Opinion ID: 844211
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Heading: Prospective and Retrospective Application of Enlarged Limitations Periods

Text: Before we analyze the application of section 340.1 to plaintiffs' case, we must consult the general rules concerning the application of enlarged limitations periods to claims involving conduct that occurred prior to the enlarging amendment. (1) The Legislature has authority to establishand to enlarge limitations periods. As we shall explain, however, legislative enlargement of a limitations period does not revive lapsed claims in the absence of express language of revival. This rule of construction grows out of an understanding of the difference between prospective and retroactive application of statutes. (2) Our decisions have recognized that statutes ordinarily are interpreted as operating prospectively in the absence of a clear indication of a contrary legislative intent. ( Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 230 [46 Cal.Rptr.3d 57, 138 P.3d 207] ( Disability Rights ); DiGenova v. State Board of Education ( DiGenova ) (1962) 57 Cal.2d 167, 174 [18 Cal.Rptr. 369, 367 P.2d 865]; see also § 3 [No part of [this code] is retroactive, unless expressly so declared.].) In construing statutes, there is a presumption against retroactive application unless the Legislature plainly has directed otherwise by means of `express language of retroactivity or ... other sources [that] provide a clear and unavoidable implication that the Legislature intended retroactive application.' ( McClung v. Employment Development Dept. (2004) 34 Cal.4th 467, 475 [20 Cal.Rptr.3d 428, 99 P.3d 1015] ( McClung ); see also Disability Rights, supra, at p. 230; Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 841 [123 Cal.Rptr.2d 40, 50 P.3d 751] ( Philip Morris ).) Ambiguous statutory language will not suffice to dispel the presumption against retroactivity; rather `a statute that is ambiguous with respect to retroactive application is construed ... to be unambiguously prospective.' ( Philip Morris, supra, at p. 841; see id. at p. 843; see also Disability Rights, supra, at pp. 229-230; Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1209, fn. 13 [246 Cal.Rptr. 629, 753 P.2d 585].) (3) The terms retroactive and prospective, however, are not always easy to apply to a given statute. (See Disability Rights, supra, 39 Cal.4th at pp. 230-231.) We must consider `the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event [citation]. In exercising this judgment, familiar considerations of fair notice, reasonable reliance, and settled expectations offer sound guidance. [Citation.]' [Citation]. ( In re E.J. (2010) 47 Cal.4th 1258, 1273 [104 Cal.Rptr.3d 165, 223 P.3d 31].) (4) In general, a law has a retroactive effect when it functions to `change[] the legal consequences of past conduct by imposing new or different liabilities based upon such conduct' that is, when it `substantially affect[s] existing rights and obligations.' ( Disability Rights, supra, 39 Cal.4th at p. 231; see also In re E.J., supra, 47 Cal.4th at p. 1273 [`In general, application of a law is retroactive only if it attaches new legal consequences to, or increases a party's liability for, an event, transaction, or conduct that was completed before the law's effective date.'].) Ordinarily, considerations of basic fairness militate against such retroactive changes. ( McClung, supra, 34 Cal.4th at p. 475; Philip Morris, supra, 28 Cal.4th at pp. 840-842.) (5) Changes to the law, however, are not necessarily considered retroactive even if their application involve[s] the evaluation of civil or criminal conduct occurring before enactment. ( Elsner v. Uveges (2004) 34 Cal.4th 915, 936 [22 Cal.Rptr.3d 530, 102 P.3d 915].) In a principle of significance to the present case, changes to rules governing pending litigation, for example, frequently have been designated as prospective, because they affect the future; that is, the future proceedings in a trial. The prospective label applies even though the trial concerns conduct that occurred prior to the enactment of the new law. ( Id. at pp. 936-937; see also Disability Rights, supra, 39 Cal.4th at pp. 231-232.) (6) Enlargement of the statutory period in which civil actions may be brought constitutes a special category within the general topic of the prospective or retroactive application of statutes. An extensive line of authority on this subject has developed and we assume that the Legislature was mindful of such existing law when it enacted legislation. (See, e.g., Estate of McDill (1975) 14 Cal.3d 831, 839 [122 Cal.Rptr. 754, 537 P.2d 874]; see also Mercy Hospital & Medical Center v. Farmers Ins. Group of Companies (1997) 15 Cal.4th 213, 221 [61 Cal.Rptr.2d 638, 932 P.2d 210].) (7) As long as the former limitations period has not expired, an enlarged limitations period ordinarily applies and is said to apply prospectively to govern cases that are pending when, or instituted after, the enactment took effect. This is true even though the underlying conduct that is the subject of the litigation occurred prior to the new enactment. (See Douglas Aircraft Co. v. Cranston (1962) 58 Cal.2d 462, 465 [24 Cal.Rptr. 851, 374 P.2d 819] ( Douglas Aircraft ); Mudd v. McColgan (1947) 30 Cal.2d 463, 468 [183 P.2d 10] ( Mudd ).) For example, in Society of Cal. Pioneers v. Baker (1996) 43 Cal.App.4th 774, 784-785 [50 Cal.Rptr.2d 865], a case involving a damage claim arising from the misappropriation of a work of art, the court held that because the prior three-year limitations period had not expired by the time the statute was amended, it was proper to apply an enlarged limitations period that added a delayed accrual provision to permit the plaintiff's damage claim to go forward. (See also Mojica v. 4311 Wilshire, LLC (2005) 131 Cal.App.4th 1069, 1072-1073 [31 Cal.Rptr.3d 887] [enlargement of the period in which to bring personal injury claim applied to a claim that had not lapsed for state law purposes because, prior to the amendment's effective date, the plaintiff filed an action in federal court]; Andonagui v. May Dept. Stores Co. (2005) 128 Cal.App.4th 435, 439-440 [27 Cal.Rptr.3d 145] ( Andonagui ) [examining a 2002 enactment extending the limitations period from one year to two years for personal injury actions, and concluding the new law applied because the plaintiff's claim had not lapsed].) (8) However, when it comes to applying amendments that enlarge the limitations period to claims as to which the limitations period has expired before the amendment became lawthat is, claims that have lapsed the analysis is different. Once a claim has lapsed (under the formerly applicable statute of limitations), revival of the claim is seen as a retroactive application of the law under an enlarged statute of limitations. Lapsed claims will not be considered revived without express language of revival. ( Douglas Aircraft, supra, 58 Cal.2d at p. 465 [`It has been held that unless the statute expressly provides to the contrary any such enlargement applies to matters pending but not already barred.']; see also 58 Cal.Jur.3d (2004) Statutes, § 38, pp. 418-419 [amendments that enlarge a limitations period ordinarily do not apply where the claim was not properly made within the statutory time limit ... and thus expired prior to the change].) For example, in Douglas Aircraft, supra, 58 Cal.2d 462, Douglas Aircraft sought a declaratory judgment to determine whether it had a duty to remit to the State Controller certain unclaimed wages that had been earned by its employees. It needed the judgment to determine whether the wages, as to which the claims limitation period had lapsed, nonetheless were subject to a new statute providing that the statute of limitations would not be a defense to the duty to remit unclaimed property to the State Controller. Because the former limitations period had run before the effective date of the new statute, we found the new statute inapplicable to Douglas Aircraft. We explained that until the statute of limitations has run it may be extended, whereas after it has run, [defendants] may rely upon it in conducting their affairs. ( Id. at p. 465; see also Mudd, supra, 30 Cal.2d at p. 468.) Another example is found in Moore v. State Bd. of Control (2003) 112 Cal.App.4th 371, 378-379 [5 Cal.Rptr.3d 116] ( Moore ), in which a claim upon a crime victim's restitution fund had lapsed and was not revived by a subsequently enlarged limitations period, because the new enactment contained no clear indication of legislative intent to revive lapsed claims. The reviewing court commented that when the Legislature intends to revive time-barred claims it does so expressly. ( Id. at p. 379; see also David A. v. Superior Court (1993) 20 Cal.App.4th 281, 286-287 [24 Cal.Rptr.2d 537] ( David A. ) [interpreting former § 340.1, as amended by Stats. 1990, ch. 1578, § 1, pp. 7550-7552, and pointing out that lapsed claims are not revived in the absence of express language of revival]; Gallo v. Superior Court (1988) 200 Cal.App.3d 1375, 1378 [246 Cal.Rptr. 587] ( Gallo ) [in the absence of express language of retroactivity, the enlargement of the period in which to sue for damages arising from commission of a felony does not revive claims that had already expired under prior law]; id. at pp. 1379, 1383; Krupnick v. Duke Energy Morro Bay (2004) 115 Cal.App.4th 1026, 1028-1029 [9 Cal.Rptr.3d 767] ( Krupnick ) [an enlargement of the limitations period for personal injury actions did not apply, because the prior period had lapsed, and the amendment's express revival clause for one class of plaintiffs did not encompass the plaintiff's class]; Maldonado v. Harris (9th Cir. 2004) 370 F.3d 945, 955 [same; Under California law, an extension of a statute of limitations will not apply to claims already barred under the prior statute of limitations unless the Legislature explicitly provides otherwise.].) The rule is based upon the defendant's interest in repose. The reason for this rule is a judicial perception of unfairness in reviving a cause after the prospective defendant has assumed its expiration and has conducted his affairs accordingly. ( Gallo, supra, 200 Cal.App.3d at p. 1378.) As one court commented, a statute of limitations grants prospective defendants relief from the burdens of indefinite exposure to stale claims. By reviving lapsed claims, the Legislature may appear to renege on this promise. As Judge Hand wrote, there may be something `unfair and dishonest' in after-the-fact withdrawal of this legislative assurance of safety. ( David A., supra, 20 Cal.App.4th at p. 285.) Individuals, as well as businesses and other enterprises ordinarily rely upon the running of the limitations period: The keeping of records, the maintenance of reserves, and the commitment of funds may all be affected by such reliance .... To defeat such reliance ... deprives [enterprises] of the ability to plan intelligently with respect to stale and apparently abandoned claims. ( Douglas Aircraft, supra, 58 Cal.2d at pp. 465-466.) It is for this reason that we have expressed confidence that the Legislature would have expressed itself in unmistakable terms had it rejected the established rules governing the interpretation of statutes of limitations. ( Id. at p. 466.) Plaintiffs contend that, notwithstanding the Douglas Aircraft decision, the modern view is that a statute may be applied retroactively if statutory terms merely suggest or imply retroactivity, or if legislative history or the overall context of the statute suggests a retroactive application was intended. The decisions of this court plaintiffs cite in support do not concern revival of lapsed claims. Contrary to plaintiffs' claim that People v. Frazer (1999) 21 Cal.4th 737 [88 Cal.Rptr.2d 312, 982 P.2d 180], overruled in Stogner v. California (2003) 539 U.S. 607 [156 L.Ed.2d 544, 123 S.Ct. 2446], concerned whether a lapsed claim may be revived in the absence of express or unmistakable language of revival, in that case there was express language of revival (see People v. Frazer, supra, 21 Cal.4th at p. 747) and we were required to decide whether this provision constituted a violation of ex post facto principles or of due process. Plaintiffs have not referred us to a decision by this court that consulted extrinsic sources or found a claim revived in the absence of express language of revival. Indeed, even the decisions plaintiffs claim are closely analogous afford scant support for their apparent view that a lapsed claim may be revived by ambiguous language or reliance upon legislative history materials. For example, in Philip Morris, supra, 28 Cal.4th 828, in rejecting the claim that the repeal of statutory immunity for products liability based upon exposure to tobacco was retroactive to the immunity period, we observed that the time-honored presumption against retroactive application of a statute ... would be meaningless if the vague phrases relied upon by plaintiff and the dissent were considered sufficient to satisfy the test of a `clear[] manifest[ation]' [citation] or an ``unequivocal and inflexible'' assertion [citation] of ... retroactivity. ( Id. at p. 843.) We continued: Although we agree with the dissent that `no talismanic word or phrase is required to establish retroactivity' [citation], we do not agree there is language in the Repeal Statute of the unequivocal and inflexible statement of retroactivity that [is] require[d]. ( Ibid.; see also McClung, supra, 34 Cal.4th 467 [holding that a statute imposing personal liability on nonsupervisory workers for harassment of coworkers would not apply retroactively to conduct occurring prior to the enactment, and noting the potential constitutional implications of a contrary view; although we responded to the plaintiff's claim based upon legislative history materials, we did not suggest that legislative history materials alone, in the absence of supporting statutory language, would establish retroactivity].) (9) Plaintiffs assert that in practice, courts have examined various materials apart from express language of retroactivity to determine whether a lapsed claim has been revived. They rely upon Krupnick, supra, 115 Cal.App.4th 1026. In that case, the plaintiff contended that an extension of the limitations period for personal injury should apply to revive his lapsed claim. The Court of Appeal disagreed. It did not cite the Douglas Aircraft decision, but relied on its principle: `[A]s a rule of statutory construction, it is established that an enlargement of limitations operates prospectively unless the statute expressly provides otherwise.' ( Krupnick, supra, 115 Cal.App.4th at p. 1029, quoting Gallo, supra, 200 Cal.App.3d at p. 1378.) The Krupnick court added that, contrary to the plaintiff's claim that the expansion was retroactive to lapsed claims, the Legislature's express revival of a limited class of claims was proof that other classes of claims would not be revived. Although it offered evidence from the legislative history to assist in its interpretation of the express revival clause, the court did not suggest that legislative history materials could demonstrate that claims could be revived in the absence of unmistakable language in the statute itself.