I like this opinion, and it has practical significance for many California litigators.
The California Supreme Court unanimously holds that a party can validly make a Section 998 offer to compromise that contains multiple alternatives. The Court of Appeal held otherwise, and the Supreme Court disagrees. So, for example, if you want to make a 998 offer that says (1) I'll pay you $75,000 total, or (2) I'll pay you $30,000 plus whatever your reasonable costs and attorney's fees are, you choose, that's fine. If the other side rejects your offer and you do better thereafter, cost-shifting applies.
There are a wide variety of cases in which such alternative offers might be valuable, not just (as here) in Song-Beverley cases. You'll also need to be very careful in crafting such offers to make sure that the offer is both sufficiently clear and enables the other side to clearly accept any of the multiple offers, but if you do it right, this should be a powerful tool. As well as one that helps push cases to settlement.
So let's make these types of offers. As early as possible, for maximum benefit and pressure. (The Supreme Court also has a nifty line in the opinion that the responding party should use. The Court says that a court might find the offer not in good faith if the responding party asks for an extension of the 30-day deadline and/or informal discovery to more fully evaluate the offer and the offering party refuses to grant it. That's likely to become a standard tactic, at least amongst sophisticated counsel, when dealing with early and/or fulsome 998 offers.)
Overall, as I said, I think this is likely to advance the ball, and seems a proper interpretation of the statute, so I'm fully on board for Justice Corrigan's opinion. There's one part, however, that I wish she'd clarify.
The 998 offer at issue here had two alternatives. The Court of Appeal held that you can't do that, and the California Supreme Court disagrees. As a result, you can validly make what the Court calls "alternative choice" 998 offers. It also seems clear to me that the Court is saying that you're not necessarily limited to two alternatives in the offer, and that even three or more might still be valid. For example, maybe an offer says (1) I'll pay you $75,000 total, (2) or $30,000 plus your costs and fees, or (3) give you a brand new 2026 Land Rover, you choose. I believe that such an offer would be fully permissible under today's decision, and rightly so. Justice Corrigan says -- and I again agree with her -- that if an offer "deluge[s] an offeree with an array of choices" that simply "attempt[] to overwhelm an opponent [] in an effort at gamesmanship, rather than genuinely attempting to reach a settlement," such an offer might be found to be not in good faith. Makes sense. But, in a normal case, multiple options contained in a single offer are perfectly fine. I agree.
But notwithstanding what I believe to be the Court's clear holding in that regard, in multiple places in the opinion, it restates its holding as limited to offers that contain "two" options. For example, on page 27, the opinion says: "To reiterate, the alternative-choice offer at issue is best understood under general contract principles as an invitation to the offeree to enter into a contract under one of two equally acceptable sets of terms presented by the offeror." (Emphasis added) Similarly, on page 29, the opinion summarizes its holding by saying: "Furthermore, under our holding, cost-shifting penalties can only be triggered by a 998 offer in which (1) the rejected or lapsed offer clearly presents a choice between two distinct sets of terms, either of which the offeree may accept as a settlement; (2) at least one set of alternative terms is sufficiently certain to be fairly valued; and (3) the offeree fails to obtain a judgment or award that exceeds the value of a valid alternative." (Emphasis added)
I understand that the 998 offer here only contained two alternatives. But these portions of the opinion aren't talking about this particular offer; they're instead setting forth general rules. I believe that what the Court means to say is that a 998 offer is valid under today's holding when it clearly presents a choice between multiple distinct sets of terms -- not necessarily limited to two -- any of which the offeree may accept as settlement. The existing language in today's opinion could easily be read by litigants and trial courts as expressly limiting alternative-choice 998 offers to two options, no more. That would be bad, so I would edit the opinion to replace the "two" in those categorical statements with "multiple." Even if a trial court could potentially rightly understand the opinion (as I do) as not necessarily limiting offers to two alternatives, some courts -- and definitely some litigants -- could easily get it wrong, so I think it would assist things a lot to make it clear that even more-than-two-alternative options are permissible (at least when, as the Court already explains, they do not constitute excessive gamesmanship).
Other than that, great opinion. Helpful, and will make litigation marginally better in California.