California Mediation and Arbitration

Book Review: Citizen Justice: The Environmental Legacy Of William O. Douglas

Public Advocate And Conservation Champion.

        My book review of the Hon. M. Margaret McKeown's The Environmental Legacy of William O. Douglas Public Advocate and Environmental Champion appears in the April 2024 issue of Los Angeles Lawyer. You can also read the review here:  Download Citizen Justice.

Arbitration, Deadlines, FAA Preemption: California: Friend Or Foe Of Arbitration?

Our Article In The Daily Journal Examines Hohenshelt v. The Superior Court.

        Our article in the April 10, 2024 Daily Journal begins: "The majority and minority opinions in a recent California appellate decision highlight the conflict between California and federal attitudes about arbitration. The case is Dana Hohenshelt v. The The Superior Court of Los Angeles County; Golden State Foods Corp. (real party in interest) (2024) 99 Cal.App.5th 1319.  The majority opinion, authored by Justice Maria Stratton, claims to further the objectives of arbitration. Sharply dissenting, Justice John Shepard Wiley Jr. writes, “Judged by actions, California law over the last few decades . . . has not been a friend of arbitration.”

        The narrow issue raised by the case concerns the application of Cal. Code of Civ. Proc. § 1281.98. This is the provision requiring payment within 30 days of arbitration fees and costs by drafters of arbitration agreements, or else the right to arbitrate is waived, and consumers and employers can then choose to arbitrate or litigate. The majority opinion joins the many California cases that have strictly interpreted the statute, leading to waiver of the right to arbitrate by employers and corporations that miss the due date for payment. The majority opinion claims that the prompt payment requirement furthers the purpose of arbitration, and prevents the abuse of initiating arbitration and leaving it in limbo.

        Justice Wiley, dissenting, lays out the argument that this statute unfairly burdens arbitration agreements more than other contracts. As a result, he concludes that it is preempted by the Federal Arbitration Act. Because preemption relies on the Supremacy Clause, it presents an issue of constitutional significance. Justice Wiley suggests that once again the US Supreme Court will eventually send a message that California law concerning arbitration is preempted by the FAA.

 

 

Settlement: Mediator settlement proposals: a perspective

My Perspective.

        I've written an article about mediator settlement proposals and it is published in the July 2023 issue of Advocate. For my readers interested in the topic, here is a link to the article: Download Alexander-July23-article 

 

PAGA: California Cases In the Wake Of Viking Cruises

We Examine Whether California Cases Are Following Justice Alito's or Justice Sotomayor's Opinion About Standing To Bring PAGA Representative Claims.

        The Daily Journal published a special issue on April 26, 2023, entitled "The Resolution Issue." My article entitled PAGA Arbitration: California Courts in the wake of Viking Cruises, is at p. 20 of the issue. It has been republished on the website of ARC (Alternative Resolution Centers).

        The Viking Cruises opinion required that the plaintiff employee's individual PAGA claim against the cruise line be arbitrated. However, Justice Alito, in the majority opinion, took the position in what is arguably dictum that once individual PAGA claims are referred to arbitration, the plaintiff lacks standing to litigate PAGA representative claims in court. Justice Sotomayor concurred with the majority, but explained that the standing issue was one of state law and California courts might decide that after individual claims are sent to arbitration, the plaintiff still had standing to bring representative PAGA claims in court. California appellate courts have now addressed these issues, and the question of standing to bring representative PAGA claims is pending before the California Supreme Court.

 

Waiver: First District, Div. 2 Applies Federal Rule Governing Waiver Of The Right To Arbitrate

Because The Parties Agreed That The Federal Arbitration Act Applied, Applying The Federal Rule In Morgan v. Sundance, Inc. Was Necessary.

        When the first paragraph of an opinion tells us that the party seeking to compel arbitration waited 19 months to bring a motion to compel arbitration, the court has pretty much telegraphed that one way or another, it will find a waiver of the right to arbitrate. That was the case in Britani Davis v. Shiekh Shoes, LLC, No. A161961 (1/2  10/31/22) (Richman, Miller, Mayfield).

        Basically, the federal rule applied in Davis when determining whether a party has waived its right to arbitrate, because the parties agreed that the Federal Arbitration Act applied to the case. As set forth in Morgan v. Sundance, Inc.,  142 S.Ct. 1708 (2022), the federal rule asks whether the party seeking to compel arbitration has evinced an intent to forego arbitration by acting inconsistently with the right to arbitrate. In contrast, California courts have required a finding of prejudice to the party seeking to avoid arbitration before they will find a waiver of the right to arbitrate. Quach v. California Commerce Club, Inc., 78 Cal.App.5th 470 (2022).

        We now have a situation where, if the Federal Arbitration Act and Morgan apply, a California court will not require a finding of prejudice in order to find a waiver of the right to arbitrate. The FAA can apply if the parties contracted for it to apply, or if interstate commerce is involved. However, if the California Arbitration Act, Quach, and a long line of California cases apply, then prejudice may be determinative to a finding of waiver of the right to arbitrate. The California Supreme Court has accepted a petition for review of Quach, so perhaps we will find out if California will require prejudice in the future in cases where the FAA does not apply, or whether California will conform its case law to the federal rule.

        COMMENT: I have written two recent articles in the Daily Journal about the subject: Waiver of the right to arbitrate revisited (November 3, 2022) and The United States and the California Supreme Courts are not on the same page (June 10, 2022). The links to the article will work if you subscribe to the Daily Journal, which, alas, is behind a paywall.

 

Reviews: Jamal Greene's How Rights Went Wrong

Your Blogger Reviews How Rights Went Wrong: Why Our Obsession With Rights Is Tearing America Apart, by Jamal Greene, with Foreword by Jill Lepore.

        My review of this very interesting book appears in Volume 35, Issue 2 at p. 21 (2022) of The Journal of the Litigation Section of the California Lawyers Association. With the permission of the CLA, and its journal, I have reprinted the review. You can access the reprint by clicking on this link.

Miscellaneous: Attorney Fees: A Potential Malpractice Minefield

We've Authored An Article About Attorney Fees And The Risk Of Malpractice Exposure In The October 2022 Issue Of Orange County Lawyer.

        "Attorney Fees: A Potential Malpractice Minefield," authored by Marc Alexander and appearing in the October 2022 issue of Orange County Lawyer, discusses the "unhappy case" of Shahrokh Mireskandari v. Edwards Wildman Palmer, 77 Cal.App.5th 247 (2022), and its implications for legal malpractice when the risks of attorney fee shifting are (allegedly) not carefully analyzed and disclosed to the client.

        Proving legal malpractice typically follows "the familiar case-within-a case method for establishing causation in litigation malpractice cases." The plaintiff-client needs to establish not only the negligence of the attorney, but also that the client would have won the underlying case but for attorney negligence. Mireskandari, however, is not a typical case, for Mireskandari's malpractice claim did not depend on prevailing in the underlying action. Instead, his malpractice claim depended on being able to prove that the "outcome" would have been better had he received different legal advice, never filed a lawsuit, and never been exposed to the risk of anti-SLAPP attorney fees. 

        The "case-within-a case" method of establishing a malpractice claim is simply an example of a more general principal, namely, that but for attorney negligence, the outcome of a case would have been better for the client. This is not exactly a bright line.

        Perhaps the most important lesson is that a careful attorney will analyze attorney fee issues early in the litigation process, and inform the client of those risks. While this may be easy in a simple case where a contract contains a "prevailing party attorney fees clause," there are numerous situations in which the risk of fee shifting is less obvious. The article describes some attorney fee situations that create a potential malpractice minefield.

Arbitration, Waiver: Your Blogger Has An Article About Waiver Of The Right To Arbitrate In The Daily Journal

The Article Is Entitled "The United States and the California Supreme Courts are not on the same page."

        My article in the June 10, 2022 online edition of the Daily Journal contrasts the analysis of waiver of the right to arbitrate in the SCOTUS case Morgan v. Sundance  (2022) with the analysis in the California Supreme Court case St. Agnes Medical Center v. PacifiCare of California (2003). SCOTUS does not require a showing of prejudice by the party opposing arbitration before the party seeking arbitration can be found to have waived its right to arbitrate [see my 5/24/22 post on Morgan v. Sundance]. The California Supreme Court views the matter differently. In 2003, the St. Agnes court endorsed federal cases requiring a finding of prejudice before there could be a waiver of the right to arbitrate. That is no longer the case after Morgan v. Sundance. Time to rethink the matter?

        Viewing the article online requires a subscription the Daily Journal.

Miscellaneous: Podcast Interview Of Marc Alexander And Mike Hensley On Subject Of California Attorney's Fees

California Appellate Law Podcast.

         My colleague Mike Hensley and I have published the California Attorney's Fees Blog since 2008. Tim Kowal and Jeff Lewis, the creators of the California Appellate Law Podcast, recently interviewed us on their podcast. Here's a link to the interview on Tim and Jeff's podcast. Thanks, Tim and Jeff, for the opportunity to participate on your excellent podcast. Our interview is the 28th episode on the podcast.

Miscellaneous: On The Exchange Of Briefs In Mediation

Recommended Reading: "Exchanging mediation briefs: the simplest path to success".

        Mediators often urge that counsel exchange mediation briefs, but an actual exchange seems more to be the exception than the rule. Mediator Robert M. Cohen has a column in the May 24,  2022 Daily Journal advocating for the exchange of briefs in mediation. In a nutshell, his argument is that great communication is the key to successful mediation, and exchanging briefs is the simplest way to further great communication. I have provided a  link to the article. The Daily Journal is behind a  paywall, but readers with access and an interest in mediation will benefit by reading his column.

        As a mediator, I acknowledge that the process is voluntary and I can't compel attorneys to exchange briefs. But I also urge the exchange of briefs, with the proviso that information that is truly confidential and not to be shared with the other side can be removed from the brief and still shared with the mediator. I also ask that the attorneys discuss whether they will exchange briefs, because I hope to avoid a situation in which one attorney provides a brief to the opposing attorney, and the opposing attorney does not  reciprocate. In such circumstances, the attorney providing the brief may feel ambushed. However, an attorney who believes the client's position is strong may choose to unilaterally provide a brief to the other  side, and the failure of an attorney to reciprocate is sometimes perceived as a sign of weakness.