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Fourth District Court of Appeal Upholds Issue Sanction for Misuse of Discovery Process, Obscuring Identity of Parties Sought for Deposition


In Creed-21 v. City of Wildomar (2017) 18 Cal. App. 5th 690, the Fourth District Court of Appeal held that the trial court did not abuse its discretion in imposing an issue sanction against Plaintiff Creed-21 (plaintiff) on standing, which terminated the action, for the misuse of the discovery process in response to a motion for sanctions pursuant to Code of Civil Procedure section 2023.030 filed by Real Party in Interest Wal-Mart Real Estate Business Trust (Wal-Mart).

At trial, Wal-Mart repeatedly attempted to set a deposition and to obtain corporate documents from plaintiff in order to investigate plaintiff’s standing to bring the CEQA lawsuit. Wal-Mart’s first notice of deposition of the plaintiff’s local person most qualified (PMQ) to appear for the deposition was issued in August of 2015.  Plaintiff did not respond to the notice or the follow-up meet and confer letter sent by Wal-Mart.  Wal-Mart set a second deposition in October of 2015.  Plaintiff refused to have its PMQ appear and Wal-Mart filed a motion to compel. Thereafter, the identity of the PMQ was acknowledged to be the president of the plaintiff-company, a non-local individual.  In response to the motion, the trial court ordered plaintiff produce the PMQ for the deposition and issued $3,000 in sanctions against the plaintiff.

Plaintiff did not comply with the order by either producing the PMQ or paying the sanction. Plaintiff instead sought relief from the order, which was denied.  Plaintiff was ordered to participate in a deposition on February 8, 2016.  Plaintiff again failed to comply with the order, but urged its failure to participate in the deposition on February 8, 2016, was based on a family emergency impacting one of its attorneys.  The trial court was unpersuaded.

Wal-Mart filed a motion for sanctions, which the trial court granted based on the plaintiff’s consistent refusal to comply with the court orders on discovery. The trial court issued a terminating sanction in light of the fact that its prior issuance of monetary sanctions and two court orders did not result in the plaintiff complying with discovery rules.

The court held the trial court did not abuse its discretion when it issued a terminating sanction. The court explained that the discovery statutes evince an incremental approach to discover sanctions, starting with monetary sanctions and ending with the ultimate sanction of termination.  The trial court properly followed the progression in issuing sanctions in the case.

The court also rejected plaintiff’s claim that a terminating sanction could not be issued without a showing of bad faith. The court concluded that no decision rendered after the Civil Discovery Act of 1986 was enacted supported plaintiff’s argument.

Key Point: 

Compliance with opposing counsel’s motions and court orders are imperative in prevailing in CEQA suits. Failure to comply, and attempts at obfuscating the identity of parties required for discovery without good reason may result in issue sanctions.

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dateFebruary 8th, 2018byby


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