California Increases Potential Liability Exposure in Multi-Defendant Cases

The risks of litigating in California just got larger.

California’s Proposition 51 makes defendants jointly liable for all economic damages, but severally liable for noneconomic damages only in proportion to fault. The California Supreme Court yesterday unanimously ruled that intentional tortfeasors cannot use Proposition 51 to reduce their share of noneconomic damages. Resolving a split among intermediate appellate courts, the court ruled that “section 1431.2, subdivision (a), does not authorize a reduction in the liability of intentional tortfeasors for noneconomic damages based on the extent to which the negligence of other actors — including the plaintiffs, any codefendants, injured parties, and nonparties — contributed to the injuries in question.”

This decision will further incentivize plaintiffs to include and pursue intentional tort claims in multi-defendant cases, even when they are really only “add-ons” to a claim grounded in another theory (e.g., fraud claims in strict product liability failure to warn cases). The potential damages against any defendant facing such a claim now include all, not just some, of the noneconomic damages. Noneconomic damages for such matters as pain, suffering, and loss of consortium are often a multiple of the economic award. Compounding the problem: whether such intentional tort claims will be precluded from insurance coverage as a “loss intentionally caused by the insured.” 

In B.B. v. County of Los Angeles, police used excessive force and caused the death of a man they caught assaulting a woman on the street while in a drug-induced haze. The jury found decedent 40% responsible, several deputies negligent and collectively 40% responsible, and Deputy Aviles liable for battery and 20% responsible. The trial court entered a judgment holding Aviles liable for 100% of both economic and non-economic damages. The Court of Appeal reversed, but the Supreme Court reversed the Court of Appeal, effectively reinstating the judgment.

In a typically thoughtful opinion from Justice Chin, the court ruled that the statute’s application to cases decided “under principles of comparative fault” included negligence (and strict product liability), but did not include intentional tortfeasors. The court rejected multiple arguments that this was unfair and inconsistent with other language in Proposition 51, including those made by defendants and in an amicus curiae brief supporting the defense to which yours truly contributed.

We previously reported on this case just after it was argued, see here.

California Asbestos Trials in the Age of COVID-19

By: IAN WILLIAMSON, San Diego

We continue to monitor how various courts in California are handling asbestos trials. The situation is unsurprisingly fluid.  Some courts have started trials and we are closely following those.

San Francisco assigned one case to a trial judge on June 26, 2020. Discussions of how that matter would proceed to trial were ongoing when the case resolved. Generally, remote jury selection was discussed. There were discussions about how to have the jurors in court – socially distanced and having virtually all witnesses appear remotely.

In Alameda County (Oakland), jury selection is ongoing in two cases. These are both living mesothelioma cases with preference trial dates. Both cases had been initially set for trial in March. Jury selection is being conducted remotely – with hardships and questionnaires done electronically and voir dire via Zoom. Both cases appear headed to a situation where the jurors are participating 100% remotely unless they do not have the technical ability to do so. It appears that all witnesses will appear remotely. Defendants have raised significant due process concerns, and in one case petitioned the Court of Appeal for a writ. The Court of Appeal denied the petition as premature, even while acknowledging that serious fairness issues were being raised.

The COVID-19 pandemic continues to disrupt trials as court implement safety procedures.

Los Angeles County does not have any jurors available yet, but has just started re-issuing jury summonses. It is anticipated that all of the first wave of jurors will go to criminal cases. There are several preference cases pending trial that are being continued on a rolling 15-day basis (per the preference statute) until a jury pool is available. The court has urged parties to waive a jury (neither side has agreed) or consider smaller jury panels. The court is setting new preference trial dates in the fall, but noting that those trial dates are “not realistic” and the cases will likely be continued until there are juries available.

Low priority cases – such as wrongful death cases and non-preference personal injury cases – are being continued into 2021 in all three venues. When and how the courts will catch up on those remains to be seen.

All three of California’s primary asbestos courts are utilizing the MSC process to try to facilitate resolution of cases. Los Angeles and Oakland are ordering remote MSCs. San Francisco required counsel to appear in person. None of these courts are requiring client or carrier representatives to travel to appear in person.

Courts with very few cases (Fresno, Sacramento, Solano, etc.) do not seem to be treating asbestos cases any different than any other cases–meaning we do not anticipate trials before 2021.

Federal courts generally remain in operation but jury trials seem to be limited to criminal cases only. We are not aware of any Federal asbestos cases being called to start jury trials since the pandemic shut court operations down.

Visit the Gordon & Rees COVID-19 Hub for ongoing updates.

Will California Eliminate Several Liability for Non-Economic Damages for Some Defendants?

In California, while all defendants are liable to plaintiff for 100% of plaintiff’s economic damages, under “Proposition 51” defendants are liable for non-economic damages only in proportion to fault. The California Supreme Court heard argument this week on whether that includes a defendant liable for an intentional tort.

B.B. v. County of Los Angeles involves suits brought by the widow and surviving children of a man who died after a “prolonged and violent struggle with several deputies” including a chokehold. Several deputies were found negligent, and one found liable for intentional use of excessive force – battery. The case involved whether the intentional tort deputy should be liable for 100% of the non-economic damages or only his 20% share of responsibility.

Plaintiffs argued that the statute applies to an “action … based on principles of comparative fault,” and that while negligence is based on such principles, intentional tort liability is not. Intentional tortfeasors should not be allowed to shift the risk of noncollectibility of any portion of the non-economic damages to plaintiff. The defense argued that the purpose of Proposition 51 is to share responsibility for non-economic damages among all tortfeasors. I co-authored an amicus curiae brief for the defense.

The court posed remarkably few questions to either side, perhaps in part due to the novelty of arguing via remote video connection. That makes it harder to assess which way the court may be leaning.

The court’s decision, due within 90 days, will potentially affect many tort cases, and in particular many toxic tort cases. Plaintiffs routinely sue many defendants in the same case for committing independent acts of wrongdoing that collectively contributed to cause an injury. In product liability and asbestos exposure cases, plaintiffs typically assert claims for negligent and strict liability failure to warn, which they use as the springboard to also assert intentional tort claims for fraud and concealment based on the same evidence concerning a defendant’s failure (decades or even generations ago) to provide information about a product. If the California Supreme Court decides that intentional tort defendants are categorically exempt from the several liability protections of Proposition 51, then we can expect to see even more emphasis by the plaintiffs’ bar to advance intentional tort theories like fraud or battery.

Unique Business Logo Creates Evidentiary Path to Product Identification

A logo can be a first impression akin to the front door of a business. In Hart v. Keenan Properties, Inc., the logo “was the letter “K” drawn to resemble a straight pipe and an angled pipe, enclosed in a circle.” The California Supreme Court decision ruled that this unique business logo can create an evidentiary path for product identification in product liability cases.

The court granted review “to determine whether a company’s name and logo appearing on an invoice can constitute hearsay.” The answer: not in this case. “Under the facts presented, a witness’s observation of the name and logo was circumstantial evidence of identity, not proof of the truth of the matters asserted in the document.”

Plaintiff Frank Hart cut, beveled, and installed pipes for Christeve Corporation on the McKinleyville project from 1976-1977. After Plaintiff developed mesothelioma, he and his wife sued a number of entities who allegedly distributed asbestos-containing pipes to the project. Plaintiffs alleged that Keenan was one such supplier.

Plaintiff’s supervising foreman testified that it was his responsibility to check goods to the items listed on the invoice to ensure they matched upon delivery. He recalled that Keenan pipe was used at the project, because he remembered seeing the name “Keenan” on the invoices. When asked why Keenan sticks out in his mind, he replied, “Just the way the – their K and stuff is all – I don’t know.”

Keenan objected to the foreman’s testimony regarding the invoice arguing it was hearsay and further objecting that Plaintiffs failed to authenticate the document. The trial court overruled Keenan’s objections, primarily on the ground that the evidence was not hearsay but instead circumstantial evidence of identity. The jury awarded judgment against Keenan.

And if you are far too busy to complete all of your day-to-day business tasks then consider using virtual office services as they can take on tasks like call answering and more to free up your time.

Keenan appealed. The Court of Appeal reversed, concluding the foreman’s descriptions of the invoices at issue were hearsay. The California Supreme Court reversed the judgment of the Court of Appeal.

The court ruled that the foreman’s testimony about the invoices was being offered not for the truth of its contents, but instead to establish the link between Keenan and the foreman’s testimony that Keenan delivered pipes to the McKinleyville project. “[I]t is the combination of some characteristic that makes the document identifiable and the independent evidence connecting Keenan to the identifiable document that established the link.”

Other witnesses supported that link. Christeve’s bookkeeper testified that she recalled Keenan’s logo, “the K with a circle around it.” When asked why she remembered the logo she stated, “Because I know that we dealt with them, and [the logo] was unique, and I like it.” This evidence demonstrated that Keenan and Christeve did conduct business together during the relevant time. Keenan’s corporate representative acknowledged that Keenan sent customers invoices that bore Keenan’s name and logo. Thus, the court found that “[i]t was not unreasonable to infer [the foreman] was referring to the K logo acknowledged by Keenan’s representative.” “Taken together, the evidence was relevant to prove the disputed link between Keenan and the pipes, regardless of the content on the invoice.”

Does this mean that testimony about an invoice or other document that was itself lost long ago will always be admitted? Not necessarily. In California, though, defendants will not likely be able to exclude that testimony based on the hearsay rule.

Responding to “No Safe Dose” Revisited: That Is Not What Regulators Thought at the Time

Some time ago we posted on the topic of responding to the inevitable contention from plaintiff counsel that there is “no known safe dose of asbestos” or its frequent companion “every major health agency says there is no known safe dose.” These arguments are repeated as if they support the conclusion that since there was no known safe dose, every health agency always agreed that any dose was UNsafe. One of the thrusts of the earlier post was to point out that while the current scientific thinking might be that a safe dose has not been demonstrated, that was not the thinking of scientists and regulators in past years when exposures were actually occurring. As discussed before, throughout the 1950’s and 1960’s the State of California was stating that it had established a safe dose and it was at a level of 5 million particles per cubic foot as an 8 hour time weighted average over an entire career. We now cite to additional publications that there never was a consensus that any and all doses are unsafe.

Perhaps it should not be surprising, but the source is the United States Public Health Service. In January 1963 the USPHS announced its intent to conduct a large survey of asbestos exposures and hazards in workplaces. While the USPHS acknowledged that hazards associated with asbestos exposures had been known for years, it also noted that “many questions remain unanswered—.” In addition to seeking to answer the question “Are malignancies occupational risks of the worker in the asbestos product industry?,” the USPHS asked: “What are the safe levels of exposures to the various materials that constitute health risks in this industry?” (emphasis added.)

This same study is discussed again in a publication from the USPHS that was presented at an International Congress on Asbestosis in Caen, France in May 1964. The authors are identified as L. Cralley, H. Ayer, P. Enterline, A. Henschel and W. Lainhart (all identified as Chiefs or Assistant Chiefs at the Department of Health, Education, and Welfare at the Public Health Service, Division of Occupational Health). They outline their plans to conduct a broad study at numerous sites to collect and analyze data. “There is a great need for further definitive information on the health effects from exposure to asbestos dusts and fibers and on safe levels of exposure.” (emphasis added.)

This same thinking prevailed in the USPHS for at least several more years. In April 1967, Dr. Cralley circulated a draft of a paper reviewing what had been discussed at a USPHS sponsored meeting in Cincinnati in 1966. The draft paper comments that “Even though asbestos has been in industrial use for well over 50 yrs, much is unknown regarding its health effects and safe levels of exposure.” (emphasis added.) At this time, the prevailing standard was the Threshold Limit Values published by the American Conference of Governmental Industrial Hygienists at 5 million particles per cubic foot as an 8 hour time weighted average over a career. One of the threshold issues for which the attendees at the conference are reported to have sought an answer was “What levels of exposure to the etiologic agents associated with asbestos-related diseases can be regarded as safe.” The paper goes on to state: “This is the prime objective of the research. When information on safe levels becomes available, environmental and other controls case be devised to keep exposures within the recommended limits.”

In 1969 Dr. Cralley, Dr. W. Clark Cooper, Dr. William Lainhart and Dr. Murray Brown published a paper in the Journal of Occupational Medicine. The authors again outline the many issues yet to be understood in regards to the health risks associated with asbestos exposure. Contrary to what plaintiff counsel repeatedly try to persuade jurors, at that time knowledge about asbestos hazards was far from complete and many conclusions argued to be established today were still very unsettled then. This paper recognized that one of the issues to be resolved was “[w]hat levels of exposure to the etiologic agents associated with asbestos-related diseases can be regarded as safe.” (emphasis added.)

Plaintiff counsel want the jurors to believe that since their experts will say that no one has yet proven that there is a “safe” level of exposure to asbestos (as if that could ever be done), that means that every exposure to asbestos is known to be unsafe. And to imply that such has been the accepted thinking for decades. That is manifestly untrue. As the citations above and other evidence demonstrates, during the pertinent time in the 50’s and 60’s when many of the claimed exposures were occurring, representatives of the USPHS and other researchers and scientists felt that they did not have adequate information to answer many questions about hazards from asbestos. They felt that collecting more data would allow them to identify a safe level. They did not claim at that time, nor do competent researchers and scientist today claim, that every exposure is hazardous. The corollary is that companies using asbestos and manufacturing asbestos products were not on notice that every use of asbestos was unsafe. To the contrary, they were being told by the State of California, the USPHS and others that controlling exposures to the existing regulatory limits would be safe.

Bad Bill Becomes Law: Time Limits on Mesothelioma Plaintiff Depositions Enacted in California

California Governor Gavin Newsom has signed Senate Bill 645 into law. This law imposes stringent time limits on asbestos defendants’ deposition examination of a mesothelioma or silicosis plaintiff. (See prior post here.)

SB 645’s passage comes after a summer of highly emotional testimony in the legislature by the proponents of the bill. It was ordered to a third and final reading before the California Assembly in July, after passing quickly through the California Senate in June.

The new law places a 7-hour limitation on defendants’ deposition examination of a mesothelioma plaintiff if a licensed physician provides a declaration attesting both that the plaintiff has mesothelioma, and that there is substantial medical doubt of survival beyond 6 months. Defendants may move the court for an additional 3 hours if more than 10 defendants appear at the deposition, and an additional 7 hours if more than 20 defendants appear at the deposition. However, the court may only grant even these minimal extensions of time upon a finding that the extension is in the interest of fairness, and that the health of the plaintiff is not endangered by the grant of additional time.

SB 645 is even worse than California’s prior law, which allowed for 7 hours of deposition testimony, plus an extension of up to 20 hours of total testimony in the trial court’s discretion. The law also seems to override case management orders in counties with heavy asbestos calendars, such as Alameda and Los Angeles counties, where the case management orders regularly provided up to 20 hours for defendants’ deposition testimony in asbestos cases.

Time Limits on Plaintiff Depositions on Their Way to Becoming Law in California

A bill to unduly limit deposition time is working its way through the California legislature, and likely to pass soon in some form. Senate Bill 645 would limit the deposition of mesothelioma or silicosis plaintiffs to 7 hours. The 7-hour time limit does not include plaintiff’s direct examination or re-direct examination by their counsel. To trigger the 7-hour time limit, the plaintiff must have a doctor declaration showing that the plaintiff has mesothelioma or silicosis and has six months or less to live.

SB 645 has already passed the California Senate and is an active bill in the Assembly. It was amended in the Assembly on July 5, 2019. Amendments to the time limits of SB 645 have been made as follows: A party can seek an order to extend the deposition time limit to 10 hours if there are more than 10 defendants appearing at the deposition. If there are more than 20 defendants appearing at the deposition, a party can seek an order extending the deposition time to 14 hours. This extension of time depends on the number of defendants present at the plaintiff’s deposition, not the number of defendants named in the caption.

SB 645 allows more time for plaintiffs whose health will not be endangered by the grant of additional time. The defense bar has expressed concern that, to avoid the extension of deposition time, plaintiffs will provide doctor declarations saying the plaintiff’s health is at risk, and judge will not extend the time of the deposition.

Given the current climate in Sacramento, SB 645 will likely pass after it is read, with its amendments, for the final time in the Assembly (date not yet set). After SB 645 passes the Assembly, it will go back to the Senate for approval of the amendments before being approved by the Governor. It is likely that SB 645 will become effective by January 2020.

The defense bar has considered potential Constitutional due process arguments against SB 645. It is likely that, at the deposition of a mesothelioma or silicosis plaintiff, some defendant will have no time to ask questions about alternative exposure or claims against their client because the clock ran out. It will take the “perfect test case” to challenge SB 645. Defendants at depositions will need to collaborate and get organized before depos commence, and work together to create a record of due process issues. Defendants will have to push the plaintiff to provide meaningful responses to interrogatories, and point out the lack of information given to each defendant before the deposition.

Survivor (Survival Action): Doe and Gratuitous Care Edition

In the recent decision Williams v. The Pep Boys Manny Moe & Jack of Cal., a California court of appeal addressed four important topics that defendants frequently confront:

  1. How to defeat a plaintiff’s attempt to name defendants late as “Does.”
  2. A not-so-welcome restatement that economic damages include nursing services gratuitously provided by family members.
  3. A welcome ruling that recoverable damages in a survival action are limited to damages incurred before death.
  4. A reminder that a settlement offer to multiple plaintiffs will not qualify for cost-shifting, even if plaintiffs fail to “beat” the offer at trial, unless the offer is apportioned among plaintiffs and is not conditioned on acceptance by all.

1. “Doe” defendants, plaintiff’s knowledge and statute of limitations.

Like most jurisdictions, California allows plaintiffs to amend their complaint to designate a defendant unknown to plaintiff at the time of filing the complaint, usually designated as “Doe.” (Cal. Code Civ. Proc., § 474.) An amendment made pursuant to this section will “relate back,” i.e. be deemed to have been filed at the same time as the original complaint, if made within three years of the original complaint, even if the statute of limitations ran in the interim.

Williams stressed that the Doe defendant procedure is “‘available only when the plaintiff is actually ignorant of the facts establishing a cause of action against the party to be substituted for a Doe.’” In other words, “[i]gnorance of the facts giving rise to a cause of action is the ‘ignorance’ required by section 474, and the pivotal question is ‘did plaintiff know facts’ not ‘did plaintiff know or believe that he had a cause of action based on those facts?’”

In Williams, plaintiffs knew before they filed the original complaint that their father died of mesothelioma, that asbestos was the cause of the mesothelioma, and that the father purchased defendant’s asbestos-containing products. They “knew most of the story.” This was enough that the Court of Appeal affirmed the trial court’s decision to dismiss the wrongful death claims as outside the statute of limitations.

2. Nursing services provided by family members to decedent prior to death are recoverable damages.

Williams reaffirmed that California allows plaintiffs to recover the value of nursing services provided to the injured plaintiff by a family member, even in the absence of an agreement or an expectation of payment.

3. Future home care that would have been provided to a spouse is recoverable up until death, not after.

Under California’s survival law, decedents’ personal representative or successor in interest can recover the decedent’s other pecuniary losses incurred before death. (Cal. Code of Civ. Proc., § 377.34.) Here, plaintiffs sought to recover the value of around the clock nursing care that decedent would have provided to his wife but for his death.

Williams ruled that section 377.34 limited recoverable damages to those incurred prior to death. Plaintiffs relied on Overly v. Ingalls Shipbuilding, Inc. (1999) 74 Cal.App.4th 164, 171, where plaintiffs attempted to recover the value of household services as income post death, even though the dying husband was still alive. The Williams court found Overly inapplicable, because it did not deal with a survival action. Furthermore, the plain language of the statute only allowed for the recovery of penalty and punitive damages incurred after decedent’s death and thus intentionally excluded other categories of damages decedent would have been entitled to had he lived. The Williams court stated that survival action damages are narrowly limited to “the loss or damage that the decedent sustained or incurred before death,” which by definition excludes future damages.

4. Cautions for settlement offers to multiple plaintiffs.

Here, as in many asbestos defense cases, plaintiffs had both a wrongful death and a survival claim. Defendant offered a single unapportioned sum in exchange for dismissal, “contingent upon acceptance by all plaintiffs as it is the intention of defendant to obtain a full and final resolution of all claims asserted by plaintiffs in this matter.” This offer did not qualify for cost-shifting, even though plaintiffs’ recovery was less than the offer amount. (Cal. Code Civ. Proc. § 998; cf. Fed. R. Civ. Proc. 67.)

The offer fell afoul of “the general rule … that a section 998 offer to multiple plaintiffs is valid only if it is expressly apportioned among them and not conditioned on acceptance by all of them.” An exception exists when one or more plaintiffs have a “unity of interest such that there is a single, indivisible injury.” A unity of interest exists for example when spouses suffer injury to community property. There is no such “unity” as between multiple survival and wrongful death claimants.

This does not mean a defendant cannot make such an offer, or that plaintiffs cannot accept one. It does however mean that such an offer will not shift costs to plaintiffs even if they fail to beat it at trial.

Conclusion

The Williams decision is a double-edged sword for defendants. On the one hand, it puts plaintiffs on notice to timely replace “Does” or face statute of limitation issues. On the other, it increases the scope of recoverable damages in survival actions to encompass fees gratuitously provided by family members. It also reminds parties (usually defendants) to carefully draft settlement agreements and appropriately apportion amounts to each cause of action and to each plaintiff without a condition for all to accept. It also shows the proper stance on the application of lost years’ damages, which hopefully shall limit the plaintiffs’ bar’s future attempts in claiming improper damages. So counsel, pay attention to the small facts and don’t cut corner with your settlements. In the famous words of Rodney Lavoie Jr. (survival Boston contestant), “this ain’t a campin’ trip. This is suhvivah!” (at least for your client’s pocket).

“But Everyone Else Did It This Way:” Industry Custom Admitted in California Strict Liability Cases

The California Supreme Court has ruled that industry custom and practice may be admissible in a strict products liability action, “depend[ing] on the purpose for which the evidence is offered.” (Kim v. Toyota Motor Corp.) The decision is a win for product liability defendants. Many trial courts have ruled all industry custom and practice evidence irrelevant as to strict liability, while allowing it in negligence.

Disapproving several prior appellate decisions, the court ruled that such evidence is admissible for the purpose of “the jury’s evaluation of whether the product is as safely designed as it should be, considering the feasibility and cost of alternative designs.” In contrast, “[e]vidence that a manufacturer’s design conforms with industry custom and practice is not relevant, and therefore not admissible, to show that the manufacturer acted reasonably in adopting a challenged design and therefore cannot be held liable.” Thus, it is admissible, but never dispositive.

Mr. Kim was injured when his 2005 pickup rolled over and crashed on the Angeles Crest Highway. Plaintiffs alleged that if the pickup had been equipped with a safety feature that came as standard equipment on SUVs, it would not have rolled over. Toyota introduced evidence that no manufacturers included that feature as standard on pickup trucks. The trial court, Court of Appeal and Supreme Court all approved.

The issue … is not whether the manufacturer complied with a standard of care, as measured by prevailing industry standards, but instead whether there is something ‘wrong’ with a product’s design … because, on balance, the design is not as safe as it should be.

[E]vidence of industry custom and practice sometimes does shed light not just on the reasonableness of the manufacturer’s conduct in designing a product, but on the adequacy of the design itself.

Another description: industry practice “illuminates the relative complexity of design decisions and the trade-offs that are frequently required in the adoption of alternative designs.” The court was persuaded in part by the fact that trade association standards are admissible, and there seemed no logical reason to distinguish those standards from industry custom.

The court was also persuaded in part by the fact that plaintiffs themselves introduced industry custom evidence, such as the evidence that many manufacturers included the safety feature on their SUVs. “[T]he rule is a two-way street.”

Is this the proverbial camel’s nose in the allegorical tent, thus the beginning of the end of the rule against introducing custom and practice in strict liability cases? If no manufacturer of a particular product ever included a warning about a supposed toxin, is that relevant? If all manufacturers of a set of products allowed a trace amount of say benzene because it was so hard to eliminate it 100%, is that admissible in a strict liability case? If all employers operating a certain kind of facility adopted one level of protections against chemical exposure, even though more could almost always at least theoretically be done? The Kim decision arguably allows such evidence, but other courts may limit the effect of the decision.

There are at least two significant limitations to the reach of this decision.

First, it applies only to the risk-benefit strict liability test. Not consumer expectations, which plaintiffs more frequently assert.

Second, it applies to “industry custom and practice,” but not “state of the art.” “By ‘industry custom and practice,’ we refer to the use of the challenged design within the relevant industry—‘what is done’—as opposed to so-called ‘state of the art’ evidence, which concerns ‘what can be done’ under present technological capacity.”

This second limit may benefit defendants. What “can be done” for safety likely includes more than what others in the industry actually do.

The Kim result may be less notable in other jurisdictions: the decision recites it is joining “the majority of states that have permitted the admission of [such] evidence.” It is, however, a major development in California.

Come to Me If You Want to Talk to Me; Plaintiffs Can’t Haul Corporate Representative to Deposition in California

Alameda County has one of the most active asbestos dockets in California, with defendants from around the country. Recently, an Alameda judge ruled that non-resident corporate representatives of a non-California defendant cannot be hauled to California for deposition. This result is consistent with prior appellate authority, but many trial judges have compelled California depositions for non-California corporate representatives (known as “persons most qualified” or PMQs in California parlance and “persons most knowledgeable” or PMKs in most other jurisdictions). So this decision is welcome news for defendants seeking to avoid that expense, inconvenience and leverage to plaintiffs.

This issue is addressed by conflicting statutes. One says that a witness is not “obliged to attend as a witness before any court, judge, justice or any other officer, unless the witness is a resident within the state at the time of service.” (Cal. Code Civ. Proc., § 1989.) Other statutes allow for depositions of “an officer, director, management agent or employee” of a party to be set at locations “within the county where the action is pending” or other California locations, with no restrictions based on the residence of the witness.” (Cal. Code Civ. Proc., § 2025.250, 2025.260.)

In Brock v. Metropolitan Life Insurance, Alameda Judge Steven Kaus ruled that the first statute governs. He refused to order a California deposition for a Rhode Island witness, and instead ordered the deposition to take place within 75 miles of the defendant’s principal office in Rhode Island.

Judge Kaus relied principally on Toyota v. Motor Corporation v. Superior Court (2011) 197 Cal.App.4th 1107. Most importantly, the court of appeal found that the Discovery Act of 1986 eliminated from section 2025.260, the phrase “Notwithstanding section 1989.” “By removing the words authorizing the trial court to override section 1989 the Legislature presumptively intended to withdraw that authority which had previously existed.”

Judge Kaus rejected Plaintiffs’ argument that Toyota did not apply because the deponent in this case was a PMQ, whereas witnesses in Toyota were named individually. “From a policy viewpoint, the differentiation between named corporate employees and PMQs, who, to coin a phrase, are people too, is form over substance.”

Judge Kaus’ decision is supported by an additional case he did not cite, I-Ca Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257 in which the California Court of Appeal also affirmed that California superior courts have no power to compel production of defendant’s nonresident PMQ.

This decision is a win for defendants. If this decision becomes a trend, it will be interesting to see how plaintiff counsel will respond. One possibility is that they will be more strategic in whose PMQ to depose. Another could be a more strategic decision in what venue to file; or at best, the decision to dismiss some defendants whose witnesses, officers or not, reside out of state.