California Mediation and Arbitration

Arbitration, Deadlines, Vacatur, Jurisdiction: Request To Vacate Award Made More Than 100 Days After Service Of Award Is Too Late, And Defective Service Of Award Is Not Jurisdictional

Court of Appeal Distinguishes Between Service For Purposes Of Notice And Service For Purposes Of Jurisdiction.

     Claimants appealed a judgment entered after the trial court granted the petition of insurer GEICO to confirm an award in its favor in an uninsured motorist case where there were questions about coverage.  GEICO General Ins. Co. v. Schroeder, D068203 (4/1 May 31, 2016) (McDonald, Nares, Prager) (unpublished).  Unfortunately for the claimants/appellants, they waited more than 100 days after service of the signed award to seek vacation of the award in the superior court.  The statutory scheme requires the court to confirm the award as made unless it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.  So end of story.  Well, not quite.

     Claimants argued that the award had been defectively served.  In fact, Cal. Code Civ. Proc., section 1283.6, requires the arbitrator to “serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.”  That wasn’t done here.

      The Court, however, held that the defect in service was not jurisdictional, distinguishing service of the motion to vacate from service of the award itself.  The purpose of service of the award is to confer notice, and Claimants did not contend that they did not get notice, or that they were prejudiced by defective service.  In contrast, service of a motion to vacate must be done according to statute, because the court only acquires jurisdiction to vacate on proper service.  “Claimants conflate notice with service of process,” wrote the Court, adding, “but the two requirements are distinct.”

     Affirmed.

Arbitration: Deadlines, Waiver, Scope, Employment, Enforceability, FINRA, Arbitrability -- An Assortment Of Recent (Unpublished) Arbitration Cases And Issues

 

Deadlines:  Lombard Knight v. Rainstorm Pictures, Inc., B253246 (2/1 March 25, 2015).

     In this case involving agreements to finance the production of motion pictures, Plaintiff sought to “confirm” a multi-million dollar arbitration award, while also asking to dismiss individuals, on the grounds that they had not been properly served, and jurisdiction over them was lacking.  The superior court refused to dismiss the individual plaintiffs, who appealed.  Unfortunately for the individuals, their petition to “confirm” was too late.  The Court of Appeal treated the petition to the superior court judge as one to vacate or correct an award, which must be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.  Plaintiffs blew that deadline.  The opinion was penned by Judge Bendix, assigned to the Court of Appeal case.

     Perhaps the most interesting issue was one addressed by the trial court.  That trial court ruled, as “an issue of first impression,” that the Hague Service Convention did not apply to private arbitration. 

Waiver:: Achterkirchen v. Montiel, A140277 (1/1 March 24, 2015).

     In a dispute among tenants in common, the trial court entered a judgment confirming an award against Montiel, who then appealed.  Montiel contended that various procedural requirements had not been satisfied, as a result of which the other parties had waived their right to arbitrate – and that waiver should have been decided by a court, not an arbitrator.

    Writing for the Court, Justice Margulies explains that ordinarily the court decides waiver issues because, “the doctrine of arbitration waiver is ordinarily one of general application governed by the common law.”  But that was not the case here, where waiver depended on whether procedural requirements had been satisfied under the specific language of the arbitration agreement –  subject matter within the jurisdiction of the arbitrator.  Judgment affirmed.

Scope:  Arbitration Disposed of Employer’s Equitable Claims.  Vista International Insurance Brokers v. Bernstein, B247681 (2/3 March 24, 2015).

     Bernstein, “a successful insurance broker”, obtained a monetary award in arbitration against her former employer.  The trial judge entered judgment confirming the award, but excluded Vista’s claim for an injunction against its former employee from the judgment.  Both sides appealed.

    The Court of Appeal affirmed the judgment in favor of Bernstein, but reversed the judgment to the extent it it not dispose of the the equitable claims against Bernstein.  The Court of Appeal rejected employer’s argument that equitable claims were excluding from the entry of judgment, reading the exclusion in the arbitration agreement narrowly.  The employer had the right to equitable relief “to immediately obtain an injunction from a court” – for example, prior to the appointment of an arbitrator, where an employer would have no place to seek relief but in a court of law.  However, the employer did not avail itself of that opportunity.  Therefore, when the arbitrator entered the award in favor of Bernstein, the arbitrator effectively decided the entire dispute, as immediate equitable relief was no longer an issue. Justice Kitching is the author of this opinion.

Employment, Enforceability, FINRA::  Riley v. Morgan Stanley Wealth Management and Emma Bridges, B256177 (2/6 March 23, 2015).

     Morgan Stanley and Bridges appealed from an order denying their motion to compel arbitration of eight statutory causes of action relating to Plaintiff Riley’s allegations that she was subjected to sexual harassment by her female supervisor.  The trial court also required that causes of action nine through fifteen, which were non-statutory causes of action, be arbitrated, and that the Riley’s lawsuit be stayed pending arbitration.

      Riley had entered into arbitration agreements with Morgan Stanley in a Financial Industry Regulatory Authority (FINRA) Submission Agreement, and in promissory notes for low-interest loans she received from her employer.  However, the Court of Appeal agreed that the arbitration agreements, as worded, did not require employment discrimination claims in violation of statute be arbitrated.  The non-statutory claims, however, properly belonged in arbitration. 

      As an affirmative defense in arbitration, Riley had alleged that her FEHA claims in her civil action were a defense to Morgan Stanley’s claim in arbitration on the notes.  However, she abandoned that defense, leaving the statutory claims to be litigated, and the non-statutory issues to be arbitrated.  Judgment affirmed.  Justice Yegan authored the opinion.

       Query whether abandonment of the defense that sexual harassment resulted in constructive termination, and acceleration of her notes, will prove to be a problem for the employee down the road.

Employment, Class Action, Unconscionability:  Valdez v. Santa Lucia Preserve Company, H040685 (District 6   March 23, 2015).

     Plaintiffs filed a putative class action complaint alleging wage and other claims against their former employer.  The trial court denied employer’s motion to compel arbitration on the grounds that the arbitration agreements were unconscionable.  However, the Court of Appeal reversed, holding that the arbitration agreements were not substantively unconscionable, in an opinion written by Justice Bamattre-Manoukian. 

     The most interesting part of the opinion concerns limiting review in FEHA cases.  Because the plaintiffs’ complaint involved unwaivable statutory rights, their arbitration was subject to minimal requirements set forth in Armendariz, including a written arbitration decision and judicial review sufficient to ensure the arbitrators comply with the requirements of the statute.  However, the Court of Appeal did not view the arbitration agreements as limiting judicial review.  Thus, references in the agreement to “limited review” of an arbitration award and to the award not being “overturned even if it is incorrect legally or factually,” are described by the Court as “merely attempts to inform the employee about the legal effect of the arbitration agreement in general, without attempting to unlawfully limit judicial review available . . . “

Employment, Arbitrability:  City of Colton v. Guerrero, E058346 (4/2 March 12, 2015).

     A police officer appealed an order denying his motion to compel arbitration with the City of Colton over an employment dispute with the City.  Judgment was entered denying his petition for arbitration and enjoining him from pursuing arbitration against the City.  The Court of Appeal affirmed.  Because Officer Guerrero was not a permanent employee, he was subject to a probationary period, during which period he was not entitled to arbitration of his grievance under a Memorandum of Understanding between the City and the police officers’ association.  Justice McKinster authored the opinion. 

    

 

Arbitration, Deadlines, Vacatur: Court of Appeal Rejects Carrier’s Argument That Arbitrator Exceeded Her Powers And That Award Was Untimely.

 

    Lanois v. Employers Fire Insurance Company, Case No. B251403 (2/1 Jan. 9, 2015) (Chaney, Rothschild, Johnson) (unpublished) involved an underinsured motorist insurance carrier’s challenge to an arbitration award, on the grounds that the award was rendered untimely, and that the arbitrator exceeded her powers by adding interest to a 950K award, after the parties had agreed that the insurer’s liability for damages under its policy could not exceed 950K.  The trial court disagreed with the carrier, confirming the award and denying the carrier’s motion to vacate.  The carrier appealed – unsuccessfully.

     The carrier’s policy was for $1M.  However, because the plaintiffs had already been paid $50K under another policy, the parties agreed the maximum liability the arbitrator could award under the underinsured motorist policy was $950K.  The arbitrator awarded $1M in an award on November 8, 2012, and subsequently corrected the award to $950K, adding pre-judgment interest from November 8, 2012.

     First, regarding the carrier’s contention the arbitrator could not add interest on top of the 950K award, the Court held:  “Neither Insurance Code section 11580.2, subdivision (p)(4), nor any provision in the insurance policy precludes plaintiffs’ recovery of prejudgment interest because, when added to the liability damages award (which does not exceed the policy limit), plaintiffs’ total recovery exceeds Employers’ maximum liability under the policy.”  So the interest award was not improper.

     Second, the carrier contended the initial November 8, 2012 award, an Interim Binding Arbitration Award, resolved the liability incorrectly, and then the arbitrator exceeded her powers by waiting more than 30 days to correct the amount to $950K.  The Court of Appeal disagreed, pointing out that the arbitrator’s time to correct did not run from the interim award, particularly so here, because there was evidence that other issues remained open at the time of the initial reward, as a result of which the final binding award could be issued later.

Arbitration/Deadlines/Correction: Arbitrator Did Not Exceed Powers By Awarding Post-Termination Royalties After License Agreement Ended And Appellant Missed Deadline To Seek Correction Of Award

Post-Termination Of License Royalties Were Part Of $128.3M Arbitration Award.

     In Amkor Technology, Inc. v. Tessera, Inc., A139596 (1/3 Nov. 25, 2014) (Pollak, Siggins, Jenkins) (unpublished), the Court of Appeal affirmed part of a larger arbitration award for $128.3M.

    Procedural hurdle. 

     Appellant Amkor stumbled on a procedural hurdle:  Its petition to correct the award was untimely.  A petition to correct an award must be served and filed not later than 100 days after the date of the service of a signed copy.  Cal. Code Civ. Proc., section 1288.  Amkor’s problem was that it appealed 236 days after “Partial Award No. 3” – the award that it was attacking.  Amkor argued a new 100-day period ran when the arbitration panel issued an addendum to the “partial award.”  Amkor’s petition, however, did not seek to correct the addendum, which addendum was not even attached to the petition.  The critical issue, concerning damages, had been decided in the earlier Partial Award No. 3, and subsequent briefing and the addendum merely confirmed the award. 

     COMMENT:  When in doubt, appeal an original “partial award”, and a later award.  Better safe than sorry.  And “superfluity does not vitiate.”  (Maxim of Equity).

     Substantive hurdle. 

     Amkor argued the arbitration panel exceeded its powers by awarding royalties for the continued use of a patent after Tessera terminated the license agreement with its licensee Amkor.  (There was no question Tessera could recover royalties for the period after Amkor breached and before Tessera terminated the license).  Amkor further argued another lawsuit for patent infringement would be necessary to recover damages after the license agreement terminated, because once Tessera elected to terminate the license agreement upon Amkor’s breach, the obligation to pay future royalties ceased.

     Relying on broad language in the arbitration clause, and the equitable powers of the arbitrator, the Court of Appeal concluded the license agreement contemplated the licensee would not continue to use the patented technology after the license expired and the arbitrator did have the authority to award royalties for the “improper use of patented technology.”  Thus, the remedy was authorized by California law, and if there was an error of law, it was not a basis for holding the arbitration panel exceeded its authority.

     COMMENT:  At the end of the opinion, the Court states:  “The court did not select a remedy not authorized by California law.  Whether the court made an error of law in awarding royalties in this particular case is precisely the type of analysis prohibited under section 1286.6.”  (italics added).  Query whether the Court of Appeal meant to refer to the “arbitrator” rather than to the “court”?  Arbitrators do not exceed their powers, “merely by erroneously deciding a contested issue of law or fact.”  Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362, 366 (1994).

Mandatory Fee Arbitration Act/Deadlines/Standard of Review

Failure To Observe 30-Day Deadline To File Rejection Or Request Trial Tubes Appeal

    Rothman v. Deshay, Case No. B245075 (2nd Dist. Div. 4 May 13, 2014) (Epstein, Manella, Edmon) (unpublished) is a Court of Appeal case that has its genesis in mandatory fee arbitration between attorney Rothman and client Deshay.  Though unpublished, the case has some worthwhile lessons for clients and attorneys engaged in fee arbitration.

    First, the review of a judgment confirming an arbitration award – like the review of arbitration awards in general – will be limited.  The award won’t be subject to judicial review except on the grounds set forth in Code of Civ. Proc. sections 1286.2 (to vacate) and 1286.6 (for correction).

     Second, even though elective arbitration before the County Bar may seem informal, there is a strict 30-day deadline to challenge the award by filing a rejection and request for trial.  Bus. & Prof. Code section 6203(b).  Here, the appellant failed to observe the 30-day deadline, and that tanked, tubed, torpedoed, and doomed the appeal.

     Third, a party needs to be careful about whom they say they represent in arbitration.  Appellant contended that the arbitration award was invalid because it only bound Deshay, and failed to bind other affiliated parties in the dispute.  Despite some confusion in the record, however, appellant had written earlier to the arbitrators and the court to clarify he sought arbitration on behalf of all appellants who were affiliated with him.  “Under these circumstances, the arbitration award bound appellants referenced in respondent’s underlying complaint, Deshay’s letter to the arbitrators and the court, and the ‘et al’ reference in their request for arbitration.”

     Fourth, the opinion discusses whether the trial court erred by denying a motion for leave to file a cross-complaint.  Deshay wanted to file a cross-complaint for malpractice.  The MFAA prohibits clients from raising malpractice claims during the arbitration, except insofar as the claim bears upon fees.  Here, the trial court denied appellant’s motion for leave to file a cross-complaint (i) because it was untimely; and (ii) because the malpractice issues, though they could not have been raised affirmatively as a cross complaint in MFAA arbitration, should have been raised defensively. 

      Fifth and finally, the case discusses whether the attorney was entitled to recover fees under Trope v. Katz, 11 Cal. 4th 274 (1995) (holding that an attorney who chooses to litigate his own case cannot recover fees under Civ. Code section 1717).  Here, attorney Rothman was entitled to recover, because he employed independent contractors.  For further discussion of the attorney’s fees aspect of the case, see the May 14, 2014 blawg post on California Attorney’s Fees.

Arbitration/Vacatur/Deadlines: Too Late To Correct Arbitrator’s Award In High-Low Arbitration, Appellant Could Still Enforce “High-Low” Limit To The Award With Motion Requiring A Satisfaction Of Judgment

Once Again, Fourth Appellate District Demonstrates That Often There’s More Than One Way To Skin A Cat Where Arbitration Deadlines Are Involved

     Cats.  1927.  Library of Congress.

     On April 4, 2014, we posted about the way a plaintiff found to get around a deadline in arbitration:  after the time ran out to modify an arbitration award, the plaintiff was able to amend a judgment to add another party as a “successor corporation.”  Butler v. Lyons & Wolivar, Inc., Case No. G04766 (4th Dist. Div. 3 March 3, 2014) (Fybel, Rylaarsdam, Aronson) (unpublished).  As our next case also  demonstrates, when it is a matter of an arbitration deadline, often, “there’s more than one way to skin a cat.”    Horath v. Hess, D063124; D063709 (4th Dist. Div. 1 April 10, 2014) (McDonald, Huffman, McIntyre).  

     In Case No. D063124, Horath and Hess submitted to “high-low arbitration.”  In such arbitration, the parties privately agree, without informing the arbitrator, on a “high-low” range to the arbitration award.  In this case, the parties agreed that Plaintiff Horath would accept the award of the arbitrator or $100,000, whichever was less, but in no event less than $44,000.  The arbitrator awarded $329,644.61 in damages, and $36,882.61 in costs – far outside the “high-low” range. 

     Let’s pause for a moment to contemplate the resulting tensions.  On the one hand, an award so far outside the “high-low” range might incline a judge to find a way around the stipulation.  On the other hand, a deal is a deal.  Despite the stipulation, the trial judge confirmed the arbitrator’s award – and the Court of Appeal reversed.

     The problem for defendant Hess in the trial court was that he encountered the 100-day deadline to move to vacate or correct an award (Cal. Code of Civ. Proc., sections 1288 and 1288.2), after filing his motion to limit the judgment amount to $100,000:  Hess filed his motion more than 100 days after the date of the award.  Plaintiff Horath opposed Hess’s motion, arguing that it was a motion to “correct” the award, and as such, was untimely.  Agreeing with plaintiff, the trial judge confirmed the award, and denied as untimely a motion to vacate it or correct it to conform with the “high-low stipulation”.  Defendant Hess’s motion for reconsideration, brought under section 473, was also denied.

     In Case No. D063709, Hess filed a motion for acknowledgment of satisfaction of the judgment, arguing he had paid Horath $100,000 plus costs, and was therefore entitled to a satisfaction pursuant to the terms of the “high-low” stipulation and section 724.050.  The trial court also denied this motion.

      In the consolidated appeal of the two cases, the Court of Appeal concluded that the trial court erroneously denied the section 724.050 motion for acknowledgment of satisfaction of judgment, because the terms of the stipulation and the intent of the parties to submit to “high-low” arbitration was clear.  Furthermore, no term could be implied in the stipulation that the defendant was required to seek enforcement of the “high-low” provision by the arbitrator, who didn’t even know about the stipulation, or that defendant had to move to vacate or correct the award or respond to a petition to confirm the award.

       The motion to obtain acknowledgment of the satisfaction provided a clear route for enforcement of the stipulation that did not require vacation or correction of the award.  Therefore, the Court of Appeal affirmed the judgment, but reversed the post-judgment order denying Hess’s section 724.050 motion for acknowledgment of satisfaction of judgment.

Arbitration/Deadline/Delegation/Vacatur: Fourth District, Div. 1 Affirms Trial Court’s Order Denying Plaintiffs’ Motion To Vacate Award Because Parties Agreed Arbitrators Could Decide Whether The Arbitration Was Timely -- Or Not

Arbitrators Acted Within Their Powers, So It Didn’t Change Results Even If They Erred

     In the underlying dispute, Plaintiffs obtained a substantial award of $150,000 compensatory and $302,784 in punitive damages, blown out when the Court of Appeal ruled that the dispute, related to lease provisions, was subject to arbitration.  Defendants then moved, successfully, to compel arbitration, and the trial court set a date of November 24, 2010 as a deadline to complete arbitration.  After November 24, 2010,  Plaintiffs made a demand to the AAA for arbitration, and Defendants successfully argued to the arbitrators that the demand was untimely.  After the trial court denied Plaintiffs’ motion to correct or vacate the arbitration award, Plaintiffs appealed. P.O.P. v. Onie O. Lively, D063550 (4th Dist. Div. 1 March 8, 2014) (Benke, Haller, McIntyre) (unpublished).

     The issue as to whether the deadline to arbitrate should have been extended arose because Cal. Code of Civ. Proc. section 1283.8 permits a trial court to set a deadline to arbitrate where the agreement to arbitrate does not set a deadline, whereas the AAA rule at the time the arbitration was pending set its own deadline for rendering a decision, typically thirty days from the date of closing the hearing.  If arbitration could be compelled, as it was, then arguably the trial court lacked jurisdiction to set a deadline.

     The Court of Appeal chose the path of least resistance:  because the record showed the parties agreed the arbitrators could decide whether the arbitration was timely, the arbitrators acted within their powers when they decided the issue.  Whether the arbitrators erred was not an issued that even had to be decided, because if the arbitrators acted within their powers, then a mere mistake of law or fact was not reviewable by the trial court.

      The result must have come as a double blow to Plaintiffs/Appellants, who won the underlying dispute, saw the judgment in their favor reversed, and then failed to initiate a timely arbitration.  It happens.

Arbitration/Deadlines: After Time Ran Out To Modify Arbitration Award, Plaintiff Could Still Seek To Amend Judgment To Add Additional Party

Plaintiff Finds Way Around JAMS Deadline

     The next case illustrates the fundamental point that an arbitration award is not the same as a judgment, and that even after the time has expired under the governing arbitration rules to amend the award, it may still be possible to amend the judgment confirming the award.  Butler v. Lyons & Wolivar, Inc., Case No. G04766 (4th Dist. Div. 3 March 3, 2014) (Fybel, Rylaarsdam, Aronson) (unpublished).

     Plaintiff Butler arbitrated with his franchisor, the investigation firm Lyons & Wolivar Investigatins (Lyons), obtaining a net award of $512,244.67 against Lyons.  So far, pretty good for Plaintiff.  But when Plaintiff petitioned to confirm the arbitration award against both Lyons and its successor corporation, LWI, Inc. (LWI), the trial court refused to confirm the award against LWI, because the award only named Lyons.

     So Plaintiff went back to the arbitrator to seek “clarification” that the award included LWI.  Now the deadline in JAMS Rule 24 kicked in:  the arbitrator had lost any power to modify the Final Award, because that award was more than 30 days old.

      California Rule of Civil Procedure, section 187 came to the rescue:  “Under section 187, the court has the authority to amend a judgment to add additional judgment debtors.”  NEC Electronics Inc. v. Hurt, 208 Cal.App.3d 772, 778 (1989).

      The Court of Appeal complimented Defendants for correctly setting forth “the law regarding judicial review of arbitration awards.”  But then the Court retracted its compliment by pointing out that judicial review of an arbitration award is not the same as judicial review of a judgment – and here, the only issue was the correctness of the trial court’s order amending the judgment. 

     Judgment affirmed – also affirming the adage that “there’s more than one way to skin a cat.”

Arbitration/Deadlines: Fourth District, Div. 3 Affirms Order Dismissing Petition To Vacate Arbitration Award, Holding 100 Day Deadline Is Jurisdictional

Petition Was Filed In Time, But Not Properly Served In Time

     Condo owners with 70-year lease terms were subject to a readjustment of monthly rental after 30 1/2 years.   The owners arbitrated the rental readjustment with their lessor, and the outcome was devastating (from the owners’ perspective):  a 27-fold increase in average lease payments, and retroactive lease payments of between $70K and $90K.  After the trial court dismissed the owners’ petition to vacate the arbitration award, because the owners had failed to petition to vacate within 100 days of service of the award, an appeal followed.  Abers v. Rohrs, Case No. G047034 (4th Dist. Div. 3 filed 6/13/13, pub. 7/15/13) (Rylaarsdam, Acting P.J., author 3:0)

     Here’s where the owners went sideways.  For strategic reasons, they filed their petition under a case number different from the still-pending declaratory relief case number.  Apparently, they timely filed their petition within the 100 day deadline, but served it by mail in the new proceeding.  Because the respondents had not yet appeared in the new proceeding, service by mail was insufficient to confer jurisdiction on the court.

     True, the lease provisions provided for service of notice  by mail.  But unfortunately for the owners, notice is not the same as service of process, as required by statute. 

     Nor was relief available under under Cal. Code Civ. Proc., section 473(b), providing the court with discretionary power to relieve a party from the consequences of mistake, inadvertence, surprise, or excusable neglect.  Section 473 was inapplicable, because the trial court’s jurisdiction had expired.

     Affirmed. 

Ninth Circuit Alphabet Soup Of Acronyms Yields Tidbits Regarding Arbitration In Regulatory Context

 

Watch Deadlines And Exhaustion Requirements And Hope That It Works Out . . .

     The next case would be even more impenetrable without the helpful glossary of 15 acronyms at the end. Some of our favorites: CMRS (Commercial Mobile Radio Service), DTMF (Dual Tone Multi-Frequency signaling), LEC (Local Exchange Carrier), ILEC (Incumbent Local Exchange Carrier), PUC (Oregon Public Utility Commission),Wink-start MF (Wink-start Multi Frequency signaling). Yes, Dear Reader, we are in the land of telecommunications regulation. Western Radio Services Co. v. Qwest Corporation, et al., No. 10-35820 (9^th Cir. March 15, 2012) (Opinion byJudge Ebel) (for publication).

     Plaintiff-Appellant Western is a CMRS (hey, we just told you what that means). Defendant-Appellee Qwest is an LEC. The case arose between two telecommunications carriers over their ICA.

     The Ninth Circuit affirmed the district court’s dismissal of Western’s claim for Qwest’s alleged failure to negotiate an ICA in good faith. Regarding a challenge to the district court’s decision affirming an order of the PUC, which order adopted results of arbitration leading to the ICA and the approval of the ICA, the Ninth Circuit affirmed in part and denied in part.

     What are the tidbits concerning arbitration?

     First, the regulatory scheme results in a complex process in which arbitration plays an important part. The carriers are required to negotiate in good faith, if they cannot agree (“Mommy, Jimmy won’t share”) they arbitrate, the arbitrator files a decision with the PUC, if the PUC adopts the arbitrator’s decision, the carrier submits an ICA to the PUC in compliance with the decision, objections can be made, and at some point, when all the steps of the administrative process are exhausted, there can be judicial review of the PUC’s decision. This is actually an incomplete summary of the complete process of review and remand that occurred here.

     The factual findings of the PUC’s decision adopting the arbitrator’s decision will be reviewed under an “arbitrary and capricious standard.”

     Administrative procedures present fiendish issues of exhaustion of remedies and narrow deadlines. The words bramble bush, maze, quicksand, and land mine spring to mind. Alas for Western, the Telecommunications Act provides “a strict window of time for the submission of a petition for arbitration: ‘the 135th to the 160^th day (inclusive) after the date on which [a carrier] receives a request for negotiation under this section. . . .’” This deadline tripped up Western on one of its issues – Qwest’s alleged failure to negotiate in good faith.

     Western submitted two petitions for arbitration. The first submission failed to properly identify Qwest’s failure to negotiate in good faith as an “open issue.” After the ICA had already been approved by the PUC, Western submitted a second petition.

     But Western could not rely on the second petition for arbitration. Why?