Arbitration Appeal Smorgasbord

Kec. v. Superior Court, No. G058119 (D4d3 Jul. 9, 2020)

Martinez v. BaronHR, Inc., No B296858 (D2d4 Jul 8, 2020)

Lonky v. Patel, No. B295314 (D2d2 Jul. 2, 2020)

Collie v. The Icee Co., No. E071654 (D4d2 Jul. 20, 2020)

Dougherty v. Roseville Heritage Partners, No. C087224 (D3 Mar. 30, 2020)

Lange v. Monster Energy Co., No. B294091 (D2d Mar. 12, 2020)

Dennison v. Rosland Capital LLC, No. B 295350 (D2d8 Apr. 1, 2020)

Torrecillas v. Fitness Int’l LLC, No. B296194 (D2d8 Jul. 21, 2020)


Here’s a whole raft of arbitration cases. Some came out right before or as the pandemic shutdown began and I didn’t manage to get to them. Along with a few new ones.

In Kec, the arb agreement contained a class/representative action waiver that specifically said it’s not severable and that the whole arb agreement is void if any part of it is invalid. And since the clause factually encompassed plaintiff’s PAGA claim, which can’t be compelled to arbitration, the whole thing goes down.

Writ granted.

In Martinez, an employment agreement had an arb clause. It included bolded language that the parties were waiving the right to jury trial. Next to that was a spot for the parties to initial. But they didn’t initial. They did, however, sign the agreement. The Court of Appeal holds the failure to initial doesn’t matter. By signing the agreement, Employee agreed to the whole thing notwithstanding the failure to initial. 

Reversed.

In Lonky an arbitrator spread out her rulings over three interim and one final award. The final award reconsidered a statute of limitations issue in one of the interim awards, which led to an increased award of damages. The final award also awarded costs and fees. Defendant argued that the reconsideration was improper because Code of Civil Procedure § 1284 puts a 30-day limit on an arbitrator’s ability to correct an award. 

But an interim award is not an “award” as that term is used in the Arbitration Act. Awards are basically like judgments—final resolutions of the controversy between the parties. There’s nothing wrong with conducting an arbitration in phases. But still it generally only produces one award. Nor was plaintiff judicially estopped for referring to one of the interim awards as an award at some earlier point in the litigation. 

Reversed.

In Collie, plaintiff brought a single cause of action under PAGA. PAGA claims are not arbitrable. And contrary to Defendant’s arguments, nothing about Epic Systems Corp. v. Lewis, --- U.S. ---, 138 S. Ct. 1612 (2018), says otherwise. Epic rejected the proposition that class action waivers are illegal under the National Labor Relations Act as an impingement on employee collective action. That has nothing to do with the reason PAGA claims aren’t arbitrable, which is that a PAGA plaintiff is suing in the place of state, which has not consented to arbitration. 

Affirmed.

And then Dougherty, Langhe, and Dennison, all held that arbitration provisions were unconscionable, while Torrecillas, held one was not. The stricken provisions all had some combination of strict limits on discovery, limits on punitive damages, limits on the right to recover statutory attorneys fees, waivers of injunction bonds, stipulations to irreparable injury, and waivers of jury for non-arbitrable claims. The provisions in Torrecillas didn’t have any of that stuff. 

Three affirmances and one reversal.