In 2004, the State Fund issued a workers’ compensation policy to a construction company doing business as L and M Construction. In May 2005, it audited the employer to calculate the final premium due for the policy year resulting in a claim by the SCIF for $497,265.48 premium due under the 2004 policy. SCIF was unsuccessful in obtaining payment, thus it assigned the debt to a collection company that sued the employer to recover.

In July 2007, SCIF propounded its first discovery set, to the employer which included form interrogatories, requests for admission, and requests for production of documents. The interrogatories were form interrogatories approved for use in civil cases. The employer’s response to each of these requests was the same: “Overbroad, overburdensome, vague and ambiguous, irrelevant, seeks information not reasonably calculated to lead to the discovery of admissible evidence.” A meet and confer process resulted in supplemental responses in September 2007. Appellant denied several requests for admission, provided non-committal answers to the rest, and added objections to requests that required admitting dates or verifying documents. This was the beginning of a discovery war between the parties that became quite acrimonious. For example, during one deposition, the employer’s attorney ridiculed the questions and then abruptly ended the deposition.

There were numerous motions by SCIF to enforce discovery. In August 2008, the court denied SCIF’s motion for terminating sanctions, but awarded $3,000 in additional sanctions on the ground that the employer and its counsel willfully violated the court’s order by failing to attend the deposition and produce documents in a timely fashion, by “stonewalling,” and walking out of the deposition. It ordered that all discovery matters be heard by the earlier-appointed discovery referee. Yet the employer “continued to evade identifying specific documents and potential witnesses in support of its denial that it owed any money.” The SCIF again filed discovery motions and requests for terminating sanctions which the referee recommended. The referee found appellant’s discovery responses continued to be dilatory, evasive, lacking a factual basis, and thus violative of the prior order. The trial court granted terminating sanctions. The sanctions were affirmed in the unpublished case of State Compensation Fund v. Notis Enterprises.

Under the Civil Discovery Act (§ 2016.010 et seq.), courts may impose monetary, issue, evidence, terminating, and contempt sanctions for “misuse of the discovery process.” Misuses of the discovery process include: (1) “[f]ailing to respond or to submit to an authorized method of discovery”; (2) “[m]aking, without substantial justification, an unmeritorious objection to discovery”; (3) “[m]aking an evasive response to discovery”; (4) “[d]isobeying a court order to provide discovery”; (5) “[m]aking or opposing, unsuccessfully and without substantial justification, a motion to compel or to limit discovery”; and (6) “[f]ailing to confer in person, by telephone, or by letter with an opposing party or attorney in a reasonable and good faith attempt to resolve informally any dispute concerning discovery . . . .” (§ 2023.010, subds.(d)-(i).) The trial court may impose terminating sanctions, such as striking a party’s pleadings and rendering a judgment by default against the party, for willful violations preceded by a history of abuse, where “the evidence shows that less severe sanctions would not produce compliance with the discovery rules . . . .”

“The record supports the referee’s finding that appellant and its counsel repeatedly violated section 2023.010 by failing to respond to discovery, making unmeritorious objections and evasive responses, disobeying court orders, opposing motions to compel without substantial justification, and failing to confer in good faith. The referee properly considered appellant’s ongoing failure to comply with discovery requests and court orders.”

Although this case was in the Superior Court, the same rules apply before the WCAB. Labor Code section 5710 provides that the deposition of witnesses in workers’ compensation cases are “to be taken in the manner prescribed by law for like depositions in civil actions in the superior courts of this state….” Thus this case is a good overview of the enforcement mechanisms available when a litigant unreasonable interferes with appropriate discovery.