After Cal Sup Ct Finds Provisions Unconscionable, Cal Ct Of Appeal Says Provisions Can’t Be Severed
Ramirez v. Charter Communications, Inc. (Ramirez III), (2025).
We previously posted on September 28, 2024, about the California Supreme Court’s Ramirez v. Charter Communications 2024 decision addressing unconscionability and severability in employment arbitration agreements, in which the California Supreme Court agreed that various provisions in an arbitration agreement were unconscionable, but remanded to determine whether the provisions could be severed.Â
On remand, the Second District Court of Appeal held that the multiple unconscionable provisions in Charter’s arbitration agreement so permeated the contract that they could not be severed, and the agreement was therefore unenforceable in its entirety. 108 Cal.App.5th 1297 (Cal. App. 2d Dist.).
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Unconscionable But Severable
Vacatur, Standard of Review: Federal Courts Have Extremely Limited Authority To Vacate Arb Awards
The Ninth Circuit affirmed the district court’s confirmation of an employment arbitration award in favor of an employee on FLSA and Arizona state law claims, holding that federal courts have extremely limited authority to vacate arbitration awards and that a claimed factual error by the arbitrator does not warrant vacatur unless it was so critical, obvious, and intentional as to amount to a manifest disregard of the law — a standard the employer failed to meet here.VIP Mortgage Incorporated v. Gates, No. 24-7624 (9th Cir. Dec. 22, 2025).
COMMENT: Why bother to publish this opinion? After all, we all know an arbitrator’s award can’t be vacated for a factual error. And here the factual error would have been dispositive of an attorney’s fees issue because the parties stipulated earlier that counterclaims would be dismissed, with parties bearing own fees and costs regarding litigating the counterclaims. But the arbitrator forgot the stipulation, and did not disallow for fees on the counterclaims in an award. By publishing, the court clarified that to invoke the “legally dispositive facts” exception allowing for a vacatur, mere forgetfulness or inadvertence by an arbitrator, even as to a documented stipulation, is not enough.
Arbitrator's Forgetfulness Was Not Enough To Overturn Result
Pending Cases Before SCOTUS Raise Arbitration Issues
Oral Argument Has Already Been Heard In The Following Two Supreme Court Cases.
FAA and Jurisdiction. Jules v. Andre Balazs Properties, No. 25-83 (cert. granted Dec. 5, 2025) — whether a federal court that initially had jurisdiction over a case and stayed it pending arbitration retains jurisdiction to confirm or vacate the resulting award under FAA §§9–10 even without an independent jurisdictional basis.
Transportation Workers and Jurisdiction. Flowers Foods, Inc. v. Brock, No. 24-935 (cert. granted Oct. 20, 2025) — whether “last-mile” delivery drivers whose routes are entirely intrastate, but who deliver goods that traveled in interstate commerce, qualify as transportation workers exempt from the FAA under Section 1.
We’ll update you when we learn about an opinion.
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Fees Allowed For Successful Petition To Appoint New Arbitrator In Existing Arbitration
Appointment of the Arbitrator Was a Final Judgment Here.
The procedural facts in Barbanell v. Lodge, D084193 (4th Dist. Div. 1 pub. 1/8/26) are unusual. The parties had reached an earlier settlement agreement concerning a long-running water rights dispute. The agreement had a heirarchical settlement procedure — negotiate, mediate, then arbitrate.
Barbanell initiated an arbitration. Lodge moved successfully to have the arbitrator withdraw, leaving the arbitration unresolved. Lodge also filed a lawsuit asserting arbitration claims in the lawsuit.
Barbanell then separately petitioned the court to appoint a new arbitrator in the existing arbitration. Barbanell prevailed, and was awarded attorney fees.
In the appeal, Lodge argued “the Barbanell entities could not have been prevailing parties in the underlying action because the parties had claims pending in a separate lawsuit in the superior court and in arbitration at the time of the award.” In effect, this was an argument that the Superior Court lacked jurisdiction to award attorneys fees until the claims were finally adjudicated.
Lodge was arguing that the Superior Court retained twilight jurisdiction, because a Superior Court action was pending and the matter was also being arbitrated; therefore, attorney fees could not be decided until the matter was complete and the court could decide who was the prevailing party on a contract claim.
Not so on the facts. The petition to appoint a new arbitrator was required as party of the settlement agreement, was a limited “action on the contract”, was fully adjudicated, resulted in a final judgment, and therefore allowed for attorney fees.
COMMENT: “Twilight jurisdiction” is a California-specific doctrine of limited judicial authority over litigation that has been sent to arbitration. The phrase traces to Brock v. Kaiser Foundation Hospitals, 10 Cal.App.4th 1790 (1992), where the court described what happens to a civil action once the parties are compelled to arbitrate: “the action at law sits in the twilight zone of abatement with the trial court retaining merely vestigial jurisdiction over matters submitted to arbitration.” The phrase was then adopted and applied by Titan/Value Equities Group, Inc. v. Superior Court, 29 Cal.App.4th 482 (1994).
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Rejecting Offer To Mediate Did Not Preclude Defendant From Attorney’s Fees, Because Defendant Timely Reversed Decision
Timing Was Critical To Preserving The Right To Collect Attorney Fees.
Plaintiff home buyers of a residence in Santa Cruz County, claiming material nondisclosures by Defendants, offered to mediate the dispute before filing their complaint. Defendant home sellers, the Meyers, rejected the offer to mediate, but reversed their decision and accepted the offer two days before the complaint was filed by the Evleshins.
In California, the standard residential purchase and sale agreement requires mediation before filing a lawsuit, with the consequence that one who rejects mediation forfeits the right to collect attorney fees.
You guessed it. The defendants, who rejected the offer to mediate and then reversed course, won the lawsuit. Are they still able to collect attorneys fees?
Yes, says the California Court of Appeal, Evleshin v. Meyer, 115 Cal.App.5th 1021 (6th Dist. 2025). The Defendants accepted the offer to mediate two days before the complaint was filed.
Comment: Timing is everything here. The offer to mediate was ultimately accepted before the complaint was filed.
Artificial Intelligence: Using AI to Parse the Logic of a Legal Opinion
Using AI to Parse the Logic of a Legal Opinion
We published an article entitled “Using AI to Parse the Logic of a Legal Opinion.” You can read the article by clicking here.
We applied Claude Sonnet 4.6 to the recent Supreme Court tariff case, Learning Resources, Inc. v. Trump, striking down Trump’s tariffs under the statutory authority relied upon by the administration.
The opinion, with concurrences and dissents, is 170 pages long as a slip opinion. We used AI to parse the logic and assumptions of the multiple opinions. This is an “actual use case” demonstrating the advantages of using AI for legal analysis.