Some Deep Procedure

Paul Blanco’s Good Car Co. Auto Grp. v. Superior Court, No. A159623 (D1d5 Oct. 20, 2020)

This is a writ taken from civil enforcement action brought by the AG against some corporations for false advertising. There’s two clusters of issues, one that deals with trial court procedure, the other which deals with appellate procedure. Both are kind of interesting, if you are into that sort of thing....

The AG filed an unverified FAL complaint against Defendants. Under Code of Civil Procedure § 446(a), Defendants were nonetheless required to answer in a verified pleading. Defendants, however, filed an unverified general denial, citing an exception in § 446(a) for when “an admission of the truth of the complaint might subject the party to a criminal prosecution.” Because defendants were corporations without any Fifth Amendment right to remain silent, the trial court struck the answer. Defendants took a writ.

The Court of Appeal issued an order to show cause on the writ. A few weeks later, the trial court issued an order noting that the case had been reassigned to a new judge. It further set a hearing for the AG to explain why the court shouldn’t vacate the first judge’s order, given the OSC. The new judge subsequently vacated the first judge’s order and un-struck the answer.

So the gating appellate issue is, was the second judge’s order—issued after the OSC—valid? This brings to bear one of the more obscure aspects of writ practice in California—the difference between an OSC and an alternative writ. An alternative writ gives the trial court a choice between showing cause (which is actually shown by the real party) and changing its order. But an OSC “does not invite the trial court to change the ruling under review.”

Although a writ petition followed by an OSC does not deprive a trial court of jurisdiction to change its mind on interlocutory decisions, the Court here explains that it is a bad idea for a trial court to do so while an OSC is pending. The point of an OSC often is for the Court of Appeal to take briefing and reach a decision on an unresolved point of law. If the trial court’s reverses course while an OSC is pending, that raises mootness issues. And indeed, if the Court of Appeal’s first priority is to merely compel the trial court to change its mind, it has the alternative writ in its quiver to do so.

The court next addresses whether the new judge had the authority to reverse the first judge’s order. (Didn’t this just come up?) A trial court may, of course, revisit interim orders. But the authority to do so generally rests with the judge that made the order in the first instance. So appellate courts have developed the rule that a reassigned trial judge can’t revisit a prior judge’s order unless the first judge is no longer available. That’s not the case when a matter is merely reassigned. (The first judge here is still on the court—he didn’t die or retire.) So, the Court of Appeal finds that the second judge lacked authority to revisit the first judge’s order.

And since the revisited order was invalid, the Court of Appeal can reach the merits of the trial court procedure issue raised by the writ. (Which it seems like it really wants to do, FWIW). 

So far as § 446 goes, the question is whether the exception in § 446 for admissions that might lead to criminal liability applies to a corporate entity that does not have a right to remain silent. Although the AG draws the equation, the statute does not itself actually reference the Fifth Amendment or any of its state law equivalents. Nor is there any doubt that a corporation can be subject to criminal liability. So Court of Appeal goes with the plain language of § 446, which permits a corporate defendant to decline to verify its answer when doing so might subject it to criminal liability. That is backed up by the case law and legislative history.

Finally, there’s the issue of whether the defendant could file a general denial. Section 431.30 says you can’t make a general denial to a verified complaint. But the complaint here was not verified, even if a verified answer is required unless the exception in § 446 applies. As the court explains, § 446 gave the AG the option of verifying the complaint. But it did not elect to do so. And given that option, it does not make sense to treat any AG complaint automatically like it has been verified, such that a general denial cannot be made to an unverified AG complaint.

Writ granted.