BILL ANALYSIS Ó SB 383 Page 1 SENATE THIRD READING SB 383 (Wieckowski) As Amended September 2, 2015 Majority vote SENATE VOTE: 38-0 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Judiciary |10-0 |Mark Stone, Weber, | | | | |Wagner, Alejo, Chau, | | | | |Chiu, Gallagher, | | | | |Cristina Garcia, | | | | |Maienschein, Thurmond | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |14-2 |Gomez, Bloom, Bonta, |Bigelow, Jones | | | |Calderon, Daly, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Holden, Quirk, Rendon, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | -------------------------------------------------------------------- SB 383 Page 2 SUMMARY: Establishes new civil procedure requirements for filing, amending, and resolving demurrers. Specifically, this bill: 1)Provides that before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections raised in the demurrer. If an amended complaint, cross-complaint, or answer is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a demurrer to the amended pleading. 2)With respect to the meet and confer process, requires the demurring party to identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies. Further requires the party who filed the complaint, cross-complaint, or answer to provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency. 3)Requires the parties to meet and confer at least five days before the date the responsive pleading is due. Provides that if the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party may obtain a 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer. Any further extensions shall be obtained by court order upon a showing of good cause. SB 383 Page 3 4)Requires the demurring party to file and serve with the demurrer a declaration stating either of the following: a) the means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement as to amendment of all challenged portions of the pleading; or b) that opposing counsel failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith. 5)Provides that any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer. 6)Provides that a party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer. 7)Provides that if a demurrer is overruled as to a cause of action and that cause of action is not further amended, the demurring party preserves its right to appeal after final judgment without filing a further demurrer. 8)Provides that if a court sustains a demurrer to one or more causes of action and grants leave to amend, the court may order a conference of the parties before an amended complaint or cross-complaint or a demurrer to an amended complaint or cross-complaint, may be filed. Further provides that if a conference is held, the court shall not preclude a party from filing a demurrer and the time to file a demurrer shall not begin until after the conference has concluded. 9)Provides that, in response to a demurrer and prior to the case being at-issue, a complaint or cross-complaint may be amended no more than three times, absent an offer as to such SB 383 Page 4 additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action; and further, that this three-amendment limit shall not include an amendment made without leave of the court under Code of Civil Procedure (CCP) Section 472, provided it is made before a demurrer is filed to the original complaint or cross-complaint. 10)Clarifies that the court's authority under CCP Section 472a to grant leave to amend a pleading if a demurrer is sustained remains subject to the three-amendment limit described above. 11)Clarifies that nothing in this bill is intended to affect the rights of a party to amend its pleading or respond to an amended pleading after the case has been at-issue, nor intended to affect the rights of a party under CCP Section 430.80 (regarding non-waivable defenses) or appellate review. 12)Permits a party to amend its pleading once without leave of the court at any time before the answer or demurrer is filed, or after a demurrer is filed but before the demurrer is heard if the amended complaint, cross-complaint, or answer is filed and served no later than the date for filing an opposition to the demurrer. Clarifies that, upon stipulation by the parties, a party may amend the complaint, cross-complaint, or answer after the date for filing an opposition to the demurrer. 13)Provides that these procedural requirements do not apply to any civil action in which a party not represented by counsel is incarcerated in a local, state, or federal correctional institution, and do not apply to any proceeding in forcible entry, forcible detainer, or unlawful detainer. SB 383 Page 5 14)Establishes a sunset date of January 1, 2021, for all of the provisions in this bill, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date. FISCAL EFFECT: According to the Assembly Appropriations Committee, insignificant costs to the courts and Judicial Council, possible minor administrative cost savings if the revised procedures result in fewer court hearings. COMMENTS: This bill represents the fruits of extended negotiation between the Consumer Attorneys, California Defense Counsel, and the California Judges Association. Working closely together, the three co-sponsors have produced a bill that seeks to establish a thoughtful update of California's civil procedure law regarding demurrers. Among other things, this bill for the first time requires the parties to meet-and-confer, in person or by telephone, before the demurring party may file a demurrer. It also seeks to establish streamlined procedures and timelines for the court and the parties to follow to resolve demurrers more efficiently. According to the author: Demurrers often present complicated issues involving multiple and sometimes overlapping causes of action. Delays resulting from overburdened courts have affected litigation disproportionally. SB 383 will help courts deal with the overloaded dockets they face in the wake of budget cuts by enabling parties to resolve some of the demurrer objections out of court, and will improve trial and court-related efficiencies by providing procedures and deadlines to streamline the demurrer process so that cases can move efficiently through the judicial system. Meet-and-confer requirement. This bill seeks to establish a SB 383 Page 6 number of new procedural requirements in order to streamline the handling of demurrers. First, this bill creates a mandatory meet-and-confer process prior to hearing a demurrer to allow the parties to consider whether amending the pleading would be appropriate. According to the author, the meet-and-confer is intended to increase judicial economy by requiring parties engaged in litigation to work out issues amongst themselves prior to coming to court in pre-trial stages or trial stages of civil litigation. At the meet-and-confer, the demurring party must specify the portions of the pleading to which it intends to demur, and provide legal support as to why the cause of action is legally insufficient. The bill requires the party who filed the complaint or cross-complaint to also provide legal support for their position that the pleading is legally sufficient, or how the pleading can be corrected to cure any insufficiencies. In short, this bill establishes a process that seeks to ensure both parties provide support for their arguments and discuss the merits of the demurrer prior to going to court. With respect to the timing of this new process, this bill requires the meet-and-confer to take place at least five days before the responsive pleading is due. If the meet-and-confer cannot take place five days prior to the due date for the responsive pleading, the parties may obtain a 30-day extension (without an additional hearing to grant the extension) if they file a declaration stating that a good faith effort to meet and confer was made. In addition, this bill requires the demurring party to serve and file with the demurrer a declaration stating the means by which the demurring party met and conferred with the opposing party, and that the parties did not reach an agreement as to amendment of all challenged portions of the pleading. Lastly, this bill provides that even if the court determines that the meet-and-confer process was insufficient, that determination is not grounds to overrule or sustain the demurrer. Changes to rules for amending pleadings and repeated demurring. SB 383 Page 7 This bill also seeks to limit the time when a plaintiff may amend a pleading without leave of court. Specifically, this bill allows a party to amend its pleading once before the answer or demurrer is filed or after a demurrer is filed but before the demurrer is heard if the amended complaint is filed and served no later than the date for filing an opposition to the demurrer. According to proponents, this provision is intended to prevent attorneys from waiting until right before a court hearing on a demurrer, then filing an amended complaint, thereby mooting out the hearing on the demurrer and wasting both court and attorney resources. California Defense Counsel contends that judges should not be "working up" demurrers and preparing tentative rulings, only to have complaints amended at the last minute, creating inefficiency and prolonging the case. Similarly, this bill would prohibit a demurring party from demurring again to the same cause of action, unless the cause of action itself is amended. Specifically, when demurring to a pleading amended after a demurrer has been ruled on, this bill would not allow a party to demur to causes of action or defenses that were not amended, and would not allow a party to raise any issue which could have been raised earlier. If a demurrer is overruled and the pleading is not amended, the demurring party preserves the right to appeal after trial. This is intended to prevent parties from bringing demurrers on the same issues in an attempt to delay the case. Recent amendments establish a limit of three times that a complaint or cross-complaint may be amended in response to a demurrer and prior to the case being at-issue, absent an offer as to such additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action. Proponents contend this three-amendment limit will help prevent delay caused by unnecessary amendments and promote greater efficiency. As amended, this bill also clarifies that the three-amendment limit shall not include an amendment made without leave of the court under CCP Section 472, provided it is SB 383 Page 8 made before a demurrer is filed to the original complaint or cross-complaint, and that the court's authority under CCP Section 472a to grant leave to amend a pleading if a demurrer is sustained is subject to this same three-amendment limit. Enabling courts to streamline the demurrer process. This bill provides the court with a number of tools to help streamline the demurrer process. For example, this bill allows a court to continue the demurrer and order the parties to meet and confer under the procedures established by this bill. When a court sustains a demurrer with leave to amend the cause of action at issue, the court may order a conference with the parties before the complaint may be amended or another demurrer may be filed. In addition, after the first hearing at which the court rules on the merits of the demurrer, this bill allows the court to order a conference with the parties before the complaint may be amended or another demurrer be filed. Finally, under this bill the court may order a conference on its own motion at any time, and any party may request the court to order a conference. Exemptions and sunset date. Recent amendments to this bill exempt certain types of civil actions from these new procedural requirements, namely 1) any civil action in which a party is unrepresented by counsel and is incarcerated in jail or prison, and 2) any proceeding for forcible entry, forcible detainer, or unlawful detainer. In the case of the latter, the exemption is appropriate because these proceedings to recover possession of real property are summary in nature and under existing law are already subject to expedited court deadlines which irreconcilably conflict with the timelines proposed by this bill. Finally, in order to allow legislative evaluation of these proposed new changes, recent amendments establish a sunset date of January 1, 2021 for all amendments made by this bill, rather than just some of them, and make corresponding technical changes to restore now-existing law after that sunset date, unless the sunset date is deleted or extended by the Legislature in the future. SB 383 Page 9 Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334 FN: 0001986