In the case of City of L.A. v. PricewaterhouseCoopers, LLC (2024) 17 C5th 46 the California Supreme Court unanimously held that the Discovery Act gives courts independent authority to impose sanctions for discovery abuses and patterns of discovery abuse provisions. This was a complete reversal of the Court of Appeal’s decision which had limited the ability to obtain sanctions to the specific discovery device decision. In their decision, the Supreme Court stated that
“Under the general sanctions provisions of the Civil Discovery Act, Code of Civil Procedure sections 2023.010 and 2023.030, the trial court had the authority to impose monetary sanctions for the City’s pattern of discovery abuse. The court was not limited to imposing sanctions for each individual violation of the rules governing depositions or other methods of discovery.” at pages 50-51.
The facts of the case are very straightforward. Defendant Pricewaterhousecoopers LLC (PWC ) filed a motion for sanctions 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 motion was based on the City of LA’s (City) conduct that throughout the litigation which PWC argued was a misuse of the discovery process under section 2023.010. The alleged abuses were:
(1) asserting attorney-client and attorney work product privileges in bad faith to prevent discovery of the [draft of the putative class action complaint against PWC regarding the same facts] and remediation documents that were not privileged (§ 2023.010, subd. (e));
(2) misrepresenting and concealing facts at the December 4, 2017 hearing to avoid production of the draft complaint (§ 2023.010, subds. (e), (f), (h));
(3) refusing to comply with the January 11, 2018 order directing production of a PMQ witness about the preparation of the draft complaint and filing a motion to quash the PMQ deposition notice (§ 2023.010, subds. (d), (e), (g), (h));
(4) giving false responses and failing to produce responsive, non-privileged documents in response to PWC’s May 2, 2017 requests for documents transmitted between LADWP and Jones’s counsel before August 7, 2015 (§ 2023.010, subds. (d)–(f));
(5) failing to produce responsive, non-privileged documents requested in the April 13, 2018 deposition notice for the PMQ (§ 2023.010, subds. (d), (g));
(6) providing false testimony and leaving the September 13, 2018 PMQ deposition without substantial justification (§ 2023.030 subds. (d)–(g));
(7) bringing an unsuccessful motion for a protective order without substantial justification to prevent further PMQ testimony and without trying to resolve the dispute informally (§ 2023.010, subds. (e), (h), (i));
(8) asserting a right to withhold the draft complaint under a “common interest privilege” (§ 2023.010, subds. (e), (f), (h));
(9) failing to produce relevant documents [Assistant City Attorney’s] computer hard drive (§ 2023.010, subds. (d), (g));
(10) spoliating evidence through [Assistant City Attorney’s] destruction of handwritten notes of interviews he conducted to prepare for his PMQ deposition (§ 2023.010, subds. (d), (g)); and
(11) testifying evasively or falsely about the City’s knowledge of the collusive nature of the class action (§ 2023.010, subd. (f)).
After a hearing, the trial court granted PWC’s motion for sanctions. The court concluded that
“Code of Civil Procedure section 2023.030 authorizes a trial court to direct any party or attorney who has engaged in the misuse of the discovery process to pay the reasonable expenses, including attorneys’ fees incurred, as a result of that conduct.” “Misuses of the discovery process include, among other things, failing to respond or to submit to an authorized method of discovery, making without substantial justification an unmeritorious objection to discovery, making an evasive response to discovery, disobeying a court order to provide discovery, and making or opposing unsuccessfully and without substantial justification a motion to compel to limit discovery. Code Civ. Proc., section 2023.010.”
The trial court also concluded that sanctions could be imposed under its “inherent power to deal with litigation abuse.” Finding a “serious abuse of discovery by the City and its counsel,” the court awarded PwC $2.5 million in sanctions against the City.
The Court of Appeal reversed the trial court, stating:
“Section 2023.010 describes general categories of discovery misconduct but does not contain any language that authorizes the court to impose the conduct listed… 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…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.” [501-503] See Blog “Where’s the authority to Impose Sanctions?”
The Supreme Court reversed the Court of Appeal and reinstated the trial court’s $2.5 million award of sanctions against the City. In addressing City’s argument that CCP 2023.010 and 2023.030 doesn’t give the court inherent authority to impose sanctions absent the authority in the specific discovery device statue, the court stated:
“One of the principal purposes of the [1957] Act,” which the 1986 Act built upon, was “to enable a party to obtain evidence in the control of his adversary in order to further the efficient, economical disposition of cases according to right and justice on the merits.” (Caryl Richards, Inc. v. Superior Court, supra, 188 Cal.App.2d at p. 303.) The Legislature that enacted the 1986 Act was aware of gaps in the preexisting scheme of statutory sanctions, and it was also aware that some courts had invoked their inherent authority to fill those gaps. (1 Hogan & Weber, supra, § 1.3, pp. 1-5 to 1-6; see, e.g., Fairfield, supra, 246 Cal.App.2d 113.) One of the central purposes of the 1986 Act, then, was to give courts the tools necessary to respond to those abuses to ensure that civil discovery can serve its central truth-seeking function. (See 2 Hogan & Weber, supra, § 15.1, p. 15-1 [“The wholesale revision of civil discovery law through the Discovery Act of 1986 was due in good part to the Legislature’s concern about discovery misuses that had developed during the three decades that the original [1957] Act was in operation.”].) at pages 73-74.
The case is significant as it reaffirms the trial court’s inherent power to address discovery abuses and that a party can bring this motion after the matter has been dismissed with prejudice.