August 11, 2008

Predicting the Outcome in Harvey v. Sybase Based on California Supreme Court Precedent

We have previously blogged about Harvey v. Sybase, a case in which the California Supreme Court recently granted review to address the following question:

On review of an order granting a motion for judgment notwithstanding the verdict with respect to an award of punitive damages, must the appellate court determine whether the record contains substantial evidence to support the award by clear and convincing evidence, or is the clear and convincing standard only applicable at the trial court level?
That answer to that question will have a broad impact. It will affect not only every punitive damages appeal, but it will affect every type of case to which the clear and convincing evidence standard applies. One would think the issue would have reached the California Supreme Court long before now. In fact, it has. But the results of those cases are in conflict, and therefore offer limited insight into how the Supreme Court might decide the issue this time around.

Several 19th century decisions by the California Supreme Court suggested, without expressly deciding, that appellate courts should consider heightened standards of proof when deciding whether a trial court decision is supported by substantial evidence. (See, e.g., Sheehan v. Sullivan (1899) 126 Cal. 189, 193 ["the testimony must be clear, convincing, and conclusive - - something more than that modicum of evidence which appellate courts sometimes hold sufficient to warrant a finding"]; Jarnatt v. Cooper (1881) 59 Cal. 703, 706 (plur. opn.), 709 (conc. opn.) [“In our opinion the evidence was sufficiently clear to warrant the findings and judgment of the Court below”].)

But the Supreme Court departed from that approach in Stromerson v. Averill (1943) 22 Cal.2d 808, 815, taking the position that the clear and convincing evidence standard applies only in the trial court. Justice Roger J. Traynor dissented, arguing that that reviewing courts have a duty to take the clear and convincing evidence standard into account when deciding whether substantial evidence supports a finding of fact:
[I]it is the duty of the appellate court in reviewing the evidence to determine, not simply whether the trier of facts could reasonably conclude that it is more probable that the fact to be proven exists than that it does not, as in the ordinary civil case where only a preponderance of the evidence is required, but to determine whether the trier of facts could reasonably conclude that it is highly probable that the fact exists.
(22 Cal.2d at pp. 817-818.)

Justice Traynor repeated his dissent in Beeler v. American Trust Co. (1944) 24 Cal.2d 1, 33. Despite Traynor's protestations, The majority of the Supreme Court adhered to the approach of the majority in Stromerson in subsequent decisions. (See Crail v. Blakely (1973) 8.Cal.3d 744, 750 and Nat. Auto & Cas. Co. v. Ind. Acc. Com.(1949) 34 Cal.2d 20, 25.)

The issue lay dormant until 2001, when the Supreme Court decided Conservatorship of Wendland (2001) 26 Cal.4th 519 (Wendland). In that case, the Court did not expressly overrule Stromerson, but it took an approach inconsistent with the Stromerson majority and consistent with Justice Traynor's dissent. The Wendland court noted that the clear and convincing evidence standard applied to the trial court's decision, and then held, "[a]pplying that standard here, we ask whether the evidence . . . has that degree of clarity."

In 2004, the Supreme Court again seemed to take the position, without deciding the issue, that the clear and convincing evidence standard is relevant to appellate review:
Mrs. Ford's single statement to Barbara Carter was not clear and convincing evidence that Mr. Ford intended Bean to be, or be treated as, his adopted son.
(Estate of Ford (2004) 32 Cal.4th 160, 173.)

Thus, the Supreme Court's shifting positions on this issue make it difficult to predict the outcome in Harvey, but the Court's most recent opinions suggest that the modern court leans towards the views expressed by Justice Traynor in Stromerson.