California Mediation and Arbitration

Public Policy And Florida Choice Of Law Result In Affirmance Of Order Partially Denying Defendant’s Motion To Compel Arbitration

 

Arbitration of Unlawful Group Boycott Claim Under California Cartwright Act Was The Juicy Florida Choice Of Law Law Issue.

    HCF Insurance Agency v. Patriot Underwriters, Inc., Case No. B257715 (2/5 May 27, 2015) (unpublished) involved a dispute between plaintiff insurance broker, and defendant program administrator/underwriter, partially governed by an arbitration clause.  The Court of Appeal affirmed the trial judge’s order that causes of action for contract breach and breach of the covenant of good faith and coverage were within the scope of the arbitration agreement, but that causes of action for fraud and intentional interference with economic advantage were not within the scope.

    However, the cause of action for unlawful group boycott, in violation of California’s Cartwright Act, raised an interesting issue of public policy and choice of law.  The dispute, which was within the scope of the arbitration clause, was governed by a Florida choice-of-law provision.  Florida law did not provide a remedy for losses resulting from antitrust violations outside Florida, and plaintiff’s alleged damages were sustained in California.  Florida law also provides an arbitration agreement is unenforceable if it violates public policy, and such a violation occurs when an arbitration agreement diminishes available remedies.  Thus, the Court of Appeal reasoned that the arbitration clause must be invalid under Florida law, because arbitration under Florida law would diminish the remedies of plaintiff for injury in California under the Cartwright Act, violating Florida public policy.

     COMMENT:  Under the Federal Arbitration Act, claims that an arbitration provision violates state public policy don’t get much traction these days.  However, even under the FAA, the parties can agree to choice of law, and here, the parties agreed to apply Florida law to their dispute.

Arbitration, Civil Rights: Ninth Circuit Rules Employer Can Expressly Require Arbitration Of Title VII Claims

1991 Amendment To Title VII Facilitates Waiver Of Statutory Remedies In Favor Of Arbitration

     “Before 1991, ‘Title VII had been interpreted to prohibit any waiver of its statutory remedies in favor of arbitration.  Prudential Ins. Co. of Am. v. Lai, 42 F.3d 1299, 1304 (9th Cir. 1994).  But Congress reversed course with amendments to Title VII [i.e., Section 118 of the Act] in the Civil Rights Act of 1991. . . ‘”  Ashbey v. Archstone Prop. Mgmt., No. 12-55912 (9th Cir. May 12, 2015) (Bea, Bybee, Christen).  Before Ashbey, Ninth Circuit opinions were loathe to find that an employee asserting Title VII claims had waived the right to a jury trial by agreeing to arbitrate.  Kummetz v. Tech Mold, Inc., 152 F.3d 1153 (9th Cir. 1998); Nelson v. Cyprus Bagdad Copper Corp., 119 F.3d 756 (9th Cir. 1997).  Relying on the Section 118 amendment to the Civil Rights Act of 1991, however, Ashbey holds that an employee may be required to arbitrate a claim alleging unlawful retaliation in violation of Title VII, where the employee “knowingly” waives the right to a jury trial by agreeing to submit such disputes to arbitration.

     The Ninth Circuit concluded that Ashbey’s waiver was “knowing” in circumstances where he was explicitly notified of a Dispute Resolution Policy, and that policy unambiguously stated: it “is governed by the the Federal Arbitration Act,” all disputes are to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial, and it “applies, without limitation, to disputes arising out of the employment relationship . . . including, without limitation, disputes over . . . harassment and claims arising under the . . . Civil Rights Act of 1964.”

     COMMENT:  The opinion states that the employer “presented Ashbey the ‘express’ choice lacking in both Kummetz and Nelson.”  What exactly is that express choice?  It’s not the choice of accepting employment and choosing to waive or not to waive the right to a judicial forum.  Rather, the choice appears to be between accepting employment and agreeing to waive the right to a judicial forum or not accepting employment.  Under those circumstances, we predict that employers will make use of the waiver language in Ashbey, and employees will choose to be employed rather than unemployed.  Thus Title VII claims will be channeled into arbitration.

Miscellaneous: Natalie Portman To Play RBG

From Queen Padmé Amidala To Ruth Bader Ginsburg . . .

     Every now and then we get the irresistible urge to blog about something that has nothing whatsoever to do with mediation and arbitration.  Today, the “off topic” item comes from Amy Howe’s Monday round up on SCOTUSblog, reporting Natalie Portman is about to take on the role of another powerful woman:

“Perhaps the biggest Court-related news at the end of last week was that actress Natalie Portman will play Justice Ruth Bader Ginsburg in a movie about Ginsburg’s career as an advocate for women’s rights.  Coverage comes from Lily Karlin and Sam Levine in The Huffington Post, from Andrea Towers for Entertainment Weekly, and from Deadline Hollywood.”