New York Times Co. v. Superior Court

• Citation: 135 Cal.App.4th 206,37 Cal.Rptr.3d 338
• Decision Date: 28 December 2005
• Docket Number: No. B183768.,B183768.
• Court: California Court of Appeals
• Parties: The NEW YORK TIMES COMPANY, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Wall Street Network, Ltd., Real Party in Interest.

37 Cal.Rptr.3d 338

135 Cal.App.4th 206

The NEW YORK TIMES COMPANY, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent Wall Street Network, Ltd., Real Party in Interest.

No. B183768.

Court of Appeal, Second District, Division 4.

December 28, 2005.

Brown Raysman Millstein Felder & Steiner, Allan Gabriel, Pamela G. Maher, Los Angeles, and Pamela E. Woodside, for Petitioner.

No appearance for Respondent.

Law Offices of Arnold G. Regardie, Arnold G. Regardie, Los Angeles; Law Offices of Scott E. Shapiro and Scott E. Shapiro, for Real Party in Interest.

EPSTEIN, P.J.

We hold the trial court order granting a motion for reconsideration violated Code of Civil Procedure section 1008,¹ authoritatively construed in Le Francois v. Goel (2005) 35 Cal.4th 1094, 29 Cal.Rptr.3d 249, 112 P.3d 636 (Le Francois), a case decided after the trial court ruling. Section 1008 subdivision (a) requires that a party seeking reconsideration base its motion upon new or different facts, circumstances, or law. The moving party also must provide a satisfactory explanation for the failure to make the showing at or before the time the challenged order was issued. The moving party in this case failed to do either. The trial court may grant reconsideration on its own instance, but that is not what happened in this case.

The New York Times Company (NYT) petitioned for a writ of mandate ordering the superior court to (1) vacate its grant of reconsideration of its prior order granting summary judgment in favor of NYT; (2) vacate its resultant denial, on reconsideration, of NYT's motion for summary adjudication on the remaining cause of action; and (3) reinstate its order granting summary judgment in favor of NYT. We shall grant the relief requested.

FACTUAL AND PROCEDURAL SUMMARY

In May 2002, Click2Boost, Inc. (C2B) and NYT entered into a contract calling for C2B to advertise, market, and promote home delivery subscriptions for NYT on Web sites of C2B's "marketing alliance" partners. The program was to run through September 2003. C2B agreed to place pop-up advertisements for home delivery of NYT on the Web sites of these partners² and NYT agreed to pay C2B for every subscription submission provided to NYT. NYT cancelled the agreement two weeks early, claiming that most of the subscriptions provided by C2B were faulty (e.g. subscribers had never agreed to subscribe, subscriptions could not be started because of inaccurate and doubtful addresses) and that C2B already had exceeded the agreed-upon quota for the final month of September.

Wall Street Network, Ltd. (WSN), as assignee for C2B, sued NYT. Its first amended complaint, filed in November 2003, alleged various contract and misrepresentation claims. NYT cross-complained against C2B in March 2004, alleging that C2B breached the agreement by failing to provide NYT with legitimate subscriptions and seeking rescission of the approximately $1.5 million paid to C2B under the contract.

NYT moved for summary judgment in December 2004 on the ground that WSN and C2B could not demonstrate that C2B performed under the agreement. NYT asserted that C2B would be unable to prove that C2B had acquired names through the Internet subscription process rather than from other databases. NYT also moved for summary adjudication of causes of action, on an array of related grounds: breach of contract (no performance); misrepresentation (no misrepresentation and no harm); and inducing breach of contract, aiding and abetting inducement of breach of contract, and conspiracy to induce breach of contract (all individual defendants acted in their capacity as agents or employees of NYT).

NYT claimed the only evidence WSN provided to support its contention that C2B performed under the agreement was an unintelligible list of names, pseudonyms, and Internet protocol addresses (or some combination of these), without any showing that the list reflected persons who actually subscribed to home delivery of the newspaper. The list began with "jon doe" and ended with "John Smith, Jr." NYT submitted the declaration of its Web manager who stated that it was unlikely that C2B had employed the agreed-upon process because an unusually high percentage of subscription orders were cancelled or failed because of incorrect addresses and other problems. Forty-one percent of C2B's alleged subscribers complained to NYT that they had never ordered the paper. Ultimately, only 187 of 45,000 subscription orders submitted by C2B resulted in any payment to NYT.

After some dispute, C2B was ordered to disclose the identity of its market alliance partners who had placed the ads on their Web sites. NYT deposed representatives of two of these partners on Friday, April 1, 2005, two business days before the hearing on the summary judgment motion. The deponents testified that C2B used their services in promoting NYT's home delivery subscriptions on their Web sites using pop-up advertisements, as required by the contract.

The summary judgment motion was heard on April 5, 2005. It was granted by the trial court, which noted that WSN had produced no evidence of performance using the pop-up system as required by the contract. WSN moved for reconsideration. The trial court granted that motion in part, denying summary judgment, but granting summary adjudication on all causes of action except breach of contract.

NYT petitioned for a writ of mandate, asking this court to direct the trial court to vacate the order granting reconsideration and denying full summary judgment, and to reinstate its original order granting summary judgment. We intervened and issued an alternative writ. We now grant the requested relief.

DISCUSSION

The principal issue before us is whether the trial court violated the requirements of section 1008 in granting WSN's motion for reconsideration. NYT argues that section 1008 bars reconsideration because WSN's motion was based on evidence known to it or available to it before the summary judgment hearing, and WSN failed to provide a satisfactory explanation for its failure to present this evidence before summary judgment was granted.

Section 1008, subdivision (a) provides in material part: "When an application for an order has been made to a judge, or to a court, and ... granted ... any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown." (Italics added.)

The decision in Le Francois construed this statute and upheld its constitutionality as construed. In doing so, the court resolved a long-standing debate. Many courts had taken the position that the Legislature overstepped the separation of powers line in purporting to tell trial courts that they could not reconsider an interim ruling, except under the narrow situations allowed in the statute. (See Remsen v. Lavacot (2001) 87 Cal.App.4th 421, 104 Cal.Rptr.2d 612, disapproved of in Le Francois, supra, 35 Cal.4th at p. 1107 fn. 5, 29 Cal.Rptr.3d 249, 112 P.3d 636.) Other courts disagreed, reading section 1008 literally so that an interim order of the court was like the Law of the Medes and Persians — once issued, it could not be altered (see Esther 8:8), except on appeal or where one of the narrow exceptions applied. (See Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092, 1096-1097, 86 Cal.Rptr.2d 909.)

The Supreme Court concluded that section 1008 does not limit a court's ability to reconsider a previous interim order on its own motion, if it gives notice to the parties that it may do so and provides a reasonable opportunity to litigate the question. (Le Francois, supra, 35 Cal.4th at pp. 1096, 1108, 29 Cal.Rptr.3d 249, 112 P.3d 636.) But the court also held that a party is prohibited from making, and the trial court from granting, a motion for reconsideration unless the requirements of sections 437c, subdivision (f)(2), or 1008 are satisfied. (Ibid.) Section 437c, subdivision (f)(2) provides: "[A] party may not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion."

Section 1008, subdivision (a) requires that a motion for reconsideration be based on new or different facts, circumstances, or law. A party seeking reconsideration also must provide a satisfactory explanation for the failure to produce the evidence at an earlier time. (Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 689, 68 Cal.Rptr.2d 228.) A trial court's ruling on a motion for reconsideration is reviewed under the abuse of discretion standard. (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457, 45 Cal.Rptr.2d 695.)

WSN's motion for reconsideration was based solely on the deposition testimony of representatives of two of its marketing alliance partners: Donald L. Cerullo, Jr. of LSF Network, Inc., and Brian Nelson of Trancos, Incorporated. WSN contends their testimony proves that C2B performed under the contract with NYT. The deponents testified that (1) their companies contracted with C2B to place advertising banners and pop-up windows for NYT home delivery on their Web sites; (2) they forwarded to C2B the customer information obtained via the ads and received payment from C2B; and (3) they confirmed that an individual had to take affirmative action to place an order.

Cerullo testified that LSF Network, Inc. placed a banner on its Web site that encouraged users to...