Arbitration, Vacatur: CCA 2nd Dist Div 1 Affirms Trial Court, Refusing To Vacate Judgment
The Majority Opinion Is Chiefly A Reminder Of The Court's Limited Ability To Vacate An Arbitration Award.
VVA-Two LLC v. Impact Development, Case No. B291330 (2/1 5/12/20) (Rothschild, Bendix; Chaney, dsst.), serves chiefly as a reminder of how limited the power of the court is to vacate an arbitration award. The Court of Appeal rejected three arguments by Plaintiff/Appellant VVA-Two LLC: 1) that the arbitrator exceeded his authority by awarding remedies inconsistent with the contract; 2) that the award was incomplete; 3) that the arbitrator's refusal to consider certain evidence and reopen proceedings did not render the arbitration process fundamentally unfair.
Justice Chaney dissented, believing that the arbitrator exceeded his power: "The effect of the arbitration award is that IDG andVVA [the parties] are suspended in an impregnable dilemma created by an arbitration award that VVA cannot comply with because it cannot force RBC—a nonparty to the arbitration—to consent to the transfer, and that IDG cannot enforce for the same reason." The majority, however, felt that the award was not rendered incomplete by a failure to address the issue of third-party consent, because that was not an issue specifically submitted to the arbitrator, and because, as a workaround, the arbitrator retained jurisdiction in case there was a failure by a third party to consent to a transfer of interest that was required by the award.
My Interview With Dean Erwin Chemerinsky About Governmental Powers And Covid-19 Now On YouTube
Because Covid -19 Is On Our Minds . . .
My interview with Dean Erwin Chemerinsky of the University of California Berkeley School of Law about the constitutional and statutory powers of the government to address covid-19 streamed on YouTube on April 30. It is now available as a recording after the event. https://bit.ly/Lit0430 My thanks to Dean Chemerinsky, and the Litigation Section of the California Lawyers Association for making this possible.
Arbitration, PAGA: Second District Div. 2 Affirms Order Granting Injunctive Relief To Prevent Arbitrating PAGA Claim
Did The Plaintiff Ask For Relief In His Individual Or Representative Capacity?
Brooks v. Amerihome Mortgage Company, B298132 (2/6 4/9/20) (Tangeman, Gilbert, Perren), is one more case upholding the rule that employers cannot compel the arbitration of a Private Attorneys General Act of 2004 (PAGA) claim. The employer acknowledged that PAGA claims are not arbitrable, and argued that the employee had agreed to final and binding arbitration because he had made individual claims for wages, rest breaks, and meal periods concerning his employment, rather than purely representative claims. Representative PAGA claims are treated as claim brought by a private attorney general on behalf of California, and the state, which is not a party to the arbitration agreement, cannot be compelled to arbitrate. The court rejected the employer's argument because the argument did not rely on Brooks' amended complaint alleging a pure PAGA claim — and the court had to look to the operative pleadings rather than to a notice to the Labor and Workforce Development Agency or to a superseded pleading.
There is one procedural twist to the case. Brooks sought a preliminary injunction to prevent arbitration. This is an uncommon procedure. because usually the employee files suit, and the employer files a motion to compel arbitration. Here, the employer filed a demand with the American Arbitration Association to initiate arbitration, and that explains why the employee sought injunctive relief.
Reviews: The Second Founding By Historian Eric Foner
Your Blogger Has Reviewed Professor Eric Foner's Book, The Second Founding: How The Civil War And Reconstruction Remade The Constitution, in California Litigation.
I've reviewed Eric Foners' book, The Second Founding. The book is about the legislative and political history of the 13th, 14th, and 15th Amendments, and the post-Civil War Supreme Court's judicial interpretation and evisceration of the Amendments. The review appears in California Litigation, the journal of the California Lawyers Association, Vol. 33, No. 1, p. 52 (2020). With the permission of the California Lawyers Association and its publication California Litigation, I am republishing the article and making it available by clicking here.
International Arbitration: California Supreme Court Allows Service Of Process By FedEx On Chinese Company Where Parties Waived Formal Service Requirements Of Hague Service Convention
The Hague Service Convention Between The US And China Did Not Apply Because . . .
The first sentence of an opinion is often an arrow pointing to where the court is headed. So it is in Rockefeller Technology Investments (Asia) VII v. Changzhou Sinotype Technology Co., Ltd., S249923 (Cal. S.Ct 4/2/20) (Corrigan, J.): “The parties here, sophisticated business entities, entered into a contract wherein they agreed to submit to the jurisdiction of California courts and to resolve disputes between them through California arbitration.” When a court tells us that sophisticated parties entered into a contract, it’s usually a pretty good hint that the court will follow the contract.
The issue here was whether the contract provided for a means of service on a company in China that was preempted by the requirements of the Hague Service Convention. The Convention provides for a Central Authority to serve in the receiving country, and in fact at the time the Convention was adopted, China objected to service by alternative postal means. Here, however, the contract (a Memorandum of Understanding or MOU) provided for notice and service by FedEx and email, jurisdiction in California, and a JAMS arbitration provision.
Rockefeller Technology initiated arbitration by FedEx and email, and Changzhou Sinotype defaulted.The award was subsequently confirmed by a judge, Changzhou Sinotype moved, unsuccessfully, to set aside the default, the Court of Appeal reversed, and the Supreme Court reversed the Court of Appeal.
The Supreme Court analyzes whether service of process in the technical sense is required, and explains that the answer depends on the law of the state where the action is brought. Therefore, if formal service is required by California, then the Convention applies.
California, however, permits the parties to waive formal service in favor of an alternative form of service. That’s what the parties did here. Therefore, the Convention does not apply, and service was effective under California law. “Holding that the Convention does not apply when parties have agreed to waive formal service of process in favor of a specified type of notification serves to promote certainty and give effect to the parties’ express intentions.”