Court's Authority to Impose Monetary Sanctions In California
The leading case on the power of a trial court to impose monetary sanctions is Bauguess v. Paine (1978) 22 Cal. 3d 626 [150 Cal. Rptr. 461, 586 P.2d 942].
In that decision, the Supreme Court recognized that the Legislature had codified the inherent "supervisory or administrative powers which all courts possess to enable them to carry out their duties" into section 128. (22 Cal. 3d at p. 635.)
The court held that the award of fees is not authorized by this statute.
The Bauguess court explained: "It would be both unnecessary and unwise to permit trial courts to use fee awards as sanctions apart from those situations authorized by statute. If an attorney's conduct is disruptive of court processes or disrespectful of the court itself, there is ample power to punish the misconduct as contempt. . . . the use of courts' inherent power to punish misconduct by awarding attorney's fees may imperil the independence of the bar and thereby undermine the adversary system. In cautioning trial courts to use their contempt powers with care, this court has repeatedly stressed the importance of permitting counsel to be a vigorous advocate:
"He has a right to press a legitimate argument and to protest an erroneous ruling."
Indeed, so essential is this "fundamental interest of the public in maintaining an independent bar" . . . that "a mere mistaken act by counsel cannot render him in contempt of court.
Even if a legal proposition is untenable, counsel may properly urge it in good faith; he may do so even though he may not expect to be successful, provided of course, that he does not resort to deceit or to wilful obstruction of the orderly process." (Id. at pp. 637-638.)
By this language, the court made it clear that a punitive monetary sanction such as the one before us is not authorized under either section 128 or the inherent powers of the courts.
After Bauguess was decided, the Legislature enacted section 128.5 granting trial courts the power to impose monetary sanctions under specific situations.
In 1994, the Legislature adapted the approach of the Federal Rules of Civil Procedure by enacting section 128.7 to replace section 128.5 for actions filed after December 31, 1994. (See discussion in Trans-Action Commercial Investors, Ltd. v. Firmaterr, Inc. (1997) 60 Cal. App. 4th 352, 367-369 [70 Cal. Rptr. 2d 449].)