Parties' new discovery obligations will take center stage this year

Looking at the headlines, one would think every commercial litigator in California will be inundated this coming year with AI-related litigation, copyright questions, or cases about "big tech" in one form or another. But, while those cases exist - and rightfully get significant attention - the litigation trend this year in California state courts will be over issues both more impactful in daily litigation and yet more mundane: disputes over parties' discovery obligations.

This past year California enacted two bills, one of which will affect nearly every commercial litigation case, and both of which are likely to generate significant motion practice and litigation activity. Of course, AI will also play a role in litigation going forward, but its scope will be more narrow and its effects more limited.

The first bill, California Senate Bill 235, applies to civil actions filed on or after Jan. 1, 2024, and adopts an initial disclosure requirement akin to the one found in Federal Rule of Civil Procedure 26(a). There are, however, some significant differences in both the timing and scope between SB 235 and Rule 26. Like Rule 26, SB 235 requires disclosure of the contact information for persons likely to have discoverable information, and copies of documents a party has in its possession that the party may use to support its claims or defenses.

But, unlike Rule 26, SB 235 also requires identification of persons and production of documents "relevant to the subject matter of the action or the order on any motion made in that action[.]" Over the coming year, this single phrase is likely to be the bane of many a litigator's existence and the genesis of innumerable discovery motions. By requiring disclosure of all persons and documents "relevant to the subject matter of the action," California litigators will now have an affirmative obligation to consider the entire universe of relevant documents, including what the other side thinks may be relevant to their case. Put differently, defendants will now have to consider what persons and documents the plaintiff may consider to be relevant when making the initial disclosures (and vice versa). Should the other side receive the disclosures and consider them inadequate because they do not comport with the receiving party's view of the scope of relevant information in the case, the parties may need to involve the court. As the initial disclosure requirements apply to all civil actions (subject to certain narrow exceptions), and parties often have drastically different views of the scope of relevant information in a case, we see this as being an area of substantial litigation activity going forward.

Unfortunately, this problem is compounded by SB 235's timing requirements, which require the disclosures be made "[w]ithin 60 days of a demand by any party to the action[.]" Since the demand can be made at any time after a party has appeared, SB 235 does not allow significant time to assess the case, determine the scope of relevant information, obtain the documents and witnesses from the client, and then produce the information. And, since these disclosures will often be requested at the outset of a case, there is little time for the disclosing party to learn the other side's view of the case or understand what the other side may deem relevant. (SB 235 also demonstrates the legislature was keenly aware of and sought to moot one of the standard objections to early discovery: a party must make its initial disclosures based on the information reasonably available, but a "party is not excused from making its initial disclosures because it has not fully investigated the case[.]"). SB 235's timing requirements will likely exacerbate the number of disputes between parties about the sufficiency of the other side's disclosures, generating even more litigation activity.

The second bill, California Senate Bill 365, is also certain to create additional litigation activity in the coming year. Before SB 365, if a trial court denied a party's petition to compel arbitration, discovery was stayed pending appeal. SB 365 changes this, allowing all proceedings, including discovery, to go forward while the appeal is pending. By itself, SB 365 would create significant litigation activity since the party seeking arbitration may try to avoid subjecting themselves to California's broad discovery regime in the hopes that the matter would eventually be referred to arbitration where discovery would be narrower. But, in conjunction with California's new broad initial disclosure requirements - which could be triggered during the appeal's pendency - SB 365 creates a perfect storm of events that will cause otherwise tepid litigation to become white hot, with a flurry of filings to compel and prevent extensive discovery while a case is on appeal.

AI is also likely to affect a litigator's daily practice in 2024 and beyond. AI-based brief writing is attention grabbing, but it does not appear that AI will be preparing briefs in the near future; there have already been too many cautionary tales of litigators who used AI to draft a brief only to find out upon questioning by a judge that the AI invented case names and citations. Instead, as AI-based discovery tools evolve, proliferate, and become democratized due to reduced costs, AI will allow parties to review and produce vast quantities of documents quickly and efficiently. Litigators, in turn, will likely become more willing to collect a larger swath of documents from more custodians than may be feasible (or appropriate) if manual document review were required. By reducing the burden to parties and attorneys, AI-based document review tools will - hopefully - reduce the number of discovery disputes. These tools' usefulness will become particularly pronounced given the initial disclosures SB 235 now requires.

Between AI-assisted review and the California legislature's recent enactments, discovery in California is changing rapidly, and with it the types of litigation activities California litigators will face in the coming years. Attorneys practicing in California should be aware of these issues and prepared to address them when handling matters filed after Jan. 1, 2024.

Jennifer L. Keller and Shaun A. Hoting are both partners at Keller/Anderle LLP.