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.
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, FAA, Transportation Workers: SCOTUS Holds Transportation Worker Exemption Applies To What Workers Do, Not Who They Work For
A 9-0 Opinion Authored By Justice John Roberts.
Wonder Bread Store, B-80, Rock Springs, Wyoming. Photographer: John Margolies. 2004. Library of Congress. No known restrictions.
The Supreme Court, in a unanimous decision, holds: "A transportation worker need not work in the transportation industry to fall within the exemption from the FAA provided by §1 of the Act." Bissonnette v. LePage Bakeries, 23-51_6647 (Sup. Ct. 4/12/24) (Roberts, J.).
Section 1 of the FAA exempts transportation workers from mandatory arbitration. The issue in Bissonnette was whether transportation workers are workers who work for employers in the transportation industry, as the District Court majority and the Second Circuit had ruled, or whether transportation workers are defined by what they do. Justice Roberts explains that transportation workers are defined by what they do.
We have written about the FAA exemption for transportation workers before. See our sidebar category Transportation Workers.
BONUS: Baby Boomers may remember advertisements for Wonder Bread, the white bread that made you grow 12 ways. Wonder Bread is one of the "flagship products" of defendant/respondent Flower Foods, Inc., "which it promotes with a 95-foot-tall hot air balloon and a parade float called The Wondership."
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.
Arbitration, Public Injunctive Relief: Predispute Arbitration Provision Cannot Make Claimant Waive Right To Public Injunctive Relief
McGill Lives.
California's McGill case, about which we have posted before1, holds a predispute arbitration provision waiving a plaintiff’s right to seek public injunctive relief is “contrary to California public policy and is thus unenforceable under California law.” The McGill holding is enforced again in Ramsey v. Comcast Cable Communications, LLC, H049949 (6th Dist. pub. 1/29/24) (Greenwood, Grover, Lie).
Charles Ramsey sued Comcast Cable Communications alleging various violations of consumer protections. He alleged that Comcast misleads the public with information about its promotional prices. Apparently Ramsey was able to contact Comcast yearly when his service contract was about to expire, and renegotiate the contract, getting pretty much the same promotional deal. The art of the deal!
Anyway, Comcast petitioned unsuccessfully to compel arbitration. Ramsey argued that he sought public injunctive relief, and could not be bound to a predispute arbitration agreement requiring a waiver of such relief. Comcast argued that the injunctive relief Ramsey requested would only benefit a discrete group of existing subscribers rather than the public. The trial court disagreed with Comcast and so did the Court of Appeal.
The opinion explains that the relief requested by Ramsey could benefit potential subscribers to the service if it meant that they would receive more accurate information. And: "An injunction that benefits both subscribers and potential subscribers is a public injunction."
1 We have a sidebar category for Arbitration: Public Injunctive Relief. You can click on the link to find other cases mentioning McGill.