California Mediation and Arbitration

My Interview With Dean Erwin Chemerinsky About Governmental Powers And Covid-19 Now On YouTube

Because Covid -19 Is On Our Minds . . .

        My interview with Dean Erwin Chemerinsky of the University of California Berkeley School of Law about the constitutional and statutory powers of the government to address covid-19 streamed on YouTube on April 30. It is now available as a recording after the event.  https://bit.ly/Lit0430 My thanks to Dean Chemerinsky, and the Litigation Section of the California Lawyers Association for making this possible.

Arbitration, PAGA: Second District Div. 2 Affirms Order Granting Injunctive Relief To Prevent Arbitrating PAGA Claim

Did The Plaintiff Ask For Relief In His Individual Or Representative Capacity?

        Brooks v. Amerihome Mortgage Company, B298132 (2/6  4/9/20) (Tangeman, Gilbert, Perren), is one more case upholding the rule that employers cannot compel the arbitration of a Private Attorneys General Act of 2004 (PAGA) claim. The employer acknowledged that PAGA claims are not arbitrable, and argued that the employee had agreed to final and binding arbitration because he had made individual claims for wages, rest breaks, and meal periods concerning his employment, rather than purely representative claims. Representative PAGA claims are treated as claim brought by a private attorney general on behalf of California, and the state, which is not a party to the arbitration agreement, cannot be compelled to arbitrate. The court rejected the employer's argument because the argument did not rely on Brooks' amended complaint alleging a pure PAGA claim -- and the court had to look to the operative pleadings rather than to a notice to the Labor and Workforce Development Agency or to a superseded pleading.

        There is one procedural twist to the case. Brooks sought a preliminary injunction to prevent arbitration. This is an uncommon procedure. because usually the employee files suit, and the employer files a motion to compel arbitration. Here, the employer filed a demand with the American Arbitration Association to initiate arbitration, and that explains why the employee sought injunctive relief.

Reviews: The Second Founding By Historian Eric Foner

Your Blogger Has Reviewed Professor Eric Foner's Book, The Second Founding: How The Civil War And Reconstruction Remade The Constitution, in California Litigation.

        I've reviewed Eric Foners' book, The Second Founding.  The book is about the legislative and political history of the 13th, 14th, and 15th Amendments, and the post-Civil War Supreme Court's judicial interpretation and evisceration of the  Amendments. The review appears in California Litigation, the journal of the California Lawyers Association, Vol. 33, No. 1, p. 52 (2020). With the permission of the California Lawyers Association and its publication California Litigation, I am republishing the article and making it available by clicking here.

International Arbitration: California Supreme Court Allows Service Of Process By FedEx On Chinese Company Where Parties Waived Formal Service Requirements Of Hague Service Convention

The Hague Service Convention Between The US And China Did Not Apply Because . . . 

        The first sentence of an opinion is often an arrow pointing to where the court is headed. So it is in Rockefeller Technology Investments (Asia) VII v. Changzhou Sinotype Technology Co., Ltd., S249923 (Cal. S.Ct  4/2/20) (Corrigan, J.): “The parties here, sophisticated business entities, entered into a contract wherein they agreed to submit to the jurisdiction of California courts and to resolve disputes between them through California arbitration.” When a court tells us that sophisticated parties entered into a contract, it’s usually a pretty good hint that the court will follow the contract.

        The issue here was whether the contract provided for a means of service on a company in China that was preempted by the requirements of the Hague Service Convention. The Convention provides for a  Central Authority to serve in the receiving country, and in fact at the time the Convention was adopted, China objected to service by alternative postal means. Here, however, the contract (a Memorandum of Understanding or MOU) provided for notice and service by FedEx and email, jurisdiction in California, and a JAMS arbitration provision.

        Rockefeller Technology initiated arbitration by FedEx and email, and Changzhou Sinotype defaulted.The award was subsequently confirmed by a judge, Changzhou Sinotype moved, unsuccessfully, to set aside the default, the Court of  Appeal reversed, and the Supreme Court reversed the Court of Appeal.

        The Supreme Court analyzes whether service of process in the technical sense is required, and explains that the answer depends on the law of the state where the action is brought. Therefore, if formal service is required by California, then the Convention applies. 

        California, however, permits the parties to waive formal service in favor of an alternative form of service. That’s what the parties did here. Therefore, the Convention does not apply, and service was effective under California law. “Holding that the Convention does not apply when parties have agreed to waive formal service of process in favor of a specified type of notification serves to promote certainty and give effect to the parties’ express intentions.”

I'm Mediating Via Videoconference During The Coronavirus Crisis

Mediating While Social Distancing -- I Am Doing It By Videoconferencing.

            During this difficult public health emergency, we have watched as courthouses have limited intake of cases to emergencies, and lawyers have turned to telecommuting. However, efforts to resolve cases through mediation have continued. I mediate state and federal cases, and I have mediated cases with videoconferencing platforms. The most widely used platform with which many are familiar is Zoom. RingCentralMeetings, which is powered by Zoom, can also be used easily by anyone familiar with Zoom.

        Videoconference mediations can be done efficiently, without traveling by the attorneys, clients, or insurance company representatives. Costs and time are less than with in-person meetings. The technology is flexible, allowing for joint sessions, separate caucuses, screen sharing, chat, and document exchange. Videoconference, like a phone call, can be initiated early during a lawsuit, and it is easy to schedule follow-up sessions. It can be lower-keyed than an in-person confrontation, helping some parties to focus on interests, rather than emotions.

        A number of persons have expressed concern about the security features of Zoom, because they have read about the phenomenon of Zoombombing, where unwanted participants intrude into a Zoom meeting. Zoom has responded to security concerns by enabling the use of passwords and a virtual "Waiting Room" that persons must enter before the meeting host allows them to participate in a meeting.

        While the coronavirus crisis has made videoconferencing a viable alternative to a physical meeting, it seems likely that after the current crisis fades, videoconferencing will become more popular as a means to conduct a mediation.

         If you have questions about mediating by videoconference or setting up a mediation with me, feel free to contact me at:

       (work email): [email protected]        phone: 714.852.6836.

        Take care and stay well,

        Marc Alexander

        

    

Arbitration, Unconscionability: Two Trial Courts Deny Motions To Compel Arbitration, Two Courts Of Appeal Affirm

Elders In Both Cases . . . 

Arbitration And An Elder Abuse Act Case.

        Dougherty v. Roseville Heritage Partners, et al., C087224 (3rd Dist. 3/30/20) (Krause, Murray, Hoch) is another of the many elder care facility cases in which the enforceability of an arbitration clause is at issue. Here, the trial court denied the defendants’ motion to compel arbitration of claims brought on behalf of a 89-year old man, and the Court of Appeal affirmed.

        The arbitration provision was held to be procedurally unconscionable, and a contract of adhesion, because the provision was part of 70 pages of documentation presented to the patient’s daughter at the time of admission, she was hurried, and she conveyed to the facility’s administrator that her father, who was suffering from dementia, had no alternative to the facility. 

        The Court of Appeal also held that the provision was substantively unconscionable because it limited discovery. While a limitation of discovery is not per se substantively unconscionable, the Court explained that it could be where statutory rights were at issue, as with the Elder Abuse Act, which provides for attorney’s fees and costs for a winning plaintiff, and which also requires proof by clear and convincing evidence. 

        The most  important teachings to be gleaned from this case are that a single factor that may not establish unconscionability in all contexts may do so when combined with other factors, and that the denial of discovery where statutory rights are involved may support substantive unconscionability.

Arbitration And A Consumer Case.

        In Dennison v Rosland Capital LLC, B295350 (2/8  4/1/20) (Grimes, Bigelow, Stratton), an 82-year old man, responded to a television ad, eventually purchased nearly $200,000 of gold and silver from Rosland Capital, but allegedly the purchases were worth considerably less than the price paid. The seller moved to compel arbitration, the trial court denied the motion, and the Court of Appeal affirmed.

        The most interesting issue concerned whether there was an effective delegation to an arbitrator of decisions about the scope or applicability of the arbitration agreement, such that the court should have been the decision maker. The Court of Appeal explained that the contract contained a severability clause providing that a court of competent jurisdiction might excise an unconscionable provision. Given that provision, there is no clear and unmistakable delegation of authority to the arbitrator to determine if the provision is unconscionable.

        The seller of precious metals argued that with a lifetime of experience and years in the military, Mr. Dennison could have negotiated the contract. To which the Court of Appeal replied:  “An 82-year-old consumer who calls a telephone number displayed in a television ad to make his first-ever investment in the highly volatile precious metals market, no matter how sophisticated he may be in other matters, cannot reasonably be expected to consider negotiating the terms of a form contract in such tiny print it cannot be read without a magnifying glass.” Besides, in the context of consumer contracts, our Supreme Court has never required a complainant to first show that it tried to negotiate the contract as a prerequisite to establishing unconscionability.