SAINT FRANCIS MEMORIAL HOSPITAL, Plaintiff and Appellant, v. STATE DEPARTMENT OF PUBLIC HEALTH, Defendant and Respondent.
S249132
IN THE SUPREME COURT OF CALIFORNIA
June 29, 2020
First Appellate District, Division One A150545; San Mateo County Superior Court CIV537118
Justice Cuéllar authored the opinion of the Court, in which Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu, Kruger, and Groban concurred.
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XX 24 Cal.App.5th 617
Rehearing Granted
Court: Superior
County: San Mateo
Judge: George A. Miram
Counsel:
Sheuerman, Martini, Tabari, Zenere & Garvin and Cyrus A. Tabari for Plaintiff and Appellant.
Xavier Becerra, Attorney General, Edward C. DuMont, State Solicitor General, Janill L. Richards, Principal Deputy State Solicitor General, Gonzalo C. Martinez, Deputy State Solicitor General, Julie Weng-Gutierrez, Assistant Attorney General, Samuel T. Harbourt, Susan M. Carson, Gregory D. Brown and Nimrod P. Elias, Deputy Attorneys General, for Defendant and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Cyrus Tabari, Scheuerman, Martini, Tabari, Zenere & Garvin, 1033 Willow Street, San Jose, CA 95125, (408) 288-9700
Samuel T. Harbourt, Deputy Attorney General, 455 Golden Gate Ave., Suite 11000, San Francisco, CA 94102-7004, (415) 510-3919
Opinion of the Court by
California law permits — but also sets certain limits on — judicial review of adjudicatory decisions made by agencies responsible for implementing public policies on health, natural resources, employment, and other issues. One example is
What we must resolve in this case is whether equitable tolling can ever lessen the otherwise strict time limit on the availability of writs of administrative mandate under
Close scrutiny of that backdrop also reveals that the first two elements of tolling are satisfied in this case: timely notice and lack of prejudice. Equitable tolling nonetheless also depends on a third element — the reasonable and good faith conduct of the party invoking it — and we cannot from this record glean, nor has the Court of Appeal thoroughly addressed, whether Saint Francis satisfies that element. So we vacate the judgment and remand for the Court of Appeal to determine whether the third element of equitable tolling is satisfied.
I.
When the State Department of Public Health (the Department) learned that doctors at Saint Francis Memorial Hospital left a surgical sponge in a patient during a 2010 surgery, it imposed a $50,000 fine on the hospital. The Department alleged that Saint Francis had “failed to develop and implement a [sponge] count procedure” and lacked a policy to properly train its staff, as required by
Saint Francis appealed. After a hearing, an administrative law judge (ALJ) issued a proposed decision in Saint Francis‘s favor. The ALJ reasoned that the regulations were not “intended to impose a penalty for any adverse occurrence during the provision of surgical services” — they only required Saint Francis to “develop[] and implement[] surgical safety [policies].” Because those policies existed at the time of the incident, Saint Francis wasn‘t liable for violating the regulations.
On administrative review, however, the Department reversed the ALJ‘s proposed decision and upheld the penalty against Saint Francis.2 It reasoned
Two weeks later, on December 30, 2015, Saint Francis filed a request for reconsideration under
On January 14, 2016, Saint Francis‘s legal counsel wrote to counsel for the Department. Counsel for Saint Francis sought to confirm his understanding that the Department had until “next Tuesday [January 19] to decide the request [for reconsideration].” Saint Francis explained that, if the request for reconsideration was denied, it “intend[ed] to petition for a writ of mandate with the Superior Court.” On January 19, 2016 — which, as the parties later learned, was after the deadline by which Saint Francis should have filed its petition for a writ of administrative mandate — counsel for the Department responded: “I believe you are correct.” The Department‘s counsel didn‘t mention that
On January 26, 2016 — just 11 days after the Department denied Saint Francis‘s request for reconsideration, but 41 days after being served with the Department‘s final decision — Saint Francis filed a petition for a writ of administrative mandate in superior court. (See
The Court of Appeal affirmed. In so doing, it acknowledged that “Saint Francis‘s mistake about the availability of reconsideration was made in good faith” and “that Saint Francis notified the Department of its intent to file a writ petition.” (Saint Francis, supra, 24 Cal.App.5th at p. 624.) The court nonetheless held that because “Saint Francis‘s request for reconsideration did not constitute the timely pursuit of an available remedy[,] . . . [¶] . . . these circumstances are insufficient to toll the running of [
II.
We first consider whether equitable tolling may apply to
Equitable tolling is a “judicially created, nonstatutory doctrine” that ” ‘suspend[s] or extend[s] a statute of limitations as necessary to ensure fundamental practicality and fairness.’ ” (McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 99 (McDonald).) The doctrine applies “occasionally and in special situations” to “soften the harsh impact of technical rules which might otherwise prevent a good faith litigant from having a day in court.” (Addison v. State (1978) 21 Cal.3d 313, 316 (Addison).)
But that presumption can be overcome. Equitable tolling, we‘ve also observed, “is not immune” from the operation of statutes. (McDonald, supra, 45 Cal.4th at p. 105.) A court may conclude that explicit statutory language or a manifest policy underlying a statute simply cannot be reconciled with permitting equitable tolling, “even in the absence of an explicit prohibition.” (Ibid.) We adopted that conclusion in Lantzy v. Centex Homes, where we held that the Legislature had sought to preclude
Contrary to the Department‘s assertions, we find no indication that the Legislature‘s purpose encompassed prohibiting
Nor does the length of
When we interpret a legislative provision and make sense of its purpose in the larger statutory scheme, however, our task ” ‘is to discern the sense of the statute, and therefore its words, in the legal and broader culture. ’ ” (Hodges v. Superior Court (1999) 21 Cal.4th 109, 114, italics omitted.) Even the Department acknowledges that equitable tolling “is part of the established backdrop of American law” — a backdrop we presume the Legislature understands when drafting limitations periods. (Lozano v. Montoya Alvarez (2014) 572 U.S. 1, 11.) That background principle isn‘t made explicit in statutes of limitations — whose purpose, after all, are to set firm deadlines by which parties must file suit. (See Chase Securities Corp. v. Donaldson (1945) 325 U.S. 304, 314 [statutes of limitations “do[] not discriminate between the just and the unjust claim, or the voidable and unavoidable delay“].) So the Legislature‘s adoption of the statute of limitations in
Similarly unavailing to the Department‘s position is the legislative history of
It was against this backdrop that the Legislature enacted the 10-year limitations period in
Nothing in the legislative history of
The Department doesn‘t point us to contrary evidence. Its argument rests instead on the fact that the Legislature “has not extended the 30-day deadline to file a writ petition” or “added any additional statutory tolling provisions” since the statute‘s enactment in 1945. From this inaction, the Department would have us infer that the 30-day deadline is an inflexible one, immune from extension on equitable grounds. Yet because legislatures acquiesce for scores of reasons, such acquiescence supports only limited inferences when we interpret statutes. (See Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1156.) The lack of amendments may instead ” ’ “indicate many [other] things[:] . . . the sheer pressure of other and more important business, political considerations, or a tendency to trust to the courts to correct their own errors . . . .” ’ ” (People v. Whitmer (2014) 59 Cal.4th 733, 741.) So we decline to attribute to the Legislature a purpose for which little or no evidence exists.
We cull little if any evidence from
III.
Having concluded that equitable tolling can apply under
Our equitable tolling doctrine evolved from three lines of California cases, each relieving plaintiffs of the duty to abide by the statute of limitations. (See Addison, supra, 21 Cal.3d at p. 317.) Courts found a basis to offer some flexibility from the statute of limitations when a plaintiff was already involved in one lawsuit, and filed a subsequent case that could lessen the damage or harm that would otherwise have to be remedied through a separate case. (Id. at pp. 317–318.) So too did courts toll statutes of limitations in situations where a plaintiff was required to pursue, and did indeed pursue, an administrative remedy before filing a civil action. (Id. at p. 318.) In a third line of cases, courts tolled the statute of limitations ” ‘to serve the ends of justice where technical forfeitures would unjustifiably prevent a trial on the merits.’ ” (Id. at p. 319.)
It was from all three of these strands of caselaw that equitable tolling emerged. The doctrine allows our courts, “in carefully considered situations,” (Lantzy, supra, 31 Cal.4th at p. 370) to exercise their inherent equitable powers to “soften the harsh impact of technical rules” (Addison, supra, 21 Cal.3d at p. 316) by tolling statutes of limitations. As we explained in Addison, equitable tolling today applies when three “elements” are present: “[(1)] timely notice, and [(2)] lack of prejudice, to the defendant, and [(3)] reasonable and good faith conduct on the part of the plaintiff.” (Addison, supra, 21 Cal.3d at p. 319.) These requirements are designed to “balanc[e] the injustice to the plaintiff occasioned by the bar of his claim
A.
Perhaps in an effort to somewhat tame the potentially capacious extent of the doctrine‘s flexibility, some lower courts have interpreted equitable tolling to contain a rigid requirement: pursuit of an alternative available administrative or legal remedy. Leaning on our decision in McDonald, the Court of Appeal explained that “equitable tolling applies ’ ” ‘[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one.’ ” ’ ” (Saint Francis, supra, 24 Cal.App.5th at p. 623; see also Hansen v. Board of Registered Nursing (2012) 208 Cal.App.4th 664, 672 [equitable tolling available when “a party with multiple available remedies pursues one in a timely manner“].) Because “Saint Francis‘s request for reconsideration did not constitute the timely pursuit of an available remedy since reconsideration was unavailable,” the court concluded that
But as the Department itself acknowledges, our past cases stop short of categorically conditioning tolling on a plaintiff‘s pursuit of a viable remedy. (J.M. v. Huntington Beach Union High School Dist. (2017) 2 Cal.5th 648, 658 (J.M.).) The doctrine is sufficiently supple “to ‘ensure fundamental practicality and fairness.’ ” (Ibid.) And even in cases where a party seeking tolling pursued an alternative remedy, we‘ve concluded that pursuit of a remedy “embarked upon in good faith, [yet] found to be defective for some reason,” doesn‘t foreclose a statute of limitations from being tolled. (McDonald, supra, 45 Cal.4th at p. 100.) We applied equitable tolling in Addison, for example, to extend the statute of limitations where the plaintiffs first sought relief in federal court, which dismissed their suit for lack of jurisdiction, before filing their action in state court after the statute of limitations had expired. (Addison, supra, 21 Cal.3d at p. 319 opportunity to begin gathering their evidence and preparing their defense.” (Ibid.)
The Court of Appeal correctly described one scenario under which equitable tolling may apply: if a plaintiff pursues one of several available legal remedies, causing it to miss the statute of limitations for other remedies it later wishes to pursue. Yet such facts are far from the only circumstances under which the doctrine may apply. To determine whether equitable tolling may extend a statute of limitations, courts must analyze whether a plaintiff
The Department asserts that Saint Francis cannot avail itself of equitable tolling because of the reason for its delayed filing: its mistake in calculating the deadline. Relying on Court of Appeal decisions such as Kupka v. Board of Administration (1981) 122 Cal.App.3d 791, 794, the Department contends the fact that Saint Francis “simply made a mistake in ascertaining its filing deadline” prevents us from tolling the statute of limitations. Kupka nonetheless differs in meaningful respects from the case before us, and the Department‘s argument oversimplifies the lesson Kupka offers. That case did not involve an equitable tolling claim. What the Court of Appeal held in Kupka was that a party‘s mistake, neglect, or personal hardship could not, without more, excuse a late-filed petition under
We agree that mistake or neglect alone doesn‘t excuse a late-filed petition. (See Irwin, supra, 498 U.S. at p. 96.) But neither is that fact, when relevant, dispositive of a party‘s equitable tolling claim; we must consider it as part of the analysis of whether a plaintiff has established equitable tolling‘s elements. (See Addison, supra, 21 Cal.3d at p. 319Id. at p. 321.) So Saint Francis‘s mistake in calculating the filing deadline under section 11523 isn‘t necessarily fatal to its equitable tolling claim. We must instead determine whether the hospital satisfies the three elements of equitable tolling.
B.
We begin with timely notice. The Department contends that Saint Francis fails to satisfy the first element because its request for reconsideration was “unauthorized” under the statutory scheme. In the Department‘s view, a plaintiff‘s pursuit of an alternative remedy that turns out to be flawed cannot provide notice of the party‘s claims to the defendant.
But that assertion rests on an overly rigid conception of equitable tolling‘s first prong. We have never concluded that pursuit of an alternative remedy is necessary for a plaintiff to provide timely notice of its claims to the defendant. When considering whether a plaintiff provided timely notice, courts focus on whether the party‘s actions caused the defendant to be “fully notified within the [statute of limitations] of plaintiffs’ claims and their intent to litigate.” (Addison, supra, 21 Cal.3d at p. 321.)
That Saint Francis provided the Department with timely notice is underscored by what happened next. On January 14, 2016, one day before
The first element of equitable tolling — that a plaintiff must provide timely notice of its claims to the defendant — has remained the same since the doctrine‘s inception. (Addison, supra, 45 Cal.4th at p. 319) That element ought to be interpreted literally: When confronted with equitable tolling claims, courts must examine each case on its facts to determine whether the defendant received timely notice of the plaintiff‘s intent to file suit. Because Saint Francis‘s request for reconsideration, together with the e-mail notifying the Department‘s counsel of its intent to file a petition for a writ of administrative mandate, provided the Department with timely notice of the hospital‘s claim, we conclude that Saint Francis has satisfied the first element of equitable tolling.
C.
The Department next argues that Saint Francis‘s equitable tolling claim fails because the hospital cannot satisfy the second element: lack of prejudice to the defendant. (See McDonald, supra, 45 Cal.4th at p. 102.) We disagree.
The Department has suffered prejudice, it contends, because Saint Francis‘s late filing circumvented its “rel[iance] on legislative rules establishing the
Consider the implications of embracing the Department‘s argument regarding prejudice: We‘d be all but compelled to find prejudice in just about every equitable tolling case. Virtually all parties, after all, tend to rely on statutes of limitations in the course of litigation. And the Department presents no explanation of why it, in particular, suffers greater prejudice because of its public charge. The Department‘s contention also fails to recognize that the finality of adjudicative decisions is already undermined by
D.
The third element of equitable tolling requires reasonable and good faith conduct by the plaintiff. The Department contends Saint Francis cannot satisfy this element because its late filing was due solely to its mistake in calculating the statute of limitations under
Our equitable tolling cases have offered little insight on what constitutes reasonable and good faith conduct. Without discussing the third element specifically, we suggested in Addison that the plaintiffs’ actions were reasonable and carried out in good faith because they “promptly asserted [their cause of action] in the proper state court” after the federal court dismissed it for lack of jurisdiction. (Addison, supra, 21 Cal.3d at p. 319.) More recently, we concluded that a party didn‘t act reasonably, and thus was not entitled to equitable tolling, when he “pursue[d] a court action when the claims filing requirements [had] not been satisfied.” (J.M., supra, 2 Cal.5th at p. 657.)
As these examples illustrate, our caselaw has sometimes suggested that “reasonable” and “good faith” have much the same meaning in the context of equitable tolling, but other times construed the terms as creating separate and distinct requirements. We are not the first to grapple with what each of these terms require. (See, e.g., Kansas City Power & Light Co. v. Ford Motor Credit Co. (8th Cir. 1993) 995 F.2d 1422, 1430 [good faith is an “amorphous concept, capable of many forms yet requiring none“]; Prosser & Keeton, Torts (5th ed. 1984) § 32, p. 175 [“The conduct of the reasonable person will vary with the situation with which he is confronted“].) Yet what makes the most sense in light of our precedent, equitable tolling‘s underlying purpose, and its narrow scope in our system, is to construe the third element to encompass two distinct requirements: A plaintiff‘s conduct must be objectively reasonable and subjectively in good faith.
When it comes to reasonableness, the “ultimate test” is “objective.” (People v. Humphrey (1996) 13 Cal.4th 1073, 1083.) An analysis of reasonableness focuses not on a party‘s intentions or the motives behind a party‘s actions, but instead on whether that party‘s actions were fair, proper, and sensible in light of the circumstances. We use this objective analysis to assess ineffective assistance of counsel claims under the
Good faith pivots instead on a party‘s intentions. It is a test “ordinarily used to describe that state of mind denoting honesty of purpose, freedom from intention to defraud, and, generally speaking, [] being faithful to one‘s duty or obligation.” (People v. Nunn (1956) 46 Cal.2d 460, 468.) To determine whether a defendant is entitled to attorney fees, for example, courts employ a subjective analysis and ask whether the plaintiff brought an action in good faith. (
Construing equitable tolling‘s third element to contain an objective and subjective requirement fits the doctrine‘s underlying rationales. Equitable tolling applies only “in carefully considered situations to prevent the unjust technical forfeiture of causes of action.” (Lantzy, supra, 31 Cal.4th at p. 370.)
The Court of Appeal didn‘t address whether Saint Francis‘s actions were reasonable and in good faith. At oral argument, the parties argued for the first time that certain facts bore on the question of whether Saint Francis satisfies the third element. But the record before us leaves some opacity about whether Saint Francis‘s conduct was reasonable and in good faith. As we‘ve often done in such situations, we remand the case for the Court of Appeal to determine whether Saint Francis satisfies the third element, and thus is entitled to equitable tolling. (See Montrose Chemical Corp. of California v. Superior Court (2020) 9 Cal.5th 215, 238; San Diegans for Open Government v. Public Facilities Financing Authority of City of San Diego (2019) 8 Cal.5th 733, 746–747 [contentions raised for the first time at oral argument “should be answered first by the Court of Appeal“].)
IV.
Statutes of limitations serve important purposes: They motivate plaintiffs to act diligently and protect defendants from having to defend against stale claims. But equitable tolling plays a vital role in our judicial system, too: It allows courts to exercise their inherent equitable powers to excuse parties’ failure to comply with technical deadlines when justice so requires. To appropriately balance these two competing ends, we recognize the Legislature‘s ability to forbid equitable tolling in certain statutes, and we require plaintiffs to establish timely notice, lack of prejudice to the defendant, and reasonable and good faith conduct by the plaintiffs before they are entitled equitable tolling. For the doctrine to fulfill its purpose, however, we continue to presume that tolling is available in the absence of evidence to the contrary, and allow courts to determine on a case-by-case basis whether tolling is warranted under the facts presented, with careful consideration of the policies underlying the doctrine. (See generally Elkins, supra, 12 Cal.3d at pp. 417–420.)
As to whether equitable tolling may apply when agency adjudicatory decisions are at issue, the text and context of
CUÉLLAR, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
KRUGER, J.
GROBAN, J.