Business Law Journal

What Changes?

The new rules require parties to disclose and provide detailed descriptions of all witnesses and documents that are relevant to the case within 60 days of a demand by any party in the case. The initial disclosures must be duly verified and identify all information, witnesses, and documents that support the disclosing party’s claims or defenses. In addition, contractual agreements/arrangements and insurance policies that might influence the litigation outcome must also be disclosed. Notably, the disclosing party must also identify witnesses and documents that are relevant to the case even if the disclosing party does not intend to use them in support of their claims or defenses at trial.  

Comparatively, unlike this new approach to initial disclosures, the prior rules on initial disclosures in California required agreement between the parties and a court order.  Typically, disclosures were limited to contact information of certain individuals and details of supporting documents, agreements, or insurance policies related to the main allegations of the case. The standard discovery tools in state court litigation were and remain driven by formal discovery requests under the Civil Discovery Act, rather than parties’ proactively sharing information, where each side must specifically ask for the information, witnesses, and documents it believes it’s lawfully entitled to obtain from the other side. This discovery process is more reactive and often leads to good-faith strategic withholding of certain information. Indeed, parties often object and dispute, sometimes extensively, what information was specifically called for and/or what the other side is entitled to, before bringing the discovery disputes to the court’s attention by way of motions to compel.  Oftentimes, that discovery process leads to longer, and more expensive litigation.

The new initial disclosure requirements, on the other hand, demand a forthright exchange of all relevant evidence, likely including even information, documents and/or witnesses that may not be favorable to the disclosing party.

Why This Matters

This new law represents a significant addition to the existing rules of civil discovery in California. By instituting a process for mandatory initial disclosures, the new law aims to:

• Reduce Discovery Disputes: Early and comprehensive sharing of information is expected to decrease the frequency and intensity of discovery-related disputes and motions.
• Expedite Case Assessments: With all relevant information (arguably) readily available, attorneys could assess cases more quickly, advising clients on the best course of action with greater accuracy.
• Encourage Earlier Resolutions: The transparency fostered by the newly adopted initial disclosures system may lead to earlier settlements, as parties should have a clearer understanding of the strengths and weaknesses of their positions.
• Streamline Litigation Strategies: Armed with comprehensive information from the outset, legal strategies can be more focused and directed, potentially shortening the overall timeline of litigation.

Section 2016.090 aligns with the principles of Federal Rule 26(a)(1). Under the federal rule, parties are required to disclose, early in the case, all witnesses, documents, and evidence in support of their claims and/or defenses, along with computation of damages and any insurance that might cover the dispute(s). California’s move towards the federal rules reflects a commitment to early and comprehensive information exchange in the litigation process.

Why Teaming With Us Matters

Section 2016.090’s new initial disclosure requirements may trigger issues with the discovery limitations in Cal. Civ. Proc. § 2017.210, particularly regarding insurance agreement disclosures. Section 2017.210 permits discovery of insurance coverage and whether the carrier is disputing coverage, however, restricts delving into the details of the coverage dispute. Section 2016.090’s broader mandates could challenge these privacy protections.

There are also likely to be disputes over whether a party disclosed all relevant evidence or witnesses, and/or what the range of sanctions may be for non-compliance. While the statute requires sanctions of at least $1,000, it is unclear if a party’s non-compliance with the initial disclosure requirements (alone) might expose it to evidentiary, issue, or even terminating sanctions that could end the entire case.

In addition, the question of what exactly the term “relevant” means is not entirely clear in this context and remains subject to continued careful evaluation at any given stage of the litigation. A party’s understanding of what is “relevant” may evolve as the case develops.  We stay ready to team with our clients in evaluating the meaning of “relevant” with our professional analysis.

As we adapt to these new requirements, our firm is committed to guiding our clients through the evolving landscape of civil litigation in California. This law presents both challenges and opportunities. By understanding and leveraging the new rules of initial disclosures, we can work towards achieving more favorable, efficient outcomes for our clients.

For those navigating civil litigation disputes filed after January 1, 2024, it’s crucial to understand how these changes might affect your case. Whether your concerns touch upon intellectual property, privacy, or broader commercial litigation matters, our Complex and Commercial Litigation Practice Group is ready to advocate on your behalf. We bring decades of experience across a spectrum of industries, ensuring that your interests are protected while complying with the new Initial Disclosure law.   

As of the date of this publication, there have not been any published court decisions interpreting and/or enforcing the new Initial Disclosure requirements.  We will keep a close eye on the rulings.  Stay tuned.

Please do not hesitate to contact the authors of this Alert or your usual AALRR attorney with any questions.[1]

[1] The text of Section 2016.090 can be found here: https://casetext.com/statute/california-codes/california-code-of-civil-procedure/part-4-miscellaneous-provisions/title-4-civil-discovery-act/chapter-1-general-provisions/section-2016090-effective-until-112027-initial-disclosures

This AALRR posting is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

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