BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2494 (Cooley) - Courts: frivolous actions or proceedings.
Amended: August 4, 2014 Policy Vote: Judiciary 7-0
Urgency: No Mandate: No
Hearing Date: August 14, 2014
Consultant: Jolie Onodera
SUSPENSE FILE. AS AMENDED.
Bill Summary: AB 2494 would authorize a trial court to, until
January 1, 2018, award reasonable expenses incurred as a result
of bad-faith actions or tactics that are "frivolous" or solely
intended to cause unnecessary delay by deleting language that
currently limits that authorization to actions or tactics
arising from a complaint filed or proceeding initiated on or
before December 31, 1994. In addition, this bill would:
Require parties who file motions for an award of costs
for bad-faith actions or tactics to transmit to the
California Research Bureau (CRB) a copy of various
documents associated with the motions.
Require the CRB to maintain a public record of all
information transmitted related to each motion for at least
three years, as specified.
On or before January 1, 2017, require the CRB to submit
a report to the Legislature examining the impact and effect
of the changes made by the bill's provisions.
Fiscal Impact (as approved on August 14, 2014):
Unknown, potentially significant costs (General Fund) to
the CRB to collect and maintain the documents as public
records for at least three years. Costs would be dependent
on the volume of documents sent via facsimile or electronic
mail and level of usage of this process.
One-time costs of about $25,000 to $30,000 (General Fund)
for the CRB to prepare and submit the legislative report.
Background: Existing federal law pursuant to the Federal Rule of
Civil Procedure (FRCP), Rule 11, which applies to federal court
proceedings (except for disclosures and discovery requests,
responses, objections, and motions) requires that every
pleading, written motion, and other paper be signed by at least
AB 2494 (Cooley)
Page 1
one attorney of record in the attorney's name, or by a person
personally if the party is unrepresented, as specified. The rule
provides that by presenting to the court a pleading, written
motion, or other paper, an attorney or unrepresented party
certifies that to the best of person's knowledge, information,
and belief, it is not being presented for any improper purpose,
such as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation. If the court determines that
this rule has been violated, the court may impose an appropriate
sanction on any attorney, law firm, or party that violated the
rule or is responsible for the violation, as specified. As
reflected in the Advisory Committee notes to the 1993 amendments
to Rule 11, "the purpose of Rule 11 sanctions is to deter rather
than to compensate."
In 1994, California adopted the requirements set forth in FRCP
Rule 11 and applied those requirements to cases filed on or
after January 1, 1995. For cases filed on or before December 31,
1994, the prior statute (Code of Civil Procedure Section 128.5)
continued to apply and permitted a trial court, after notice and
hearing, to order a party to pay reasonable expenses, including
attorney's fees incurred by another party as a result of
bad-faith actions or tactics that are frivolous or solely
intended to cause unnecessary delay. "Frivolous," for these
purposes, is defined to mean totally and completely without
merit, or for the sole purpose of harassing an opposing party.
This bill would temporarily delete the December 31, 1994,
limitation on a trial court's authority to award reasonable
expenses incurred as a result of bad-faith actions or tactics
that are "frivolous" or solely intended to cause unnecessary
delay.
Proposed Law: This bill would, authorize a trial court to, until
January 1, 2018, award reasonable expenses incurred as a result
of bad-faith actions or tactics that are "frivolous" or solely
intended to cause unnecessary delay by deleting language that
currently limits that authorization to actions or tactics
arising from complaints filed or actions initiated on or before
December 31, 1994. In addition, this bill would:
Require parties who file motions for an award of costs
for bad-faith actions or tactics to transmit to the CRB
copy of various documents associated with the motions and
indicate whether a motion for sanctions was made pursuant
AB 2494 (Cooley)
Page 2
to existing provisions of law under Code of Civil Procedure
� 128.7.
Require the CRB to maintain a public record of all
information transmitted related to each motion for at least
three years, as specified.
On or before January 1, 2017, require the CRB to submit
a report to the Legislature examining the impact and effect
of the changes made by the bill's provisions.
Prior Legislation: AB 3594 (Weggeland) Chapter 1062/1994 adopted
Federal Rule of Civil Procedure 11, relating to sanctions.
Staff Comments: The CRB has indicated one-time costs of $25,000
to $30,000 (General Fund) to meet the legislative reporting
mandate of this bill. In order to accept and maintain the
information transmitted by electronic mail or facsimile as
public records over the effective period of this legislation,
the CRB would incur unknown costs, which would be dependent on
the volume of documents and usage of this process.
Committee amendments delete the requirement for the CRB to
accept data via facsimile.