Nothing is more frustrating than receiving an adverse, nonappealable pretrial ruling destroying an important claim or defense. Until recently, the list of options available to attack such a ruling were limited and not very enticing. A motion for reconsideration carries significant statutory limitations. Writ review is available, but the chances of success are slim. There is always appellate review following a final judgment, but that involves added expense and delay.
A fourth alternative — stipulating or consenting to an adverse judgment to expedite appellate review — can be more cost-effective and timely, but has been of somewhat questionable propriety. In Norgart v. Upjohn Co., 21 Cal. 4th 383 (1999), however, the California Supreme Court endorsed the principle of appellate review of final judgments entered pursuant to the parties’ stipulation or consent. The decision makes this alternative worthy of close consideration.
Before Norgart, ability to confer jurisdiction by a stipulated or consent judgment was far from clear. In Mecham v. McKay, 37 Cal. 154 (1869), and Building Industry Ass’n v. Camarillo, 41 Cal. 3d 810 (1986), the Supreme Court expressed the general rule that a "party may not appeal a consent judgment." In these cases, however, the court identified at lest one exception: Appellate review could be available if "consent was merely given to facilitate an appeal following an adverse determination of a critical issue."
Nevertheless, any party that stipulated or consented to a judgment was vulnerable on appeal to a claim that it had waived all objections to the judgment or invited any alleged error. Alternatively, it could be argued that the appellant could not be "aggrieved" by a judgment to which it had stipulated or consented and thus lacked standing to appeal. See, e.g., Phillips v. Phillips, 41 Cal. 2d 869 (1953). Because of these conflicting lines of cases, no plaintiff could be guaranteed appellate review of a case if it stipulated to judgment. And, even if review was permitted, stipulating or consenting to a judgment carried the risk of waiver or invited error, thereby circumscribing claims of prejudicial error and reducing the chances for reversal.
Norgart involved a wrongful-death action again Upjohn Co. because the action was not filed until six years after the decedent’s death, Upjohn brought a summary judgment motion based on the statute-of-limitations defense. The trial court initially denied the motion, but an intervening appellate decision arguably changed the existing law regarding accrual of the statute. Upjohn renewed its motion, but, despite the new decision, the trial court issued a tentative ruling again denying summary judgment.
The parties nevertheless agreed that this new appellate decision was controlling and, if correctly decided, mandated judgment in favor of Upjohn. Thus, instead of allowing the trial court to rule against Upjohn consistent with its tentative ruling, the parties stipulated to summary judgment in favor of Upjohn. In their stipulation, each party reserved their right to appeal, and they agreed also that the Norgarts had standing to appeal as "aggrieved" parties. The trial court complied with the stipulation and changed its tentative ruling in the Norgarts’ favor to judgment in favor of Upjohn. The Norgarts appealed.
The Court of Appeal did not question its jurisdiction to hear the merits and reversed the judgment for Upjohn. Upjohn successfully petitioned the California Supreme Court for review.
Before it turned to the statute of limitations issue, the Supreme Court looked closely at whether it had jurisdiction to review the matter. The court first noted that the Norgarts had standing to pursue the appeal, as they were in fact statutorily aggrieved parties - parties with an interest in the subject matter of the judgment and "injuriously affected" thereby — regardless of the "consent" they gave merely to expedite the appellate process. Next, the curt stated that Code of Civil Procedure Section 904.1(a)(1) permits appeals from final judgments like the Norgarts’ appeal. In deciding these two issues, the court disposed of any argument that California courts lack statutory jurisdiction over appeals following stipulated or consent judgments.
The court further disposed of the proposition that a stipulated or consent judgment constitutes a waiver of objections or invites error. The court recognized that when consent to a judgment is given "following an adverse determination on a critical issue," the appellant does not intend to waive its right to appeal or invite error. Instead, in such circumstances, the consent is given simply to avoid a wasteful trial.
As the lone dissenter, Justice Joyce Kennard was not persuaded by the majority’s reasoning. She observed that the court did not need to allow litigants to manufacture appellate jurisdiction particularly because review was available by discretionary writ.
For trial and appellate counsel, Norgart provides a welcome additional option for obtaining prompt appellate review of significant and potentially dispositive court rulings under appropriate circumstances. In Norgart, the court had no doubt that the plaintiffs had stipulated to judgment following an "adverse determination" that was rendered on a "critical issue." The Norgarts" stipulation did follow an adverse decision, and it was irrelevant whether the adverse decision was one by the trial court in the same case or an appellate court in another case. The court also agreed that the statute-of-limitations defense was a critical issue — and it no doubt was because it potentially barred the Norgarts’ suit in its entirety.
Accordingly, if the adverse determination is truly dispositive, a stipulated or consent judgment may well be the most cost-effective way to obtain review of the issue if a motion for reconsideration or a writ petition is unavailing.
To meet the requirements of Norgart, any stipulation or consent to judgment should clearly explain that its purpose is to expedite appellate review and that it is not intended as a waiver of issues on appeal.
It is less clear, however, how the Courts of Appeal will respond. The intermediate appellate courts traditionally have jealously protected their jurisdiction and have not looked kindly on litigants’ efforts to confer jurisdiction by stipulation or other means. In those cases that are procedurally identical to Norgart, it would seem that the Courts of Appeal have no choice but to provide appellate review.
But in cases that are procedurally distinct from Norgart, the appellate courts may decide that review is not mandatory. It remains to be seen whether an issue that is important but falls short of potentially disposing of an entire action will be deemed "critical" in later cases, just as it remains to be seen how narrowly the term "adverse decision" will be construed in the future. After all, only five years ago the Supreme Court mandated that a judgment is not appealable if any claim remains pending between two parties. See Morehart v. County of Santa Barbara, 7 Cal. 4th 725 (1994).
Until it is clear how the Courts of Appeal will react to Norgart, and until the contours of an "adverse decision on a critical issue" are more fully defined, stipulating or consenting to a judgment still carries some risk. And because stipulating to an adverse judgment before trial limits the record available for review (and because the outcome of an appeal is never guaranteed in any event), counsel need to consider the potential of an unfavorable result before rushing to employ the stipulated or consent-judgment procedure endorsed in Norgart. In the end, however, Norgart appears to provide a significant road map for obtaining prompt appellate review.