Court Opinion

ID: 9584646
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:51:07.498336+00
Date Added: 2024-06-11T15:11:46.285349
License: Public Domain

BROWN, J., Concurring and Dissenting.
Although I agree with part II of the majority opinion, I strongly disagree with its conclusion in part I that judicially confirmed arbitration awards do not have “nonmutual” collateral estoppel effect absent a specific agreement between the arbitral parties.
The majority conveniently disregards the fact that the Legislature has already resolved this question. Section 1287.4 of the Code of Civil Procedure (section 1287.4) establishes that a confirmed arbitration award has “the same force and effect as, and is subject to all the provisions of law relating to, a judgment in a civil action of the same jurisdictional classification . . . .” (Italics added.) This language is clear and unambiguous: confirmed arbitration awards are equivalent in all respects to other court judgments. Thus, a confirmed arbitration award, like any other judgment, may have nonmutual collateral estoppel effect with or without the express or implied consent of the arbitral parties.
In accordance with the well-established tenets of statutory construction, our analysis should begin and end here. (See Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299] [“If the language [of a statute] is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature . . . .”].) Indeed, we recently refused to disregard or rewrite any part of a statute absent “necessity” and “firm evidence of the drafters’ true intent.” (People v. Garcia (1999) 21 Cal.4th 1, 6 [87 Cal.Rptr.2d 114, 980 P.2d 829].) As we noted just one month ago, the separation of powers doctrine requires that we “limit ourselves to interpreting the law as written and leave for the . . . Legislature the task of revising it as [it] deem[s] wise.” (Id. at p. 15.) Today, the majority unblushingly ignores our earlier pronouncement and usurps the role of the Legislature by enacting a consent exception to section 1287.4. This judicial enactment, however, cannot be reconciled with the clear and unambiguous language of section 1287.4 or the overall statutory scheme governing arbitrations.
The majority does engage in a lengthy and tortuous discussion in an attempt to justify its ad hoc revisions to section 1287.4. The discussion, however, is riddled with logical inconsistencies. On the one hand, the majority acknowledges that the Legislature enacted a comprehensive statutory scheme governing arbitration. (Maj. opn., ante, at p. 830.) On the other hand, the majority relegates the text of section 1287.4 to a footnote and dismisses it without even addressing its language. (Maj. opn., ante, at p. 835, *843fn. 9.) The majority also acknowledges that the arbitration statutes define the basic characteristics and effect of arbitration proceedings and apply “even absent the specific agreement of the parties.” (Maj. opn., ante, at p. 831.) Yet, in the same breath, the majority concludes that parties must specifically agree to the application of nonmutual collateral estoppel even though section 1287.4 makes no mention of any such requirement. (Maj. opn., ante, at p. 835.) Finally, the majority inexplicably concludes that the parties in this case did not intend to give the arbitration award collateral estoppel effect despite their massive expenditure of time and resources in the arbitral proceedings. (Maj. opn., ante, at pp. 837, 826.)
The majority’s use of public policy considerations to circumvent section 1287.4 is just as specious. This case does not present a question of common law policy; it presents a question of statutory interpretation. The court is not at liberty to reject the plain meaning of a statute merely because it believes the statute implements an unwise policy.
In any event, most of the cited public policy considerations actually repudiate the majority’s position. Notwithstanding the majority’s conclusory statements to the contrary, its decision today undermines public confidence in the judicial system. First, denying judicially confirmed arbitration awards collateral estoppel effect creates the risk of inconsistent rulings. (See Lucido v. Superior Court (1990) 51 Cal.3d 335, 347 [272 Cal.Rptr. 767, 795 P.2d 1223, 2 A.L.R.5th 995].) Because the Legislature has given these arbitration awards “equal status” to court judgments, any inconsistencies between the rulings of the arbitrator and court would have a profoundly negative impact on the integrity of our judicial system. (Id. at p. 350.)
Second, leaving the determination of the collateral estoppel effect of a judicially confirmed arbitration to the parties creates the possibility that summary proceedings lacking “judicial character” will have nonmutual collateral estoppel effect. Such a result not only contravenes well-established precedents (see, e.g., People v. Sims (1982) 32 Cal.3d 468, 479 [186 Cal.Rptr. 77, 651 P.2d 321]; Kelly v. Trans Globe Travel Bureau, Inc. (1976) 60 Cal.App.3d 195, 202-203 [131 Cal.Rptr. 488]), but also threatens the integrity of judicial decisions. Because individual litigants often have little choice when entering into arbitration agreements, binding these individuals to rulings made without a full and fair opportunity to litigate creates an unavoidable perception of unfairness.
Denying judicially confirmed arbitrations collateral estoppel effect also undermines judicial economy. The majority correctly recognizes that private arbitrations do not waste judicial resources because they do not involve “the use of a judge and a courtroom.” (Maj. opn., ante, at p. 833.) Indeed, the Legislature enacted the arbitration statutes in order to provide a viable *844alternative to the courts. (See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 [10 Cal.Rptr.2d 183, 832 P.2d 899] (Moncharsh).) This, however, does not support the conclusion that later relitigation has no effect on judicial economy. If arbitration awards have collateral estoppel effect, relitigation— including additional discovery, motions and trials—would not be necessary. Thus, courts could avoid this needless dissipation of judicial resources by deciding just one motion addressing the collateral estoppel effect of the award.
Finally, in perhaps the greatest irony of all, the majority’s foray into legislative enactment will likely have the very “adverse effects” on arbitrations that it seeks to prevent. (Maj. opn., ante, at p. 836.) As an initial matter, the majority’s conclusion that the pressure to conform the arbitral process to the litigation process will discourage the use of arbitrations is suspect. Even if arbitrations become more like litigation, they still have several inherent advantages, including greater limits on discovery, more flexible hearing and trial dates, limited judicial review and the ability to choose arbitrators with expertise in the type of controversy at issue.
Instead, the majority decision may also make many commercial disputes inarbitrable or encourage procedural gamesmanship. Commercial disputes often involve nonparties to the arbitration agreement. If the majority is correct and tactical considerations weigh against agreements according non-mutual collateral estoppel effect to judicially confirmed arbitration awards, then the guaranteed “possibility of conflicting rulings on a common issue of law or fact” in disputes involving nonparties will lead to two probable outcomes. (Code Civ. Proc., § 1281.2, subd. (c).) Courts will either deny or stay arbitration or order arbitration and stay the action against nonparties to the arbitration agreement. (Ibid.; see also Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 347-348 [79 Cal.Rptr.2d 308, 965 P.2d 1178].) The first outcome makes otherwise arbitrable disputes inarbitrable in direct contravention of the strong public policy in favor of arbitration. (See Moncharsh, supra, 3 Cal.4th at p. 9.) The second outcome gives a party asserting claims against nonarbitrating parties an undeserved second bite at the apple if they are not satisfied with the arbitration award. We have already rejected similar forms of “procedural gamesmanship” where a party attempts to combine litigation and arbitration in order to obtain an unfair advantage. (Christensen v. Dewor Developments (1983) 33 Cal.3d 778, 784 [191 Cal.Rptr. 8, 661 P.2d 1088].)
• Even if arbitral parties avoid these outcomes by agreeing to give the arbitration nonmutual collateral estoppel effect, they, by the majority’s reasoning, will likely insist on the same sort of procedural safeguards that exist in litigation. Thus, the majority’s decision, at best, would have the same effect on arbitrations as the case-by-case approach that it rejects.
*845Accordingly, I believe the only reasoned view is to determine the applicability of collateral estoppel on a case-by-case basis. If the parties have a full and fair opportunity to litigate the issues in arbitration, then a judicially confirmed arbitration award has nonmutual collateral estoppel effect. If the parties do not, then the award does not have nonmutual collateral estoppel effect. By rejecting this approach, the majority ignores the plain language of section 1287.4, the overall statutory scheme governing arbitrations in California and the clear weight of authority—including the decisions of our sister states with similar statutes,1 the Restatement of Judgments,2 and most commentators and treatises.3 In doing so, the majority sends a clear message to the Legislature—“judicial hostility” to arbitration still trumps. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 707 [131 Cal.Rptr. 882, 552 P.2d 1178].)
Chin, J., concurred.
The petition of real party in interest United States Fidelity and Guaranty Company for a rehearing was denied October 20, 1999. George, C. J., did not participate therein.

For example, Connecticut, Idaho, Nevada and New York all have statutes similar to section 1287.4 and have concluded that final and binding arbitration decisions have nonmutual collateral estoppel effect. (See Bulger v. Lieberman (1995) 39 Conn.App. 772 [667 A.2d 561, 562], citing Corey v. Avco-Lycoming Division, Avco Corporation (1972) 163 Conn. 309 [307 A.2d 155, 160], cert. den. 409 U.S. 1116 [93 S.Ct. 903, 34 L.Ed.2d. 699] (1973) [Conn. Gen. Stat. § 52-421]; Western Indus, v. Kaldveer Associates (1994) 126 Idaho 541 [887 P.2d 1048, 1051] [Idaho Code § 7-914]; Firefighters Local 1285 v. Las Vegas (1991) 107 Nev. 906 [823 P.2d 877, 880] [Nev. Rev. Stat. § 38.165]; Dimacopoulos v. Consort Development Corp. (1990) 158 A.D.2d 658 [552 N.Y.S.2d 124, 125] [N.Y. C.P.L.R. § 7501].)

The Restatement Second of Judgments provides that: “When arbitration affords opportunity for presentation of evidence and argument substantially similar in form and scope to judicial proceedings, the award should have the same effect on issues necessarily determined as a judgment has. Economies of time and effort are thereby achieved for the prevailing party and for the tribunal in which the issue subsequently arises.” (Rest.2d Judgments, § 84, com. c, p. 290, italics added.)

See, e.g., 18 Wright et al., Federal Practice and Procedure (1981) section 4475, page 771; 1 Raven et al., Business and Commercial Litigation in Federal Courts (1998) Arbitration vs. Litigation: Enforceability and Access to Courts, section 9.6, and footnote 1.