BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1197|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   THIRD READING 


          Bill No:  AB 1197
          Author:   Bonilla (D)
          Amended:  7/15/15 in Senate
          Vote:     21  

           SENATE JUDICIARY COMMITTEE:  5-0, 7/7/15
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NO VOTE RECORDED:  Moorlach, Anderson

           ASSEMBLY FLOOR:  78-0, 4/23/15 - See last page for vote

           SUBJECT:   Deposition notices


          SOURCE:    Deposition Reporters Association of California

          DIGEST:   This bill requires that a deposing party include in  
          its deposition notice to the person it seeks to depose:  (1) a  
          statement disclosing the existence of a contract, if any is  
          known to the noticing party, for any service beyond the noticed  
          deposition, between the noticing party or a third party who is  
          financing all or part of the action and either the deposition  
          officer or the entity providing the services of the deposition  
          officer; and (2) a statement disclosing that the party noticing  
          the deposition, or a third party financing all or part of the  
          action, directed his or her attorney to use a particular officer  
          or entity to provide services for the deposition, if applicable.  
           

          ANALYSIS: 
          
          Existing law: 









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          1)Requires, generally, that a deposition be conducted under the  
            supervision of an officer who is authorized to administer an  
            oath and is subject to all of the following requirements,  
            among others:

                 The officer must not be financially interested in the  
               action and shall not be a relative or employee of any  
               attorney of the parties, or of any of the parties;

                 Services and products offered or provided by the  
               deposition officer or the entity providing the services of  
               the deposition officer to any party or to any party's  
               attorney or third party who is financing all or part of the  
               action must be offered to all parties or their attorneys  
               attending the deposition, at the same time; and

                 The deposition officer or the entity providing the  
               services of the deposition officer must not do either of  
               the following: (1) provide to any party or any party's  
               attorney or third party who is financing all or part of the  
               action any service or product consisting of the deposition  
               officer's notations or comments regarding the demeanor of  
               any witness, attorney, or party present at the deposition;  
               or (2) collect any personal identifying information about  
               the witness as a service or product to be provided to any  
               party or third party who is financing all or part of the  
               action.  

          1)Provides that any objection to the qualifications of the  
            deposition officer is waived unless made before the deposition  
            begins or as soon thereafter as the ground for that objection  
            becomes known or could be discovered by reasonable diligence. 

          2)Provides that violation of the above provisions by any person  
            may result in a civil penalty of up to $5,000 imposed by a  
            court of competent jurisdiction. 

          3)Requires that a party desiring to take the oral deposition of  
            any person give notice in writing to that person, stating  
            certain information, such as:

                 The address where the deposition will be taken;

                 The date of the deposition, selected pursuant to  







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               specified law, and the time it will commence;

                 The name of each deponent, and the address and telephone  
               number, if known, of any deponent who is not a party to the  
               action or, if the name of the deponent is not known, a  
               general description sufficient to identify the person or  
               particular class to which the person belongs;

                 The specification with reasonable particularity of any  
               materials or category of materials, including any  
               electronically stored information, to be produced by the  
               deponent; and

                 Any intention by the party noticing the deposition to  
               record the testimony by audio or video technology, in  
               addition to recording the testimony by the stenographic  
               method as required under existing law, and any intention to  
               record the testimony by stenographic method through the  
               instant visual display of the testimony. 

          1)Provides that any party served with a deposition notice that  
            does not comply with specified deposition notice requirements  
            waives any error or irregularity unless that party promptly  
            serves a written objection specifying that error or  
            irregularity at least three calendar days prior to the date  
            for which the deposition is scheduled, on the party seeking to  
            take the deposition and any other attorney or party on whom  
            the deposition notice was served.  Existing law provides that  
            if an objection is made three calendar days before the  
            deposition date, the objecting party must make personal  
            service of that objection, pursuant to specified law, on the  
            party who gave notice of the deposition.  

          2)Provides that any deposition taken after the service of a  
            written objection shall not be used against the objecting  
            party under specified law, if the party did not attend the  
            deposition and if the court determines that the objection was  
            a valid one. 

          3)Provides, in addition to serving this written objection, a  
            party must also move for an order staying the taking of the  
            deposition and quashing the deposition notice. This motion  
            must be accompanied by a meet and confer declaration, under  
            specified law, and the taking of the deposition is stayed  







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            pending the determination of this motion. 

          4)Requires the court to impose a monetary sanction, under  
            specified law, against any party, person, or attorney who  
            unsuccessfully makes or opposes a motion to quash a deposition  
            notice, unless it finds that the one subject to the sanction  
            acted with substantial justification or that other  
            circumstances make the imposition of the sanction unjust. 

          This bill requires that the following also be included in the  
          deposition notice: 

          1)A statement disclosing the existence of a contract, if any is  
            known to the noticing party, between the noticing party or a  
            third party who is financing all or part of the action and  
            either of the following for any service beyond the noticed  
            deposition: (a) the deposition officer; or (b) the entity  
            providing the services of the deposition officer.

          2)A statement disclosing that the party noticing the deposition,  
            or a third party financing all or part of the action, directed  
            his or her attorney to use a particular officer or entity to  
            provide services for the deposition, if applicable.

          Background
          
          Court reporters, also known as "shorthand reporters," not only  
          transcribe courtroom proceedings, but also serve as judicial  
          officers overseeing a deposition.  (See Civ. Code Sec.  
          2025.320.)  Because they serve to provide true and accurate  
          records of trial proceedings (such as witness testimony, or  
          court orders), as well as depositions conducted by parties in  
          the pursuit or defense of their cases, the impartiality of these  
          officers of the court must be maintained, irrespective of  
          whether they are providing these services inside, or outside, of  
          the courtroom.  Of particular importance for this bill, is the  
          issue of impartiality of deposition reporters.  In this regard,  
          California law prohibits a deposition officer from being  
          financially interested in the action and or serving as a  
          deposition officer if he or she is a relative or employee of any  
          attorney of the parties, or of any of the parties.  California  
          law further requires that, if the deposition officer or the  
          entity providing the services of the deposition officer offers  
          or provides any services and products to any party or to any  







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          party's attorney or third party who is financing all or part of  
          the action, the deposition officer or entity also must offer the  
          same to all parties or their attorneys attending the deposition,  
          at the same time.  Violations of these laws by any person can  
          result in a civil penalty of up to $5,000.  (Id.)  

          More generally, California regulations also require that every  
          person under the jurisdiction of the Court Reporters Board who  
          holds a license or certificate, or business that renders  
          professional services, namely shorthand reporting services,  
          within the meaning of the Moscone-Knox Professional Corporation  
          Act, complies with certain professional standards of practice.   
          These include, for example:  (1) not entering into, arranging,  
          or participating in a relationship that compromises the  
          impartiality of the certified shorthand reporter, including, but  
          not limited to, a relationship in which compensation for  
          reporting services is based upon the outcome of the proceeding;  
          and (2) neither directly nor indirectly giving or receiving any  
          gift, incentive, reward, or anything of value to or from any  
          person or entity associated with a proceeding being reported,  
          other than the receipt of compensation for reporting services,  
          except where the items that do not exceed $100 (in the aggregate  
          for any combination of items given and/or received) per calendar  
          year or where the certified shorthand reporter reasonably  
          expects to be reimbursed from the Transcript Reimbursement Fund  
          for services provided free of charge or otherwise provided the  
          services for an "indigent person" as specified.  (16 C.C.R. Sec.  
          2475(b)(6)-(8).)

          This bill seeks to now require additional disclosures in a  
          deposing party's notice of deposition to a person it seeks to  
          depose, based upon concerns relating to ongoing financial  
          relationships, beyond a particular deposition, between the  
          deposing party and the person or entity providing deposition  
          reporting services in that particular deposition.  Currently, a  
          deposing party must disclose certain information relating to the  
          deposition to the person that it seeks to depose in a notice of  
          deposition.  This information, for example, includes the time  
          and place of the deposition, as well as what, if any, materials  
          the deponent needs to bring or produce at the deposition.  If  
          the party fails to make the required disclosures, the person  
          being deposed may object to the sufficiency of that notice  
          pursuant to the procedures provided in the Code of Civil  
          Procedure, which requires that the objecting party promptly  







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          serve any written objections on the party seeking to take the  
          deposition and any other attorney or party on whom the  
          deposition notice was served, specifying the error or  
          irregularity, at least three calendar days prior to the date for  
          which the deposition is scheduled, as specified.  

          Under these provisions, any party, person, or attorney who  
          unsuccessfully makes or opposes a motion to quash a deposition  
          notice faces the imposition of specified monetary sanctions,  
          unless the court finds that the individual subject to the  
          sanction acted with substantial justification or that other  
          circumstances make the imposition of the sanction unjust.  (See  
          Code Civ. Proc. Secs. 2025.220, 2025.410.)  

          This bill requires a deposing party to also provide in its  
          deposition notice to the deponent:  (1) a statement disclosing  
          the existence of a contract, if any is known to the noticing  
          party, for any service beyond the noticed deposition, between  
          the noticing party or a third party who is financing all or part  
          of the action and either the deposition officer or the entity  
          providing the services of the deposition officer; and (2) a  
          statement disclosing that the party noticing the deposition, or  
          a third party financing all or part of the action, directed his  
          or her attorney to use a particular officer or entity to provide  
          services for the deposition, if applicable. 

          Comments
          
          As stated by the author: 

            There are numerous potential problems that arise under the  
            existence of ongoing contracts for deposition services.   
            First, is the potential for (or the perception of) court  
            reporter impartiality that occurs when ongoing contracts  
            effectively make the court reporting firm the "in-house"  
            provider of services for certain companies. Second, ongoing  
            contracts increase the possibility of cost shifting onto the  
            cost of deposition copies. Long-term contracts are often  
            associated with cheap rates for service. Unfortunately, one  
            tactic used to recoup the money lost under the contracts is to  
            increase the cost of copies of the deposition notice, a  
            practice known as cost shifting. Opposing counsel has no  
            choice but to use the contracted firm to order copies while at  
            the same time unaware of the ongoing contract which could lead  







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            to cost shifting.  AB 1197 would correct this issue by making  
            all parties aware of the contract and thus more sensitive to  
            price discrepancies over time.

            [Specifically,] AB 1197 requires a disclosure statement to be  
            included on the deposition notice that increases the awareness  
            of all parties to a deposition of the existence of ongoing  
            contracts for services.  AB 1197 requires the disclosure of  
            ongoing contracts (both oral and written) to be included in  
            the notice of deposition that exist between the noticing party  
            or a third party financing the deposition and either of the  
            following: 1) the deposition officer or 2) the entity  
            providing the services of the deposition officer.  However, in  
            certain cases lawyers may be unaware of the existence of an  
            ongoing contract. Still, these lawyers would be directed by  
            the noticing party or a third party financing the deposition  
            to use a particular deposition officer or entity to provide  
            deposition services.  In these cases, a disclosure statement  
            must also be included in the deposition notice that the lawyer  
            was directed to use a particular officer or entity providing  
            deposition services.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified7/15/15)


          Deposition Reporters Association of California (source)
          California Official Court Reporters Association
          Consumer Attorneys of California
          Consumer Watchdog
          Court Reporters Board of California


          OPPOSITION:   (Verified7/15/15)


          Esquire Deposition Services, LLC
          Magna Legal Services
          U.S. Legal Support, Inc.
          Veritext Corp








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          ARGUMENTS IN SUPPORT:     In support of the bill, Consumer  
          Watchdog writes that "[t]he integrity of the judicial system  
          depends on the public's perception that the process is fair.   
          Court reporters are supposed to be impartial officers of the  
          court, but some non licensee-owned court reporting corporations  
          are entering into ongoing, one-sided financial relationships  
          with parties to litigation who have no ethical obligations.   
          These corporations are also often aiding one side in litigation  
          by providing litigation support services in the very same  
          proceeding in which they are supposedly providing impartial  
          court reporting services.  Worse, the other parties to the  
          litigation are often charged more for transcript copies to make  
          up the difference for the discount that the contracting party is  
          given on transcript costs.     [ . . . ]  AB 1197 will simply  
          require that the attorney preparing the notice of deposition  
          include in the notice one additional line disclosing: (1)  
          whether there exists a contract between his or her party-client  
          and the reporting firm being hired to transcribe the deposition;  
          or (2) if that is unknown, whether the lawyer's party-client has  
          instructed the lawyer to use a particular reporting firm.  Upon  
          disclosure, the bill affords the other parties the opportunity  
          to inquire and/or to object, invoking current law's rules and  
          process for objections to depositions." 


          Also in support, the Court Reporters Board of California writes,  
          "the passage of this bill would shine a bright light on  
          contracts that may exist behind the scenes, helping to keep bias  
          out of the deposition room. Given the stakes, consumers of court  
          reporting services deserve to know the details of contracting  
          parties to make better, informed decisions on case management.  
          This bill does not restrain trade; it does, however, help guard  
          against actual bias and the appearance thereof."   


          ARGUMENTS IN OPPOSITION:     A coalition of deposition services  
          firms (Esquire Deposition Services, LLC; Magna Legal Services;  
          U.S. Legal Support, Inc.; and Veritext Corp.) writes in  
          opposition to this bill, questioning both the need for the  
          legislation and the practical issues the coalition believes are  
          raised by the legislation. Specifically, coalition notes that  
          their companies "retain the most qualified licensed court  
          reporters to transcribe depositions, and there has been no  







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          credible suggestion that any partiality has resulted in  
          inaccurate transcripts.  To the contrary, court reporters enjoy  
          a sterling reputation for impartiality and accuracy, truly one  
          of the most admired participants in the litigation  
          environment[.]" 


          ASSEMBLY FLOOR:  78-0, 4/23/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, 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, Harper, 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,  
            Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,  
            Waldron, Weber, Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Campos, Salas

          Prepared by:Ronak Daylami / JUD. / (916) 651-4113
          7/15/15 16:39:01


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