California Code of Civ. Proc. Section 1281.9 Enumerates Specific Instances Where Disclosure Is Always Compelled
Plaintiff appealed an adverse judgment affirming a medical malpractice decision in favor of defendant doctor, arguing arbitrator failed to make a necessary disclosure. The neutral arbitrator and defendant’s counsel failed to disclose that defendant’s counsel had, subsequent to the commencement of arbitration, become affiliated with the firm providing the arbitrator. Gray v. Chiu, Case No. B238404 (2nd Dist. Div. 6 January 22, 2012) (Perren, J., author) (for publication).
The Court of Appeal reversed the judgment confirming the award, and directed the trial court to vacate the arbitration award. The Court held that the California Arbitration Act, and the California Ethics Standards for Neutral Arbitrators in Contractual Arbitrations, require:
“(1) a neutral arbitrator to disclose that a lawyer in the arbitration is a member of the administering ‘dispute provider resolution organization’ (DRPO); and (2) section 1286.2, subdivision (a)(6) compels a trial court to vacate the arbitration award if the arbitrator fails to disclose that information.”
It will not do to argue, as did defendant/respondent, that the arbitrator had no duty to disclose the relationship, “because there was no evidence of any ‘significant . . . financial or professional relationship or affiliation’ between the neutral arbitrator and a lawyer in the arbitration.” The reason is that Code of Civ. Proc. section 1281.9 “enumerates specific instances where disclosure is always compelled.” (emphasis added). Thus, for the specific instances enumerated by section 1281.9, there is a bright-line test.
One of those specific instances enumerated, 1281.9(a)(2), requires disclosures of “[a]ny matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council pursuant to this chapter” – a provision encompassing the lawyer’s membership in the DRPO, under Ethics Standard 8(b)(1)(A).