SB 1344 edits Section 529.2 of the California Code of Civil Procedure, which governs when a defendant in a civil challenge to a qualifying housing development project may move for an undertaking (bond) to secure costs and damages that result from delay. The statutory framework lets defendants seek a noticed motion for an order requiring plaintiffs to post security if the action (including requests for injunctions) would prevent or delay a development that meets the low‑ or moderate‑income thresholds set in Gov.
Code §65915 and is defined as a development project under Gov. Code §65928.
The revised text preserves the core mechanics: the defendant must move on grounds that the suit is without merit and was brought in bad faith or for delay; the plaintiff can show that posting a bond would cause undue economic hardship (including for members of unincorporated associations); the court must consider that evidence and may limit or decline to impose a bond; and the plaintiff’s liability is capped at $500,000. The statute also retains a provision making a developer liable for the cost of the undertaking if the developer later alters the plan in bad faith so it no longer meets the income requirements.
Practitioners should view this as a drafting cleanup that leaves intact a potent cost‑shifting device with familiar practical and constitutional tensions.
At a Glance
What It Does
The bill restates and reorganizes CCP §529.2 to clarify that defendants may move by noticed motion for an undertaking when a plaintiff’s action would prevent or delay qualifying low‑ or moderate‑income housing. It preserves plaintiff protections: admissible hardship evidence, judicial discretion to limit or refuse a bond, and a $500,000 liability cap.
Who It Affects
This applies to developers and project opponents in lawsuits challenging projects defined by Gov. Code §65928 that meet the income thresholds of §65915, and to lead public agencies that defend project approvals. It also affects courts that must adjudicate hardship claims and set bond amounts.
Why It Matters
The provision is a routine but powerful procedural tool: it shifts immediate financial risk of delay onto challengers, potentially speeding projects or deterring suits. Even as a nonsubstantive edit, the statutory language determines how lower courts evaluate hardship, scope of allowable relief, and the mechanics of cost allocation in housing litigation.
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What This Bill Actually Does
SB 1344 replaces the current text of CCP §529.2 with streamlined language that keeps the statute’s existing structure. Under the provision, a defendant in a civil action challenging a qualifying housing development can file a noticed motion asking the court to require the plaintiff to post an undertaking — essentially a bond — to cover costs and damages that the defendant could incur if the action prevents or delays the project.
The motion must assert that the lawsuit lacks merit and was filed in bad faith, vexatiously, or principally to delay or defeat the project’s low‑ or moderate‑income character.
If the defendant persuades the court of those grounds, the statute directs the court to set the undertaking amount while taking into account any admissible evidence from the plaintiff showing that posting a bond would cause undue economic hardship. The text explicitly recognizes unincorporated associations and their members as potential hardship claimants.
The statute caps a plaintiff’s liability for costs and damages at $500,000 and gives the court discretion to decline imposing any bond if the evidence shows that even a bond in any amount would cause undue hardship.Finally, the statute contains a conditional protection for plaintiffs in the event the developer later alters the project: if, after a bond is filed, the developer changes the plan in bad faith so that it no longer meets the statutory low‑ or moderate‑income criteria, the developer becomes liable to the plaintiff for the cost of the undertaking. Practically, the rule preserves a cost‑shifting threat against suits that delay affordable housing while leaving courts with a fact‑intensive duty to weigh hardship and the propriety of a bond.
The Five Things You Need to Know
Defendant may obtain a noticed‑motion order requiring an undertaking when the plaintiff’s suit or requested relief would prevent or delay a qualifying development project.
The motion must be grounded on court findings that the action is without merit and was brought in bad faith, vexatiously, for delay, or to thwart the project’s low‑ or moderate‑income nature.
A plaintiff — including an unincorporated association and its members — can present admissible evidence of undue economic hardship to limit or avoid the undertaking, and the court may refuse to impose a bond if any bond would cause undue hardship.
The statute caps a plaintiff’s maximum liability for the defendant’s costs and damages at $500,000 under this provision.
If the plaintiff has posted an undertaking and the developer later, in bad faith, changes the plan so it no longer meets the low‑ or moderate‑income requirements, the developer must reimburse the plaintiff for the undertaking’s cost.
Section-by-Section Breakdown
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When defendants can move for an undertaking
Subsection (a) restates the trigger for a defendant’s noticed motion: a civil action challenging a ‘‘development project’’ (Gov. Code §65928) that meets the low‑/moderate‑income thresholds of Gov. Code §65915, and where the action or sought relief would prevent or delay carrying out the project. The practical import is procedural: defendants have a statutorily authorized route (a noticed motion) to seek security when injunctions or other relief would pause construction. The provision ties this mechanism to specific statutory definitions instead of leaving it as an open common‑law device, which affects which projects qualify and narrows the universe of suits that can provoke a bond motion.
Plaintiff hardship defense; bond amount; liability cap
Subsection (b) prescribes how courts must handle motions for an undertaking. Plaintiffs may present admissible evidence that posting a bond will cause undue economic hardship — a fact‑based inquiry that can include individual members’ circumstances when the plaintiff is an unincorporated association. The court must weigh that evidence when setting the bond amount and is explicitly permitted to decline to impose any bond if it finds that a bond of any amount would cause undue hardship. The section also sets an express liability ceiling: plaintiffs’ liability for costs and damages under this mechanism shall not exceed $500,000, which bounds potential exposure but leaves courts to quantify the appropriate bond below that cap.
Developer reimbursement if project is changed in bad faith
Subsection (c) preserves a safeguard for plaintiffs who post an undertaking: if the developer subsequently alters the project in bad faith so it no longer meets the low‑ or moderate‑income requirements, the developer must reimburse the plaintiff for the cost of obtaining the undertaking. This creates a deterrent against developers converting affordable units after obtaining court protection and introduces a separate causation and bad‑faith inquiry that can spawn follow‑on disputes.
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Who Benefits
- Developers and project sponsors building qualifying low‑ or moderate‑income projects — they gain a statutory tool to seek security against suits that would delay construction and thereby reduce financing and carrying costs.
- Local lead agencies (cities, counties) that defend project approvals — the provision helps shift immediate delay costs away from public agencies and onto challengers, simplifying defense strategy and budgeting.
- Project financiers and lenders — by enabling defendants to secure undertakings, the statute can reduce project risk from litigation delays, which may preserve credit terms or insurance coverage tied to timelines.
Who Bears the Cost
- Community groups, individual neighbors, and small nonprofits that challenge qualifying projects — the potential need to post an undertaking or face a capped but substantial exposure increases the financial hurdle to bringing suit.
- Unincorporated associations and their members — although the statute allows them to show hardship, they remain exposed to bond requirements and litigation over their members’ financial circumstances.
- Trial courts and clerks — judges must conduct fact‑intensive hardship hearings, set bespoke bond amounts, and adjudicate bad‑faith change claims, increasing case management and evidentiary work.
Key Issues
The Core Tension
The central tension is between protecting the delivery of statutorily prioritized low‑ and moderate‑income housing from obstructive litigation and preserving meaningful, affordable access to the courts for neighbors and public‑interest challengers; requiring undertakings reallocates immediate financial risk to challengers to safeguard construction timelines, but that reallocation can deter legitimate judicial review and spur follow‑on fights over bad faith and hardship.
The statute codifies a classic trade‑off between speedy project delivery and access to judicial review. A bond requirement shifts short‑term delay costs onto challengers, which may accelerate construction but also risks chilling meritorious claims that require time and money to litigate.
The statute tries to blunt that effect by allowing plaintiffs to present admissible evidence of undue economic hardship and by capping liability at $500,000, but it leaves undefined several friction points: the evidentiary standard for ‘‘bad faith’’ by plaintiffs or developers, the contours of ‘‘undue economic hardship,’’ and precisely how courts should calculate a bond amount that reflects prospective damages during a pause in construction.
Those undefined standards create predictable secondary litigation. Parties will contest whether a suit is ‘‘without merit’’ and was brought ‘‘in bad faith,’’ and whether a developer’s later modification was truly in bad faith.
The hardship inquiry invites discovery into plaintiffs’ finances (and, for associations, their members’ finances), which can be intrusive and time‑consuming. Likewise, the $500,000 cap bounds exposure but may not match actual carrying costs for large projects, producing either insufficient deterrence (if courts set bonds well below true damages) or a chilling ceiling (if plaintiffs cannot afford even a much smaller bond).
Finally, although this bill appears to be a nonsubstantive cleanup of existing language, how courts parse the revised wording could still influence procedural outcomes in ways the drafters did not foresee.
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