Div. 4 Aug. 21, 2019) (unpublished) interesting, not because it affirmed discovery sanctions rulings, but for its discussion on appealability.  Appellant argued that discovery sanctions rulings were not appealable under CCP § 906 because they were not on the merits.  The 2/4 DCA disagreed, finding persuasive the reasoning in In re A.L., 224 Cal.App.4^th 354, 362 n. 4 (2014), a Second District, Division 8 decision, which found that an appeal of a final judgment will encompass prior discovery rulings also. 

Discovery, Family Law: $2,500 Discovery Sanctions Order Reversed In Favor Of Responding, Prevailing Party Because No Competent Declaration Of Incurred Expenses Was Presented

CCP § 2023.040 Was The Key Statutory Provision.

            Just to show you that technicalities can matter in the discovery area, the First District, Division 2 reversed a $2,500 discovery sanction against ex-wife in Marriage of Stupp v. Schilders, Case No. A154396 (1^st Dist., Div. 2 July 10, 2019) (unpublished).  What happened is that a party moving to compel discovery responses lost, and the lower court awarded the successful responding party with $2,500 in discovery sanctions.  This one had to be reversed because the trial judge, earlier, had stricken a declaration filed by the responding party because it was not signed by the actual declarant and that was the only proof of what was expended in responding to the motion to compel.  Given the lack of evidence on expenses incurred in responding to the discovery motion, the sanction award had no support at all.  (Code Civ. Proc., § 2023.040.) 

Discovery, Family Law: Family Law Judges, On Discovery Matters Rather Than OSC Matters, Can Issue Sanctions Based On Declaration Testimony

No Oral Testimony Required Under The Circumstances.

            We found Marriage of Clarke and Akel, Case No. A151888 (1^st Dist., Div. 5 Dec. 11, 2018) (unpublished) to be an interesting case given that it involved an intersection between family law and civil discovery procedures.

            The essence of the matter was a discovery dispute between parties to a marital dissolution proceeding. Eventually, ex-wife was ordered to pay to ex-husband $15,000 on a discovery motion to compel under CCP §§ 2023.030(a), 2031.310(h). The principal challenge was that the family law judge erred in deciding the discovery dispute based on declarations, rather than admitting oral testimony.

            The appellate court affirmed. Nothing exempts family law cases from application of discovery principles, which routinely allow these disputes to be resolved through declaration testimony. This is contrasted with substantive order to show cause matters, which usually require oral testimony unless the parties stipulate otherwise. Beyond that, ex-wife did not object to the declarations such that any argument otherwise was waived.

Discovery, Reasonableness Of Fees: 6 DCA Remands Determination For Prevailing Party Under Subpoena To Look Again At Amount Of Fees To Be Awarded

CCP § 1987.2 Prevailing Party Fees In Subpoena Context Might Depend On Who Met Litigation Objectives, Although The Test Is Not Crystal Clear.

            John/Jane Roe v. Halbig, Case No. H043248 (6^th Dist. Nov. 20, 2018) (published) is an interesting, but somewhat perplexing, opinion on the fees to be awarded to a party which ultimately prevailed because the other side withdrew a subpoena, which did allow for a prevailing party award under Code of Civil Procedure section 1987.2(c). Although adopting a “did you achieve your litigation objectives test,” it was only done under an abuse of discretion standard such that the test is not crystal clear at all as far as providing a benchmark guidance for future litigants. We are not complaining about the result, but benchmarks are good.

            What happened was that plaintiff sued certain doe defendants in Florida about alleged comments made by them on websites/social medical websites. Plaintiff served a subpoena on Google, who coughed up the account holders—including the doe defendants.   One account holder filed a motion to quash the subpoena under CCP § 1987.2(c), which includes a fee-shifting provision in the prevailing party’s favor. Plaintiff withdrew the subpoena, with the doe defendant found to be the prevailing party although the trial judge only awarding $22,000 out of a requested $42,581 in fees.

            The appellate court remanded for a “re-do” of the fee determination.

            It did determine that a challenging subpoenaed party could be the prevailing party under circumstances where a subpoena was withdrawn, although did not articulate a clear-cut test. Rather, it found no abuse of discretion with the trial judge adopting a “prevailing party” test where the party achieved its litigation objectives, although discussing under tests under the anti-SLAPP statute (although a catalyst test was rejected) but only deciding that the “litigation objective” standard was a reasonable one to use.  

            The challenging party did prevail, but the reviewing court was flummoxed about the amount of the fee award. There were some hourly fees which likely should have been honored, but the trial judge cut them down drastically. So, the fee award was sent back down for a “relook.”

Discovery/Sanctions: Plaintiff In Pro Per Attorney Properly Imposed With Discovery Sanctions Of $5,510 (Inclusive Of Attorney’s Fees) Under CCP § 2030.300(d)

Appellate Court Rejects In Pro Per’s Due Process Argument And Challenge To Temporary Judge’s Initial Assignment To Motion Matter.

            DeWitt v. HSBC Bank USA, N.A., Case No. A151545 (1^st Dist., Div. 2 June 22, 2018) (unpublished) is a situation where an in pro per attorney, representing himself as plaintiff, sued several defendants in a California Anti-Spam Act case. A superior court judge granted a motion to compel further responses against plaintiff and imposed monetary discovery sanctions of $5,510 against plaintiff/in Bank’s favor under CCP § 2030.300(d). Earlier, plaintiff had nixed having the motion matter heard by a temporary judge, which in hindsight was a mistake.

Plaintiff appealed the motion to compel and discovery sanctions, although only the sanctions award was appealable. (CCP § 904.1(a)(12); Doe v. U.S. Swimming, Inc., 200 Cal.App.4^th 1424, 1432 (2011).)

            Plaintiff’s two challenges on appeal did not succeed.

            First, plaintiff argued there were due process/equal protection violations in allowing discovery sanctions, inclusive of fees, to be awarded against an in pro per attorney, who could not gain fees as sanctions based on the attorney’s self-representation. The First District, Division 2 rejected this argument based upon the reasoning in Kravitz v. Superior Court, 91 Cal.App.4^th 1015, 1020 (2001). Kravitz first of all recognized that an in pro per plaintiff winning discovery sanctions can obtain reasonably identifiable expenses incurred such as computer-assisted legal research, photocopying, or transportation to/from court, just like lawyers representing parties can recover out-of-pocket costs. However, by definition, self-represented have incurred no attorney’s fees such that they are not similarly situated for due process/equal protection purposes. As far as the asymmetry argument made by plaintiff, the fact in pro per plaintiffs can recover out-of-pocket expenses is not that far askew because most lawyers representing parties ordinarily include such expenses in their hourly rates.

            Second, the record showed that the temporary judge did not hear the motion matter after plaintiff objected, with the matter going to a superior court judge who made an independent review. Plaintiff should have stuck with the temporary judge, whose tentative was to issue sanctions of only about 1/5^th of the amount eventually awarded by the superior court judge. Ouch! – this case reinforces the old adage “Be careful what you ask for.”

Discovery, Family Law, Sanctions: $5,500 Discovery Sanctions Award Against Ex-Client Attorney Reversed Where Attorney Not Given Notice She Was A “Sanctions Target”

Due Process Violation Was Reason For Reversal.

             In Marriage of Mehta & Grover, Case No. A146919 (1^st Dist., Div. 4 June 19, 2018) (unpublished), a $5,500 discovery sanction against an ex-attorney for wife was reversed on due process grounds. What happened was that before the discovery sanctions motion was decided, attorney was relieved as wife’s attorney, with nothing in the papers indicating she was the target of a discovery sanctions request (with only her client wife indicated as a target). The subsequent $5,500 sanctions order against ex-attorney was reversed on due process grounds, given the attorney had no notice that she was personally the subject of the sanctions request. Here is what the appellate court had to say on a broader basis with respect to sanctions request in moving or opposing papers: “To interpret [Code of Civil Procedure] section 2023.040 as imposing a notice obligation only on those who elect to include a sanctions motion in moving papers (i.e., in a discovery motion or in a separate sanctions motion), and not on those who include a sanctions motion in opposition papers, would defeat the obvious purpose of the statute and would lead to absurd consequences.” (Slip Op., p. 9.)

Appealability/Discovery/Sanctions: Separate Discovery Sanctions Cannot Be Aggregated For Purposes Of Meeting $5,000 Appealability Threshold

Two Separate Sanctions Below $5,000 Cannot Be Aggregated For Appealability Purposes.

            In Mitchell Anthony Productions, LLC v. Baron, Case No. B282974 (2d Dist., Div. 5 Mar. 28, 2018) (unpublished), the trial judge awarded $4,860 in discovery sanctions on separate motions to compel further discovery responses to the interrogatories and requests for production.  The sanctioned party appealed because the total sanctions came to $9,720, claiming that the $5,000 jurisdictional threshold for an appeal of monetary sanctions over $5,000 was met.  (CCP § 904.1(a)(11), (a)(12).) 

            The appellate court dismissed the appeal.  The reason?  A party cannot aggregate monetary sanctions for purposes of appealability purposes, fully endorsing the reasoning to the same effect in Calhoun v. Vallejo City Unified School Dist., 20 Cal.App.4^th 39, 44-45 (1993) [1^st Dist., Div. 5]), but indicating this did not foreclose an extraordinary writ petition if a true wrong was done through a sanctions order below. 

Costs/Discovery: Expenses For Activities Associated With Production Of Electronically Stored Documents Properly Awarded As Discretionary Costs Under CCP § 1033.5(c)

$150,449.49 Was Costs Award To The Successful Defendant.

            Litigators at both the federal and state levels are fully aware of the expense which has been added to litigation based on having to produce electronically documents/information in cases (also known as “ESI”).  The next opinion demonstrates that ESI expenses can be recouped by a successful party as being “reasonable and necessary” to the litigation under the discretionary costs provision contained in CCP § 1033.5(c).

            In Dremak v. Urban Outfitters, Inc., Case No. D071308 (4^th Dist., Div. 1 Mar. 23, 2018) (unpublished), three plaintiff consumers, on behalf of a certified class, lost a consumer ZIP code sales information case against Urban Outfitters, with the trial judge awarding the defense $150,449.49 in defense costs—a lot of which were associated with expenses incurred to produce electronically stored documents in response to plaintiffs’ discovery requests.

            The 4/1 DCA found this award was no abuse of discretion.  Given that activities associated with e-discovery analytics and database searches are “reasonable and necessary” to the conduct of the litigation under CCP § 1033.5(c), the defense correctly was allowed to recoup these costs against the unsuccessful plaintiffs. 

Costs, Discovery, Private Attorney General, Special Fee Shifting Statutes: Multi-Million Dollar Costs, Discovery Violation Sanctions, And Fee Recoveries Reversed And Remanded Based On Reversals And Necessity To Revisit Fee Entitlement Bases

            

Moonlight Fire.  2007.  Wikipedia.  Author:  kkmontandon.

                 Dept. of Forestry & Fire Protection v. Howell, Case Nos. C074879/C076008 (3d Dist. Dec. 8, 2017) (fully published; first posted on Dec. 6, 2017 with costs/fee discussions not published) is a case arising from the 2007 Moonlight Fires which burned 65,000 acres in Plumas County.  Plaintiffs, mainly governmental agencies or affiliates, sought to recover fire suppression costs, investigation costs, and damages from defendants, mainly landowners, alleged to violate fire suppression statutes.  The defense won, with the trial judge awarding multiple millions of dollars for routine costs, discovery violations, and attorney’s fees to the various prevailing defendants. 

            Lots of things happened on appeal, but a revisit was necessary on most of these postjudgment orders.  However, the multi-millions in attorney’s fees award against Department of Forestry (Cal Fire) evaporated on appeal.

            With respect to routine costs, the appellate court had to remand to apportion costs given that it found only the judgment against Cal Fire was justified on appeal.  The costs award was not allocated, requiring a remand to determine the costs to be awarded against Cal Fire.

            The discovery violations of over $20 million also had to be remanded because the trial judge’s award was overbroad in nature—it awarded costs and fees for work prior to the discovery violations and failed to apportion out expenses not related to the violations.  Federal court broader discovery sanctioning authorities were different, and did not require a different result given the more narrow sanctions mandate under Code of Civil Procedure section 2033.

            That brought the appellate court to the attorney’s fees award against Cal Fire (somewhere in the $28 million area), which fell as a matter of law.  The first basis was Health and Safety Code sections 13009 and 13009.1, which provide in relevant part that the charge for fire suppression costs, rescue or emergency medical service costs constitute “a debt of that person [found liable under sections 13009 or 13009.1], and is collectible by the person, or by the federal, state, county, public, or private agency, incurring those costs in the same manner as in the case of an obligation under a contract, expressed or implied ” combined with Code of Civil Procedure section 1021.8, which provides that when the Attorney General prevails in a civil action based on sections 13009 and 13009.1, the Attorney General is to be awarded his or her “ costs of investigating and prosecuting the action, including expert fees, reasonable attorney [] fees, and costs.”  From this, the trial judge concluded fees were awardable pursuant to Civil Code section 1717; however, the appellate court found that the first scheme only talked about a mechanism for collection (not a fee entitlement basis) and the second statute only related to the Attorney General (not private persons).  The second basis was California’s private attorney general statute, but the Third District perceived that the defense had significant financial stakes given the potential personal exposure such that the financial burden element of Code of Civil Procedure section 1021.5 could not be met under the circumstances.

Costs, Discovery, Private Attorney General, Special Fee Shifting Statutes: Multi-Million Dollar Costs, Discovery Violation Sanctions, And Fee Recoveries Reversed And Remanded Based On Reversals And Necessity To Revisit Fee Entitlement Bases

            Dept. of Forestry & Fire Protection v. Howell, Case Nos. C074879/C076008 (3d Dist. Dec. 8, 2017) (fully published; first posted on Dec. 6, 2017 with costs/fee discussions not published) is a case arising from the 2007 Moonlight Fires which burned 65,000 acres in Plumas County.  Plaintiffs, mainly governmental agencies or affiliates, sought to recover fire suppression costs, investigation costs, and damages from defendants, mainly landowners, alleged to violate fire suppression statutes.  The defense won, with the trial judge awarding multiple millions of dollars for routine costs, discovery violations, and attorney’s fees to the various prevailing defendants. 

            Lots of things happened on appeal, but a revisit was necessary on most of these postjudgment orders.  However, the multi-millions in attorney’s fees award against Department of Forestry (Cal Fire) evaporated on appeal.

            With respect to routine costs, the appellate court had to remand to apportion costs given that it found only the judgment against Cal Fire was justified on appeal.  The costs award was not allocated, requiring a remand to determine the costs to be awarded against Cal Fire.

            The discovery violations of over $20 million also had to be remanded because the trial judge’s award was overbroad in nature—it awarded costs and fees for work prior to the discovery violations and failed to apportion out expenses not related to the violations.  Federal court broader discovery sanctioning authorities were different, and did not require a different result given the more narrow sanctions mandate under Code of Civil Procedure section 2033.

            That brought the appellate court to the attorney’s fees award against Cal Fire (somewhere in the $28 million area), which fell as a matter of law.  The first basis was Health and Safety Code sections 13009 and 13009.1, which provide in relevant part that the charge for fire suppression costs, rescue or emergency medical service costs constitute “a debt of that person [found liable under sections 13009 or 13009.1], and is collectible by the person, or by the federal, state, county, public, or private agency, incurring those costs in the same manner as in the case of an obligation under a contract, expressed or implied ” combined with Code of Civil Procedure section 1021.8, which provides that when the Attorney General prevails in a civil action based on sections 13009 and 13009.1, the Attorney General is to be awarded his or her “ costs of investigating and prosecuting the action, including expert fees, reasonable attorney [] fees, and costs.”  From this, the trial judge concluded fees were awardable pursuant to Civil Code section 1717; however, the appellate court found that the first scheme only talked about a mechanism for collection (not a fee entitlement basis) and the second statute only related to the Attorney General (not private persons).  The second basis was California’s private attorney general statute, but the Third District perceived that the defense had significant financial stakes given the potential personal exposure such that the financial burden element of Code of Civil Procedure section 1021.5 could not be met under the circumstances.

Discovery/Sanctions: Yelp Properly Ordered To Disclose Documents Relating To Anonymous Reviewer Making Alleged Slanderous Comments

However, Sanctions Order Relating To Discovery Order Reversed As A Matter Of Law Based On Evolving, Unsettled Area Of The Law.

            In Yelp Inc. v. Superior Court, Case Nos. G054358/G054422 (4^th Dist., Div. 3 Nov. 13, 2017) (published), plaintiffs successfully obtained a discovery order against Yelp compelling it to disclose documents that might reveal the identity of an anonymous reviewer allegedly making slanderous statements (with plaintiffs proving a prima facie case of slander).  The lower court also imposed $4,962.59 in discovery monetary sanctions against Yelp.

            Although losing a standing argument, plaintiffs did obtain affirmance of the discovery order.  However, with respect to the sanctions order, the 4/3 DCA—in a 3-0 opinion authored by Presiding Justice O’Leary—reversed as a matter of the law given that this area of the law was evolving and unsettled such that Yelp’s challenge of the discovery order was substantially justified. 

            BLOG OBSERVATION—We noticed that Steve Krongold, who both contributors know, won the merits on behalf of plaintiffs.  Congratulation, Steve.

Discovery: Superior Court Justified In Awarding $4,000 Daily Sanctions For Litigant’s Refusal To Comply With Discovery Orders

Sanctions Justified, In Part, Based On Prior Inconsistent Position By Challenging Litigant.

            In Padron v. Watchtower Bible and Tract Society of New York, Inc., Case No. D070723 (4^th Dist., Div. 1 Nov. 9, 2017) (published), the appellate court faced the answer to this question:  Can a superior court impose a hefty daily, continuing monetary sanction against a party who steadfastly refuses to comply with a discovery order?  Answer:  You betcha, to the tune of $4,000 a daily under the right circumstances.   Those circumstances were the right ones here, especially where the challenging party had argued earlier in favor of a monetary sanction versus a more severe terminating sanction. 

Discovery: Few Opinions Discuss Cost-Shifting Under The 2015 Amendments To Federal Rule Of Civil Procedure 26

Charles S. Fax Discusses This In A Fall 2017 Article in ABA’s Section of Litigation News Magazine.

            In an article in the Fall 2017 edition of the ABA’s Litigation News magazine, Charles S. Fax, Litigation News Associate Editor, observes that at the time his article went to press only four cases had discussed costs-shifting after 2015 amendments to Federal Rule of Civil Procedure 26 expressly allowed for the court to order allocation of expenses against a discovery-requesting party.  The reported decisions, with varying results, are In re Buccaneer Resources, LLC, 2015 Bankr. LEXIS 4203 (Bankr. S.D. Tex. Dec. 10, 2015); Gaudet v. GE Industrial Services, 2015 U.S Dist. LEXIS 59902 (E.D. La. May 5, 2016); U.S. ex rel. Bibby and Donnelly v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 178458 (N.D. Ga. May 26, 2016); and Lopez v. United States, 2017 U.S. Dist. LEXIS 40739 (S.D. Cal. Mar. 21, 2017).  In trying to determine why there were so few reported decisions, Mr. Fax suggests that the answer may lie in the intersection of other amendments in 2015, such as the proportionality rule, narrowing the scope of discovery to information “relevant to a claim or defense,” elimination of the language “reasonably calculated to lead to the discovery of admissible evidence” in Rule 26(b), and the in terrorem effect of Rule 37(e) sanctions for willful e-discovery violations. 

Appealability/Discovery: Separate Discovery Sanctions Below $5,000 Threshold Cannot Be Aggregated To Make Them Appealable

 

4/3 DCA Choose Calhoun Over Dicta In Champion/L.B.S.

Boyd Jones doing his arithmetic lesson at the blackboard in the Alexander Community School in Greene County, Georgia.  Nov. 1941.  Jack Delano, photographer.  Library of Congress.

     In Stueve v. Berger Kahn, Case No. G052689 (4th Dist., Div. 3 Nov. 22, 2016) (unpublished), a plaintiff party was assessed three separate discovery sanctions totaling $7,335, but not exceeding the $5,000 appealability threshold for each individual sanctions order contained in Code of Civil Procedure section 904.1(a)(12) [sanctions exceeding $5,000 are appealable].) 

    Plaintiff’s appeal was dismissed for failure to satisfy the $5,000 appealability threshold.

    In this regard, the 4/3 DCA panel agreed with the “non-aggregation” analysis of Calhoun v. Vallejo City Unified School Dist., 20 Cal.App.4th 39, 45 (1993), which rejected contrary dicta in Champion/L.B.S. Associates Development Co. v. E-Z Serve Petroleum Mktg., Inc., 15 Cal.App.4th 56, 59-60 (1993). 

    Acting Presiding Justice Moore authored the 3-0 opinion.

Discovery: Discovery Into Amount And Source of Attorney’s Fees Not Privileged On Punitive Aspect Of Mining Claim Jumping Case

 

Requested Discovery Was Relevant To Discovery On Punitive Damages Financial Condition Where Trial Court Allowed Civil Code Section 3295 Discovery.

    In Johnson v. Superior Court (Parker), Case No. C070028 (3d Dist. Sept. 28, 2016) (unpublished), the Third District denied the defendants’ mandate petition to prevent discovery of the amount and source of attorney’s fees paid and owed to the defense after the trial judge allowed punitive damages financial condition discovery under Civil Code section 3295.  The defense claimed the information was protected by the attorney-client privilege, with plaintiffs challenging this because they did not want the retainer agreement but only information regarding the amount of attorney’s fees paid by defendants.  The Third District sided with plaintiffs, citing In re Michaelson, 511 F.2d 882, 888 (9th Cir. 1975) for the proposition that the fact of a retainer, the identity of a client, the conditions of employment, and the amount of the fees and who paid do not come within the scope of the privilege and the information was relevant as to defendants’ financial condition.

Discovery: ESI Discovery Sanctions Are Going Downward In Federal Courts

 

First Half Of 2016 Saw A Large Decline.

     Gibson Dunn has published a mid-year 2016 review of electronically stored information (ESI) decisions in federal courts involving requests for sanctions.

     There has been a large decline. In the first half of 2016, there were only 32 reported decisions, 13 granting sanctions and 19 denying them for ESI violations. This compares to 150 reported decisions in 2011 and 120 in 2012 (federal courts). The authors of the review believe that some of the decline is related to the federal rule amendments requiring both relevancy and proportionality.

     Some of the most volatile decisions involve how to deal with text messages and mobile data.

Arbitration/Discovery/Sanctions: Discovery Sanctions A Little Shy Of $6,500 Affirmed Against Plaintiff For Discovery Disputes Not Arising Out Of An Arbitration

 

Substantive Claims Were To Be Arbitrated, But Prior Discovery Disputes Before Motion To Compel Granted Remained In Superior Court.

     In Vlahopouliotis v. Vallarta Properties, LLC, Case No. G069832 (5^th Dist. Feb. 1, 2016) (unpublished), plaintiff did win a motion to compel arbitration of substantive claims under a settlement agreement, but lost preexisting discovery motions to compel brought by his opponent because the discovery disputes arose before arbitration was ordered and had been pending in the trial court for some time. The trial judge also awarded a little shy of $6,500 in discovery abuse sanctions (CCP § 2023.030(a)) against plaintiff and his counsel, jointly and severally.

     The appeal of this sanctions order was unsuccessful. The Fifth District agreed that the arbitration agreement was narrow, only applying to substantive claims. The discovery disputes producing the sanctions award occurred before arbitration was ordered such that it did not arise out of discovery disputes relating to the arbitration.

     BLOG POINTER—For you out-of-town practitioners litigating in Fresno County Superior Court, be aware that there is a local rule by which a litigant can ask for a pretrial discovery conference on disputed discovery issues which has the effect of tolling certain deadlines.

Probate, Private Attorney General, Civil Rights, Costs, Discovery Sanctions: Lots Of Topics Covered In Four Unpublished Decisions For September 29, 2015

 

Chang v. Chang, Case No. G049309 (4th Dist., Div. 3 Sept. 29, 2015) (Unpublished; Ikola, J.).—Probate.

    In this and a companion appeal, the appellate court cut some surcharges to the trustee of about $345,000.  Because of this companion ruling, the appellate court sent back a $187,900 fee award against trustee and in favor of beneficiary (his brother) under Probate Code section 17211(b).  The surcharge cut might impact the lower court’s view of whether fees should be the same or different.

L.A. County Regional Park and Open Space Dist. v. City of Whittier, Case No. B257541 (2d Dist., Div. 1 Sept. 29, 2015) (Unpublished)—Private Attorney General.

    Petitioner won mandate based on a contract-based claim under a project agreement with Whittier, but not claims based on Proposition A violations, the public trust doctrine, and CEQA.  Petitioner moved to obtain fees of $1,105,651.20 under CCP § 1021.5, but the trial and appellate said “no.”  The reason was that vindication of contractual rights alone was not equivalent to vindication of a significant public right under 1021.5.

Cooter v. Angeles National Golf Club, Case No. B245137 (2d Dist., Div. 7 Sept. 29, 2015) (Unpublished)—Civil Rights/Costs.

    Here, the appellate court reversed an order denying in part a FEHA losing plaintiff’s motion to strike certain routine costs incurred after a CCP § 998 offer.  In doing so, the appellate court determined that the expert fees awarded under 998 were proper because they do not have to survive the frivolous/unreasonable standard.  (Holman v. Altana Pharma U.S., Inc., 186 Cal.App.4th 262, 282 (2010).)  However, the award of other routine costs had to be reexamined to see if the action was frivolous/unreasonable/without basis after the state supreme court’s ruling in Williams v. Chino Valley Independent Fire Dist., 61 Cal.4th 97 (2015). 

Gray1CPB, LLC v. Gulfstream Finance, Case No. G047966 (4th Dist., Div. 3 Sept. 29, 2015) (Unpublished) (Moore, J.)—Discovery Sanctions.

    Last but not least, the court of appeal affirmed more than $159,000 in monetary sanctions against a party for discovery abuse, based on 30 reports from a discovery referee, but reversed as to another party not given adequate due process notice of the sanctions until a too-late point in one discovery referee proceeding.

Discovery/Family Law: 271 Sanctions Remanded For Reconsideration, But Bulk Of $123,087.50 Award Likely To Stand

 

Playing Racial/Religion Discrimination Card And Attacking Opposing Counsel/The Court Did Not “Play” Well For Ex-Husband In Bitter Custody Dispute.

    Well, this next case – Marriage of Salas and Farraj, Case No. B252053 (2d Dist., Div. 7 Sept. 1, 2015) (unpublished) – is a good lesson for family law practitioners to not play the discrimination card or to attack opposing counsel/the court even if the client insists on it.  The upshot may well be client exposure for Family Code section 271 sanctions which frustrate efforts to settle or to informally resolve normally contentious dissolution matters.

    In this one, ex-husband got in a bitter custody/visitation dispute after his ex-wife and child moved to India.  Emotions obviously raged, but ex-husband apparently played the racial/religious discrimination card, engaged in lots of discovery disputes, and attacked ex-wife’s counsel/the court. 

    The lower court eventually awarded postjudgment discovery sanctions against ex-husband as well as substantial 217 sanctions of $123,087.50. 

    Most of it got affirmed on appeal, or will be after a remand.

    Even though a litigant cannot aggregate discovery sanctions to meet the $5,000 appealability threshold, the nuance here was that this was a postjudgment award which is expressly appealable.

    On the 271 sanctions, there was a remand because the lower court did draw a “time demarcation” line, finding efforts on attacking a psychiatric report and initially challenging the move-away order were not sanctionable in nature.  However, because the time demarcation was not firmly taken into account, the sanctions had to be revisited in a post-remand proceeding.

Discovery, Sanctions, Substantiation Of Fees: $2.7 Million In Discovery Sanctions Against Goodyear And Its Attorneys In Tire Failure Case Affirmed On Appeal

 

No Precise Linkage Between Harm and Compensatory Sanctions Required, Where Discovery Abuse Was Frequent Or Severe.

    This next case is a reminder of how one must be candid in discovery, with contrary positions and obstructionist litigation tactics possibly leading to large monetary sanctions against both client and client’s attorneys (as well as non-monetary sanctions).

    In Haeger v. The Goodyear Tire & Rubber Co., No. 12-17718 (9th Cir. July 20, 2015) (published), a district court found that Goodyear and two of its attorneys had engaged in egregious discovery abuses in a tire failure case, taking contrary positions to positions they had taken in other cases where sanctions were not involved—in essence, a “fraud on the court.”  The district judge levied large monetary sanctions under “the inherent power of the court,” finding that traditional FRCP 37 remedies were not well applied because the discovery fraud was discovered after the case the settled.  The district judge assessed compensatory, monetary sanctions of $548,246 against one Goodyear attorney and the same type of sanctions of a little shy of $2.2 million against Goodyear and another Goodyear attorney on a joint and several basis.  The district judge also ordered that the sanctions order be filed in other tire failure cases to alert plaintiffs’ attorneys to what happened in this one.

    The monetary and non-monetary sanctions were affirmed by the Ninth Circuit, in a 2-1 published decision.

    The majority decision, authored by Circuit Judge Milan Smith and concurred with by Circuit Judge Wallace, decided the sanctions were appropriate and that no precise linkage was required between the harm and compensatory sanctions awarded where the sanctionable conduct was frequent and severe.  They found that Chambers v. NASCO, Inc., 501 U.S. 32, 57 (1991) so found under “inherent power of the court” situations, with this authority “trumping” contrary Ninth Circuit authority (Miller).  The district judge also properly reduced the lodestar fee requests as follows:  20% for recreation of time entries; $32,470 for vague time entries; $4,880.73 for lack of proper substantiation; $50,721 for clerical tasks; and $25,827.50 for excessive billing.

    In a dissent, Circuit Judge Watford believed that such substantial compensatory sanctions had to satisfy heightened procedural protections relating to penal sanctions (which were not utilized and should lead to a reversal), although the majority found his supporting authorities distinguishable in nature.

Civil Rights, Discovery, Prevailing Party: Disabled Plaintiff Dismissing Suit, Where Defendant Eliminated Architectural Barrier After Filing Suit, Was Properly Not Exposed To Fee Recovery Under California Disabled Persons Act Fee-Shifting Provision

 

No One Prevailed in This Case, Both Trial and Appellate Courts Agreed, Under The Facts—But Prior Discovery Sanctions Award Did Survive.

     The California Disabled Persons Act (Civ. Code, § 54 et seq.) [DPA] does have a reciprocal fee-shifting provision in favor of a “prevailing party.” (Unlike the American with Disabilities Act [ADA], which requires a showing of frivolousness or unreasonableness in order to fee shift against a disabled person, the California statutory equivalent does not have a similar requirement.) With that in mind, Pineda v. Bekhor, Case No. B255583 (2d Dist., Div. 1 Mar. 13, 2015) (unpublished) focused on a lower court’s determination that neither plaintiff nor defendant prevailed after plaintiff voluntarily dismissed a case after architectural barrier corrections were made.

     Plaintiff sued because a towel dispenser was mounted too high above a floor in defendant’s coin-operated laundry facility, based on both the ADA and DPA. Within 30 days after service of the complaint, defendant lowered the towel dispenser so as to be disability compliant. Defendant did win $2,160 in discovery sanctions along the way. Then, one week later, plaintiff dismissed with prejudice, but never paid the sanctions order.

     Defendant then moved to recover $11,300 in attorney’s fees under the DPA statutory provision, inclusive of the $2,160 discovery sanctions. The trial court denied the fee request, finding neither side “prevailed.”

     The Second District, Division 1 affirmed, but with one clarification. Although the lower court found the action was not frivolous (introducing some confusion as to ADA and DPA claims), defendant moved under the DPA such that the pragmatic definition of who really “prevailed” was at issue. The lower court did not abuse its discretion in determining that neither side really won, given that the plaintiff voluntarily dismissed due to health issues and that the defendant did lower the towel dispenser. However, nothing in what the lower court did disturbed the earlier discovery sanctions order, given that plaintiff could not “alter a court order by his or her fiat, to wit, merely by including the discovery sanctions awarded in the total amount of fees requested in a subsequent motion.” So, the $2,160 sanctions award was separately enforceable, notwithstanding the fee denial. (Newland v. Superior Court, 40 Cal.App.4^th 608, 615 (1995).)

     Los Angeles County Superior Court Judge Helen Bendix, sitting by assignment, authored the 3-0 opinion.

Discovery/Sanctions: Vasquez v. Calif. School of Culinary Arts Now Published

 

Deals With Third-Party Subpoena Compliance Sanctions.

     In our August 27, 2014 post, we discussed Vasquez v. Calif. School of Culinary Arts (an unpublished decision at the time), involving sanctions against a non-party for failing to prevail in opposing a subpoena compliance motion. We can report that this opinion was certified for publication on September 26, 2014.

Discovery/Sanctions/SLAPP: Round-Up Of Three Unpublished Decisions On Fee/Sanctions Issues For September 18, 2014

 

Estate of Johnson, Case Nos. A134733 et al. (1^st Dist., Div. 3 Sept. 18, 2014) (unpublished).

     An attorney was sanctioned for $7,290 (representing fees incurred by another litigant) for making a false allegation in a probate Third Amended Petition. The basis for the award was under CCP § 128.7. The award was reversed because the appellate court determined that the germane allegation was not without evidentiary basis.

T.R. & B Property, LLC v. Lincoln Best Hotel, Inc., Case No. B249168 (2d Dist., Div. 4 Sept. 18, 2014) (unpublished).

     Plaintiff bringing a losing SLAPP motion was hit with $5,122.50 in attorney’s fees because the lower court decided the motion was frivolous. No change on appeal, because a contractual dispute over nonpayment of money is not protected activity, with many cases establishing this so that the motion was indeed frivolous.

Marriage of Smith, Case No. E056872 (4^th Dist., Div. 2 Sept. 18, 2014) (unpublished).

     Ex-wife was sanctioned $3,309 in actual fees incurred by the other side and $32,500 in sanctions for disobeying a prior court order prohibiting dissemination of third party, with ex-husband’s current wife being the third party and beneficiary of the sanctions order. Only the $3,309 component of the order held up, because it constituted actual reasonable fees incurred by the third party. However, the $32,500 component was pure “punishment,” not countenanced under the discovery statutes. (Welgoss v. End, 252 Cal.App.2d 982, 992 (1967).) No other bases justified the award, not the inherent authority of the court, Family Code section 271 (no proper notice provided), or CCP § 128.7 (which does not encompass discovery disputes).

Discovery/Sanctions: Party Seeking E-Discovery Entitled To $11,487 In Attorney’s Fees For Successfully Resisting Opposition to Motion To Compel Business Record Subpoena Compliance

 

Federal Decisions Looked to in E-Discovery Area.

     Vasquez v. Calif. School of Culinary Arts, Case No. B250600 (2d Dist., Div. 2 Aug. 27, 2014) (unpublished) is an example of how a litigant seeking documents from non-party Sallie Mae really set up a discovery battle very well. The litigant sent a first subpoena, drawing an objection to which the litigant responded by narrowing the requests via a second subpoena to target a very selective subset of documents, even offering to pay non-party reasonable costs of compliance. Sallie Mae once again objected to the second business document subpoena, moved to quash, and lost—and with the lower court awarding successful litigant $11,487 in attorney’s fees for having to deal with Sallie Mae’s unsuccessful opposition.

     Sallie Mae’s appeal did not overturn the result. CCP § 1985.8 was the operative statute, with the appellate court looking to federal decisions because of the absence of California opinions on the topic. The fact that a non-party had to compile and produce information for a search index was not unreasonable in response to a subpoena, such that litigant’s win was no abuse of discretion under the circumstances where the opposing litigant had tried to be reasonable and “work it out.” (Gonzalez v. Google, Inc., 234 F.R.D. 674, 683 (N.D. Cal. 2006).)

Discovery/Sanctions: If Motion To Compel Was Untimely, Any Sanctions Awarded Related Thereto Had To Be Reversed

 

Court Also Discusses Response Time When Leave Is Granted To Amend After Demurrer Hearing.

     Carlton v. Dr. Pepper Snapple Group, Inc., Case No. E056566 (4^th Dist., Div. 2 Aug. 14, 2014) (partially published; discovery sanctions reversal unpublished) has two nice takeaways for litigators.

     First, although discussed in the unpublished portion, this opinion addresses the question: what happens to a discovery sanctions award for fees when the appellate court determines the underlying motion to compel was untimely filed? Answer: the discovery sanctions award falls too, because the motion to compel accomplished nothing and was unreasonable (meaning the sanctions award was also unreasonable).

     Second, in the published section (and a blog bonus for readers), the appellate court discussed the vexing issue of when a litigant has to respond to an amended pleading after a demurrer hearing is sustained with leave—reconciling CRC 3.1320(j) and CCP § 471.5. This is how they were reconciled: if a party elects not to amend within the time set by the court or else by statute (10 days) to amend, the other side has 10 days to respond to the residual pleading; however, if the party elects to file an amended pleading, then the other side has 30 days to respond.

Discovery/Sanctions: Quinn Emanuel Firm And Client Samsung Ordered To Pay More Than $2 Million In Discovery Sanctions For Disclosing Confidential License Terms Between Apple And Nokia To Samsung

 

Nokia Receives $1.5 Million And Apple About $894,000.

     U.S. Magistrate Judge Paul Grewal of the Northern District of California, on June 20, 2014, ordered Quinn Emanuel Urquhart & Sullivan LLP and its client Samsung Electronics Co. Ltd. to pay more than $2 million in sanctions for disclosing confidential terms of a patent license between Apple Inc. and Nokia Corp. to Samsung. What happened was that a junior associate failed to redact confidential license terms (which were “attorneys’ eyes only” designated and safeguarded by a protective order) from an expert report. These terms were distributed to Samsung in violation of the protective order, with Samsung trying to exploit the terms in negotiations with Nokia.

     In fashioning his award, Magistrate Judge Grewal did strike some first class air/travel expenses to Korea and reduced 19 specific billing entries by 20% due to lack of sufficient detail. His opinion was issued in Apple Inc. v. Samsung Electronics Co., Ltd., Case No. 5:111-cv-01846 LHK (PSG), and can be found for viewing in a post at “Patently Apple.”

Discovery/Sanctions: Appeal By Plaintiff’s Attorney From Adverse Discovery Monetary Sanctions Award Dismissed As Moot

 

Parties Agreed to Settlement Where Neither Plaintiff Nor His Attorneys Liable for Discovery Sanctions, Mooting the Appeal.

     Ya know, sometimes you should simply throw in the towel once a dispute has been resolved, aiding the appellate court in saving some resources so that they can dismiss an appeal without the need for an opinion, published or unpublished.

     Perez v. Back Flip Software, Inc., Case No. H038426 (6^th Dist. June 24, 2014) (unpublished) involved just this sort of situation.

     Both sides in a case filed dueling motions to compel, with the lower court sanctioning both sides (including attorneys for plaintiff) to the tune of $5,320 in discovery sanctions of a monetary nature. One side appealed but had the appeal dismissed after failing to file an appellant’s opening brief. Then, a settlement agreement was reached between the parties by which the remaining side and his attorneys were absolved from liability for the sanctions award. The remaining side’s appeal was dismissed based on the settlement.

     However, the attorneys persisted in the appeal, but the appellate court dismissed their appeal. The reason is pretty simple—the settlement agreement resolved the sanctions exposure with respect to the attorneys, so the appeal was moot.

Discovery/Sanctions: $6,000 In Sanctions For “Walking Away” From Deposition Affirmed On Appeal

 

“Walking Out and Not Coming Back” Is Not a Legitimate Option.

     The defense in Fletcher v. HPN Holdings, Case No. F064864 (5^th Dist. Apr. 8, 2014) (unpublished) was sanctioned $6,000 under CCP §2023.030(a), inclusive of attorney’s fees for bringing the motion to compel and arguing it, for failing to honor an agreement to take PMK depositions past the discovery cut-off. (This agreement was memorialized through renewed deposition notices and a trial court continuance stipulation.) However, at the time of the PMK depositions, defense counsel was bothered by the scope of the deposition and both he/deponent walked out of the deposition. Both the lower and appellate courts were not impressed with this conduct, determining that “walking out and not coming back, and not appearing at the other scheduled depositions, were not among [the defense’s] legitimate options.” Also, defense counsel failed to properly suspend the deposition to move for a protective order.

     Besides affirming the sanctions order, the appellate court denied the defense effort to dismiss the appeal after oral argument—determining the opinion should be issued for the education of the bench and the bar. So, if you are going to seek a dismissal, do it earlier and do it much earlier than after oral argument!

     BLAWG BONUS:  Eddie Kendricks – Keep on Truckin’.

Appealability/Discovery/Sanctions: Ninth Circuit Decides That Non-Party’s Appeal Of Interlocutory Orders After Date Of Final Judgment Is Timely

 

Appeals Court Affirms Denial of Sanctions But Remands for Cost-Shifting in Favor of Non-Party in FRCP 45 Subpoena Dispute.

     The Ninth Circuit has ended the year with a “bang” as far as clarifying non-party appeal rights and the circumstances under which subpoena compliance cost shifting is mandatory under F.R.Civ.P. 45.

     The opinion in which this occurred is Legal Voice v. Stormans Inc., Case No. 12-35224 (9^th Cir. Dec. 31, 2013) (published), authored by Circuit Judge Tashima for a 3-0 panel.

     In this one, plaintiffs served a subpoena duces tecum on Law Center, a non-party that had participated in the FDA’s rule-making process regarding emergency contraception dispersals by pharmacists in the State of Washington. Law Center objected to the subpoena and argued that the costs of complying with it should be borne by plaintiffs. The district court denied Law Center’s motion for sanctions under FRCP 45 and its motion for costs shifting under the same federal procedural rule.

     The Ninth Circuit affirmed in part and reversed in part, remanding for a cost allocation consideration in favor of non-party.

     At the outset, the appeals court decided an issue of first impression about appealability. The Ninth Circuit decided that a non-party may appeal an interlocutory order within 30 days from entry of final judgment to the same extent a party could appeal such interlocutory order. So, the appeal was timely even though the non-party appealed from the final judgment rather than prior interlocutory orders.

     Following Linder v. Calero-Portocarrero, 251 F.3d 178 (D.C. Cir. 2001), the Ninth Circuit then decided that the district judge erred in not entertaining Law Center’s cost-shifting request under Rule 45 based on a flawed “undue burden” test. The correct test was whether the non-party faced a significant expense in complying with the subpoena, with the proof below showing it did—evidence demonstrated it had spent $20,000 so far in complying with the subpoena, a significant cost for purposes of cost-shifting analysis.

     However, the denial of sanctions to the non-party Law Center was no abuse of discretion. The subpoena was not facially overbroad, and there was no evidence of bad faith/improper motive by Plaintiffs, especially given some ambiguity in two prior discovery orders issued by the district judge.

     The matter was remanded for consideration of cost allocation in non-party’s favor under Rule 45.

Discovery/Sanctions: To Aggregate Or Not, That Is The Question

 

$6,000 Aggregate Sanctions for Three Separate Discovery Motions Did Not Meet $5,000 Minimum Appellate Threshold.

     In order to be appealable, an order imposing a monetary sanction must exceed $5,000. (Code Civ. Proc., § 904.1(a)(12).) However, what happens when a litigant appeals a $6,000 reduced sanctions award where the opponent filed three separate discovery motions to compel/sanctions requesting separate sanctions which would way exceed the $5,000 threshold amount?

     Bayati v. Town Square M. Properties LLC, Case No. B245695 (2d Dist., Div. 3 Oct. 7, 2013) (unpublished) considered that circumstance and decided that the $6,000 sanctions should be allocated $2k/$2k/$2k for purposes of appealability, dismissing the appeal because the sanctions were below the $5,000 threshold.

     What happened specifically was this: moving party brought three separate motions to compel relating to distinct discovery requests, seeking respective sanctions of $3,667.50, $4,772.50, and $4,805 for noncompliant discovery responses. In the end, the lower court granted all three motions, ordering service of discovery responses and imposing sanctions on the eventually-appealing party “in the reduced sum of $6,000.”

     Appealing party argued an aggregation theory based on the $6,000 total sanctions award, while the opponent argued that basically the trial court granted sanctions of only $2,000 per motion so the $5,000 appealability threshold was not satisfied.

     Opponent got the better side of the argument. Although indicating it was not necessarily fond of “aggregation” dicta in Champion/L.B.S. Associates Development Co. v. E-Z Serve Petroleum Marketing, Inc., 15 Cal.App.4th 56, 59-60 (1993), the Bayati court found that the sanctions before it were based on distinct misconduct rather than unified conduct found persuasive in Champion. Because the amount of sanctions per motion did not reach the $5,000 appeal threshold, appeal dismissed.