How to Lose Your Appeal

Davis v. TWC Dealer Grp., Inc., No. A155030 (D1d2 Oct. 30, 2019)

So I have to cop that I only got around to writing up the Supreme Court’s decision in Kho because I read this case. It involves the essentially same Toyota arbitration agreement that the Supreme Court invalidated in Kho this past August. The same firm that represented the Toyota dealership in Kho represents a Toyota dealership here. Kho was decided a few weeks after the last brief was filed in this case. But nobody gave any notice of supplemental authority. 

The Court of Appeal flagged Kho in a pre-argument notice and asked the Dealership to explain why the parts of the agreement the Court in Kho found so oppressive were replaced with ellipses in the Dealership’s briefs. It also requested an explanation for why the Dealership never apprised the Court of the Kho decision, citing “Batt v. City and County of San Francisco (2007) 155 Cal.App.4th 65, 82, fn. 9,” which deals with attorneys’ duty of candor. (The Court later explains that the duty has been made express by the recent restyling of the Rules of Professional Conduct, which now, in Rule 3.3, require attorneys to “disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel[.]”) 

The Dealership’s law firm (called out by name in the opinion) sent an associate to the argument—his name wasn’t even on the briefs. He had no explanation for the ellipses—he didn’t write the brief and hadn’t spoken to the attorney who did. He didn’t read the footnote in Batt. The arguing claimed only that the Dealer didn’t give notice Kho as supplemental authority because it was “different.”

This all, quite understandably, makes the Court of Appeal very mad. Especially when framed in the context of the somewhat hyperbolic arguments the Dealership made in its brief. Arguments like a claim—unsupported by citation—that arbitration clauses “identical in all material terms to arbitration provisions that have been routinely enforced by appellate courts, including the state Supreme Court.” 

The Court, describing the Dealership’s arguments as “wrong on all counts,” “easily affirm[s]” the trial court’s denial of the motion to compel arbitration. The opinion concludes by noting that “It is hard to imagine legal authority more ‘directly adverse to the position of’ [the Dealership] than Kho—hard to imagine a more obvious violation of Rule 3.3.” 

Easily Affirmed.