The next three cases show that, notwithstanding the trend to uphold agreements to arbitrate, there are still plenty of situations in which our California Courts of Appeal will agree that arbitration should be denied or stayed, and allow litigation to go forward.
Tran v. Integra LifeSciences Corporation, No. G051620 (4th Dist. Div. 3 8/18/16) (unpublished): Order Denying Motion To Compel Arbitration Affirmed.
In Tran, the trial court denied defendants’ motion to compel arbitration on the grounds that the arbitration provision was superseded by a different, later arbitration provision, and the later provision was unconscionable. The operative arbitration provision was “take it or leave it” and unconscionable because it required Tran, a California employee, to arbitrate her claims in New Jersey, and because the arbitration provision had various provisions reflecting the unilateral nature of the arbitration requirement. Justice Thompson authored the decision. Affirmed.
Scheiber v. Shoe Palace Corporation, No. H041495 (Sixth Dist. 8/16/16) (unpublished): Appeal Of Order Staying Arbitration Of Plaintiff’s Individual Claims And Allow PAGA Claim To Proceed In Court Declared Moot.
Defendant’s appeal was limited to challenging the trial court’s decision to stay the arbitration of plaintiff’s individual claims, and did not challenge order that representative claims could be litigated in court. However, because the plaintiff sought dismissal of his individual claims in the trial court, and represented in the Court of Appeal that he would dismiss those claims before they were ever arbitrated, the appeal was dismissed as moot. Justice Bamattre-Manoukian authored the decision.
Ashbury Heights Capital, LLC v. FactSet Research Systems Inc., No. A145806 (1st Dist. Div. 1 8/16/16) (unpublished): Order Denying Motion To Compel Arbitration Is Affirmed.
The trial court denied defendant’s motion to compel arbitration, because plaintiff’s claims pertained only to defendants’ conduct in the years after the contract was terminated. Affirmed.
One interesting question here is why the court, rather than the arbitrator, decided the issue. After all, the Commercial Arbitration rules of the AAA entitled the arbitrator to decide disputes over the scope of the arbitration agreement. The Court of Appeal, however, viewed the issue as turning “on the continued validity of the arbitration clause, not the clause’s scope.” So essentially the Court viewed the validity issue as a gateway issue that the Court should decide. Justice Margulies authored the decision.