BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2494
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 2494 (Cooley)
          As Amended August 19, 2014
          Majority vote 
           
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          |ASSEMBLY:  |78-0 |(May 28, 2014)  |SENATE: |35-0 |(August 25,    |
          |           |     |                |        |     |2014)          |
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           Original Committee Reference:    JUD.  

           SUMMARY  :  Provides an additional tool for sanctions of bad faith  
          actions and tactics.  Specifically,  this bill  :  

          1)Provides that a trial court may order a party, the party's  
            attorney, or both to pay the reasonable expenses, including  
            attorney's fees, incurred by another party as a result of  
            bad-faith actions or tactics that are frivolous or solely  
            intended to cause unnecessary delay, as defined. 

          2)Provides that expenses pursuant to this bill shall not be  
            imposed except on notice contained in a party's moving or  
            responding papers or, on the court's own motion, after notice  
            and opportunity to be heard.  An order imposing expenses shall  
            be in writing and shall recite in detail the conduct or  
            circumstances justifying the order.

          3)Provides that in addition to any award pursuant to this bill  
            for conduct described in of Code of Civil Procedure (CCP)  
            Section 128.5(a), the court may assess punitive damages  
            against the plaintiff on a determination by the court that the  
            plaintiff's action was an action maintained by a person  
            convicted of a felony against the person's victim, or the  
            victim's heirs, relatives, estate, or personal representative,  
            for injuries arising from the acts for which the person was  
            convicted of a felony, and that the plaintiff is guilty of  
            fraud, oppression, or malice in maintaining the action.

          4)Provides that any sanction imposed pursuant to this bill shall  
            be imposed consistently with the standards, conditions and  
            procedures set forth in subdivisions (c), (d), and (h) of CCP  
            Section 128.7.

          5)Provides that the liability imposed by this bill is in  








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            addition to any other liability imposed by law for acts or  
            omissions within the purview of this bill.

          6)Specifies that the foregoing shall not apply to disclosures  
            and discovery requests, responses, objections, and motions.

          7)Provides that a party who files a motion pursuant to CCP  
            Section 128.5 shall, promptly upon filing, transmit to the  
            California Research Bureau of the California State Library  
            (CRB), by email, a copy of the endorsed, filed caption page of  
            the motion or opposition, a copy of any related notice of  
            appeal or petition for a writ, and a conformed copy of any  
            order issued pursuant to this section, including any order  
            granting or denying the motion, as well as a notice of any  
            corresponding motion under CCP Section 128.7.

          8)Provides that this bill shall remain in effect only until  
            January 1, 2018, and as of that date is repealed, unless a  
            later enacted statute, that is enacted before January 1, 2018,  
            deletes or extends that date.

          9)Provides that on or before January 1, 2017, the CRB shall  
            submit a report to the Legislature examining the impact and  
            effect of this act, as specified and shall maintain a public  
            record of information transmitted pursuant to it for at least  
            three years, or until this act is repealed, whichever occurs  
            first and may store the information on microfilm or other  
            appropriate electronic media.

           The Senate amendments  add the CRB notification requirement,  
          shift the required report to the Legislature from the Judicial  
          Council to the CRB, shorten the date for the report, and delete  
          the condition that the bill be effective upon receipt of private  
          funding.  
           
           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee:


          1)Unknown, potentially significant costs (General Fund) to the  
            CRB to collect and maintain the documents as public records  
            for at least three years.  Costs would be dependent on the  
            volume of documents sent via facsimile or electronic mail and  
            level of usage of this process. 









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          2)One-time costs of about $25,000 to $30,000 (General Fund) for  
            the CRB to prepare and submit the legislative report.

           COMMENTS  :  The author explains the reason for the bill as  
          follows:

               Existing law until 1995 provided that litigants  
               subject to bad-faith and unmeritorious tactics could  
               seek sanctions in the form of attorney's fees (CCP  
               128.5).  Many thought the bar to use this provision  
               was too high because the statute had been interpreted  
               to require both an objective standard that the act was  
               without merit and a subjective bad-faith motive, which  
               was difficult to prove.  Thus, in 1995 CCP 128.7 was  
               enacted.  This also brought California into alignment  
               with federal law (FRCP's [Federal Rule of Civil  
               Procedure] Rule 11) and imposed a lower threshold for  
               sanctions against an attorney by only requiring the  
               attorney's conduct be objectively unreasonable.   
               Unfortunately, it stopped the applicability of CCP  
               128.5 as applied to bad-faith tactics outside the  
               scope of filing frivolous pleadings. 

               Unfortunately, bad-faith disobedience and tactics by  
               either side are needlessly employed in litigation.  It  
               can result in clogging our courts and wasting precious  
               judicial resources.  Courts routinely give litigants  
               the benefit of the doubt, but they have lost an  
               important tool used to ensure bad faith actions that  
               can materially harm the other party or the fairness of  
               a trial are discouraged.  Under existing law a court  
               can compel obedience with a court order, but  
               financially the most a court can do if a party  
               violates one is find them in contempt with penalty of  
               up to $1500.  Moreover, if a case ends in a mistrial  
               or in the release of protected documents it is  
               difficult to undo the waste of judicial resources or  
               harm done to the litigant who was not at fault.

          Similarly, supporters note that the effect of the bill would be  
          to allow for sanctions for violation of a court order.  There is  
          no opposition on file.

          This measure makes clear that it is intended to be read in  








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          harmony with the salutary cognate provisions of CCP Section  
          128.7.


           Analysis Prepared by  :    Kevin G. Baker / JUD. / (916) 319-2334 


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