By Brent N. Mackay, Partner and Kyle S. Case, Associate
Introduction
On September 30, 2023, California Governor Gavin Newsome signed into law Senate Bill (“SB”) No. 235, which, starting on January 1, 2024, enacted important changes to California’s Civil Discovery Act that every litigator practicing in California should know. Specifically, Code of Civil Procedure (“CCP”) Sections 2016.090 and 2023.050 have been updated to modify California’s initial disclosure rules and impose greater penalties on those who violate the discovery process.
This article identifies and explores the recent changes, compares the old with the new, and provides practical insight on the implications the changes could have on California litigators and their clients alike.
Prior Law
As CCP Section 2016.090 was previously drafted, a party to an action was only required to make certain initial disclosures upon order of a court following the stipulation of the parties. Upon such an order, a party’s initial disclosure was required to include the following: (1) the identification of all persons likely to have discoverable information, that the disclosing party may use to support its claims or defenses; (2) a copy or description of all documents that a party may use to support its claims or defenses; and (3) any contract or insurance agreement under which an insurance company or person may be liable to satisfy or indemnify a judgment.
Updated Law
Now, a party’s initial disclosures are not contingent upon a stipulation and order of the court, but rather, are now required to be made upon a demand by any party to the action. Specifically, newly revised CCP Section 2016.090 states, “Within 60 days of a demand by any party to the action, each party that has appeared in the action, including the party that made the demand, shall provide to the other parties an initial disclosure ….”
Additionally, while the category of information required to be disclosed tracks closely with the prior rules, there are subtle, but important differences. For instance, initial disclosures now require the parties to provide:
- the identification of persons likely to have discoverable information that the disclosing party may use to supports its claims or defenses, “or that is relevant to the subject matter of the action;”
- a copy or description of all documents that a party may use to supports its claims or defenses “or that is relevant to the subject matter of the action;” and
- any contractual agreement or insurance policy under which an insurance company or other person may be liable to satisfy or indemnify a judgment.
As revised, the scope of a party’s disclosure of documents and persons is far broader and encompassing than the prior rule and goes beyond just those documents and/or persons that a party may use to support its claims and defenses. Parties must now identify those documents and persons “relevant to the subject matter of the action,” which requires a party to disclose even those documents or witnesses that could be or are detrimental to their case.
Additionally, SB No. 235 also brought new changes to discovery sanctions for attorneys who misuse the discovery process. Specifically, CCP Section 2023.050 now increases the minimum sanction imposed by a court to $1,000 for violations, a four-fold increase from $250. Notably, this increase in the amount of discovery sanctions is now mandatory if a court finds one of the following violations: (1) a party did not respond in good faith to a request for production of documents; (2) a party produced requested documents within seven days before the court was scheduled to hear a motion to compel production of documents; and (3) a party failed to confer in a good faith attempt to resolve any dispute concerning a document request.
The new rule also permits a court, in its discretion, to require an attorney to report to the State Bar when a sanction is imposed against him/her.
Comparison to Federal Rule of Civil Procedure 26
Upon seeing these revisions, many attorneys will likely wonder whether California is heading in the direction of the Federal Rules of Civil Procedure, which has its own set of initial disclosure requirements. While that remains to be seen, it is worthwhile to touch on the key differences between Section 2016.090 and Federal Rule of Civil Procedure 26.
One of the most important differences between Rule 26 and Section 2016.090 is that unlike in Section 2016.090, where initial disclosures are required upon demand of a party, initial disclosures under Rule 26 are always mandatory.
Additionally, some aspects of the new revisions to Section 2016.090 make California’s disclosure requirements more difficult for parties than those requirements found in Rule 26. For instance, as discussed above, California now requires parties to disclose documents “relevant to the subject matter of the action,” while Rule 26 only requires a party to disclose those documents upon which it will rely. As discussed above, this added burden in California requires parties to disclose all relevant documents, including those which may be detrimental to its case, which will require parties to spend more time analyzing relevance of documents than otherwise needed under Rule 26. On the other hand, Rule 26 has an additional burden not found in CCP 2016.090, in that a party is required under Rule 26 to compute its damages, while no such requirement is found in the newly revised Section 2016.090.
Finally, the time limitation between the two rules are drastically different. As touched on above, disclosures in California are due 60 days from demand. Rule 26, on the other hand, requires a party to makes its disclosures within 14 days from a Rule 26 conference.
Ultimately, whether California is leaning towards mirroring its discovery procedures to track with the Federal Rules remains to be seen. But, as it stands now, California’s disclosure requirements contain their own unique requirements that should be followed closely.
Implications
With an understanding of the major changes brought about by SB No. 235, it is important to understand the effects that will arise. While the changes to the subject code sections appear minor on their face, the revisions have important implications and demonstrate a commitment by California law makers to reduce gamesmanship in the discovery phase of litigation.
As California litigators and their clients know all too well, the discovery procedure is often a time consuming and expensive endeavor. The revisions to Section 2016.090 appear to attempt to address this concern. For instance, the revisions require parties to analyze their cases in greater detail prior to filing a lawsuit than perhaps was the case previously given that disclosing information and documentation “relevant to the subject matter of the action” is quite the feat for a party who has not done their due diligence prior to commencing suit. Analyzing facts, documents, and witnesses prior to commencing an action will ensure a party’s ability to comply with SB No. 235’s new revisions.
Additionally, giving parties the ability to demand initial disclosures, as opposed to having to stipulate with their opposing party and wait for a court order, allows a party to control the amount of discovery at the outset of cases and will likely reduce the amount of time attorneys will spend trying to uncover basic facts. Requiring a party to disclose basic facts at the outset of the case will permit attorneys to prepare more narrowed discovery requests later in the litigation, without wasting a round of discovery on merely obtaining basic level information. Such an effect unquestionably results in the benefit of saving time and money.
Finally, the increase in the minimum sanctions amount is certainly the legislature’s attempt to deter those from playing games during the discovery process. Faced with a mandatory minimum $1,000 sanction, and the potential for reporting to the State Bar, attorneys may be more inclined to abide by the discovery rules, which in turn, will save everyone time and money.
Conclusion
In summary, California’s new revisions to its initial disclosure requirements are subtle, but important. California litigators should review these new changes and prepare for a new era of discovery in California aimed at streamlining the exchange of information between parties. Litigators and their clients must also continue to take their discovery obligations seriously to avoid the imposition of California’s new mandatory minimum sanction amount.