BILL ANALYSIS �
AB 2494
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2494 (Cooley) - As Amended: May 7, 2014
Policy Committee:
JudiciaryVote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, until January 1, 2018, provides an additional means
to seek sanctions for attorney bad-faith actions, using
provisions (Code of Civil Procedure (CCP) Section 128.5) that
currently apply only to complaints file before December 31,
1994. Specifically, this bill:
1)Provides that a trial court may order a party, the party's
attorney, or both to pay the reasonable expenses, including
attorney's fees, incurred by another party as a result of
bad-faith actions or tactics, as defined, that are frivolous
or solely intended to cause unnecessary delay.
2)Provides that in addition to any award pursuant to this
section for conduct described in subdivision (a), the court
may assess punitive damages against the plaintiff on a
determination by the court that the plaintiff's action was an
action maintained by a person convicted of a felony against
the person's victim, or the victim's heirs, relatives, estate,
or personal representative, for injuries arising from the acts
for which the person was convicted of a felony, and that the
plaintiff is guilty of fraud, oppression, or malice in
maintaining the action.
3)Specifies that the foregoing shall not apply to disclosures
and discovery requests, responses, objections, and motions.
4)Provides that any sanction imposed pursuant to this section
shall be imposed consistently with the standards, conditions
and procedures set forth in subdivisions (c), (d) and (h) of
CCP Section 128.7.
AB 2494
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5)Requires the Judicial Council, by June 30, 2018, to report to
the Legislature on the impact and effect of this bill,
including the number of motions made under both section 128.5
and existing Section 128.7, the number of motions under both
sections resulting in an award of sanctions, the nature and
amount of any sanctions awarded under both sections, and
whether or not the enactment of Section 128.5 has had a
demonstrable effect on reducing the frequency and severity of
bad faith actions or tactics that would not be subject to
sanction under Section 128.7.
FISCAL EFFECT
The Judicial Council indicates that it currently has no
automated means to capture the information required for the
Legislative report, therefore establishing a means to collect
and summarize such data, absent any technological capability,
would likely cost at least in the hundreds of thousands of
dollars over four years.
COMMENTS
1)Background . According to the author, "Existing law until 1995
provided that litigants subject to bad-faith and unmeritorious
tactics could seek sanctions in the form of attorney's fees
(CCP 128.5). Many thought the bar to use this provision was
too high because the statute had been interpreted to require
both an objective standard that the act was without merit and
a subjective bad-faith motive, which was difficult to prove.
Thus, in 1995 CCP 128.7 was enacted. This also brought
California into alignment with federal law and imposed a lower
threshold for sanctions against an attorney by only requiring
the attorney's conduct be objectively unreasonable.
Unfortunately, it stopped the applicability of Section 128.5
as applied to bad-faith tactics outside the scope of filing
frivolous pleadings.
2)Purpose . AB 2494 revives Sectioin 128.5 and the ability for
courts to make attorney fee's awards for bad-faith tactics
intended soley to harass an opposing party. It applies the
same procedures and conditions for sanctions made under
Section 128.7. The bill sunsets after four years.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081
AB 2494
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