Wednesday, June 15, 2005

Acosta v. SI Corp. (Cal. Ct. App. - June 6, 2005)

This opinon by Justice Epstein makes sense upon first glance, which is undoubtedly why it comes out the way it does. But I don't know if it stands up to more substantial scrutiny.

Over 100 plaintiffs, all represented by the same lawyer, file a construction defect suit against the defendant for damages to 101 different homes. Defendant wins at trial, and promptly files a cost bill for over $120,000. Plaintiffs move to tax, arguing that the costs need to be allocated against each particular plaintiff. But the trial court disagrees, and the Court of Appeal affirms. Which means that each of the plaintiffs is jointly responsible for the entire $120,000+.

Sure, it's one lawsuit. On the same theory. And with one set of lawyers. And Justice Epstein repeatedly notes this latter fact to hold that the plaintiffs are jointly responsible for the costs.

But it's the plaintiffs that are required to pay the costs, not their lawyer. And it'ss undeniably true that some of the costs incurred by the defendant are only relevant to particular plaintiffs. Why is Plaintiff A responsible for the costs of deposing Plaintiff B about damages that only Plaintiff B incurred and which Plantiff A isn't seeking? These costs aren't the costs of defending against the claims of A. So it doesn't seem to me that A is responsible for paying them.

Sure, A and B have the same lawyer, and are raising similar claims. But that just means that some of the costs can indeed be allocated between the two. So, for example, when D pays a $300 fee to file its answer or $3000 to get a transcript of its own deposition on liability, maybe both A and B are responsible. But that doesn't mean -- as Justice Epstein's holding would require -- that A should be required to pay the costs that the defendant incurred in, say, moving for summary judgment exclusively against B. That's a cost of defending against B's claim. Not A's.

Plus, the rationale articulated by Justice Epstein both has no principled limit and would lead to seemingly absurd results. Sure, the parties here had the same lawyer. But what if they didn't? Justice Epstein likes to reiterate that it's the same attorney, but there's nothing in the CCP that says anything about costs being allocated per attorney, and the statutory interpretation advanced by the opinion would mean that even costs incurred entirely against A (represented by X) would be the responsibility of B (represented by Y) since the defendant was still the "prevailing party". Plus, what about cases that are consolidated? After consolidation -- which is fairly common in cases such as these (and many other mass tort cases) -- the action is treated as one lawsuit. According to Justice Epstein's reasoning, defendant is still the "prevailing party" if it wins at trial, which means that A is responsible for the (potentially massive) costs incurred in defending against B as long as the claims are eventually tried (or resolved) together. But that seems clearly wrong.

So I understand why Justice Epstein comes out the way he does, but the result he reaches nonetheless seems to articulate a very troubling principle. Plus, what's the problem with the converse: just holding each plaintiff liable for its own share of the costs? So if defendant incurs $1000 in costs in connection with acts relevant to both A and B, and an additional $200 in costs in connection with activities relevant only to B, what's the big deal about holding A responsible for $500 (half of $1000) and B responsible for $700 ($500 + $200)? This seems like the entirely right result -- Plaintiff A cost defendant $500 and Plaintiff B cost defendant $700 -- and I don't see the problem with holding each responsible accordingly. Whereas I have a fairly big problem with holding some tiny Plaintiff A who's seeking, say, $5000 -- alongside 100 other plaintiffs seeking the same thing -- responsible for some massive $100,000+ cost award. That just doesn't seem right.

So I think that even though the opinion seems to make sense as you read it, it's still wrong. My take, anyway.