Friday, November 23, 2018
Court of Appeal:
By a MetNews Staff Writer
A Los Angeles Superior Court judge erred in declining on March 26 of this year to terminate, under the mandatory dismissal statute, a putative class action against Warner Bros. that was filed Jan. 29, 2013, the Court of Appeal for this district has held, rejecting the judge’s reasoning that a 43-day stay he issued in early 2013 tolled the five-year period for bringing the case to trial.
“Alternately,” Justice Elizabeth A. Grimes of Div. Eight said in an opinion filed Nov. 14 and certified for publication on Tuesday, even if the stay had elongated the period for bringing the case to trial, it was a “manifest abuse of discretion” for the trial court to rush the case along to avoid the five-year bar, to the point of holding a class-certification hearing on the day of trial.
In finding the stay ineffective for tolling purposes, Grimes said it only partially frozen activity in the case.
She cited the California Supreme Court’s 2016 decision in Gaines v. Fidelity National Title Ins. Co. which says that a tolling period is created only by a “a complete stay of the prosecution of the action,” and the high court’s 2011 decision in Bruns v. E-Commerce Exchange, Inc. providing for tolling while “all the proceedings in an action are stayed.” Both decisions, Grimes noted, say that tolling exists where the stay will “stop the prosecution of the action altogether.”
The opinion directs the issuance of a writ of mandate ordering dismissal of the action brought by Larco Productions, Inc.
A Feb. 15, 2013 order issued by Los Angeles Superior Court Judge Elihu M. Berle, relating to a similar case involving Paramount Studios—and applied in other cases including that against Warner Brothers following coordination—says:
“To facilitate the management of this complex case through the development of orderly schedules for briefing and hearings on procedural and substantive challenges to the complaint, discovery, and other issues, pending further order of this Court, and except for service of the summons and complaint and as otherwise provided in this Initial Status Conference Order, these proceedings are stayed in their entirety. This stay shall preclude the filing of any responsive pleadings, including any answer, demurrer, motion to strike, or motions challenging the jurisdiction of the Court. However, any defendant may file a Notice of Appearance for purposes of identification of counsel and preparation of a service list.”
The order adds:
“This stay shall not preclude the parties from continuing to informally exchange documents that may assist the parties in their initial evaluation of the issues presented in this case; however, it shall stay all outstanding discovery requests. [¶] Nothing herein stays the time for filing an affidavit of prejudice pursuant to Code of Civil Procedure Section 170.6.”
Counsel were ordered to meet and confer with respect to 17 matters and to set forth, in a joint report, matters in controversy.
“In this case, the question is whether an order that specifically stays ‘any responsive pleadings’ and ‘outstanding discovery requests’—but requires the parties to do many other things during the same period—is a ‘complete stay’ that ‘stop[s] the prosecution of the action altogether.’ Our answer, informed by the principles stated in Bruns and Gaines, is ‘no.’ ”
The jurist explained:
“We find it impossible to conclude that an order requiring the parties to engage in significant litigation-related activities can nevertheless be considered to have stopped prosecution of the case altogether….[T]he parties met and conferred on March 20, 2013; agreed to the exchange of various documents…; prepared the joint report discussing numerous topics; and submitted the report to the court on April 8, 2013. These are significant litigation activities that occurred while other litigation activities (responsive pleadings and discovery) were stayed.”
“The stay of responsive pleadings and formal discovery during this time effectively facilitates the parties’ focus on case management issues, including multiple issues concerning how discovery is to be conducted. Plainly, this is a step—an important step—in the action. Plaintiffs have offered us no basis to conclude otherwise.”
Berle’s Haste Questioned
Despite resolving the appeal by finding that the mandatory dismissal statute, Code of Civil Procedure §583.310 applied in the circumstance, Grimes went on to observe that even if it didn’t, Berle went overboard in expediting the proceeding.
It was on March 2 of this year that Warner Bros. moved to dismiss the case, proclaiming that the five-year deadline set forth in §583.310 expired that day. It took into account the 32-day interval between he death of the named class representative and installment of a substitute, a tolling factor which was not in controversy.
Berle, in denying the motion, relied not only on his 43-day stay, but also on that factor, reckoning the cut-off date to be April 16. He set both the trial and the class-certification hearing for April 10.
Grimes said that “[w]ell-settled principles of law” militate against resolving merits of a putative class action case prior to class certification and that the five-year bar should not be averted where there is not enough time for class members to exercise their options. These principles would be rendered “a nullity,” in the factual context presented, she wrote, by “[s]etting a trial to begin one week before expiration of the five-year statute.”
She said Berle’s action in doing so was “impermissible.”
Allegations of Complaint
The putative class action accused the Warner Brothers of miscalculating home video profits for motion pictures. The plaintiffs, various Hollywood creatives, claimed the defendant had used an improper metric to cheat them out of royalties.
The lawsuit, filed in January 2013, was initially led by Stuntman, Inc., a company associated with the late Hal Needham, a prolific Hollywood stuntman active in the 1950s to 1970s who later transitioned to acting and directing.
Needham died shortly after the case was filed; screenwriter Michael Elias took over the role of named plaintiff.
Other plaintiffs filed similar suits against four other studios around the same time and the cases were related in March 2013.
The case is Warner Bros. Entertainment, Inc. v. Superior Court, B289109.
Steven A. Marenberg, Josh B. Gordon and Andrew J. Strabone of the Los Angeles office of Irell & Manella were attorneys for Warner Brothers.
Representing Larco were Paul R. Kiesel, Jeffrey A. Koncius and Nicole Ramirezof the Beverly Hills firm of Kiesel Law; Raymond P. Boucher, Shehnaz M. Bhujwala, Maria L. Weitz of the Woodland Hills firm of Boucher LLP; and Neville L. Johnson, Douglas L. Johnson and James T. Ryan of Johnson & Johnson, located in Beverly Hills.
Copyright 2018, Metropolitan News Company