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2 November 20236 minute read

California adopts broad initial disclosure rule

Governor Gavin Newsom has signed California Senate Bill 235, enacting significant changes to California’s Discovery Act that will go into effect in 2024.

First, California is adopting mandatory initial disclosures that are far broader than the requirements of Federal Rule of Civil Procedure 26. Disclosures in California will require identification of documents that the party intends to rely upon, as the federal rules do, but also all documents “relevant to the subject matter of the action.” This provision will sunset, however, in 2027.

Second, the minimum penalty to be imposed for bad faith discovery conduct has been raised from $250 to $1,000, with potential mandatory reporting to the State Bar.

Initial disclosures in California state court

Effective January 1, 2024 to January 1, 2027, any party to a civil action can demand that all parties provide verified initial disclosures within 60 days. Previously, initial disclosures could only be required under Section 2016.090 with a stipulation of all parties.

Initial disclosures will require the production of four categories of information, including all of the following:

  1. The contact information (including names, addresses, phone numbers, and email addresses) of persons likely to have discoverable information, and the subject of that information, which the disclosing party may use to support its claims or defenses, or which is relevant to the subject matter of the action.

  2. The (a) production or (b) a description by category and location of two categories of documents or electronically stored information that a party has in its possession, custody, or control, which are (i) relevant to the subject matter of the action or (ii) which the disclosing party may use to support a claim or defense.

  3. Policies of insurance under which an insurance company may be liable to satisfy a judgment.

  4. Contracts of indemnity under which any person may be liable to satisfy a judgment.

Additionally, parties may issue supplemental demands for updated disclosures except in certain actions, like preference matters and those under the probate and family codes. Self-represented litigants are generally exempted.

Importantly, these requirements may be altered by the stipulation of all parties to an action, and certain categories of information, such as the identity of expert witnesses or evidence used solely for impeachment, need not be provided in an initial disclosure. Additionally, the Code has no provision for asserting objections, including objections on the grounds that the required disclosure is overly burdensome. Neither are courts expressly authorized to narrow the scope of required disclosures, though judicial authority to narrow the scope of all discovery under Section 2017.020 is arguably unaffected.

The requirements of the new initial disclosure law in California are potentially far broader than the requirements of FRCP 26. Unlike Rule 26, which only requires the disclosure of those witnesses or documents that the disclosing party will use to support its claims and defenses, the new California law additionally requires the email addresses of disclosed witnesses, or the identification of witnesses and documents that may be “relevant to the subject matter of the action or the order on any motion made in that action.” Additionally, disclosures must be verified. Coupled with the heightened sanctions imposed by the bill’s other amendments, this broad mandate to make client-verified disclosures will likely result in significant motion practice.

Minimum sanction for discovery misconduct

Senate Bill 235 also amends Section 2023.050, increasing the $250 fine to a minimum $1,000 for sanctions courts may issue, whether sua sponte or upon motion, for discovery conduct. Specifically, the statute (enacted in 2019), permits courts to fine litigants for the following conduct:

(1) Responding in bad faith to written discovery

(2) Producing documents within seven days of a hearing on a motion to compel filed due to a party’s failure to respond to written discovery in good faith

(3) Failing to meet and confer in good faith in connection with discovery.

Further, while current California law does not require attorneys to report sanctions for failure to make discovery to the State Bar, the new bill specifically gives judges the discretion to “require an attorney who is sanctioned…to report the sanction, in writing, to the State Bar within 30 days.”

Practical implications

The new requirements are likely to incentivize all litigants to move more quickly at the onset of litigation to prepare discovery strategies. Also, while written discovery is notoriously broad in California, the required disclosures may narrow the scope of written discovery in the future by alleviating the need to propound written requests aimed at the topics now slated for initial disclosures. Though the effect is likely only marginal, this may provide some efficiencies for all litigants going forward.

Additionally, although all litigants should consider whether a stipulation to limit the scope of disclosures to Rule 26’s requirements may serve all parties’ interests, the burden of compliance with initial disclosures – and incentive to stipulate – is likely to fall mostly on corporate defendants with large numbers of potentially relevant employees and documents that may be difficult to identify at the outset of litigation.

Further, to the extent those litigants would have objected to overly broad or burdensome discovery on the same topics – with disputes over scope aired before the court on the propounding party’s a motion to compel – they may now have to consider an early motion under Section 2017.020 to limit the scope of disclosures to avoid sanctions. While Section 2016.090(a)(2) only requires disclosures be based “based on the information then reasonably available, a party is not excused from making its initial disclosures because it has not fully investigated the case, because it challenges the sufficiency of another party's disclosures, or because another party has not made its disclosures.”

It is also certain that the limits of the new Section 2016.090 will be tested in the courts, as certain provisions may conflict with existing limitations on discovery. For example, the requirement to produce insurance policies, contracts of indemnity, and all relevant documents in the amended Section 2016.090 appears broad, but coverage disputes between an insured and an insurer are protected from discovery under Section 2017.210 (which allows discovery of the existence and contents of an insurance policy, and the fact of a coverage dispute, but protects “the nature and substance of that dispute.”).

Additionally, litigants are likely to test whether the failure to initially disclose documents will preclude their admissibility at trial.

Learn more about the implications of SB 235 by contacting either of the authors.