CALIFORNIA ATTORNEY'S FEES

Appealability, Costs, Discovery: Denial Of $1.1 Million For Electronic Discovery Costs Reversed Because Lower Court Seemed To Indicate No Discretion On Awarding Them

Modern Trend Is To Recognize E-Discovery Recoupment Costs As Long As They Are Justified.

            Ya know, times change, technology changes, and jurisprudence changes.  Although unpublished, City of Los Angeles v. PricewaterhouseCoopers, LLP, Case No. B305583 (2d Dist., Div. 5 July 8, 2021) (unpublished) shows how electronic discovery costs may be awardable, if justified, based on  evolving technological changes from an early appellate court decision which was adverse to recovery of these costs.  (We do not discuss the affirmance of some substantial costs reductions for out-of-town attorneys traveling and attending depositions, because the reductions were in order given that the same law firm had Los Angeles attorneys who could attend rather than New York travelling attorneys.  If you need support for these reductions, you can read the decision.)

            What happened here is that the City of Los Angeles voluntarily dismissed a suit, with defendant moving to recover about $1.1 million in electronic discovery costs, mainly for processing/loading, hosting, and producing documents.  The lower court denied all the requested costs based on an older decision in Science Applications Internat. Corp. v. Superior Court, 39 Cal.App.4^th 1095, 1103-1104 (1995), deciding that routine costs in this area should be denied in an earlier time where the technology costs were substantial and the rationale for granting them was more attenuated.  Much has changed with technology since Science Applications, given that subsequent decisions generally show a proclivity to award these electronic discovery costs as long as they are supported as being necessary and reasonable in nature.  (See, e.g., El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4^th 612, 620 (2007); Bender v. County of Los Angeles, 217 Cal.App.4^th 968, 990-991 (2013); Hooked Media Group, Inc. v. Apple Inc., 55 Cal.App.5^th 323, 338-339, 351 (2020).)  Because these costs are not prohibited and can be awarded in the trial court’s discretion, the denial based on an outright ban had to be reversed and remanded for another look. 

            BLOG MILEAGE TIME—Although there is a split in thinking, this appellate panel also sided with the view that an order taxing routine costs is appealable as a post-trial order, following Mesa Shopping Center-East, LLC v. O Hill, 232 Cal.App.4^th 890, 898 (2014) and Gassner v. Stasa, 30 Cal.App.5^th 346, 354-355 (2018), but not following the contrary decision in Mon Chong Loong Trading Corp. v. Superior Court, 218 Cal.App.4^th 87, 92 (2013).  The panel found its conclusion was consistent with the treatment of collateral final orders.  (Krikorian Premiere Theatres, LLC v. Westminster Central, LLC, 193 Cal.App.4^th 1075, 1083 (2011).) 

Discovery, Sanctions: No Abuse Of Discretion In Trial Court’s Denial Of Plaintiffs’ Motion For $17,074 In Monetary Sanctions Against NonParty For Failure To Comply With Trial Court’s Discovery Order And For Order Requiring Further Production

The Trial Court’s Finding That Nonparty’s Amended Responses And Production Were Adequate And In Compliance With Its Discovery Order In Ruling On Plaintiffs’ Request For A Contempt Sanction Against Nonparty Sealed The Results.

            Husband and wife plaintiffs – suing over two loans, one for $11,327 and one for $427,000, they had made to defendants – filed a motion to compel against nonparty Wells Fargo when they were dissatisfied with Wells’ responses to a deposition subpoena for personal appearance and production of documents.  The trial court issued an order directing Wells to provide supplemental responses within 30 days, and Wells served an amended response to plaintiffs’ subpoena, along with additional responsive documents and a privilege log indicating that specified documents were withheld as attorney-client communications.  Still dissatisfied, plaintiffs filed another motion – seeking monetary sanctions of $17,074 against both Wells and its attorney for discovery misuse, a contempt sanction, and an order requiring Wells to produce unredacted documents responsive to the subpoena – alleging Wells had not complied with the trial court’s order as the order did not permit Wells to make objections or redactions.  The trial court found that Wells had complied with its order, which did not explicitly prevent Wells from producing redacted documents or a privilege log, by producing supplemental responses that appeared to be adequate, and denied plaintiffs’ motion.

            The 2/3 DCA affirmed these results in Dutton v. Marinescu, Case No. B305851 (2d Dist., Div. 3 June 22, 2021) (unpublished) – concluding there was no abuse of discretion with regard to the trial court’s order refusing plaintiffs’ requests for monetary sanctions and for an order requiring further production given the trial court’s finding that Wells had complied with its order.  As to the trial court’s order refusing to hold Wells in contempt, the panel dismissed given that such an order is not appealable as the only method of obtaining review is a petition for extraordinary writ.  (Wanke, Industrial, Commercial, Residential, Inc. v. Keck, 209 Cal.App.4th 1151, 1162, fn. 11 (2012).)

Deadlines, Discovery, Sanctions: Class Action Debt Collector Defendant Unsuccessfully Argues On Appeal That Renewed Discovery Motion Was Untimely And 1/3 DCA Affirms Monetary Sanctions Of $8,400

The Trial Court Declared The Discovery Motion Moot When It Granted Summary Judgment To Plaintiff, But Motion Was Renewed After Remand, And Parties Were Returned To Same Positions They Would Have Been In If Plaintiff Had Defeated Summary Judgment In The First Instance.

            In Timlick v. National Enterprise Systems, Case No. A160110 (1^st Dist., Div. 3 June 22, 2021) (unpublished), class action defendant, being sued for violating the minimum type-size requirements in its consumer collection letters, obtained summary judgment in its favor for having cured the violation as to plaintiff.  At the time, plaintiff’s pending motion to compel further responses and for sanctions was declared moot in light of the summary judgment.  After successfully appealing the summary judgment on behalf of the class (but not on behalf of herself), plaintiff renewed her discovery motion, which the trial court granted in substantial part in addition to awarding $8,400 of the requested $11,115 in requested monetary sanctions against defendant. 

            Defendant appealed – arguing that the discovery motion was untimely as the 45-day deadline to compel further responses had passed by the time plaintiff renewed her discovery motion.  Not so, said the 1/3 DCA.  Plaintiff’s discovery motion was timely filed prior to the trial court’s grant of the summary judgment, and the trial court had not denied the discovery motion when it declared the motion to be moot and “dropped without prejudice.”  Rather, the trial court’s grant of the summary judgment created a loss of ability for the trial court to grant the relief plaintiff sought.  However, reversal of the summary judgment left the parties “in a position no different from that they would have occupied if they had simply defeated the defendants’ motion . . . in the trial court.” (Urbaniak v. Newton, 19 Cal.App.4^th 1837, 1844 (1993).)  As such, the trial court’s jurisdiction to rule on plaintiff’s motion was restored and it had the discretion to order precertification discovery – notwithstanding any adverse rulings as to plaintiff individually.  Additionally, the panel found no abuse of discretion in the award of sanctions – especially given the trial court reduced the amount requested to reflect defendant’s partial success. 

Discovery, Sanctions: $4,423 Discovery Sanctions Affirmed Against Plaintiff And Its Attorney On Appeal

Reduced Sanctions Were Awarded, But Excuses For The Losing Side Were Not Credited.

            We would say that Heesung Investment, Inc. v. Karle, Case No. E074320 (4^th Dist., Div. 2 May 11, 2021) (unpublished) indicates that, like many other appeals, credibility reigns king.

            This one involved reduced discovery sanctions of $4,423 against a litigant and its counsel for failing to respond to four discovery requests.   The other side had requested $9,546 in discovery sanctions, but the lower court found this requested amount to be excessive so as to lead to the reduced amount as the ultimate award.

            The 4/2 DCA found the reduced sanctions order was no abuse of discretion.   A failure to respond to discovery, unless there is substantial justification, is one which automatically leads to sanctions.  No credible excuses were offered.   In fact, the attorney who was sanctioned as well promised responses, but did not deliver.  Discovery sanctions order affirmed.  (We always wonder why an appeal would be made from this type of lower monetary award, but one cannot speculate why.)

            This does give us a chance to inform practicing attorneys about CCP § 2023.50, which does allow a court to report to the State Bar document discovery sanctions above $250 in specified circumstances.   Just letting you all know ….

Discovery, Sanctions: 1/3 DCA Affirms Trial Court’s Order, Entered After Plaintiffs Voluntarily Dismissed The Case, Setting Aside Monetary Sanctions Previously Imposed Against Defendant For Discovery Abuses.

Exceptions To The General Rule That Deprives Trial Courts Of Jurisdiction Following Voluntary Dismissal Of A Case Allow Trial Courts To Retain Jurisdiction To Determine And Enforce Collateral Statutory Rights – Such As Motions For Sanctions.

            In Manhan v. Gallagher, Case No. A158152 (1^st Dist., Div. 3 March 26, 2021) (published), plaintiffs filed motions to compel for further discovery responses and obtained monetary sanctions against defendant for discovery violations.  In support of their motions, plaintiffs’ counsel submitted a declaration stating his billing rate in the matter was $300 per hour.  Plaintiffs later dismissed their lawsuit against defendant without prejudice. On the same day, defendant filed a motion for reconsideration or to have discovery sanctions imposed against her set aside based on a declaration filed by plaintiffs’ lead attorney stating plaintiffs had incurred no legal fees and had been represented pro bono in their case against defendant. 

            It turned out that the associate attorney who filed the declaration claiming a $300 hourly billing rate for his work on the lawsuit was unaware that the firm had taken the case pro bono in light of plaintiffs’ long-standing relationship with the firm. 

            After the trial court granted defendant’s request and set aside the monetary sanctions imposed against her, plaintiffs appealed – arguing that the trial court lacked jurisdiction to consider and set aside the previously imposed sanctions following plaintiffs’ voluntary dismissal of the action.

            The 1/3 DCA affirmed – citing Pittman v. Beck Park Apartments Ltd., 20 Cal.App.5th 1009, 1022-1024.  While, as a general rule, voluntary dismissal of a case deprives the trial court of both subject matter and personal jurisdiction in that case, a number of exceptions have been carved out allowing a trial court to retain jurisdiction postdismissal and postjudmgent to determine and enforce collateral statutory rights – such as motions for sanctions. Further, the panel found no sound basis in logic or public policy to deny a remedy to a party burdened with sanctions obtained through misrepresentation (whether or not intentional) simply because a plaintiff dismisses an action – that disallowing reconsideration in cases such as this, where sanctions are based on misrepresentations, violates a reasonable sense of justice and fair play.

Discovery, Sanctions: Continued Deficiencies In Discovery Responses Resulted In Monetary And Evidentiary Sanctions Against Self-Represented Plaintiff, And Ended In Terminating Sanctions.

Affirmance Of The Terminating Sanctions Mooted Plaintiff’s Appeal Of The Trial Court’s Order Sustaining Defendants’ Demurrers And Motions To Strike.

            Following ten months of meet and confer correspondence, seven sets of amended discovery responses, and impositions of evidentiary and $8,000 in monetary sanctions, the trial court issued terminating sanctions with prejudice against self-represented plaintiff for his continued failure to correct persistent issues with his discovery responses.

            Plaintiff appealed in Soofi v. Contreras Law Firm, Case No. D076884 (4^th Dist., Div. 1 March 25, 2021) (unpublished) – alleging trial court bias and claiming his discovery deficiencies were the result of his misunderstanding of the discovery statutes – not willful noncompliance.  The 4/1 DCA affirmed – finding no abuse of discretion nor bias.  Plaintiff had been provided with ample time and opportunity to correct his errors of providing incomplete or nonresponsive information to defendants, and failed to meet his burden of showing the actual probability of bias by the trial judge.

            Because the panel affirmed the terminating sanctions – which the trial court issued with prejudice, resulting in the dismissal of the entire case – it did not reach plaintiff’s challenges to the trial court’s order sustaining defendants’ demurrers and motions to strike.

Discovery, Sanctions: $6,954.95 Deposition Discovery Sanctions Award Was Appealable Even Though It Was Payable To Two Different Recipients, While $1,750 Sanctions Award Was Not Appealable

However, The Merits Appeal Of The $6,954.95 Sanctions Award Did Not Succeed Based On Failure To Appreciate The Nature Of The Deposition Process.

            Burke v. Newport-Mesa Unified School Dist., Case No. G058732 (4^th Dist., Div. 3 Jan. 21, 2021) (unpublished), authored by Justice Goethals of our local Santa Ana appellate court, has some interesting discussion points on discovery sanctions appealability thresholds and on the nature of the deposition process in civil litigation.

            In this one, plaintiff was sanctioned two times in relation to deposition conduct or non-conduct: (1) $6,954.95 in discovery sanctions for refusal to answer questions at a court-ordered deposition, although they were made payable to two different sets of recipients (one motion based on the same conduct); and (2) $1,750 in discovery sanctions for failing to sit for a subsequent deposition, payable to just one party.  Plaintiff, obviously upset, appealed.

            The $1,750 order was not appealable because it was one for sanctions below $5,000.

            However, the $6,954.95 order was appealable, because CCP § 904.1(a)(12) focuses on the amount to be paid, not the amount split between any diverse recipients.  All the more so because it was a single motion arising from the same deposition conduct.  Respondents argued that a removal of the matter to federal court somehow divested jurisdiction away from the state courts, but this did not resonate with the appellate court.  However, although getting past the crucial appealability and procedural hurdles, plaintiff could not prevail on the merits.   After all, he refused to answer 223 questions at his deposition and responded “I don’t know” to an additional 234 questions.  Plaintiff argued that he “cured” any transgressions by providing supplemental responses after the deposition in writing to many of the unanswered questions, but the appellate court indicated this misapprehended the difference between on-the-spot deposition cross-examination and an after-the-fact interrogatory type of answering process—no effective cure at all and a misunderstanding of the deposition process.  In the end, the larger sanctions order was affirmed, and the appeal from the lower sanctions order was dismissed.

Appealability, Discovery, Sanctions: Appeal Of Terminating Sanctions Does Not Necessarily Also Encompass Challenge To Discovery Monetary Sanctions

2/7 DCA Implicitly Suggests Disagreement With Other Decisions, But Finds Two Sanctions Orders Were Not Intertwined.

            OK, for you folks who love technical appealability issues, Taylor v. Forde, Case No. B298957 (2d Dist., Div. 7 Jan. 20, 2021) (unpublished), may be your forte, especially when it comes to appealability of discovery terminating sanctions orders and discovery monetary sanctions.  Be careful when you appeal a terminating sanctions order.

            What happened here is that both discovery terminating sanctions and monetary sanctions orders were entered, but no judgment was ever entered on the complaint or stricken cross-complaint—no default prove-up proceedings resulted in a final judgment.  Appellants appealed the terminating sanctions order, but they did not contest the monetary sanctions order.  The lack of a final judgment on the merits sealed the deal with respect to appealing the terminating sanctions order, except for appellant’s argument that the appeal of the monetary sanctions preserved the appeal of the terminating sanctions.  Appellant argued that the terminating sanctions order was “inextricably intertwined” with the monetary sanctions order over the $5,000 limit such that everything was good. 

            The 2/7 DCA disagreed, dismissing the appeal.  It questioned whether the “inextricably intertwined” exception in Nickell v. Matlock, 206 Cal.App.4^th 934 (2012) and Mileikowsky v. Tenet Healthsystem, 128 Cal.App.4^th 262 (2005) was valid.  However, the terminating sanctions and monetary sanctions orders were not intertwined given no suggestion the sanctions order was erroneous, all the more so because they serve different purposes.  Because the terminating sanctions order was nonappealable and not intertwined, the appeal was dismissed.    

Discovery, Sanctions: Monetary Discovery Sanctions Improperly Denied Against Litigants Under “Unjust” Exception Simply Because Other Terminating Sanctions Granted Previously

However, Litigant’s Attorneys Were Not Subject To Sanctions Because No Evidence Indicated The Attorneys Advised The Clients To Engage In The Discovery Violations.

            Litigators need to read the Sixth District’s recent decision in Kwan Software Engineering, Inc. v. Hennings, Case Nos. H042715 et al. (6^th Dist. Dec. 2, 2020) (published) on sanctions available for discovery abuses.  In a very scholarly opinion, the Court of Appeal held that (1) monetary sanctions cannot be denied against litigants engaging in discovery abuses simply because terminating sanctions (in this case, dismissing some claims) had been previously granted, because this does constitute injustice under the “sanctions unjust” exception; and (2) litigant’s attorneys cannot be sanctioned under Code of Civil Procedure section 2023.030 unless there is evidence that they advised the clients to engage in the discovery violations.  Here is what the Sixth District had to say on the attorney issue: “We understand defendants’ observation about the difficulty of eliciting direct proof of such conduct in light of an attorney’s ethical obligations and privileges protecting attorney-client communications. However, the difficulty of carrying this burden stems from the statute itself, and we lack the authority to ignore its explicit statutory directive.”    

Costs, Discovery: D.C. Circuit Decides That Only Electronic File Conversion Costs, Not Hosting, Organizing, Or Bates Stamping Expenses, Can Be Recovered By Federal Court Winners

Interpretation Of The Scope of 28 U.S.C. § 1920 Was At Issue.

            28 U.S.C. § 1920 provides:  “A judge or clerk of any court of the United States may tax as costs the following:  (1) Fees of the clerk and marshal; (2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.” (In federal court, taxing costs means the costs can be granted—just the opposite of the terminology familiar to California state judges and practitioners.)

            Of course, electronic discovery (e-discovery) has compounded greatly the costs and expenses of litigating in federal courts, with the question naturally arising as to what e-discovery expenses can be “taxed” (recovered as a matter of right), subject to being reasonable.

            U.S. ex rel. Barko v. Halliburton, 954 F.3d 307 (D.C. Cir. 2020) did consider that very question, coming to a conclusion that some commentators have indicated it out of line with modern e-discovery practice/the expense of e-discovery—a conclusion, however, that was governed by the fact that section 1920 has not been amended since 2008 such that judicial interpretation is guided by a more outdated interpretation of document review expenses (such as when associates were relegated to review and the recoverable costs were limited to photocopying expenses untethered to the expensive pre-copying activities).

            In Barko, a district judge sustained a clerk’s taxing (granting) of a $100,000 costs bill to a prevailing employer in a False Claims Act case for the following e-discovery items:  (1) initial conversion (converting files from their native formats into a format compatible with an e-discovery hosting platform); (2) subscribing to a hosting platform facilitating the various e-discovery steps; (3) processing documents (organizing, keyword-searching, and Bates stamping documents); (4) conversion for production (converting documents into shareable formats for production to opposing counsel and transferring those files onto portable media such as USB drives); and (5) production processing (drafting production cover letters and shipping discovery materials to opposing counsel).

            The D.C. Circuit reversed, determining that only category (4) costs were recoverable, which only came to $342.41, which respect to “costs of making copies of any materials where the copies are necessarily obtained for use in the case” under § 1920(4).  “Put another way, section 1920(4) authorizes taxation of costs for the digital equivalent of a law-firm associate photocopying documents to be produced to opposing counsel,” not the previous, more expense-laden “doc review” tasks performed by the associate. 

            Here is our favorite ending observation from Barko:  “Too often ‘cost disputes embody all the acrimony of hotly contested litigation, sometimes with great nitpicking and pettifogging, refusing to “go gently into that good night” of the closed docket.’  Matter of Penn Central Transportation Co., 630 F.2d 183, 191 (3d Cir. 1980).”

Discovery: 4/3 DCA Affirms Substantial $586,600 Discovery Order, With A Remand On A Relatively Smaller, Potential Add-On Amount, Against Plaintiffs, But Not Their Counsel

Principles Of Compulsion, Causation, And Reasonableness Are Beacons For Discovery Sanctions.

            Justice Fybel, the author of Cornerstone Realty Advisors, LLC v. Summit Healthcare REIT, Inc., Case No. G057176 (4^th Dist., Div. 3 Oct. 28, 2020) (published) on behalf of a 3-0 panel, has penned a decision which all litigation clients and attorneys should consult with respect to what principles govern discovery sanctions, given that much of modern day litigation expense is devoted to the discovery stage of a case in many instances.

            Plaintiffs got hit with terminating sanctions (not at issue) and monetary sanctions (at issue) for various discovery abuses under Code of Civil Procedure section 2023.030.  The defense requested about $2 million in sanctions, but the lower court awarded $586,600 instead, but only against Plaintiffs (not their counsel).  This awarded amount was three times over that recommended by a discovery referee (yep, referees are appointed all so often in contentious, high stake matters).  However, the defense appealed, arguing that more sanctions should have been awarded and they should have been awarded against Plaintiffs’ counsel.

            The 4/3 DCA affirmed a huge amount of the rulings, but it remanded for a fairly insubstantial amount at issue—agreeing that sanctions were not warranted against counsel.  This opinion is mandatory reading for litigators, because it teaches that three principles should always guide discovery sanctions requests by litigants, their counsel, and presiding trial judges.  Those principles are these:  compulsion; causation; reasonableness.  Read the decision to see why!

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.