While minimum-wage hikes and high taxes are often cited as budget-eating bogeymen by members of the L.A. business community, there’s another specter haunting commerce in the region: court congestion.
A reorganization of the Los Angeles County Superior Court in the wake of massive budget cuts during California’s financial crisis has created a backlog of cases that often causes business disputes to drag on for years. The new system, implemented in 2013 to close the final $80 million of what was then a $187 million yearly shortfall in the court’s budget, dramatically shifted the way it operated and involved the closure of eight courthouses and dozens of courtrooms.
The newly consolidated court shifted cases into “hub” courts, bunching specific case types together to be run out of a few courtrooms across the county. While this created some efficiencies, it has also generated a backlog of general, unlimited jurisdiction cases (typically cases involving potential damages in excess of $25,000), where the majority of business litigation takes place.
The average pending case load for a general civil judge is now 415 cases, according to the court. That’s up from fewer than 350 in the years before the budget cuts struck.
The difference might not seem like much, but the practical impact has been huge.
“The opportunity to have your case heard by a judge has been extended dramatically,” said Paul Kiesel, a Beverly Hills attorney and president of the Los Angeles County Bar Association. “It can take six to eight months for an (initial appearance in front of a judge), where before it would have taken 45 days.”
Kiesel said a case can take four years to get to trial at this point.
Businesses share the frustration.
“The business community has been aware of this issue for a number of years,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce, who called the delays a detriment to conducting business here.
Large corporations, often involved in multiple suits, can see legal budgets bloat. Alan Muldawer, general counsel for French transportation conglomerate Transdev’s North American subsidiary, said he is dismayed by the extended litigation schedule in Los Angeles. For instance, it took his firm nearly three years to win a summary judgment award in a $132.5 million dispute with insurer Lloyd’s of London in the wake of a 2008 Metrolink commuter train crash in Chatsworth, which regulators said was caused by one of the company’s train operators.
“Due to the extreme case load and obvious shortage of resources the court faces, the ability to schedule hearings and to reach a point where the case could be resolved was significantly delayed, prolonging the litigation and adding greatly to the cost of defending it,” Muldawer said in an email.
Even Presiding Judge Carolyn Kuhl acknowledged there is a problem, noting it can take up to eight months for a simple calendar hearing to take place. However, she said there isn’t much to be done about it without funding increases.
Funding for the courts plummeted in the wake of the state’s budget crisis. Contributions went from $662 million in fiscal year 2010-11 to $507 million in 2011-12 and bottomed out in 2012-13 at $407 million. As the California economy has rebounded, these numbers have been bumped back up, with the latest budget figures available showing the court received $485 million from state coffers in 2014-15.
“What we need is additional funds in order to open more courtrooms and to get the backlog of cases taken care of,” Kuhl said.
New court order
The impetus behind the plan, according to Kuhl, came partly from the court’s experience with complex litigation and so-called coordinated proceedings. Starting decades ago, court administrators realized the influx of a particularly popular type of litigation – the most infamous being asbestos cases – could overwhelm the system. So single-issue courts were created to deal with the problem. Hubs, which are broader in scope, were the next iteration.
Despite the headaches created by the sluggish time line, Kuhl and attorneys practicing regularly in the hubs said the system has worked well. Early on, hub courts received some initial criticism from community activists who complained it destroyed the neighborhood court system, but litigators have since realized the hubs create uniformity that wouldn’t otherwise exist. And that, according to Curt Cutting of Encino’s Horvitz & Levy, is a byproduct carried over from single-issue courts.
“If you know what the rules are going to be on the issues, it makes it much easier to resolve disputes,” he said.
In all, six different case types have been consolidated into these streamlined courts: Small claims, limited-jurisdiction collection, and unlawful detainer cases have been consolidated at regional hubs located in several courthouses around Los Angeles County. General personal injury, limited civil, and probate cases have all been moved exclusively to downtown L.A.’s Stanley Mosk Courthouse.
“We won’t ever go back to the structure we had previously,” Kuhl said. “Having expert staff and expert judicial officers address specific case needs has efficiencies that we would probably try and maintain even if we were (able to open more courtrooms).”
