California Mediation and Arbitration

Prompt Payment: Along With Other Courts, 1st District Div. 3 Strictly Interprets Statutory Prompt Payment Requirement For Employer Wanting To Arbitrate

The Payment Must Be Received By The Arbitrator Within 30 Days Of When It Was Due.

        September 1, 20221 was the “due date” for the employer in a sexual harassment dispute to pay arbitration fees and costs to the arbitrator, making payment due October 3. Cal. Code of Civ. Proc., § 1281.98(a)(1). The employer mailed the check on September 30, and it was received on October 5, two days after the 30 day grace period expired. That was good enough for the superior order, which issued an order compelling arbitration, but not good enough for the Court of Appeal. "We do not find that the proverbial check in the mail constitutes payment and agree with petitioner that real parties’ payment, received more than 30 days after the due date established by the arbitrator, was untimely." Jane Doe v. The Superior Court of the City and County of San Francisco, Respondent, and Na Hoku, Inc., et al, Real Parties in Interest, A167105 (1/3  9/8/23) (Petrou, Tucker, Fujisaki).

        What can one say? Almost doesn't count? Close but no cigar? How about: close only counts in horseshoes.

        We have now posted a number of times that California courts have been real sticklers about strictly interpreting the 30 day requirement in § 1281.98. See posts of  7/10/23,  8/1/22, 12/11/22, 1/2/23, 3/21/23. Employers who do not comply with the requirement risk ending up outside arbitration and inside court.

 

Celebrities: Senator Dianne Feinstein's Family Dispute Goes To Mediation

The Judge says, "I'm looking for a global outcome if we can get it."

        It is painful to watch Senator Dianne Feinstein in the dusk of her long and distinguished career of public service, mired in a family lawsuit in which she is represented by her daughter former San Francisco judge Katherine Feinstein, acting as her trustee. Earlier in August, when Senator Feinstein's cognitive abilities were being questioned, CBS News reported that Senator Feinstein had turned over power of attorney to her daughter.

        As reported by the NYT on 9/11/23, the dispute pits the three children of Senator Feinstein's late husband, investor Richard C. Blum, against Senator Feinstein and Katherine Feinstein. At issue are the sale of a vacation home in Stinson Beach, the use of the assets of Blum's estate for payment of Senator Feinstein's medical expenses, and a request to appoint Katherine Feinstein as a trustee of the Blum estate. 

        The trustees of Blum's estate claim that Senator Feinstein has "$1 million in annual income, a quarterly $125,000 disbursement from another of her late husband’s trusts, and a net worth of more than $50 million." Senator Feinstein's trustee claims that Blum's trust is being manipulated to maximize his daughters' inheritance. Whatever the outcome, it appears that Senator Feinstein will not be left destitute.

        With the consent of the parties, the dispute will be mediated. Mediation is definitely the best way to resolve a family dispute such as this. What high profile public person -- indeed, what person -- would want to air family acrimony before the wide public? Mediation offers the parties the opportunity to resolve their dispute globally and in private. Hopefully they will not squander that opportunity.

 

Automobiles, Nonsignatories: Hyundai Is Unable To Piggback Onto Dealership's Arbitration Agreement

California Court of Appeal, 3rd District, Disagrees With California Court of Appeal, 3rd District.

        A Third District California Court of Appeal panel composed of Justices Renner, Earl, and Hull, disagrees with an earlier Third District panel composed of Justices Hoch, Robie, and Murray. The issue is whether an automobile manufacturer can rely on an arbitration agreement between a dealership and a customer to compel the customer to arbitrate a breach of warranty claim with the nonsignatory automobile manufacturer. The earlier case, Dina C. Felisilda et al., v. FCA US LLC, 53 Cal.App.5th 486 (2020), held that the manufacturer could rely, because the customer had to rely on the contract with the dealer to sue the manufacturer. We posted about the Felisilda case on 8/29/20.

        In light of developing case law, Justice Renner, writing for the court, disagrees with Felisilda. The customer's claim that the manufacturer breached its warranty does not rely on the customer's contract with the dealership. The manufacturer's warranty is not part of the dealership contract. Mark Kielar v. Superior Ct. of Placer County (Hyundai Motor America, Real Party in Interest), C096773 (3rd Dist. 8/16/23).

PAGA: California Courts Will Now Hold PAGA Plaintiffs Arbitrating Their Claims Have Standing To Litigate Representative Claims Of Others

The Issue Was Resolved By The California Supreme Court In July 2023, And Lower Courts Are In-Step.

        Earlier this year the California Supreme Court addressed the following question: "[W]hether an aggrieved employee who has been compelled to arbitrate claims under PAGA that are 'premised on Labor Code violations actually sustained by' the plaintiff . . . maintains statutory standing to pursue 'PAGA claims arising out of events involving other employees' . . . in court." The Court held that the answer is "yes". Adolph v. Uber Technologies, Inc., S274671 (Cal. Sup. Ct. 7/17/23) (Liu; Guerrero, Corrigan, Kruger, Groban, Jenkins, Evans).

        This conclusion is contrary to the explanation provided by Justice Samuel Alito writing for the majority in Viking River Cruises, Inc. v. Moriana. Alito opined that once the individual PAGA plaintiff was compelled to arbitrate individual claims, the plaintiff lacked standing to litigate representative PAGA claims. However, Justice Liu explained that the California Supreme Court, in accord with Justice Sonia Sotomayor's concurrence in Viking River Cruises, was the final interpreter of a California statute. He concluded that under the California PAGA statutory framework, the individual PAGA plaintiff had standing to bring representative claims.

        The latest California case recognizing that Adolph has resolved the representative standing issue for now is Barrera v. Apple American Group LLC, A165445  (1/2  8/31/23). 

        In a Daily Journal article earlier this year I presented the disagreement between the California courts and the US Supreme Court regarding standing of an individual PAGA plaintiff to pursue representative claims. Though I resisted the temptation to guess how the California Supreme Court would rule on the issue, I am not in the least bit surprised by the result.