By Jeremy Pasternak
CAOC “Forum” – July 2004
It’s been only a year and a half since the Legislature amended the summary judgment statute to, among other things, increase the notice period for bringing such a motion from twenty-eight to seventy-five days. There is no doubt that this is a great thing. But it still is not clear exactly how this will affect our practices. Sure, we have more time to respond, but what other advantages are there? And what new challenges in terms of trial and settlement strategy should we be aware of?
The following is a discussion of these issues. First will be a brief overview of the changes in the law – there are more than you might think. Next will be an examination of the new practical considerations in conducting discovery, and some new discovery strategies you might wish to employ in light of the new statute. Finally, this article will address the broader strategic implications of the new statute, that is, how the new statute might affect settlement and litigation strategy.
I. THE BIG CHANGE – TIMING
We all know the big change in the statute: the motion must be noticed at least seventy-five days before the hearing. As we also know, there were no other “timing” changes to the statute. Therefore, we still have to oppose it only fourteen days before the hearing. Our response time has increased from fourteen days to sixty-one days.
Consider the effect this has on the timing of a fast-track case. Plenty of cases are now being set for trial within twelve months of filing. This is true not only in independent calendar courts (such as Los Angeles, where all civil rights – i.e., employment – cases can be filed in the independently-calendared Central District pursuant to local rule), but also in master-calendar courts (such as San Francisco, where employment cases are often assigned to what that court calls “Plan I,” in which cases are expected to be set for trial within one year).
Here’s a sample timeline for a case set for trial within a month of filing:
Jan. 1: case filed
Feb. 1: case served
Mar. 1: demurrer filed
Late Mar.: demurrer heard
Mid-Apr.: case at issue
Late Apr. –
Early Sept.: only 4 ½ months to conduct discovery!
Sept. 17: last day to file MSJ
Dec. 1: last day to hear MSJ
Jan. 1: trial date
This timeline is not hard-and-fast. For example, there is no rule that discovery can’t be taken until the pleadings are in order, but we all know that often no more than first-round written discovery is conducted until that point. Therefore, the “Take-Home” message is: MSJs have to be filed faster, with less time to prepare and take discovery. The ramifications of this are discussed in more detail below.
II. THE NOT-AS-BIG CHANGE – CONTINUANCES
The statute has not changed the fact that pursuant to Section 437c(h), a continuance shall be granted if the opposing party shows that discovery essential to the opposition exists but cannot yet be presented. This is of less import now, because we have over sixty days to conduct that discovery. Previously, it was almost impossible to conduct discovery while the motion was pending. The only discovery device that could even possibly be used was a ten-day deposition notice. Now, there is time for all types of discovery to be taken.
Nevertheless, the Legislature did not change this part of the statute. If time is needed, it should still be granted.
The new statute adds the following language:
The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due. (C.C.P. § 437c(h).)
Although ex parte continuances were sometimes previously granted, there was no direct statutory authority for them, and I, for one, had seen them denied on that basis – with the court’s rationale being that the plaintiff should make that application in the opposition papers, putting counsel in the awkward position of 1) preparing the opposition without meaningful discovery, and 2) if the extension was granted, having to move forward with discovery after disclosing in the opposition the plaintiff’s entire case strategy.
Now, there is statutory authority for seeking a continuance via ex parte motion. Procedurally, there is no problem. Substantively, the very existence of this new part of the statute suggests that it is relief the court should, as opposed to merely can, grant.
Of course, given the existence of the statute, the court may expect that a continuance be sought via ex parte relief, rather than incorporate it as a last-chance argument in an opposition. We used to be able to argue in our oppositions, “Hey, we’ve just shown facts more than sufficient for denial, but if you’re inclined to grant the motion, give us a stay of execution to bring all this discovery.” This argument is now less likely to fly.
In sum, then, PRO: the good news is that you now have statutory authority to go in and request a continuance before your opposition is due, whereas previously your ability to obtain this relief (generally based on C.C.P. § 128) used to depend solely on the habits/outlook of the judge. CON: given the existence of the statute, you may now be expected to go this route, rather than present an opposition with a last-ditch request for a continuance.
A more interesting development on this subject matter is the following language in the new statute:
If, after granting a continuance to allow specified additional discovery, the court determines that the party seeking summary judgment has unreasonably failed to allow the discovery to be conducted, the court shall grant a continuance to permit the discovery to go forward or deny the motion for summary judgment or summary adjudication. (C.C.P. § 437c(i).)
This is nice new language. If you get a continuance, and then the defendant sand-bags you on the discovery, this becomes an independent basis for yet another continuance or even a denial of the summary judgment motion. But first, you have to satisfy the statute, by getting a continuance in the first place. In other words, you can’t use sand-bagging as a basis for denial of the motion unless it occurs after a continuance is granted, as opposed to during the standard sixty-day period during which the motion is pending. Take-Home Message: to avail yourself of this section, you have to request a continuance and get it!
The statute both before and after the amendment continues to contain mandatory, as opposed to permissive language: “… the court shall deny the motion or order a continuance ….” This language has not changed.
Not only is the statutory language mandatory, but California case law is in accord. See Dee v. Vintage Petroleum, Inc. (2003) 106 Cal.App.4th 30
III. SO WHAT? – PRACTICAL CONSIDERATIONS IN PLANNING YOUR DISCOVERY
The key question here is, “Should I hold my discovery until I see their MSJ? If I do, I’ll know exactly where to go, I can cross-examine witnesses with their own declarations, etc.” Here’s the basic premise: Conduct written discovery, but don’t take any key depositions until after MSJ filed and declarations submitted.
1) A roadmap to discovery
In short, now you know you’re not going to miss anything in those depositions.
2) Evidentiary objections
Even good defense lawyers often draft poor declarations when they bring MSJs. As a general rule, they aren’t trial lawyers. They just aren’t thinking about the rules of evidence, laying foundation, establishing personal knowledge, and everything else that makes a declaration viable. Too often we overlook the fact that declarations, particularly in employment cases, are full of unsupported conclusions and opinions, and too often we fail to object.
Walking into a deposition armed with the deponent’s MSJ declaration presents another opportunity to challenge that declaration, by establishing that there is no personal knowledge to support it. Particularly if you don’t lead off with all the typical “scary” questions regarding the fact that declarations are signed under penalty of perjury, witnesses are often willing to admit to the flaws in their own declarations. Accomplishing this can, standing alone, provide a court with a basis for denial of the motion.
In addition, because of the new timing requirements, the MSJ has probably been brought at or near the last possible moment. As of the date your opposition is filed along with your objections to declarations, it is unlikely that the defendants have an additional 105 days (75 days for notice of the motion, plus the 30 days before trial that the hearing must be set) to re-file their motion with sufficient declarations.
1) Will you get your discovery in time?
If you hold your depositions or other discovery, you run the risk of being caught short, or sand-bagged when you rush to complete necessary discovery in sixty days. Despite everything above regarding continuances, you still might be accused of not having been diligent in pursuing discovery, and a judge may make you lie in the strategic bed you’ve made.
2) Whose case is this anyway?
This strategy may also inspire a strong and negative gut reaction in many plaintiffs’ counsel. Sitting back and doing little sort of flies in the face of “prosecuting” a case. As a practical matter, this strategy also has the effect of your losing “control” of the pacing of a case, which inhibits your ability to push it “forward” – including towards settlement. This effect on settlement is discussed in more detail below.
Here are some methods you might try so as to move forward with discovery, but still have the opportunity to take depositions after summary judgment has been filed.
1) Take the Deposition Again
C.C.P. § 2017 states that you can take discovery “that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action.” (Emphasis added.)
Arguably, you can take a deposition a second time, despite the general rule (and conventional wisdom) that depositions are taken once and only once. But this is not a hard-and-fast rule. For example, in punitive damages cases, plaintiffs cannot take discovery on a defendant’s financial status until after a motion is brought pursuant to Civil Code § 3294, which first requires a showing of probability of success on the merits of the claim. The statute presumes that a defendant’s deposition must be taken twice, and this is consistent with the language cited above. Why then, not after an MSJ is filed?
Defendants’ counter-argument to this is:
[S]ummary judgment may not be denied on grounds of credibility or for want of cross-examination of witnesses furnishing affidavits or declarations in support of the summary judgment …. (C.C.P. § 437C(e).)
This undermines an argument that a declarant’s (second) deposition is necessary so as to defend a summary judgment motion.
However, under the same section, the court may choose to disregard a declaration that attests to a state of mind of a defendant:
… except that summary judgment may be denied in the discretion of the court, where the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual who was the sole witness to that fact; or where a material fact is an individual’s state of mind, or lack thereof, and that fact is sought to be established solely by the individual’s affirmation thereof.
Although this may not get you the deposition, it at least gives you authority to encourage the court to disregard the inevitable “I had no discriminatory intent [and therefore there is no liability]” declaration.
2) Notice a PMK Depo After the MSJ Has Come In
Another stratagem is to take the deposition before the MSJ is served, and then notice it again, but as a Person Most Knowledgeable deposition; that is, “The Person Most Knowledgeable Regarding the Content of Declaration of X,” or on a specific point asserted in the declaration. This has the benefit of fitting quite nicely into the language of C.C.P. § 2017 quoted above, that is, that discovery may be taken if pertinent to “any motion.” However, it suffers from the fact that it so clearly addresses the content of a “declaration,” which is suggested against by the language of C.C.P. § 437c(e), also quoted above.
3) Your Depositions May Still Be Open Anyway
I rarely finish a defendant’s deposition in one day. This is particularly true when the case involves complex issues of law, which require at least a morning be devoted to examination of the witness’s knowledge of applicable legal standards and the company’s policies (such as a disability discrimination/reasonable accommodation/failure-to-engage-in-the-good-faith-interactive-process case) or multiple separate incidents (such as in an ongoing-sexual-harassment case).
In such cases, where the deposition is unlikely to be finished in one day, it may just naturally happen that the deposition is started but not completed at the time MSJ is filed.
4) Make Your Game Plan Clear from the Beginning
Obviously, some of the above strategies may draw accusations of “gamesmanship.” Therefore, make your intentions obvious and above-board from the beginning. After all, it is unlikely to change the defendants’ strategy. Defense counsel is going to know you are probably going to take or complete certain depositions after the MSJ is filed; the MSJ itself is going to be whatever it is. But to avoid accusations of gamesmanship, set forth from the beginning your intentions. Other recent changes in California procedure are helpful here. All California courts are now required to use the standard Case Management Conference Statement Form. This form contains a section for “Anticipated Discovery.” In that section, make your intentions clear, that is, state that you intend to take depositions of any defense witnesses (or whoever else files a declaration) in response to any motion for summary judgment or adjudication. Thereby, you can point out when you seek a continuance, or when you face a motion to quash a “second” deposition notice that your intentions have been clear from the beginning.
IV. STRATEGIC CONSIDERATIONS: WHY DO DEFENDANTS BRING MOTIONS FOR SUMMARY JUDGMENT/WHAT DOES THIS TELL US?
Disclaimer – The following information is based on informal conversations with defense counsel who are good enough sports to share this information with me. This somewhat rarefied group may not be an accurate sampling of defense counsel.
If the defendants really think they have a shot, then so be it. The new statute gives you more time, but in terms of strategizing for resolution of your case, the new statute makes little difference.
This is not a new use for summary judgment motions. It’s the best way for defense counsel to find out what we really have. But now, because the case is farther from trial, and probably not as well developed, this use has risen in importance, particularly because of the often commensurately lower cost.
Take Home Messages:
1) The nature of the MSJs we are seeing may more likely be based on a “lack of evidence” theory, i.e., “Plaintiff has no facts with which to prove this particular cause of action.” Although this sounds like the obvious point of any summary judgment motion, it really isn’t. Under the McDonnell Douglas/Burdine burden-shifting test, defendants in employment cases actually have an affirmative duty in all but simple harassment cases to make a case. That is, the test requires them to set forth by admissible evidence a legitimate basis for the employment decision (termination, demotion, refusal to hire, etc.) which they have made. Therefore, in employment cases perhaps more than any other type of litigation, we have seen defense MSJs really set forth the defendants’ positions. With more limited discovery, this is somewhat less likely to be the case.
2) With the new statute, there is an even greater probability that defense counsel and their clients are not as confident in their MSJ, simply because the case is likely not to be as fully fleshed-out. There are that many more unknowns. The take-home message here, which is discussed in more detail below, is that the conventional wisdom that cases do not settle with MSJs pending is less and less true.
Defense counsel often bring MSJs because they feel that they have to. Not only do they want to avoid a situation in which they win at trial but then must answer the question “why couldn’t we have done this at summary judgment and saved a lot of money,” but because they fear an even worse question: “We just lost at trial; why couldn’t we have thrown this out at summary judgment?”
California case law makes this a real possibility. In D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, the California Supreme Court held that once a plaintiff has made an “admission” at deposition which is damning to the case, the “admission” cannot be retracted or contradicted by a declaration filed in response to MSJ. Example: well, I didn’t really mind the harassment at the time. This would effectively destroy the “unwelcomeness” element of a harassment case, and, per D’Amico, could not be explained away by a declaration. But were MSJ never brought, the plaintiff could offer testimony contrary to this at trial (in fact, could offer both versions of testimony at trial itself) and the jury would have the right to determine which of the plaintiff’s “stories” it believed. In short, D’Amico holds that in some cases, MSJ may be granted, despite the fact that the case can win at trial. Based on my conversations with defense counsel, they are aware of this case law and find it a compelling reason to file MSJs, even if only for the “CYA” factor.
Take-Home Message #1:
Prep that plaintiff for deposition. Insofar as D’Amico compels defense counsel to bring MSJs based on plaintiffs’ depositions, and given that this may be the only deposition taken as of the time of the MSJ, the plaintiff’s deposition may end up being all the more important.
Take-Home Message #2:
It may not be enough just to attack those declarations. This is because of the point made above, that is, that because of the faster track to MSJ and commensurately lesser discovery, the plaintiff’s deposition must take on a larger importance when defendants bring MSJs, or may be based solely on a “dearth of evidence” theory. Therefore, the opportunity to defeat MSJ by attacking defendants’ depositions may be less common.
Average Cost of a PI MSJ:
$7,5000 to $10,000
Average Cost of an Employment MSJ:
$25,000 to $35,000 (and up)
The defense counsel to whom I spoke admitted these costs, and though they denied bringing MSJs just to make money, they did concede that they’ve been making less on them lately, because not as much discovery has been done, and there just isn’t as much evidence to cull through.
V. PRACTICAL CONSIDERATIONS: SETTLEMENT
The conventional wisdom is: DON’T. If the defendants think they can knock you out, they won’t pay what the case is worth. Even if they don’t think they can knock you out, they won’t pay what it’s worth because they might as well take the shot. Even if they are almost sure they’ll lose, they’ve already paid to write and file the thing, so they might as well play it out.
These arguments all still have weight, but not as much.
The basic argument is that the defendants are now thinking more along these lines: “Hey, it was 105 days before trial, my lawyers had to file the thing, they hadn’t finished the discovery, so we aren’t really all that invested in it.”
This was true particularly among the in-house counsel with whom I spoke. The still wanted to bring the motions, but their litigation counsel had given them so many disclaimers and caveats that they were that much less confident of success. This was also true because of the lower cost – in a literal sense, they may not be as “invested” in these motions.
What does this mean about settlement? It means that the conventional wisdom about not settling while MSJ is pending may be out the window. If the defendants aren’t as confident of winning their MSJs, if they’ve only brought them because time was running out, and if they haven’t spent as much on them, it is very unlikely that these MSJs are going to have as negative an effect on settlement as they used to.
My personal experience has been that there is a change here. It has been most clear at mediation. Previously, I followed the conventional wisdom, for example, rarely attending mediation while MSJs were pending. Now, when I attend mediation with an MSJ pending, I am unlikely to hear much from the mediator about the pending MSJ. It just doesn’t seem to be an argument that is being made in the other room.
Nobody should take on an employment case if they aren’t prepared to defend an MSJ. Unfortunately, some do, and even more unfortunately, defense counsel and their clients don’t always know the difference between the lawyers who are prepared and those who aren’t. As a result, there was often the following “defense wisdom”: The lazy plaintiff’s lawyer on a contingency doesn’t want to do the work to oppose the MSJ, and because they have only two weeks to do so, will settle on the cheap right after it’s filed. My conversations with defense counsel indicate that this was definitely the thinking behind filing MSJs on the eve of pre-scheduled mediations.
The seventy-five day notice period may have destroyed this thinking. After all, even the laziest lawyer can oppose MSJ with two months to do it.
This is one area where the new statute may not help us, in that it encourages frivolous MSJs.
Past Wisdom: The cooperative defense lawyer agrees to attend mediation before MSJ, to save the defendant’s money, and to avoid a “bad” defendant becoming too invested in an MSJ the smart defense lawyer knows they will lose. As discussed above, under the old statute, MSJs were more likely to be fully developed, because there was simply more time to bring them. Particularly when dealing with a reasonable defense counsel, who recognized the limits of a client’s case and wanted to keep that client by not overbilling with a frivolous MSJ that would ultimately lose, the old statute helped avoid frivolous MSJs. But with the new, tighter time periods, the defense lawyer may have no choice but to get the thing on file. Again, they have to fear the D’Amico case, and because the case has not been as fully developed, they cannot say to their client with as much confidence what the problems with an MSJ are. The reasonable defense counsel just doesn’t have the same opportunity to recommend against MSJ as a cost savings, and therefore we’re probably even more likely to have to oppose weak ones.
Because MSJs were more likely to be brought well before trial, there was time after you beat them to settle. If the defendants just had to lose an MSJ before they were willing to pay on the case, there was plenty of time to do it after MSJ.
The MSJ is much more likely to be filed at the last possible minute, to be heard only thirty days before trial. So get that mediation set up before the hearing. There won’t be much time (30 days and less for pre-trial filings!) after the hearing, particularly if it’s taken under submission.
New Reality 2:
Consider asking for a trial continuance while you are preparing your Opposition, as a mediation continuance (which is mandatory under CRC 1637, for up to 90 days). This way, if you need to ask for a continuance of the MSJ, the trial date has already been continued, and the court has lost one of the most common reasons for being reluctant to continue MSJ hearings.
The new MSJ statute is definitely a great thing for plaintiffs’ lawyers, particularly those who do employment law, an area in which MSJs are more common than most. By paying attention to how this new timing might affect your discovery plan, the thinking of defendants and their counsel, and the opportunities for settlement, you can use this statute to achieve the best results for your clients.
Jeremy D. Pasternak has law offices in San Francisco. He is a member of the Forum Editorial Board.