California adopts new early disclosure rule
Peter S. Selvin
by Peter S. Selvin
For cases filed after 01 January 2024, California procedure now mandates that the parties engage in an early exchange of information. This new requirement, codified in section 2016.090 of the Code of Civil Procedure (CCP), mirrors the early disclosure procedures under Federal Rule of Civil Procedure 26.
In brief, the statute requires this early exchange of information within 60 days following a demand therefore by either party. Like Federal Rule of Civil Procedure 26, California’s early disclosure procedure requires each side to identify relevant parties (and their contact information) and documents, including electronically stored information.
The California statute also mandates the disclosure of all pertinent insurance policies, as well as any contractual agreements under which a person or entity may be required to indemnify or reimburse a party-litigant for any judgment in the action. This latter requirement transcends the scope of the disclosures required under Federal Rule 26.
The California statute changes existing law by making discoverable “any and all documents regarding whether any insurance carrier is disputing the agreement’s or policy’s coverage of the claim involved in the action”. CCP Section 2016.090(a)(1)(D). This provision stands in contrast to existing case law which generally shields from discovery communications from a liability carrier to insured reserving rights or otherwise qualifying an insured’s right to a defence or to indemnity protection. See, for example, Sea Salt, LLC v. Bellerose, No. 2:18-cv-00413-JAW, 2020 WL 5032466, at *2 (D. Me. Aug. 25, 2020); Southern Rehab. Network, Inc. v. Sharpe, No. 5:99CV353-BR, 2000 WL 33682699, at *4 (E.D.N.C. Jan. 14, 2000).
Interestingly, the statute is silent concerning the litigation consequences that may arise if a party seeks to call a witness or introduce a document that was not listed in the initial disclosure. Thus, although the statute provides that the court may enforce a party’s obligation to make the initial disclosure (CCP Section 2016.090(a)(4), it is silent concerning the appropriate sanction in the event a party seeks to call a witness or introduce a document that was not listed in its initial disclosures.
In this regard, Federal Rule 37 provides an enforcement mechanism where a party seeks to call a witness or introduce a document that was not listed in its initial disclosures. Section (c)(1) of that Rule provides in part that “if a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing or a trial, unless such failure was substantially justified”.
While the new early disclosure rule in California has no similar enforcement mechanism, it is likely that a party’s failure to make adequate early disclosure would constitute a misuse of discovery under CCP 2023.010. Section (d) makes “failing to respond or submit to an authorised method of discovery” a category of “misuse”. Notably, the sanctions for misuse of discovery include the imposition of “an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence”.
As California early disclosure rule is quite new, there are no appellate decisions interpreting it or outlining the sanctions for its violation. But insofar as it seeks to impose the federal disclosure procedures into state procedure, it reflects a continuing interest on the part of the legislature in streamlining the litigation process and avoiding “trial by ambush”.
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Peter S. Selvin is a business trial lawyer and chair of the insurance coverage and recovery department at Ervin Cohen & Jessup LLP. Contact Peter.
