Deposition length in California is regulated by statute, but Courts retain power to modify the limits

Class action practitioners often handle a smaller portfolio of cases than, say, a firm specializing in personal injury matters.  As a result, that practice group is sometimes slower to experience procedural changes first hand.  This is particularly true when the changes do not generally apply to class actions.  One such example of this is the change last year regarding the length of depositions in California  Superior Court.  Code of Civil Procedure § 2025.290 limits the length of depositions to seven hours, absent specific exceptions: "Except as provided in subdivision (b), or by any court order, including a case management order, a deposition examination of the witness by all counsel, other than the witness' counsel of record, shall be limited to seven hours of total testimony."  One exception applies to any case deemed complex under Rule 3.400.  That exception has an extra twist to it:

(3) To any case designated as complex by the court pursuant to Rule 3.400 of the California Rules of Court, unless a licensed physician attests in a declaration served on the parties that the deponent suffers from an illness or condition that raises substantial medical doubt of survival of the deponent beyond six months, in which case the deposition examination of the witness by all counsel, other than the witness' counsel of record, shall be limited to two days of no more than seven hours of total testimony each day, or 14 hours of total testimony.

Code Civ. Proc. § 2025.290(b)(3).

In Certainteed Corporation v. Superior Court (January 8, 2014), the Court of Appeal (Second Appellate District, Division Three) was called upon to determine whether the discretion provided to the trial court generally in section 2025.290 applied to the 14-hour limit on depositions in complex actions involving a deponent suffering from a potentially terminal illness or condition.

Examining the statute, the Court found the language of (b)(3) to be ambiguous as to whether the trial court could modify the 14-hour limit imposed on depositions of deponents with the aforementioned health limitations.  Nevertheless, the Court found that a clear enough indication existed in the statute to conclude that the trial court had discretion to alter the limits in all circumstances:

The second sentence of section 2025.290, subdivision (a) includes language requiring the court to allow additional time to examine a deponent “beyond any limits imposed by this section” if additional time is “needed to fairly examine the deponent . . . . ”  (Italics added.) We hold that this exception applies not only to the seven-hour limit, but also expressly applies to “any limits imposed by this section,” which necessarily includes the 14-hour limit set out in subdivision (b)(3). The Legislature’s use of the words “this section,” rather than “this subdivision,” and “any limits,” rather than “the limit,” establishes that the exception applies not only to the seven-hour limit in subdivision (a), but also to the 14-hour limit in subdivision (b)(3).

Slip op., at 11.

So, a trial court can alter the presumptive limits on deposition length in section 2025.290, but, since you class action is probably complex, it doesn't really matter unless the deponent is not likely to live more than six months.

For appellate procedure wonks, the Court granted the petitions for a writ and issues an accelerated Palma notice, given the plaintiff's health and his right to a trial preference.

A little antitrust nugget in the movie theater business...

This one entertains me becaues it faintly evokes the studio system of the 1930's and the decades of antitrust action by the FTC, with United States v. Paramount Pictures, 334 U.S. 131 (1948) stealing a good deal of the spotlight.  It's not quite as big as Paramount, but it's what we have.  In Flagship Theaters of Palm Desert LLC v. Century Theaters, Inc. (August 31, 2011), the Court of Appeal (Second Appellate District, Division One) considered an appeal of a summary judgment ruling that ended Flagship's antitrust action.  The allegations were summarized by the Court:

Flagship filed this antitrust action against Century and two film distributors, alleging that Century has used the power deriving from both the size of its theater circuit and its many theaters in noncompetitive markets to undermine the competitive process through which theaters bid for and obtain licenses to exhibit first-run films. According to Flagship, under previous ownership the River and the Palme obtained roughly equal numbers of first-run films, but under Century the River now obtains licenses for far more first-run films than the Palme, the few that are left to the Palme are commercially inferior, and the imbalance is not based on the relative merits of the Palme's and the River's bids. On the contrary, according to Flagship, superior bids by the Palme are often rejected in favor of inferior bids by the River as a result of Century's abuse of the power of its circuit

Slip op., at 2.  I'm not going to cover the Court's interesting attempt to assess the current state of unlawful circuit dealing under the Sherman Act and the Cartwright Act.  But if you practice or dabble in antitrust law, this is like a brief history lesson centered around the movie distribution world.  I will note, however, that the Court wasn't thrilled with all of the sealed documents the Court received and later concluded were not appropriately classified as confidential.

Ninth Circuit discusses individual privacy interests in FOIA context

While not directly applicable to class member identity discovery, the Ninth Circuit recently provided some guidance about individual privacy interests and how they are weighed against a countervailing set of interests to keep them confidential.  Prudential Locations LLC v. U.S. Department of Housing and Urban Development (9th Cir. June 9, 2011) involved a Freedom of Information Act request for identification of various informants that advised the U.S. Department of Housing and Urban Development (“HUD”) about their suspicions that Prudential Locations LLC was violating the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601-2617, which was passed, in part, to “eliminat[e] . . . kickbacks or referral fees that tend to increase unnecessarily the costs of certain settlement services.” 12 U.S.C. § 2601(b)(2).

The Court described the process of review as one in which the Court must first identify a non-trivial privacy interest.  If such an interest is identified, the Court must then “balance the privacy interest protected by the exemption[ ] against the public interest in government openness that would be served by disclosure.”  Finally, the Court said that it must evaluate the likelihood that a privacy invastion would occur.  The Court concluded that HUD had failed to provide the trial court with sufficient information to rule on the request and remanded to give HUD an opportunity to do so.

While not precisely analagous to the test applied when discovery of class member identity is sought, this opinion at least suggests the type of analysis that must occur then balancing an asserted privacy interest in identity and contact information with the strong right to discover that information.

Refusing to produce documents? Not priceless.

The correct answer, at least for yesterday, is $25,000. I normally don't write, even obliquely, about cases that I am actively litigating, but I felt like I should bend the rule this one time. A trial court granted $25,000 in monetary sanctions for a defendant's failure to comply with a discovery order. I'm trying to be a "glass is a little over half full" kind of guy. I asked for $45,000.

Courtroom View Network is streaming a wrongful death trial trial involving a Ford Explorer rollover accident

Courtroom View Network, with over three years of experience Webcasting high-stakes civil litigation, is streaming the trial of Moreno v. Ford.  This trial is part of the statewide coordinated judicial proceeding involving Firestone tire tread separation and Ford Explorer rollover related litigation, currently centralized in Los Angeles.  Judge Anthony Mohr is presiding over the trial.  Access to video and streaming is available here.

Courtroom View Network has covered multiple legal proceedings across the country, including such cases as “Jose Adolfo Tellez et al v. Dole Food Company Inc et al” and “Norman Turner v. Chevron Corporation” in Los Angeles Superior Court. Courtroom View Network’s target audience are members of the legal and financial community who require instant, comprehensive coverage of litigation that affects their business. Its Web site is at www.courtroomview.com.

"Approved as to form and content" language added to many agreements finally held to be just shy of worthless

You've seen them.  The settlement agreements with "Approved as to form and content" at the end of document, with a place for the attorneys to sign right along with the parties.  I know a lawyer that has, for many years, refused to sign off on such language.  His reason?  He's not a party to the agreement; his client is.  It turns out that his instincts were pretty accurate.  In what it believes to be a case of first impression, the Court of Appeal (Second Appellate District, Division Four), in Freedman v. Brutzkus (March 11, 2010), examined at least some of the legal import of that language:

The signature block on a contract bears an attorney signature under the legend “approved as to form and content.” Does that signature amount to an actionable representation to an opposing party‟s attorney? We conclude that it does not.

Slip op., at 2.  The Court noted the lack of authority directly construing the import of this recital:

Apart from the signature approving the agreement “as to form and content,” Freedman does not allege, nor does the record show, that Brutzkus made any representation as to the agreement‟s validity, or affirmed any representation of his clients. We find little authority in California or elsewhere addressing the meaning of this recital. (See, e.g., In re Marriage of Hasso (1991) 229 Cal.App.3d 1174, 1181 [declining to find an attorney‟s approval “as to form” a condition precedent to enforceability of an agreement]; Ahrenberg Mech. Contractor v. Howlett (Mich. 1996) 545 N.W.2d 4, 5-6, citing Kirn v. Ioor (Mich. 1934) 253 N.W. 318 [finding approval as to form and content of a court order insufficient to establish a consent judgment]; First American Title Ins. Co. v. Adams (Tex.Ct.App. 1992) 829 S.W.2d 356, 364 [determining that an attorney‟s approval as to form and substance does not establish a consent judgment or relinquish a party‟s right to appeal]; CIC Prop. Owners v. Marsh USA, Inc. (5th Cir. 2006) 460 F.3d 670, 672-673 [agreement stating it was “„reviewed by counsel for parties and approved as to form and content‟” indicates that parties were separately advised by counsel].)

Slip op., at 5.  Having no direct authority to answer the question raised on appeal, the Court did the only thing it could do, apply common sense: 

We conclude that the only reasonable meaning to be given to a recital that counsel approves the agreement as to form and content, is that the attorney, in so stating, asserts that he or she is the attorney for his or her particular party, and that the document is in the proper form and embodies the deal that was made between the parties.

Slip op., at 5-6.

This isn't a complex litigation issue, or a class action issue.  It's just a fine example of all those mindless acts of habit that attorneys insist upon without a good reason.

It's about time for a reminder about the purpose of discovery in civil litigation, and Clement v. Alegre provides much needed medicine

Twenty-three years ago, the Legislature enacted the Civil Discovery Act of 1986 (Code Civ. Proc., § 2016.010, et seq.)1 (the Act), a comprehensive revision of pretrial discovery statutes, the central precept of which is that civil discovery be essentially self-executing. More than 10 years ago, Townsend v. Superior Court (1998) 61 Cal.App.4th 1431 (Townsend) lamented the all too often interjection of "ego and emotions of counsel and clients" into discovery disputes, warning that "[l]ike Hotspur on the field of battle, counsel can become blinded by the combative nature of the proceeding and be rendered incapable of informally resolving a disagreement." (Id. at p. 1436.) Townsend counseled that the "informal resolution" of discovery disputes "entails something more than bickering with [opposing counsel]." (Id. at p. 1439.) Rather, the statute "requires that there be a serious effort at negotiation and informal resolution." (Id. at p. 1438.)

Clement v. Alegre (September 23, 2009), slip op., at 1-2.

So begins Clement v. Alegre (September 23, 2009), authored by the Court of Appeal (First Appellate District, Division Two).  The case involves a dispute over a real property transaction, but that's not all that relevant.  But it certainly isn't a class action matter, and it's not all that complex of a case.  The issue, however, permeates civil litigation to its core.  The discovery process is nearly, but not quite, broken.  The higher the stakes (like in class actions), the more entrenched and obstructive the positions taken by counsel.  Compromise is now a pleasant surprise.  Bitterness is the norm.  Clement reminds counsel and courts that it shouldn't be.

The discovery fight began with a set of 23 special interrogatories:

As described by the referee, plaintiffs‘ objections were of two types:

"Special Interrogatory No. 1 requested a description of 'all economic damages you claim to have sustained. . . .'  Clement objected that the question was 'vague and ambiguous'. Clement's contention that the term 'economic damages' is vague is based on propounding party's failure to specifically refer to Civil Code section 1431.2, [subdivision] (b)(1) which defines economic damages. Thus, reasons Clement, 'Responding Party reasonably construes the failure to adopt this definition as expressing Propounding Party's intention to define economic damages in a manner different than as provided in California Civil Code Section [1431. 2, subdivision] (b)(1).' Clement goes on to supply a restricted definition of his own, to wit: the lost profit from the potential sale of the property to a third party buyer. Thus limited, he answers that he is aware of none."

"Special Interrogatory No. 2 asks: 'Please state the amount of such damages as identified in interrogatory number 1.'  Clement's objections this time were (1) that this Special Interrogatory violates [section] 2030.060[, subdivision] (d) because it is not full and complete in itself, requiring, as it does, reference to the answer to an earlier interrogatory in the same set. He brands the reference to the answer to an earlier question as reference to 'other materials' in order to answer the question, citing Catanese v. Superior Court (1996) 46 Cal.App.4th 1159, 1164 [(Catanese)]." Plaintiff Clement also stated that he did not have to answer the interrogatory, because it would deny him 30 days to respond, as interrogatory No. 2 was a follow-up question that referred to the answer to interrogatory No. 1, and there could be no answer to interrogatory No. 1 in existence until the response to interrogatory No. 1 was rendered. The 30 days to answer interrogatory No. 2 would start after the answer to interrogatory 1. Finally, Clement stated that he would meet and confer in good faith with defendant to resolve any dispute, without the need for a motion. However, he also stated no response to a meet and confer communications could be given without "reasonable time and opportunity to consult with [his] attorney."

Slip op., at 3-4.  A great deal of correspondence followed the initial objections.  Eventually the defendant filed a motion to compel.  An award of sanctions in excess of $5,000 followed soon thereafter, and an appeal of right was next.  The Court of Appeal was not sympathetic:

Ample evidence supports the referee‘s determination that plaintiffs "deliberately misconstrued the question."  Plaintiffs themselves quoted the statute defining the term in their initial response. Yet, they objected, and then deliberately provided an answer using a definition narrower than that provided by statute. Somewhat artfully, plaintiffs urge that Goldstein agreed in his January 23, 2008 letter to respond to any definition of economic damages that plaintiffs chose to provide. However, even after defendant's counsel advised that the term was being used as defined in the statute plaintiffs had cited, plaintiffs did not answer the question, but demanded that defendant supply the definition in writing and allow them an extra 30 days from the date of receipt in which to respond. Clearly this was "game-playing" and supports the referee's findings and the sanctions award.

Slip op., at 8.  Then the Court noted that, though they believed the plaintiff fully intended to obstruct discovery, that intent was irrelevant:

Even assuming we agreed that neither plaintiffs nor Goldstein intended to be evasive — and we do not — their intent is not relevant here. "There is no requirement that misuse of the discovery process must be willful for a monetary sanction to be imposed." (Cal. Civil Discovery Practice (Cont.Ed.Bar 4th ed. May 2009 update) § 15.94, p. 1440, citing Code Civ. Proc. § 2023.030, subd. (a); 2 Hogan & Weber, Cal. Civil Discovery (2d ed. 2004) Sanctions, § 15.4, p. 15-8 ["Whenever one party's improper actions — even if not 'willful' — in seeking or resisting discovery necessitate the court's intervention in a dispute, the losing party presumptively should pay a sanction to the prevailing party." (Fn. omitted)]; Kohan v. Cohan (1991) 229 Cal.App.3d 967, 971.)

Slip op., at 8.  Then the Court turned to the nonsense contention that an interrogatory that refers to a prior interrogatory answer is not "full and complete" by itself:

Plaintiffs do not contend that any of the interrogatories to which they objected on this basis were unclear, or that the interrogatories, considered either singly or collectively, in any way undermined or violated the presumptive numerical limit of 35 interrogatories of section 2030.030. Yet plaintiffs seized on what might have been at most an arguable technical violation of the rule, to object to interrogatories that were clear and concise where the interrogatories did not even arguably violate the presumptive numerical limitation set by statute. In so doing, plaintiffs themselves engaged in the type of gamesmanship and delay decried by the drafters of the Act.

Slip op., at 9.  The Court goes on to explain that the prohibition on preface instructions, definitions, and references to other materials were enacted solely to prevent circumvention of the presumptive 35 interrogatory limit.  More choice commentary:

Plaintiffs rely upon Catanese, supra, 46 Cal.App.4th at p. 1164, and upon Weil & Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group 2009) paragraph 8:979.5, which provides: "No incorporation of other questions: The requirement that each interrogatory be 'full and complete in and of itself' is violated where resort must necessarily be made to other materials in order to answer the question. [Citation.]" (Weil & Brown, supra, at p. 8F-21, citing Catanese at p. 1164, italics added.)

First, the paragraph heading — "No incorporation of other questions:" — is not mirrored by the substance of the paragraph, which identifies the violation as interrogatories requiring resort to "other materials" — not to a previous question — to answer the interrogatory. Second, the treatise clearly is relying upon Catanese, supra, 46 Cal.App.4th 1159, which involves a very different situation and which is demonstrably distinguishable. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 8:979.5, at p. 8F-21.)

In Catanese, supra, 46 Cal.App.4th 1159, after the plaintiff had been deposed for eight days, she propounded a series of five interrogatories inquiring whether the defendant contended that any of her answers to questions in the deposition were untruthful, and if so, what evidence supported that contention. (Id. at pp. 1161-1162.) The appellate court concluded that the interrogatories violated the "rule of 35" and the requirement of "self-containment" codified in the predecessor to the current statute.  (Id. at pp. 1163-1164.)  "This rule was violated here by interrogatories which necessarily incorporate, as part of each interrogatory, each separate question and answer in eight volumes of deposition. An interrogatory is not 'full and complete in and of itself' when resort must necessarily be made to other materials in order to complete the question. [Plaintiff] could have propounded interrogatories which inquire separately regarding each deposition question and answer, but if [she] had inquired separately in self-contained interrogatories, she would have violated the 'rule of 35.' " (Id. at p. 1164.) The court further explained that the "interrogatories as worded effectively posed upwards of 10,000 separate questions. It was a violation of the 'rule of 35' to propound these interrogatories without the supporting declaration required by [the statute]." (Id. at p. 1165.)

Slip op., at 11-12.  The opinion should be read fully and carefully by all litigators, but more is worth repeating here:

"It is a central precept to the Civil Discovery Act of 1986 (§ 2016 et seq.) . . . that civil discovery be essentially self-executing. [Citation.]" (Townsend, supra, 61 Cal.App.4th at p. 1434.) A self-executing discovery system is "one that operates without judicial involvement." (2 Hogan & Weber, Cal. Civil Discovery, supra, § 15.4, pp. 15-7 to 15-8.) Conduct frustrates the goal of a self-executing discovery system when it requires the trial court to become involved in discovery because a dispute leads a party to move for an order compelling a response. (Ibid.) The Reporter‘s Notes to the predecessor to section 2023.030, subdivision (a) confirms that revision of the "substantial justification" provision was "intended to encourage judges to be more alert to abuses occurring in the discovery process. On many occasions, to be sure, the dispute over discovery between the parties is genuine, though ultimately resolved one way or the other by the court. In such cases, the losing party is substantially justified in carrying the matter to court. But the rules should deter the abuse implicit in carrying or forcing a discovery dispute to court when no genuine dispute exists. And the potential or actual imposition of expenses is virtually the sole formal sanction in the rules to deter a party from pressing to a court hearing frivolous requests for or objections to discovery. . . . The proposed change provides in effect that expenses should ordinarily be imposed unless a court finds that the losing party acted justifiably in carrying his point to court.  At the same time, a necessary flexibility is maintained, since the court retains the power to find that other circumstances make an award of expenses unjust – as where the prevailing party acted unjustifiably. The amendment does not significantly narrow the discretion of the court, but rather presses the court to address itself to abusive practices. . . ." (2 Hogan & Weber, Cal. Civil Discovery, supra, Appendix D, Reporter‘s Notes at pp. AppD-19 to AppD-21, quoting Advisory Committee to Federal Rule of Civ. Proc. § 34(a)(4) as amended in 1970, italics added; see Cal. Law Revision Com. com., 21A West‘s Ann. Code Civ. Proc. (2007) foll. § 2023.030, p. 64.)

Slip op., at 14-15.  The Court concludes its discussion with a thorough review of the meet and confer efforts.  I won't quote from that discussion here, but it's cut from the same cloth.  I end with the Court's final admonitions:

Perhaps after 11 years it is necessary to remind trial counsel and the bar once again that "[a]rgument is not the same as informal negotiation" (id at p. 1437); that attempting informal resolution means more than the mere attempt by the discovery proponent "to persuade the objector of the error of his ways" (id. at p. 1435); and that "a reasonable and good faith attempt at informal resolution entails something more than bickering with [opposing]counsel . . . . Rather, the law requires that counsel attempt to talk the matter over, compare their views, consult, and deliberate." (Id. at p. 1439.)

Slip op., at 17-18.  I'd say these reminders were well overdue.

Arias v. Superior Court (June 29, 2009) analyzes certification obligations under two of California's representative action statutes

[Editor’s Note: This post was prepared by new Contributing Author, Shawn Westrick. Mr. Westrick is an attorney at Initiative Legal Group, LLP, and it is the Editor’s hope that this column is the first of many such posts. Mr. Westrick has spent considerable time in his career litigating PAGA issues, and the Arias decision was of particular interest as source material for a first blog post submission.]

By Shawn Westrick:

In Arias v. Superior Court (Angelo Dairy) (June 29, 2009), the California Supreme Court issued its long-anticipated opinion addressing when conventional class action procedural requirements must be met in representative actions filed against employers.

Plaintiff Jose Arias sued his employer Angelo Dairy, alleging, among other things, violations of the unfair competition law and under the Labor Code Private Attorneys General Act of 2004 (“PAGA”) (Cal. Lab. Code § 2698, et seq.). The trial court granted defendant’s motion to strike the causes of action based on the unfair competition law. The trial court’s reasoning was that claims brought under the unfair competition law and PAGA had to plead class action requirements.

In essence, the appellate court affirmed a portion of the trial court’s Order, directing the trial court to “issue a new order striking the representative claims alleged in the seventh through tenth causes of action, but not the eleventh cause of action” (slip op., at 3), the eleventh cause of action being the claim arising under PAGA.

The Supreme Court began its analysis with a thorough discussion of Proposition 64. Proposition 64 amended the unfair competition law to ensure that a plaintiff suffering injury in fact must comply with Code of Civil Procedure § 382. However, Proposition 64 did not specifically use the phrase “class action” in any of its statutory language. Nevertheless, the Supreme Court ruled that a literal construction would frustrate the purpose of Proposition 64. A review of the Voter Information Guide, the official summary of Proposition 64, and the ballot measure summary suggested that the purpose of Proposition 64 was to require plaintiffs to meet the requirements for a class action.

Turning to PAGA, the Supreme Court then analyzed the question of whether PAGA claims must be certified as class actions to proceed on a representative basis. As an important distinction to be aware of, it has already been determined that actions under the Labor Code Private Attorneys General Act of 2004 may be brought as class actions. (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1173.) At issue in Arias was whether such actions must be brought as a class action. Beginning its discussion, the Supreme Court noted that the statute was passed because of the lack of adequate financing for labor law enforcement. Employees would act as private attorneys general to collect civil penalties for violations of the Labor Code:

Before bringing a civil action for statutory penalties, an employee must comply with Labor Code section 2699.3. (Lab. Code, § 2699, subd. (a).) That statute requires the employee to give written notice of the alleged Labor Code violation to both the employer and the Labor and Workforce Development Agency, and the notice must describe facts and theories supporting the violation. (Id., § 2699.3, subd. (a).) If the agency notifies the employee and the employer that it does not intend to investigate (as occurred here), or if the agency fails to respond within 33 days, the employee may then bring a civil action against the employer. (Id., § 2699.3, subd. (a)(2)(A).) If the agency decides to investigate, it then has 120 days to do so. If the agency decides not to issue a citation, or does not issue a citation within 158 days after the postmark date of the employee‘s notice, the employee may commence a civil action. (Id., § 2699.3, subd. (a)(2)(B).)

Slip op., at 9.

The Supreme Court rejected the employer’s convoluted argument that permitting employees to proceed with representative actions that did not satisfy class action requirements would cause absurd results. Explaining the strange reasoning of the employer, the Supreme Court said:

Defendants read the Court of Appeal‘s decision as holding that class action requirements do not apply to actions under Labor Code section 2699, subdivision (a) only because class action requirements are "provisions of law" and subdivision (a) says that it applies regardless of, or notwithstanding, "any other provision of law." Defendants then argue that because Labor Code section 2699, subdivision (g) does not contain subdivision (a)'s "[n]otwithstanding any other provision of law" language, it follows that actions under that subdivision must comply with class action requirements. According to defendants, to conclude that subdivision (g) actions must satisfy class action requirements but subdivision (a) actions need not is "absurd" and therefore the Court of Appeal's statutory construction must be wrong. We disagree.

Slip op., at 11. According to the Supreme Court, Defendants' argument presupposed that class action requirements apply to all representative actions unless the Legislature affirmatively precludes their application by inserting the phrase "notwithstanding any other provision of law," or similar words, in the statute authorizing the representative action. The Court rejected that assumption.

The Supreme Court then turned to the employer’s argument that the legislative history required PAGA actions be brought as class actions. The Supreme Court noted that some committee reports expressed concerns that PAGA would allow employees to sue as a class action and some commentators were concerned that without a class action there could be no preclusive effects. The Supreme Court rejected committee report comments as insufficient to demonstrate any particular legislative intent regarding certification of PAGA claims.

The Court then turned to the due process issue of collateral estoppel. The employer argued that in the absence of class action requirements, employers would be subject to constant one-way intervention, violating their rights to due process. However an action under PAGA is binding not only on the named employee but also on the government agencies and any aggrieved employee not a party to the proceeding. An employee suing under PAGA does so as a “proxy or agent of the state’s labor law enforcement agencies.” Slip op., at p. 16. The employee can only bring a PAGA action after giving written notice pursuant to Section 2699.3. Id. An employee acts as a substitute for “the government itself” and a “judgment in an action binds all those ... who would be bound by a judgment in an action brought by the government.” Slip op., at p. 17.

Overall, the Court’s decision on the unfair competition law is straightforward. The long term effect of the Court’s foray into res judicata could have far reaching consequences for class actions in California. Taken as a whole, Arias should be a lesson to lawyers representing employers during settlements. Arias is clear that a PAGA action can only be commenced by adhering to the requirements under Section 2699.3. Slip op., at p. 16. In conjunction with the Supreme Court’s suggestion that the State of California has a vested interest in the civil penalties in PAGA, employers who settle class actions but do not settle PAGA actions with an employee who is authorized to file a PAGA action may find themselves liable for civil penalties owed to California (and, if authorized, other employees) for the same time period and the same class members who participated in a previous class action.

[Full Disclosure: Mr. Westrick is counsel in the matter of Deleon v. Verizon Wireless, in which the Supreme Court issued a “grant and hold” Order pending disposition of Arias. The Deleon matter directly raises the issue of whether settlement of wage & hour claims implicitly settles PAGA claims based upon the same underlying violations.]

Court of Appeal limits complex litigation court's ability to resolve "threshold issues" as case management tool

"A 'complex case' is an action that requires exceptional judicial management to avoid placing unnecessary burdens on the court or the litigants and to expedite the case, keep costs reasonable, and promote effective decision making by the court, the parties, and counsel." (Cal. Rules of Court, rule 3.400(a).) California's complex litigation pilot project Courts are charged with managing, on average, some of the more complicated civil litigation matters in California. To handle that burden, complex litigation Courts have to balance obligations imposed by rule and statute with the application of creativity in the areas where discretion and flexibility are options. In my experience, particularly in the complex litigation departments in Los Angeles, one way in which complex cases have been managed has been through the early evaluation of pivotal "threshold" legal issues that tend to give direction to such cases.

That case management technique just hit something of a snag.  The Court of Appeal (Second Appellate District, Division Five), in Magana Cathcart McCarthy v. CB Richard Ellis, Inc. (May 21, 2009) held, at least on the facts before it, that early determination of "threshold issues" is not a substitute for the summary adjudication procedural requirements:

Without filing a motion for summary judgment or mandatory separate statements of undisputed facts, and for the purpose of creating appellate review of pretrial rulings, the parties to an action in a complex litigation case stipulated that the court would have granted summary judgment based upon its ruling on certain "threshold issues" in favor of the defendant. The stipulation also included a dismissal, without prejudice, of class action allegations.

We disapprove of the unauthorized procedure utilized to create appellate review without compliance with the mandatory requirements of a summary judgment, and reverse. The requirements of a motion for summary judgment and the supporting separate statements of undisputed facts are expressly mandated by statute and court rules. In the absence of such documents, the stipulated judgment cannot stand. The convenience of the parties in a complex litigation case, and their desire to be spared the expense of a summary judgment motion, do not warrant deviation from the procedural requirements of summary judgment applicable to litigants who do not have the benefit of appearing in the complex litigation court. In addition, the stipulated judgment in this case violates an express agreement between the parties and the trial court that rulings on the threshold issues would not be a substitute for a motion for summary judgment that complies with the Code of Civil Procedure. We also conclude there is nothing about this action that warrants an exception to the foregoing rules promulgated by the Legislature and Judicial Council in a case which, in its current posture, involves a potential penalty of $500 and treble damages.

(Slip op., at p. 2.)  The majority opinion (yes, there is a dissent) spends a great deal of time reviewing the obligatory nature of the separate statement and other requirements associated with summary judgment motions or anything purporting to finally resolve matters outside the four corners of the pleadings.  In reading the opinion, I come away with the sense that there is something like contempt for the complex litigation courts, including a suggestion that the issues coming from those courts are no more difficult than those coming up for review out of standard general jurisdiction courts.  I happen to strongly disagree with that apparent sentiment; the complex courts, by virtue of their experience and creativity, make complex cases move more smoothly through the system.

The dissenting opinion is extensive.  It includes its own statement of facts and procedural background.  Part of that extensive workup appears intended to demonstrate that the record was suitable for appellate review.  In the dissent, Justice Mosk first explained why the Trial Court's procedure was permitted:

The parties stipulated to a judgment based on a pronouncement of the law by the trial court that followed legal briefing and argument by the parties. The procedure used, which did not include a demurrer, summary judgment motion, or other dispositive statutory motion, was justified as being a case management tool under the complex litigation program of the Los Angeles County Superior Court (Super. Ct. L.A. County, Local Rules, rules 7.3(h), 7.6; see Cal. Rules of Court, rule 3.400 et seq.; 3.750 et seq.; Gov. Code, § 68612; Code of Civ. Proc., § 575.1).

Although trial courts in complex cases have broad discretion to manage those cases in a manner that promotes efficiency and the conservation of judicial resources (see, e.g., Cal. Rules of Court, rules 3.400 et seq., 3.750 et seq.), that discretion is limited by countervailing interests of litigants and the public. "Reviewing courts have not hesitated to strike down local court rules or policies on the ground they are inconsistent with statute, . . . [¶] A common theme in the appellate decisions invalidating local rules . . . is that a local court has advanced the goals of efficiency and conservation of judicial resources by adopting procedures that deviated from those established by statute, thereby impairing the countervailing interests of litigants as well as the interest of the public in being afforded access to justice, resolution of a controversy on the merits, and a fair proceeding." (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1352-1353.) Deviation from formal procedures may, in many instances, present on appeal a case without an adequate record. Therefore, statutory procedures, such as those governing summary judgment, are designed, inter alia, to provide the appellate court with a factual and analytical framework upon which there can be de novo review.

It is important to recognize that the trial court did not, in effect, depart from established summary judgment procedures because the parties entered into a stipulation in connection with those procedures; "[s]tipulations may be entered into concerning any step of an action." (Bardendregt v. Downing, supra, 175 Cal.App.2d at p. 735.) Moreover, the court did not dispense with any procedure over the objection and to the prejudice of one of the parties. Here, both parties agreed to the procedure employed by the trial court to determine the legal issues, stipulated to the entry of judgment as if it were based on an order granting summary judgment, and agreed that the ensuing judgment was appealable.

(Slip op., Dissent, at pp. 5-6.)  It's an interesting debate.  I come down on the side of permitting the complex courts to manage cases with the flexibility that has proven itself in real cases over and over again.  Despite that, I understand the majority's call for predictability of procedure in any instance where a case is summarily adjudicated.