Friday, December 7, 2018
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CCP §128.5, When Resurrected in 2014, Incorporated ‘Safe Harbor’ Proviso
Fourth District’s Div. One Backtracks on Its Earlier View in Light Of Legislative Clarification and Persuasive Contrary Opinion
By a MetNews Staff Writer
When Code of Civil Procedure §128.5 was resuscitated in 2014, it incorporated the safe harbor provision of §128.7, Div. One of the Fourth District Court of Appeal held yesterday, repudiating its contrary 2016 opinion.
The change of mind, Justice William Dato explained, is based on a clarifying amendment last year and the persuasive force of a Jan. 31 opinion by this district’s Div. Seven. Dato’s opinion reverses a sanction slightly in excess of $30,000 imposed pursuant to §128.5—prior to the clarifying amendment—based on the party seeking the sanction having failed to observe the safe harbor provision in §128.7.
Sec. 128.5 was enacted in 1981 in response to the California Supreme Court’s 1978 holding in Bauguess v. Paine that trial courts have no inherent power to impose monetary sanctions for bad faith litigation actions or tactics. The new statute provided that authority.
Application Restricted
The statute was amended in 1994 to limit its application to cases filed on or before Dec. 31, 1994, and §128.7 was enacted which applied to cases filed on or after Jan. 1, 1995. Patterned after a federal statute, it contained a “safe harbor” provision (then 30 days, now 21 days) under which a sanction may be avoided by withdrawing or correcting “the challenged paper, claim, defense, contention, allegation, or denial.”
Sec. 128.5 was revitalized in 2014 by removing the restriction of it to pre-1995 cases. Among the changes was the addition of ¶7, reading:
“(f) Any sanctions imposed pursuant to this section shall be imposed consistently with the standards, conditions, and procedures set forth in subdivisions (c), (d), and (h) of Section 128.7.”
The Fourth District Div. One in 2016 declared in San Diegans for Open Government v. City of San Diego, an opinion penned by Justice Alex C. McDonald (now deceased), that “a party filing a sanctions motion under section 128.5 does not need to comply with section 128.7, subdivision (c)(1) (the safe harbor waiting period)….”
Dato’s Opinion
Yesterday’s opinion, in CPF Vaseo Associates, LLC. v. Gray, 2018 S.O.S. 5796, declares:
“While a panel of this court previously determined that no such safe harbor applied to a sanctions motion like the one here, the Legislature’s subsequent clarifying amendment of the section and the contrary opinion of another court convince us we must now reach a different conclusion.”
He noted that §128.5 was amended as of Aug, 1, 2017, to “clarify the legislative intent,” at least in part in response to the decision in San Diegans for Open Government.
“With the benefit of the clarified Legislative intent expressed in the amended statute, Division Seven of the Second Appellate District recently reached a different conclusion” from that set forth in San Diegans for Open Government, he noted, pointing to Nutrition Distribution, LLC v. Southern SARMS, Inc.
Perluss’s View
There, Presiding Justice Dennis M. Perluss wrote:
“As reflected in the plain language and legislative history of former subdivision (f), and confirmed by the August 2017 amendments to that provision, a 21-day waiting period applies to a motion for sanctions under section 128.5 that, as here, is directed to allegedly improper actions or tactics that can be withdrawn or appropriately corrected.”
He recounted:
“In a bill analysis prepared for the Assembly Committee on Judiciary for an April 29, 2014 hearing, the proposed addition of subdivision (f), together with several other changes, were identified as ‘[a]uthor’s [a]mendments’ to ‘clarify the intent of the bill and address opposition concerns.’…The bill analysis explained, ‘As proposed to be amended, this measure makes clear that it is intended to be read in harmony with the salutary cognate provisions of section 128.7.’…The analysis concluded by stating that, as proposed to be amended, there was no known opposition to the measure.”
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