By Murray M. Sinclair
Does it ever seem like the fast-track system is on steroids? Based on various recent U.S. Supreme Court rulings, if you’re an environmental practitioner, you may be filing or responding to more soil and groundwater contamination cases in state court rather than federal court lately.
In state court, the fast-track system adheres to the basic principle that most noncomplex cases should be brought to trial or resolved within 12 months of the filing date. If you’re handling a typical pollution case – in which the site investigation has barely begun or is far from complete as far as the slow-as-molasses state or federal regulators are concerned – you probably know in your heart that your case is as likely to be resolved within 12 months as the current problems at GM and Chrysler or the current mortgage and lending crisis – no way. Why, if it takes a lifetime or two for hazardous contaminants to migrate through the subsurface until they impact groundwater, should the disputes arising out of environmental problems be susceptible to any quicker resolution?
As such, when you prepare your case management statement and attend the case management conference in the case, are you closer to hysterical laughter or tears when your trial judge inquires whether the parties will be prepared for trial by the 12-month mark. Your fast-track train is starting to derail.
Do not despair. There’s an answer. It’s buried (not as in hazardous waste or the skull and bones variety) in plain sight, in the Code of Civil Procedure. You’ve seen it before regarding discovery disputes, where like it or not the court appoints a special master under Code of Civil Procedure Section639 without the parties’ agreement for the purpose of hearing discovery disputes. Under the section right before this, Section 638, with the parties’ agreement, and written stipulation, a consensual general reference can be ordered by the court allowing for a referee (either a retired judge or an attorney) to be appointed by the court for the purpose of hearing and determining any or all of the issues in dispute in the action, whether of fact or of law, and to report a statement of decision thereon.
Pursuant to Section 644 (a) of the Code of Civil Procedure, the decision of the referee shall stand as the decision of the court, and upon filing of the statement of decision with the clerk of the court, judgment may be entered thereon in the same manner as if the action had been tried by the court.
Pursuant to Section 645 of the Code of Civil Procedure, the decision of the referee appointed pursuant to Section 638 may be excepted and reviewed on appeal in like manner as if made by the court.
The parties can specify in their stipulation for consensual general reference that the referee shall be a retired judicial officer or an attorney, both of whom must be experienced in environmental litigation.
If the parties are unable to agree on a referee, they can elect to proceed under Section 640 of the Code of Civil Procedure and submit up to three nominees f to the court for consideration so that an impasse can be avoided.
Until the case is either dismissed or judgment is entered, you can request that the court exercise its discretion to maintain jurisdiction over the action for the purpose of ensuring that the matters referenced in the stipulation are accomplished in an appropriate and timely fashion. You can also propose carve out provisions to allow any party to unilaterally request that the court rule on dispositive motions, including applications or motions for good-faith settlement and motions for summary judgment and/or summary adjudication, if the court will agree to retain jurisdiction to hear and decide such motions. Such carve-out provisions are particularly helpful if the parties intentionally delay the process of appointing a referee.
You can include a provision allowing any of the parties to the stipulation to petition the court by noticed motion or on an ex parte basis, if necessary, to enlist the court’s assistance for the purpose of securing compliance with the parties’ duties under the stipulation. In this regard, to keep either the defendant or the plaintiff (or both) honest and the much-needed environmental site investigation on track, you can have your cake and eat it too, as the original trial judge will take your case off his or her active list while issuing orders to show cause, which require status reports from the parties every six or nine months (the time between order to show cause hearings can fluctuate based on the parties’ agreement and the court’s discretion).
The foregoing code sections provide the basic structure. The rest is up to you to construct creatively depending on the technical requirements of your particular case. The parties may elect to mediate any of the issues described in the stipulation, and you can draft your stipulation to require that they mediate before the trial occurs before the referee, or you can make the mediation provision looser, allowing the parties to mediate at any time. To avoid divulging information that may weaken your position or lessen your ability to make confidential disclosures that may enhance settlement possibilities, you may also want to specify that the mediation should be conducted before a retired judicial officer or attorney other than the retired judicial officer or attorney who shall serve as the referee in the matter.
The judicial reference process avoids pitfalls that can occur in arbitration, where you basically have little or no right of appeal – which can be troubling when complex legal issues are decided erroneously at the trial level.
Overall, the best thing about the consensual general reference process is that it allows for complex site investigation activities to be conducted over months or years so that soil and groundwater studies can be completed, soil or groundwater cleanup can occur and liability and damages can be fairly estimated and assessed before the parties resolve the dispute by settlement or trial.
In this regard, if the parties are working cooperatively, the reference stipulation can be set up so that the parties need not choose or appoint the referee until the site investigation and/or cleanup is finished. This
way, the parties’ dollars can be spent on investigation and site cleanup instead of on often pointless formal discovery that does nothing more than drain money away from where it should really be spent, in addition to wasting the parties’ time and the court’s resources in babysitting the case through a panoply of misspent motions and appearances.
In the world of insurance coverage, too, the judicial reference process is a winner, as a lawsuit is still pending in a court of law if it is in general reference.
In comparison, when the parties stipulate to arbitrate a dispute, the defendants liability insurer no longer has a duty to defend under older liability policies which, under California law, require a formal lawsuit filed in court in order for the duty to defend to be triggered (or stay intact).
What have you lost? Your right to a jury trial, which is critically important in exceptional cases. In most environmental cases, however, a jury trial is not of critical importance. What have you gained? The ability to litigate your environmental case at your own pace, which will benefit all concerned immeasurably.
© 2009 The Daily Journal Corporation (Insight/Focus & Forum 4/30/09)
Murray M. Sinclair is the founder and principal of Murray M. Sinclair & Associates, specializing in environmental and insurance coverage litigation. He can be reached at email@example.com.
Sinclair is co-author of the book, “How to Avoid Environmental Litigation,” currently available on Amazon.com.