Case Held That Arbitration Agreement Between Indiana Based Distance-Learning Partnership And California Licensed Vocational Nurses Was Unconscionable.
We can report that on July 8, 2016, Magno v. The College Network, Inc., D067687 (4/1 6/14/16) (McConnell, Nares, O’Rourke), a case we posted about on June 22, 2016, was ordered for publication. Perhaps the most notable part of the case is the weight that the Court gave to an Indiana forum selection clause for binding arbitration in determining that substantive unconscionability existed. Also, there was an absence of evidence that the plaintiffs, young nursing students, knew about the forum selection clause.
We just posted on Baxter v. Bock on May 22, 2016, a case involving the MFAA and an acknowledged arbitrator’s error that was not a basis for vacating an award, as well as disclosure requirements. We can now report that the case is partially published as of May 24, 2016.
I posted about SingerLewak v. Gantman on July 31, August 31, and September 1, 2015. This is an interesting case discussing the so-called “public policy exception” that will sometimes justify review of an arbitral award by the superior court – though in the end, not in this case.
Previously, the Court of Appeal had ordered the case published in the morning, only to revoke the publication order in the afternoon, when it realized that the time to order publication had expired. The Justices then wrote a letter to the Supreme Court asking for publication. Yesterday, the Supreme Court ordered publication.
Ted Bacon, Mike Hensley, and Matt Hansen, my colleagues at AlvaradoSmith, represented SingerLewak, the appellant/plaintiff prevailing on the appeal. I was pleased to see publication was ordered, as I had written the letter to the Court of Appeal requesting publication.
Court of Appeal’s Jurisdiction To Authorize Publication Expired.
Just yesterday, in the preceding post, I reported the Court of Appeal, Second District, Division 8, had authorized publication of SingerLewak v. Gantman, a case offering an excellent discussion of the so-called “public policy exception” that, when it is found it exist, allows for judicial review of an arbitral award.
By the end of the day, however, the following case docket entry appeared:
Pursuant to California Rules of Court, rule 8.264(b)(1), the court's opinion became final on August 28, 2015. The court's order filed August 31, 2015, granting certification to publish the opinion is hereby vacated as improvidently issued. Forthwith, the court will comply with the provisions of California Rules of Court, rule 8.1120(b) regarding publication of the opinion upon order of the Supreme Court.
As Arte Johnson would say, “Very interesting . . . but not very funny.”
Rule 8.1120(b) provides: “If the rendering court does not or cannot grant the request before the decision is final in that court, it must forward the request to the Supreme Court with a copy of its opinion, its recommendation for disposition, and a brief statement of its reasons. The rendering court must forward these materials within 15 days after the decision is final in that court.”
An Arbitrator Implying A Geographic Limitation Under Bus. & Prof. Code Section 16602 Did Not Violate An Important Public Policy, And Thus Did Not Expose The Arbitral Award To Judicial Review.
On July 31, 2015, I posted about SingerLewak, LLP v. Gantman, B259722 (2/8 July 29, 2015; pub. Aug. 31), a case providing a detailed discussion of the “public policy exception” that can sometimes justify judicial review of an arbitral award, though not in that specific case. On August 31, 2015, the Second District, Division 8, ordered that the case should be published.
NOTE: My colleagues Ted Bacon, Mike Hensley, and Matt Hansen represented the successful plaintiff/appellant. I wrote a letter to the Court of Appeal in support of publication.
PAGA Issue Will Continue To Percolate Through Federal Courts.
The United States Supreme Court today denied the petition for a writ of certiorari brought by CLS Transportation Los Angeles, LLC, No. 14-341. Left intact, for now, is the California Supreme Court’s holding in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014), that the Federal Arbitration Act does not preempt a state law that prohibits waiver of PAGA representative actions in an employment contract.
The denial of the petition should not come as a great shock. There was no conflict among decisions of state supreme courts or federal courts of appeal.
However, the issue is percolating through the federal district courts in California, and the outcomes have been mixed. The issue is also pending in the Ninth Circuit in Hopkins v. BCI Coca Cola Bottling Co., No. 13-56126.
Court Agreed With Trial Court That Parties’ Arbitration Agreement Expressly Excluded Statutory Claims From The Arbitration Obligation.
On July 14, 2014, I blogged about Rebolledo v. Tilly’s, Inc., in which the Court of Appeal, 4th District, Division 3, affirmed the trial court’s order denying an employer’s motion to compel arbitration of an employee’s putative class action regarding statutory wage claims. The key to the case was that the operative language in the employment agreement provided for arbitration, except for “matters governed by the California Labor Commissioner.” The Court of Appeal held that the employee’s statutory wage claims were within the jurisdiction of the California Labor Commissioner if they would have fallen within its jurisdiction, even if the claims were not brought before the Commissioner – and that was the case. Therefore, the statutory wage claims were excluded from arbitration. On August 6, 2014, the Court certified the case for publication.
Unconscionability Of Arbitration Clause Involved In Car Wash Employees’ Contracts Was At Issue In This Case
Today, Carmona v. Lincoln Millenium Car Wash, Inc., Case No. B248143 (2nd Dist. Div. 8 filed April 21, 2014) (certified for publication May 9, 2014), originally not certified for publication, has been ordered to be published in the Official Reports. On April 23, 2014, I posted about this case. The Court of Appeal affirmed the trial court’s order, finding the arbitration agreement to be permeated by unconscionability, and refusing severance. An interesting aspect of the case is the weight given by the Court, in concluding that there was a high degree of procedural unconscionability, to the employer’s failure to translate key provisions into Spanish for Spanish-speaking employees.
On February 26, 2014, I posted the Delaware Chancery Courthad petitioned SCOTUS to allow the Chancery Court to oversee private arbitrations. An arbitration forum provided by Chancery Court judges was thought to be attractive and a draw for large corporations, with heavy-weight commercial disputes, desiring the expertise of the Chancery Court and the privacy afforded by arbitration.
Denniston explains the Delaware legislature had adopted the arbitration experiment because “it was concerned that other nations might be able to attract corporations to organize there by setting up user-friendly, closed systems of business arbitration.”
If the First Amendment provides a right of access to civil proceedings, including arbitrations administered by Chancery Court judges, that’s likely to be less of a draw for the multinationals.
This case was argued before the Supreme Court on December 2, 2013. It presents a unique fact pattern concerning arbitration between an investor (BG Group PLC) and a sovereign state (Argentina). The issue to be resolved by this appeal to the Supreme Court is whether a court or the arbitrator will get to determine whether a precondition to arbitration has been satisﬁed.
BG had obtained a 2007 arbitral award of $185M, despite the fact that it had not followed a bilateral investment treaty (BIT) clause requiring that a precondition be met before bringing arbitration. After de novo review, the D.C. Circuit vacated, finding a failure to comply with an explicit intent to comply with an arbitration precondition.
Delaware Chancery Court Petitions SCOTUS To Allow Chancery Court To Oversee Private Arbitrations
As reported by the ABAJournal on January 22, 2014, Delaware seeks a writ of certiorari from SCOTUS to review the decision of the Third Circuit ruling that the Delaware Chancery Court’s corporate arbitration program violated the First Amendment because it involved secret trials.
Delaware’s Chancery Court is well-known for its expertise in corporate matters, and touts its arbitration program as a benefit for sophisticated corporate clients. Besides, it will argue, secret arbitrations aren’t really trials. The Chancery Court is represented by Andrew J. Pincus of Mayer Brown. Mr. Pincus represented AT&T in its significant SCOTUS victory over consumer plaintiffs in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011).