Mediation: The Curious Exclusion of Inactive Attorneys From Mediation.
The Case Is Morris S. Getzels v. State Bar.
We are pleased to be able to give readers a direct link to our July 2, 2025 Daily Journal article about the Getzels case. The article is entitled “The curious exclusion of inactive attorneys from mediation.” And here is a link: https://calmediation.org/wp-content/uploads/2025/09/Getzels-DJ-7-2-25.pdf
Transition To A New Platform
Typepad announced rather precipitously that this blog would become extinct at the end of September 2025. Yikes!
We had to scramble to migrate this blog from Typepad to a new platform. Since we have published this blog since 2012, and it has 1200 posts about California mediation and arbitration, it seemed worth expending some time, effort, and expense to keep the blog alive.
Fortunately, a techie in the family directed me to Fiverr, a website that offers the services of expert freelancers. We found one, and he did a quick and efficient job migrating the blog. If you are able to read this blog online, then the migration was successful. And if you want to know more about how this was accomplished, feel free to contact me directly. calmediation@gmail.com.
Undoubtedly it will take us time to master the “backend” of the blog hidden from your view and used to prepare and publish our posts. Please be patient with us while we learn new skills.
Arbitration, PAGA: “Headless” PAGA Claims Held Allowable Under Pre-2024 California PAGA Law
A "Headless" PAGA Claims Is Permitted Pre-2024, But Now The Law Has Changed.
Headless Statue of Athena, Goddess of Wisdom. Creative Commons Attribution-Share Alike 2.0 Generic license. Carole Raddato, photographer.
A “headless” PAGA case is one in which the plaintiff abandons their individual PAGA claims and pursues only representative claims on behalf of other employees and the State. This has been a tactic used to avoid arbitration of personal claims and preserve standing to litigate nonindividual PAGA representative claims in court. Because SCOTUS held in 2022 in Viking River Cruises, Inc. v. Moriana, that individual PAGA claimants could be compelled to arbitrate their individual labor law claim, employees and their attorneys in California used the workaround of dropping individual claims so that representative claims could be litigated in court.
The Fifth District holds that headless PAGA actions are permissible under the pre-2024 version of PAGA. CRST Expedited, Inc. v. Superior Court, F088569 (5th Dist. 7/7/25) (Franson, Detjen, De Santos).
COMMENT: PAGA law changed for civil actions filed on or after June 19, 2024. If CRST Expedited had been filed on or after June 19, 2024, the post-2024 PAGA framework would not permit headless PAGA cases. Under the new law, because Sanchez (the plaintiff) would have had to have personally suffered each alleged violation to bring a PAGA action for others, dismissing his individual claims would strip him of standing for headless claims. The viability of proceeding without individual claims would vanish.
Arbitration, Automobiles, Nonsignatories: Cal Sup Ct Ruled Ford Could Not Arbitrate Via Dealer Arbitration Agreement With Customer
The Court Disapproved of Felisilda v. FCA US LLC (2020) To The Extent It Suggested Manufacturers Could Make Use Of Dealers' Arbitration Clauses.
An issue knocking about in California Courts of Appeal has been whether Ford Motor Company and other automobile manufacturers could piggyback off arbitration clauses found in the contracts between dealerships and their customers. Ford has relied on an estoppel theory that sometimes arbitration can be compelled by a nonsignatory to the arbitration provision when claims are “intimately founded in and intertwined with” the sales contracts. While Ford wanted to drive the disputes to arbitration, the California Supreme Court took a different road. Ford Motor Warranty Cases, S279969 (Cal. Sup.Ct. 7/3/25) (Corrigan, author).
The arbitration clauses only applied to the disputes between the buyers and the dealers. However, consumer claims against Ford rested on statutory obligations and fraud, not the sales contract.
COMMENT: Given the existing paperwork, many Lemon Law cases will go to court.
A Model T Ford that has "come to rest half on and half off a a streetcar boarding platform in Washington, D.C." 1922. Library of Congress.
Settlement: Lack Of Judicial Evaluation Of Derivative Lawsuit Settlement Results In Reversal
Judicial Review Of The Fairness Of A Derivative Lawsuit Settlement Is Much Like Review Of The Settlement Of A Class Action.
Norman v. Strateman, A170356 (1/3 6/20/25) (Petrou, Fujisaki, Rodriguez), involved a cryptocurrency exchange dispute requiring judicial approval of derivative settlements. Donald Norman, Patrick Strateman, and Amir Taaki established Intersango, a cryptocurrency exchange that Patrick eventually shuttered. Norman filed a derivative action alleging Patrick excluded partners from operations, closed the exchange without consent, and retained assets while refusing to return customer bitcoins.
During trial, parties reached a settlement before Judge Harold Kahn, who memorialized terms on the record. Over a year later, Norman moved to set aside the settlement, claiming it lacked required judicial approval for derivative actions. The Stratemans moved to enforce the settlement. Judge Rochelle East granted enforcement and denied Norman's motion, finding all shareholders were parties and the settlement protected their interests.
The Court of Appeal reversed, holding that derivative settlements require independent judicial review to ensure fairness and reasonableness, not mere memorialization. Neither Judge Kahn nor Judge East conducted the necessary analysis considering factors like case strength, litigation risks, settlement adequacy, and discovery completeness. The court remanded for proper judicial review, emphasizing that derivative settlements protect absent shareholders and corporate interests, requiring more than party consent.
COMMENT: Approval of a derivative action lawsuit requires more than a handshake. The process, requiring judicial oversight and evaluation of fairness and reasonableness, entails review much like what is required when a court reviews a class action settlement.
Arbitration, Unconscionability: Unconscionable Terms In Employment Agreement Vitiated Separate Arbitration Agreement
The Two Agreements Were Read Together As One Agreement.
In Silva v. Cross Country Healthcare, Inc., B337435 (2/5 6.13/25) (Hoffstadt, Moor, Kim), employees Isabel Silva, Alejandro Garcia, and Janai Velasco challenged their employer’s attempt to compel arbitration of their wage-and-hour and related claims. Each plaintiff had signed two agreements at hiring: (1) an Arbitration Agreement requiring binding arbitration of nearly all employment-related claims, and (2) an Employment Agreement containing restrictive covenants and granting the employer the unilateral right to seek injunctive relief in court without posting a bond. The Employment Agreement also superseded contemporaneous agreements, including the Arbitration Agreement.
The employees argued that the two documents must be read together under Civil Code section 1642, which provides that multiple contracts executed as part of one transaction should be construed jointly. The trial court agreed, finding that the combined effect of the two agreements was substantively unconscionable: employees had to arbitrate all claims they were likely to bring (e.g., wage, hour, and statutory claims), while the employer preserved court access for claims it was likely to bring (e.g., confidentiality, non-compete, and non-solicitation). The court further noted one-sided attorney fee provisions and forced concessions that breaches caused “irreparable harm” justifying injunctions without bond. It declined to sever offending terms, holding that the arbitration framework was “permeated by an unlawful purpose.”
On appeal, the Court of Appeal affirmed. It rejected the employer’s arguments that the contracts should be considered separately, that mutuality existed, or that severance was required under federal law. The court stressed that allowing employers to evade precedent by splitting terms across multiple contracts would reward manipulative drafting.
An employer cannot sidestep unconscionability precedent by requiring employees to sign separate contracts that, when read together, create an unconscionable arbitration framework favoring the employer.