Suggestive Palma Notices

by David M. Axelrad

A litigant dismayed by a trial court ruling understandably wants immediate relief from an appellate court. But in California, unless the trial court ruling is appealable as a matter of right, the disgruntled litigant generally must petition the appellate court for discretionary relief by extraordinary writ or wait for the end of a trial and entry of judgment. (Eisenberg, Horvitz & Wiener, Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2010) ¶¶ 15:1?15:1.2). Recently, however, the California Supreme Court approved a procedure that may make it easier to obtain writ relief-and simultaneously reduce chances that the opponent of a writ petition will be heard before the appellate court issues a written decision that, for all intents and purposes, grants relief (Brown, Winfield & Canzoneri, Inc. v. Superior Court, 47 Cal. 4th 1233, 1238?1239 (2010)).

To fully appreciate this development and its implications, a brief review of writ procedure may be helpful.

Different Writs
The California Constitution provides that appellate courts "have original jurisdiction in proceedings for extraordinary relief. ..." (Cal. Const., Art. VI, § 10; Palma v. U.S. Indus. Fasteners, Inc., 36 Cal. 3d 171, 177 (1984).)

An appellate court may issue three basic writs in the exercise of its original jurisdiction:

? Certiorari (or writ of review), which "may be granted by any court when an inferior tribunal, board, or officer, exercising judicial functions, has exceeded [its] jurisdiction ... and there is no appeal, nor, in the judgment of the court, any plain, speedy, and adequate remedy." (Cal. Code Civ. Proc., § 1068(a) [all future section references are to the Code of Civil Procedure]);

? Mandate, which "may be issued by any court to any inferior tribunal, corporation, board, or person to compel the performance of an act which the law specially enjoins. ..." (§ 1085(a)); and

? Prohibition, which "arrests the proceedings of any tribunal, corporation, board, or person exercising judicial functions, when such proceedings are without or in excess of ... jurisdiction." (§ 1102.)

(A fourth writ, supersedeas, stays a pending appeal but is ancillary to appellate jurisdiction and thus is not an original proceeding. (Cal. Practice Guide: Civil Appeals and Writs, at ¶ 7:260.) The purpose of a supersedeas writ is to preserve appellate jurisdiction pending review of the appeal and a ruling on its merits.)

Because most appellate writ petitions seek a writ of mandate to compel a lower court to change an allegedly erroneous ruling, the remainder of this article focuses on that procedure.

Unlike appeals, which are heard in the court of appeal as a matter of right, relief through writ review is deemed extraordinary, equitable, and completely discretionary. Thus, even if a trial court ruling is incorrect, the appellate court is not required to grant immediate writ review; it may instead defer review of the issue until a party eventually appeals from the final judgment.

Routine Denial
Consistent with these principles, the court of appeal does not often wade into a dispute by way of an original writ proceeding. Indeed, appellate courts in California summarily deny writ petitions without comment approximately 94 percent of the time (Brown, 47 Cal. 4th at 1241 & n. 3). The large number of writ rejections "demonstrates that courts will not use their scarce resources to second-guess every ruling and order of the trial court, particularly when to do so would save neither time nor aid in the resolution of a lawsuit." (Omaha Indem. Co. v. Superior Court, 209 Cal. App. 3d 1266, 1272 (1989).)

Thus, the court of appeal might deny relief to encourage efficient resolution of trial court proceedings free of appellate intervention on an interlocutory basis; or to avoid piecemeal review of litigation in favor of plenary review on appeal from the final judgment. In addition, the appellate panel may recognize the possibility that a trial court error might be cured or become moot as a result of subsequent events in the trial court: The case might settle, for example, or the party complaining about the error could win a favorable final decision from the trial court.

Palma Notices
In the small number of writ proceedings where an appellate court considers granting relief, the court can issue an alternative writ or an order to show cause that commands the party to whom it is directed?usually the superior court?to "do the act required to be performed, or to show cause before the court ... why he has not done so." (§ 1087.) If the lower court does not comply, the writ proceeding becomes a "cause" to be decided in writing with reasons stated, as required by article VI, section 14 of the state Constitution (Palma, 36 Cal. 3d at 178). In many respects, the writ case resembles a typical appeal, with briefing, oral argument, and a written decision by the court (Palma, 36 Cal. 3d at pp. 177?178 & n. 5).

Alternatively, under Code of Civil Procedure section 1088, the appellate court can issue a peremptory writ in the first instance, provided it gives "due notice." If that happens, the court dispenses with the need to await the filing of a return, oral argument, and the preparation of an appellate opinion. (See Lewis v. Superior Court, 19 Cal. 4th 1232, 1241 (1999).)

In the Palma case, the state Supreme Court decided that such due notice requires, at a minimum, that no peremptory writ issue in the first instance unless the parties adversely affected have received notice, from the petitioner or from the court, that the issuance of such a writ is being sought or considered. The court further held that, absent exceptional circumstances, no appellate court should issue a peremptory writ in the first instance before receiving or soliciting opposition from the adversely affected parties (Palma, 36 Cal. 3d. at 180).

That decision in 1984 spawned a procedural step that has become commonly known as the Palma notice. Typically, a Palma notice tells the parties that the appellate court is considering issuance of a peremptory writ in the first instance and, further, that opposition to such a writ should be submitted by a specified date.

This year's Brown case re-examines the Palma procedure. In Brown an insurer (Great American) sought declaratory relief to settle a coverage dispute with a policyholder (Brown). The trial court stayed the insurer's declaratory relief action pending the outcome of other litigation in which the policyholder sought coverage from Great American. When the trial court later lifted the stay and set the declaratory relief case for trial while the underlying litigation was still pending, Brown petitioned the court of appeal for a writ to reinstate the stay of the declaratory relief action until the other litigation could be completed.

The court of appeal responded by issuing a Palma notice. But this was no ordinary Palma notice simply advising the parties that issuance of a peremptory writ in the first instance was under consideration. Instead, the court issued what has been christened a "suggestive" or "coercive" Palma notice. The court announced?without having solicited or received opposition from the respondent?that it had reached a tentative decision to grant the petition. The notice discussed both the factual and legal merits of the writ petition; advised the trial court of its power and jurisdiction to change and correct its erroneous order; and stated that if the trial court were to correct its ruling in accordance with the court of appeal's views, "the writ petition would be dismissed." (47 Cal. 4th at 1239?1240.) Opposition briefing would be allowed only if the trial court refused to change its order in accordance with the court of appeal's tentative opinion.

The day after the court of appeal issued its suggestive Palma notice, the trial court reversed itself, and the court of appeal then dismissed the writ petition. The opposing party, Great American, was never heard in the appellate court.

Great American asked the California Supreme Court to review the propriety of the suggestive Palma notice.

A New Rule
The Supreme Court, in a 43 decision written by Chief Justice Ronald M. George, upheld the court of appeal, concluding that nothing in California jurisprudence prohibits a suggestive Palma notice (Brown, 47 Cal. 4th at 1241?1244). Such notice, George wrote, "in no sense commands or obligates the trial court" and "is more analogous to a tentative ruling." (47 Cal. 4th at 1245.)

According to the court, a suggestive Palma notice preserves all the options available to the appellate court. If the trial court refuses to accede to the equivalent of a tentative opinion, the court of appeal can summarily deny the petition; issue a peremptory writ; or issue an alternative writ and schedule briefing and argument. (See 47 Cal. 4th at 1246.)

Nonetheless, the majority opinion concluded that additional procedural safeguards were in order because of the "difficult situation" that the opposing party's appellate counsel might face. On the one hand, counsel do not wish to waste their client's resources by responding immediately and fully to every writ petition, particularly since the vast majority of such petitions are summarily denied. On the other hand, counsel face a risk, albeit a small one, that a suggestive Palma notice will be issued and, in response, the trial court may reconsider its prior ruling, without counsel having vigorously represented the client's interests in the appellate court (Brown, 47 Cal. 4th at 1248).

To resolve this problem, the California Supreme Court added an important procedural safeguard: Before vacating, modifying, or otherwise reconsidering an interim ruling in response to a suggestive Palma notice, "the trial court must inform the parties that it is considering taking such action and provide them with an opportunity to be heard." (Brown, 47 Cal. 4th at 1250.)

A Dissenting View
The majority opinion drew a vigorous dissent from Justice Kathryn Werdegar, who was joined by Justices Carlos Moreno and Carol Corrigan. In Justice Werdegar's view, the Brown case illustrates how a suggestive Palma notice subverts the orderly process that should precede issuance of a peremptory writ. By issuing a suggestive notice, the court of appeal expresses an opinion on the merits without ever having heard from the opposing side. Addressing the majority's comparison of the suggestive Palma notice to a tentative opinion, Justice Werdegar pointed out that when a court issues a tentative decision, the party who stands to lose generally has a chance to argue its side in the hope of persuading the court to reconsider and reach a different decision. A suggestive Palma notice subverts this opportunity, effectively sending the case back to the trial court immediately without further proceedings in the court of appeal (Brown, 47 Cal. 4th at 1253 (conc. & dis. opn. of Werdegar, J.)).

As for the new safeguard of a hearing in the trial court, Justice Werdegar noted: "In suggestive Palma notice situations, the court of appeal, not the supposedly mistaken trial court, is the true decision maker. Consequently, the opportunity to be heard in the trial court may prove illusory. Rare ... is a trial court that would adhere to its initial ruling in the face of a court of appeal's written assessment that it was patently wrong." (Brown, 47 Cal. 4th at p. 1254.)

Justice Werdegar may have the better of this argument. Judges and juries are admonished not to decide cases until they have heard the whole story. (See CACI No. 100 (2009) ("Do not form or express an opinion about this case while the trial is going on. You must not decide . . . until after you have heard all the evidence. ..."); and Webber v. Webber, 33 Cal. 2d 153, 158 (1948) ("A trial judge should not prejudge the issues but should keep an open mind until all of the evidence is presented. ...").) Consistent with this principle, court rulings - including tentative opinions - should be issued only after both sides have been heard.

The Brown decision alters the traditional process by permitting an appellate court to issue an opinion that effectively decides the case without hearing from both sides?in essence a prejudgment of the proceedings. Though the trial court is not bound to comply with a suggestive Palma notice and must now hold a hearing before it takes action, few trial courts will ignore the thrust of such a notice. Indeed, when they issue suggestive Palma notices, appellate justices are telling the trial court: "You are wrong. We've written this opinion explaining why you are wrong. And we are giving you an opportunity to correct your error." A suggestive Palma notice also sends an implicit, but unmistakable message: "If you don't correct your error, we will have to use more of our precious time to do it for you."

The Brown decision is now the law of California until either the state Supreme Court modifies the Palma procedure further or the Legislature intervenes. Some modification should be considered. The party opposing writ relief should have a chance to argue its case to the appellate court in the first instance - before that court issues any communication on the merits. After all, the opportunity to be heard, which is at the heart of due process, "is an opportunity which must be granted at a meaningful time and in a meaningful manner." (Armstrong v. Manzo, 380 U.S. 545, 552 (1965).) The most meaningful time to be heard is before, not after, a court has come to a determination on the merits.

David M. Axelrad is a partner at Horvitz & Levy in Encino, where he specializes in appellate litigation.

---