A New and Challenging Obstacle for California Employers’ Use of Experts in State Courts
Employers litigating cases in California courts face many obstacles. Summary judgment has become increasingly difficult for employers. Criminal cases take precedent and often cause trial postponements, resulting in civil litigators having to prepare for trial multiple times, thereby substantially increasing expenses. With most claims filed by California employees, if the employee succeeds, the employee recovers his/her reasonable attorneys’ fees. At the same time, recent rulings have made it almost impossible for California employers to recover the costs of their attorneys’ fees, even when the claims are obviously frivolous. Jurors can be disproportionately made up of the unemployed and underemployed, who often favor employees over employers in almost all claims. These are just some of the numerous obstacles facing employers who take their chances at trial in California courts.
Now, California employers have another significant obstacle when litigating in state court. Earlier this month, California Evidence Code section 801.1 went into effect. This bill was enacted last summer as Senate Bill (SB) 652. SB 652 was enacted and signed into law by Governor Newsom in response to Kline v. Zimmer, Inc., 79 Cal. App. 5th 123 (2022), a published appellate opinion holding that a defendant’s expert offering evidence on alternative causes of damages need not prove reasonable medical probability before offering expert testimony on the causation of damages. In Kline, the Court of Appeal held that in such situations, the defendant only needs to show that the evidence introduced by the plaintiff was insufficient to prove that the injuries were more likely than not caused by the allegations in the complaint to admit rebuttal evidence on causation.
New Evidence Code section 801.1, which overrules and supersedes Kline¸ provides that when employers or other defendants offer rebuttal evidence from expert witnesses who testify that the employee/plaintiff’s emotional distress or other medical condition was caused by something other than the claims set forth in the complaint, this rebuttal evidence will only be admitted into evidence if the expert can also opine that the alternative cause or causes exist to a reasonable medical probability. Under California law, reasonable medical probability means “more likely than not.” Thus, if an employer’s expert cannot testify that the damages alleged were more likely than not caused by something other than the allegations in the complaint, the expert’s testimony on causation will not be admitted. This is a very challenging standard.
The relevant portion of the new section 801.1 of the California Evidence Code provides that:
where the party bearing the burden of proof proffers expert testimony regarding medical causation and where that party's expert is required as a condition of testifying to opine that causation exists to a reasonable medical probability, the party not bearing the burden of proof may offer a contrary expert only if its expert is able to opine that the proffered alternative cause or causes each exists to a reasonable medical probability
Emotional distress damages can be quite large in California. Let’s look at some recent verdicts. In November, in Sosa v. Comerica Bank, a Los Angeles jury awarded a bank manager who was fired and sued for gender discrimination and other claims $13 million dollars in emotional distress damages (as well as over $1 million in lost wages and benefits). Last month, a different Los Angeles jury awarded $9 million dollars in emotional distress damages in a retaliation/whistleblower case called Gatchalian v. Kaiser Foundation Hospitals. These are far from the only cases awarding sizeable emotional distress damages to employees in jury trials in California courts in 2023. Now, as a result of this new Evidence Code provision, which was sponsored and pushed by the plaintiff’s lawyers bar, California employers are faced with a new limitation that makes it materially more challenging to present expert testimony at trial demonstrating that the employee’s alleged emotional distress was caused by something other than the claims asserted in the complaint.
This new statute sends the following messages to California employers and their attorneys:
- It represents another reason why mandatory arbitration agreements can be very helpful to employers in managing disputes with employees, particularly if they invoke the Federal Rules of Evidence;
- Unlike punitive damages, emotional distress damages are insurable, and employers should be carefully considering whether EPLI policies/riders make sense for them to help mitigate the increased risk of a sizeable emotional distress verdict; and
- When considering settlement options, California employers must consider that it may be more difficult to prove that the employee’s alleged emotional distress and related symptoms were not caused by the employer, and the claims in the complaint instead resulted from something else in the employee’s life.