Jones v. City of Los Angeles CA2/5 ( 2023 )

Filed 12/15/23 Jones v. City of Los Angeles CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
ANTWON JONES, B313095
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No.
v. BC577267)
CITY OF LOS ANGELES,
Defendant and Respondent;
MICHAEL J. LIBMAN et al.,
Appellants.
APPEAL from an order of the Superior Court of Los
Angeles County, Elihu M. Berle, Judge. Affirmed in part,
reversed in part and remanded.
Law Offices of Michael J. Libman and Michael J. Libman
for Appellants.
Kabateck, Brian S. Kabateck, Anastasia K. Mazzella and
Hugo B. Flores for Plaintiff and Respondent.
Annaguey McCann and Kathryn L. McCann; Ellis George
Cipollone O’Brien and Eric M. George; Hydee Feldstein Soto, City
Attorney, Kathleen A. Kenealy and Julie C. Riley Deputy City
Attorneys for Defendant and Respondent.
______________________
Attorney Michael J. Libman and Law Offices of Michael J.
Libman, APC (collectively Libman), purported to represent
ratepayer Antwon Jones, individually and on behalf of a class, in
consolidated class action lawsuits that were brought against the
City of Los Angeles based on inaccurate billing by the Los
Angeles Department of Water and Power (LADWP). As part of a
settlement with the City that was approved by the trial court,
Libman was awarded attorney fees of $1.65 million plus costs.
Following revelations that some of the attorneys who negotiated
the settlement represented both the City and the class, the trial
court instituted proceedings to reevaluate whether the settlement
was fair and reasonable, including the award of attorney fees. As
a result of these proceedings, the court entered an order requiring
Libman to disgorge all of the fees that he received. The court
entered a second order imposing monetary sanctions of
approximately $116,000 and nonmonetary sanctions based on
Libman’s discovery misconduct during the proceedings. Libman
appeals from both orders.1 Ultimately, we affirm the
nonmonetary sanctions imposed and the disgorgement of $1.65
1 The motions seeking discovery sanctions and
disgorgement were filed by Jones alone. On appeal, the City filed
a brief as a purported respondent joining in the contentions made
by Jones.
2
million in attorney fees, but reverse the monetary sanctions of
approximately $116,000, as explained below.
With respect to the sanctions order, Libman contends on
appeal that: (1) the court’s inherent supervisory authority does
not include the power to award attorney fees as a sanction; (2)
the Civil Discovery Act (Discovery Act: Code Civ. Proc.,
§ 2016.010 et seq.)2 does not authorize sanctions against a
nonparty; (3) the trial court abused its discretion by awarding
both non-monetary and monetary discovery sanctions against
Libman for asserting a constitutional privacy right; and (4) the
trial court abused its discretion by imposing both non-monetary
and monetary sanctions for lost electronically stored information.
We conclude that nonmonetary sanctions were properly
imposed under the trial court’s inherent authority to control the
proceedings before it, but the trial court did not have the power to
impose monetary sanctions in this case pursuant to its inherent
authority or the discovery statutes. The sanctions order must be
modified to delete the award of monetary sanctions, and as
modified, we affirm.
With respect to the disgorgement order, Libman contends
on appeal that: (1) the disgorgement order exceeded the trial
court’s authority to order injunctive relief; (2) the disgorgement
order is not supported by substantial evidence that Libman
violated the California Rules of Professional Conduct;3 (3) denial
of discovery violated his due process rights; (4) the disgorgement
order is an excessive fine; (5) the trial court lacked authority
2 All further statutory references are to the Code of Civil
Procedure, unless otherwise stated.
3 All further references to rules are to these rules.
3
under Code of Civil Procedure sections 128 and 664.6 to order
disgorgement; and (6) the trial judge should have recused
himself.
Because Libman failed to set aside the order imposing
nonmonetary sanctions, which included striking his opposition to
the motion for disgorgement and entering his default, the issues
that he may raise on appeal from the disgorgement order are
correspondingly limited. Even were we to consider the issues on
the merits, however, we would affirm. The disgorgement order is
a money judgment, not injunctive relief, and it is supported by
substantial evidence of egregious violations of the rules for
ethical conduct. It is not an excessive fine. The trial court
properly exercised its authority in ordering disgorgement, and we
find no basis for the trial court’s recusal. Therefore, we affirm
the disgorgement order.
4
FACTS AND PROCEDURAL HISTORY
Background4
In 2013, the Los Angeles Department of Water and Power
(LADWP) implemented a new billing system designed by
PricewaterhouseCoopers (PWC) which resulted in thousands of
inaccurate billing statements to LADWP customers. LADWP
customers began filing lawsuits against the City of Los Angeles
in December 2014 in connection with the billing errors. On
December 9, 2014, LADWP customer Antwon Jones entered into
a written attorney-client fee agreement with attorney Paul
Paradis of Paradis Law Group.
Paradis and attorney Paul Kiesel met with an attorney at
the City, after which the City agreed to retain Paradis and Kiesel
as special counsel to represent the City against PWC in
connection with the billing program.
In January 2015, Paradis sent Jones a draft for a class
action complaint against PWC (the draft complaint). Paradis,
Kiesel, and attorney Gina Tufaro were listed as counsel for Jones
in the draft complaint. Jones was not aware that Paradis and
Kiesel were also acting as special counsel for the City. The draft
complaint was never filed.
Paradis was unable to obtain a conflict waiver from the
4 In accordance with the standard of review, we state the
facts in the light most favorable to the judgment. (Meister v.
Mensinger (2014) 230 Cal.App.4th 381, 387 (Meister).) Many of
the background facts are drawn from the October 2019 report of
ethics attorney Ellen Pansky to the Los Angeles City Attorney’s
Office, which both parties relied on in their briefs on appeal.
5
City to represent both the City and a ratepayer. In February
2015, Paradis suggested Ohio attorney Jack Landskroner could
represent Jones. Kiesel suggested Libman to serve as local
counsel in California.
On March 3, 2015, Kiesel informed Libman that Paradis
was drafting a complaint for Jones’s class action against the City.
He asked for Libman’s state bar number to add to the complaint.
Lawsuits Filed
On March 6, 2015, Paradis, Kiesel, and several of the City’s
attorneys filed a lawsuit on behalf of the City against PWC (the
PWC action). The complaint alleged claims arising out of the
billing system that PWC designed for the LADWP. The PWC
action was assigned to Judge Elihu M. Berle.
On March 24, 2015, Paradis sent a draft of a claim notice
for Jones to Kiesel, asking him to send it to Libman to sign.
Kiesel sent the notice to Libman with a reminder to sign it.
Paradis introduced Jones to Landskroner. Jones believed
Paradis and Landskroner were filing a complaint for him against
the City. Landskroner provided a final draft of Jones’s class
action complaint to Libman with directions to file it.
On April 1, 2015, Libman filed Jones’s class action
complaint against the City, listing Libman and Landskroner as
counsel for Jones and alleging claims arising from the inaccurate
bills (the Jones class action). The Jones class action was also
assigned to Judge Berle.
After the Jones class action complaint was filed, Jones
communicated solely with Landskroner. Jones never met
Libman or understood Libman to be his counsel.
6
The other class actions filed against the City were found to
be related to the Jones class action, and the Jones class action
was designated as the lead case (collectively referred to as the
class action).
In July 2015, Libman associated Kiesel as cocounsel in an
unrelated personal injury lawsuit. Libman and Kiesel conducted
a trial in the personal injury case between August 10 and
August 20, 2015. They obtained a $2.5 million verdict, after
which the parties in that case reached a confidential settlement.
Kiesel received at least $500,000 for his work on the case.
In August 2015, four months after the Jones class action
was filed, a proposed settlement was reached with the City. The
trial court did not initially approve the settlement, however,
because of concerns expressed by the court and the counsel in the
related cases.
In September 2015, Libman associated Kiesel as cocounsel
in a case against a home repair store, which went to trial a few
weeks later and resulted in a $1.415 million verdict.
In December 2015, Paul L. Bender was appointed as the
independent court monitor in the class action.
In May 2017, Jones filed a motion for final approval of the
settlement and an award of attorney fees. Jones executed a
declaration in support of the motion that referred to Landskroner
as “class counsel” and to Libman as “liaison counsel.” Jones
declared that he approved of his class counsel’s request for
attorney fees and costs based on the high quality work that class
counsel performed and the benefits of the settlement for the
Jones class.
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Libman Declaration Supporting Request for Attorney
Fees
Libman submitted a declaration in support of his request
for attorney fees for his work as class counsel. He declared that
his firm expended 1,444 hours in the litigation, and he personally
worked 1,340 hours. He attached monthly time reports of the
work that his firm performed, as well as charts dividing the work
into different categories. He represented that his firm prepared
the charts from contemporaneous daily time records that the firm
maintained.
He submitted his firm resume. Under the title “Wage and
Hour and Consumer Class Actions (Co [ ] Counseled with
Kingsley and Kingsley),” Libman listed 32 cases and stated:
“Since 2005 the Libman firm successfully collaborated and
co [ ]counsel[ed] with Kingsley & Kingsley in class actions and
consumer protection litigations.”
Libman’s billing litigation summary for work attributable
to the Jones class action showed Libman worked 31.75 hours in
November 2013, and 25.5 hours in December 2013, at a rate of
$575 per hour. In 2013, his paralegal performed 2.5 hours in
November and 1.5 hours in December. The tasks that Libman
listed having performed in 2013 were factual investigation and
communication with the client/class member.
Libman’s billing summary for 2014 listed 43.5 hours in
January, 23.25 hours in February, 12 hours in March, and
approximately 20 hours per month thereafter, for a total of
253.75 hours expended in 2014. 229.75 of those hours were spent
on factual investigation, 5.5 hours were spent drafting the initial
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and amended complaint, and 18.5 hours were spent
communicating with the client/class member. His paralegal also
spent 3.5 hours drafting the initial and amended complaint in
2014.
His 2015 summary similarly listed a total of 256.25 hours
worked. He claimed his time was spent on a wider variety of
tasks in 2015, including 23 hours drafting the initial and
amended complaint. In 2016, he listed 478.5 hours expended,
including 22.75 hours working with the independent court
monitor on confirmatory discovery. For the first five months of
2017, he listed 294.25 hours.
Libman did not disclose his working relationship with the
City’s special counsel Kiesel to the trial court or to Jones.
Entry of Judgment in the Class Action
The motion for approval of the settlement and an award of
attorney fees was heard on July 7, 2017, by Judge Berle. Libman
identified himself at the hearing as appearing for Jones and as
class liaison. The court explained that although the burden was
on the proponent of the settlement to establish that the
settlement was fair and reasonable, there was a presumption of
fairness when the settlement was reached through outside
bargaining, the investigation and discovery were sufficient to
allow counsel and the court to act intelligently, counsel was
experienced in similar litigation, and the percentage of objectors
was small. In ruling that the settlement was entitled to a
presumption of fairness, the court relied on the fact that the
settlement negotiations and the mediation were undertaken in
good faith and at arm’s length at all times. The court also
9
concluded that the settlement was fair and reasonable in part
because the plaintiffs understood there would be risk involved in
continuing the litigation, and class counsel believed the
settlement was fair, reasonable, and adequate.
On July 20, 2017, the trial court entered an order
approving the class action settlement and awarding a total of $19
million in attorney fees to counsel for the various class actions.
The City paid $19,241,003.99 to Landskroner, from which
attorney fees and costs were distributed to the other attorneys in
the consolidated cases. Libman received $1.65 million for
attorney fees and $3,370.01 for expenses.
During discovery proceedings in the PWC case, Paradis’s
simultaneous representation of Jones and the City was revealed.
Ultimately, in March 2019, Landskroner filed a motion to be
relieved as class counsel in the Jones class action.
Appointment of New Class Counsel and Discovery Orders
At a hearing in the Jones class action in April 2019, the
trial court appointed attorney Brian S. Kabateck as the new class
counsel. The trial court informed Libman that if he wished to
withdraw as liaison counsel, he should file a motion and submit
an accounting of all sums that he received from the class action
litigation. The trial court ordered Kabateck to prepare written
orders based on the court’s rulings.
In May 2019, the trial court entered a written order
appointing Kabateck as class counsel. The order directed
Kabateck, among other duties, to educate himself on how the
settlement was reached, and after evaluating whether the
settlement was fair, reasonable, and adequate under all of the
10
circumstances, if he should deem it necessary to protect the
interests of the class, to seek appropriate relief on behalf of the
class.
On July 3, 2019, in the class action, the trial court entered
an order directing Libman to provide an accounting to the court
for the funds that he had received, including cash receipts and
disbursements, debits and credits, and full dates and recipients of
all funds. In addition, Libman was ordered to produce all
documents in connection with the class action and related
matters reflecting the following information: sums that he
received and sums received by anyone, disbursements made from
any sums that Libman received and disbursements made to
anyone, all time records submitted for compensation, actual time
expended by Libman, expenses incurred and expense
reimbursements submitted, attorney-client agreements, and
agreements among Landskroner, Paradis, Kiesel, Libman, and
their related companies. Libman was directed to deliver the
accounting and the documents to the trial court by July 12, 2019.
In addition, Libman was ordered to produce to Kabateck by
July 12, 2019, all of the original correspondence, pleadings,
deposition transcripts, expert reports and other writings
reasonably necessary to the representation of Jones and the
class, all original documents reflecting Libman’s work product,
the original and complete file in the class action and in the PWC
action, and all original retainer and fee sharing agreements in
connection with the PWC action.
On July 22, 2019, in the PWC action, PWC took Libman’s
deposition. Asked how many potential class members he spoke
with before the Jones class action was filed, he said more than 20
people.
11
At a hearing in the PWC action on July 25, 2019, Libman
stated that he began investigating the LADWP billing errors in
2013. Kiesel suggested that Libman act as local counsel, because
Kiesel knew Libman had been investigating the billing problem a
year before anyone else started work on the case. Although
Libman had stated in court and in the mediation that he
represented Jones, he admitted that he never met Jones, did not
have a written attorney-client agreement with Jones, did not
have Jones’s consent to represent him, and did not have Jones’s
consent to any fee arrangement. He asserted that he represented
Jones indirectly through Landskroner and did not need the
client’s consent to be paid, only the court’s approval of the fees.
The trial court noted that in response to the court’s order
for an accounting, Libman provided an envelope containing some
time sheets, copies of checks, and invoices. The submission did
not qualify as an accounting. The court explained that an
accounting was a compilation of debits and credits, cash receipts
and disbursements, with explanations of the items. Libman
stated that he thought he was supposed to produce the
documents supporting the accounting that was already done, not
to create a new accounting. The trial court explained the order
was to create a new accounting and gave Libman an opportunity
to correct the situation by submitting a full accounting by
August 30, 2019.
Kabateck requested copies of the documents in the
envelope. He noted Libman provided 5 boxes of documents, but
had not provided a privilege log. The court directed Libman to
provide a privilege log.
At a hearing in the PWC action in August 2019, Libman
acknowledged the court’s order for a new revised accounting and
12
asked for additional time due to an impending trial. The court
granted an extension to September 25, 2019, to file the
accounting.
On three occasions, Jones asked Libman for an acceptable
date to take his deposition. Libman did not respond to any of the
requests. At a status conference on September 24, 2019, the
court ordered Libman to cooperate with Jones to schedule his
deposition.
Initial Motion Seeking Disgorgement and Continuing
Effort to Obtain Discovery
On September 26, 2019, the City filed a request to dismiss
the PWC action with prejudice. That same day, Jones and the
City filed a joint application in the class action for an order to
show cause regarding issuance of a preliminary injunction
requiring disgorgement of approximately $11,755,000 in attorney
fees received by Landskroner and Libman.
On September 27, 2019, Libman filed an accounting in the
class action consisting of a single page that listed four dates and
a total amount of $1,655,805 received from Landskroner for fees
and expenses.
Jones sent two emails to Libman asking for deposition
dates without receiving a response. On October 9, 2019, Jones
sent a notice of deposition and production of documents to
Libman. Libman asked Jones to take the deposition off calendar,
stating that he would provide information voluntarily. Jones
discussed dates with Libman’s attorney, but ultimately concluded
Libman’s offer for an inadmissible confidential meeting was not
sufficient.
13
Libman filed a response to the motion for an order to show
cause regarding a preliminary injunction. Jones and the City
each filed a reply. A hearing was held on the motion on
December 2, 2019. The trial court found there was sufficient
evidence to issue an order to show cause regarding a preliminary
injunction requiring disgorgement of fees against Landskroner
and Libman.
Jones sent another email to Libman requesting dates for
his deposition that went unanswered. In December 2019, Jones
issued a subpoena to take Libman’s deposition on January 15,
2020, which required the production of documents. The
deposition subpoena expressly stated that Libman was not a
party to the action.
Initial Motion for Contempt and Continuing Effort to
Obtain Discovery
On January 8, 2020, Jones filed an ex parte application for
an order to show cause regarding contempt, fines, incarceration,
and sanctions against Libman for failing to provide a complete
accounting and privilege log. In opposition to the ex parte
application, Libman filed his own declaration. The trial court
deemed the ex parte application to be a motion for contempt,
ordered a briefing schedule, and set a hearing date in March
2020.
That same day, Libman filed an ex parte application
seeking to take the depositions of Kabateck and two of the City’s
attorneys. He argued the attorneys had submitted executed false
and misleading documents in support of the order to show cause
regarding a preliminary injunction. He claimed they had
14
knowledge and evidence that other people were responsible for
Libman’s predicament based on Kabateck’s statement, “I suggest
you turn your anger and angst toward the fellows who got you
into this fine mess.” The trial court denied the request for
depositions.
On January 30, 2020, Jones, the City, Landskroner, and
Libman filed a stipulation to stay further proceedings on the
order to show cause regarding a preliminary injunction for
disgorgement of attorney fees and to vacate the scheduled
hearing, without prejudice to the City and/or Jones refiling an
application for an order to show cause, or similar motion for
disgorgement, at a later date.
Libman filed a motion to quash the subpoena for his
deposition, which was heard on February 14, 2020. The trial
court found that a subpoena to compel the appearance of a
nonparty at a deposition must be personally served. Because
Libman was not served personally, the court granted the motion
quashing service of the subpoena.
The trial court noted that Libman continued to be liaison
counsel in the class action for limited purposes, with fiduciary
duties to the class and to the court. Based on those duties, the
court ordered Libman to produce to the court all of his records for
any time expended in connection with the class action by
February 24, 2020. The court ordered Kabateck to prepare an
order reflecting the court’s ruling. Kabateck asked whether the
order included that Libman must appear for his deposition. The
court stated that Kabateck needed to personally serve Libman
with a subpoena, and if Libman didn’t comply with the subpoena,
Kabateck needed to bring a motion to compel.
On February 24, 2020, Libman submitted the very same
15
time records to the court that he provided with his application for
attorney fees in 2017. Jones sent a meet and confer letter
notifying Libman that the submission of his time records was
inadequate.
On March 16, 2020, Jones personally served Libman with a
deposition subpoena that is not part of the record on appeal. Due
to the coronavirus pandemic, the subpoena was withdrawn in
April 2020. After issues created by the pandemic could be
resolved through the use of remote depositions, Jones twice asked
Libman for dates to hold his deposition and Libman failed to
respond.
The motion for contempt was continued and heard on
July 9, 2020. Kabateck described Libman’s inadequate
submissions in response to the court’s orders to provide an
accounting and the various attempts to schedule Libman’s
deposition, concluding that holding Libman in contempt was the
only way to get the information from him.
The court asked the status of Libman’s deposition.
Kabateck stated that Libman had been served with a subpoena
and twice asked to provide dates for his deposition, but Libman
failed to respond. Kabateck acknowledged that he had to take
further action with respect to the deposition.
The court asked Libman about appearing for deposition
and whether it would be helpful to explain matters in a
deposition. Libman, in explaining why he did not want to sit for
his deposition, stated that he began working on the DWP
problem before Jones became involved. In 2013 and 2014, his
mother-in-law was a prospective client. The billing for her house
started Libman’s investigation.
Kabateck noted that Libman’s mother-in-law passed away
16
in 2012. Kabateck requested that the court hold Libman in
contempt and charge him $1,000 per day until he produced an
accounting showing where the money went that he received for
fees.
The trial court told Libman, “These are very serious
charges made by Mr. Kabateck. I would like to give you an
opportunity to explain all those charges . . . and give you an
opportunity to explain in detail all of your receipts and
disbursements, all your credits and debits, the accounting. [I]
want to give you an opportunity to explain all the time entries,
explain all the emails in response to Mr. Kabateck’s charges.
[I’m] going to give you an opportunity to present all evidence of
any fraud that you claim. [¶] The court is going to order your
deposition.” The court ordered Libman’s deposition be taken
within 30 days, which would include the production of
documents. The court offered to participate if necessary to make
rulings on any objections.
Based on the court’s statement that he could present all
evidence of fraud at his deposition, Libman served subpoenas on
Kabateck personally and as the person most knowledgeable for
his law firm, seeking testimony concerning the drafting and filing
of a post-appointment report in June 2020. Kabateck filed a
motion to quash the subpoenas.
At the same time, Libman filed a motion to revoke the trial
court’s July 9, 2020 order compelling his deposition. He argued
that the March 2020 deposition subpoena had been withdrawn
and no motion to compel Libman’s deposition had been filed
before the July 9, 2020 hearing. He was not provided any
statutory notice that his deposition would be compelled during
the July 9, 2020 hearing. In addition, he argued that the court
17
lacked jurisdiction to compel his deposition, as he is not a party
to the case and there was no authority for this type of deposition.
In response to the motion to revoke the deposition order,
Jones argued that the court exercised its inherent power to order
Libman’s deposition. The court deferred ruling on the contempt
motion by ordering alternatively for Libman’s deposition.
On September 23, 2020, a hearing was held on several
matters in the class action. The court considered the motion to
quash Kabateck’s deposition subpoenas. The court clarified that
by ordering Libman’s deposition, the court did not authorize
Libman to serve subpoenas and start taking discovery. Kabateck
was acting as class counsel, while Libman was a percipient
witness who submitted an application for fees, was paid, and had
percipient knowledge with regard to the hours worked, services
provided, and monies received. The trial court quashed the
subpoenas for Kabateck’s deposition personally and as person
most qualified for his law firm.
The court considered Libman’s motion to revoke the July 9,
2020 order compelling his deposition. The court stated that in
deferring a ruling on the contempt motion, the court ordered
Libman’s deposition as an alternative. The court concluded it
had inherent power to enforce order in the proceedings before the
court, or before a person who was under the court’s authority to
conduct a judicial investigation, and to compel attendance in a
proceeding pending before the court under section 128. A
deposition was one of the court’s proceedings and Libman was a
person connected to the proceedings over whom the court had
jurisdiction and may exercise control, as Libman was the liaison
counsel for the class and continued in a limited capacity to fulfill
his duties with regard to providing an accounting. The court
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stated that it had invoked its inherent power to control the
proceedings and under these circumstances, had authority to
order Libman to have his deposition taken in connection with
Kabateck’s efforts to investigate the settlement and in connection
with the order to show cause for contempt. The court had already
ordered an accounting and Libman’s deposition related to the
accounting and supporting documents. Based on the evidence,
Libman was a percipient witness with firsthand knowledge of the
facts and circumstances relevant to the issues being investigated
by Kabateck. The court denied Libman’s motion to revoke the
order compelling his deposition. The court ordered Libman’s
deposition be taken on October 23, 2020, and the court would be
available to rule on objections.
Libman’s Deposition
The first date of Libman’s deposition was held on
October 23, 2020. The trial court was intermittently present to
rule on objections. Libman stated he was not listed as an
attorney of record on any of the 32 class action cases that he
listed in his firm resume in support of the award of fees. He did
not recall the names of the cases that he described in the firm
resume. Libman refused to answer questions about the work
that he performed on the cases on the grounds of privilege. The
trial court overruled his objections. Libman objected that he was
not a party, simply a witness, and asked to adjourn so that he
could file a writ. The trial court overruled his objection. Asked
further questions about his purported collaboration with the
Kingsley law firm on the cases listed, Libman repeatedly stated
that he could not recall.
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Kabateck asked about the contemporaneous daily time
records that were used to create the charts submitted to the court
in 2017. Libman stated that in March 2018, he had a data
breach of his computer network that paralyzed the hardware and
software. He produced a declaration from computer technician
Tony Clark that he had filed in March 2018 in a different case.
In the declaration, Clark stated that as a result of hardware and
software malfunctions, some data on Libman’s server was
missing, and Clark was in the process of retrieving the data.
Libman testified that he continued to experience attempted data
breaches.
Kabateck established that Libman’s mother-in-law passed
away in 2012. Libman stated that his wife and father-in-law
were having a billing problem with LADWP, which alerted
Libman to the matter. Libman refused on privacy grounds to
provide the name of any class representative other than a family
member who Libman had talked to before being introduced to
Jones in 2015. The court gave Libman an opportunity to conduct
research on the issue and submit a brief at the next deposition
session.
The second date of Libman’s deposition was held on
November 13, 2020. The trial court was intermittently present.
Asked where he deposited the $1.6 million that he received from
Landskroner, Libman refused to answer on the ground that it
was private information. The trial court found the information
did not invade Libman’s personal finances and ordered Libman to
answer the question. Libman stated that it was deposited into a
business account and refused to answer the question further.
Asked for the name of the bank where he has his personal
accounts, Libman refused to answer on the ground that the
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information was private and implicated the privilege of his other
clients. The court found the name of the bank did not involve any
confidential information, overruled the objections, and ordered
Libman to answer the question to provide the name of his bank.
Libman refused. The court informed Kabateck that he could take
appropriate action to enforce the court’s orders.
Libman testified that his firm has an accountant. Asked
for the name of the accountant, he refused to answer based on his
privacy rights. The trial court overruled his objection and
ordered Libman to answer the question. Libman continued to
refuse to answer and the court informed Kabateck that he could
take appropriate action. Libman stated that the
contemporaneous daily time records that he used to prepare his
fee application were lost or corrupted as a result of hacking in
2018.
Jones asked Libman to provide the names of individuals
that he spoke with as a potential class representative. Libman
objected on the grounds of privacy for himself and third parties,
requesting an opportunity to contact the third parties to consider
whether they wanted to be identified. The trial court overruled
the objection and ordered Libman to answer the question.
Libman refused and the trial court informed Kabateck that he
could take appropriate action. Jones attempted to ask Libman
about certain email messages and he refused to answer on the
basis of the agreement governing the email service. The trial
court overruled his objection and ordered him to answer. Libman
refused.
Jones asked Libman when he had last spoken to Paradis.
Libman refused to answer on the grounds of work product
privilege and ongoing investigation. The trial court overruled the
21
objection and ordered him to answer the question. Libman
refused to answer despite the court’s order.
On November 18, 2020, Jones served a notice of deposition
for Libman’s computer technician Clark to be held on
December 17, 2020.
Motions for Contempt, Discovery Sanctions, and
Disgorgement
On January 4, 2021, Jones filed three motions against
Libman. The first was an amended motion for an order of
contempt based on violation of the court’s orders to produce a
comprehensive accounting and related information in the class
action, including documents showing the money he received and
disbursement of those sums, as well as the names of his bank and
his business accountant. The motion described the deposition
questions that the trial court ordered Libman to answer, which
he refused to answer. Jones requested attorney fees of
$44,012.50 in connection with the contempt motion.
Second, Jones filed a motion for disgorgement of attorney
fees in the amount of $1.65 million pursuant to sections 128 and
664.6 based on violations of rules 1.1.5, 1.7, and 3.3. The
disgorgement motion was based on evidence of the following
conduct: Jones never retained Libman; Libman failed to obtain
Jones’s written consent to divide attorney fees with Landskroner;
Libman failed to disclose and obtain written consent from Jones
as to Libman’s relationships with Paradis and Kiesel; and
Libman violated his duty of candor to the trial court by
intentionally falsifying his declaration in support of an attorney
fees award and failing to disclose material information, including
22
conflicts of interest, to the trial court prior to final approval.
Although the motion was based on the same statutory sections as
the prior joint application, it did not seek disgorgement by way of
a preliminary injunction. Jones sought a judgment against
Libman to recover $1,650,000 in attorney fees and order the
disgorged fees be deposited into an escrow account in the names
of Jones’s counsel and the City’s counsel.
Third, Jones filed a motion for discovery sanctions against
Libman for violating the trial court’s orders to produce a full
accounting and respond to deposition questions. The sanctions
motion was based on the court’s inherent authority and sections
128, 2023.010, 2023.030, 2025.450, and 2025.480. Jones sought
monetary sanctions of $116,647.29 and non-monetary sanctions
in the form of issue preclusion, evidentiary sanctions, and
terminating sanctions.
Jones provided the declaration of class counsel Serena
Vartazarian in support of all three motions. Jones also provided
the declaration of the independent court monitor Bender. Bender
declared that although Libman’s billing summary included hours
worked in conjunction with the independent court monitor, in
Bender’s role as independent court monitor, he never had contact
with Libman.
Jones submitted the declaration of attorney Eric B.
Kingsley. Kingsley stated that he was the managing partner of
Kingsley and Kingsley. Libman rented office space from his firm,
but was never an employee and did not trade services for rent.
Libman was not cocounsel on any of the 32 cases identified in his
firm resume. He did not collaborate with Kingsley or anyone at
his firm on any of those cases. Libman did no legal work on any
of the cases listed, and he did not receive any fees or
23
compensation on those cases. Libman did work, however, on one
class action case with the firm, and Kingsley’s father, who was
his former partner and since retired, was cocounsel for several
personal injury cases with Libman.
Kabateck filed his declaration in support of the motion for
disgorgement. He requested the motion for disgorgement replace
and supersede the prior joint application for a preliminary
injunction as to Libman only.
Opposition to Motions and Clark’s Deposition
Libman filed a special appearance to challenge the court’s
jurisdiction and a “preliminary opposition” to the three motions.
Among other arguments, Libman asserted that he was not a
party to the action and had been relieved of his position as liaison
counsel, so an order to show cause regarding contempt could not
be served on him by email.
Among other arguments in response, Jones stated that
Libman was put on notice of the disgorgement motion in 2019
and had been on notice of the contempt proceedings since
January 2020. Both parties and nonparties must be personally
served with a contempt affidavit, but personal service was not
necessary for an amended motion.
At a hearing on January 27, 2021, the trial court found the
pending motion for contempt was a continuation of the contempt
proceedings filed in January 2020. In addition, the court found
Libman had notice of the intent to seek disgorgement in 2019.
The trial court permitted Libman to take Kingsley’s deposition.
The court reiterated that Libman was not entitled to take
Kabateck’s deposition.
24
Libman, on behalf of his computer technician Clark, had
filed a motion to quash Clark’s deposition subpoena. The trial
court denied the motion to quash because Clark’s testimony had
direct bearing on Libman’s claims that his records were
permanently destroyed in a cyberattack. Despite the court order,
Libman and Clark failed to appear for Clark’s deposition.
On February 22, 2021, Libman filed oppositions to the
sanctions motion, the disgorgement motion, and the contempt
motion. In opposition to the motion for discovery sanctions,
Libman argued that section 128 did not provide unlimited
authority to create new discovery rules contrary to the discovery
statutes or to award attorney fees to punish attorney misconduct.
He argued that sanctions under the discovery statutes were
authorized only to the extent provided by a particular discovery
procedure, each of which referred to a motion to compel, which
Kabateck had not sought. It was an abuse of discretion to impose
discovery sanctions solely for punishment. He argued that an
order must be in writing and he complied with the court’s
discovery orders. There was no finding that he disobeyed a court
order. He also argued that the trial court judge should recuse
himself from deciding the motion.
In support of the oppositions, he filed his own declarations.
He also filed the declaration of Clark. He filed the declaration of
attorney Scott A. Miller, who stated that he worked on half of the
cases listed in Libman’s firm resume in collaboration or cocounsel
arrangements with the Kingsley firm, had often spoken with
Libman about the cases, and had also seen Libman frequently
speak with the Kingsley firm attorneys.
Jones filed a reply to the opposition to the motion for
discovery sanctions. Jones stated the motion for discovery
25
sanctions was not substantively a second motion for contempt,
but an alternative vehicle for holding Libman accountable for
disregarding court orders and the judicial process. Libman
abused the discovery process by failing to comply with the court’s
July 3, 2019 order to provide an accounting. Jones argued that
section 2025.480, subdivision (a), allowed a party to move the
court for an order compelling an answer or production, but did
not require a motion to compel before a court could issue
sanctions under the discovery statutes. Section 2023.040
required only that the motion for sanctions identify the party
and/or attorney against whom the sanctions were sought and
specify the sanctions. Moreover, Jones argued, a court may issue
sanctions under the discovery statutes on its own if it concludes a
party abused the discovery process, as long as the party receives
notice and an opportunity to be heard.
Jones also filed replies to the motion for disgorgement of
attorney fees and to the opposition to the amended motion for an
order of contempt. Jones filed additional evidence in support of
the replies, including excerpts from Kingsley’s deposition.
Hearing and Trial Court Rulings
All three motions were heard on March 4, 2021. Libman
made an oral motion for the trial court judge to recuse himself
due to bias against Libman, but the court found Libman’s
statements to be without foundation and denied the motion for
recusal.
With respect to the motion for discovery sanctions, the trial
court asked, in the event that monetary sanctions were imposed
only, whether Libman would comply with the court’s orders
26
requiring an accounting and answers to the deposition questions
that he had previously refused to answer. Libman was unable to
state that he would comply with the court’s orders. If evidentiary
sanctions were imposed, the court asked if Libman would comply
with the court’s orders requiring an accounting and answers to
the deposition questions. Libman equivocated and refused to
state that he would comply with the court’s order. The court
asked if issue sanctions were imposed, would Libman comply
with the orders previously made in the case for an accounting
and answers to the deposition questions. Libman insisted that he
had already provided an accounting on three occasions, the
court’s order was not clear, and he did provide answers. The
court interpreted Libman’s response as refusing to comply.
A. Ruling on Motion for Disgorgement
The trial court addressed the motion for disgorgement first.
Libman’s failure to disclose a conflict of interest supported
disgorgement of fees. In addition, Libman understood the court
was relying on the representations in his declaration in support
of his application for attorney fees, yet he intentionally
misrepresented substantial portions of his declaration involving
his credentials, the time that he devoted to working on the Jones
class action, the nature of the work performed, and his
paralegal’s time. He failed to disclose crucial information about
his working relationship with opposing counsel. Had Libman
made truthful statements, the information would have had a
substantial impact on the court’s assessment of whether the fees
requested were reasonable or fair. Based on the evidence, the
court granted the motion and ordered Libman to disgorge all
27
attorney fees in the Jones class action. The court also ordered
disgorgement of undeserved fees paid to Libman by the City.
B. Ruling on Motion for Discovery Sanctions
The trial court ruled on the motion for monetary and non-
monetary sanctions next. The court noted that Jones sought
$116,647.29 for reasonable expenses necessitated by Libman’s
delays and discovery abuse, including investigating facts,
conducting research, preparing and arguing multiple motions,
preparing multiple meet-and-confer letters, preparing for and
taking two deposition sessions, and preparing a comprehensive
sanctions motion. In addition and alternatively, Jones requested
non-monetary sanctions.
The trial court summarized the actions taken to obtain
discovery from Libman and concluded that California’s discovery
law authorized a range of penalties for conduct that amounted to
misuse of the discovery process. The court stated, “Given the
revelation that the Jones settlement might have been a product
of collusive conduct, this court exercised its authority by
appointing attorney Kabateck as new class counsel and by
fashioning and overseeing an investigatory procedure, which
inherently and expressly involved the use of typical discovery
tools. [¶] The court further ordered Mr. Libman to produce a full
accounting of records reflecting disbursements to and from his
firm bank account and [ ] detailed time records. [¶] These
procedures are fashioned in the discovery process, and the issued
orders are well within the court’s authority.”
The court found that Libman failed to produce the full
accounting ordered by the court and refused to answer relevant
28
questions or produce relevant documents, despite his objections
being overruled. As a result of ignoring court orders, Libman
continuously delayed and impeded the proceedings, resulting in
class counsel sending numerous meet-and-confer letters,
attending numerous hearings, and filing numerous motions to
obtain court-ordered documents and responses. Libman refused
to submit to authorized methods of discovery in violation of
section 2023.010, subdivision (d); made unmeritorious objections
in violation of section 2023.010, subdivision (e); provided evasive
responses in violation of section 2023.010, subdivision (f); and
disobeyed court orders to provide discovery in violation of section
2023.010, subdivision (g). This conduct amounted to an abuse of
discovery under section 2023.010.
The court concluded that it was authorized to impose a
monetary sanction under 2023.030. The court stated, “[S]ection
2023.030 provides that a court may impose a monetary sanction
ordering that one engaging in the misuse of the discovery process,
or any attorney advising their conduct, or both, to pay the
reasonable expenses, including attorneys’ fees incurred by anyone
as a result of that conduct. [¶] In this case, the fees and costs
incurred by class counsel relate to more than a year of class
counsel’s efforts to obtain the documents and information that
the court ordered Mr. Libman to produce on numerous occasions.
[¶] In a supporting declaration, Mr. Kabateck, class counsel, has
set forth the type of fees and costs incurred, which include,
among other things, attorneys’ fees relating to investigation,
researching, drafting, filing multiple motions, including the
instant motion for sanctions, as well as preparing and arguing
the discovery issues, . . . reviewing Mr. Libman’s document
production, and preparing for and taking two sessions of Mr.
29
Libman’s deposition. [¶] So based on all the argument submitted
and the argument of counsel, the court will award . . . monetary
sanctions in the amount of $116,647.29, to go to class counsel,
against Mr. Libman and the Law Office of Michael J. Libman.”
The court found sanctions were reasonable and warranted,
and within the court’s authority under section 128 and the
discovery statutes. The court ordered as an evidentiary sanction
that Libman could not rebut the presumption that no evidence
exists where he refused to answer deposition questions
pertaining to (1) his accounting, including bank records and the
name of his accountant, (2) his detailed time records, (3) his work
that he claims he did with the Kingsley law firm, and (4) the
names of any potential class representatives Libman claimed to
have spoken with prior to 2015.
The court imposed an issue sanction that it be taken as
established that Libman performed no substantive work in the
Jones matter and served as local counsel for the purpose of filing
the complaint and performing minor administerial tasks only.
The court imposed an issue sanction that it be taken as
established that Libman did not act as cocounsel or perform work
in the 32 class action cases listed in his firm resume.
The court imposed an issue sanction that it be taken as
established that Libman did not talk to any potential class
representative prior to 2015.
The court also imposed an issue sanction that Libman
could not refute an email showing that he routinely transferred
questions to Landskroner, rather than perform substantive work
in the Jones class action.
In addition, the court ordered that Libman’s flagrant
conduct merited terminating sanctions. The court found it was
30
just to strike Libman’s opposition to the motion for disgorgement
and enter his default on the motion for disgorgement. Libman
refused to comply with the court’s orders in the event that only
monetary and issue sanctions were imposed, and therefore, the
court found it must additionally impose terminating sanctions.
The court granted the motion for monetary and non-monetary
sanctions, including evidentiary, issue, and terminating
sanctions.
C. Ruling on Motion for Contempt
On the motion for contempt, the trial court found it had
jurisdiction. Class counsel presented evidence supporting a
contempt citation and contempt was warranted. The court
ordered Libman held in contempt of court and ordered him to pay
$44,012.50 as attorney fees under section 1218, subdivision (a), to
class counsel. The trial court’s ruling on the contempt motion is
not at issue on appeal.
D. Written Orders and Appeal
On March 24, 2021, the trial court entered written orders
granting the motions for disgorgement, discovery sanctions, and
contempt. The order granting the motion for disgorgement
ordered that Jones and the City were entitled to judgment
against Libman and recovery of $1,650,000, with interest until
paid. The judgment was immediately enforceable upon entry.
The discovery sanctions order stated it was made pursuant
to sections 2023.030, 2025.450, and/or 2025.480. In addition to
ordering monetary sanctions of $116,647.29 paid to Kabateck, the
31
sanctions order set forth the issue and evidence sanctions, and
ordered terminating sanctions striking Libman’s opposition and
entering default on the motion for disgorgement. Libman filed
timely notices of appeal from the disgorgement order and the
sanctions order.
DISCUSSION
Discovery Sanctions
Libman contends the trial court had no authority to impose
sanctions against him. First, he asserts, the court cannot award
monetary sanctions pursuant to the court’s inherent supervisory
authority, which is codified in the general provisions of section
128. Second, he contends that he was not a party to the action,
and under the discovery statutes, sanctions against a nonparty
are limited to contempt.
In response, Jones contends the trial court had authority
under section 128 to fashion its own discovery procedures. Jones
does not contend that Libman was a party to the proceedings.
Instead, Jones asserts that under the discovery statutes, Libman
was the attorney for a party, rather than a nonparty. Jones
further contends that regardless of Libman’s specific role in the
matter, the trial court was authorized to impose monetary and
nonmonetary sanctions for misuse of the discovery process under
sections 2023.010 and 2023.030.
We conclude the court properly awarded nonmonetary
sanctions pursuant to its inherent authority, but did not have
inherent authority to award monetary sanctions. An attorney for
a party may be treated as a nonparty under certain statutes, and
32
during the discovery proceedings, Libman was treated as a
nonparty. We conclude that monetary sanctions were not
authorized under the discovery statutes governing oral
depositions in California and could not be imposed based solely
on the sanctions provisions of sections 2023.010 and 2023.030
alone.
A. Standard of Review
“We review an order imposing discovery sanctions under
the abuse of discretion standard. [Citation.] An abuse of
discretion occurs if, in light of the applicable law and considering
all of the relevant circumstances, the court’s decision exceeds the
bounds of reason and results in a miscarriage of justice.
[Citations.] The abuse of discretion standard affords considerable
deference to the trial court, provided that the court acted in
accordance with the governing rules of law.” (New Albertsons,
Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1422 (New
Albertsons).)
“The trial court’s findings of fact that underlie a discovery
sanction are reviewed for substantial evidence. [Citation.] ‘In
this regard, “the power of an appellate court begins and ends
with the determination as to whether, on the entire record, there
is substantial evidence, contradicted or uncontradicted, which
will support the determination [of the trier of fact].” ’ ” (Victor
Valley Union High School Dist. v. Superior Court (2023) 91
Cal.App.5th 1121, 1137.)
Although appellate review is deferential, a trial court
ruling that does not follow the applicable statutes and legal
principles is an abuse of discretion. (New Albertsons, supra, 168
33
Cal.App.4th at p. 1422.) “Statutory interpretation involves
purely legal questions to which we apply the independent
standard of review. [Citation.] Thus, ‘where the propriety of a
discovery order turns on statutory interpretation, an appellate
court may determine the issue de novo as a question of law.
[Citation.]’ [Citation.]” (Haniff v. Superior Court (2017) 9
Cal.App.5th 191, 198.)
“[O]ur fundamental task is to ascertain the Legislature’s
intent so as to effectuate the purpose of the statute. [Citation.]
We begin with the language of the statute, giving the words their
usual and ordinary meaning. [Citation.] The language must be
construed ‘in the context of the statute as a whole and the overall
statutory scheme, and we give “significance to every word,
phrase, sentence, and part of an act in pursuance of the
legislative purpose.” ’ [Citation.]” (Smith v. Superior Court
(2006) 39 Cal.4th 77, 83.)
“In other words, ‘ “we do not construe statutes in isolation,
but rather read every statute ‘with reference to the entire scheme
of law of which it is part so that the whole may be harmonized
and retain effectiveness.’ [Citation.]” ’ [Citation.] If the
statutory terms are ambiguous, we may examine extrinsic
sources, including the ostensible objects to be achieved and the
legislative history. [Citation.] In such circumstances, we choose
the construction that comports most closely with the
Legislature’s apparent intent, endeavoring to promote rather
than defeat the statute’s general purpose, and avoiding a
construction that would lead to absurd consequences. [Citation.]”
(Smith v. Superior Court, supra, 39 Cal.4th at p. 83.)
34
B. Inherent Authority of the Court
California courts have broad inherent equitable,
supervisory, and administrative powers, including inherent
power to control the litigation before them. (Stephen Slesinger,
Inc. v. Walt Disney Co. (2007) 155 Cal.App.4th 736, 758
(Slesinger).) Although the court’s supervisory and administrative
powers are codified in section 128, they exist apart from the
statutory authority. (Bauguess v. Paine (1978) 22 Cal.3d 626,
635–636 (Bauguess).)5 The court’s inherent authority includes
the power to impose evidentiary sanctions as a remedy for
litigation misconduct and to dismiss an action for pervasive
litigation abuse. (Slesinger, supra, 155 Cal.App.4th at p. 758.)
“When a plaintiff’s deliberate and egregious misconduct in the
course of the litigation renders any sanction short of dismissal
inadequate to protect the fairness of the trial, California courts
necessarily have the power to preserve their integrity by
dismissing the action.” (Id. at p. 762.)
The courts cannot, however, award attorney fees as a
sanction for misconduct unless authorized by statute or contract.
(Slesinger, supra, at p. 761.) In Bauguess, the Supreme Court
explained that courts have sufficient power to punish misconduct
5 Section 128 provides in pertinent part: “Every court shall
have power: [¶] . . . [¶] 3. To provide for the orderly conduct of
proceedings before it, or its officers; [¶] 4. To compel obedience to
its judgments, orders, and process, and to the orders of a judge
out of court, in an action or proceeding pending therein; [¶] 5. To
control in furtherance of justice, the conduct of its ministerial
officers, and of all other persons in any manner connected with a
judicial proceeding before it, in every matter pertaining thereto.”
35
as contempt, which is buffered by legislative safeguards.
(Bauguess, supra, 22 Cal.3d at pp. 637–638.) Approving an
inherent power to impose sanctions in the form of attorney fees
for misconduct could jeopardize the independence of the bar,
undermine the adversary system, and give courts a power
without procedural limits, potentially subject to abuse. (Id. at
pp. 638–639.)6
6 We recognize that in Fairfield v. Superior Court (1966)
246 Cal.App.2d 113, 115–116 (Fairfield), which was decided
before the Supreme Court’s decision in Bauguess, the appellate
court referred to the court’s inherent supervisory power when it
interpreted certain discovery statutes to authorize monetary
sanctions. The plaintiff in Fairfield served interrogatories on two
defendants. One defendant provided responses that the plaintiff
considered inadequate and the other did not respond. The
plaintiff moved the court for an order compelling further answers,
an order holding the other defendant in contempt, and sanctions.
Under the discovery statutes in effect at the time, if a party
answered interrogatories or stated objections, the proponent
could seek an order requiring further responses under former
section 2020, but there was no mention of sanctions. (Fairfield,
supra, at p. 119) If a party refused to answer an interrogatory,
however, the discovery statutes provided the proponent could file
a motion for an order compelling an answer under former section
2034 and the court could impose a monetary sanction, and if the
responding party failed to comply with the order compelling
responses, the court could impose further sanctions. (Id. at
pp. 118–19.) The Fairfield court relied on the court’s inherent
power to compel obedience to its orders and the plain intent of
the Legislature to interpret the discovery statutes to authorize
sanctions in the nature of those provided under section 2034
when a party failed to comply with an order made under section
2030.
36
Although Libman raises challenges to the nonmonetary
sanctions awarded in this case, which are discussed further
below, he does not challenge the proposition that the trial court’s
inherent authority includes the power to impose nonmonetary
sanctions. He simply contends that the trial court’s inherent
authority does not include the power to award monetary
sanctions. On that specific point, we agree. Unless the award of
monetary sanctions was authorized under the discovery statutes,
monetary sanctions must be stricken from the sanctions order.
(See Slesinger, supra, 155 Cal.App.4th at p. 763 [power to impose
sanctions under Discovery Act supplements inherent power to
deal with litigation abuse].)
C. Statutory Scheme Governing Discovery
The Discovery Act provides for six methods of civil
discovery in separate chapters: depositions, interrogatories,
inspections, medical examinations, requests for admission, and
exchanges of expert witness information. (§ 2020.010.) The
statutes governing each discovery method authorize the court to
impose specific types of sanctions under chapter 7 (the sanctions
chapter, commencing with § 2023.010) under specific
The Bauguess court acknowledged the holding in Fairfield
had relied on the court’s inherent supervisory power, but the
Bauguess court limited the holding to its unique facts.
(Bauguess, supra, 22 Cal.3d at p. 637.) We additionally note the
Fairfield court did not simply conclude monetary sanctions were
authorized under the court’s inherent supervisory power, but
rather, interpreted certain discovery statutes as authorizing
monetary sanctions under the circumstances of that case.
37
circumstances.
Chapter 6 allows limited discovery to be obtained from
nonparties, including oral depositions under chapter 9.
(§ 2020.010.) A party who wants to take the oral deposition of
any person must give notice in writing. (§§ 2025.220, subd.(a);
2020.010.) A deposition subpoena for a nonparty may require
testimony, as well as the production of documents, electronic
information, and tangible things. (§ 2020.020, subd. (c).) A
nonparty deponent who disobeys a deposition subpoena under
section 2020.220, subdivision (c), may be punished for contempt
under the sanctions chapter without the necessity of a prior order
of court directing compliance by the witness. (§ 2020.240.) The
nonparty deponent is also subject to forfeiture of a sum and
payment of damages provided in section 1992, which may be
recovered in a civil action. (§§ 1992 and 2020.240.)
Chapter 9 governs oral depositions in California. If a
deponent fails to answer any question or to produce any
document, electronic information, or tangible thing specified in
the deposition notice or subpoena, the party seeking discovery
can make a motion to compel the answer or production.
(§ 2025.480, subd. (a).) The court must impose a monetary
sanction under the sanctions chapter against any party, person,
or attorney who unsuccessfully makes or opposes a motion to
compel an answer or production, unless the court finds there was
substantial justification or it would be unjust. (§ 2025.480, subd.
(j).)
If any deponent fails to obey an order to compel entered
under section 2025.480, that failure may be considered a
contempt of court. (§ 2025.480, subd. (k).) If the disobedient
deponent is a party to the action, or an officer, managing agent,
38
or employee of a party, the court may make additional orders
against the party with whom the disobedient deponent is
affiliated, including issue sanctions, evidence sanctions, or a
terminating sanction under the sanctions chapter. (§ 2025.480,
subd. (k).) The court may also impose a monetary sanction under
the sanctions chapter against the party with whom the deponent
is affiliated. (§ 2025.480, subd. (k).)
Section 2023.010 describes general categories of discovery
misconduct, but does not specifically authorize the court to
impose sanctions for the conduct listed. Section 2023.010 states
in relevant part: “Misuses of the discovery process include, but
are not limited to, the following: [¶] . . . [¶] (d) Failing to respond
or to submit to an authorized method of discovery. [¶] (e)
Making, without substantial justification, an unmeritorious
objection to discovery. [¶] (f) Making an evasive response to
discovery. [¶] (g) Disobeying a court order to provide discovery.
[¶] (h) Making or opposing, unsuccessfully and without
substantial justification, a motion to compel or to limit discovery.
. . .” (§ 2023.010.) Unlike provisions of the Discovery Act that
direct the court to impose specific types of sanctions under
specific circumstances, there is no language in section 2023.010
authorizing the court to impose a sanction under Chapter 7 or
specifying the type of sanction to impose. (City of Los Angeles v.
PricewaterhouseCoopers, LLC (2022) 84 Cal.App.5th 466, 500,
review granted Jan. 25, 2023, S277211 (City of Los Angeles).)
Section 2023.030 describes the types of sanctions that are
available when another provision authorizes sanctions, but
section 2023.030 does not independently authorize the court to
impose sanctions for discovery misconduct. (City of Los Angeles,
supra, 84 Cal.App.5th at p. 502, review granted.) Section
39
2023.030 provides in pertinent part: “To the extent authorized by
the chapter governing any particular discovery method or any
other provision of this title, the court . . . may impose the
following sanctions against anyone engaging in conduct that is a
misuse of the discovery process: [¶] (a) The court may impose a
monetary sanction ordering that one engaging in the misuse of
the discovery process, or any attorney advising that conduct, or
both pay the reasonable expenses, including attorney’s fees,
incurred by anyone as a result of that conduct. . . . If a monetary
sanction is authorized by any provision of this title, the court
shall impose that sanction unless it finds that the one subject to
the sanction acted with substantial justification or that other
circumstances make the imposition of the sanction unjust. [¶] (b)
The court may impose an issue sanction ordering that designated
facts shall be taken as established in the action in accordance
with the claim of the party adversely affected by the misuse of
the discovery process. The court may also impose an issue
sanction by an order prohibiting any party engaging in the
misuse of the discovery process from supporting or opposing
designated claims or defenses. [¶] (c) The court may impose an
evidence sanction by an order prohibiting any party engaging in
the misuse of the discovery process from introducing designated
matters in evidence. [¶] (d) The court may impose a terminating
sanction by one of the following orders: [¶] (1) An order striking
out the pleadings or parts of the pleadings of any party engaging
in the misuse of the discovery process. [¶] . . . [¶](4) An order
rendering a judgment by default against that party. [¶] (e) The
court may impose a contempt sanction by an order treating the
misuse of the discovery process as a contempt of court.”
40
D. Libman’s Role in the Litigation
In the trial court, Libman was not treated as a party to the
proceedings. He was considered an attorney of a party, but not a
party. He continually objected that he was not a party to the
litigation. The deposition subpoena that Jones issued for Libman
stated that Libman was not a party. And the trial court ruled
that Libman must be personally served with the deposition
subpoena because he was a nonparty. Jones has not argued in
the trial court or on appeal that Libman was a party to the
proceedings. (Cabatit v. Sunnova Energy Corp. (2020) 60
Cal.App.5th 317, 322 [“If a party fails to raise an issue or theory
in the trial court, we may deem consideration of that issue or
theory forfeited on appeal”].)
Libman was acting as an attorney for the class in a limited
capacity, not as a party to any litigation, when the court
originally ordered him to produce an accounting and to cooperate
in scheduling his deposition. At the time that the initial
discovery orders were made, no motion had been filed against
Libman. Proceedings on the initial motion related to
disgorgement were stayed, and the operative motion for
disgorgement was filed along with the motion for discovery
sanctions. Based on the facts of this case and the arguments of
the parties, we cannot conclude that Libman was a party. (Cf.
Bauguess, supra, 22 Cal.3d at p. 634, fn. 3 [sanctioned attorney
was not a party in the main action, but was made a party of
record in a collateral matter by sanctions order].)
Libman is also not an “officer, director, managing agent, or
employee of a party.” When the Legislature intended a provision
to apply to a party’s attorney, the statutes clearly state that
41
relationship. For example, section 2025.480, subdivision (j),
requires the court to impose monetary sanctions against any
“party, person, or attorney” who unsuccessfully makes or opposes
a motion to compel under that section. Section 2023.030,
subdivision (a), allows the court to impose monetary sanctions
under certain circumstances against “one engaging in the misuse
of the discovery process, or any attorney advising that conduct.”
In this case, no argument has been made that Libman is the
“employee of a party.” Libman was an attorney of a party and
himself a nonparty.
E. Application of the Discovery Act
Libman is correct that the discovery statutes at issue do
not authorize the court to impose monetary sanctions against a
disobedient nonparty deponent under the circumstances of this
case, even if the nonparty is the attorney of a party.
A nonparty who disobeys a deposition subpoena may be
punished for contempt under the sanctions chapter. (§ 2020.240.)
The disobedient nonparty deponent is also subject to forfeiture
and payment of damages under section 1992, which may be
recovered in a civil action. (§§ 1992 and 2020.240.) There is no
provision in the statutes governing nonparties that allows
monetary sanctions to be imposed under the sanctions chapter.
The sanctions order in this case states that it was brought
pursuant to section 2025.480. Under that statute, if a deponent
fails to answer a question or produce a document, the party
seeking discovery can move to compel the answer or production,
in which case the court must impose a monetary sanction under
the sanctions chapter against any party, person, or attorney who
42
unsuccessfully makes or opposes the motion without substantial
justification. (§ 2025.480, subds. (a) and (j).) In this case,
however, no motion to compel was made or opposed. The trial
court simply ordered Libman to answer questions and produce
documents without requiring a motion to compel. Monetary
sanctions were not authorized on the basis that Libman
unsuccessfully opposed a motion to compel.
If any deponent fails to obey an order to compel entered
under section 2025.480, that failure may be considered a
contempt of court. (§ 2025.480, subd. (k).) Additional sanctions
under section 2025.480, subdivision (k), for failing to obey an
order to compel may only be imposed against a party.
(§ 2025.480, subd. (k).) There is no provision of section 2025.480
that authorizes the trial court to impose monetary sanctions
under the sanctions chapter against a nonparty, including the
attorney of a party, for failing to obey a court order compelling
answers or production of documents.
The other discovery statute listed as a basis for the
sanctions order, section 2025.450, is clearly inapplicable. Section
2025.450 provides: “If, after service of a deposition notice, a
party to the action or an officer, director, managing agent, or
employee of a party, or a person designated [as the most qualified
to testify] by an organization that is a party . . . fails to appear for
examination, or to proceed with it, or to produce for inspection
any document, electronically stored information, or tangible thing
described in the deposition notice, the party giving the notice may
move for an order compelling the deponent’s attendance and
testimony, and the production for inspection of any document,
electronically stored information, or tangible thing described in
43
the deposition notice.” (§ 2025.450, subd. (a).)7 In this case,
there was no service of a deposition notice, and Libman does not
fall into any of the categories described. He was not a party, he
was not an officer, director, managing agent, or employee of a
party, and he was not a person designated as the most qualified
to testify on behalf of a party.
On appeal, Jones concedes that due to the unique facts and
procedural posture of this matter, the parties did not follow the
process set forth in the discovery statutes to compel discovery,
including serving a deposition subpoena, filing a motion to
compel, or obtaining an order under section 2025.480. Instead,
Jones contends the court had inherent and statutory authority to
order Libman to produce discovery, and when Libman failed to
comply with the court’s discovery orders, the court had authority
to issue monetary and non-monetary sanctions against Libman
under section 2023.030.
We disagree. Sections 2023.010 and 2023.030 do not
7 If a motion under section 2025.450, subdivision (a), is
granted, the court must impose a monetary sanction under the
sanctions chapter in favor of the party who noticed the deposition
and against the deponent or the party with whom the deponent is
affiliated, unless the court finds there was substantial
justification or it would be unjust. (§ 2025.450, subd. (g)(1).) If
that party or party-affiliated deponent fails to obey an order
compelling attendance, testimony, and production, the court may
make those orders that are just, including imposition of issue
sanctions, evidence sanctions, or a terminating sanction under
the sanctions chapter against that party deponent or against the
party with whom the deponent is affiliated. (§ 2025.450, sub.
(h).) The court may also impose a monetary sanction under the
sanctions chapter against the party with whom the party
deponent is affiliated. (§ 2025.450, subd. (h).)
44
independently authorize the trial court to impose monetary
sanctions for discovery abuse, and a sanctions order based solely
on sections 2023.010 and 2023.030 without regard to any other
provision of the Discovery Act is outside the bounds of the court’s
statutory authority. Under Jones’s interpretation of the
discovery statutes, careful distinctions in the statutes between
sanctions available against parties and nonparties would be
irrelevant surplusage, because the court could impose monetary
sanctions against any person or entity disobeying a discovery
order regardless of whether a party or nonparty. The award of
monetary sanctions must be stricken from the sanctions order.8
F. Financial Privacy
Libman contends it was an abuse of discretion to impose
any sanctions against him, monetary or nonmonetary, for
refusing to answer questions about his bank records and his
8 Because we conclude monetary sanctions must be stricken
from the sanctions order, we need not address Libman’s
contention that the monetary sanctions awarded were duplicative
of monetary sanctions awarded in connection with the contempt
order. We also reject Libman’s contention on appeal that Jones
brought his sanctions motion only as an alternative to the motion
for contempt, and therefore imposition of sanctions in addition to
those imposed in connection with the contempt proceedings were
improper. This is incorrect. The sanctions motion sought
sanctions to enforce the discovery orders, which are different
sanctions than those that were sought and imposed for contempt.
The trial court had authority to impose cumulative sanctions to
enforce the discovery orders; Libman has not shown otherwise.
45
accountant based on his constitutional right to privacy. We
disagree.
“Although the scope of civil discovery is broad, it is not
limitless.” (Calcor Space Facility v. Superior Court (1997) 53
Cal.App.4th 216, 223.) In general, “any party may obtain
discovery regarding any matter, not privileged, that is relevant to
the subject matter involved in the pending action or to the
determination of any motion made in that action, if the matter
either is itself admissible in evidence or appears reasonably
calculated to lead to the discovery of admissible evidence.” (§
2017.010.)
Information that is otherwise discoverable, however, may
be protected by a constitutional or statutory privilege, such as the
right to privacy. “The party asserting a privacy right must
establish a legally protected privacy interest, an objectively
reasonable expectation of privacy in the given circumstances, and
a threatened intrusion that is serious. [Citation.] The party
seeking information may raise in response whatever legitimate
and important countervailing interests disclosure serves, while
the party seeking protection may identify feasible alternatives
that serve the same interests or protective measures that would
diminish the loss of privacy. A court must then balance these
competing considerations.” (Williams v. Superior Court (2017) 3
Cal.5th 531, 552.)
We find no abuse of discretion in the trial court’s
determination that Libman’s right to privacy did not outweigh
the parties’ legitimate interest in obtaining disclosure of the
requested financial information in this case. The order did not
seek discovery of the private information of third parties as was
at issue in Board of Registered Nursing v. Superior Court (2021)
46
59 Cal.App.5th 1011, 1039–1040.
G. Electronically Stored Information
Libman also contends the trial court abused its discretion
by imposing any sanctions based on electronic information that
he purported to have lost. We conclude substantial evidence
supports the trial court’s finding that electronically stored
evidence was not lost or damaged.
Section 2023.030, subdivision (f)(1), provides:
“Notwithstanding subdivision (a), or any other section of this
title, absent exceptional circumstances, the court shall not
impose sanctions on a party or any attorney of a party for failure
to provide electronically stored information that has been lost,
damaged, altered, or overwritten as the result of the routine,
good faith operation of an electronic information system. [¶] (2)
This subdivision shall not be construed to alter any obligation to
preserve discoverable information.” (§ 2023.030.)
The trial court found Libman’s evidence not credible that
there was responsive electronically stored information that was
lost or damaged. When the trial court ordered Libman to produce
an accounting and supporting documents in 2019, he did not
claim that his electronic evidence had been lost or damaged in
2018. He waited more than a year, despite repeated orders by
the court to produce discovery, before belatedly claiming the
evidence had been destroyed long ago. He failed to make a
computer technician who purportedly examined Libman’s
computer available for deposition. The trial court’s conclusion
that Libman could not produce the requested discovery because
he did not work the hours that he claimed, rather than that the
47
evidence was lost or destroyed, was supported by reasonable
inferences from the evidence.
Disgorgement Order
A. Scope of Review Following Terminating
Sanctions
Having concluded that the trial court properly imposed
nonmonetary sanctions, including striking Libman’s responsive
pleadings and entering Libman’s default to the motion for
disgorgement, the contentions remaining for consideration on
appeal are correspondingly limited. We typically review the trial
court’s finding of a violation of the Rules of Professional Conduct
under the substantial evidence standard and the trial court’s
conclusion that the violation was sufficiently egregious to require
forfeiture of fees for an abuse of discretion. (Mardirossian &
Associates, Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 278
(Mardirossian).)
Libman’s default to the motion for disgorgement and the
resulting judgment against him are analogous to other default
judgments. Default judgments are reviewable on appeal, but
contentions going to the merits are substantively and
procedurally barred. (Steven M. Garber & Associates v.
Eskandarian (2007) 150 Cal.App.4th 813, 823.) The default
operates as an express admission of well-pleaded factual
allegations. (Ibid.) The only issues that the defaulted party may
raise on appeal from a default judgment are questions related to
the court’s jurisdiction, the sufficiency of the pleadings, whether
the relief awarded exceeded the relief requested in the pleading,
48
and related procedural issues. (Id. at p. 824.)
“[W]hen a party repeatedly and willfully fails to provide
certain evidence to the opposing party as required by the
discovery rules, preclusion of that evidence may be appropriate,
even if such a sanction proves determinative in terminating the
plaintiff's case.” (Biles v. Exxon Mobil Corp. (2004) 124
Cal.App.4th 1315, 1327.) “The ratio decidendi behind such cases
appears to be on the theory that a persistent refusal to comply
with an order for the production of evidence is tantamount to an
admission that the disobedient party really has no meritorious
claim or defense to the action.” (Kahn v. Kahn (1977) 68
Cal.App.3d 372, 381–382, emphasis added.)
“An action or proceeding is uncontested when no answer or
opposition is filed. [Citation.] Appellant’s default having been
duly entered, the action was uncontested. By failing to answer
the complaint, defendant admitted the material allegations; no
fact necessary to support the judgment was disputed.” (E.N.W. v.
Michael W. (1983) 149 Cal.App.3d 896, 899.)
B. Nature of Claim for Disgorgement
Libman contends trial court acted in excess of jurisdiction
by entering the disgorgement order, because the requirements for
an injunction were not met. We conclude the disgorgement order
is a money judgment, not injunctive relief.
“In certain circumstances, a violation of the Rules of
Professional Conduct may result in a forfeiture of an attorney’s
right to fees. [Citations.] Although the breach of a rule of
professional conduct may warrant a forfeiture of fees, forfeiture is
not automatic but depends on the egregiousness of the violation.”
49
(Mardirossian, supra, 153 Cal.App.4th at p. 278.)
“As California courts have often noted, the rule governing
attorney forfeiture derives primarily from the general principle of
equity that a fiduciary’s breach of trust undermines the value of
his or her services. [Citations.] ‘The remedy of fee forfeiture
presupposes that a lawyer’s clear and serious violation of a duty
to a client destroys or severely impairs the client-lawyer
relationship and thereby the justification of the lawyer's claim to
compensation.’ [Citation.] Forfeiture also serves as a deterrent
to misconduct, and it avoids putting clients to the task of proving
the harm stemming from the lawyer’s conflict of interest when
the extent of the harm may be difficult to measure. [Citation.]”
(Sheppard, Mullin, Richter & Hampton, LLP v. J-M
Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 89–90 (Sheppard,
Mullin).)
“The degree to which forfeiture is warranted as an
equitable remedy will necessarily vary with the equities of the
case.” (Sheppard, Mullin, supra, 6 Cal.5th at p. 90.) “When a
law firm seeks compensation in quantum meruit for legal
services performed under the cloud of an unwaived (or improperly
waived) conflict, the firm may, in some circumstances, be able to
show that the conduct was not willful, and its departure from
ethical rules was not so severe or harmful as to render its legal
services of little or no value to the client. Where some value
remains, the attorney or law firm may attempt to show what that
value is in light of the harm done to the client and to the
relationship of trust between attorney and client. Apprised of
these facts, the trial court must then exercise its discretion to
fashion a remedy that awards the attorney as much, or as little,
as equity warrants, while preserving incentives to scrupulously
50
adhere to the Rules of Professional Conduct.” (Ibid.)
“Disgorgement as a remedy is broader than restitution or
restoration of what the plaintiff lost. [Citations.] There are two
types of disgorgement: restitutionary disgorgement, which
focuses on the plaintiff's loss, and nonrestitutionary
disgorgement, which focuses on the defendant’s unjust
enrichment. [Citation.] ‘Typically, the defendant’s benefit and
the plaintiff’s loss are the same, and restitution requires the
defendant to restore the plaintiff to his or her original position.’
[Citation.] However, ‘[m]any instances of “liability based on
unjust enrichment . . . do not involve the restoration of anything
the claimant previously possessed . . . includ[ing] cases involving
the disgorgement of profits . . . wrongfully obtained. . . .”
[Citation.] “[T]he public policy of this state does not permit one
to ‘take advantage of his own wrong’ ” regardless of whether the
other party suffers actual damage. [Citation.] Where “a benefit
has been received by the defendant but the plaintiff has not
suffered a corresponding loss or, in some cases, any loss, but
nevertheless the enrichment of the defendant would be unjust . . .
the defendant may be under a duty to give to the plaintiff the
amount by which [the defendant] has been enriched.” ’
[Citations.]” (Meister, supra, 230 Cal.App.4th at p. 398.)
“ ‘The emphasis is on the wrongdoer’s enrichment, not the
victim’s loss. In particular, a person acting in conscious
disregard of the rights of another should be required to disgorge
all profit because disgorgement both benefits the injured parties
and deters the perpetrator from committing the same unlawful
actions again. [Citations.] Disgorgement may include a
restitutionary element, but it “ ‘may compel a defendant to
surrender all money obtained through an unfair business practice
51
. . . regardless of whether those profits represent money taken
directly from persons who were victims of the unfair practice.’ ”
[Citation.] Without this result, there would be an insufficient
deterrent to improper conduct that is more profitable than lawful
conduct.’ [Citation.]” (Meister, supra, 230 Cal.App.4th at
pp. 398–399.)
In this case, the legal relief sought was a judgment for a
specific amount of money. Jones was not required to allege or
prove that the class suffered any harm as a result of Libman’s
egregious violations of the Rules of Professional Conduct.
Libman’s contentions based on his assumption that the motion
for disgorgement sought injunctive relief are inapplicable.
C. Rule Violations
As a consequence of the terminating sanctions in this case,
Libman has admitted the allegations of the motion and cannot
raise issues contesting the merits for the first time on appeal.
Even were we to address the merits of Libman’s contentions,
however, we would find no abuse of discretion.
1. Former Rule 2-200
Libman argues that he did not violate former 2-200,
subdivision (A) (current rule 1.5.1, subdivision (a)), which
prohibits attorneys who are not in the same law firm from
dividing fees without obtaining the client’s written consent,
because the fees were divided pursuant to a court order in
accordance with current rule 1.5.1., subdivision (b). It is
undisputed, however, that subdivision (b) of rule 1.5.1 was not in
52
effect at the time that attorney fees were awarded in the Jones
class action, and the version of the rule in effect at the time of the
attorney fees award in this case did not contain a similar
provision. No abuse of discretion has been shown.
2. Former Rule 3-310
On appeal, Libman contends the trial court did not properly
analyze the conflicts of interest in the Jones class action under
former rule 3-310 (current rule 1.7). Former rule 3-310,
subdivision (b), prohibits an attorney from representing a client
without providing written disclosure to the client when the
attorney has a legal, business, financial, professional, or personal
relationship with another person or entity that the attorney
knows or reasonably should know would be affected substantially
by resolution of the case. As one example in this case, Libman
invited Kiesel, who was acting as special counsel for the City, to
join him as cocounsel on other trials without disclosing this
business and financial relationship to Jones or the trial court. No
further analysis was necessary and no abuse of discretion has
been shown.
3. Former Rule 5-200
Libman contends there is no substantial evidence to
support the trial court’s finding that he knowingly made a false
statement of fact to the court in violation of former rule 5-200
(current rule 3.3). We conclude there is ample evidence to
support the trial court’s finding. As just one example, Libman
listed himself as cocounsel with Kingsley and Kingsley on 32
53
class action lawsuits. The evidence showed that he was not in
fact cocounsel on any of the cases that he listed.
4. Revision of Rules
For the first time in his reply brief, Libman contends that
he was prejudiced because the trial court relied on the current
version of the rules, rather than the version that was in effect at
the time that the attorney fees award was entered. Because
Libman failed to raise this argument below or in his opening
brief, he has forfeited it on appeal. In addition, although he has
described differences in the language between the former and
current rules, he has not shown that the outcome in this case
would have been different under the former version of the rules.
It is clear that the trial court’s findings would have been the
same under either version of the rules at issue.
D. Denial of Discovery
Libman contends the trial court’s denial of his requests to
take depositions of current counsel for the Jones class, the City’s
former outside counsel, former City attorney Jim Clark,
Kingsley’s retired partner, and the independent court monitor,
denied him due process. We find no abuse of discretion. Libman
has not shown on appeal that any of the requested discovery was
relevant to the issues in this proceeding concerning the fee
application that Libman submitted and the fees awarded to
Libman in 2017. Moreover, any error was harmless, because
Libman’s opposition to the motion for disgorgement was stricken
and his default entered for failing to comply with his own
54
discovery obligations, as affirmed in this appeal.
E. Excessive Fine
Libman contends the disgorgement order is an
unconstitutionally excessive fine. It is not an excessive fine. It is
restitution of the same amount that he received in order to
prevent unjust enrichment. As stated above, the egregious
nature of Libman’s ethical violations in this case supported
complete forfeiture of the fees that he received.
F. Trial Court’s Authority
Libman contends the trial court exceeded its authority
under sections 128 and 664.6 by awarding attorney fees to punish
misconduct. Libman mischaracterizes the court’s award. The
disgorgement order is not an award of attorney fees or monetary
sanctions to Jones. The trial court ordered disgorgement of the
fees that Libman had received to prevent Libman from being
unjustly enriched. The trial court had inherent authority under
sections 128 and 664.6 to provide for the orderly conduct of the
proceedings and to order disgorgement of fees awarded in
connection with the settlement based on false statements of
material fact and egregious violations of ethical rules.
G. Recusal
Libman contends that the trial court should have recused
itself from this matter. We have reviewed the record thoroughly.
There is no evidence that the trial court was biased or retaliated
55
against Libman. In fact, even after Libman failed to obey
multiple discovery orders, the trial court continued to provide
him with opportunities to explain his statements in deposition
and to present evidence to support his position. There is no
evidence supporting his contentions on appeal concerning
recusal.
DISPOSITION
The March 24, 2021 sanctions order is modified to delete
the award of monetary sanctions, and as modified, the sanctions
order is affirmed. The March 24, 2021 disgorgement order is also
affirmed. Respondent Antwon Jones is awarded his costs on
appeal.
NOT TO BE PUBLISHED.
MOOR, J.
I concur:
RUBIN, P. J.
56
B313095
Libman v. City of Los Angeles and Antwon Jones
GRIMES, J., Concurring.
I concur with the majority opinion in the disposition of this
case. Specifically, I agree the trial court’s disgorgement order
should be affirmed, and I agree that nonmonetary sanctions were
properly imposed under the trial court’s inherent authority to
control the proceedings before it.
I write separately to express my continued disagreement with
the majority’s view that Code of Civil Procedure sections 2023.010
and 2023.030 “do not independently authorize the trial court to
impose monetary sanctions for discovery abuse” (maj. opn., ante, at
pp. 44-45; see City of Los Angeles v. PricewaterhouseCoopers, LLC
(2022) 84 Cal.App.5th 466, 475, review granted Jan. 25, 2023,
S277211). As I explained at length in that case, I find “no basis in
statutory law, case law, or common sense” to conclude, as the
majority did, that sections 2023.010 and 2023.030 “ ‘do not
authorize the court to impose sanctions in a particular case.’ ”
(PricewaterhouseCoopers, at p. 526 (dis. opn. of Grimes, J.).) I
instead read those statutes “just as other courts, up to now, have
universally done” (ibid.), concluding that where “monetary
sanctions are authorized in the various discovery statutes for the
kinds of discovery violations the trial court found to have occurred,”
no more is required to enable the trial court to award monetary
sanctions under section 2023.030 for “egregious and ongoing
misuses of the discovery process” (PricewaterhouseCoopers, at p.
530 (dis. opn. of Grimes, J.)).
This case, however, presents an additional factor not present
in PricewaterhouseCoopers: the monetary sanctions were awarded
against former class counsel of record who, as the majority properly
1
concludes, was a nonparty and was treated as a nonparty during
the discovery proceedings at issue here. In his brief, Mr. Jones
argued (among other points) that monetary sanctions in the form of
attorney fees were proper under Code of Civil Procedure
section 2023.030 for Mr. Libman’s abuse of the discovery process
and refusal to comply with court orders.
But at oral argument, current counsel for Mr. Jones and the
class essentially conceded, under questioning by the court, that the
discovery statutes do not empower the trial court to award
monetary discovery sanctions against a nonparty. Counsel
indicated this case was different from PricewaterhouseCoopers. He
agreed the trial court had no authority to order attorney fees as
sanctions under its inherent powers, either statutorily or its
independent inherent powers. Setting aside the
PricewaterhouseCoopers issue, counsel stated he could not identify
any other discovery statute authorizing monetary sanctions against
a nonparty. Counsel stated he was not prepared to argue the issue
of the court’s authority to award monetary sanctions and did not
want that issue to drive the case.
Under these circumstances, where counsel has effectively
abandoned the contention that Code of Civil Procedure
sections 2023.010 and 2023.030 are a proper basis for a monetary
sanctions award against a nonparty—even nonparty class counsel
over whom the court retained jurisdiction—I see no reason to weigh
2
in on the point. Accordingly, I concur in the majority’s disposition
of the issue in this case.
GRIMES, J.*
* Justice of the Court of Appeal, Second Appellate District,
Division Eight, assigned by the Chief Justice pursuant to article VI,
section 6 of the California Constitution.
3