Court Opinion

ID: 9542055
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:30:55.138755+00
Date Added: 2024-06-11T15:06:14.319900
License: Public Domain

*382CLARK, J.
I dissent.
The trial court’s order requiring defendant to pay costs of notice to plaintiff constitutes a permanent deprivation of property without a final or even tentative adjudication of liability. As such the order constitutes a denial of due process. Omitting reference to the affidavit filed in support of the motion to compel payment of notice costs and mischaracterizing the order of the trial court, the majority ignore the fact that there is a final deprivation of property.
In her affidavit in support of the motion to compel defendant to pay costs of publication, plaintiff declared her salary as a clerk typist and that she did not have the financial resources to pay notice costs. There is no allegation as to whether plaintiff’s counsel could advance costs. Ordering notice both by mail and publication in several newspapers, the court first provided that cost of notice is a recoverable cost to the prevailing party. The court continued: “The costs of mailing and publishing notice are to be split equally between the plaintiff and defendant for the first $20,000 of such cost, and the defendant alone shall bear all costs above $20,000. Further, the plaintiff is not required to pay any costs of notice until such time as judgment is rendered in this action, and then only if plaintiff is not the prevailing party.”
The court’s order compelling defendant to expend money (property) to notify the class results in a taking in the constitutional sense. The fact that the defendant theoretically may be able to recover part or even all the expended costs would not change its unlawful nature. (North Georgia Finishing, Inc. v. Di-Chem., Inc. (1975) 419 U.S. 601, 606 [42 L.Ed.2d 751, 757, 95 S.Ct. 719]; Fuentes v. Shevin (1972) 407 U.S. 67, 86 [32 L.Ed.2d 556, 573, 92 S.Ct. 1983]; Brooks v. Small Claims Court (1973) 8 Cal.3d 661, 666 [105 Cal.Rptr. 785, 504 P.2d 1249].)
Defendant’s hope of recovering notice costs from the named plaintiff is truly speculative as a practical matter. The court’s order is based on plaintiff’s affidavit that she cannot afford to pay for notice, and there is no reasonable expectation that should defendant prevail it could recover notice costs from the named plaintiff. Moreover, the trial court’s order precludes defendant recovering from the named plaintiff more than one-half of the first $20,000 of costs.
*383It is suggested that defendant, should it prevail, could recover notice costs from members of plaintiff class other than the named plaintiff. But to allow defendant to single out a solvent plaintiff who takes no active part in the litigation, requiring him to pay all of the notice costs—possibly exceeding $20,000—is monstrous. A prorata approach would also be manifestly unfair. It would be patently inequitable to permit defendant to recover against potential class members who received notice and chose to opt out of the litigation—frequently realizing that the game is not worth the candle. Defendant’s recovery would be no less unfair as to those class members who chose not to incur the expense of consulting an attorney and who did not have the foresight to opt out. Indeed, the mind is boggled by the possibility that defendant would record its judgment for notice costs against the class and proceed to enforce it by execution or garnishment against each member’s home or personal property, constantly increasing the costs of a class member who took no part in the litigation. Plaintiff may not be permitted to use without consent the resources or credit of unnamed class members to finance the action.
Defendant’s inability to recover notice costs means that the trial court’s order requiring their payment is a permanent deprivation of property without a final or even tentative adjudication of liability.
Fundamental principles of due process require notice and hearing in every case involving deprivation of property. (Goss v. Lopez (1975) 419 U.S. 565, 576 [42 L.Ed.2d 725, 735-736, 95 S.Ct. 729]; Beaudreau v. Superior Court (1975) 14 Cal.3d 448, 458 [121 Cal.Rptr. 585, 535 P.2d 713]; Adams v. Department of Motor Vehicles (1974) 11 Cal.3d 146, 151-152 [113 Cal.Rptr. 145, 520 P.2d 961, 64 A.L.R.3d 803].) Absent extraordinary circumstances, the requisite hearing must precede the deprivation of a significant property interest. (Beaudreau v. Superior Court, supra, 14 Cal.3d at p. 458; Brooks v. Small Claims Court, supra, 8 Cal.3d at pp. 667-668; Randone v. Appellate Department (1971) 5 Cal.3d 536, 547 [96 Cal.Rptr. 709, 488 P.2d 13]; Blair v. Pitchess (1971) 5 Cal.3d 258, 278 [96 Cal.Rptr. 42, 486 P.2d 1242, 45 A.L.R.3d 1206].)
The nature and scope of the requisite hearing is determined by balancing the respective interests. (Boddie v. Connecticut (1971) 401 U.S. 371, 377 [28 L.Ed.2d 113, 118, 91 S.Ct. 780]; Goldberg v. Kelly (1970) 397 U.S. 254, 263 [25 L.Ed.2d 287, 296, 90 S.Ct. 1011].) However, the hearing must be significant (Armstrong v. Manzo (1965) 380 U.S. 545, 552 [14 L.Ed.2d 62, 66-67, 85 S.Ct. 1187]) and appropriate to the nature of the *384case. (Mullane v. Central Hanover Tr. Co. (1950) 339 U.S. 306, 313 [94 L.Ed. 865, 872-873, 70 S.Ct. 652]; Beaudreau v. Superior Court, supra, 14 Cal.3d at p. 458.) These principles apply to the deprivation of all personal rights, not merely to prejudgment creditor remedies. (Rios v. Cozens (1972) 7 Cal.3d 792, 795 [103 Cal.Rptr. 299, 499 P.2d 979], vacated sub nom. Dept. Motor Vehicles of California v. Rios (1973) 410 U.S. 425 [35 L.Ed.2d 398, 93 S.Ct. 1019], opn. reiterated Rios v. Cozens (1973) 9 Cal.3d 454 [107 Cal.Rptr. 784, 509 P.2d 696]; see Randone v. Appellate Department, supra, 5 Cal.3d at p. 547.)
The trial court’s order forces the defendant to finance plaintiff’s lawsuit, despite there being neither historic nor statutory basis for doing so (Code Civ. Proc., §§ 1031, 1032; 4 Witkin, Cal. Procedure (2d ed. 1971) §§ 80, 84, pp. 3242, 3245),1 and despite plaintiff’s having no right to defendant’s property beyond an unsubstantiated claim for damages. (See Adams v. Department of Motor Vehicles (1974) 11 Cal.3d 146, 154-155 [113 Cal.Rptr. 145, 520 P.2d 961, 64 A.L.R.3d 803].) Under these circumstances, the trial court’s order constitutes a clear taking of defendant’s property without due process. (Beaudreau v. Superior Court, supra, 14 Cal.3d 448, 464.)
Defendant has raised numerous defenses to the underlying action both by denials and by affirmative defense. The partial summary judgment attempted to dispose of only two affirmative defenses, giving no more than a hint as to the outcome of the action. In fact, defendant’s motion to amend its answer and to set up three additional affirmative defenses was later granted. Contrary to the implications of the majority opinion, there has been no determination of probable liability.
Because defendant was ordered to advance costs for the lawsuit against it before adjudication of its liability, the trial court violated defendant’s *385right to due process. Defendant is entitled to a writ of prohibition restraining respondent court from ordering it to notify the class or to pay the cost of notice.
The majority rely upon provision in the Consumers Legal Remedies Act that a court may direct “either party” to notify class members. (Civ. Code, § 1781, subd. (d).) However, the provision should not be read as conferring absolute discretion upon judges to order defendants to serve notice but only as conferring discretion to do so in proper cases. The proper cases are shown by the immediately preceding subparagraph. Section 1781, subdivision (c), subparagraph (3), provides that the trial judge upon motion may determine “there is no defense to the action.” It is only after he can properly determine on motion that there is no defense to the action, i.e., strike the answer, that he may properly order a defendant to bear the cost of notice. In the instant case, there has not been a determination of no defense to the action; rather trial is still pending based upon defendant’s denials and affirmative defenses.
It has been suggested the due process objections to requiring a defendant to pay plaintiff’s costs pendente lite might be satisfied by pretrial hearing to determine the probable outcome of the action. It is argued that available public records in some cases furnish sufficient basis for such adjudication without lengthy testimony. (Cartt v. Superior Court (1975) 50 Cal.App.3d 960, 975 [124 Cal.Rptr. 376].) However, even in the unusual case where such documentation exists, such cursory prejudgment should be rejected. It is unfair to require a litigant to defend against unspecified claims from unidentified class members. Thus, class certification and notice are required before the trial court may adjudicate substantive issues.2 Changing the battlefront from motions determining *386piecemeal merits to motions compelling advance costs—often irrecoverable—does not alter the unfairness. The probable outcome hearing again pits defendant against phantom plaintiff.
Moreover, as the United States Supreme Court pointed out in rejecting a pretrial hearing to determine probable outcome in class actions, “a preliminary determination of the merits may result in substantial prejudice to a defendant, since of necessity it is not accompanied by the traditional rules and procedures applicable to civil trials. The court’s tentative findings, made in the absence of established safeguards, may color the subsequent proceedings and place an unfair burden on the defendant.” (Eisen v. Carlisle & Jacquelin (1973) 417 U.S. 156, 178 [40 L.Ed.2d 732, 749, 94 S.Ct. 2140].)
Requiring plaintiffs in class actions to pay notice costs does not place an unreasonable limitation upon meritorious causes of action. The traditional method of financing class litigation involving minor claims of many plaintiffs—like the method of financing plaintiff costs in personal injury litigation—is for counsel to advance the costs. If counsel does not have sufficient confidence in his cause to advance costs, he should not burden our courts with the questionable claims of clients who have not retained him.
While this case was pending, the United States Supreme Court unanimously held that a trial court abused its discretion in requiring a defendant to pay costs of notice to the class. The court recognized that in *387some situations the defendant could more efficiently perform some of the tasks incidental to notice and could be compelled to perform those tasks. However, it held that as to the payment of costs of notice the burden was on the plaintiff because it is the plaintiff not the defendant who chose to maintain the action as a class action. The court rejected the argument that defendant could be required to pay because it was wealthy. (Oppenheimer Fund, Inc. v. Sanders (1978) 437 U.S. 340 [57 L.Ed.2d 253, 98 S.Ct. 2380].)
The two justifications for requiring the defendant to pay the plaintiff’s costs—the asserted predetermination of liability and the wealth of the parties—both failing, I would grant the relief sought.
Richardson, J., and Manuel, J., concurred.

An attempt is made to analogize the cost-shifting order in the instant case to such orders in discovery matters. The analogy is not persuasive. First, Code of Civil Procedure sections 2019, subdivision (b)(1), and 2020, subdivision (d), specifically authorize the court to impose discovery costs on either party. No similar statutory authorization applies here. Second, in discovery—as is traditional in our system of jurisprudence—the ordinary rule is that each party or witness produces the evidence in his possession. Obviously, the cost of producing evidence may be substantial in some cases, and the statutory authority given to the courts to shift the expense of producing the evidence is to allow the courts in appropriate cases to place the cost on the moving party—the one seeking the evidence and thereby creating the necessity for the expense. Cost shifting in the instant case is to permit the moving party to escape the expenses traditionally placed on it—expenses it has required be met.

The propriety of adjudicating substantive issues prior to certification and notice was addressed in Home Sav. & Loan Assn. v. Superior Court (1974) 42 Cal.App.3d 1006 [117 Cal.Rptr. 485] (Home I). In Home I the court held that certification and notice must precede substantive determinations. (See Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385, fn. 3 [134 Cal.Rptr. 393, 556 P.2d 755].) As the court there noted, the vice inherent in permitting this procedure is that it places a defendant in a “can’t win” situation. (Id., at pp. 1011-1012.)
Until the scope of named plaintiffs’ representation has been determined, notice to prospective class members is given, and a reasonable opportunity afforded for class members to “opt out” of the action, members of the class—other than the named plaintiffs—are not bound by the substantive adjudication. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 704-706 [63 Cal.Rptr. 724, 433 P.2d 732]; Chance v. Superior Court (1962) 58 Cal.2d 275, 288-289 [23 Cal.Rptr. 761, 373 P.2d 849]; Weaver v. Pasadena Tournament of Roses (1948) 32 Cal.2d 833, 842 [198 P.2d 514]; see City of San Jose v. Superior Court *386(1974) 12 Cal.3d 447, 463 [115 Cal.Rptr. 797,'525 P.2d 701, 76 A.L.R.3d 1223]; Civ. Code, § 1781, subd. (e)(2).)
Given this rule, a substantive decision prior to certification and notice places the class members in the very advantageous position of being able to reserve their decision to remain in the class or to “opt-out” until after they have had an opportunity to learn the outcome. Thus, the class members are granted the option of either joining the class action if the decision on the merits is favorable and thus of sharing in the recovery, or of opting out of the action and avoid being bound by any adverse rulings if the decision is not in their favor. By this procedure, the class members are guaranteed all benefit of victory without risk of defeat. The class cannot lose.
The defendant cannot truly win. Under such procedures, any victory the defendant achieves may be an empty one. Substantive determination binds only named plaintiffs. The remaining class members are free to renew actions against the defendant for an extended time. The defendant is therefore left to face an uncertain chain of lawsuits that cannot be defended, settled or adjudicated except piecemeal. The inherent unfairness to a litigant contravenes the fundamental purposes of class actions. (Blue Chip Stamps v. Superior Court, supra, 18 Cal.3d 381, 385; Collins v. Rocha (1972) 7 Cal.3d 232, 238 [102 Cal.Rptr. 1, 497 P.2d 225]; La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, ■873 [97 Cal.Rptr. 849, 489 P.2d 1113].)