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: 8/26/15 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 renames the existing Expedited Jury Trials Act (hereinafter "EJT Act" or "Act") as the Voluntary EJT Act and modifies the Act to extend the number of hours for each side to present their case and to repeal the January 1, 2016 sunset date. This bill also establishes the Mandatory EJT Act to make 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. Senate Floor Amendments of 8/26/15 make technical corrections, including a correction to an internal cross reference. AB 555 Page 2 Senate Floor Amendments of 8/24/15 (1) expand the list of circumstances under which either party may opt out of a mandatory EJT to include where: (a) a case has been reclassified as unlimited, as specified; or (b) the complaint contains a demand for attorney's fees, except as specified; (2) clarify what constitutes "good cause" for a judge to allow the parties to opt out of an otherwise mandatory EJT; (3) delete the definition of "post-trial motion;" (4) increase the number of peremptory challenges from three to four; (5) increase the number of jurors to allow for an alternate; (6) add both a delayed enactment date of July 1, 2016 and a three year sunset to the mandatory EJT provisions of the bill; and (7) make other technical and clarifying changes. ANALYSIS: Existing law: 1) Establishes the EJT Act, with a January 1, 2016 sunset. 2) 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 AB 555 Page 3 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. 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) 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. 5) 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. 6) 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. 7) 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 AB 555 Page 4 accordance with the Code of Civil Procedure. 8) 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. 9) Requires the Judicial Council to adopt rules and forms to establish uniform procedures implementing the provisions of this chapter, as specified. 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) Renames the Act as the Voluntary EJT Act and removes the Act's January 1, 2016 sunset date, thereby extending these provisions indefinitely. 4) Establishes the Mandatory EJT Act to require that an action or special proceeding treated as a limited civil case under existing law be conducted as a mandatory EJT, as specified. 5) Permits either party to opt out of the mandatory EJT 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; AB 555 Page 5 The case involves claims of intentional conduct; The case has been reclassified as unlimited pursuant to specified law; The complaint contains a demand for attorney's fees, unless those fees are sought pursuant to Civil Code Section 1717 (allowing for reasonable attorney's fees in an action on a contract, where the contract specifically provides for the award of attorney's fees and costs when incurred to enforce that contract); or The judge finds good cause exists for the action not to proceed under the mandatory EJT rules. Good cause includes, but is not limited to, a showing that a party needs more than five hours to present or defend the action and that the parties have been unable to stipulate to additional time. 1) Includes various provisions for mandatory EJTs that are identical to existing law for voluntary EJTs. These identical provisions generally relate to: The definition of the term "high/low" agreement; The cap on the time each party has to present its case, including voir dire; 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 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, these provisions: AB 555 Page 6 Allow for an alternate juror for a total of eight jurors and one alternate; Allow for four peremptory challenges; Provides that a judgment in a limited civil case conducted as an EJT may be appealed , as specified; Provide 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. Provide, 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; Allow 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; Provide 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 Require the Judicial Council, on or before July 1, 2016, to establish uniform procedures implementing the Mandatory EJT Acts, as specified. 1) Includes a July 1, 2016 enactment date and a July 1, 2019 sunset date for the Mandatory EJT Act provisions. 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 the procedures for the state's expedited civil jury trial process and required the Judicial Council to adopt rules and AB 555 Page 7 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. . . . AB 555 removes the sunset for the current expedited jury trial statutes, provides some procedural fixes [], 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: (Verified8/26/15) AB 555 Page 8 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: (Verified8/26/15) American Council of Life Insurers Association of California Life and Health 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 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 Page 9 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 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. [ . . . ] 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 Association of California Life and Health Insurance Companies and the American Council of Life Insurers write in opposition: Most insurance companies, like most individuals, would prefer to avoid Jury trials for a number of reasons. If insurers must go to trial, it is usually not be choice so there is usually not much benefit to having expedited rules versus a more deliberative process. As the cost of mandatory expedited trials under $25,000 is high, it can often cost more than what it at issue. Most companies would prefer a reasonable AB 555 Page 10 arbitration process, per what is allowed under California law and the contract. If a case goes before a jury, we do not believe there should be a limitation as to what procedures are available and what inquiries can be made-including time on voir dire, number of jurors and any appeal rights. The award value can be quickly agreed to by both parties in court. 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 8/28/15 8:44:47 **** END ****