Saint Francis Memorial Hospital v. State Dept. of Public Health ( 2020 )

IN THE SUPREME COURT OF
CALIFORNIA
SAINT FRANCIS MEMORIAL HOSPITAL,
Plaintiff and Appellant,
v.
STATE DEPARTMENT OF PUBLIC HEALTH, Defendant and
Respondent.
S249132
First Appellate District, Division One
A150545
San Mateo County Superior Court
CIV537118
June 29, 2020
Justice Cuéllar authored the opinion of the Court, in which
Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu,
Kruger, and Groban concurred.
SAINT FRANCIS MEMORIAL HOSPITAL v. STATE
DEPARTMENT OF PUBLIC HEALTH
S249132
Opinion of the Court by Cuéllar, J.
California law permits — but also sets certain limits on —
judicial review of adjudicatory decisions made by agencies
responsible for implementing public policies on health, natural
resources, employment, and other issues. One example is
Government Code section 11523,1 which lets parties seek
judicial review of an agency’s adjudicatory decision by filing a
petition for a writ of administrative mandate “within 30 days
after the last day on which reconsideration can be ordered.” Yet
lurking in the backdrop for most limitations periods is equitable
tolling: a judicially created doctrine allowing courts to toll the
statute of limitations when justice so requires.
What we must resolve in this case is whether equitable
tolling can ever lessen the otherwise strict time limit on the
availability of writs of administrative mandate under section
11523, and if so, whether the doctrine applies in this case. The
answer to the first question is yes. Section 11523 allows for
equitable tolling because nothing in the statute’s language,
structure, or legislative history demonstrates a legislatively
enacted expectation to prohibit equitable tolling — which
1
All statutory references are to the Government Code
unless otherwise noted.
SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
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Opinion of the Court by Cuéllar, J.
otherwise tends to function as a crucial backdrop to statutes of
limitations.
Close scrutiny of that backdrop also reveals that the first
two elements of tolling are satisfied in this case: timely notice
and lack of prejudice. Equitable tolling nonetheless also
depends on a third element — the reasonable and good faith
conduct of the party invoking it — and we cannot from this
record glean, nor has the Court of Appeal thoroughly addressed,
whether Saint Francis satisfies that element. So we vacate the
judgment and remand for the Court of Appeal to determine
whether the third element of equitable tolling is satisfied.
I.
When the State Department of Public Health (the
Department) learned that doctors at Saint Francis Memorial
Hospital left a surgical sponge in a patient during a 2010
surgery, it imposed a $50,000 fine on the hospital. The
Department alleged that Saint Francis had “failed to develop
and implement a [sponge] count procedure” and lacked a policy
to properly train its staff, as required by California Code of
Regulations, title 22, section 70223, subdivision (b)(2).
Saint Francis appealed. After a hearing, an administrative
law judge (ALJ) issued a proposed decision in Saint Francis’s
favor. The ALJ reasoned that the regulations were not
“intended to impose a penalty for any adverse occurrence during
the provision of surgical services” — they only required Saint
Francis to “develop[] and implement[] surgical safety [policies].”
Because those policies existed at the time of the incident, Saint
Francis wasn’t liable for violating the regulations.
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On administrative review, however, the Department
reversed the ALJ’s proposed decision and upheld the penalty
against Saint Francis.2 It reasoned that “the term ‘implement’
informs licensees that they must not only develop and maintain
a policy, [but] must actually use the policy.” Saint Francis had
failed to put its sponge-count policy into practice — “[h]ad [it]
done so, the sponge count would have revealed that a four-inch
by eight-inch surgical sponge was still inside the patient” — so
the hospital had violated the regulations. The Department
served Saint Francis with its decision — which was “effective
immediately” — on December 16, 2015.3
Two weeks later, on December 30, 2015, Saint Francis filed
a request for reconsideration under section 11521. This section
typically allows an agency to order reconsideration of its
2
After an ALJ issues a proposed decision, there is “a second
level of decisionmaking in which the [Department] decides
whether to adopt the ALJ’s proposed decision.” (Department of
Alcoholic Beverage Control v. Alcoholic Beverage Control
Appeals Bd. (2006) 40 Cal. 4th 1, 5.) If it chooses not to adopt
the proposed decision in its entirety, the Department may:
reduce or mitigate the penalty but otherwise adopt the decision
(§ 11517, subd. (c)(2)(B)), make technical or minor changes to
the decision (§ 11517, subd. (c)(2)(C)), reject the proposed
decision and refer the matter back to the ALJ (§ 11517, subd.
(c)(2)(D)), or reject the proposed decision “and decide the case
upon the record, including the transcript, or upon an agreed
statement of the parties, with or without taking additional
evidence” (§ 11517, subd. (c)(2)(E)).
3
Although the Department issued its final decision on
December 15, 2015, the Department conceded in its briefs and
at oral argument that the relevant date for the purposes of the
statute of limitations is December 16, 2015 — the date the
Department served Saint Francis with its final decision.
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Opinion of the Court by Cuéllar, J.
decision within “30 days after the delivery or mailing of a
decision to a respondent.” (§ 11521, subd. (a).) According to
Saint Francis, the Department had mistakenly placed the
burden of proof on the hospital, and by failing to consider
evidence introduced by Saint Francis at the administrative
hearing. The Department sought to rebut these arguments on
the merits in its response, which it filed on January 8, 2016.
On January 14, 2016, Saint Francis’s legal counsel wrote
to counsel for the Department. Counsel for Saint Francis sought
to confirm his understanding that the Department had until
“next Tuesday [January 19] to decide the request [for
reconsideration].” Saint Francis explained that, if the request
for reconsideration was denied, it “intend[ed] to petition for a
writ of mandate with the Superior Court.” On January 19, 2016
— which, as the parties later learned, was after the deadline by
which Saint Francis should have filed its petition for a writ of
administrative mandate — counsel for the Department
responded: “I believe you are correct.” The Department’s
counsel didn’t mention that section 11523’s 30-day statute of
limitations for filing a petition for a writ of administrative
mandate had begun running on the effective date of the
Department’s decision, December 16, 2015, and expired on
January 15, 2016. Instead, counsel for the Department offered
to put Saint Francis in touch with the lawyer who would be
representing the Department in the superior court proceedings.
The Department also denied Saint Francis’s request for
reconsideration on January 14, 2016. It explained that because
the Department’s decision was “effective immediately,” Saint
Francis couldn’t seek reconsideration of the Department’s
decision. The Department was thus “unable to consider [Saint
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Opinion of the Court by Cuéllar, J.
Francis’s] Request for Reconsideration[,] which is deemed
denied.”
On January 26, 2016 — just 11 days after the Department
denied Saint Francis’s request for reconsideration, but 41 days
after being served with the Department’s final decision — Saint
Francis filed a petition for a writ of administrative mandate in
superior court. (See § 11521.) The Department demurred on
the ground that the petition was untimely under section 11523,
which requires that a writ petition “be filed within 30 days after
the last day on which reconsideration can be ordered.” After
allowing Saint Francis to amend its petition, the court sustained
the Department’s demurrer. It reasoned that Saint Francis’s
petition was time-barred, and “that Saint Francis’s ‘mistake []
as to [the] law . . . [was] not a sufficient basis to excuse [a] late
filing.’ ” (Saint Francis Memorial Hospital v. State Dept. of
Public Health (2018) 24 Cal. App. 5th 617, 621 (Saint Francis).)
The Court of Appeal affirmed. In so doing, it acknowledged
that “Saint Francis’s mistake about the availability of
reconsideration was made in good faith” and “that Saint Francis
notified the Department of its intent to file a writ petition.”
(Saint Francis, supra, 24 Cal.App.5th at p. 624.) The court
nonetheless held that because “Saint Francis’s request for
reconsideration did not constitute the timely pursuit of an
available remedy[,] . . . [¶] . . . these circumstances are
insufficient to toll the running of [section 11523’s] 30-day
[limitations] period.” (Ibid.) We granted review to decide
whether equitable tolling may apply to petitions filed under
section 11523 and, if so, whether the Court of Appeal erred in
concluding that tolling did not apply to this case.
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II.
We first consider whether equitable tolling may apply to
section 11523. The Department argues it cannot because
equitable tolling is inconsistent with the statute’s “text,
structure, and legislative history.”
Equitable tolling is a “judicially created, nonstatutory
doctrine” that “ ‘suspend[s] or extend[s] a statute of limitations
as necessary to ensure fundamental practicality and fairness.’ ”
(McDonald v. Antelope Valley Community College Dist. (2008)
45 Cal. 4th 88, 99 (McDonald).) The doctrine applies
“occasionally and in special situations” to “soften the harsh
impact of technical rules which might otherwise prevent a good
faith litigant from having a day in court.” (Addison v. State
(1978) 21 Cal. 3d 313, 316 (Addison).) Courts draw authority to
toll a filing deadline from their inherent equitable powers — not
from what the Legislature has declared in any particular
statute. (See Elkins v. Derby (1974) 12 Cal. 3d 410, 420, fn. 9
(Elkins).) For that reason, we presume that statutory deadlines
are subject to equitable tolling. (See Irwin v. Department of
Veterans Affairs (1990) 498 U.S. 89, 95–96 (Irwin).)
But that presumption can be overcome. Equitable tolling,
we’ve also observed, “is not immune” from the operation of
statutes. (McDonald, supra, 45 Cal.4th at p. 105.) A court may
conclude that explicit statutory language or a manifest policy
underlying a statute simply cannot be reconciled with
permitting equitable tolling, “even in the absence of an explicit
prohibition.” (Ibid.) We adopted that conclusion in Lantzy v.
Centex Homes, where we held that the Legislature had sought
to preclude Code of Civil Procedure section 337.15’s statute of
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limitations from being tolled. (Lantzy v. Centex Homes (2003)
31 Cal. 4th 363 (Lantzy).)
Contrary to the Department’s assertions, we find no
indication that the Legislature’s purpose encompassed
prohibiting section 11523’s statute of limitations from being
tolled. Our analysis begins with the statute’s language and
structure. A petition for a writ of mandate “shall be filed within
30 days after the last day on which reconsideration can be
ordered.” (§ 11523.) Although the statute — like all statutes of
limitations — sets forth a deadline by which writ petitions must
be filed, its language and structure is no different from that of
other statutes of limitations that are subject to equitable tolling.
(See, e.g., McDonald, supra, 45 Cal.4th at p. 106 [tolling
available under statute stating: “ ‘No [] complaint may be filed
after the expiration of one year from the date upon which the
alleged unlawful practice or refusal to cooperate occurred’ ”];
Tarkington v. California Unemployment Ins. Appeals Bd. (2009)
172 Cal. App. 4th 1494, 1502, fn. 6 [tolling available under
statute that required parties “ ‘to seek judicial review from an
appeals board decision . . . not later than six months after the
date of the decision of the appeals board’ ”].) So the fact that
section 11523 sets a deadline for filing a petition for a writ of
administrative mandate does not, by itself, demonstrate that
the Legislature sought to prohibit tolling.
Nor does the length of section 11523’s statute of limitations
demonstrate a legislative purpose to forbid the availability of
equitable tolling. A 10-year statute of limitations, we’ve
reasoned, is “so ‘exceptionally long’ ” that it “indicates the
Legislature’s effort to provide, within the strict statutory period
itself, a reasonable time to” file suit. (Lantzy, supra, 31 Cal. 4th
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 SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
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at p. 379.) But section 11523’s 30-day limitations period is
relatively brief, so it carries with it no such inference.
The Department nonetheless identifies two features of the
statute purportedly revealing that the Legislature sought to
preclude tolling. The Department first contends that section
11523’s 30-day deadline is significant because “[o]rdinary
mandamus writs do not have a specific filing deadline.” So the
Legislature’s adoption of a statute of limitations, it argues, was
a departure from the usual state of affairs that we should
interpret as indicative of a legislatively enacted expectation that
tolling be prohibited. The Department also relies on the fact
that section 11523 already tolls the statute of limitations in one
situation: when a petitioner requests the administrative record
within 10 days of the deadline for requesting reconsideration.
(§ 11523.) That the Legislature explicitly included this one
situation under which tolling is permitted demonstrates, the
Department contends, why section 11523 prohibits tolling under
any other circumstance. (See California Redevelopment Assn. v.
Matosantos (2011) 53 Cal. 4th 231, 261 [describing the legal
maxim inclusio unius est exclusio alterius (the inclusion of one
is the exclusion of another)].)
When we interpret a legislative provision and make sense
of its purpose in the larger statutory scheme, however, our task
“ ‘is to discern the sense of the statute, and therefore its words,
in the legal and broader culture. ’ ” (Hodges v. Superior Court
(1999) 21 Cal. 4th 109, 114, italics omitted.) Even the
Department acknowledges that equitable tolling “is part of the
established backdrop of American law” — a backdrop we
presume the Legislature understands when drafting limitations
periods. (Lozano v. Montoya Alvarez (2014) 572 U.S. 1, 11.)
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That background principle isn’t made explicit in statutes of
limitations — whose purpose, after all, are to set firm deadlines
by which parties must file suit. (See Chase Securities Corp. v.
Donaldson (1945) 325 U.S. 304, 314 [statutes of limitations “do[]
not discriminate between the just and the unjust claim, or the
voidable and unavoidable delay”].) So the Legislature’s adoption
of the statute of limitations in section 11523 may very well have
reflected a goal that petitions for a writ of administrative
mandate be filed within 30 days — but it does not, by itself, give
rise to the inference that the Legislature sought to foreclose
equitable tolling. Our courts have emphasized how equitable
tolling can advance “important [public] policy considerations,”
effectively offering the kind of narrowly drawn flexibility for
unusual situations that allows the Legislature to preserve strict
default rules. (Collier v. City of Pasadena (1983) 142 Cal. App. 3d
917, 926; accord McDonald, supra, 45 Cal.4th at p. 100.) A
requirement that parties seek judicial review within 30 days
under section 11523 doesn’t prohibit courts’ exercise of their
equitable powers to toll that limitations period when justice so
requires.
Nor is the judiciary powerless to toll the statute of
limitations in situations besides the one mentioned in section
11523. A plaintiff’s timely request for the administrative record
extends the statute of limitations by “30 days after its delivery
to him or her.” (§ 11523.) Such an exception is sensible: It
would be unreasonable, after all, to require plaintiffs to file writ
petitions before they receive the record on which their petitions
will be based. But section 11523 does not “contain exclusivity
language [] that courts have interpreted as confining tolling to
specific listed bases.” (McDonald, supra, 45 Cal.4th at p. 107
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[citing “ ‘ “in no event” shall the prescriptive period be tolled
except under those circumstances specified in the statute’ ” and
no tolling “ ‘for any reason except as provided’ therein” as
examples of such language].) The single exception to section
11523’s 30-day limitations period bears little relation to the
purpose of equitable tolling: to excuse noncompliance with the
statute of limitations in exceptional circumstances in which a
party didn’t act within the limitations period because of an
obstacle not acknowledged in the statute. We decline to infer
from that single exception that it was within the ambit of the
Legislature’s purpose to bar tolling in any other circumstance.
(See Young v. United States (2002) 535 U.S. 43, 49 [The
Legislature is presumed to draft limitations periods in light of
the “hornbook law that limitations periods are ‘customarily
subject to “equitable tolling” ’ ”].)
Similarly unavailing to the Department’s position is the
legislative history of section 11523. In contrast to what we
discerned from the legislative history of Code of Civil Procedure
section 337.15, it does not “reflect[] a clear intent” that equitable
tolling ought not be available under section 11523. (McDonald,
supra, 45 Cal.4th at p. 105.) Code of Civil Procedure section
337.15, as we explained in Lantzy, was enacted in “response to
[a] considerable expansion of California’s common law of
construction liability.” (Lantzy, supra, 31 Cal.4th at p. 374.) In
the decades preceding the statute’s enactment, “members of the
building industry [] faced exposure to liability for all defects in
their past projects so long as these defects remained
undiscovered and undiscoverable by reasonable inspection.” (Id.
at p. 375.) The absence of a strict limitations period “produc[ed]
a risk for which insurance was available only at prohibitive cost
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. . . thus threatening the industry’s economic health.” (Id. at p.
376.)
It was against this backdrop that the Legislature enacted
the 10-year limitations period in Code of Civil Procedure section
337.15. The Legislature appears to have “carefully considered
how to provide a fair time to discover construction defects, and
to sue upon such defects if necessary, while still protecting a
vital industry from the damaging consequences of indefinite
liability exposure.” (Lantzy, supra, 31 Cal.4th at p. 377.) It
ultimately “specified in section 337.15 that whatever limitations
periods might otherwise apply, ‘no action’ for injury to property
arising from latent construction defects ‘may be brought’ more
than 10 years after substantial completion of the project.” (Ibid.,
italics omitted.) The statute’s 10-year limitations period,
therefore, was intended “to be firm and final.” (Ibid.)
Nothing in the legislative history of section 11523 supports
a similar conclusion. Indeed, the limited history that exists
could reasonably be read to support the availability of equitable
tolling. The Legislature amended section 11523 in 1971 to allow
plaintiffs who requested the administrative record 30 days,
instead of five days, to file a petition for a writ of administrative
mandate after receiving the record. (Stats. 1971, ch. 984, § 1, p.
1896.) The analysis prepared by the Department of General
Services advised the Governor that although the amendment
“may on occasion cause subsequent judicial review proceedings
to commence somewhat later than would be the case under
existing law[,] . . . such delays would not be likely to measurably
affect departmental interests, either favorably or adversely.”
(Dept. of Gen. Services, Enrolled Bill Rep. on Assem. Bill No.
2067 (1971-1972 Reg. Sess.) Sept. 29, 1971, p. 1.) If the
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executive branch wasn’t persuaded that extending the deadline
from five to 30 days would tend to make a difference in these
cases, it seems harder still to conclude that it was within the
ambit of the Legislature’s purpose for the 30-day deadline to
function as an austere, unforgiving limitation period,
notwithstanding any equitable considerations buttressing the
case for tolling.
The Department doesn’t point us to contrary evidence. Its
argument rests instead on the fact that the Legislature “has not
extended the 30-day deadline to file a writ petition” or “added
any additional statutory tolling provisions” since the statute’s
enactment in 1945. From this inaction, the Department would
have us infer that the 30-day deadline is an inflexible one,
immune from extension on equitable grounds. Yet because
legislatures acquiesce for scores of reasons, such acquiescence
supports only limited inferences when we interpret statutes.
(See Harris v. Capital Growth Investors XIV (1991) 52 Cal. 3d
1142, 1156.) The lack of amendments may instead “ ‘ “indicate
many [other] things[:] . . . the sheer pressure of other and more
important business, political considerations, or a tendency to
trust to the courts to correct their own errors . . . .” ’ ” (People v.
Whitmer (2014) 59 Cal. 4th 733, 741.) So we decline to attribute
to the Legislature a purpose for which little or no evidence
exists.
We cull little if any evidence from section 11523’s text,
context, and legislative history that the Legislature took a
scalpel to equitable tolling under section 11523. Because we
presume that statutes of limitations are ordinarily subject to
equitable tolling, the paucity of evidence that the Legislature
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ruled it out compels the conclusion that the 30-day statute of
limitations may be tolled.
But “may” here means possibility, and not just permission:
That equitable tolling is available under section 11523 doesn’t
mean it will apply in every — or even most — cases. As we’ve
explained, equitable tolling is a narrow remedy that applies to
toll statutes of limitations only “occasionally and in special
situations.” (Addison, supra, 21 Cal.3d at p. 316; see also
Lantzy, supra, 31 Cal.4th at p. 370 [equitable tolling should be
applied only “in carefully considered situations”].) So the
conclusion that the Legislature hasn’t prohibited a statute of
limitations from being tolled ought not transform equitable
tolling into “a cure-all for an entirely common state of affairs.”
(Wallace v. Kato (2007) 549 U.S. 384, 396 (Wallace).) Courts
must instead carefully examine the facts of each case to
determine whether “justice and fairness” demand that the
limitations period be tolled. (Lambert v. Commonwealth Land
Title Ins. Co. (1991) 53 Cal. 3d 1072, 1081.)
III.
Having concluded that equitable tolling can apply under
section 11523, we consider whether it does apply in this case.
We begin by outlining the elements of the doctrine, along with
the history from which they emerged.
Our equitable tolling doctrine evolved from three lines of
California cases, each relieving plaintiffs of the duty to abide by
the statute of limitations. (See Addison, supra, 21 Cal.3d at p.
317.) Courts found a basis to offer some flexibility from the
statute of limitations when a plaintiff was already involved in
one lawsuit, and filed a subsequent case that could lessen the
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damage or harm that would otherwise have to be remedied
through a separate case. (Id. at pp. 317–318.) So too did courts
toll statutes of limitations in situations where a plaintiff was
required to pursue, and did indeed pursue, an administrative
remedy before filing a civil action. (Id. at p. 318.) In a third line
of cases, courts tolled the statute of limitations “ ‘to serve the
ends of justice where technical forfeitures would unjustifiably
prevent a trial on the merits.’ ” (Id. at p. 319.)
It was from all three of these strands of caselaw that
equitable tolling emerged. The doctrine allows our courts, “in
carefully considered situations,” (Lantzy, supra, 31 Cal.4th at p.
370) to exercise their inherent equitable powers to “soften the
harsh impact of technical rules” (Addison, supra, 21 Cal.3d at p.
316) by tolling statutes of limitations. As we explained in
Addison, equitable tolling today applies when three “elements”
are present: “[(1)] timely notice, and [(2)] lack of prejudice, to
the defendant, and [(3)] reasonable and good faith conduct on
the part of the plaintiff.” (Addison, supra, 21 Cal.3d at p. 319.)
These requirements are designed to “balanc[e] the injustice to
the plaintiff occasioned by the bar of his claim against the effect
upon the important public interest or policy expressed by the
[operative] limitations statute.” (Id. at p. 321.)
A.
Perhaps in an effort to somewhat tame the potentially
capacious extent of the doctrine’s flexibility, some lower courts
have interpreted equitable tolling to contain a rigid
requirement: pursuit of an alternative available administrative
or legal remedy. Leaning on our decision in McDonald, the
Court of Appeal explained that “equitable tolling applies ‘ “
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‘[w]hen an injured person has several legal remedies and,
reasonably and in good faith, pursues one.’ ” ’ ” (Saint Francis,
supra, 24 Cal.App.5th at p. 623; see also Hansen v. Board of
Registered Nursing (2012) 208 Cal. App. 4th 664, 672 [equitable
tolling available when “a party with multiple available remedies
pursues one in a timely manner”].) Because “Saint Francis’s
request for reconsideration did not constitute the timely pursuit
of an available remedy since reconsideration was unavailable,”
the court concluded that section 11523’s statute of limitations
shouldn’t be tolled. (Saint Francis, supra, 24 Cal.App.5th at p.
624.)
But as the Department itself acknowledges, our past cases
stop short of categorically conditioning tolling on a plaintiff’s
pursuit of a viable remedy. (J.M. v. Huntington Beach Union
High School Dist. (2017) 2 Cal. 5th 648, 658 (J.M.).) The doctrine
is sufficiently supple “to ‘ensure fundamental practicality and
fairness.’ ” (Ibid.) And even in cases where a party seeking
tolling pursued an alternative remedy, we’ve concluded that
pursuit of a remedy “embarked upon in good faith, [yet] found to
be defective for some reason,” doesn’t foreclose a statute of
limitations from being tolled. (McDonald, supra, 45 Cal.4th at
p. 100.) We applied equitable tolling in Addison, for example, to
extend the statute of limitations where the plaintiffs first sought
relief in federal court, which dismissed their suit for lack of
jurisdiction, before filing their action in state court after the
statute of limitations had expired. (Addison, supra, 21 Cal.3d
at p. 319.) Although the plaintiffs’ first action was futile because
of the federal court’s lack of jurisdiction, we reasoned that it
“notified [defendants] of the action” and gave them “the
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opportunity to begin gathering their evidence and preparing
their defense.” (Ibid.)
The Court of Appeal correctly described one scenario under
which equitable tolling may apply: if a plaintiff pursues one of
several available legal remedies, causing it to miss the statute
of limitations for other remedies it later wishes to pursue. Yet
such facts are far from the only circumstances under which the
doctrine may apply. To determine whether equitable tolling
may extend a statute of limitations, courts must analyze
whether a plaintiff has established the doctrine’s three
elements: timely notice to the defendant, lack of prejudice to the
defendant, and reasonable and good faith conduct by the
plaintiff. (Addison, supra, 21 Cal.3d at p. 319.)
The Department asserts that Saint Francis cannot avail
itself of equitable tolling because of the reason for its delayed
filing: its mistake in calculating the deadline. Relying on Court
of Appeal decisions such as Kupka v. Board of Administration
(1981) 122 Cal. App. 3d 791, 794, the Department contends the
fact that Saint Francis “simply made a mistake in ascertaining
its filing deadline” prevents us from tolling the statute of
limitations. Kupka nonetheless differs in meaningful respects
from the case before us, and the Department’s argument
oversimplifies the lesson Kupka offers. That case did not involve
an equitable tolling claim. What the Court of Appeal held in
Kupka was that a party’s mistake, neglect, or personal hardship
could not, without more, excuse a late-filed petition under Code
of Civil Procedure section 473. (Kupka, supra, 122 Cal.App.3d
at pp. 794–795.)
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We agree that mistake or neglect alone doesn’t excuse a
late-filed petition. (See Irwin, supra, 498 U.S. at p. 96.) But
neither is that fact, when relevant, dispositive of a party’s
equitable tolling claim; we must consider it as part of the
analysis of whether a plaintiff has established equitable tolling’s
elements. (See Addison, supra, 21 Cal.3d at p. 319.) This allows
courts to balance “the injustice to the plaintiff occasioned by the
bar of his claim against the effect upon the important public
interest or policy expressed by the [operative] limitations
statute.” (Id. at p. 321.) So Saint Francis’s mistake in
calculating the filing deadline under section 11523 isn’t
necessarily fatal to its equitable tolling claim. We must instead
determine whether the hospital satisfies the three elements of
equitable tolling.
B.
We begin with timely notice. The Department contends
that Saint Francis fails to satisfy the first element because its
request for reconsideration was “unauthorized” under the
statutory scheme. In the Department’s view, a plaintiff’s
pursuit of an alternative remedy that turns out to be flawed
cannot provide notice of the party’s claims to the defendant.
But that assertion rests on an overly rigid conception of
equitable tolling’s first prong. We have never concluded that
pursuit of an alternative remedy is necessary for a plaintiff to
provide timely notice of its claims to the defendant. When
considering whether a plaintiff provided timely notice, courts
focus on whether the party’s actions caused the defendant to be
“fully notified within the [statute of limitations] of plaintiffs’
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PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
claims and their intent to litigate.” (Addison, supra, 21 Cal.3d
at p. 321.)
Saint Francis’s actions did just that. On December 30,
2015 — well before section 11523’s statute of limitations was set
to expire — Saint Francis filed a request for reconsideration.
Although this request was later “found to be defective for some
reason” (McDonald, supra, 45 Cal.4th at p. 100) — because the
Department’s “effective immediately” decision rendered
reconsideration unavailable to Saint Francis — it provided the
Department with timely notice that Saint Francis was seeking
to appeal the Department’s penalty against the hospital.
That Saint Francis provided the Department with timely
notice is underscored by what happened next. On January 14,
2016, one day before section 11523’s statute of limitations was
set to expire, Saint Francis notified the Department’s counsel of
its intent to file a petition for a writ of administrative mandate
if the request for reconsideration was unsuccessful. The
Department’s counsel — apparently unaware that Saint
Francis’s petition was already four days overdue —
acknowledged the forthcoming petition on January 19, 2016.
The most plausible interpretation of these facts is that Saint
Francis’s request for reconsideration, together with its
communications with the Department’s counsel, notified the
Department of its intent to seek review of the Department’s
penalty against the hospital. Because equitable tolling is
designed to apply when a plaintiff has “ ‘satisfied the notification
purpose of a limitations statute’ ” (McDonald, supra, 45 Cal.4th
at p. 102), ignoring this inference would undermine the
doctrine’s underlying rationale and purpose.
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Opinion of the Court by Cuéllar, J.
The first element of equitable tolling — that a plaintiff
must provide timely notice of its claims to the defendant — has
remained the same since the doctrine’s inception. (Addison,
supra, 45 Cal.4th at p. 319.) That element ought to be
interpreted literally: When confronted with equitable tolling
claims, courts must examine each case on its facts to determine
whether the defendant received timely notice of the plaintiff’s
intent to file suit. Because Saint Francis’s request for
reconsideration, together with the e-mail notifying the
Department’s counsel of its intent to file a petition for a writ of
administrative mandate, provided the Department with timely
notice of the hospital’s claim, we conclude that Saint Francis has
satisfied the first element of equitable tolling.
C.
The Department next argues that Saint Francis’s equitable
tolling claim fails because the hospital cannot satisfy the second
element: lack of prejudice to the defendant. (See McDonald,
supra, 45 Cal.4th at p. 102.) We disagree.
The Department has suffered prejudice, it contends,
because Saint Francis’s late filing circumvented its “rel[iance]
on legislative rules establishing the finality of its adjudicative
decisions in order to execute its statutory charge of safeguarding
the public health.” That argument ignores the core focus of our
prejudice analysis: whether application of equitable tolling
would prevent the defendant from defending a claim on the
merits. (See Addison, supra, 21 Cal.3d at p. 318.) Given that
the Department defended its assessment of the fine against
Saint Francis throughout the administrative proceedings, we
don’t see how tolling section 11523’s statute of limitations would
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SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
undermine the Department’s ability to defend the propriety of
that same penalty in superior court.
Consider the implications of embracing the Department’s
argument regarding prejudice: We’d be all but compelled to find
prejudice in just about every equitable tolling case. Virtually all
parties, after all, tend to rely on statutes of limitations in the
course of litigation. And the Department presents no
explanation of why it, in particular, suffers greater prejudice
because of its public charge. The Department’s contention also
fails to recognize that the finality of adjudicative decisions is
already undermined by section 11523, which expressly allows
those decisions to be appealed — appeals which can, and
typically do, postpone the finality of the Department’s decisions
for years. For these reasons, we conclude that tolling the statute
of limitations wouldn’t prejudice the Department.
D.
The third element of equitable tolling requires reasonable
and good faith conduct by the plaintiff. The Department
contends Saint Francis cannot satisfy this element because its
late filing was due solely to its mistake in calculating the statute
of limitations under section 11523.
Our equitable tolling cases have offered little insight on
what constitutes reasonable and good faith conduct. Without
discussing the third element specifically, we suggested in
Addison that the plaintiffs’ actions were reasonable and carried
out in good faith because they “promptly asserted [their cause of
action] in the proper state court” after the federal court
dismissed it for lack of jurisdiction. (Addison, supra, 21 Cal.3d
at p. 319.) More recently, we concluded that a party didn’t act
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SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
reasonably, and thus was not entitled to equitable tolling, when
he “pursue[d] a court action when the claims filing requirements
[had] not been satisfied.” (J.M., supra, 2 Cal.5th at p. 657.)
As these examples illustrate, our caselaw has sometimes
suggested that “reasonable” and “good faith” have much the
same meaning in the context of equitable tolling, but other times
construed the terms as creating separate and distinct
requirements. We are not the first to grapple with what each of
these terms require. (See, e.g., Kansas City Power & Light Co.
v. Ford Motor Credit Co. (8th Cir. 1993) 995 F.2d 1422, 1430
[good faith is an “amorphous concept, capable of many forms yet
requiring none”]; Prosser & Keeton, Torts (5th ed. 1984) § 32, p.
175 [“The conduct of the reasonable person will vary with the
situation with which he is confronted”].) Yet what makes the
most sense in light of our precedent, equitable tolling’s
underlying purpose, and its narrow scope in our system, is to
construe the third element to encompass two distinct
requirements: A plaintiff’s conduct must be objectively
reasonable and subjectively in good faith.
When it comes to reasonableness, the “ultimate test” is
“objective.” (People v. Humphrey (1996) 13 Cal. 4th 1073, 1083.)
An analysis of reasonableness focuses not on a party’s intentions
or the motives behind a party’s actions, but instead on whether
that party’s actions were fair, proper, and sensible in light of the
circumstances. We use this objective analysis to assess
ineffective assistance of counsel claims under the Sixth
Amendment (see People v. Mai (2013) 57 Cal. 4th 986, 1009
[“defendant must demonstrate . . . counsel’s performance was
deficient, in that it fell below an objective standard of
reasonableness under prevailing professional norms”]), for
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SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
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Opinion of the Court by Cuéllar, J.
example, and in the context of insurance law to determine which
party must pay an insured’s site investigation costs (see Aerojet–
General Corp. v. Transport Indemnity Co. (1997) 17 Cal. 4th 38,
62 [“Whether the insured’s site investigation expenses are
defense costs that the insurer must incur in fulfilling its duty to
defend must be determined objectively”]). A party seeking
equitable tolling must satisfy a similar standard: It must
demonstrate that its late filing was objectively reasonable under
the circumstances.
Good faith pivots instead on a party’s intentions. It is a
test “ordinarily used to describe that state of mind denoting
honesty of purpose, freedom from intention to defraud, and,
generally speaking, [] being faithful to one’s duty or obligation.”
(People v. Nunn (1956) 46 Cal. 2d 460, 468.) To determine
whether a defendant is entitled to attorney fees, for example,
courts employ a subjective analysis and ask whether the
plaintiff brought an action in good faith. (Code Civ. Proc.,
§ 1038, subd. (a).) The third element of equitable tolling
likewise requires courts to determine whether a party’s late
filing was subjectively in good faith — whether it was the result
of an honest mistake or was instead motivated by a dishonest
purpose.
Construing equitable tolling’s third element to contain an
objective and subjective requirement fits the doctrine’s
underlying rationales. Equitable tolling applies only “in
carefully considered situations to prevent the unjust technical
forfeiture of causes of action.” (Lantzy, supra, 31 Cal.4th at p.
370.) It does not, as courts have explained, “extend to . . . garden
variety claim[s] of excusable neglect.” (Irwin, supra, 498 U.S. at
p. 96.) Yet if we were to apply equitable tolling to situations
22
SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
when a party demonstrates only reasonable conduct or good
faith –– but not both –– we would risk shaping the doctrine into
one that becomes a norm instead of an exception. Limiting the
doctrine’s applicability to only those cases in which a party
demonstrates objective reasonableness and subjective good faith
precludes the doctrine from being “a cure-all for an entirely
common state of affairs,” while ensuring that it provides a
narrow form of relief in “unusual circumstances” when justice so
requires. (Wallace, supra, 549 U.S. at p. 396.)
The Court of Appeal didn’t address whether Saint Francis’s
actions were reasonable and in good faith. At oral argument,
the parties argued for the first time that certain facts bore on
the question of whether Saint Francis satisfies the third
element. But the record before us leaves some opacity about
whether Saint Francis’s conduct was reasonable and in good
faith. As we’ve often done in such situations, we remand the
case for the Court of Appeal to determine whether Saint Francis
satisfies the third element, and thus is entitled to equitable
tolling. (See Montrose Chemical Corp. of California v. Superior
Court (2020) 9 Cal. 5th 215, 238; San Diegans for Open
Government v. Public Facilities Financing Authority of City of
San Diego (2019) 8 Cal. 5th 733, 746–747 [contentions raised for
the first time at oral argument "should be answered first by the
Court of Appeal"].)
IV.
Statutes of limitations serve important purposes: They
motivate plaintiffs to act diligently and protect defendants from
having to defend against stale claims. But equitable tolling
plays a vital role in our judicial system, too: It allows courts to
23
SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
exercise their inherent equitable powers to excuse parties’
failure to comply with technical deadlines when justice so
requires. To appropriately balance these two competing ends,
we recognize the Legislature’s ability to forbid equitable tolling
in certain statutes, and we require plaintiffs to establish timely
notice, lack of prejudice to the defendant, and reasonable and
good faith conduct by the plaintiffs before they are entitled
equitable tolling. For the doctrine to fulfill its purpose, however,
we continue to presume that tolling is available in the absence
of evidence to the contrary, and allow courts to determine on a
case-by-case basis whether tolling is warranted under the facts
presented, with careful consideration of the policies underlying
the doctrine. (See generally Elkins, supra, 12 Cal.3d at pp. 417–
420.)
As to whether equitable tolling may apply when agency
adjudicatory decisions are at issue, the text and context of
section 11523 persuade us: The Legislature did not prohibit the
statute’s 30-day limitations period from being tolled. And the
facts of this case demonstrate that Saint Francis satisfied the
doctrine’s first and second elements. Although the hospital’s
belated filing arose from a mistake about the filing deadline
under section 11523 — a mistake that appears to have been
shared by the Department — it provided timely notice to the
Department of its intent to file a petition for a writ of
administrative mandate. And nothing in the record
demonstrates that the Department was prejudiced by Saint
Francis’s late filing. Because the Court of Appeal didn’t address
equitable tolling’s third element, we vacate the judgment and
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SAINT FRANCIS MEMORIAL HOSPITAL v. STATE DEPARTMENT OF
PUBLIC HEALTH
Opinion of the Court by Cuéllar, J.
remand the case to the Court of Appeal for further proceedings
consistent with this opinion.
CUÉLLAR, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
KRUGER, J.
GROBAN, J.
25
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Saint Francis Memorial Hospital v. State Department of Public Health
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XX 24 Cal. App. 5th 617
Rehearing Granted
__________________________________________________________________________________
Opinion No. S249132
Date Filed: June 29, 2020
__________________________________________________________________________________
Court: Superior
County: San Mateo
Judge: George A. Miram
__________________________________________________________________________________
Counsel:
Sheuerman, Martini, Tabari, Zenere & Garvin and Cyrus A. Tabari for Plaintiff and Appellant.
Xavier Becerra, Attorney General, Edward C. DuMont, State Solicitor General, Janill L. Richards,
Principal Deputy State Solicitor General, Gonzalo C. Martinez, Deputy State Solicitor General, Julie
Weng-Gutierrez, Assistant Attorney General, Samuel T. Harbourt, Susan M. Carson, Gregory D. Brown
and Nimrod P. Elias, Deputy Attorneys General, for Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Cyrus Tabari
Scheuerman, Martini, Tabari, Zenere & Garvin
1033 Willow Street
San Jose, CA 95125
(408) 288-9700
Samuel T. Harbourt
Deputy Attorney General
455 Golden Gate Ave., Suite 11000
San Francisco, CA 94102-7004
(415) 510-3919