What’s wrong with Taliaferro v. Hoogs?

[First published Nov. 10, 2013 – 231 views]

What’s wrong with Taliaferro?

Taliaferro v. Hoogs (1965) 236 Cal.App.2d 521 is an appellate court opinion widely cited for upholding the constitutionality (of the original version) of California’s so-called “Vexatious Litigants” statute (“VLS”).

In 1965 Taliaferro ruled that the original 1963 VLS is not unconstitutional on due process grounds. However, as discussed below, Taliaferro errs by equating specialized lawsuits (viz. stockholders derivative actions) with all types of actions (e.g.. actions to vindicate personal rights). This distinction was made clear in a later US Supreme Court case, Boddie v. Connecticut, 401 U. S. 371, 374 (1971).

TALIAFERRO WAS DECIDED BEFORE THE 1990 AMENDMENTS TO THE STATUTE AND BEFORE BODDIE V. CONNECTICUT QUALIFIED COHEN V. BENEFICIAL LOAN CORP

Taliaferro is the source case cited by later cases upholding the constitutionality of the vexatious litigant statutes. However, Taliaferro was decided before those statutes were broadened in 1990 (adding §391.7, §391(b)(3), and §391(b)(4)). The new sections completely change the nature of the statute.

In any event, the analysis of Taliaferro is flawed as shown below.

Taliaffero’s due process analysis relies on Beyerbach v. Juno Oil Co. (1954) 42 Cal.2d 11. Beyerbach upholds the constitutionality of §834 of the California Corporations Code, permitting a court to require security for costs and attorneys’ fees of stockholders suing on behalf of a corporation. Beyerbach, in turn, relies on Cohen v. Beneficial Loan Corp (1949) 337 U.S. 541. Cohen, like Beyerbach, concerns only that one unique type of litigation — stockholder’s derivative actions. Cohen does not deny fundamental litigation rights in all types of cases (as does §391 et seq). Cohen discusses the unique nature of the “stockholder’s derivative action”:

“The very nature of the stockholder’s derivative action makes it one in the regulation of which the legislature of a state has wide powers. . . . a stockholder who brings suit on a cause of action derived from the corporation assumes a position, not technically as a trustee perhaps, but one of a fiduciary character. He sues, not for himself alone, but as representative of a class comprising all who are similarly situated. The interests of all in the redress of the wrongs are taken into his hands, dependent upon his diligence, wisdom and integrity. And while the stockholders have chosen the corporate director or manager, they have no such election as to a plaintiff who steps forward to represent them. He is a self-chosen representative and a volunteer champion. The Federal Constitution does not oblige the State to place its litigating and adjudicating processes at the disposal of such a representative, at least without imposing standards of responsibility, liability and accountability which it considers will protect the interest he elects himself to represent.” (Cohen at 549 — emphasis added).

In this narrow context Cohen makes the statement (at p.552), echoed by Taliaferro (and by Wolfgram v. Wells Fargo (at 50)):

“A state may set the terms on which it will permit litigations in its courts.” .

Taliaferro interprets this much too broadly. Moreover, Taliaferro overlooks that the statutory security requirement for shareholders’ derivative suits “applies only to actions by shareholders in the right of a corporation. It does not authorize the requiring of security from shareholders who seek to vindicate their personal rights, even though they allege facts that would also give rise to a corporate cause of action” (Hagan v. Superior Court (1960) 53 Cal.2d 498, 503 — emphasis added).

Boddie v. Connecticut (1971) 401 U.S. 371 (striking down a filing fee as applied to divorce cases brought by indigents) makes this distinction clear — and in this respect the Supreme Court departed from Cohen.

“We think Cohen v. Beneficial Loan Corp., 337 U.S. 541 (1949), has no bearing on this case. Differences between divorce actions and derivative actions aside, unlike Cohen, where we considered merely a statute on its face, the application of this statute here operates to cut off entirely access to the courts.” (Boddie at n.9).

Likewise here, §391 et seq operates to cut off entirely access to the courts. Section 391 et seq, far from being narrowly-tailored, applies to all types of litigation rather than to one unique type.

The majority opinion in Boddie focuses on the fact that the state has a monopoly on the means for legally dissolving the marriage relationship. The concurring opinion of Mr. Justice Douglas uses equal protection analysis (invidious discrimination based on poverty) to arrive at the same result. [Note: Taliaferro sidesteps the equal protection issue by viewing only the lawyer side (as litigator) rather than the client side (as litigant): “The restriction . . . to persons proceeding in propria persona is not arbitrary or unreasonable. Attorneys are governed by prescribed rules of ethics and professional conduct, . . . not applicable to litigants in propria persona.”. ]

The concurring opinion (in part) of Mr. Justice Brennan holds that the courts cannot be closed to an indigent in any kind of litigation.

“A State has an ultimate monopoly of all judicial process and attendant enforcement machinery. As a practical matter, if disputes cannot be successfully settled between the parties, the court system is usually ‘the only forum effectively empowered to settle their disputes. . . . I see no constitutional distinction between appellants’ attempt to enforce this state statutory right and an attempt to vindicate any other right arising under federal or state law. . . .” (Boddie at 387)

“Where money determines not merely ‘the kind of trial a man gets,’ . . . but whether he gets into court at all, the great principle of equal protection becomes a mockery. A State may not make its judicial processes available to some but deny them to others simply because they cannot pay a fee.” (Boddie at 389).

Likewise, a state cannot make its judicial processes available to those who hire a lawyer but deny them to others simply because they cannot afford to hire a lawyer.

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