Judge: Douglas W. Stern, Case: 21STCV33449, Date: 2022-09-08 Tentative Ruling

Case Number: 21STCV33449    Hearing Date: September 8, 2022    Dept: 52

Tentative Ruling:

Defendant American Arbitration Association, Inc.’s Demurrer to Second Amended Complaint

Defendant American Arbitration Association, Inc. (AAA) generally demurs to all three causes of action alleged in plaintiffs BHFC Operating II, LLC and Frank Seddigh’s second amended complaint.

The doctrine of arbitral immunity bars each cause of action.  “[A]rbitral immunity applies where one of the parties to the arbitration seeks to impose liability based on the alleged bias of the arbitrator or the sponsoring organization.”  (Stasz v. Schwab (2004) 121 Cal.App.4th 420, 441.)  “In determining whether absolute immunity applies to the conduct of a public or private arbitrator, the courts look at the nature of the duty performed [to determine] whether it is a judicial act.”  (La Serena Properties, LLC v. Weisbach (2010) 186 Cal.App.4th 893, 901, internal quotes omitted.)  Arbitral immunity applies to “functions normally performed by judges.”  (Id. at p. 903, internal quotes omitted.) 

            Plaintiffs allege AAA violated the Americans with Disabilities Act (ADA), the Unruh Civil Rights Act, and the Unfair Business Practices Act.  The court sustained AAA’s demurrer to the first amended complaint due to arbitral immunity. 

The second amended complaint’s only pertinent amendments are that it now specifies the reasonable accommodation Seddigh requested: to participate remotely at an evidentiary hearing (SAC, ¶¶ 10-11), and allegations blaming AAA’s “administrative staff” (¶ ¶ 11, 15).  All three causes of action arise from the allegation that AAA refused to permit Seddigh to appear remotely at an evidentiary hearing as a reasonable accommodation of his disability.

Seddigh, however, did appear remotely at the evidentiary hearing.  (RJN, Ex. E, Final Award, pp. 101-102.)  Plaintiffs’ opposition concedes that fact, but argues, “While the arbitrator offered a remote zoom appearance, it did not provide the same access to Plaintiffs as Defendants to the hearing.”  (Opp., p. 4.)  Plaintiffs further argue, “The appearance via zoom was did not [sic] consider Plaintiff’s disabilities and was insufficient.”  (Opp., p. 7.)

Plaintiffs make no attempt to explain what was insufficient about the Zoom appearance or what accommodation should have been made—other than a continuance to permit Frank Seddigh to appear in person, which the arbitrator denied.  The Final Award notes that “neither Mr. Seddigh nor Respondent [BHFC] even suggested anything other than delaying the proceeding.”  (RJN Ex. E, Final Award, p. 101.)

As the court ruled in sustaining AAA’s demurrer to the first amended complaint, denying a continuance is a judicial function subject to arbitral immunity.  Indeed, the arbitrator’s final award includes a lengthy appendix explaining why he denied the continuance and describing Frank Seddigh’s persistent misconduct.  (RJN Ex. E, Final Award, pp. 93-107.)

Denying an accommodation that would have permitted plaintiffs “the same access” to the hearing (opp., p. 4)—which plaintiffs fail to explain and did not request (Final Award, p. 101)—was not a denial of reasonable accommodation.  That was not a reasonable accommodation because the arbitrator determined that Frank Seddigh was not entitled to full participation.

The Final Award explains why Seddigh was not entitled to full participation: “Mr. Seddigh’s attendance was merely the Respondent’s contract general counsel, not trial counsel; Respondent had three other lawyers for the trial; Mr. Seddigh was not a party to the case, and Mr. Seddigh was not even necessarily entitled to attend the hearings pursuant to AAA Construction Industry Rule R-26 since he did not have a ‘direct interest’ in the arbitration, a private, non-public proceeding.”  (Final Award, p. 101.) 

Furthermore, the award notes that the opposing party, claimant Shawmut Woodworking & Supply, Inc., made a “motion to have Mr. Seddigh appear ‘on camera’”, which “was denied permitting [Seddigh] to fully observe the proceedings without being seen.”  (Final Award, p. 102, fn. 25.)  Thus, the arbitrator expressly chose not to grant Frank Seddigh full access to the hearing.  Even if denying full access constitutes denial of a reasonable accommodation, the arbitrator chose to do it—via denying a “motion.”  That was a judicial function protected by arbitral immunity. 

Leave to Amend

After a successful demurrer, where “there is a reasonable possibility that the defects can be cured by amendment, leave to amend must be granted.”  (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.)  The plaintiff bears the burden of “demonstrat[ing] how the complaint can be amended.”  (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711.)  Leave to amend should be denied where “no liability exists under substantive law.”  (Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436.)

Plaintiffs show no possibility of amending the complaint to cure its defects.  After the court sustained AAA’s demurrer to the first amended complaint, plaintiffs made only one substantive amendment: the allegation that AAA failed to “facilitate Mr. Seddigh’s remote participation in evidentiary hearings.”  As the final award indicates and as plaintiffs’ opposition concedes, Seddigh did participate remotely in the evidentiary hearings. 

The opposition only argues that some other mysterious accommodation would have permitted greater participation in the hearing.  The final award notes that, after the arbitrator chose to proceed only via Zoom, plaintiffs never requested any accommodation other than a continuance.  (RJN, Ex. E, Final Award, p. 101.)  And, as discussed above, denying Seddigh full access to the proceeding was both not a denial of reasonable accommodation and was a judicial decision subject to arbitral immunity. 

As a matter of substantive law, arbitral immunity bars plaintiffs’ causes of action against AAA.

Disposition

            Defendant AAA’s demurrer to the entire second amended complaint is sustained without leave to amend.  AAA is ordered to file a proposed judgment of dismissal forthwith.