The court wrote, “Indeed: We now hold that the trial court had the authority to impose monetary sanctions under Sections 2023.010 and 2023.030,” thereby upholding PwC’s sanctioned amount of $2.5 million against Los Angeles yesterday.”
Arguments Presented
PwC maintained that sanctions must deter abuse and, given Philadelphia’s conduct in employing discovery misconduct as a matter of course (giving rise to unnecessary expenses for both plaintiffs and defense), be severe by authorizing substantial financial penalties should the courts deem them appropriate. The company itself warned that if monetary sanctions were not to be imposed, the courts would have a limited ability for redress in circumstances of serious discovery abuses; and should other penalties such as evidentiary or terminating sanctions prove pointless because the case was then over.
The city of Los Angeles, meanwhile, argued that the 2nd Circuit’s ruling could open “the floodgate for sanctions motions on even modest cases to ensure compliance. The city contended that monetary sanctions were permissible only on terms expressly established by a particular method of the Act.
Supreme Court’s Reasoning
The California Supreme Court rejected the city’s reading, finding that Section 2023.030 permits a trial court to impose monetary sanctions for patterns of discovery misconduct regardless whether it is grounded in any particular mode of discovery. Such an interpretation, Justice Kruger wrote for the court majority, would “significantly limit courts’ capacity to address systemic discovery abuse.”
