BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        AB 555|
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                                   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.  









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          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  







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                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  







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             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; 







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                   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: 







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                   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  







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          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)








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          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. 








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          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  







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            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


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