As a person keenly interested in litigiation strategy, I very much enjoy it when the Court of Appeal not only issues opinions that generate opportunities for tactical behavior, but also goes ahead and gives tactical pointers. And when, on those rare occasions, there's a conflict between the justices, and each gives his or her own insight into the tactical move and countermoves that are generated by the court's holding, it's pure gold, IMHO.
Gold like this.
Justice Butz writes the majority opinion, and holds that a Section 998 offer tendered (as here) simultaneously with service of process may well generate cost-shifting. Justice Sims -- who, by the way, authors a sincerely respectful dissent -- not only disagrees on the merits, but says that such early offers may give rise to strategic abuse, since defendants at that stage of the litigation aren't typically able to conduct discovery and/or accurately assess the plaintiff's damages. Plus, Justice Sims argues, "[i]magine . . . the litigation frenzy that will be produced if defense counsel must also take the plaintiff’s deposition and obtain medical specials during this 30-day period. Not to mention the retention of experts and obtaining opinions from them. Why on earth do we want to do this?"
But Justice Butz responds that early settlement is precisely the goal of Section 998, and if that coincides with early discovery, so much the better. Justice Butz also gives tactical counsel to a defendant facing an early offer, counsel that's especially good advice as it comes from the Court of Appeal: "Even assuming a situation (unlike the one presented here) where a defendant has no information about the plaintiff’s damages when served with an early section 998 offer, defense counsel may request that plaintiff provide informal discovery on the damage issue and/or allow an extension of time to respond to the demand. If plaintiff’s counsel refused to accord the defendant these courtesies and unyieldingly insisted that defendant respond without information, such conduct could then be presented to the trial court when it considered whether to award special fees and costs. Undoubtedly, such obstinacy would be viewed as potent evidence that plaintiff’s offer was neither reasonable nor made in good faith." Thanks for the pointer! We'll definitely make such requests at this point, right? No reason not to.
But Justice Sims responds with a quasi-tactical point of his own, though I'm sure he's not really suggesting the resulting strategy as opposed to just identifying a problem with the solution that Justice Butz advances: "With respect, I do not think a defendant should be obligated to evaluate a $99,000 offer based on damages information supplied informally (not under oath) by a plaintiff or his attorney. Although plaintiffs’ attorneys are officers of the court, on rare occasions such attorneys have been known to inflate their client’s damages in demand letters written prior to discovery. In my view, a 998 offer approaching $100,000 can be reasonably evaluated only after basic discovery procedures (requiring responses under oath) have been used."
Darn good point. Which leaves me with only one question: Raise your hand if you think that Justice Sims was being deliberately sarcastic when he said that on "rare" occasions plaintiffs have been known to exaggerate their damages in pre-litigation communications. Awesome.
Anyway, a very interesting case. Both doctrinally as well as strategically. Know it. Use it. Be it.