Thursday, July 28, 2016

Sandquist v. Lebo Automotive, Inc., S220812

Arbitration: California Law: Class arbitration availability: Contract of adhesion: Interpretation (contracts and arbitration): Preemption: Harmless error:

A salient question is whether (…) the agreement permits or prohibits arbitration on a classwide basis. Here we must answer a question one step removed—who decides whether the agreement permits or prohibits classwide arbitration, a court or the arbitrator? The question has divided the many state and federal courts to consider it.
We conclude no universal rule allocates this decision in all cases to either arbitrators or courts. Rather, who decides is in the first instance a matter of agreement, with the parties‘ agreement subject to interpretation under state contract law. Under state law, these parties‘ arbitration agreement allocates the decision to the arbitrator. Under federal arbitration law, no contrary presumption requires a different result, so the issue remains one for the arbitrator.

The issue before us is not whether class arbitration is permissible here, but a matter antecedent to that issue: who should decide whether it is permissible, a court or an arbitrator. No universal one-size-fits-all rule allocates that question to one decision maker or the other in every case. Rather, who decides is a matter of party agreement. As the United States Supreme Court has explained in a closely related context, just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question who has the primary power to decide arbitrability turns upon what the parties agreed about that matter. (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 943.) And just as whether class arbitration is available depends on whether the parties agreed to allow or forbid it (Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at pp. 684–687), so the question who has the power to decide the availability of class arbitration turns upon what the parties agreed about the allocation of that power.

The United States Supreme Court‘s treatment of the issue confirms the parties‘ agreement as the mandatory starting point. In Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 (Green Tree), the plurality and the principal dissent, although disagreeing about the ultimate who decides question, both agreed about where the analysis should begin. (See id. at p. 451 (plur. opn. of Breyer, J.) [concluding the question should be for the arbitrator because under the terms of the parties‘ contracts, the question—whether the agreement forbids class arbitration—is for the arbitrator to decide]; id. at p. 456 (dis. opn. of Rehnquist, C. J.) [agreeing that the decision of what to submit to the arbitrator is a matter of contractual agreement by the parties].) Similarly, in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at page 680 and Oxford Health Plans LLC v. Sutter (2013) 569 U.S. ___, ___, fn. 2 [186 L.Ed.2d 113, 119, fn. 2, 133 S.Ct. 2064, 2068, fn. 2], the Supreme Court accepted—because the parties had so agreed—that an arbitrator should decide in the first instance whether class arbitration was available.

Consequently, we must examine the parties‘ agreements to determine what they say concerning the who decides question. But under what body of law? Sandquist argues federal law governs exclusively, while Lebo Automotive urges state law does. We agree with Lebo: this examination must be conducted, at least initially, through the prism of state law. When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts. (First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at p. 944; see DIRECTV v. Imburgia (2015) ___ U.S. ___, ___ [193 L.Ed.2d 365, 372, 136 S.Ct. 463, 468]; Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 474.) This default choice-of-law rule applies to the question whether the availability of class arbitration is for an arbitrator or a court; insofar as the question who decides presents a disputed issue of contract interpretation, state law, not federal law, normally governs such matters. (Green Tree, supra, 539 U.S. at p. 450 (plur. opn. of Breyer, J.); accord, id. at p. 454 (conc. opn. of Stevens, J.) [applying state law]; id. at pp. 457–458 (dis. opn of Rehnquist, C. J.) [agreeing that states may regulate contracts, including arbitration clauses, under general contract law principles and  the interpretation of private contracts is ordinarily a question of state law].)

The parties do not disagree as to which state‘s law applies: California.

These features of the arbitration clauses suggest the who decides question is an arbitrable one, but they are by no means conclusive. In the presence of ambiguity, we turn to other principles applicable to the interpretation of arbitration clauses and contracts generally.

When construing arbitration provisions, we must consider the parties‘ likely expectations about allocations of responsibility. (See Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83, 86.) Typically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts. (Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 402, fn. 5.) In the many cases where the parties agree an underlying dispute is arbitrable and thus begin with a filing before an arbitrator, to resolve the who decides question in favor of a court would contravene that expectation and impose substantial additional cost and delay, requiring the parties to stay matters before the arbitrator, proceed to a courthouse for a construction of their arbitration agreement, perhaps continue through appellate review of that construction, and only then return back to arbitration for further dispute resolution. Here, the parties‘ arbitration provision declares a preference for arbitration because of its reduced expense and increased efficiency. (See Hall Street Associates, L.L.C. v. Mattel, Inc. (2008) 552 U.S. 576, 588.)

Ultimately dispositive here are two other long-established interpretive principles. First, under state law as under federal law, when the allocation of a matter to arbitration or the courts is uncertain, we resolve all doubts in favor of arbitration. (Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 26; Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971; see Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 62 & fn. 8.) All else being equal, this presumption tips the scales in favor of allocating the class arbitration availability question to the arbitrator.

Second, ambiguities in written agreements are to be construed against their drafters. (Civ. Code, § 1654; Rest.2d Contracts, § 206.)

Moreover, the rule requiring the resolution of ambiguities against the drafting party applies with peculiar force in the case of a contract of adhesion. Here the party of superior bargaining power not only prescribes the words of the instrument but the party who subscribes to it lacks the economic strength to change such language. (Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 819, fn. 16.)

This general principle of contract interpretation applies equally to the construction of arbitration provisions. (Mastrobuono v. Shearson Lehman Hutton, Inc., supra, 514 U.S. at pp. 62–63; Victoria v. Superior Court (1985) 40 Cal.3d 734, 739; 24 Hour Fitness, Inc. v. Superior Court, supra, 66 Cal.App.4th at p. 1215.) Where the drafter of a form contract has prepared an arbitration provision whose application to a particular dispute is uncertain, ordinary contract principles require that the provision be construed against the drafter‘s interpretation and in favor of the nondrafter‘s interpretation. (Victoria, at pp. 745–747.)

No party disputed the proposition, well settled under both state and federal law, that absent the parties‘ commitment of the arbitrability decision to an arbitrator, disagreements over whether a particular dispute is within the scope of an arbitration provision are ordinarily the responsibility of a court. (City of Los Angeles v. Superior Court, supra, 56 Cal.4th at pp. 1093, 1096; see First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at p. 944; Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 479–480.)

As Lebo Automotive asserts, City of Los Angeles confirms the strong presumption that courts should determine the jurisdiction of arbitrators. (See City of Los Angeles v. Superior Court, supra, 56 Cal.4th at p. 1096; Code Civ. Proc., § 1281.2 [on a petition to compel arbitration, the court should order arbitration if it determines that an agreement to arbitrate the controversy exists].) That is what we, a court, are tasked with doing here; consistent with the presumption, we are engaged in deciding whether a decision on the availability of class arbitration is for a court or an arbitrator.

(To the extent Keating and its progeny hold a court may order class arbitration based on the interests of justice and without regard to the parties‘ wishes (see Keating v. Superior Court, 31 Cal.3d at pp. 613–614), they are no longer good law (see Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. at p. 684 [a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so]). 

This is not a case where the parties by agreement have expressly opted for the application of state law in lieu of any otherwise applicable federal rule. In the absence of such an opt out, the issue whether the availability of class arbitration is a question of arbitrability subject to a pro-court presumption arises in the shadow of federal law. Any state law presumption, were there one, would have to yield to whatever presumption the FAA establishes. We thus turn to federal law.

The crux of this case is whether the FAA imposes an interpretive presumption that, as a matter of federal law, preempts state law rules of contract interpretation and alters the conclusion state law would otherwise reach here. Congressional intent is the touchstone of any preemption analysis (e.g., Quesada v. Herb Thyme Farms, Inc. (2015) 62 Cal.4th 298, 318; Brown v. Mortenson (2011) 51 Cal.4th 1052, 1060), but neither the FAA‘s text nor its legislative history speaks to the question we face or offers insight as to that intent. Accordingly, we look to judicial understandings of the FAA.

The United States Supreme Court has directly addressed the who decides issue only once, in Green Tree, supra, 539 U.S. 444. The Green Tree parties‘ agreement submitted to the arbitrator all disputes, claims, or controversies arising from or relating to this contract or the relationships which result from this contract. (Id. at p. 451 (plur. opn. of Breyer, J.).) The plurality interpreted this language as allocating the class arbitration availability question to the arbitrator. (Id. at p. 452.) Furthermore, the same four justices explained, nothing in the FAA subjects the who decides question to any contrary pro-court presumption. (Green Tree, at pp. 452–453.) Accordingly, the plurality concluded this matter of contract interpretation should be for the arbitrator, not the courts, to decide. (Id. at p. 453.)

However, as the United States Supreme Court has twice reiterated in cases not directly addressing the who decides question, Green Tree contains no controlling view concerning what presumption, if any, the FAA requires when interpreting the parties‘ agreement as to who decides class arbitration availability. (See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. at pp. 678–679; Oxford Health Plans LLC v. Sutter, 569 U.S. at p. ___, fn. 2 [186 L.Ed.2d at p. 119, fn. 2, 133 S.Ct. at p. 2068, fn. 2].) The issue thus remains unresolved. While accepting that extant Supreme Court cases do not decide the matter (dis. opn., post, p. 7), the dissent argues that from what they do decide, it is only a small leap to the conclusion that the availability of class arbitration is a question to presumptively withhold from the arbitrator (id. at p. 9). In the absence of controlling authority, however, we must resist the urge to take that leap without convincing evidence the FAA imposes an anti-arbitral presumption that overrides the state law reading of the parties‘ arbitration clause. In our view, the FAA does not.

The Supreme Court has interpreted the FAA as imposing two distinct presumptions, depending on the subject matter. On the one hand, courts presume that the parties intend courts, not arbitrators, to decide . . . disputes about arbitrability, e.g., whether there is an enforceable arbitration agreement or whether it applies to the dispute at hand. (BG Group PLC v. Republic of Argentina (2014) 572 U.S. ___, ___ [188 L.Ed.2d 220, 228, 134 S.Ct. 1198, 1206]; see Howsam v. Dean Witter Reynolds, Inc., 537 U.S. at pp. 83–84.) On the other hand, courts presume that the parties intend arbitrators, not courts, to decide disputes about the meaning and application of particular procedural preconditions for the use of arbitration. (BG Group, at p. ___ [188 L.Ed.2d at p. 229, 134 S.Ct. at p. 1207]; see Howsam, at pp. 84–85.) (…) Even a challenge to the enforceability of the entire contract in which an arbitration clause appears is presumptively for the arbitrator, not the court. (Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440, 446.)

As the Green Tree plurality recognized, the availability or unavailability of class arbitration has nothing to do with whether the parties agreed to arbitrate, either in general or with respect to a specific dispute. Instead, the question is of the what kind of proceeding sort that arises subsequent to the gateway issue of whether to have an arbitral proceeding at all.

We disapprove Garden Fresh Restaurant Corp. v. Superior Court, supra, 231 Cal.App.4th 678, to the extent it is inconsistent with this opinion. We also disapprove Kinecta Alternative Financial Solutions, Inc. v. Superior Court, supra, 205 Cal.App.4th 506, to the extent it suggests the availability of class arbitration is always an issue for the court. 

Lebo Automotive argues that state law requires harmless error review in all cases before reversal will follow. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475.) Not so; some errors are reversible per se. The error here falls within that class requiring automatic reversal because its effects are unmeasurable and defy analysis by harmless-error standards. (People v. Blackburn (2015) 61 Cal.4th 1113, 1135; see People v. Collins (2001) 26 Cal.4th 297, 311; Martin v. County of Los Angeles (1996) 51 Cal.App.4th 688, 698.) We cannot say whether an arbitrator would have decided the issue the same or differently. Indeed, to deny remand by insisting an arbitrator would surely have agreed with the trial court‘s view or our view of the merits of class availability is to recommit the very error complained of—deprivation of a decision by a contractually agreed-upon decision maker. The denial of the parties‘ right to their agreed-upon decision maker is thus the sort of miscarriage of justice that requires reversal without further harmless error analysis.

Secondary sources: Am. Arbitration Assn., Supplementary Rules for Class Arbitration (2003) rule 3 [allocating the class availability question to the arbitrator]; JAMS, Class Action Procedures (2009) rule 2 [same].

(Cal.S.C., July 28, 2016, Sandquist v. Lebo Automotive, Inc., S220812).

Arbitrage de classe en Californie, la décision de l’autoriser revient-elle au Tribunal ou à l’arbitre ? Notion d’erreur dans les considérants sans effet notable sur le dispositif.

Une question importante posée par cette affaire est celle de savoir si la clause compromissoire convenue par les parties au contrat permet ou prohibe un arbitrage de classe (le contrat de base était un contrat préformé de près de 100 pages entre un vendeur de voitures et son employeur ; ce contrat est susceptible de concerner de nombreux vendeurs dans la même situation). Mais la présente espèce pose surtout une question en amont, à savoir qui décide si le contrat permet ou prohibe un arbitrage de classe : s’agit-il du Tribunal ou de l’arbitre ? Cette question a divisé les nombreuses cours étatiques et fédérales qui l’ont considérée.

En résumé, la Cour Suprême de Californie juge en l’espèce qu’aucune règle absolue ne permet de trancher cette question. Bien plutôt, la réponse est donnée par le contrat lui-même, interprété selon le droit étatique applicable. En l’espèce, selon le contrat d’arbitrage, la décision est de la compétence de l’arbitre. Et selon le droit fédéral de l’arbitrage, aucune présomption contraire ne vient contredire cette conclusion.

De même que l’arbitrabilité de la question au fond posée par un litige dépend de la question de savoir si les parties ont convenu ou non d’arbitrer dit litige, de même la question de savoir qui dispose de la compétence de décider d’un arbitrage dépend de ce que les parties ont convenu à ce niveau.

La Cour doit dès lors examiner l’accord des parties pour déterminer ce qui est exprimé s’agissant de la question de « qui décide ». Mais à la lumière de quel droit ? Fédéral exclusivement ou dans un premier temps étatique puis fédéral ? En effet, pour décider si les parties se sont mises d’accord pour arbitrer une certaine dispute, les Tribunaux appliquent généralement les principes ordinaires du droit de l’état régissant la formation des contrats. Cette règle de conflit par défaut s’applique à la question de savoir si la disponibilité ou non de l’arbitrage de classe est tranchée par l’arbitre ou par le Tribunal, en tant que cette question de savoir « qui décide » présente un point litigieux d’interprétation des contrats : le droit étatique régit en priorité ce type de situations.

Les parties s’accordent à soutenir que le droit californien s’applique ici, et non celui d’un autre état.

En interprétant une clause d’arbitrage, la Cour considère les expectatives des parties s’agissant de l’allocation des responsabilités. Typiquement, les parties qui concluent une clause d’arbitrage s’attendent à ce que leur litige soit résolu sans qu’il soit nécessaire de solliciter le Tribunal. Dans les nombreux cas où les parties s’accordent à saisir l’arbitre et commencent la procédure en soumettant leurs mémoires à l’arbitre, exiger que la question « qui décide » (d’un arbitrage de classe) relève de la compétence du Tribunal contreviendrait aux attentes des parties et imposerait des coûts et des délais additionnels substantiels : les parties devraient tout d’abord suspendre la procédure arbitrale, puis saisir le Tribunal de leur litige relatif à l’interprétation de la clause arbitrale, éventuellement recourir ensuite contre la décision du Tribunal, et enfin seulement retourner devant l’arbitre pour la suite de la procédure arbitrale. En l’espèce, la clause d’arbitrage mentionne une préférence pour l’arbitrage du fait de ses coûts réduits et de son efficacité particulière.

Par ailleurs, deux principes d’interprétation établis de longue date s’appliquent ici : tout d’abord, sous l’angle du droit étatique comme sous l’angle du droit fédéral, lorsqu’il n’est pas clair si un litige relève de l’arbitrage ou du Tribunal, le doute à cet égard est résolu en faveur de l’arbitrage. Secondement, les ambiguïtés dans des accords écrits s’interprètent contre leurs rédacteurs (Civ. Code, § 1654; Rest.2d Contracts, § 206.)

De plus, la règle exigeant de résoudre les ambiguïtés à l’encontre de la partie qui a rédigé s’applique avec une force particulière dans le cas d’un contrat d’adhésion, où la partie qui rédige dispose d’un pouvoir de négociation supérieur, tandis que l’autre partie ne dispose pas de la force économique pour modifier le texte du contrat.

Ce principe général d’interprétation des contrats s’applique également à l’interprétation des clauses d’arbitrage.

Aucune des parties en l’espèce ne conteste le principe, bien établi en droit californien aussi bien qu’en droit fédéral, selon lequel les parties en litige peuvent convenir de conférer à l’arbitre la compétence de décider si un litige particulier relève ou non de l'arbitrage. En l’absence d’accord des parties dans ce sens, cette décision revient au Tribunal.

La jurisprudence Keating v. Superior Court, 31 Cal.3d at pp. 613–614, en tant qu’elle attribuait au Tribunal la compétence d’ordonner un arbitrage de classe fondée sur l’intérêt de la justice et sans égard à la convention des parties, est renversée. La présente affaire consiste donc en un revirement de jurisprudence à ce niveau.

En l’espèce, la convention des parties n’a pas expressément opté pour l’application du droit étatique à la place du droit fédéral. En l’absence d’un tel « opt out », la question de savoir si la disponibilité d’un arbitrage de classe relève du concept de base d’arbitrabilité, présumé de la compétence du Tribunal, s’analyse à la lumière du droit fédéral. Que dit ce droit à cet égard ?

Il est déterminant d’analyser si la loi fédérale sur l’arbitrage impose une présomption d’interprétation constituant préemption des règles étatiques d’interprétation des contrats et altérant les conclusions qui découleraient du droit étatique. L’intention du Congrès est le point de départ de toute analyse en matière de préemption. Or ni le texte de la loi fédérale sur l’arbitrage ni son histoire législative ne se prononcent à ce niveau, ni n’offrent d’éléments qui pourraient être utiles. Dès lors, la Cour se tourne vers la jurisprudence appliquant la loi fédérale sur l’arbitrage.

La Cour Suprême fédérale s’est directement prononcée sur notre question « qui décide » à une reprise (Green Tree, 539 U.S. 444) : dans cette affaire, la convention des parties soumettait à l’arbitre toutes les disputes, prétentions ou controverses, qui naissaient du contrat ou qui se trouvaient liées au contrat, ainsi que les relations qui résultaient du contrat. La pluralité des Juges a interprété ce langage comme conférant à l’arbitre la compétence de se prononcer sur la disponibilité de l’arbitrage de classe. Par ailleurs, les mêmes quatre Juges ont expliqué que rien dans la loi fédérale sur l’arbitrage ne soumettait la question « qui décide » à une présomption contraire en faveur d’une compétence du Tribunal. Par conséquent, la pluralité des Juges a conclu que cette question d’interprétation des contrats relève de la décision de l’arbitre, et non du Tribunal.

Cependant, comme la Cour Suprême fédérale l’a indiqué dans la jurisprudence Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp. et Oxford Health Plans LLC v. Sutter, qui ne concernaient pas directement la question « qui décide », la décision Green Tree ne contient pas d’opinion ayant valeur de précédent s’agissant de savoir quelle présomption éventuelle la loi fédérale sur l’arbitrage requiert en interprétant l’accord des parties s’agissant de la question de « qui décide » de la possibilité ou non de recourir à un arbitrage de classe. Le problème reste ainsi non résolu. In casu, la Cour Suprême de Californie n’entend pas retenir que la loi fédérale sur l’arbitrage imposerait dans cette discussion une présomption contre l’arbitrage qui l’emporterait sur l’interprétation par le droit étatique de la convention d’arbitrage. Et la Cour de poursuivre en jugeant que la loi fédérale sur l’arbitrage n’impose rien de cette sorte.

La Cour Suprême fédérale a interprété la loi fédérale sur l’arbitrage comme imposant deux présomptions distinctes, en relation avec les prétentions de fond. D’une part, les Tribunaux ont à présumer que l’intention des parties est de confier auxdits Tribunaux la compétence de trancher, en cas de litige à ce sujet, la question de l’arbitrabilité, soit la question de savoir s’il existe une convention d’arbitrage exécutoire, ou si cette convention s’applique au litige concerné.

Et les Tribunaux présument que les parties entendent que ce soient les arbitres, et non la justice ordinaire, qui décident des litiges concernant le sens et l’application de préconditions procédurales particulières, préconditions devant être remplies avant de permettre la mise en œuvre de la procédure arbitrale. Même la remise en cause de l’exécution de l’entier du contrat qui contient la clause d’arbitrage est présumée relever de la compétence de l’arbitre.

La disponibilité ou non d’un arbitrage de classe est sans rapport avec la question de savoir si les parties se sont mises d’accord ou non sur le principe d’un arbitrage, soit de manière générale, soit relativement à une difficulté spécifique. Au contraire, cette disponibilité ou non est une question subséquent à la question seuil de savoir si la procédure d’arbitrage est ou non retenue.

La Cour renverse ici deux précédentes jurisprudences en ce qu’elles disposaient que la question de la mise en œuvre ou non d’un arbitrage de classe relevait toujours de la compétence du Tribunal et non de l’arbitre (Garden Fresh Restaurant Corp. v. Superior Court, supra, 231 Cal.App.4th 678 ; Kinecta Alternative Financial Solutions, Inc. v. Superior Court, supra, 205 Cal.App.4th 506).

S’agissant de la question de l’erreur sans effet notable sur le dispositif du Jugement (« harmless error ») : l’une des parties soutient que le droit californien impose de revoir dans chaque cas une erreur dans les considérants sous l’angle de « harmless error » (évitant ainsi une annulation du Jugement inférieur si l’erreur dans les considérants est sans effet notable sur le dispositif) (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475). Tel n’est pas le cas, juge en l’espèce la Cour Suprême de Californie. Certaines erreurs entrainent une annulation automatique du Jugement inférieur. L’erreur commise dans la présente affaire est de cette sorte, car ses effets ne sont pas mesurables et ne peuvent pas valablement être analysés sous l’angle de « harmless error ». la Cour ne peut pas dire si un arbitre se serait en l’espèce prononcé de la même manière ou différemment. Et ne pas annuler le Jugement inférieur en jugeant qu’un arbitre se serait sûrement prononcé de la même manière que l’autorité inférieure s’agissant de la disponibilité d’un arbitrage de classe revient à commettre l’erreur de priver du pouvoir de décider celui qui avait été contractuellement nommé à cet effet, soit l’arbitre.

Monday, July 4, 2016

Judicial notice: Legal research: Legislative history:

Judicial notice: Legal research: Legislative history:

« You need to provide the court with a copy of any legislative history materials on which you rely in a brief. Legislative history materials are often submitted to the court through a request for judicial notice. See Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc., 133 Cal. App. 4th 26, 29-31 (3d Dist. 2005) (discussing protocol for submitting legislative history materials via request for judicial notice)”.

(Macfarlane, Dudovitz, Rowe, California Legal Research, Second Edition, Carolina Academic Press, 2013, p. 108, fn. 12)

Ethics, Legal Research

Ethics, Legal Research

There is an ethical duty to ensure that the court knows about a case directly on point from the controlling jurisdiction, even if the outcome of that case is adverse to the client (Macfarlane, Dudovitz, Rowe, California Legal Research, Second Edition, Carolina Academic Press, 2013, p. 52).

Indian Law: Legal Research

Indian law: Legal research:

Links from the National Indian Law Library, at (click on « Tribal Law Gateway ») ; the Tribal Court Clearinghouse, at; California Indian Legal Services, at; California Indian Law Association, at

California Compendium on Professional Responsibility

California Compendium on Professional Responsibility. The Compendium includes a comprehensive index of ethical issues and contains the:
·         State Bar Act
·         Ethics opinions
·         Orange County Bar Association

Courts can “reform” or rewrite a state statute

State statute: when no constitutional interpretation is possible:

In California, a court can “reform” or rewrite a state statute to avoid invalidating it on specific constitutional grounds when the intention of the legislature or the electorate is clear (Kopp v. Fair Political Practices Comm'n, 11 Cal. 4th 607, 615 (1995)). (Macfarlane, Dudovitz, Rowe, California Legal Research, Second Edition, 2013, p. 5).

John Roemer, Special to the Bar Journal (California Bar Journal, July 2016), about gig economy

On the road to a gig economy, litigators take the wheel
By John Roemer
Special to the Bar Journal (California Bar Journal, July 2016)

Republished here with the permission of the editor of the California Bar Journal

Just four years from now, up to 40 percent of American workers will be independent contractors navigating the so-called gig economy, an Intuit Inc. study predicts – and it’s going to take a lot of lawyers to realign the rules for a profoundly altered social landscape.
Already at issue in California courtrooms and at regulatory agencies are major changes in the state’s $28 billion transportation sector, as ride-sharing platforms like Uber and Lyft plus the self-driving vehicle market disrupt today’s car culture.
Uber has only been in business since 2009, but a collision of the complex issues upending the industry came to light on New Year’s Eve 2013. On that day an Uber driver was using the Uber app to look for fares when his vehicle struck and killed a 6-year-old girl in a San Francisco crosswalk as she headed home with her mother and brother. The family sued.
Uber’s defense to the family’s wrongful death and negligence suit was that the driver wasn’t carrying a passenger at the time of the accident, so he wasn’t working for the company, and Uber was not responsible. But the underwriter of the driver’s personal injury insurance policy contended he actually was working for Uber at the time, and his $15,000 coverage allegedly did not apply.
It’s just one case, but the incident highlights some of the issues – including liability, insurance coverage and worker classification – and the complexities that plague this emerging industry.
San Francisco attorney Christopher B. Dolan of Dolan law Firm PC, a past president of Consumer Attorneys of California who represents victim Sofia Liu’s family, opened three lines of attack in the lawsuit. Along with wrongful death and negligence claims, Dolan introduced a novel product liability cause of action against the Uber app that driver Syed Muzaffar was using at the time of the accident.
“It’s a defective product, a defective app,” Dolan said. “California law prohibits distracted driving, yet Uber drivers have to look at the app to get text messages. Uber really doesn’t want to get that into court.”
Dolan and his clients also worked with Assemblywoman Susan Bonilla (D-Concord) to pass AB 2293, legislation that requires such “transportation network companies” to carry liability insurance. Gov. Jerry Brown signed the measure into law in 2014; it took effect July 1, 2015. After the bill passed, Uber settled with Sofia Liu’s family for an undisclosed amount. Dolan would only say it was “to the plaintiffs’ satisfaction.”
Dolan sees California Public Utilities Commission’s rulemaking process becoming further complicated as it strives to frame regulations for new forms of transit in a state where Google Inc. and Tesla Motors Inc. are forging driverless technology. He foresees a wave of driverless car litigation as the next major source of transportation lawsuits.
“There have been no personal injuries in California yet,” Dolan said, “but in Philadelphia, Uber has petitioned to put full driverless vehicles in service. This is coming on fast.” Dolan noted that Uber, with a market value of more than $41 billion, pays about 75 percent of its gross profit per ride to drivers, a strong impetus for the company to move toward driverless vehicles.
In December, the commission announced preliminary regulations for autonomous cars that hold motorists – and presumably any transportation networks that dispense with drivers – responsible for obeying traffic laws, whether or not humans are behind the wheel.
“I represent the interests of those hurt by these new transportation network carriers,” Dolan said. “The future is now.”
Meanwhile, Uber and Lyft drivers are plaintiffs in two massive class actions that could become milestones that define the future of the gig economy. The lawsuits stem from a long-running legal debate over whether service workers should be classified as employees or as independent contractors. Both cases turned unusually contentious when some of the driver plaintiffs rejected proposed settlements that would have left them defined as contractors.
One objector in the suit against Uber is the case’s original named plaintiff, driver Douglas O’Connor. A class of more than 240,000 California and Massachusetts Uber drivers have attacked the company’s business model and tried to redefine how rideshare companies operate. The stakes were high, so Uber drivers retained prominent class action employment veteran Shannon Liss-Riordan of Boston-based Lichten & Liss-Riordan PC.
Uber brought on prominent class action defense lawyer Theodore J. Boutrous Jr. of Gibson, Dunn & Crutcher LLP. Boutrous won a unanimous U.S. Supreme Court reversal of class certification in the largest employment class action in history against Walmart Stores Inc.
In April, Boutrous and Liss-Riordan announced they had hammered out a settlement that would not change the drivers’ status, but would afford them other benefits such as a drivers’ association and some job security plus $100 million.
But one of the case’s original named plaintiffs, driver Douglas O’Connor, objected and hired well-known litigators Brian S. Kabateck of Kabateck Brown Kellner LLP and Mark J. Geragos of Geragos & Geragos APC to try to monkey-wrench the settlement.
In May, Kabateck and Geragos filed a strongly worded objection with U.S. District Judge Edward M. Chen of San Francisco. The proposed “collusive and disastrous” settlement, they complained, is nothing less than a $1 billion wage theft from the drivers because it does nothing about classification, which Kabateck called “an important social issue that is at the center of the gig economy.” The objection took aim squarely at the drivers’ lead counsel.
“It is apparent that this proposed settlement is designed solely to enrich Ms. Liss-Riordan and protect Uber at the expense of its drivers,” according to the objection. It “has broad implications and may single-handedly ruin the economy for California workers.”
The objection noted that another Northern District judge, Vince Chhabria, rejected a similar deal in a different class action against Lyft by drivers – also represented by Liss-Riordan – because it was inadequate. Referring to state authorities’ view, Kabateck and Geragos wrote, “It is shocking for an out-of-state attorney to so blatantly sell out the California class of drivers, consciously ignoring the California Labor Commission’s ruling that an Uber driver is an employee and not an independent contractor.”
Liss-Riordan and Boutrous denied collusion in separate court filings. Liss-Riordan, without identifying him by name, termed Geragos a “celebrity lawyer” not well versed in labor and employment law who did not understand that an arbitration clause in Uber’s drivers’ contract could wipe out many of their class action claims.
“Labor right advocates – who understand the issues we were facing – have congratulated me on what I achieved in this case,” Liss-Riordan said in a published interview. In her response to the objection, she highlighted the case’s significance. “Simply because this case deals with an emerging sector of the economy, and involves far more class members than the average misclassification class action, does not mean the settlement is subject to a different standard of approval,” she wrote.
Even so, in June Liss-Riordan sought to quell the class members’ rebellion by slashing her fee request from $25 million to $10 million. That gambit satisfied no one. A lawyer not involved in the case called it desperate, especially when Liss-Riordan conceded she had not kept detailed billing records.
“I feel strongly that lawyers have to stand up to corporations like Uber,” Kabateck said in an email summarizing the dispute. “If not us, who? The so-called ‘gig’ or ‘shared’ economy is one of the biggest threats to individual workers in California today. Most don’t understand the significance of having a growing percentage of the workforce out there without the protection of an employer-employee relationship. As the Uber model seeps into other businesses and professions, soon most people won’t be ‘employed.’ They will just float from job to job as business owners get richer and richer off their hard work.”
John Roemer is a San Francisco Bay Area freelance writer who has covered the California legal community for more than 20 years.