California Mediation and Arbitration

Arbitrability, Delegation: When Two Arbitration Contracts Conflict, Court Decides Which One Supersedes The Other

The Supreme Court Does Not Decide Whether The Ninth Circuit's Decision Was Correct, Only Whether The Decision Was For The Court To Make.

        The parties "had executed two contracts: the User Agreement, which sent disputes about arbitrability to arbitration, and the Official Rules, which appeared to send disputes to California courts." Coinbase, Inc. v. Suski, No. 22-3 (S. Ct. 5/23/24). The Official Rules governed a sweepstakes to enter for a chance to win Dogecoin, and in fact, respondents had entered the sweepstakes. The Ninth Circuit held that the Official Rules, which sent disputes to California courts, superseded the User Agreement which would have delegated arbitration and arbitrability matters to an arbitrator. The United States Supreme Court affirmed.

        However, the Supreme Court ruling is narrow. It does not decide whether the Ninth Circuit was correct. Rather, as Justice Ketanji Brown Jackson explains, "We granted certiorari to answer the question of who—a judge or an arbitrator—should decide whether a subsequent contract supersedes an earlier arbitration agreement that contains a delegation clause." All the Supreme Court decides is that in a case where there are multiple agreements that conflict over whether the dispute is to be arbitrated, a court decides which agreement prevails.

        Justice Neil Gorsuch concurred with the understanding that the Court was not deciding whether the Ninth Circuit was applying contract principles correctly.

Stay: US Supreme Court Holds That Stay Means Stay

Overruling A Ninth Circuit Decision (62 F.4th 1201 (2023).

        Though the plain language of the Federal Arbitration Act appeared to require a district court to stay a lawsuit pending arbitration rather than dismiss it, the Ninth Circuit ruled that case law allowed district courts to dismiss the lawsuit when all claims are subject to arbitration. The Supreme Court reversed in Smith v. Spizzirri, no. 22-1218 (5/16/2024). Justice Sonia Sotomayor penned the Court's unanimous opinion, writing: "Just as 'shall' means 'shall,' 'stay' means 'stay.'"

Legislation: SB 1141 Would Raise Amount For Court-Ordered Mediation; AB 1903 Will Assist International Commercial Arbitration

Mediation.

        Generally, we have little to say on our ADR blog about mediation, because key issues, such as the scope of confidentiality, are settled law. But there is a noteworthy Senate Bill, SB 1141 which, when it passes through all legislative hoops, will impact mediation. Currently, the superior courts cannot order a matter to mediation if the amount in controversy exceeds $50,000. SB 1141, which passed in the Senate Judiciary Committee 11-0, would raise the amount in controversy to $150,000.

        Shout-out to Ellie Vilendrer, an Orange County ADR neutral and state and federal court panel mediator, who has been a forceful proponent of this legislation.

Arbitration.

        AB 1903 will be a welcome addition to the arbitration framework in international commercial disputes. The current framework provides that arbitration agreements can be found in various written agreements. The proposed legislation provides an arbitration agreement can be contained in an exchange of electronic mail or in an electronic communication if the information contained is accessible so as to be usable for subsequent reference. Additionally, the bill clarifies the meaning interim measures of protection that an arbitral tribunal can issue before a final award. AB 1903, which has passed the Assembly and the Senate, awaits the Governor's signature.