Selected Developments
June 2023 Update
The current update includes changes that reflect recent developments in case law, legislation, court rules, and jury instructions. Summarized below are some of the more important developments included in this update since publication of the 2022 update.
Malicious Prosecution
In LA Invs. v Spix (2022) 75 CA5th 1044, the court held that an attorney lacked probable cause to maintain the underlying action when the potential damages were only $4,000 and there was an exposure to an award of attorney fees. See §1.4.
Representation Agreements
Effective January 1, 2023, there are new maximum limits for contingency fee agreements in medical malpractice cases. The maximum is 25 percent of the dollar amount recovered if the recovery is made as a settlement agreement and release of all claims by all parties prior to a civil complaint or demand for arbitration being filed. Bus & P C §6146(a)(1). If the recovery is made pursuant to settlement, arbitration, or judgment after a civil complaint or demand for arbitration is filed, the maximum is 33 percent of the amount recovered. Bus & P C §6146(a)(2). If the case is tried in court or arbitrated, the plaintiff’s attorney may file a motion and request a contingency fee in excess 33 percent. Bus & P C §6146(a)(3). See §3.23.
California Jurisdiction
In Shaw v Superior Court (2022) 78 CA5th 245, the exclusive concurrent jurisdiction rule applied and the trial court properly denied a motion to lift the stay when plaintiffs conceded that their suit arose from the same facts and theories as another pending action. See §6.8.
In Travelers Indem. Co. v Lara (2022) 84 CA5th 1119, exclusive concurrent jurisdiction did not apply to proceedings pending before trial court and administrative agency. See §6.8.
In Global Rescue Jets v Kaiser Found. Health Plan (9th Cir 2022) 30 F4th 905, the court properly dismissed an action when the plaintiff failed to exhaust its administrative remedies arising under the Medicare Act (42 USC §1395w–21(a)(1)) and showed no basis for excusing that requirement. See §§6.54 and 7.16.
In Salazar v Target Corp. (2022) 83 CA5th 571, a consumer lacked standing to bring class action fraud claims based on a retailer’s website because the named plaintiff did not see the website and did not rely on it. See §6.57A.
In Limon v Circle K Stores Inc. (2022) 84 CA5th 671, a job applicant lacked standing to pursue his claim because he failed to allege any concrete injury in connection with his claim of informational injury under the Fair Credit Reporting Act (FCRA) (15 USC §§1681–1681x); the FCRA damages provision did not confer public interest standing. See §6.57A.
In Deputy Synthes Sales v Howmedica Osteonics Corp. (9th Cir 2022) 28 F4th 956, the district court properly denied a motion to transfer because the forum selection clause in an employee’s contract was void under Lab C §925. See §6.79.
In Daimler Trucks N. Am. LLC v Superior Court (2022) 80 CA5th 946, a California court had specific jurisdiction of a truck accident that occurred in Oklahoma because a nonresident defendant’s activities supported the sale and service of the truck in California and demonstrated that plaintiff’s claims related to those very California activities. See §6.95.
Federal Jurisdiction
Under Fed R Civ P 4(k), the federal long-arm statute, a federal court may exercise jurisdiction over a foreign defendant if (1) the claim arises under federal law; (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and (3) exercising jurisdiction comports with due process. Will Co. v Ka Yeung Lee (9th Cir 2022) 47 F4th 917. See §7.2.
In Hooks v Nexstar Broad., Inc. (9th Cir 2022) 54 F4th 1101, the “capable of repetition, yet evading review” exception to mootness applied in the context of the National Labor Relations Act (NLRA) §10(j) (29 USC §160(j)). See §7.7.
When federal jurisdiction is based on a challenge on First Amendment grounds, it does not matter that the resulting injury could be described as willingly incurred. Federal Election Comm’n v Ted Cruz for Senate (2022) ___ US ___, 142 S Ct 1638, 1650. See §7.9.
In Pinkert v Schwab Charitable Fund (9th Cir 2022) 48 F4th 1051, plaintiff lacked standing when he did not allege that he experienced or will experience any of the purported injuries raised in the complaint. See §7.9.
In Central Sierra Env’t Resource Ctr. v Stanislaus Nat’l Forest (9th Cir 2022) 30 F4th 929, environmental groups had standing to challenge government allowance of livestock grazing when at least one member of each plaintiff organization averred that they regularly hiked in all three areas and that the physical impacts of the cattle grazing impaired their present and anticipated enjoyment of the area. See §7.9.
In Mecinas v Hobbs (9th Cir 2022) 30 F4th 890, the Democratic National Committee had standing to challenge an Arizona election law. See §7.9.
In Arizona v Yellen (9th Cir 2022) 34 F4th 841, the state had standing to challenge the American Rescue Plan Act (42 USC §802(c)(2)(A)) because there was a realistic danger of enforcement. See §7.9.
In Save the Bull Trout v Williams (9th Cir 2022) 49 F4th 1292, the Ninth Circuit found that plaintiffs established procedural injury under the Endangered Species Act (16 USC §1531) and had standing as long as there was “some possibility” that the requested relief would redress their alleged harms. See §7.9A.
In Gearing v City of Half Moon Bay (9th Cir 2022) 54 F4th 1144, the Ninth Circuit found that the Pullman abstention applied to an eminent domain action. See §7.12.
In Global Rescue Jets v Kaiser Found. Health Plan (9th Cir 2022) 30 F4th 905, plaintiff’s claims were inextricably intertwined with claims for benefits under Part C of the Medicare Act (42 USC §1395w–21(a)(1)) and therefore arose under the Act. See §7.16.
In Negrete v City of Oakland (9th Cir 2022) 46 F4th 811, police officers contesting their termination did not raise federal questions despite an anticipated defense that the city terminated them to comply with a federal consent decree. See §7.17.
In Unite Here Local 30 v Sycun Band of the Kumeyaay Nation (9th Cir 2022) 35 F4th 695, the district court only had supplemental jurisdiction over defendant’s counterclaim arising from the Declaratory Judgment Act (28 USC §2201(a)) and could decline to exercise jurisdiction. See §7.17.
In Swiftair v Southwest Airlines (2022) 77 CA5th 46, a software vendor’s claims against an airline company were preempted under the Airline Deregulation Act of 1978 (49 USC §41713(b)(1)) because they related to airline services. See §7.21.
Despite the presumption against implied preemption and the requirement of a clear expression from Congress to preempt state law, there is nevertheless a live doctrine of “implied” preemption. Nexus Pharms., Inc. v Central Admixture Pharm. Servs. (9th Cir 2022) 48 F4th 1040. See §7.21A.
A court declining to exercise supplemental jurisdiction must first give the plaintiff notice of its intent to dismiss state law claims and an opportunity to be heard. Ho v Russi (9th Cir 2022) 45 F4th 1083, 1086. See §7.35.
Prelitigation Claims, Notices, and Petitions for Guardians Ad Litem
Correspondence should be deemed to constitute a notice of intention to commence an action only when a writing clearly fulfills all of the statutory requirements of CCP §364. McGovern v BHC Fremont Hosp., Inc. (2023) 87 CA5th 181. See §9.31.
Fee Waiver
Effective June 30, 2022, persons receiving benefits under the California Special Supplemental Nutrition Program for Women, Infants, and Children (WIC Program) (Health & S C §123275) and unemployment compensation (Un Ins C §1251) can be granted initial court fee waivers. See §10.4.
Effective June 30, 2022, the court must also grant an initial fee waiver to an applicant whose income is no more than 200 percent of current official poverty guidelines. Govt C §68632(b). See §10.5.
Noticed Motions
The 45-day clock on a motion to compel interrogatory responses does not begin until service of the verified or supplemental verified response. Golf & Tennis Pro Shop, Inc. v Superior Court (2022) 84 CA5th 127. See §12.8.
Ascertaining, Joining, and Naming Parties
The legal standard for naming a fictitious party is not whether the plaintiff knew or should have known the facts giving it a cause of action against the defendant when it filed the complaint. There is no duty to exercise reasonable diligence to obtain such facts. Hahn v New York Air Brake LLC (2022) 77 CA5th 895. See §14.13.
Amending Complaints
Although it is good practice to request an order permitting amendment, California courts have recognized circumstances when a stipulation pursuant to CCP §472 need not be signed by the court to be enforceable. Mac v Minassian (2022) 76 CA5th 510. See §16.12.
Service of Papers
Effective January 1, 2023, CCP §1010.6, which addresses electronic service by parties or the court, was rewritten with the legislative intent of providing for the eventual standardization of electronic filing and service procedures on a statewide level. See §§18.23–18.40.
Motions to Stay or Dismiss for Inconvenient Forum
A public interest factor to consider in entering a stay under the forum non conveniens doctrine includes the existence of a similar bellwether case in another jurisdiction. St. Paul Fire & Marine Ins. v AmerisourceBergen (2022) 80 CA5th 1. See §21.11.
Removal to Federal Court
A purely procedural statute that grants no affirmative regulatory powers has no preemptive effect. Cohen v Apple Inc. (9th Cir 2022) 46 F4th 1012. See §22.14.
In Moreno v UtiliQuest (9th Cir 2022) 29 F4th 567, even though the NLRA does not contain express preemption provisions, plaintiff’s state law claims were a logical outgrowth of prior labor activity. See §22.15.
Under the Class Action Fairness Act, a defendant is required to show the amount of controversy by a preponderance of the evidence; there is no anti-removal presumption. Jauregui v Roadrunner Transp. Serv. (9th Cir 2022) 28 F4th 989. See §22.29A.
In County of San Mateo v Chevron (9th Cir 2022) 32 F4th 733, an oil company’s contracts to supply fuel to the U.S. Navy and lease agreements to drill on federal land were not enough to establish federal officer removal jurisdiction. See §22.35.
In City & County of Honolulu v Sunoco LP (9th Cir 2022) 39 F4th 1101, the Ninth Circuit found that government oversight of offshore drilling leases is not enough to transform activities into acting under a federal officer. See §22.35.
Demurrers
In a federal claim-splitting case, the Ninth Circuit stated that plaintiffs generally have no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant. Mendoza v Amalgamated Transit Union Int’l (9th Cir 2022) 30 F4th 879. See §23.32.
In Amy’s Kitchen, Inc. v Fireman’s Fund Ins. Co. (2022) 83 CA5th 1062, the court stated that a trial court should deny leave to amend an initial complaint “only rarely” when it appears “conclusively” that it is impossible to allege facts to state a viable cause of action. See §23.55.
Anti-SLAPP Motion
In City of Rocklin v Legacy Family Adventures-Rocklin, LLC (2022) 86 CA5th 713, a theme park did not contain constitutionally protected artistic works. A dispute about construction did not fall within the artistic work exception in CCP §425.17(b) for anti-SLAPP protection. See §24A.15.
In Cordoba Corp. v City of Industry (2023) 87 CA5th 145, each cause of action underlying the cross-complaint failed to state a valid claim. The trial court properly granted the city’s special motion to strike such cross-complaint. See §§24A.18 and 24A.32.
In Golden Gate Land Holdings LLC v Direct Action Everywhere (2022) 81 CA5th 82, a racing track’s claims based on vicarious liability for another’s nonprotected conduct of trespass and intentional interference with prospective economic relations were not a constitutionally protected activity that could be stricken under the anti-SLAPP statute. See §24A.18.
In Flickinger v Finwall (2022) 85 CA5th 822, plaintiff could not show probability of succeeding on civil extortion claim because the litigation privilege barred the claim and the illegality exception to anti-SLAPP protection did not apply because defendant’s conduct was not extortion as a matter of law. See §§24A.19 and 24A.30.
The IRS process for determination of a nonprofit organization’s tax-exempt status is an official proceeding. A party’s submission of an application for tax-exempt status was protected activity for anti-SLAPP purposes. Li v Jin (2022) 83 CA5th 481. See §24A.20.
A cause of action seeking to recover a surcharge against a trustee for breach of trust arose out of allegations of waste and misuse of trust assets and was not a protected litigation activity. Starr v Ashbrook (2023) 87 CA5th 999. See §24A.21.
In White v Davis (2023) 87 CA5th 270, defendants’ plans to unduly influence a conservatee and change the estate plan were not protected litigation activities. The trial court properly denied defendants’ special motions to strike plaintiff’s applications for elder abuse restraining orders. See §24A.21.
In Clarity Co. Consulting v Gabriel (2022) 77 CA5th 454, an attorney’s actions were not protected litigation-related activity, as they were not made in contemplation or anticipation of future litigation because when they were made, there was no claim or dispute to be litigated or settled. See §24A.21.
Plaintiffs’ discussions of whether to terminate an attorney’s services and then doing so were protected by the anti-SLAPP statute. Bowen v Lin (2022) 80 CA5th 155. See §24A.23.
In Ratcliff v Roman Catholic Archbishop (2022) 79 CA5th 982, defendant’s allegedly negligent failure to educate, train, and warn plaintiffs regarding prevention, detection, and reporting of child abuse did not implicate defendant’s constitutional right not to speak. See §24A.23.
In Manlin v Milner (2022) 82 CA5th 1004, an LLC managing member’s appropriation of funds to finance litigation was not protected activity. See §24A.23D.
In Bishop v Bishop’s Sch. (2022) 86 CA5th 893, an employment termination letter, which supported a defamation claim against the defendant, did not merit anti-SLAPP protection, as it privately communicated an employment decision without contributing to the public discourse. Plaintiff could not establish probability of proving that defendant’s statement was false or defamatory. See §§24A.23G and 24A.32.
In Jenkins v Brandt-Hawley (2022) 86 CA5th 1357, plaintiffs demonstrated a probability of prevailing. A malicious prosecution cause of action can proceed against an anti-SLAPP motion if any of the claims was brought without probable cause. See §24A.23J.
In Timothy W. v Julie W. (2022) 85 CA5th 648, the litigation privilege under CC §47(b) barred causes of action arising from a private investigator’s disclosure of sensitive information while conducting a financial investigation in connection with divorce proceedings; plaintiff could not establish probability of succeeding on its claims. See §24A.30.
In Water for Citizens v Churchwell White LLP (2023) 88 CA5th 270, a trial court correctly granted a law firm’s anti-SLAPP special motion to strike an advocacy group’s malicious prosecution claim because the advocacy group did not establish a probability of prevailing on the claim. See §24A.32.
In International Union of Operating Eng’rs, Local 39 v Macy’s Inc. (2022) 83 CA5th 985, the court held that a plaintiff in an anti-SLAPP motion must present credible evidence that satisfies the standard of proof required by the substantive law of the cause of action that the anti-SLAPP motion challenges. Plaintiff failed to meet the required “clear proof standard” in the underlying action. See §24A.32.
In Wisner v Dignity Health (2022) 85 CA5th 35, plaintiff failed to establish a probability of succeeding on claims that the defendant made a false report because there was no sufficient evidence for a reasonable jury to conclude that the report was false. The trial court did not err in granting the defendant’s anti-SLAPP motion as to such claims. See §24A.32.
Cross-Complaints
The prohibition in Lab C §925 against requiring California employees to litigate cases in another state is an implicit exception to the compulsory cross-complaint requirement of CCP §426.30(a). LGCY Power v Superior Court (Sewell) (2022) 75 CA5th 844. See §26.8.
It is well established that the filing of an underlying lawsuit tolls the statute of limitations for compulsory cross-complaints. Paredes v Credit Consulting Serv. Inc. (2022) 82 CA5th 410. See §26.49.
Vexatious Litigants
In Blizzard Energy, Inc. v Schaefers (2022) 85 CA5th 802, a respondent’s cross-complaint in a Kansas action counted as one of the five actions required under CCP §391(b)(1). See §29.55.
Effective January 1, 2023, the definition of a vexatious litigant under CCP §391(b)(5) was expanded to include a person who, after being restrained pursuant to a restraining order issued after a hearing pursuant to Fam C §6300 and while the restraining order is still in place, commenced, prosecuted, or maintained one or more actions against a person protected by the restraining order that are determined to be meritless and caused the person protected by the order to be harassed or intimidated. See §29.55.
In In re Marriage of Deal (2022) 80 CA5th 71, the court held that an order denying a vexatious litigant’s request to file a new action is not among the appealable orders listed in CCP §904.1. See §29.55.
In Lindow v Cantil-Sakauye (ND Cal, Apr. 6, 2022, No. 5:20–cv–07555–EJD) 2022 US Dist Lexis 64266, the district court held that California’s vexatious litigant statute is not void for vagueness and does not violate the right to due process. See §29.56.
Intervention
An heir is not categorically precluded from intervening as a matter of right under CCP §387(d)(1)(B) in a pending lawsuit brought by the personal representative of the decedent’s estate to recover damages for wrongful death. Allowing an heir to participate after satisfying the statutory requirements for mandatory intervention did not contravene the rule that there could be only one wrongful death action. King v PG&E (2022) 82 CA5th 440. See §31.37.
The most important circumstance in the timeliness of an intervention is that the nonparty seeking to intervene do so as soon as it becomes clear that its interests would no longer be protected by the named parties in the action. Cameron v EMW Women’s Surgical Ctr. (2022) ___ US ___, 142 S Ct 1002. See §31.37.
Mandatory Injunction
As in California courts, federal rules require a showing of irreparable injury for a mandatory injunction to be granted. Doe v Snyder (9th Cir 2022) 28 F4th 103. See §32.14.
While injunctive proceedings under the Workplace Violence Safety Act (CCP §527.8) are truncated, a trial court is required to allow for cross-examination of witnesses because it is not merely a privilege, but an absolute right under due process and is fundamental to a fair proceeding. CSV Hospitality Mgmt. LLC v Lucas (2022) 84 CA5th 117. See §32.28.
In hiQ Labs v LinkedIn (9th Cir 2022) 31 F4th 1180, a data analytics company demonstrated the threat of irreparable injury and showed it had no viable way to remain in business if defendant prevented access to its public profile pages. See §32.31.
While the procedures set forth in CCP §527.6 are expedited, they contain important due process safeguards. In D.Z. v L.B. (2022) 79 CA5th 625, the due process rights of a restrained party’s spouse were violated when the spouse was not identified as a party to be restrained in the petition; the petition and accompanying declaration did not indicate that the spouse’s behavior would be at issue; and the prohibition could cause the spouse to face harsher consequences for future conduct than if the order did not exist. See §32.138.
Summary Judgment
In California-American Water Co. v Marina Coast Water Dist. (2022) 86 CA5th 1272, the court held that a trial court cannot grant summary judgment based on inferences that are contradicted by other inferences or evidence. See §36.3.
A 2-day extension applies to motions for summary judgment served electronically; therefore, a party’s summary judgment motion was filed within the time limits set by CCP §437(c). The party had a right to have its motion heard before the start of trial. A peremptory writ is the correct means for an aggrieved party to seek review of a trial court’s refusal to hear oral argument on summary judgment. Cole v Superior Court (2022) 87 CA5th 84. See §§36.31 and 36.160.
Default
A party in default has standing to file a motion for a “new trial” asserting legal error relating to calculation of damages under CCP §657. Siry Inv. L.P. v Farkhondehpour (2022) 13 C5th 333. See §§38.86–38.87 and 38.117.
Dismissal
In Seto v Szeto (2022) 86 CA5th 76, the trial court erred in precluding plaintiffs from relying on CCP §583.340(c) in tolling the 5-year deadline to bring a civil action to trial because there was a failed settlement agreement in place. See §39.46.
In State v Gharib-Danesh (2023) 88 CA5th 824, a 5-year statutory period was tolled for the time period during which a qui tam action was kept under seal, barring plaintiff from making use of any of the procedures and tools typically available to a civil litigant. See §39.46.
In Tukes v Richard (2022) 81 CA5th 1, the court held that a bare pre-trial dismissal of a lawsuit with prejudice does not result in the actual litigation of any issues for issue preclusion purposes. See §39.119.
Jury Trial Demand
A party does not waive the right to jury trial by violating a local pretrial procedural rule. A trial court cannot sanction a party by waiving this right for violation of such a rule. Amato v Downs (2022) 78 CA5th 435. See §41.12.
Consolidation and Severance
Grande v Eisenhower Med. Ctr. (2022) 13 C5th 313 (nurse’s settlement of claims against staffing agency did not preclude suit against hospital when agency had placed nurse because hospital was not party to that action and neither contractual indemnity nor derivate liability gives rise to claim preclusion) is discussed in §43.19.
Alternative Dispute Resolution
The U.S. Supreme Court in Viking River Cruises, Inc. v Moriana (2022) ___ US ___, 142 S Ct 1906, found that the Federal Arbitration Act preempted the Iskanian v CLS Transp. Los Angeles, LLC (2014) 59 C4th 348 decision insofar as it precluded division of Private Attorneys General Act of 2004 (PAGA) (Lab C §§2698–2699.5) representative actions into Labor Code claims that are “individual” to the PAGA representative and “non-individual” claims on behalf of other aggrieved employees through an agreement to arbitrate. See §§45.26, 45.28D–45.29.
In Doe v Massage Envy Franchising, LLC (2022) 87 CA5th 23, a “Terms of Use agreement,” which was available to plaintiff via hyperlink on an electronic tablet that was used at check-in for the service, was not a valid and enforceable clickwrap agreement. As there was no valid contract, there was no binding agreement to arbitrate. See §45.27A.
Despite a clear and unmistakable delegation clause in an arbitration agreement, when a party denies agreeing to arbitrate at all, the court must consider that claim. A party has met their burden in opposing a motion to compel arbitration when they did not recall agreeing to arbitrate by electronically clicking a “Done” box and declared that they would not have accepted the job had they known of the arbitration clause. Trinity v Life Ins. Co. of N. Am. (2022) 78 CA5th 1111. See §§45.27A and 45.27B.
In Desert Reg’l Med. Ctr., Inc. v Miller (2023) 87 CA5th 295, the trial court had jurisdiction to decide the issue of waiver. The employer waived the right to arbitrate because it delayed petitioning to compel arbitration for a substantial period of time and “invoked the litigation machinery.” See §§45.27A and 45.27D.
The court is presumptively the appropriate entity to review the question of arbitrability when the parties did not clearly agree to submit the question of arbitrability to arbitration. Los Angeles College Faculty Guild Local 1521 v Los Angeles Community College Dist. (2022) 83 CA5th 660. See §45.27A.
In Caremark v Chickasaw Nation (9th Cir 2022) 43 F4th 1021, the Ninth Circuit held that given plaintiff’s long history of submitting hundreds of thousands of medical reimbursement claims to defendant, plaintiff could not plausibly deny that it formed contracts with the defendant, and that the language of those contracts included arbitration provisions. See §45.27A.
In B.D. v Blizzard Entertainment (2022) 76 CA5th 931, the court held that although a dispute resolution policy contained some references to occasions on which a court might interpret the policy, such references did not undermine an otherwise clear and unmistakable delegation of gateway issues to an arbitrator. See §45.27A.
In Beco v Fast Auto Loans, Inc. (2022) 86 CA5th 292, 306, there was no evidence of “clear and unmistakable” intent to delegate to the arbitrator, even if the agreement incorporated the rules of the American Arbitration Association, because incorporation by reference is not sufficient and the agreement was both procedurally and substantively unconscionable. See §§45.27A, 45.28B–45.28C.
In Iyere v Wise Auto Group (2023) 87 CA5th 747, the denial of a motion to compel arbitration was reversed because plaintiffs did not present any evidence that created a factual dispute as to the authenticity of their signatures on the arbitration agreement. See §45.27B.
In Johnson v Walmart Inc. (9th Cir 2023) 57 F4th 677, while the arbitration agreement in the “Terms of Use” on a retailer’s website applied to an online purchase, a dispute arising from a subsequent lifetime tire rotation and service agreement was not encompassed, even though it involved the same parties and same tires as those covered by the Terms of Use. See §45.27B.
In Logan v Country Oaks Partners (review granted Nov. 16, 2022, S276545; opinion at 82 CA5th 365 to remain published and precedential until further order), the court held that the authority to make health care decisions granted to an adult child by an advanced health care directive did not extend to executing optional arbitration agreements on the mother’s behalf. See §45.27B.
In Rogers v Roseville SH (2022) 75 CA5th 1065, the court held that a nursing home resident’s son had no actual or ostensible authority to bind the resident to an arbitration agreement by signing as a representative. Because the resident was not bound by the agreement, his spouse and heirs were not bound. See §45.27B.
In Berman v Freedom Fin. Network (9th Cir 2022) 30 F4th 849, the Ninth Circuit held that an enforceable agreement to arbitrate will be found if the website provides reasonably conspicuous notice of the terms to which the consumer will be bound. If the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests assent to those terms. See §45.27B.
Under the Federal Arbitration Act (FAA) (9 USC §6), prejudice is not a condition of finding that a party, by litigating too long, waived its right to stay litigation or compel arbitration. Morgan v Sundance (2022) ___ US ___, 142 S Ct 1708. See §45.27D.
In Espinoza v Superior Court (2022) 83 CA5th 761, an employer failed to timely pay arbitration fees and thus waived its right to arbitration. See §45.27D.
In Davis v Shiekh Shoes, LLC (2022) 84 CA5th 956, a defendant’s delay in moving to compel arbitration, request for trial, active participation in discovery, acquiescence to the trial and discovery schedule, and court appearance supported the trial court’s conclusion that defendant’s actions were inconsistent with an intent to arbitrate. See §45.27D.
In Leger v R.A.C. Rolling Hills L.P. (2022) 84 CA5th 240, a defendant waived its right to compel arbitration when it waited until after the trial court ruled on plaintiff’s motion for trial preference to claim its right to arbitration. See §45.27D.
In Armstrong v Michael Stores, Inc. (9th Cir 2023) 59 F4th 1011, there was no waiver of arbitration when the employer repeatedly reserved its right to arbitration, did not ask the district court to weigh in on the merits, and did not engage in any meaningful discovery. See §45.27D.
In Quach v California Commerce Club (2022) 78 CA5th 470, there was no waiver when the party made no showing that he spent time or money on litigation that he would not have spent had the opposing party moved to compel arbitration earlier, nor would his claims have been resolved more quickly. See §45.27D.
The plain language of CCP §1281.98 provides a simple bright-line rule that a drafting party is in material breach of an arbitration agreement and waives its right to compel an employee or consumer to proceed with that arbitration if the drafting party fails to pay outstanding arbitration fees within 30 days after the due date. De Leon v Juanita’s Foods (2022) 85 CA5th 740. See §45.27D.
An arbitration agreement waiving a statutory right to seek a public injunction “in any forum” is invalid as “contrary to California public policy.” Vaughn v Tesla (2023) 87 CA5th 208. See §45.27F.
When a party is unable to pay for arbitration, the opposing party could be required to either pay for the other’s share of the arbitrator’s fee or waive the right to arbitration because this alternative protects the right to a fair tribunal. Aronow v Superior Court (Emergent) (2022) 76 CA5th 865. See §45.27F.
In Mills v Facility Solutions Group, Inc. (2022) 84 CA5th 1035, the arbitration agreement had elements of procedural and substantive unconscionability. See §§45.28B–45.28C.
In Navas v Fresh Venture Foods, LLC (2022) 85 CA5th 626, the arbitration agreement had elements of procedural and substantive unconscionability. See §§45.28B–45.28C and 45.35.
In Nelson v Dual Diagnosis Treatment Ctr. (2022) 77 CA5th 643, a mental health treatment center’s arbitration agreement was unconscionable because it failed to provide a copy of the arbitral rules, obtained the patient’s signature while he was mentally impaired, and imposed numerous harsh and one-sided provisions. See §§45.28B–45.28C.
In Nunez v Cycad Mgmt. LLC (2022) 77 CA5th 276, the court struck an arbitration agreement as procedurally unconscionable because it was given to plaintiff in English, which he could not read, without adequate explanation or a fee schedule. It was also substantively unconscionable because it allowed the arbitrator to shift attorney fees and costs onto plaintiff and drastically limited his ability to conduct discovery. See §§45.28B–45.28C.
In Galarsa v Dolgen Cal., LLC (2023) 88 CA5th 639, the invalid waiver of PAGA claims was severable from the remainder of the arbitration agreement. See §45.30.
A line of cases following Iskanian v CLS Transp. Los Angeles, LLC (2014) 59 C4th 348 have been called into question in the wake of Viking River Cruises, Inc. v Moriana (2022) ___ US ___, 142 S Ct 1906. Lewis v Simplified Labor Staffing Solutions, Inc. (2022) 85 CA5th 983. See §45.29.
If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence. Iyere v Wise Auto Group (2023) 87 CA5th 747. See §45.32.
A legal action is not a prerequisite to an arbitration order, but when the plaintiff does not maintain an action in any forum based on arbitrable claims, there is no action for the defendant to counter by filing a petition for arbitration. Leshane v Tracy VW (2022) 78 CA5th 159. See §45.32.
In Zhang v Superior Court (2022) 85 CA5th 167, a stay was granted because the lawsuit involved an issue that had been clearly and unmistakably delegated to the arbitrator under a partnership agreement. See §45.44.
Code of Civil Procedure §1281.4 does not authorize the court to stay a plaintiff’s action on the basis of a pending arbitration to which the plaintiff is not a party. Leenay v Superior Court (2022) 81 CA5th 553. See §45.44.
In Darby v Sisyphian, LLC (2023) 87 CA5th 1100, the trial court was obligated to confirm the arbitration award when the petition to confirm was procedurally proper, no party sought dismissal of plaintiff’s petition, and employer’s filings to vacate or correct the arbitration award were not timely. As the requests to vacate and correct were untimely, the court of appeal could not consider these arguments. See §§45.49–45.50.
In E-Commerce Lighting, Inc. v E-Commerce Trade LLC (2022) 86 CA5th 58, a trial court’s correction of set-off in an arbitration award was improper when it was a contested issue of law and fact that had been submitted for decision to, and decided by, the arbitrator. See §45.49.
Arbitrators possess a nonstatutory power to amend an award when it is consistent with other findings on the merits and the amendment does not cause demonstrable prejudice to any party’s legitimate interests. Starr v Mayhew (2022) 83 CA5th 842. See §45.49.
In Vascos Excavation Group LLC v Gold (2023) 87 CA5th 842, a court vacated an arbitration award because Bus & P C §7031(a) barred the contractor from recovering on its breach of contract claim and the arbitrator exceeded its powers. See §45.49.
Negotiation and Case Settlement
Settlement agreements that provide for mutual confidentiality as to the underlying case and the terms and amount of the settlement agreement, but do not prohibit disclosures required by law, are not overbroad. Pappas v Chang (2022) 75 CA5th 975. See §46.43J.
Offers to Allow Judgment Under CCP §998
Effective January 1, 2023, when an award in a medical malpractice action is for more than $250,000 (up from $50,000), the court is to order periodic payments under CCP §667.7. See §47.8.
A CCP §998 offer does not need to include language regarding the prevailing party for purposes of a motion for attorney fees. Smalley v Subaru of Am., Inc. (2023) 87 CA5th 450. See §47.12.
A CCP §998 offer expires when a trial court orally grants summary judgment. Trujillo v City of Los Angeles (2022) 84 CA5th 908. See §47.21.
A qualified or conditional acceptance of an offer does not create a binding settlement and is considered a counteroffer. Siri v Sutter Home Winery (2022) 82 CA5th 685. See §47.24.
Good Faith Settlement
A timely petition for writ of mandate is the sole means of obtaining appellate review of a good faith settlement determination. Pacific Fertility Cases (2022) 78 CA5th 568. See §50.28.
