New Rules for Litigators: 2016 Brings Significant Changes to the California Code of Civil Procedure
Here is what you need to know about key procedural rules that took effect on January first.
New year, new law. California litigators need to be aware of a host of changes to key procedural rules that took effect on January first. (Unless otherwise indicated, all section references are to the California Code of Civil Procedure.)
Included among the new legislation are changes to California law concerning:
- Demurrers and amendment of pleadings (Cal. Code Civ. Proc. §§ 430.41 & 472);
- Offers to compromise (§ 998);
- Use of electronic signatures (§§ 17(3) & 34);
- Recovery of interpreter costs (§ 1033.5(a)(3)(B));
- Limits on preemptory challenges (§ 231.5);
- Use of expedited jury trials in limited civil cases (§§ 630.03, 630.11, 630.20-630.30); and
- Choice of court reporters (§ 2025.220(a)(8)).
Here is what you need to know about several of the new procedures—those dealing with demurrers, settlement offers, and summary judgment—and the intriguing backstory on how each came to be California law.
Perhaps most interesting, over one third of these changes were the direct result of work by the Conference of California Bar Associations (CCBA)—an organization of diverse attorneys from across the State that works to advance and improve California law. (www.calconference.org) Specifically, the expansion of the use of electronic signatures, the ability to recover interpreter costs, and the changes to 998 offers all are the direct result of resolutions authored by delegates to the CCBA, vetted by attorneys from across the state at the association’s Conference of Delegates meeting (held concurrently with the State Bar Annual Meeting), and successfully carried forward by the CCBA’s lobbyist in Sacramento. Similarly, the amendments governing demurrers and to summary judgment were initially proposed by CCBA, though the final bills were sponsored by other organizations.
In all, at least half of the new amendments to the CCP this year result from the efforts of the Conference and its attorney delegates. (For more on the CCBA, including how to become a volunteer attorney delegate, visit the CCBA’s website (http://calconference.org/html/registration/) or your local bar association (see, e.g., http://www.sfbar.org/cle/committees_conferenceofdelegates.aspx or http://lacba.org/connect/standing-committees/lacba-delegation-to-conference).)
Demurrers And Leave To Amend
For years, California practitioners and courts have voiced concern over wasteful motion practice as parties engage in the dance of demurrer and amendment. This is particularly true in civil litigation, where a heavy volume of demurrers filed in the state’s trial courts are often sustained with leave to amend. Court dockets have been congested by demurrer hearings which are vacated as an amended pleading is filed immediately prior to the schedule hearing. These delays erode the limited resources of already overburdened courts, to the detriment of all litigants. Indeed, the entire procedure is subject to abuse by attorneys who seek to delay litigation, harass opponents, and drive up costs.
The issue was the subject of attorney debate and draft legislation prepared by the CCBA in 2012 and 2013. However, it was not taken up the legislature until 2015, when the California Defense Counsel, California Judges Association, and the Consumer Attorneys of California sponsored Senate Bill 383. (The Bill was signed by Governor Brown on October 1, 2015.) SB 383 added a meet and confer requirement and limits the number of demurrers and amendments a party may file. (See new §430.41 and discussion below.) It also amended the code to reflect these changes and to curtail the filing of amended pleadings on the eve of demurrer hearings. (See §§ 472 & 472(a), also discussed below.)
Meet and Confer
New section 430.41(a)(2) mandates a meet and confer meeting at least five days before filing any demurrer, so as to encourage good-faith litigation, produce well-pleaded complaints and answers, and reduce the waste of court time and party resources. Under this new section, if the parties fail to meet and confer, the demurring party is granted an automatic 30-day extension within which to file a responsive pleading by filing and serving (by the initial demurrer deadline) a declaration explaining why the meet and confer did not occur and stating that it made a good faith attempt to meet.
To further limit wasteful motion practice in this area, the new section 430.41 restricts the filing of demurrers and amendments. Under § 430.41(b) the scope of demurrer is now limited: A party demurring to a pleading that was previously amended following a prior demurrer cannot now demur to the amended pleading on any grounds that could have been raised in the earlier demurrer.
Similarly, new section 430.41(e)(1) limits the number of times a pleading may be amended in response to demurrer: No complaint or cross-complaint may now be amended more than three times in response to a demurrer, absent a showing of additional facts to be pled such that there is a reasonable possibility the defect can be cured. Additionally – and underscoring the goal of encouraging good-faith litigation and the creation of well-pleaded complaints and answers – new section 430.41(c) allows the court, after it has sustained a demurrer and granted leave to amend, to order a conference of the parties before the amended pleading may be filed.
Amendments on the Eve of Hearing
To further curtail abuse, SB 383 also amended section 472 to prohibit the filing of amendments on the eve of hearings. Under the revised statute, a party now may only amend without leave of court if it files its amendment before the date that any opposition to demurrer is due. (The parties may stipulate to filing of an amended pleading on a later date.)
Parties are advised to plan well in advance of filing any demurrer, adding time for required meet and confer, in order to satisfy the new requirements. They are also advised to participate actively in a meaningful meet and confer regarding the scope of demurrer and amendment, given the new statutory limitations.
Offers To Compromise
The primary purpose of section 998 is to encourage parties to settle disputes prior to trial. It incentivizes litigants to accept pre-trial settlement offers so as to avoid being ordered to pay an opponent’s expert witness costs if the final trial award is less favorable than the 998 settlement offer. As California courts have recognized, the policy of section 998 is to encourage settlement by providing a severe penalty when the trial result is less favorable than the settlement offer. See Bank of San Pedro v. Superior Court 3 Cal.4th 797, 804(1993).
In 2005, however, an omnibus bill by the Assembly Committee on the Judiciary inserted the word “postoffer” into subdivision (d) of section 998, dealing with rejection of an offer made by a plaintiff—but not into subdivision (c), which deals with rejection of an offer made by a defendant.
The amendment created what appeared to be an unintended inequity between defendants and plaintiffs related to the discretionary authority of a trial court to award expert witness costs after one party’s rejection of a 998 settlement offer: Under the 2005 amendment, if the plaintiff rejected a defendant’s 998 offer and then failed to receive a better award at trial, the court could, in its discretion, require the plaintiff to pay the defendant’s pre and post-offer expert witness costs. Conversely, if the defendant rejected the plaintiff’s 998 offer and subsequently failed to receive a more favorable judgment or award at trial, the court had discretion to order the defendant to pay only the plaintiff’s “postoffer” expert witness costs. The obvious concern was that the section created an incentive for a defendant to delay service of a statutory offer until substantial expert costs have been incurred because the penal nature of the statute was not tied to the timing of the offer.
To equalize the treatment of parties under section 998, the Consumer Attorneys of California and the California Defense Counsel proposed Assembly Bill 1141 in April 2015. (As discussed below, this bill also reenacts and makes permanent a summary adjudication statute that was inadvertently allowed to sunset on January 1, 2015.) Initially, AB 1141 sought to remove the word “postoffer” from section (d) regarding a plaintiff’s offer so that both plaintiffs and defendants could obtain pre and post-offer costs.
This proposed solution, including the specter of unknown pre-offer plaintiff’s expert costs, was met with initial concern by the California Chamber of Commerce and the Civil Justice Association of California. As a result, and following lobbying and negotiations in Sacramento, an alternative solution was proposed in June of 2015.
Citing the Conference of California Bar Associations (and, in particular, CCBA’s Resolution 08-05-2013), the legislature proposed a “bill [that] will enable the statute to work the way it was intended, providing equal incentive to both parties to make offers to compromise and equal penalty if they refuse a compromise offer and fail to do better at trial.” (June 3, 2015 State Judiciary Committee report, p. 6.) Based upon the CCBA’s resolution and debate, a revised AB 1141 was proposed with this compromise language. The statute keeps the insertion of “postoffer” in section 998(d), but adds the same qualifier to subsection (c), so that parties are only able to recover expert witness costs incurred after a section 998 settlement offer is made, and not pre-offer costs.
Following the adoption of the CCBA’s language, AB 1141 was finalized and signed into law by Governor Brown on September 28, 2015. As a result, after January 1, 2016 both plaintiffs and defendants may recover only expert witness costs incurred after a section 998 settlement offer has been made. With this change, parties are encouraged to make (and accept) reasonable 998 settlement offers earlier in litigation. Defense litigants in particular should be aware of this change, as it otherwise limits costs they previously might have recovered.
While frequently proposed, amendments to California’s summary judgement/summary adjudication statute are always contentious. The interrelated stories of AB 1141 and Senate Bill 470 are no different.
Both Bills proposed two relatively simple changes to section 437c, and both were driven by the promotion of judicial efficiency.
First, the two bills add a new section 437c(q) to clarify that a court is only required to rule upon objections to evidence that it deems material to the given summary judgment or summary adjudication motion; any evidentiary objection not ruled on by the court shall be preserved for appellate review.
Second, the bills “added” section 473c(t), effectively reenacting and making permanent California’s previous partial summary judgment/adjudication statute (which was inadvertently allowed to sunset on January 1, 2015 when no legislation was enacted to reauthorize its provisions). Under the “new” section 437c(t), parties to California litigation can again bring a motion to summarily adjudicate an issue that does not completely dispose of a cause of action, affirmative defense, or issue of duty. Procedurally, the §437c(t) that took effect January 1, 2016 is the same as the old §437c(s) that lapsed a year ago.
Why two bills for the same amendment? Therein lies the political workings of Sacramento: AB 1141’s language is identical to SB 470’s, amending the same subsections of section 437c. Unlike SB 470, however, AB 1141 also contains the final language amending section 998. And in order to assure that the proposed amendments to section 998 both contained the compromise language and had sufficient political support, the changes to section 437c were tied to the changes to section 998.
Thus, while Governor Brown signed SB 470 on August 10, 2015 (shortly after CCBA’s compromise language was first suggested for section 998) that bill’s amendment of the summary judgment statute did not and could not take effect without AB 1141’s passage. By express provision in both pieces of legislation, SB 470 could only become effective if and when AB 1141 was enacted and became law – which occurred with Governor Brown’s signature on September 28, 2015.
The legislature’s decision to have AB 1141 control by being later enacted is the result of an intentional political compromise: AB 1141’s passage amended both sections 437c and 998, and ensured that changes to address the apparent (pro-defense) inequity in section 998 had the political support necessary to become law.
Section 437c and Rulings on Evidentiary Objections
Section 437c requires the court to consider all evidence submitted in support of a summary judgment motion, except evidence to which it sustains evidentiary objections. See § 437c(c). Parties must make any such objections on or before the summary judgment hearing; if they do not do so, the objections are deemed waived. See § 437c(a)(5).
Overworked trial judges have long complained, however, that evidentiary objections in summary judgment proceedings are one of the most time-consuming pretrial matters they face. As the drafters of AB 1141 and SB 470 noted, “it has become common practice for litigants to flood the trial courts with inconsequential written evidentiary objections, without focusing on those that are critical.” (February 25, 2015 Senate Judiciary Committee Report, p. 2, citing Reid v. Google, Inc. 50 Cal.4th 512, 532 (2010).) Indeed, in one noteworthy case, “the moving papers in support of a summary judgment totaled 1,056 pages, plaintiff’s opposition was nearly three times as long and included 47 objections to evidence, and the defendant’s reply included 764 objections to evidence.” Nazir v. United Airlines, Inc., 178 Cal.App.4th 243, 249, 250-251 and 254 (2009).
As a result, judges “spend hours ruling on evidentiary objections for a single summary judgment motion. Frequently, the number of objections that pertain to evidence on which a court relies in determining whether a triable issue of fact exists is a small subset of the total number of objections made by the parties.” (February 25, 2015 Report at p. 3) Not surprisingly, California courts sometimes provide summary judgment rulings in which they do not (intentionally or otherwise) rule on every evidentiary objection raised by the parties. This creates an apparent ambiguity as to whether an unmentioned objection was deemed waived for purposes of any appeal.
Focusing on this issue, in 2010 the California Supreme Court held that while the law requires all evidence be considered unless an objection is sustained, section 437c “does not mandate that, in the absence of express rulings, the underlying objections are waived on appeal.” Reid v. Google, Inc., 50 Cal. 4th at 526. Rather, “if the trial court fails to rule expressly on specific evidentiary objections, it is presumed that the objections have be overruled, the trial court considered the evidence in ruling on the merits of the summary judgment motion, and the objections are preserved on appeal.” Id. at 527.
AB 1141 and SB 470 amended 437c to recognize the reality of court practice and to codify the Reid v. Google decision. As of January 1, 2016, California courts are required to rule only on objections to evidence which are material to a given summary judgment or summary adjudication motion. Specifically, the new section requires that the Court “rule only on those objections to evidence that it deems material to its disposition of the motion.” And, any evidentiary objection not ruled on by the court “for purposes of the motion shall be preserved for appellate review.” See § 437c(q).
Both Bills were co-sponsored by the Judicial Council of California and the California Judges Association in an effort to increase court efficiency. To be sure, new section §437c(q) will reduce the strain of evidentiary objections on overburdened courts, allowing them to focus only on objections that pertain to the evidence upon which they rely in determining whether a triable issue of fact exists. But this change to §437c solves only half of the problem: Nothing in the amended statute discourages inconsequential written evidentiary objections, or otherwise ensures a focus on objections that are critical to the issues at hand. Rather, cautious litigants will still be required to “flood the trial courts” with written evidentiary objections attached to their motions for summary judgment, given that such objections must be raised or be deemed waived pursuant to §437c(a)(5).
Parties are now left in the unenviable position of having to make evidentiary objections in order to preserve them, knowing in advance that new section 437c(q) effectively codifies the courts’ ability largely to ignore and/or not rule upon much of what is submitted. As a result, while trial court workloads may be eased by this amendment, the bemoaned volumes of objections cited the Nazir case are unlikely to disappear.
The Return of “Partial” Summary Judgment/Adjudication
AB 1141 and SB 470 also reenact and make permanent California’s previous partial summary judgment/adjudication statute, which was inadvertently allowed to sunset on January 1, 2015 when no legislation was enacted to reauthorize its provisions. These amendments to section 437c were again co-sponsored by the Judicial Council of California and the California Judges Association to assist in the promotion of judicial efficiency.
The Bills add section 437c(t) to allow a party to file a motion for summary adjudication that does not completely dispose of a cause of action, affirmative defense, or issue of duty under specific circumstances – specifically, when the parties whose claims or defenses are put at issue by the motion jointly stipulate as to the issue(s) to be adjudicated, and declare that a ruling on the motion would further the interest of judicial economy. The court has discretion to summarily adjudicate the stipulated issues, and non-stipulating parties (whose claims and/or defenses are not directly implicated) can object to the filing.
Under new section 437c(t) the party seeking to bring such partial summary adjudication must first seek leave of the court to file the motion. Specifically, they must provide a joint stipulation stating the issue or issues to be adjudicated, including a declaration from each stipulating party that the motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement. See § 437c(t)(1)(A)(i-ii) The moving party must then serve the joint stipulation on any party to the action who is not also a party to the motion. See § 437c(t)(1)(B) Those parties not stipulating to the motion then have 10 days from the submission of the stipulation to object. See § 437c(t)(2).
Within 15 days of receipt of the stipulation, the court must notify the parties as to whether the motion may be heard. In making its decision, the court may consider objections by non-stipulating parties that were made within 10 day period. Id.
If the court chooses, in its discretion, not to permit the motion be filed, the stipulating parties may request—and the court must then conduct—an informal conference to permit further evaluation of the notice. See § 437c(t)(3)
If the court does allow the motion, the notice of motion must be signed by all parties to the motion and must contain a statement indicating that the “motion is made pursuant to subdivision (t) of section 437c of the Code of Civil Procedure. The parties to this motion stipulate that the court shall hear this motion and that the resolution of this motion will further the interest of judicial economy by decreasing trial time or significantly increasing the likelihood of settlement.” See § 437c(t)(4)(A-B)
For many California practitioners the “new” section 437c(t) is a welcome old friend. Clients, the bench, and the bar will benefit from the return of an efficient litigation tool that can help reduce congestion in the state’s crowded trial courts. That said, litigants are reminded that already long statutory lead times for summary judgment filings are further extended by these changes to the code: Parties filing a motion under section 437c(t) will need to file and hand serve their stipulations a minimum of 120 days before trial (15 days for consideration of the stipulation, plus 75 days’ notice, plus 30 days pre-trial for hearing).
And, of course, they will need to negotiate the actual party stipulation before they can ever consider requesting leave to file the motion. More cautious counsel should allot even more time so as to allow for an informal conference to permit further evaluation of the notice should it initially be denied.
Extra time may also be required where there are non-stipulating parties who might object to the motion, or otherwise seek to encourage an initial denial. However, avoiding trial and long waits for a courtroom by using section 437c(t) to resolve important issues (and perhaps cases), may well be worth this additional, advance planning.
These are the highlights, and the backstory. As always, there is no substitute for reviewing the new code sections in detail, and then making sure that your filings and practice track the letter and spirit of the law.
Oliver Dunlap is a litigator with King & Spalding in San Francisco, where he focuses on mass tort, product liability and IP cases for life sciences and high-tech companies. He is a former chair of the BASF delegation to the Conference of California Bar Associations.
Richard Normington is counsel with King & Spalding in San Francisco, where he litigates environmental and toxic tort cases in state and federal court. He is a BASF delegate to the Conference of California Bar Associations.