CALIFORNIA ATTORNEY'S FEES

Family Law, Sanctions: Husband Losing Hiding Marital Asset Appeal Was Going To Have To Pay Attorney’s Fees And Frivolous Appeal Sanctions On Remand, Likely, In Some Amount

Rub Here Was That Trial Judge Stayed Any Fee Ruling Pending Determination Of Merits Appeal.

           Although procedurally different in nature, Marriage of Haghighat, Case No. G054993 (4^th Dist., Div. 3 April 17, 2019) (unpublished) demonstrates how family law judges and appellate justices can impose attorney’s fees and frivolous appeal sanctions when a litigant hides marital assets.

            Briefly stated, husband eventually lost a merits appeal that he hid marital assets, which under Family Code section 1101 allows for recovery of interest, attorney’s fees and costs, as well as the invested assets. However, the trial judge stayed any ruling on fees until the appeal on the merits decision was made.

            The 4/3 DCA affirmed the merits decision as well as remanded to the family law judge to determine the initial fees requested under section 1101 as well as sanctions for the frivolous appeal. Although normally the appellate court would determine the frivolous appeal sanctions, this one went back to the lower court to set given that it had to determine the initial fees which had to be awarded also. Justice Goethals authored the 3-0 panel decision.

In The News, Sanctions: Over $1 Million Sanctions Imposed Against Condo Plaintiff And His Lawyer In Cook County Superior Court

Sanctions Paid For Fees Incurred By HOA/Condo Board Members And For Increased HOA Insurance Costs.

            As reported by Debra Cassens Weiss in an April 8, 2019 post on the ABA Journal (on-line version), a Cook County, Illinois (Chicago) state court judge has sanctioned a condo litigant and his attorney over $1 million in sanctions to cover attorney’s fees/costs incurred by the HOA and a condo board member as well as to cover increased HOA insurance costs. Judge Margaret Ann Brennan found no basis for the claim and labeled the sanctioned persons’ actions as “simply obscene.” One of the defending attorneys, who has practiced 48 years in Cook County, observed that the sanctions award could be a record and was one like he had never seen before as far as amount.

Requests For Admissions, Sanctions: Defendants Properly Denied RFA Costs Of Proof Sanctions And Plaintiff Properly Denied CCP § 128.7 Request For Defense Bringing Frivolous Proof Of Costs/128.5 Sanctions Motion

Defendant Failed To Meet RFA Costs Of Proof Burden Or Segregate Out Costs For Actually Proving Truths Of Matters In A Demurrer Proceeding, While Plaintiff’s Request For 128.7 Sanctions In An Opposition Was Procedurally Infirm.

            I guess we can say that the results in Eng v. Brown, Case No. D072980 (4^th Dist., Div. 1 March 21, 2019) (unpublished) shows how meeting procedural requirements or burden of proof elements are keys in winning RFA costs-of-proof sanctions or CCP § 128.7 sanctions requests.

            In this one, the defendants prevailed after a jury trial against plaintiff, moving for costs of proof sanctions for request for admissions denials under CCP § 2033.420 and for CCP § 128.5 sanctions. In response, plaintiff asked for CCP § 128.7 sanctions against the defense for bringing frivolous motions, but only doing so through an opposition to the defense motions. The lower court denied the defense motions and never really ruled on plaintiff’s 128.7 request.

            The 4/1 DCA affirmed the defense appeal of the costs of proof sanctions denial and plaintiff’s cross-appeal of the 128.7 request denial.

            Defense Appeal. The problem with some of the costs of proof requests was that defendants failed to prove to the trial judge what they had to prove in the truth of certain facts with respect to RFA denials. They never submitted trial transcripts before the lower court so it could make the determination; simply supplying them on appeal did not help as far as showing how the lower court abused its discretion. However, the defense did win a demurrer with respect to a conversion cause of action for which certain RFA denials were made. Although expressing skepticism that CCP § 2033.420 could be used at a demurrer stage of proceedings, the appellate court assumed it could but found that the defense failed to isolate expenses relating to the denials at issue—instead, the defense sought all fees applicable in the demurrer proceeding, which did not meet its burden to segregate under section 2033.420.

            Plaintiff’s Cross-Appeal. The flaw in this cross-appeal was that Plaintiff never made a separate motion for 128.7 sanctions. Rather, plaintiff simply made a request for them in the opposition to the 2033.420/128.5 motions by the defense—a procedurally improper method of requesting 128.7 sanctions.

Sanctions: $5,000 CCP § 128.7 Sanctions Jointly And Severally Assessed Against Defendant And Its Attorney Reversed On Appeal (Which Was Treated As A Writ)

Appeal Treated As Mandate Petition, With Plaintiff Not Showing He, As In Pro Per Attorney, Incurred Any Independent Attorney’s Fees.

            In Electronic Universe, Inc. v. Superior Court (Reece), Case No. B285898 (2d Dist., Div. 3 Feb. 20, 2019) (unpublished), corporate defendant (which was suspended for failure to pay franchise fees) and its attorney were sanctioned, jointly and severally, $5,000 in sanctions fees under CCP § 128.7. However, the moving party was an in pro per attorney seeking § 128.7 attorney’s fees.   Defendants appealed, and that was a good move by them.

            First up was an appealability issue. The trial judge’s order was for just $5,000, with the appeal statute only allowing for an appeal unless it exceeded $5,000. The appellate court, as it can, decided to treat the appeal as a mandate petition in an effort to resolve the dispute. The 2/3 DCA panel further justified that this was the right move because the attorney defendant would have to report sanctions over $1,000 to the State Bar even if they were unwarranted such that it would be prejudicial to the attorney in the meantime (stay tuned, but you probably know what happened here—as if our titles did not give it away).

            Next up was the merits ruling after the appeal was treated as a writ for appellate review. The problem here was that the moving in pro per attorney never showed that he incurred any independent attorney’s fees or expenses as a result of the defendants’ conduct. (Key here was that the suspended defendant company revived its existence so as to proceed with the appeal.) That invoked the Trope v. Katz prohibition (see our Leading Case No 12), which does not allow in pro per moving attorneys to recover for their own fees in such situations. (Musaelian v. Adams, 45 Cal.4^th 512, 520 (2009).) Sanctions overturned on appeal.

Sanctions: CCP § 128.7 Sanctions Award Reversed Because Disputed Factual Issues Does Not Mean The Litigation Was Frivolous

$3,500 Sanctions Award Was At Issue.

            Justice Bendix, the author of Osborn v. Saucedo, Case No. B283605 (2d Dist., Div. 1 Feb. 1, 2019) (unpublished), reminds trial judges that litigation is not frivolous where there are disputed issues of fact even if they might be somewhat slim in nature. A $3,500 sanctions award under CCP § 128.7 was reversed because the dispute involved an oral agreement relating to tenant removal of fixtures separate from the written lease provisions. The disputed facts in such a scenario showed that the litigation was not frivolous in nature even though plaintiff lost.

Sanctions: $17,820 In CCP § 128.7 Sanctions Affirmed, Because No Subjective Bad Faith Finding Necessary, Unlike What Is Required Under § 128.5

However, No Additional Appellate Sanctions Imposed.

            In Horner v. Judges’ Retirement System, Case No. C084619 (3d Dist. Jan. 25, 2019) (unpublished), the Third District affirmed a $17,820 sanctions award imposed under CCP § 128.7, observing in the process that no showing of bad faith (only legal frivolousness) is necessary under this sanctions statute versus the bad faith showing required under § 128.5. However, it refused to impose additional appellate sanctions, based on this reasoning: “The easy case is where there is evidence the appeal was filed for an improper motive. The more difficult case is to distinguish misguided lawyering from an egregious misuse of the appellate process because we certainly do not want to punish a lawyer for full-throated advocacy on behalf of his or her client by raising a novel theory or nudging the development of the law” (Slip Opn. at p. 7), with there being enough advocacy to justify the result.

Sanctions: $12,000 In CCP § 128.5 Sanctions Were No Abuse Of Discretion For Unsuccessful Disqualification Motion On The Eve Of Trial

“Safe Harbor” Argument Might Have Worked, But It Was Waived Because Only Raised In Appellant’s Reply Brief.

            Hanna v. City of Long Beach, Case No. B281878 (2d Dist., Div. 3 Dec. 17, 2018) (unpublished) shows how good arguments can be lost if not timely raised. In this one, City and its counsel were jointly sanctioned $12,000 for unsuccessfully attempting to disqualify plaintiff’s counsel on the eve of trial. The appellate court found this award was no abuse of discretion. However, in its reply brief, City raised the argument that no “safe harbor” period had been afforded under CCP § 128.7 in line with the Second District’s Nutrition Distribution opinion [No. 19 on our 2018 Top 25 Decisions]. This might have been a winner, but City did not raise the contention until filing its appellant’s reply brief. Too late—the argument was waived!

Sanctions: 4/1 DCA Panel Agrees That CCP § 128.5 Sanctions Are Unwarranted Unless Moving Parties Comply With CCP § 128.7 “Safe Harbor” Requirements

Panel Disagrees With Prior 4/1 Panel In San Diegans for Open Government And Follows Contrary Result Reached By 2/7 DCA In Nutrition Distribution.

            We find the result in CPF Vaseo Associates, LLC v. Gray, Case No. D072909 (4^th Dist., Div. 1 Dec. 6, 2018) (published) both refreshing and correct in its reasoning. It goes to show you that appellate courts, even within different panels in a particular division, are willing to disagree among themselves.

            In this one, a 4/1 DCA panel decided that CCP § 128.5 moving parties must satisfy the 21-day “safe harbor” requirement of CCP § 128.7 in order to be procedurally entitled to sanctions—providing the opposing party an opportunity to withdraw the challenged conduct. This panel decided that a different 4/1 DCA panel’s decision to the contrary in San Diegans for Open Government v. City of San Diego, 247 Cal.App.4^th 1306 [reviewed in our June 9, 2016 post] was not the right result, siding instead with the reasoning by the 2/7 DCA in Nutrition Distribution, LLC v. Southern SARMS, Inc., 20 Cal.App.5^th 117, 130 [reviewed in our Feb. 3, 2018 post].

            BLOG OBSERVATION—Co-contributor Mike made this argument before a Los Angeles County Superior Court judge, who did not accept it because only San Diegans was published at the time. Likely, this decision may make unnecessary California Supreme Court review given that there is now an intermediate appellate court “plurality” requiring compliance with the “safe harbor” requirements.

Appealability, Sanctions: Later Order Vacating Default Judgment Was Appealable But Stayed Where Prior Appealed Order Had Required $27,968.75 In Attorney’s Fees And Costs To Vacate Default Judgment

Result Was Defendant Had 25 Days After Remittitur To Pay Fee/Costs Vacate Award, With Dissenting Justice Believing That The Fees/Costs Award Should Be Reduced Down By Another $17,250.

            This next case, F&S Investment Properties v. Nguyen-Stevenson, Case Nos. B281031/B281973 (2d Dist., Div. 1 Oct. 9, 2018) (unpublished), is a 2-1 decision regarding stay appealability issues and how much discretion attends a lower court’s decision to condition a vacate of a default judgment based on payment of $27,968.75 in attorney’s fees and costs.

            Plaintiff obtained a default judgment against defendant, who moved to set aside under CCP § 473.5 (a section allowing this be done but with fee and cost shifting as the trial judge deems just and proper). The trial court granted the vacate of the default judgment on condition that defendant serve an answer and pay $27,968.75 in fees and costs. Defendant did not pay and appealed this order; later, the trial court ordered the vacate default and reinstatement of the default judgment, a second order appealed from by defendant.

            The 2/1 DCA majority agreed that the first order was appealable and that it was ambiguous—it either said the judgment will be set aside upon payment or was set aside no matter what, such that is was appealable. However, the majority decided that the conditional payment order was no abuse of discretion but that the lower court had no jurisdiction to make the second order given that the first order was not one for payment of money per se such that it was stayed on appeal.   The result was that the plaintiff had to pay the money 25 days after the remittitur issuance or else the default judgment would be reinstated.

            In dissent, Justice Johnson found the $27,968.75 amount was an abuse of discretion because there was no proper allocation of fees and costs for work to actually get the default judgment vacated; he would have reduced the amount of $17,250 at a minimum.

Sanctions: February 2017 Report By California Research Bureau On CCP § 128.5 and 128.7 Sanctions Motions Show They Are Not Filed In Very Many Cases

Report Also Shows That Reporting Attorneys Did Not Provide The “End Conclusions” To The Sanctions Requests.

            In February 2017, the California Research Bureau issued a mandatory report for 2015-2016 relating to the use of CCP § 128.5 motions (whether alone or combined with CCP § 128.7 motions) as required under section 128.5. Although attorneys are under a requirement to report to the California Research Bureau, its results show that even reporting attorneys do not provide the actual order on the 128.5 proceeding in 64.4% of matters for which initial motion submissions were made. However, we do give you a flavor for the conclusions reached by the Bureau:

• 128.5 requests, whether single or combined with 128.7 requests, totaled only .05% of all civil filings for 2015-2016;
• 129 sanctions motions were made during 2015-2016, as reported;
• Of those reported motions, 11.6% were granted, 24% were denied, and 64.4% of the motions never resulted in reporting the results on the sanctions requests;
• The county leaders as far as numbers of sanctions requests were, in order: Los Angeles; Orange; San Francisco; San Diego; Santa Clara;
• If one takes away the nonreporting anomaly, one-third of the frivolous action requests were granted (15 of 46), with 6 of 15 awarded for full attorney’s fees requests and with the average award being $8,833; and
• When one boils down both the Bureau and Judicial Council statistics, less than one-half of 1% of civil cases filings involved 128.5 requests (singular or combined with 128.7 requests).

Arbitration, Sanctions: After Compelling Arbitration And Then Failing To Pursue It, Fitbit And Its Litigation Attorneys Liable For Bad-Faith Sanctions In Heart-Tracking Devise Action

Fitbit Did Finally Agree To Arbitrate, But Only After District Judge Expressed Concerns Over Its Litigation Conduct, Which Will Result In Some Amount Of Sanctions And Other Prospective Actions Ordered By District Judge.

            Arbitration frequently is invoked by defendants because of the perception that it is more user friendly in many types of cases, including consumer disputes. U.S. District Judge James Donato of the Northern District of California put it this way in the case we post on next: “[The defense conduct in this case] has also bolstered the perception that arbitration is where consumer lawsuits go to die. While the merits of that view can be debated, it’s no surprise that many people, including judges, are skeptical about arbitration agreements in light of situations like this one. Fitbit’s conduct undermines the public’s confidence in getting a fair shake when arbitration is compelled.”

            In McClellan v. Fitbit, Inc., Case No. 3:16-cv-00036-JD (N.D. Cal. July 24, 2018 [Doc. 153 “Order re Arbitration Proceedings,” Dkt. No. 146]), Fitbit moved to compel arbitration against a plaintiff consumer in a suit alleging that the company made misrepresentations about the accuracy of its heart rate monitoring devices. District Judge Donato granted the request, but Fitbit failed to pay AAA arbitration fees and told plaintiff it had no intention of arbitrating her claims or the arbitrability issues delegated to the arbitration for determination, ostensibly because the AAA fees were way more than her actual claim was worth. One of plaintiff’s attorneys’ paralegal took notes of a phone call with Fitbit’s counsel Morrison & Foerster where this intention was announced, which spurred a conference with the district court and drew some concerns “in plain terms” at a hearing so as to cause Fitbit to pay its fees before the AAA suspended the case and then proceed with the arbitration.

            However, the story did not end there. District Judge Donato, although denying more draconian relief requested by Ms. McClellan, did find that Fitbit and its attorneys were going to have to pay sanctions for bad-faith litigation conduct as well as do filings in prospective actions and do 90-day update filings in the case before him.

            Ms. McClellan first argued that by failing to pay the arbitration fee, Fitbit had lost the right to arbitrate. The district court rejected that argument, because Fitbit had changed course and paid the arbitration fee before AAA suspended the case. She then suggested that the district court should find the arbitration agreement unenforceable for all of Fitbit’s customers as a punishment for its conduct in her case. District Judge Donato also rejected this suggestion, reasoning that the tactics in this one case did not necessarily undermine arbitration in future cases or inherently waive a consumer’s right to pursue statutory remedies under Fitbit’s terms of service with the arbitration provision.

            But, the district judge found that Fitbit and its attorneys would have to pay some amount of yet-to-be-determined sanctions for bad-faith litigation conduct under Chambers v. NASCO, Inc., 501 U.S. 32, 43, 45-46 (1991), which allows courts to assess fees against counsel where a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Beyond that, he ordered that Fitbit was ordered to file a copy of his decision in all cases where it sought to compel arbitration with consumers for a period of one year from the order’s date and directed that the parties file joint status statements every 90 days until the arbitration proceedings were completed.

            The moral of the story is that if you elect to compel arbitration, you better stick with it or risk sanctions.  

           

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.”

Sanctions: Moofly Productions Opinion Certified For Publication

Trial Court Must Provide 21-Day Safe Harbor Warning Before Imposing Sanctions For Improper Reconsideration.

            On June 1, 2018, we posted on Moofly Productions, LLC v. Favila, Case No. B282084 (2d Dist., Div. 1 June 1, 2018), unpublished at the time. It held that a trial court must follow CCP § 128.7 21-day safe harbor rules before imposing sanctions for an improper reconsideration motion under CCP § 1008. We can now report that the opinion was certified for publication on June 22, 2018. 

            Read our June 1, 2018 post here.

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.)

Sanctions: 2/1 DCA, In Unpublished Decision, Determines That Trial Court Must Comply With CCP § 128.7 Safe Harbor Rule Before Sanctioning Party For Violating CCP § 1008 Reconsideration Prohibitions

Trial Judge Did Not Notify Putative Sanctioned Party That It Would Be Sanctioned Sans A Withdrawal Of The Reconsideration Motion.

            Moofly Productions, LLC v. Favila, Case No. B282084 (2d Dist., Div. 1 June 1, 2018) (unpublished) demonstrates that trial judges, just like litigants, must satisfy CCP § 128.7 sanctions safe harbor requirements before doling out sanctions under statutes subject to section 128.7 strictures.

            Code of Civil Procedure section 1008(d) allows sanctions to be imposed for an improper reconsideration motion “as allowed by [s]ection 128.7.” In turn, section 128.7 does allow a court to impose sanctions on its motion, pursuant to subdivision (c)(2), if the court enters an order describing the specific conduct appearing to violate the sanctions statute and directing an attorney, law firm, or party to show cause why it has not violated section 128.7(b) unless within 21 days of service of the OSC there is a withdrawal/correction by the notified attorney, law firm, or party.

            In Moofly Productions, the trial judge did not notify Moofly that it would be subject to sanctions if it did not withdraw the motion for reconsideration. Instead, the court denied the motion for reconsideration at the same moment that it issued the OSC, mooting Moofly’s subsequent attempt to withdraw its motion. The appellate court held that the trial judge was subject to the 21-day safe harbor requirements of section 128.7 before imposing sanctions for an unwarranted motion for reconsideration under section 1008. This resulted in a reversal of a $10,499.51 sanctions award made payable to defense counsel by Moofly and one of its attorneys.

Sanctions: U.S. Magistrate Judge Issues $10,000 In 28 U.S.C. § 1927 Sanctions Against Class Action Attorney Giving Dishonest Excuse For Not Timely Filing Class Certification Motion

Instagram And Suspicious Plane Itinerary, Along With Attorney Admission, Led To Imposition Of Sanctions.

            When it comes to blowing deadlines which can be cured, counsel should be candid with courts in requesting relief, which can be granted if the circumstances are right.  The next situation, which has drawn quite a bit of publicity, illustrates the necessity for honesty in requesting such relief.

            What happened in Ha v. Baumgart Café of Livingston, Civil Action No. 2:15-cv-5530-ES-MAH (D.N.J. Apr. 26, 2018 (PACER Document No. 123) is that a class conditional certification motion deadline in a wage/hour case was blown by co-counsel who then filed a request for extension of time to file the motion.  Co-counsel said that she had to attend to a family emergency in Mexico City, and attached a copy of her plane itinerary as corroborating proof.  Her other co-counsel was unaware that the deadline had been blown or that she had a family emergency.  In opposition, defense counsel presented an Instagram account showing that plaintiffs’ attorney was not in Mexico City when the motion was due but was instead in New York City.  Also, the date on the flight itinerary supplied as corroboration listed a date which did correspond to the actual date of the week for that designated date.  The attorney first withdrew the class certification motion with prejudice, and then reversed course asking to change the withdrawal to be without prejudice.  This resulted in a rift between plaintiffs’ two attorneys, with the one attorney moving to withdraw as plaintiffs’ counsel.  U.S. Magistrate Judge Michael A. Hammer eventually found no prejudice from the delay in filing the motion, allowed the one attorney to withdraw, and ordered the remaining attorney to obtain new local counsel.  During the various hearings, the withdrawing attorney admitted she was not in Mexico City during the pertinent dates and the remaining counsel indicated he was unaware of the blown deadline until later. 

            The defense requested leave to apply for sanctions, which the magistrate judge granted.  He found that sanctions were justified under 28 U.S.C. § 1927 because the offending attorney misled the court and other attorneys in the case as shown by the Instagram account, flight itinerary, and her own admissions in open court.  However, remaining counsel was not sanctioned.  With respect to the amount of sanctions, the magistrate judge awarded $10,000 in favor of defense attorneys on a pro rata basis, but found that the $44,283 request was “unreasonably high.”

     

Bankruptcy/Sanctions: Contempt Sanctions Against Creditor For Knowingly Violating Discharge Injunction Could Not Stand Based On Creditor’s Subjective Good Faith Belief, Even If Unreasonable

Ninth Circuit Clarified Some Reasoning In Zilog Decision.

            In In re Taggart, Case No. 16-35402 (9^th Cir. Apr. 23, 2018) (published), the Ninth Circuit clarified some prior reasoning in In re Zilog, 450 F.3d 996, 1009 n.14 (9^th Cir. 2006) to reinforce that contempt sanctions cannot be assessed against a creditor for knowingly violating a discharge injunction based on creditor’s good faith belief, even if unreasonable in nature.  The bankruptcy judge found the creditor’s subjective intent was irrelevant, an erroneous determination resulting in the BAP’s prior decision to reverse the bankruptcy judge ruling—with the Ninth Circuit affirming the BAP’s reversal.

Sanctions: $34,000 In CCP § 128.5 Sanctions Affirmed Against Litigant Unsuccessfully Trying To Upset Earlier Adjudication Based Upon Extrinsic Fraud

Among Other Things, Damning Admissions In Debtor Exam Sealed The Deal.

            In Quadri v. Alkayali, Case No. G054914 (4th Dist., Div. 3 Apr. 19, 2018) (unpublished), the 4/3 DCA—in a panel decision authored by Justice Bedsworth—affirmed around a $ 34,000 sanction against a litigant losing an “extrinsic fraud” challenge to a prior verdict.  Among other things, the affirmance was justified because the appellant had made disavowals in earlier debtor examinations of having any ownership interest in a company which was contrary to the contention that he was indeed the controlling shareholder of the company years later. 

Sanctions: Third District Decides That An Asserted Nonfrivolous Claim Cannot Be Found To Be Brought For An Improper Purpose Under CCP § 128.7

Plaintiffs Advanced A Plausible Interpretation Of A Phrase In Prior Settlement Stipulation Such That Sanctions Were Not Warranted.

            In Ponce v. Wells Fargo Bank, 21 Cal.App.5^th 253, Case No. C080680 (3d Dist. Mar. 13, 2018) (published), a trial judge sanctioned plaintiffs who brought lender liability claims in a residential property dispute with terminating sanctions and also imposed over $25,000 in monetary sanctions (as against plaintiffs and their attorneys) under Code of Civil Procedure section 128.7.  The basis for the sanctions was that plaintiffs advanced a frivolous interpretation of “predecessor in interest” language in a release under a prior settlement stipulation in other proceedings. 

            The Third District, on appeal, reversed.  It was swayed by the fact that sanctioned plaintiffs presented a plausible interpretation of “predecessors in interest” under the prior settlement stipulation given that the defendants interpreting otherwise were not involved in the prior proceedings.  Put another way, one could say that the reviewing court believed the trial judge erred by pulling the “sanctions trigger” without hearing more on the threshold contractual interpretation issue.  After reaching the conclusion that plaintiffs’ contractual interpretation position was not frivolous in nature, it was no far stretch to conclude the claim was not brought for an improper purpose under section 128.5.   This decision does establish that a failure to show frivolity means there was a failure to show an improper purpose, with the appellate court adjudicating this issue de novo (as opposed to the more deferential abuse of discretion standard which is generally hard to surmount on appeal).

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. 

Sanctions: CCP § 128.7 And Family Code Section 271 Sanctions Improperly Imposed Against Attorney

$5,000 Sanctions Award Against Attorney Reversed.

            Attorney and client her were sanctioned for $5,000 under CCP § 128.7 and Family Code § 271 in Saidiner v. Jacobs-Jakubowicz, Case No. B275860 (2d Dist., Div. 7 Mar. 26, 2018) (unpublished).  Attorney appealed the sanctions award, which was reversed on appeal.

The CCP § 128.7 sanctions could not stand because it was imposed without giving attorney the benefit of the 21-day safe harbor protection.  The Family Code section 271 basis for the award was infirm, because sanctions can only be awarded against a party, not an attorney, with Division 7 endorsing the same result reached in Webb v. Webb, 12 Cal.App.5^th 876, 883 [an earlier 2/8 DCA decision discussed in our June 14, 2017 post].  Furthermore, the section 128.7 sanctions were improperly directed to be paid to party’s counsel, rather than the party.  (Webb v. Webb, 12 Cal.App.5^th at 878.) 

Sanctions: CCP § 128.5 Sanctions For 1/1/15 – 8/7/17 Time Frame Must Comply With Safe Harbor Section 128.7 Requirements

Second District Departs Company With Contrary Result In San Diegans for Open Government.

            San Diegans for Open Government v. San Diego, 247 Cal.App.4^th 1306, 1317 (2016) [reviewed in our June 9, 2016 post] held that a party filing a CCP § 128.5 sanctions motion does not need to comply with the safe harbor waiting period described in section 128.7(c)(1).

            We can now report that the Second District, Division 7, has expressly departed company with this view in Nutrition Distribution, LLC v. Southern SARMs, Case No. B280983 (2d Dist., Div. 7 Jan. 31, 2018) (published).  That led the appellate court to affirm a trial judge’s denial of sanctions based on moving party’s failure to satisfy section 128.7’s “safe harbor” protection where the motion for sanctions was based on a purportedly frivolous complaint, written motion or court filing that could be withdrawn or on some other alleged action or tactic that could be appropriately corrected.

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.

Sanctions: Trial Court’s “Vestigial Jurisdiction” When Case Ordered To Arbitration Justified CCP § 128.7 Sanctions Against Litigant’s Counsel

Continuing Jurisdiction And Waiver Principles Justified Sanctions Order.

Old Jail Whipping Post.  St. Augustine, Florida.  John Margolies, photographer.  Library of Congress.

            Windsor Mango Way LLC v. Taylor, Case No. B268967 (2d Dist., Div. 3 Sept. 28, 2017) (unpublished) is a case where an attorney was sanctioned under CCP § 128.7 for conduct relating to a case which had been ordered to arbitration.  Attorney challenged the order primarily on the theory that the trial court lacked jurisdiction to issue sanctions given the case had been ordered to arbitration.

            Not so, said the Court of Appeal in affirming the sanctions order.  Two reasons sealed this conclusion.  First, because the sanctions ordered related to activities after a motion to compel was granted, the trial court had “vestigial jurisdiction” to order sanctions and an erroneous order did not give rise to CCP § 473 relief.  Second, waiver principles precluded attorney’s efforts to vacate the sanctions order because attorney himself invoked the jurisdiction of the trial court when he moved for sanctions against the other party on his client’s own behalf. 

Probate Two-Fer/Sanctions: $440,000 Fee Award Based On A Common Fund Properly Awarded Against Entire Trust Res And $16,060 In CCP § 128.7 Sanctions Sustained For Failure To Remove Lis Pendens

Frye v. Collins, Case No. A143623 (1^st Dist., Div. 2 Aug. 9, 2017) (unpublished)

            In this one, a trustee lost certain trust challenges by other relatives, also saddled with a costs/fees award of $440,000.  This award was affirmed because the lower court decided that it should be paid out of the entire trust res, so that the successful parties had to bear some of the fees because of a common fund wrinkle in the case making it fair to spread the fee award over the res rather than simply paid out of losing trustee’s res share.

Leino v. Balkcom, Case No. C080950 (3d Dist. Aug. 9, 2017) (unpublished).

            The second decision was a situation where a trial judge granted CCP § 128.7 sanctions against a trustee and attorney, who challenged on many, many grounds.  None held up on appeal.  The interesting aspect of this opinion is the appellate court’s conclusion that trustee’s failure to remove a lis pendens after the probate action was dismissed for over a year justified imposition of sanctions.  The sanctioned parties argued that the recording of a lis pendens did not justify imposition of sanctions, but the appellate court disagreed based on the fact that a lis pendens needs to be procedurally filed with the court so to trigger section 128.7. 

Appealability/Sanctions: Client’s Appeal Of Sanctions Only Against Her Attorneys Did Not Confer Appellate Jurisdiction To Review Sanctions Award

Different Result Had Sanctions Been Imposed On Both Client And Attorney

 

            The probate court in In re Patrice Libaw Trust, Case No. B271815 (2d Dist., Div. 1 Aug. 3, 2017) (unpublished) awarded CCP § 128.7 sanctions against only a probate litigant’s attorneys, not the probate litigant (although sanctions were requested against both).  Litigant appealed the sanctions award against attorneys, but the appellate court determined it lacked jurisdiction because client alone did not have standing to appeal an adverse award against her attorneys.  The result would have been different had both client and attorneys been assessed with sanctions; however, this did not happen, so no appellate jurisdiction. 

Sanctions: Ninth Circuit Remands To District Court The Sanctions Issue In Haeger v. Goodyear “Inherent Power Of The Court” SCOTUS Decision

 

 

Dissenting Circuit Judge Would Have Affirmed Based On Waiver.

 

            On April 23, 2017, we posted on the U.S. Supreme Court’s decision in Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017), which found that a $2.7 million “inherent power of the court” sanctions award needed a restudy based on the correct “but for” causation standard albeit indicating that a waiver issue needed upfront adjudication.

            The Ninth Circuit, in Haeger v. Goodyear Tire & Rubber Co., No. 12-17718 (9^th Cir. June 8, 2017) (published), ruled through a 2-0 majority decision that the district court should revisit the sanctions issue.  Circuit Judge Milan D. Smith, Jr., in dissent, found that Goodyear had admitted that only $722,406.52 of the sanctions award was tainted, such that the remaining $2 million award should simply be affirmed rather than involve any further scrutiny by the district court. 

Family Law: $250,000 271 Sanction Affirmed In Contentious Divorce Case Between Two High Profile Attorneys

 

Abuse Of Discretion Standard Not Overcome By Appealing Ex-Wife.

     Marriage of Gregora and Feldman, Case No. B269587 (2d Dist., Div. 8 May 8, 2017) (unpublished) was a high profile divorce case involving Los Angeles attorneys, where ex-wife lost a key breach of fiduciary claim, prompting the trial court to impose a sanction against her to the tune of $250,000 under Family Code section 271 (the sanctions was an award of partial attorney’s fees incurred by ex-husband). Ex-wife appealed, but to no avail. The appellate court observed that the sanctions award was no abuse of discretion given that (1) ex-wife issued 450 subpoenas on third parties yielding over 100,000 pages of documents; (2) she deposed ex-husband’s ex-wife, several partners in his firm, and numerous accountants; (3) ex-wife spent $3.6 million on the case and ex-husband spent $2.1 million; and (3) ex-wife lost on the breach of fiduciary claim.

Equity, Sanctions, Section 998, Special Fee Shifting Statute, Allocation: Unpublished Decisions In Last Few Days Address Multiple Fee Issues

 

 

Equity—Gilotti v. Stewart, Case No. C075611 (3d Dist. April 26, 2017) (Unpublished):  Section 998 Offer, Typo Notwithstanding Valid, and Attorney’s Self Interest Disqualified Fee Recovery.

 

                In this construction defect lawsuit, plaintiff was ordered to pay a prevailing grading contractor expert fees under CCP § 998, even though the offer said $49,999 in the written part but a typo for $39,999 in the numerical (  ) explanatory part. The trial judge granted 998 fee-shifting expert witness expenses, but plaintiff argued the offer was vague – naught!, said the court, the written numerical part made it clear $49,999 was at issue typo notwithstanding.   Plaintiff challenged a denial of fee recovery to plaintiff’s husband/attorney, but this was affirmed because he had a pecuniary interest as a co-trustor of the trust owning the property subject to the action.  (Gorman v. Tassajara Development Corp., 178 Cal.App.4^th 44, 90, 95 (2009).)

Sanctions—Maxwell v. Deutsche Bank National Trust Co., Case No. A142562 (1^st Dist., Div. 2 April 27, 2017) (Unpublished):  128.7 Sanctions Against Represented Parties Were Appropriate.

 

            Represented parties appealed $17,685 in CCP § 128.7 sanctions based on the argument that they only followed the advice of their counsel.  The appellate court affirmed the trial judge award because 128.7 sanctions are authorized against represented parties, especially given that a judge warned the represented parties about what they were doing in the action.

Special Fee Shifting Statutes—Casas v. City of Baldwin Park, Case No. B275535 (2d Dist., Div. 5 April 27, 2017) (Unpublished):  Denial of Further CPRA Fees Was Correct.

 

            Here, plaintiff’s counsel in a California Public Records Act (CPRA) case already received about $40,000 in fees, but moved to get more.  Both the trial and appellate courts said no way, given that counsel did not properly authenticate billing records to show there was a connection with the CPRA compliance litigation work which was the subject of the additional fee request.

Allocation—IV Solutions, Inc. v. Health Net of California, Case No. B268816 (2d Dist., Div. 2 April 27, 2017) (Unpublished):  No Allocation Necessary Where Work Inextricably Intertwined.

 

            Defendants won a demurrer and judgment on the pleadings based on the statute of limitations, determinations affirmed on appeal on the merits.  The defense was awarded contractual attorney’s fees of $78,768, with plaintiff arguing that at least an allocation was needed between contract and other claims.  Nope, all of the claims were intertwined.

Sanctions: SCOTUS Decides Federal “Inherent Power Of The Court” Sanctions Must Satisfy A But-For Causal Connection Between The Misconduct And Fees Incurred By The Innocent Party

 

 

$2.7 Million Sanctions Against Goodyear Reversed And Remanded, But Waiver Issue Might Sustain $2 Million Of Sanctions Award.

 

           

Stripping tube on mandrel before sending to cure, Goodyear Tire Factory, Akron, Ohio.   c1928.  Library of Congress.

        The U.S. Supreme Court, in Goodyear Tire & Rubber Co. v. Haeger, No. 15-1406 (SCOTUS April 18, 2017), clarified the standard to be used by district judges in imposing “inherent power of the court to control judicial process” sanctions as far as setting an appropriate amount of sanctions, reversing a $2.7 million sanctions award in favor of plaintiff and against defendant Goodyear after a case was settled.  Determining that both the district judge and Ninth Circuit used the wrong standard, SCOTUS—in a decision authored by Justice Kagan—articulated that a “but-for” test was appropriate, where the award must have a causal connection between the sanctioned litigant’s misbehavior and the legal fees by the opposing party seeking the sanction.  The district judge did not use a “but-for” standard, and the Ninth Circuit erroneously used a temporal, rather than causal, limitation by sustaining a $2.7 million award for all legal fees incurred by plaintiff since the date of the misconduct.  Interestingly enough, the district judge made a $2 million “contingent” award based on some causation analysis, but SCOTUS was still concerned that it was not quite right.  However, Goodyear may have admitted that the $2 million award was causally related, setting up a waiver issue that SCOTUS observed “should be the initial order of business below” upon a remand. 

    Scotusblog analysis is available by clicking here.

Appealability/Sanctions: Sanctioned Attorney’s Failure To Appeal Sanctions Order Was Fatal

 

Appeal By Attorney's Client Did Not Get It Done.

 

    In K.J. v. Los Angeles Unified School District, Case No. B269864 (2d Dist., Div. 3 Feb. 23, 2017) (unpublished), a minor's attorney was ordered to pay attorney's fees and costs to LAUSD as a discovery sanctions. Minor appealed from the sanctions order.

 

    The appeal was dismissed. Because minor was not sanctioned, the failure to appeal by attorney was fatal given that minor was not an aggrieved party. (People v. Indiana Lumbermens Mutual Ins. Co., 226 Cal.App.4^th 1, 10 (2014).)

Equity/Sanctions: Attorney’s Fees Award Remanded To Recalculate To Account For Previously Awarded Discovery Sanctions

"Double Dipping" Was The Rationale.

    Earl & Reimer APC v. Klimek, Case No. H041638 (6^th Dist. Feb. 1, 2017) (unpublished) is a case where an attorney's fees award was reversed and remanded in order to prevent "double dipping": the trial judge previously awarded discovery sanctions, and those sanctions were not properly taken into account with respect to the fee recovery calculations. Reversed and remanded for a "re-do."

    Click here to see the famous "double dip" episode in Seinfeld.

In The News/Sanctions: Throwing A Cup Of Coffee At A “Heated” Deposition – What Does That Cup Cost You?

 

Answer: Roast Costs $250 In A Recent California Federal Magistrate's Ruling.

 

 

Pike Place Market, cup detail on sign. Seattle, Washington. Photographer: Carol M. Highsmith. Between 1980 and 2006. Library of Congress.

 

    As reported by Law360, an attorney who spilled — or perhaps threw — a cup of iced coffee on an opposing lawyer during a deposition must pay him $250 to cover his damages, according to U.S. Magistrate Judge Donna M. Ryu (N.D. Cal.) who apparently on January 26, 2017 scolded both attorneys for their behavior in a contentious trade secrets case. Hope the coffee was not a good latte!

Arbitration/Sanctions: $17,000 Trial Court Sanctions Order Against Defendant Failing To Pay Arbitration Fees Reversed And Remanded

 

Sanctions Order Did Not Have Adequate Specificity.

     Idewu v. Clark, Case No. B266573 (2d Dist., Div. 3 Jan. 24, 2017) (unpublished) is a situation where a trial judge likely was somewhat irked by the conduct of a defendant successfully moving to compel arbitration. After the matter was moved to arbitration, the arbitration proceeded for several days but was terminated when the defendant (who had moved to compel arbitration) failed to pay her share of arbitration fees. The matter returned to the trial court, who granted CCP § 128.5 sanctions against defendant to the tune of $17,000.

     This one was reversed on a procedural ground. The trial judge only issued a one-page minute order not detailing the conduct or circumstances justifying the sanctions order. The requirement that the offending conduct be specified in writing is existent in both the former and current versions of section 128.5. So, without passing on the merits at all, the appellate court remanded for the trial court either to enter a new sanctions order which details the offensive conduct or to vacate the imposition of sanctions absent a clarifying order.

Equity: Trial Court Erred In Not Giving Effect To Plaintiff’s Voluntary Dismissal, But That Did Not Deprive It Of Jurisdiction To Award Discovery Sanctions And Attorney’s Fees

Somewhat Of A Pyrrhic Victory For Plaintiff.

    Wilson v. Nationstar Mortgage LLC, Case No. D070965 (4^th Dist., Div. 1 Jan. 20, 2017) (unpublished) was somewhat of a pyrrhic victor for plaintiff on appeal. What happened below was that a trial judge erroneously failed to honor plaintiff's dismissal of an action, striking it and then going forward to award discovery sanctions and attorney's fees against plaintiff and in favor of the defendant. The appellate court agreed with appellant Wilson that the trial judge lacked jurisdiction to strike and dishonor the dismissal, but critically found the lower court retained jurisdiction to enter discovery sanctions and attorney's fees (the latter, subject to any Santisas limitations) post-dismissal anyway. So, those sanctions and fees award stuck on appeal.

Judgment Enforcement/Sanctions: $5,000 Sanctions Award Against Judgment Debtor’s Attorney For No Answer Instructions During Judgment Debtor Examination Was Vacated

 

Reason Is That Ground For Sanctions Was Statute Only Applying To Postjudgment Interrogatories And Document Requests, Not J/D Exams.

    A lower court sanctioned a judgment debtor’s attorney to the tune of $5,000 under CCP § 2023.030 for directing a client not to answer certain questions at a judgment debtor examination.  The appellate court, in Smith Bros. Constr. v. T.S. Stone and Title, Inc., Case No. D069212 (4th Dist., Div. 1 Dec. 9, 2016) (unpublished), reversed.  The reason was simple enough:  section 2023.030 does not apply to judgment debtor exams, but only postjudgment interrogatory and document request items.  The wrong ground for the sanction was raised, a ground not allowing for imposition of sanctions.

Sanctions: $10,000 128.7 Sanction Against Attorney Affirmed For Filing Of Second Amended Complaint With Allegations Similar To Prior Pleading To Which Demurrer Was Sustained

 

$10,000 Out Of $28,080 Sanctions Request Granted.

    In Concepcion Vinas v. Queen of the Valley Medical Center, Case No. A143541 (1st Dist., Div. 4 Oct. 20, 2016) (unpublished), attorney was sanctioned $10,000 under CCP § 128.7 for filing a second amended complaint which had the same allegations as a first amended complaint to which a demurrer had been sustained in many ways with prejudice.  His appeal was unsuccessful.  Filing an improper complaint can give rise to 128.7 sanctions.   (Eichenbaum v. Alon, 106 Cal.App.4th 967, 971-972 (2003).)  The amount was not unreasonable, given that only $10,000 out of a requested $28,080 in sanctions was imposed by the lower court.

Sanctions: Defense Motion To Vacate Sanctions After Plaintiff’s Voluntarily Dismissal Was Not Cognizable

 

Lower Court Lacked Jurisdiction To Consider Motion Post-Dismissal.

    Timing is everything, as illustrated in the sanctions area by Cerna v. Molina, Case No. B265272 (2d Dist., Div. 7 Oct. 17, 2016) (unpublished).

    There, defendants and their attorney were monetarily sanctioned in connection with certain discovery motions.  Plaintiff voluntarily dismissed the action.  However, defendants and their attorney moved to vacate the trial court’s orders imposing sanctions.  The lower court denied the motions to vacate, a determination affirmed by the 2/7 DCA.

    The reason was very fundamental:  the trial court lost jurisdiction to act on the case following the voluntary dismissal.  There was nothing else to do. 

Cases Under Review/Sanctions: SCOTUS Decides Whether “Inherent Authority Of Court” Sanctions Must Have Causal Connection To Sanctioned Conduct And Must Have Procedural Protections Applicable In Criminal Cases

 

Certiorari Granted With Consolidated Case On September 29, 2016.

    On September 29, 2016, the United States Supreme Court granted certiorari in The Goodyear Tire & Rubber Co. v. Haeger, No. 15-1406 (U.S.), a Ninth Circuit 2-1 decision [discussed in our July 21, 2015 post], and consolidated it with Musnuff v. Haeger, No. 15-1491 (U.S.).  The Ninth Circuit decision, over a dissent by Circuit Judge Watford, affirmed a $2.7 million sanction award granted under the “inherent authority of the court” without requiring a causal connection between the sanctioned conduct and civil monetary sanction imposed.  The Ninth Circuit majority decided that no precise linkage was required between the harm and compensatory sanctions awarded where the sanctionable conduct was frequent and severe. Here is the issue presented for review in this case:  Whether a federal court is required to tailor compensatory civil sanctions imposed under inherent powers to harm directly caused by sanctionable misconduct when the court does not afford sanctioned parties the protections of criminal due process.

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.