Administrative Arbitration: City Manager Had Discretionary Authority Under MOU To Review Non-Binding Arbitration Decision And Reject It
A Non-Binding Arbitrator's Decision Recommended Reinstatement Of Police Officer. . . The Court of Appeal Allowed The City Manager To Reject It.
Former police officer Ramirez administratively appealed the decision of the City of Indio Police Department's decision to terminate his employment at the conclusion of the “Appeals Procedure” set forth in the Memorandum of Understanding (MOU) between the City and the Indio Police Officers’ Association. A non-binding arbitrator's decision recommended the reinstatement of Ramirez. However, the City Manager upheld the decision of the Chief of Police to terminate Ramirez. After unsuccessfully petitioning the superior court, Ramirez appealed. Sergio Ramirez v. City of Indio et al., D082997 (4/1 pub. 10/10/24) (Kelety, McConnell, Rubin).
The chief issue was whether the City Manager, who the parties agreed could make the ultimate decision, should have deferred to the arbitrator's determinations of credibility and evidence. The Court held that under the MOU, discretion rested with the City Manager, and the MOU provide for due process: notice and an opportunity to respond, right to an evidentiary hearing, final review by the City Manager, and an option for judicial review. Affirmed.
Settlement: Simultaneous Section 998 Offers Are Not Valid
But If One Of Two Simultaneous Offers Is Invalid, Section 998 Can Be Applied To The Remaining Section 998 Offer.
Our next case, which does not involve mediation or arbitration, involves settlement. But since section 998 settlement offers can be made in both arbitration and litigation, our next case is worth considering. Gorobets v. Jaguar Land Rover North America, LLC , B327745 (2/2 10/10/24) (Hoffstadt, Chavez; Ashmann-Gerst, dsst), is a Lemon law case in which Land Rover offered simultaneous settlement offers to the Jaguar purchaser, one of which offers ultimately turned out to be invalid. The plaintiff did not respond to the 998 offer, thereby rejecting both valid and invalid offers.
The panel majority held that simultaneous offers under section 998 are invalid, because it makes the court's task of applying section 998 at the end of the case impossible. The court offered the following hypothetical: the offeror offers $100,000 or $200,000 simultaneously, and the plaintiff recovers $150,000. Should the plaintiff's success be measured against the rejection of $100,000, or the rejection of $200,000? It becomes impossible for the court to apply section 998 to a simultaneous offer.
However, in the instant case, there was a further wrinkle: one of the simultaneous offers was for $85,000, an amount that Land Rover beat at trial, because damages were less than $85,000. But the other simultaneous offer was for the recovery of statutory categories of damages, and in the case of disagreement between the offeror Land Rover and the offeree plaintiff, the dispute would be shunted over to a third party to decide. The court deemed the second simultaneous offer invalid, because a court couldn't determine its value. That meant only one valid offer remained, the offer for $85,000. "Because plaintiff failed to obtain a more favorable judgment than that offer at trial," explained Justice Hoffstadt, "the trial court was correct in ruling, pursuant to section 998, that plaintiff is limited to recovering his pre-offer costs and attorney fees and is required to pay Land Rover’s post-offer costs."
Justice Ashmann-Gerst dissented. She agreed that simultaneous offers are invalid. But she did not agree that invalidating one of the simultaneous offers left the offeror with a single valid offer. The fact that one of the offers was ultimately found to be invalid placed too much burden on the plaintiff offeree. How was he to know that years later, one of the two offers would be found to be invalid? The result seemed unfair to the dissenting Justice.
Suggestion. When making a section 998 settlement offer, review the statute to make sure you have dotted the i's and crossed the t's. Avoid simultaneous offers. Try to keep it simple.
The Second District, Div. 1 Agrees That Ending Forced Arbitration Of Sexual Assault And Sexual Harassment Act Applies To “Mixed Cases”
The Agreement Is With The Second District, Division 3.
The Ending Forced Arbitration Of Sexual Assault and Sexual Harassment Act (EFAA) amended the Federal Arbitration Act by exempting claims of sexual assault and sexual harassment from forced arbitration. An issue that cases addressing the EFAA have faced is whether in a mixed case, involving claims of sexual assault and harassment as well as other claims, the EFAA exempts just the assault and harassment claims or the entire case from arbitration.
The California Court of Appeal, Second District, Div. 1, agrees with the Second District, Div. 3, that in mixed cases, the entire case is exempt from arbitration. Yongtong Liu v. Minisco Depot CA, Inc., et al., B338090 (2/1 10/7/24) (Weingart, Rothschild, Kline).
Public Injunctive Relief Means Case Is Not Arbitrable Under McGill Rule
McGill Lives On When California Law Applies.
In Kramer v. Coinbase, Inc., A167779 (1/3 pub. 10/4/24) (Petrou, Tucher, Fujisaki), plaintiffs filed a lawsuit against Coinbase, Inc. for public injunctive relief under California's Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law. Plaintiffs alleged Coinbase misrepresented the security of its platform, misleading the public and leading it to believe it was highly secure. This lawsuit seeks to stop Coinbase's alleged deceptive security claims directed at the public. Coinbase moved to compel arbitration based on the user agreement’s arbitration clause, arguing plaintiffs' relief was private and thus arbitrable. The trial court denied Coinbase’s motion, interpreting plaintiffs' request as public injunctive relief, which is non-arbitrable under California’s McGill rule, allowing claims for public injunctive relief to remain in court rather than arbitration. Coinbase appealed, contending the claims were private.
Affirmed.The appellate court upheld the trial court's decision, agreeing that the complaint seeks public injunctive relief as it aims to prevent future public deception about Coinbase's security measures rather than solely benefiting existing users.
Comment: Coinbase continues to generate published opinions. See our Sept. 27, 2024 post.
Employment, Civil Rights, FAA: The Second District, Div. 3 Applies The Ending Force Arbitration of Sexual Assault And Sexual Harassment Act
The Case Clarifies How The EFAA Should Apply To Arbitrating Cases Stradling The Effective Date Of The EFAA, And To Mixed Cases Involving Sexual Harassment And Other Claims.
Jane Doe brought claims of sexual harassment and related violations by her employer, The Huntley Hotel. The employer sought to compel arbitration. The court ruled that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) applies, which makes arbitration agreements unenforceable at the plaintiff's discretion in sexual harassment disputes. The Court of Appeal affirmed the trial court's order denying a motion to compel arbitration. Jane Doe v. Second Street Corp., B330281 (2/3 9/30/24) (Edmon, J.). Since Doe's harassment claims included conduct both before and after the EFAA’s effective date (March 3, 2022), the arbitration clause is invalid for her entire case, not just the sexual harassment claims. Additionally, the court determined that the arbitration provision in the employee handbook cannot be enforced for any of Doe's claims, as they are part of the same case.
COMMENT: The case applies the EFAA in a significant and evolving area of employment law, regarding arbitration agreements in cases involving sexual harassment. The decision clarifies key legal points: 1. Application of the EFAA: The court interpreted how the EFAA applies to cases involving ongoing sexual harassment that straddles the act’s effective date (March 3, 2022), applying the EFAA to preclude arbitration of a case straddling the effective date. Arbitration in Mixed Claims: The ruling emphasized that under the EFAA, arbitration agreements are unenforceable not just for the sexual harassment claims but for the entire case if any part relates to sexual harassment. This broad interpretation is significant because it would prevent employers from compelling arbitration in cases that contain a mix of claims (sexual harassment alongside other employment violations), expanding protections for plaintiffs in similar cases.
Arbitration, Health Care: An LPS Conservatorship Only Confers Authority To Make Health Decisions, Not To Bind The Patient To Arbitrate
An LPS Conservatorship Only Created Authority To Make Decisions Concerning Health Care And Treatment, Not Authority To Agree To Arbitration.
Health care facilities are a fertile breeding ground for problems enforcing arbitration agreements. The problems usually stem from deciding who has authority to agree to arbitration, who has capacity, and whether the claims to be arbitrated are survival actions or wrongful death actions. Our next case, a tragic case, involves such issues.
In Enmark v. KC Community Care, LLC, B333022 (2/2 9/25/24) (Lui, J.), the plaintiffs, Scott Enmark and Marilyn Warhol, sued KC Community Care following the death of their daughter, Lisa Enmark, who was under an LPS (Lanterman-Petris-Short) conservatorship due to mental illness. Lisa was a resident at Community Care Center, where Scott signed two arbitration agreements on her behalf. After Lisa was sexually assaulted at the facility and died days later, her parents brought both wrongful death and survivor claims against the facility. The defendants moved to compel arbitration based on the agreements Scott signed.
The trial court denied the motion to compel arbitration, finding that Scott lacked the authority to bind Lisa to arbitration under the LPS conservatorship order and that the wrongful death claim was not subject to arbitration since neither Scott nor Marilyn signed the agreements in their individual capacities. The appellate court affirmed the ruling, holding that the LPS conservatorship did not grant Scott the authority to sign arbitration agreements on Lisa’s behalf as it did not involve health care decisions. The court also ruled that wrongful death claims could not be compelled into arbitration under the agreements.
COMMENT: Survival actions are brought by the personal representative of the deceased's estate for injury to the deceased. Here, however, Lisa did not sign an arbitration agreement that would have bound her estate representative to arbitrate her claims. As for the wrongful death claims, those were personal to Lisa's surviving family members. However, Marilyn hadn't signed an arbitration agreement. And Scott did not sign in his individual capacity. He signed under the LPS conservatorship to admit Lisa for care. An LPS conservatorship is a legal arrangement where a conservator is appointed for individuals who are gravely disabled due to mental illness, allowing the conservator to make decisions regarding the person's care and treatment but not to waive legal rights such as jury trials through arbitration agreements.
What solution would have worked to create a binding arbitration agreement? Perhaps Lisa could have signed an arbitration agreement, but she suffered from mental disability, for which a conservatorship was necessary. Had she signed, this could have created an issue of capacity. Scott and Marilyn could have signed an agreement in their personal capacities, which would have bound them to arbitrate personal wrongful death claims.