Source: https://www.calmediation.org/2018/10/index.html
Timestamp: 2019-04-19 03:33:29+00:00

Document:
Arbitration, FAA, Adequacy of Record, Collateral Estoppel, Fees: Five Unpublished Cases Involving Hodgepodge Of Issues Result In Four Affirmances And One Dismissal.
Arbitration Cases Fly Under The Radar.
First, all five cases involve affirmances, or in one case, a grant of defendants'/respondents motion to dismiss the appeal. And this is an example of what we know to be true: it is very difficult in the courts to undo results of an arbitration.
Second, the five unpublished cases demonstrate just how widely arbitration is now used to resolve myriad disputes: Loeffler v. RSM 8, LLC, No. G055100 (4/3 10/25/18) (Thompson, Fybel, Ikola) (dispute between home buyer and seller); Kivorkian v. Star Insurance Company, No. B272162 (2/3 10/26/18) (Egerton, Lavin, Dhanidina) (dispute between injured driver and insurance company); Belnap v. Pierce, No. D071245 (4/1 10/26/18) (O'Rourke, Nares, Haller) (partnership dispute between two dentists); Axten v. Axten, No. D073089 (4/1 10/30/18) (Guerrero, O'Rourke, Dato) (dispute between ex-spouses concerning attorney fees and costs award); Kote v. Blonska et al., No. G055436 (4/3 10/30/18) (Thompson, Aronson, Ikola) (dispute concerning accounting by trustee).
Third, the five unpublished cases provide an example of how arbitration-related issues tend to fly under the radar. First, the arbitration itself is usually a private affair, without precedential importance. Second, when arbitration issues do end up in the appellate courts, resulting in written opinions, then the written opinions, like most generated by the California Courts of Appeal, are unpublished and uncitable. That is the case with all five of these unpublished opinions, appearing over a span of five calendar days. During the same time period, as of the time of this post, I had not seen any published California state court appellate opinion involving arbitration.
Kote -- whether a notice of appeal of an order confirming an award was proper in the absence of a judgment.
The Case Is Lamps Plus Inc. v. Varela.
Yesterday, I posted about three arbitration cases pending before the Supreme Court, one of which is Lamps Plus Inc. v. Varela. Charlotte Garden, Co-Associate Dean For Research and Faculty Development, and Associate Professor at the Seattle University School of Law, has drilled down with a preview of arguments in the Lamps Plus case in today's Scotusblog.
"In Lamps Plus Inc. v. Varela," Prof. Garden explains, "the Supreme Court will decide whether the U.S. Court of Appeals for the 9th Circuit correctly held that an employer did consent to class arbitration when it included language in the arbitration contract that committed the parties to use arbitration 'in lieu of any and all lawsuits or other civil legal proceedings,' specified that arbitral claims include those 'that, in the absence of this Agreement, would have been available to the parties by law,' and authorized the arbitrator to 'award any remedy allowed by applicable law.'" [Query whether a convoluted explanation puts the 9th Circuit behind the eight ball]. Then Prof. Garden has some fun explaining the sub-arguments in the case that could, conceivably, enable SCOTUS to duck the issue entirely if it so chose to do.
COMMENT: If SCOTUS were to reach the merits and conclude that the correct result is that the allegedly ambiguous arbitration clause referencing legal proceedings that "would have been available to the parties by law" authorizes class arbitration, it seems likely that sophisticated employers will soon find a drafting solution to forestall class arbitration in the future. Or SCOTUS may save them the effort.
Federal Arbitration Act Cases Pending Before SCOTUS Present Issues of Interpretation Of FAA, And Who Decides Gateway Issues.
Henry Schein, Inc. v. Archer & White Sales Inc., scheduled to be argued in November, presents as an issue whether judge or arbitrator decides the gateway issue of arbitrability. The general rule is that the judge decides, unless the arbitration provision clearly and unmistakably delegates the decision to the arbitrator. The twist in the Henry Schein case is that the 5th Circuit will not send a case to arbitration if the basis for doing so is "wholly groundless." Will SCOTUS endorse that position, or leave the decision up to the arbitrator, if there is a delegation clause with clear and unmistakable language?
On October 1, 2018, and February 26, 2018, I blogged about New Prime Inc. v. Oliveira, a case that presents an FAA interpretive issue. Does an exemption clause in Section 1 of the FAA for workers engaged in interstate commerce apply to independent contractors? And who decides?
And on August 22, 2018, and May 12, 2018, I blogged about Lamps Plus Inc. v. Varela, which presents a question as to whether generalized language in an arbitration agreement forecloses a state law interpretation authorizing class arbitration under the FAA.
Ronald Mann posted on October 22, 2018, about these cases. As Mann writes, "I don't think the Supreme Court has rejected an FAA claim yet this century." However, he adds, "the argument in New Prime . . . displayed a bench that was not only open to rejecting the claim for arbitration there, but indeed strongly predisposed to reject it." We'll know more when these three cases are decided. And we'll keep you posted.
Two Books Reviewed By Your Blogger In Latest Issue Of California Litigation.
In the latest issue of California Litigation, Vol. 31, No. 2 (2018), p. 44, I've reviewed Cass R. Sunstein's Impeachment: A Citizen's Guide, and Laurence Tribe and Joshua Matz's To End A Presidency: The Power Of Impeachment. You can read the review, which is republished with the permission of California Litigation, by clicking here.
This Is Part Of The Ongoing Google - Uber Litigation/Arbitration Over Alleged Misappropriation By Uber Of Google Self-Driving Car Technology.
Google initiated arbitration proceedings against two former employees involved in developing self-driving car technology after the employees formed their own company (Otto) and their new company was acquired by Uber. A discovery dispute ensued: "Google sought discovery from Uber, a nonparty to the arbitration, related to pre-acquisition due diligence done at the request of Uber and Otto's outside counsel by Stroz Friedberg LLC." The arbitration panel determined the due diligence documents sought by Google were not protected by attorney-client privilege or the work-product rule. Uber, a non-party to the arbitration, then initiated a "special proceeding" in superior court, limited in scope to vacating the arbitration panel's discovery order, and prevailed. Google appealed the superior court's order. Uber Technologies, Inc., v. Google LLC, A153653 (1/3 9/28/18) (Siggins, Pollak, Jenkins).
The case raised an arbitration issue of first impression: "We know of no case that addresses the precise issue before us, namely, whether a party to an arbitration has a right to appeal an adverse superior court order vacating an arbitrator's discovery order in favor of a third party to the arbitration." The Court of Appeal held that, given the nature of the "special proceeding" involving a discovery issue and completely resolving the discovery issue, there was a final judgment, and Google could appeal.
The Court of Appeal went on to hold that the due diligence documents sought by Google were not protected by attorney-client privilege or by the work-product rule.
COMMENT: We have written an article and posted on July 17, 2018, about the availability of third-party document discovery in arbitration governed by the Federal Arbitration Act. The general rule is that such discovery is not available, though the documents can be obtained in connection with a hearing. In Uber v. Google, the issue is not discussed, from which we surmise that the arbitration proceedings were governed by the California Arbitration Act, which unlike the FAA, does allow for third-party document discovery.
Does Exemption In Section 1 Of The FAA For Workers Engaged In Interstate Commerce Apply To Independent Contractors? And Who Decides?
(1) Whether a dispute over applicability of the Federal Arbitration Act's Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause; and (2) whether the FAA's Section 1 exemption, which applies on its face only to “contracts of employment,” is inapplicable to independent contractor agreements."
COMMENT: Oliveira worked for an interstate trucking company under a contract that purported to set up an independent contractor relationship. He sued the trucking company for labor violations. The district court determined that it, rather than the arbitrator, should decide the threshold arbitrability issue. Affirming the district court, the First Circuit Court of Appeals held that Section 1, which defines terms in the FAA, and provides that nothing in the FAA shall apply to workers engaged in interstate commerce, applies to contracts that purport to establish the independent contractor relationship.
Passage Of SB 766 Opens Up Opportunities For Foreign Attorneys To Participate In International Arbitration In California.
An excellent article by Eric Z. Chang appearing in California Litigation --The Journal of the Litigation Section of the CLA, Vol. 31,No. 2 (2018), p. 27, explains how an ambiguity in the law as to whether foreign attorneys could participate in international arbitration in California has been cleared up by the passage of SB 766. The problem had been uncertainty as to whether foreign attorneys who participated in international arbitration in California were engaging in the unauthorized practice of law. With the legislative fix now in place, Chang sees a bright new future for expanding the large market for international arbitration in California.

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