FOLLOW US

The city's counsel, Kathryn L. McCann of Annaguey McCann LLP, contended that reversing the majority's decision could open up the floodgates and cause litigants to bring any motions to court at any time, notwithstanding the procedures under the Discovery Act's method-specific provisions, which first require litigants to identify some form of abuse.

Litigants then must file a motion to compel, which the court will determine and later issue sanctions; if that order is violated, further nonmonetary sanctions are available, like evidentiary or terminating sanctions. The process is gradual, as it's "intended to put a chokehold on a litigant, to remind them to hit the brakes," McCann said.

Courts have the power to do more than impose monetary sanctions to ensure nobody benefits from discovery abuse and to ensure fairness of the proceedings, she added.

When Justice Liu asked for the definition of "any other provision" language in Section 2023.030, McCann replied that the language cannot refer to Section 2023.030 or Section 2023.010 because the phrase "to the extent authorized by" in Section 2023.010 doesn't authorize the court to levy monetary sanctions.

"Any other provision" would mean any other provisions found in the six-step method-specific chapters for obtaining discovery under the Discovery Act, she explained.

Associate Justice Leondra Kruger asked McCann if she believed the trial court had the inherent authority to impose sanctions other than monetary penalties. McCann replied that it did but that the underlying dispute was only in its procedural stages and no other sanction was available to issue since the city dismissed its lawsuit against PwC with prejudice.

Monetary sanctions are a "different animal" than nonmonetary sanctions, and courts recognize that monetary sanctions must be authorized by a statute or through an agreement of the parties, which means that the California Legislature made the conscious decision not to give trial courts inherent authority to issue monetary sanctions without limits, McCann added.

On rebuttal, Poon countered that the city is conceding that courts have the authority "to go nuclear" or issue much harsher nonmonetary penalties like terminating or issuing evidentiary sanctions, while simultaneously arguing that monetary sanctions are limited, or "off-the-table."

It makes no sense for the city to argue that courts are stripped of power to use monetary sanctions when "that's where you start, when a litigant refuses to comply" with discovery requests, he continued. The city dismissed its own suit against PwC to cover its tracks instead of coming clean, so the only sanction that can be imposed is monetary, Poon said.