BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 555| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 555 Author: Alejo (D) Amended: 7/2/15 in Senate Vote: 21 SENATE JUDICIARY COMMITTEE: 6-1, 7/14/15 AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski NOES: Anderson SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 79-0, 4/13/15 (Consent) - See last page for vote SUBJECT: Civil actions SOURCE: California Defense Counsel Consumer Attorneys of California DIGEST: This bill modifies the existing Expedited Jury Trials Act (hereinafter, "EJT Act" or "Act") to extend the number of hours for each side to present their case and to repeal the Act's January 1, 2016 sunset date. Separately, this bill makes expedited jury trials (EJTs) mandatory for limited civil cases, subject to the right of parties to opt out in certain circumstances, as specified. This bill includes various provisions governing mandatory EJTs, such as provision allowing for a right of appeal, as specified. ANALYSIS: Existing law: 1) Allows cases in which the demand, exclusive of interest, or AB 555 Page 2 the value of the property in controversy amounts to $25,000 or less to be tried as a limited civil case with informal trial requirements. 2) Allows, generally, each party to a civil action a limit of six peremptory challenges of the jury panel. 3) Establishes the EJT Act and defines various terms. 4) Provides that all parties agreeing to participate in an EJT and, if represented, their counsel, must sign a proposed consent order granting an EJT, which must contain, among other things, the parties' agreement to all of the following: That all parties waive all rights to appeal and move for directed verdict or make any post-trial motions, as defined, except as specified; That each side shall have up to three hours in which to present its case; That the jury shall be composed of eight or fewer jurors with no alternates; That each side shall be limited to three peremptory challenges, unless the court permits an additional challenge in specified cases; and That the trial and pretrial matters will proceed under the Act's provisions limiting the ability to appeal, time to present the case, number of jurors, and number of peremptory challenges, and, unless the parties expressly agree otherwise in the proposed consent order, under all other provisions in this Act and implementing rules of court. 1) Provides that the verdict in an EJT case is binding, subject to any written high/low agreement or other stipulations concerning the amount of the award agreed upon by the parties. Provides that a vote of six of the eight jurors is required for a verdict, unless the parties stipulate otherwise. AB 555 Page 3 2) Provides that, except where court approval is required under specified law, the agreement to participate in the EJT process is binding upon the parties, unless: (a) all parties stipulate to end the agreement to participate; or (b) the court, on its own motion or at the request of a party by noticed motion, finds that good cause exists for the action not to proceed under the rules of the Act. 3) Provides that by agreeing to participate in the EJT process, the parties agree to waive any motions for directed verdict, motions to set aside the verdict or any judgment rendered by the jury, or motions for a new trial on the basis of inadequate or excessive damages. 4) Provides that by agreeing to participate in the EJT process, the parties agree to waive the right to bring post-trial motions or to appeal from the determination of the matter, except as specified. 5) Requires court approval for the use of an EJT and any high/low agreements or other stipulations for an EJT involving either: (a) a self-represented litigant; or (b) a minor, an incompetent person, or a person for whom a conservator has been appointed. 6) Requires the court to issue the consent order as proposed by the parties, unless it finds good cause why the action should not proceed though the EJT process, in which case the court must deny the proposed consent order in its entirety. 7) Specifies that juries in EJT cases shall be composed of eight jurors, unless the parties have agreed to fewer and that no alternates shall be selected. 8) Requires the court to allow each side three peremptory challenges. If there are more than two parties in a case and more than two sides, as determined by the court under specified law, the parties may request one additional challenge each, which the court is to grant as the interests of justice may require. AB 555 Page 4 9) Provides that nothing in this chapter is intended to preclude a jury from deliberating as long as needed. 10)Provides that the rules of evidence apply in EJTs, unless the parties stipulate otherwise, and that the right to issue subpoenas and notices to appear to secure the attendance of witnesses or the production of documents at trial shall be in accordance with the Code of Civil Procedure. Prohibits any stipulation by the parties to use relaxed rules of evidence from being construed to eliminate, or in any way affect, the right of a witness or party to invoke any applicable privilege or other law protecting confidentiality. 11)Provides that all statutes and rules governing costs and attorney's fees shall apply in EJTs, unless the parties agree otherwise in the consent order. 12)Requires the Judicial Council to adopt rules and forms to establish uniform procedures implementing the provisions of this chapter, as specified. 13)Provides that the Act will sunset on January 1, 2016. This bill: 1) Extends the time that each party has to present its case in a voluntary EJT to five hours, including time to complete voir dire. 2) Requires the Judicial Council, on or before July 1, 2016, to update rules and forms and establish uniform procedures implementing the procedures of the EJT Act, as specified. 3) Removes the Act's January 1, 2016 sunset date, thereby extending these provisions indefinitely. 4) Provides, separately, that an action or special proceeding treated as a limited civil case under existing law, as specified, must be conducted as an EJT pursuant to specified mandatory EJT provisions. 5) Permits either party to opt out of the mandatory EJT AB 555 Page 5 procedures if: Punitive damages are sought; Damages in excess of insurance policy limits are sought; A party's insurer is providing a legal defense subject to a reservation of rights; The case involves a claim reportable to a governmental entity; The case involves a claim of moral turpitude that may affect an individual's professional licensing; The case involves claims of intentional conduct; or The judge finds good cause exists for the action not to proceed under the mandatory EJT rules. 1) Includes various provisions for mandatory EJTs that are identical to existing law for voluntary EJTs. These identical provisions generally relate to: Definitions of the terms "high/low" agreement and "post-trial motions;" The cap on the time each party has to complete voir dire and present its case; The number of jurors and peremptory challenges; The ability of the jury to deliberate as long as needed and the number of jurors required for a verdict; The application of the rules of evidence; The application of the Code of Civil Procedure for purposes of subpoenas, notices to appear, and the production of documents at trial; and AB 555 Page 6 The application of all statutes and rules governing costs and attorney's fees. 1) Includes various provisions for mandatory EJTs that differ from existing law for voluntary EJTs. Specifically, this bill: Provides that a judgment in a limited civil case conducted as an EJT may be appealed , as specified; Provides that its procedures and the implementing rules of court shall apply to EJTs conducted in limited civil cases, unless the parties agree otherwise, as specified, and the court so orders. Provides, further, that any matters not expressly addressed by this bill, in the implementing rules of court, or in an agreement authorized by this bill and the implementing rules, are governed by applicable statutes and rules governing civil actions; Allows the parties to agree to modify the rules and procedures specified in this bill and the implementing rules of court, subject to the court's approval; Provides that the verdict in a limited civil case following an EJT shall be appealable, as specified, and subject to any written high/low agreement or other stipulations by the parties concerning the amount of the award; and Requires the Judicial Council, on or before July 1, 2016, to adopt rules and forms to establish uniform procedures implementing this bill's mandatory EJT provisions, as specified. Background In 2010, following the proposal of a Judicial Council working group, the Legislature enacted AB 2284 (Evans, Chapter 764, Statutes of 2010) to establish the Expedited Jury Trials Act in California. Sponsored by the California Defense Counsel and Consumer Attorneys of California, AB 2284 generally set forth AB 555 Page 7 the procedures for the state's expedited civil jury trial process and required the Judicial Council to adopt rules and forms, as specified, to establish uniform procedures implementing the provisions of that process. Under the resulting streamlined process, an EJT, as compared to a regular jury trial, is shorter in length (at three hours total, separate from voir dire), smaller in jury size (with eight as opposed to 12 jurors), and has a faster jury selection process (allowing for only three peremptory challenges per side). Perhaps most importantly, there is no right to an appeal, thereby resulting in finality of the judgment earlier than in many regular jury trials. The Act is currently set to sunset on January 1, 2016. This bill, sponsored by the California Defense Counsel and the Consumer Attorneys of California, now seeks to repeal the sunset date placed on the voluntary EJT Act in order to extend the Act indefinitely, while also extending the time for each side to present their case from three hours to five hours, including voir dire. Separately, this bill makes EJTs mandatory for civil cases of under $25,000 or less, except as specified, and sets for rules and procedures, accordingly. Comments As stated by the author: The expedited jury trial (EJT) option was enacted in 2011 to help courts deal with overloaded dockets that were the result of major budget cuts and courtroom closures. EJTs are ideal for cases involving smaller dollar amounts that do not involve catastrophic injuries, cases that often affect lower-income workers. These cases are prone to being lost in the system and leaving vulnerable Californians without compensation. The EJT statute is set to sunset January 1, 2016. Despite the need to resolve these cases and support for the innovations in EJTs, parties have not been utilizing the EJT system. Although the cause for the lack of use is unknown, it is possible that the timeframes allowed for presenting cases is too short, that voir dire is too limited, and that the lack of appeal rights discourages parties, their counsel and insurers from agreeing to participate. AB 555 Page 8 AB 555 removes the sunset for the current expedited jury trial statutes, provides some procedural fixes to address the problems above, and creates a new chapter requiring limited civil cases to be conducted as expedited jury trials. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified8/17/15) California Defense Counsel (co-source) Consumer Attorneys of California (co-source) California Association of Joint Powers Authorities California Chapters of the American Board of Trial Advocates OPPOSITION: (Verified8/17/15) American Insurance Association American Council of Life Insurers Association of California Insurance Companies Association of California Life and Health Insurance Companies Civil Justice Association of California Pacific Association of Domestic Insurance Companies Personal Insurance Federation of California National Association of Mutual Insurance Companies ARGUMENTS IN SUPPORT: Co-sponsor Consumer Attorneys of California writes that: This bill removes the sunset for the current expedited jury trial statutes and provides some procedural fixes. For example, while both parties are allowed three hours to present their case, judges in different jurisdictions interpret this AB 555 Page 9 time requirement differently. Some judges allow EJTs to be held in multiple days, while others do not. Some judges do not include voir dire in this time frame, while others require jury selection and presentation to be complete on the same day. AB 555 allows each party 5 hours to present their case and complete voir dire. This provides parties with ample time to present their case and allows them [to] use their time as they see fit, divided amongst jury selection and case presentation. Second, in order to provide cases with smaller dollar amounts their day in court, AB 555 adds a new statute creating a Limited Jurisdiction Expedited Jury Trial Act for all limited jurisdiction cases under $25,000. Under this Act the EJT system will be mandatory for limited jurisdiction cases with a series of opt out exceptions. AB 555 also reinstates the right to appeal for limited jurisdiction cases to their respective Superior Court Appellate Division. AB 555 improves the EJT system, which provides resolution of cases while saving time, expense and court resources. Also in support, co-sponsor California Defense Counsel adds: Despite the pressing need for efficiencies in our civil trial system, and despite the consensus support for the innovations in EJTs, utilization of the model has not been as robust as hoped. There are varying theories as to the cause of this underutilization. It is possible that the timeframes allowed for presenting cases is too short, that voir dire is too limited, and that the lack of appeal rights discourages parties, their counsel and insurers from agreeing to participate. We believe that it is time to act more aggressively to achieve the efficiencies in expedited jury trials. To that end, AB 555 proposes to make the EJT model mandatory for the first AB 555 Page 10 time, but only for a very limited range of cases and with carefully crafted exemptions for certain types of cases where EJT may be inappropriate. [ . . . ] To address perceived disincentives in the current law, the bill replaces the current per-side time limit to present cases of three hours, exclusive of very limited time for voir dire of jurors, with a five-hour per side limit, inclusive of voir dire. Because EJT would now be mandatory in limited cases and circumstances, AB 555 also provides for a right to appeal to the appellate division of superior courts. Working with our colleagues in the plaintiff's bar, we believe that AB 555 has been carefully constructed to move towards the efficiency promises of expedited jury trials, but with the protections that plaintiffs, defendants and insurers deserve. Given the compelling need [to] utilize extremely limited civil trial resources as efficiently as possible, we believe that a slightly bolder approach is now appropriate. ARGUMENTS IN OPPOSITION: The Personal Insurance Federation of California, Association of California Insurance Companies, Pacific Association of Domestic Insurance Companies, National Association of Mutual Insurance Companies and the American Insurance Association take an oppose unless amended position on this bill, writing that they are most concerned that "the bill now mandates expedited jury trails for limited civil actions ($25,000 or less), even though certain cases may be too complex for mandatory expedited jury trials. The current law was supported by a variety of stakeholders due to its voluntary nature." The coalition writes that if this bill is to continue to impose mandatory EJTs on limited civil actions, they will "strong concerns regarding the lack of flexibility in the program" and request that, at minimum, the following amendments be made to this bill: (1) add a sunset provision to allow for determination of whether such a program is suitable; (2) include within the opt-out provision allowing for good cause language that would "include as 'good cause' a party's ability to show that the party needs more than five hours to effectively AB 555 Page 11 prosecute or defend the action, unless the parties are able to stipulate to more time;" and (3) increase peremptory challenges from three to four." The coalition also rights that they have additional (unspecified) revisions to discuss with the author. ASSEMBLY FLOOR: 79-0, 4/13/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Harper Prepared by:Ronak Daylami / JUD. / (916) 651-4113 8/18/15 17:18:16 **** END ****