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Ordinarily, courts cannot, in the first instance, impose evidentiary or terminating sanctions for an initial failure to respond to an interrogatory, request for admission, or inspection demands; courts can only first impose monetary sanctions, then issue an order requiring the recipient of the request to respond. Only then can courts proceed gradually, Poon replied.

One may not immediately go to the most extreme sanction possible unless monetary sanctions are imposed first to try to induce compliance, he added.

Wednesday's oral argument stems from Los Angeles County Judge Elihu M. Berle's decision in October 2020 ordering the city to pay $2.5 million in sanctions for "serious abuse of discovery" in a since-dismissed lawsuit claiming PwC caused hundreds of millions of dollars in damages when it implemented a faulty utility billing system, leading to Los Angeles Department of Water and Power ratepayers to be overcharged.

The Second District Court of Appeal reversed sanctions in 2022, writing in a split opinion that monetary sanctions under 2023.030 can be issued only "to the extent authorized" by another provision of the Civil Discovery Act, but doesn't give courts independent authority to impose monetary sanctions.

The majority opinion also said that Section 2023.010 describes conduct and lists examples of misuse of the discovery process, but alone, it too doesn't give independent authority to issue monetary sanctions.

In court papers, the city contended that PwC failed to seek sanctions under the chapters governing specific discovery methods and sanctions, like Chapter 9, which involves deposition conduct, or Chapter 14, which involves inspection demands.

On Wednesday, Poon maintained that courts cannot simply impose sanctions under Section 2023.030 "willy-nilly" and disagreed with the city's position that courts are powerless to impose monetary sanctions unless they can find something in method-specific provisions of the Discovery Act to do so.

Reversing the state appellate court's majority opinion is necessary, as requiring courts to impose sanctions only under the Discovery Act's specific provisions would hamper courts' abilities to address such pervasive discovery abuse, he added.

"It's amazing what the city engaged in here and the kind of fraud and extortion that they tried to perpetuate to cover up, not just the discovery abuse, but frankly their crimes in this case," Poon argued, adding that to this day, the city still refuses to accept responsibility for those abuses and scapegoats others.