This published opinion involves the intersection of two California procedural rules in the context of punitive damages litigation.

The first rule is Code of Civil Procedure (section 170.6), which allows parties to assert one peremptory challenge to a trial judge without a showing of cause, but requires parties to assert the challenge before the judge makes a “determination of contested fact issues relating to the merits.”

The second rule is Civil Code (section 3295(c)), which provides that a plaintiff cannot conduct discovery of the defendant’s financial condition for the purposes of seeking punitive damages unless the plaintiff first demonstrates a substantial probability that he or she will prevail on a claim for punitive damages.

The question presented in this case was whether a finding by the trial court that a plaintiff has a substantial probability of prevailing on a claim for punitive damages is a “determination of contested fact issues relating to the merits” under section 170.6. The trial court concluded that it was not such a determination, and the Court of Appeal (Second District, Division Eight) agreed. The Court of Appeal relied on the statutory language of Sec. 3295(c), which expressly states that a pretrial punitive damage discovery determination “shall not be considered to be a determination on the merits of the claim.” The court concluded that a decision that is not on the “merits” for the purpose of section 3295(c) is also not on the “merits” for the purpose of section 170.6.