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Commencing a Lawsuit: Initial Considerations (CA) Resource type: Practice Note
Status: Maintained
Jurisdiction: California
A Practice Note discussing the key issues an attorney should consider before initiating a lawsuit in California superior court. Specifically, this Note sets out the rules regarding forum and venue and explains how to investigate claims, formulate legal theories, and name the proper parties. Practical Law Litigation
Contents Forum Is State-Court Litigation an Option? Choosing the Right State Court Anticipating a Change in Forum
Claims Gathering Facts and Evidence Formulating the Legal Theories Researching the Available Relief Analyzing Potential Cross-Claims
Parties Identifying the Plaintiffs and Defendants Ensure All Proper Parties Are Named Ensure Parties are Subject to Personal Jurisdiction
Taking on the Representation Client Consultation Ensure the Attorney can Represent the Client in Court Retainer Agreement
To commence a lawsuit, plaintiff's counsel needs to consider a host of issues and procedures ranging from investigating the legal claims to determining which court to sue in and which parties should be named in the suit. This Note explains the major issues counsel should consider and analyze before filing and serving the initial papers in a civil suit.
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Forum Before commencing suit, plaintiff's counsel must determine where the lawsuit may be brought. This section of the Note outlines the key issues for plaintiff's counsel to consider in identifying the proper venue in which to bring a lawsuit.
Is State-Court Litigation an Option? Before drafting the complaint or taking other steps to commence a lawsuit in California's state courts, plaintiff's counsel should take a moment to consider whether state-court litigation is even an option. If it is, counsel should also think about the type of action to bring. Depending on the circumstances, the plaintiff may need to: Arbitrate its claims instead of filing suit in court. File suit in federal, not state, court. Fulfill certain prerequisites before filing the lawsuit. Arbitration or Litigation? Litigation may not be an option sometimes because the parties may be required to arbitrate instead. This is common for breach of contract cases where the underlying contract contains a mandatory arbitration clause. Before filing suit, plaintiff's counsel should review any relevant contracts to determine if they contain arbitration clauses. If they do and the plaintiff still wants to litigate its claims in court, counsel should research ways to void those clauses. Common grounds for challenging arbitration clauses include fraud, duress, or unconscionability (see Hartley v. Sup. Ct. (Monex Deposit Co.) (2011) 196 Cal.App.4th 1249, 1254). For a detailed analysis on enforcing arbitration clauses, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 9(I)-H, 9:408.
Federal or State Court? Before bringing suit in California state court, plaintiff's counsel should determine whether the suit must be filed in federal court. Although federal and state courts have concurrent jurisdiction over many types of claims, some claims fall within the exclusive jurisdiction of the federal judiciary. These include: Admiralty and maritime cases (28 U.S.C. § 1333(1)). Federal patent and copyright cases (28 U.S.C. § 1338(a)). Bankruptcy cases (28 U.S.C. §1334(a); but see 28 U.S.C. § 1334(b) (district courts do not have exclusive jurisdiction over certain bankruptcy "proceedings")). Federal antitrust cases (15 U.S.C. § 4). Securities and banking regulation cases (15 U.S.C. § 77v(a)). Prerequisites to Proceeding in State Court Depending on the claims asserted, the plaintiff may need to fulfill certain prerequisites before filing suit in state
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court. Common examples include: Exhaustion of administrative remedies where the law has created an administrative body to resolve the issue before it is presented to the court (Abelleira v. Dist. Ct. of Appeal (1941) 17 Cal.2d 280, 292). Claims against governmental entities that must first be presented to the entity (Cal. Gov't Code §§ 945.4, 911.2 and 912.4). Professional negligence actions against architects, professional engineers, and land surveyors that require a certificate of merit (Cal. Civ. Proc. Code § 411.35). Certain claims that are restricted by statute and require a court order before the claim can be filed, including: punitive damages claims against health providers (Cal. Civ. Proc. Code § 425.13(a)); punitive damages claims against religious corporations (Cal. Civ. Proc. Code § 425.14); claims against attorneys for conspiracy with their clients (Cal. Civ. Code § 1714.10(a)); and negligence claims against volunteer directors or officers of non-profit corporations (Cal. Civ. Proc. Code § 425.15). Certain causes of action that require the plaintiff to give the defendant notice or a demand before filing a suit, such as: medical malpractice (Cal. Civ. Proc. Code § 364); breach of warranty (Cal. Coml. Code § 2607(3)(A)); and defamation against a newspaper publisher or radio broadcaster (Cal. Civ. Code § 48a).
Choosing the Right State Court Once the plaintiff decides to bring a state-court action in California, plaintiff's counsel must determine where to file suit. This section of the Note outlines: The venue rules for determining which branch of a particular court to sue in. The monetary thresholds of California's trial-level courts. The effect a contractual forum (or venue) selection clause may have on where to sue. Superior Court California has only one trial level court, the superior court, which generally handles all claims. The superior court is divided into separate departments for convenience (for example, probate or family law) that are still part of the superior court. The amount in dispute as pled in the plaintiff's complaint may also determine the division or classification of the case and the governing rules and procedures. The small claims division of the superior court provides a streamlined adjudication process. Matters must be filed in small claims when the amount in controversy, exclusive of interest and costs, does not exceed either:
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$10,000 for individuals. $5,000 for businesses and other entities. (Cal. Civ. Proc. Code §§ 116.220-116.221.) If the amount in controversy exceeds those of the small claims division, the matter must be heard in the general division of the superior court. However, the amount in dispute (not including interest and costs) determines whether a case is classified as limited or unlimited and changes which rules and procedures will be applied to the matter. Specifically: Limited. Civil cases are classified as limited when the amount in controversy is $25,000 or less (Cal. Civ. Proc. Code §§ 85-86). Unlimited. Civil cases are classified as unlimited when the amount in controversy is more than $25,000 (Cal. Civ. Proc. Code § 88). For more information on how monetary thresholds affect subject matter jurisdiction, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-A, 3:4-122.7.
Venue Rules Although the superior court has statewide jurisdiction, each county has its own respective superior court (Cal. Const. art. VI § 4). The appropriate county in which to commence an action is generally the county where either: The defendant lives. The defendant has its principle place of business (if the defendant is a corporation or other entity). The dispute arose, such as where an accident happened, where real property is located, or where a contract was entered into or breached. (Cal. Civ. Proc. Code §§ 395 and 395.5.) In some counties, the superior court has additional branches, departments, or divisions of the superior court that exist to serve different geographic portions of the county. Each court's local rules should be reviewed to determine if there is a specific location where an action may be filed, heard, or tried (Cal. Civ. Proc. Code § 402). For more information on venue, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-D.
Forum Selection Clauses For contract-related disputes, plaintiff's counsel should check whether the underlying contract has a forum selection clause. If so, the decision on where to sue (California or some other jurisdiction) may be dictated by the terms of the contract. Mandatory forum selection clauses are presumed valid and enforceable in California unless shown by the resisting party to be unreasonable (see Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149). Despite the parties' agreement to litigate in California, a court may dismiss, on forum non conveniens grounds,
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cases where neither the litigants nor the public have a real interest in having the matter litigated in California (Cal. Civ. Proc. Code ยง 410.30; see also Appalachian Ins. Co. v. Sup. Ct. (Union Carbide Corp.) (1984) 162 Cal.App.3d 427, 437-438). Venue selection clauses, in which parties agree to litigate in a particular county within the state of California, will not be upheld if venue is assigned to an improper county under California's venue statutes (Alexander v. Sup. Ct. (The Brix Group, Inc.) (2003) 114 Cal.App.4th 723, 731-32). For more information on forum selection clauses, see Forum Non Conveniens Dismissal and Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-B, 3:170.
Anticipating a Change in Forum The plaintiff does not always have the last word on where to litigate. In some instances, the defendant may force the plaintiff to litigate in a different forum. For example, the defendant may attempt to: Remove the case to federal court. Transfer the case to another county. Have the case dismissed and re-filed in a court in a different state or country. Compel the plaintiff to arbitrate. Removal to Federal Court The defendant may attempt to remove the case to federal court if the plaintiff's claims support a finding of federal subject matter jurisdiction. Depending on the case, litigating in a federal forum may or may not hurt the plaintiff's chances of success. If the client wants to remain in state court, plaintiff's counsel may be able to defeat removal by: Asserting state-law claims only. This should prevent removal on federal question grounds, unless the plaintiff's state-law claims are completely preempted by federal law. Naming a California defendant in the lawsuit (if the plaintiff is also a California resident). This should prevent removal on traditional diversity grounds if the plaintiff has a colorable claim against the in-state defendant (28 U.S.C. ยง 1441(b)(2)). Limiting the amount in controversy to not exceed the monetary threshold of the federal diversity jurisdiction statute (currently any amount above $75,000, exclusive of interest and costs) (28 U.S.C. ยง 1332(a)). However, even damages that are not specifically pled (for example, personal injury, wrongful death, and punitive damages cannot be specified in the complaint) may still be accounted for in determining the amount in controversy for the basis of removal to federal court. Defendant must, however, prove by a preponderance of evidence that the entire amount in controversy, which may include the unspecified damages, exceeds $75,000. (Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997).) Transfer to Another County The defendant may try to transfer the case to another county within the state if one or more of the following conditions are met:
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The plaintiff filed suit in the wrong county according to California's venue rules. (Cal. Civ. Proc. Code §§ 396b, 397(a)). An impartial trial cannot be held in the proper county (Cal. Civ. Proc. Code § 397(b)). The change in venue promotes the convenience of witnesses and the ends of justice (Cal. Civ. Proc. Code § 397(c)). There is no judge qualified to act in the matter (Cal. Civ. Proc. Code §§ 397(d)). For more information on California's transfer rules, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-D 3:549-594.
Forum Non Conveniens Dismissal Even if the court has jurisdiction over the parties and claims, it still may dismiss (or stay) on forum non conveniens grounds an action that should be heard in the courts of another state or country (Cal. Civ. Proc. Code § 410.30(a)). A forum non conveniens dismissal (or stay) is not a jurisdictional requirement, but a discretionary decision by the court to decline the exercise of jurisdiction when an action may be more appropriately and justly tried elsewhere (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751; In re Christopher B. (1996) 43 Cal.App.4th 551, 559). A forum non conveniens dismissal (or stay) is unavailable in breach of contract cases where the aggregate value of the underlying transaction is $1 million or more and the relevant contract has California choice of law and choice of forum provisions (Cal. Civ. Proc. Code § 410.40). For more information on the forum non conveniens doctrine under California law, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-C.
Compelling Arbitration The defendant may move to compel arbitration if the plaintiff commences litigation despite a prior contractual agreement between the parties to arbitrate. However, arbitration may sometimes be resisted on certain grounds, such as fraud, duress, or unconscionability (see Hartley v. Sup. Ct. (Monex Deposit Co.) (2011) 196 Cal.App.4th 1249, 1254). For more information on compelling arbitration, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 9(I)-H, 9:408.
Claims Before drafting the complaint or taking other steps to commence a lawsuit, plaintiff's counsel must decide which claims to bring on the client's behalf. This section of the Note outlines the general process for making that determination.
Gathering Facts and Evidence The first step in deciding which legal claims to pursue is to gather the pertinent facts and evidence from the plaintiff and other key players. During the pre-suit investigation, plaintiff's counsel typically obtains most of the
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relevant information directly from the client. Counsel should approach the information gathering strategically and be aware of the privilege issues involved.
Interviewing the Client When interviewing the client, counsel should focus initially on the facts that relate to the plaintiff's claims and the defendant's potential defenses. Among other things, counsel should: Identify the key players. Determine: what the defendant is accused of doing (or not doing); and when the relevant events occurred.
For corporate clients, counsel may need to interview lower-level employees involved in the disputed transaction as well as key corporate executives. Counsel should use the client interview as a way to uncover the identities of other witnesses and the location of relevant documents. If the client is a corporation or other business organization, counsel should ask whether any corporate or business affiliates have information that may be relevant to the suit. The client interview can also reveal whether any relevant evidence has been lost or destroyed.
Reviewing the Client's Documents Counsel should carefully review any documents in the client's possession that relate to the dispute. The plaintiff's documents should ideally corroborate the information obtained during the witness interviews. If the documents appear to tell a different story, however, counsel should re-interview the relevant witnesses to find out whether the documents either: Truly contradict the client's claims. Simply need to be put in their proper context. When reviewing the plaintiff's documents, counsel should also remember to look for leads to other documents and witnesses. If, for example, the plaintiff has emails to the defendant regarding issues relevant to the case, counsel should check whether the plaintiff also has the defendant's responses.
Privilege Issues for Clients Client interviews are most productive when the client speaks freely and openly with counsel. To help with this free flow of information, the attorney-client privilege generally protects communications between an attorney and the attorney's client from disclosure to third parties (Cal. Evid. Code ยง 952). For corporate clients, the privilege covers officers and managers as well as employees, if the communication with the employees surrounds actions that may be imputed to the corporation (Cal. Rule of Prof. Conduct 2-100(A)). The attorney-client privilege should protect counsel's interview notes. Counsel's notes should also qualify for
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protection as attorney work product (see Cal. Civ. Proc. Code § 2018.030; Mack v. Sup. Ct. (State of Calif.) (1968) 259 Cal.App.2d 7, 10). For more on privilege issues, see Practice Note, Attorney-Client Privilege: Privileged Parties (CA).
Evidence from Non-Parties Interviews of "friendly" non-party witnesses are typically informal and done on a voluntary basis. If the non-party is not friendly toward the plaintiff, counsel must decide whether to subpoena the witness after the action is commenced or, where appropriate, obtain a court order compelling pre-suit discovery. Pre-suit discovery, however, is rarely used and usually involves a party that expects to be sued and wishes to preserve evidence that may be unavailable later (Cal. Civ. Proc. Code §§ 2035.010-2035.060; see also Block v. Sup. Ct. (Shaver) (1963) 219 Cal.App.2d 469, 478 (party sought pre-lawsuit physical exam for a child injured in a traffic accident because the child's parents indicated a claim was going to be made but was not going to disclose any information about the child's injuries and the claim may potentially not have been brought for years)).
Consulting Experts For particularly complex matters, plaintiff's counsel may want to consult with an expert to gain a better understanding of the pertinent transactions or underlying events. Consultants are frequently used in cases involving sophisticated financial instruments, medical diagnoses, complicated scientific issues, or other matters beyond counsel's level of expertise. Consulting experts are also used to compute damages when the amount or extent of the plaintiff's damages is hard to prove or subject to different valuations. Communications between counsel and a consulting expert, as well as materials considered and prepared by the consultant, are generally shielded from disclosure (Williamson v. Sup. Ct. (Shell Oil Co.) (1978) 21 Cal.3d 829, 834). However, counsel should be cautious when communicating with a consulting expert that may later be used as a testifying expert. Any protections otherwise attaching to communications with and documents prepared by the consultant may be lost if the consultant testifies at trial (see National Steel Products Co. v. Sup. Ct. (Rosen) (1985) 164 Cal.App.3d 476, 489 (attorney identifying a building consultant as a testifying expert waived the attorney-client privilege of the building consultant's report for the attorney in a prior litigation because they pertained to the same subject matter); but see DeLuca v. State Fish Co., Inc. (2013) 217 Cal.App.4th 671, 691-692 (the court did not address the issue of whether attorney work product protection applies to issues in a report that were unrelated to subject matter on which the expert was expected to testify)).
Litigation Holds When conducting the pre-suit factual investigation, plaintiff's counsel should advise the client of its duty to preserve relevant evidence. A party must begin to preserve relevant documents, emails, and other materials once it reasonably anticipates litigation (see Williams v. Russ (2008) 167 Cal.App.4th 1215, 1227 (sanctions imposed in legal malpractice action because the attorney's former client only maintained part of his client file and let the rest be destroyed by a landlord before and after he filed an amended complaint)).
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Counsel should also consider sending the intended defendant a letter stating that the plaintiff plans to file suit and informing the defendant of its duty to preserve potentially relevant evidence. However, California law is unclear whether a litigant has a duty to preserve evidence before being served with a discovery demand (see Cedars-Sinai Med. Ctr. v. Sup. Ct. (Bowyer) (1998) 18 Cal.4th 1, 12 ("destroying evidence in response to a discovery request after litigation has commenced would surely be a misuse of discovery within the meaning of section 2023 as would such destruction in anticipation of a discovery request"); but see New Albertsons, Inc. v. Sup. Ct. (Shanahan) (2008) 168 Cal.App.4th 1403, 1430-1431 (under the Discovery Act, the court sanctions parties only to the "extent authorized by the chapter governing any particular discovery method or other provision of this title" and no discovery method applies to spoliation before a discovery request)). For more information on issues related to litigation holds, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 8A-6.
Formulating the Legal Theories After identifying the pertinent facts and marshaling the available evidence, plaintiff's counsel must begin to formulate the client's legal claims.
Choice of Law Before deciding which legal theories to pursue, plaintiff's counsel must figure out whether the plaintiff's substantive causes of action arise under California law or the law of another jurisdiction. In cases involving persons, property, or transactions outside of California, the applicability of California law is subject to a three step analysis that examines: Whether the laws of the different states actually differ. Determining whether each state has a policy interest in having its law applied to this case if the laws do differ. Which state's interests may be more impaired if its policy were not followed if both states have a policy interest having their laws applied. (People ex rel. DuFauchard v. U.S. Fin'l Mgmt., Inc. (2009) 169 Cal.App.4th 1502, 1520.)
Researching the Law When researching potential causes of action, counsel should consider available statutory and common law claims. Counsel should research potential federal claims in addition to state-law claims because state and federal courts have concurrent jurisdiction over many kinds of federal claims. However, counsel should be careful when bringing a federal claim in state court, as this may trigger the defendant's right to remove the case to federal court (see Removal to Federal Court). Counsel should also identify the governing statute of limitations period for plaintiff's claims as soon as possible. This is particularly important if the plaintiff must take immediate action to prevent the claim from lapsing or if it has already lapsed and no legal remedy is available.
Multiple Claims
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As a general matter, the plaintiff should include all available legal claims in its complaint. The plaintiff may bring as many claims as it has in a single suit regardless of consistency (Clauson v. Sup. Ct. (Pedus Services, Inc.) (1998) 67 Cal.App.4th 1253, 1256). Res judicata bars the plaintiff from bringing a second suit against the same defendant based on the same event or transaction (Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1145).
Researching the Available Relief Plaintiff's counsel should research and consider all potential damages and other relief available to the plaintiff when assessing whether or not to bring suit.
Compensatory Damages Compensatory damages are awarded to a party in a civil action to compensate for an injury or loss caused by another party's unlawful conduct. The damages amount may be relatively certain (for example, medical expenses, loss of income, or cost of services) or more difficult to quantify (for example, pain and suffering or emotional distress). Counsel should note, however, that a plaintiff must not specify an amount of damages in complaints asserting personal injury or wrongful death actions (Cal. Civ. Proc. Code ยง 425.10(b)).
Statutory Damages For certain causes of action, a statute dictates the damages available to the plaintiff. Counsel should research and review the causes of actions for any related statutory damages. For example, a violation under the Consumers Legal Remedies Act requires that the minimum damages recoverable start at $1,000 (Cal. Civ. Code ยง 1780).
Punitive Damages Punitive damages are intended to punish the defendant and deter the defendant and others from engaging in conduct similar to that which is the basis of the suit. Because punitive damages are relatively uncertain, plaintiffs are barred from stating a punitive damages figure in the complaint (Cal. Civ. Code ยง 3295(e)). Punitive damages are available if the plaintiff shows that the defendant acted with either: Oppression. Fraud. Malice. (Cal. Civ. Code ยง 3294(a); see also Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949, 958 (oppression, fraud, and malice require an evil motive and a punitive damages award is improper without a definite showing of intent to injure).)
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Costs Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover the costs of litigating an action (Cal. Civ. Proc. Code § 1032(b)). Allowable costs are set out in Cal. Civ. Proc. Code § 1033.5 and include filing fees, depositions costs, copying costs, among others.
Attorneys' Fees The parties typically are responsible for paying their own respective attorneys' fees. However, a prevailing party may recover its attorneys' fees from the losing party if authorized by contract or statute (Cal. Civ. Proc. Code § 1033.5(a)(10)).
Interest The plaintiff may be entitled to pre-judgment and post-judgment interest. Pre-judgment interest is available by statute while post-judgment interest is generally available as a matter of right (Cal. Civ. Code § 3287(a)). In California, the availability of pre-judgment interest is governed generally by three statutory provisions: Cal. Civ. Code § 3287(a) applies when the plaintiff seeks to recover liquidated damages. The court must award pre-judgment interest in cases governed by Section 3287(a). (N. Oakland Med. Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) Cal. Civ. Code § 3287(b) applies when damages are unliquidated and are based on a cause of action in contract. The court has discretion to award pre-judgment interest in cases governed by Section 3287(b). (N. Oakland Med. Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) Cal. Civ. Code § 3288 applies in actions for breach of an obligation not arising from contract and in every case of oppression, fraud, or malice. The trier of fact has discretion to award pre-judgment interest in cases governed by Section 3288. (Greater Westchester Homeowners Ass'n v. City of Los Angeles (1979) 26 Cal.3d 86, 102.) Pre-judgment interest awarded under Section 3288 may only be added to special or economic damages, not to general damages, such as pain and suffering (Greater Westchester Homeowners Ass'n v. City of Los Angeles (1979) 26 Cal.3d 86, 102-103). The pre-judgment interest rate varies depending on the type of claim asserted: For breach of contract claims, the interest rate is generally set at "any legal rate" specified in the contract (Cal. Civ. Code § 3289(a)). If no legal rate of interest is specified by contract, the rate is: 10% per annum, for contracts entered into after January 1, 1986 (Cal. Civ. Code § 3289(b)); or 7% per annum, for contracts entered into before January 1, 1986 (Cal. Const. art. XV § 1; Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1131-1132). For non-contractual claims, the rate is generally set at 7% per annum (Cal. Const. art. XV § 1; Children's Hosp. & Med. Ctr. v. Bonta (2002) 97 Cal.App.4th 740, 775). Pre-judgment interest accrues at different times, depending on the statutory provision under which it is sought. Pre-judgment interest sought under:
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Cal. Civ. Code 3287(a) generally begins to accrue on the first date there is both a breach and a liquidated claim (N. Oakland Med. Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828). Cal. Civ. Code 3287(b) may accrue no earlier than the date the action was filed (although the accrual date is ultimately set by the court). Cal. Civ. Code 3288 generally begins to accrue on the date of the plaintiff's loss (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241). Every person entitled to recover damages that are certain and vested is also entitled to recover post-judgment interest on this amount (Civ. Code ยง 3287(a)). The post-judgment interest rate in California is 10% per annum on the principal amount of a money judgment remaining unsatisfied (Cal. Civ. Proc. Code ยง 685.010(a)). Post-judgment interest generally begins to accrue on the date judgment is entered (Cal. Civ. Proc. Code ยง 685.020(a)). For more information on interest as damages, see Cal. Prac. Guide Civ. Trials & Ev. Ch. 17-F.
Equitable Relief The plaintiff may seek non-monetary relief, such as a temporary restraining order or preliminary injunction. If counsel is representing the client on a contingency basis (meaning plaintiff's counsel collects a percentage of any damages awarded to the plaintiff), counsel should factor this into the case assessment, because the overall monetary damages may be partially or completely offset by the granting of some form of equitable relief. For example, in an employment discrimination lawsuit, plaintiff may prefer to negotiate a lower monetary settlement in exchange for certain job accommodations. Equitable relief is commonly sought in cases to prevent: A foreclosure. Violence or threats of violence in the workplace or educational campus. A business from engaging in actions that violate the unfair competition laws, such as misleading advertising. A court's power to grant equitable relief is limited in cases where the amount in controversy is $25,000 or less. In these cases, the court cannot: Issue permanent injunctions, but can issue temporary injunctions and preliminary injunctions (Cal. Civ. Proc. Code ยง86(a)(8)). Determine title to real property. It can only authorize actions to determine title to personal property (Cal. Civ. Proc. Code ยง86 (b)(1)). For more information on equitable forms of relief, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 9(II).
Declaratory Relief The plaintiff may seek a declaratory judgment which is a binding legal determination clarifying an uncertain legal
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right (see for example, Market Lofts Community Ass'n v. 9th St. Market Lofts, LLC (2014) 222 Cal.App.4th 924, 931 (condominium owners' association that was named beneficiary of parking license agreement and contracting party to sublicense agreement was "interested party" entitled to seek declaration interpreting agreements); California Union Ins. Co. v. Club Aquarius, Inc. (1980) 113 Cal.App.3d 243, 169 (insurer and insured publisher sought declaratory relief to determine whether insurer needed to defend insured on publications outside coverage of the insurance policy)). Declaratory relief is designed in large part as a practical means of resolving controversies so that the parties involved can adjust their conduct to reduce the likelihood of future litigation. Declaratory relief is appropriate only where there is an actual controversy, not simply an abstract or academic dispute (Connerly v. Schwarzenegger (2007) 146 Cal.App.4th 739, 746). The party seeking relief must also have an actual interest in the subject of the controversy (Cal. Civ. Proc. Code ยง 1060). For more information on declaratory relief, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 6-B; 6:186-191.
Analyzing Potential Cross-Claims When assessing the case's worth, counsel must also analyze the plaintiff's exposure to any cross-claims the defendant may raise. As part of this analysis, counsel should consider the strength of the defendant's potential claims and the plaintiff's potential defenses and liability for damages.
Parties Deciding the parties to name in a lawsuit can be a major strategic decision for plaintiff's counsel. Although simple cases may involve only one possible plaintiff and defendant, complex cases may potentially involve several actors and stakeholders with interests that must be accounted for. There may also be ethical or legal requirements that affect which parties are named or not named as parties to a lawsuit. This section of the Note outlines the key issues for plaintiff's counsel to consider in deciding which parties to name as plaintiffs and defendants in a California state-court lawsuit.
Identifying the Plaintiffs and Defendants Before drafting the complaint, plaintiff's counsel must conduct pre-suit due diligence. The first step in the process is to identify all of the parties that should be named in the action.
Assumed Names and Name Changes Counsel must determine the exact identity (or identities) of both the plaintiff and the defendant. In many instances, the parties' identities are obvious. In other instances, they are not. For example, the plaintiff or the defendant may have legally changed its name (also called "formerly known as" or "f/k/a") or may be doing business under an assumed name (also called "doing business as" or "d/b/a"). At the initial consultation, plaintiff's counsel should ask whether the client is known by (or does business under) any names other than its legal name. Plaintiff's counsel may also need to run a public records search to confirm whether the defendant has any aliases or is doing business under an assumed name, as counsel may not be able
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to obtain this information directly from the defendant before filing suit. It is vitally important to properly identify the parties during the pre-suit planning phase of the case. This helps ensure that: A conflicts check is properly run. A background check on the parties is properly conducted. The proper defendant is served. Corporate Parties If the plaintiff is a corporation or other organization, counsel should inquire at the outset whether counsel are being asked to represent either: The corporation only. The corporation and certain of its executives, shareholders, or other constituents. If the client requests a joint representation, counsel should confirm that this is ethical under the circumstances and obtain informed written consent from the client that informs them of the actual and foreseeable adverse consequences of joint representation (Cal. Rule of Prof. Conduct 3-310).
Governmental Parties If the plaintiff's injury was caused by governmental misconduct, counsel must determine whether the wrongdoer's actions can be attributed to a local, state, federal, or foreign government. Different procedures may apply when the party being sued is a governmental entity. For example, generally a governmental entity must first be presented with a formal claim before suit (Cal. Gov't Code ยง 945.4). Depending on the government entity that is being sued, other procedures or limitations may also apply. For more information on suing governmental entities, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 1-C, 1:646.
Anonymous Plaintiffs Depending on the nature of the case, the plaintiff may wish to sue anonymously. In California, plaintiffs are not permitted to use fictitious names absent exceptional circumstances. Exceptional circumstances include when: The matter is of a highly sensitive and personal nature. There is a danger of physical or mental harm to the plaintiff. Disclosure of the plaintiff's identity incurs the injury the complaint seeks to avoid (for example, invasion of the plaintiff's privacy). (Doe v. Lincoln Unified School Dist. (2010) 188 Cal.App.4th 758, 767.) For more information on anonymous plaintiffs, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 2-B, 2:136.5.
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Unknown Defendants Sometimes, the plaintiff may know that it has a cause of action against a particular defendant, but may not know the defendant's name. A plaintiff finding itself in this position is not precluded from commencing an action until it discovers the unknown defendant's identity. The plaintiff can instead file suit against the unknown defendant and then add the defendant's name in the caption once its true identity becomes known (Cal. Civ. Proc. Code ยง 474). If counsel later learns a "Doe" defendant's true name and promptly seeks leave to amend the complaint to include it, the statute of limitations is calculated by relating back to the original complaint's filing date, therefore tolling the statute of limitations (Okoro v. City of Oakland (2006) 142 Cal.App.4th 306, 313). For more information on suing unknown defendants, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 6-B, 6:79.
Ensure All Proper Parties Are Named After identifying all potential plaintiffs and defendants, plaintiff's counsel must: Confirm that each of them may properly be made parties to the suit. Ensure that all parties that should be named in the suit are included. Capacity To properly bring a lawsuit in California state court, a plaintiff must have the legal capacity to sue. Any natural person or artificial person (for example, corporations, governmental entities, and partnerships) generally has the capacity to sue subject to certain limitations. The following generally do not have legal the capacity to sue: Minors or incompetents (Cal. Civ. Proc. Code ยง 372(a)). Corporations that have been suspended for nonpayment of corporate franchise tax (Reed v. Norman (1957) 48 Cal.2d 338, 342). Nonqualified out-of-state corporations and LLCs cannot initiate suit but can defend themselves (Cal. Corp. Code ยง 17708.07). Unlicensed building contractors suing for compensation for their services (Cal. Bus. & Prof. Code ยง 7031(a)). Fugitives from justice and individuals found in contempt of court. However, these individuals can defend against a lawsuit (Doe v. Sup. Ct. (Polanski) (1990) 222 Cal.App.3d 1406, 1410). For more information on capacity to sue, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 2-B.
Real Party In Interest In addition to having legal capacity, the plaintiff must also be the "real party in interest" (Cal. Civ. Proc. Code ยง 367). This is the person holding title to the claim or property involved, in contrast to others that may merely be interested in or benefited by the litigation (Gantman v. United Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566). In some situations, however, a representative of the real party in interest may file the suit, for example:
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An executor or administrator of an estate. A guardian. A trustee. For more information on California's standing requirement, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 2-A.
Additional Plaintiffs and Defendants Depending on the case, more than one party may have an interest in the property or controversy that is the subject of the suit. If so, plaintiff's counsel may, and in certain situations, must join additional plaintiffs and defendants to the lawsuit. Joinder is mandatory when either: In the person's absence, complete relief cannot be accorded among those already parties to the action. Any judgment rendered in the person's absence may either: prejudice the person's ability to protect the person's interest in later litigation; or leave any of the parties before the court exposed to a risk of additional liability or inconsistent obligations.
(Cal. Civ. Proc. Code § 389(a).) Joinder is permissive when a potential co-plaintiff or defendant has a claim or an interest in the property or controversy which is the subject of the action that does not meet the test for mandatory joinder described above (Cal. Civ. Proc. Code §§ 378(a)(2), 379(a)(2)). For cases involving many potential plaintiffs, counsel should also consider filing a class action (Cal. Civ. Proc. Code § 382). In rare situations, where there are too many defendants to practically sue and personally serve, a defendant class action may be appropriate. For more on mandatory and permissive joinder, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 2-C. For more on class actions, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 14.
Ensure Parties are Subject to Personal Jurisdiction Before filing suit, plaintiff's counsel should confirm that there is a basis for the court to exercise personal jurisdiction over the defendant. As explained below, a defendant may either be subject to general or specific personal jurisdiction in California. For more information on personal jurisdiction, see Cal. Prac. Guide Civ. Pro. Before Trial Ch. 3-B.
General Jurisdiction In certain circumstances, a defendant may be subject to general jurisdiction in California. General jurisdiction
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means the defendant can be sued in California for any cause of action no matter where the claim arose. (Cornelison v. Chaney (1976) 16 Cal.3d 143, 147.) Individuals domiciled in California are subject to the general jurisdiction of the state's courts. (Daimler AG v. Bauman (2014) 134 S.Ct. 746, 760). Service of process on an individual while voluntarily present in the state (even briefly) may also allow California courts to exercise general jurisdiction over that individual (Burnham v. Sup. Ct. (1990) 495 U.S. 604, 612). Corporations are subject to general jurisdiction in California if they are either incorporated in the state or have their principal place of business here (Daimler AG, 134 S.Ct. at 760). Out-of-state defendants may also be subject to general jurisdiction in California if their business activities within the state are substantial, continuous, and systematic (Koninklijke Luchtvaart Maatschappij v. Sup. Ct. (1951) 107 Cal.App.2d 495, 500-501).
Specific Jurisdiction A nonresident defendant with California contacts that are not sufficiently continuous and systematic for general jurisdiction may still be subject to specific jurisdiction in California regarding claims related to its in-state contacts. Specific personal jurisdiction requires a showing that: The out-of-state defendant purposefully established contacts with California. Plaintiff's cause of action arises out of or is related to defendant's contacts with California. California's exercise of personal jurisdiction in the particular case comports with fair play and substantial justice. (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 477-478; Vons Cos., Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 446.) Some examples of activities that may support a finding of specific jurisdiction include: Business transactions within California. Tortious acts within California. Advertising directed at California residents. Ownership, use, or possession of real property within California. California courts also presume that they may exercise personal jurisdiction over a nonresident that has contractually consented in advance to jurisdiction in California (Miller-Leigh LLC v. Henson (2007) 152 Cal.App.4th 1143, 1149).
Taking on the Representation The decision to take on a new case should be deliberate and not made hastily. Before agreeing to represent the plaintiff, counsel must: Consult with the client.
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Ensure counsel can represent the client in court. Sign a retainer agreement with the client.
Client Consultation Before deciding to take on any new representation, counsel should set up an initial consultation with the prospective client to discuss: The claims in the case. Counsel should make an initial determination whether the client's claims have merit, the chances of success, and the claims' worth. Counsel should also use this consultation as an opportunity to assess the client's credibility. The client's motivation. Counsel should determine what the client's motivation is for suing. For example, if the client merely wants to harass the adversary, it may be inadvisable to take on the representation. If the client wants "justice" to be done, it may not be willing to settle. The litigation budget. Counsel should know from the outset how much the client can (or is willing to) spend on the case. This helps counsel determine how aggressively to litigate and whether settlement is a good option. The fee arrangement. Although the fee arrangement should be outlined in a formal retainer agreement, counsel should explain to the client at the initial consultation how counsel plan to bill for the matter (whether hourly, on a contingent fee basis, or some alternate arrangement).
Ensure the Attorney can Represent the Client in Court If the attorney decides to pursue representation of the client after the consultation they must then verify they can represent the client in court.
Conflicts Check An attorney generally may not represent a client if the representation is adverse to another of the attorney's present or sometimes former clients (Cal. Rule of Prof. Conduct 3-310(B)). Counsel should run a conflicts check at the outset of the representation and confirm that no conflict of interest exists.
Bar Admission and Local Counsel Before signing and filing a complaint on behalf of a client in superior court, counsel typically must either be: Formally admitted to the State Bar of California. Admitted in the case pro hac vice. (Cal. Bus. & Prof. Code ยง 6125; Cal. Rules of Court, rule 9.40.) For more information, see Practice Note, General Formatting Rules in Superior Court (CA): Bar Admission and Local Counsel.
Retainer Agreement
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Counsel and the client should sign a retainer agreement that clearly sets out: The legal services being provided. The law firm's fee arrangement for the particular matter. The obligations of the firm and the client. The retainer fee (if any). The grounds on which either party may dissolve the relationship. If the plaintiff is an existing client, counsel should confirm that the retainer agreement on file covers the new matter and that the amount currently on retainer is sufficient. To view sample retainer agreements, see the samples provided by the California Bar, here.
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