Friday, September 22, 2000
Page 6
PERSPECTIVES
(Column)
Sanctions: How They Evolved, Legislation That's Needed
By ROGER M. GRACE
The concept of monetary sanctions emerged in the 1950s as a judicial reform aimed at creating disincentives to attorneys and parties imposing on the courts' resources through dilatory tactics and tomfoolery. Effectuation of the reform was tied, clumsily, to courts' contempt powers as well as their inherent powers to control proceedings.
Contempt, carrying as it does the prospect of jailing as well as a stigma, was too potent a remedy to be used, reasonably, in dealing with minor deviations from rules. Yet, before the advent of sanctions, judges had that remedy available, and no other.
Some transgressions were shrugged off by jurists not wishing to use a tommy-gun to kill a gnat. In other instances, trifling misconduct resulted in jailings. In Lyons v. Superior Court (1955) 43 Cal.2d 755, for example, the California Supreme Court upheld a 5-day jail sentence for an attorney who showed up in court 45 minutes late following the noon recess. He explained he had fallen asleep in his office across the street and didn't awaken when his answering service phoned, as he had arranged, to rouse him.
An early sanction provision was Rules for the Superior Courts, rule 8.9, enacted by the Judicial Council in 1956, becoming effective Jan. 1, 1957. It provided:
"Any failure of an attorney to prepare for, appear at, or participate in, a pre-trial conference, unless good cause is shown for any such failure, is an unlawful interference with the proceedings of the court; and in addition the court may impose costs, actual expenses, counsel fees, or any or all thereof, arising therefrom."
The first part of the rule, declaring the failure to be "an unlawful interference with the proceedings of the court," was a short-hand way of saying it could be punished as a contempt. Code of Civil Procedure Sec. 1209(a)(8) rendered then, as it does now, "[a]ny... unlawful interference with the process or proceedings of a court" a contempt of court. Such an offense was punishable, under Sec. 1218, by imprisonment for up to five days, a fine not exceeding $500 (it's now $1,000), or both. However, the portion of the rule authorizing "costs, actual expenses, counsel fees" was not grounded on a statute. The rule envisioned exacting money from one party and giving it to the other party by way of recompense.
Validity of the first part of Rule 8.9 was rapidly determined. On April 15, 1957, the Court of Appeal, in Cantillon v. Superior Court (1957) 150 Cal.App.2d 184, held at 188-89: "Rule 8.9 delineates certain omissions by an attorney as constituting an unlawful interference with the proceedings of the court in a pre-trial conference and does not attempt to define any new or distinct act of contempt and, in our opinion, is not an encroachment upon the legislative authority to enact substantive law, which conclusion answers petitioner's...contention that rule 8.9 attempts to trench upon a field of law already preempted by the Legislature." The case dealt with a $100 fine that had been imposed. The validity of the provision for monetary sanctions payable to the opposing party was not addressed. Resolution of that issue would not come for 40 years.
The Legislature in 1957 enacted a discovery sanction, providing in Code of Civil Procedure Sec. 2034(d) that a court granting a motion to compel a party to respond to an interrogatory "may order that party or his attorney to pay to the moving party the reasonable expenses in making such motion, including reasonable attorney's fees." But it would not be until 24 years later that the lawmakers would enact a sanction statute broadly addressing litigation conduct outside of the area of discovery.
In ensuing years, at least two cases—Fairfield v. Superior Court (1966) 246 Cal.App.2d 113, 120 and Santandrea v. Siltec Corp. (1976) 56 Cal.App.3d 525, 529—upheld monetary sanctions on the basis of courts' inherent powers.
Then came Bauguess v. Paine (1978) 22 Cal.3d 626. The high court held that inherent powers are not that powerful; monetary sanctions must rest on legislative authority. It did not view a power to impose monetary sanctions as being encompassed in the contempt power; rather, it observed at 638: "The power advocated by respondents is potentially more sweeping in scope than even the power of contempt."
Thus, the state of the law was that absent authorizing legislation, a court could not impose monetary sanctions—but it could use contempt powers.
This reminds me of a time I was in the hospital with kidney stones. The pain from the stones had subsided, but I had a headache, and asked for an aspirin. It seems the nurse was not allowed to give me an aspirin because it hadn't been prescribed, so she gave me an injection of morphine, the approved medication for pain from kidney stones. Morphine for a simple headache did seem like overkill.
So is a contempt adjudication where there has been a relatively insignificant wrong move. Contempt, under Code of Civil Procedure Sec. 1209, is quasi-criminal in nature. (It's also punishable as a misdemeanor under Penal Code Sec. 166.) Contempt has been aptly denominated "a drastic remedy which should be used only when necessary to maintain law and order." Board of Supervisors v. Superior Court (1995) 33 Cal.App.4th 1724, 1742.
The need for legislation permitting the courts to impose monetary sanctions was clear. One logical legislative response to Bauguess would have been to amend Code of Civil Procedure sections 1209 and 1218 to provide for the alternative of imposing monetary sanctions for violations of court orders and other unlawful interferences with the proceedings of a court.
That wasn't the path that was chosen. Instead, a sanction statute was enacted in 1981 and fitted right behind Sec. 128, which codifies inherent powers. Sec. 128.5 opened by proclaiming: "Every trial court shall have the power to order a party or the party's attorney, or both, to pay any reasonable expenses, including attorney's fees, incurred by another party as a result of tactics or actions not based on good faith which are frivolous or which cause unnecessary delay."
By then, Rule 8.9 had become California Rules of Court, rule 217. It now applied to parties, as well as attorneys, and spelled out, more clearly than before, that sanctions could be ordered that are payable to the opposing party. In light of Bauguess, the rule permitting monetary sanctions in favor of the opposing party for failing to cooperate in connection with pre-trial conferences was invalid from its inception, given the lack of legislative authorization. Rule 217 became unimportant, however, with the enactment of Sec. 128.5, since refusal to cooperate at such conference was clearly among the bad-faith, delay-causing conduct the statute encompassed.
The 1982 Legislature enacted two more sanction statutes. Code of Civil Procedure Sec. 177.5 rendered violations of court orders sanctionable, with the sanctions, in an amount not to exceed $1,500, to be paid to the county. Sec. 575.2 authorized superior courts to provide in their local rules that violations of the rules would give rise to a sanction payable to the opposing party.
Defying the wisdom behind the old saw "If it ain't broke, don't fix it," the Legislature in the next decade embarked upon some unfortunate tampering with the statutory scheme. Sec. 128.5 became restricted to cases filed "on or before December 31, 1994." Sec. 128.7 was put into place, scheduled to disintegrate Jan. 1, 1999, when Sec. 128.6—a reincarnation of Sec. 128.5—would spring into existence. The sunset date for Sec. 128.7 was later extended to Jan. 1, 2003. Sec. 128.7, patterned after a federal rule, does not apply to all blameworthy litigation conduct, merely to faulty papers that are filed. It's a virtually useless statute, providing for a "safe harbor"; if the offending party withdraws or corrects the paper in issue within the 30 days, no sanction is permitted. So, if a hearing is set on a frivolous motion on 21 days' notice, the hearing will be held prior to the expiration of the 30-day period, and it is then impossible to withdraw or correct the papers. No sanction.
Meanwhile, what was enacted as Rule 8.9 in 1956, and later became Rule 217, evolved into Rule 227 in 1985. It's a broad rule, purporting to authorize sanctions in favor of both opposing parties and the county.
Under Cantillon, the Judicial Council may properly declare, as it has in Rule 227, that a violation of a state rule, a local rule, or a court order, or a failure to participate in good faith at a mandatory conference constitutes "an unlawful interference with the proceedings of the court" (hence, upon a proper showing, a contempt). However, as I discussed in a column on Wednesday, Bauguess does not permit the Judicial Council to specify conduct as giving rise to monetary sanctions, either in favor of the county or parties, in the absence of legislative authorization.
No statute says that sanctions may be imposed for violations of state rules of court. Sec. 575.2 grants superior courts authority to render violations of their local rules sanctionable, but only sanctions payable to parties, not to the county. On the other hand, Sec. 177.5 authorizes sanctions payable to the county for violations of court orders—but neither it nor any other statute permits awards to parties on that basis.
No statute renders refusal to participate in good faith at a conference sanctionable, although a local rule to that effect would be supported by Sec. 575.2. For example, San Francisco's Rule 5.0 renders it sanctionable to fail "to prepare for, appear at or participate in good faith in a settlement conference." Los Angeles has no such rule.
Court of Appeal Justice Joanne C. Parrilli explained in Trans-Action Commercial Investors, Ltd. v. Firmaterr, Inc. (1997) 60 Cal.App.4th 352 why a $50,000 sanction awarded pursuant to Rule 227 in favor of the plaintiffs based on repeated violations by the defendant's lawyer of in limine orders, resulting in a mistrial, could not be enforced: namely, no statute authorized such a sanction.
By way of consolation, Parrilli noted at 371: "The judge in this case did not lack statutory authority to curb [the defense lawyer's] trial tactics. Contempt is the primary and long-established remedy available to judges for punishing those who violate court orders."
However, a contempt adjudication would not have benefitted the plaintiffs in that case, whose unremunerated out-of-pocket losses exceeded $50,000. Justice demands that parties aggrieved by an opponent's deliberate violation of court orders or state rules or the obligation to participate in good faith at conferences be compensated. It is unimaginable that any such conduct would not have given rise to a sanction under Sec. 128.5. The remedy is in the works. Unless again stalled, Sec. 128.6 will come to life on Jan. 1, 2003, reinstating the former sanction provisions.
A simple approach to fully effectuating the goals behind Rule 227 would be the amendment of Secs. 1209 and 1218, or the addition of a new code section, providing that disobedience of a court order, punishable as a contempt under Sec. 1209(a)(5), or "[a]ny other unlawful interference with the process or proceedings of a court" proscribed by Sec, 1209(a)(5), may be treated as a sanctionable offense, rather than as a contempt. Sanctions would be payable to aggrieved parties in such amount as would reasonably compensate them for their costs and expenses, including attorneys' fees, or to the state to compensate it for impositions on its resources.
Any compensation based on a drain on court resources should go to the state, taking into account that there's now state funding of trial courts. The county only provides facilities and representation of indigents.
Sec.
177.5, which authorizes sanctions in favor of the county, should be amended.
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