Pending Cases Before SCOTUS Raise Arbitration Issues
Oral Argument Has Already Been Heard In The Following Two Supreme Court Cases.
FAA and Jurisdiction. Jules v. Andre Balazs Properties, No. 25-83 (cert. granted Dec. 5, 2025) — whether a federal court that initially had jurisdiction over a case and stayed it pending arbitration retains jurisdiction to confirm or vacate the resulting award under FAA §§9–10 even without an independent jurisdictional basis.
Transportation Workers and Jurisdiction. Flowers Foods, Inc. v. Brock, No. 24-935 (cert. granted Oct. 20, 2025) — whether “last-mile” delivery drivers whose routes are entirely intrastate, but who deliver goods that traveled in interstate commerce, qualify as transportation workers exempt from the FAA under Section 1.
We’ll update you when we learn about an opinion.
Â
Â
Fees Allowed For Successful Petition To Appoint New Arbitrator In Existing Arbitration
Appointment of the Arbitrator Was a Final Judgment Here.
The procedural facts in Barbanell v. Lodge, D084193 (4th Dist. Div. 1 pub. 1/8/26) are unusual. The parties had reached an earlier settlement agreement concerning a long-running water rights dispute. The agreement had a heirarchical settlement procedure — negotiate, mediate, then arbitrate.
Barbanell initiated an arbitration. Lodge moved successfully to have the arbitrator withdraw, leaving the arbitration unresolved. Lodge also filed a lawsuit asserting arbitration claims in the lawsuit.
Barbanell then separately petitioned the court to appoint a new arbitrator in the existing arbitration. Barbanell prevailed, and was awarded attorney fees.
In the appeal, Lodge argued “the Barbanell entities could not have been prevailing parties in the underlying action because the parties had claims pending in a separate lawsuit in the superior court and in arbitration at the time of the award.” In effect, this was an argument that the Superior Court lacked jurisdiction to award attorneys fees until the claims were finally adjudicated.
Lodge was arguing that the Superior Court retained twilight jurisdiction, because a Superior Court action was pending and the matter was also being arbitrated; therefore, attorney fees could not be decided until the matter was complete and the court could decide who was the prevailing party on a contract claim.
Not so on the facts. The petition to appoint a new arbitrator was required as party of the settlement agreement, was a limited “action on the contract”, was fully adjudicated, resulted in a final judgment, and therefore allowed for attorney fees.
COMMENT: “Twilight jurisdiction” is a California-specific doctrine of limited judicial authority over litigation that has been sent to arbitration. The phrase traces to Brock v. Kaiser Foundation Hospitals, 10 Cal.App.4th 1790 (1992), where the court described what happens to a civil action once the parties are compelled to arbitrate: “the action at law sits in the twilight zone of abatement with the trial court retaining merely vestigial jurisdiction over matters submitted to arbitration.” The phrase was then adopted and applied by Titan/Value Equities Group, Inc. v. Superior Court, 29 Cal.App.4th 482 (1994).
Â
Rejecting Offer To Mediate Did Not Preclude Defendant From Attorney’s Fees, Because Defendant Timely Reversed Decision
Timing Was Critical To Preserving The Right To Collect Attorney Fees.
Plaintiff home buyers of a residence in Santa Cruz County, claiming material nondisclosures by Defendants, offered to mediate the dispute before filing their complaint. Defendant home sellers, the Meyers, rejected the offer to mediate, but reversed their decision and accepted the offer two days before the complaint was filed by the Evleshins.
In California, the standard residential purchase and sale agreement requires mediation before filing a lawsuit, with the consequence that one who rejects mediation forfeits the right to collect attorney fees.
You guessed it. The defendants, who rejected the offer to mediate and then reversed course, won the lawsuit. Are they still able to collect attorneys fees?
Yes, says the California Court of Appeal, Evleshin v. Meyer, 115 Cal.App.5th 1021 (6th Dist. 2025). The Defendants accepted the offer to mediate two days before the complaint was filed.
Comment: Timing is everything here. The offer to mediate was ultimately accepted before the complaint was filed.
Artificial Intelligence: Using AI to Parse the Logic of a Legal Opinion
Using AI to Parse the Logic of a Legal Opinion
We published an article entitled “Using AI to Parse the Logic of a Legal Opinion.” You can read the article by clicking here.
We applied Claude Sonnet 4.6 to the recent Supreme Court tariff case, Learning Resources, Inc. v. Trump, striking down Trump’s tariffs under the statutory authority relied upon by the administration.
The opinion, with concurrences and dissents, is 170 pages long as a slip opinion. We used AI to parse the logic and assumptions of the multiple opinions. This is an “actual use case” demonstrating the advantages of using AI for legal analysis.
Non-Mutual Offensive Collateral Estoppel Could Not Be Applied By Plaintiffs to Void Arbitration Agreements
Is the Ninth Circuit Ruling Fair?
Nurses sued Aya Healthcare for wage violations. Each nurse had signed an individual arbitration agreement. Four disputes went to separate arbitrations; two arbitrators upheld the agreements, two struck them down as unconscionable. The district court applied non-mutual offensive collateral estoppel — using the two invalidating awards to void 255 other arbitration agreements, without sending those to arbitration. The Ninth Circuit reversed, holding the FAA prohibits this approach. O’Dell, et al. v. Aya Healthcare Services, Inc., No. 25-1528 (9th Cir. 4/1/26) (Tallman, VanDyke, Tung).
Non-mutual offensive collateral estoppel, when it does apply, enables a plaintiff to use collateral estoppel as a sword rather than a shield, applying a helpful outcome from a case in which the plaintiff was not a party to the benefit of the new plaintiff. It is a form of issue preclusion used to avoid relitigating an issue. But unlike classical issue preclusion, it is not mutual because it is used by a party who was not part of the initial litigation, and it is offensive rather than defensive.
At first blush, the outcome seems unjust, because a fundamental principle of justice is that like cases should be decided alike. But here, fairness cuts both ways.
The parties’ consent to arbitrate is a fairness principle, if one can put out of mind the adhesive nature of many employment contracts. Also, two of the four arbitrations accepted the defendant’s position, and one can see a lack of symmetry if issue preclusion were only to be invoked by the plaintiffs here.Â
Text-to-Voice Capability Has Been Added To This Blog
We’ve added text-to-voice capability to this website. That means that by clicking on a heading, you should be able to hear the text read out loud. Please let me know if this feature does not work for you. From time to time we will remind readers of this text-to-voice capacity that we added with a plugin.