Appellate Report

Limits on trial court’s ability to impose sanctions for misuse of discovery

Jeffrey I. Ehrlich
2023 March

Discovery sanctions; limits on trial court’s ability to impose sanctions for misuse of discovery

City of Los Angeles v. PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466 (Second Dist., Div. 5.)

PricewaterhouseCoopers (PWC), a defendant in litigation initiated by the City, filed a motion under Code of Civil Procedure sections 2023.010 and 2023.030 of the Civil Discovery Act nine months after the case was dismissed with prejudice, seeking monetary sanctions for egregious misuse of the discovery process while the litigation was pending. The trial court awarded $2.5 million in sanctions. On appeal, the City contended the Discovery Act does not authorize the trial court to award monetary sanctions under section 2023.030 alone or together with section 2023.010. Reversed and remanded for further proceedings.

The factual basis for the motion was too extensive to fit into this summary. In short, PWC sought sanctions under sections 2023.010 and 2023.030 for the following conduct: bad-faith assertion of the attorney-client and work-product privileges; misrepresenting and concealing facts; refusing to comply with the court’s discovery orders; giving false discovery responses and failing to produce responsive, non-privileged documents; providing false testimony and leaving a PMQ deposition without substantial justification; bringing a motion for protective order without substantial justification; spoliation of evidence; offering false or evasive testimony.

PWC asserted that the court had authority to award monetary sanctions under section 2023.030 and the court’s inherent power. PWC requested a “baseline amount” of $8,002,412 as monetary sanctions. The total incorporated attorney fees of $7,857,017.98, including $792,579 to prepare and file the motion for sanctions, and related expenses. In addition, PWC suggested it would be an appropriate exercise of the court’s inherent power to increase the amount of the monetary sanction for fees and costs by $1,000,000 or more due to the egregious nature of the City’s discovery abuse. PWC stated that the City’s misconduct had been largely litigated and established through the prior motion practice.

The Discovery Act authorizes six methods of civil discovery in different chapters: depositions, interrogatories, inspections, medical examinations, requests for admission, and exchanges of expert witness information. (§ 2019.010.) Each discovery method authorizes the court to impose specific types of sanctions under specific circumstances. When a discovery motion is filed, the statute governing the motion generally requires that the court impose a monetary sanction against a party, person, or attorney who unsuccessfully made or opposed the motion, unless the person subject to the sanction acted with substantial justification or sanctions would be unjust under the circumstances.

In addition to the chapters governing specific discovery methods, there are other provisions of the Discovery Act that expressly authorize the court to impose certain types of sanctions. (See, e.g., § 2019.030 [court must impose monetary sanctions under the sanctions chapter against party who unsuccessfully files or opposes motion for protective order arguing discovery is duplicative, burdensome, or expensive, unless party acted with substantial justification or sanctions would be unjust under the circumstances]; § 2023.020 [court must impose monetary sanction against any party or attorney who fails to confer as required].)

Discovery sanctions are intended to remedy discovery abuse, not to punish the offending party. Accordingly, sanctions should be tailored to serve that remedial purpose, should not put the moving party in a better position than he would otherwise have been had he obtained the requested discovery, and should be proportionate to the offending party’s misconduct.

Section 2023.010 describes general categories of discovery misconduct, but does not contain any language that authorizes the court to impose sanctions for the conduct listed. Unlike provisions of the Discovery Act which expressly direct the court to impose specific types of sanctions under specific circumstances, there is no language in section 2023.010 stating that the court may impose a sanction under chapter 7 or stating the type of sanction to impose.

Section 2023.030 describes the types of sanctions available under the Discovery Act when another provision authorizes a particular sanction. Section 2023.030 does not independently authorize the court to impose sanctions for discovery misconduct.

It is clear that the Legislature knows how to enact statutes that authorize the court to impose sanctions under chapter 7 of the Discovery Act. (See, i.e., § 2031.300, subd. (c).) If the Legislature intended for the court to impose sanctions for misuse of the discovery process based directly on the provisions of section 2023.010, they knew how to write section 2023.010 to authorize sanctions under section 2023.030.

Instead, each of the categories of misconduct listed in section 2023.010 are managed through the procedures set forth in the chapters governing the discovery methods, as well as the other provisions of the Discovery Act that regulate and sanction misconduct.

The plain language of the statute requires sanctions under section 2023.030 to be authorized by another provision of the Discovery Act. Other courts have interpreted the statutory language to mean that sanctions are available under section 2023.030 to the extent they are authorized by another provision of the Discovery Act. Based on the plain language of the statutes discussed above, the court concluded that sections 2023.010 and 2023.030 do not independently authorize the trial court to impose monetary sanctions for misuse of discovery. The award of monetary sanctions in this case, which was based solely on sections 2023.010 and 2023.030 without regard to any other provision of the Discovery Act, constituted an abuse of discretion because it was outside the bounds of the court’s statutory authority.

The trial court was authorized by other provisions of the Discovery Act, however, to impose some amount of monetary sanctions in connection with rulings in favor of the defendant on discovery motions during the litigation. The order in this case must be reversed and remanded to allow the defendant to present the issue of sanctions to the trial court for determination under the correct law.

Jeffrey I. Ehrlich Jeffrey I. Ehrlich

Jeffrey I. Ehrlich is the principal of the Ehrlich Law Firm in Claremont. He is a cum laude graduate of the Harvard Law School, an appellate specialist certified by the California Board of Legal Specialization, and an emeritus member of the CAALA Board of Governors. He is the editor-in-chief of Advocate magazine, a two-time recipient of the CAALA Appellate Attorney of the Year award, and in 2019 received CAOC’s Streetfighter of the Year award.  He is also the chair of the California Academy of Appellate Lawyers’ Task Force on Generative AI and the Law.

http://www.ehrlichfirm.com

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